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Organizers of last month’s Offshore Northern Seas (ONS) conference and exhibition have been quick to publicize the shattering of their attendance record, with 91,682 people visiting this year, versus 60,000 in 2012. What the ONS folks haven’t publicized is that two interesting sub-plots developed during the conference. In one sub-plot, during the opening session, IEA Executive Director Maria van der Hoeven suggested that if development of some of Norway’s hydrocarbon resources might be too environmentally risky, or would contribute to climate change, then they should be left in the ground.
Norwegian officials responded a day later, insisting that they can develop all of their oil and gas resources in an environmentally responsible manner. Norwegian Minister of Petroleum and Energy Tord Lien said, “After 40 years, the NCS is still attractive. But producing EC oil, only, is not in keeping with good resources management. We should not have resources left in the ground.”
Later in that session, an obviously irritated Arne Sigve Nylund, Statoil’s executive V.P. for Development & Production, took a direct shot at van der Hoeven. “There is a myth emerging, that we must leave the world’s resources in the ground, as according to the IEA scenario,” said Nylund. “This is not correct. What often is forgotten is that by 2034, large amounts of the world’s oil and gas will be produced, and large amounts of new production will be needed, in a world needing more energy but lower emissions. The world climate change situation is not solved by less production on the NCS.”
The other sub-plot that emerged was growing unhappiness among some Europeans with regard to the European Union’s (EU’s) imposition of climate change-related energy initiatives and mandates, which Germany has implemented with slavish devotion. However, that headlong rush toward renewables in place of nuclear energy has backfired. Germany’s once-grand goal, of significantly reducing CO2 emissions, has been scuttled by energy companies switching to coal-fired electricity to replace nuclear power, because it’s cheaper.
Following Lien in the same ONS session, Philip Lambert, CEO of Lambert Energy Advisory Ltd., summed up the situation: “European policy is hostile to gas. Why? Because it’s not renewable. Yet, we dare not talk about the rush to coal in the high priest of environmentalism, Germany, which is breathtaking. So, I ask all of you in Norway, are you serious about converting coal to gas usage? If not, Europe may slip back into recession, due principally to its high cost of energy.”
Martin Bachmann, board member for E&P at Wintershall, chastised his own country, remarking that “people and industry will do what is best for them at the moment, losing sight of the long-term goal.” Bachmann said that the industrial electricity price in Germany has risen 60%, while it has fallen significantly in the U.S., where gas usage is on the rise. “The U.S. has managed in five years to achieve what Germany has now set out to achieve by 2050.”
Frank Sivertsen, CEO of E.ON E&P, remarked that “when looking at the period, 2010-2013, the energy production from renewables has grown 7% in Germany. This growth, however, is merely replacing the drop in consumption of nuclear power. During the same period, coal has grown 3% in Germany, replacing the 3% drop in natural gas consumption. These developments do not represent huge, if any, improvements from an environment or market perspective.” Sivertsen called on the EU to make major changes to its Emission Trading Scheme.
Climate change opposites. Just before we went to press, the United Nations issued yet another hand-wringing report, stating that global concentrations of CO2 , methane and nitrous oxide all set new records during 2013. The report said that CO2 concentrations soared to 396 parts per million, or 142% of pre-industrial levels (before the year 1750). “We know without any doubt that our climate is changing, and our weather is becoming more extreme, due to human activities, such as the burning of fossil fuels,” said Michel Jarraud, head of the World Meteorological Organization, which released the report.
Yet, just as the UN report was issued, British aristocrat, Lord Christopher Monckton, announced on his website, ClimateDepot.com, that recent research shows that there has been no global warming for 18 years. He said that his scientific satellite data show that temperatures have remained fairly stable between October 1996 and August 2014, despite a rise in GHGs. Monckton wrote, “It is becoming harder and harder to maintain that we face a ‘climate crisis’ caused by our past and present sins of emission.”
Another Keystone angle. In Nebraska, the state’s Supreme Court was set on Sept. 11 to hear arguments about whether the state legislature improperly passed a law, giving the governor authority to approve the Keystone XL pipeline project, rather than the state’s Public Service Commission. It likely will take the justices several months to reach a decision, and they will have to do it with a five-man “super-majority” of the seven-member panel. Depending on their decision, Keystone could either move closer to fruition or be set back even further.
California (day)Dreamin’. While most California residents were not paying attention, their mischievous legislature passed a carbon cap-and-trade bill during 2006 that allows the state’s Air Resources Board (CARB) to add transportation fuels to existing cap-and-trade auctions. Like any good bureaucrats, the CARB staff announced that it will do just that, effective Jan. 1, 2015. The cost of compliance by energy companies equates to an additional gasoline tax that could amount to between 13 and 20 cents/gal. California already has the second-highest state gasoline tax (68.1 cents/gal) behind New York (68.9 cents), and may drive out the remaining productive people that haven’t already jumped ship for more business-friendly states. 
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