Energy Security: A Multivariate Analysis of Emerging Trends and Implications for South Asia

Introduction

Energy security has not yet attained a foremost or precise definition, but it achieved salience in the twenty-first century. From the view point of a consumer and net importer of energy sources, energy security denotes the right to use reliable sources of energy at competitive prices produced by an environmentally sustainable and safe means. It also includes absence of physical disruptions and volatile increases in prices. On the other hand, energy security is in the perspective of a producer and net exporter of energy resources signifies the security of supply as well as security of demand. In the words of Winston Churchill ‘safety and certainty in oil lies in variety and variety alone’ (Witton 2010, 3). The concept of energy security is different from country to country and also differs from one period to another. For Russia, it is the reassertion of state control over strategic resources and transport channels of their energy sources to international markets. In the case of Japan, it is the strive to compensate the scarcity of domestic resources through diversification, trade and investment and the developing countries’ concern is about the impact of fluctuating prices on their balance of payments. When taken into account of India and China, both fast growing economies, energy security is their ability to rapidly adjust to their new dependence on global markets; it represents the deviation from their earlier commitments on self sufficiency (Yergin 2006, 71).

A traditional description of energy security accentuates that minimizing US vulnerability to supply interruptions and price increases. This approach to energy security is insufficient for the reason that it does not capture the additional rationales for sinking consumption of oil in order to restrain the flow of resources to unfriendly governments and to diminish the adverse impact on the world’s climate (McComas 2007, 15). Another view on the traditional thinking of energy security is state-centric, supply-side biased, tremendously focused on oil and tends to equate security with self sufficiency (Downs 2004, 23). Energy security has crossed the threshold to the international scene amid the oil shocks of the 1970s and ever since the oil shocks it has been viewed only just as a reduced dependence on oil consumption and imports, particularly in major oil importing countries but this view has been distorted due to the increase in number of suppliers, proven reserves, transparency in prices and market liberalisation.

Over 80 per cent of the global energy used by human beings is still derived from fossil fuels and the International Energy Agency (IEA) anticipates that this proportion will remain quite constant for a few decades to come. In this sense, energy security has both economic and geopolitical value—the implications on human agencies such as investors, technologists, consumers and foreign governments to dominate the scene and strategic withholding of energy to use oil as a weapon for the military, industrial and economic purposes by challenging the security of consumer states (Mulligan 2010, 79). For the business community, energy security means confidence in its enduring ability to access reliable and affordable energy at its operating field. Secure and reliable energy supply and infrastructure favours feasible, competitive and productive business and it is significant not only for day to day operations but also for long term investment (ICC 2007). According to the International Energy Agency (IEA) energy security consist of security of energy supplies, rational management of the world’s energy resources and also the protection of the environment. IEA officials are keen to promote an international cooperative approach to the question of energy security (Winrow 2009, 438). The latest thought on energy security was elucidated by Chinese President Hu Jintao during the G-8 Summit at St. Petersburg in July 2006. He propounded that there is a need to develop and implement a new energy security concept for the global energy security that should be based on mutually beneficial cooperation, diversified forms of development and common energy security through coordination (Fengying and Jiejun 2008, 52).

From these perspectives on energy security, one can assume that energy security is a relative concept because it is impracticable to achieve full security on any realm. It is unfeasible to achieve total energy security. Anyway, in the observation of Daniel Yergin (1988) the purpose of energy security is to guarantee adequate, reliable supplies of energy at reasonable prices and in ways that do not endanger major national values and objectives. At the same time it includes the sovereignty and usual performance of the economy. In the recent panorama, energy security has been viewed on the basis of tangible dangers like political tensions, hike in energy prices, terrorism, increased demand from the emerging economies of China and India, the role of market speculators, lack of equitable distribution between major powers occasionally at the expense of less developed countries, large-scale environmental and social side effects of energy sources including climate change by carbon dioxide from fossil fuels, or the spread of nuclear bomb materials by nuclear energy technology (Marcus 2011, 71).

In a wide spectrum of economy, energy security has different dimensions according to economic, environmental, social, foreign and technological progress which differ from country to country, and also from one region to another. In addition, the rationale of examining energy security status of an economy in an event of exogenous price or quantity shock is that the ability of the economy in absorbing and adapting to the shocks with the existing structure of the energy consumption and production technology, the trade patterns, and the possibility of substituting away from fossil fuels by alternative energies (Lin, Feng and Ko 2011, 3).

According to Gavin and Lee (2007), governments have espoused ‘strategic’ and ‘market’ approaches to enhance energy security. The ‘strategic’ approach comprises maintenance of physical energy supplies by enhancing political links with energy exporters, guaranteeing safe delivery of energy supplies, promoting foreign investment and overseas development aid and increasing control through national, state-owned oil companies. According to the ‘market’ approach, energy security is improved through the efficient functioning of national and international markets which reduces the dependence on imports by improving efficiency of energy use, emphasising on the liberalisation of domestic energy markets to reduce energy costs, promoting investment in new and renewable energies to replace fossil fuels, improving flows of information plus strengthening the robustness of markets to achieve a long term equilibrium between demand and supply. When it comes to the practical level, a combination of both approaches is necessary to guarantee energy security and sustainable economic development because one of them alone cannot achieve a pleasing height of energy security.

The World Energy Assessment 2000 put forward diverse options to supplement energy security. It consists of the following: dependence on local resources and improvement of end-use efficiency to evade excessive imports; divergence of suppliers and energy forms; composition of international agreements between importing and exporting countries and between energy importing countries for nurturing political stability; persuading infrastructure and technology transfers to developing countries for mounting the competence of local resources and pick up energy efficiencies; and intensifying the national and regional strategic reserves of energy sources by means of augmented investment and superior exploration technologies (UNDP et al. 2000, 13).

Regional cooperation will facilitate the developing countries to engage with each other to cooperate in the energy arena to provide energy security to the whole region. On this assumption Kohli (2011) suggests five measures that can contribute to the energy security of a region: (a) establishing bilateral or multilateral agreements to develop untapped energy resources on a build-and-buy basis; (b) perusing non-fossil fuels such as nuclear, solar, wind and biomass fuels; (c) using available energy sources more efficiently; (d) spreading the energy security risk by diversifying the sources and the import mix; and (e) increasing efforts to discover more fossil fuels more efficiently. Regional and multilateral cooperation between states is of fundamental importance in ensuring energy security.

In the case of the South Asian region energy security condition is acute, where energy sectors typically grow by 2–3 per cent over the GDP growth rate simply to sustain the economy. Energy use is directly connected with the economic growth and other vital developmental parameters (RIS 2008, 115). The economic development of South Asia has begun to hasten during the last few years, with Gross Domestic Product (GDP) per capita upward at about 6 per cent per annum. In accordance with this economic growth, the energy use of South Asia has been increasing at over 5 per cent per annum and expected to double by 2020 (Siddiqi 2007b, 2). South Asia has the highest levels of energy consumption per unit of GDP even though it continues to average among the lowest level of per capita energy consumption of the world. To meet up to the growing aspirations of the people and economies of South Asia, each of the countries is under massive social and political strain to secure reliable, sustainable and reasonably priced energy supplies to meet the escalating demand for commercial energy. Energy security is thus no longer merely a catchword but an irrefutable reality for vital economic development throughout South Asia. Regional energy cooperation will facilitate a more comprehensive, cost-effective and sustainable set of solutions to face the challenges of energy security (Pattanaik 2006, 139).

South Asia is not well bestowed with fossil energy resources, especially oil and natural gas. The 2006 estimates show that proved oil reserves in South Asia were only 6.2 billion barrels of oil, equivalent to around 0.5 per cent of world reserves. South Asia’s proven natural gas reserves were projected as 81.3 trillion cubic feet, roughly one per cent of the world total. The chief constituent of power generation in South Asia is thermal power plants and conventional thermal power plants contribute almost 81 per cent of the total generation capability of the region. The remaining part of the power generation is shared by hydroelectric plants, nuclear plants and renewable-based plants. South Asia’s current net energy import in its total energy use is about 19.4 per cent in comparison with other regions of the world (RIS 2008, 118–119). Fuel wood, agricultural waste and animal waste are the forms of biomass used as primary fuel for the majority of poor people of the region although the spread of electricity and the penetration of fuel products for lighting and cooking has led to a gradual reduction in the share of biomass in the urban areas. A majority of the imported oil products are utilised for the transportation sector as well as to meet some urban cooking requirements (SARI/ENERGY 2009).

Low access to energy and their high costs seem to be major restraining factors inhibiting the future growth of South Asia. It is expected that the energy deficiency situation can be overcome with high-quality regional energy cooperation and through the exploitation of available resources optimally such as river waters in the high Himalayas, wind energy along coasts, natural gas and other hydrocarbons. In addition, pipelines from neighbouring energy surplus regions will need to be cooperatively developed; for instance, Myanmar in the East and Central Asian Republics (Kazakhstan, Turkmenistan and Uzbekistan) and Iran in the west will contribute to the region’s energy security. Nuclear energy is another option that could be tapped to reduce carbon emission levels (Banerjee 2008, 13).

In many under-developed countries the problems of terrorism, organised piracy and military blockades are main obstacles in the process towards securing energy supply at reasonable costs in a sustainable manner. Energy insecurity impinges on countries in dual ways: they undermine productive activities as well as consumer welfare and it puts a damper on investors by threatening production along with increasing costs. One way to improve energy security in any country is to cut down its carbon intensity and energy intensity ² (AGECC 2010, 7, 9). The threats to energy security like oil price volatility and physical supply disruptions can be addressed with advanced fossil energy technologies and pursuing opportunities to diversify the supply base for fuels.

The global energy trade mould moves from primary to secondary energy forms which improves trade flexibility and lowers energy security concerns. A number of developing regions stumble on exporting of secondary energy forms like methanol, biofuels and hydrogen as a staple source of income (Nakicenovic 2000, 358). Methane gas (chemically the same as natural gas) from anaerobic digestion ³ is considered as a clean source of energy with multiple purposes—it is used for producing heat and electricity, for its application in sewage treatment plants and food processing plants, for the conversion of food waste to energy and can be injected into the natural gas pipeline (Focus on Energy 2008). Development of methane clathrate hydrate technology and synthetic fluid fuels through polygeneration strategies by using petroleum residuals, natural gas and coal as feedstocks depending on local resource endowment could lead to improved energy security for a number of economies that heavily depend on imported hydrocarbons but have large off-shore hydrate deposits, such as India, Japan, the Republic of Korea, Taiwan and China (Williams 2000, 277).

Desirability of diversifying sources of energy supplies will lessen the dependence on the output of any single producer. Therefore it becomes the founding principle of energy security and global shortages of energy origins from the unevenness of supply and demand as of highly fluctuating energy prices. The potential threats such as conflict, sabotage, disruption of trade, uneven distribution of fossil fuels and reduction in strategic reserves point to the necessity of strengthening global as well as national and regional energy security. At the global level, it is pivotal to ensure sufficiency of resources; at the national level, it must be made certain that the availability of all energy consumption requirements are at all times from indigenous sources, imports or from stocks; and at the regional level, proper networking of trade could take place and consumer demand should be satisfied. The scarcity of fossil fuels, concentration reserves in a few areas and ownership of the minority exposes the vulnerability of the existing energy model and any disruption thereby brings unprovoked crisis in world economy and geopolitical dangers. Energy security is a universal issue and energy resources are crucial components of various countries’ foreign policy. Intensifying global energy use directs to greater interdependence between countries to achieve energy security, which highlights the notion that energy is ever more an attractive constituent of geopolitical relations (Sarkar 2009, 288).

In 2006, the Mckinsey Global Institute found in its study that the growth rate of energy demand around the world could be decreased to a half by 2020 as a result of using readily available technologies such as compact fluorescent bulbs, solar water heaters and efficient insulation on new constructions that would not take away the comfort of our lifestyle (Peacock 2010, 52). The advocates of the peak oil theory saw a contraction in petroleum supplies, innovations in oil production and new sources that can be developed. But the new energy optimists propagate that potential resource availability coupled with extractive technology and sufficient investment and relaxation of environmental regulations proclaim a golden age of fossil fuel production that will be enough for all mankind’s future energy needs (Klare 2012, 25).

Energy Security for Sustainable Development

Energy security can provide sustainable development from the beginning to end by means of ensuring the accessibility and availability of energy at all times on various forms with sufficient quantities at affordable prices. Ample energy supplies for the whole world as well as for national economies are indispensable to secure human wellbeing along with sustainable development. Importing countries are anxious to ensure security in quantities and forms required by the economy and society from sustainable sources and exporting countries are anxious to export to guarantee sustainable income. Primarily, the end uses of energy and the services that energy provides must become instruments for advancing sustainable development that should be economically viable, need-oriented, self-reliant and environmentally sound (Goldemberg, Johansson, Reddy and Williams 2001, 330).

One of the building blocks of energy sustainability involves reining in emissions of greenhouse gases from energy use while providing adequate energy supplies to meet the requirements of the developing and the developed world (Benson and Orr 2008b, 297). Attainment of sustainable economic development on a global scale requires the diversification and use of local energy resources, technologies, proper economic incentives and strategic policy planning at the local and national levels. If the biomass resource potentials could develop in a sustainable way with export capabilities in a large number of countries, the right infrastructure is put in place and the expansion of markets and international trade guarantees an upgrading of energy security in comparison with the currently concentrated mineral oil supplies in the world (Faaij 2009, 394).

According to natural, geographic and meteorological conditions of a state, alternative and renewable energy sources (RESs) can be firewood and wood waste products, water resources, wind-driven potential, biogas from cattle breeding wastes, solar energy, phytomass, solid domestic wastes, plant growing wastes and geothermal resources. Different kinds of these renewable energy resources complement each other and taken together they can contribute to the sustainable development and energy security to nations. Yet again, the wide use of these energy sources will be beneficial for every region and the work on the use of RESs with the intention of exporting in the future will promote the development of their own technologies. And these sources are pollution-free, thus contributing to environmental protection. The development of such sources will raise the energy security of nations (Bull and Billman 2000, 230; Kundas, Tarasenko, Pazniak and Gishkeluk 2007, 282).

Many accept the fact that both mitigation of climate change and sustainable development require reallocation of renewable energy sources and nuclear energy sources (Williams 2000). Renewable energy is more expensive compared to hydrocarbons, though it improves the security of energy supply by increasing the share of domestically produced energy, diversifying the fuel mix and the sources of energy imports and increasing the proportion of energy from politically stable regions as well as creating new jobs and it emits few or no greenhouse gases that bring significant air quality benefits (Tremeer 2007). Hydropower, biomass combustion, solar water heating and geothermal technologies are commercially viable in many situations and the principal impediment to the wider commercialisation of these technologies is their higher cost compared to conventional technologies and their short term variable character.

An ecologically oriented energy policy gives new prospects for renewable energy plus a cost effective option in the long run. But high capital investment requirements, difficulty of access to small scale loans and customs and tax policy-favouring fossil fuels, etc. impede the dissemination of renewable energy. Simultaneously, energy efficiency and renewable energy are vital to sustainable development, combating climate change, achieving energy security and promoting economic development. Take into account that for the last 15 years, wind energy has experienced an average annual growth rate as high as 25 per cent, a 50 per cent leap in the solar photovoltaic generation capacity in the recent years, biodiesel production has doubled each year since 2004 and technologies like hydropower, ethanol and solar hot water marked a fast growth (GTZ 2007; Sklar 2007). Thus, renewable energy is an apposite option for decentralised energy systems. It can help diversify the sources of supply for energy demand by providing energy that is clean, sustainable and generates no or little greenhouse gases.

The rise in sea levels due to global warming severely threatens the existence of the tiny island country Maldives which is the only state so far committed to totally discarding fossil fuels. The plans to achieve the goal of zero carbon by 2020 comprises large wind turbines, half a square kilometre of rooftop solar panels, biomass plant burning coconut husks and battery banks to act as a backup storage. They hope that this new energy infrastructure will generate power for homes, business and vehicles. Thus it will attain the declared aim to become the world’s most eco-friendly country (Worth 2010, 17). The expansion of renewable energy sources and an increase in energy efficiency proposes the other way to satisfy growing energy demands, diversify national energy sources and reduce dependence on energy imports, further boosting local economic development with green technologies and products (Netzer and Steinhilber 2011, 12).

South Asia is a region with abundant renewable energy resources. So cooperation for exploiting renewable energy sources is vital to its energy security and sustainable development. Most of South Asia is exposed to sunlight, but photovoltaic (PV) technology is generally too expensive for regional applications in South Asia. PV panels are suitable for remote areas where it may be cheaper than alternatives such as diesel. Wind potential in much of South Asia is largely inaccessible at this time, except in India, the world’s fifth largest wind power market. An agricultural residue, bagasse, a by-product of sugar cane, is being used as fuel in the transportation sector in India. India is a potential producer of biofuels in the world. Thus, other South Asian countries can also exploit India’s experiences and successful ventures. Probably the most promising of other renewable sources is biomass, if it were produced and used in sustainable ways (RIS 2008, 126).

All of the countries in South Asia are attempting to exploit the large-scale commercial use of biomass energy in an environmentally friendly fashion. In addition to the substitution of liquid fuels by natural gas, many countries are exploring the possibility of biofuels as partial or full replacement of petroleum-based fuels, which up to now have dominated the transportation industry. There are two types of biofuels: ethanol and biodiesel. It is estimated that about 68 per cent of the alcohol produced globally is used as a transportation fuel, either as power ethanol or as an extender of petroleum fuels. In Brazil, 12 billion litres are used each year in the transportation sector, and the USA uses about 8 billion litres annually (SARI/ENERGY 2009). The South Asian region relies heavily on non-commercial energy. Biomass, fuel wood, animal waste and agricultural waste are the primary traditional non-commercial sources of energy that meet most of the demands of the rural areas in the region. The share of these sources is on the decline as commercial fuels gradually replace them. Usage of commercial energy in the region accounts for barely 5.9 per cent of world’s commercial energy consumption. The commercial energy mix of South Asia is 47 per cent coal, 33 per cent petroleum, 12 per cent natural gas, 7 per cent hydro power and one per cent nuclear power (Sami 2008, 143).

It is better for all on the planet and for the energy industry to invest in a massive, rapid expansion of alternate sources of energy, especially renewables like solar, wind, geothermal and advanced non-edible biofuels. These sources are not derived from finite materials like oil, natural gas and coal but are infinitely replaceable and release very little or no carbon in their operation (Klare 2009, 30). In South Asia, non-hydroelectric renewable capacity—that is, wind, solar, ocean, biomass and geothermal—is small at present, but is increasing, with wind power considered the most promising. The dependence of South Asia on renewable energy sources will help to ensure energy security along with sustainable development.

The 3E’s—energy security, economic development and environmental protection—are considered as the criteria for energy efficiency involving fuel diversity, supplier diversity, sound transmission and distribution infrastructure, efficient conversion and delivery technologies, and low and zero carbon technologies. Producing and delivering secure and environment-friendly sources of energy and increasing the efficiency of energy use might advance sustainable development in the energy supply sector (OECD 2007, 9).

Nowadays, hydrogen is extensively looked upon as one of the potential energy solutions capable of assisting issues of environmental emissions, sustainability and energy security which has the potential of providing energy for transportation, storage systems, distributed heat and power generation. Hydrogen can be used as storage medium for electricity generated from intermittent renewable resources such as solar, wind, wave and tidal power, thereby providing a solution for the intermittency of sustainable energy supply. The energy storage capacity of hydrogen provides the potent link between sustainable energy technologies and a sustainable energy economy. Hydrogen is the energy source with little or no impact on the environment both locally and globally, so it is considered as a green fuel (Edwards, Kuznetsov and David 2007, 1043–1044). There is a widespread consensus on the crucial role that hydrogen as an energy source can play in the future energy model. In this context, there is an opinion to use fossil fuels to produce hydrogen, thereby pushing the problem of energy scarcity and environmental degradation aside by mitigating rather than completely resolving it. The use of hydrogen could act as a complementary and integrated energy source in order to build up a stock of available energy from discontinuous ways of renewable energy sources such as wind and solar power (Borghesi, Vercelli and Verdesca 2005).

Energy Security to Tone Down Climate Change

In 1827, the French scientist Jean-Baptiste Fourier traced the phenomenon of the greenhouse effect, in which atmospheric gases trap solar energy, increasing the earth’s surface temperature. In addition to this, in 1896, the Swedish chemist Svante Arrhenius blamed the burning of fossil fuels for the generation of carbon dioxide liable for climate change. The temperature variation on earth in the twenty-first century may lie between a minimum of 1.4°C and a maximum of 5.8°C, depending on the level of stabilisation of carbon releases, the swiftness of de-carbonisation of the international economy and the model of demographic and economic growth (ICLEI et al. 2009, 10). Global climate change is accelerated by the burning of fossil fuels, which restricts the decision-making freedom of future generations and immediate endeavours are required to tackle the backdrop of a growing international energy demand. Far reaching actions are vital to ease carbon emissions into the atmosphere so as to maintain climate change within a range that nature can adapt to and to meet already existing impacts of climate change with glaciers melting, sea ice disappearing, deserts advancing, wildfires stripping vast areas and rolling extreme climate events. This might lead to a sea change in the way we live and the way governments regulate our activities, particularly in relation to industry, transport and buildings. To achieve the designed target on the issue of climate change, countries and markets should be equipped to stimulate opportunities in low carbon and energy efficient investments across the globe and requires a massive hike on investment in renewable and clean energy sector.

Climate change and energy security have emerged to become two of the chief navigators of energy policy on various countries in the last few years. D. Jhirad, the then Vice President for Science and Research at the World Resources Institute, uttered the observation that energy security and climate change would need intertwined solutions. He put across the analysis that energy is the life force of rural areas and vital to economic development as it impulses healthcare utilities, education and telecommunication. At the same time to abscond just about two billion people in poverty is not a recipe for the political, energy and ecosystem stability that would overcome through ensuring energy security by opening up means that reduce unhealthy emissions. For instance, in India, energy security is the core element for shifting from fossil fuels to carbon-free fuels because India currently imports 70 per cent of its oil and over the next 15 years that would grow to nearly 100 per cent. The focal point is to find out realistic lanes that the global community can work within, to control carbon emissions without hindering the economic progress of developing nations, to pick up energy security and build up ways to acclimatise and mitigate the effects of climate change (Warner et al. 2006, 4).

The phenomenon of climate change is mainly due to the constantly increasing atmospheric concentrations of the key greenhouse gases—carbon dioxide (CO₂), methane (CH₄), halo-carbons, tropospheric ozone and nitrous oxide (N₂O) in the last 250 years since the beginning of the industrial revolution (Bolin 1998, 350). The United Nations Framework Convention on Climate Change, adopted at the Rio Earth Summit of 1992, and the Kyoto Protocol signed by more than 160 countries in 1997, both called for major reductions of greenhouse gas emissions which are caused largely by energy use. The sector of electrical power production accounts for about 27 per cent of global anthropogenic CO₂ emissions and constitutes the fastest growing source of greenhouse gas emissions. On the basis of government policies and measures enacted or adopted by mid-2009, the World Energy Outlook 2009 of IEA estimates that in 2030, the world’s primary energy demand will be 40 per cent higher than in 2007 and 77 per cent of the worldwide energy demand increase will be based on using fossil fuels despite the fact that 1.3 billion people still lack access to electricity in 2030. Whereas it suggests that energy related CO₂emissions need to peak globally by 2020 at 30.9 gigatonnes (Gt) and then decline to 26.4 Gt in 2030 to avoid irreversible damage to global climate and ecosystems (UNDP and UNFCCC 2010).

The two principal human-caused troubles associated with climate change operating at the global scale are the energy-related emanations of heat-trapping greenhouse gases with long atmospheric residence times and the depletion of stratospheric ozone as a result of discharges of chlorofluorocarbons and related compounds. Regional patterns of temperature variation across the earth’s surface and vertical patterns of temperature disparity in the atmosphere endow with further evidence of human-induced global warming. Climate change and the resulting sea level rise can have a number of downbeat blows on energy, industry and transportation infrastructure, human settlements, the property insurance industry, tourism and cultural systems and values. Energy systems generate two-thirds of human-caused greenhouse gases and climate change is feared to have been bringing about noteworthy direct impacts on human health as well as on the earth’s ecosystems (Holdren and Smith 2000).

According to the ADB (Asian Development Bank 2009), energy efficiency is essential for slackening growth in fossil fuel demand and upward pressure on energy prices, enhancing energy security, tumbling emissions of greenhouse gases, easing fossil fuel consumption, improving public health and inducing commercial savings. This can be achieved by improved vehicle efficiency, better urban planning, increased use of new and renewable energy sources, use of alternate fuels and greater emphasis on demand side management. It is one of the most effective ways of meeting energy demand and increasing the efficiency of energy use and supply which will yield more service value from each primary energy unit consumed as well as huge environmental and economic benefits. It is a fact that there is no energy production or conservation technology without risk or without waste. Burning of fossil fuels for electricity and heat generation, transport and industry is the main source of greenhouse gas emissions and easing global greenhouse gas emanations is the remedy for the effects of climate change (Augutis, Kriktolaitis, Peciulyte and Konstantinaviciute 2011, 6).

The use of fossil fuels—coal, oil and natural gas—can be made more climate-friendly through two primary means: CO₂ capture and storage (CCS) at power plants and industrial facilities, and substitution to lower-carbon fuels in power plants and industry. CCS is the mechanism applied to reduce CO₂ emissions from the use of fossil fuels which has two approaches—CO₂ is captured directly from the industrial source, concentrated into a nearly pure form, and then pumped deep underground for long term storage; and the capture of CO₂ directly from the atmosphere by enhancing natural biological processes that sequester CO₂ in plants, soil and marine sediments (Benson and Orr 2008a, 303; A. Demirbas, A.S. Demirbas and A.H. Demirbas 2004, 194).

Energy security concerns have led to an increased interest in coal due to its availability; proven reserves of coal are enormous and widely dispersed. It is also easy to transport and store and is not affected by weather changes. However, coal and its use have a number of serious environmental implications, including the highest CO₂emission rates among fuels used to generate electricity. Measures to reduce pollutants, coal mine safety, coalbed methane extraction and environmental safeguards in coal extraction are controversial issues. China would become the world’s leading market for advanced clean coal technologies, including gasification and liquefaction, and eventually CO₂ capture and storage. But these technologies are deployable on a large scale for decades and by then China will likely be used up much of the world’s remaining carbon budget. China’s coal-fired power plants are the main cause of the rapid increase in its greenhouse gas emissions, now the world’s second largest after the US (Lester and Steinfeld 2006, 12).

Serious air pollution problems in the cities of South Asia are largely as a result of the growing use of coal and oil products. Indoor air pollution, primarily from the burning of fuel wood and other biomass, is also a very serious problem (Siddiqi 2007a, 3). The transportation sector is the fastest growing energy user in all the countries of South Asia. The combustion of petrol and diesel in the vehicles of the subcontinent is the largest source of air pollution. The transportation sector, the primary market for oil, is expanding its choices of fuels as well (WEF 2006, 22). An accelerated use of Compressed Natural Gas (CNG) for transportation, combined with hybrid and electric vehicles in specific locations, would result in cleaner air for South Asia and would reduce the rate of growth of greenhouse gases from the region. Any increase in coal consumption using existing combustion technologies will result in a speed-up of global warming and an onslaught of climate disasters. This is so because coal releases more CO₂ per unit of energy generated than do the other two fossil fuels such as oil and natural gas (Klare 2009, 27).

Coal, oil and biomass combustion are the least desirable sources as far as air quality and greenhouse gas emissions are concerned. Hydropower, solar and wind energy rank at the top, with natural gas at the middle. Nuclear energy is difficult to rank, since it is excellent in routine operations, but the impact of the relatively rare accidents can be severe (Siddiqi 2007a, 3). The strong interest in CCS technology can be linked to both energy security and climate change. Although the oil industry has led the way in CCS technology, it is of growing interest to the power sector. Building new coal-fired power plants that are based on integrated gas combined-cycle technology allows the operators to separate, capture and store streams of CO₂. Because coal is both the most carbon-intensive and the most abundant fossil fuel, carbon capture and storage offers an attractive opportunity to keep coal in the fuel mix for energy security without releasing greenhouse gas emissions into the atmosphere (WEF 2006, 23). This would help South Asia to revitalise its energy sector with available resources and to meet its future energy needs in an environment friendly way.

The increased awareness of climate change over the past years has gained supporters for nuclear energy on its alleged contribution to climate protection due to low CO₂ emissions. But in reality, indirect CO₂emissions from nuclear power plants will increase considerably due to the use of fossil energy to mine uranium; the emission of radioactive isotopes such as tritium or carbon-14 contributes to climate change. In view of this trend, nuclear power plants will not have any advantage over modern gas-fired power plants as well as in comparison to the advantages offered by increased energy efficiency or greater use of renewable energies. These facts could not overcome the assertion that nuclear energy is needed to promote climate protection and has not received any attention in international climate protection negotiations (Mez 2011, 20).

The largest part of the installed nuclear capacity in the world is in the US, Europe, and East Asia. Presently, nuclear power generation accounts for about 16 per cent of the world’s electricity production, although nuclear power use faces considerable challenges: soaring capital costs, problem on waste management, acquiring weapons capability and adoption of safety measures in design, construction and operation. Effective utilisation of nuclear energy could be possible within the frameworks of efficient procedures to assure international guarantees for nuclear fuel supplies, encourage supplier states that are willing to take back spent fuel, strengthen the International Atomic Energy Agency’s (IAEA) inspection regime and launch a consortium among nuclear supplier nations with existing technologies and financial instruments capable to offer developing nations nuclear power at reasonable cost and without proliferation risk (Deutch, Lauvergeon and Prawiraatmadja 2007, 48).

Regarding nuclear energy, there is an assumption that the extension of the life spans of existing nuclear energy stations and all the more the building of new plants would act as a massive brake on the development of renewable energies. The claim that nuclear energy and renewable energies complement each other is a myth since they compete for exploding amounts of investment capital as well as because nuclear plants limit the growth potential owing to their inflexible continuous operation (Thomas 2010, 5). In addition, nuclear energy is highly water-intensive and nuclear plants use 25–50 per cent more water per unit of electricity generated than fossil fuel plants with equivalent cooling systems that will act as a curse during drought because many nuclear facilities either cannot operate or induce water shortages. Tonnes of spent nuclear fuel are discharged each year from existing nuclear facilities since nuclear plants convert almost all of their fuel to waste. It is estimated that by 2050 nuclear electricity will have the same carbon footprint as natural gas (Sovacool 2011, 7).

Fresh investments of nuclear capacity will be needed for the coming decades. The challenge is that pursuing non-nuclear energy policy can compensate the loss of nuclear power and reduce CO₂ emissions without creating problems to energy security. So the advocates of nuclear power recommend large scale constructions, though it may increase the risk of nuclear terrorism and weapons proliferation. In their conclusion, the perils from failing to trim down atmospheric CO₂ levels overshadow the consequences of nuclear terrorism or a regional nuclear war (Barnham 2007, 45). The US President Barak Obama said in his State of the Union address in February 2010, ‘We know the country that harnesses the power of clean, renewable energy will lead the twenty-first century.’ Thus, rapid deployment of renewable energy technologies that holds the promise of energy generation free of greenhouse gas emission with domestically available infinite inputs in an extent throw away the threat of manmade climate change and supply security concerns which challenge the relative competitiveness of fossil fuels in terms of cost, environmental impact, energy output and access (Froggatt and Lahn 2010, 17).

The objectives of augmenting energy security and mitigation of climate change are frequently conflicting on the pretext of the world’s dependence on fossil fuels as a foremost source of energy. In some countries tension occurs between assuring energy supplies to meet growing energy needs and reducing the share of fossil fuels to mitigate climate change. Such a conflict can be alleviated through policies and measures aimed at reducing demand for fossil fuels, using cleaner fossil fuels, promoting diversification of fuel types and sources by using renewable sources of energy, improving energy efficiency, providing incentives for the development of clean technologies and international cooperation for climate friendly investments. Keeping up social and economic development along with energy policy goals and actions to address climate change have seemed to be a global challenge (Atmanand et al. 2009, 130; Koakutsu and Watanabe 2006, 17). At present, energy security can be treated as a competition and a zero sum game between developed and developing countries since they are competing for same resources and that will influence the choice of future paths of climate change abatement strategies.

Globalisation to Secure Energy Security

Globalisation and energy security have got momentum in the last decades. The term energy security has many implications in times of globalisation, breathtakingly fast growing technological development and burgeoning violent conflict (GTZ 2002). The process of globalisation encouraged the liberalisation of energy markets which contributed higher options, supplies and competition, thus enhancing energy security. Simultaneously, this trend also heaved anxieties among the impoverished that they may be left out of the process, yet again ensuing a persistent energy insecurity for a number of individuals. In fact, economic globalisation has made it unfeasible for any single country to accomplish its energy supply entirely on its own.

Globalisation fetches various choices for energy security such as better admittance to markets and services and the transfer of technologies that are serving to diminish the cost of energy exploration and expand proven reserves. In unison the greater role of markets and flow of information are allied directly to the process of globalisation. Globalisation has strengthened markets through competition as well as encouraged regional plus international trade for the most part of crude oil, oil products, natural gas and energy services. International trade in energy resources and services is imperative to energy security. For instance, in developing countries, trade is mounting faster than national income, attaining 50 per cent of GDP and a major share of that trade is in energy. The forces of liberalisation and globalisation have reconstructed entire energy systems all over the world where the governance of a small number of national or corporate actors have been replaced by multiple and fragmented influences, even beyond national borders. Hence the heterogeneous and multifaceted change in the governing system formulated the energy sector more complex than before by incorporating a combination of local, national and international actors (Ekins, Winskel and Skea 2011, 342).

The oil crisis in 1973–1974 due to the embargo imposed by OPEC as an answer to the support provided to Israel by the Western countries during the Yom Kippur War, the energy crisis in 1979 after the Iranian Revolution, the explosion of the oil prices in 1990 caused by the Gulf War and the crisis of fossil fuels’ prices between 2001 and 2008 are the energy crises encountered by the world since 1970. These are the examples for the mis-functioning from one side of the world being capable of affecting worldwide consumers, but the globalisation process is capable of producing more unprecedented calamities than before by challenging the entire theme of energy security (Mihaela 2008, 174). In a globalised world, terrorism and conflicts form complexities around the energy industry in protecting and retaining access to assets, operating facilities such as wells, refineries and liquefaction plants and completing the delivery of energy and refined products via pipelines and ships.

In the globalised market economy, energy security turns out to be a matter of prices, economic growth rates and wealth transfers. Markets go ahead in innovation, decreasing costs, increasing trade, improving allocation of resources and urging technological development, all these aids to enhance energy security. In a free market economy decisions are made by market players rather than by governments but in a scenario of energy crisis it cannot be assumed that free market conditions will prevail throughout the crisis; there the state has to play a key role. Energy security demands long-term planning, investment and political will and the state should promise national long-term security of supplies and protecting consumers (Jefferson 2000, 417; Khatib 2000, 129–130). The globalisation of oil markets suggests that rhetoric on the subject of the goal of self-sufficiency in energy is outdated and the diversification of energy mix and energy sources is the key means to energy security (Bahgat 2006, 965–966).

In several countries, the process of market globalisation is in its early stages and remains vulnerable to reversals and in the context of market globalisation, approaches to energy security vary from country to country and region to region because the process of energy globalisation is uneven and possesses fresh challenges to strategic planners. The US props up market-oriented energy policies at home and abroad to unlock traditionally closed markets to new tenets of competition and restructuring and pursuing energy security on a different track by making Persian Gulf security as a high priority along with vast security stakes at Asia. Whereby Asian policy-makers expect a rapid increase in oil and gas imports for the next two decades and believe that the market alone will not ensure energy security. In the existing scenario, critical choices are taking place about financial investments, partnerships, technology development and in evolving multidimensional interdependent relations among actors. Energy market globalisation brings significant benefits for producers and consumers by executing thoroughgoing market oriented reforms. Tackling energy security concerns, rather than dismissing them, is a prerequisite for promoting market oriented policies (Harris 2001, 271).

In the energy market, globalisation is deepening and broadening through international trade, cross-investments, deregulation of domestic markets and industrial restructuring that links the older energy industries to the new global political economy. It tenders great promise in terms of economic efficiency, technology development, consumer choice and the renovation of energy industries and markets across the world. The prospective energy security risk curtails over a large area from the unintended consequences of uneven globalisation in a milieu of partial market liberalisation. Globalisation has created novel challenges for states as well as new opportunities for furthering global cooperation and state stability within the markets. As a consequence, linkages between energy security and globalisation have become decisive for a serious assessment of global security and stability (Al-Rodhan 2006, 2).

As a result of globalisation energy trade has expanded tremendously along with the threats to energy security. The share of international energy trade, average distance of energy transported and the volume of investment required to meet growing energy demands are greater than ever. Global tendencies of market liberalisation have reinforced competition by forging energy firms to achieve escalating rates of infrastructure utilisation. Simultaneously, environmental apprehensions have discouraged new investments in conventional energy sources to prevent global warming (Gault 2006, 3). Global interdependence is a common phenomenon in an era of globalisation in which nations follow an interdependent path for everything, including its energy needs; thus the world conforms to the views of globalisation. Globalisation brought more comprehensive interdependence in the energy sector and increased the role of the International Energy Agency (IEA). Thus, moves according to the projections developed by such agencies became obligatory for the future, which needs massive investments in both exporting and importing nations and vast networks of facilities, ships and trading arrangements to function smoothly. On the part of governments, it is desirable to call for openness, reliance on private enterprise and peaceful resolution of disputes (Allen and Raynor 2004, 23). As long as globalisation remains on the current track, the prospects look favourable for the energy sector.

Conclusion

Energy is the lifeblood of each and every nation and it underpins all other elements of an economy and polity. Diversity of fuels is an essential element of energy security and sustainability on the pretext that the concentration of dependency on few sources, technologies or types of fuels adds to risks and reduces flexibility of the energy system. Energy security will remain a high priority issue all over the world and the duty of ensuring energy security to the people is not only confined to national governments but also to regional and international regimes. In South Asia, access to clean, reliable and affordable energy sources would help the South Asian countries in attaining higher growth at lower costs of production. Enhancing energy security in South Asia would require supplying rural areas with alternate and cleaner forms of energy. As in other parts of the world, the need for national and regional energy security has become a compelling reality for South Asia, as evidenced by the fact that each country in the region is seriously exploring avenues and options to meet future energy demands. It is assumed that if the energy security of different countries improves, the energy security of the region will also improve.

The strategic significance of energy security has been stirred by the political and economic events of 1970s. And the emergent concern over energy security is obsessed with the soaring oil prices over the years, turmoil in some exporting countries, fears of scramble for supplies, geopolitical rivalries, threat of terrorism, the second Iraq war, unpredicted natural calamities due to climate change, recent political developments in the Middle East and the economic burst of developing countries. The global energy scenario needs a common strategy to secure energy in a sustainable, competitive and environment friendly manner in a world of hiking demand, depleting reserves, underinvestment, climate change and so forth. The strategy should be guided by the intensions of reductions in carbon emissions, greater competition in energy markets and increased support for technological innovation in renewable energy resources, energy conservation, clean coal burning and nuclear power.

Energy cooperation at regional and international levels will make possible the integration of markets for higher economic development, which is an effective way to address energy security as well as promote energy efficiency. A deliberate attempt has to be taken for the intensification of innovations in the enlargement of sustainable, socially compatible and smart energy services and technologies. Sporadic distribution of energy resources and market demands, diversity of supply, open markets and political interconnectedness are indispensable for energy security at the global level. The energy sector should reap the opportunities brought by the wave of globalisation at the international level. The transnational energy trade and an international energy market are widely accepted solutions towards securing energy security all over the world which can integrate major new economies also.