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Clean energy wrecking ball slips from Trumps grasp
By Christian Roessing*
Carbon dioxide, sulphur dioxide, methane andDonald Trump? To the list of the big
environmental hazards facing our planet, it is tempting to add the US presidentelect. He has, after all, dismissed climate change as a hoax, threatened to ditch the
Paris accord on carbon emissions and promised to dismantle the Obama
administrations clean energy programme.
Of all forms of energy production, energy efficiency is the cheapest. In other words,
the cost of electricity generated from improved efficiency excess power that
can then be used for other purposes is lower than for every other energy source.
US states and cities were quick to recognise this, and a large number have
introduced laws and regulations to cut energy use. In doing so, they have also sped
up the adoption of energy-saving technologies across the country, including
sustainable building design, LED lighting, low-energy semiconductors and variable
speed industrial electric motors.
This distinctive aspect of the USs clean energy revolution should resonate with
investors for two reasons. It will be unaffected by Mr Trumps plans, and it can
hasten the countrys transition to an environmentally friendly energy mix.
So even in the unlikely event that Mr Trump manages to halt his predecessors
federal clean power drive, the transition to a sustainable energy system will not be
derailed.
The next president of the US may have defied the polls, but he cant defy the power
of technological progress and economics.
*Christian Roessing is senior investment manager at Pictet Asset Management. His
comment was originally published in the Financial Times of 28 November,2016
But there was scepticism that Turkey will need additional gas. It is aiming for future
energy mix diversification, with natural gas demand being revised downwards
through increasing use of coal, hydro, renewables, nuclear and LNG imports, and it is
already on the way to achieving this. In fact, gas imports this year may total 45bcm,
in comparison to 48.4bcm last year.
Turkish Stream is back on track and is a game-changer for the region. If a second
string is built, it will make gas imports to Turkey from other sources that much more
difficult. Depending on how this develops, Turkeys need for East Med gas may no
longer be an urgent priority.
Cyprus, meanwhile, is dominated by the negotiations for a peace settlement and, at
present, this issue over-shadows all others. Nonetheless, the results of the third
offshore licensing round are expected soon, with awards possibly during the first
quarter of 2017.
Total is planning to drill in Block 11 April next year, if its problems with access to port
facilities are finally sorted out, and prospects for gas discovery look reasonable. ENI
was bullish that, over the next few years, drilling may lead to new discoveries, which
will alter the prospects for Cyprus. Otherwise, gas exports from Aphrodite are stalled
due to the very low gas prices prevailing globally.
With East Med export options dwindling, marine-based developments, such as FLNG,
may gain prominence. FLNG is coming of age, proving to be a viable gas export
option even in the present low-price climate.
The EU is interested in the East Med through Cyprus, whose sovereign rights it
supports. The EU looks at the East Med for its own security, for diversification and as
a bridge for greater cooperation. But, mindful of price limitations, the priority for the
EU is to see the new gas opportunities turn into a blessing and not into a curse, and
wants to help the region and regional markets benefit.
Opportunities for the region to export its gas are, thus, becoming more challenging.
In the longer term, FLNG may become a serious option. In the meantime, the region
needs to plan with realism and pragmatism if it is to successfully develop its gas.