By A F Alhaji
The following article was written for MEES by A F Alhajji, energy economist and associate professor at the College of Business Administration, Ohio Northern University. This is the first of five articles on the theme of energy security by Prof Alhajji. The remaining four will be published in future weeks. The author can be reached via e-mail: a@a-alhajji.com
Many pundits warn about the impact of oil nationalism in oil producing countries on energy security in the oil-consuming nations. They ignore the fact that talk about energy independence and lower oil imports in the consuming countries is another facet of oil nationalism, which paradoxically leads to greater energy insecurity. Politicians and IEA officials who press the oil producing countries for “security of supply” are instigating nationalism in these one-resource states. They give legitimacy to an illegitimate concept – “security of demand.” The rise of both concepts in recent years hinders cooperation and increases animosity between the two groups.
US politicians who call for eliminating dependence on oil to “improve energy security” and at the same time agree to fund doubling the size of the US SPR to “improve energy security” are ignorant of inherent contradictions in their proposals. Politicians who support building up the SPR in their countries seem blind to the fact that it reduces commercial stocks, thus rendering vain their efforts to enhance energy security.
The contradictions built into the concept of “energy security” make it as elusive as a needle in a haystack. Worse, politicians talk about energy security despite the fact that they do not provide a clear definition of energy security and do not know how to assess it or measure it. Even energy literature has failed to come up with a definition that most people can agree on. In a sense, we are searching the haystack, but we do not know what we are looking for.
This is the first in a series of articles on energy security that aims to invigorate the debate on energy security in the hope that experts and policy makers will have a better understanding of these issues. The costs of not understanding them are steep and cannot be ignored: energy independence posturing could well lead to energy shortages and political instability.
What Is Energy Security?
The debate should focus on answering questions such as: What is energy security? Is it just a slogan or a real issue that societies have to deal with? If energy security is a real issue, what are its main concerns? Is the aim of energy security to eliminate or reduce the effect of energy shortages or to reduce energy prices and reduce their volatility? What is the relationship between energy security, national security, economics security, and environmental security? Should governments intervene to enhance the energy security of their nations or leave this matter to free markets? Why or why not? Should governments intervene only during periods of market failures, or should they intervene to prevent market failures? What is the role of monetary and fiscal policies in improving energy security?
Does energy security apply only to consuming countries? What about producing countries? Should oil producers intervene to protect the value of their energy exports to get what they call a “fair price”? What is the fair price? How does this price contribute to the world energy security? Why does it vary substantially from time to time? What are the factors that determine such a price?
Is energy security the responsibility of each country, of all countries, or a group of countries? What is the exact relationship between interdependence and energy security? Does cooperation among energy-producing and energy consuming countries enhance energy security? What is the theory behind such thinking? Is there any evidence to show that such cooperation works? Should that cooperation be market-based and market driven? Or should it be negotiated?
Role Of SPR?
Does building the SPR enhance energy security? If the answer is yes, does the location of the SPR matter? Does it matter who owns the SPR? Should the SPR contain all types of crude and products or just certain types of crude? As oil imports increase over time, should the level of the SPR increase proportionally to keep the days of import cover the same?
Does energy security apply only to tradable energy resources such as oil and natural gas or to all energy sources? How does nationalism threaten world energy security? Does privatization of national energy companies enhance energy security? How does the privatization of the national companies differ from the privatization of energy resources? And finally, does energy self-sufficiency enhance energy security? Now I hope that I’ve got you thinking.
The following article was written for MEES by A F Alhajji, energy economist and associate professor at the College of Business Administration, Ohio Northern University. This is the first of five articles on the theme of energy security by Prof Alhajji. The remaining four will be published in future weeks. The author can be reached via e-mail: a@a-alhajji.com
Many pundits warn about the impact of oil nationalism in oil producing countries on energy security in the oil-consuming nations. They ignore the fact that talk about energy independence and lower oil imports in the consuming countries is another facet of oil nationalism, which paradoxically leads to greater energy insecurity. Politicians and IEA officials who press the oil producing countries for “security of supply” are instigating nationalism in these one-resource states. They give legitimacy to an illegitimate concept – “security of demand.” The rise of both concepts in recent years hinders cooperation and increases animosity between the two groups.
US politicians who call for eliminating dependence on oil to “improve energy security” and at the same time agree to fund doubling the size of the US SPR to “improve energy security” are ignorant of inherent contradictions in their proposals. Politicians who support building up the SPR in their countries seem blind to the fact that it reduces commercial stocks, thus rendering vain their efforts to enhance energy security.
The contradictions built into the concept of “energy security” make it as elusive as a needle in a haystack. Worse, politicians talk about energy security despite the fact that they do not provide a clear definition of energy security and do not know how to assess it or measure it. Even energy literature has failed to come up with a definition that most people can agree on. In a sense, we are searching the haystack, but we do not know what we are looking for.
This is the first in a series of articles on energy security that aims to invigorate the debate on energy security in the hope that experts and policy makers will have a better understanding of these issues. The costs of not understanding them are steep and cannot be ignored: energy independence posturing could well lead to energy shortages and political instability.
What Is Energy Security?
The debate should focus on answering questions such as: What is energy security? Is it just a slogan or a real issue that societies have to deal with? If energy security is a real issue, what are its main concerns? Is the aim of energy security to eliminate or reduce the effect of energy shortages or to reduce energy prices and reduce their volatility? What is the relationship between energy security, national security, economics security, and environmental security? Should governments intervene to enhance the energy security of their nations or leave this matter to free markets? Why or why not? Should governments intervene only during periods of market failures, or should they intervene to prevent market failures? What is the role of monetary and fiscal policies in improving energy security?
Does energy security apply only to consuming countries? What about producing countries? Should oil producers intervene to protect the value of their energy exports to get what they call a “fair price”? What is the fair price? How does this price contribute to the world energy security? Why does it vary substantially from time to time? What are the factors that determine such a price?
Is energy security the responsibility of each country, of all countries, or a group of countries? What is the exact relationship between interdependence and energy security? Does cooperation among energy-producing and energy consuming countries enhance energy security? What is the theory behind such thinking? Is there any evidence to show that such cooperation works? Should that cooperation be market-based and market driven? Or should it be negotiated?
Role Of SPR?
Does building the SPR enhance energy security? If the answer is yes, does the location of the SPR matter? Does it matter who owns the SPR? Should the SPR contain all types of crude and products or just certain types of crude? As oil imports increase over time, should the level of the SPR increase proportionally to keep the days of import cover the same?
Does energy security apply only to tradable energy resources such as oil and natural gas or to all energy sources? How does nationalism threaten world energy security? Does privatization of national energy companies enhance energy security? How does the privatization of the national companies differ from the privatization of energy resources? And finally, does energy self-sufficiency enhance energy security? Now I hope that I’ve got you thinking.
1 comentario:
Con este articulo el profesor Alhaji inicia una discusion sobre el verdadero significado del termino "Energy Security".
Sin duda se plantean diversos puntos como que significa energy security para un pais productor como Venezuela...espero sus comentarios
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