Politics to complicate energy conflicts

BELFAST – Energy-producing nations with state-owned oil and gas firms will continue to flex their muscles on the world stage, causing more confrontations, according to a panelist at Saturday’s energy symposium.

And the volatile mix of oil and nationalism will bring dire consequences to energy consumer nations such as the United States, said Nikolay Bogachev, chairman of Yamal LNG of Moscow, Russia.

Bogachev was one of several speakers at the energy symposium held at the University of Maine Hutchinson Center as part of the annual Camden Conference on foreign affairs. This year’s conference, set for Feb. 23-25, focuses on Europe.

Bogachev had both good news and bad news.

“There is enough energy in the world. The bad news is it will not be available to the market if the current trend continues,” he said.

Bogachev used the West African nation of Ghana, which he recently visited, as an example of the trend.

Reserves of natural gas have been identified in Ghana, he said, but the country has little access to capital to develop those resources. When it does begin producing gas, and if the production is controlled by the government, as seems to be inevitable, national pride and arrogance follow, Bogachev said.

State-owned companies lead to privatization of power, he said, which leads to countermarket tactics. State-owned energy firms see revenue whether they increase or decrease production, so they don’t care whether they sell large quantities or not. Or they will trade away energy revenue for political leverage, he said.

“If oil and gas is controlled by politicians, they will definitely use [that power]. There will be confrontations all over the globe,” Bogachev predicted. “They are not really interested in providing the markets with more oil and gas.”

On the good news side, he said there is enough natural gas to supply the world’s needs for 25 years.

“The energy is there. It can be used. But there are political obstacles preventing market forces,” he said.

Not surprisingly, since Bogachev is in the liquefied natural gas business, he said, “gas is becoming the major source of energy.”

Tracing the history of humans’ energy use, he noted that wood has more carbon than hydrogen, which was displaced by coal, which has less carbon and more hydrogen. Coal was displaced by oil, with even less carbon and more hydrogen, and now gas is replacing it, with even less carbon.

Finally, Bogachev said, hydrogen fuels will emerge with no carbon waste. Natural gas now is the best source for producing hydrogen, he said. When gas supplies run out in about 25 years, new ways of producing hydrogen will have emerged, he predicted.

Bogachev was dismissive of the role alternative fuels will play in the transition away from petroleum-based fuels, noting that all of the windmills now operating in the world provide the amount of energy used in a single flight from New York City to Tokyo.

Robert Evans of the National Renewable Energy Laboratory followed Bogachev, and he painted a different picture. He said windmills should be built everywhere they are technically feasible, despite the objections of neighbors.

“If it were up to me, we’d be producing these windmills like battleships were produced in World War II, and we’d be putting them up where they need to go, regardless of what people thought,” he said.

Evans also predicted that so-called fourth-generation nuclear power plants, which consume all of their fuel and thereby eliminate waste problems, will be a part of the energy future.

Evans agreed with Bogachev that a transition to hydrogen fuel was possible.

“We have the technical capability to solve these problems in 30 years,” though to do so, governments must spend money on research, he said.