For most of the last half century, energy security has been defined in terms of Opec boycotts, the risk of the Strait of Hormuz being closed to oil tankers and the dangers of Russia cutting off gas supplies through the European pipeline network. In the last few years, however, much has changed. Now, energy security concerns are focused internally and the risks are concentrated around the networks that sustain complex modern economies. The networks are physical but they are controlled by electronic systems. The greatest threat on this updated analysis is that hostile forces – whether terrorists or state-sponsored cyber specialists – could penetrate and disrupt or destroy those systems. These fears are beginning to reshape public policy and that will affect how the energy business develops across the world. Two factors have contributed to the changing definition of energy security. First, there is no longer any sense that supplies are scarce. If anything, there is a shortage of buyers, a situation compounded by the achievement of virtual self-sufficiency in North America. Patterns of trade have shifted so the US is now a supplier of oil to Venezuela and of gas to the UK petrochemical sector via the Grangemouth refinery.
FT 3rd Oct 2016 read more »