Energy demand is driving new thinking about water use and how to reduce the 'water-footprint' in energy extraction and power generation. As JES contributor Mike Hightower points out, "over 50 percent of daily water withdrawals in the US and about 25 percent of all daily non-agricultural fresh water consumption are for energy-related uses," which is a staggering figure by any account. For nations around the world, plagued by either low water availability or the lack of power generating capacity or both, the problem is understandably even more acute. Mike tackles the issue of how to balance future projected energy demand, increasing water stress and environmental imperatives in addressing human development goals.

In celebration of World Water Day on March 22nd, the Journal of Energy Security is launching a series of articles on the nexus between energy and water. There is a symbiotic relationship that is at work here—according to sources we’ve accessed, which include Scandia National Laboratories in Albuquerque,  New Mexico, Pacific National Laboratories in Washington State, and the Stockholm International Water Institute (SIWI) in Stockholm, Sweden, among others.  Jakob Granit from SIWI makes his first contribution to the JES, providing the suggestion that cooperative measures in the energy sector, through energy pooling, may be an applicable model to facilitate the development of needed global water resources on a region-by-region basis. In May, the JES will spotlight a water contribution from Steven Solomon drawing on research from his new book, Water: The Epic Struggle for Wealth, Power and Civilization. 

Cooperation is a key word in determining the future energy security of European nations, particularly for those scattered across Central and Eastern Europe. While Russia steams ahead with its Nord Stream project, it has picked up a key ally in France’s GDF (Gaz de France) while the Visegrad nations (Czech Republic, Hungary, Bulgaria, Poland and Slovakia) seek to press forward in diversifying gas resources away from Russian-origin gas. In March these nations (and a handful of others including Austria, Bosnia and Herzegovina, Romania, Slovenia and Bulgaria) called for greater EU cohesion and structural funding for enhanced and diversified energy flow, primarily LNG through the Black Sea and Mediterranean. These movements, combined with Russian fears of a ‘gas glut’, lead this past month to a rethink of Russia’s own gas production development strategy. Already the huge Stockmann gas field project has been put at least on temporary hold, and, interestingly, Russia’s Gazprom inaugurated its first coal-bed methane plant this past month. Clearly movement is afoot in global gas markets, and one well worth watching—particularly for gas import dependent states. 

Heading south from Russia through the CIS from Turkmenistan to Afghanistan and beyond are the potential implications of the construction and development of the Turkmen-Afghan-Pakistan-India (TAPI) pipeline. While the development of such a transnational pipeline would bring treasure to the government of Afghanistan as a major transit state for this gas pipeline, it has direct and immediate security implications for ISAF troops already stationed in the country. John Foster, a long-standing industry professional who has served with the World Bank, gives us his perspective on TAPI development and what it means for all the stakeholders.  

Notwithstanding the geopolitics of energy, contributors Andreas Goldthau and Jan Martin Witte share their research, insight and perspective on how global energy markets, and in particular how the anemic producer-consumer dialogue, might be enhanced through governance mechanisms. In a wide ranging discussion, from the applicability of the methodology that underlies the WTO to financial market stabilization, the authors contend that while energy will remain political, a global governance approach towards problem resolution provides a new analytical perspective on viewing energy trade and resource development in a different, non zero-sum light.   

Finally, tensions are heating up in the Britain's Falkland Islands with the arrival of an off-shore oil rig to explore for oil in off-shore Falklands’ waters. This has raised the ire of the Argentine government, which has called on the United Nation’s Secretary General and US Secretary of State Hilary Clinton to intervene. Whether the UK considers this a dispute is an altogether different question.  What is increasingly clear is that where energy and politics mix there is no neat way to sort out the wheat from the chaff; understanding the energy security dilemmas of our time requires boring down into the details.  This is what the JES is all about.    

 

Best regards,
Kevin Rosner
editor@iags.org

US vulnerability to dwindling Mexican oil exports is growing.  The US-Mexican relationship in oil has long been a collaborative one.  Over the early part of this decade, as US demand grew, so did Mexican exports to the US mainland—a relationship author  Jeremy Martin calls an “oil symbiosis made in heaven.”  Since 2007, however, Mexican production has been falling.  An uncomfortable redefinition of this symbiotic relationship may be unavoidable in the near future if Mexico’s oil majors cannot sort out their own problems.

Russia and Iran are two of the world’s energy powers if measured by their proven reserves of oil and gas.  In oil, Iranian reserves are nearly double those of Russia yet Russia on any given day is the world’s largest oil producer.  There are any number of reasons which explain this dichotomy.  These include the fact that Iran, not Russia, is an OPEC member and therefore its oil production is limited by the OPEC cartel’s production quota system.  Second, Iran is isolated and ostracized by the international community given the state’s sponsorship of terrorism and its determination to build a domestic nuclear program and with it the value-added of weapons grade nuclear materials.  Further, Iranian oil fields suffer from high inefficiencies due to lack of access to new technology, know how, and foreign investment  all which would be forthcoming had it not positioned itself as a pariah  to peace and a threat to its Middle Eastern neighbors including on the one hand Saudi Arabia and at the other end of the spectrum Israel. 

In gas, the situation is the opposite.  Russia’s reserves of natural gas are approximately 27% of proven global reserves with Iranian reserves at approximately 15%.  Together, should these gas giants join forces, as they have threatened to do through the Gas Exporting Countries Forum (GECF), they would hold considerable sway over global gas supplies at least on a regional basis.  And this is the key point.    Why does the Russian Federation as a full member of the UN Security Council often act as a key arbitrator seemingly on Iran’s behalf in moderating international sanctions on Iran when Iran itself is more geographically proximate to Russia than Paris, London or Washington?  Viewed against the backdrop of the Obama administration’s September release of an intelligence report citing the discovery of the Fordow Fuel Enrichment Plant, a secret nuclear enrichment site near Iran’s holy city of Qom in Iran, Emanuele Ottolenghi helps explain the nuances in the Russian-Iranian relationship with a view towards oil and gas through the lens of this most recent Iranian nuclear dispute.

The OSCE is the world's largest regional security organization whose 56 participating States span the geographical area from Vancouver to Vladivostok.  Over the past several years the organization has intensified its focus on the issue of energy security.  In January 2010 Kazakhstan will be the first non-European country to chair the organization.  Kazakhstan has already pledged to focus on energy transit issues within the energy security block of issues.  Critical energy infrastructure protection may be a key area where the organization can make a tangible contribution to its member-states’ security.

Rare earth metals are important to the world’s ability to pursue a low carbon future because many of the enabling technologies, such as wind turbines, advanced automotive batteries, energy efficient light bulbs, and solar panels require these select materials for their manufacture. For national defense purposes, a proposed bill in the US Congress entitled the Rare Earths Supply-Chain Technology and Resources Transformation Act of 2009 (RESTART ACT) reads that, “Many modern defense technologies such as radar and sonar systems, precision guided weapons, cruise missiles, and lasers cannot be built, as designed and specified, without the use of rare earth elements (REEs) and materials produced from them.” In short, rare earths are important not only for the production of environmentally sustainable products and technologies but for national defense as well. Rare earths elements are, alas, limited in their distribution. While the United States owns at least 15% of the world’s REEs reserves, it now depends nearly 100% upon imports for rare earth elements, oxides, and alloys because there are virtually no active REE producers in the United States. More than 95% of all REEs for world consumption are produced in China.

IAGS, publisher of the Journal of Energy Security,  has announced a new initiative to reduce oil's strategic importance.  IAGS has long focused on public policy initiatives to expand fuel choice for businesses and consumers.  The Mobility Choice Coalition complements this effort by focusing on competition among transportation modes.  More information on Mobility Choice can be found at www.mobilitychoice.org. 

Chinese competition for Russian and Central Asian oil and gas has been accelerating for years.  Instead of Western-style wrangling about government subsidies, hand-wringing about whether their actions reflect free-market economics, or in worrying about the projected future value of present hydrocarbon goods (exhaustively finite) the Chinese are busy securing their own energy future and in doing so in shaping ours.