UFRGSMUN | UFRGS Model United Nations
ISSN: 2318-3195 | v.2, 2014| p. 337-374
ENERGY TRANSITION
AND CHALLENGES FOR
THE 21ST CENTURY
ABSTRACT
Bruna Jaeger1
Patrícia Machry2
his section deals with the debate on the challenges generated by the
Energy Transition. “Energy Transitions” are based on the notion that an energy
resource, or a group of energy resources, dominates the market for a period or
era, until it is challenged and eventually replaced by other(s) resource(s) (Melosi
2010). Since the 1970s, when the world watched two major oil crises, states
and corporations began discussing alternatives that could replace oil as the basis
of the global energy mix. In recent years, this process has intensiied. he use
of clean energy sources (hydro, nuclear, wind, solar, tidal, geothermal, biofuels) emerge as possible replacements for fossil fuels. However, this is not an
easy transition. here are many questions about the ability of these new sources
to meet world energy demand, which is growing. In addition, proposals that
include increased use of new forms of fossil fuels (shale gas, tar sands, ultraheavy oil) keep the world dependent on inite fuels and generate huge impacts
on the environment. In this sense, the WEC seeks to discuss possible solutions
to this energy challenge. Ie, how to perform the transition to a post-oil era without afecting energy supply, maintaining equitable distribution of electricity and
without destroying the environment.
1 Bruna Jaeger is a 8th semester International Relations undergraduation student at UFRGS and
director of the WEC.
2 Patrícia Machry is a 6th semester International Relations undergraduation student at UFRGS and
assistant director of the WEC.
Ministerial roundtable of the World energy CounCil
1 HISTORICAL BACKGROUND
1.1 THE CONCEPTS OF ENERGY TRANSITION
AND ENERGY SECURITY
According to Kerr Oliveira (2012), the concept of energy basically refers to
three aspects: natural energy resources, the infrastructure logistics of energy, and the
set of techniques, knowledge and energy development. In other words, this can be
understood as an Energy System.
Energy refers to the set of basic processes of extraction, capture and processing of
natural energy resources. Also includes consumption systems or end use of diferent
forms of energy that occur in the main productive activities (industry, agriculture,
utilities, trade, transport and communications). Finally, energy can be understood
as the capacity to make decisions regarding the use of energy infrastructure and
investment in Research & Development (Kerr Oliveira 2012, 19).
As it already have been pointed out, “Energy Transitions” are based on the
notion that an energy resource, or a group of energy resources, dominates the market
for a period or era, until it is challenged and eventually replaced by other(s) resource(s)
(Melosi 2010). An Energy Transition is not an abrupt change from one reality to
another. It is a transformation that evolves through considerable time, and that can
lead to greater diversity in the energy market (Yergin 2013). Energy Transitions are
not sudden breakthroughs that follow periods of prolonged stagnation. Rather, they
are processes that unfold continuously, gradually changing the composition of the
resources used to generate heat, motion and light. hese transitions also replace the
dominant methods of energy conversion, increasing eiciency in energy-dependent
processes (Smil 2013).
he concept of Energy Security can be understood as the state in which a
country or region has a level of energy availability that is suicient to maintain
reasonable rates of economic growth and development (Klare 2004). In the long
term, it means the ability to magnify the power consumption without major
obstacles in terms of technology, infrastructure, power generation and distribution, or
availability of energy resources. In addition, the ideal conditions for Energy Security
shall ensure the integrity and security of energy infrastructure (Yergin 2006). Kerr
Oliveira (2012) ranks the main Energy Security Strategies in three broad categories:
(I) Energy Self-Reliance, which can be operationalized through the diversiication
of energy sources, decentralized infrastructure for generation and distribution of
energy, energy innovation, and energy eiciency; (II) Security of External Energy
Supply, which involves the diversiication of foreign suppliers, or the militarization
of the energy resources control abroad; and (III) Regional Energy Integration, which
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is achieved through the integration of infrastructure and energy supply chains in a
region or continent.
1.2 THE IMPORTANCE OF ENERGY FOR HUMANKIND: AN OVERVIEW
here are several ways in which energy can transform human life. According
to energy analyst Daniel Yergin, these transformations can be summarized in the
simplest forms: the access to lighting, cooling, heating and transportation (Yergin
2004, 716). Before the light bulb was invented, lighting could be provided by the
sun, candles, oil and gas lamps. Access to light gave men a whole variety of choices, as
productive hours were extended once they no longer depended on sunlight. Access
to heating by burning wood also made a diference to mankind, from cooking to the
survival in cold temperatures. Cooling, on the other hand, allowed men to live and
perpetuate the species in arid zones. Finally, the energy revolution that took place
with the industrialization represented a change also in terms of transportation, when
steam power was applied to boats and trains and resulted in locomotives and steam
ships. People could travel on railways many times faster than on foot, transforming
also the way services and goods were transported.
Energy can also be easily related to civilization and social development. Societies
that remained agrarian for a long time and were not touched by industrialization had
little population growth (Grigg 1980). hat is because demographical increases have
to rely on an expanding energy supply, for the simple reason that whenever human
population grows, societies begin to require more of everything in order to satisfy
the basic material needs of individuals: food, water, ibers, clothing, shelter and so on
(Klare 2002). herefore, alongside with developments in production (generally the
spread of industrialization), communications, transportation and military, increases
in human numbers can also enlarge the demand for natural resources3. According to
Goldemberg (1998, 7), energy is an essential ingredient for development, therefore
the energy consumption per capita could be a good meter of a nation’s quality of life,
wealth and development4.
Since humans irst appeared on Earth, controlling energy resources has been
a major concern for survival. As men learned how to use and control energy, they
increased their power to alter the environment around them, producing more food
and building bigger and stronger shelters. As centuries passed by, societies became
3 Michael Klare stresses that increases in personal wealth also contributes for an insatiable appetite for
energy, as people start to desire more resource-intensive commodities as they get wealthier (e.g. private
automobiles) (Klare 2002, 15).
4 Energy is a relevant variable to understand the diferent capacities among great powers: the richest
and most developed nations present the greater amounts of energy consumption (Kerr Oliveira 2012).
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more complex, which led to an increased use of energy resources to maintain such
new arrangements. A variety of new energy resources were discovered throughout
the years, and the control over them turned to be a main concern of states, as
they believed that this control would render them powerful within a competitive
international system.
Yet, during a period of over ifty thousand years, humankind relied only on
a single form of energy: human muscles (Smil 1994). Human labor power was for
centuries an important source of mechanical energy: not only it was responsible
for agricultural production, but it was also crucial for the formation of armies to
defend territories since the Ancient Ages (Kerr Oliveira and Brandão 2011). Fire
was discovered by burning wood, animal dung and charcoal, providing heat, and
this discovery came as a means to complement human strength in providing energy.
he domestication of animals also turned out to be an important source of energy,
since animal traction proved to be useful for transporting people and goods. Later,
the use of water and wind to generate power gained importance, and windmills and
water-wheels became the most powerful mean to use energy until the invention of
the steam engine (Smil 1994).
In the end of the 18th century, a wave of technological advances led to a
process of modernization which later became known as the Industrial Revolution.
In that moment, men discovered the potential of fossil fuels - starting with coal -,
and steam engines rendered windmills and water-wheels obsolete. his use of coal
and other fossil fuels such as oil and natural gas showed an energy intensity as never
seen before (Smil 1994). With developments in the energy system such as changes
in the production, transmission, storage and consumption of energy, a wide range
of industrial branches started to become viable. he use of steam engines also held
important developments on military afairs, as they fastened the speed of troops and
the transport of supplies.
Between the 18th and 19th centuries, the aforementioned innovations
regarding coal use deeply changed the textile production. hey also revolutionized
metallurgy and steel industry, allowing the creation of a whole new naval industry.
On the second half of the 19th century, electricity started to be used, completely
altering means of communication with the advent of the telegraph. he introduction
of telephone and radio changed forever the conduct of warfare, as they facilitated
communication between troops and led to the invention of coding. hey also
revolutionized communications, allowing real-time transmission of events to the
civilian population. Almost at the same period, the development of oil reining
processes ended up constituting a whole complex of industries connected to the
petrochemical sector. hese petrochemical developments enabled the arrangement
of electric, aerospace and nuclear industries, which deeply inluenced the war
industry (Kerr Oliveira 2012).
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1.3 ENERGY TRANSITIONS THROUGHOUT HISTORY
In the last centuries, technological and productive revolutions were always
strictly related to transformations in energy systems5. Every time the main source of
energy changed, other modiications also took place with it, such as transformations
in military craft, capital accumulation and international hegemony (Kerr Oliveira
2012; Arrighi 1996). To historian Giovanni Arrighi, commerce development
and accumulation of wealth led to the constitution of a more advanced form of
production and energy management, and these factors were crucial for the emergence
of modern capitalist states (Arrighi 1996, 39-40). herefore, in this analysis, energy
becomes fundamental for states’ accumulation of power, as it impacts defense
capacities, economical and productivity competitiveness, social welfare and access
to goods and services. States that can use energetic infrastructure more eiciently
can achieve more relative power than the ones which are less developed in such area.
When human force and animal traction were the most important energy
sources, a powerful nation would be the one with an enormous population and
large pastures. For instance, the huge supply of human energy contributed to grant
the Chinese Empire with great power (Kerr Oliveira and Brandão 2011). Later on,
when men discovered that energy could be provided by burning wood, nations who
had access to forests were the ones who accumulated more power. Merchant cities
of northern Italy irst manipulated wood, but the true hegemonic states turned out
to be the maritime ones, especially Portugal, because of its access to great forests
in America. Wood became the main raw material of European economies, serving
both for fueling and for the construction of tools (Nogueira 1985). However, even
though wood is a renewable6 source of energy – as it can be easily replaced by
reforestation -, the demand for it started to grow faster than its replacement, and
a new source started to become more popular: mineral coal (Kerr Oliveira 2012).
Simultaneously with the status of coal as the fundamental and predominant
energy resource, England raised as the great hegemonic power of the 19th
century. he importance of control over coal sources grew remarkably, since it
became decisive for wars and for the sustainability of production, transportation
and communication systems in the Industrial Revolution era. England beneited
5 An energy system involves and connects natural energy resources with the infrastructure, technology
and knowledge related to the use of many diferent forms of energy. It includes the extraction of natural
resources and the transformation of nature forces in other forms of energy or work through diferent
means and types of converters (Kerr Oliveira 2012).
6 According to the International Energy Agency, “renewable energy is energy that is derived from
natural processes (e.g. sunlight and wind) that are replenished at a higher rate than they are consumed.
Solar, wind, geothermal, hydropower, bioenergy and ocean power are sources of renewable energy”
(OECD/IEA 2014).
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from the almost inexhaustible supply of Scottish coal reserves (Kerr Oliveira and
Brandão 2011). Nonetheless, the energy model based on coal would not survive the
expanding energy demand of an increasingly industrial and wealthier world.
he transition of the Coal Era to the Petroleum Era was slow. Diferently from
the transition from wood to coal, the transition to the intense use of oil did not occur
due to an extinguishment of coal reserves, but because a new technology proved
itself to be signiicantly more eicient. Petrochemical revolution led to other energy
innovations such as aeronautical turbines and propelled rockets fed by petroleumbased fuels. he former led to a revolution in transportation; the latter permitted a
restructuration in communications, as it led to surveillance and observation from
the space (Kerr Oliveira 2012).
he most powerful nations of the 20th century were precisely the ones which
had major consumption and production of oil: the United States of America and
the Soviet Union. While the First World War consolidated the use of radio in the
battleield, the Second War proved to the entire world that a huge availability of
fuel to feed navies and aviation was central to winning any campaign (Kerr Oliveira
2012). he bipolarity of the balance of power structured during the Cold War was
reinforced by the easy access and domain over natural energy resources detained
by the USA and the USSR. By the end of that century, industrialized countries
were fully adapted to fossil fuels. Coal and natural gas continued to provide power,
while oil was consolidated as essential for transportation and industries. Capitalism
expansion allowed petroleum to become the most important fuel of the present,
therefore starting to be related to the American hegemony.
hus, it can be deinitely said that the great dominant power of a speciic
period always turned out to be the one which had control over the current energy
model. However, this did not happen without jeopardizing the ones who were left
behind in industrialization. Nations that could not follow the most powerful ones on
this process turned to be on a dependent and subordinated position. As high quality
of life is related to energy consumption, populations who cannot count on modern
energy forms are also the poorest in the world. his leads to increasing competition
among states, mainly over the domain of natural resources and control of new
technologies. he desire for self-suiciency over energy issues drives developing
nations to ind alternative sources in order to diversify their energy matrix, in an
efort to increase their independence and relative power (Yergin 2006).
he current energy model based on the preeminence of oil has been showing
signs of weakness since the 1970s. he petroleum crisis of 1973 and 1979 were
samples of this system’s exhaustion. In both situations, the worldwide dependence
on this energy source spread a major crisis, and the debate over alternative sources
started to become important. Other forms of energy such as nuclear and hydroelectric power, biomass, solar and wind, seem to be an interesting alternative. It is
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not known if the world will be able to maintain an energy matrix based on scarce and
polluting fossil fuels for a very long time, and therefore it is of extreme importance
to debate over a possible new energy transition that might be happening just now.
2 STATEMENT OF THE ISSUE
According to the World Economic Forum (2013), there is currently major
attention focused in the next Energy Transition: the expectation or the possibility
of a signiicant change in the global energy mix. In relation to this possibility, some
questions stand out. What would be the nature of the mix change? How fast would
it be? How long could it take? he answers to these questions will have a profound
impact on the global energy system for producers and consumers worldwide.
2.2 TRANSITION TO A POST-OIL ERA
In the 1970s, the energy model centered on oil showed its structural limits
for the irst time. Before 1973 and the subsequent oil crises, the global energy
mix was composed by 86.6% of fossil energy, with 46.1% of oil, 24% of coal and
16% of natural gas (IEA 2009). In that period, nuclear energy and hydropower
accounted for less than 3% of primary energy produced in the world. he irst
signs of exhaustion from that model were appearing, as it became clear that the
world could not continue to generate sustained economic growth by expanding the
consumption of inite fossil energy at the same rate that occurred in the years 19401960. It became evident the need to establish a major transition to a “Post-Oil Era”
(Kerr Oliveira 2012).
Although the construction of a new model may have a high economic and
technology cost, this development seems to be the only way that would allow
increased energy supply on a global scale. In this sense, the post-oil Energy Transition
has major impacts on issues of socio-economic development, environment, regional
integration and international security. Particularly, the theme that permeates this
debate is centered on the concept of Energy Security of a State or group of States.
he structural characteristics of this crisis seem to be irreversible and are becoming
increasingly clear: it is a crisis of the entire current energy model based on fossil
hydrocarbons (coal, oil and gas) (Yergin 2006).
Today there is a renewed and much more intense focus on what kind of Energy
Transition might be ahead and what timing it might be. Two factors have converged
to generate this focus. he irst is the concern about climate change and the traction
of carbon policy in many countries and international forums. he second is the
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worry that the current energy mix will not prove adequate to meet the rapidly
growing energy needs of emerging market nations. he shifts in the balance within
the mix will have direct consequences for all participants in the world’s energy
industry – incumbents, new entrants and innovators, governments and, of course,
for all the peoples of the world (Yergin 2013, 2).
he energetic model that is proposed by many studies is based on the view that
it should overcome the actual one, which is dependent on inite energy resources.
his way, it would allow the structuring of a new model that makes possible to
generate energy almost virtually ininite, with fairly low costs in economic, social
and environmental terms (Kerr Oliveira 2012). However, the challenges of the
diferent stages of a Great Energy Transition underway can signiicantly increase
the likelihood of conlicts in the twenty-irst century, marking disputes between
diferent States’ energy security strategies, especially if they are willing to dispute the
last largest reserves of oil and gas (Fuser 2008).
With the increase in oil prices in the 2000s, this debate has been resumed,
partly by new environmental pressures, but mainly due to limitations presented
by the actual energy model. he current energy mix is composed by 86.9% of
fossil energy, with 33.1% of oil, 29.9% of coal and 23.9% of natural gas (British
Petroleum 2013). In percentage terms, the global energy mix reduced dependence
on fossil fuels about 10% over the last 30 years, which was at 95% in 1973. Crude
oil remains the main energy resource; however, their representation in the overall
mix was not so low in 13 years. However, considering that the world has doubled
the total energy consumption, in reality the dependence on these energy sources
has increased in absolute terms (Kerr Oliveira 2012). Although nuclear energy in
its current stage of technological development is still dependent on inite energy
resources (uranium, plutonium, thorium), this alternative to fossil fuels increased
its participation in the global energy mix to 4.5%, while hydropower is at 6.6%
and other renewable energies (wind, solar, geothermal) reached 1.9% of the total
primary energy produced (British Petroleum 2013). herefore, as it can be seen, the
current model, based on fossil fuels, can be considered “monoenergetic”, i.e., one
major source is responsible for most of the energy produced (Nogueira 1985).
Table 1 - Composition of energy mix by source and by region
Nuclear
Hydro
Coal
Natural
Gas
Oil
Other
Renewable
North America
7.6%
5.7%
17.1%
30%
37.3%
2%
Latin America
0.7%
24.9%
4.2%
22.2%
45.4%
2.3%
Europe and Eurasia
9.1%
6.5%
17.6%
33.3%
30%
3.3%
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Nuclear
Hydro
Coal
Natural
Gas
Oil
Other
Renewable
Middle East
0.04%
0.6%
1.2%
48.6%
49.3%
0.01%
Africa
0.8%
5.9%
24.1%
27.4%
41.3%
0.35%
Asia and Paciic
1.5%
5.7%
52.2%
11.2%
27.8%
1.3%
Source: Developed by the authors based on data from British Petroleum (2013).
Image 1 - Energy demand by 2035 and share of
global energy consumption growth 2012-2035
Source: IEA (2013)
he International Energy Agency conducted a study on energy scenarios to
2035, highlighting the increasing global demand for energy. With an average growth
of energy demand of 1.7% per year, oil consumption in the world will reach 120
million barrels per day by 2030 (IEA 2003). With a world GDP growth of around
1% in 2030, US$16 trillion would be needed in investments in the construction
and expansion of global energy infrastructure, 60% of it in the electricity sector and
38% in the oil and gas sector (IEA 2003).
Hence, humanity faces the following problem: maintaining current existing
energy infrastructure, which extends to the maximum possible duration of the
current energy mix, implies the use of relatively scarce fuels unevenly distributed
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geographically, costly and highly polluting.
Kerr Oliveira (2012) introduces the debate on the crisis of the Oil Age, which
involves three main shortcomings. he irst considers that oil, as a inite resource, is
in a process of exhaustion which will be accelerated in the coming decades, creating
an unprecedented crisis (Campbell 2005). his position is summarized in the thesis
of “world peak oil” (Hubbert 1956), which can be considered the most pessimistic
approach, or “catastrophic”. he second one also considers oil a fossil and a inite
resource, but sees its reserves as suicient to supply mankind for a long time, probably
for decades, with the greatest solutions to the expansion of oil extraction being the
development of new technologies and exploration of new reserves (Deming 2003;
Clarke 2006). Finally, the third approach, more optimistic, states that oil is not
a fossil resource, but one of mineral origin (Gold 1987). According to this view,
it would be formed deep inside the Earth, mainly from mineral carbon, which
signiicantly alters the calculations of the total available volume in the crustal. In this
model, formation of more oil would be a constant, although at a relatively slow rate.
What this discussion shows is that there is a great diiculty in estimating how much
oil can still be found. As there is a large margin of error in such calculations, it is also
diicult to predict a date for the global peak oil.
Both in the intermediate and in the pessimistic scenario, the maintenance
of high prices tends to favor the replacement of oil and other fossil fuels for other
sources of cheaper fuels. his could reduce pressure on oil, postponing its exhaustion
(Yergin 2006). he reduced capacity of extra oil production, or the lack of capacity
for rapid expansion of its supply, would be one of the most important factors in
explaining the rise in the prices in 1998 to 2000. With the demand virtually equal to
the supply, any kind of risks to the global production may alter prices (Kerr Oliveira
2012; Klare 2005).
“Considering the immense variety of petroleum based products, the more
likely it is that their high cost restricts its use to those purposes that cannot be easily
replaced” (Kerr Oliveira, 2012, 145). Anyway, it is clear that a major world oil crisis
might occur from the fall of world production of this resource. Due to the increase
in costs that this will bring upon, such process is likely to extend the disputes for
oil throughout the world. How this will happen is almost unpredictable for now,
but the more a country is prepared to make this transition less it will be likely to
sufer the consequences of the crisis. States that go through the Energy Transition
earlier may advance more competitively in the Post-Oil era. States, or block of states,
which are more advanced in planning their Energy Security will be able to make
through this transition in an easier way and with less political, economic, social and
environmental costs (Kerr Oliveira 2012).
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2.3 IMPACTS OF ENERGY TRANSITION
In this section, it will be explained the main impacts of the current Energy
Transition to the International System, listing aspects related to International
Security, Socio-Economic Development, Regional Integration and Environment.
International Security
Energy can be considered an essential feature to understand relations of
hierarchy, power distribution and security among states. Besides having direct
implications for society and economy, the energy system also afects politics and
war. In this sense, the ability to decide about the use of energy resources is central to
ensuring the sovereignty of a state. he deinition of Energy Decision Center of a
state refers to the capacity of planning and autonomous controlling the generation
and the use of energy inside the country, what directly inluences the ability of
states to transform energy resources in power (Kerr Oliveira 2012). As an example,
without modern energy use, a country would be unable to use basic weapons of
contemporary warfare, which rely on fuels and electricity for their operation systems.
herefore, “the success of the Energy Security Strategy of a state or group of states
inluences the perception of the distribution of power in the International System”
(Kerr Oliveira 2012, 19).
he concept of National Logistics refers to planning the use of multiple
means to accumulate political, economic, industrial, technological and military
capabilities in order to, ultimately, accumulate power and ensure the safety of the
country (Sebben 2010). National Logistics planning can also expand the deterrent
capabilities of a state if it is successful in turning the national logistical infrastructure
into a mechanism able to defend its territory in case of foreign attack (Martins 2008).
At the center of such planning is energy infrastructure, which supports the operation
of all other strategic infrastructure of National Logistics, such as communications,
transport and industrial production (Kerr Oliveira 2012).
his way, energy is central to military and defense logistics, as well as being
crucial to the long term sustainability of any country strategy (Lins 2006). In this
sense, the control of energy resources and the energy distribution infrastructure can
be considered central variables in global geopolitical disputes. Moreover, it can be
an excuse or motivation for conlict between energy commodities exporters and
suppliers. Logistics, energy infrastructure, and the pattern of energy consumption
are understood as mechanisms of power transformers, and can be considered as key
variables to the competition in the International System (Kerr Oliveira 2012).
Socio-Economic Development
Virtually all basic public services depend on energy for their operation.
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Contemporary political institutions depend on energy for its maintenance and
proper functioning: treatment and pumping of water, street lighting, health systems,
communications, and especially production processes and transport systems, i.e.,
the low of people and essential goods. Nations that have become richer and more
developed are those that managed to master a set of innovative energy technologies,
which impacted on their political, economic and productive systems, thus enabling
the achievement of a high degree of capital accumulation and in life quality. Currently,
these countries are highly industrialized and with extensive ability to decide in a
sovereign way issues related to their own Energy System (Kerr Oliveira 2012).
Today, the index of average energy consumption is one of the most reliable
variables to assess a population’s life quality and is highly correlated to a number of
other economic and social indicators (Goldemberg 1998). he correlations between
energy and development prompted the International Energy Agency to propose an
analysis of countries using an Energy Development Index in order to complement the
analysis with United Nations’ Human Development Index (IEA 2010). here is a need
for programs aimed at expanding access to electricity, as increasing access to energy can
be one of the fastest ways to improve life quality of a population, reducing poverty and
inequality. Especially when it points out that about 2 billion people worldwide have no
access to energy on a regular basis or afordable prices (IEA 2011).
he current world energy mix might be characterized as clearly concentrating
wealth and highly exclusionary. Currently, between 4 and 5 million people die each
year related to the lack of basic energy and sanitation infrastructure causes (IEA
2011). Kerr Oliveira (2012, 64) describes this as an “almost energy apartheid”. If
the 3.5 billion poorest people in the world, which includes the 2.7 billion who lack
modern energy sources for cooking, had the same pattern of energy consumption
per capita as Canada, this would represent an increase in about three times the
current global primary energy consumption (Kerr Oliveira 2012). Surely this fact
points to major challenges for developing countries. Such restrained energy demand
on global scale cannot be fully satisied with the current scarce and inite energy
sources. Hence, this also justiies the necessity of a large and deep global Energy
Transition, which enables support for all mankind a pattern of life quality, consistent
with the current technological stage.
Regional Integration
Regional integration processes based on the economic integration of
productive chains, consumer markets and political integration between states in the
same region and with common interests has been accelerated by the integration of
infrastructure. For most states, regional integration is one of the few alternatives
to expand its consumer market in order to sustain technological innovation and
industrial production, in addition enabling the expansion of jobs for the available
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labor force. “Maintaining the current trends, it seems that the countries or regions
that are not integrated into blocks are in serious danger of disappearing economically
or even politically” (Kerr Oliveira 2012, 56).
Regional infrastructural integration of energy, transport and communications
is a key step in this process, since it enables the integration of consumer markets,
workforces, regional production chains. It also favors the building of common
political institutions between countries of the same block. Ensure that decisionmaking for investment in energy infrastructure occur at the national level may not
be suicient when compared to the importance that such decisions can have on
regional-continental level.
Environment
Any process of Energy Transition has also signiicant impacts to the environment.
he model based on fossil fuels, in particular oil, is in debate over the past four
decades as it would be responsible for increasing environmental damage and emission
of polluting gases into the atmosphere. herefore, the discussion on which energy
source will prevail is central to assess potential environmental impacts as well as the
sustainability of the energy model in question.
In recent years, the environmental legal apparatus has signiicantly increased,
besides the fact that there was an increase in world public opinion for the adoption of
renewable and cleaner energy sources. Such sources would be central in mitigating the
impacts of the increasing global demand for energy.
he reconciliation of exploitation/production of oil and environmental
preservation requires speciic instruments for environmental control in order to prevent
and/or mitigate environmental damage from this activity. he potential environmental
impacts of the oil industry varies, the most well-known being against the population
associated with leaks in oil tankers and oil terminals, causing contamination and
environmental degradation of oceans and seas. However, other environmental
impacts are inherent in this activity, which are related to changes in water quality
and contamination of marine sediments, interference in animal’s migration routes,
interferences in coral reefs, mangroves, marine ecosystems, and social uses related to
ishing activity.
2.4 ALTERNATIVE ENERGY
New sources of energy are at the core of the 21st century Energy Transition
process. hus, next section seeks to assess the potential and deiciencies of the main
new forms of energy, especially those considered renewable and/or clean sources.
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Wind Energy
Wind energy is achieved through the usage of wind to produce electricity
through aero-turbines. It is considered one of the cleanest forms of renewable energy
available, since it does not emit air pollution throughout the electricity generation
process. However, the construction of wind turbines requires extensive use of rare
minerals that generate serious environmental impacts in its processing (Kerr Oliveira
2012). Nevertheless, wind energy is a promising complementary option as source of
energy, since wind farms can be allocated both on land and at sea.
High costs for purchasing wind turbines is one of the biggest problems related
to wind energy, due to the need of rare earth materials7 for producing turbines,
as already pointed out. Although wind farms do not demand large areas for their
construction, the market for purchasing aero turbines is concentrated in very
few companies, which diicult the access to it around the world. After the global
economic crisis of 2008, demand from developed countries for wind turbines felt,
especially in Europe, thus diminishing its acquisition costs, which, in turn, allowed
for an extension of the acquisition of these technologies by countries of Southeast
Asia, Africa and Latin America (Global Wind Energy Council 2012). Even though
wind power cannot be used as the basis of the new energy mix, since even the
entire wind power capacity was installed it would not be suicient to meet world
consumption., it can fulill an important role as complement to other sources such
as hydropower.
Hydroelectricity
Hydroelectricity is produced by the kinetic energy of falling water in an area
of signiicant declivity. Such kinetic energy is converted into electricity by turbines
that intercept the water low. his energy form is considered clean since after
moving the turbines, the water returns to its normal cycle without contaminants
or residues derived from the energy producing process. In addition, the level of air
pollutants emission is almost negligible. It is noteworthy that the energy potential of
hydroelectric stations varies according to the size of the declivity, the magnitude and
the eiciency of hydro turbines
According to the World Energy Council (2014), only about a third of the
world’s hydroelectric potential has been used, corresponding to 17% of global
energy consumption. he overall potential for hydropower production is still small
forward to the expansion of world energy consumption; however there is still a
great potential to be explored. he chart below shows the hydroelectric capacity
installed by region. It can be noticed that East Asia and Europe, with over 20%
of installed capacity, are those whose hydroelectric potential is better exploited. In
7 A rare earth mineral is a mineral which contains one or more rare earth elements as major metal
constituents.
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this sense, Latin America and especially Africa, which had high economic growth
in recent years, have yet vast hydroelectric potential to be harnessed, what may be
fundamental for sustaining the growth in energy demand in these continents.
Image 2 - Hydropower Installed Capacity by Region.
Source: World Energy Council (2014).
Moreover, hydropower has advantages in regards to the possibility of its
storage, which may be accomplished through the construction of large artiicial
dams. his diferentiates it from other forms of energy production such as solar or
wind, whose production does not allow storage. Also in these terms, when compared
to other energy sources that also enable storage, such as biomass, hydroelectricity has
a relatively lower cost (Kerr Oliveira 2012; Sauer and Carvalho 2013). However,
the construction of artiicial lakes and dams has environmental and social costs,
especially due to the fact that the looding of large areas implies the displacement of
several species of animals and riparian populations, as well as the destruction of large
green areas. On the other hand, the hydrological changes caused by water storage
enables the construction of waterways, facilitating transport and logistics, which in
some regions may even facilitate regional integration (World Energy Council 2014).
Tidal Energy
he use of tidal energy to drive generators and produce electricity has great
potential of production in geographic terms. First, most of Earth’s surface is covered
by oceans and seas (about two thirds of it), and, second, because the majority of the
world population lives in coastal areas (World Energy Council 2014; Kerr Oliveira
2012). Energy can be obtained from the seas by harnessing tidal power, by the force
of the waves and by temperature variations given the depth of the seas and oceans.
Nevertheless, this form of energy is still incipient and undeveloped, which makes
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the inancial costs of implementing and maintaining such energy parks very high.
Analyzing the three previously mentioned ways of obtaining energy from the
sea, it can be seen that tides are a global resource that might be used through the
building of dams that harness the tidal low to release water through turbines, or
by the exploitation of ocean currents. However, both technologies are still nascent:
as the turbines should be installed at sea (under the sea, in large vertical towers, or
suspended in vessels), inancial costs are quite high. Nonetheless, energy from the
waves is a renewable form of energy, with many signiicant advantages over other
energy sources, such as the low environmental cost and the continuous low of
energy. Also, are the most widespread of use of maritime energy potential mode
(Emerging Energy Research 2010; Kerr Oliveira 2012; South West MEP 2012;
World Energy Council 2014).
Solar Energy
Solar energy is a renewable form of energy considered ecologically viable and
with high productive potential. he two main mechanisms of obtaining energy
through sunlight are photovoltaic collectors and thermal collectors. Photovoltaic
collectors convert solar radiation directly into electricity without the use of engines.
Nevertheless, they are not the most eicient way of harnessing solar energy. hermal
collectors, on the other hand, can be used for household heating, both in terms of
home and water.
he main diiculty for using solar energy is the intermittence of the source,
either daily or seasonal, which results in low eiciency in areas of high humidity or
where there are many rainy days during the year, as well as in areas of high latitudes,
where day length is shorter during a great part of the year (Kerr Oliveira 2012; World
Energy Council 2014). In addition, the inancial costs for the implementation and
maintenance of solar collectors are still quite high, which impedes its spread. With
the increased production of collectors, nonetheless, it might be possible that in the
coming decades the cost of production will fall signiicantly.
Geothermal Energy
he use of geothermal energy is the use of heat from inside the earth to
generate electricity. his source of energy is an alternative with great potential as
it leverages a virtually endless source of energy to heat water, using the pressure of
boiling water to move steam turbines, like a thermoelectric plant. Diferently from
thermal energy, it does not burn fuel, thus being considered a clean source of energy
(World Energy Council 2014; British Petroleum 2014).
Among the problems of such energy source is its dependency on very speciic
geographical regions to be advantageous. In this sense, it is needed a source close to
the surface, which means installing stations in regions with high volcanic or tectonic
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activity, that are geologically unstable. For this energy source being indeed feasible,
it would require the development of technologies that allow the capture of this heat
source from any point on Earth’s surface. Moreover, it would be necessary to develop
techniques for drilling in ultra-deep areas of the earth’s crust, which is currently
unviable (Kerr Oliveira 2012; British Petroleum 2014). It is estimated that currently
the geothermal potential could supply 8.3% of global electricity consumption
(World Energy Council 2014).
Biomass and Biofuels
Biomass refers to any organic matter, usually in solid form, which can be used
as fuel to produce electricity. In this sense, its origin may be from agriculture, lumber
mills or waste, municipal or industrial. he decomposition of this biomass produces
biogas, which is composed mostly of methane (Kerr Oliveira 2012; World Energy
Council 2014).
he energy resources of biomass can be classiied in several ways, however it should
be recognized that the lows of biomass energy are associated with biofuels which,
in turn, can be presented in three main groups, according to the origin of matter
composed. hus, there are biofuels from wood (dendrofuels), biofuels from nonforest plantation (agrofuels) and municipal waste (Nogueira and Lora 2003, 1).
Currently, biomass energy meets 10% of the world energy consumption
(Schill, 2013). Of these 10%, about two thirds are produced in developing countries,
which have sought to harness the potential of this energy source more intensively in
the last decade. Biomass stands out as a renewable energy because it reuses discarded
materials, including organic waste, which qualiies it as a source of environmentally
sustainable energy.
Liquid biofuels - ethanol, biodiesel and vegetable oils - stand out because they
are simple substitutes for hydrocarbon fuels, especially for transport and industry. In
2010, biofuels accounted about 3% of world consumption of fuels, with ethanol being
responsible for 73% of such consumption, while biodiesel accounted for 27% (Schill
2013; World Energy Council 2014). Both ethanol and biodiesel can be produced
from various plant species: cane sugar, corn, cassava, sunlower, etc. hey have a huge
potential for exploitation because all these diferent plants can be grown in diferent
seasons, which reduces the negative efects of seasonality. Moreover, in ecological terms,
biofuels are considered a renewable and environmentally sustainable source because
they are biodegradable and their emission of pollutants is lower than those emitted
by fossil fuels, besides the fact that planting areas also ofset greenhouse gas emissions.
hus, biofuels have been considered a relevant alternative. Nonetheless, competition
with the oil industry still hinders its rise (World Energy Council 2014).
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Nuclear Power
Nuclear power is based on the use of heat from exothermic nuclear reactions
to produce electricity. Given the diiculties to ensure the safety of nuclear power
plants, as well as the high inancial costs involved in the production of this form of
energy, nuclear power has never succeeded in establishing itself deinitively on the
basis of global energy. Although, this is a clean source of energy, and can contribute
to reducing greenhouse gas emissions. Also, the costs of energy production are stable
in the medium and long term, since it is possible to predict the energy production
of a nuclear reactor. Figure 3 shows the installed capacity of nuclear power from
uranium by region of the globe. Clearly, North America, Europe and East Asia are
the main producers of such kind of energy, since the costs of installing a nuclear
power plant are quite high (World Energy Council 2014).
Image 3 - Uranium Installed Capacity by Region.
Source: World Energy Council 2014.
he possibility of nuclear energy becoming an alternative in the Energy Transition
lies in the possible use of more conventional radioactive elements, other than uranium
and plutonium, or in changes in the production process of this energy. Uranium and
plutonium can be used for purposes other than the production of energy, i.e., for
war purposes. Moreover, uranium reserves are small compared with world demand,
and are concentrated in speciic regions such as Oceania, which accounts for about a
third of the world reserves (World Nuclear Association 2014). Another problem is the
residue derived from the uranium enrichment process since nuclear waste is highly
dangerous, either by security issues, or for environmental reasons.
In this sense, the use of metals such as thorium can prove to be a paradigm
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change in nuclear energy production. he use of thorium as nuclear fuel dates from
the mid-1950s and 1960s. horium is safer than uranium and plutonium, it is not
eicient for war purposes, it has abundant reserves and the reactor needed for its
use is smaller, which can reduce the cost of installing a nuclear power plant (Kleina
2011; Kerr Oliveira 2012). he nuclear waste originated from it would be inert
after a time, which reduces the environmental impact and the possibility of it being
used for military purposes. Although there are plants that have advanced in the
use of thorium, reactors are still incipient, pointing that this is not an immediate
alternative for possible energy shortages (Hamman 2013).
In terms of nuclear energy production process, the great revolution would be
the use of nuclear fusion as a mechanism for obtaining electricity. In theoretical terms,
the process of nuclear fusion can generate virtually endless amounts of energy without
producing air pollution or highly dangerous nuclear waste (Kerr Oliveira 2012).
his mechanism is based on the generation of energy by replicating what happens
inside the sun and in thermonuclear weapons, such as hydrogen bombs. Although
this technology has not been developed signiicantly, there are large investments for
research in the area (World Energy Council 2014; Kerr Oliveira 2012).
Hydrogen
he use of hydrogen as a fuel is one of the most promising alternatives in
terms of energy production for the future. However, its production, transport,
storage and conversion to a form of usable energy are still unresolved problems.
Hydrogen has the advantage of being much more lammable than fossil fuels and
do not producing toxic waste, since the fuel burns completely, generating only water
vapor as residual waste, i.e., thus being a clean source of energy. In potential terms,
it could be used in various stages of the production processes, replacing petroleum
eiciently, which lead several authors to believe in that hydrogen will be the central
element in the transition to the post-oil era (Geller 2002; Kerr Oliveira 2012; World
Energy Council 2014). he most serious problem for generating energy from
hydrogen comes from the fact that it is not found in pure state at nature. For the
production of the fuel it is necessary to use large amounts of energy, which makes its
use disadvantageous. his way, hydrogen cannot be considered an alternative in the
short and medium term, as production costs are still quite high.
Electromagnetic Energy and Virtually Endless Radiation
(light, microwaves, space radiation)
he use of electromagnetic energy and space radiation is directly linked to the
space domain, since outer space has virtually endless energy in the form of microwave
radiation. here is already certain capacity for the transformation of microwave radiation
into electricity, yet it is still not an economically feasible technology since it largely
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depends on the use of semiconductor materials of high costs (Kerr Oliveira 2012).
here are projects that seek to develop a solar energy collector to be installed
on the space, capable of emitting concentrated microwave to the ground (Lee 2013).
he project is still in its experimental stage and the irst prototype might be launched
in 2025, but questions as how to capture the microwaves are still unresolved. If
the project succeeds, it will reduce the energy costs of KW/h in about 15%
(Murphy, 2012). However, the use of this form of energy increases the disparity
between developed and developing countries, as it depends on the control of space
technologies that are too costly.
Expansion of Energy Eiciency
Increasing energy eiciency is one of the strategies to counter the challenges
derived from the Energy Transition. Energy eiciency relates to improvements in
certain sectors of the energy system (generation, distribution or consumption), or
gains in eiciency that involve substantial changes in the energy mix (the energy
sector, industry or the transportation sector).
Since it may expand the energy capacity of a country, increasing energy
eiciency is considered a “new energy feature”, since it helps to reduce dependence
on primary energy resources (World Energy Council 2013). According to Kerr
Oliveira (2012), investments in energy eiciency can be divided into two types.
he irst, in the whole economy of a country (relationship between GDP/energy
intensity), and the second is related to speciic technologies for increase eiciency
in generation, distribution or consumption of energy. he great advantage in the
expansion of energy eiciency is that there is no time limit for such measures to be
employed, and the cost can be diluted over time.
Unconventional Oil
Against the grain of renewable energies is the use of “new” forms of fossil
fuels8 as an alternative to the Energy Transition, especially non-conventional oil,
which corresponds to the ultra-heavy oil, oil sands and shale (Johnson, Crawford
and Bunge 2004; Kerr Oliveira 2012). he ultra-heavy oil is a form denser than
normal; the main global reserves are in the Americas, particularly South America.
Commercial exploitation of all these unconventional forms of oil has higher costs
than conventional oil and they do not constitute a sustainable alternative energy
to the environment, since they are even more polluting than conventional oil9
(Kerr Oliveira 2012; World Energy Council 2014). Moreover, it deeps energy
8 Besides the unconventional (ultra-heavy) oil shale and oil sands, these new forms include gasiication
or liquefaction of coal.
9 On the other hand, they resize the world energy panorama by introducing the possibility of oil not
being anymore a inite fossil resource.
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asymmetries that exist between countries, as the world’s reserves are concentrated in
a few countries more than conventional oil for example.
2.5 THE WORLD ENERGY COUNCIL AND THE ENERGY TRANSITION
he world is currently facing huge and unprecedented uncertainties in relation
to safeguarding a safe Energy Transition. States and leaders are faced with three
major challenges: 1) signiicantly increasing the supply of energy to all humankind;
2) replacing the current fossil fuel-based energy matrix array for a cleaner, more
abundant and less expensive one; and 3) accomplishing this endeavor without
the occurrence of major conlicts or wars between states vying for control of inite
energy resources.
Image 4 - hree key interconnected policy areas are
necessary to support the transition to sustainable energy
Source: World Energy Council 2013 (a)
From the study of the Trilemma Energy, World Energy Council (2013)
produced a report with scenarios for the situation of global energy in 2050 and
launched 10 key messages:
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1) Energy system complexity will increase by 2050.
2) Energy eiciency is crucial in dealing with demand outstripping supply.
3) he energy mix in 2050 will mainly be fossil based.
4) Regional priorities difer: there is no ‘one-size-its-all’ solutions to the energy
trilemma.
5) he global economy will be challenged to meet the 450 ppm target without
unacceptable carbon prices.
6) A low-carbon future is not only linked to renewable: carbon capture, utilization
and storage (CC (U) S) is important and consumer behavior needs changing.
7) (CC (U) S) technology, solar energy and energy storage are the key uncertainties
up to 2050.
8) Balancing the Energy Trilemma means making diicult choices.
9) Functioning energy markets require investments and regional integration to the
deliver beneits to all consumers.
10) Energy policy should ensure that energy and carbon markets deliver.
(WEC 2013(a))
herefore, the Ministers present at the meeting of the World Energy Council
will be faced with many questions on the subject of Energy Transition. At what level
of the energy transition process we ind ourselves at the moment? Until when the
current energy model will be viable in economic, environmental and social terms?
How to solve international security problems inherent in energy issues? What
measures must be adopted to overcome the socio-economic and environmental
predicaments? How to promote regional integration processes that optimize the
energy security of all? What forms of energy generation should guide the nascent
model? he answers to these questions are central to the direction that the Energy
Transition process will take as well as to its future impacts.
3 PREVIOUS INTERNATIONAL ACTIONS
In 2002, the United Nations created the World Summit on Sustainable
Development (WSSD). his summit discussed the relationship between poverty
reduction, energy access, energy security, energy transition and climate change.
UN-Energy was created by the UN two years after that: a mechanism on the
energy ield in which diferent UN agencies can relate to assure cohesion and
interconnection when it comes to energy matters. Besides that, it also serves as a
mean to support countries on their transitions to a sustainable scenario. UN-Energy
is organized around three major themes, each of them being coordinated by two
United Nations organizations. One of them is “energy access”, which is coordinated
by the United Nations Development Programme (UNDP) and the World Bank.
Another theme is “renewable energies”, coordinated by the Food and Agriculture
Organization of the United Nations (FAO) and the United Nations Environment
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Programme (UNEP). he last one is “energy eiciency”, which is led by the United
Nations Industrial Development Organization (UNIDO) and the International
Atomic Energy Agency (IAEA) (UN-Energy 2014).
During the petroleum crisis, from 1973 to 1974, the International Energy
Agency, IEA, was created, as a reaction from developed countries to the oil crisis
and the OPEC. Back then, it aimed to help countries coordinating their reactions
to great interruptions on oil supply. Nowadays, IEA’s main focus is directed to four
major areas: energy security, economic development, environmental awareness and
global engagement on energy issues (IEA 2014).
he World Energy Council (WEC), by its turn, is the most important network
of countries and enterprises that look for debates related to the energy system, its
sustainability and stability. he Council exists since 1923 and it is strongly supported
by the UN. In the beginning, the WEC essentially gathered specialists in order to deal
with multiple energy issues. However, with time, it evolved to a world forum seeking
for a future where sustainable energy is a possible picture. WEC’s intention is to work
over energy matters in a most expanded way, therefore being a most inclusive organism.
his means that all the stakeholders on every energy deployment can be part of the
discussions and the decision makings: NGOs, enterprises, universities, governments
and so on. here are around 3000 registered members, from over 90 countries. WEC’s
major event is the World Energy Congress, the most inluent energy summit of the
world. Twenty-two congresses have already taken place since 1924, the last one hosted
in 2013 by Daegu, South Korea. WEC outstands for its enormous amount of studies,
with publications of great technical and informational levels. he World Energy Issues
Monitor, from 2014, is one of the most recent of it, covering the current energy agenda
as well as its evolution over time. he World Energy Trilemma: time to get it real – the
agenda for change is another of WEC’s papers, which seeks to support policy makers
and the energy industry on facing the three main energy challenges: energy security,
energy equity and environmental sustainability. Finally, the World Energy Scenarios:
composing energy futures to 2050, is the result of another intensive research, and it shows
prognostics on energy consumption and all the diiculties that will be faced on the
next decades (WEC 2014).
4 BLOC POSITIONS
he United States of America is at the center of discussions about global
energy transition. Historically, it is among the major producers and consumers of
energy in the world, occupying the actual second position. Moreover, it was involved
in wars whose background was the competition for energy resources, as occurred in
Iraq in 1991 and 2003 and Libya in 2011. In recent years, the country has faced a
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debate on the future of its energy, which is based on the use of hydrocarbon resources,
especially oil and natural gas. Fossil fuels account for about 82% of total energy
consumption in the country. On the one hand, the US has deepened its dependence
on fossil resources, especially after the discovery of vast reserves of shale gas. On the
other, it has invested in the so-called “Green Revolution”, under which it seeks to
expand the use of energy derived from renewable or clean sources. his way, the US
has adopted a conservative position with respect to the energy transition model.
Major US initiatives to address the challenges of energy transition are related to the
pursuit in reducing its external vulnerability. In this sense, it has been seeking to
diversify oil suppliers, minimizing the importance of the Middle East in its imports
of this feature, use the shale gas - despite possible environmental implications - and
invest in highly expensive projects in inancial terms to try to get virtually ininite
energy especially by, for example, capture energy in outer space. I.e., the initiatives
have been aimed at resolving the dilemma internally (EIA 2014; DOE 2014).
Canada is one of the world’s ive largest energy producers and is an especially
signiicant producer of conventional and unconventional oil, natural gas, and
hydroelectricity. Its economy is relatively energy-intensive when compared to other
industrialized countries. Canada is the third largest producer of natural gas and
controls the third-largest amount of proven oil reserves in the world, after Saudi
Arabia and Venezuela (EIA 2014). It stands out as the largest foreign supplier of
energy to the United States. But Canada is profoundly dependent on the United
States, since virtually all of its crude oil exports are directed to US reineries.
However, economic and political considerations are leading Canada to consider
ways to diversify its trading partners, especially by expanding ties with emerging
markets in Asia. Canada’s unconventional oil sands are a signiicant contributor to
the recent and expected growth in the world’s liquid fuel supply. Also, the country
is the world’s third-largest producer of dry natural gas and the source of most US
natural gas imports. Moreover, Canada is a net exporter of electricity to the United
States, and most of its energy needs are met by hydroelectricity. Only China and
Brazil produce more hydroelectricity. Conventional thermal power plants satisfy
most of Canada’s electricity needs not met by hydroelectricity (EIA 2014; Canada
Energy 2014).
Mexico is a major non-OPEC oil producer and is among the largest sources of
US oil imports. Since Mexico’s total oil production had been declining substantially,
it had a direct impact on the country’s economic output and on the government’s
iscal health. Mexico’s total energy consumption in 2012 consisted mostly of oil
(53%), followed by natural gas (36%) (EIA 2014). Natural gas is increasingly
replacing oil as a feedstock in power generation; however, Mexico is a net importer
of natural gas. Mexico nationalized its oil sector in 1938, and PEMEX was created
as the sole oil operator in the country. PEMEX is the largest company in Mexico
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and one of the largest oil companies in the world. However, in December 2013, the
Mexican government enacted constitutional reforms ending PEMEX’s monopoly on
the oil and gas sector and opening it to greater foreign investment. he United States
received approximately 71% of Mexico’s oil exports and Mexico was the destination
for 44% of U.S. exports of motor gasoline (EIA 2014). his way, it is relevant to
note that Mexico is believed to possess considerable hydrocarbon resources in the
deepwater Gulf of Mexico that have not yet been developed. Despite Mexico has no
international oil pipeline connection, theft of oil from pipelines by organized crime
groups has become increasingly problematic. Most of Mexico’s electricity generation
comes from fossil-fueled power plants, while hydroelectricity supplied about 11% of
Mexico’s electricity generation in 2013 (EIA 2014; SENER 2014).
Brazil is the eighth largest consumer and tenth largest producer of primary
energy in the world (British Petroleum 2013). Total primary energy consumption
in Brazil has increased by more than one third in the past decade because of
sustained economic growth. Moreover, Brazil has made great strides in increasing
its total energy production, particularly oil and ethanol. he largest share of Brazil’s
total energy consumption comes from oil and other liquid fuels (47%), followed
by hydroelectricity (35%) and natural gas (8%), and hydropower accounted for
80% of the electricity generation (EIA 2014; MME 2014). More than 90% of
Brazil’s oil production is ofshore in very deep water and consists of mostly heavy
grades. In 2011, Brazil’s liquid fuels consumption surpassed its production (EIA
2014). Petrobras - the dominant participant in Brazil’s oil sector - plans to increase
its Brazilian reining capacity, since the country imports great part of its reined
oil. Brazil’s pre-salt announcements immediately transformed the nature and the
focus of the country’s oil sector, and the potential impact of the discoveries upon
world oil markets is vast. Besides, the pre-salt areas are estimated to contain sizable
natural gas reserves, which if proven could increase Brazil’s reserves by 50%. Unites
States, China and India are the major importers of Brazilian crude oil. However,
the country maintains strong energy links with the neighboring, such as Paraguay,
Argentina, Bolivia, Venezuela and Uruguay, especially in hydropower, oil and
natural gas. In this sense, Brazil is expected to deepen ties with the region, which if
integrated, could achieve the status of great energy superpower in the XXI century
(Kerr Oliveira 2012).
Bolivia is economically dependent on its energy production, especially natural
gas, which represents 50% of its exports (IMF 2012). he energy consumption is
also based on hydrocarbons, which represent 80% of the total, the remainder being
waste and biomass, hydroelectricity and other renewable features (EIA 2014). Bolivia
is an oil importing country, however, it is key to the supply of natural gas in South
America, mainly via pipelines into Brazil and Argentina. he state company YPFB
has sought new partnerships for investment in new areas for natural gas exploration in
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the country. Being a poor country, 2.2 million Bolivians do not have adequate access
to electricity (IEA 2012). In this sense, as well as Paraguay, the country depends
on foreign investment and especially the integration with neighboring countries in
order to diversify the economy, strengthen the development and reduce regional
disparities. Besides the economic similarity, like Bolivia, Paraguay has a central
geostrategic position in South America. he two countries have even clashed in the
Chaco War (1932-1935) to compete in a region that previously had been thought to
have oil. It was the geopolitical centrality that led Paraguay to negotiate with Brazil
for building the binational Itaipu Hydroelectric Power Plant, one of the world largest
and which accounts for about 75% of the energy consumed in Paraguay (Itaipu
Binacional 2012). he country has no energy reserves of hydrocarbons, however,
hydropower exports to Brazil guarantees signiicant contribution of resources, since
the country does not consume all it could claim in the division of Itaipu’s production.
Colombia has seen a great increase in oil, natural gas, and coal production
in recent years after the implementation of a series of regulatory reforms. he
government implemented a partial privatization of state oil company Ecopetrol
(Empresa Colombiana de Petróleos S.A.) in an attempt to revive its upstream oil
industry. However, after nearly a half-decade of relatively secure operations, attacks
on oil and natural gas pipelines have increased. Expanded oil production will
require discoveries of reserves and improvements to infrastructure safety. Colombia
is self-suicient in natural gas supply and recently began exporting to neighboring
Venezuela. In 2011, the country was the ifth-largest coal exporter in the world.
Besides, 60% of Colombia’s electricity generation is derived from hydropower (EIA
2014; Colombia Energía 2014).
Argentina is the largest producer of natural gas and the fourth largest oil
producer in South America (British Petroleum 2013). he domestic demand for
energy has grown rapidly in the country, however, the increase in oil and natural gas
production has not met this demand, which makes Argentina dependent on imports
of these resources, especially reined liquids. Together, natural gas and petroleum
match for about 86% of energy consumption. A smaller share of the country’s total
energy consumption can be attributed to nuclear, coal, and hydropower (EIA 2014).
In order to counter the energy bottleneck, the Argentine government began investing
in tarif incentives to companies that do partnership with the state owned ENARSA.
In May 2012, the Argentine government, claiming under investment in the country
hydrocarbon sector, passed legislation conirming the expropriation of the YPF, the
largest oil producer in the country (EIA 2014). Moreover, Argentina has sought to
strengthen the proposed energy integration in South America, as it is currently part
of a network of regional transmission of natural gas, which passes through Bolivia,
Brazil, Argentina, Chile and Uruguay. Also, Argentina maintains interconnections
in electricity with Brazil, Chile, Paraguay and Uruguay. In this sense, the focus on
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regional integration can guarantee the country a stronger position in the context of
global energy transition (Kerr Oliveira 2012).
In recent decades, China has experienced a great economic growth, which has
increased energy demands of the country, which went from an exporter of oil to one
of the largest importers in the world. In the last decade, China has become the world’s
largest consumer of energy, a situation which has brought many challenges for the
country. Especially because the energy mix of the country is mostly centered on fossil
energy resources, about 90%, mainly coal, that meets 69% of total consumption
(EIA 2014). his scenario brings challenges to energy security of the country, which
has sought to respond to this situation basically in two ways. On the one hand, the
country has been trying to expand investments in renewable energy sources such as
hydroelectricity, and, secondly, to increase the integration of infrastructure pipelines
with neighbors such as Kazakhstan and Russia. Both measures aim to minimize
its external vulnerability, which imports most of its oil from the Middle East, a
region of high political instability (Kerr Oliveira 2012). Moreover, the country has
also sought to invest in nuclear energy, following a trend that has prevailed in East
Asia, especially in Republic of Korea and Japan. hese two countries were using
nuclear energy as a major alternative to reduce dependence on imported resources
energy (the Republic of Korea imports about 85% and Japan about 86% of energy
consumed), especially oil, as it does not possess signiicant energy reserves. However,
after the nuclear accident in Fukushima in 2011, many of the projects to build new
plants were suspended or postponed, and has been gradually resumed (Brites 2014).
he two countries have also been investing in alternative sources like tidal, yet it still
does not represent a great energy source.
India is among the top energy consumers in the world; however, the country
still sufers from enormous diiculties to supply the growing demand. he basis
of the country’s energy mix is coal, which accounts for just over 40% of total
consumption (EIA 2014). Nonetheless, the very signiicant use of solid biomass
(about 23%), especially wood and trash, shows that the country still lacks a system
of modern energy generation, as well as ineicient use of wood waste and is highly
toxic and lethal, especially to be used in poorer areas in the home environment
(Kerr Oliveira 2012). India is also an importer of oil, and has sought to diversify its
partnerships, since actually it has more than 60% of its imports from the Middle
East. he great problem, however, is the lack of access to modern energy sources,
with 25% of the population having no access to energy. Similarly, Pakistan has
sufered energy shortages, which leaves about 30% of the population without
regular access to electricity. he country’s energy mix is based on natural gas (about
48%), however, the country lacks a solid network of gas pipeline infrastructure,
which has restricted the industrial capacity of the country (he Dioplomat 2013).
his way, the country has sought to ally themselves with neighbors in the quest for
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building projects of common pipeline. I.e., has focused on regional integration as an
alternative for energy deiciencies.
Over the past decade, Indonesia has increased by approximately 50% its energy
consumption. he country that historically has consolidated itself as an exporter of
energy resources, has been trying to reorient its production to the domestic market.
he country is a leading exporter of liqueied natural gas and coal. Coal have been
the energy source whose use has grown more in recent years, becoming the second
leading source only behind oil. he country still stands out for being at the heart of
disputes over control of routes, since its narrow territorial waters spend much of the
low of energy resources directed to Asia (Brites 2014). In relation to renewable and
clean sources, the country has a high rate of utilization of geothermal energy and has
been investing in biofuels (EIA 2014).
he Russian Federation is one of the biggest energy powers in the world. It
is the second largest natural gas producer and the third largest oil producer in the
world, a condition that makes it one of the leading exporters of world energy (EIA
2014). Its economic growth in recent years has led the expansion of energy exports,
accounting for about 70% of total exports of the country (EIA 2014). Besides the
energy derived from oil, Russia stands out from nuclear energy, ranking third in
the world in production of this form of energy. he abundance of energy resources
make the country not to invest substantially in new forms of energy, which makes
its energy mix concentrated around fossil fuels, especially natural gas. Another
consequence of this scenario is derived from disputes linked to the geopolitics of
pipelines, which creates enormous pressure on its borders, which often become
zones of disputes and actions of neighbors’ separatist groups (IEA 2014).
Kazakhstan, an oil producer since 1911, has the second largest oil reserves
as well as the second largest oil production among the former Soviet republics after
Russia. he key to its continued growth in liquids production from this level will be
the development of its giant Tengiz, Karachaganak, and Kashagan ields. Kazakhstan
is land-locked and lies a great distance from international oil markets. he lack of
access to a seaport makes the country dependent mainly on pipelines to transport its
hydrocarbons to world markets. It is also a transit country for pipeline exports from
Turkmenistan and Uzbekistan. Kazakhstan is a Caspian Sea littoral state. he legal
status of the Caspian area remains unresolved, mainly driven by a lack of agreement
on whether the Caspian is a sea or a lake. Until all states agree on a deinition,
legal status of the area will remain unresolved. he vast majority of Kazakhstan’s
electricity generation comes from coal-ired power plants, concentrated in the north
of the country near the coal producing regions (EIA, 2013).
Ukraine has a strategic position in close proximity with Russia, which explains
its importance for trade in natural gas and oil. here are two major pipeline systems
that transport natural gas from Russia to Western Europe through Ukraine: the
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Bratstvo (Brotherhood) and Soyuz (Union) pipelines. In the past, disputes between
Russia and Ukraine over natural gas supplies, prices, and debts have resulted in
interruptions to Russia’s natural gas exports through Ukraine, with the latest one
occurring in 2009 (EIA 2014). Most of Ukraine’s primary energy consumption is
fueled by natural gas (about 40%), coal (about 28%), and nuclear (about 18%) (EIA
2014). Only a relatively small portion of the country’s total energy consumption
is accounted for by petroleum and renewable energy sources. More than half of
the country’s electric supply comes from its uranium and coal resources. Fossil fuel
sources (46%) and hydropower (6%) generate the remaining of Ukraine’s electricity
(EIA 2014; IEA 2014).
he United Kingdom is the largest producer of oil and the second largest
producer of natural gas in the EU. he Kingdom established many targets
for renewable energies, but oil is still the most important source for its energy
consumption. he majority of the electricity produced in the UK is generated from
fossil fuels, essentially coal. Renewable energy, however, accounted in 2013 for more
than 15% of the total generation. Renewable energy use more than tripled from
2000 to 2012 (EIA 2014). he UK is also planning a decarbonization of its energy
system – the Low Carbon Transition Plan -, seeking for declining on over 80%
greenhouse gas emissions by 2050.
With its well-designed policies for renewable energy, energy eiciency and
climate change, Denmark is a strong voice internationally on these matters. Danish
policies are based on strong governmental institutions with very clear obligations
and responsibilities. he Danish Renewable Energy Action Plan expects almost
52% of total electricity consumption to be met by renewable energy sources by
2020 (EWEA 2011). Almost 60% of this will be wind, and biomass mainly will
make up for the rest. Its long-term goal is to become a sustainable low-carbon
society, completely independent of fossil fuels use by 2050. he energy solutions
leading to this goal include building green transport and promotion of smart grids.
Danish government is to implement a series of actions aiming not only to achieve
these goals but also to secure Denmark’s position as world leader in energy, climate
and environmental technology (IEA 2011).
Comparatively to other European countries, energy use in Turkey is low. In the
past years, the Turkish main focus has been on improving energy eiciency in order
to reduce pollution and assure energy supply security for its economy. he country
faces many energy policy challenges, since it needs reforms on the power and natural
gas sector, and also an urgent decrease on energy-related CO2 emissions – which
have been increasing since the 90’s. With growing economy and energy demand, the
government seeks for investments in natural gas and electricity infrastructure, and
mostly for a diversiication in its energy mix (EIA 2014, IEA 2009).
Oil represents about one-third of France’s primary energy consumption. he
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country has little domestic natural gas production, importing it from other European
countries, and the government has banned the use of hydraulic fracturing10. Nuclear
power is the main source of French electricity generation, and the country is the
second largest producer of biofuels in Europe, after Germany (EIA 2014). he French
have recently started to worry about energy transition and further discuss it in both
international and domestic forums, looking for partnerships in that matter with Italy
and Germany. he energy transition strategy is based on energy eiciency and sobriety
and on priority to renewable energies (Ministère de l’Écologie, du Développement
durable et de l’Énergie 2012). hey believe that any energy policy must balance between
security of supply, cost and sustainability, in order to reduce greenhouse gas emissions
by 75% until 2050(Le Roux 2012, Gautier 2014). French policies aims on securing
its huge nuclear power, reducing emissions within the transport and buildings sectors,
and on the growing regionalization of the energy sector in Europe – by expanding
infrastructure and interconnections with neighboring countries to stabilize electricity
and gas markets. France faces multiple challenges, since its energy development
strategy is very ambitious and expensive (IEA 2009). he country believes that the
energy future must, therefore, be thought on a common European space, in which
France has a key role to play (Le Roux 2012).
he Netherlands is the second-largest European producer and exporter of
natural gas, following Norway. In 2012, petroleum accounted for more than a half
of the country’s energy consumption, and natural gas for 36%. Most of its energy
is generated by fossil fuel-ired power plants, but more than 15% is generated from
renewable resources, mainly biomass, waste and wind (EIA 2014). Netherlands is
very important to the region due to its integrated supply chains11, but it is still one
of the economies most intensive on fossil-fuels and CO2 in Western Europe. he
Dutch government is prioritizing actions to support sustainable economic growth,
and the country can beneit a lot on this matter from expanding interconnections
with neighboring countries (IEA 2014).
Back in 2012, Germany was the largest energy consumer in Europe, and the
eighth in the world, what gave it huge inluence over the European energy sector. It
was also the ifth larger producer of nuclear energy, and petroleum still was its main
source of energy. However, the country is also a preeminent regional and world
leader when it comes to renewable energy use: it is the largest European producer
of non-hydro renewable electricity – being solar and wind the biggest sources (EIA
2014).Germany has been working on an energy transition strategy since the 1980’s,
in a program called Energiewende. he irst German publication on this matter
called on the total abandonment of nuclear and petroleum energy. Goals were
10 A drilling technique used to extract shale oil and gas resources (EIA 2014)
11 It pipeline system connects the country with the United Kingdom, Germany and Belgium (EIA 2014).
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elaborated on greenhouse gas reductions, energy eiciency and raise of renewable
energy use (he Economist 2012, Morris and Pehnt 2012). Yet, this German
energy transition is facing some critics, because it seems that the country cannot
accomplish to eliminate completely fossil-fuel and nuclear dependence on its own:
these ambitious objectives afect European neighbors, and therefore a strategy must
start to be thought on a regional level (Eddy 2014, he Economist 2012, EurActiv
2014). he German Energywiende has impacted especially Poland, efecting grid
stability and Polish electricity markets. hrough the last years, Poland’s main
priority has been energy security. Although it had some improvements on increasing
the country’s share of renewables, it is still far from being put irmly on a low-carbon
path. In 2011, coal accounted for 55% of Polish primary energy supply and 92%
of electricity generation12, which makes the country face a plenty of climate and
environmental challenges. he strength of the coal industry, the abundance of coal
in the region and its subsequent competitive relative price are major obstacles for
Poland to follow the environmental measures proposed by the EU (EIA 2013).
Poland has to improve its energy eiciency and its eforts on diversifying the
country’s energy mix in order to decarbonize it (IEA 2011).
he National Renewable Energy Action Plan of Italy has set the goal to
achieve a 23% share of renewable sources in gross inal consumption of energy by
2020. However, the country relies heavily on imports to meet its energy needs (EIA
2013) and still is strongly dependent on fossil fuels. hroughout this century, Italy’s
greenhouse gas emissions grew and the Italian government did not put major eforts
to develop energy infrastructure (IEA 2009). Also, the country’s rate of wind energy
installations has decreased 65% in 2013 (Purchas and Gimon 2014), proving that
Italy still has some great challenges to face towards a clean and renewable energy future.
Considering all of that, it can be perceived that energy policy decisions made
in one EU country may afect the other EU member states as well. he transition
might be successful only if it is embedded in a broader European framework.
Coordination and cooperation among European countries is therefore the solution
to avoid conlict (Hockenos 2014).
In Africa, progresses on sustainable energy models are much more discrete
than in the most developed countries of the world. South Africa is the African
country with the largest energy consumption, and it relies on its large coal deposits
to meet most of its energy needs, since it has limited reserves of oil and natural gas.
he country holds around 95% of Africa’s total coal reserves. he coal industry is,
however, responsible for serious air, land and water pollution. South African shale
gas resources are very notable, though this industry is still very small in the country.
In 2012, renewables were responsible for only 1% of primary energy consumption’s
12 Poland is the second largest coal producer in Europe, behind Germany (EIA 2013).
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Ministerial roundtable of the World energy CounCil
totality. his strong dependence on coal made South Africa the principal dioxide
emitter of the continent (EIA 2013).
he largest oil producer in Africa is Nigeria, and the country has also the
continent’s largest proven natural gas reserves. Nigerian electricity generation per
capita is one of the lowest of the world, and its energy sector faces severe problems
due to an aged infrastructure and low maintenance. Oil spills and natural gas laring
are responsible for generating brutal environmental problems, and pollution by
the oil companies are seriously damaging air, soil and water. Traditional biomass
and waste account for more than 80% of the country’s total energy consumption,
and transition for a clean and renewable energy system is still very far away from
Nigerian reality (EIA 2013).
Meanwhile, Algeria is the largest natural gas producer and the second largest
oil producer in Africa. Its economy is heavily reliant on the hydrocarbon sector,
which is responsible for almost all export earnings. Currently, almost a hundred
percent of the country’s electricity generation comes from fossil-fuel sources. he
country consumes a very insigniicant amount of hydropower, coal and traditional
biomass. However, unlike its neighboring countries, the Algerian government has
recently created a program which aims on reducing this fossil-fuel dependence and
producing around 40% of domestic consumed electricity from renewable energy
sources by 2030 (EIA 2013).
Middle Eastern countries also face some energy issues due to some political
instability and infrastructure hindrances. he situation of the energy sector in Syria,
for example, is quite alarming. It has been in constant turmoil since the beginning
of the hostilities between government and opposition forces within the Arab Spring
framework. Both oil and natural gas production have decreased drastically since
2011, not only because of the conlict but also because of the sanctions imposed
by the US and the EU. Energy infrastructure has been seriously damaged, and the
country is facing challenges on the supply of heat and fuel oil to its citizens. Talks
over a clean and renewable energy transition are very distant and unlikely to take
place in the Syrian government as long as the crisis continues, and it is improbable
that the energy sector might recover in the short-term analysis (EIA 2014).
Iran is the third largest natural gas producer in the world and it has the second
largest reserves in the world. When it comes to oil, it has the fourth largest proven
reserves. International sanctions have been compelling Iran to redeine its energy
system, and the lack of investment and technology is harmful for the sector. Natural
gas and petroleum represent together 98% of Iranian total energy consumption.
Energy wastage is one of the country’s most signiicant energy issues, since it recycles
much less energy than the average of most countries (EIA 2013).
Almost one-ifth of the world’s oil proven reserves is located in Saudi Arabia,
the largest producer and exporter of petroleum in the world. Although it has
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signiicant reserves of natural gas, its production remains extremely limited. he
electricity demand in the country has been growing in the past years, for what
the government plans to increase its generating capacity. he Kingdom of Saudi
Arabia is also the largest consumer of petroleum of the Middle East. In 2013,
large investments were made on renewable energy, in accord with the Saudi goal
of generating around a third of the Kingdom’s energy demands using renewables,
especially solar, nuclear, geothermal and wind power. Still, it remains questionable
whether a country so economically dependent on petroleum will be able to perform
such a transition (EIA 2013, Arab News 2013).
Israel is not one of the major producers of oil or natural gas, and it has always
been an importer of the latter, but this scenario may change in the next decade.
Over the past years, some signiicant natural gas resources were discovered in the
country. his fact may transform it from major importer to great exporter of this
resource, which will become the country’s primary energy resource. he growth of
the natural gas sector is even very likely to reduce Israeli’s consumption of coal,
which is mainly used to generate electricity (EIA 2014). Besides natural gas, the
energy regime that is emerging in Israel, alongside with the already on-going sociotechnical transition, includes also oil shale, biomass, nuclear, wind and solar energy
as alternatives to oil and coal (Teschner and Paavola 2013, Ministry of National
Infrastructures, Energy and Water Resources n.d.). Israelis believe that the energy
transition must be integrated with transitions in other sectors, such as technology
and industry (Teschner, McDonald, et al. 2012).
Qatar is the largest explorer of Liqueied Natural Gas (LNG) in the world.
Like its neighbors, this country also relies on the energy sector to sustain its
economy. he country does not pursue any coal or nuclear generating capacity, and
all of Qatar’s current generating capacity is natural gas-ired. Some discussions about
potential solar power projects took place recently, and intensive research is being
made in order to help Qatar and other Gulf countries to develop a low-carbon
energy transition (EIA 2014, Meltzer, Hultman and Langley 2014).
he energy sector is heavily based on oil in Iraq, which has the ifth largest
crude oil reserves in the world and it is the second larger producer of crude oil in
OPEC. However, even with these huge reserves, oil production has been below
the potential levels, due to infrastructure and political constraints. he country has
plans on tripling the generating capacity by the end of 2015. Around 90% of its
energy needs are met with petroleum, and the rest is supplied by natural gas and
hydropower. Iraq’s hydrocarbon resources have not been completely exploited yet,
and just a part of its ields is in development (EIA 2013). he government is looking
on developing solar and wind plants in the next years, and by 2016, it plans on
generating 400MW of its electricity from renewable sources - what represent about
2% of the total generating capacity. It may be a tiny step, but it shows a growing
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preoccupation on pursuing a cleaner energy mix (Iraq-Business News 2013).
5 QUESTIONS TO PONDER
1. What are the major challenges faced by emerging countries and how could
they meet their energy needs in a “Post-Oil” Era and how would they deal with
the economic and technological costs involved in such scenario?
2. How can countries prevent themselves from this transition’s impacts on
International Security?
3. To what extent can this Energy Transition efectively impact the current
processes of Regional Integration?
4. Is there any way for this changes to occur without leading to interstate
conlitcts and wars over control of energy resources?
5. Which energy model corresponds to your country’s objectives and goals?
What should be the nature of the expected change in the global energy mix?
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