The starting point for energy security today as it has always been is diversification of supplies and sources.
But that's not enough: To maintain energy security, one needs a supply system that provides a buffer against shocks. It needs large, flexible markets. And it's important to acknowledge the fact that the entire energy supply chain needs to be protected.
We are living in a new age of energy supply anxiety.
So the major obstacle to the development of new supplies is not geology but what happens above ground: international affairs, politics, investment and technology.
People always underestimate the impact of technology. To give you an example: In the 1970s the frontier for offshore development was 200 meters, today it is 4,000 meters.
The Russians are turning east to the Chinese - to the Europeans' surprise. It always seemed to me that the relationship between Russia and China would shift from being based in Marx and Lenin to being based in oil and gas.
We are living in a different world now. You can see it everywhere in international relations: It was noteworthy that, after his visit to Washington, the Chinese president's next stop was Saudi Arabia.
The North Sea was supposed to run out in the 1980s. Then in the 1990s. And now production is still on-line.
First, we have to find a common vocabulary for energy security. This notion has a radically different meaning for different people. For Americans it is a geopolitical question. For the Europeans right now it is very much focused on the dependence on imported natural gas.
The bulk of extra supplies that could be put into the market come from two places. One, they come from other Persian Gulf suppliers, of which Saudi Arabia is at the top of the list.
This has a lot to do with the unrest in Nigeria, but also with the production loss after the hurricanes in the Gulf of Mexico, the decline in Iraq since the 2003 war, and the decline in Venezuelan output since 2002.
It's extraordinary how inventive one can be with ethanol right now.
We experienced similar fears in the 1880s, at the end of World War I and II. And we ran out in the 1970s.
But eventually it's a question of access: Getting access to fields is on top of the oil companies' agenda. We see a substantial build-up of supply occurring over the coming years.
I think the producers, for the most part, don't want to see prices skyrocket because that will only create problems for them down the road and would also be a, you know, would be a very serious shock for a world economy that can't afford serious shocks right now.
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