Forum @ Kanadahaus Berlin 2012
Energy Security: National and Regional Perspectives
On May 11, the Deutsch-Kanadische Gesellschaft e.V. for the third time held its annual interdisciplinary conference at the Embassy of Canada, this year under the new label Forum @ Kanada Haus Berlin and in cooperation with the OECD Berlin Centre. Ninety participants from the private sector and various organisations made use of this opportunity to discuss aspects of energy security; notably so in the absence of a joint German-Canadian platform for exchange on energy politics.
The expert audience received an excellent briefing. Ambassador Peter Boehm initially stated the extremely diverging situation Germany as an importer of energy faces compared to Canada as an energy exporting country, thus illustrating the Forum’s framework.
The Honorable Kevin Lynch, previously the highest public officer in Canada and today the Vice-Chair of the BMO Financial Group, unfolded a rich panorama of factors which currently determine the course of energy politics. They extend from social factors (such as demographics or the declining trust in institutions) to political (such as the revolution in North Africa or the rise of Asia in the process of globalisation) and economic factors (such as the consequences of the global financial crisis or the increasing importance of innovation as competitive advantage). Against this background Lynch states an Energy Game-Change: the increasing global demand for energy facilitates the rise of unconventional energies made of hydrocarbons, such as shale gas and oil sands, as well as of renewables. This development has transformed Canada into an exporter of energy who is looking for stable foreign markets and who will be able to realise much higher profits in Asia compared to North America. This trend also leads to significant Canadian investment into infrastructure for transporting energy to the coastlines and beyond.
Prof. Diethard Mager, Deputy Director General, General Issues of Energy Policy, Energy Research, Renewable Energies, Coal, German Federal Ministry of Economics and Technology, painted a different picture. According to him, both the rising global energy demand and the surging electricity prices create enormous challenges for the energy importer Germany. The Energy Policy Concept of September 2010 already meant a push towards further diversifying the national energy mix at the advantage of renewables. However, this strategy experienced a serious acceleration after the nuclear meltdown in Fukushima. Germany’s current concept of an Energiewende (energy transition) relies on a series of factors which can be influenced only indirectly such as the macro-economic effects of a nuclear phase-out in 2022, the successful implementation of measures aimed at increasing energy efficiency, or the acceptance of rising energy costs for private households and industry alike. In addition, stable political framework conditions and a close interlocking of energy policies within Europe will be decisive for financing this change of paradigm.
Both Lynch and Mager stressed the key role R&D has in fostering the use of new, unconventional energies. Research cooperation may be one area to single out as common ground in spite of the diverging perspectives on energy security in both countries.
Alexander Wood, Senior Director, Policy and Markets, Sustainable Prosperity, a green think tank based in Ottawa took a critical look at Canada when discussing the challenges of finding the right energy mix. He described the lack of a national policy framework on climate change as a handicap for the planning of a sustainable energy infrastructure, the reduction of greenhouse emissions, or the development of renewables. Most recently, the failing of the Keystone XL pipeline project (to transport synthetic crude oil and diluted bitumen from the Athabasca Oil Sands in northeastern Alberta, Canada to refineries in Illinois, Oklahoma, and Nebraska) demonstrated the need of diversifying Canadian energy exports. Wood described the risks of an entirely export-driven economy which may eventually lead to turning manufacturing into a component of the energy production supply chain and to a decline in overall productivity (the so called Dutch Disease). He made the point for using the Natural Capital derived from energy exports for re-investments in less fortunate policy fields.
Josef Braml from the German Council on Foreign Relations (DGAP), a Berlin-based think tank, postulated Germany’s task as an energy intensive economy to bring about an integrated European energy market as part of a new global energy regime. He named the International Energy Agency and the WTO as organisations well suited to facilitate such measures.
David Buchan, Oxford Institute for Energy Studies, finally delivered an introduction into discussing global energy trends. He identified three of them: (1.) the political instability in the MENA region, (2.) the shale revolution and its consequences for North America and Europe, and (3.) the rising cost of clean energy. Buchan outlined the enormous possibilities Canada currently has by providing energy independently of the neuralgic chokepoints, the Straits of Hormuz and Malacca. He also painted the mid-term prospects of the US to become energy-independent which would significantly impacts its geopolitics. As for Europe, the North American energy revolution could eventually lead to a declining dependence from Russian gas. However, there remains the dilemma that environmentally friendly renewables will only penetrate the markets with the help of substantial subsidies.
Dr. Carsten Rolle, Head of the Energy and Raw Materials Division, Federation of German Industries (BDI) and Secretary, German Member Committee, World Energy Council, provided the WEC perspective. According to a survey among WEC members the German Energiewende is not deemed feasible within the given timeframe; however, WEC members consider the concept worthwhile and sustainable in the long run. In his presentation Rolle stated five global trends as a background for future energy politics: (1.) unclear political framework conditions and the resulting insecurities related to energy investments, (2.) the diminishing role of oil and the rise of natural gas, (3.) the cost-intensiveness of renewables, (4.) the potential of both gas and renewables to fundamentally change the global energy mix, and (5.) the diverging speed with which energy producers on the one hand and nation states on the other continue with internationalising their market strategies.
Summing up the Deutsch-Kanadische Gesellschaft in cooperating with both the Embassy of Canada in Berlin and the OECD Berlin Centre succeeded in offering a platform with a clear USP, an achievement against which it will have to be evaluated in the future. The conference had been made possible by the generous support of Blackberry/ RIM (Gold Sponsor), the Lette Knorr law firm (Silver Sponsor), and a grant by the Government of Canada.