Montreal, September 2010

The September 16th round-table at the 21st World Energy Congress, titled “Energy for a Sustainable Future: Think the Unthinkable”, brought together experts from various continents and industries, and helped quantify some important differences between industrialized countries and developing countries. It is Christoph Frei, Secretary General of the World Energy Council that moderated the discussion.

India illustrates the magnitude of these differences: P. Uma Shankar, Secretary, Ministry of Power with the Government of India, indicated that the Indian population, which represents 17% of the world population, consumes only 4% of the planet’s energy. In 2005, 20% of the population still had no access to electricity, and to improve the population’s living standards, the Indian government hopes to multiply energy consumption by six while reducing consumption growth of per capita by a factor of three by 2035. To achieve this, the country will draw on its immense hydroelectric potential, among other sources. But one constraint is unavoidable: “if energy is not affordable, it cannot be considered sustainable,” Mr. Shankar concluded.

Brazil, on the other hand, is seeking ways to use different technologies, including biofuels, which occupy an ever growing share in the country’s energy supply. “When Brazilians buy a car, they no longer look at just the brand, but also the kind of fuel it consumes,” said Jose A. Lima Neto, President of the Brazilian firm Petrobras Distribuidora. He indicated that his company’s three priorities were improving efficiency, developing biofuels and introducing technological advances and in this direction. He further noted that his company maintained relationships with researchers from hundreds universities. “It is important to secure the commitment of society as a whole in developing energy sources in order to create new jobs,” he remarked.

In a very different perspective, Frederick Werner, Executive Vice President for Business Lines with AECOM in the US, noted that the movement of rural populations toward urban centres is continuing on a large scale, and that energy usage increases with urban sprawl. “Governments must get involved in solving energy problems in large cities,” he remarked. “Steps must be taken to develop multilateral sharing between urban centres. The public sector must play a role in implementing solutions.”

Dirk Beeuwsaert, Executive Vice President in Charge of Energy, Europe and International, with GDF Suez of France, echoed the same observation, emphasizing the need to maximize efficiency. “In France, 60% of electricity production comes from natural gas sources,” he said. With this resource becoming more abundant, as new shale gas and methane gas hydrates reserves are discovered, it can be expected to remain available for at least 30-40 years. Policymakers must take this availability into account, which would result in natural gas playing a larger role.”

Approaching the topic from the standpoint that lack of access to energy results in perpetuation of poverty, André Caillé, former Chairman of the World Energy Council, spoke about the vicious circle that afflicts populations in developing countries: “lack of access to energy leads to poverty and poverty leads to lack of access to adequate health care,” he pointed out. “Not only must energy be more accessible, it must also be more affordable. If 30% of the world population is to achieve North American living standards, the energy supply must be tripled.” Mr. Caillé indicated that all available energy sources would be needed to change the future of populations, while it is imperative to consider unconventional sources like shale gas as a means to increase the supply: “Shale gas is abundant in many places around the globe, in Europe, China, and India, and only access to energy can break the vicious circle.”

Mr. Caillé went on to mention that energy reserves are still sizeable: 50 years for natural gas, 75 years for oil and more than 200 years for coal. “Then it will probably necessary to shift to nuclear, but in a fast changing energy world, we must first ensure that energy is affordable.”

Miguel Martinez, Chief Operating Officer with the Spanish firm Repsol-YPF, lamented that “energy problems are a global issue that is approached locally.” In his view, global cooperation and a multilateral approach are needed to achieve results. “Governments must get more involved in compensating the work of energy companies, which are constantly working against the clock time rather than creating sustainable solutions.”

The presentations ended with a talk by Phillip Ellis, Chairman, Global Energy, with the UK based Willis Group insurance company. Mr. Ellis reported on the increasing difficulties energy industry projects face, and indicated that for some time his sector has been doing risk recalibration. In his opinion, “innovation in a 300 year-old industry is not as easily as in other sectors.”

By way of conclusion, participants in the roundtable appeared to feel generally that the market cannot solve all problems by itself: government involvement will take on a greater importance than any future technological advances.

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