If one would desire to specify the energy security, he or she should turn to the inquiry what does “ security ” means in general? Is it a response to a concrete menace? Or is a scheme to avoid a possible menace?

In the mainstream of International Relations theory, the Realist attack has been traditionally focused on the definition of international security. In visible radiation of a Realist construct presented by Waltz ( 1979 ) , provinces are moving harmonizing to their structural power within international dealingss ( structural realism/nonrealism ) . The rise for power features the inter-state dealingss, including those of the entree to natural resources. Security of energy supply achieved a peculiar importance in the wake of the oil dazes in 1970s caused by the Arab oil trade stoppage.

Security can be defined as defensive ( a response to a possible menace ) or violative ( a scheme to a concrete menace ) . Waltz ‘s significance of security is chiefly defensive, in the sense that it arises from the lawless construction of the society. On the other manus, energy security is violative.

Energy security is a really wide construct ( Grevi, 2006 ) . Different menaces emerge depending on whether energy security is regarded over short-run ( including breaks ) or long-run ( turning dependence on imports ) . Strong statements for analysing individually the security deductions of oil and gas markets originate with their transit capablenesss, the construction of their markets and the challenges that might happen from the worsening modesty base, the turning environmental concerns, new economic models, or competition from alternate energy beginnings. Crude oil can be easy transported worldwide by big oilers and therefore the oil market is planetary, whereas the natural gas trade lays upon far less nomadic gas grapevines, hence there is no such thing as planetary gas markets or planetary gas monetary values.

Energy security can be described as “ the uninterrupted physical handiness at monetary value which is low-cost, while esteeming environmental concerns ” . Energy security has many facets: long-run energy security is chiefly linked to seasonably investings to provide energy in line with economic developments and environmental demands. On the other manus, short-run energy security id the ability of the energy system to respond quickly to sudden alterations in supply and demand.

Another manner to look at energy security is to analyze the different beginnings ( coal, oil, gas, and renewable ) , intermediate agencies ( electricity, refineries ) and transit manners ( grids, grapevines, ships ) . All of these have hazards of supply breaks or failures, disputing the security of undisturbed energy supply.

( International Energy Agency, Energy security )

Challenges of Oil and Gas Industry into the twenty-first Century

Global primary energy demand is about to surge. Despite attempts to increase the portion of renewable in the overall energy mix, fossil fuels remain the most of import beginnings of energy supply in the foreseeable hereafter ( Goldthau, 2007 ) . In visible radiation of this, there are antagonistic force per unit areas that should keep back demand.

Oil ‘s portion of future universe energy demands is likely to worsen but ingestion of oil will increase because the biggest future jobs lie in conveyance where there is, as yet, no suited option to oil. Each twelvemonth an extra 84 million people are added to the universe ‘s population. Even though China, India and Indonesia are significantly lower users of energy than North America, they are still confronting a billowy population and important economic growing. Thus, universe energy is clearly set to increase dramatically.

Noreng ( 2002 ) claims that oil monetary values and volumes are reciprocally independent entities, at least in the short-run. However, in the long-term, oil monetary values, oil demand, trade and supplies link in a consistent manner. Merely a important addition in the oil monetary value leads to an addition in the per barrel value on which companies would do investings and huge amounts may so be spent on researching new geographical frontiers, as occurred when OPEC hiked in the seventiess. In the 1970s and early 1980s such geographic expedition finally led to a bead in oil monetary value, but new frontiers are acquiring progressively hard to happen and this is of import in footings of measuring supply chances over the following 25 old ages. Under the long-run scenario in which new militias are hard to happen and a demand rush is predicted so supply force per unit areas are inevitable. Without new militias, merely a leap in demand will take to a supply crisis.

The position of gas within the energy sector has changed well in recent old ages. Having long been considered simply a byproduct of oil, gas is now emerging as a fuel of pick in a figure of industries across Europe and across the universe. There are a figure of grounds for the recent rush of the gas industry. Lending factors range from the realisation that natural gas militias are likely to last several decennaries longer than rough oil militias, to increasing environmental concerns over pollution degrees caused by the assorted energy beginnings. Natural gas has so far been exploited less than oil ( mostly because of troubles in transit ) , gas production is predicted to increase much more aggressively than oil, with developed states accounting for much of this addition.

Besides the competition from gas another force per unit area that should keep back demand is the increased consciousness of the impact of fossil fuels on the environment, which is driving the quest for suited options.

European Union Energy Security Market

The inquiry of energy security requires to be framed in the wider image of geopolitical tensenesss and instability impacting many energy-abundant parts, chiefly the Middle East and Russia, every bit good as South Caucasus ( Armenia, Azerbaijan, Georgia ) , Central Asia, Western Africa and South America.

European concern sing the security of its energy supply was foremost instigated by the 1973 Arab oil trade stoppage, which highlighted three chief issues. First, it exposed a demand for increased policy coaction among European states and between Europe and the energy bring forthing universe. Second, the debut of institutional mechanism for better coordination in instance of future supply breaks was indispensable. Third, consensus emerged that Europe should fix schemes to forestall itself from going the victim of possible efforts by the exporting states to utilize energy as a political or economic arm ( Yergin, 2006 ) .

The 1974 creative activity of the International Energy Agency ( IEA ) – which has become Europe ‘s chief instrument for monitoring universe energy markets – was one response to the trade stoppage.

Menaces to the European Union Energy Security Market

The EU becomes progressively dependent on oil and gas imports from unstable and insecure parts. “ Europe ‘s energy imports come chiefly from Russia and Middle East where about 70 per cent of planetary oil and gas supplies originate ” ( Belkin, 2008 ) .

Refering the oil, most of the production addition will happen in OPEC states, Russia and Central Asia. The attempts to diversify energy beginnings and minimise trust on OPEC stimulate geographic expedition attempts in non-OPEC states. The best formula to face dependence is the variegation of the energy mix, providers and conveyance paths. The best protection against sudden oil breaks resides in strategic stocks.

Turning to gas, the largest militias lie in the Middle East and in Russia. It was stressed that the latter will stay the EU chief person gas supplier. It was besides noted that LNG ( liquified natural gas ) would play an of import function in the hereafter of gas supplies.

High oil monetary values might present a major economic job in the EU. On the positive side, it was besides noted that high monetary values represent a powerful inducement to put in alternate beginnings of energy and technological progresss. It is highlighted that high monetary values entailed three major effects:

monetary value fluctuations added to the volatility of fiscal markets, which might in bend negatively affect nest eggs and pension financess.

high monetary values have a much more terrible consequence on hapless importing states.

windfall energy grosss cut down inducements for economic reform and variegation in manufacturer states.

The “ resource expletive ” ( Auty, 1993 ) – the negative economic, societal and political effects of windfall energy grosss. “ Easy rents ” from the energy industry prevents a balanced economic growing in resource-rich states. Energy money made a batch of states less secure, which affected EU ‘s involvements.

Environmental force per unit areas will go so great in the EU that oil and gas monetary values will lift significantly and authoritiess will make economic conditions for the energy supply that encourage the development of alternate fuels ( atomic power, solar panels, hydroelectricity, weave energy ) . However, except in particular fortunes, such fuels are still unable to vie in free energy markets. Alternate fuels, although frequently more environmentally friendly, are by and large more expensive and less effectual than oil.

Decision

To sum up, I believe that variegation of the energy mix, providers and conveyance paths is a standard scheme in minimising the hazards from overreliance on a peculiar province or group of provinces.

The majority of the universe ‘s energy resources, located in Russia, the Caspian Sea part, the Middle East and North Africa, are all good within geographic range of the European Union.

To increase energy security, the European Union should endeavor to decrease dependance on oil and gas from the Middle East and Russia, and farther diversify its supply by escalating energy from the Caspian Sea and North Africa and by prosecuting alternate energy beginnings, including atomic power.