Mamuka Tsereteli School of International Service American University Global Energy Security

1. Instructor: Dr. Mamuka Tsereteli Mamuka TsereteliSchool of International ServiceAmerican University�Global Energy Security� Basic Principles 

2. Definition Churchill: "Safety and certainty in oil, lie in variety and variety alone.� Global Energy Security � secure, reliable access to the diversified sources of energy at affordable prices that preserves environment Current concept of the Energy Security is an umbrella term, that covers many concerns linking energy, economic growth and political power: Security of Supply, security of infrastructure, Supply diversity, Security of revenue for producers, Prices, Investment regime, Access to new reserves, Security of margin, Terrorism, Energy as a weapon.

3. Mamuka Tsereteli, 659 Energy Security Energy security means security of all aspects of the energy activities -- the production of energy, its transportation, and consumption. The understanding and perception of energy security is different for different actors: consumers, producers of energy, as well for transit areas.. Understanding of the energy security differs between the governments, and the energy industry Different consumers may have different understanding of the energy security: Europe is different from the US and China 

4. Key Actors Affecting the Global Energy Security Governments Energy Industry Consumers International Organizations NGOs Transnational actors, including illicit groups Local communities in the areas of production Media Instructor: Dr. Mamuka Tsereteli

5. Major Factors Affecting Global Energy Security Today Status of the Global Economy Oil spill, and response from the government and the industry Environment and available technology Political stability, including in the areas of the energy production Existing and potential sanctions Instructor: Dr. Mamuka Tsereteli

6. Global Energy in 2009 Global Oil Production was 79,948 thousand b/d (3.8 billion tons a year) in 2009. Production fell by 2 million b/d in 2009, or 2.6%, the largest decline since 1982. OPEC production fell by 2.5 million b/d; Saudi Arabian output fell by 1.1 million b/d, the world�s largest volumetric decline. Production outside OPEC rose by 450,000b/d, led by an increase of 460,000b/d in the US, the largest increase in the world and the strongest US growth since 1970. Instructor: Dr. Mamuka Tsereteli

7. Oil Reserves 2009 oil reserves stand at 1333.1 billion barrels. Global proved oil reserves in 2009 rose by 0.7 billion barrels to 1,333.1 billion barrels, with an Reserve to Production R/P ratio of 45.7 years. Increases in Brazil, Denmark, Saudi Arabia, Egypt, and Indonesia outpaced declines in Mexico, Russia, Norway, and Vietnam. The 2008 figure was revised higher by 74.4 billion barrels, with an upward revision in Venezuela of 73 billion barrels accounting for a majority of the change. Instructor: Dr. Mamuka Tsereteli

8. Ten Key Principles of Energy Security Diversification of energy supply sources is the starting point for energy security. There is only one oil market. A �security margin� consisting of spare capacity, emergency stocks and redundancy in critical infrastructure is important. Instructor: Dr. Mamuka Tsereteli

9. Ten Key Principles: continued Relying on flexible markets and avoiding the temptation to micromanage them can facilitate speedy adjustment and minimize long-term damage. Understand the importance of mutual interdependence among companies and governments at all levels. Foster relationships between suppliers and consumers Instructor: Dr. Mamuka Tsereteli

10. Ten Key Principles continued Create a proactive physical security framework that involves both producers and consumers. Provide good quality information to the public before, during and after a problem occurs. Invest regularly in technological change within the industry. Commit to research, development and innovation for longer-term energy balance and transitions. Instructor: Dr. Mamuka Tsereteli

11. Mamuka Tsereteli New Trends in Political Economy of Oil Western companies that dominated the world energy market in the 19th and 20th centuries appear to be slowly losing political control over the sector. As time goes by, national oil companies account for an ever-larger share of world energy production. For the West the loss of political control over the energy market means a serious weakening of its position in the world economy with a likely prospect of the revision of global economic and, possibly, political rules of the game

12. Factors of Energy Security: Availability Physical endowment; Technological solutions; Capital investment; Legal and regulatory factors; Environmental performance Instructor: Dr. Mamuka Tsereteli

13. Reliability Technical robustness; Diversified energy supply chains; Reserve capacity and emergency stocks; Protection of energy systems; Information about the market; Insulation against knock-on effects from distant events. Instructor: Dr. Mamuka Tsereteli

14. Affordability Prices that allow consumers to buy the energy Costs in differing time scales � full lifecycle, as well as short-term operations. Instructor: Dr. Mamuka Tsereteli

15. Threats to Energy Security: Political Factors Political interruption of energy production / transport Interruption due to military conflict Terrorist attack State-to-state energy deals Resource nationalism Sanctions Instructor: Dr. Mamuka Tsereteli

16. Threats to Energy Security: Natural Factors Severe weather (supply disruption or demand spike) Exhaustion of traditional fuels Infrastructure outage Delays in responding to threat of climate change Distances and Barriers Instructor: Dr. Mamuka Tsereteli

17. Threats to Energy Security: Technology and Infrastructure Limited Investments Absence or Outage of Infrastructure Delay in technology advancement Instructor: Dr. Mamuka Tsereteli

18. Meeting Energy Security Challenges Efficiency Standards for household products, certain autos, Federal building Tax incentives for efficient vehicles, renewable energy production Domestic production Oil and gas, coal, nuclear, ethanol and biodiesel incentives Infrastructure modernization Regulatory clarity Reliability standards R&D incentives Technology Hydrogen technology Clean coal ec. Instructor: Dr. Mamuka Tsereteli

19. Mamuka Tsereteli, 659 SECURITY OF ACCSESS ROUTS TO THE WORLD MARKETS AND NATURAL RESOURCES

20. Mamuka Tsereteli, 659 IMPORTANT RESOURCES AND PRODUCTS Energy: Oil, Gas, Electricity Food Water

21. Mamuka Tsereteli, 659 MAJOR MARKETS:Energy United States Europe Japan China India Turkey China and India became net oil importers. Their import needs are expected to reach from five to ten million barrels per day. This rising needs for oil imports means that India and China will compete for resources and transportation routes with US, Europe and Japan. China and India became net oil importers. Their import needs are expected to reach from five to ten million barrels per day. This rising needs for oil imports means that India and China will compete for resources and transportation routes with US, Europe and Japan.

22. Mamuka Tsereteli, 659 MAJOR PRODUCERS:Energy Gulf States Northern Africa Russia Northern Sea Caspian Basin West Africa Latin America

23. Mamuka Tsereteli, 659 IMPORTANT EXISTING ACCESS ROUTES Suez and Bab el-Mandab Persian Gulf for the West and for Asia Russia - Europe Turkish Straits South-East Asian Seas and Straits Baltic

24. European Goals Core energy objectives of sustainability, competitiveness and security of supply, by reducing greenhouse gas emissions by 20%, increasing the share of renewables in the energy consumption to 20% and improving energy efficiency by 20%, all of it by 2020. Energy security is an issue of common EU concern. With the integration of energy markets and infrastructures within the EU, specific national solutions are often insufficient. Instructor: Dr. Mamuka Tsereteli

25. EU energy security and solidarity action plan five-point EU Energy Security and Solidarity Action Plan: Infrastructure needs and the diversification of energy supplies External energy relations Oil and gas stocks and crisis response mechanisms Energy efficiency Making the best use of the EU�s indigenous energy resources. Instructor: Dr. Mamuka Tsereteli