Explosive growth in global population, increasing wealth in developing countries and a rising dependency on energy is making the need for energy increase significantly, whilst also increasing the demand for green energy. At the same time a changing world order led by Russia has placed security of supply high on the foreign policy agenda. This is the assessment of the man in charge of the review aiming at developing a more strategic effort in Danish foreign policy.
On 2 May 2016, Denmark’s ambassador to India, Peter Taksøe-Jensen briefly stepped out of the anonymous world of diplomacy and into the spotlight. This happened when he handed in his review “Danish Diplomacy and Defence in Times of Change” to the Danish government. The review is meant to secure the maximum possible effect of Danish foreign policy, and concludes that Denmark should focus more on Danish interests when conducting foreign policy.
The magazine met Peter Taksøe-Jensen for a talk on demography, increasing demand for energy and independence from Putin’s gas.
How will the need for energy develop in the future?
“I don’t think there is any doubt that energy will be in even higher demand in the future. The developed societies of the world grow ever more dependent on energy, and at the same time we see a demographical development in the world, which means vast new markets for energy will open. I have just arrived from India, where we see a rapid growth in population and an expanding middle class; this at the same time as millions of Indians are moving from rural areas to the city. It is expected that 400 million Indians will move to the city in the coming 25 years. Millions of people will move from a situation where they were not dependent on energy, to a situation where energy is an integral part of every day life, as it is for you and I. In Africa we will see population increase by 400 million in the next 15-20 years, combined with massive initiatives to promote growth. A central element in growth – besides water – is energy”, says Peter Taksøe-Jensen, and continues to say that he sees the increase in demand for energy putting the transition to green energy under pressure.
“Either you will end up in a situation where people lack energy, or fossil fuels will continue to play too great a part, in a climate perspective. Because of this, I think that the nations of the world will be forced into investing in sustainable energy, as I simply do not believe that it is possible to continue burning so much fossil fuel. In Delhi, where I live, we see an increase in population of about 5 percent a year. It may not sound as much, but when you are 20 million people it is a further 1 million people a year, who are driving on the roads and need electricity for charging iPhones and air conditioning. It kind of puts it into perspective. So if nothing is done (in relation to the transition to green energy, red.), there are going to be very few places on Earth where it is possible to make a decent life for yourself.
How important is security of supply of energy to a country?
“One of my colleagues in the Ministry of Foreign Affairs told me 10 years ago that it was time for us to develop a policy for energy. I thought to myself, what do we need one of those for, get out there; we have all sorts of important things to do – European policy and such. But it was actually a very good idea, since energy has moved up on the foreign policy agenda during the last 15 years, compared to where it was before. The Middle East has played a major part as the supplier of energy to the world in many years. It has had an impact on the vision of stability in the Middle East, and securing sailing routes among other things. This is changing now. We are seeing a shale gas and oil revolution in the USA, meaning that the USA is now the largest producer of both oil and gas in the world. But is has really come into play after Russia started changing the landscape of security policy in Europe. I was in the USA at that time, and I had a front row seat to the reaction of countries dependent on a single supply of energy, Russian gas, being subjected to pressure. The gas valve was turned as an instrument of geopolitics, and how do you respond to that? By securing diversity in supply and independence from a single supplier. Ukraine has seen how the question of gas was central to Russian-Ukrainian relations. That has led to a stronger demand for a European distribution network, where energy can be transferred in other ways than before. Trying to create alternative sources of energy. This is something I believe not many people thought of as hugely important, following the end of the cold war. So my colleague was very foresighted when he said that energy policy should be part of our foreign policy. And some of my eastern European colleagues, referring to the countries 100% dependent on foreign energy supply are hugely occupied with developing gas infrastructure to make “reverse flow” possible, as they have not invested in independence, like we have… It is an absurd situation when the Russians are selling gas to Germany at one price, and selling to Ukraine at close to twice the amount. This is why energy has become a foreign policy instrument, also in European security policy, within the last 10 years. Earlier, this was not the case.
What has self-supply in oil and gas meant to Denmark?
“Denmark has been on a fantastic journey. From 1974, when we were walking on the freeway and were 98% dependent on foreign energy, to a situation where we are self-sufficient, and where we have seen an economic development raising our GNP by 80-82% from 1974 until now, and where we have been capable of keeping our use of energy at similar levels, as we have been capable of meeting part of the growing demand by using energy more effectively, using our energy supply in an ever more effective way. First and foremost, it has had a huge impact on the national economy, but it has also had an impact on our foreign policy. We have not been targeted by the same pressure as others have, as we have been self-sufficient for many years. We are linked up with the others, and indirectly rely upon Russian gas for Europe, but it does give you the chance of formulating a completely different energy policy, rather than if you were 100 % reliant on others. You only have to go back to the energy crisis of 1974 and ask yourself, what really happened? Foreign powers decided to turn a valve, which risked totally undermining the Danish national economy, as we were dependent on foreign energy, which is exactly what created the incentive to put us in the situation we are in today. That we were fortunate to have a supply of oil and gas in the North Sea was nice of course. We have had a chance – which we have taken – to invest in alternative sources of energy. So, when the oil dries up, it will still be the case that Denmark is relatively independent of foreign energy. That is a massive advantage.
Should Denmark start looking at itself as part of a bigger picture in terms of energy supply in the future?
“I think that the first step is mutually obligating cooperation in Europe and the EU, which provides a really good framework for introducing competition in this area. At the end of the day, that will mean cheaper energy for consumers. But it is also important to establish the necessary infrastructure in order to say that all countries have security of supply, and that you are independent of anyone deciding to use this geopolitical instrument (as you see Russia doing at the moment; red.). I don’t think, that we will see a transatlantic energy union, as it is more profitable to the Americans to sell their energy in Asia compared to Europe. It is more a question of solidarity in terms of security policy, when the Americans are considering exporting to Europe, expressing a wish to be integrated with Europe. But the Americans do spend a lot of time viewing energy in a strategic perspective, as they are attentive to its importance. We already have a decent infrastructure in our part of Europe with Sweden, Norway and Germany, and the more we are able to expand this to the rest of Europe, the better it will be for all of us.