POLITIC4168 Global Energy Politics : Flagship of International Energy

Shell Oil Company in the USA

Shell USA targets to increase domestic production of oil to attract more investors for the growth of the USA’s economy. Global energy outlook is of great importance within the Shell Company due to the following reasons.

• The USA’s energy production could increase from around 8.1 million barrels up to 11.1 million barrels per day by the year 2020 while the demand for oil in the USA could reduce to 15 million drums from 17 million drums by the year 2025 as estimated by the International Energy Agency.
• Shell could construct a gas-to-liquid facility along the Gulf Coast of the USA as well as advocating for the use of equitably low cost liquid natural gas to fuel trucks and trains.
• The company has led to massive growth of USA’s GDP due to emerging economies that are growing at a swift rate since people more than 2 billion are raised from low incomes.
• Shell Company has enhanced the rapid growth of renewable sources of energy which, as estimated will quadruple over the coming 20years due to the competitive nature of the market.
• It has also led to the development of the power sector as the world economy keeps electrifying with almost 2-thirds of energy globally pumped into the power sector.
• Low-cost oil producers are also able to increase their market share by taking advantage of their competitiveness since oil resources are abundant (Johansson, 2012).

Analyze the different energy policy frameworks in relation to the impact of the different elements of energy sources and sustainability

Three main policy scenarios are used to run the global energy outlook which includes New Policy Scenarios, Current Policy Scenarios, and the 450 Scenario. The three policies are taken with the assumptions on population and economic growth, along with energy and climate policies and deployment of technologies (Kuzemko, 2015). Essential developments in policy in 2013 have been given many considerations to varying depths in the scenarios as mentioned above as noted in WEO-2013.

The New Policy Scenario incorporates the measures and policies affecting the energy market which were enacted in mid-2013. It also gives consideration to other commitments which have already been announced even though the correct implementation measures have not been defined as of yet (International Energy Agency, 2014). Examples of these commitments include; programs to improve energy efficiency and support renewable energy, plans of promoting alternative fuels and policies that relate to the expansion of nuclear energy among others.

The Current Policy Scenario only considers policies and measures that affect energy markets which were enacted formally by mid-2013. This policy scenario provides a picture of the probable evolution of the global market as long as the established trends in demand for energy is not controlled.

The 450 Scenario, on the other hand, sets global energy sector on a course that is compatible with close to 50% possibility to limit the average increase in global temperature to 2°C in the long term. These scenarios have numerous building blocks that include;

Economic growth

Economies of developing countries have been growing at a faster rate as compared to established economies. Global energy consumption has been increasing at a slower pace as compared to the GDP growth due to structural changes in the economy, fuel switching and improvements in energy efficiency. Global energy intensity fell by 32% between 1971 and 2012. In all the scenarios it is estimated that the GDP will grow at a rate of 3.6% between 2011 and 2035.

Population and demographics

Energy demand depends on population growth. Increase in energy demand also depends on per-capita income, but this relationship though may be weaker in growing economies in case they jump to efficient use of energy. Population growth is faster in urban areas with an estimation of population growth from 52% to 62% as from 2011 to 2035 as rural population drops over the same period (Spataru, 2017). The changes in population growth will have effects on the type and amount of energy used. These changes can facilitate the improvement of energy efficiency through economies of scale.

Patterns of energy demand also influence some demographic changes, mostly the increasing number of older people and a reduction in household size. These demographic changes highlight the essence of having long-term strategies to see to it that cities and other metropolitan areas grow in a manner that is energy-efficient.

Energy prices

Demand and supply of energy are affected by the prices. Energy pricing has evolved and thus could be a significant determinant of the future trends. It determines the choice and amount of fuel a consumer decides to consume and the technology they settle upon to provide the energy service of choice. Each of the three scenarios has international fossil fuel prices that indicate the analysis of the costs required to enhance enough investments in supply to meet the demands that are projected (Craik, 2013). In all the three scenarios it is assumed that the rates of excise duties on fuels and value-added taxes do not change unless in situations where future tax changes have already been put in place.

Technology

World Energy Outlook shows that there is an ongoing need to improve energy efficiency, conservation and management of energy and adopting a portfolio of current and emerging technologies to curb the challenges brought by the world’s rise in fossil fuel use. The rate of improvement of new technologies will thus have a significant impact on future energy balances (Filho, 2013). A 2013 review by IEA found that the progress witnessed in the development and deployment of clean energy technologies and improvement of efficiency of energy has not been enough to attain the policy objectives that had been announced and thus being limited by failures in the market.

United States Renewable Energy and Climate Policies

Introduction:

Under Donald Trump, the US cabinet has started eliminating the policies on global warming as well as rules of emissions from power plants, methane leaks limits among other policies that President Obama had put into place. Overturning all President Obama’s policies will be a challenge though as this attempts will face battles within the corridors of justice and some federal Judges may even thwart such efforts by President Trump. If he succeeds though in killing Obama’s policies the USA will not be able to attain the Paris treaty that aims at reducing gas emissions from greenhouses 26% by 2025 below the level in 2005. Some of Trump’s policies include the following:

Reverse the ban that prohibited the leasing of coal on federal lands

Trump argues that the prohibition was killing employment opportunities. Lifting the ban will create more job opportunities, and it could also make sure that taxpayers enjoyed fairer revenue royalties. This is in contrast to Obama’s policy that banned this leasing in order to re-examine the health and environmental impacts of coal mining (Kraft, 2017). According to President Obama’s administration, the halting of leases was not going to affect jobs since the present federal contracts were capable of offering enough jobs and producing sufficient coal to be used by the country for up to 20years.

An end the to the clean power plan

President Obama was brought this energy policy with an aim to curb climate changes. The focus of this policy was to reduce emissions to the environment from coal-burning thus reducing risks of global warming (Bloomberg, 2017). The Donald Trump’s administration argued that the policy set the standard of emissions to a level that was not reasonable to be achieved by coal-burning industries and therefore he is hell-bent on signing a rule to render the policy useless.

Bring back to life Hydropower

Obama administration supervised the removal of dams that could generate hydropower even hydropower is an affordable source of energy free of any emissions. Trump though wants to reverse the energy policy that prevents the production of energy through hydropower (Trump, 2016). His aim is to in fact raise hydropower production by a staggering 50% with much-reduced effects on the environment (White House, 2017).

Ridding wind and solar powers of the disproportionate subsidies they enjoy

Wind and solar energies have enjoyed high subsidies than other sources in the past and thus making power expensive to consumers in the USA. Trump administration though is planning to lower the subsidies and bring back a level playing field for all the energy sources to compete favorably.

Reviving coal power

Obama administration restricted coal production due to the extreme levels of Carbon (IV) Oxide emitted to the environment. Coal miners even feel like the restrictions have reached excessive levels, but the same cannot be said of the environmentalists who support the limits. The Trump administration though is set to revive coal production and subject it to fewer regulations (Hughes, 2017). Environmentalists may argue that this is a fight against the environment and the climate.

Conclusion:

Donald Trump and his administration are focused on getting rid of Obama’s policies and lay a mark by setting up his Energy policies. However, overturning all that will pose a significant challenge since some of the attempts to reverse Obama’s policies on energy and climate could be challenged before federal judges. If Trump succeeds in eliminating Obama’s policies though then the USA will fail to attain her Paris treaty pledge that was supposed to see the greenhouse emissions drop 26% in 2025 below the level in 2005.

References:

Caroline Kuzemko, M. F. K. A. G., 2015. The Global Energy Challenge: Environment, Development, and Security. 1st ed. New Jersey: Palgrave Macmillan.

Energy Information Administration (U.S.), G. P. O., 2016. International Energy Outlook. Illustrated ed. New York: Government Printing Office.

International Energy Agency, W. B. G., 2014. Sustainable Energy for All 2013-2014. Minneapolis: World Bank Publications.

Kraft, M. E., 2017. Environmental Policy and Politics. 1 ed. Chicago: Taylor & Francis.

Michael Bloomberg, C. P., 2017. Climate of Hope. Ilustrated ed. New York: St. Martin's Press.

Neil Craik, I. S. D. V., 2013. Climate Change Policy in North America. Illustrated ed. Toronto: University of Toronto Press.

Sara Hughes, E. K. C. S. G. M., 2017. Climate Change in Cities. 1st ed. New York: Springer.

Spataru, C., 2017. Whole Energy System Dynamics. 1 ed. Ohio: Taylor & Francis.

Thomas B. Johansson, A. P. P. N. N. L. G.-E., 2012. Global Energy Assessment. Illustrated ed. Chicago: Cambridge University Press.

Trump, D., 2016. Great Again. Reprint ed. Washington DC: Simon and Schuster.

Walter Leal Filho, V. V., 2013. Global Energy Policy and Security. illustrated ed. New York: Springer Science & Business Media.

White House, U. D. o. I., 2017. U.S. Climate Policy. N/A ed. Washington DC: Madison & Adams Press.