From Daniel Yergin: The Return of Energy Security

[Note: I recently interviewed Daniel Yergin, Author of “The New Map,” and Vice-Chairman of S&P Global, for The Energy Question podcast. That episode will be published in the coming days. In the meantime, Dan agreed to let me share this piece for my readers here. Enjoy.]

The return of energy security

Ensuring energy security is a high priority for the energy transition.

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Daniel Yergin, Ph.D.
Vice Chairman, S&P Global
Chairman, CERAWeek

Published: February 29, 2024

Events in the last few years have demonstrated that the energy transition depends on energy security to proceed at a steady pace and at scale. The biggest emphasis on the need for reliable and affordable energy is in the developing world, where 80% of the world’s population lives.

The use of natural gas provides a major path to decarbonization in two ways.

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Introduction

Climate policy is a priority around the world. But current experience also demonstrates what has been learned and relearned again and again — that energy security is also a priority. And that requires continuing investment to assure reliable and affordable energy. To downplay energy security or dismiss its importance is to risk fueling backlash, derailing climate objectives and generating crises.

To downplay energy security or dismiss its importance is to risk fueling backlash, derailing climate objectives and generating crises.

Energy security is a fundamental imperative for countries as energy undergirds economies and is essential for the well-being of populations. Although muted during the COVID-19 pandemic, its salience has reemerged with a new urgency. Today, energy security — assuring the availability of reliable and affordable supplies — encompasses both conventional oil and gas and renewables as well as electric grid reliability. But, in terms of sources of supply, the main focus of energy security remains assuring needed supplies of oil and gas, which provide 55% of world energy, compared with 7% for renewables. Coal supplies 27%, while nuclear and hydro provide much of the rest of commercial energy. The engine of energy security is investment in supplies and infrastructure needed to meet increasing demand. Moreover, given a natural decline of about 3%-4% per year in existing oil production, substantial investment is needed merely to maintain current levels of supply.