What is Energy Security?

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What is Energy Security?
By Daniel Yergin
The Wall Street Journal Europe
11 Jul 2006

ST. PETERSBURG—At the conclusion of last year’s summit, in Scotland, Vladimir Putin said to the other leaders of the G-8 industrial nations, “We’ve talked about Africa and climate change this year. Next year it will be energy security.” Setting the agenda was certainly his prerogative as the incoming “president” of the G-8.
But the turbulence in the year since has earned “energy security” its place as the No. 1 item for this weekend’s meeting here. There was the huge shock that Hurricanes Katrina and Rita delivered to the Gulf of Mexico energy complex; the continuing loss of 20% of Nigerian oil output from domestic insurgency; Russia’s temporary interruption of natural gas supplies to Ukraine at the beginning of this year; the chronic impairment of Iraqi oil output; Hugo Chavez’s warnings about cutting off Venezuelan supplies to the U.S.; and the recurrent threats by some Iranian leaders to unleash an “oil crisis” (even if other Iranians deny any such intent.) Fueling the anxiety, of course, has been the 60% rise in oil prices, to $75 a barrel, since the beginning of last year.
The world has changed much since the concept of “energy security” emerged in the 1970s. But agreeing on the importance of the topic is not the same as agreeing on what it means. Consuming countries declare that they want “security of supply”—that is, reliability and availability of energy at reasonable prices. Exporting countries, whether Russia or in the Middle East, turn it around and talk about “security of demand”—sufficient access to markets and consumers to justify future investment (and protect their national revenues).
Probe further and the differences become even sharper. For Russia, energy security in recent years is about the state’s retaking control of the “commanding heights” of the energy industry and extending that control downstream... read more...