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Foreign Affairs
Ensuring Energy Security
Daniel Yergin
Summary: The institutions and policies that were set up after the 1973 Arab oil embargo can no longer meet the needs of energy consumers or producers. The definition of energy security needs to be expanded to cope with the challenges of a globalized world.
Daniel Yergin is Chair of Cambridge Energy Research Associates and the author of The Prize: The Epic Quest for Oil, Money, and Power. He is currently writing a new book on oil and geopolitics.
OLD QUESTIONS, NEW ANSWERSOn the eve of World War I, First Lord of the Admiralty Winston Churchill made a historic decision: to shift the power source of the British navy's ships from coal to oil. He intended to make the fleet faster than its German counterpart. But the switch also meant that the Royal Navy would rely not on coal from Wales but on insecure oil supplies from what was then Persia. Energy security thus became a question of national strategy. Churchill's answer? "Safety and certainty in oil," he said, "lie in variety and variety alone."
Since Churchill's decision, energy security has repeatedly emerged as an issue of great importance, and it is so once again today. But the subject now needs to be rethought, for what has been the paradigm of energy security for the past three decades is too limited and must be expanded to include many new factors. Moreover, it must be recognized that energy security does not stand by itself but is lodged in the larger relations among nations and how they interact with one another.
Energy security will be the number one topic on the agenda when the group of eight highly industrialized countries (G-8) meets in St. Petersburg in July. The renewed focus on energy security is driven in part by an exceedingly tight oil market and by high oil prices, which have doubled over the past three years. But it is also fueled by the threat of terrorism, instability in some exporting nations, a nationalist backlash, fears of a scramble for supplies, geopolitical rivalries, and countries' fundamental need for energy to power their economic growth. In the background -- but not too far back -- is renewed anxiety over whether there will be sufficient resources to meet the world's energy requirements in the decades ahead.
Concerns over energy security are not limited to oil. Power blackouts on both the East and West Coasts of the United States, in Europe, and in Russia, as well as chronic shortages of electric power in China, India, and other developing countries, have raised worries about the reliability of electricity supply systems. When it comes to natural gas, rising demand and constrained supplies mean that North America can no longer be self-reliant, and so the United States is joining the new global market in natural gas that will link countries, continents, and prices together in an unprecedented way.
At the same time, a new range of vulnerabilities has become more evident. Al Qaeda has threatened to attack what Osama bin Laden calls the "hinges" of the world's economy, that is, its critical infrastructure -- of which energy is among the most crucial elements. The world will increasingly depend on new sources of supply from places where security systems are still being developed, such as the oil and natural gas fields offshore of West Africa and in the Caspian Sea. And the vulnerabilities are not limited to threats of terrorism, political turmoil, armed conflict, and piracy. In August and September 2005, Hurricanes Katrina ...