Energy Security Summit 2013: "How to Feed and Secure the Global Demand?"
Is our energy supply still safe? The Frankfurter Allgemeine Forum and the MSC hosted their first joint conference on the subject of energy security
By Tobias Bunde and Oliver Rolofs
The international conference "Energy Security: How to Feed and Secure the Global Demand" took place on 10 July in the Palmengarten Casino in Frankfurt, hosted by both the Frankfurter Allgemeine Forum and the Munich Security Conference. The conference, the patrons of which were the German Federal Minister of the Environment, Peter Altmaier, and the German Federal Minister of the Economy, Philipp Rösler, was devoted to the current challenges of global energy security and the political developments in the producing countries.
In view of the U.S. shale gas revolution and the German energy turnaround, not only the security-related and geostrategic effects of changed global energy supply flows and the question of how a safe supply of energy could be ensured in future for the German and European production sites in view of increasing dependencies on oil and gas imports were discussed. With an eye to the equally revolutionary energy turnaround, the possibilities of reducing the dependencies on energy imports as well as questions concerning energy generation and environmental policy were discussed, among them the pros and cons of the production of natural gas by means of fracking.
The chairman of the Munich Security Conference, Ambassador Wolfgang Ischinger, made it clear at the beginning of the conference that today's energy security policy undoubtedly constituted a core element of international security policy. He said that in view of the far-reaching changes in the field of energy at the present time, not least the so-called shale gas revolution in the Unites States, politicians concerned with security were now forced to increasingly deal with questions of energy security.
Effects of the possible end of the United States' dependence on oil and gas imports
The prognoses on the United States no longer being dependent on oil and gas imports in the future, which also ran like a common thread through the conference, clearly revealed that security policy in the 21st century will be marked by serious changes in the field of energy. According to a number of conference attendees, the energy revolution in the United States will have "profound consequences for the geostrategic conditions". Ischinger voiced the criticism that "these changes affect our security interests directly and are a cause for concern about Europe's future energy policy." For the EU had "barely started" to reflect about the security-related consequences. The USA was reducing its dependencies and interest in the Middle East was decreasing. Washington would ask itself if it would still lavishly fund its military presence in the Mediterranean and the Gulf regions or if it preferred to spend the assets some other way.
Friedbert Pflüger, director of the European Center for Energy and Resource Security at King's College in London and former Parliamentary Undersecretary of State at the German Federal Ministry of Defense, warned that the US bonanza would also force down world market prices for crude oil and gas – a development that would have a direct impact on the Gulf states The decrease there would then be in petrodollar revenues, with which the Arabic autocracies in the Gulf region had up to now bought the loyalty of their citizens, would limit their leeway. At the same time, Pflüger said, they had to find answers to the problems related to the fast-growing and young populations in the region. Recent developments in Egypt had shown how great the social and political pressure was there. According to Ramzy Ezzeldin Ramzy, the Ambassador of the Arab League to the United Nations in Vienna, the country was undergoing a "second wave" of emancipation in which especially the young Egyptians rejected any form of authoritarian rule.
In addition to these factors, Europe's dependency on the Near and Middle East, a region that is becoming increasingly unstable, but that up to now has met a major share of Europe's oil and gas needs, keeps on growing. Altogether, it threatens to become a security vacuum that can barely be filled by China and India in the foreseeable future. In this context, Mr. Ischinger suggested that the heads of state and government of the 28 EU countries use their summit in December to order a policy document on security to be prepared in which tasks and priorities of a common European energy security policy are also defined. The extent to which the Near and Middle East region will then influence the agenda of European foreign and security policy, besides the questions pertaining to energy, remains to be seen. It is likely that Iran will also play a role in this.
Iranian Minister of Energy: Against the "Politicization" of Energy Questions
The attendees of the Frankfurt conference were able to gain an impression of Iran's views during the discussion between Ischinger and Rostam Ghasemi, the Iranian minister of energy. The increasing independence of the United States with respect to energy imports played an important role here as well. Ghasemi made it clear that he welcomed the discovery of new energy deposits since they would benefit all nations. He repeatedly pointed out that his government was willing to export Iranian resources to other countries in the world if it was allowed to do so. The minister claimed that the international sanctions had not weakened the Iranian economy. At the same time, however, he solicited European companies, which he said were welcome again anytime, and complained that energy questions were being politicized due to sanctions.
When asked about the hopes in the West that a diplomatic solution to the nuclear dispute would become more likely after the election of Rohani as the new Iranian president, he gave an evasive answer and repeated the traditional Iranian policy line: He said that the country had a right to make civilian use of nuclear energy and would assume it. By contrast, the acquisition of nuclear weapons was strictly forbidden to Muslims. Iran was keen to accommodate the international community and prove that it only had peaceful intentions if the sanctions were repealed before Rohani took office. Ischinger's inquiry as to why then no progress had actually been achieved during the past ten years remained unanswered.
While the sanctions have severely hit the Iranian energy exports, a new aspiring oil supplier is particularly benefitting from the increasing energy demand of Turkey, namely the autonomous region of Iraqi Kurdistan. Ashti Hawrami, the oil minister of the Kurdish regional government, announced in Frankfurt that Iraqi Kurdistan disposed of oil reserves that were as large as those of Libya. Hawrami said that the intention was to produce 2 million barrels a day by 2019.
Climate Change as a Security Risk, Energy Security Policy as a Global Regulatory Policy
Besides geostrategic questions, it was also noted at the conference that sight should not be lost in the discussion on energy security of the long-term effects on climate change or other threats to the environment. In his video message, German Federal Minister of the Environment Peter Altmaier explicitly addressed climate change, calling it a security risk. Energy policy was therefore also a core element of climate policy. Altmaier demanded that the architecture of energy security also had to include an international treaty limiting the CO² emissions worldwide. Ursula Heinen-Esser, Parliamentary Under-Secretary of State at the German Federal Ministry for the Environment, underlined the Minister's message. She said that today, an energy security policy that satisfied the manifold aspects of energy security was considered a global regulatory policy at its best.
On the other hand, some conference attendees pointed out that it was important to discuss questions about the German energy turnaround more from the aspect of energy security. Elmar Brok, MEP of the Christian Democratic Union and Chairman of the Foreign Affairs Committee of the European Parliament, criticized the fact that the energy turnaround was seen in Germany above all as a purely ecopolitical measure and not enough consideration was given to the equally relevant economic and industrial policy aspects. Günther Nonnenmacher, editor of the Frankfurter Allgemeine Zeitung, said that the dimension of the energy turnaround and its financial and social consequences had to be comprehended first. Anne Ruth Herkes, the state secretary at the German Federal Ministry of Economics and Technology, said that Germany could not master the energy turnaround on its own. It needed European and international partners for that, but they were at present following Germany's energy policy with a mixture of interest, scepticism and curiosity.
Challenges of the Energy Turnaround
Lutz Raettig, chairman of the supervisory board of the Morgan Stanley investment bank, warned of possible competitive disadvantages for the German economy, particularly in view of the shale gas revolution in the Untied States. He said that the price of electricity had halved in the United States since 2008, whereas it had risen by 45 percent in Germany since 2005. This would be disadvantageous for industry in Germany and Europe. This could only be compensated by a higher energy efficiency and a new energy mix. Friedbert Pflüger emphasized that the focus must not only be placed on the energy turnaround and renewable energies. He said that equal care had to be taken to ensure that fossil fuels that would still have to be used for decades due to the lack of alternatives and lower-cost solutions were made cleaner and more efficient. Thiemo Gropp, the director of the Desertec foundation, and Andree Böhling, an energy expert with Greenpeace, were much more optimistic as regards the economic conversion to renewable energies. They said that the technology needed to ensure a power supply with regenerative energies in due time.
In contrast, Harald Schwager, a member of the BASF board, argued that it would also be necessary to exploit domestic shale gas deposits to ensure a safe supply of energy for Europe. Referring to the enormous concerns in Germany about pollution, several conference attendees expressed their doubts that some day shale gas deposits might even be produced through "fracking" in Germany. Caio Koch-Weser said that he did not believe there would also be a shale gas revolution in Europe. The reservations of the people were too serious. Some of the conference attendees warned that this attitude not only jeopardized the implementation of the energy turnaround in Germany itself. The "German Sonderweg" regarding energy policy also put the requirements for European energy security at stake. Ischinger called for this conflict of interest, however, to be overcome so to enable a credible European energy policy to be forged. He said that we needed a common coherent and credible European energy and energy foreign policy. And now it is up to Berlin: In advance of the Frankfurt conference on energy security, Ischinger mentioned the formation of a ministry of energy in an interview with the energy portal energlobe.de. It was his belief that an independent energy department should not only concentrate on the energy turnaround in Germany, but should also follow and shape the energy and the energy security policies of the European Union.
The Way Ahead
The first conference on energy security held by the MSC and the FAZ clearly revealed that we are still at the beginning of a debate which Germany and its neighbors need to continue in the decades to come. Marc Elsberg, the author of the novel "Blackout – Morgen ist es zu spät" (Blackout - Tomorrow will be too late) and Karsten Nohl, Security Research Labs, pointed out in their inputs, in which they spoke about the importance of and threat to critical infrastructure, that some questions about energy security were scarcely in the public eye. Frankfurt finally underlined that the success of the energy turnaround will depend on the expertise and cooperation of a wide variety of players: from pioneer enterprises in the field of renewable energies, financial experts, IT experts, politicians specializing in security, environmental experts and politicians. At the end of the conference, FAZ editor Nonnenmacher summed matters up, saying that we needed a holistic approach for handling the complex subject of energy security. Further steps on the way to this holistic approach are planned to be taken next year. The Frankfurter Allgemeine Forum and the Munich Security Conference plan to follow up this conference with another one in May.