Climate Change and Energy, American Petroleum Institute (2017) Review – Getting our Priorities Straight!


Climate Change and Energy is an excellent report which helps to get the gist of the subject matter, of course what the oil and gas producers point of view is. I also find it very straight-forward and easy to read. The American Petroleum Institute points out that focusing too much on carbon dioxide emissions means that we fail to appreciate the repercussions of the economy and social well-being. In fact, the API also emphasizes that renewables at present actually contribute very little to the U.S.’s energy transformation. Environmental awareness is all well and good, nevertheless falls short of the immensity of the issue at hand.

1. Energy poverty

Energy poverty is a good reason why we should make oil and natural gas part of the U.S. energy mix in the future. According to the American Petroleum Institute, lack of access to oil and natural gas in sufficient amounts can lead to a nation’s energy poverty. Fuel poverty will almost certainly limit a nation’s GDP growth and it partly explains why the U.S. has continued to grow its economy with respect to consumer price inflation (CPI), whereas the European economy almost stagnated. As a rule of thumb, energy costs in Europe are twice that of the United States, as a consequence of this European manufacturers and heavy industry such as steel producers think twice about making investments in the European Union. Having abundant energy supplies has allowed the U.S. to maintain its high standard of living.

2. Oil is the basis of our industrial way of life

Of course, oil has many uses and is needed in the IT industry, agriculture, civil engineering, the medical sector and even in the renewable energy sector. The American Petroleum Institute forgot to mention in its paper that the energy requirements to set up and operate wind farms almost always exceed the energy production of the wind farm over its life span. So even renewables depend to varying degrees on fossil fuels.

3. Natural gas and carbon dioxide emissions

Natural gas is primarily composed of methane and that the United States has massively benefited from the shale gas boom. According to the American Petroleum Institute, using natural gas on an industrial scale releases less CO2 into the atmosphere then oil would by comparison. The United States was the only industrialized country, in fact it was the only country in the whole world able to increase GDP while at the same time lowering its emissions. The main contributor for natural gas, driven by the increase in shale gas production. It must be seen if it is viable strategy in the long-term to push shale gas production further, as the wells drilled have a more rapid falloff then conventional wells once peak production has been reached. This is a point of contention of course.

4. What stuck with me

The most convincing point that has presented in the paper by the American Petroleum Institute is that of fuel poverty. Germany currently experiences artificially-induced fuel poverty because renewable energy was subsidized for many years which incentivized local communities to invest in wind energy and photovoltaics, even though Germany is located at 51.1657° N, and is not well suited to build up photovoltaic systems on a large, industrial scale to fill Germany’s energy gap. Due to misguided incentives, Germany has curtailed the optimization of conventional gas power plants and construction of new ones. In order to maintain the base load for high voltage transmission, the regulator advices to fill the gap with electricity imports from France. But transnational imports and exports of electricity have to be balanced. So this leads to increased electricity costs, indirectly. Energy poverty is the result.

5. References

For more information, please refer to the American Petroleum Institute (2017):

American Petroleum Institute (Climate Change and Energy, 2017)

Many thanks for the shared interest in the energy world!

This article is meant to inform the reader of recent developments in the energy industry at large. We take great pride in our work. Despite all this, we would like to point out that we do not guarantee the reliability of the content on this website.
Please note that the information presented on this site reflects the opinion / views of the author himself. No relationship to artists, authors, companies, institutions or organizations can be inferred from these texts, illustrations, images and presentations. 
The contents are not to be understood as business advice in any form. The author does not put forth investment recommendations. This article should not be taken as investment advice and the author cannot be held to account for investments made. For more information, please refer to the Legal Disclosure and Privacy Policy, which you can click on or find at the top of this page in the menu bar. 

Email (case-based consultation and support):

Whether advice can be provided depends on the specifics and particular subject matter of each individual case.

COPYRIGHT CONTACT: Please contact us by email or phone if you would like to use the following content: i. Energy industry texts and energy industry articles, ii. Presentations (PowerPoints / PDF documents) and iii. Images (i.e. images of power plants and industry). 
COPYRIGHT: Please note that these texts, reports, presentations, including presentation layouts and presentation designs, and images are subject to copyright. Please contact the website owner if you wish to use copyrighted content. For copyrighted content, permission from the content owner is required. 
GEOGRAPHIC MAPS, MUSIC, VIDEO CONTENT OF WELDER IN THE INTRODUCTION VIDEO, PRIVACY POLICY AND LEGAL DISCLAIMER (BOTH GERMAN AND ENGLISH): Geographic maps, music and video content of the welder in the introduction video, privacy policy as well as legal disclaimer (both German and English) have been provided by third party providers. Geographic maps, music and video content of the welder in the introduction video, privacy policy as well as legal disclaimer (both German and English) are NOT part of the offer. They are not part of the Boegelsack Energy portfolio.

Your subscription could not be saved. Please try again.
Your subscription has been successful.


Subscribe to our newsletter and stay updated.

Wir verwenden Sendinblue als unsere Marketing-Plattform. Wenn Sie das Formular ausfüllen und absenden, bestätigen Sie, dass die von Ihnen angegebenen Informationen an Sendinblue zur Bearbeitung gemäß den Nutzungsbedingungen übertragen werden.