Title: Energy and Democratic Leadership: The management of natural resources for development
1Energy and Democratic LeadershipThe management
of natural resources for development
- Willy H Olsen
- Advisor to INTSOK, Norwegian Oil and Gas
Foundation - Member of the Governing Board, Revenue Watch
Institute - Santander 21 August 2007
2The world needs more energy
- World energy demand is projected to increase by
over 50 between now and 2030. - 80 of traded oil will come from just three
areas - Russia
- West Africa
- Middle East
- Investment of 17 trillion will be needed
- Technology is an important enabler to deliver the
energy the world will need
Source ExxonMobil, IEA
3New alliances is changing the competitive
landscape
- Asian countries offer billion dollar investments
in infrastructure for attractive oil and gas
assets - China, India and Korea are grabbing assets all
over the world - Entering deals of limited interest to most IOCs
President Roh Moo-hyunof Korea meetsPresident
Olusegun Obasanjo
4The Chinese footprints in Africa
5The price is a nightmare for the energy poor and
filling the accounts of the rich
Source EIA
6The poverty goal is still just a goal
- Access to energy is critical for the achieving
the Millennium Development Goals - Still some two billion poor people has no access
to modern energy services. - For the majority of developing countries in
Africa, Asia and Latin America ensuring access to
energy for the poor, especially in rural areas,
is a huge challenge
7The challenge is still enormous
- More than one billion people live on less than a
dollar a day - 70 in Africa
- Laos, Cambodia, Burma and North Korea fall into
the bottom billion group - They are in the conflict trap
- More than 70 have recently been through a civil
war or are still in one - And in the natural resource trap
- More than 30 of the poorest people live in
countries where resource wealth dominates the
economy - And where autocracies tend to outgrow democracies
Source Paul Collier, The Bottom Billion
8Energy is a vital link to tackle poverty
- Energy has helped transform and underpin human
development over Centuries - Energy is vital if we are to achieve the
Millennium Goals - Energy is needed to increase productivity and
provide jobs - Energy has long been a missing element in plans
to tackle peoples chronic poverty - Norway has during the last 25 years granted more
than 10 billion NOK to power sector aid - Poverty reduction was never an integrated goal
9Mega project has been important but not
addressed the poverty issue
- Sustainable hydropower development has still
considerable potential in many developing
countries. - International development aid has often focused
on large scale supplies at national or regional
levels - Poverty reduction has only recently become an
issue - High costs of new connections and rural
electrification as well as cost of use of
electricity remains crucial challenges for
expanding coverage in poor countries
10Removing the burden on women
- Poverty condemns the vast majority of poor people
to rely on biomass - Placing a large burden on women and children
- Efficient technologies for the use of biomass
would ensure that scarce biomass resources are
effectively utilised, - Reducing the negative impacts the use of biomass
women and childrens health
11The resource curse will not go away
- Some 50 countries are rich in hydrocarbon and
mineral resources - Resource-rich developing countries have
experienced - Low per capita growth rates
- Slow progress in human development
- Social and political instability and violence
- And high corruption
- Escalating global demand for natural resources,
higher prices and fierce competition is deepening
the challenge
12Emergency crisis in the energy sector
- Nigeria has large oil and gas reserves
- The country is a major exporter
- Investing 10 12 billion dollars annually in new
oil fields and new LNG plants - 70 Nigerians are directly or indirectly
dependent on forest resources to meet their
domestic energy needs - President YarAdua declared emergency in the
energy sector
13An oil field with no impact on the women
- Africa is producing close to 10 of the worlds
oil most of the oil is exported - Africas role as a major gas exporter is growing
- Africa is only consuming 3 of global energy
14Wasting valuable energy resources
- Flaring in Africa 200 TWh of CCGT power
production - Enough power for 85 million low-income urban
households - Nigeria is reducing flaring but large volumes
of gas is still not monetized
Source World Bank flaring report
15Oil from Chad flowing to global markets
- If this is development, you can keep it.
- A Cameroonian farmer commenting on the
Chad-Cameroon Project, seeing his land converted
into a construction site.
16Who has always access to electricity?
- Burmas new capital Naypyidaw enjoys light at all
times - Gas to Thailand represents 43 of export earnings
- India and China competing for a new gas pipeline
- Burmas poor can only dream of access to energy
17Preparing for a life after oil and gas
- Algeria, aware that its oil and gas riches will
one day run dry, is gearing up to tap its
sunshine - New Energy Algeria was set up by the Algerian
government to develop renewable energies and is a
subsidiary of Algeria's state-owned oil and gas
company - A recent study confirms the potential for using
renewable energies, especially solar power.
- Work ongoing at the first plant at Hassi R'mel
- The plant will use both sun and natural gas.
- 25 megawatts will come from giant parabolic
mirrors stretching over 45 football fields
18The challenges
- Poverty reduction requires the development of
energy systems that can bring electricity to poor
users - Distribution is a major challenge
- Affordability limits the focus on mostly
stand-alone solutions - Access to power sector investment capital is poor
due to series of mutually reinforcing political,
governance and financial risk barriers to
investment - Development of adequate public institutions that
can take on the sector development challenge - Development of reliable and stable framework
conditions for private investors
19Good governance is critical
- Governance as the set of traditions and
institutions by which authority in a country is
exercised - The process by which those in authority are
selected and replaced - Voice and accountability
- Political stability and absence of violence and
terrorism - The capacity of government to formulate and
implement policies - Government effectiveness
- Regulatory quality
- The respect of citizens and state for
institutions that - govern interactions among them
- The rule of law
- Control of corruption
20Effective and sound institutions required
- Development of effective and sound institutions
in the energy sector is a major challenge - Modern power legislation and regulation is in
place in many countries, but implementation and
enforcement lag far behind - Lack of performance monitoring
- Weak reporting on progress and problems
- Weak financial statements
21Where are the Energy Saving Bulbs?
- Energy efficiency strategies under way in many
countries - Detailed energy audits in industries,
institutions and commercial building - Local government will be required to enforce
energy conservation - Distribution of free energy saving bulbs,
consuming five times less energy and have a
longer life span than the ordinary bulbs - Ghana has ordered 6 million bulbs to replace the
power hungry ones currently in use - Uganda, Namibia and others are doing the same
Headline in Accra Mail
22The Ministry of Power and Steal
- Oil profits generally seem to find their way by
some invisible pipeline into private pockets
- Lloyd George,
- British Prime Minister
- 1916-22
- 26 March 1920
Nigerians view during the military regime
23Promote energy literacy through capacity building
- Communities must have a voice in the decision
making process - Such inclusion is not always in the interest of
those in government. - Capacity and knowledge are key elements to
empower the poor to participate in the energy
debate - No sustained public education on energy
conservation - Without the power to claim their rights and to
pressure the government to ensure access to basic
services that can develop their capabilities,
they will remain stuck in poverty
24Expanding public private partnership
- Public-private partnerships can combine the
public interest and social responsibility of the
government with the efficiency and responsiveness
to customer demand of the private sector - Allocating risks and rewards between the partners
is not easy - The private sector cannot be expected to serve
the poor populations in remote areas without some
form of public policy support
25Making renewable energy a priority