Energy security and energy as a political weapon

Energy security and energy as a political weapon

A book for reading Francisco Parra “Oil Politics a Modern History of Petroleum”

Course reading 1) Energy Security and Conflict: A Country-Level Review of the Issues (Book) 2) Energy Security Issues (Book) 3) Energy as a tool of hybrid warfare by Michael Ruhl (Research Paper)

Outline of the lecture 1) What is energy security? 2) Importance of energy security. 3) Energy security as an integral part of national security. 4) Oil/gas as a weapon of politics and hybrid warfare.

Energy security In cases such as the international oil market, where prices are allowed to adjust in response to changes in supply and demand, the risk of physical unavailability is limited to extreme events. Supply security concerns are primarily related to the economic damage caused by extreme price spikes. The concern for physical unavailability of supply is more prevalent in energy markets where transmission systems must be kept in constant balance, such as electricity and, to some extent, natural gas. This is particularly the case in instances where there are capacity constraints or where prices are not able to work as an adjustment mechanism to balance supply and demand in the short term. Ensuring energy security has been at the centre of the mission of the IEA since its inception.

Energy security The ability to respond collectively in the case of a serious oil supply disruption with short-term emergency response measures remains one of the core activities of the IEA. The long-term aspect of energy security was also included in the Agency’s founding objectives, which called for promoting alternative energy sources in order to reduce oil import dependency. The IEA continues to work to improve energy security over the longer term by promoting energy policies that encourage diversification, both of energy types and supply sources, and that facilitate better functioning and more integrated energy markets.

Quantifying energy security Historically, energy security was primarily associated with oil supply. Whilst oil supply remains a key issue, the increasing complexity of energy systems requires systematic and rigorous understanding of a wider range of vulnerabilities. Disruptions can affect other fuel sources, infrastructure or end-use sectors. Thus, analysis of oil supply security alone is no longer sufficient for understanding a country’s energy security situation as a whole.

Quantifying energy security One of the ways in which the IEA is responding to this challenge is by developing a comprehensive tool to measure energy security. The IEA Model of Short-term Energy Security (MOSES) examines both risks and resilience factors associated with short-term physical disruptions of energy supply that can last for days or weeks. MOSES extends beyond oil to monitor and analyse several important energy sources, as well as the non-energy components (such as infrastructure) that comprise an energy system. Analysis of vulnerability for fossil fuel disruptions, for example, is based on risk factors such as net-import dependence and the political stability of suppliers. Resilience factors include the number of entry points for a country (e. g. ports and pipelines), the level of stocks and the diversity of suppliers.

Energy Security Drivers There are many drivers governing the secure supply of energy. Diversification of generation capacity – a well-balanced energy system, comprising various power generation technologies, and with suitable capacity, enables the advantages of each to be maximised, allows prices to remain reasonably stable, and ensures a continuing supply to the consumer. Prices – the provision of affordable energy to the consumer is dependent on the cost of generation, transmission and distribution. The interruption of supply networks can negatively impact prices and create economic difficulties for countries exposed by overreliance on one energy source. Sustained price rises and short-term spikes in oil, gas or electricity can trigger inflation and recession.

Energy security drivers Levels of investment required – significant investment is needed to meet the forecast growth in energy demand. The availability of that investment – particularly problematic in many developing countries – will be a significant factor over coming years. Ease of transport – energy must be readily available, and thus the ease and safety with which fuels and electricity can be transported is a key driver for energy security. Concentration of suppliers – the reliance on imported fuels from a limited number of suppliers may increase the risk of adverse market influence. Where suppliers are from politically unstable countries, there may also be an increased risk of supply disruption.

Energy security drivers Availability of infrastructure expertise – to achieve a diverse energy mix, countries must have access to different energy sources, requiring both infrastructure and expertise, whether in generation technologies, fuel handling, access to delivery systems such as pipelines, ports or electricity interconnections and transmission lines. Interconnection of energy systems – the interconnection of energy systems, particularly electricity, must also be considered in terms of security. A limited market or connection increases the risk of supply disruption by reducing the options available to meet demand.

Energy security drivers Fuel substitution – diversification in the uses of fuels may also be important for energy security. Fuel transformation – such as coal to gas, gas to liquids and coal liquefaction – can meet demand even when conventional supplies may be affected. Political threats – the energy supply system can be vulnerable to disruptions caused by political interests and even terrorist attacks.

Why is energy a national security issue? Energy is the lifeblood of every economy. Cut off the flow of energy and the economy will die. For this reason, energy independence is a matter of national security.

Why is energy a national security issue? “Our entire economy depends on the expectation that energy will be plentiful, available, and affordable. Nations like Venezuela and Iran can use oil and gas as political and economic weapons by manipulating the marketplace. Half of our trade deficit goes toward buying oil from abroad, and some of that money ends up in the hands of terrorists. ” General James Jones is a retired United States Marine Corps fourstar general.

Why is energy a national security issue? “At a time of such great challenge for America, no single issue is as fundamental to our future as energy. America's dependence on oil is one of the most serious threats that our nation has faced. It bankrolls dictators, pays for nuclear proliferation, and funds both sides of our struggle against terrorism. It puts the American people at the mercy of shifting gas prices, stifles innovation and sets back our ability to compete. ”

According to U. S. Energy Information Administration, The United States consumes 20 million barrels of oil every day. The U. S. economy has become dangerously dependent on foreign oil. 57% of all oil consumed in the U. S. is imported. 70% of all oil consumed in the U. S. is used for transportation. The United States consumes 20 million barrels of oil products every day. — 14 million barrels per day consumed for transportation fuel. — 9 million barrels of the transportation fuel is gasoline. The United States imports 6 million barrels of crude oil per day from OPEC nations.

Energy as a weapon of politics President Obama’s former National Security Advisor, Retired General James Jones testified before a congressional hearing in March (2015) stating, “The international bullies who wish to use energy scarcity as a weapon against us all are watching intently. If we want to make Mr. Putin’s day and strengthen his hand, we should reject the Keystone. If we want to gain an important measure of national energy security, jobs, tax revenue and prosperity to advance our work on the spectrum of energy solutions that don’t rely on carbon, it should be approved. ”

About Keystone XL Pipeline The Keystone XL Pipeline is a proposed 1, 179 -mile (1, 897 km), 36 -inchdiameter crude oil pipeline beginning in Hardisty, Alberta, and extending south to Steele City, Neb. This pipeline is a critical infrastructure project for the energy security of the United States and for strengthening the American economy. Along with transporting crude oil from Canada, the Keystone XL Pipeline will also support the significant growth of crude oil production in the United States by allowing American oil producers more access to the large refining markets found in the American Midwest and along the U. S. Gulf Coast.