2006-09-13 12:30:00

Ten years, which will revive the Ukraine. Future energy independence begins today

Development through a challenge

«Sustainable development» is an international trend, announced 14 years ago in Rio de Janeiro, and is gaining popularity with each passing year. The UN Conference on the Environment in 1992, the Millennium Forum in 2000, and the Monterrey Conference and the Johannesburg Summit in 2002, defined it as a strategy of survival of mankind in the XXI century. In other words, satisfying the needs of present generations should not be in conflict with the interests of future generations, and destroy the environment.

The problem for us is the difficulty of translation. The term «устойчивое развитие» does not convey all the faces of the English expression sustainable development. It should be rather translated as undamped or continuous development. And yet — environmentally sound, which is able to exist without harming the environment, sustainable. But, as any development, it can only occur through the conflict of interests and overcoming it, through a challenge and response to it.

Russian statement about raising the gas prices must be considered as such a challenge from above that will force us to develop more intensively towards sustainable development.

Energy vampirism

As the theater begins with a hanger, sustainable development begins with changes in the approach to energy security. Everyone knows that energy drives industry, provides vital functions of state, but also ensures its security and independence. However, there is a big contradiction: «sustainable development» versus traditional energy consumption. One or the other. It is hard to argue that the traditional power which is not caring about future generations is leading to depletion of natural resources.

In addition, sustainable development is at odds with the country’s involvement in the processes of globalization. The global economy is tied to the traditional forms of hydrocarbon energy resources. In this case leaders are those who own these resources or control them. World understood it during the oil crisis of 1973. Realized and drew conclusions — many countries managed to prepare for the new increases in oil prices. First of all, by getting armed with energy-saving technologies and developing renewable energy. No wonder that the rise of oil prices during the Iraq crisis caused much less damage to the world economy than the crisis decades ago.

However, even the most oil-rich countries, as has been noted, are running out of these resources. And these resources will be before the end of this century (plus-minus a few decades). In fact, extensive consumption has led to the fact that oil and gas reserves in the world were enough only for three centuries of the industrial revolution. What kind of «sustainable development» are we talking about?

It is natural that as resources exhaust fight for control over them hardens. And all the countries that do not have a strong position in the large redivision will lose its independence. That is why, agreeing with the role assigned to us a «buffer» in the global geopolitical games, we greatly weaken our economic (and political) position.

Swiss version

However, if we realize in time that all of these challenges will help Ukraine to rethink its goals and objectives to build a real and independent economy, the situation will not look so dangerous for us. Yes, Ukraine is not the strongest player in the oil and gas field. But it is not alone in this world. There are other states that do not have strategic reserves of hydrocarbon energy, but are successfully building an independent policy and the economy, forcing larger and more ambitious states to reckon with them.

For example, Austria can afford not to join NATO, and Switzerland — not to become an EU member.

And the solution is not in the powerful nuclear industry what representatives of the nuclear lobby are now trying to impose on the Ukrainian state.

The fact that both these countries are made «bets» not on a political «power», supposedly able to protect from negative influences like the U.S. or the major regional players but on the development of their own nationally oriented economy, which responds to the fuel crisis, but does not depend on it. Obviously, those countries whose economies are in almost absolute dependence on Middle Eastern oil suffered most from the rise in oil prices (risen during the Iraq crisis and did not descended). Those who made bets first of all on the economic guarantees of independence, received a privilege not to be dependent on global geopolitical situation. By creating their own mechanisms to counter such influences, they become more resistant to them than the countries that pass their powers to stronger partners.

There is one more thing. In order to remain under the protection of a strong player (example — the relations between Ukraine and the United States), the country should coordinate its policy all the time, so to speak, to delegate some of its independence. But this does not insure it against all risks. Example — the gas conflict with Russia.

Speaking about Ukraine, conflict of interests for it (inevitable in sustainable development) is resolved through the creation of new ways of economic development. The main thing is to understand that energy conservation, energy efficiency and renewable energy is not a set of «shamanistic spells», but the program of real economic mechanisms.

We survived the shock, but this shock may be beneficial. Energy can and must turn from our weakness into our strength and strategy of energy independence — become a national and social project for Ukraine. Such a project, which mobilizes the nation, becomes a driving force for the economy and provides the political independence of the state. And for this we need political will.

The common cause

However it is important to understand that, except for the state’s care, this strategy needs the support of society. Therefore, the state should make people feel lively interest, realize that the common good is behind this, not profit of small group of people, and support the idea.

First of all, to fully legitimize the coming reforms it is necessary to conduct a referendum on such a question — «What should be the basis of the Ukrainian energy — nuclear or renewable energy and energy conservation?». That is what Austria did. The way to energy independence must be approved by the society.

A conscious choice should be made, whether to buy nuclear fuel and paying for it with the quality of life of future generations, or to develop our own energy technologies, creating jobs for scientists and engineers, workers and peasants.

The program of energy independence of Ukraine should be calculated for about 10 years and consist of three main phases.

Preliminary costs

The first phase, of course, will be the most expensive and in some sense unprofitable. The government should explain the goals and objectives of the program to people, allocate special funds for the information campaign across the country. This will require from one to three years, depending on the intensity of explanatory and organizational work.

The executive branch in order to address this critical issue must create a structure that will coordinate all the work in the field of energy security. This may be a committee of the Cabinet of ministers of the structure of the NSDC of Ukraine. State propaganda should be directed on creation of a new Ukrainian energy sector — both in business and in government which will be prestigious and respected in the community. Completely different mechanisms can be used, including the awards of the President and the government, the public award, etc.

It is necessary to convey the series of messages to the public. Officials and businessmen in the energy sector should stop lobbying for multimillion-dollar contracts related to the payment of equipment and labor abroad. Money must work within the state — for job creation, the development of scientific potential… Energy as such should be «unbundled», becoming a sphere of application for medium business — open and promising. However, the task of Ministry of Internal Affairs, NSDC of Ukraine and other «security» agencies is to bring the fight against corruption in the energy sector to the national level. The authorities should recognise profiting from the «dirty energy», not caring about the interests of future generations, as unlawful, and society should recognise it as immoral.

Economic mechanisms must be implemented in parallel with the promotion. We should start with the law, and then run credit lines, as we need soft loans for warming of thin panel walls and joints, the introduction of flexible systems for heating…

And the work should be carried out not only with the end consumer of energy. We must achieve the elimination of heat losses during transportation to recipients. In winter we all can observe tracks with melted snow on the lawns, there lie heating pipes, and in the spring grass breaks first in these places. This is the heat that goes nowhere. All economic actors must fight for energy saving.

The fact is proved that competent energy saving can give 50% savings in total energy consumption (20% due to the utilities sector, and 30% — at the expense of industry). These savings will help us to fully overcome the dependence on «Gazprom».

We should also encourage the development of renewable energy. «Green tariffs» are required — now they appropriate law is proposed for the first reading in the Parliament, but it must be the basis of the current legislation and it needs special refinement by the new Parliament. Also specific regulations should be adopted by other for the refinement and development of existing laws, which will show the business community that the Ukrainian government is ready to really encourage the development of renewable energy, considering it as a priority sector for development.

The state should help launch production of Ukrainian multifuel boilers for heat production from biomass, promote package bundle of powerful modern wind turbines, etc. This requires the system of tax benefits and government guarantees for real long-term investors in this sector.

All this noble, although loss-making activity will pay off later and allow the state to recover all investments with profit.

New earth and new sky

At the second phase the state will be able to think of a system of economic stimulant of other properties. Now our domestic consumer pays up to $ 50 for 1,000 cubic meters, and the Englishman — $ 1000. But it stimulates him to use «gratuitous» local agricultural and wood waste.

Government proposal, for example help to human settlement or credit fro farming industry for the purchase of boiler for burning straw, creating a system of leasing in this area, with an increase in the cost of traditional energy sources, will certainly contribute to an increase in demand. However, the whole system of measures will help to pay off the negative of the price increase when the state will be unable or unwilling to hold them down in the future.

In other words, the implemented rate must be supported by sanctions. State may propose a system of administrative penalties for those worst embezzlers of energy that do not want to switch to a more effective economical management. Note that only after the implementation of mechanisms and incentives for energy conservation such measures can be effective. But not now — when many businesses simply run the risk of going broke because of following instructions of the state to conserve energy. Today it is much easier to «solve the problem» with a number of banknotes and easily waste energy.

Also, the second phase is the period of the formation of renewable energy as multi branch. For example, one of the leading organizations in the field of bioenergy STC «Biomass» has estimated that the introduction of bio-energy in life can create about 45,000 new jobs — and that is in rural areas where the unemployment problem is particularly hard. The money will circle inside the country without going abroad.

Energy saving as a habit and good manners

On the third phase, we can fully reap the benefits of our efforts. Economical and efficient use of energy should enter into the life and habits, becme part of moral of society. For, as you know, only that moral is viable which is beneficial and effective. Similarly, one must be proud that he diligently uses what is given to him by nature and God — the energy from natural sources, that there are no losses in the economy. That he saves on heat and light and does not depend on centralized systems. And most importantly, he protects the nature of the country, keeping it for his children and future generations.

Due to the production of thermal energy from biomass and other fuels (wood waste, straw, husk, peat) today Ukraine may reduce natural gas consumption by 5 billion cubic meters a year. If the state focuses attention on the implementation of renewable energy as a whole — including all bioenergy resources like cattle manure to produce biogas, rapeseed plantations for biodiesel, etc., replacement of up to 20 billion cubic meters of natural gas annually can become real.

Renewable energy should be developed not only in villages and small towns, but also in major cities, helping to recycle waste, waste water, methane, and other outcomes of human activity into energy. It has to set a new tone of the urban development of the country, to form ecologically clean environment and patriotic way of life in the city. Life activity of a city must also be also provided by the sun, water and wind. The synergy of systemic efforts will stimulate the development of new technologies which promote the restoration of the environment, the development of industrial and social complex of the city.

The state will receive the entire set of bonuses and dividends. Energy undependent countries can afford to pursue an independent foreign policy and to form their own social and economic order, becoming a role model and causing stable respect to them. Ukrainians will be involved in the G7, G8, G9 because of objective economic reasons, not political speculation. And it is possible in the near five-ten years.

This is the approach that makes a new energy policy of Ukraine critical determinant of its transition to «sustainable development» and, therefore, will allow Ukraine to enter the elite club of countries which are forming the global agenda.

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