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Energy Security and British Diplomacy

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Presentation by Julian Mansfield, Policy Lead for Energy Security in European & Multilateral Fora, British Foreign & Commonwealth Office, delivered at a briefing and energy policy discussion forum …

Presentation by Julian Mansfield, Policy Lead for Energy Security in European & Multilateral Fora, British Foreign & Commonwealth Office, delivered at a briefing and energy policy discussion forum held at the British Embassy in Oslo on 28 March 2011.

Published in News & Politics
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  • 1. Energy security and Britishdiplomacy28 March 2011Julian Mansfield, Policy Lead for Energy Security inEuropean and Multilateral Fora
  • 2. Content• Energy security context – What is energy security? – What are the energy risks?• British energy diplomacy – International energy strategy: • Price stability • Investment in production • Reliable supply • Low carbon• The importance of Norway – Energy supplier – Low carbon partner
  • 3. Energy security
  • 4. What is energy security? Economic security • Affordable • Not volatile Energy Security Physical security • Reliable • Accessible
  • 5. But there are risks to energy security Investment Developed challenges linked economy to supply demand constraints Emerging Geopolitical risks economy affecting supply demand > Price rises and volatility > Supply interruptions
  • 6. Demand-side risks: Emerging / developed economy demand 5 000World primary energy (Mtoe) Oil Global primary energy 4 000 Coal Gas demand grows by 36% 3 000 between 2008 & 2035, with natural gas rising 2 000 Biomass the most Nuclear 1 000 Other renewables Hydro 0 1980 1990 2000 2010 2020 2030 IEA WEO: New Policies Scenario 8 9 12 9 11 15 36 4 11 As OECD & Asia import 8 3.5 20 7 more, MENA, Russia and 1.5 West Africa must supply more Net Imports now & in 2030 (Million barrels per day)‫‏‬ Net Exports now & in 2030 (Million barrels per day)‫ ‏‬IEA WEO
  • 7. Supply-side risks:production constraints• Production capacity is limited: – increasingly complex geology and technology (e.g. Arctic) – ultimately finite resources – political conditions (e.g. MENA)• Underinvestment after 2020 – Private capital • Regulatory and tax uncertainties (e.g. Russia) • Technology uncertainties – Resource nationalism (e.g. Kazakhstan)
  • 8. Supply-side risks:geopolitical risks to export and production
  • 9. Supply-side risks:gas supply and security
  • 10. But what are we doingabout it?
  • 11. International Energy Strategy• FCO/DECC/Cabinet Office jointly developed an International Energy Encouraging production Strategy to address these risks. investment• It is based around 4 pillars: Reducing British Enhancing demand through low energy supply diplomacy reliability carbon Enhancing price stability
  • 12. Enhancing price stability Promote transparency in oil and gas markets (JODI) Enhance producer-consumer dialogue (IEF) Shared analysis (IEF, IEA, OPEC) Emergency arrangements (IEA, OPEC)
  • 13. Encouraging investment in production Demand transparency Investment friendly regulation in key Multilateral legal producer states protection
  • 14. Enhancing reliability of supply More efficient EU Diversity and Facilitating a North and global gas reliability of gas Sea offshore grid markets supplies Improving the Limiting climate physical security of threats key infrastructure
  • 15. Encouraging low carbon growth Our objectives Our diplomacy Encourage low carbon technology Building Gathering and confidence in sharing collective analysis action Eliminate fossil fuel subsidies Promote energy efficiency Influencing Shaping and key framing the constituencies global debate Global legal framework / EU 30%
  • 16. The importance of Norway
  • 17. Norway‫‏‬and‫‏‬Britain’s‫‏‬energy‫‏‬security• Norway supplies nearly 30% of UK energy, including 58% of our gas imports and 74% of our oil imports.• Gas has a vital role to play in the UK energy mix during the transition to low carbon and beyond.• January’s‫‏‬Joint Prime Ministerial Statement of Cooperation reflects the importance we place on Norway
  • 18. Norway: our key partner• PMs joint Statement of Cooperation (January 2011): – Energy supply: Safe oil and gas exploration, extraction and supply, offshore wind, CCS, development of a North Sea power grid, and a Norway-UK electricity interconnector. – Low carbon: Promote climate policies and technologies and work towards a successful COP17 in Durban• Officials dialogue will take forward this political vision• “One North Sea Joint Ministerial Statement”‫(‏‬August‫ )0102‏‬agreed on cooperation priorities on energy and climate change
  • 19. Conclusion