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16121. The Global Energy Crisis: Implications of Record High Natural Gas Prices

Author:
Anne-Sophie Corbeau
Publication Date:
10-2021
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The recent spike in energy prices across the globe has led to talks of an energy crisis with far reaching repercussions as the Northern Hemisphere braces for winter. While a significant focus has been on natural gas as gas spot prices in Asia and Europe hit levels unthinkable before ($56/million British thermal unit [mmBtu], or over $320/barrel [bbl] in oil-equivalent terms), the crisis has extended well beyond gas: oil prices are rising, China and Europe are facing record coal prices, and carbon prices in Europe have reached historic levels. As gas-fired plants (or coal in some regions) are at the margin, this is also leading to record power prices in different parts of the world. These circumstances lead to immediate concerns, but also flag important potential lessons for the future. In the short term, immediate concerns include a potential gas supply and power crunch over the coming winter, the impact of record-high gas and electricity prices on end-users’ energy bills, and power shortages. For natural gas, however, the crisis may extend beyond the weather. The role of natural gas in a world looking to slash carbon emissions has been an ongoing topic of discussion, and the potential for a sustained crisis that batters consumers may have critical repercussions for the fuel longer term. Already, at least two schools of thought are emerging from the current situation that reflect the ongoing debate about natural gas: one that views this episode as further proof that the world needs to rapidly get rid of fossil fuels, including natural gas, and one that views it as proof that more gas is needed in the immediate future to satisfy growing global energy demand. Questions of security of supply and affordability are also part of the discussion, especially in a future world with a higher share of renewables but where fossil fuels are still necessary to provide flexibility and are likely to continue to set power prices at the margin until new flexibility tools such as batteries or demand-side management are developed at scale. In addition, there are concerns about another widespread gilets jaunes[1] protest movement triggered by price spikes as governments push their agenda for decarbonization. For the gas industry, it could prove to be a moment of truth. The IEA stated earlier this year that “no new oil and natural gas fields are needed in the net-zero pathway.”[2] Indeed, producers are facing increased scrutiny about future investments, including in upstream activities and liquefied natural gas (LNG), but at the same time are asked to make gas readily available when needed.[3] Meanwhile, developing countries that had been looking favorably at natural gas as a way to complement renewables and decommission coal could be deterred by these high and volatile gas prices from supporting LNG imports. The recent increase in gas prices could impact these decisions in different ways, especially if they remain high for the next few years. This commentary provides a brief overview of the current gas market and examines the potential near- and longer-term impacts for natural gas.
Topic:
Economics, Energy Policy, Natural Resources, Gas, and Energy Crisis
Political Geography:
Global Focus

16122. Promoting Energy for Development in a World Accelerating to Net-Zero: Roundtable Report

Author:
Hon Xing Wong, Jonathan Elkind, Philippe Benoit, and Aashna Aggarwal
Publication Date:
10-2021
Content Type:
Policy Brief
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On September 14, 2021, Sustainable Energy for All (SEforALL) and Columbia University’s Center on Global Energy Policy (CGEP) co-hosted a high-level virtual roundtable on energy for development and climate objectives, the first of a series of discussions focusing on the intersection between these two policy priorities. Among the roundtable participants were senior leaders representing major international organizations, development finance institutions, civil society, philanthropic foundations, academia, youth activists, and energy and finance industries. Convened a week before the United Nations (UN) High-Level Dialogue on Energy—the first in 40 years—the virtual roundtable occurred at a time when the focus of many decision makers around the globe was on accelerating climate change mitigation to fulfill the goals of the Paris Agreement. Amid this sense of urgency to accelerate decarbonization, the roundtable served as a timely reminder of energy’s role in alleviating poverty and promoting growth. With 2.6 billion people (more than a third of the world’s population) lacking access to clean cooking and almost 760 million people (roughly 10 percent of the world’s population) lacking access to electricity, bridging the energy gap by 2030 should remain at the top of the global agenda.[1] Energy access is essential for economic development, especially for the 9.1–9.4 percent of the world that still lives in extreme poverty (defined as living on less than $1.90 per day).[2] Moreover, the role of energy extends beyond basic access: it is critical to generating broad-based economic growth to lift people out of poverty and enable quality healthcare, education, gender equity, food security, and other benefits enjoyed by middle-class populations worldwide. Roundtable participants discussed options to promote energy for development and climate change mitigation, considering matters of policy, finance, and technology. This report summarizes the roundtable discussion and presents participants’ key questions. The discussion occurred on a not-for-attribution basis under the Chatham House rule.
Topic:
Climate Change, Development, Energy Policy, and Green Technology
Political Geography:
Global Focus

16123. The Impact of ESG on National Oil Companies

Author:
Luisa Palacios
Publication Date:
11-2021
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
The rise of ESG investing—investment focused on environmental stewardship, social responsibility, and corporate governance—in the 21st century has created significant pressures on oil companies. Some shareholders of international oil companies (IOCs) have pressed them to pay closer attention to ESG goals and diversify their business models away from hydrocarbons and into other sources of energy amid efforts to address greenhouse gas emissions.[1] National oil companies (NOCs)—which currently control about 50 percent of the world’s oil production—have different corporate mandates than their IOC peers that might imply a more complicated relationship with ESG goals. NOCs are mainly owned by governments in the developing world, and thus face vastly different demands than IOCs answering to private sector shareholders.[2] But different does not mean NOCs do not or will not feel pressure to address ESG issues. Given NOCs’ significant share of global oil production—and the fact that this share may increase as IOCs diversify—the pressures they face and changes they make could have a significant impact on the future of the oil and gas industry as well as countries’ abilities to meet climate goals. During the November 2021 COP 26 meetings in Glasgow, Saudi Arabia and India became the latest countries with strong NOCs to pledge to reach net-zero greenhouse gas emissions in the next decades.[3] This commentary examines how the ESG agenda is impacting NOCs through the ecosystem of organizations and principles that have emerged from the UN’s Sustainable Development Goals and the Paris Agreement as well as from investors and regulators in global financial markets. The piece then describes the three components of the ESG framework in relation to NOCs and the challenges of accurately measuring adherence to them due to insufficient standardization of metrics and the variety of reporting frameworks. Also, because environmental, social, and governance competence are not strictly related to one another, companies may be strong in some areas and weak in others, making it difficult to evaluate their ESG performance as a whole.[4] Finally, while ESG pressures are coming alongside discussions about the energy transition and climate change, ESG assessments do not evaluate companies’ energy transition plans, even if some aspects of ESG scores might provide insights about them. The commentary pays special attention to the importance of corporate governance for national oil companies in achieving overall ESG goals, given the key differences between their ownership structure and that of private sector companies working in the oil industry.
Topic:
Climate Change, Energy Policy, Oil, Natural Resources, and Green Technology
Political Geography:
Global Focus

16124. Market, Policy, and Political Implications of the Global Natural Gas Crisis: Forum Report

Author:
Hon Xing Wong, Erin Blanton, and Samantha Lang
Publication Date:
11-2021
Content Type:
Policy Brief
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On October 18, 2021, Columbia University’s Center on Global Energy Policy (CGEP) hosted a special session of the Natural Gas Forum on the global nature of the current unexpected gas crisis, which has sparked chaos in many parts of the world. A number of factors have been put forward to explain the crisis, including a faster-than-expected pandemic recovery in economic demand that has precipitated global supply chain issues, extreme weather conditions around the world, and liquified natural gas (LNG) facility outages. The forum was an opportunity for participants to discuss the underlying causes of the global gas crisis and its long-term market, policy, and political implications. The discussion started with outlooks for the winter across the European Union, Russia, the United States, and East Asia before turning to a debate over any longer-term implications of the natural gas crisis on the energy transition. The forum’s participants included policy makers and senior leaders from major international agencies, energy companies, financial institutions, civil society organizations, academia, and nongovernmental organizations. This summary of the proceeding begins with the broad takeaways of the discussion, which occurred on a non-attribution basis under the Chatham House Rule, and then delves into regional issues and the future of natural gas.
Topic:
Energy Policy, Natural Resources, Global Markets, Gas, Renewable Energy, and Energy Crisis
Political Geography:
Global Focus

16125. Advancing Corporate Procurement of Zero-Carbon Electricity in the United States: Moving from RE100 to ZC100

Author:
Melissa Lott and Bruce Phillips
Publication Date:
12-2021
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
Corporate pledges to purchase renewable electricity have led to significant new solar and wind capacity investments and driven down the carbon intensity of the power sector in the United States. Participating companies have increasingly procured this power, many with a goal of procuring quantities that are equal or proportional to the amount of electricity that they consume at their facilities on an annual basis.[1] Corporate buyers can reap many benefits from renewables procurement, including hedging against power price fluctuations and enjoying positive brand association, helping them meet shareholder demands around climate or other environmental, social, and governance (ESG) goals. However, the reality is that commitments to buy 100 percent renewable electricity may not equate to a company actually reducing its power carbon footprint to zero. This report from Columbia University’s Center on Global Energy Policy quantifies the mismatch between companies’ contracted variable renewable electricity (VRE) and their actual use of electricity to highlight the degree to which these companies still rely on a partially fossil-fueled power grid to bridge the gap. A modeling exercise and analysis done in collaboration with The NorthBridge Group reveals a significant shortfall between electricity demand and VRE supply, leaving companies that contract for 100 percent renewables to in fact draw between 20 percent and 50 percent[2] of their annual electricity from the regional electric grid, depending on their location, demand profile, and mix of contracted renewable supplies. This disparity presents a number of challenges to corporations that wish to achieve deep decarbonization and are unable to curtail operations to match renewable energy supplies. There are several approaches to get closer to a true zero-carbon power footprint. Installing storage capacity either on-site or at the power plant to provide stored electricity when renewables are not sufficient, such as with a battery,[3] is one option. However, this only reduces the minimum shortfall by half, requiring a customer to continue to rely on electricity from the regional electric grid for 10 percent to 28 percent of its annual load.[4] Resolving the shortfall by procuring extra renewable power (e.g., to 150 percent of annual electricity demand with renewables) can drive costs up substantially without closing the gap.
Topic:
Climate Change, Energy Policy, Environment, Green Technology, Carbon Emissions, and Decarbonization
Political Geography:
North America and United States of America

16126. How the ESG Investing Framework Applies to National Oil Companies: Workshop Report

Author:
Luisa Palacios and Hon Xing Wong
Publication Date:
12-2021
Content Type:
Commentary and Analysis
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
On November 16, the Center on Global Energy Policy (CGEP) at Columbia University SIPA convened a private workshop to discuss the applicability of the current ESG (environmental, social, and corporate governance) investing framework on national oil companies (NOCs). The workshop brought together representatives from NOCs, international oil companies (IOCs), international organizations, multilateral banks, private banks, institutional investment firms, ESG rating agencies, think tanks, and non-governmental organizations, as well as academics. The group discussed the types of ESG pressures that NOCs face, how NOCs are responding to these challenges, whether all the components of ESG are equally relevant when it comes to NOCs, the challenges associated with ESG reporting and ratings, how investors are integrating ESG considerations into their investment process in relation to NOCs, and the risks of future access to financing
Topic:
Energy Policy, Oil, Privatization, Natural Resources, and Private Sector
Political Geography:
North America and United States of America

16127. Comparing a Clean Electricity Standard and a Carbon Tax

Author:
Peter Marsters, John Larsen, Ben King, Hannah Kolus, and Whitney Herndon
Publication Date:
12-2021
Content Type:
Special Report
Institution:
Center on Global Energy Policy (CGEP), Columbia University
Abstract:
As the United States commits to accelerating decarbonization as part of global efforts to combat climate change, the policies it enacts will govern its chances of success. These international ambitions are balanced against domestic realities: the effect of net-zero greenhouse gas strategies on households and the broader economy. Comparing different policy options against one another in terms of specific outcomes, such as emissions abatement and financial impact on consumers, is a useful exercise for policy makers. Because US congressional proposals have focused on two potential policy routes—an economy-wide price on carbon dioxide and other greenhouse gas emissions, and a sector-by-sector approach that starts with a clean electricity standard—this report models outcomes for these scenarios. A carbon tax and clean electricity standard (CES) are similar policies in some ways. Both have the potential to drive large emissions reductions from the US power sector and beyond. If the CES is designed to be technology-neutral with tradable credits for clean electricity generation, both policies would operate as market-based mechanisms to encourage such generation. They also differ in significant ways, and this report, part of the Carbon Tax Research Initiative at Columbia University’s Center on Global Energy Policy, uses energy system modeling to zero in on those differences to enable policy makers to better understand the advantages and drawbacks of each policy tool. A variety of constructions even within a single tool—particularly a CES—can be employed. What type of generation is eligible for credit in a CES and how much credit each resource receives, for example, are in part products of political and policy trade-offs. For comparison purposes with an economy-wide carbon tax, this report primarily focuses on a single crediting approach that most closely resembles the incentives new and existing electric power generators could receive under a carbon tax (and is similar to the CES included in the Clean Energy Innovation and Deployment Act of 2020). And for CES comparison purposes, the authors construct a carbon tax pathway that closely approximates the annual and cumulative electric power CO2 emissions of the CES. Given the equal emissions-reduction ambitions of the two policies modeled in this report, the greatest trade-offs come down to price increases and revenues. The carbon tax raises consumers’ electricity price more than the CES does, but also raises significant revenues that could be used, among other purposes, to offset increases in consumers’ energy-related bills.
Topic:
Green Technology, Tax Systems, Electricity, Renewable Energy, Carbon Tax, and Carbon Emissions
Political Geography:
North America and United States of America

16128. Commemorating 50 Years of 'Outcast London'

Publication Date:
12-2021
Content Type:
Video
Institution:
Mile End Institute, Queen Mary University of London
Abstract:
This event from the Mile End Institute, Raphael Samuel History Centre, and Modern British History Seminar will commemorate fifty years since the publication of Gareth Stedman Jones’ Outcast London. The webinar celebrates the book and featured a panel of experts whose research interests speak to the book’s themes, methods and politics.
Topic:
Development, Labor Issues, Urban, and Industrialization
Political Geography:
United Kingdom, Europe, and London

16129. Forty Years On New Perspectives on the 1981 Budget

Publication Date:
12-2021
Content Type:
Video
Institution:
Mile End Institute, Queen Mary University of London
Abstract:
This year is the fortieth anniversary of the 1981 UK Budget Statement, one of the most controversial in British history. Geoffrey Howe, the Conservative Chancellor in Margaret Thatcher's first government, deliberately increased taxes during a vicious world recession after two years of tight monetary policy and punishingly high-interest rates, to tame high inflation. Inflation dropped, but the Budget also accelerated deindustrialization and spiralling unemployment, and turbocharged inequality. It has since indelibly shaped memories of ‘Thatcherism’. Forty years on, the current Conservative government is at a new fork in the road in its economic policy, grappling with pandemic spending legacies, the fallout from Brexit, and post-2008 economics, and with electoral pledges both to fiscal probity and to 'level up' the UK.
Topic:
Economics, Labor Issues, Governance, Budget, Unemployment, and Deindustrialization
Political Geography:
United Kingdom and Europe

16130. The Civic University

Publication Date:
12-2021
Content Type:
Video
Institution:
Mile End Institute, Queen Mary University of London
Abstract:
In 2018, the UPP Foundation established a commission to investigate the civic work of universities. The commission published its findings in February 2019 and recommended that universities set out to co-create Civic University Agreements with other key civic partners in order to beyond traditional civic engagement and become truly civic universities, embedded into their areas.
Topic:
Education, Social Policy, Higher Education, and Civic Engagement
Political Geography:
United Kingdom and Europe