World Summit highlights wide range of clean energy proposals

A broad coalition of stakeholders pledged support for a variety of clean energy initiatives at a United Nations-sponsored summit on sustainable development held in Johannesburg, South Africa.

By OGJ editors

WASHINGTON, DC, Sept. 3 -- A broad coalition of stakeholders pledged support for a variety of clean energy initiatives at a United Nations-sponsored summit on sustainable development held in Johannesburg, South Africa, this week.

The proposals are all non-binding although individual countries may seek to codify the agreement to meet their own specific pollution targets.

Among the items of interest for industry are two new partnerships, one with an upstream focus, the other downstream.

The Global Gas Flaring Reduction Public-Private Partnership seeks support from national governments, development agencies, and the petroleum industry to reduce what the UN calls "the environmentally damaging flaring and venting of gas associated with the extraction of crude oil."

By reducing gas flaring, product produced at the oil extraction source can be channeled to more useful outlets, including the power generation industry and for use in households, World Bank officials said. Organizers added that the partnership aims to enable private investments in pipelines and related infrastructure to make "capturing" possible.

Led by the World Bank in collaboration with Norway, the initiative started at another UN summit in Marrakech, Morocco, in November 2001. Three companies: Royal Dutch/Shell Group, BP PLC, and the Algerian national oil company Sonatrach have joined the partnership, while non-governmental organizations, civil society groups, and other stakeholders are expected to join the activities of the partnership as it grows.

In the US, Senate Energy Chairman Jeff Bingaman (D-NM) is also expected to hold hearings on the issues this fall (OGJ Online, Aug. 28, 2002).

"More than 100 billion cu m of natural gas are flared around the world each year," said Peter Woicke, managing director of the World Bank and executive vice-president of International Finance Corp. "The flaring occurs in association with crude oil production and results in a significant waste of resources. For instance, were the flaring of gas in Africa alone to be used for power generation in efficient power plants, this could produce about 50% of the current power consumption of the African continent."

Public-private partnerships
Partnership members plan to meet regularly; their goal is to see an improvement in flaring statistics and reporting, and the development of common technical standards. The group stressed, however, that they expect investment money to come from the private, not public, sector.

"This cooperation will also enhance the use of World Bank mechanisms to help mitigate the risk of financing flaring reductions, as well as provide assistance in designing carbon credit schemes to unlock "green" financing. The intention, however, is that the bulk of the investments come from the private sector," UN officials said.

Industry goals
Oil industry participants urged colleagues to join the initiative.

"The aim of the partnership is to support national governments, development agencies, and the petroleum industry in their efforts to reduce the flaring and venting of gas. For the oil industry, it makes sense to support this public-private partnership as it is an integral part of our strategy to reduce gas flaring. Also, a substantial reduction is only possible in a concerted effort with the support of national governments and other key stakeholders," said Philip Watts, Chairman of The Committee of Managing Directors of Shell.

Going forward, the partnership pledged to "overcome the barriers that currently inhibit flaring reduction investments through various practical solutions."

Members said specific goals include improving the legal and regulatory framework for investments in flaring reductions, expanding international market access for gas and providing technical assistance to develop domestic markets for flared gas.

The group also wants to disseminate information, including on international "best practices"and promote local small-scale use of gas, that could help alleviate poverty.

Downstream fuel issues
Also at the summit, several energy and environmental stakeholders pledged to form a downstream partnership on clean fuels and vehicles that aims to reduce urban air pollution worldwide. The US Environmental Protection Agency spearheaded the Clean Fuel/Vehicle Partnership, which wants to find ways to make gasoline lead-free and diesel fuels lower in sulfur, particularly in developing nations.

EPA said it wants to help developing countries craft their own action plans to phasedown leaded gasoline. It also wants partners to support cleaner fuel standards and cleaner vehicle requirements. Automakers and refiners are now in a heated debate over an automaker proposal to create an international fuel quality specification that severely limits sulfur levels and places strict controls on aromatics and other petrochemical components in motor fuel.

The agency also said it wants more public outreach on instituting clean fuel/vehicle programs, with an initial focus on fuel adulteration.

Conflicting views
Engine manufacturers, some environmental groups, and trade associations affiliated with automakers and oil producers lended their support to the EPA proposal.

EPA's mission statement for the new group noted that "there is a broad consensus among government, industry, and civil society partners that reducing human exposure to lead in gasoline and urban air pollution is a major environmental and public health priority."

According to the agency, eliminating lead from transportation fuels, in any country, is seen as "an essential first step" in any motor vehicle emission control program.

The charter also said that phasing down sulfur levels is also an important public policy goal because the diesel fleet is growing faster than the gasoline fleet in many parts of the world.

However one group, the American Petroleum Institute, stressed that while the partnership "holds great promise" in reducing urban air pollution, that members should take care not to emphasize "overly broad statements that do not apply in all situations encountered in developing countries and on which there is not general agreement."

Other energy issues
Many, although not all environmental groups were generally critical of the summit, saying policy-makers failed to make commitments on specific targets or timeframes for encouraging cleaner burning renewable fuels.

The United States along with Japan, most oil-producing countries, and developing nations rejected a call by the European Union to support a goal of producing 15% of global energy from renewable sources by 2010.

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