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Some Applications of Non Equilibrium Thermodynamics Thinking to Current Geopolitical Issues

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In recent decades, there has been a development of several related concepts, some under the category of thermodynamics, which may be applied, to some degree, to the current geopolitical scene.

One is the perception of organization in this universe as ordered energy flows. This perspective can be characterized as ‘‘non equilibrium thermodynamics”. Probably the foremost and broadest scale explicant of this way of looking at the universe is cosmologist Eric Chaisson, now at Harvard. One of his signature books is ‘Cosmic Evolution’ .

Chaisson quantifies energy flows, and relates them to structures, at stellar, galactic, planetary, and even life levels. He relates complexity, at each of these levels, to ‘energy rate densities’. Somewhat surprisingly, he points out that energy rate densities in life forms exceeds those of cosmic structures such as suns. He also identifies energy rate densities of different types of life organization, such as plants and animals, and even the structure of industrial human activities, such as cities, airplanes, etc.

On separate but related themes, explorations of concepts such as ‘hierarchy theory’ and ‘emergence’ have shown that all structures at the scale humans perceive are in a sense hierarchic. Simple atoms make up complex, heavy atoms, atoms make up complex elements often described as molecules and chemical species, molecular structures make up, or are involved in, life structures, single cells make up multicellular organisms, both single cells, at their level, and multicellular organisations make up what we tend to call social systems, and so forth. (e.g. in currently visible human terms, cities are clumped in States, or provinces, states in an United States, ‘nation states’ around the world in the United Nations; or at lower levels franchisees under franchisors, etc,) In this framework, each level of aggregation is seen as a system of relationships, and a differentiated unit at that level joins with other elements, or systems, in a set of stabilized relationships to form the next level of hierarchy.

All these ordered systems involve — or more accurately consist of — stabilized energy flows, or, equivalently, stable systems of relationships, in energy flows. A condensed public summary of this perspective, with citations, is available.

Insights which arise in this perspective include that all organization is combinatorial — combinations of elements. Relatedly, ‘emergent’ effects of any combination of elements upon other combinations which it encounters are the effects of the organization as a whole as distinguished from the effects of its components might have were they not bound in their particular organization. That is, all organized systems are identified and in effect measured, or given meaning, by other systems in terms of the relationships system-to-system, so to speak.

This is an highly condensed overview, but one can get further, and somewhat complementary, clues concerning the stream of thought by looking at some of the work involved in the International Big History Association, including some of its leading members such as Fred Spier and David Christian. This Association traces cosmic evolution from its origins through human historical processes, in a variety of ways and from a variety of perspectives. The Association is recently formed, and its work is evolving in form and content.

Another architectural insight has been offered by Mark Buchanan, in his book ‘Ubiquity’ , to the effect that, as far as he could identify, all phenomena seemed to fall on ‘power law’, or log normal, statistical distributions — wars, city sizes, wealth distributions, earthquakes, etc.   This author has suggested that this is because all ordered phenomena consist of, or arise from, correlational processes, and such correlational processes produce this sort of statistical distribution.

Lastly, for initial introduction, a set of theories, or concepts, called ‘maximum entropy production’ (MEP) suggests, in general layman’s conceptualization, that given a differential (e.g. heat, or temperature, differential), it will be dissipated by all available means, and at situation-quantifiable rates, with common statistical signatures.  

Now to human societies, and the relationships between them. Each society is a group, and a group of groups. For each of these groups to have sustained coherence, its constituents must have stable inter-se relationships, or systems of relationships. But for any given group or set of groups to coexist with others, rather than devouring or being devoured by others, they must work out modi vivendi, so to speak. They must somehow establish complementarities, or symbiotic relationships, or at least non-lethal sets of relationships. Each and all must have an energy basis — a flow of energy into and through the stable system of relationships.

In large scale agricultural society examples, all ‘empires’ are hierarchic, in the sense of being made up by a coordinating mechanism which maintains relationships between component elements.

In analysing any given society, or set of them, we have to follow the energy flows. Karl Marx’s thesis that societies are structured by their means of production translates into the view that any given society, or set of them, will have institutions (regular patterns of activity embodying energy flows) which feed off of, embody and maintain the energetics of the system.

‘Agricultural’ societies can be seen as group-organized means of harvesting the photosynthetic capture of energy by plants, plus the energy of other-animal harvesters of the plants (‘livestock’). ‘Industrial’ societies maintain the plant and animal harvesting base, but have taken flight, so to speak, by capturing stored and concentrated energy of the residues of past eons of plant life on earth.

Since this cache of stored plant energy is finite and its boundaries are visible, it increasingly appears that if the multibillion human complex thus created is to be maintained in some form, over decades and centuries, humans will have to move to reliance on artifactual photosynthesis (AKA ’solar energy’), supplemented by wind energy, tapping the energy of breakdowns of heavy, complex atoms (nuclear energy), and perhaps some trace additions of current and earth-stored biological photosynthesis. Perhaps the best references for the data and analysis underlying this perspective are an international review of renewable energy sources,   and a conceptually elegant report by Sandia Laboratory personnel.  

We currently tend to call this a ‘renewable’ energy society. But it can be seen as a larger scale, current technological, or artifactual, or human-mediated, direct harvesting of sunlight, bypassing the biological processes of other organisms, past and present. In addition there seems a likelihood of harvesting of the differentials created by differentials in sunlight on the Earth’s surface (wind energy), with limited additional sourcing.

We tend to think of this all as a human created and engineered mastering of energy flows. But let us try to look at it from the Universe’s point of view, were the Universe to bother itself, apart from creating ourselves, to have one. From a thermodynamics perspective, from Chaisson on down, one can consider that life itself was created as a means of channelling energy flows to reducing differentials caused by universal ordering, as proposed by Santa Fe Institute researchers.   Derivatively, all our institutions, being driven by energy differentials and flows, and ourselves, can be seen as expressions of thermodynamic forces. We are, from such a point of view, but the enablers of Chaisson’s energy density rate functions.  

Lest this expression be interpreted as a whimsy to attract attention, I will use it to make suggestions about how current and future societies may tend to work out.

Let us consider the turbulent Middle East. Also we can consider the Soviet Union, and nearby Euro-asian areas.

Assuming no system-wide catastrophic breakdown, the stored plant energy potentials of these areas have been and will continue to be tapped. Pipelines will be built. Streams of oil tankers will continue.

This does not mean that there will not be intrastate and interstate maneuvering about where, when, and at what rate. Water flows downhill. But humans make dams, channels, irrigation projects, etc. And we humans do a lot of squabbling about how to create and divide up participation in reservoirs and flow systems over and outside political boundaries. Elinor Ostrom was given a Nobel prize for her careful and extensive work on how such situations, particularly those involving economic ‘commons’, have been successfully managed. Her prescriptions are worth careful attention.

The fractured and fractious political organizations of the Persian Gulf area have been, to some extent, and are likely gradually to be shaped to allow these energy concentrations to be distributed, or, to use MEP logic, dissipated. If democracies cannot reliably be constructed, autocracies and dynasties will have to conform themselves to these requirements. If they cannot do so, then possibly ‘trusteeships’ might be constructed by the world’s hydrocarbon thirsty and consuming polities. The political entities in the area will be monitored for efficiency and stability. This may lead to assistance, if possible; reshaping if necessary: both from outside their boundaries, and, possibly to a lesser degree, from within.  

Though thinly populated in many of its parts, Russia will, from its vast and central position on the Eurasian land mass, continue to feed gas into the highly organized energy transformation and use systems of Europe, and perhaps also China. It will also continue to be a source of other resources. (There may be some question whether the Easternmost portion of Russia remains European oriented, or becomes Sinified to such an extent as to lead to rearrangement of the State identification and administration.)

Around the globe the hydrocarbon potentials available from fracturing rocks will also continue to be developed, geographically unevenly but widely, on and adjacent to several continents. The phasing will be partially gated over time by relative efficiencies as between the hydrocarbon pools of the Middle East, Venezuela, and Canada, and ‘shale’ systems elsewhere. And the extent and rate of rock mining for hydrocarbons may be affected by the efficiencies of emerging photovoltaics based energy systems. But the techniques and tools are in hand, so to speak, in use, and expansible at current and sufficiently rewarded EROEI (energy return on energy investment) ratios.

Two factors seem likely to limit, or boundary, these extractions from the energy concentrations of life’s past, other than exhaustion. One is the possibility that the atmospheric temperature effects of the gaseous emissions from freeing up all these hydrocarbons — particularly carbon dioxide — will so disrupt the organic processes of current life as to arrest the whole process. The other is, as noted, the apparent potential of tapping the vastly larger solar energy flux of Earth to entrain larger energy flows with lesser disruption of current life patterns.

The first potential limitation has engendered much attention, but limited current effect, other than to lead to some effort to manage replacement of hydrocarbon mining by tapping the global solar energy flux — ‘renewable energy’ technologies, including the ancillary and necessary technologies to make solar energy universal, convenient, and supportive of at least the current level of human activity.

Efforts to coordinate limitations on ‘greenhouse gas’ emissions may slow the rate of increase, but seem far short of capping or reducing such emissions in immediately upcoming decades.

The salient geopolitical consequences of this projected transition to artifactual solar energy are interesting in a number of respects, prominently two.

First, artifactual solar energy capture, like biological, is inherently geographically extensive. The capture systems may be on the whole more southerly (take note, Northern Europe), and less co-located with water (but still dependent on some water to keep the needed biological support mechanisms in place). Whether this leads to massive territory wars like those of the agricultural era remains to be seen. We had best hope not, and strive to avoid them, for urgent reason.

The scope, efficiency and sustainability of this artifactual photosynthetic system seems likely to depend upon a complex web of interconnected resource, processing, and exchange systems implemented by humans, as distinguished from self sustaining (if we do not too much interfere) plants, ocean oxygen emitters, and generally the vast web of biological processes which we call Nature. The combinatorics of this system, globally employed, will be complex, subtle and demanding — of us.

In other words, whatever the array of geographically defined governance systems, if the systems for replacement of ‘fossil’ energy support for humans are to be realized, humans are going to have to construct and durably maintain large, and probably at best global, cooperation systems.

We may characterize these systems in economic, social, institutional, and other terms. But if we are going to get, for example, silicon, lithium, iron, copper, aluminum, etc. from where they are first found, and do all the intricate dances of transporting them, cunningly shaping them into microscopically toleranced formats, in large volume and at large scale, covering them with sand made into glass (or not), and have them harvest energy for decades, we have to have sophisticated coordinating mechanisms (including markets, and thus also including financial markets). And if humans seek a sustainable future of abundance of the sort many humans now enjoy, we can’t be blundering about periodically, or widely, destroying parts of such interconnected systems at will or impulse (read, if you wish, ISIL).

Lastly, for the moment, the imperative for hierarchical construction suggests that central coordinating functions, like those now embodied by the United Nations, will continue to evolve.

I have suggested that the above general directions, or tendencies, emerge from a consideration of order building, non equilibrium thermodynamic forces. However, I cannot assure my fellow humans that life on Earth, and our human part of it, must necessarily realize all the potentials one can envisage. Life, and order building in it, works in probabilistic increments. Over several billions of years, Earthlife has advanced as a whole in mass and complexity, it now appears, but also suffered some catastrophic setbacks in the process.

Whether our species of language and tool wielding ape will be able to achieve and maintain — over centuries — global integration at high levels of energy-fed activity, with current or better levels of individual welfare, is thus very much an open question. We have no good reason to think that an Abrahamic God, or other general Universal Governor, has decreed success for our hopeful projections of organizational potentials of human life on this Earth at this time. We are on our own, in an evolutionary adventure. In Star Wars terms, the force(s) may be with us, but guarantees are not on order.      

This leads to questions about what those concerned with ‘diplomacy’, or forms of facilitating international concert, may need to focus on in order to foster the needed, but far from guaranteed, international coherence. Modern Diplomacy, as a publication, is oriented to this topic.

In a prior post in another publication, I attempted an outline of some major themes, or focal points. In very brief summary, I suggested that we be aware of the central importance of energy flows and hierarchical ordering tendencies, mentioned here, that participants will be required to focus on arrangements which yield sustained mutual benefit to the participating parties (in current parlance, ‘win-win’ solutions), that there need to be monitoring of and controls on parasitism of the coordinated system by the coordinators, or ‘elites’ in the systems, that sound, objective knowledge systems of the sort developed in the sciences, and published through ‘free speech’ and ‘free presses’, be maintained, and that there is a need for continuity in systems (as massive breakdowns in an highly industrialized world may be very difficult, if not impossible, fully to repair).

Some of these suggestions relate to a need to prevent ossified, myopic national and international structures evolving, milked unproductively by national and international elites, stifling the growth potentials of the global human (and life) community.

I also pointed out that however much we wish completely to equalize welfare results for all participants globally, the prevalence of ‘power laws’ in the Universe counsels that we will never be able to do so. The operational possibility to be sought is that the various elements of the system be better off than if there were no system. (The philosopher John Rawls addressed this criterion in a way when he suggested that one approve or disapprove of a given system as if one did not know where one would fit in it.) A refinement of this concept is that an optimal system is one in which no one can be made more well off without making someone else less well off. But this logic does not, strictly, imply that in all circumstances complete equality applies as to all system participants.

On the global scene, both State and non-state actors seek to encourage successful and sustainable global integration. Some current organizations target selected international objectives from time to time, such as, but not limited to, Citizens for Global Solutions, and other organizations seek to create a global ‘parliament’ to parallel and inform the United Nations, promote a global ‘rule of law’ at the UN level and non governmental organization level, promote economic freedom, protect human rights, as by indexing State performance in human rights protection, and inhibit corruption in various polities by indexing State success in doing so. This is only a very limited sketch of such organizations. Please feel free to point up others in any comments on this essay.

The concepts I suggest here provide some support for the specifics of such efforts. Given my background as an attorney, I suggest that the ‘rule of law’ can be justified as an universal requirement by appeal to the basic nature of ordered processes — that is, that there be regularity and thus predictability in component processes — and the requirement that participating elements, such as ‘elites’, do not advantage themselves at the expense of the regularity and efficiency of the whole (the generic word for this is ‘corruption’). This basis goes deeper than others conventionally offered.  

I would also note that ‘human rights’ activities can be justified, perhaps somewhat undramatically and colorlessly, by the requirement that participating human elements in social groups, such as States, be accorded those nutrients and potentials for action which allow them to function with some equilibrium and effect.  

How well are such efforts succeeding? In the IA Forum piece, this author, perhaps parochially, attempted to rate the performance of his own native country, the United States, in meeting these criteria,, or requirements. Readers of this article are invited to correct this rating, and self-evaluate the conformance of their own polities by these criteria, if so inclined.

The effort reflected in this paper to to re-conceptualize some of traditional ‘statecraft’ has resulted in a limited and general set of suggested approaches. Broader efforts can be undertaken. Having had some connection with the US State Department and its education program for its foreign service officers, this author has proposed that such institutions might consider fostering research organizations (in a loose parallel to the US Defense Department’s DARPA) to probe analytically the theoretical and practical underpinnings of State construction and interaction.

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Iran’s ‘oil for execution’ plan: Old ideas in a new wrapping

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This week Iranian Oil Ministry is going to officially start a new plan that is aimed to be a new way for selling oil and tackling the pressures imposed by U.S. sanctions on the country’s oil industry.

The plan is to execute a barter system which allows domestic and foreign companies, investors and contractors to carry out projects in Iran in exchange for oil (I would like to call it “oil for execution”).

In this regard, as the official inauguration of this new program, a business contract will be signed within the next few days, under which a domestic company is going to receive crude oil in exchange for funding a project to renovate a power plant in Rey county, near the capital Tehran.

At the first glance, the idea of offering oil in exchange for execution of industrial projects seems quite a new idea, however unfortunately it is no more than the same old structure under a new façade.

U.S. sanctions and Iran’s coping tactics

Since the U.S.’s withdrew from Iran’s nuclear pact in May 2018, vowing to drive Iran’s oil exports down to zero, the Islamic Republic has been taking various measures to counter U.S. actions and to keep its oil exports levels as high as possible.

The country has repeatedly announced that it is mobilizing all its resources to sell its oil, and it has done so to some extent. However, considering the U.S.’s harsher stand in the new round of sanctions, the situation seems more complicated for the Iranian government which is finding it harder to get its oil into the market like the previous rounds of sanctions.

Selling in the gray market, offering oil in stock exchange, offering oil futures for certain countries, bartering oil for basic goods and finally bartering oil in exchange for executing industrial projects are some of the approaches Iran has taken to maintain its oil exports.

A simple comparison between the above mentioned strategies would reveal that they are mostly the same in nature, and there are just small differences in their presentation and implementation.

For instance, let’s take a look at the “offering oil in stock market” strategy, and to see how it is different from the new idea of “offering oil in exchange for development projects”.

Oil at IRENEX vs. oil for execution 

As I mentioned earlier, one of the main strategies that Iran followed in order to help its oil exports afloat has been trying new ways to diversify the mechanisms of oil sales, one of which was offering oil at the country’s energy stock market (known as IRENEX).

In simple words, the idea behind this strategy was that companies would buy the oil which is offered at IRENEX and then they would export it to destination markets using whatever means necessary.

Since the first offering of crude oil at Iran Energy Exchange (IRENEX) in October 2018, the plan has not been very successful in attracting traders, and during its total 15 rounds of oil (including heavy and light crude) offerings only 1.1 million barrels were sold, while seven offerings of gas condensate have also been concluded with no sales. This has made some energy experts to believe that this whole strategy is doomed to fail.

The most important challenge that Iran has been faced in executing this approach is the impact of U.S. sanctions on the country’s banking system and its shipping lines, since the purchased oil, ultimately has to be transported from the agreed oil terminals via oil tankers to different destination across the world. 

With the previous strategies coming short, nearly six months after the first offering of oil at IRENEX, in early May, Masoud Karbasian, the head of National Iranian Oil Company (NIOC) announced that the company plans to barter oil for goods and in exchange for executing development projects.

However, the “oil for execution” part wasn’t implemented until this weekend when Head of Thermal Power Plants Holding Company (TPPH) of Iran, Mohsen Tarztalab announced that the company is going to sign a €500 million contract under the new “oil for execution” framework for renovation of Rey power plant near Tehran.

According to Tarztalab, the TPPH decided to go for the deal after the sanctions prevented Japan from financing the renovation of Rey power plan.

Based on this deal, TPPH is going to renovate the power plant and in return NIOC will pay for the services in the form of crude oil. Clearly, TPPH is then in charge of the received oil and it’s their concern weather to export it or sell it inside the country.

A closer look at this deal, reveals how similar it is to other approaches that NIOC has been taking. Just like the oil offered at IRENEX, in this model, too, a company is left with an oil cargo which is banned from entering global markets. The buyers are once again facing financial barriers and shipping difficulties.

Although, like the first oil offering in which a few companies risked buying some oil, this time, too, TPPH, is making a significant gamble in signing this deal, but, just like the IRENEX experience, it seems really improbable for more companies to follow the state-owned TPPH’s footsteps.

Final thoughts

The need for taking all necessary measures for withstanding the economic pressures of the U.S. sanctions is an obvious fact, however the ways of doing so should be chosen more carefully.

It seems that the government has been only wrestling with the “problem” here rather than attempting to find practical “solutions”.

Fortunately, in the past few months, the government seems to have seen the fact that the best way to withstand any economic pressure is the transition from an oil-dependent economy to an active, self-sufficient and independent economy which is more invested in its potentials for trade with neighbors rather than the oil market. 

Solutions like offering oil in the energy exchange or oil for execution might be some kind of transition from traditional oil sales to new approaches, but they are not ultimate solutions in the face of sanctions.

To overcome the current economic conditions, the government has realized that it should have medium- and long-term planning and policy making. 

Active diplomacy and attention to the energy needs and capacities of the neighboring countries and offering discounts for oil products, although are more time-consuming ways to increase oil sales, but will be more successful than the ways we discussed, and will yield greater benefits for the country.

From our partner Tehran Times

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The who and how of power system flexibility

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All around the world, power systems are changing fast. For example last year Denmark supplied 63% of its power demand from variable renewables (wind and solar PV) while last June Great Britain went a full 18 days without burning coal for power generation.

Yet despite such examples of progress, change has not been fast enough to meet the objectives of the Paris Agreement. In fact, power sector emissions have been on the rise over the past two years and investments in variable renewable power capacity appear to have stalled for the first time in two decades. Meanwhile electrification continues in sectors such as transport – and without accelerated decarbonisation, much of the growth in power demand will be met by fossil fuels.

But having more low-carbon electricity on the grid is not enough; we need to make better use of that low-carbon electricity. That means coordinated action on the transformation of power systems.

Power system flexibility – the ability to respond in a timely manner to variations in electricity supply and demand – stands at the core of this transformation. Luckily, policy makers and industry leaders across the globe are increasingly aware of the importance of flexibility and are taking action. Over the last two years, two Clean Energy Ministerial Campaigns have contributed to developing an understanding of what technical solutions for flexibility are available – in power plants, grids, storage and on the demand side.

That’s the ‘what’ of power system flexibility. But the more difficult questions are ‘how do we implement this flexibility?’ and ‘who should be involved?’.

The answer is: it depends. More precisely, introducing the appropriate measures to deploy power system flexibility requires a deep, thoughtful look at each country’s institutional framework. One key finding from the various workshops and forums organised by the CEM Power System Flexibility Campaign is that the changes necessary to activate innovative flexibility solutions inevitably deal with regulatory decisions.

One key myth that these same events are contributing to dismantle is that power sector regulation is far too complex and far too country-specific to profit from international sharing of best practices. In fact, it may be the contrary. This sharing of best practices is one of the main contributions of the joint IEA and 21st Century Power Partnership report Status of Power System Transformation 2019, which explores the various points of intervention, along with the relevant stakeholders for flexibility deployment.

The report describes how it is possible for policy makers to easily identify areas where they can directly enable change and areas where more targeted interventions may need wider stakeholder engagement.

It starts by looking at energy strategies, legal frameworks, and policies and programmes. These high-level instruments are usually what is thought of when looking at renewable energy policy support. While relatively far away from implementation, this level is particularly important as it sets the overall course for power system development.

Energy strategies typically lay out broad targets, such as China’s target of flexibility retrofits for 220 GW of coal-fired power plants in its 13th Five-Year Plan or Switzerland’s ‘Energy Strategy 2050’. Legal frameworks go one step closer to implementation by defining electricity industry structure along with the foundations of who does what, such as the UK’s recent bill for electric mobility or the distribution sector and flexibility reforms in Chile. Lastly, policies and programmes can be useful tools to test specific technology approaches or focus on specific aspects of the energy transition, for example Italy’s feasibility study on ‘Virtual Storage Systems’ or the creation of a working group for the modernisation of Brazil’s power sector.

While these high-level solutions are necessary and can be very effective, accelerating the energy transition for increasingly complex and decentralised power systems will increasingly require detailed fine-tuning of institutional frameworks. This is where we come to regulation, market rules and technical standards. By allocating costs and risk, regulation essentially determines who can do what, and how. Similarly, market rules and technical standards play a key role in shaping the interactions of different stakeholders in the power system.

In many cases, it may be necessary to update regulatory frameworks to recognise the new capabilities of new technologies in the power system. This might be the responsibility of the regulator in the case of vertically integrated utilities or spread across regulatory decisions, market rules and technical standards in the case of more unbundled power systems.

For example, if modern wind and solar power plants are technically able to provide frequency regulation, the recognition of their contribution to system reliability may require a regulatory decision to assess and validate their capabilities. It might also require modifying the system operator’s market rules to allow access to ancillary services, as was done in Spain.

Similarly, if digitalisation and decentralisation of the power system offer the potential of greater demand-side participation, it will be regulation that enables smaller system resources to participate in energy, capacity and ancillary service markets. How this is implemented would vary across jurisdictions, for example updating prequalification requirements may be necessary to enable aggregation, as in the EU, simply recognising independent aggregators as market players, as in Australia, or reforming retail tariffs as in Singapore.

But to know what changes should be implemented, and by who, it is critically important to understand the specific point of intervention and engage the right stakeholders. More broadly, it is important to start a conversation with a comprehensive set of stakeholders, to get an idea of what is possible and what is needed, and to compare experiences within and across countries.

Over the coming year, the IEA and PSF Campaign will continue working on this global dialogue to improve the understanding of regulatory and market design options for the deployment of system flexibility, supported by the Campaign’s co-leads – China, Denmark, Germany and Sweden. The PSF campaign is preparing initial steps to collaborate with CEM’s 21st Century Power Partnership, the Electric Vehicle Initiative and the International Smart Grid Action Network to look at the linkage between power system flexibility and transport electrification, an important conversation given the trend towards decentralisation driven by adoption of electric vehicles.

This work all aims to drive home one key-message: we need creative policy making if we are serious about accelerating the energy transition, and regulatory innovation and international cooperation are a good place to start.

IEA

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U.S. Is World’s Largest Producer of Fossil Fuels

Todd Royal

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The world is using more, not less energy, with the United States (U.S.) leading this surge. This fact will continue changing the world geopolitically, and bring changes to global markets. British Petroleum’s (BP) seminal Statistical Review of World Energy 2019 was released in early June, and the findings revealed the U.S. is leading the world in production of fossil fuels. The report counters prevailing wisdom that peak oil demand is rapidly happening, when the exact opposite is taking place.

World oil records were broken in 2018; according to the Review: “a new oil consumption record of 99.8 million barrels per day (mbpd), which is the ninth straight year global oil demand has increased.” Demand for oil grew 1.5 percent. This is above the “decades-long average of 1.2 percent.”

The Review showed the U.S. is the world’s top consumer at 20.5 mbpd in 2018, and China was second at 13.5 mbpd, with India in third place at 5.2 mbpd. China and India are growing faster than world and U.S. consumer growth at 5 percent the past decade. What’s noticeable about the data is: “Asia Pacific has been the world’s fastest growing oil market over the past decade with 2.7% average annual growth.”

BP also released the emergence of a new global oil production record in 2018 that averaged 94.7 mbpd. This increased from 2.22 million mbpd from 2017. The U.S. came in at 15.3 mbpd, and led all countries by increasing production from 2017 by over 2.18 mbpd. The U.S. added 98 percent of total global additions, an astonishing figure.

Before the U.S. shale exploration and production (E&P) took off, oil was over $100 a barrel, but since the 2014 oil crash, global oil production has increased by 11.6 mbpd, and shows no signs of slowing down. What Russell Gold of The Wall Street Journal calls, “the shale boom,” has seen “U.S. oil production increase by 8.5 mbpd – equal to 73.2% of the global increase in production.”

What the numbers increasingly showed was the U.S. quickly surpassing Saudi Arabia. which is the second leading oil producer at 12.3 mbpd, and Russia in third at 11.4 mbpd. Though Canada has domestic opposition from environmental groups to fossil fuel production, Canada added over 410,000 bpd in 2017.

Add these figures to U.S. numbers, and North America is now arguably the most important source for oil in the world. The BP Review decided to add natural gas liquids (NGLs) to oil production numbers and found that U.S. NGL is higher than any country at 4.3 mbpd. This is higher than Middle Eastern numbers combined, and “accounts for 37.6% of total global NGL production.”

What does this mean for geopolitics? The axiom whoever controls energy controls the world now takes on new meaning with the U.S. drastically pulling ahead of Middle Eastern rivals, Russia and other global producers. Energy has always been a main factor in human development, and is especially true of today’s complex international, political and economic systems that have been in place since the end of World War II (WWII)

With abundant energy, scarcity no longer makes sense when global energy sources are now readily available. When geopolitical havoc comes from Africa since over 600 million Africans are without power, added to the over 1.2 billion people on earth without electricity that is a recipe for geopolitical disaster than can be avoided.

What abundant U.S. shale oil, and natural gas can provide, as well if steadfastly pursued, is putting a stop, or at least halting the rampant weaponization of energy from countries like Russia and Iran. However, both would argue they are doing this national security and sovereign protection.

The current path of demonizing fossil fuels won’t lift billions out of energy poverty, but it will serve to fortify Putin’s resolve. Western media outlets that back the get-off-fossil-fuels crowd do not seem to understand those geopolitical realities. Building electrical lines powered by U.S. natural gas over authoritarian dictators oil and natural gas supplies is a great pathway to promoting democratic capitalism, energy-sufficient nation-states, and continents with market economies.

This will lead billions out of despair, and solve a host of geopolitical problems that has vexed the U.S., EU, NATO and UN for decades. All of these problems will be solved without a shot being fired, or another fruitless war occurring.

By the U.S. countering the weaponization of energy through increased oil and NGL production this has national security and foreign policy implications that affects literally every person on the planet. As an example, if Ukraine, a NATO Member Action Plan applicant since 2008, can be bullied, annexed and invaded without consequence from the West, then global economic markets can be crushed on a whim.

Understanding foreign policy decisions through the lens of energy can lead either to chaos, or the deterring of determined enemies, and that’s why it is so important the U.S. continues leading the world in oil and natural gas production.

When more than 80 percent of the world’s energy comes from oil, natural gas and coal, while understanding “fossil fuels have enabled the greatest advancements in living standards over the last 150 years,” then energy is the number one soft and hard power geopolitical weapon outside of a nuclear arsenal.

“Leading from behind” and “resets” favored by the former U.S. administration won’t help Ukraine or other Russian border states under systematic assault. Trillions in economic growth is then stifled over energy concerns when the exact opposite should be happening.

Viewing the U.S.’ number one oil producer status through the prism of stopping authoritarians, and moving international relations toward the U.S.-led order is the best hope for the world in this perilous century. Geopolitically, it may also be out best hope for growth and forestalling another global war.

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Increasing Data Accessibility and Usability for Prosperous Nepal

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