So I’m in Santiago to talk about energy security. “What does that even mean, anyway?” asked my father. It seemed wise, then, to define “energy security.” We use the phrase all the time, but what are we in fact talking about?
Energy security, I think, comes in three flavors.
Weak energy security: insuring liquidity in the energy market, e.g., insuring that your country’s consumers can buy as much energy as they need at whatever the prevailing price happens to be.
Strong energy security: insuring not only liquidity in the energy market at whatever price, but insuring liquidity along with some level of price stability.
Extreme energy security: insuring that should the maintenance of liquidity in the energy market create rents (during times of high prices, whether deliberately promoted or not) firms from your country will enjoy those rents. Alternatively, it means trying to create circumstances at which energy is priced at marginal cost, and there are no rents for anyone ... or, should that be impossible, disadvantaging foreign companies or knocking off foreign governments that your government doesn’t trust with such rents.
Thoughts?
I've been stress-testing it in my head, and have two observations.
First, energy involves the domains of both economics and national security, but it's still potentially confusing when you take a term from one domain and apply it in another. If you start analyzing with "potential economic problem" in the back of your mind, you may not wind up in the same place as if you start with "potential threat to homeland".
Of course, you may be in fact starting from the assumption that maximizing national security comes before maximizing wealth production, which is fine. Even so, the assumption needs to be made explicit at some point.
After all, it is questionable. Country A is larger and wealthier than Country B, but Country B is comfortable with that because Country A is dependent on Country B for some vital resource. Country A suddenly takes steps to reduce this dependency, leaving Country B feeling less secure. Both countries now have a new problem.
Second, the nature of energy security means radically different things over different time frames. In the short term, it means the ability of the society to obtain oil AND natural gas AND coal AND hydroelectic AND uranium AND whatever else they need to feed their current energy infrastructure, so they are vulnerable at half a dozen points and need to worry about all of them. Over the medium term it starts to mean having access to things which can be substituted for any one or two other things which might become unavailable, so the individual points tend to become less critical. At longer terms it becomes about how to change the infrastructure to accomodate new resources and let go of old ones.
As the time frame extends out further, ISTM, it becomes less and less about access to particular resources, and more and more about the creativity and adaptability of that society.
Since you are presumably not speaking at a science fiction convention, the far end of the spectrum isn't that immediately important. But it does add a dimension to the energy security question that might otherwise be left out.
Posted by: David Allen | June 20, 2009 at 12:49 PM