The Energy and Climate Change Journal

Discover insight into energy markets, energy competition and climate change trends


Oil and Gas Industries

The energy industry may be one of the most fundamental industries in the world today.  The energy industry comprises all industries that deal with the production and distribution of energy in any form, including gas and oil.

The energy industry is divided into two further categories--upstream and downstream. The upstream industry, also known as the E&P industry, mainly deals with the exploration and production of natural gas and crude oil.  The downstream industry deals with the refining and selling of all the products derived from petroleum, including natural gas, gasoline, fuel, petcoke, and asphalt. It includes industries that make use of refined petroleum products such as lubricants, pesticides, fertilizers and pharmaceuticals.

Energy is derived from natural resources, and many reserves are found in the Middle Eastern countries. For some countries, oil production may be the major industry that supports their economy.  Energy is becoming an expensive and coveted commodity.

The energy industry is highly volatile and may be impacted by many economic factors.  The energy industry has gone through some major crises in the past, resulting in highly unstable prices.

Political tensions among nations are major contributors to energy crises. The prices and terms for exporting energy are often entirely dependent on the governmental bodies of exporting states. One such crisis, known as the 1973 Oil Embargo, occurred when most of the Arab oil exporting countries refused to supply oil to the U.S. The recent political upheaval in the Middle Eastern countries, such as Libya, may once again render the energy industry unstable.  Such crises can cripple the economy of oil- importing countries within days.   

Market share has shifted in the oil and gas industries.  Traditionally dominated by countries in the Middle East, the industry has seen Russian and the United States emerge as key players.  The United States, as a result of innovative production techniques and shale gas production, may become the world’s largest oil producer by 2020.  Russia is also emerging as a key player on the world’s energy stage.  Its Arctic, Eastern Siberian, and Krasnoyarsk regions are rich in oil.  It has an extensive array of tunnels left over from its Soviet days.  It has been growing in the European oil market.  

The energy industry may face major challenges, such as sustainability and geopolitical risks. The rising competitiveness of the market may require continuous improvements and effectiveness in the operations of companies. The potential of environmental risk may make it difficult to comply with the rules and regulations imposed by the governments.  The industry may also require a highly skilled workforce. Oil-drilling companies are also required by law to ensure maximum protection against any accident, such as an oil spill, that can affect the health and safety of workers or harm the environment. These challenges may deter potential investors.

More industries are on the lookout for alternative sources of energy. The use of solar, geothermal, wind and hydropower energy is on a constant rise. These may pose competition to the current oil and gas industry, but these alternatives may still have a long way to go before they can replace petroleum goods.



Sustainable Agriculture

Sustainable agriculture has been mistaken for organic farming but sustainable agriculture is a system that requires certain measures and takes many forms.

Sustainable agriculture was born out of a rejection of the industrial approach in favor of methods that hew to natural ecological processes. The industrial system can produce abundant crops cheaply but its effect on the ecology has been disastrous: erosion, depleted soil and water resources and deforestation are just some of the effects.  Conventional agriculture also tends to involve more resources such as fossil fuels for chemical fertilizers, running irrigation sources, transportation and large amounts of water.

Methods of Sustainable Farming

Sustainable agriculture can encompass a wide range of techniques, including free-range, low-input, organic and biodynamic. An organic farm does not mean that it is automatically sustainable, especially if organic farming is carried out on a large scale to threaten the environment.  Sustainable agriculture would ensure that a single area can produce food indefinitely. In order to achieve this, the farm has to withdraw no resources from the environment that cannot be replenished naturally, not make irreversible changes to the land, avoid pesticide use by using organisms that control crop pests and to integrate croplands with livestock grazing.


Sustainable farming has drawn its share of critics who claim that such a system produces lower crop yields than traditional agriculture. The debate on both sides has been lively and critics have lambasted sustainable agriculture as too simplistic. There have also been dire warnings that practicing sustainable farming wholesale could result in global food shortages.  On the side, proponents of sustainable agriculture cite a 2010 United Nations study that organic and other sustainable farming methods would be necessary to feed future generations. 

However, more scientists, experts and policy panels are suggesting that sustainable practices can feed more poor people and at the same time begin to repair the ecological damages caused by industrial agriculture. A new study from researchers at McGill University and the University of Minnesota concludes that while sustainable farming generally produces lower crop yields the differences is less significant for certain crops. A U.N. study of African farming in 2008 found that organic or near-organic farming produced yields of more than 100%.

Prospects for the Future

Achieving sustainable food security commonly may possibly be supported by the use of many different techniques, including hybrid systems. For underdeveloped countries, sustainable agriculture could be developed further. Decentralizing food production and using small scale farming may have the potential to make the system less at risk from climate shocks.


Biofuels in the Airline Industry

Limassol CyprusIn 2011 over 2.8 billion people traveled on by the world’s airlines burning around 210 million to 220 million tons of fuel and generating 676 million tons of carbon emissions globally, according to figures from the Air Transport Action Group.

The global aviation industry is responsible for 12% of carbon emission from all transports sources and around 2% of all human produce carbon dioxide emissions. Aviation’s share of the greenhouse gas emission will likely grow in the coming years as air travel increases.

Coupled with the fact of spiraling fuel costs, airlines are even more motivated to look at biofuels to power their planes. Aircraft manufacturers, scientists and academics have banded together in associations like the Sustainable Aviation Fuel Users Group and the Algal Biomass Organization to develop the use of sustainable biofuels for aviation.

Environmental Footprint

Biofuels represent the most viable means to cut carbon emissions for airlines and remain the key building block in the airline industry’s goal of carbon neutral growth by 2020 and halving emissions by 2050. There has been much development in designs and material to improve fuel efficiency and other alternative energy sources like solar power remain in initial stages. Biofuels would not require modifications to commercial airplanes; they would just replace the current Jet-A fuel.

Airlines like KLM, Finnair and Continental Airlines have used biofuels on commercial flights shortly after international aviation regulators approved the use of biofuels in 2011. Other airlines around the world may likely follow suit.

Present Limitations

Despite the willingness of major airlines and manufacturers to use biofuels, the most prohibitive factors preventing widespread use are the availability and cost of biofuels. Presently, airplane biofuels still cost three to five times as much as jet fuel, Air Transport Action Group said. Commercially the biofuel industry is still in its infancy and manufacturers may not be able to cope with increased demand.

Neste Oil the supplier of Lufthansa’s biofuel during its six-month test flights could not produce the airlines required amount.  Aviation officials urged government during the July 2012 Farnborough Airshow to help implement policies to create a flourishing market in sustainable market in biofuels similar to initiatives that helped alternative fuels in road transport.

Biofuels also can present ecological downsides. The demand for land to grow crops for biofuel has put added pressure on agriculture in poor nations and could displace existing natural habitats. Concerns have also been raised about the additional carbon emissions from burning down forests and grasslands to grow fuel crops.

There have also been concerns that using crops like sugar cane and corn to create biofuels could push food prices higher following the poor harvest in growing regions. To counter that assertion, airlines may have to look at second generation fuels using non-food crops like camelina and jatropha. The industry is also investigating ways to develop aviation fuel from municipal waste, of which lack of supply may not be a problem as the megacities around the world can produce millions of tons of organic waste to convert into biofuels.

The aviation industry is increasingly seeing potential in biofuels but the widespread adoption of biofuels still faces many challenges, more testing and government support before jet fuel consumption can be reduced.


Corporate Sustainability Strategies: A Siemens Case Study

An independent SIS Market Intelligence Report by Michael Stanat, Research Executive, SIS International Research. 

Siemens is one of the world’s most prominent companies and Europe’s largest technology conglomerate. With 430,000 employees, $77 billion in revenue and industrial manufacturing, the company naturally has a major impact on greenhouse gases emissions emitting 4.53 million tons CO2e. 

Siemens has acknowledged the importance of climate change as one of the most important challenges facing humanity, alongside world poverty and access of all people to proper sanitation and energy.  This perspective has helped the company’s manufactured products eliminate 15 times the company’s total emissions.  Investing €2 billion annually in research and development, Siemens has a hefty 30,000 environmental technology patents and offers efficient solutions that better combat climate change.  

The company’s goal is to become a leader in climate change reduction by improving the performance of customers through efficient products. In fact, it has proclaimed to media that it has the most environmentally-friendly industrial technologies portfolio.  Further, Siemens has publicly embraced the need to address climate change and energy efficiency into its operations, communications, cross functional boards, product development and its membership at non-governmental organizations.  Beyond this, Siemens has set tangible targets for the future: its leadership expects by 2011 a 20% increase in energy efficiency and a 20% reduction of global carbon dioxide emissions.  Given the company’s size, global research and industrial technology solutions, the company has a strong platform to impact climate change.

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Gone with the Wind? The Financial Crisis and Wind Energy

Undoubtedly, the Global financial crisis is impacting formerly high growth energy sectors.  The wind energy sector has witnessed dramatic growth over the past 10 years.   Our researchers explored some of the ways the wind industry has been impacted by the financial crisis.

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