A Holistic Solution to Energy Security

A Holistic Solution to Energy Security

To ensure energy security, a more holistic global policy framework is needed. This would encourage companies to cooperate in ways that facilitate the flow of finance, technological advancement and increases in capacity.

Since 2014 the overarching priority has been a reduction in global emissions and a move away from the global dependence on fossil fuels and natural resources considered harmful to the environment.

The common sense solution has been a move to renewables as a primary source of global energy.

The current situation involving the invasion of Ukraine by Russia and the sanctions imposed as a result, have shown just how interconnected national economies are. It has also highlighted how unstable energy supplies impact every aspect of those economies.

Higher oil prices across Western Europe have led to higher energy costs for business, which consumers then pay for as prices rises for goods and services.

The holistic solution involves both short-term and mid-term goals.

According to the IRENA (The International Renewable Energy Agency) the current pace and scale of renewables is not sufficient to completely replace fossil fuels.

Governments are facing the problem of energy security, economic recovery and affordability of energy bills for households and commercial business, particularly SME’s all at the same time.

According to OPEC there is an estimated 2 million barrels per day deficit in Oil supplies.?The Norwegian Petroleum directorate claim Norway has increased its gas production by 6% increasing supply to Europe.

OPEC also state that 80% of people live in countries which are net importers but most could develop renewable energy generation in some capacity.

The development of renewable energy offers a way out of the import dependency of fossil fuels, reducing costs, creating economic growth and new jobs.

To achieve energy security the transition from fossil fuels to clean energy has to be pragmatic, bespoke to the context, diversified and above all, collaborative.

There needs to be more collaboration between oil & gas, mining and clean technology companies. The context of different countries and regions are different; that means each would require practical solutions bespoke to those regions and sectors.?

By practical I mean that several developing countries have millions of people without a source of power and several regions sourcing their energy from coal and other sources like diesel which have high emission levels.?

The solution here is to set specific dates for these coal mines to cease production, while ensuring the introduction of modular alternatives like biomass, compressed natural gas and grids to harvest solar power.?

In Asia and countries such as India where there is a particular need for the supply of oil and development of the power sector, the power infrastructure does not reach many rural areas. Decentralisation will help resolve the absence of such infrastructure.

?In Western developed markets such as Europe there is infrastructure but not enough domestic natural resources to provide for consumers without supplies from countries such as Russia.

The US has enough domestic sources of gas and Oil with a developed consumer and trading market and reliable infrastructure.?The unstable of supply oil and gas from Russia is an opportunity for more cooperation between developed economies to work with oil & gas companies to increase investments in developing markets. Africa, Latin America and Asia are notable examples, where oil & gas can be sourced (bearing in mind that oil & gas investment is a mutually beneficial long term collaboration).

The infrastructure in emerging markets however, has to be built to fulfil the demand for export and domestic markets. The developed markets require more importation of LNG which can come from the USA in the short term and then from developing countries going forward. However, the LNG infrastructure in many developed countries is simply not operating at full capacity at the moment.

Approval for completion of projects that have reached FID (final investment decision) is becoming easier though and will provide more supply.

?Some IOC’s (Integrated Oil Companies) in the West are able to increase supply while others are unable to due to fiscal responsibility. Securing finance for exploration since 2014 has been increasingly difficult as many financial institutions have been restrained from investing in the oil & gas sector.

For energy security I think these oil & gas companies are most suited to facilitating transition by establishing new departments focusing on clean technology and renewables and the establishment of joint ventures and partnerships with renewable energy companies.

Investing in energy transition will bring social economic and welfare benefits and will add a staggering 85 million jobs globally. These jobs would be in energy transition as well as other related technologies from 2022-2030. The job gains far outweigh the 12 million job losses from the conventional fossil fuel industry.

Energy insecurity however, can also occur within the renewable energy sector, as we see today with fossil fuels and the situation in Russia. For example the cobalt, nickel, manganese and Lithium needed for electric vehicles and battery storage are sourced from particular mines in particular geographic regions. These mined resources have an upstream and downstream refining process that needs to be diversified and the emissions and environmentally damaging processes improved.

Renewables would have to scale up from 14% of total energy supply today to 40% in 2030 to be a viable alternative to oil & gas.

?Technology is an essential component of the sector and geopolitics should be put to good use to enable the development of clean energy, increased production, storage and effective distribution in developed and emerging markets. Electrification and efficiency are the key drivers for energy transition. These are enabled by renewables, hydrogen and biomass.

?The most crucial part of energy security and transition is the development of a circular economy and a shift away from linear economies.?

At present most economies are linear in that resources are sourced, used and then dumped. With a circular economy the energy resources are sourced, efficiently used and then recycled and reused.

In such circular models, products like plastic and municipal waste suddenly become viable sources of energy and their by-products used for manufacturing.

We use technology to share means of transport like cars which reduces traffic and commuting, as well as the need to own and consume so much fuel.

The fossil fuels produced have less carbon content, fewer emissions and work with renewable and manufacturing companies to ensure energy sources aren’t just diverse but also secure.