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Energy Transition? Not So Fast, One Expert Says

David Howell, whose career in British politics dates to the 1960s, has participated in a lot of energy history.

When he served as Margaret Thatcher’s secretary of state for energy from 1979 to 1981, Britain’s North Sea was just making its presence felt on world oil markets.

In a recent stint as international energy security minister under Prime Minister David Cameron, he saw the beginnings of what has turned out to be a sputtering effort to replicate the shale gas boom of the United States in Britain.

Now 83, and a member of the House of Lords, Britain’s upper chamber, Lord Howell, who also advises energy companies, retains a strong interest in everything from nuclear power to OPEC.

In 2016, he published a book on the energy transition away from fossil fuels called “Empires in Collision: The Green versus Black Struggle for Our Energy Future.” In a recent interview, he shared his views on everything from the need for what he called a “cleareyed” approach to tackle climate change to the shale revolution. The conversation has been edited.

From your perspective, is an energy transition underway that stands out from other eras?

Yes, but it is going to be much slower and much more expensive than people realize. The sorts of targets that have been set by the Paris Agreement, let alone the more extreme proposals for cutting to zero emissions by 2050, are going to be unbelievably disruptive and expensive.

Industrialists, energy companies and global experts say that by 2050 we will still be relying on hydrocarbons for at least 70 percent of the world’s energy (compared with an estimated 85 percent in 2018).

The green world says “Oh no!” We are going to make oil history, and we are going to have no hydrocarbon emissions by 2050. These are two absolutely contradictory views. They can’t both be right.

I have argued all along that the only possibility for progress is for the two energy empires of hydrocarbons and greens to work together.

Markets will help and technology will help, but if you try to predict the technology or define the markets, no progress will be made.

How serious do you think the pressures from environmentalists, politicians, young people and so on are for the oil industry?

There are very strong pressures and a great idealistic view that catastrophe lies ahead on climate unless we do certain things. The focus of what should be done is very blurred. In reality, what we do in the U.K. in our little 1 percent of world emissions — or even what Europe does — is marginal compared to the big emitters’ activities. The big emitters are obviously China, India, Russia and the United States.

If there are going to be protests, they should be against the policies of those four countries. The protests we have had — like blocking the streets of London — are, I am afraid, completely pointless. And the protest in the financial markets of trying to disinvest in energy companies is also pretty badly targeted because most oil production is in the hands of national oil companies. They are not affected by attempts to strand assets and disinvest and so on.

Have opportunities to deal with climate change been missed?

I was energy secretary a long time ago in the 1980s. At that time, very few people talked about carbon emissions at all. If you remember, at that time the mood among scientists was that there was going to be global freezing, not global warming. The main concern was with the reliability of oil supplies, which is why we made big efforts to emulate the French and go to nuclear electricity supply. Our efforts failed, but that is another story.

There was no effort then to respond to a problem that wasn’t foreseen. It has grown in the last 20 years. I don’t want to be too gloomy and say it is too late to do anything, but it is too late to unscramble the last 150 years of industrial technology.

Are governments taking the right steps to encourage a transition to low-carbon energy?

I do think that we have to be realistic, and realism dictates that hydrocarbons will have a major place in the global economy for the next 100 years. If we were really serious about climate change, we would be going all out to produce the technologies that would allow countries like China and India and other big emitters to produce cheap, reliable energy in a clean low-emissions form.

What should the governments in places like China and India be encouraging?

Although coal may be in decline, it is going to have a major role in cheap energy production in both China and India. The coal age is still with us — not in Western Europe, but in Asia and, indeed, Africa. So the concentration should be how do we have cleaner coal production from supercritical boilers and cheap carbon capture and storage. That is where the technology should he going.

How important has been the impact of production of oil and gas from shale rock?

It is central to the whole evolution of oil markets. No one foresaw that America would turn around from being the biggest importer to approaching being a net exporter of oil and gas. That is an extraordinary turnaround. And furthermore, there is considerable flexibility in response to price in the American shale industry. So it can switch on and switch off at speeds which completely undermine the whole OPEC role.

So OPEC really has lost its power. It has tried to maintain it by agreements with Russia, which are made to try to control the oil price market, but I am not sure that they are going to succeed. I think shale has altered the entire pattern of world oil. I think American shale oil, which is plentiful and now relatively easy to extract, has changed everything. And, of course, the political implications behind that for the Middle East and American interests in the Middle East are enormous. I am not sure even now that people appreciate the size of the difference.

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