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Analysis: U.S.-European energy future

Sweden-based energy company Vattenfall recently unveiled the world's first CCS test plant in eastern Germany, and several other companies in Europe and the United States have announced they are researching CCS technology, which could be economically viable by 2030, a report by consultants McKinsey and Co. said. Experts, however, hope that with U.S. backing, this date could be pushed forward by a decade or so.
by Stefan Nicola
Berlin (UPI) Sep 29, 2008
Cooperation in clean technology and competition over new energy supplies will likely dominate the European-U.S. energy relationship once a new U.S. president takes office in January.

In Europe, most energy experts can't wait for a new president to enter the White House. Granted, Democrats have controlled the Congress, resulting in new bills and more momentum for energy efficiency and renewable energy. But even a committed Congress can't replace a committed president. Both candidates, Sen. John McCain, R-Ariz., and Sen. Barack Obama, D-Ill., have a much more progressive view on energy and climate protection than the current officeholder, and Europe is aware of that.

"We hope for a fresh start on energy and climate policy with a new U.S. president," a Western diplomat said recently.

Such a fresh start could include significant cooperation on green technologies, mainly carbon capture and storage, the holy grail of clean coal.

"CCS is a technology that should be pushed in larger cooperation" between the United States and Europe, Jens Hobohm, energy expert at the German Institute for International and Security Affairs, a Berlin-based think tank, told United Press International in a telephone interview Monday.

The United States and Europe both have significant domestic coal resources, but the fossil fuel has come under scrutiny because it's responsible for a vast amount of carbon dioxide emissions that experts say are responsible for global warming.

Sweden-based energy company Vattenfall recently unveiled the world's first CCS test plant in eastern Germany, and several other companies in Europe and the United States have announced they are researching CCS technology, which could be economically viable by 2030, a report by consultants McKinsey and Co. said. Experts, however, hope that with U.S. backing, this date could be pushed forward by a decade or so.

Both McCain and Obama support CCS. The Obama-Biden comprehensive energy plan foresees investments of at least "$150 billion over 10 years in clean energy technologies, including incentives to accelerate private-sector investment in commercial-scale zero-carbon coal facilities," Obama campaign spokesman David Wade was quoted on Jonathan Martin's blog Politico.

If elected, Obama's Department of Energy would push for the development of "five 'first of a kind' commercial-scale coal-fired plants with carbon capture and sequestration" in the United States, Wade added.

Observers in Europe welcome such proposals.

"If the United States wants to lead in climate protection, it could do so by proving that CCS works and can be economical," Hobohm said. "The global climate problem can't be solved without CCS and exporting that technology to China, which burns dirty coal like no other country in the world."

While CCS would aid the struggle to curb climate change, it would also boost energy security -- at least in the view of Washington, which long has argued that Europe should become less dependent on Russian gas.

"Without CCS, we wouldn't have a choice but to rely on Russian gas in the future," Hobohm said.

Of course, it won't all be cooperation. The United States wants to become a leader in CCS technology to export it all over the world; naturally, European companies have similar plans.

"But we could easily cooperate researching the basic issues, such as how and where to best store the CO2," the Western diplomat said.

Apart from CCS, the United States under a new president could even enforce the push into other green technologies such as wind and solar energy. Already several initiatives have been launched, with U.S. companies eager to steal business from the German, Danish, Spanish and Asian firms that currently dominate the wind and photovoltaic industry.

But greater competition doesn't necessarily have to be bad, Hobohm said. It could "launch a momentum that forces the European renewable energy industry to follow suit" by getting even better than the Americans.

When it comes to fossil fuel resources, Europe and the United States will likely battle for the best deals. Europe's own oil and gas reserves are quickly depleting, and several countries have announced they plan to diversify their import sources to become less dependent on Russia. New oil and gas reserves are up for grabs in Central Asia, Northern and Western Africa (Algeria, Angola, Nigeria) and Iran.

"In countries like Angola, we are going to be competitors," the diplomat said.

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Atlanta GA (SPX) Sep 29, 2008
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