Tuesday, June 21, 2011

How Do Renewables and Oil Sands Affect Energy Security?

Despite its frequent use in policy and other discussions, "energy security" lacks a single, fixed meaning, and the consensus on its definition seems to be in flux. As an outgrowth of the oil crises of the 1970s, it has usually been associated with the economic, defense and geopolitical implications of imported oil and petroleum products, focused mainly on security of supply. It was often seen as a more nuanced term than energy independence. Over time, it has taken on other connotations, including the financial impact of imported energy. However, an even more recent trend to incorporate climate change and other sustainability concerns into energy security bears careful consideration, because it can sometimes lead to a direct conflict with energy security's most basic aspects. When I see advocates of a renewable electricity technology like solar power touting its energy security benefits, I can't help wondering how carefully they've thought through that claim, especially in light of the significant energy changes arising from the shale gas revolution.

A blogger conference call hosted by the American Petroleum Institute last week got me thinking about this topic again. Based on API's analysis, increased access to US oil resources that are currently off limits for exploration and development, together with approval of the Keystone XL pipeline to bring in more Canadian crude--including synthetic crude from new oil-sands projects--could dramatically reduce US oil imports. Imports from countries other than Canada could fall from 38% of our supply in 2010 to just 8% by 2030. Their assessment builds on a US Department of Energy forecast that already incorporates improvements in vehicle fuel economy and the expected contribution of oil shale resources such as the Bakken Shale in North Dakota and Montana. In API's resulting scenario, US oil production would increase by 4.8 million barrels per day (bpd) and domestic biofuels output would grow by 1.9 million bpd, along with an extra million bpd of imports from Canada. That combination would shrink our net non-Canadian imports of crude and petroleum products from 7.2 million bpd last year to just 1.8 million bpd in under 20 years.

However one views the potential environmental consequences of the steps necessary to achieve such an outcome, that would be a stellar result under the most commonly used definition of energy security. That's because these actions would directly replace imported oil and products, barrel for barrel, with supplies from more stable and dependable countries--including our own--as an extension of one of the main energy security strategies we've employed since the 1970s. Assessing the energy security benefits of some of our other options is less clear-cut, particularly when it comes to the generation of electricity from renewable sources.

Consider today's most familiar renewable energy projects, wind farms and rooftop solar installations. Both reduce greenhouse gas emissions, but do they also enhance energy security? The answer depends on where they are installed and how their output is used. If the venue is Europe, which imports large quantities of natural gas, or Japan, where the post-Fukushima electricity shortage is leading to significant increases in imports of fuel oil and liquefied natural gas (LNG), it's clear that they do. But the answer isn't as obvious in the US, where the generation they displace is mainly fueled by coal--a domestic resource--or natural gas. Prior to the explosion of domestic gas production from shale resources, it was much easier to argue that displacement of gas from a peaking gas turbine power plant backed out imported LNG somewhere and thus bolstered energy security. Today, with most gas coming from domestic wells and with most renewables relying on gas-fired backup power, that assertion is becoming a stretch.

Making the case for energy security benefits from wind and solar on the basis that they can back out oil imports by powering electric vehicles looks like even more of a stretch. This notion might be true in the 2030 time frame of the API scenario described above, by which time I'd expect to see many more EVs on the road, along with a smarter power grid capable of channeling the output of renewable power generation into EV recharging. In the nearer term, however, there simply won't be enough EVs on the road to substantiate such a claim. In fact, it would take more than 23 million EVs like the Nissan Leaf to consume the output of the wind and solar installations already in place last year. And in most locations, the EVs coming to market will be recharged mainly with average grid electricity, which includes a significant contribution from coal, even in California, thanks to that state's sizable electricity imports from neighboring states.

Resorting to such contingent and indirect claims of enhanced energy security sets up a debate that only liquid biofuels are currently positioned to win. However, it seems equally unrealistic to adhere to a definition of energy security that ignores the many ways in which our perspective on the world has changed in the last decade. I wasn't surprised to find a definition of energy security from within the US military incorporating sustainability along with sufficiency and surety. In effect, sustainability represents a new, albeit self-imposed, risk on the security of supply for conventional fuels that we're less accustomed to considering. It can also cut both ways, leaving some renewables, such as food-based biofuels, vulnerable under a definition of energy security that includes this metric.

Our notions of energy security are moving into a 21st century context, as they begin to recognize factors beyond supply and demand. That seems appropriate. At the same time, the term should still convey the pragmatism that gave rise to this concept in the first place. The traditional view of energy security never constituted a trumping argument in US energy policy, or else we wouldn't be sitting here with so many billions of barrels of technically recoverable resources off-limits to exploitation because of worries about the possible effect on beaches, tourism, wildlife and a myriad other concerns, broad and narrow. Similarly, a greater inclusion of sustainability aspects into our view of energy security should not be expected to disqualify efforts like the Keystone XL pipeline or expanded access to hydrocarbon resources. Even if such endeavors must also demonstrate their soundness on other criteria, they would unquestionably leave the US more secure in its energy sources. Instead of pitting one view of energy security against another, I'd prefer to see a scenario for 2030 that incorporates more access to North America's liquid fuel resources, together with expanded efforts on energy efficiency, transportation energy diversification, and creative capitalization on our new-found natural gas wealth--all of which would enhance US energy security.

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