To ensure energy security, a more holistic global policy framework is needed. This would encourage companies to cooperate in ways that facilitate the flow of finance, technological advancement and increase capacity.

Since 2014 the overarching priority has been to reduce global emissions and move away from the global dependence on fossil fuels and natural resources, which are considered harmful to the environment. 

The common-sense solution has been a move to renewable energy as a primary global energy source. 

The current situation involving the invasion of Ukraine by Russia and the sanctions imposed, as a result, have shown how interconnected national economies are. It has also highlighted how unstable energy supplies impact every aspect of those economies. 

Higher oil prices across Western Europe have led to higher energy costs for business, which consumers then pay for as prices rise for goods and services.

 

Current Scenario of Renewable Energy

The holistic solution involves both short-term and mid-term goals. 

According to the IRENA (The International Renewable Energy Agency), current pace and scale of renewable energy is insufficient to replace fossil fuels entirely. 

Governments are facing the problem of energy security, economic recovery, and affordability of energy bills for households and commercial businesses, particularly SME's all at the same time.

According to OPEC, there is an estimated 2 million barrels per day deficit in oil supplies. The Norwegian Petroleum directorate claims that Norway has increased its gas production by 6%, increasing its supply to Europe. 

OPEC also states that 80% of people live in countries which are net importers, but most could develop renewable energy generation in some capacity. 

Renewable energy development offers a way out of the import dependency on fossil fuels, reducing costs and creating economic growth and new jobs. 

 

Methods for Energy Transition

To achieve energy security, the transition from fossil fuels to clean energy has to be pragmatic, bespoke to the context, diversified and above all, collaborative.

There needs to be more collaboration between oil & gas, mining, and clean technology companies. The contexts of different countries and regions are different; that means each would require practical solutions bespoke to those regions and sectors. 

By practical, I mean that several developing countries have millions of people without a source of power and several regions sourcing their energy from coal and other sources like diesel, which have high emission levels.

The solution here is to set specific dates for these coal mines to cease production while ensuring the introduction of modular alternatives like biomass, compressed natural gas and grids to harvest solar power.

 

Energy Infrastructure

In Asia and countries such as India, where there is a particular need for the supply of oil and development of the power sector, the power infrastructure does not reach many rural areas. Decentralisation will help resolve the absence of such infrastructure.

In Western developed markets, such as Europe, there is infrastructure but not enough domestic natural resources to provide for consumers without supplies from countries like Russia.

The US has enough domestic sources of gas and oil with a developed consumer and trading market and reliable infrastructure. 

 

Opportunities for Emerging Energy Markets

The unstable supply of oil and gas from Russia is an opportunity for more cooperation between developed economies to work with oil & gas companies to increase investments in developing markets. 

Africa, Latin America, and Asia are notable examples where oil & gas can be sourced (bearing in mind that oil & gas investment is a mutually beneficial long-term collaboration).

However, the infrastructure in emerging markets must be built to fulfil the demand for export and domestic markets. The developed markets require more importation of LNG, which can come from the USA for the short term and then from developing countries.

However, the LNG infrastructure in many developed countries is simply not operating at full capacity now.

Approval for the completion of projects that have reached FID (final investment decision) is becoming easier and will provide more supply.

Some IOCs (Integrated Oil Companies) in the West are able to increase supply, while others are unable due to fiscal responsibility. Securing finance for exploration since 2014 has been increasingly difficult, as many financial institutions have been restrained from investing in the oil & gas sector.  

 

Holistic Approach to Energy Security

1. Establishing New Departments

For energy security, I think these oil & gas companies are most suited to facilitating transition by establishing new departments focusing on clean technology and renewables and establishing joint ventures and partnerships with renewable energy companies.

Investing in the energy transition will bring social, economic and welfare benefits and add a staggering 85 million jobs globally. These jobs would be in energy transition and other related technologies from 2022-to 2030. The job gains far outweigh the 12 million job losses from the conventional fossil fuel industry.

Energy insecurity, however, can also occur within the renewable energy sector, as we see today with fossil fuels and the situation in Russia. 

For example, the Cobalt, Nickel, Manganese, and Lithium needed for electric vehicles and battery storage are sourced from particular mines in particular geographic regions. 

These mined resources have an upstream and downstream refining process that needs to be diversified, improving the emissions and environmentally damaging methods.

Renewable energy would have to scale up from 14% of the total energy supply today to 40% in 2030 to be a viable alternative to oil & gas.

2. Sustainable Energy Technologies

Technology is an essential component of the sector, and geopolitics should be used to enable the development of clean energy, increase production, storage, and effective distribution in developed and emerging markets. 

Electrification and efficiency are the critical drivers for the energy transition, enabled by renewables, hydrogen, and biomass.

The most crucial part of energy security and the transition is the development of a circular economy and shifting away from linear economies. 

Currently, most economies are linear in that resources are sourced, used, and dumped. With a circular economy, the energy resources are sourced efficiently, used, and then recycled and reused. 

In such circular models, products like plastic and municipal waste suddenly become viable energy sources, and their by-products are used for manufacturing. 

We use technology to share means of transport like cars which reduces traffic and commuting, as well as the need to own and consume so much fuel. 

The fossil fuels produced have less carbon content and fewer emissions and work with renewable and manufacturing companies to ensure energy sources aren't just diverse and secure.

 

This article was contributed by our expert Francis Akpata

 

Frequently Asked Questions Answered by Francis Akpata

Q1. What are the components of energy security?  

The components are demand concerning population, production, infrastructure supply and storage. 

Q2. How do countries achieve energy security?

Countries achieve security by ensuring they have adequate supply from the fossil fuel industry and can store and distribute effectively in relation to demand and a variety of domestic or international sources.

Q3. What are the issues and challenges in sustainable energy supply?

The primary issue is that the production level is not yet high enough to replace fossil fuels but is developing quite effectively. The sustainable energy supply is also not integrated compared to fossil fuels, and the cost of production is higher.  

Q4. What is the future of the energy industry? 

The future is fossil fuels produced in a cleaner fashion with less emissions and more stakeholder engagement. Clean technology companies are becoming more advanced and playing a crucial role in the circular economy. There will also be more collaboration between fossil fuel companies and clean technology companies. 

Q5. What is the impact of the energy crisis on society? 

Higher cost of power increases the cost of transportation, manufacturing etc, which is passed on to customers and higher cost of living. This is the primary cause of inflation.