6GEO3 Unit 3 Contested Planet Energy Security

What is this topic about? Energy is fundamental to our lives, and we often take it for granted This topic explores our energy supply, and asks challenging questions about it Can we continue to rely on fossil fuels, or do we need a radical switch in energy sources? Energy is very closely linked to climate change as fossil fuels (our main energy source) are the main source of greenhouse gas emissions.

Energy supply, demand and security The impacts of energy insecurity CONTENTS Energy supply, demand and security The impacts of energy insecurity Energy security and the future Click on the information icon to jump to that section. Click on the home button to return to this contents page

1. Energy supply, demand and security There are a wide range of energy resources, with different security of supply and environmental issues: Non-renewable Renewable Recyclable A finite stock of resources, which will run out A flow of resources, which is infinite in human terms Can be used repeatedly, if managed carefully Coal, oil, gas (plus oil shale, tar sands, lignite etc.) Wind, solar, hydroelectric, wave, tidal, geothermal Biomass, nuclear (with reprocessing of fuel) Significant environmental impacts during extraction (oil wells, opencast mines) Greenhouse gas emissions during use, and acidic emissions May require large areas (solar arrays, wind farms) for operation. NIMBY issues. Limited / no greenhouse emissions. Large land area needed for biomass. Largely unresolved issues of storing high level radioactive waste.

Life cycle analysis Life cycle analysis accounts for C02 emissions at all stages of the energy supply chain, not simply during use  Comparing the environmental impact of different energy sources is a challenge Life cycle greenhouse emissions is one approach Even this does not account for NIMBY issues (e.g. windfarms), or the loss of ecosystems and biodiversity linked to extraction of fossil fuels Some sources, such as nuclear and biomass are highly controversial and there is intense debate over their ‘green’ credentials.

Top 15 countries by oil, gas and coal reserves in 2008 Access to energy Direct access to fossil fuel reserves is a coincidence of geological history and international boundaries. Some countries find themselves with more fossil fuel sources than their needs Others have none Reserves run down over time, as is the gas with the UK’s once abundant North Sea oil and gas Remaining oil and gas will increasingly concentrate in the Middle East over the next 30 years. Top 15 countries by oil, gas and coal reserves in 2008

Access to renewables UK renewable potential Most renewable energy is constrained by physical geography, and especially climate This means its availability is place specific The UK has significant renewable potential, especially wind, although it is a small country with limited land area; most HEP sites are already used. Many renewables are intermittent energy sources, so energy must be stored (very costly and technically difficult) or backed up by another source UK renewable potential Source Physical limitations Wind Requires wind speeds of 8-25 mph Solar PV Works best in areas of over 6 kwh per sq. metre per day Biomass Requires large land area for feedstock HEP Suitable valleys i.e. long, deep and relatively narrow, and predictable water supply

Access to energy Which energy sources are used is not simply a matter of which fossil fuels or renewable forms are available in a country Other factors influence choice of energy sources Cost is critical, as people are sensitive to energy sources Nuclear power station construction ground to a standstill after the 1986 Chernobyl accident. Technology Technology is required to drill, mine, process etc, and is not available everywhere e.g. LDCs. Attitudes Public attitudes may be anti-nuclear, or NIMBYISM may block wind turbines or dams. Cost While desirable, technologies like wave and hydrogen may be too expensive due to technical challenges.

Energy poverty Lack of access to energy resources is common in the developing world Reliance of fuel wood, farm waste and dung is high and fossil fuel consumption low Up to 40% of the world’s population rely on these sources as their primary cooking and heating fuel Close to 2 billion people have no access to electricity Access to cheap, reliable energy is strongly related to development as so much of ‘modern’ life and industry depends on it.

Demand Global demand for energy has risen dramatically, especially since the 1960s Demand doubled between 1960 and 1980 Growth in demand has been slower since 1980, but is projected to rise by up to 60% between 2002 and 2030 and continue upward. The BRIC countries, as well as other large developing nations (Mexico, Indonesia) have contributed to much to recent increases in demand and are likely to do so in the future. Further industrialisation inevitably brings demands for cars and consumer goods, all of which need power.

Domestic fossil fuel reserves Domestic renewable potential Security Energy security depends on a number of factors (see table) Countries with a diverse energy ‘mix’ are less at risk than those relying on 1 or 2 sources Renewable potential could be used to offset declining fossil fuel reserves or supply interruptions Reliance on long distance international trade in fossil fuels may be risky Demand and dependency are important too, as it is difficult to replace a large amount of oil with another energy source for instance Domestic fossil fuel reserves Countries like Italy and Japan have few of their own resources Domestic renewable potential Small, crowded nations like Singapore and South Korea lack renewable potential Domestic energy mix France relies heavily on nuclear power, and the UK on gas. Import pathway risk The UK imports gas from Russia and Qatar, both long distance pathways.

2. The impacts of energy insecurity Pathway disruption Price and payment disputes Piracy e.g. off the Somali coast Terrorism or conflict closing choke points Political discord between supplier and consumer Diversion of supply, perhaps for a higher price Technical interruption to production Producer’s supply simply runs out Natural disasters e.g. hurricane Katrina Fossil fuel supply regions are poorly matched with areas of largest demand This is especially true for oil and gas Energy must flow along international pathways from producer to consumer These are either pipelines (oil and gas), bulk carriers (coal, uranium), LNG tankers (gas) or oil tankers. Electricity is also exported / imported. Pathways could be disrupted, increasing energy insecurity.

Risks of disruption Gas pipeline disruption has already occurred, as disputes between Russia and Ukraine disrupted European gas supplies in 2006 and 2009 Russia holds 25% of world gas reserves, the Middle East 40% (and 56% of oil) Disruption to narrow ocean choke points (see map) could seriously affect the flow of oil Countries close to some choke points are unstable (Iran, Somalia, Yemen)

Risks of disruption There are real risks if oil and gas supplies are disrupted. Any potential disruption is headline news So dependent are we on cheap, uninterrupted energy supplies that disruption could lead to: Soaring energy costs and rising energy poverty Pressure on politicians to act; possibly rationing energy Civil disruption Rising costs for industry, job losses and recession Unsound decisions (economically and environmentally) to rapidly develop alternative sources Diplomatic conflict UK energy disruption Oct 1973 Oil crisis; petrol rationing Sept 2000 UK wide fuel protests over price and tax Aug 2005 Further UK protests; Hurricane Katrina pushes oil prices higher Aug 2008 Oil at $147 a barrel Jan 2010 National Grid ‘gas balancing alerts’ are headline news ; gas supply from Norway drops on technical problems

Environmental impacts Supply: new sources As oil prices remain high, and fears of ‘peak oil and gas’ increase the search is on for new sources: Example Source Technical challenge Environmental impacts Canadian (Athabasca) tar sands Bitumen combined with sand / rock under boreal forests; close to surface MODERATE Strip mining or extraction by steam; gas is used to heat the sands and extract oil. HIGH Energy intensive extraction and destruction of ecosystems Arctic oil Conventional oil in fragile wilderness region, both on and offshore LOW Conventional drilling and extraction; Arctic oil has been taken from Prudhoe Bay for decades. Fragile environment but production has relatively small footprint West of Shetland, Foinaven field Conventional oil in deep ocean water Production began in 1997, but using ‘floating’ rigs Low risk of spills and limited impact on sea bed USA (Green River) oil shale Bitumen encased in solid rock Opencast mining, then can be directly burnt or heated to drive off oil. Large areas mined, scarring landscape and energy intensive production

Viable alternatives? The chart below shows the estimates oil price required for each energy resource to be competitive with oil and gas without any form of State support or subsidy Source: the FT 2009

Generators and Distributors Players The diagram below summarises the role of some key players in the energy supply Energy Players Governments National energy mix; renewable policy; subsidies and grants Generators and Distributors Vital infrastructure (National Grid) and power stations Environmentalists Pressure to adopt renewables and reduce carbon intensity; campaigns OPEC Key role in the global oil price, by managing production Scientists, R&D Research into alterative fuels and applications ; efficiency gains Energy TNCs Exploration for reserves, exploitation and refining; distribution of oil Consumers Often highly price sensitive; can exert pressure on politicians.

Big oil: TNCs and OPEC ‘Supermajor’ TNCs State owned oil giants Total Fr Saudi Aramco Saudi Arabia BP UK Gazprom Russia Shell UK/Nl CNPC China Chevron USA Petrobras Brazil ExxonMobil NOIC Iran ConocoPhilips PDVSA Venezuela Supermajor and other oil and gas TNCs control most oil and gas extraction, refining and distribution. State owned oil companies own / control access to 95% of world oil and gas reserves OPEC is effectively a price control cartel, with considerable power.

3. Energy security and the future There are several key uncertainties relating to energy futures: Future demand is uncertain – it partly depends on future population and economic growth The lifespan of fossil fuel reserves, especially oil, is unknown The extent to which we exploit unconventional oil (see image) The extent and timing of switching from fossil fuel to renewables is uncertain. Peak oil and gas are important; after peak production prices can only rise.

The nuclear option? Opinion is divided over whether nuclear power is the answer It provides about 15% of the world’s electricity, but only 2% of all energy needs There are over 400 reactors in 30 countries, but few currently being built Advantages Disadvantages Fuel sources (see map) Low life cycle carbon emissions. Constant power output Takes up little space . Large power output per plant Public distrust. High initial cost. Long build times. High level waste disposal. Fears of terrorism. Nuclear proliferation. Technically challenging

Future biofuels might not use food crops: Biofuels have the advantage of being flexible liquids As such they can replace diesel (biodiesel) and petrol (bio-ethanol) However, they require food crops as feedstocks (sugar cane, maize etc) This means land that could be used for food. In 2007-08 explosive growth of biofuel crop area was blamed for pushing up global food prices Biofuels are not carbon neutral, because of the energy used in farming, transport and refining. Future biofuels might not use food crops: 1st generation – food crops 2nd generation – crop wastes 3rd generation – algae

Geopolitics There are a number of sources of tension, both present and future, related to energy security and the threat of insecurity: Scenario Explanation Consequences Oil hits $100 Sustained oil price of over $100 per barrel, for several years. Prolonged economic recession and rising fuel poverty in OECD countries Middle East meltdown Tensions in the Gulf escalate into war between Muslim factions; possibly involving Iran, Iraq, Israel, Syria, Turkey and others. Interruption of oil and gas flows; rising prices; tension between China and USA to secure oil supply The nuclear option Wholesale shifting towards nuclear to replace fossil fuels, leads to global spread of nuclear power and technology Power stations become ‘soft targets’ for terrorism; enriched uranium and depleted plutonium get into the wrong hands…. Energy superpowers The Gulf States hold 60%+ of oil reserves and Russia/Qatar/ Iran 60%+ of gas; the world has not shifted to renewables. Energy superpowers begin to ‘name their price’ and take care of their friends; major geopolitical shifts Arctic attack Canada, Russia, USA and EU begin to exploit the Arctic for oil and gas, but without clear delineation of territorial areas. A war or words over who has the right to exploit what, quickly becomes a new cold war – possibly a hot one……

Future challenges What are our energy challenges in 2010? There are some that are obvious: Reduce dependency on fossil fuels to increase energy security Increase renewable energy use as fossil fuels become more expensive / peak Reduce greenhouse gas emissions Increase access to energy in developing nations Mix it up Wind, solar and others can be used to diversify energy sources. This would increase security, but could also reduce greenhouse emissions. Technology for all Aid could be used to help developing nations grow their renewable sectors Intermediate technology is key to this. They need energy, but without greenhouse emissions. Tax it down Green taxes i.e. taxing fossil fuel use, could encourage efficiency Greenhouse emissions would fall as efficiency rises The dirtiest fuels could be taxed the most. Self generation Homes can generate renewable energy using ground source heat pumps, micro-wind and solar PV / thermal This would diversify the energy mix, reduce emissions and increase self-reliance.