Presentation on theme: "1 THE CHALLENGES OF ENERGY SECURITY IN OUR TIME 2nd ASEAN Regional Forum Session I : Energy Security Risks and Strategies (Part 1) 16 April 2008 Singapore."— Presentation transcript:
1 THE CHALLENGES OF ENERGY SECURITY IN OUR TIME 2nd ASEAN Regional Forum Session I : Energy Security Risks and Strategies (Part 1) 16 April 2008 Singapore Elspeth Thomson Senior Fellow Energy Studies Institute National University of Singapore
2 Purpose/Outline To set the stage for this Forum by providing an overview of: Definition of energy security Review of energy security indicators The worlds (non-country specific) energy security risks (the dilemma) The security risks of each form of energy The link between climate change and energy security The main strategies to lower a countrys energy security risks
3 What is Energy Security? Definitions generally include all of these: security of energy supply in terms of quantity security of energy supply in terms of timeliness security of energy conveyance to final consumer security of energy price security of safe consumption, etc. At each stage there are physical, capital and labour constraints, the potential for accidents, Acts of God, political manipulation and acts of terrorism.
4 Energy Security Indicators Great variety in use: They differ in terms of - i)the range of [often difficult to quantify] political factors that they attempt to capture ii)The econometric techniques, sensitivity analyses employed Bottom line is the need to measure: i) diversification of energy supply sources (geographical origin and type) ii) net energy import dependency iii) net oil import dependency
5 Indicators (cont) – The Imperatives of Climate Change Any responsible energy security strategy today must also accommodate the imperatives of climate change, making policy-making in the energy arena even more complex and challenging. Governments must be creative and have a flexible, more diverse portfolio of options.
6 Todays Global Energy Security Dilemmas Summarised Transport Sector- how to fuel road, air and water transport Lack of viable substitutes for oil products Proven, largest and easily accessible oil reserves are concentrated in geopolitically sensitive areas Climbing oil prices reflect various supply- and demand-related factors Pressure on the prices of gas (and coal) Role of oil consumption in climate change
7 Dilemma contd High cost and questionable viability of biofuels High cost and impracticalities of electric, hydrogen, etc. vehicles Power Sector- how to generate large quantities of electricity Most countries are diversifying electricity production – oil, gas, coal, hydro, biomass, nuclear. Some countries have more options than others Worries about nuclear power plant disasters, proliferation and waste disposal
8 Relative Risks All energy types have security risks associated with their extraction/generation, conveyance and/or use. Governments must weigh the relative advantages and disadvantages of each type given their countrys particular circumstances and make tradeoffs.
9 Oil Security Risks Depletion of easily extractable reserves, though potential for new discoveries does exist Non-conventional resources are becoming commercial Geopolitical risks at point of extraction and in conveyance Concern over dominance of OPEC Major capital and specialised labour requirements Concern over affordability Concern over current and future effects of GHG emissions
10 Oil Security Risks (cont) A fairly new development (though it has been some years in the making): the trend for oil (and gas) assets, especially upstream assets, to be increasingly in the hands of governments. Unlike, say a decade ago, when the oil/gas majors controlled a large share of energy assets, the reverse is true today. One consequence is that an already imperfect energy market is now more unpredictable (and even less transparent) as more political considerations come into play.
11 Gas Security Risks Ample supplies still available and promising exploration outlook Geopolitical risks at point of extraction and in conveyance LNG considered a positive option Major capital and specialised labour requirements Considerable opposition to construction and routing of pipelines Concern over current and future effects of GHG emissions
12 Coal Security Risks Abundant reserves on all continents Lower extraction and conveyance risks Lower capital and specialised labour requirements Higher concern over GHG emissions: function of integrated gasification combined cycle and carbon capture and storage carbon capture and storage Coal option may be eliminated depending on GHG regulation Climbing prices
13 Hydropower Security Risks Inflexible geographical constraints Climate change already affecting water flows Major capital and specialised labour requirements High initial costs but relatively low operation costs Potential annihilation of local ecologies, societies, historical heritages
14 Nuclear Power Security Risks Uranium resources are readily available but processing is not Requirement of large geographical area Major capital and specialised labour requirements High initial costs, but relatively low operation costs No GHG emissions, but waste disposal, safety and proliferation risks NIMBY- sometimes major demonstrations
15 Biofuel Security Risks Questions over potential for sufficiently large-scale production Production is a function of land, soils, water resources, climate, etc. Significant capital and specialised labour requirements Potential competition with food crops Potential high ecological damage from fertiliser use, water depletion, deforestation Questions over energy consumption per unit of output Price of output from large-scale production unknown
16 Renewables Security (Solar, Wind, etc.) Risks Insufficient scale for modern economies Potential high land-use and ecological impacts Currently high costs though could decline No direct emissions
17 Climate Change and Energy Security The environmental consequences of burning large quantities of fossil fuels are increasingly being regarded as a security issue. Many countries would be very badly affected by rising sea levels, extreme wind storms, etc. Potentially hundreds of thousands of homeless people Loss of prime agricultural land Increased incidence of diseases ******These are all ingredients for instability, if not conflict
18 Climate Change and Energy Security (cont) The task of enhancing energy security, challenging as it already is, is further complicated by the need for governments to take on the concerns of the wider international community with respect to their emission of GHG. This factor limits the reliance on the softer, cheaper energy options, e.g. coal.
19 Climate Change and Energy Security (cont) Although the vast majority of countries (non-Annex 1 countries under KP) do not have binding obligations to reduce their GHG emissions, governments are under increasing pressure from the international community, NGOs, and sometimes their own publics, to do their bit to reduce the growth rate of their GHG emissions, or better still, to reduce their levels of emissions altogether.
20 Common Strategies to Reduce Energy Security Risks 1.Increase the number of fuels and technologies in the energy mix 2.Increase the number of suppliers for each fuel 3.Raise energy consumption efficiency 4.Set conservation goals 5.Build storage capacity
21 Concluding Remarks It is important for countries/regions to develop national energy policies that are comprehensive, and which go beyond ensuring the flow of oil/gas and to avert short-term disruptions. Countries/Regions need to develop energy policies that address the main concerns arising from the larger global threat of climate change.