June 11, 2015
Heads of six European oil and gas companies (BG Group, BP, Eni, Royal Dutch Shell, Statoil, and Total) have issued an appeal for more effective decarbonisation. They argued that the quickest way to reduce carbon dioxide emissions (using today’s technologies) is by phasing out coal in favour of natural gas, particularly in energy generation. In an open letter to the Financial Times, the energy companies have called for introducing widespread and effective carbon pricing – a pragmatic step of key importance to unlocking the positive effect that natural gas can have on climate change.
CEOs of ExxonMobil and Chevron, the two largest oil and gas companies in the US, have declined to join the initiative, which shows that the instruments of climate policy are perceived differently across the Atlantic. The US companies also represent a pragmatic approach, arguing that the relations between prices of energy derived from primary sources (fossil fuels and renewable energy sources) should be motivated by technology profitability and should not be distorted by subsidies and taxes.
As Poland lies in Europe and its energy sector is built on coal, any initiatives increasing costs of carbon dioxide emissions are bound to raise concerns because we cannot see a good alternative to coal-based generation, particularly when it comes to energy security and jobs. Natural gas is a necessary support for RES, while nuclear power is entirely dependent on imports (feedstocks, reactors and maintenance). Both generation methods are highly labour-efficient and currently more expensive than coal.
By objecting to decarbonisation outpacing technological progress (improvement in efficiency), Poland takes a very pragmatic standpoint rooted in a legitimate concern that higher energy prices would further erode the already weak competitive position of the European Union on the international market (as Poland is an important link in Germany’s supply chain, higher production costs in Poland would also drive up production costs in Germany).
Our problem on the EU forum is not that we have a different opinion on how fast decarbonisation should progress – given the character of our energy mix, which it will take a long time to change – but that we do not have a long-term strategy how to disentangle this Gordian (coal) knot. I believe that we should look for solutions in new technologies which permit clean (or cleaner) use of coal. To this end, we should prepare a long-term strategic development vision for the Polish economy based on our own resources. As I have said before, this vision should be supported by substantial spending on research and innovation (R&I). Properly-structured, interdisciplinary research (primary, applied and implementation research) should be carried out by specialist institutions coordinating the relationship between science and industry. As the only country in Europe to be dependent on coal to such an extent, Poland should take the initiative. No one will do this for us.
But how can we win support for this initiative in the EU? We should underline the environmental benefits that the development of coal-based technologies can bring. What kind of benefits? Today, with the EU seeing coal as a fuel to be phased out, there is no drive for innovation in the area, which has considerable potential to support climate protection.
According to our current state of knowledge (New Policy Scenario, IEA), coal will continue to satisfy one-fourth of global energy demand in 2040. In electricity generation, it will be 30%. Clearly, coal cannot be eliminated from the global energy mix over this time horizon, and it is bound to remain significant. Shouldn’t we therefore actively invest in efficient decarbonisation in the segment where this primary energy source is used? China and India are set to become the largest coal consumers. If innovative coal technologies are created, the two countries will become their users, as is currently the case with RES, which will allow them to reduce their carbon dioxide emissions and thus benefit the climate. To make this possible, however, we must invest in coal-based technologies without neglecting innovation in other areas, which will not possible if coal is labelled a fuel of the past.
Coal and its innovative use are a significant opportunity for Poland to build an innovative economy, use its coal reserves, break the energy impasse on the international forum, and stimulate development in Silesia, for which no useful concepts exist now.
Let’s not wait for the EU’s financial support. If we believe in Silesia relying on innovative technologies for efficient use of coal, we should make the investment ourselves, as it is only through action that we can convince others to believe in this vision too. If they decide to follow in our footsteps, they will not regret it. If they do not, we will celebrate the success alone. Believing in something can work miracles if it is backed by enough money. Then it simply becomes pragmatism. Just look to the West, at Energiewende – Germany’s energy transition.adamczyzewski