Enhancing Australia’s energy security and sustainability: the case for domestic hydrocarbon fuel production from natural gas

Abstract: In the aftermath of recent natural gas and oil supply disruptions to European markets, Russia's long-term supply stability and Europe's natural gas market developments are of utmost concern to both the producer and the consumer. As Europe's indigenous supply declines, it will rely more on gas imports. Concurrently, Russia's domestic gas consumption is growing, its infrastructure continues to age, and Gazprom will continue to rely on both Central Asian imports and growth from independent gas producers to meet its long-term supply commitments. This article discusses a medium-term outlook for Russia and the European Union and outlines the barriers that are inhibiting competition and collaboration in the energy sphere. Keywords: competition, energy markets, energy security, European Union, natural gas, oil, Russia ********** In the past year, the security of natural gas supplies has emerged as one of the top issues of concern for countries in Europe, for the European Union (EU) and the North Atlantic Treaty Organization (NATO), and even for the United States. Concerns about natural gas security reflect uncertainty about available natural gas supplies, how supplies are delivered to the market (by pipeline or by liquefied natural gas tanker), and how much is paid for these supplies. In the aftermath of natural gas and oil supply shutoffs from Russia, Europe is trying to ensure its own security of supply through diversification and energy efficiency. Russia is trying to ensure energy security by diversifying its customer base, investing in the entire value chain (not only the upstream), and ensuring adequate investment levels both in its own energy supplies and those of its Central Asian neighbors. The way in which the policies of regional and international organizations differ from the policies of individual states is hampering progress on energy market liberalization and energy efficiency programs, both of which are necessary to achieve stable market relationships between producers and consumers. To accurately frame the policy debate, one must understand the current and future role that natural gas plays for Europe's energy mix. Europe's demand for natural gas is increasing and Russia is the region's main supplier. However, Russia's ability to invest in upstream natural gas development over the next several years will directly contribute to Russia's natural gas production growth and Europe's security of supply. In the meantime, several alternative energy sources and hedging instruments are expected to mitigate Europe's dependency. For the region to best take advantage of these options, continued regional natural gas market liberalization is necessary. Europe and Russia's Natural Gas Interdependence In 2006, Europe depended on Russia for 34 percent of its natural gas imports, including European LNG imports (see figure 1). In contrast, Russia depended on Europe for 60 percent of its natural gas exports, sending the remainder via pipeline to the Commonwealth of Independent States (CIS), predominantly Ukraine and Belarus. (1) In evaluating Europe's true dependency on Russian natural gas imports, it is essential to understand the role that it plays in the total energy mix. In the decade after the mid-1990s, oil's share in Europe's primary energy consumption fell by around 3 percentage points while natural gas's share increased by twice this amount, to around 24 percent of final consumption. On the one hand, Europe's natural gas consumption growth could slow in the future. Since the mid-1990s, EU demand for natural gas has been growing at a rate of around 4 percent per year. (2) The International Energy Agency (IEA) estimates that, over the next several years, the EU's demand for natural gas will grow at a slightly lower rate, by around 0.8 to 1 percent per year between 2004 and 2015. (3) Even though the growth rate is expected to slow in the next several years, as figure 2 shows, Europe's natural gas import dependency is still more than 30 percent higher today than it was only a decade ago. …

Natural gas is relatively clean energy source, which emits less greenhouse gases (hereinafter – GHG), compared to other fossil fuels, such as hard and brown coal, and therefore it may be the most feasible resource to ensure smooth energy transition towards Europe’s climate neutrality by 2050. Traditional natural gas can be easily transported and used in liquefied (hereinafter – LNG) or compressed form. As for biomethane, in future it also can be used in liquefied (hereinafter – bioLNG) and compressed form, as well as transported by means of the current natural gas infrastructure. It can also significantly enhance regional and national energy security and independence, which has been challenging for the European Union (hereinafter – EU) over at least several decades. Issue on energy independence, security of supply, alternative natural gas sources has been in a hotspot of the Baltic energy policy makers as well. Now, considering Russia’s invasion in Ukraine, since late February 2022, a problem of the EU natural gas dependency on the Russian Federation has escalated again and with force never before experienced. The European natural gas prices also hit records, as the natural gas prices in the Netherlands Title Transfer Facility reached 345 euros per megawatt-hour (hereinafter – EUR/MWh) in March 2022. Therefore, LNG import terminal is the only viable option to reduce national dependency of the so-called pipe gas which in some cases, due to the insufficient interconnections, may be delivered from very limited number of sources. The European policy makers and relevant institutions are currently working towards radical EU natural gas supply diversification, where LNG deliveries coming from outside of Russia will certainly take a central stage. In case of Latvia, the potential benefits of the LNG terminal development in Skulte were evaluated in order to reduce energy independence of the Russian natural gas deliveries in the Baltic region and to introduce new ways and sources of the natural gas flows to the Baltics. LNG terminal in Skulte could ensure significant capital investment cost reduction comparing to other projects proposed for Latvia in different periods, due to already existing natural gas transmission infrastructure and the relative closeness to the Incukalns underground gas storage (hereinafter – UGS). Various aspects, such as technical, political and economic ones, were analysed to assure that Skulte LNG terminal would be a real asset not only to customers of Latvia, but also to those of the whole Baltic region, where in future it would be possible to use biomethane for efficient utilisation of existing and developing natural gas infrastructure.

Measuring the natural gas supply security performance of China's natural gas suppliers: A comprehensive framework using FAHP-Entropy-PROOTHEE method

Energy Policy And Security Through The Lenses Of The Stochastic Portfolio Theory And The ACEGES Model.- Energy Security As A Subset Of National Security.- Challenges To Global Energy Policy And Supply Security.- Change In Energy Structure And Energy Security Under Climate Mitigation Scenarios.- Insights On Cooperative Electricity Consumption In Human Aggregates From A Thermodynamic Analysis: Implications For Energy Policies.- The UK Electricity System And Its Resilience.- The Macroeconomic Effects Of Energy Purchases.- EU's Dynamic Evaluation of Energy Efficiency: Combining Data Envelopment Analysis and Multicriteria Decision Making.- The Availability Of European Oil And Gas Resources.- Energy Security: Stochastic Analysis Of Oil Prices.- Green Energy Development in China: The Case of Clean Coal Technologies.- China's New Energy Security: A Swing of the Pendulum.- The Energy Efficiency Policy Initiatives and Energy Security: Experiences from India.- Impact of Shocks on Australian Coal Mining.- An Assessment of the Impacts of Government Energy Policy on Energy Technology Innovation and Security: The Case of Renewable Technologies in the US Electricity Sector.- An Overview of Energy Policy and Security in the Pacific Region.- The Evolution of the Spanish Energy System in the Context of Energy Security: Current Trends, Future Developments.- Energy, Development and Economic Growth in Colombia.

This thesis examines the interplay between energy security and law and policies promoting green energy. Based on empirical work carried out in two very different country case studies – Great Britain and Brazil – this thesis attempts to foster a better understanding of the role played by energy security in constructing and deconstructing green energy policy initiatives. Understanding the diversity of views on and the complexities of the interplay between energy security and green energy development is at the heart of this thesis. The diversity of views raised in national contexts leads to legal disputes in international forums when attempts are made to address the issues of this energy security-green energy interplay. As such, building on the findings of the case studies of Great Britain and Brazil, this thesis then analyses the interplay between energy security and green energy development in international trade law as encapsulated in the law of the World Trade Organisation (WTO), an international trade organisation which adjudicates between competing discursive claims surrounding energy security and green energy development and pronounces on their legal status. This thesis shows the complexity of the relationship between energy security and law and policies on green energy development and how the existing discursive constructions are broadening, deepening and transforming this interplay. In summary, the findings demonstrate the discursive contests that lead to divergent constructions of energy security not only in the context of different countries, but also in different sectors of the economy within a country. It also shows that the links between energy security and national and international law and policies on green energy pose challenges to a transition to a green energy system. In order to assist the energy transition, this thesis puts forward the adoption of the broader energy security concept in law and policies which includes environmental, climate and social considerations. It also argues for the incorporation of a dominant positive frame in relation to the interplay between energy security and law and policy on green energy development since a positive frame in relation to this link has the implication to significantly contribute to the promotion of an energy source. In addition, it advances the need to embrace emerging green energy technologies in energy systems and argues that an evenly distributed market share of green energy technologies and equipment around the world is the best solution to ensure green energy security in the context of the just energy transition. This thesis then proposes a way forward in creating the legal space in the law of the WTO for trade restrictive measures aimed at ensuring green energy security.

POLITICS AND ENERGY SECTOR IN THE SELECTED COUNTRIES OF SOUTHEAST EUROPE (SERBIA, CROATIA, BULGARIA, GREECE, ROMANIA) The research issue of this monograph comprises a comparative analysis of selected (crucial) countries of Southeast Europe in terms of their energy sector and security. The indicated region is specific due to its small area and big political socioeconomic diversity. On the one hand, the region contains countries which have been functioning for decades within the EU (Greece) or are new members of the EU (Croatia, Romania, Bulgaria). On the other hand, in the analysed area there are countries which have formed a strategic alliance with Russia and develop cooperation with China (Serbia). Each of the mentioned countries is marked by the different energy potential (resources) and consequently the different shape of the energy sector. An analysis of the politics and energy sector of the indicated countries allows to understand how their energy security is created and which factors could support its growth or threaten its stability. Although the issue is considered from the perspective of a state, the analysis gives also a possibility to determine current and future roles of the countries from Southeast Europe in assurance of the transregional energy security.The monograph consists of seven chapters in which issues concerning the energy sector and security of the selected countries from Southeast Europe are discussed. The first chapter deals briefly with theoretical issues which explain the most important concepts used in the work, i.e. energy security, politics and energy strategy. In the next chapter energy projects in the Balkan area, Central Europe and Southeast Europe are presented. The attention has been primarily focused on concepts developing infrastructure of the distribution of strategic raw materials, i.e. natural gas and oil. Five next chapters constitute the analysis of the politics and energy sector in the selected countries of Southeast Europe: Croatia, Serbia, Bulgaria, Greece and Romania. The analysis of five cases has been conducted with the same criteria. The first parameter is an estimation of the resources of the strategic energy raw materials and the potential of renewable energy sources. The next criterion is the analysis of the energy sector of a particular country in the context of production and consumption of electric energy as well as the level of production and import of oil, natural gas and coal. And the third parameter relates to specification of the most important elements of energy strategies of the particular countries and their implementation in realized and planned investments in the filed of energy technology with the special emphasis on concepts developing gas, oil and nuclear sectors, and renewable energy sources.

At the heart of the European Union (“EU”) energy policy is energy security. Energy security is maintained, in part, by a diversification of supply. Despite the fact that the EU has prioritized diversification, its dependency on Russian natural gas has increased in recent years. Contemporaneously, the politicalrelationship between the EU and Russia has worsened. Construction of NordStream 2(“NS2”) will further establish Russia as the dominant supplier of natural gas to the EU while lessening the diversification of its energy supply. To further the EU’s stated goals of energy diversification and security, another steady source of natural gas imports for the countries along the Baltic Sea is needed. LNG importation assets in Poland and the Baltic states exist for this purpose. Unlike other EU members, these countries have demonstrated the economic and political will to curb the coercive influence ofRussian natural gas imports. America is awash in natural gas, with plenty for export and can sendincreasing volumes of LNG worldwide. In contrast to other sources, America is well located to supply Europe with secure LNG, and its importation should be a shared goal of the EU and America. Despite the desire of some American statesmen to use the “shale gas revolution” to further U.S. geopolitical goals; however, the U.S. hydrocarbon industry (unlike in Russia) is overwhelmingly controlled by private landowners and industry. The goal ofthe American, Polish, and the Balticstates should therefore be narrowly focusedon establishing free trade agreements and the encouragement of longer -term contractual relationships between America and Poland and the Baltic states.

PurposeClean energy stocks are exhibiting signs of increasing volatility reflecting the varied and conflicting strategies employed by nations to pursue energy security objectives. In this regard, this paper aims to examine the response of NASDAQ clean energy stock returns volatility to the influences of external energy security elements including oil price, natural gas price, coal price, carbon price and green information technology stock price.Design/methodology/approachThe paper uses symmetric and asymmetric generalised autoregressive conditional heteroskedasticity models (GARCH and TGARCH, respectively), which incorporate external energy security elements as exogenous variables, to estimate volatility models for clean energy stock returns.FindingsAlthough, prices of oil, coal and natural gas are negatively associated with NASDAQ clean energy returns volatility, only the effect of natural gas price is significant. While carbon price affects NASDAQ clean energy returns volatility positively, green information technology price affects the volatility negatively. These results are robust to exponential GARCH and lead-and-lag robust ordinary least-squares as alternative estimation methods.Research limitations/implicationsThe study lumps the effects of all other external and internal factors, including internal energy security elements, in the autoregressive conditional heteroscedasticity (ARCH) term to predict NASDAQ clean energy returns conditional variance. GARCH method does not disentangle individual roles of the factors captured in the ARCH term in predicting volatility.Practical implicationsResults documented imply that natural gas appears a closer substitute for renewable energy sources than crude oil and coal, such that its price rise is perceived as good news in the NASDAQ clean energy financial market, while a fall is considered bad news. Furthermore, both an increase in carbon price and a decrease in green information technology stock performance are perceived as negative shocks.Social implicationsIn assessing risks associated with clean energy stocks, investors and fund managers should carefully consider the effects of external energy security elements.Originality/valueTo the best of the author’s knowledge, the paper is the first to identify external energy security elements and examine their effects on clean energy stock volatility.

Research Highlights This paper aims to assess the current progress of RE in this country and identify the impact of business sustainability idea towards RE policy development. The extensive review presented in this work offers a useful reference for policy makers, corporate managers and researchers who have vested interest in business sustainability and renewable energy related studies. ___________________________________________________________________________ Research Objectives The objectives of this study is to explore the evolving concept of business sustainability towards environmental concern and to identify the impact of business sustainability idea towards Malaysia’s policy development on RE deployment. Methodology This is conceptual paper where the authors tend to make the analysis by exploring particular theories on business sustainability, renewable energy (RE), and the engagement of RE activities on Malaysia policy development. Results All energy sources have some impact and benefit on our environment. For instance, renewable energy (RE) is energy resource that naturally replenished over time and always can be generated such as solar, wind and hydro energy. However, if the rate of use exceeds the rate of renewal, gradually it will become unsustainable. Thus, to have a sustainable energy which defined as energy production that can last for the foreseeable future is crucial and become main focus of recent national policies, strategies and development plan as of many countries. Malaysia energy consumption still heavily depended on the non- renewable energies (RE) such as fossil fuel and natural gases. Unfortunately, the use of the non-RE is unsustainable and can contribute adversely towards the environment and economic performance of a country. Renewable energy is brought to play as it is believed sustainable and has the potential to thrive in infinitely competitive market of contemporary business nowadays. Therefore, in 2009, the government of Malaysia has announced a National Renewable Energy Policy and Action Plan (NREPAP) as part of their commitment to accelerate the growth of RE as an alternatives energy sources for the coming years. Moving onwards, a strong policy is needed to tackle the challenges in meeting the demand, energy security and also the affordability of energy pricing. Thus, in energy security dimension, perhaps the government should put attention on renewable energy by engaging more on the alternative mechanism to deploy RE capacity through program such as Large-Scale Solar PV, Net Metering as at current practices and also other new initiative like green certificates. The exploration on new RE resource such as wind, geothermal, ocean thermal energy conversion (OTEC) also could assist in build up a new opportunity to enlarge the share of renewable energy mix percentage and ensure the future energy security (UNDP, 2007) Findings The energy industry is changing fast and in multiple directions. It is also regularly known as the catalyst for development in a country. Realizing the importance of energy as a vital dimension in economic and social development, the government of Malaysia has been continuously reviewing its energy policy and practices to ensure long-term sustainability, reliability and security of energy supply (Mohamed & Lee, 2006). The private sector even the communities should also be more corporate in social responsibilities and make compromises for instance by participating in green programs and accepting longer payback periods in RE projects. Nevertheless, continuous efforts and strong support from the societies are vital to ensure RE development can reach its maximum potential. This effort is also supported by (Dincer, 2000) and (Wutenhagen, Wolsink, & Buer, 2007) where they are stressed that increases the public awareness and acceptance on RE, it is as the initial step to make the sustainable energy program successful. This is done through the media, professional organizations, public and government channels. In conclusion, since there is still insufficient insight to critically reasoning the RE development in aspect of business and sustainability, the paper insists to contributes more to the research on energy policies enhancement in Malaysia particularly. This could be a challenge on governing agenda that involves a series of tradeoffs, market players, organizations and companies (Oliveira, 2018) and these efforts are important to ensure the future success of the RE development in Malaysia. Acknowledgement The authors would like to acknowledge Universiti Tenaga Nasional (UNITEN) for the fund granted through the Internal Grant (UNIIG2019), Project code: J510050852. References Dincer, I. (2000). Renewable energy and sustainable development: a crucial review. Renewable and Sustainable Energy Reviews, 4(2), 157–175. Mohamed, A. R., & Lee, K. T. (2006). Energy for sustainable development in Malaysia: Energy policy and alternative energy. Energy Policy, 34(15), 2388–2397. Oliveira, R. L. De. (2018). Powering the future : Malaysia ’ s energy policy challenges. Kuala Lumpur: IDEAS Policy Research Berhad. UNDP, United Nations Development Programme. (2007). Energy and Poverty in Malaysia: Challenges and the Way Forward. UNDP. Wutenhagen, R., Wolsink, M., & Buer, M. J. (2007). Social acceptance of renewable energy innovation: An introduction to the concept. Energy Policy, 35, 2683–2691.

This introductory chapter presents the concept of sustainable energy security which flows from two related notions of ‘energy security’ and ‘sustainable energy’. The chapter examines the emergence, varying interpretations and the salient aspects of energy security. Sustainable energy and its characteristics are also identified. The two notions of energy security and sustainable energy are different, but there is an intrinsic relationship between them. In order to achieve the objectives of both energy security and energy sustainability together, the concept of sustainable energy security (SES) is proposed. ‘Sustainable energy security’ (SES) is defined as ‘provisioning of uninterrupted energy services (short term and long term) in an affordable, equitable, efficient and environmentally benign manner’. The conceptualization of SES goes beyond sustainable and secure energy ‘sources’ and implies a sustainable and a secure energy ‘system’. Hence, SES is contextualized in an energy system framework and the concept of ‘sustainability’ and ‘security’ is applied to the entire ‘energy system’. This perspective accommodates the supply side, the demand side and the three dimensions of sustainable development, viz. social, economic and environmental, in its approach. The characteristics, importance and competing dimensions of SES are also highlighted.

Southeast Asia (SEA) is composed of Brunei, Myanmar, Cambodia, Timor-Leste, Indonesia, Laos, Malaysia, the Philippines, Singapore, Thailand and Vietnam. The population is forecasted to expand by 20% with the urban population alone growing by over 150 million people which is the driving force behind the region’s growing energy demand. The Association of Southeast Asian Nations (ASEAN) and six other countries in the Asia–Pacific region comprising of: Australia, the People’s Republic of China, India, Japan, Korea and New Zealand forming the ASEAN + 6 group, whose share of global energy demand is expected to reach 40% by 2040 making this region the world’s most dynamic economically. Southeast Asia’s supply of energy comes from more than 50% of fossil fuels (led by oil, coal and natural gas) and 17% from renewables but the supply is now depleting fast as these countries have become net importers of oil rather than exporters since 2018. The region is also relatively well endowed with renewable energy sources particularly in hydro and solar and other types of renewable energy (such as geothermal found mainly in the Philippines and Indonesia). Although this region has set out a target to contribute 23% of its primary energy supply from renewables by 2025, conventional fossil energy still dominates the regional energy mix. Energy security has now become an issue as it affects Southeast Asia’s efforts to secure their energy requirements in a sustainable manner environmentally and economically. Continuous reliance on energy imports, especially of oil and gas, to sustain economic growth serves as an example of Asia’s energy insecurity. Natural gas security has also become a concern in the region, as it is expected to account for 85% of the growth in global gas trade between now and 2040. The energy impacts on environmental systems and climate change have strong links to energy security. More than 60% of global carbon dioxide emissions are produced from energy supply and transport. Continuing to subsidise the cost of energy to citizens over the course of the next ten years will not be sustainable. It becomes necessary to reform some present policies and formulate new policies to ensure the energy security of these countries. Governments in the region also need to employ alternative energy sources and collaborate to maintain energy security not only for their own countries, but for the rest of the region as well. Recent reports by the World Economic Forum (WEF) have favorably focused on ASEAN countries based on their current energy systems and readiness to adapt to future needs. This chapter therefore, discusses on the current scenario of energy in the light of climate change, sustainability in environment, energy security issues and economy in ASEAN + 6, barriers, possible solutions, and case studies of mitigation efforts as well as policies laid out and implemented with specific examples from Malaysia, Thailand, Indonesia, Singapore, Vietnam and the Philippines.

The history of civil engineering is marked by significant changes in focus and work arrangements. Organized after military engineering, civil engineering initially encompassed all nonmilitary infrastructure work. That neat division would soon become more complicated. As new technologies developed, new infrastructure applications were incorporated into civil engineering, such as railroads, airports, water supply, and wastewater treatment engineering. New social concerns also sparked changes in civil engineering work, such as new regulations for air and water pollution abatement. Engineering itself evolved into numerous distinct disciplines, including engineering specializations in biomedical, chemical, electrical, mechanical, metallurgical, and mining engineering. Civil engineers tended to work on larger spatial and temporal scales than other engineering disciplines. Civil engineers have been increasingly working in teams with multiple professions represented, such as architects, constructors, and other engineers. Computer-aided communications and engineering aids have revolutionized the framework for working in such teams. Civil engineering is also distinguished from other engineering disciplines by the importance of private–public interactions for regulation and ownership. The emerging shift to sustainable, clean, and renewable energy sources represents a major new challenge for our global society generally and for civil engineering in particular. In the past, civil engineering encompassed dams, hydraulic turbines, and transmission systems for energy provision. But this role is now expanding. New technologies will contribute to this shift, particularly for power generation, but there are important needs to make new infrastructure investments and better management decision making. Several factors are motivating a switch to sustainable energy sources (NRC 2009; America’s Energy Future Panel 2009). Many nations, including the United States, are importing a greater fraction of their energy sources, particularly petroleum for liquid fuels, and so energy security is a concern. Overall energy demand is increasing and so new sources of energy are being sought. The longterm availability of sufficient fossil-fuel energy supply is a major concern; for example, petroleum production in the United States already peaked around 1970, and a world peak is expected this century (Wood et al. 2004). Concern for the global climate change and the public health effects of fossil-fuel power generation place a premium on clean energy sources and energy efficiency. Numerous states have enacted requirements for renewable or alternative energy production (Pew Center on Global Climate Change 2010). Even though the switch will undoubtedly be relatively slow and fitful, significant changes are already under way in areas such as wind-power investments, where the worldwide growth rate in installed capacity has been as high as 30% per year (EIA 2010a). The growth of civil engineering coincided with a rapid increase in fossil-fuel extraction and use. Fossil fuels such as coal, natural gas, and petroleum have high energy density and are relatively inexpensive to extract. Ships switched from clean and renewable wind power to coal, oil and to a limited extent, nuclear power. Railway switched from the renewable wood fuel to coal and diesel. Electricity grids became widely available and facilitated a widespread development of water supply and distribution systems. Energy costs declined in real dollar amounts over the past few centuries. Indeed, inexpensive energy has been a major factor in overall economic development in the past two centuries (Ayres and Ayres 2009). However, the previously noted factors are working to decrease the role of fossil fuels and to increase the real cost of energy in the future. Moreover, the infrastructure that has evolved for this era of inexpensive, primarily fossil fuel energy sources must be altered for a new regime of sustainable energy sources. Sustainable energy is only one aspect of sustainable engineering (Graedel and Allenby 2010). Many other application areas are also important. For example, reducing the spread of toxic materials (including nanoparticles with health impacts) is a continuing concern. Better management of renewable resources such as fisheries, forests, and water is also important. Nevertheless, the pervasive use of energy in modern societies makes sustainable energy a priority. In the next sections, the characteristics of infrastructure for a sustainable energy future are discussed; the importance of a lifecycle perspective for planning, implementing, and managing this new infrastructure is emphasized; and in the concluding section, engineering management priorities for sustainable energy are summarized.

The Italian energy system is characterised by a high level of import dependency, especially regarding natural gas supply. A dominant role in the NG imports is played by Russia, that in 2013 accounted for 43.6% of the total. As a consequence, the political and institutional crisis between Russia and Ukraine could have significant effects on the energy supply to Italy. In order to analyse these effects, a forecasting scenario analysis was performed by using the TIMES-based optimization model developed under the 7th Framework Programme REACCESS, able to fully represent the energy corridors (both captive and open sea) supplying the European Union and to evaluate, in a quantitative manner, the risk related to each supply. The analysis was focused on the consequences of a disruption in the supply through the Dolina physical natural gas hub (located in Ukraine) by means of two scenarios: one considering the closure of the hub from 2015 and the other describing a 50% NG flow reduction through it in 2015. The assumed time horizon was 2010-2040, and the effects on the supply composition, on the total system costs, on the marginal costs of natural gas and on the CO2 emissions level were investigated. The results show that the unavailability of the Dolina physical hub causes more significant effects on the mid-long term supply composition than the reduction of the NG flows through it in 2015. In particular, a strong reduction of the Russian contribution in comparison with the baseline one, a simultaneous increase of the import of LNG from Qatar and a decrease in the total amount of the NG supply by corridors, due to a fuel shift phenomenon, can be noticed. In the same way, the Dolina closure scenario leads to major negative effects also from the economical and environmental point of view. This study highlights the main problems of a high import dependency from a major supplier (as in the case of natural gas imports from Russia to Italy, but the modelling tool allows for the assessment of any EU country security of supply) and underlines the need of a strong diversification in the supply composition

Construction and measurement of China’s comprehensive energy dependence index

A large part of the European natural gas imports originates from unstable regions exposed to the risk of supply failure due to economical and political reasons. This has increased the concerns on the security of supply in the European natural gas market. In this paper, we analyze the security of external supply of the Italian gas market that mainly relies on natural gas imports to cover its internal demand. To this aim, we develop an optimization problem that describes the equilibrium state of a gas supply chain where producers, mid-streamers, and final consumers exchange natural gas and liquefied natural gas. Both long-term contracts (LTCs) and spot pricing systems are considered. Mid-streamers are assumed to be exposed to the external supply risk, which is estimated with indicators that we develop starting from those already existing in the literature. In addition, we investigate different degrees of mid-streamers’ flexibility by comparing a situation where mid-streamers fully satisfy the LTC volume clause (“No FLEX” assumption) to a case where the fulfillment of this volume clause is not compulsory (“FLEX” assumption). Our analysis shows that, in the “No FLEX” case, mid-streamers do not significantly change their supplying choices even when the external supply risk is considered. Under this assumption, they face significant profit losses that, instead, disappear in the “FLEX” case when mid-streamers are more flexible and can modify their supply mix. However, the “FLEX” strategy limits the gas availability in the supply chain leading to a curtailment of the social welfare.