Remarks on the Gulf oil spill

May 12, 2010 | 00:00

Remarks on the Gulf oil spill

The energy industry has again provided a major story and headlines in the world press. It is not the story of the energy industry enabling longer lives, better health, more abundant food, less human toil and instant knowledge transfer, communications and entertainment shared worldwide at the speed of light.  No, today’s headlines tell of the risks experienced in the extraction of the primary energy fuels of coal and petroleum.  In this case attention has been turned to two energy industry catastrophes.

The first is that of the loss of life of 29 miners in West Virginia and the less reported of 11 oil drillers on a platform in the Gulf of Mexico. On behalf of this committee (see box below)  I would like to extend our condolences to the families of our forty colleagues in the energy industry who perished in these two accidents.

The second catastrophe is the environmental impact of the oil spill in the Gulf of Mexico. The spill continues today despite efforts on multiple fronts to seal the well or capture the oil as it is spilled. We hope a technical solution is quickly found for these problems. The extent of the environmental damage will not be known for some time but the most recently reported estimates are beyond $1.5 billion.

The political, legislative and regulatory consequences of these two events in the US will most likely lead to more stringent safety and operational requirements including even the prepositioning of mitigation equipment and resources in designated offshore basins. 

A less likely consequence will be the acceptance of calls, such as from one environmental group “…. to recognize that the risks of offshore drilling far outweigh any benefits.”  Those of us who have followed the history of mankind’s increasingly intensive use of energy and its net positive impact on society recognize that our policymakers will continue to understand that the benefits of energy access far outweigh the risks even in the face the current tragedy.

This does not mean that our society should ignore the experienced and anticipated negative impacts of energy extraction, conversion and use on health, environment and climate. It does mean that society should look for ways to reduce the associated negative impacts while still providing adequate energy supplies to current and future consumers in this and future generations. 

That challenge is great. Demand for new energy supply will increase in the future. We in the developed world must not forget that at this moment in time only a third of humanity has adequate energy access to energy. A third of humanity today has intermittent electricity service and another third has no electricity service at all and is still dependent on twigs, branches and dried manure for primary energy supply. Add to this challenge the fact that the globe’s population is expected to grow by 2 billion in the next few decades and that an estimated 1.7 billion will enter the middle class with incomes affording more energy intensive and higher quality lifestyles.

Countering forces to this increase in energy demand can only come from new technologies and government policies which will 1) enable greater efficiency in energy extraction, delivery and consumption and 2) incent increased use of renewable, nuclear and cleaner fossil fuel technologies.

The subject of cleaner fossil fuel technologies is the mandate of this ad hoc group of experts. Thus our meetings today will cover a variety of important agenda items advancing the cleaner fossil fuel objectives.

Branko Terzic
The first program agenda item addresses the issue of attracting foreign direct investment to advanced fossil fuel technologies. The second item relates to working with the major electricity companies of the “e8” organization of G8 countries to advance programs of production efficiency, and sustainability in transition and emerging economies. The third agenda item relates to the funding of projects and activities fostering direct investment in cleaner technologies.

These programs recognize that for society to progress it must meet the three challenges of 1) providing adequate energy services to all, 2) insuring reasonable costs and 3) mitigating the negative impacts of energy extraction, conversion and end use on health, environment and climate. The challenges in the energy sector are great but so is humanity’s capacity to invent, innovate and organize itself around a problem. The key will be humanity’s capacity to organize and coordinate around the global energy, environment and climate problem.

This committee is a small step in that direction.

The above remarks were made at the 5th Session of the UNECE Committee on Sustainable Energy – Ad Hoc Group of Experts on Cleaner Electricity, Production from Coal and Other Fossil Fuels in Geneva on 11 May 2010 by Dr Branko Terzic, Chairman. Mr Terzic is the Global and US Regulatory Policy Leader for Energy and Resources at Deloitte Services and a regular contributor to European Energy Review. He can be reached at bterzic@deloitte.com

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