Presented at the Symposium on Pacific Energy Cooperation 2003 – 12-13 February 2003, Tokyo
Why is energy security still on the agenda?
The concept of energy security as an international issue first came to prominence in the 1970s as a result of the disruptions to global oil supplies. During the 1990s most nations of the western world, and indeed many developing countries, ignored the issue of energy security. The first two years of this century have seen a renewal of concern for a number of reasons relating to the functioning of energy markets, to the sources of energy supply and to international security.
The quantity of energy traded internationally continues to grow in both volume and diversity. Twenty years ago crude oil and oil products dominated international energy trade. Gas is now an important component and gas markets are increasingly taking on a global character. The volume of internationally-traded coal continues is growing and cross-border electricity networks are expanding. These trends reflect a growing inter-dependence between energy suppliers and energy consumers which, on the one should enhance energy security but, on the other hand provides both suppliers and consumers with security concerns.
Despite the increase in the volume of energy traded internationally, two features of international energy markets persist: the dominance of oil within traded energy and the dependence of many states on supplies from the Middle East. To this can be added the increased volatility of oil prices resulting from the increasing importance of paper markets and the continuing rise of global demand. Thus the renewed focus of consumer states of security of oil supply is understandable.
These arguments apply equally well to north-east Asia. Here economic growth continues to run ahead of the world average, thanks mainly to China in recent years. There appears to be a recognition that dependence on traditional supplies of energy, whether domestic or overseas, is no longer sustainable and that existing strategies to enhance security of supply are inadequate. Set against these considerations is the recent appearance of Russia as a major potential supplier of oil, gas and possibly electricity to the region.
The aim of this paper is to provide a European perspective on energy security. The paper first examines the different dimensions of energy security and the means which may be employed to enhance energy security. It then discusses the role of multi-lateral cooperation in the enhancement of energy security and the implications for regional security drawing on the European experience.