Climate change, also known as global warming, poses significant challenges for the energy industry, according to a U.S. Department of Energy report out last Thursday. Everything from oil and gas exploration to all varieties of power generation to energy trading and risk management could see a shakeup as temperatures rise around the globe.

Global warming "poses a range of possible effects on the energy sector in the United States, including reduction of total U.S. heating requirements and increases to total U.S. cooling requirements," says the report. That's obvious, but the DOE document enumerates consequences to energy that might not have occurred to some.

"Changes are expected to vary by region and season, but since nearly all cooling is provided by electricity while heating is fueled by a variety of energy sources, such as natural gas and fuel oil, demands for electricity are likely to grow," DOE said. "Other effects on energy consumption are less clear primarily due to insufficient information available."

The report is titled "Effects of Climate Change on Energy Production and Use in the United States" and is the third in a series of 21 such assessments from the U.S. Climate Change Science Program (CCSP). The CCSP was established by President Bush in 2002 to integrate federal research on global environmental change in 13 federal agencies and to provide the nation with science-based knowledge to manage the risks and opportunities of change in the climate and related environmental systems.

"This report represents the first overview of impact vulnerabilities, opportunities, and adaptive response issues for the energy sector in the United States," said Thomas Wilbanks, the coordinating lead author of the report from DOE's Oak Ridge National Laboratory. "It is notable because unlike some other sectors of interest regarding climate change -- such as water, agriculture and human health -- the energy sector has not been the focus of climate impact discussions over the past decade."

Effects on energy production and supply include the possibility of severe storms and changes in water availability, in addition to the possible impacts of warming on energy exploration, production and transportation in Alaska, the report said. The report finds that climate change could mean increased exposure to severe weather events, especially in storm-prone coastal areas. Reduced snowfall in mountain areas in the West would mean reduced water supplies for hydroelectric power, and changes in precipitation patterns could also have implications for thermal power plant cooling.

Because air and water are used to cool thermoelectric power plants, the report finds that warming of the atmosphere and water in rivers used to cool power plants could increase cooling demands and might reduce overall thermoelectric power plant efficiencies. Sea-level rise could have long-term effects on the siting of power plants along the coast. Possible effects of climate change on renewable energy alternatives such as solar energy, wind energy and bioenergy are of great interest, but current knowledge did not support conclusions at this time, according to the report.

Research data available varies on possible indirect effects of climate change on energy production and use, but the report indicates that climate change could affect risk management strategies in the investment behavior of some energy institutions. It is also likely to have effects on energy resource and technology choices and research and development investments. Other possible indirect effects on the U.S. energy system include energy prices, depending considerably on progress toward advanced energy technologies, and effects on other countries that are linked to the U.S. energy system.

The authors of the report note that the energy sector is vulnerable to stresses from climate change that if identified early enough, could likely be addressed by adaptation strategies that will reduce eventual costs to consumers and to energy institutions.

The report was authored by staff from several DOE national laboratories, nongovernmental organizations, consulting firms, state and local governments and the academic research community. The report was subject to a number of reviews by technical experts and public comment period, and final reviews by federal agencies of the CCSP Interagency Committee and the National Science and Technology Council.

For more information, visit www.climatescience.gov.

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