Transcript Annex 06 The Challenges of Energy Security in our time (Ms Elspeth

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
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Purpose/Outline
To set the stage for this Forum by providing an overview
of:
• Definition of energy security
• Review of energy security indicators
• The world’s (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 country’s energy
security risks
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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.
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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
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Indicators (con’t) –
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.
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Today’s 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
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Dilemma cont’d
• 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
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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 country’s
particular circumstances and make tradeoffs.
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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
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Oil Security Risks (con’t)
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.
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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
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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
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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
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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
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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
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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
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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
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Climate Change and
Energy Security (con’t)
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.
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Climate Change and
Energy Security (con’t)
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.
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Common Strategies to
Reduce Energy Security Risks
1.
2.
3.
4.
5.
Increase the number of fuels and technologies in
the energy mix
Increase the number of suppliers for each fuel
Raise energy consumption efficiency
Set conservation goals
Build storage capacity
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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.
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THE END
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