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Puts consequences and costs in place

The 2023 Pacific Energy Summit hosted in Seattle by the National Bureau of Asian Research was a superb forum for learning about advances, cooperation, and challenges in the energy field. Scholars, policymakers, not-for profits, and energy industry leaders convened from across the world to discuss this incredibly timely topic. Unlike most discussions inside the Beltway, China was only one of many concerns rather than THE topic. It’s not that people were being naive out a China threat but they are dealing with a danger pressing at least as hard for the populations of the Asia Pacific. Asians attending this conference were busy addressing their own options rather than trying to control Beijing‘s.

Much of the conversation this year focused on what the energy transition. This entails means moving primary energy production and consumption from fossil fuels into renewables while diversifying options for consumers and producers. The transition would theoretically end reliance on something destroying our environment and climate in such devastating ways. It would also give more nations greater opportunities to meet their growing energy needs. Inspirational idea, no?

Industry operates on the profit motive. It tends to look at options optimistically and hopefully as they marsh towards solutions. Rather than focus on blame (appropriately or not), energy folks strive to look ahead in concert with many Asians policy-makers. Business people are by nature optimists while security folks look for worst case to address remediation.

One of the scholars on the panel I moderated, Dr. Se Hyun Ahn of the University of Seoul, brought a chilling reminder to all, however. He said Korea’s costs for the energy transition, according to calculations he has done, will cost more double the accumulated national debt; that is purely for Korea. It has, I remind you, a developed economy.He predicted this cannot be paid for under current costs, certainly not by a single government. He was blunt and the room silenced.

Let’s go further. Not only will Korea find this impossible or at least tres difficult but what about those states really needing to do so because of burgeoning, rather than declining populations like Indonesia or Nigeria? As living conditions deteriorate with climate change, pressures will grow as the requirements for energy transformation alone shifts.

Where are we going to find the money? Where can industry find this sort of money?

I have attended many meetings over my career but rarely have I heard such a stark reminder that costs can be prohibitive.

Perhaps he is wrong although I suspect not. Perhaps breakthroughs will occur to drop the costs to manageable rates. Unfortunately, the poorer states with growing populations, especially in the Islamic world, have multiple challenges rather than simply energy transition and they are all far more expensive that what those governments can afford.

This kind of discussion which is why NBR and other serious policy agencies continue inviting global leaders to hash out the challenges. But we are no where near to solutions that are realistic yet.

But the 2023 Pacific Energy Summit was a real wake up call for actions indeed creating consequences. In this case the actions are costs and they appear to be major.

Be safe and be well.FIN