Energy Security Flashcards
Different sources of energy?
Solar - Panels on German roofs - produce the most energy in Europe
Oil - Saudi Arabia largest Exporter - Saudi Aramco = no.1 Oil company - Reserves of 262 billion barrels
Coal - China and ‘Open Cast Mining’
Nuclear power - NIMBY cus of Chernobyl and Fukushima - Hinkley Point delayed with a petition of over 300,000 signatures
Electric Mountain - Wales Pump storage
Concentrated Solar Power: Use of sun to heat salt that heats water in a power generator.
Why is France energy secure?
France relies on Nuclear power for 75% of its energy supply - largest reserves of uranium are Canada and Australia which are reliable sources
OPEC working as a cartel?
1998 - cut their quotas - $14 to $32 (2006 dollar)
Yom Kippur War 1973 - cut their supply to spite US
Nov 2016 - Counter current glut - cut production next year by about 4.5 percent
Previous Crude Oil Price changes?
1978 Iranian Revolution and Iran/Iraq War - $35 to $66 (2006 dollars)
2001 9/11 attacks $2006 to $60
Peak Tight Oil?
2015 - 5.5 million barrels a day
Costs of finding ‘New Oil’?
Lay pipelines in environmentally sensitive areas - was the case with the ESPO oil pipeline, which was originally set to have been laid through the habitat of the last remaining Amur Leopard’s in the world.
Expensive and can be a wasted effort if none or not enough is found, e.g. Shell and their exploration of Alaska.
Socially, new oil exploration can impact on a local population’s culture when the town becomes an oil-producing town.
Benefits of finding ‘New Oil’?
Countries’ can secure their own energy security by finding a ‘new oil’ source that they can control.
New Oil can stop the oil cartels
Costs of Fuel Wood and Dung as fuel source?
• Using wood unsustainably leads to deforestation and energy insecurity
o Causes the issues of increased erosion and flooding
• Dung is very dirty and leads to health issues when burnt
• Dung should be used for fertiliser and hurts food security if burnt
What complicated the construction of the ESPO?
The region the pipeline was originally planned to run through is the last remaining habitat of the Amur Leopard; there is only 30-40 of these leopards left in the world.
The original pipeline also ran too close to the northern tip of Lake Baikal (the world’s largest freshwater lake and a UNESCO protected site) and there were fears that oil spills could cause an environmental disaster.
The increasing price of steel and having to build in permafrost conditions also meant that the price of construction was seriously elevated.
Why does the ESPO have end points?
One travels to a port in Vladivostok so that it can be transported to the entire of Asia and possibly North America. It also runs into China so that it can have direct access to this major market with less transportation costs and have preference to Chinese buyers. The reason the two end points split so early is so that only the pipe intended for China travels through China and so the Chinese have no influence over the second end point and therefore have less influence over Russia.
Why motivated them to overcome the complication of ESPO?
The new energy pathway would provide them with access to Asia and possibly North America. The pathway would also run straight into China and therefore would provide access to an increasingly demanding market for oil as China continues to industrialise and provide energy for its industry and its massive population which is advancing economically. Japan also wants a share of Russia’s oil and therefore encouraged the creation of the pathway. The new pathway would also mean that Russia would be less dependent on Europe, who continue to put pressure on Russia, for the majority of its oil exporting income and therefore makes Russia more economically and to an extent, politically secure.
Russia = largest reserves of natural gas - 47,000 billion cubic metres
Implication of ESPO for European Energy Security?
This pipeline, when finished, will be damaging to European Energy security as the Russians will no longer be reliant on Europe due to it being their main buyer of oil
Loss of buying power
Possibility of Russia cutting their supply to Europe such as during the March 2014 Crimea annexation
Energy Security threats to crude oil?
Piracy of oil tankers, such as that off of the Straights of Malacca and off of the Horn of Africa
Possible terrorism to oil supply chokepoints in the Middle East such as the major Saudi exporting port Ras Tanura
24th Feb 2006 - terrorists attack the oil-processing plant at Abqaiq in Saudia Arabia - Abqaiq is the largest oil-processing plant in the world - producing 6.8 million barrels of oil a day (about 75% of Saudi’s oil output) - disruption would have global effects and possibility of a financial crisis
Causes of California’s Energy crisis
2000-2001
• The US energy market is completely privatised and building energy infrastructure is expensive so energy companies have not been willing to invest in US energy infrastructure schemes.
• Oregon and Washington states supply hydro-electricity to California but 2000 was the third year of a drought and they had less surplus energy to export.
• There was an increased demand for electricity as the summer of 2000 was unusually hot and more people were using air-conditioning.
• The demand for gas was also increased by an unusually cold winter of 2000-2001 where the price of gas for heating soared over night.
• Strong anti-pollution laws set in the 70s meant that new power stations were expensive to build so companies were not willing to invest it the infrastructure.
• The limited capacity of interstate power lines meant that more energy could not be imported to deal with the shortage.
• Previously, 80% of power supply used to be vertically integrated so that energy companies would own their power plants however the power industry in California was deregulated in 1996. So the current infrastructure could only supply 20% over peak demand.
Enron’s market manipulation?
They used the supply and demand system to keep energy prices high even when the supply was in surplus. This was achieved by:
• Obscuring the origin of electricity (‘megawatt laundering’)
• Deliberately reserving more power line usage than was actually required (‘overscheduling’)
• Moving energy around the Californian electricity grid in order to receive payments from the state for ‘relieving congestion’
• Encouraging suppliers to shut down plants to perform unnecessary maintenance – thus reducing the supply
This meant that in 2000-2001, the two major power companies in California – Pacific Gas and Electric and Southern California Edison were forced to shut off electricity supplies in order to conserve their limited stocks.
