Developing Countries Could Use Support In Energy Transition, Luncheon Hears

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OECD (Organization for Co-operation and Development) countries should be doing more to help countries across the developing world in the energy transition, improving the lives of their citizens, a global policy expert said Wednesday.

“We would be fooling ourselves if we think that people in the developing world will opt for a different pathway other than developing their energy economy for the benefit of their own people,” said Jon Elkind, a senior research fellow at the Center On Global Energy Policy at Columbia University in New York City. “But we can, and we should, from OECD countries be delivering the capabilities [to decarbonize] because they have an active choice about their energy futures.”

However, if countries such as the U.S. and Canada wish to see those countries committing resources for lower carbon energy sources, additional needs in terms of capital and technical capability will be required, he told a World Petroleum Congress luncheon.

Fellow panelist Deborah Yedlin, CEO of the Calgary Chamber of Commerce, echoed his comments.

Economic growth is key to environmental sustainability and if you’re living in … poverty in the Global South, you’re less likely to support any sort of climate action,” she said. “So what we really have to do is think about that global positioning to make sure that the South is afforded the same abilities and future that we enjoy.”

“It's something that we need to recognize is important, because if we don't, we're going to be dealing with the effect of a climate change political climate.”

Recent COP (Conference of the Parties) United Nations climate change meetings have raised the need to involve countries newer to development in the energy transition, said RJ Johnston, the centre’s executive director, in a panel on “How our geopolitical reality is shaping the energy transition.”

Elkind, though, had some words of caution about the transition. “People have a tendency to talk about the transition almost with religious fervor that we need speed and we need scale,” he said.

However, durability — the ability of society to sustain its focus on decarbonization progressively over time, through economic cycles, wars and pandemics — also is needed, he said. “We cannot engage in the kind of self deception that says we have the luxury of attending to the decarbonization agenda without realizing that we have got to do that through thick and thin and that’s where the energy security comes up.”

Johnston, the former CEO of the Eurasia Group, said energy security today includes a new focus on supply chains and a lot more focus on stranded assets. “Another new thing is that we didn't always bring trade policy into discussions on security but that's being discussed from a geopolitical perspective.”

Energy security can still be managed through diversification, led by fuel, technology and geography, he said. Access and affordability also continue to be factors in energy security, he said.

In the United States, the Inflation Reduction Act (IRA) boosts clean energy investments and encourages procurement of critical mineral supplies domestically or from free-trade partners.

Yedlin said Canada should look at the legislation as what it needs to do — introduce an industrial policy to increase the country’s economic health and increase productivity.

The IRA “is a very big piece to match,” she acknowledged. “But we can make a difference, on the R&D side or on the operational side or we can work on permitting to make sure that we remove those barriers so that people can look to Canada as a place to invest.”

Canada has an incredibly rich mineral resource but when it takes 15 years to put a mine on production, “that’s a problem because that means that we’re not going to be able to supply the world demand,” she said. “Daniel Yergin, the founder of IHS, has said the dreams of the energy transition will crash on the rocks of inadequate supply chains and I think that’s what we're talking about right here.”

Federal legislation such as Bill C-69, the Impact Assessment Act, will be coming into play when industry is looking at developing mines for the production of these critical minerals, said Yedlin. “We don't know that timing process, we don’t know how long it’s going to take for certain types of development,” she said. “So that's an issue that we’ve had to address in Canada across both oil and natural gas and now minerals.”

Canadian natural gas also will continue to play a role in the energy transition, the luncheon heard. “It's not a sunset commodity by any stretch,” said Yedlin.

Countries such as South Korea and Japan like Canadian LNG because it has lower levels of methane than from other jurisdictions, she said. Natural gas also can play a role in the hydrogen economy and provides a reliable baseload of backup electricity for the renewables on the power grid.

 Elkind said that persons from a variety of different developing countries around the globe don’t want to see gas excluded from the energy mix. “They need natural gas as something that delivers improved air quality and reduced emissions ... it’s the air quality issue that really bites and that's hugely important,” he said.

“Canada should play to its advantage and get its resource on the market and help address those requirements.”  

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