p5 Flashcards
Energy Pathway:
describes the flow of energy between the producer and consumer, and how it reaches the consumer, e.g. pipeline, transmission lines, ship, rail etc.
There are influential players (organisations, individuals or groups) with particular involvements in the energy busines for example
For example: Shell
The world energy council has suggested that energy players have three objectives:
Energy security - energy supply must meet demands
Energy equity - there must be accessible and affordable energy for all countries
Environmental sustainability
During the recent ‘oil age’ energy security has been threatened by geopolitical tension e.g. Arab uprising in North Africa, Arab-Israeli war.
There are 5 major players in world energy…….
OPEC
Energy companies
TNCs
Consumers
Governments
OPEC
Stands for Organisation of the Petroleum Exporting Countries.
OPEC is made up of 12 member countries and between them they own around two-thirds of the world’s oil reserves.
OPEC is in a position to control the amount of oil and gas entering the global market, as well as the prices of both commodities.
It has been accused of holding back production in order to drive up oil prices.
Energy companies
These are the companies that convert primary energy (oil, gas and oil) into electricity and then distribute it.
Most companies are involved in the distribution of both gas and electricity.
They have considerable influence when it comes to setting consumer prices and tariffs.
TNCs
Some big names include Gazprom, BP and Total.
Nearly half of the top 20 oil companies are state-owned, so therefore very much under government control.
Most of these companies are involved in a range of operations, such as exploring, extracting, transporting, refining and producing petrochemicals.
Consumers
They create the demand.
The most influential consumers are transport, industry and domestic users.
Purchasing choices are often based on price/cost issues e.g. petrol prices can be keenly competitive between supermarkets
Consumers are largely passive players when it comes to fixing energy prices.
Governments
They can influence the sourcing of energy for geopolitical reasons.
To meet international obligations, whilst securing energy supplies for the nation’s present and future, as well as supporting the countries economic growth.
Regulating the role of private companies and setting environmental priorities.
Fossil Fuel Demand
The global demand for different sources of energy has increased by around 50% since the 1990s.
Fossil fuels still make up 84% (in 2019) of the global energy mix.
China’s rapid economic growth has largely driven in the increase of consumption, doubling it’s oil consumption between 2000-2010. This is expected to increase at twice the global average, which means that by 2035 China will be the world’s largest energy importer.
The issue is the mismatch between where fossil fuels are found and where the demand for them is greatest.
The distribution of fossil fuels is uneven across the world
Why?
Coal, oil and natural gas all from under certain geological conditions which determines where they are found.
Because of the disparity between production and areas of high demand, this is called a mismatch.
Gas Pathways
Natural gas is transported via pipelines because it’s efficient and increasingly international.
These pathways depend on multilateral (between many countries) and bilateral (between two countries) agreements.
For example: gas pathway
The Russian firm Gazprom exports 80% of their gas to Europe. For security reasons they try to avoid transporting the gas through other countries.
Gas PathwaysThe Nord Stream pipeline
The Nord Stream pipeline runs 1200 km along the bed of the Baltic Sea to avoid other countries.
Nord Stream 2
Nord Stream 2 is a 1,200km pipeline under the Baltic Sea, which will take gas from the Russian coast near St Petersburg to Lubmin in Germany.
It cost €10bn (£8.4bn) and was completed last September. The Russian state-owned energy giant Gazprom put up half of the cost and western energy firms such as Shell and ENGIE of France are paying the rest.
Nord Stream 2 runs parallel to an existing gas pipeline, Nord Stream, which has been working since 2011.
Together, these two pipelines could deliver 110bn cubic metres of gas to Europe every year. That is over a quarter of all the gas that European Union countries use annually.
