Oil Supply Security Research Articles

ENVIRONMENTALLY SUSTAINABLE ENERGY FOR THE EAST ASIA/PACIFIC REGION: IMPLICATIONS AND OPPORTUNITIES FOR AUSTRALIAN OIL AND GAS EXPLORERS AND PRODUCERS

The oil and gas reserves of Australia and the East Asian region fall well short of the region's long-term requirements, even for a scenario that phases out all fossil fuels by the end of the 21st century. There is, therefore, no contradiction between vigorous exploration for oil and gas and the process of transition to renewable energy sources. However, to be an independent player in environmental policy-making, the Australian petroleum exploration industry should focus on its particular role within the energy sector as a whole, whose nature will change radically over the next several decades. This role will combine concerns over long term oil supply security with, in particular, the objective of reducing greenhouse gas emissions from oil and gas consumption to levels commensurate with Australia's international obligations. The role extends to Australian involvement in the region as a whole through the accrual of emissions credits from projects implemented jointly with developing countries. It also envisages that Australian explorers, especially those focussed on gas, will form alliances with downstream companies, power generators, appliance manufacturers and energy marketers as links in an integrated chain of operations with value added and emissions reduced at each stage. This re-orientation should lead the industry to question the extent to which its interests correspond with those of the coal and mineral industries, which do not face the same resource limitations.

On the Renewal of Concern for the Security of Oil Supply*

It seems curious that the security of oil supply would again emerge as a source of concern precisely when oil market conditions seem to be most favourable to oil-importing nations. We trace this development to the increased import volumes that have followed the 1986 collapse in the world oil price, and argue that concerns over the source of oil are of primary importance only in situations where physical availability is likely problematic. As the conception of security of supply is broadened, a distinction between random and strategic shocks is useful. Supply-side considerations, such as stockpiles, seem apt only to address the consequences of random shocks. As time horizons lengthen, supply-side measures lose their effectiveness, and demand-side considerations emerge as possible means of dampening the macroeconomic effects of future strategic shocks. Implementation remains an unresolved issue: the expected costs and benefits of specific interventions must still be compared.

Political trends in the Middle East: Their effect on the security of oil supplies

This article questions and evaluates perceived, notions concerning the relative stability, or other‐wise, of the Middle East and its effects on oil supplies. William Quandt traces major political flashpoints in the Middle East including the Arab‐Israeli Peace Process, Iran's and Iraq's political positions and Islamic movements, noting the effect of politics on oil supplies to the West. He speculates as to future political events which could influence the price of oil and concludes with the hope that the West will do everything in its power to minimise political unrest in the region, thus ensuring a steady flowing oil supply.

Oil resources for the next century: What's ahead?

Proven reserves of liquid hydrocarbons are now assessed at between 950 and 1,000 billion barrels, depending on the source. Their life expectancy at the current rate of world production is about 41 to 45 years. This lifetime is much longer than what was predicted in both 1970 and 1980. However, this wealth of resources does not necessarily mean that the security of oil supplies is guaranteed for all countries. Oil reserves are unequally distributed from a geopolitical standpoint. Reserves and output are mainly due to big fields (with more than 500 million barrels of initial reserves). Though oil supplies seem to be ensured for the coming 30 to 40 years, what does the picture look like beyond 2020–20307 The increased lifetime of proven oil reserves has been apparent only in the last 10 to 20 years. The considerable increase in proven oil reserves reported after 1986 is, in fact, mainly due to revisions and extensions, rather than to new sources of oil: conventional oil (with the price per barrel of oil on the order of $20 and recovery rate around 30 percent) remaining to be discovered today; oil resources stemming from an improvement in recovery rate; oil resources resulting from exploitation of new zones, such as deep sea zones; and unconventional types of oil, such as extra-heavy crudes, tar sands, shale oils, and liquid hydrocarbons from chemical-enhanced oil recovery methods.

Energy Policy in the European Community: Conflicts Between the Objectives of the Unified Single Market, Supply Security and a

Policies for energy and the environment in Europe were previously the preserve of national governments, but the Commission of the European Community has gained a role in both policy areas in the past few years. This was due to the 1987 Single European Act which, in effect, extends the writ of competition law throughout the energy and other previously excluded sectors, the desire to reduce acid rain and greenhouse gas emissions, and reaffirms Europe's renewed concern for long-term oil and gas supply security after the Gulf War and the disintegration of the USSR. The Commission's proposals for the unified internal energy market were driven by concern for competition and free market forces, and seemed to exclude any scope for long-term policy considerations. This paper argues that the implementation of those proposals will be uneven and protracted, and that the Commission's more recent proposals for reducing CO2 emissions and the European Energy Charter appear to mark positive steps towards a long-term strategy for a clean environment, energy efficiency, and oil and gas supply security.

The impact of the Middle East on Pacific oil and gas markets

The Gulf war solved few of the middle East's problems. Political uncertainty continues to place a brake on investment. The risk of oil supply security remains, but the risk of new Gulf export refining capacity and downstream investment in the Pacific area dominating and distorting these oil markets is very small. New gas exports to the Pacific may have significant impacts and help to draw the Gulf producers closer to the affluent Pacific basin economies.

Oil, Turmoil, and Islam in the Middle East, by Sheikh R. Ali

The turmoil and strife of the Middle East raises serious questions about the security of the world's oil supply. Oil, Turmoil, and Islam in the Middle East is a hard-hitting indictment of OPEC and OAPEC, arguing that these organizations can no longer afford to impose indiscriminate price increases on the marketplace because they hurt not only themselves but oil poor Third World nations, as well. The author analyzes the importance of Middle Eastern oil in world politics. He emphasizes that any consideration of the forces influencing development in the Middle East should take Islamic tradition into account. Each chapter is organized around a current Middle Eastern problem: oil politics in relation to international energy needs; the ramifications of the new oil wealth and power of the Middle East; the Iran-Iraq War; Muslim insurgency in Afghanistan; the Arab-Israeli conflict; turmoil in Lebanon; Palestinian nationalism; and the Middle East as a superpower.

The security of oil supplies

The security of oil supplies

Canada and hydrogen systems: An energy policy for a nation

The character of energy problems in Canada coupled with its abundance of hydro-resources and natural gas make hydrogen energy systems a particularly effective technological fix for several Canadian provinces. Tens of thousands of megawatts of prospective hydroelectric sites in Labrador, Quebec and across Canada as well as the construction underway for a pilot tidal power plant in the bay of Fundy could be dedicated towards hydrogen production. Which sites can produce how many billions of cubic feet of hydrogen per year are described. Adoption of hydrogen as an energy carrier will address fundamental difficulties in Canadian energy policy: 1. (1) dependence and security of foreign oil supplies; 2. (2) disagreement between the federal government in Ottawa and the provinces over ownership and/or control of energy resources; 3. (3) mixed blessing of the energy export relationship with the U.S.; 4. (4) environmental degradation from energy generation activities. Hydrogen technologies can expand the policy-space available to government decision-makers and are beginning to receive serious attention in Canada.

Canada and Hydrogen Systems: An Energy Policy for a Nation

Abstract The character of energy problems in Canada coupled with its abundance of hydro-resources and natural gas make hydrogen energy systems a particularly effective technological fix for several Canadian provinces. Tens of thousands of megawatts of prospective hydroelectric sites in Labrador, Quebec and across Canada as well as the construction underway for a pilot tidal power plant in the bay of Fundy could be dedicated towards hydrogen production. Which sites can produce how many billions of cubic feet of hydrogen per year are described. Adoption of hydrogen as an energy carrier will address fundamental difficulties in Canadian energy policy: 1. (1) dependence and security of foreign oil supplies; 2. (2) disagreement between the federal government in Ottawa and the provinces over ownership and/or control of energy resources; 3. (3) mixed blessing of the energy export relationship with the U.S.; 4. (4) environmental degradation from energy generation activities. Hydrogen technologies can expand the policy-space available to government decision-makers and are beginning to receive serious attention in Canada.

Japan

RUTH BENEDICT once wrote perceptively that Japan will seek its place with a world at peace if circumstances permit; if not, within a world organized as an armed camp. For the best part of 33 years since Miss Benedict wrote, Japan-under a constitution outlawing war, and also under the protective shield of the US nuclear umbrella-has sought a place in a world at peace with armed forces that neither match its economic muscle, nor provide any real security for the home islands, or for the vital sea lines of communication to them. Today, the gradual American withdrawal from the Far East, the Soviet Union's military buildup in northeast Asia, the tensions generated by the confrontation between China and the Soviet Union, and the deep fears about the future security of oil supplies have brought about striking psychological changes in Japan's attitude toward defense. The debate is no longer over whether Japan should have armed forces, but rather to what extent it should be prepared to expand and improve them. Today, of a total ground force of 168 divisions, the Soviet Union has 44 divisions deployed along the Sino-Soviet border. More than 30 of them are east of Lake Baikal, particularly in the horseshoe-shaped region around China's northeast. These forces have recently received large numbers of new weapons, such as T-62 tanks (with 115mm guns), BMP-76 armored personnel carriers (76mm guns and antitank missiles), BM-21 multiple rocket launchers (122mm, 40 barrels), and FROG-7 tactical nuclear weapons. At the same time, there has been a consistent quantitative and qualitative buildup in air and naval power. The twin-jet Badger bomber is being replaced with the supersonic, longrange Backfire bomber, with bases on Kamchatka; and the MIG-17s and MIG-19s are giving way to MIG-23s, MIG-25s, and SU-19s.

CURRENT REFINERY PROBLEMS AND ISSUES IN PETROLEUM IMPORTING DEVELOPING COUNTRIES

This article discusses the problems facing refinery operations in developing countries and possible solutions to them. The topics covered include security of crude oil supply to the developing countries; difficulties encountered in development of indigenous expertise in refinery operation; refinery capacity and the special problems of maintenance and repair facing refinery operators in the developing parts of the world; and the potential for improved refinery operation through increased international co‐operation.

The Future of Oil: A Rejoinder

This paper is a rejoinder by Professor Peter R. Odell to 'The future of oil' by H. R. Warman which was published in the September 1972 issue of this Journal. The paper presents an alternative interpretation of the nature and size of the world's proven oil reserves, their likely appreciation over time and the oil industry's ultimate resource base. It concludes that there is no evidence that there will be any physical shortage of oil to meet the world's needs over the next 50 to 60 years. The paper is followed by 'Further remarks on the future of oil' by R. D. H. Simpson which comments on Professor Odell's conclusions. IN his article, 'The future of oil' (Geogrl J. 138, 3), H. R. Warman justifiably observed, 'in our energy hungry society oil has assumed a dominant role with its future affecting economics, politics and the patterns of life' (p. 295). It is because oil has come to fulfil this role that, as with the question of war which is too important to be left to the generals, the future of oil is similarly too important to be left only to the oil companies. Hence this lengthy rejoinder on a subject which needs to be opened up to more general debate. During the past two decades of very high annual rates of increase in oil consump? tion in Western Europe, Japan and elsewhere, the spectre of the imminent danger of the exhaustion of conventional oil resources has often been raised?particularly by spokesmen for coal industry lobbies anxious to find arguments in favour of the pro? tection of indigenous but high cost coal (Odell, 1963). Until very recently, however, such arguments were constantly derided by the oil industry whose spokesmen were emphatic in their response that no restraint should be introduced on the growth of oil demand and who pointed out that the argument for limitation emerged from generally inadequate and incomplete evaluations of the nature of the oil resource base. In as far as the resource-exhaustion spectre was raised largely on the basis of a comparison of the current year's oil production with the so-called proven reserves of oil, the evaluations could certainly be described as inadequate and incomplete, for such proven reserves represent nothing more than the working stock of the oil indus? try. Thus, proven reserves can only be defined as a function of the demand for oil, given the fact that proving it is so expensive that no one?neither companies nor governments?has any incentive to undertake the task merely to show that the world, or a particular part of it, is oil rich. Oil is sought?and found?because oil companies and state entities have to make long-term investment and infrastructure plans to produce, transport, refine and market the oil they expect to sell and thus must have a firm idea as to where their crude oil supplies are to come from over the next ten years. Moreover, given their expectation, based on their experience over the period since 1945, that the demand for oil will build up year by year they know that the reserves available to them on which to justify such long-term investment must be equal to about 15 times the current annual level of consumption. This, in theory, sets what might be termed the overall optimum level for proven reserves. In practice, in a world of less-than-perfect mobility for the trading of commodities and divided into hostile or potentially hostile groups, the search for security of oil supply will necessitate the discounting of the apparent availability of some resources and the discovery of others in areas on which greater strategic and political reliance can be placed. This is one of the two main reasons why the optimal reserves/production (R/P) ratio has been greatly exceeded throughout the post-war period (Fig. 1). It should be noted that it was not generally exceeded before 1940 when the proven reserves of the ^ Professor Peter R. Odell is Director of the Economisch-Geografisch Instituut, Nether? lands School of Economics, Rotterdam,