Chile’s Drive to Renewable Energy: A Conversation with Dr. Paul Sullivan

Chile’s Drive to Renewable Energy: A Conversation with Dr. Paul Sullivan

October 22, 2018 Blog 0

Last spring, Dr. Paul Sullivan returned from an energy field study in Chile and sat down with Core Pathways to discuss some observations from his trip. Dr. Sullivan identified energy insecurity and climate change as the two catalysts causing Chile to rapidly invest in renewable energy technologies. Dr. Sullivan is a Professor of Economics at the Eisenhower School at the National Defense University and an Adjunct Professor of Security Studies at Georgetown University. He is an Adjunct Senior Fellow for Future Global Resource Threats at the Federation of American Scientists and a Senior International Fellow at the National Council on US-Arab Relations.  Dr. Sullivan is an expert on resource security issues, with a special focus on the nexus of energy, water, food and land. Below is some of our conversation:

Core Pathways: Why did you bring your Energy Industry Study to Chile?

Dr. Sullivan:

The Eisenhower School is the premier Joint Professional Military Education school that focuses on industry, economics and national resources strategy. To that end, we normally conduct 18-20 industry studies. The industry study that I lead is the energy industry. The energy industry study process includes classroom teachings by me, expert guest lectures, visits with local experts and policymakers, and visits to energy sites in Houston. Last year, I also took the students to Chile. Chile is one of the most interesting countries for those looking at energy transitions happening today and in the future.

Chile is now one of the most energy-import-dependent countries on the planet. However, they have massive solar and wind potential. They want to exploit those natural resources and move towards renewable energy systems. They are making great strides in this. As a former Minister of Energy told us in a meeting, Chile’s foreign direct investment has recently been greatest in renewable energy, mostly solar, rather than in mining, its historically most important foreign direct investment sector.

Copper and other mining industries are very energy intensive, so Chile is looking more towards solar and other renewables to power mining. Much of Chile’s mining sector can also be found in places that have water stress. Water stress for Chile will increase over the next few decades, causing it to be one of the most water stressed countries on the planet by 2050. That is a bit terrifying for a country that relies so much on water for industry and agriculture.

Chile not only has problems with drought, but also with extreme flooding at times. Chile and Argentina contain 35% of the frozen water in the southern hemisphere. These glaciers are melting so quickly that the friends and colleagues I have in the Chilean military see climate change as a top threat to its national security and prosperity.

There are ways to mitigate and resolve these present and upcoming problems via nexus thinking (for example, the water-food-energy nexus) and via better natural resource, energy, and economic strategies. Chile has a very well-run government. It is a well-educated society. It is a close ally of the US. It has a coastline of 2300 miles. It is a strategically important country in a strategically important area that few Americans know much about. China is making great inroads there, including investing in its mining and energy sectors. China is becoming more powerful in this region. The US needs to learn what is going on there and become more strategic and neighborly with important countries like Chile. There is a book I could write about the importance of Chile and the Southern Cone for national and international security issues, but that is for another time.

Core Pathways: What is energy insecurity and why is Chile facing energy security problems?

Dr. Sullivan:

Energy security is a complex subject. Many politicians in the US when they talk about energy security only mention oil imports. That is an overly simplistic view of the concept of energy security, but I suppose it gives them the 10-second sound bite for their base. The concept of energy security should consider what energy sources are easily available, affordable, and sustainable both internally to the country and from imports. Energy security is at its best when there are many energy sources that can be easily substituted for one another, such as transport technologies that allow for oil-based products, but also gas and electricity. However, these substitutions are rarer than one might think.

Energy security is less when a country relies heavily on imports of fuels, and even less when the ports, pipelines and grids for these imports are few and unconnected to each other in any secure and meaningful way. When a country’s energy import facilities are jammed together in small geographic areas, such as how they are in Tokyo Bay, The Houston Ship Channel and certain limited coastal areas of Chile, then energy security is at an obvious risk.

Energy security also relies on having secure and reliable infrastructure, in secure and reliable areas. It also relies much on other systems, such as information systems. Energy is very informationally intensive. That means energy security relies a lot on cyber security and information security. Many energy systems also rely on water, and hence on water systems, and these water systems rely a lot on energy. If one of these connected and nested systems is damaged, so is energy security. For example, if water becomes too scarce, many electricity generation systems and refineries will simply have to shut down. If there is no electricity, pipelines cannot work. If pipelines are not working, then the oil and gas needed to run electricity is put at risk.

One has to consider the reliability and security of the outside sources of energy. Energy security in this instance requires a variety of sources of imported energy to reduce the risks that may come from one. Imagine if the US relied solely on one country for its oil and that country’s system was damaged by war, revolution, terrorist attacks or natural events?

Energy security also means that a nation can and will be able to afford its energy needs. If a country goes into a depression or deep recession, sometimes its ability to import, produce, transport, invest, and maintain its energy systems are damaged, thus causing energy security to be damaged.

Chile’s energy insecurity primarily emerges from its dependence on energy imports, the fact that is has few ports and facilities to import fuels, and the fact that many of its energy systems lack national infrastructure fully connecting this 2300-mile long country’s energy sources with its energy needs. Its reliance on fossil fuels for electricity and transportation also makes for energy insecurity.

Chile imports about 65% of its national energy consumption. It imports almost all of its natural gas, oil, and coal through very few ports and facilities along it very long coastline. These import facilities are connected by pipelines only to their nearby region, but not to the entire country. The country relies much on few ports of entry for energy imports, and many of these are found in small geographic locations. All of them are in earthquake zones.

Chile at one time relied on Argentina for imports of natural gas. Then in the mid-1990s, Argentina suddenly cut off its exports of gas to Chile. This was not a political move. Argentina’s heavy subsidies and socialist energy policies caused shortages inside of Argentina. Chile had no other alternative sources even though Bolivia and Peru had lots of natural gas. Politics and the power of historical grudges going back to the 18th century in some things stopped that gas from flowing. Also, to bring gas from Peru and Bolivia required a significant pipeline system connected to Chile, which was not there.

Argentina is now starting to develop its massive shale gas resources, such as those found in a field called Vaca Muerte (Dead Cow). If all goes well, Argentina will export its natural gas to Chile, and a vibrant trade could blossom going from Argentina’s great natural gas fields to Chile. We also might see the end of the absurdity that natural gas rich Argentina is importing natural gas from Chile, which imports its natural gas from places like the Cheniere LNG facility in Sabine Pass, LA and Trinidad and Tobago.

The difference between the 65% imported energy and the 100% of energy Chile needs is mostly made up by hydropower, wood and solar power. However, even these sources are not well connected from where they are produced to where they might be needed in times of national emergency, such as another major earthquake, a terror incident, landslides, or fires. Wood accounts for a very large percentage of heating and cooking fuels, especially in the center of the country.

Wood fuels are a source of pollution and cause health issues in some parts of the country, particularly in the winter months when one can barely see the Andes from certain cities and towns, even though this is a very thin country and the Andes dominate the close-up scenery of much of the country (and they are a beautiful site from Santiago on a clear day). There were days when I would wake up early and see parts of the Andes clearly. After a fairly short time period, they became barely visible. This is not only from wood smoke, but also from transport vehicles using petrol and diesel. The traffic in Santiago and other areas can be, well, humbling at times.

Core Pathways: How does climate change tie into this?

Dr. Sullivan:

I didn’t run into one person there who thought climate change was a debatable topic. Climate change is a complex subject, but let’s focus on water.

You can’t have a natural gas or coal or nuclear facility without requiring a lot of water. It’s astonishing how the connection is not well known. You need the water to cool it and to generate steam which will turn the turbines. As hydrological cycle patterns are altered by warming climate and shifting ocean currents, Chile is finding it difficult to ensure their infrastructure will handle the various levels of water flow and energy needs. I saw the river for Santiago and some of the farms. It looked like Rio Grande on a bad day. However, with lots of rains, it would flood over. This polluted their water system. They have the problem of not enough water and too much water.

Projecting that these extremes in water flow will be more frequent in the future, Chile is spending resources to improve their national capacities in water capture and water allocation so that it can be used in various energy facilities and so that water will still be available its population following droughts and storms. They are also looking into how to use water more efficiently for energy, residences, and its important agricultural and mining industries. Climate change is intimately connected with the water-food-energy nexus.

Additionally, Chile is trying to cope with the glacial melt. Down in Patagonia, Chile contains 25% of the glaciers in the Southern Hemisphere. Further north, the glaciers near Santiago are melting. I spoke with one of the locals about this, and I knew the answer before I even asked. She was mentioning how small these glaciers were compared to when she was a little girl. They’re terrified. It’s a major source of their water.

Much of our academic efforts on climate change in the US focus on Asia and the US. We should not neglect The Southern Cone. It is time Americans learned more about what is happening just south of them.

Now add to the water issues increasing air and sea temperatures, the development of sub-tropical cyclones, changing flora and fauna habitats and more, and one can see how complex the effects and implications are for a country as important as Chile. And they may be coming on quickly.

Core Pathways: How is Chile addressing these issues?

Dr. Sullivan:

Chile refuses to remain stagnant as their government and people deal with the consequences of climate change. Alongside adapting their infrastructure, Chile is employing strategies to mitigate their global greenhouse gas contributions. Chile is building these massive solar facilities. Not just concentrated solar fields, but massive numbers of solar panels. They’re using molten salts to store the energy in some facilities. The Chileans are also figuring out how to clean solar panels without water. It’s brilliant.

Chile is also looking at utilizing a source of power buried deep in their ocean. Chile has the Andes on one side and a very deep ocean on the other side. Sometimes 10 thousand-feet-deep water. When you’re in ultra-deep water, it’s really cold. You can have natural gas captured from cold water called methane hydrates. The Japanese are looking at this as an energy source too. There is more energy in the methane hydrates of the world than all of the coal, oil and shale gas that we know about. In Chile, there could be a whole bunch of methane hydrates off the shoreline. Additionally, there is the potential for ocean energy by using temperature differentials between the cold depths of the ocean and the warmer surface. There is also great potential for wave energy. Chile has some awesome surf.

When one thinks about energy sources, one should look well beyond just oil, gas and coal. Chile is an example of a country that is doing this.

Core Pathways: What are your final thoughts and the broader implications of what you observed?

Dr. Sullivan:

Many Chileans understand what’s going on. Local people are seeing local effects. There are many very smart people in Chile who see the global implications. It’s not something the world can solve by the Chileans choosing solar or wind. They have a small proportion of energy use in the world. But the world can learn by seeing how quickly Chile is transforming its energy systems. Like Iceland, Chile has the chance to be a role model for the world in energy transition.

We cannot forget our neighbors. Latin America, South America, and Central America are vital to our security and our future. And if we don’t consider them fully, we should consider ourselves fools.

** All opinions are Dr. Sullivan’s alone.