Energy Security

Energy Security

Rising demand
1. China
  1. per capita demand still low > BUT will increase
    1. Mega cities & Urbanisation
    2. Manufacturing
    3. Emerging middle class
    4. Increased car ownership
    5. Rising standard of living
  2. 1.1 BILLION POPULATION
    1. 2nd largest global consumer, but set to overtake USA
      1. 2007: 15% of global demand
  3. "Increasing energy insecurity due to increase in demand."
  4. Inefficient usage
  5. Issues with supply
    1. Importing since 1993
    2. Exploration hindered by territorial disputes
      1. e.g. Japanese islands in S. China Sea
    3. Dependence on fossil fuels
      1. (70% coal)
    4. PROTECTIONISM POLICY
      1. Quotas and tariffs on imports to promote Chinese products
    5. Past peak oil production
    6. Natural gas production limited by cost of long distance pipelines
      1. Gas fields in WEST
      2. Mega cities in EAST
    7. HEP development hindered by Earthquakes
  6. Solutions
    1. Resource based foreign policy
      1. e.g. Burma, East African nations
    2. 50% privatisation
    3. Improved internal infrastructure (West/East)
    4. New/upgraded pathways
      1. 80% of oil via sea (Straits of Malacca)
        Increased naval presence
      2. Planned Burmese pipeline
      3. Proposed Karachi highway (Iran)
      4. Eastern Siberia- Pacific Ocean Pipeline (ESPO)
        Russia no longer dependent on EU
        1.6 million b/day
        Proposed 1000km branch to Daqing
        Phase 1 began in 2006
    5. Nuclear construction
2. BP Energy Outlook
  1. 41% rise in demand by 2025
    1. 50% of increase from India & China
  2. USA produce 101% of their demand (69% in 2005)
  3. Russia remains largest net exporter (4.2% of global usage)
  4. China overtakes EU as largest importer by 2030
  5. 72% of rise in emissions from non-OECD
  6. Total renewables = 7% (2% today) Electricity renewables = 14% (5% today)
  7. US, Russia, Saudi produce 1/3 global liquids
  8. 87% of coal growth from India and China
3. IEA estimates $22 trillion investment required by 2030
Exploitation of sensitive areas
1. Alberta Tar Sands
  1. Arctic contains 25% of global unexploited oil and gas reserves.
  2. 2.5 trillion barrels of oil
    1. More than Saudi Arabia's reserves
  3. Unconventional oil deposits now commercially viable
    1. Rising oil prices
    2. New technology
  4. Anthabasca deposit contains 1.75trillion barrels (> 50% of global proven reserves)
  5. Canada replaced Saudi Arabia as US primary oil supplier in 2004
  6. ENVIRONMENTAL IMPACTS
    1. Emissions equiv. to 1.3bn cars
    2. High pressure prevents dispersal of air pollution
    3. Water tainted by heavy metals (used for steam seperation of tar/sand)
      1. Cannot be decontaminated
        Held in 30sq mile holding pens
  7. PROCESS
    1. Forest clearance
      1. Strip mining
        Tar sands sent to refinery (heating)
        Proportion of oil used to refine more oil (low output)
  8. 20% surface recoverable
"self sufficient in energy"
1. "access to reliable/affordable sources"
  1. "diversity of supply"
UK renewable potential
1. Physical geography & climate
2. Renewables often 'intermittant'
3. HEP
4. Nuclear
5. Compare to Iceland...
6. Wind
7. CHP
8. Tidal
9. Solar
10. Biomass
Risks to energy security
1. Geopolitics & Pathways
  1. Political stability of producer regions
  2. Resource conflict (e.g. environmental issue in Arctic)
    1. Lomonosov ridge
  3. Pathway disruption
    1. Natural disasters: Hurricane Katrina
      1. 19% US gas affected
      2. US Gov stockpiles used
      3. Global price +$3pb
      4. 113 offshore platforms damaged
    2. Technical Interruption
      1. National Grid warned of blackouts in winter 2014
      2. 2 EDF nuclear shutdowns in 2014 and fire at coal plant
      3. UK's ageing power stations shutting down and new plants slow to come online
    3. Price and payment issues: Russia halts pipes to Ukraine (June 2004)
      1. Dispute with state owned Gazprom
      2. Conflict with pro-Russian seperatists
      3. Ukraine owes £3.2billion
      4. Dispute taken to ICCA (Stockholm)
    4. Piracy: Horn of Africa
      1. Europe's biggest alternative supply route to Russian oil (Quwait)
      2. Piracy and robbery from shipping
      3. EU 2014 Policy - naval antipiracy activity at Cape of Africa
    5. Terrorism: Al Qaeda
      1. One of their three methods of 'economic war' against America is OIL.
      2. Destroying wells/pipelines
      3. Attacking tankers
      4. Menacing maritime chokepoints
      5. Bombing TNC HQs and kidnapping officials
    6. Diversion for higher price: ESPO Pipeline
      1. EU fear Russia may 'turn off taps' if they can sell gas elsewhere
      2. Previously, 76% of Russia's supply went to small EU states
      3. Pipelines cost $50bn
      4. Russia agreed with China in 2014 to sell $400bn gas over 50yrs
2. PHYSICAL: resource depletion
  1. Control over supply
  2. North Sea Oil Past Peak Production
3. ECONOMIC: sudden price rises
  1. Control over prices
  2. Marginal reserves become viable (e.g. Alberta Tar Sands)
PLAYERS ACTIONS FUTURES
Key players
1. TNCS
  1. Monopolies
  2. Upstream
    1. Midstream
      1. Downstream
        Shell in Nigeria
        Refining, processing, marketing & retail
      2. Transport and storage
    2. Exploration & Production
2. Environmentalists
  1. Pressure & lobbying for renewables
  2. Campaigns, protests & media attention
3. Scientists/R&D
  1. Alternative & renewable sources
  2. Efficiency gains
4. Consumers
  1. via Regulator
    1. Prevent exploitation by 'big 6'
  2. Highly price sensitive
5. Distributers
  1. Role of National Grid (see technical interruption)
6. Governments
  1. OPEC
    1. Adjust output to fix prices
    2. 12 nations
  2. Subsidies/ renewable incentives
  3. Diplomatic relations & trade agreements

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	Created by jamesnchlsn almost 9 years ago