ENERGY SECURITYSharif University

June 1st 2014

Thanks to Sami Andoura Notre Europe – Jacques Delors Institute for many input

What to know to tackle energy security

• Geology – the stone age did not end by lack of stone !….

• Geography - always look at maps• Technology –It changes, but speed is unknown?• Historical evolution –long memories….• Demography and social acceptance / environment• Geopolitics – International law -Economics…and understand visions, and….. keep common sense

Some Historical points

• Prehistory: domestic fires 800 to 400,000 years ago

• Silk road and the trans African route until 15th century.• The British Empire: watch the map• The great game – capital Kashgar• War in Europe and then “Coal and steel pact”• The coal story, then oil, gas, LNG, GTL,….• The path to energy efficiency • The new great game –revival of the silk road?• A new world…

SILK ROAD – Is it back on the map?

Why did the roman empire collapse ? Why did the silk road collapse in the 15th century?

SUPPLY SECURITY – British Empire geostrategic view

Straight of MalaccaCape Town

Gibraltar

PanamaHong Kong

Kashgar

Straight of Magellan

Channel

Aden & Ormuz

Suez

World Oil Transit Chokepoints

CRUDE OIL FLOW

The Strait of Malacca, linking the Indian and Pacific Oceans is the shortest sea route between the Middle East and growing Asian markets.

More than 15 million bbl/d, no wander why China is worried about Malacca!

Increased oil exports from the Caspian Sea region make the

Bosporus Straits one of the busiest and most dangerous chokepoints in the world supplying Western and Southern Europe.

The energy supply problem is not going to disappear any time soon ….More than 9 billion customers thirsty for energy by 2050!

How is Iran Energy triangle ? How is it managed?

What will be the price target for Iranian gas? – remember the GTL gas price negotiation?The train might not come back soon to the station… not only for GTL!

Dilemma on energy security

Self sufficiency

Interdependency

Bilateral Agreements

FOR IMPORT & EXPORT

Would you like to see a similar map for ME and Central Asia?

No one expected such an event. Back in 2005, regasification terminals were being planned on US West Coast

What if coal become cleaner? What if RES does not take off ? What about public acceptance in Europe on nuclear ?

Iran share?

What if there is also in European unconventional revolution?

What will be Iranian share? – it missed the 2015 opportunity!

What is Iran view?

But, how far, how fast will unconventional go?

IRAN

and export

WasteEnergy efficiency Cost of development

Access to technology

Deal with neighbours

Some self sufficiency… but not onlyWhich alliances?

Increasingly relevant- not only in Iran

and, … what about other natural resources….

Questions on energy security in Iran

• Why so much oil produced and so little capacity to refine –no flexibility no quality?• Why so much energy (and water) wasted?• Could there be in this region a local version of the “1950’s coal and steel pact”? why

not a regional interconnection for gas, electricity, water and products? More interdependency, less risk of serious conflicts, more security ?

• Promote a regional peak shaving mechanism?• Move away from a power game based on the illusion of self sufficiency to a regional

collective better economic development?• “East or West” choice or “Region and East and West and South” alliance? A no brainer!• Energy, yes but not only: water, technology, efficiency, health, other raw material,…

SELF SUFFICIENCY: A MYTH, even Maoists are moving away from the concept of “rely on your own forces”.

INTER DEPENDENCY : THE BEST PATH TO SECURITY and lower cost

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