Energy Security

Why Is USA in Energy Crisis?

Oil is used in every sector of the economy - price rises make everything more expensive

Obtains most oil from Middle East - 9/11 caused concern over dependence

Consumption

2007- consumed 23.8% of world's oil

3 main needs... (oil & natural gas)

• Electricity
• Transport
• Heating

Price

1996-2006 = barrel of oil rose from $20-$60

• Lowest per capita energy consumption rate - mild weather = no heating
• Produces 5% of USA's total electricity
• More registered vehicles than any other state

Blackouts

• Energy market = privatised - maximise profits, cut costs & pay dividends
• Provision of infrastructure  = £££
  • Energy companies won't invest & cope with increasing demand

Influencing Factors

• 1) Weather in 2000-2001 - 2000 was 3rd year of drought, unusually hot = electricity of air con, winter unusually cold = demand for heating
• 2) Insufficient generating capacity - strong anti-pollution energy laws
• 3) Limited capacity of power lines to import electricity

• 2000-2001 - 'Pacific Gas & Electric' & 'Southern California Edison' forced to cut-off electricity supplies to conserve limited stocks.
• 2003 - Arnold Schwarzenegger - conserve supplies, seek alternatives

UK's Energy Sources

• Natural Gas - 36.8%
• Coal - 35.2%
• Nuclear - 20.9%
• Renewable - 4.2%
• Other - 2.9%

E.On

• Build 2 new coal-fired power stations
• Claim they will be 20% cleaner
• Controversial

Location

• Atlantic Ocean & North Sea = best wind, wave & tidal power resources
• River Severn = 2nd highest tidal range in world (14m)
• Barrage = £15 billion, 10 miles long, meet 5% demand

• World's 2nd largest energy consumer 
• Controls 3% of world's oil reserves (was self-sufficient until 1993)
• Steep rise in energy consumption
  • Not only by economic growth, but urbanisation & car ownership
    • 1000 new cars arrive in Beijing every day 
• Coal
  • Biggest producer & consumer
  • Coal = 75% of electricity generation
  • 3 new coal-fired power stations a week
  • Coal- cheap, dirty ("clean" power stations - expensive & necessary)
  • Located in North West but 71% of demand is South East 
• HEP
  • 16% of energy production
  • Three Gorges Dam (25 gigawatts of electricity)
  • Plan to build on major rivers - environmentalists & neighbours :\
• Oil
  • Production peaked... therefore... Exploration for new fields
  • Failed to attract investors- remote location & difficult geology

Strait of Malacca

Japan & China's oil imports pass through here

500 miles long & 1.5 miles wide

Danger from pirate attacks (150 in 2003) & haze of bush fires - collisions

500,000 ships a year

Japan

Dependency = 80%

Largest Asian economy and smallest energy reserves

99% of oil & gas is imported

Since collapse of Soviet Union, want to reduce dependence on Middle East

• 2,600 miles long
• Originally...
  • Through where last wild Amur Leopards live
  • Too close to lake Baikal (largest freshwater lake) - oil spills = disaster
• Route was changed (north = £££) - safety, logistical & environmental
• Rising steel prices & challenges of building in permafrost = £££ :(
• Russia has new energy pathway - can export :)
• Russian, Chinese & Japanese governments competing for access...
  • China - energy to fuel economic growth, energy security, 80% through Strait of Malacca, China & Russia  = political interest.
  • Japan - almost no reserves of its own, 3rd largest consumer, reduce dependence on Middle East by 10-15%, engage with Russia to increase economic & political influence.
  • Russia & China share a border = :) relationship is vital (Russia sees China- threat & rival), Russia reluctant to commit too heavily.
  • Japan = offered to finance $7bn, including a spur to run into China.

Moscow

World's largest gas supply company

• Controls ⅓ gas reserves
• 25% of EU's natural gas
• Employs 432,000

• Russian Federation Government owns 50.002% of shares
  • Retains close links with the state

Russia...

• Economic power lies in key natural resources- energy = political tool
• Helped re-assert influence over former soviet states
• Helped regain geopolitical importance

Worried about energy security...

YES

• Amount of gas Russia supplies to EU (most piped through Ukraine)
• 2006 - flow of gas to EU fell by 40%

NO

• Exports markets to W. Europe = too valuable to lose
• Even during Cold War - supply of gas was stable
• Gazprom helping to secure EU's energy supplies with construction of new pipelines bypassing Ukraine
  • Nord Stream Pipeline - run along sea bed - no transit countries - less political interference
• EU looking at alternative sources- could take years

• 2007 - Russia planted flag on seabed
• Claim that Lomonosov Ridge is an extension of their land mass

• Arctic...

• Contains 25% of world's unexploited oil & gas reserves
• China & India demand more oil to fuel development - price increased
  • $70 a barrel makes drilling in the Arctic viable

• Environmental View
• Already wreaked havoc on Alaska & Siberia
• Ruin the environment - search for renewables, not fossil fuels
• Only possible due to shrinking of polar ice caps - global warming :\

...Bituminous sands & heavy oil - Venezuela. Naturally occurring mix of sand / clay & water & very dense petroleum Bitumen...

Found in...

• Canada 
• Venezuela

Why Tar?

• Oil prices & demand is increasing
• Oil industry has spent $86 billion on frontier hydrocarbons
• Below Alberta's forests = oil reserves - tar - 180 billion barrels
• Extracting is not easy or cheap
  • Oil prices risen
• By 2030 - expect to produce >50 million a day
  • Export more than Nigeria & Venezuela