NS4960 Spring Term 2017 North America Energy Trilemma Federal Reserve Bank of Chicago, Strong Dollar Weak Dollar

Overview World Energy Council Trilemma Framework Energy Security The effective management of primary energy supply from domestic and external sources The reliability of energy infrastructure and The ability of energy providers to meet current and future demand Energy Equity The accessibility and affordability of energy supply across the population Environmental Sustainability The achievement of supply and demand side efficiencies and The development of energy supply from renewable and other low-carbon sources

The Energy Trilemma II http://www.eng.nus.edu.sg/EResnews/062014/sf3.html

The Energy Trilemma III https://www.linkedin.com/pulse/who-stole-climatechange-decc-energy-trilemma-dilemma-rufus-howard

Energy Trilemma Top Performers I

Energy Trilemma Top Performers II

Country Context Country context Focuses on elements that enable countries to effectively develop a policy and achieve energy goals This component examines factors such as The capacity to support a coherent and predictable policy framework A stable regulatory environment and Overall attractiveness of the country to investors.

Top Thirty Performers

U.S. Trilemma Balance I

U.S. Trilemma Balance II The U.S. balances the three dimensions of the energy trilemma in a fashion typical for a “fossil fueled” country. Strong performance on energy security and energy equity are partially offset by country’s large environmental footprint. A further diversified electricity generation system and greater oil stocks lead to improved energy security situating. Recent development of sources of shale gas will likely help the U.S. become a net energy exporter in the near future.

U.S. Trilemma Balance III Performance on the environmental sustainability dimension lags but shows improvement Slightly lower levels of energy and emissions intensities CO2 emissions from electricity generation are also reduced but remain high U.S. predominantly conventional thermal energy mix The recent decision by the Trump administration to withdraw from the Paris Agreement has added uncertainty to the Nevertheless, commitment among Americans remains high in supporting renewables development, with some cities pledging to stick by earlier commitments to target emissions decreases and increase shares of renewables.

U.S. Electricity Diversity

U.S. Outlook Important energy policy developments in the U.S. that will impact on balance in the three dimensions of the trilemma include Under Obama administration, the Environmental Protection Agency (EPA) regulations on coal leading to the projected closure of more than 200 coal plants in the next few years Accounting for more than 10% of the U.S’s current energy production Possible regulations on unconventional gas production How much will the EPA roll back regulations?

Canada: Trilemma Balance I Canada ranks 21 in the overall energy ranking Although one of the top Index performers overall, Canada’s weaker environmental sustainability ranking continues to undermine its overall score Canada is one of the largest energy exporters in the world The country ranks exceptionally well on the energy security dimension with A favorable energy export-to-import ratio A significantly diversified electricity generation mix away from fossil fuels and A low economic dependency on fuel exports

Canada: Trilemma Balance II

Canada: Trilemma Balance III Energy equity is also high with plentiful, relatively affordable energy. Environmental sustainability remains Canada’s weakest energy dimension Country has relatively high levels of energy and emission intensity due to long distances and a higher reliance on energy intensive resource development industries than most countries Emissions per kWh generated stay at relatively low levels because of the hydro heavy electricity fuel mix Contextual performance stable and strong

Canada: Diversity of Electricity Generation

Canada: Outlook I Canada’s high and improving position in the index reflects The country’s extensive and diverse energy resource base and Public and private commitment to develop those resources The two main challenges Canada faces are Balancing resource development with environmental protection and Developing diverse markets for Canada’s energy resources

Canada: Outlook II The most recent energy policy developments include A strong focus on developing markets for oil and gas beyond North America A faster energy infrastructure approvals process, and More stringent environmental standards for fossil fueled power generation, both federally and provincially These initiatives should support continuing improvement in Canada’s energy balance

Canada: Outlook III The three key issues policymakers need to focus on are Managing the environment/climate impacts of energy resource development Market diversification and Ensuring an appropriate sharing of the benefits from resource development most notably with Canada’s aboriginal population in whose territory most resource development and delivery projects are being developed.

Mexico: Trends and Outlook I

Mexico: Electricity Generation

Mexico: Trends and Outlook II Mexico falls by 5 places in this year’s Index, from rank 52 in 2016 to rank 57 in 2017. The country performs well across the board, receiving a balance score of BBB. The Mexican energy sector is facing a dual challenge The transition from a monopolistic structure to a competitive market scheme, following the market liberalization in 2013 and The transition from a high-carbon to a low-carbon economy. • Mexico is the second country, after the UK, which has enacted a law that frames the actions to be taken with regards to climate change (2012 General Law on Climate Change, LGCC), both from an emission mitigation point of view, as measures of adaptation.

Mexico: Trends and Outlook III Mexico’s Intended Nationally Determined Contributions for COP21 include a 25% reduction in GHG emissions by 2030 (compared to a business-as-usual projection), with 35% of electricity generation to come from clean energies by 2024 and an aspirational goal of a 50% reduction in GHG emissions by 2050.

Mexico: Trends and Outlook III The greatest challenges policymakers need to focus on to meet the targets are the continuation of a renewable energy program and the re- initiation of a nuclear program continued increase of production of both oil and natural gas on and offshore as well as the development of shale gas resources; and improved energy efficiency and energy conservation in order to reduce Mexico’s energy intensity