Oil and energy issues at stake
During this last month three news have waken up my interest on oil and energy issues. It is not a question of interest, instead a question of importance in the current context. How to deal with oil is included in the agendas of all the relevant international meetings of the last 3 years, whether if they were the WTO, G20, Rio+20, European Union, etc. The issues related with the most important energy resource have implication in many ways: economical, geopolitcal, environmental, social, human rights, financial, etc. That’s the reason why three important facts demonstrate the importance of this issue in nowaday’s international agenda. Let’s see:
- A study made by the Global Subsidies Initiative (IISD) which reports a summary of how many money could be saved in 24 OECD countries from fossil-fuel subsidy reform;
- The European Parliament is discussing whether shale gas extraction benefits outweights its potential harms;
- The United States Security and Exchange Commission (SEC) passed rules 1502-1504 of the Dodd Frank Financial Regulation Bill that requires oil and gas industries to publish all their payments to host governments.
GLOBAL SUBSIDIES INITIATIVE
The Global Subsidies Initiative was established by the International Institute on Sustainable Development and it is dedicated to analyze the impacts that subsidies to energy have on sustainable development. It is well-known that governments have been and are transfering public money to private actors to subsidize energy, especially fossil fuels such as oil and gas. Due to the negative impacts that this policies have, we are contributing to an energetic pattern which is affecting our environment thus undermining sustainable development and generating greenhouse emitions. The reform of these policies would lead to a greenhouse emission’s reduction while freeing-up money for other public goods and a change in the energetic pattern.
In order to demonstrate all the above-mentioned, the Initative launched in June a report titled “Fossil fuel subsidies anf government support in 24 OECD countries“. According to the report $750 billion of public funds are spent every year to support the consumption of fossil fuels. The reform of these policies, appart form freeing up money for different initiatives (US $100 billion per year till 2020 for adaptation and mitigation as negotiated in Copenhagen), would mean an 0.7% GDP increase in both OECD and non-OECD countries, and a 5.8% reduction in carbon-dioxide emissions. In reference to the 24 OECD countries, some figures relative to hom many money would they save if phasing out subsidies is very useful:
- France 2.6 billion €uros per year;
- Germany 7.4 billion €uros per year;
- Spain 2.6 billion €uros per year;
- United Kingdom 4.5 billion €uros per year;
- USA 11.8 billion €uros per year.
The final amount of dollars that the 24 countries would save phasing out fossil fuel subsidies is up to almos 50 billion €uros per year. It is half of the money spent last year by CAD-OECD to ODA.
SHALE GAS AND EUROPE
One of the alternatives in which scientifics are working on is shale gas. Shale gas is ” natural gas trapped in fine grained sedimentary rocks”. This energy is cheaper than other ones and can improve european energy security but it could imply environmental degradation. On last week two committees from the European Parliament (environment and industry) started to discuss on that. At the beginning of October there will be a vote in the EP on the two reports prepared by each committee. We will be following it!!
RULES 1502 & 1504
If there is one country in the world for who fossil fuels are vital is the United States (the first oil consumer in the world according to the 2012 BP Statistical Review of World Energy). Three American oil and gas companies are among the 10 biggest in the world: Exxon, Chevron and Conoco. Oil interests and energetic security have shaped American foreign policy for decades thus affecting the daily life and future perspectives of millions of people. Nowadays, when citizens are claiming for more and more accountability and transparency, oil and gas companies are the ones who have to improve it the most and politicians have to regulate their activities. Even though lobbies have been working hard against the new 1502 and 1504 rules of the Dodd Frank financial regulation bill, on last August these rules were included. What do these rules say?
Both rules require companies to publicly disclose their use of conflict minerals in the Democratic Republic of Congo or other countries. The rules also obly companies to disclose all payments over 100.000$. This is a huge improvement in the promotion of transparency in the activities that these companies are carrying on all over the world, activities that have produced several Human Rights violations and which have a deep link with tax havens and money laundering.
These three news open a “hope window” in the regulation and transparency of activities related with oil and in the existing alternative to nowadays energetic pattern. Nobody said that changes in the energetic model were eas but, however, they are absolutely necessary for many reasons. Let’s keep looking at future development, the political will and, of course, the lobby actions that these companies do shaping country policies.
PS: As maybe some of you know my final project of the first PhD years that I took was on oil. Specifically “Power, security energy resources and international relations: oil as a foreign policy tool. The study of Venezuela in the Post Cold War context”. If you want to check the project just let me know!!