Saturday, March 25, 2023

Costs of collaborating to develop new energy sources across borders

U.S. Embassy Political and Economic Chief (PEC) Domingo Villaronga says the Southern Africa Development Community (SADC) estimates of a colossal price tag of US$173 billion around (P1.557 trillion) to bring regional natural gas supply in line with demand by 2027 shows how regional integration can be complex and expensive.
Giving opening remarks on March 11, 2014 during a two-day Unconventional Gas Workshop Unconventional Gas Workshop held in Gaborone, Villaronga said this type of capital investment cannot be paid for by the SADC countries alone, and therefore “we all have to think about smart and sustainable ways of utilizing existing resources, collaborating across borders and developing new energy sources, to bring balance to the system.
“The impact of the US’ newfound energy resources is only beginning to be felt around the globe. While the contours of this development are still being defined, the one thing we know for certain is that there will be an impact, and its reach will be felt beyond our shores. This is not just because of the size or depth of our economy: it is inherent in the nature of energy markets themselves.
“Energy markets are integrated. For example, a storm thousands of miles away, whether climactic or political, can have an impact on the price of fuel, groceries, or power driven domestic appliances such as thermostat settings. This further underscores regional energy networks can be particularly sensitive, intertwining the fates of neighbouring countries with both positive and negative consequences.”
According to the US Embassy PEC, in the US for instance, the increase in unconventional gas production, due to advances in drilling technology, has allowed industry to access resources not previously economically viable. Unconventional gas today makes up over 50 (UG) is projected to grow to 75 percent. Supplies are surging, natural gas prices are dropping, and the economy has received a much-needed boost. American industries like steel, glass, and cement have become more competitive and at the same time the natural gas lower carbon portfolio has helped reduce carbon emissions to the lowest levels in over a decade.
New and emerging innovations have had tremendous energy security impacts as compared to “unconventional” hydrocarbons. However, developing natural gas particularly unconventional gas has inherent technical challenges like financing. This is not just to attract sufficient investment to get the resource out of the ground, but also to develop the infrastructure to access the market. There are also environmental challenges: protecting water, air, wildlife and limiting the negative impact on surrounding communities and habitats.
The US having faced and overcome the challenges feels obliged to share the experiences with other countries like Botswana on UG. One of the most important lessons involves the need to establish a dialogue between governments, industries and communities on issues concerning environmental protection and community engagement.
The basic concept behind unconventional gas is its’ composition of tiny fissures inside rock formations like shale gas, tight gas and CBM, which did not register on the global energy map even a few years ago. But over the last several years everything has changed especially in the US.


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