The impacts of energy security

Question 1

What are energy pathways?

Answer 1

The flows of energy from producer to consumer are the pathways.

Question 2

What is one of the most significant gas pathways?

Answer 2

Trans-siberian pipeline, the main conveyor of Russian natural gas exports.

Question 3

Oil pathways

Answer 3

The middle east exports around 15,000 barrels per day, mainly to Japan, Europe and China.
Substantial amounts flow from Africa, Europe and Canada and central America to the USA.

Question 4

What is OPEC?

Answer 4

Organisation of Petroleum Exporting Countries, a permanent intergovernmental organisation of twelve oil-exporting developing nations.

Question 5

OPECs declared aims are:

Answer 5

• protect the interests of member countries
• stabilise oil prices
• ensure efficient, economic and regular supply of oil

Question 6

Why did OPEC form?

Answer 6

“Middle Eastern companies felt they were being exploited by foreign oil companies; felt uncomfortable with fluctuating oil prices so they formed a cartel and agreed a set price for oil; took over fields.”

Question 7

What is a Cartel?

Answer 7

“An association of producers or suppliers formed to monopolise the production and distribution of a product or a service to control prices, etc.”

Question 8

What role does OPEC play in energy supply?

Answer 8

Sets oil production quotas for member countries in response to economic growth rates and demand-and-supply conditions.
•If demand rises, it can increase oil production to prevent steep price rises.
•If demand falls, oil can be reduced to stabilise the price.

Question 9

How powerful is OPEC as a player?

Answer 9

It has around 78% of the world’s oil reserves.
It produces around 45% of the world’s crude oil and 15% of natural gas.
Fracking has reduced their power, USA able to produce their own oil.

Question 10

Why do we look for energy in technically difficult and environmentally sensitive areas.
Give examples of such areas.

Answer 10

As we run out of fuel and prices increase, the option to exploit resources previously considered unavailable and uneconomic becomes more attractive. 
North Sea Oil Drilling
Antarctic/Arctic 
Desert
Rainforest

Question 11

Somali Pirates and Energy Security:

Answer 11

1991 the Somali state collapsed, the government lost control- no government no law, taxes
Somali fish stock was exploited by South Asia and Europe
Made an illegal coast guard: developed into the pirates
Fishermen taking oil tankers and charging a ransom.
Increased risk so higher insurance.
Hijacked and oil tanker worth $100,000,000 near Kenya
Operation Ocean Shield is NATO’s counter piracy mission in the Gulf Aden and off the Horn of Africa
Piracy: change in pattern; no attacks in the first 6 months of 2015. Could shift to South Asia.

Question 12

Nabucco Pipeline:

Answer 12

Pipeline known as the Turkey-Austria pipeline
Passes from Azerbaijan to the EU
It can carry 100 billion cubic metres of gas per year
Makes up 1% of Europe’s total demand
Cost the EU £11.4% billion
Suppliers of the pipeline consist of Iran, Turkmenistan and Azerbajin.

Question 13

Hurricane Katrina

Answer 13

2005, before the storm was a port city
Poverty was high before and after
Damaged the US refinery and production
Oil refinery was forced to stop
Gulf of Mexico- oil wells, hurricane hit them and then the refineries on land.
Bush: released federal emergency oil supply.
Powerlines, gas pipes and and oil reserves destroyed- leaving people without energy/power.

Question 14

Oil Crisis: 1973

Answer 14

October
OAPEC- proclaimed an embargo
Response to US involvement in the 1973 Yom Kippur War- they sided with the Israelis and not Egypt- Arab oil countries not impressed.
OPEC raised posted price of crude oil $3 to $12 per barrel for US allies.
At the same time US oil production began to decline- became more reliant on other countries.
Lead to recession and strain on economies for many countries.
Lead to many countries creating a strategic petroleum reserves.
UK, December 1973- announced measures to conserve fuel.
17th-30th December energy users were restricted to only five days of energy consumption.

Question 15

First Gulf War:

Answer 15

Saddam Hussein- 1991 invaded Kuwait; gas and oil rich.
USA tried to force Iraq out of Kuwait (self interest).
Global prosperity and peace depended on the preservation of order in the Middle East, whose oil is critical to the economic fortunes of the Global North.
Having a war stopped oil production.

Question 16

Algerian Hostage Crisis:

Answer 16

Tigantourine gas plant, Sahara Desert.
Militants took Algerian and foreign workers hostage.
Anti-western attack.
Algeria is Europe’s third largest gas supplier

Question 17

Processes involved with energy TNCs such as BP?

Answer 17

Exploration: seeking new oil reserves mostly in difficult conditions, mostly in LEDCs.
Drilling: working with the governments of different countries for the right to extract the oil.
Transport: BP moves crude (unrefined) oil all over the world to refineries.
Refining: most profitable part, located in ‘safe’ locations.
Transport: direct to customers by garages.
Sales: garages,
Research: finding alternative energy supplies for when oil runs out.
TNC’s can affect the price of oil: controlling the whole supply chain, they find new oil reserves- they’re very influential.

Question 18

Influencing Politics:

Answer 18

Oil and politics, especially in the USA are inextricably linked.
The USA is the biggest consumer of oil at 24% in 2007.
Since the 1990 US election cycle, the oil and gas industry has contributed
They do this to exert their influence: e.g. Exxon Mobile successfully lobbied the US government t gain access to federal lands (national forests and nature reserves).
Chevron Texaco lobbies on all energy issues, opening up the ANWR.
Some of the big oil companies are state owned and governed by their country’s government; they are public rather than private sector companies; more active in the realms of geopolitical.

Question 19

What is it like having BP or another TNC operating in your country? Pro’s

Answer 19

Jobs: improving people’s quality of life.
Adding to the local economy which can be reinvested into improving infrastructure or building schools etc.
Government gets money from the company’s- oil revenue.

Question 20

What is it like having BP or another TNC operating in your country? Cons

Answer 20

Loss of culture.
Disruption to towns and cities.
Damaging to the environment and creating added pollution.
Reliant.
Resources run out.
Importing companies own workers in.

Question 21

Environmental Pressure Group:

Answer 21

Greenpeace: when Shell announced they would not be drilling for oil in the Arctic anymore in 2015, it was a huge victory for Greenpeace because they believed it was due to their campaigning. However, others argued it was due to financial reasons.
Russia arrested the Arctic 30 and put in prison for 6 months for trying to storm the Gazprom oil rig as they thought to believe it was about to start drilling for oil.
The environmental pressure groups increased their spending but the oil and gas industry outpaced them by spending nearly eight fold.

Question 22

What is the UK doing to try end become more energy secure?

Answer 22

UK is investing in a £2bn nuclear plant deal to try and combat energy security issues built by Chinese.
Nuclear energy is expensive and the waste is difficult to expose of.
Relying on China doesn’t reduce energy security problems.
Takes at least 10 years to build.

Question 23

Who are the players?

Answer 23

Source countries
Recipient countries
Oil/coal/gas companies- TNCs 
OPEC
Governments
Consumers
Petrol stations 
Power station companies
Refinery companies
Transport 
NGOs- environmental pressure groups.
IGOs- OPEC- producers IPCC- intergovernmental panel on climate change.

Question 24

What are some responses to increasing energy demands?

Answer 24

Business as usual
Multi energy solution
Energy conservation