A decision in Europe has been one of the most important developments in the energy agenda this week. Denmark, which is the largest oil producer in the European Union after Brexit, declared that they would end new gas and oil explorations. This decision will have been put into action to stop extracting fossil fuels by the mid 21st century and closing the fossil fuel era. Since Denmark is the European Union leader, which is one of the most crucial political entities in the world in terms of oil production, I think this move is worth examining. In the following paragraphs, backstage of the decision, and the motivation behind it, Denmark's current role in energy markets, prospective preparations of country, and potential effects on the world will be discussed.
As it is mentioned before, despite the huge difference, Denmark is the largest oil producer in the European continent after the U.K. and Norway, with 103,000 barrels per day in 2019. Climate minister of Denmark Dan Jørgensen said that they are paving the way for the end of the fossil era by this decision. In this way, the target has been approved by official sources. Since energy production is an important source of revenue and economic activity, this action's cost is unignorable. According to the energy ministry's estimation, the burden of it is 13 billion kroner, which is equivalent to 1.1 billion euro. Also, this development has been welcomed by civil society. Greenpeace Denmark evaluated it as a "watershed moment.' When we consider the planned decrease of greenhouse gases emission by 70% from the 1990s to 2030s, it can be said that Denmark can be regarded as a "green frontrunner" in the words of Helene Hagel, head of the climate and environmental policy at Greenpeace Denmark. To understand Denmark's energy transformation, not only the actions taken about the status-quo but also the prospective plans and construction of the new framework have importance. In this context, having information about Denmark's renewable energy landscape is necessary. According to the Danish Energy Agency report, renewable energy constitutes 32.9% of gross energy consumption in 2018, and the percentage of electricity supplied by renewable energy is 60%.
Consequently, Denmark is an outstanding country in terms of energy transformation, and they acknowledge this via radical changes. When we analyze the developments in Denmark, I care about this country case because of two reasons. Firstly, they are a member of the European Union, and since they are a unitary political entity, Denmark's action can affect the alliance entirely. Secondly, they are the largest producer among the members, and with the help of this feature, Denmark can undertake the mission of leadership. The second point that I want to emphasize is the country's structure and conditions, which catalyze the transformation. First of all, as a typical Scandinavian country, they have the advantage of a low population. In this way, they can substitute fossil fuels with renewable energy for the need of society. Secondly, concerning democracy and freedom indexes, it is known that Denmark is a country that completed its institutionalization and maintains a standard in terms of transparency. In this context, they do not have an economy based on natural resources like Middle Eastern countries.
Finally, I want to touch on the situation of other countries. As I explained above, some conditions make Denmark advantageous in this issue. In my opinion, especially in the U.S. and Western countries, governments and leaders of the countries should take the initiative. Probably a government that has a social liberal/democrat background would be a better opportunity. This situation reminds us of the Marxist theory's base and superstructure analysis. It suggests that the base, which consists of means of production and economic relations, shapes the superstructure, consisting of politics, culture, religion, law, media, etc. On the other hand, the superstructure maintains the base. However, the relationship is not unidirectional. In this context, reforms and initiatives by governors change the energy structure of a country, which can be included in commodities (one of the components of the base).
1) British Petroleum Company. (2020). Statistical Review of World Energy.
2) Danish Energy Agency. (2018). Energy in Denmark 2018. https://ens.dk/sites/ens.dk/files/Statistik/energyindenmark2018.pdf