Osman MİCANWhat is the mutual interdependency? What is the effect of pipelines for the increase of interdependency? What is the mean of security of energy supply and demand?
“It is an obvious fact that ‘security of supply’ is crucially important for the uninterrupted flow of the continuation of the social life and the economies of energy importers. Beside of that ‘security of demand’ is really important for the continuous flow of the social life and economies of energy exporters. that brings the interests of energy exporters, importers, transit countries, international money lending institutions and operator companies and creates a cobweb of relations among different participants. And this interests create mutual intedependency.”[1]
We know that energy security describe as availability of energy source everytime, variable with different forms of it and affordability of prices. For the energy importer country “Security of Supply” is vital. In that context, first of all availability is so important because energy is the inevitable part of our life and mean of lackness of energy sources is can’t providing maintainance of daily, routine and social life of the people. Importer country binded to exporter one because of that all the cases which exporter faced to face may effect the trade of the energy between two countries. Therefore importer country generally want to make long term agreements for providing guarantee of affordibility. Secondly, variability provide country much more confidence and independency against to country where she takes energy. Last one is the affordability. Changing of prices of energy sources has a devastating affect on the energy importer countries. In domestic economy may ocur lackness of sufficient amount of energy in any sector would result to low levels of output, decline of the investmens even create unemployment.
Energy security have to be provided against any kind of threat. That can be come from global impacts, from specific country or region, even from terrorist organization and NGO. Embargo distruptions becasue of the problems between countries, local market distruption because of the mismanagement of the policy makers, The disruption of the strategic infrastructure of any kind are the some kind of threats which can come from abovementioned different kinds of actors.
Revenues coming from the energy trade are the backbone of the budgets of the exporting countries. Because of that we have to care about “Security of Demand” concept of energy exporters. Two major threats for security of demand can be categorized as the loss of the market share of hydrocarbon energy sources in general and the deterioration of the market share of the exporting country in particular.
Hydrocarbons have the biggest rate in the energy trade between countries in general. In that sense losing a market for an energy exporter country would have some consequences which can be devastating for it. Not only these kind of countries try to avoid lose market but also have to search for a new market because of dependence to the energy revenues in the domestic development of the country. Like mentioned for the security of supply part, these kind of countries also for ensuring their sale prefer long term agreements. Lastly, changes in the markets are too dangerous for these kind of countries. For this one, example of Russia will be good. Up until to 1998, price of the crude oil for the barrel became 10$. But after the 2000’s price of it increased to 100$ and Russia as an exporter country parallely increased its power and wealth.
In this concept, for securing both demand annd supply countries try to form a mutual interdependency between themselves. Most efficient way of it pipelines which can bring interests of energy exporters, importers, transit countries, international money lending institutions and operator companies and create interdependency between themselves. Beside pipelines there are different kinds of transportation ways which are crude oil and Liquefied Natural Gas (LNG) ships, huge trucks and some specially designed railway storage tanks.
Establishing pipeline to a big size of area is very complex duty for governments and also companies. Political, economical, geological and ecological issues are considered in that sense. Beside the political effects of government, there are also effects of terrorist organization. Configuration period also so complex because investors has to take some precautions and implement different configuration process for crude oil and natural gas. Additionally, there is no legal study which covers principles, norms, regulations and activities of pipelines globally and also there is no ultimate authority to supervise implementations properly. Only principles of Energy Charter Treaty (ECT) and World Trade Organization (WTO) may be loadstar about issues.
Pipelines even its complexity can increase rate of interdependency. Hence, change of the interest of one state can effect all other participant state & also non-state and participants with taking into consideration interest of other participants can diminish harmful consequences and outcomes.
The interdependence between Spain and Algeria is an example worthy of great attention in this context. Spain not like other European countries can’t take energy sources from Russia. In that reason, She changes her direction to the other exporters like Algeria, Nigeria, Qatar, Egypt etc. Currently is one of the key partners of the Spain in securing energy supplies with the Gazoduc Mediteraneannee Europeenne (GME) pipeline which can provide natural gas to Spain, Portugal and Morocco. Risk of the effect of Al-qaide on the Algeria may have some serious problems for security of energy supply of Spain. Hence the al-Qaide
Security of supply and demand is vital issue for energy exporter and importer countries. However, these countries can overcome this problem with increasing the rate of mutual interdependency. In the energy sector, transportation of energy sources by pipelines can provide highest increasing rate for interdependency. By that way pipelines even its complexity can diminish harmful and unintended outcomes.
[1] Demir, Asst. Prof. Dr. İdris. «Strategic Importance Of Crude Oil And Natural Gas Pipelines.» Australian Journal of Basic and Applied Sciences 6, no. 3 (2012): 87-96 .