ENERGY SECURITY IN A NEW LIGHT

Current events are putting energy security at the fore. And as CERA Chairman Danial Yergin discusses in this article from Foreign Affairs, the meaning of the term energy security has expanded. Once, energy security really meant "security of oil supplies against disruption." Today, it includes not only diversification, but also protection of the entire infrastructure and the strength of markets. Different countries see energy security from various perspectives and with different emphases-a scramble for supplies by consuming countries, reliable revenues for producing companies, geopolitical rivalries, nationalist backlash, threats of terrorism, and the fundamental role of energy to fuel economic growth.

- Much of the needed new capacity growth is already under way to soothe the market. However, aboveground risks could affect the timing of bringing it onstream, and supplies will be more geographically concentrated than in the past.
- The classic principles of energy security, including the value of diversity of supply, continue to be the centerpieces of policy. However, they need to be expanded to incorporate the global nature of the energy security system and to protect the entire value chain. China and India need to be brought into the global energy security system that was established in the 1970s.
- Lines of responsibility need to be strengthened, and flexibility should be the hallmark of any response.

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