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5 September 2014

As we rely on Russia and the Middle East for energy, Nato must face the energy security challenge

Currently, we depend on both Russia and the Middle East for much of our energy; the Nato summit's priority should be to tackle the energy security challenge.

By Neil Morisetti

For the first half of my career in the Royal Navy Nato’s main role was as a counter to Soviet expansionism, the Cold War a very real and present danger.

With the end of the stand-off 25 years ago, with military budgets falling and with less political and public appetite for military confrontation, the organisation was beginning to look irrelevant to today’s world, with questions being asked about its role.

But now, as the Nato summit is in Wales this week, the organisation is facing a renewed challenge on its Eastern border from an increasingly belligerent Russia – perhaps heralding a re-boot in Russian expansionism. Further afield, the threat of Islamic State and continuing instability in the Middle East cannot be ignored.

Currently, we depend on both Russia and the Middle East for much of our energy. Recent events serve to highlight the vulnerability of our energy supplies and the political straitjacket that results from our dependence on fuel imports from these volatile regions.

Without political stability in those regions, there can be no energy security at home.

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The true cost of energy

The most immediate question is whether Russia might choose to use its energy exports to the EU as a political bargaining tool.

The threat that it might is being taken seriously, given reports this week that the EU is drafting emergency plans that would impose rationing on industry this winter, with serious economic repercussions.

Secure, sustainable, predictable and affordable supplies of energy are essential for economic growth and prosperity. A $20 dollar rise in the price of oil for two economic quarters is likely to reduce global GDP by 0.5 per cent.

Price volatility is an ongoing risk for all sectors of the economy. The armed forces consume large amounts of fuel. As I saw during my years of service, rapid and unexpected increases in the price of oil disrupt forces’ capacity, be it through less time at sea for training or fewer hours flown in helicopters and jets.

The economic and supply disruption risks are especially acute in those countries with a high dependency on imported energy like the EU, which imports 53 per cent of the energy that it consumes. The UK sources about 40 per cent of its coal imports from Russia.

The political corollary of dependence on energy from unstable and unsavoury regimes is that it constrains the response that the UK, Europe and Nato are able to give when faced with aggression. Whilst Germany has been active in calling for sanctions, its stance towards Russia is partly determined by the continuing need to keep Russian gas flowing.

Looking further ahead, how would we deal with a situation in which the Islamic State became established as a permanent presence, including control of oil and gas exports?


Cutting demand, cutting risk

So what is the solution?

The quickest and most effective form of energy security is to use less. Following the lessons learned in Iraq and Afghanistan energy efficiency is embedded in military thinking on both sides of the Atlantic. Not only does it improve effectiveness but it reduces risk and saves money.

The same needs to happen with national energy security strategies. There needs to be a comprehensive programme of energy efficiency measures across all sectors; power, domestic and commercial buildings, and transport.

It also needs to be a demanding programme, for only then will the full benefits be delivered, including reduced energy imports but also wider gains from improved air quality and reduced greenhouse gas emissions.

Most importantly it also makes economic sense for Europe to be at the forefront of energy efficiency measures as this will improve competitiveness with the US and China, which enjoy the benefits of scale and low cost energy.

EU ministers are currently debating whether to approve a target of improving energy efficiency by 30 per cent (from 2005 levels) by 2030. Analysis indicates that we can go to 40 per cent without economic penalty; Ukraine indicates that we must.

Alongside this, we must invest in domestic sources of energy – established ones such as wind, solar and nuclear, and new entrants like wave and tidal power. We cannot always rely on imported energy, but the tide will always come in and go out twice a day.

Nato can be a powerful forum for promoting this change, by explicitly articulating the threat we face. Efficiency and diversity in domestic energy generation are not issues that should be seen as simply a ‘green’ agenda. They are vital to our national and regional security.

Reducing energy consumption and investing in new forms of energy is a strategy that simultaneously defends against international volatility, improves our economy and liberates our response to aggression from the straitjacket of dependency.

The challenges posed by increasing geopolitical instability and the threats to our energy security are only likely to grow. Our leaders must act to reduce our vulnerability – starting this week in Wales.

Rear Admiral Morisetti is a former Commander, UK Maritime Forces and was the UK Government Climate and Energy Security Envoy from 2009-12. He sits on the Advisory Board of the Energy & Climate Intelligence Unit

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