Some 1.2 billion people globally have no access to electricity, while 2.8 billion are forced to burn waste to cook and heat their homes, according to a recent World Bank-sponsored report.
These are some crazy figures that significantly challenged the United Nation’s ambitious goal of ensuring that every person in the world has clean and modern electricity by 2030.
While the fossil fuels keep pumping and new discoveries are coming on line continually thanks to technological advances that allow us to drill deeper and unlock unconventional hydrocarbons, this doesn’t necessarily translate into energy accessibility for developing countries. It translates into exports to feed Western consumers, mostly. Nor have renewable energy efforts managed to put a dent in this brand of poverty.
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Population growth is quickly out-pacing any progress towards increasing energy accessibility. The result is that energy accessibility seems to be at a standstill despite the progress. It isn’t gaining the necessary traction even though an additional 1.7 billion people were given access to electricity between 1990 and 2010. Populations are growing faster, so we’re back to the beginning with the math.
It’s a problem largely spanning 20 countries in Africa and Asia.
Take India, for example, where the report says massive efforts to chip away at energy poverty have added 24 million people to the grid annually since 1990—but still it hasn’t moved forward, overwhelmed by continual population growth. India still has over 306 million people without electricity and over 705 million people who have to use wood or waste for cooking.
Then we have China, which the World Bank highlights as the most ambitious in terms of energy-efficiency projects—again, to no net effect. China still has nearly 613 million people using wood and waste for cooking and heating.
This lack of clean fuel for cooking and heating kills. Annually, some 3.5 million people—mostly women and children—die of respiratory illnesses related to the use of these unclean fuels.
The report also singles out Nigeria, Africa’s largest oil-producing country, where energy poverty is second only to India. Here, over 82 million people have no access to electricity and nearly 118 million people use wood and waste for cooking. It’s an unacceptable reality for a country that has THE largest natural gas reserves in Africa, but no infrastructure for getting it to people.
And then we have Indonesia, the world’s largest coal exporter and one of the top ten gas exporters but nonetheless home to over 131 million people who can’t use either for cooking.
This alarming report is also the World Bank’s desperate plea for “substantial investment” by the private sector, which is most likely a long shot. But it’s got some other suggestions as well, which include talk of a phase-out for fossil fuel subsidies and establishing a price on carbon.
This, however, requires a closer examination of what fossil fuel subsidies actually are, and whether getting rid of them would actually have any effect on an improved playing field for renewable energy.
In a recent interview with Oilprice.com, Breitling Energy CEO Chris Faulkner opined that the what certain factions call fossil fuel “subsidies” are actually better described as “standard tax incentives” and that there is enough bipartisan support for them—at least in the US—that they are unlikely to be phased out.
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“A more likely development in the US would be incremental attempts to impose a ‘back door’ carbon tax by proxy–essentially the Obama administration resorting to regulatory overreach to add to the costs of fossil fuel development, production, and consumption. This kind of disincentive essentially creates a subsidy-in-reverse,” Faulkner said.
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And in the end, he said, it’s the independent exploration and production companies, not the massive integrated firms that benefit from these “subsidies”.
If we’re talking about “true subsidies such as those in Iran or Venezuela aimed at keeping gasoline and other fuel costs to consumers below their real costs,” according to Faulkner, “then the primary beneficiaries are the autocrats and dictators who might get ousted without them.”
The bottom line is that the World Bank doesn’t have the answer to this problem—yet, and its fossil fuels subsidy phase-out and private investment suggestions are not likely sound remedies.
By. Charles Kennedy of Oilprice.com
