In the wake of an escalating global oil industry crisis, drastic global energy law reforms are more needed than ever in order to salvage a viable energy transition, argue Vicente López-Ibor Mayor and Raphael Heffron.
Dr. Vicente Lopez-Ibor Mayor is Spain’s former National Energy Commissioner. He is also the founder of Lightsource BP, the EU’s largest solar energy generator.
Raphael Heffron is a professor for Global Energy Law & Sustainability at the Centre for Energy, Petroleum and Mineral Law and Policy at the University of Dundee. He is a Jean Monnet Professor in the Just Transition to a Low-Carbon Economy awarded by the European Commission.
The COVID-19 crisis risks making a deeply negative impact on our society. We can anticipate aggressively negative economic consequences unless there is swift and decisive financial action to the contrary.
Make no mistake, the world economy is now at risk of entering freefall. But one of the most alarming accelerators is the crisis facing the global oil sector. That crisis also underscores how the decarbonisation we so sorely need due to climate change is also needed for economic stability.
Swift economic support programs will allow recovery in the shortest time possible. Despite the primacy of the moment, it is important that decarbonisation plans in the European Union be balanced with the need to create jobs.
Energy is a central sector of economic and social life. Its importance is highlighted in its capacity to support our essential service infrastructure at this critical time. It has ensured a minimum and necessary welfare for massively confined populations.
Homeworking has only been made possible through steady power supply provision and the transit and delivery of products to one’s doorstep. Yet, without the corresponding logistical chain: all telecommuting would end abruptly. The economy would be teetering on chaos.
In the aftermath of this crisis, world leaders must come together to build a more durable global energy system. A system that reflects the importance of the energy sector which includes one-third of global industrial and economic activity.
One of their priorities should be a reinforced formulation of global energy law and its new regulatory principles. Energy and Environmental ministries need to be writing their budgets and policies now.
Therefore, the first mission of Energy Law is to guarantee the safety of supply, especially in these moments of exceptional crisis. But with it, under no circumstance must we give up on preparing the regulatory frameworks to allow the near-future society to integrate, in a specific manner, the climate requirements in the application of energy legal policies.
More broadly we must ignore the regressive and nostalgic temptation of inefficient monopolistic positions – despite the fact that the rise of populist politics might seem to suggest this is inevitable. Too often a single energy company (oil, utility, or gas) is allowed to dominate a market.
Energy is vital a component in our modern lives. That is why a strong and robust new global approach to energy must be a priority. We need a regulatory framework for different energy resources, technologies and applications, as well as the telecommunications and information platforms focused on increasing not reducing our connectivity.
Changes must be made to guarantee the safety of supply, especially in these moments of exceptional crisis. The recent OPEC move to reduce oil production and bring stability to markets should be appreciated. But under no circumstance must we give up on our climate initiatives.
In the short-term, planning for new and sustainable technologies may impact job creation. But in the long-term, technological development will ensure new jobs are created, something our societies desperately need considering this crisis has the potential to impact more than over 30% of jobs on the planet.
Infrastructure projects are often drivers of employment. Building new green energy infrastructure projects can have multiple benefits including furthering economic growth, increasing energy access, replacing aged infrastructure, providing jobs and meeting national carbon dioxide reduction policies.
A new global energy agreement could also provide certainty to investors and encourage government support for such energy projects. And in addition, governments could eventually partner in some energy projects and thus ensure more redistribution from the energy sector.
The G20 will convene later this year either in Riyadh, Saudi Arabia or online. At this crucial meeting of world leaders, energy governance must be on the agenda. Good governance points towards new and robust energy laws and sustainable principles that can deliver new energy projects globally and reignite national economies after this pandemic.
The formula for employment is clear. It can rise from investment in new energy technology and low-carbon energy sources, making our economies more resilient.
Doing so now will align strongly with the strategy of the Green New Deal launched recently by EU President Von der Leyen – a nexus combining innovations in communications technology and renewable energy to pave the way for a new era of sustainable economic productivity.
We stand at the precipice of where decisive action can be taken globally and the introduction of global energy law could be transformative. Now, more than ever, we should recall Plato’s advice: “Accidents and calamities … are the universal legislators of the world”. This crisis presents a unique opportunity to develop a new global energy system based upon sustainable regulatory principles for all.