How better use of energy systems can reap benefits for society

In a series of blog posts leading up to the launch of the World Economic Forum’s Global Energy Architecture Performance Index Report 2013 on 11 December 2012, Mr. Manpreet Anand, a Senior Policy Adviser at Chevron, discusses how energy is a key driver to reach today’s socioeconomic objectives

Energy is foundational for promoting growth in our economies and progress in our societies. The energy footprint and security of a country are also key factors in facilitating development and sustainability. When considering how to advance development in societies around the world, we rightly think of the perennial issues that policy-makers face on a regular basis, such as improving access to healthcare, investing in education, minimizing environmental impacts, providing conditions for greater employment opportunities, and creating attractive trade and investment climates.

Yet sometimes we forget that energy underpins each of these goals. It is the common thread when tackling these perennial issues, whether it is providing power to health clinics and schools, or ensuring affordable and reliable fuel supplies to keep commerce thriving or using natural resources in ways that minimize harm to the environment. It is within this context that the World Economic Forum has introduced a new Energy Architecture Performance Index (EAPI) to better understand energy profiles across the world and encourage progress.

The EAPI is designed to provide a dashboard of metrics along three main categories: economic growth and development; environmental sustainability; and energy security and access. The Index describes a country’s performance in terms of this “energy triangle”, providing a baseline of data along a standard set of indicators.

This information is meant to provide citizens of a country with a one-stop-shop of information related to a country’s energy profile, as well as public officials with a tool to identify areas where their efforts could be better focused – all with the overarching purpose of creating an enabling environment in which the right policies, technology, market structures and human capacity can put economies on a more sustainable and secure path going forward.

Central to understanding how this information can advance socioeconomic objectives is in ensuring that efforts are oriented towards the distinct needs of the people of a particular country or locale. At Chevron, we follow a model that seeks to tailor our business and social investment strategies to the local experience and the needs of the communities surrounding our operations.

For example, Chevron’s recent entry in south-western Pennsylvania to produce natural gas from Marcellus shale has followed a strategy that very much incorporates the key elements of EAPI’s energy triangle. The investment in the Marcellus shale can reap tremendous economic benefit for local communities, and Marcellus natural gas can provide affordable energy, regional jobs and economic growth for the US. In fact, a study by a global information company IHS estimated that by 2015, approximately 270,000 new jobs will be created in the Marcellus region, which could also support 1.6 million new jobs by 2035.

Equally important is ensuring that this cleaner burning natural gas is produced using appropriate technologies and operational management practices. This starts with robust well design and drilling practices and extends to water management, including working to recycle most of the water we use onsite. This reduces our freshwater consumption as well as our need for trucking and disposal.  All of these practices aim to manage our environmental footprint and the impact of our activities on the community.

Finally, it is important to recognize how natural gas from shale is dramatically changing the gas supply landscape in the entire United States, boosting reserves and providing a supply of safe, clean affordable energy. It is the fastest-growing source of natural gas in the US and could become a major global energy source. Natural gas from shale has grown to about 25% of US gas production in just a decade, and according to the US Energy Information Administration, it will be nearly 50% by 2035.

The development of this resource is creating thousands of jobs, improving energy security and lowering greenhouse gas emissions from electricity production – a great example of the kind of progress that the EAPI seeks to encourage. It is now incumbent on all of us to ensure that we continue to support an enabling environment that takes advantage of this resource. As a result, we may even see the US improve its EAPI scores in the years to come.

Author: Manpreet S. Anand is a Senior Policy Advisor with Chevron. He has served on an expert panel of the World Economic Forum’s Energy Architecture Performance Index. He also serves as a trustee of the World Affairs Council of Northern California and a term member on the Council on Foreign Relations.

Image: Workers walk in front of a drilling rig the village of Lesniowice REUTERS/Kacper Pempel