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20 June 2012

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William R. Cumming

If we agree security threats to the energy sector are on the increase why is this occurring? How exactly does the energy sector threaten both nation-states and sub-state actors or is the energy sector not one that poses a risk to any nation-state or sub-state actors?

Are there paradigm errors in the analysis of Daniel Yergin in his book "The PRIZE"? His conclusion that the energy sectors biggest threat is abundance not scarcity?

Writing here largely out of ignorance of course!

Lee Gardner

The article is primarily focused on oil and not energy in general. The major problem OECD countries have isn't to terrorist attacks it's the simple fact oil has tripled in price in ten years and is likely to double in the next ten. To focus on terrorist attacks, though real, as a significant concern for secure oil supplies is grossly missing the greater reality that our oil consuming economy grew on $20/b oil while world production was increasing and that we can't grow as presently structured with $100/b oil with world production flattening out.
Terrorist threats are a problem for those whose income comes from resource extraction but for oil importers our threat is willful ignorance and unwillingness to prepare and change our use of oil in anticipation of price instability and production decline.
The available net exports of oil have declined in the last few years as major oil exporters like Saudi Arabia increase their own consumption. They can proclaim they are increasing production but it won't matter when internal consumption increases leaving less on the world market.
Articles like this that elevate the external threat or define oil insecurity in terms of "bad actors" justifies all kinds of quasi-military responses but misses the larger point that the "enemy" is us when we don't read the writing on the wall.

rjj du Nord

Is this for real?

N M salamon

It is notable that this analysis has left out the effect of USA overt and covert foreign policy and war policy.

Recent past indicates that the invasion and occupation of IRaq negated the possibility of incresed oil production therein [indeed a loss of production]. The Lybian experiment in democracy promotion similarly caused far greater impact on oil production than all the issues raised in the aticle. Now it is Syria's and Yemen's oil production issues are on the military conflict's target; not even mentioning the effect of the misguided anti Iran catastrophy.

One should not leave out of this analysis the effect of the great growth of oil demand by the USA and NATO war machines in the last 10-11 years, with the wars in Afghanistan, Iraq, Lybia, troop/materiel tranport to and fro and maintenace in the Persian Gulf, Africa Command, etc.

Mr. Gardner astutely referred to FALL OF NET EXPORT by the world's 33 net exporters, whose contribution to tightening of the available oil to OECD etc - excluding China and India, indicates more than million barrels per day negative effeect on overall market [and forcing higher prices].Mr Gardner's reference to the difficulties of economic growth in OECD countries accostumed to $20 oil in a $100 area is well put. If the developing copuntries are grwoing with the avalable oil, then the developed countries will have to contract if oil production is at a plateau, or worse it is falling.

The artifical WTI pricing which costs over $20 million/day to Canadain oil producers will also have negative effect on USA oil issues in the foreseeable future; as is the anti
Venezuela issue, a country which has the largest recoverable [under present technology] oil reserves accordingto the US GEOGRAPHICAL SURVEY [Canada pprox 175 billion barrels in opil sands while the Orinico Basin is 575 billioon barrels at today;stechnology]. Notably no USAbased oil company works on Orinico Heavy oil, the companies are from Euroasia.

The issue of other sources of energy are of little value when compared to oil, for the others energy densityfar lower than oil and their tranportablity is considerably more troublesome than that of oil.

elkern

"global boutique intelligence firm"?!

...providing artisanal reports printed on hand-made paper made from 100% post-consumer recycled material?


But the most interesting thing I find is the idea that multi-national corporations might be better able to "develop" third & fourth world areas than (local or foreign?) governments. I don't really buy the idea, but it's worth arguing about.

Walrus

Translation: local populations regard multinational companies extracting local natural resources without recompense as theft.

You can hair split about the distribution or definition of "recompense" all you like, but ultimately if nothing flows to the locals then they are justifiably angry.

Classic example is the Bouganville copper mine insurrection.

There are hundreds of others.

Alba Etie

Meanwhile the Congresscritters zero'd out the biofuels development accounts at the DOD . We never would have had unconditional surrender from the Japanese had we defunded the Manhattan project . We need energy independence biofuels could be one arrow in that quiver yes ?

Alba Etie

think globally act locally

Babak Makkinejad

All:

I completelt disagree with the premises of this essay; I do not believe there is any threat to global energy security.

There is plenty of oil out there and the potential of problems with Persian Gulf oil, West African oil, South American oil etc. have been around for decades without causing any harm.

N M salamon

There is no question that there is lot of oil [gas, coal, uranium, etc] in the ground. the problem is that the cost of extraction and distribution is getting higher and higher in energy requirement. Once the ENERGY OUT gets close to the ENERGY IN [this applies from the seismic analysis to drilling, refining and transportation/distributioon] then the energy source becomes too expensive for economic growth, or in worse case for any economic activity related to energy. This does not even include the problem of CO2 and global warming.

While Syncrude, the oldest plant in Canadian Tar Sands can operate at approx 35. dollars per barrel [capital cost has been depreciated to large extent], the newest plans need dollar 80[or more] to break even. The WTI is approaching the point where it is not worth further investment under present circumstances.
The USA's greatest unexploited deposit is the Colorade oilshale [KEROGEN] which probably will never be profitably exploited- limit of ENRGY IN/ENERGY OUT and lack of water]

Similar issues arise with respect to Coal, Gas, etc. At present there is no bioenergy source which pays excluding garbage in defferent forms exploited in different ways.

Finally exponential growth of energy requirement will lead to total use of all energy from the Sun [as received on Earth], in short order [considering growth of population and economic advancement of the 5.5 billion living below European standards.

Babak Makkinejad

I agree with your statements about oil and oil shale.

Oil must be kept above $ 80 for the foreseeable future to make US independent of any oil imports save those from Canada.

I disagree, however, with your comments about gas.

There are numerous gas fields in Mobile Bay that could - each singly - power the United States for 300 years.

The Earth population estimates are inaccurate.

A UN report (see http://www.un.org/esa/population/publications/longrange2/WorldPop2300final.pdf) gives a range of 2.3 billion to 36 billion souls in 2300.

Taking the medium estimate - 8.97 billion souls 300 years from now - I think there is plenty of coal and natural gas for everyone.

And if that is not going to be enough, there is always breeder reactors and U238 from sea water to U235 enrichement.

Who knows, may be a way can be discovered to split proton or neutrons into quarks and tap into their binding energy.

optimax

Babak,

Your link didn't work. "2.3 billion to 36 billion souls?" Where do you get these numbers? There are 6 to 7 billion of us now.

And if the natural gas is so easy to tap in the bay, why are we fracking up the mid-west?

Alba Etie

I agree with you NM salamon .We are looking at this through the eyes of the Energy Robber Barons ie the Koch Brothers . We do not need to deplete every remaining aquifer for the last of the hydrocarbons - open pit mining for coal also dewaters our aquifers. We can and must better manage our energy requirements- one good way is conservation . A national push for a brand new smart transmission grid would be a good first step . Investing in renewables & conservation is better spent money -then fighting the next Oil War .

Mark Gaughan

From what I've read, many folks in Nigeria are upset with how the oil companies have polluted their country.

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