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

2. 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

3. The Energy Trilemma II

4. The Energy Trilemma III

5. Energy Trilemma Top Performers

6. U.S. Trilemma Balance I
In 2014 the U.S. moved up three places in the index.
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.
Country maintains the global first place ranking on energy equity – some of most (relatively) affordable energy in the world

7. U.S. Energy Trilemma Scores

8. U.S. Trilemma Balance II

9. 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
Overall – country’s performance is constant and improving

10. U.S. Electricity Diversity

11. U.S. Outlook
Important energy policy developments in the U.S. that will impact on balance in the three dimensions of the trilemma include
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
The extension (or not) of the wind production tax credit, which can cut the cost of developing a wind project by nearly one third.

12. Canada: Trilemma Balance I
Canada ranks sixth 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

13. Canada: Trilemma Balance II
Energy equity is also high with plentiful, relatively affordable energy.
Environmental sustainability remains Canada’s weakest energy dimension
Country has relatively, although decreasing 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

14. Canada: Energy Trilemma Scores

15. Canada: Trilemma Balance III

16. Canada: Diversity of Electricity Generation

17. 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

18. 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

19. 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.

20. Mexico Trilemma Balance I
Mexico continues the positive trend of previous years and moves up three places in the latest Index
Like other highly industrialized countries, Mexico shows
a strong performance in energy security,
decent levels of energy equity, and
an environmental sustainability ranking that lags behind
The net energy exporter’s energy security remains stable with no notable changes
Energy equity is improving as prices for electricity and gasoline are mostly stable, compared with sharp increases in other countries
Mexico still generates 81% of its electricity by burning fossil fuels, and struggles the most with mitigating its impact on the environment

21. Mexico: Energy Trilemma Scores

22. Mexico Trilemma Balance II

23. Mexico: Electricity Generation

24. Mexico: Outlook I
The most recent policy development is the reform of the energy sector.
The government approved the constitutional changes and respective legislation allowing the full participation of the private sector though competitive markets in most of the activities involved
Thus the Mexican energy sector will have the challenge to manage two transitions simultaneously:
The transition from a monopolistic structure to a competitive market scheme and
From a high carbon to a low carbon economy

25. Mexico: Outlook II
One of the new laws establishes a cap-and-trade scheme for the energy sector bringing it in line with the 2012 General Law on Climate Change
Mexico is the second country, after the UK which has enacted a law that frames the actions to be taken as far as climate change is concerned
The three explicit goals are
By 2020 there should be a 30% reduction in GHG emissions with respect to a business as usual projection
By 2024, 35% of the electricity generation has to come from clean energies (non GHG emitting technologies) and
By 2050 an aspirational goal of 50% reduction in GHG emissions with respect to a business as usual projection

26. Mexico: Outlook III
The greatest challenges policy makers need to focus on to meet the above 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 off-shoe as well of the development of shale gas resources, and
Improved energy efficiency conservation including decreasing energy intensity

27. Profiles of Energy Investment Challenges