Categories
Security Environment

Today’s Energy Security Risks: Complacency, Uncertainty, and Ideology

Burning Oil Well. Image: LCpl. Dick Kotecki/Wikimedia

This article was originally published by the Atlantic Council on 3 December, 2015.

At the 2015 Atlantic Council Energy and Economic Summit in Istanbul, twenty-one Ministers and senior officials from Europe, Asia, North America, and the Middle East met to assess the changing geopolitics of energy security. The assembly was a reminder that energy security — the ability of a nation to secure affordable, reliable, and sustainable supplies to maintain national power — is very different for each nation.

It was clear that advances in technology — in oil and gas, and renewables — have changed the geopolitics of energy dramatically, and mostly for the better, from the world of 2008 or even 2011. We have moved from an era of resource scarcity to abundance, from a concentration of resources to ubiquity of access, and from monopoly power in oil and gas to gas on gas competition in Europe. There is now a clear de-linkage of oil and gas pricing, more hub pricing and a growing spot market in LNG. Floating LNG and containerized shipping are enabling lower cost and quicker access of nations to gas, helping them move away from coal.  US shale, with huge resources, low extraction costs, and rapid drilling times may help put a ceiling on the price of oil.  Changes in wind, solar, and energy efficiency technology have driven down the cost of renewables in many countries, making them cost competitive with coal or gas in many cases.