Panel 1: Energy Security

What is the impact of oil, renewable energies, and shale gas on energy security in the U.S. and Europe? A review of U.S. energy security revealed mixed results. On the one hand, the U.S. is experiencing a “shale gas revolution” and excess natural gas could be exported to help balance the budget and trade deficit. The U.S. also has enough coal to last for 250 years, increasing its potential energy independence. On the other hand, oil dependency remains problematic and is the primary challenge to U.S. energy security.

Europe has also received mixed reviews on energy security, though for different reasons.  Europe has aggressively and successfully pursued its renewable energy goals, now at 12 percent of its targeted 20 percent of energy generated by renewables by 2020. European, and more specifically German, insecurities stem from its dependency on gas from Russia, its primary natural gas supplier. The EU must also play a greater role in ensuring successful east-west transfers of energy, such as gas, within Europe. This could include a market-based approach by establishing a European regulatory agency. The lack of a common market and regulatory body in Europe means individual states have less incentive to harmonize energy across borders.

Although the U.S. and Europe face different issues at present, both the U.S. and Europe need to diversify their energy portfolios in order to reduce the risk of dependency on a single energy source. Each should exploit domestic energy resources while maintaining benefits of trade with neighboring countries, whether the U.S. and Canada or European countries.

Panel 2: The Shale Gas Challenge

The extraction of shale gas in Germany and the EU is a fairly new idea, and currently there is no production in this region. However, the U.S. has significant experience in this field and some analysts predict it could lead to U.S. energy independence by 2020. This panel discussed the risks and measurement of risks involved with extraction of shale gas, the need for an exchange of ideas across the Atlantic, and the impact of shale gas on foreign relations.

Due to the decentralized nature of environmental and energy policy in the U.S., there is not a single database that contains all incidents of shale gas extraction. The measurement of risks and what is defined as an incident differs by state. This makes it difficult to compare the U.S. experience with other countries. There are some organizations like Resources for the Future that aim to compare practices between American states and to measure public and expert opinion across the board. In the EU, shale gas extraction has not been pursued to the same degree. Some of the reasons are the higher costs of extraction (due to higher clay contact, denser population, and the need to drill deeper), stronger public opposition, decreasing demand as as coal costs decrease, and a more risk-adverse EU regulatory framework.

The reduction of need for foreign gas in the U.S. market could significantly alter foreign relations with Russia and the Middle East. The new challenge for Europe is to convince the U.S. that Europe is indispensable in this new balance of power, and the challenge for the U.S. is to use this leadership position with wisdom.

Panel 3: Nuclear Energy

As the U.S. and Europe begin integrating carbon-free options into their energy portfolios, they debate the risk of including nuclear energy as a viable alternative, particularly in the wake of the events in Fukushima, Japan in 2011.  The U.S. and France, for example, are pro-nuclear, while countries such as Germany have decided to phase out nuclear power. Understanding the distinction between “nuclear safety” (within a power plant) and “nuclear security” (plutonium development, terrorist attacks, etc.) is an important part of the general European discussion on the risks of nuclear energy, as outlined in the European Council assessment of nuclear energy in 2011.

Bipartisan political support and public opinion polls in favor of nuclear energy indicate that U.S. nuclear energy policy will not change in the near future. Despite widespread support, problems remain. New plants are extremely expensive to build and determining interim storage locations for nuclear waste has faced political challenges.  Some have offered creative nuclear alternatives instead of abandoning nuclear energy entirely. For example, rather than building an entire multi-billion dollar reactor on site, researchers and engineers have designed small modular reactors that can be made in factories and shipped to their final locations.  Generally, the U.S. pro-nuclear stance has remained constant.

Due to Germany’s population density, where to store nuclear waste has become a sensitive political issue, an issue which is of similar concern in the U.S. While risks surrounding nuclear power plants have not changed, overall German perceptions have shifted drastically over the past few years. Germany now envisions a post-nuclear era and plans to phase out nuclear energy by 2022.  The question is now not whether to abandon nuclear energy, but rather which energy source is its best replacement. Thus far, Germany has emphasized renewables as the best long-term solution.

Panel 4: Mitigating and Adapting to Climate Risks

Policymakers’ efforts at mitigating versus adapting to climate risks both in the U.S. and the EU depend mainly on public perception of the risks, which is judged through polls and level of coverage in the media. In order to take action, environmental risk must be made a priority, which is tied to economic and security risks. The media’s role is to make a personal connection, as exemplified after Hurricane Katrina. The communication of risk to American and European citizens is important, especially in order to gain awareness of environmental impacts on less industrialized countries and determine what can be done to reduce the global environmental threats.

On a positive note, greenhouse gas emissions are being reduced in the U.S. and Europe and both are getting closer to reaching the Kyoto Protocol goals. Clean energy jobs are lucrative and on the rise. Much progress has been made and it is important to continue to look at the mitigation of climate risk as the common goal of a variety of sectors using a combination of techniques.

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Kimberly Frank

The development of fracking as a new technology created a boom in natural gas production in the United States. Shale gas production rapidly increased from about 0.2 trillion cubic feet in 2000 to about 4.3 trillion cubic feet in 2010.[1] Development of new gas fields is considered promising, particularly in the fields of the Marcellus shale, located in New York, Pennsylvania, Maryland, Virginia, and Ohio. The U.S. Energy Information Administration (EIA) projects that shale gas will make up 49 percent of natural gas produced in the U.S. by 2035.[2]

Fracking in the U.S. – A Job Creation Miracle?

Proponents of shale gas tout the job creation potential of this revitalized industry. States such as Pennsylvania and Ohio, which were especially hard-hit by the decline in manufacturing and steel production in the U.S., view the shale gas reserves as an opportunity for revitalization and create job creation. A study by the World Economic Forum and IHS CERA argues that “the shale gas industry alone employs 600,000 people in the United States, with an additional 400,000 employed in the production of tight gas and coal seam gas.”[3] An earlier study by IHS Global Insights estimated that “approximately 2.8 million jobs could be attributed to the natural gas industry in 2008.”[4] The labor market benefits are clear in North Dakota.  Although not a swing state, North Dakota is heralded as the state benefiting most from the new oil and gas boom: its unemployment rate was 3.3 percent in July 2012—the lowest in the nation. While not nearly as low, the employment picture in the swing states with natural gas reserves also looks rosier than in the rest of the nation: Ohio faced unemployment of 7.2 percent and Pennsylvania 7.9 percent in July. Both are below the national unemployment rate of 8.3 percent (for July 2012).

To dramatically illustrate the divide, the German delegation hosted a total of twenty-three side events over the course of the two-week conference; the U.S. delegation, in contrast, hosted just one. Strikingly, major German corporations, including Volkswagen and BMW, sent representatives to the German delegation’s events in order to highlight their companies’ efforts to achieve sustainability. To these companies, sustainability has become enshrined in corporate mantra through growth strategies, such as Volkswagen’s “Strategy 2018,” and greater demand for energy-efficient products. As a result, German companies are more likely than their American counterparts to view sustainability as a goal compatible with, or even a step toward, growth and profit, rather than an obstacle thereto. Additionally, German companies are more open toward their government’s intervention in the energy market through the Energiewende. Speaking during a Rio +20 side event, Holger Loesch of the Federation of German Industry (BDI) acknowledged both the innovative potential of the private sector in response to the energy transition and the risk of higher costs in the short term.

Germany’s private sector, as it has already begun integrating sustainability as a core value, is more willing to embrace and participate in sustainability initiatives such as Rio +20. As a result, the German government can better coordinate its actions on sustainability with a private sector whose interests have already begun to converge toward the same values. While it might be too harsh to criticize the United States for neglecting the conference, attended by Secretary of State Hillary Clinton, the U.S. delegations’ inactivity beside the Germans’ hyperactivity at the conference reflects a divergence in capacity to organize with business and industry regarding sustainability.

Rösler identified the Fukushima disaster and the U.S. shale gas discovery as the two key issues confronting German government and business in formulating an effective energy policy. Although Rösler’s ideologically free market FDP has never been fully comfortable with their coalition’s Energiewende, they have reluctantly quieted their opposition in favor of celebrating the convergence of German industry’s prowess in energy technology with a policy of government investment in that sector. Moreover, Germany’s increased demand for an expanded energy network opened an opportunity for further economic integration with the country’s European neighbors, perhaps leading to a common approach to energy policy. From the perspective of coalition partners FDP, Germany’s energy policy is not only important in itself, but also as a building point for greater European cooperation.

Similarly, Rösler called for greater cooperation on energy policy with the United States. While investment in green energy technology had gained ground in the past few years, the discovery of large reserves of shale gas threatened to derail U.S. interest in promoting energy reform. Rösler’s emphasis on the importance of maintaining a focus on renewable energy reflected his interests as economics minister in protecting Germany’s strong and growing renewable energy industry. While the Energiewende promises to buoy the green energy sector, long-term growth will require greater global demand, coming at least in part from the United States, reflecting the application of Germany’s traditional export-based model to the energy industry.

Renewable energy, far from a peculiar fixture of Germany’s domestic politics, has taken a prominent position among the country’s international interests. Rösler’s promotion of energy policy to one of the transatlantic relationship’s three key challenges demonstrates its importance to a German government keen both on accomplishing a successful transition to renewable energy and on enhancing growth in key industries. As renewable energy continues to hold an important place in Germany’s domestic politics, the transatlantic dialogue will likely grow more inclusive of a cooperative energy policy as a vital component of the U.S.-German relationship.

With the Fukushima disaster demonstrating the violent potential inherent in nuclear power and a public all but clamoring for a fundamental shift in energy supply, Angela Merkel announced the Energiewende with a compelling mandate for reform. However, it is possible that the Chancellor overestimated Germans’ support for an immediate transition to renewable energy. One year after Fukushima, pollsters have found that Germans’ support for closing the nuclear plants far outpaces their willingness to pay higher prices for the transition to renewable energy. Additionally, Ernst & Young and the Deutsche Energie-Agentur GmbH’s index measuring German businesses’ feelings towards the Energiewende reveal an underwhelming ambivalence toward the reform outside of the political sector.

These results reflect a reality quickly catching up to the idealism of the Energiewende. If Germans truly want the transition – and their long-held, staunch opposition to nuclear power and strong support for renewable energy suggest that they do – then objections of cost will be unable to hold back the fait accompli of the fundamental energy transition.

However, policymakers face a more pragmatic challenge as they plan the energy network connecting Germany’s geographically distant renewable energy hubs. Mass protests against the expansion of Stuttgart’s rail network sparked months of political debate and significant delays. The Stuttgart 21 saga showcased a “not-in-my-backyard” attitude normally reserved for quieter protests for noise protection at expanding airports. In order to build an energy network capable of supplying the rest of Germany with the northern coastline’s wind and wave power, policymakers will be forced to intrude on many more backyards. Inevitably, the development of the expansive infrastructure necessary to enable Germany’s dreams of green energy will ignite protests in the neighborhoods through which power lines must necessarily pass. At the very least, this will mean construction delays, prolonging the country’s awkwardly renewed dependence on fossil fuels. Coupled with legal challenges, these protests could pose a serious threat to the completion of Merkel’s Energiewende.

The first panel focused on planning aspects of sustainable transportation. In their presentations, the panelists sought to address the following queries: Why is transatlantic learning relevant? How does planning work? How is transportation and land use coordinated? With the mutual economic strength of Germany and the United States, high levels of car ownership, strong federal and local governments, and the importance of automobile manufacturing, the panelists reaffirmed the relevancy of transatlantic learning with regard to transportation. Despite these similarities, the German government employs markedly more regulation in order to reduce demand for automobiles, and thus, compel its citizens to use public transportation. With heavy taxes on gasoline and restrictions in land development, the environment of many German cities favors extensive public transportation systems. Conversely, in the United States investment in transportation infrastructure has remained relatively constant for nearly four decades. All panel participants emphasized the importance of proper marketing of transportation policies. In the discussion, Arlington arose as an example of a city that has successfully promoted and developed its public transportation system. While 88 percent of families living in Arlington own a car, often these automobiles sit in garages during the week. Since 1996, mass transit in Arlington has grown by 40 percent, making the city an advantageous location to start businesses. The panelists reported that public policy initiatives created the most pronounced impact on workers’ commutes.

The second panel on “Financing Aspects of Urban and Regional Transportation” addressed challenges to and alternative methods of publicly and/or privately financing energy-efficient urban and regional transportation systems. Introduced in the context of three prolonged challenges for financing transportation projects, including a trend of decreasing traditional tax revenue, the need for linking transportation and land use, and an opportunity for capitalizing on the ongoing technological revolution, this panel adopted a wide perspective from local to national. Furthermore, highlighting projects from various innovative models, speakers addressed their respective experience from progress on projects or in academic theory with specific consideration of funding challenges.

Defining the existing problem in funding in the United States both at a micro and macro level, the continuing decrease in public funds, particularly from the federal government, necessitates alternative financing structures. Speaking to this effect, one panelist detailed the progress of the Dulles Corridor Metrorail Project, which is independently estimated to cost $2.7 billion. Although Virginia is the first state to use a public-private partnership (PPP), this project has received only state and federal funding commitments and is working to reduce cost by shifting costs to counties and seeking further state funds. Meanwhile, tacitly addressing many of the struggles this project encounters, another speaker supported the benefits of infrastructure banks, which are initially capitalized by the government and can issue bonds, take on debt at six-to-one, engage in credit enhancement, and give grants at up to 20 percent of its capitalization to support transit projects statewide. In addition to the fact that they do not generate revenue, the speaker also warned that these banks, which thirty-five states currently have, need to evaluate projects carefully, diversify geographically, and predict demand.

Throughout the panel, many speakers pointed to the notion that existing technology has the capacity to meet transportation demand within the current infrastructure both cost-efficiently and sustainably. To this end, one speaker noted the immediate necessity of Department of Defense facilities, which are suffering an extreme shortfall in parking infrastructure, to implement a ridesharing program and negative incentives for single occupant vehicles. Sharing many similar concerns, such as safety for riders and passengers, coverage to and from locations, and competition with taxi and public transit, another speaker detailed the historical transition of rideshare methods and outlined how Smartphone applications and other technology can ensure safety and up-to-the-second availability to a wide variety of destinations.

One speaker highlighted German practices to overcome similar challenges as the United States. Although the German general funding structure is 10 percent farebox revenue and primarily Bundesland (state) and federal level subsidies, the panelist noted Germany’s law requiring trucks to pay road charges at 12 euro cents per kilometer and generating €4.9 billion as a PPP with Deutsche Bahn AG and other firms. The Stuttgart region emphasizes the transition to electric transportation to avoid smog buildup in the bowl-shaped city of Stuttgart and has implemented a five-year competition among municipalities to use more common and connected modes of transportation. These strides for sustainability, in addition to the existing prohibitively expensive price of gasoline, did, however, suggest a limited ability to expand due to the cost to consumers, which is a looming question in the debate over whether to extend the toll program to personal vehicles.

This workshop highlighted the challenge ahead in learning from transportation and energy policies in Germany and the U.S. The process of de-stigmatizing exchange and travel between the United States and Germany and recognizing the commonalities that bind us will require myth-breaking. But, if we study how our systems on both sides of the Atlantic function, require/assess quantitative benchmarks, and analyze/evaluate which pieces of each system to use, then mutual gain is possible.

Keynote and Presentations:

Keynote remarks by Roy Kienitz. Follow along with Mr. Kienitz’s presentation by opening his powerpoint presentation listed below.

View keynote speaker Roy Kienitz’s presentation.

View Frederick Ducca’s presentation.

View Ron Kirby’s presentation.

View Dennis Leach’s presentation.

View Andrea Broaddus’s presentation.

View Patty Nichoson’s presentation.

View Frederick Ducca’s presentation.

AICGS is grateful to the Daimler-Fonds im Stifterverband für die Deutsche Wissenschaft for its support of this event.

Urban communities on both sides of the Atlantic face economic and environmental challenges related to sustainable urban transportation, particularly the inter-related issues of sustainable energy and mobility.   Decisions that are made now will have a far-reaching impact on the environment and energy usage in the coming decades. This project is designed to bring together policymakers and practitioners from two urban regions in the U.S. and Germany to compare challenges and best-practice solutions in two half-day workshops. The workshops will also include several technical and policy experts and scholars who will present working papers which will then be revised and published as two Policy Reports (one for each workshop) to be widely distributed in Germany and the U.S.

The project will consist of these two workshops and two Policy Reports, focusing on tworesearch topics: 1) Financing Energy-Efficient Urban and Regional Transportation Systems and 2) Planning for Sustainable Urban Transportation.

Economic and financial market risks, the consequences of climate change, terrorism, organized crime, supply security of energy and raw materials, the increase of cybercrime, and the vulnerability of critical infrastructure—governments, businesses, and societies face numerous systemic risks. Purely national approaches to cope with these transnational challenges are doomed to fail. In fact, there is a need for international cooperation. The United States and the EU are key players in this context—without the two economic and political heavyweights, systemic risks cannot be handled adequately. Despite the high degree of integration of their economies, sound political relations, and similar vulnerabilities to systemic risks, cooperation between the two partners is often difficult. What are the reasons for the lack of cooperation? Are there different risk cultures on both sides of the Atlantic hindering closer cooperation? Or do material interests explain diverging risk perceptions and/or policy answers to systemic risks?

The project “New Systemic Risks: Challenges and Opportunities for Transatlantic Cooperation” aims at answering these questions in order to identify the need and potential for cooperation as well as points of conflicts between the transatlantic partners.

Objective

The project analyzes governance of systemic risks in the United States and the EU in three relevant policy fields. Differences and similarities of the transatlantic partners in the four pillars of risk governance—assessment and evaluation of risks, risk management, and risk communication—within the policy fields of economic and financial policy, raw materials policy, and security politics will be identified with the help of case studies (single case studies and comparative analyses).

Project partners and research activities

The research project is carried out by the Stiftung Wissenschaft und Politik (German Institute for International and Security Affairs (SWP)), and the American Institute for Contemporary German Studies (AICGS) at Johns Hopkins University, USA. The project brings together scholars as well as practitioners in Europe and the United States. It contributes to the exchange between these experts from both sides of the Atlantic and aims at elaborating scientific knowledge and policy recommendations that serve a better transatlantic cooperation in the governance of risks.

The research is accompanied by three workshops with international scholars and practitioners. Results are published and discussed at two conferences in Berlin and Washington.