China: Gas Deal Could Complicate Sanctions Threat Against Russia (Foreign Policy)

Gas Deal Could Complicate Sanctions Threat Against RussiaForeign Policy

• BY JAMILA TRINDLE
• MAY 21, 2014 - 06:00 PM
•    

China just signed a 30-year, $400 billion natural gas deal with Russia, handing a big win to Russian energy companies desperate to find new export markets. But the pact may have delivered Russian President Vladimir Putin an equally important win in his ongoing standoff with the Obama administration and its European allies over the ongoing crisis in Ukraine. Put simply, the deal may deal a death blow to the foundering Western efforts to punish Putin for his meddling in Ukraine and annexation of the country's Crimean peninsula.

The new pact strengthens an emerging Moscow-Beijing economic alliance that's out of the reach of Western influence -- and financial pressure. The deal, which capped years of tense negotiations, was inked in Shanghai on the sidelines of an Asian economic and security conference that included 40 countries, including Iran and Kazakhstan. Though it will be years before the gas starts flowing to China, the deal raises doubts about how effectively Western countries will be able to use sanctions as a weapon against Putin's Russia.

Former Treasury Department sanctions official Elizabeth Rosenberg, who is now a senior fellow at the Center for a New American Security, said the deal was Russia's "attempt to build up commercial opportunities outside of Europe where it's vulnerable and losing friends."

Sanctions -- Western leaders' weapon of choice in the battle over Ukraine - may have less bite now that Russia has proved it can find other foreign customers for its main export, natural gas. U.S. and European leaders have threatened broad sanctions against whole swaths of the Russian economy, including its finance or energy sectors, if Moscow meddles in Ukraine's presidential election this weekend. But the China deal gives those threats less teeth in the years to come because Russia would have Beijing's gas contract to fall back on, if the West decided to go after the country's crucial energy sector.

"I don't think this inhibits the ability of the U.S. and its partners to impose sanctions in the short term, but I do think it could affect the ultimate price those sanctions would exact in the medium term," said Zachary Goldman, a former Treasury Department sanctions official who now heads the Center on Law and Security at the New York University.

Though Europe still accounts for roughly 75 percent of Russia's gas export market, developing countries could make up a larger proportion over time. The gas going to China wouldn't take away from Europe's portion immediately because the gas is being extracted from different fields, but by increasing the number of buyers, Russia would be less dependent on the European market.

China is also an ideal economic ally for Putin because Beijing -- unlike Europe -- is unlikely to ever agree to sanctioning Moscow over the Ukraine crisis or to try to intentionally reduce its oil imports from Russia because of the unrest there. Chinese leaders have historically been averse to getting involved in other countries' political squabbles.

"The government in Beijing isn't interested in coming out and supporting this volatile political issue in terms of the Russia-Ukraine situation," said Nicholas Consonery, an Asia analyst with political risk consultancy Eurasia Group.

So far, Washington has frozen the assets of 45 people, including some of the Russian president's closest allies, and 19 banks and companies in an attempt to pressure Putin to reverse his annexation of Crimea and abandon his threats of invading eastern Ukraine. Tuesday, the Treasury Department added 12 more names to list in connection with unrelated alleged human rights abuses.

Some of the moves have been literally laughed off by Putin, who has given no indication whatsoever that they are making him even think of reversing his annexation of Crimea. Still, they go further than what Europe has been willing to do, highlighting the lack of unity over whether to sanction Russia and, if so, how harshly. Outside of the West, few countries have express support for the use of financial tools that could affect the global economy. The big emerging market nations -- Brazil, Russia, India, and China, collectively nicknamed the BRIC countries -- have already registered their clear dissatisfaction with the idea. Foreign ministers for Brazil, India and China joined Russia in criticizing sanctions in March after the initial rounds of tit-for-tat visa bans and asset freezes between the U.S. and Russia.

"The escalation of hostile language, sanctions and counter-sanctions, and force does not contribute to a sustainable and peaceful solution," the four foreign ministers said in a statement after a meeting at The Hague on March 24.

Some developing countries are likely to seek natural gas deals with Russia in the years ahead, and their unwillingness to go along with even modest sanctions today suggest they'd be even less likely to do so while they're in an active energy and economic partnership with Moscow. Energy experts who've followed years of fits and starts over the new natural gas deal also caution that the long-term implications of the contract will only be clear when more details are revealed  -- as long as it doesn't fall through.

"Anyone who's been watching this for the last decade is ready to take this news with a heavy dose of salt," said Rosenberg.

MARK RALSTON/ AFP/ GETTY IMAGES

Energia: as politicas equivocadas do governo - Editorial Valor Econômico

Energia: um novo esqueleto para o Tesouro?

Editorial Valor Econômico, 17/02/2014

Deu-se um importante passo na semana passada na discussão sobre as dificuldades que enfrenta o setor elétrico. Depois de insistir em negar o óbvio, o governo mudou o discurso e admite também o óbvio: se não chover, há risco de faltar energia no país. "Baixíssimo", segundo avaliam as autoridades federais, mas ainda assim, presente.

Não se deve desprezar o sinal vindo do governo. Qualquer sistema baseado em hidrelétricas, como é o caso do Brasil onde 75% da energia depende da água, terá risco aumentado com a falta de chuvas. Como bem disse o ministro de Minas e Energia, Edison Lobão, "um avião não é feito para cair, mas ele sazonalmente cai. O que não se pode dizer é que ele todo ano tem que cair. Assim é o sistema elétrico brasileiro". É, sem dúvida, um avanço no debate.

Falta ao governo, no entanto, reconhecer os outros riscos que o modelo atual de gerenciamento do sistema elétrico pode trazer para a economia brasileira, especialmente para a contas fiscais.

A exemplo do que fez com a Petrobras e o preço dos combustíveis, as decisões recentes do governo têm jogado para um futuro incerto a definição de como será paga a conta de evitar um apagão às custas da geração de energia térmica. No ano passado, o Tesouro Nacional gastou R$ 9,8 bilhões. Esse ano, o setor privado estima o gasto em R$ 18 bilhões. Isso sem falar nas indenizações e subsídios que o governo se comprometeu a pagar a partir do fim de 2012, quando renovou antecipadamente as concessões das geradoras de energia para reduzir a tarifa em 20% aos consumidores.

As usinas termelétricas têm um custo de operação muito mais elevado que as hidrelétricas. O desenho do sistema elétrico brasileiro, feito a partir do racionamento de 2001, se baseia na ideia de que as térmicas serão uma espécie de backup, para enfrentar situações conjunturais no mercado de energia. O que se tem visto, no entanto, é a exceção virar regra e o que era conjuntural se transformar em uma saída estrutural. As térmicas, que são usinas caras e poluentes, foram ligadas no fim de 2012, funcionaram a pleno vapor em 2013 e prosseguem ligadas em 2014.

De acordo com o último relatório do Operador Nacional do Sistema Elétrico (ONS) as térmicas geraram 13,166 MW, o equivalente a 17,92% de toda a energia do sistema.

Essa realidade se transforma em custo mais elevado da energia no mercado de curto prazo e desequilibra as contas das distribuidoras. A regra em vigor estabelece que esse aumento seja repassado às tarifas cobradas dos consumidores. É assim que o modelo, desenhado pela então ministra de Minas e Energia, Dilma Rousseff e aprovado pelo governo Lula, prevê lidar com o problema. Foi assim que funcionou até o ano passado.

Em 2013, o governo decidiu mudar a regra. O reajuste nas tarifas seria de tal magnitude que, somado à inflação já elevada, fez o governo assumir a despesa. Mas o Tesouro Nacional avisou que começaria a repassar o gasto adicional aos consumidores nas contas de 2014. Na semana passada a Agência Nacional de Energia Elétrica (Aneel) oficializou o adiamento da cobrança e disse, inclusive, que o governo estuda "isentar" os consumidores desse pagamento. Não se sabe como a conta de R$ 9,8 bilhões será paga.

Esse ano entrariam em vigor as "bandeiras tarifárias" para que os aumentos no custo de energia fossem repassados aos consumidores no mês seguinte ao ocorrido. A inflação ainda elevada de 2014, jogou a medida para o frente. A Aneel fala em 2015 e o governo voltou a falar em usar recursos do Tesouro Nacional para cobrir a conta das térmicas esse ano.

Além da operação corrente do sistema, há custos sobre os quais não se tem ainda clareza do valor. Um deles é a renovação das concessões das transmissoras de energia elétrica. A Aneel definiu a metodologia no início do ano e as empresas ainda preparam os cálculos. A estimativa feita pelo próprio governo é de R$ 10 bilhões. As geradoras ainda têm a receber recursos não calculados relativos às indenizações por investimentos feitos antes de 2000. Até o fim do ano, o governo terá quitado R$ 16,3 bilhões dos ressarcimentos devido pela renovação antecipada dessas concessões. Faltam ainda R$ 3,7 bilhões.

Num cálculo rápido, são R$ 41,5 bilhões em despesas já contratadas, suficiente para produzir um apagão fiscal.

Melhor seria seguir as regras já estabelecidas nos prazos combinados do que gerar um novo esqueleto fiscal

A incompetencia energetica e administrativa do PT - Suely Caldas

Primeiro o guia genial dos povos usou essas companhias estaduais de distribuicao de eletricidade como moeda de troca nas sua barganhas sujas com as oligarquias locais, usando recursos públicos para fins partidários. Depois, a gerentona do setor (vocês sabem quem foi e quem é) se opos, por razões inteiramente ideológicas à sua privatização. Agora, aí estão elas a torrar dinheiro do contribuinte com falcatruas generalizadas. Esse é o governo que infelizmente temos.

Paulo Roberto de Almeida 

Privatização

Suely Caldas

O Estado de S.Paulo, 1/12/2013

Agora que as licitações de aeroportos e de rodovias engrenaram com leilões bem-sucedidos, o governo federal deveria aproveitar o embalo, engatar a marcha e dar a partida para a mais urgente e mais difícil das privatizações de ativos enfileirados na nova prateleira de Dilma Rousseff: as seis distribuidoras de energia estaduais empurradas para a Eletrobrás, que não as quer nem dá a isso uma solução definitiva.

Há vários anos elas sangram o balanço financeiro da Eletrobrás, são campeãs em serviços de péssima qualidade, acumulam gigantescos prejuízos e dívidas, que crescem ano a ano, e agora viraram empecilho para o governo definir as condições para renovar as concessões de 44 contratos de distribuidoras que vencem entre 2014 e 2017.

Os números financeiros dessas distribuidoras (dos Estados do Amazonas, Acre, Alagoas, Piauí, Roraima e Rondônia) são de espantar e expulsar quem nelas poderia pensar em investir. Só com a taxa denominada Reserva Global de Reversão (RGR) elas têm uma dívida global de R$ 2 bilhões, e ainda há outras, entre elas com as geradoras Eletronorte e Chesf, de quem elas compram energia. Os prejuízos são também gigantes e se avolumam há décadas: o de 2012 foi de R$ 1,33 bilhão, 33% maior do que o de 2011, que foi maior do que o de 2010. A situação delas, enfim, é caótica e não há como vendê-las sem ajeitar suas dívidas e sua gestão.

Incapaz de engendrar uma solução, a Eletrobrás contratou o Banco Santander e o escritório Machado, Meyer, Sendacz e Opice Advogados para modelarem um plano de reestruturação das seis distribuidoras, que há muito está para sair e não sai.

Algumas alternativas são cogitadas, mas a que o governo quer é atrair investidores privados para entrarem com dinheiro e capitalizarem as seis. Qual louco colocaria dinheiro em empresas que já estariam falidas não fosse o guarda-chuva da Eletrobrás? Também nos aeroportos o governo queria atrair operadoras estrangeiras e manter o poder de mando com a Infraero. Não houve interesse dos investidores e o governo foi obrigado a recuar. Quer repetir o erro com as distribuidoras de energia?

Este é mais um descalabro de gestão pública irresponsável. Essas empresas passaram mais de 20, 30 anos sendo usadas (ou, melhor, depredadas) por lideranças políticas locais, no governo Lula foram transferidas para a Eletrobrás, mas o uso político continuou. A única forma de acabar com a gestão política é vendê-las para empresas privadas. Só que não há quem compre ativos falidos. A melhor opção é estancar a sangria com urgência, afastando os obstáculos à venda para o capital privado. Essa seria a maior prova de fogo da nova fase de Dilma Rousseffpró-privatização - não fossem as eleições de 2014.

* JORNALISTA, É PROFESSORA DE COMUNICAÇÃO DA PUC-RIO E-MAIL:SUCALDAS@TERRA.COM.BR

Energia erratica: o desgoverno dos puxadinhos energeticos - Adriano Pires

Apenas a conclusão:

" As consequências do modelo de “puxadinhos” serão o desabastecimento, o aumento da dependência externa e a criação de grandes “esqueletos” para os futuros governos.."
Paulo Roberto de Almeida

“Puxadinhos” na política energética

O Estado de S.Paulo, 16/08/2013

Adriano Pires

Por Adriano Pires e Abel Holtz

A busca míope pela modicidade tarifária e pelo controle da inflação tem levado o governo a tomar medidas, no setor energético, sem coerência e sem avaliação plena das suas consequências, tornando necessária a realização de remendos que desconfiguram o marco regulatório, sacrificam as empresas, criam instabilidade e dificultam o planejamento e o investimento. O marco regulatório resultante de todos esses “puxadinhos” não atribui a lógica necessária ao bom funcionamento do setor, enfraquecendo as empresas, criando conflito entre as partes e aumentando a perspectiva de judicialização das decisões.

Um exemplo é a judicialização da questão do rateio do custo das térmicas. Antes, as despesas criadas pela ligação das térmicas eram rateadas entre os consumidores de energia, tanto no mercado livre (indústrias e comércio de grande porte) quanto no mercado cativo (clientes das distribuidoras). Agora, a divisão da conta passou a contar com a participação das comercializadoras e das próprias geradoras de energia elétrica, para que com isso o governo possa cumprir a promessa de reduzir as tarifas do consumidor final. As geradoras foram à justiça e conseguiram uma liminar para serem excluídas do rateio do chamado Encargo para Segurança do Sistema (ESS). A União tentou derrubar tal liminar, mas o pedido foi indeferido pelo Supremo Tribunal Federal (STF).

Outros “puxadinhos” têm sido construídos para financiar as desonerações fiscais, que incentivam artificialmente a atividade econômica no curto prazo. As empresas “estatais”, por exemplo, estão sendo mobilizadas para aumentar seus pagamentos de dividendos. Entre 2007 e 2012, o montante dessas receitas saiu de 0,26% do PIB (R$ 6,9 bilhões) para 0,64% do PIB (R$ 28 bilhões). Com isso, a participação dos dividendos no superávit do governo central passou de 11,74% para 32,6%.

O foco no populismo deixará como herança um setor energético desconstruído e cheio de remendos

Não por outro motivo, a contabilidade criativa do governo chegou à Petrobrás. A empresa divulgou um fato relevante ao comunicar que, a partir de meados de maio, passou a aplicar às suas exportações a prática contábil conhecida por contabilidade de hedge. Essa ação contábil permite que empresas reduzam impactos provocados por variações cambiais em seus resultados periódicos, desde que gerem fluxos de caixa futuros em moeda de outro país que se equivalham e tenham sentidos opostos. Assim, 70% do total da dívida líquida exposta à variação cambial serão protegidos por 20% das exportações, por um período de sete anos. Dessa forma, ao compensar prejuízos com a dívida de exportações futuras projetadas, a empresa diminui a transparência do seu resultado e acrescenta um novo risco ao seu valuation. Embora a prática seja permitida, o resultado prático será o aumento dos dividendos pagos principalmente nas ações ON, beneficiando o caixa da União.

No caso da Eletrobrás, o empréstimo de R$ 2,5 bilhões tomado por ela no BNDES no final de junho foi feito, ao menos em parte, para possibilitar o pagamento de dividendos aos acionistas da estatal, entre eles a União e o próprio BNDES. Para viabilizar esses pagamentos, a Eletrobrás teve de pagar juros “acima do esperado em operações com garantia da União”, conforme avaliação do próprio Tesouro Nacional.

Se vasculharmos as notícias publicadas na imprensa, encontraremos outros exemplos de arranjos, como o uso da Conta de Desenvolvimento Energético (CDE) para financiar o desconto nas contas de energia, o uso dos recebíveis de Itaipu para compor a CDE e a possibilidade de colocar os índios como sócios das hidrelétricas.

O foco no populismo deixará como herança um setor energético desconstruído e cheio de remendos. Isso resultará em empresas sem capacidade de investimento e agências reguladoras enfraquecidas, que serão substituídas pela justiça na arbitragem dos conflitos criados pelo próprio governo. As consequências do modelo de “puxadinhos” serão o desabastecimento, o aumento da dependência externa e a criação de grandes “esqueletos” para os futuros governos.

O novo mapa mundial da energia - Financial Times, The Economist

Shale potential could alter global trade, says US official 

By Anna Fifield in Washington

Financial Times, August 2, 2013

The development of all the shale gas and oil resources in China and Europe would change the nature of the international energy trade, Ernest Moniz, the new US energy secretary, has said.

His comments came days after a billionaire Saudi Arabian investor gave warning of the threat the US shale boom posed to his country.

Mr Moniz, a Massachusetts Institute of Technology physicist who was confirmed as President Barack Obama’s energy secretary in May, said there would be “geopolitical consequences” if the shale oil and gas resources around the world were developed.

“Clearly, if all of the shale resources that have been talked about globally – the 1,200tn cubic feet in China, the significant hundreds of trillions of cubic feet in Europe and eastern Europe – if those were all developed, obviously it would affect trade flows,” he said at a breakfast briefing organised by the Christian Science Monitor.

“We’ve seen that in microcosm in this country, where what used to be almost purely south-to-north flows have gotten much more complex as different geographies come in,” said Mr Moniz. “Clearly the same thing would happen internationally. There would obviously be geopolitical consequences in terms of where gas is flowing.”

The US has been enjoying a shale boom triggered by technological advances that have made it possible to extract gas and oil from previously unproductive rocks – notably in North Dakota.

As a result, the International Energy Agency projects that the US will overtake Saudi Arabia and Russia to become the world’s largest global oil producer by 2020 and could be almost self-sufficient in energy by 2035.

Prince Alwaleed bin Talal, a Saudi Arabian investor, said on Sunday that his country’s oil-dependent economy was increasingly vulnerable to competition from the US shale revolution.

In an open letter addressed to Ali al-Naimi, the Saudi oil minister, and copied to his uncle, King Abdullah, the prince called on the government to accelerate plans to diversify the economy.

“Our country is facing continuous threat because of its almost total dependency on oil,” he wrote in the letter, which set him at odds with his country’s oil ministry and Opec officials.

Mr Moniz said he had not read the letter, but was familiar with its premise.

He said that logistical challenges could stymie efforts to export gas.

“It’s always going to be the case that the cost of moving gas relative to its intrinsic value is high, whereas for oil, it’s extremely small,” he said. “So there’s a fundamental difference when it comes to physics as to why the markets will never be the same in my view.”

============

Yesterday’s fuel

Editorial The Economist, August 2, 2013

The world’s thirst for oil could be nearing a peak. That is bad news for producers, excellent for everyone else

THE dawn of the oil age was fairly recent. Although the stuff was used to waterproof boats in the Middle East 6,000 years ago, extracting it in earnest began only in 1859 after an oil strike in Pennsylvania. The first barrels of crude fetched $18 (around $450 at today’s prices). It was used to make kerosene, the main fuel for artificial lighting after overfishing led to a shortage of whale blubber. Other liquids produced in the refining process, too unstable or smoky for lamplight, were burned or dumped. But the unwanted petrol and diesel did not go to waste for long, thanks to the development of the internal-combustion engine a few years later.

Since then demand for oil has, with a couple of blips in the 1970s and 1980s, risen steadily alongside ever-increasing travel by car, plane and ship. Three-fifths of it ends up in fuel tanks. With billions of Chinese and Indians growing richer and itching to get behind the wheel of a car, the big oil companies, the International Energy Agency (IEA) and America’s Energy Information Administration all predict that demand will keep on rising. One of the oil giants, Britain’s BP, reckons it will grow from 89m b/d now to 104m b/d by 2030.

Scraping the barrel 

We believe that they are wrong, and that oil is close to a peak. This is not the “peak oil” widely discussed several years ago, when several theorists, who have since gone strangely quiet, reckoned that supply would flatten and then fall. We believe that demand, not supply, could decline. In the rich world oil demand has already peaked: it has fallen since 2005. Even allowing for all those new drivers in Beijing and Delhi, two revolutions in technology will dampen the world’s thirst for the black stuff.

The first revolution was led by a Texan who has just died (seearticle). George Mitchell championed “fracking” as a way to release huge supplies of “unconventional” gas from shale beds. This, along with vast new discoveries of conventional gas, has recently helped increase the world’s reserves from 50 to 200 years. In America, where thanks to Mr Mitchell shale gas already billows from the ground, liquefied or compressed gas is finding its way into the tanks of lorries, buses and local-delivery vehicles. Gas could also replace oil in ships, power stations, petrochemical plants and domestic and industrial heating systems, and thus displace a few million barrels of oil a day by 2020.

The other great change is in automotive technology. Rapid advances in engine and vehicle design also threaten oil’s dominance. Foremost is the efficiency of the internal-combustion engine itself. Petrol and diesel engines are becoming ever more frugal. The materials used to make cars are getting lighter and stronger. The growing popularity of electric and hybrid cars, as well as vehicles powered by natural gas or hydrogen fuel cells, will also have an effect on demand for oil. Analysts at Citi, a bank, calculate that if the fuel-efficiency of cars and trucks improves by an average of 2.5% a year it will be enough to constrain oil demand; they predict that a peak of less than 92m b/d will come in the next few years. Ricardo, a big automotive engineer, has come to a similar conclusion.

Not surprisingly, the oil “supermajors” and the IEA disagree. They point out that most of the emerging world has a long way to go before it owns as many cars, or drives as many miles per head, as America.

But it would be foolish to extrapolate from the rich world’s past to booming Asia’s future. The sort of environmental policies that are reducing the thirst for fuel in Europe and America by imposing ever-tougher fuel-efficiency standards on vehicles are also being adopted in the emerging economies. China recently introduced its own set of fuel-economy measures. If, as a result of its determination to reduce its dependence on imported oil, the regime imposes policies designed to “leapfrog” the country’s transport system to hybrids, oil demand will come under even more pressure.

A fit of peak

A couple of countervailing factors could kick in to increase consumption. First, the Saudis, who control 11% of output and have the most spare capacity, may decide to push out more, lowering prices and thus increasing demand. Then again, they might cut production to try to raise prices, thereby lowering demand further. Second, if declining demand pushes down the oil price, drivers may turn back to gas-guzzling cars, as they did when oil was cheap in the 1990s. But tightening emissions standards should make that harder in future.

If the demand for oil merely stabilises, it will have important consequences. The environment should fare a little better. Gas vehicles emit less carbon dioxide than equivalent petrol-powered ones.

The corporate pecking order will change, too. Currently, Exxon Mobil vies with Apple as the world’s biggest listed company. Yet Exxon and the other oil supermajors are more vulnerable than they look (see article). Bernstein, a research firm, reckons that new barrels of oil from the Arctic or other technologically (or politically) demanding environments now cost $100 to extract. Big Oil can still have a decent future as Big Gas, but that will not prove as profitable.

The biggest impact of declining demand could be geopolitical. Oil underpins Vladimir Putin’s kleptocracy. The Kremlin will find it more difficult to impose its will on the country if its main source of patronage is diminished. The Saudi princes have relied on a high oil price to balance their budgets while paying for lavish social programmes to placate the restless young generation that has taken to the streets elsewhere. Their huge financial reserves can plug the gap for a while; but if the oil flows into the kingdom’s coffers less readily, buying off the opposition will be harder and the chances of upheaval greater. And if America is heading towards shale-powered energy self-sufficiency, it is unlikely to be as indulgent in future towards the Arab allies it propped up in the past. In its rise, oil has fuelled many conflicts. It may continue to do so as it falls. For all that, most people will welcome the change.

Argentina: nacionalismo energetico, receita para o desastre - The Economist

Argentina and YPF: Flogging a Dead Cow

The Economist, 26/07/2013

The recently nationalised oil company agrees on a big foreign investment

LITTLE more than a year ago President Cristina Fernández de Kirchner announced the nationalisation of YPF, an oil company owned by Spain’s Repsol. Ms Fernández called it a victory for “energy sovereignty”, claiming that Repsol had plundered its Argentine holding for quick profits without investing in exploration or development. But on July 16th, after a year in which YPF’s oil and gas production continued to disappoint, the government announced that it had agreed on a big joint venture between YPF and a different foreign oil giant, Chevron.

Argentina’s energy industry is in a sad state. In 2011 the country became a net importer of energy for the first time since 1984, further eroding its foreign-currency reserves, now at their lowest in six years. Nationalisation has not helped: in the first quarter of this year YPF’s output of crude oil fell by 0.7% and of natural gas by 3.7%. April saw a fire at a refinery. Energy imports are expected to reach $14 billion this year, up from $9.2 billion in 2012.

The great hope is vast shale-oil and gas reserves in Neuquén province, which Repsol discovered shortly before the government expropriated YPF. The Vaca Muerta (“Dead Cow”) field is estimated to hold 16 billion barrels of shale oil and 308 trillion cubic feet (8.7 trillion cubic metres) of shale gas, which would give Argentina the world’s fourth-largest reserves of shale oil and second-largest of shale gas.

Extracting the deeply buried spoils is complicated, costly work. Jorge Ferioli of the World Energy Council, an industry research group, estimates that developing Vaca Muerta will require $68 billion-89 billion. YPF lacks such funds, and Argentina’s borrowing costs in effect bar it from seeking international financing.

As well as bringing expertise, Chevron has promised an initial investment of $1.24 billion in Vaca Muerta as part of its joint venture with YPF. The deal was announced after Ms Fernández issued a decree seemingly tailor-made for Chevron, which states that energy companies that invest over $1 billion will, after five years, be allowed to sell 20% of their production abroad without paying export taxes or being forced to repatriate profits.

Opposition parties, which backed the expropriation, have labelled the Chevron deal a “re-privatisation” and challenged the legality of the decree. They will make the most of the controversy in the run-up to congressional elections due in October. “A year ago the government considered energy sovereignty to mean ‘Spanish, get out’, whereas now it seems to mean ‘Yankees, come in’,” says Daniel Montamat, a former energy secretary and former head of YPF (under opposition governments).

YPF faces obstacles to attracting more collaborators. For one thing there is runaway inflation and a distorted exchange rate. More pressing is the government’s unfinished business with Repsol. Argentina has yet to compensate the company a peso for the $10.5 billion it claims it is owed. Last year, anticipating its deal with YPF, Repsol sued Chevron in Spain and the United States; on July 24th it sought an injunction to halt the deal. Keeping the lights on in Argentina is not getting any easier.

O futuro incerto dos biocombustíveis no país - Adriano Pires

Brasil foi ultrapassado pelos EUA na liderança do setor (Fonte: Reprodução/Veja)

COMBUSTÍVEIS RENOVÁVEIS

O futuro incerto dos biocombustíveis no país

A falta de políticas públicas capazes de garantir a previsibilidade inibe os investimentos e o crescimento da produtividade

por Adriano Pires

19 de julho, 2013

Desde a crise do petróleo nos anos 70 e do início da conscientização dos efeitos perversos da emissão de gases poluentes, o mundo tem se voltado para o desenvolvimento de combustíveis limpos e renováveis.

Segundo a Agência Internacional de Energia a demanda global por biocombustíveis deve triplicar de 2010 a 2035, aumentando de 1,3 milhão para 4,5 milhões de barris de petróleo equivalente por dia (bep/d), crescimento de 5,1% ao ano.

Esse crescimento é sustentado pelos mandatos de mistura e o etanol continua a ser o biocombustível dominante.

No período de 2010-2035, os EUA permanecem como maior mercado de biocombustíveis, com a demanda crescendo de 0,6 para 1,7 milhão de bep/d em 2035. A participação dos biocombustíveis na matriz de transporte americana crescerá de 5% para 19% no período.

Esse aumento é impulsionado pelo Renewable Fuel Standard que obriga a mistura crescente de biocombustíveis em combustíveis utilizados no transporte, até atingir 136 bilhões de litros, em 2022. Em junho de 2012, a Agência Ambiental Americana (EPA) aprovou o aumento de 10% para 15% de etanol na mistura de gasolina.

Num primeiro momento, o Brasil parecia ocupar posição privilegiada na corrida pelos biocombustíveis, dadas as suas condições propícias ao plantio de matéria-prima para a produção de etanol e biodiesel. No entanto, após a descoberta do pré-sal, o governo parece ter feito uma clara opção pelo combustível fóssil.

Enquanto o consumo de gasolina cresceu 62,3% de 2007 até o final de 2012, o de etanol elevou-se apenas 5,2%. Este desempenho é ainda mais estranho quando se considera o aumento da frota de veículos flexfuel, que representou mais de 90% das vendas de automóveis leves desde 2007.

É inexplicável o fato da gasolina e do diesel terem ficado isentos do pagamento da Contribuição de Intervenção no Domínio Econômico (CIDE). Só com a gasolina o governo deixou de arrecadar R$ 22 bilhões desde 2008. Essa desoneração provocou perda de competitividade, redução de investimentos no setor, sem falar na parcela que era destinada às prefeituras.

Segundo dados da Empresa de Pesquisa Energética (EPE) e da U.S. Energy Information Administration (EIA), nos últimos cinco anos, a produção de etanol de cana no Brasil cresceu 29%, enquanto nos EUA, o salto foi de 185% no etanol de milho. Em 2000, as usinas americanas fabricavam apenas 57% do volume das usinas brasileiras. Em 2011, a produção de etanol norte-americana representou mais que o dobro da brasileira, 230%.

Com o baixo crescimento da produção, o Brasil foi ultrapassado pelos EUA na liderança do setor. Qual a receita do sucesso americano? Previsibilidade. Até 2022, o governo norte-americano se comprometeu, por lei, a comprar 136 bilhões de litros de etanol, a US$ 1,07, reajustado anualmente.

Para o Brasil voltar a liderar o mercado dos biocombustíveis é fundamental o crescimento da produtividade, que infelizmente está sendo prejudicada pela a adoção da política do stop-and-go. As idas e vindas do governo geram custos para a indústria, que deixam de melhorar a tecnologia.

Portanto, se o crescimento do mercado dos biocombustíveis tivesse sido contínuo, estaríamos em outro patamar de produtividade. O governo parece não se dar conta de que a falta de políticas públicas capazes de garantir a previsibilidade inibe os investimentos e o crescimento da produtividade. O que falta é um marco regulatório estável, baseado na política da previsibilidade.

Fontes: Instituto Millenium - O futuro incerto dos biocombustíveis no país

A Revolucao energetica americana - Foreign Affairs

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May/June 2013

ESSAY

America's Energy Opportunity

How to Harness the New Sources of U.S. Power
Michael Levi
MICHAEL LEVI is David M. Rubenstein Senior Fellow for Energy and the Environment at the Councilon Foreign Relations. His most recent book is The Power Surge: Energy, Opportunity, and the Battle for America's Future [1](Oxford University Press, 2013), from which parts of this essay are adapted. Copyright ©Oxford University Press. Follow him on Twitter @levi_m.
A pumpjack drills for oil in the Monterey Shale, in California, 2013. The vast Monterey shale formation is estimated by the U.S. Energy Information Administration to hold 15 billion barrels of technically recoverable oil, or four times that of the Bakken formation centered on North Dakota. (Lucy Nicholson / Courtesy Reuters)
An energy revolution is unfolding in the United States -- but unlike most past or promised revolutions, this one is not confined to a single fuel or technology. After falling for more than two straight decades after 1985, U.S. crude oil production has now risen for four consecutive years, and in 2012, it posted its largest one-year increase since the dawn of the oil industry more than 150 years ago. Meanwhile, in 2011, natural gas surpassed coal as the United States' biggest source of domestically produced energy, thanks to surging output and plunging prices. And all this growth in U.S. fossil fuel production has not prevented the rise of zero-carbon energy sources: the amount of electricity generated from cutting-edge renewables -- wind, solar, and geothermal -- has doubled since 2008, and prices have plummeted. Moreover, as technological innovations have made U.S. motor vehicles more fuel efficient, the country's oil consumption has fallen by nearly ten percent since 2005, reversing what previously seemed to be an interminable upward trend.
The U.S. energy landscape has not undergone such drastic changes since the 1960s and 1970s, which witnessed the emergence of nuclear power, peak U.S. oil production, two oil crises in the Middle East, and the birth of the environmental movement. Not surprisingly, the present transformation is prompting big predictions about the future. Oil and gas enthusiasts are projecting such massive growth in production that the United States might soon grasp the Holy Grail, energy independence; natural gas, meanwhile, is being hailed as a one-stop solution to climate change and a replacement for petroleum. Advocates of renewable energy are just as jubilant, predicting that their technologies will soon be cheaper than fossil fuels, and supporters of advanced automobile technologies are heralding an impending move beyond oil. Virtually every energy booster is also insisting that his or her fuel or technology of choice will turbocharge the U.S. economy.
There is something to all these claims. Yet what they often miss -- and what too few players in the usually zero-sum world of energy politics embrace -- is that the best future lies in capitalizing on all the new developments. The energy revolution is splitting Americans into two rival camps: one that is enthusiastic about the resurgence of oil and gas and another that favors renewable sources and more fuel-efficient cars and trucks. The first camp typically rejects government support for renewables and advanced automobile technologies, warning that it wastes taxpayer money and threatens the country's economic health. The second camp often opposes efforts to enhance U.S. oil and gas production, arguing that these fuels pose grave risks to the environment and could kill progress on clean energy.
Both camps raise important concerns, but each regularly overstates its case -- especially when it claims that the other's gains are intolerable. The truth is that the best way to strengthen the American economy, bolster national security, and protect the environment is for the country to take advantage of all the new energy opportunities. No single fuel or technology can solve the country's problems: increased oil production will not free the United States from involvement in global petroleum markets, natural gas alone will not solve climate change, renewables remain expensive, and vehicles that do not rely on oil are far from being broadly economically competitive. The central challenge, therefore, is figuring out how to capitalize on all the new opportunities, which will require enthusiasts of different energy sources to start cooperating, or at least to stop fighting so bitterly. Leaders around the country, and particularly in Washington, need to adopt a most-of-the-above approach: carefully increasing opportunities for energy production of all kinds, while penalizing dangerous energy consumption that would worsen climate change and sustain U.S. dependence on oil.
HYDROCARBONS GALORE
There are three primary objections one hears to a most-of-the-above approach. First, critics argue that some of the new energy opportunities could prove to be mirages. Energy forecasters have certainly been burned before: oil prices skyrocketed in the first decade of this century, for instance, after projections in the 1990s that they would stay low forever. Second, one of the fuel sources or technologies now being promoted could end up rendering the others superfluous. If natural gas alone could solve climate change, for example, supporting renewables might be a waste of time and money. Finally, some of the energy options could fundamentally conflict with one another or with other important national goals. If it is impossible to boost U.S. oil output while also cutting U.S. oil consumption, for instance, then it makes sense to pick sides.
But these objections do not stand up to scrutiny. At present, oil and gas production, renewable energy, and fuel-efficient automobile technologies all show great promise. None of them alone offers a panacea. And the continued pursuit of all of them will not fatally undermine any central U.S. objective. Consider recent increases in oil and gas production, which benefit the U.S. economy and national security but cannot solve all energy-related problems in those areas. One study by the energy consulting firm IHS CERA claims that shale gas alone supported 600,000 American jobs in 2010, and another by a team at Citigroup projects several hundred billion dollars in added economic output if domestic oil and gas production soar. Meanwhile, growing natural gas production has freed the United States from dependence on importing the fuel by tanker, sparing the country from entanglements in politically charged global gas markets. (Gas also promises to replace some oil that is currently used in cars and trucks.) Rising U.S. oil production, moreover, will moderate world petroleum prices and help mitigate the impact of turmoil in global oil markets on the U.S. economy.
The revolution in U.S. oil and gas production, however, is neither an economic nor a foreign policy cure-all. The economic gains that even bullish analysts project fall far short of what the U.S. economy needs to get back on track. And even if domestic production and the replacement of oil with natural gas allowed the United States to eliminate all petroleum imports (a massive stretch), the country would still not be energy independent in a meaningful sense. Because the price of oil is largely set on world markets, disruptions in the Middle East and other major oil-producing regions would continue to trigger price spikes for Americans at the pump. The only way out of this problem would be to try to block oil exports from North America in times of crisis. But such a strategy, if it worked, would inflict severe pain on allies by taking additional oil off world markets and could easily result in blowback if those who were hurt by Washington's moves retaliated economically.
Just as increases in oil output will assist, but not ensure, strong U.S. economic growth and freedom of action in foreign policy, gains in natural gas production will ease, but not solve, the climate change problem. Abundant natural gas supplies present a major opportunity to cut U.S. greenhouse gas emissions. Burning natural gas to generate electricity produces roughly half as much carbon dioxide as burning coal does. As recently as 2010, coal-fired electricity accounted for a third of U.S. carbon dioxide emissions, and mainstream projections at the time anticipated that this fraction would increase slightly in the immediate future. But in the years since, coal use has dropped sharply, and even more significant, cheap natural gas has scuttled plans to build new coal-fired power plants, which are no longer economically competitive. Once built, coal plants often remain operational for over half a century, so preventing new construction today will help reduce carbon dioxide emissions well into the future.
Nevertheless, cheap natural gas alone cannot solve the United States' climate problems. Absent government assistance, natural gas production will not decrease coal usage much more than it already has. Furthermore, for global temperatures to stabilize, total greenhouse gas emissions will eventually have to fall to nearly zero. Natural gas by itself cannot accomplish this task. To meet U.S. demand for electricity while essentially eliminating emissions, either nuclear power, renewables, or technologies that capture and store emissions from gas- and coal-fired power plants will have to fill the gap.
GREEN AND CLEAN
New developments in renewable energy and automobile technologies are almost as astonishing as those in fossil fuels. Costs have been falling thanks to technological innovation and government support, making wind, solar, and other technologies ever more attractive tools for reducing carbon emissions. Between 2008 and 2012, for example, the cost of a solar module fell by 80 percent. Yet given current prices, shifting from coal to natural gas is usually still a cheaper way to cut emissions than moving all the way to renewables. Looking into the future, moreover, it is unclear whether renewable energy, nuclear power, or technologies that sequester carbon dioxide will be most useful in bringing down U.S. greenhouse gas emissions. So long as this uncertainty remains, and renewables stay relatively expensive, the United States will be better off switching from coal to natural gas while moving forward on a wide range of zero-carbon energy fronts.
Meanwhile, in recent years, the combination of high oil prices, technological innovation, and new government regulations has spurred the development and use of increasingly fuel-efficient cars and trucks. This trend is poised to continue over the next decade. New fuel-efficient vehicles are reducing American demand for oil and, in turn, tempering global oil prices. Lower oil use in the United States is helping shield the country from the economic consequences of volatile world petroleum markets -- although declining oil use will not come close to eliminating the United States' vulnerability to oil price shocks anytime soon. Still, cars that use no oil-based fuels are far from being broadly competitive with traditional vehicles, and since the typical car stays on the road for about 15 years, change will be slow to penetrate.
Some critics argue that further increases in U.S. oil and gas production could be catastrophic for both the development of clean energy and efforts to curb American oil consumption. These concerns are understandable but ultimately overwrought. There is a simple way to square rising U.S. oil output with lower oil use: fewer imports. To be sure, greater U.S. petroleum production will reduce world oil prices, which will encourage slightly more U.S. oil consumption. But American petroleum use tends to go up only modestly when prices fall, so the net result will still be that the United States spends less money on oil. Moreover, since U.S. regulation is a central driver of the shift to more fuel-efficient cars and trucks, lower oil prices will have a smaller impact on petroleum consumption than one might assume -- so long as regulations are kept in place and extended over time.
Lower oil prices will prompt other countries to boost their oil consumption -- a development that, no matter how small, spells bad news for the climate. But gains in U.S. oil production are likely to encourage other states, such as Saudi Arabia and the United Arab Emirates, to curb their own output in an effort to avoid lowering prices significantly. As a result, increased U.S. petroleum production will likely have only a marginal effect on total world oil supplies and consumption, muting the impact of the U.S. oil boom on global emissions. Even a boost in U.S. oil production that eliminated all imports -- a highly improbable outcome -- would probably add just one or two percentage points, at most, to global emissions.
Natural gas presents a different challenge. Currently, natural gas is replacing far more coal than it is renewables and other zero-carbon energy sources. That makes its net impact for climate change an immediate positive, even if it is pushing aside some zero-carbon fuel. Bigger problems, however, may loom in the future, since emissions will ultimately need to drop down close to zero, which is unlikely to happen if zero-carbon energy prices do not fall substantially.
The real near-term risk from natural gas, then, is that it could undercut innovation and prevent prices from falling in the clean energy sector. Even if gas displaces relatively little renewable energy compared to the size of the U.S. energy system, the impact could be substantial relative to the size of renewable energy markets. The natural gas boom, therefore, has increased the importance of the U.S. government's efforts to ensure that zero-carbon innovation persists.
WHERE WASHINGTON COMES IN
Fortunately, the United States does not need to make a stark choice; it can take advantage of all the major changes under way in the energy world by pursuing a two-pronged strategy. First, Washington should expand and sustain opportunities for energy production across the board by reforming regulations and making investments in innovation. Second, in order to blunt broad economic, security, and climate risks, it should pursue an ambitious policy, focused on how the United States uses energy, that reduces U.S. carbon emissions and oil consumption.
The first prong of the strategy would involve new efforts in three areas: environmental regulation, infrastructure development, and energy innovation. Striking the right balance when it comes to environmental protection and permitting processes is difficult. On the one hand, excessively onerous regulation can render energy development unprofitable and, in turn, undermine the benefits of the policy. It would be particularly unwise to severely curtail certain activities, such as shale gas development and offshore drilling, when effective regulation is a viable alternative. On the other hand, exerting too little effort to protect the environment would not just be dangerous and unfair; it would put development at risk of being thwarted by political opposition. A good model of balance is the International Energy Agency's list of 22 "golden rules" for shale gas development, which go a long way toward protecting the environment and add only an estimated seven percent to the cost of a typical shale gas well.
Too many energy developers seem to believe that stricter regulation is unnecessary so long as they adhere to sound practices themselves. But affected citizens tend not to discriminate between companies. The 2010 Deepwater Horizon oil spill, for example, hurt offshore drilling prospects not only for BP -- the primary culprit -- but also for every other developer. More recently, bad behavior by a handful of shale gas developers in Pennsylvania has prompted concerns from landowners in neighboring New York, threatening shale gas firms uninvolved in the misconduct next door.
It is not just oil and gas producers, moreover, who spark environmental opposition. Many champions of renewable energy believe that their preferred fuels should be immune from environmental concern -- no wind turbine or solar plant, they point out, has ever sullied a beach with toxic goo or poisoned an aquifer. But producing renewable energy often uses a lot of land and, consequently, provokes intense resistance. Other zero-carbon sources face similar challenges: nuclear power must deal with plant safety and waste disposal, and carbon sequestration requires locals to accept underground repositories. Policies that safely expand opportunities for development are essential for all sources on both sides.
The second critical area that Washington should promote is long-distance energy transport infrastructure. Oil and gas are developed only in places where the geology is favorable, and these locations are frequently far from refineries, power plants, and homes. To encourage development, pipelines are needed to connect the waypoints -- and policymakers should resist placing unnecessary barriers in their way. Meanwhile, the sunny expanses and windy tracts that are necessary for renewable power generation are also often remote from the metropolises where energy is in greatest demand. To make renewable sources more viable, Washington should create a better investment climate for private developers who can build power lines that span these long distances.
These projects will not be easy: building pipelines and power lines can be extremely complicated politically. Each one typically crosses hundreds or thousands of individual properties, meaning that huge numbers of owners must be won over and compensated for any given project. (In some cases, developers can invoke eminent domain, but that risks sparking popular anger and political opposition.) Part of the problem is that politicians often focus more on local objections to long-distance infrastructure than on the national benefits of it. But Washington can help by taking steps such as requiring state regulators to consider costs and benefits that extend beyond their borders and possibly eliminating the need for each affected state to sign off on power-line projects. (Pipelines are already handled at the federal level.) Such reforms would go a long way toward helping the United States get the energy transport infrastructure it needs.
The third essential element for boosting energy production opportunities is government support for innovation. Most economists agree that the private sector naturally underinvests in innovation. Breakthroughs made by one person or company are often copied by others, so individual inventors and businesses are frequently unable to capture the full benefits of their investments. As a result, they do not invest as much in innovation as the country needs. The upshot for the energy sector is that there are not enough technologies for the cheap production of renewable energy, the secure generation of nuclear power, the efficient extraction of gas, the safe development of oil, or the effective capture of carbon emissions from power plants.
But observers who agree that the private sector falls short in these areas often disagree about whether and how the government can help. The furor that followed the collapse of Solyndra, the California-based solar company that went bankrupt after receiving generous government support, is a case in point. Some argue that failed investments are a price worth paying for government efforts to spur innovation; others insist that Washington's tinkering, however well intended, is itself the source of failure.
The truth is that government investment in energy innovation is invariably risky, but staying out of the game entirely is even riskier, because it could severely constrain U.S. energy options down the road. Policymakers can navigate this situation by focusing as much as possible on the earliest stages in the innovation process -- namely, research and development -- since single bets there will be small and budget allocations can be spread widely. Meanwhile, Washington could support more expensive efforts, such as the commercialization of emerging technologies, by occasionally taking equity stakes in innovative projects and by deploying broad programs with clear and simple rules, such as making cash grants available to all zero-carbon energy systems meeting certain criteria.
A LOW-OIL DIET
Washington must do more, however, than just expand opportunities for energy production. Absent additional initiatives, zero-carbon sources and oil alternatives will struggle to compete in a market dominated by cheaper fossil fuels. Even natural gas will have a hard time displacing still-inexpensive coal. Inaction would represent a failure by the United States to become more economically resilient in the face of volatile world oil markets. It would also leave the country with dangerously high greenhouse gas emissions -- unable to be a serious part of, let alone lead, international efforts to combat climate change.
Washington can confront these challenges by helping change the way Americans use energy. The demand side, not the supply side, is where steps that limit U.S. energy activities will be most effective at achieving their intended national goals. Advocates of cutting greenhouse gas emissions have a habit of getting bogged down in debates over technical choices. Some favor cap and trade -- a scheme that would make polluters buy scarce permits to cover their carbon dioxide emissions, thus creating incentives to switch to cleaner fuels -- while others prefer a carbon tax, which would charge polluters directly for their emissions. Recently, some advocates have focused on a so-called clean energy standard, which would mandate that electricity producers generate an increasingly large fraction of power from low-carbon sources, including natural gas. And more and more attention is given to Environmental Protection Agency (EPA) mandates that tell power producers and industrialists to cut their emissions. All these approaches have the potential to cut emissions at lower cost than was previously possible because of gains in natural gas and renewables.
The fixation on debating technical policy options, however, is misguided. Instead, the objective should be achieving a combination of ambition and flexibility -- ambition because even the most carefully crafted policy is worth little if it does not have the potential to cut U.S. emissions substantially, and flexibility because cuts that do not allow companies and individuals the freedom to decide how to achieve them are a recipe for expensive error. Mandating that all U.S. power eventually be derived from renewable sources, for example, could turn out to be disastrous if their costs do not continue to fall steeply. Forcing power plants to switch to less carbon-intensive sources instead of allowing consumers to adopt new energy-saving technologies in a cost-effective manner could be similarly unwise.
Ideally, the U.S. Congress should put in place some sort of market-based system -- whether cap and trade, a carbon tax, or a clean energy standard -- and focus on getting that system's ambition and flexibility right rather than haggling over the different options. At least in the short term, however, that is unlikely to happen, so the Obama administration will be left with narrow regulation of major carbon sources as its only viable option. Exercising its existing authority, the EPA should concentrate on maximizing flexibility and calibrating the ambition of its regulations to match. If the Obama administration chooses this route, the least Congress can do is let the EPA's authority stand. In the long term, though, enacting one of the more flexible market-based approaches will be necessary.
Washington should also endeavor to make the country's motor vehicles more fuel efficient. In this area, the Obama administration is already off to a strong start. Last year, it finalized aggressive fuel-economy regulations for the years 2017 through 2025, supplementing those it had already put in place for vehicles sold through 2016. These rules will require automakers to boost the efficiency of their average car or truck from around 30 miles per gallon in 2012 to nearly 55 miles per gallon by 2025. (The Toyota Prius is currently rated at 50 miles per gallon.) The actual fuel economy that these standards will achieve will be slightly lower than the targets, since automakers can take a variety of alternative steps, such as selling electric vehicles, that give them bonus credit toward the mandates. But the Obama administration has set its sights high.
There are two more simple but controversial policies that Washington should explore. First, lawmakers seeking ways to cut the U.S. budget deficit should consider raising gasoline taxes as part of a broader package of spending cuts and revenue increases. Implemented properly, this sort of move would result in less oil use, greater economic growth, and lower unemployment than a package without it would deliver. Congress and regulators should also consider requiring that new automobiles be capable of accepting biofuels and methanol (a fuel that can be synthesized from natural gas and plant material) in addition to gasoline or diesel. That would reduce the risks for developers of alternative fuels and give consumers more options in the face of volatility in oil markets.
POWER UP
Some people will enthusiastically embrace every element of this agenda. But many others will take issue with one part or another. There will be concerns about the ultimate ends -- particularly among people who think that climate change is unimportant or that Washington does not need to protect Americans from turmoil in world oil markets. More frequently, the two major camps will disagree about means, with one side intensely opposing new regulations on industry and additional government spending and the other just as forcefully rejecting any expansion of fossil fuel production. It would best serve both sides, however, to accept a broad approach rather than digging in and fighting narrowly for their ideal outcomes.
Coming around to that conclusion will require both sides to accept two facts. The first is that each has considerably more power to hinder its opponent's agenda than to promote its own. Historically, opponents of fossil fuels have been successful in preventing large expansions of the federal land available to oil and gas development. More recently, opponents of fracking have waged campaigns that have put expanded use of that technology at risk. The opponents of renewables and fuel-efficient automobiles have been even more successful: they have thwarted serious climate legislation and mounted effective resistance to new government investment in energy innovation. Consequently, the alternative to a path that embraces a diverse set of developments is likely to be not victory for the fossil fuel enthusiasts or for the renewables and fuel-efficiency advocates but rather unending disputes that damage core interests on both sides.
The second fact is that compromise need not be fatal for anyone. People who are worried about climate change are right that unfettered fossil fuel consumption is unacceptable. But that does not mean that accepting some fossil fuel development would destroy their cause -- in fact, in the case of natural gas, it would help. Meanwhile, those who are worried about state intervention in the economy are right to criticize inflexible and indiscriminate government regulations. But not all schemes to curb emissions or to protect communities from the downsides of energy development fit that bill. A most-of-the-above agenda would eliminate the genuine deal killers for each side, leaving a package that could deliver the essentials of what both want, take advantage of gains across the board, and avoid the risk of an extended battle that would devastate everyone and satisfy no one.
It would be foolish to expect either side in this decades-old fight to lead the charge for a most-of-the-above approach. It would also be unreasonable to ask the two sides to stop skirmishing over individual decisions, such as opening new areas to oil and gas development or establishing a carbon-pricing scheme. The burden of advancing this agenda ultimately rests with U.S. leaders. President Barack Obama has advocated an energy policy that, as his first term evolved, became increasingly consistent with this sort of approach, but there is much more work to be done. Using legislation and executive action, Obama and a core group of lawmakers should push forward with a most-of-the-above energy strategy. The result would be a stronger economy, a more secure country, and a safer planet.

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