Energy security

What does it mean?

4th July 2011

Petra Kuchynkova

Energy security

• Different definitions5 Ss: supply (having resources, such as fossil

fuels, alternative energy and renewable energy); sufficiency (adequate quantity of fuel and services from these sources); surety (having access to them); survivability (resilient and durable sources of energy in the face of disruption or damage); sustainability (reducing waste and limiting damage to the environment)

4 „A“s: availability, accessibility, affordability, acceptability

Energy security - definitonsEuropean Commission: „Uninterrupted physical availability

of energy products on the market at an affordable price for all consumers.“

International Energy Agency: „Adequate, affordable and reliable access to energy fuels and services, it includes availability of resources, decreasing dependence on imports, decreasing pressures on the environment, competition and market efficiency, reliance on indigenous resources that are environmentally clean, and energy services that are affordable and equitably shared

World Bank: „Access to secure supplies of fuel, a competitive market that distributes those fuels, stability of resource flows and transit points, and efficiency of end use

D.Yergin: „Reliable and affordable access to energy supplies, diversification, integration into energy markets, and the provision of information

Energy security - definiton

Usually 3 components are included:

• Reliability

• Affordability

• Environmental friendliness

Different perspectives of the consumer, supplier and transit country

Energy security

• Perspective of the consumerHow to achieve energy security?• Diversity of energy resources• Diversity of suppliers• Storage of energy and strategic petroleum

reserves• Redundant energy infrastructure• Flexibility to shift fuels

Energy security

• Producers and resource exportersEconomic characteristics – danger of „Dutch

Disease“?Political regimes – especially major oil exporters

display a strong common tendency to be governed by non-democratic regimes („rentier effect“, „repression effect“, „modernization effect“)

Stability of regimesMiddle East X states of former Soviet Union

Energy security

• Producers´perspective

Energy and foreign policy

Resource nationalism

Possibility to use oil or gas „weapons“?• Different characteristics of oil and gas markets

and trade• Gas – dependence or interdependece between

the exporter and the consumer?

Energy weapon or commercial considerations?

Energy security – oil and gas

• Role of transit statesCould they use „energy weapon“?Direct linkages (e.g. Kazakhstan-China

pipeline) X big international projects (Baku-Tbilisi-Ceyhan, Nabucco?)

Landlocked states-producers: rise of the importance of that phenomenon after USSR disintegration

Role of transit states: Georgia, Turkey

Energy resources – conflict potential

• Energy – potential both for interstate conflict and cooperation

Border-delimitation conflictsBorder hotspots: Iran-Qatar (South Pars field);

Spratly Islands in the South China Sea (China X Vietnam); East China Sea (China X Japan)

Peace potential of pipelines?Potential conflict areas?• Arctic Circle• Caspian Sea

Energy security – vulnerability of transport routes

• Vulnerable energy transport chokepoints

Strait of Hormuz

Strait of Malacca

Bosporus Strait

• Terrorism and vulnerability of energy infrastructure

Energy security - Nuclear energy

• Rising popularity during periods of rising prices of oil (after 1970´s oil crisis etc.) X Three Mile Island, Chernobyl, Fukushima

• Electricity production (cca 16 % of world production) X Cannot replace oil in transport (potentially production of hydrogen)

• Low emissions of climate-altering gases• Advocates and opponents among the EU

member statesX• Proliferation of nuclear weapons (commercial

fuel-making facility = latent nuclear bomb factory?; opportunities for terrorists)

Nuclear energy

• Factors of Price (more expensive than other

conventional sources of electricitySafety and environmental concerns

(difficulties in disposing of nuclear waste)Weapons proliferation concerns (Iran – UN

Security Council sanctions)Nuclear reactors as objects of terrorist

attacks

Energy security and climate changes

• World´s continuing dependece on fossil fuels• Climate change no longer considered only an

issue relating to quality of life and the environment, but also directly affecting human and global security (2007 UN Security Council – climate change as an international security threat)

• Energy consumption patterns and policies have become international security issue

• ¾ of of world´s CO2 emissions produced by burning fossil fuels (rest – deforestation etc.), oil, coal X natural gas

• Events like Hurricane Katrina in the USA

Energy and climate changes• 1992 – UN Framework Convention on Climate Change

(Earth Summit) in Rio – universal membership X no concrete government commitments for limiting emissions

• 1997 Kyoto Protocol – 38 industrialized nations agreed to cut emissions of 6 greenhouse gases to an average of 5.2% below 1990 levels by 2008-12 X only partially applies to economies in transition and developing countries (China, India) are not obliged

• 2007 – China overtook USA in greenhouse gases emissions

System of emissions trading –using market mechanisms to reduce greenhouse gas emissions (inspiration with U.S. emissions-trading program for SO2

2005 – EU emissions-trading system x effectivity in reducing emissions in EU

Kyoto – only a symbol for the public? Lack od effective legal and enforcement framework

Energy and climate changes• Post-Kyoto

2007 – Bali – road map document adopted – framework for the negociations about the new treaty X no fundamentaly new framework or binding emissions reductions

Unanimous endorsement (incl. USA, EU, China, India)

X failure of Copenhagen conference in 2009 (attempt to adopt framework replacing Kyoto)

Energy and climate changes

The future – rather the consensus of top emitters than wide encompassing agreement?

Biofules? (Danger of deforestation) „Climate change policy requires current populations to

make material sacrifices to avert danger to future generations“ (Brenda Shaffer)

Ethical problem of emissions-trade mechanismsResponsibility of developing countries, access to new

technologies Addressing climate changes create a significant challenge

to the sovereignty of the state in international system – state security can become dependent on the actions of other states; demands to radically change organization of states´economies and lifestyles

Actors of energy security in Eurasia - Russia

• World´s largest natural gas reserves• Second-largest coal reserves• Eighth-largest proven oil reserves• Major producer of nuclear energy (export of

technologies, reactors, fuel, waste processing and storage)

• Revenues from energy export are largest source of foreign earnings

• More diversified economy than most of the world´s major energy producers (Persian Gulf states)

• 20 – 25 % of Russia´s GDP from oil and gas, revenues from this sector – cca 37% of state budget (before financial crisis)

Russia – geopolitical dimension of energy security

• Close to two major energy markets (EU, China)• At the same time in a sense a landlocked state – most of

the ports are not operational for the whole year for weather conditions (Novorossiysk on Black Sea + Bosporus Strait)

• Important feature of foreign energy policy: to reduce dependency on exports through transit states

• Energy Policy Strategy until 2020 (from 2003) – Russia sees energy resources as a strategic resource for economic development and as a geopolitical tool

Russia´s export infrastructure must be sufficiently diversified to allow exports to all directions

X Limited sea access for oil export and relying on gas pipelines

„Dependece“ on transit states

Europe

• Role of energy in the process of European integration

• Energy resources

1% of world´s proven oil reserves

2% of world´s proven natural gas reserves

4% of the world´s proven coal reserves

By 2020 2/3 of European energy consumption is expected to be imported X EU is the 2nd largest consumer of energy in the world

EU

• TPEC

42% oil

24% natural gas

14% nuclear energy

13% coal

6% renewables

Portion of natural gas in TPEC rose rapidly over last 3 decades

• Electricity mix

31% nuclear

30% coal

20% natural gas

4% oil

Member states split on the issue of nuclear energy

Future challenges

• Rising role of China as a world economy and energy consumer

• Changes in the world gas market

GECF

Shale gas extraction

Influence of LNG and spot market on gas prices and long-term contracts

Sources

• Sovacool (2011): The Routledge Handbook of Energy Security. Routledge.

• Shaffer, B. (2009): Energy Politics. University of Pennsylvania Press