Shale gas strategy ‘not the optimum path’: Fatih Birol


An energy strategy without fossil fuels would be preferable to the regulated gas pathway outlined in the International Energy Agency (IEA)’s new report, the paper’s own author told EURACTIV in an exclusive interview yesterday (30 May).

An increase in unconventional gas production would be “a good move if it replaces coal,” Fatih Birol, the IEA’s chief economist said at the launch of ‘Golden rules for the Golden Age of Gas’ in Brussels, “but it is definitely not the optimum path.”

“The optimum path would be to see more renewables, more efficiency and more low carbon technologies,” he added.

Shale gas has the potential to bridge the transition to a decarbonised economy, if a series of social, regulatory and environmental rules are followed, the IEA’s report says.

But environmental groups have complained that by the agency’s own estimates, this would put the world on a trajectory to 3.5 degrees Celsius of global warming, which would in turn produce “a different planet” according to Dr James Hansen of NASA’s Goddard Institute for Space Studies.

“Industry-biased thinking will lock Europe into fossil fuel dependency, undermining renewable energy developments and Europe’s ability to reduce emissions,” Antoine Simon, an extractive industries campaigner for Friends of the Earth told EURACTIV.

Stephan Singer, the director for Global Energy with the Worldwide Fund for Nature (WWF) went further, arguing that the IEA’s dual roles as an analytical energy watchdog for OECD countries and an ally in the fight against climate change were creating dissonance.

'Communications disaster'

“The word ‘golden’ has connotations of something positive, outstanding – like a gold standard or a champion,” Singer told EURACTIV. “So to call this a ‘golden age’ for gas is a communications disaster because business-as-usual damage limitation will really create a dark age for the climate.”

But the IEA, whose mission statement spans energy security and economic development, as well as environmental awareness, may not walk as fine a line between industrial analysis and environmental advocacy as its ‘golden’ language suggests.

“A 3.5 degrees Celsius temperature increase trajectory is unacceptable in terms of its implications for human beings, climate, species, and the fragile equilibrium of our planet,” Birol told EURACTIV.

The world was “very close to saying goodbye to a two degrees trajectory” Birol continued, with CO2 emissions having jumped to their highest-ever level in 2011, and  realism thus had to be tempered with environmental urgency.

“If countries only rely on gas replacing coal for their environmental policies they would make a mistake,” Birol said.

Fears remain, however, that this is the drift of policy within Europe, especially after revelations by The Guardian newspaper that gas projects have been made eligible for billions of Euros of funding as a low carbon energy source under the EU’s 'Horizon 2020' research programme, which starts in 2014.

This could put gas on a legislative plane with renewable energy and nuclear power – itself a controversial ‘clean energy’ pick – even though it is a fossil fuel emitting significant levels of carbon dioxide.

Countries such as the UK are reportedly pushing for a low carbon rather than renewables-based strategy, with conditional support from the IEA, which yesterday (30 May) said that it “encourages the UK to maximise its remaining potential for oil and natural gas production as the low-carbon transition continues.”

Tone change

Birol accepted that there had been a tone change in the IEA’s language, reflecting current political realities, but also expressed concern that renewable subsidies could be eliminated due to cheap gas prices.

“This would be very unwise and very myopic,” he said. “It would definitely have long-lasting implications for the energy sector, and for climate change.”

And in a hat tip to environmentalists, he declined to extend the IEA’s ‘golden age’ tag to other unconventional fuels such as tar sands – also known as oil sands.  

The EU is currently embroiled in a dispute with Canada over a bid to label the fuel as highly polluting within its Fuel Quality Directive that has led to legislative gridlock.

“I think that the EU has every right to show its sensitivities,” Birol said. “However I believe that that oil – given the prices and the demand and supply situation of the world – will meet its client, if not in Europe or the US, then somewhere else.”

“But it is up to the countries and the governments to make their own regulations and specifications,” he added tactfully.

Shale gas is an 'unconventional' fossil fuel that is found within natural fissures and fractures underground. Until recently, no method of safely transporting it to the surface existed.

However, by pumping water, sand and chemicals into rock formations under high pressure via a technique known as hydraulic fracturing or 'fracking', energy companies believe they have found a part of the answer to Europe's energy security problems.

The method remains intensely controversial because of its possible environmental risks, including poisoning groundwater and higher greenhouse gas emissions than traditional gas.

To proponents, shale gas represents a hitherto untapped and welcome alternative energy source to traditional fossil fuels. At the moment the continent depends on gas imported from Russia, and disputes between that country and Ukraine have disrupted winter supplies in recent years.

In the US, shale gas already accounts for 16% of the world's largest economy natural gas production and some analysts predict that could rise to 50% within 20 years.

  • 12 Nov. 2012: IEA due to release report on energy efficiency
  • 2013: EU due to take decision on classifying fuel from tar sands within the Fuel Quality Directive

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