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Lesson 6 - Energy Pathways

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by

Luke Hopper

on 13 November 2014

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Transcript of Lesson 6 - Energy Pathways

To start
Key Terms - you need to know
Define these...

Energy Infrastructure

Energy Pathways

Transit State

Geopolitics
ESPO - completed 2010
In June 2009, Russia and China signed a deal to built the spur pipeline to China by which Russia supplies China with 15 million tonnes of oil (300,000 barrels per day (48,000 m3/d)) each year for 20 years in exchange for a loan worth US$25 billion to Russian companies Transneft and Rosneft for pipeline and oil fields development
This is a matrix -
Pros to the right, Problems to the left
Let us assess the current situation of energy pathways in the world.
USE PAGES 16-19 TO HELP YOU COMPLETE THE MATRIX.
Main Oil and Gas Pipelines in Europe
Possible Answers
Energy Pathways
Lesson Aim:
To understand how energy pathways, between producers and consumers, are complex and show increasing levels of risk.


Question time...

Using named examples, evaluate the economic and political impacts of disruption to energy supply pathways (15).

What your answer could include:
Energy supply pathways include any movement of fossil fuels or electricity from supplier
to consumer.
This includes pipelines for oil and gas, e.g. across Europe and Central Asia, or Alaska as
well as offshore to onshore. Also electricity grids and transboundary grids such as the UK
interconnectors to France and Belgium. It also includes shipping routes for oil, coal,
uranium and LNG. Pathways can also be internal, such as the disruption caused by the
fuel price protests in the UK in 2000.

Disruptions can occur for a number of reasons such as accidents, e.g. the 2010 Gulf oil
spill (and possible knock-on effects for wider offshore drilling), natural hazards e.g.
hurricane Katrina, Japanese tsunami; political and economic decisions such as the
Ukraine / Russia disputes in 2006 and 2009, terrorist attacks and piracy especially at
choke points. The current Iran situation and the Straits of Hormuz might be referred to.
Price hikes such as the 1973 oil crisis or recently in Nigeria can also effectively disrupt
supplies.

Impacts include:
Economic
· Oil price has spikes contributing to rising costs and even recession.
· Increased costs for industry, which leads to inflation and rising prices. People
spend proportionately more on energy and less on other goods. Fuel / energy
poverty.
· Slow down in development, e.g. in South Africa and India due to lack of electricity
supply (poor long term planning); deterring investment.
· The need to develop alternative routes, e.g. the Nabucco and Nord-stream
pipelines.
Political
· People may take to the streets if they feel they cannot get, or afford, energy, e.g.
fuel protests in UK 2000
· Undermining of the authority of governments.
· Escalating conflict (diplomatic or actual) over energy suppliers, e.g. Russia and
Ukraine.
· Pressing need to search for new sources e.g. new pipelines, domestic resources
which could increase conflict (ANWR, biofuels, wind)
· Some might argue that because of the risks, energy prices are kept artificially low
by subsidies e.g. in India, the Middle East.
Better answers may make judgments about how serious the impacts are e.g. political –veconomic,
or when disruptions are local/ internal –v-international.
Credit other impacts and examples.
Now read the article I have given you regarding disruption of energy pathways - note down what the energy key pathways are and how they have been manipulated or effected in the past (politically, economically).
Construction of the pipeline started in April 2006.
On 29 May 2003, Russia and China signed an agreement on construction of the pipeline.[3] On 31 December 2004, the Russian government approved the construction of the pipeline from Taishet in East Siberia to Pervoznaya in the Pacific region. Finished 2009
Use what you have learnt about key energy pathways around the world as well as the EPSO.
Russia-China: Both financed the EPSO. China large consumer of Russian O&G.
Russia-Japan: potential customer (China depending)
Japan-China: Constant geographical tensions. Will be disappointed with China´s access to these supplies.
Middle East- Russia: Both competing for these markets. EPSO will be a threat to their dominance.
Russia-Europe: Ukraine disputes 2014 & 2006 gas war, insecurity of supplies. Belarus has previously cut off supplies. Germany a large consumer of Russian Gas. Is Russia manipulating oil and gas for its own benefit in Europe? 23% of gas consumption from EU provided by Russian supplies.
Middle East-Europe: Constant political and ideological tensions. Conflict has a big impact on supplies. Gulf War. Iran has indicated it could block the main shipping route - Strait of Hormuz.
Japan-Europe: Competition for supplies.

Energy Pathways
These can be complex and exhibit levels of risk. As major energy consumers have had to search further for supplies of resources, the supply line has become longer.

They more vulnerable to economic, environmental, political and terrorist disruption.

There are growing concerns about protecting this growing maze of energy infrastructure.
Factors which make pathways vulnerable
Energy Pathway
The flow of energy from producer to consumer
Oil
Gas
Middle East exports the most oil - followed by Russia, then South America.

Europe exports very little.
Main Gas pathway is through the trans-Siberian pipeline in to Eastern Europe.

New pipeline being planned.
Geopolitical connections between countries - eg: Russia and Ukraine

War - Eg Gulf War and Iraq War

Strikes by energy workers

Damaged infrastructure from natural disasters

Disintegration of infrastructure

Terrorism
Read the following article about China and the solidification of this agreement!
How important is this pipeline to Chinese Energy Security?

How important is the ESPO to ensuring economic stability for the power?

What roles does securing energy pathways play in political stability?
http://www.bbc.com/news/business-29976419
Full transcript