International Energy Outlook Presentation
Maximilian Teleki: President, Hungarian-American Coalition, USA
Justin Barden: Economist, Energy Information Administration (EIA), U.S. Department of Energy, USA
Komentatorzy:
Mihaly Bayer: Ambassador-at-Large for Nabucco, Hungary
Matyas Eorsi: Senior Researcher Fellow, Oxford Institute for Energy Studies, United Kingdom
The International Energy Outlook 2008 (IEO2008) presents an assessment by the U.S. Energy Information Administration (EIA) of the outlook for international energy markets through 2030. In the IEO2008 reference case projection—which reflects a scenario where current laws and policies remain unchanged throughout the projection period—world energy consumption increases by 50 percent over the 2005 to 2030 period. Total world energy use is expected to rise from 462 quadrillion British thermal units (Btu) in 2005 to 563 quadrillion Btu in 2015 and then to 695 quadrillion Btu in 2030. Global energy demand grows despite sustained high world oil prices that are projected to persist over the long term.
In the IEO2008 reference case, world oil prices are expected to decline from recent highs to about $70 per barrel in 2016 (on a nominal basis); then rise to $113 per barrel in 2030. World oil price nearly doubled during the IEO2008 production time period, rising from $63 per barrel in May 2007, when work on setting price assumptions began, to $134 per barrel in June 2008, when IEO2008 results were released on the EIA web site. Price volatility made preparing this year’s projections particularly challenging. High and low world oil price cases define a substantial range of uncertainty. In 2030, prices range from $69 per barrel to $186 per barrel, and the corresponding use of liquids ranges from 122 million barrels per day to 99 million barrels per day.
The IEO2008 emphasizes the potential importance of unconventional sources of liquid fuels and other petroleum. Unconventional resources (including oil sands, extra-heavy oil, biofuels, coal-to-liquids, and gas-to-liquids) from both OPEC and non-OPEC sources are expected to become increasingly competitive in the IEO2008. World production of unconventional resources, which totalled only 2.5 million barrels per day in 2005, is likely to increase to 9.7 million barrels per day in 2030 in the reference case and to 19.0 million barrels per day in the high price case. High oil prices in the reference case lead many consumers to switch to other fuels when feasible; fuel-switching and efficiency gains, for instance, slow the growth of oil use in the industrial sector. Those trends are even stronger in the IEO2008 high price case.
Renewable energy is the fastest growing fuel in the IEO2008—at an average annual 2.1 percent per year. Higher fossil fuel prices, particularly for natural gas in the electric power sector, along with government policies and programs supporting renewable energy, allow renewable fuels to compete economically.
Coal is the world’s second fastest growing fuel in the IEO2008, at 2.0 percent per year. The IEO2008 projections are based on U.S. and foreign government laws in effect on January 1, 2008. The potential impacts of pending or proposed legislation, regulations, and standards are not reflected in the projections, nor are the impacts of legislation for which the implementing mechanisms have not yet been announced. In the absence of policies or legislation that would limit the growth of coal use, the United States, China, and India are expected to turn to coal in place of more expensive fuels. Together, the three nations account for 90 percent of the projected world increase from 2005 to 2030.
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I Plenary session:
Energy as a Factor of Stability and Security
Moderator:
Pawe³ Lisicki: Editor-in-Chief, Rzeczpospolita daily, Poland
Panelists:
Victor Orban: President, Fidesz-Hungarian Civic Union, former Prime Minister, Hungary
Boyden C. Gray: Special Envoy for Eurasia and Energy Security, USA
Giorgi Baramidze: Vice Prime Minister, State Minister for European and Euro-Atlantic Integration, Georgia
Discussion:
Said Nachet: Energy Director, Internarional Energy Forum Secretariat, Saudi Arabia
What kind of impact do crisis In Georgia and financial crisis have on energy markets In Europe and all over the world? That was the question raised by the chair person- Mr Lisicki at the beginning of the session and addressed to all the participants.
Mr Orban Said: as for crises in Georgia, I was very much offended by the fact how Hungary reacted to the situation in Georgia. Poland knew what to do, Baltic countries knew what to do, Ukraine knew what to do, but we seemed not to. Central European-solidarity was manifested in many places but not in Hungary.
Mr Orban Said that when he was invited to the conference he immediately accepted it as he believes that very important issues are to be discussed at the conference, such as: economic development, energy issues, and financial crisis. However the Hungarian dimension in Hungary is different from the European dimension. Hungary was in the very weak condition when the crisis came and nobody was expecting it. All difficulties were not visible at all before the crisis had come.
Hungary will be the first country In the European Union to sign the agreement with the International Monetary Fund in order to handle the financial crisis. This is going to be an extraordinary help that on regular basis is given to African countries but not EU countries. Of course, we realise that Hungary will lose its sovereignty, independence in this way. Mr Orban clearly remembers being against getting any help from IMF in 1998 since he strongly believed that Hungary would shortly become the member of the EU saying that at those days they could have access to cheaper financial sources within EU. Unfortunately 10 years had passed and they are in the point where they were 10 years ago. The conclusion is that the Georgian conflict diverted foreign attention from Hungarian situation, and it was a mistake to regard the symptoms of crisis as an adjustment. The financial crisis draws our attention to the fact that independence even in mutually dependent world is a value and it is painful to the country when it needs to give away a bit of its sovereignty to handle the financial crisis.
Regarding the subject of security and stability Hungary suffers because there is no one clear energy policy. It is very important to have one common energy policy in Europe but the political conditions are not given In the EU for such a Policy. The question is what can be done in such a situation? The solution lies in our fellow countries and cooperating and making alliances with them. If Central Europe is able to rise cleverly its opportunities then in the next 15 years there will be a very serious upgrading in the economic performance in the region. Central Eastern Europe has enormous potential and working on that together will secure stability in the region. We need to build platform for strengthening our cooperation. The question is why Central Europe does not have a central development bank and a central development agency, which could tackle issues of Central European cooperation and strengthen our future in this regard? That is very important for Central European Cooperation and in the first place in energy markets. The doors are opened.
Mr Boyden Gray stressed that cooperation in Europe in building one common energy market is absolutely essential as well as diversification of energy markets.
Mr Baramidze said that if that if the conflict hadn’t occurred in Georgia it could have happen in another part of the region and it is all showing that the for this reason the countries In the Caspian region have to be unified to diversify their energy sources and to counterbalance the distractive role of Russia in the region.
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Where to Focus: EU-centered or Regional Cooperation in Managing Energy Dependence?
Moderator:
Mete Gonkel: Senior Energy Researcher, Center for Eurasian Strategic Studies, Turkey
Tibor Navracsics: Head of Parliamentary Group of Fidesz, Hungary
Zeyno Baran: Director, Center for Eurasian Policy, Senior Fellow, Hudson Institute, USA
Cozmin Gusa: Member of Parliament, Comittee for Foreign Affairs, Romania
Dariusz Szymczycha: Senior Consultant, Pleon, Poland
Aleksey Khaitun: Director, Institute of Europe, Russian Academy of Sciences, Head of Energy Policy Center, Russia
Discussant:
£ukasz Dziekonski: Advisor, European Parliament, Member of the Strategic Commitee Constellation Energy Institute, Poland
The competitiveness of Russian oil prices in Europe has been affected as a result of the financial-economic crisis, start of exploitation of new deposits in Libya, Algeria, Iraq, and Iran and in the Caspian Sea region and increase of the costs of mining in new Russian deposits.
The economic niche for supplies of Russian gas (26 % of consumption in the EU) will remain unchanged, with realization of investments within the boundaries of USD 50-75 billion. That is why the essence of the Eastern policy of the Russian Federation boils down to volumes, prices and routes of supply of hydrocarbons as well as control of transit of much cheaper gas from the region of Central Asia.
The project of Nabucco pipeline is more effective than the project of Blue Stream, while the project of Baltic pipeline is costly and dangerous in construction. The war in Georgia is bound to have a negative effect on the plans of increasing supplies of hydrocarbons from Central Asia to Europe.
All mentioned factors can have a negative impact on development of alternative sources of energy.
The panellists emphasized the necessity of becoming independent from Russian supplies of energy.
The above mentioned view, shared by all participants in the discussion, was especially sharply presented by Marta Szigeti Bonifert, who proposed to promote contracts concluded with other suppliers than Russians.
Also the role of regional solutions in shaping the global energy policy was emphasized.
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„Energy Dependence”: What is the right balance between economic, political and environmental considerations in the energy policy?
Moderator:
David Bucham: Oxford Institute for Energy Studies, Senior Researcher Fellow, United Kingdom
Paneli¶ci:
Tomas Tobe: Member of Parliament, Commitee on Environment and Agriculture, Sweden
Viacheslav Ilarionov: Deputy Chairman of the Comitee on Natural Resources and Enviroment, Chamber of Industry and Commerce, Russia
Jose Eduardo Martins: Member, Parliament of Portugal
Zsolt Nemeth: Chairman of the Comittee on Foreign Affairs, Parliament of Hungary
Bohdan Sokolovskyi: Representative of the President for International Energy Policy, Secretariat of the President of Ukraine
Discussants:
Marta Szigeti Bonifert: Exevutive Director of Regional Environmental Center for Central And Eastern Europe (REC), Hungary
Anna Chaplygina: Chief Analyst, Institute of Energy and Finance, Russia
David Buchan, a moderator: Energy Policy means both security policy and environmental policy. There is an internal market policy, which deals with structural market reforms. There is a climate change policy in the EU, a very comprehensive one. There are also other forms of energy policy. Member states will have to surrender their national control of the energy mix and resources. Getting to the EU structures indicates some kind of sacrifice for new members.
Tomas Tobe, Sweden: Economic growth and decreasing green house emissions. It is possible and Sweden is a good example in this field. Regarding energy supplies we have found in Sweden a right balance, which each country should have. Sharing the Swedish experience since the 1990: Sweden has a 35% DNP growth and it succeeded in reducing its CO2 emissions.
Swedish experiences:
1. in 1991we did introduce in Sweden a carbon dioxide tax
2. we have a green electricity system
3. we do have a large field of subsidies for energy, for example we produce energy from garbage
4. we do have a fossil free electricity production, based on hydro power and nuclear power
5. we do have an integrated electric energy sector – it is integrated with the markets of Finland and Norway.
Regarding the European Energy Policy: there should be a lot of responsibility for climate changes.
The goals for the EU should be:
1. EU should have competitive electricity prices
2. EU should try to deliver more renewable energy supplies to individual users
3. try to minimize the negative impact
4. we should have a lot of global and local cooperation
Ilarionov: producers-consumers -understood from different points of view. Diversification of energy supplies and finding the right balance between them:
-security of supply and of demand
-split the investment risk
Jose Eduardo Martins, Portugal:
Climate change is about energy and economy. The tradition has been changed. The oil prices have changed. In the EU countries, we are dependent on imported energy in about 50%. 93% of the EU energetic domestic demand is based on fossil fuels.
In the years 2005-2030 energy consumption in the world will rise by 50%, nevertheless oil and gas prices will continue to rise. Tradition is no longer what it used to be. Global warming can reduce 20% of world economy. The negative effect of doing nothing in this field will be 200 million people who will become refugees.
In Portugal we have created wind power energy; by 2030 we want to have 30% of energy from the wind power. We export to Spain, creating jobs and having an economic growth. Renewable energy industry has an annual turnover of more than 25 billon euro and it employs more than 350 000 people. In addition it reduces GHG emissions.
Zsolt Nemeth Hungary
The title of the panel is really good. We have to find the right balance between these three factors. In Central Europe the political and security conditions are the most important. The economic considerations are very pressing. The Hungarian perspective in 2008, right after the political conflict in Georgia, and in the middle of the financial crisis, is that if we want to have a right energy policy we have to have a right policy towards Russia and vice versa. We need to reconsider our policy towards Russia, when we talk about energy. Without a common European and Atlantic-Russia policy we are not going to achieve any kind of goals. The EU is divided if it comes to Russia. I am talking about Schroderism (private policy inside the European Union).
Regarding the Russian approach there are two important points which we have to have in mind:
1. Russia has introduced a new foreign policy doctrine-sphere of influence approach, Yalta is back again)
2. global challenges- terrorism, proliferation, climate change- which requires the proper engagement of Russia.
A conditional approach of engagement with Russia has to come from the EU side. The strategic cooperation with Russia has to be mutual and based on reciprocity.
The key to the policy towards Russia is the right energy policy.
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How to deal with energy dependence? National energy security strategies of Central and Eastern European countries
Moderator:
Timothy Krysiek: Assiociate, Russian and Caspian Energy, Cambridge Research Associates, USA
Paneli¶ci
Andrzej Zybertowicz: Advisor to the President of the Repubilc of Poland for National Security, Poland
Kresimir Cosic: Member of the Foreign Affairs Committee, Parliament of Croatia
Keith C. Smith: Senior Associate, Energy and National Security Program; Center for Strategic and International Studies, USA
Valery Fedorov: General Director, All-Russian Republic Opinin Center (VCIOM), Russia
Volodymyr Yevdokimov: Deputy Director, State Enterprise "Energorynok", Ukraine
Andrzej Zybertowicz, Poland – the majority of energy in Poland is generated from coal. Other sources are problematic for us; we depend on Russian energy carriers. Europe should develop its own energy policy. Russia diversifies its energy policy towards EU members depending on their time of membership in the EU. In the same time, member states try to follow their own energy policy. Russian meat embargo was a test of the joint policy of Russia towards Europe.
Russian energy policy is not a business issue, but a tool, which allows to have influence on the European policy. Solidarity is in short supply in Europe. Therefore, a question can be asked what Russia should be like in its policy: should it be European or in opposition to Europe?
Economic crisis is an abuse of the basic economic principles. Many companies lost their assets. In Russia the situation is not clear. Is the West able today to balance the Russian aspirations to hegemony? Perhaps exactly the economic crisis will deliver such instruments– which can be, for example, development of new methods of regulating financial markets or interbanking operations.
Perhaps the barriers of neoliberalism in the economy can be overcome– it would allow controlling transparency of the finances of Russian entities in the West, in the EU and in other countries.
Kresimir Kosic, Croatia:
Croatia is expected to announce soon its energy policy. Both politicians, analysts and voters should be responsible for the strategy. In every democratic country many centres have influence on forming the policy, especially the energy policy. All groups of interest have their own goals - politicians want to decrease the influence of experts, while experts criticize political decisions.
Croatia is in an underspecified situation. The need of discussion on this issue is greater on the eve of upcoming elections. Every country must build a policy, which is adequate to its situation.
Gas and electricity are Croatian priorities. We have harbours, which can be used to transfer gas to the Island of Krk. The issue of electric energy and its availability is important. A decrease in stock exchange prices of aluminium has also influence on the necessity to change priorities of the energy policy.
Fragmentation of the EU policy is a problem for us. We ask whether countries, which have conflicting interests, can build a common energy policy?
Optimization of the EU energy policy can help in building a common market. All analyzes of experts must take that into account. Elaborating common priorities lies also in the hands of certain organizations.
Croatia has a significant transit potential, it disposes of ports useful in transporting LPG.
Keith C. Smith, USA
We talked about a need of a common policy, a coordinated policy, but I can’t see such policy neither in the USA nor in Europe. Russia, in its energy policy, proceeds very rationally, using its opportunities. Europe is indifferent in this matter. Big companies have their lobbying in Brussels, while consumers do not have it. As a result intermediary companies can purchase gas cheaply in Turkmenistan and sell it expensively in Europe. Which interests are represented by indifferent governments? Big corporations have a stronger voice in Brussels than small states; that is why Brussels does not hear the voice of small states or Ukraine. Also Russian politicians think that a coordinated energy policy of the EU would be beneficial for both the EU and Russia itself, but this is underlain by different interests. Especially countries, which do not have large resources of energy, should fight against trust policy of large corporations.
Now we have gas OPEC, situation can turn out to be very difficult because western countries can transport gas from Africa, but Central European countries will have a problem. There is a need for a group monitoring the common energy policy. Many countries signed a treaty on construction of South Stream without consultation with other countries and the European Commission and against acquis communautaire, but none faced the consequences of that.
Activity of corporations from outside of the EU should also be better controlled, including also their incomes – confidential character of information on income is unacceptable. The example here is a cut-off of oil in Lithuania with a complete lack of reaction from the EU. Similar situation happened in the Czech Republic.
Coordinated energy policy is needed and useful for all
Igor Krugovykh, Russia:
Russia is mentioned in every speech. I would like to touch on Russian policy as well. It is underlain by the fact that Russia is a great producer, consumer and a transit country for energy carriers.
Europe for 40 years has received thermal energy, first from the USSR, and later from Russia.
According to a programme document – Energy Strategy of Russia until 2020– Russia will try to have mutually favourable conditions of cooperation, competitiveness and availability of energy carriers and distribution markets.
The energy market in Russia also deals with many problems. They include, for instance, excessive internal gas consumption. However, actions have been taken to solve these problems (a federal gas reserve fund), which allows looking optimistically into the future.
The current crisis has also affected the issues of energy security. Creation of a new security system in Europe will not decide on the issue of energy security. A solution to this issue could be found in the common area of economic cooperation between the EU and Russia, which was proposed by Mr Sarkozy.
According to the energy policy gas can only be mined, when it has already been sold. Nobody builds structures first to look for recipients later.
Power industry should be moved from the political domain to the area of responsibility for the economy.
Much is said about diversification, while this is a normal policy - Russia also follows it. Nevertheless, the more transport routes of carriers the more space for conflicts.
Today transport is not the most important issue, but exploration and exploitation of new places of mining energy carriers.
The same is related to assessment of the position towards Nabucco – relation to it does not measure if policy is pro- or anti-Russian. Perhaps also Russia can join Nabucco.
Gas OPEC is not as terrible as it is shown. Creation of a gas OPEC is related to the issue of separating gas prices from oil prices. The prices of one carrier do not have to be tied to the other.
The focus of attention should be the issue of building a common energy security system from Europe to Alaska. Thus, we need to look for such a mechanism, which can effectively coordinate such programme.
Walerij Fedorow, Russia:
The main energy issue of Lithuania is the demand of the EU to close down Ignalina Power Plant. After closing it Lithuania will become energy dependent.
Today’s Russia is like a big motorway and that is why one should not expect that Russia will have one position regarding the energy issue. At present Russia needs more energy itself.
The effectiveness of the use of carriers should be enhanced.
Nowadays many companies are owned by corporations. They become global; operate in Libya, Columbia etc. Should we follow this track or rather develop own mining?
For Russia diversification means also a change of the directions of energy supply – which policy should be pursued towards China? Should cooperation with transit countries be increased – Ukraine, Poland, Belarus or rather new transport routes should be developed – Nord Stream, South Stream. This issue has not been solved yet.
Volodymyr Yevdokimov, Ukraine:
The issue of electric energy is a priority for Ukraine. Politicians avail themselves of energy issues, but we need also business talk on this subject. Ukraine debates on supply of electric energy to Europe. Yet, the market needs investments and privatization. In Ukraine the functioning market model is based on one buyer. Energy is exchanged with other countries – Moldova, Romania, Hungary, Poland. The issue of the price of energy depends on the buyer. Ukraine wants this price to be real, considering the costs of production and transport.
Today, we speak about privatization of energy companies. The government supported this policy – of stimulating investment and competitiveness of production and adaptation to cooperation with the EU.
Ukraine will move away from the model of one buyer to a system of mutual contracts. Realization of this concept is expected to require further investments.
Peter Poptchev, Bulgaria: Bulgarian energy strategy is a necessity to modernize infrastructure including also the nuclear power plant.
Our possibilities of receiving gas from our neighbours are limited. Our network is insufficiently developed. Only 50% of people can use gas. Decisions related to energy policy were preceded by a joint discussion. Issues of climate changes and availability of carriers were considered, among other things. Some of our targets went beyond the expectations of Brussels.
Today’s challenges are to capitalize the energy sector and find funds for construction of a nuclear power plant. We want to have a holding with a large share of the European countries.
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Competition in the energy sector: cooperation or rivalry?
Moderator:
Liviu Muresan: President EURISC Foundation, Romania
Paneli¶ci:
Laszlo Varro: Vice President for Strategy and Development, MOL, Wêgry
Jan Bury: Secretary of State, Ministry of the Treasury, Polska
Karoly Gerse: Deputy CEO, MVM, Wêgry
Said Nechet: Energy Director, International Energy Forum Secretariat, Arabia Saudyjska
Peter Kaderjak: Director, Regional Center for Energy Policy Research, Wêgry
Dyskutanci:
Igor Dekanic: Faculty of Mining, Geology and Petroleum Engineering, University of Zagreb, Chorwacja
Peter Jambor: President, Onyo Group, Czechy
Yaroslaw Minullin: International Institute for Applied Systems Analysis (IIASA), Austria
Liviu Muresan, Romania:
Since many key issues have already been discussed we will ask about the possibility of finding a compromise between energy, as a domain of politics, and energy as a domain of competitiveness.
There is a significant competition inside the EU in terms of energy. A question should be addressed how to defend national interests, and at the same time take care for the interests of the European Union.
Laszko Warro, Hungary
Competition and energy security – these two visions are represented here entirely differently. Certain companies think that there is a need of a vertical integration to achieve success. Other initiatives are negatively perceived from the point of view of competitiveness. An alternative policy, a European competitiveness policy is extremely important to ensure guarantees for energy supply.
We should consider the fact that needed are both one’s own resources and infrastructure on the part of the client.
Current problems are related first of all to infrastructure, additionally believe in market competitiveness was shaken in the time of crisis.
In Hungary we invest in infrastructure (MOL), so far we have had old and not modernized structures, while infrastructure allows development. Theoretically it was in our interest to have old infrastructure – engineers could always find a justification why something was not working. However, we changed our approach – we can earn because others use our infrastructure. Dealing with problems, the market needs large investments, there are political risks, problems of transit countries emerge (pipeline from Hungary to Croatia). We inherited this system from old times.
Jan Bury, Poland:
Russia and the EU are connected with each other and one cannot function without the other. Energy security of Europe depends on the EU itself. Russia without EU policy will follow one’s own policy. Pipelines are not sufficient; we also need diversified source of oil supply. We look for other alternative ways of energy supply, but energy security does not only mean Russia. Still, we must try to make ourselves independent from Russian sources.
The EU should support alternative sources of energy. Innovations in energy are very important. Application of new energy blocks is likely to increase effectiveness of these power plants alone and decrease fuel consumption.
The EU does not have a good system of cross-border connections. We need regionally strong gas operators. With such foundations we can impose conditions on Russia, Europe’s energy security depends on it.
I will quote here a sheik, who said that the Stone Age did not end because people were short of stone, but because other raw materials were found. New technologies can be an answer to issues of the security of competitiveness and the security of energy supply.
Said Nachet, Saudi Arabia:
We must find an answer to the question – what competitiveness do we talk about? Today the market decides about prices, deliveries, use of resources. States can change market signals, make a decision on energy prices and cause that consumers use more expensive carriers. Monopolies can be preserved if there is no alternative. That is why we have to look for an alternative. Competition is helpful here; it forces us to look for new opportunities, undermining adopted postulates.
What does security mean? It means that access to carriers at specific price range is guaranteed. In some price ranges carriers become unavailable to certain countries. We must think how to guarantee continuous availability of carriers to consumers. The market cannot build reserves for which none pays; that is why we need also other mechanisms. In the last 30 years money was invested and it proved that such investments were justifiable.
Miros³aw Bielinski, Poland:
Regulation is an important thing, but we compete with other companies. New infrastructures are created, our company prepares new strategies. We invite investors to projects. The purpose of package investments is to increase regional security. We propose to investors to create new coal power plants, the cost of which is approx. 2 billion euro. We build gas and hydro-electric power stations. We have new opportunities thanks to new investments. Transparent investments are something, which is also expected by the public opinion. A compromise – cooperation on investment issues and social responsibility – is certainly possible.
Krzyszfof Rosen, Poland:
I think that mutually beneficial cooperation with Russia is possible. We must guarantee that the market responds to the needs of consumers, that services are of good quality and certain. It seems to me that the EU is still likely to change a lot as regards the energy issue. Politicians are elected by people and that is why they have to defend their interests. We must consider it all, especially if conflicts emerge.
Everyone wants to be the father of success also regarding the energy policy. Sometimes we think about security in terms of control and not competitiveness. Control is needed, but it does not guarantee security, especially energy security.
We have seen in Poland what has been done by certain companies. A problem of our whole region is shortage of cooperation. Pipelines and gas pipes go from the East to the West. There is not north-south direction. We must change it. Only this will guarantee a real diversification of supplies. We must privatize the energy sector, but the governments in Europe do not like such privatization at home, instead they recommend it abroad. Privatized companies are important and safe. Today, we need reliable and transparent privatization. This is precisely a milestone in ensuring security for consumers.
300 years ago a known economist claimed that the world could not supply enough food for the growing numbers of people. But a technological revolution came and the issue has been solved.
The technological revolution changes work processes and the next revolution will consist in finding new solutions to energy issues, which are expected to help changing the whole world.
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II plenary session
European Neighborhood and Energy Policy
Moderator:
Peter Balazs: Director of the Center of EU Enlargement Studies, Central European University, Hungary
Paneli¶ci:
Urszula Gacek: Member, European Parliament, Poland
Modest Kolerov: Managing Director, REGNUM News Agency, Russia
Gilyan Gyorgy: State Secretary, Ministry of Foreign Affairs, Ukraine
Geza Jeszenszky: Professor, Corvinus University of Budapest, former Minister of Foreign Affairs, Hungary
The main points:
the geopolitical situation is characterized by the triangle of three giants; Russia, Ukraine and Turkey. In this conditions the common energy policy has to be formed considering tree factors: scarcity of energy resources, unstable EU energy position and changing Russia, which push the UE for energy diversification The quote of Mr. Kolerov; the whole Energy Forum is devoted to the issue how to make the Old Europe reject energy dialog with Russia. The goal of the USA is to subordinate energy resources to international society. The rhetoric of common energy policy was imported from USA. Initially Caucasus and Central Asia were not on the energy agenda of the EU, however the energy sources were not changed; the rhetoric changed drastically.
Kolerov: Ukraine and Lithuania are eager to set up dictatorship in energy sphere since they are energy bankrupts. Europe speaks about completion in the energy supply market, it doesn’t wish to start dialog on competition in transit matters. Turkmenistan is not interested in Europe; as a customer, its direction is the East. In this regards Europe will loose the fight for diversification of energy sources. Europe is not consistent is connecting human rights and business, it applies double standards – which can be seen in the example of Turkmenistan, with which EU wants to build NABUCCO pipeline, and doesn’t pay attention to the domestic violation of human rights. At the same time the EU tries to suppress Russia to change its domestic policy.
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What is the right balance between economic, political and environmental considerations in the energy policy?
Moderator:
David Bucham: Oxford Institute for Energy Studies, Senior Researcher Fellow, United Kingdom
Paneli¶ci:
Tomas Tobe: Member of Parliament, Commitee on Environment and Agriculture, Sweden
Viacheslav Ilarionov: Deputy Chairman of the Comitee on Natural Resources and Enviroment, Chamber of Industry and Commerce, Russia
Jose Eduardo Martins: Member, Parliament of Portugal
Zsolt Nemeth: Chairman of the Comittee on Foreign Affairs, Parliament of Hungary
Bohdan Sokolovskyi: Representative of the President for International Energy Policy, Secretariat of the President of Ukraine
Discussants:
Marta Szigeti Bonifert: Exevutive Director of Regional Environmental Center for Central And Eastern Europe (REC), Hungary
Anna Chaplygina: Chief Analyst, Institute of Energy and Finance, Russia
David Buchan, a moderator: Energy Policy means both security policy and environmental policy. There is an internal market policy, which deals with structural market reforms. There is a climate change policy in the EU, a very comprehensive one. There are also other forms of energy policy. Member states will have to surrender their national control of the energy mix and resources. Getting to the EU structures indicates some kind of sacrifice for new members.
Tomas Tobe, Sweden: Economic growth and decreasing green house emissions. It is possible and Sweden is a good example in this field. Regarding energy supplies we have found in Sweden a right balance, which each country should have. Sharing the Swedish experience since the 1990: Sweden has a 35% DNP growth and it succeeded in reducing its CO2 emissions.
Swedish experiences:
1. in 1991we did introduce in Sweden a carbon dioxide tax
2. we have a green electricity system
3. we do have a large field of subsidies for energy, for example we produce energy from garbage
4. we do have a fossil free electricity production, based on hydro power and nuclear power
5. we do have an integrated electric energy sector – it is integrated with the markets of Finland and Norway.
Regarding the European Energy Policy: there should be a lot of responsibility for climate changes.
The goals for the EU should be:
1. EU should have competitive electricity prices
2. EU should try to deliver more renewable energy supplies to individual users
3. try to minimize the negative impact
4. we should have a lot of global and local cooperation
Ilarionov: producers-consumers -understood from different points of view. Diversification of energy supplies and finding the right balance between them:
-security of supply and of demand
-split the investment risk
Jose Eduardo Martins, Portugal:
Climate change is about energy and economy. The tradition has been changed. The oil prices have changed. In the EU countries, we are dependent on imported energy in about 50%. 93% of the EU energetic domestic demand is based on fossil fuels.
In the years 2005-2030 energy consumption in the world will rise by 50%, nevertheless oil and gas prices will continue to rise. Tradition is no longer what it used to be. Global warming can reduce 20% of world economy. The negative effect of doing nothing in this field will be 200 million people who will become refugees.
In Portugal we have created wind power energy; by 2030 we want to have 30% of energy from the wind power. We export to Spain, creating jobs and having an economic growth. Renewable energy industry has an annual turnover of more than 25 billon euro and it employs more than 350 000 people. In addition it reduces GHG emissions.
Zsolt Nemeth Hungary
The title of the panel is really good. We have to find the right balance between these three factors. In Central Europe the political and security conditions are the most important. The economic considerations are very pressing. The Hungarian perspective in 2008, right after the political conflict in Georgia, and in the middle of the financial crisis, is that if we want to have a right energy policy we have to have a right policy towards Russia and vice versa. We need to reconsider our policy towards Russia, when we talk about energy. Without a common European and Atlantic-Russia policy we are not going to achieve any kind of goals. The EU is divided if it comes to Russia. I am talking about Schroderism (private policy inside the European Union).
Regarding the Russian approach there are two important points which we have to have in mind:
1. Russia has introduced a new foreign policy doctrine-sphere of influence approach, Yalta is back again)
2. global challenges- terrorism, proliferation, climate change- which requires the proper engagement of Russia.
A conditional approach of engagement with Russia has to come from the EU side. The strategic cooperation with Russia has to be mutual and based on reciprocity.
The key to the policy towards Russia is the right energy policy.
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Unconventional energy in Europe and its impact on Energy Security
Moderator:
Paul Domjan: Member of the Executive Committee, Constellation Energy Institute, United Kingdom
Steve Kidd: Director of Strategy & Research, World Nuclear Association, United Kingdom
Andras Kiraly: Chief Geoscientist, MOL Group, Hungary
Gyrogy Szabo: Member of the Board, Falcon, Hungary
Unconventional energy has a brilliant future in front of it for obvious reasons. Currently in the world 16 percent of global demand for energy is satisfied from nuclear energy, and this index has been continuously growing. One can distinguish 4 factors, which speak in favour of the profitability of investing in nuclear energy:
1. Global energy demand is characterized by continuous growth, while the resources of traditional energy carriers have been shrinking more and more.
2. Nuclear energy pollutes the natural environment to a smaller degree.
3. It is more profitable in the economic dimension, ensuring continuity of supplies.
4. In the political dimension nuclear energy gives the opportunity of becoming independent from foreign supplies.
Additional benefits of nuclear energy are quite even location of uranium ores in the world and that its mining is quite easy. Unconventional wind energy or energy from thermal sources should go hand in hand with nuclear energy. The world will need more and more energy in the future. As opposed to wind, which does not always blow, atom works 24 hours a day during 356 days in the year, which ensures continuity of energy supplies. Initially, it was assumed that reactors can operate 20-25 years. Currently reactors are able to operate from 40 to 60 years. A good example of cooperation between unconventional energy and nuclear energy is Sweden, when in spring more water accumulates in dams during thaws. At that time production of energy in nuclear power plants decreases, and water flow in turbines increases.
In many countries there is no political will for future solutions and a new nuclear technology. The main issue for development of nuclear energy is to create appropriate legal basis. Certainly every country has the right to set its energy priorities, I hope that you will make the most favourable decisions for your countries.
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Future of nuclear energy.
Moderator:
Andras Deak: Expert, Hungarian Institute of International Affairs, Hungary
Paneli¶ci:
Gerard Cognet: Delegate for Central Europe, Atomic Energy Commission (CEA), France
Jozesf Palinkas: President Hungarian Academy of Sciences, Hungary
Vladivoj Reznik: Engineering Manager, Slovenske Elektrarne, Czech Republic
Dusko Corak: Director, Institute for Nuclear Technology, Croatia
Nuclear energy is a relatively young industry
What is really important for nuclear energy market is to assure its stability and enlarge the industry.
Speaker Palicaz: the general public fears nuclear energy and the fear drives their attitudes. Clear statements by politicians and nuclear energy expert are really important to make the general public aware of this relatively new industry (started in 1950’s)
There are 435 nuclear power stations in the world and 16% OF THE WORLD ENERGY IS GENERATED IN NUCLEAR POWER PLANTS.
Energy sources: a problem with green house gases so that nuclear power can be just environmentally friendly. The main question of nuclear power is its safety. Years of reactor operation- 2 unfortunate accidents. One in Czernobyl. The life time of a nuclear reactor is 30-40 years. There is still a question of waste disposals.
As for Hungary more than 1/3 of energy production in Hungary is generated in nuclear plants.
The Hungarian the Nuclear Research Institute would like to give a clear answers to the best of its knowledge, the clear and true information about nuclear energy industry and make people aware of the key facts regarding the industry, since the opinion is that general public fears nuclear energy.
One other thing we need to stress is that renewable energy and nuclear energy should be developed together but never either one or the other. Of course nuclear energy industry involves some risks and all the fears should be dealt with whole due respect, but in the very first place the meaning of the notion- nuclear risk should be clearly explained.
Our plants are getting older and older.
Gerard Cognet
Form the point of view of climate, energy carries with it very negative effects. During its presidency France has prepared a project, a strategy how to prevent them. First of all one should develop research, obtain more knowledge on nuclear energy. Considering for example transport, I do not think that nuclear energy would reduce pollution entirely, but it will certainly ensure less polluted atmosphere.
Vladivoj Reznik
A very important aspect is reduction of CO2. In order to reduce its emission the EU will spend 28 billion Euro. One should notice that nuclear energy is more environmentally friendly. Moreover, the costs of its disposal are much lower. Slovakian government supports research in the field of nuclear energy. I can see it as our future.
Dusko Corak
The topic is not easy, even more because the precedent speakers have already pointed the most important aspects related to the future of nuclear energy. In 1970 we had the first energy crisis, at that time no one thought yet about nuclear energy as our future. What happened in the 1990s? A new energy crisis, which caused a change of thinking. First of all attention was drawn to CO2 emissions. The first crisis was caused by diversification; the next was connected with Russia, and what about the following one? Absolutely the following crisis can be caused by polluted atmosphere. Energy should be cleaned. I would like to stress still that there is one very specific system, which is the system of electricity. It is very important, its prices are very stable, as opposed to prices of oil, for example. However, we should remember that we will need more and more energy, and this can be ensured only by nuclear energy.
Karoly Gerse:
I would like to say briefly about the future of nuclear energy from the point of view of a citizen of the European Union. There are 3 major elements speaking in favour of nuclear energy. In the first place it is the cheapest; secondly it does not pollute the environment. It is very important to purify the atmosphere, and not pollute it. Thirdly nuclear energy is very stable.
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The role of alternative sources in the energy mix.
Moderator:
Igor Lobovskiy: Director, Global Energy International Prize Foundation, Russia
Tibor Szanyi: State Secretary for Agriculture and Rural Development, Hungary
Andor Nagy: Deputy Chairman of the Enviromental Committee, Parliament of Hungary
Gediminas Jakavonis: Deputy Chairman, Committee on Eviromental Protection, Lithuania
Igor Prokofyev: Deputy Director, Russian Institute for Strategic Studies, Russia
Igor Lobovsky: The analysis of energy situation in the world from a scientific point of view. Renewed and not renewed kinds of energy. Energy mix used in Europe consists basically of oil and gas; the nuclear energy represents 15 %, coal - 18 %, alternative kinds of energy, such as a wind energy and the sun, - 6 %. Energetic strategy of many countries turns from hydrocarbon to matrix, or mixed energy. The planet requires stimulation of serious energetic researches, especially regarding non-renewable sources. In 2002 Russia founded the International Global Energy Prize, which marks all most serious works.
The project of creation of an experimental thermonuclear reactor ITER was the laureate of 2006. Hydrogen power for Iceland, the project of Thorsteinn Ingi Sigfusson, was the laureate of 2007. "The know-how" of artificial oil, presented by E.Volkov (Russia) and C. Bowman (Canada), was the laureate of 2008.
Thus, the tendency of delivering the award in the field of non-standard energy sources allows speaking about a world tendency of development of researches in this area.
Andor Nagy; climatic changes can also be understood as political changes – there is a significant dependence between them.
Alternative sources of energy should not be imported by us, but we should rather develop our own technologies in the field of renewable energy.
Renewable energy represents currently 5% of the total energy potential in Hungary, until 2020 this value is expected to reach 13%. There is a question regarding its source– should it be fuel or food products? Biofuel sector plays an important role in agricultural production.
We should remember that alternative sources of energy mean free of charge energy, expensive is the technology. Cooperation among Poland, Romania and Hungary is indispensable for optimum development of energy in the region.