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Energy Demand in Developing Countries: Challenges and Opportunities

April 20, 2012

tec logoFrom the respective roles of the private and public sectors in electricity generation to the main challenges of operating in the African continent, from the contribution of state-owned enterprises to ways to ensure the energy sector doesn't disturb another pillar of the economy, there are numerous considerations for business and policy leaders interested in energy in the developing world.

“Electricity generation is the cornerstone of what people care about when they talk about development,” explained Joseph Brandt, President and Chief Executive Officer of CountourGlobal, during a recent panel at The Fletcher School. “It’s critical to understand what kind of energy people don’t have access to,” added Dai Jones, President and General Manager of Tullow Oil Ghana. “If it’s energy for cooking, then you need to get them gas instead of wood, as it’s the case in most of rural African communities.”

The panel, titled “Meeting Growing Energy Demand in Developing Countries: Challenges and Opportunities,” was part of the seventh annual Tufts Energy Conference, a two-day event co-sponsored by CIERP that brings business, government and NGO leaders together to share ideas and discuss today’s most salient energy issues. Professor William Moomaw, CIERP Director, chaired the panel and moderated the discussion.  

Because of suspicions of corruption that might arise and consequently delegitimize important projects, the panelists supported the role of energy companies in pushing for transparency at every opportunity. International companies should do so by “working hand in hand with local governments from the beginning until the very end,” said Jones. “It is important to remember who the oil and gas ultimately belong to.”

Greg Saunders, Senior Director of International Affairs for BP, pointed to a prominent debate regarding his company’s industry, between those who think oil companies should just pay taxes and leave policy alone, and those who support their getting engaged in communities and trying to improve other aspects of society. “This is no longer just a Western-specific debate,” but rather it is a prominent dilemma in numerous emerging economies.

Jones added, “meeting local energy demand in developing countries can be done – transparently and openly – with the private sector and the government working together, as Tullow has done.”

H.E. Elin Suleymanov, Ambassador of the Republic of Azerbaijan to the United States, rounded out the panelists, bringing the perspective of a government of a developing, resource-rich country to the conversation. He discussed Azerbaijan’s strategy to use oil and gas income, which is finite, to create long-term sustainable projects for the continued development of the country. “We don’t see oil and gas as a permanent resource,” he further explained. “For this reason, we want to use this temporary income to upgrade the country’s facilities and connectivity with the world.”

“Oil and gas are tools both to put the country back on track, especially with regards to sustainability, and to integrate the region,” he added. 

In highlighting the current shift from Western markets to Asia, the panelists also addressed the role of state-owned enterprises in dealing energy demand. In China, for example, there are three national oil companies; they follow the government’s energy plan and international companies are forced to partner with one of them to invest there. Together, they implement the government mandate, in a very unique business setup. Nonetheless, “it is imperative for international companies to help China deliver on its energy demands,” argued Saunders. 

The question and answer session introduced new aspects to the conversation, from the role of gender to the amount of pushback international companies receive in developing countries with regards to liquefied natural gas. 

The panel was preceded by a keynote address on renewable energy and sustainable development by Mohamed T. El-Ashry, Senior Fellow at the UN Foundation and former Chief Environmental Adviser to the President of the World Bank. The Tufts Energy Conference is entirely organized and run by student volunteers from various graduate and undergraduate programs at the university. 

-Article by Elia Boggia, MALD candidate F13