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NS4053 Comparative Energy Security and Global Energy Governance

NS4053 Comparative Energy Security and Global Energy Governance. Week 4.2. Alternative views. International relations/international security Conflict, cooperation, politics Global public policy Technical problems, technical solutions Fix it mentality

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NS4053 Comparative Energy Security and Global Energy Governance

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  1. NS4053Comparative Energy Security and Global Energy Governance Week 4.2

  2. Alternative views • International relations/international security • Conflict, cooperation, politics • Global public policy • Technical problems, technical solutions • Fix it mentality • Recognizes trade-offs but deemphasizes politics • Look at two approaches to global public policy • Comparative • Economics

  3. Comparative Dimensions of Energy Security • Availability • Supply, access, diversification • Affordability • Stability, quality • Efficiency • Technological innovation • Sustainability

  4. Energy Security Interactions Sovacol and Brown 2010

  5. Sovacol and Brown 2010

  6. Sovacol and Brown 2010

  7. Delta in energy security 70-07 Adjusted for per capita emissions Sovacol and Brown 2010 Right of diagonal is worse off in 2007

  8. Comparing 4 cases Sovacol and Brown 2010

  9. Comparing four cases Sovacol and Brown 2010

  10. Things to think about • Right comparisons? • OECD • Denmark, Japan, US, Spain • Affects conclusions? • Right metrics? • Data? • We only have one experiment: history

  11. Oil producers and consumers

  12. US Energy sources and uses

  13. Energy Security as public policy problem • Market failures • Imperfect competition • Monopolies and monopsonies • Externalities • Price volatility leads to underinvestment • Linkages of oil and LNG markets

  14. Energy Security as public policy problem • Public Goods • Strategic stockpiles • Spare capacity (Saudi Arabia) • SLOCs • Infrastructure investment (pipelines) • Free rider problem • Damping price volatility leads to … • Price pegs for LNG lead to … • Regulatory uncertainty at global level

  15. IEA member petroleum reserves 12OCT212

  16. Spare capacity public good

  17. SLOCs 1975 c. 2000

  18. Natural gas flows in Europe, July 2012

  19. Solutions? • Focus on oil • Other energy prices, investments, etc. move in relation to oil. • De-peg natural gas prices from oil • Increase transparency in information on oil markets to ensure more accurate pricing. • Investment • Consumers at risk of underinvestment, producers at risk of overinvestment. • Hedge against risk of public goods failure • Saudi or US not providing • Deal with free riders, encourage burden sharing. • Pipeline risks

  20. Conclusions • Things to watch out for: • Explanations that have very little politics. • Explanations that rely mostly on ‘leadership’ as an explanation for differences among outcomes. • Explanations that are purely technical. • Global system has no sovereign to impose a technical solution. • Many of the argumentsin energy security are not about what to do, but rather who pays (politics).

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