Securing energy supply in an uncertain world

Dr Nazrin Mehdiyeva, PA gas expert, is the author of 'Power Games in the Caucasus', which explores the growing importance of the region's oil and gas reserves in world energy markets. Here she considers how geopolitical and economic risk from around the world will influence European energy security.

In the aftermath of the Fukushima nuclear crisis, concerns over energy security are once again on the agenda of political and business leaders. In a recent report, the International Energy Agency estimated that by 2035, global gas demand could increase by 50%, to over 5.1 trillion cubic metres. Non-OECD states would account for the bulk of this growth.

Faced with dwindling indigenous production, security of supply in the UK and on the Continent will be increasingly influenced by geopolitical and economic risks emanating from further afield.

Events such as the ‘Arab Spring’, which has engulfed a growing number of states in North Africa and the Middle East, highlight the spontaneous, protracted and unpredictable nature of social uprisings - all of which has a disruptive potential for the world’s supplies of oil, gas and LNG (liquefied natural gas). Inter-state conflict could also be devastating, affecting not only the parties at war but also producer-states in sensitive geostrategic locations. 

Furthermore, Asia’s growing gas demand is an even greater source of uncertainty today than it was prior to the Fukushima crisis; its effect on Europe needs to be continuously and carefully monitored. An examination of geopolitical dynamics and the strategies of major producer states, such as Russia, is essential to assess the existing and future challenges to Europe’s security of supply.

Sound political and business decisions are often predicated on the correct understanding of the geopolitical and geostrategic challenges. PA is working with clients in the area of energy security to help identify and explain the sources of political, regulatory and economic risk, and to design strategies to deal with uncertainty today and in the future. 

Dr Nazrin Mehidiyeva's book 'Power Games in the Caucasus:Azerbaijan's Foreign and Energy Policy towards the West, Russia and the Middle East' is available now.

To find out how PA can help your organisation manage the challenges presented by uncertainty in energy security, contact us now.