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Alex Kimani

Alex Kimani

Alex Kimani is a veteran finance writer, investor, engineer and researcher for Safehaven.com. 

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Energy Security Was The Most Important Topic In 2022

  • Energy security became a leading topic among decision-makers last year.
  • Decarbonization takes a back seat amid the rush to secure sufficient energy supplies.
  • Energy Intel: European oil majors to continue to succumb to pressure on decarbonization spending.
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The Energy Intelligence 2023 outlook report sheds light on a very important sentiment that will guide the market this year: It’s not the energy transition or even the affordability of energy that is on the top of everyone’s mind. It’s the security of supply that trumps everything. 

The industry priority is energy security this year, and while that does not mean that decarbonization will be sidelined, it does mean that it’s not the year’s top priority. Even more shocking, based on the results of a Energy Intel’s survey is that affordability does not top the agenda despite the wildly high oil and gas prices we saw in the first half of 2022. 

“Energy Intelligence does not believe the crisis will derail decarbonization. Rather, energy security challenges will underscore the transition’s untidy trajectory (uneven pace, regional differences),” the outlook noted. 

Over 60% of industry figures surveyed by Energy Intel said security of supply topped their agendas, while fewer than 30% chose affordability and only around 10% chose decarbonization.

Europe is the biggest risk to global energy security, according to the report, with the continent’s energy system set to “face the greatest shocks, as it continues to slash its dependence on Russian energy and reorder its energy mix”. 

Particularly for natural gas, the global energy industry sees Europe’s quest to source new supplies as forcing prices higher and prompting more government intervention as a result. While Energy Intel analysts hold the view that while LNG supply looks good long-term, the market’s current tightness will take years to sort out. 

The report cites some 70 million tons per year of LNG ventures set for FDIs this year, which will help with energy security in the long term, but do little to assuage tightness in the short-term. A new supply wave is expected around 2025 or 2026 to help counteract that tightness with another 150 million tons under construction, but until then, supply will be an issue. Energy Intel is also concerned about the 70 million tons per year that could reach a final investment decision this year. There are issues that may get in the way of that, including cost inflation that could lead to FDI delays. Additionally, if market participants start to feel that we might get into a state of oversupply in the future, some of those projects might be delayed as they take stock of the situation. 

What does this all mean for decarbonization?

While new low carbon technology will continue to lead the energy transition this year, it has taken a back seat to concerns about energy security.

Related: UK’s Top Oil Producer To Cut Jobs Over Windfall Tax

The energy transition has not been derailed, nor has it lost its momentum; however, Energy Intel notes that its progress will be “uneven” and “untidy”. 

Even though energy supply tops the agenda, Energy Intel expects European oil majors to continue to succumb to pressure on decarbonization spending and sees them having limited flexibility to spend on oil and gas in any aggressive manner. American companies will have an easier time spending on upstream oil and gas, but will also be expected to maintain a strong focus on the energy transition. National oil companies in the rest of the world will continue to try to increase oil and gas output. 

The issue of energy security is clearly topping the industry’s agenda in the United States, though shareholders will continue to maintain pressure on companies for their transition strategies. 

The American Petroleum Institute (API) has placed new oil and gas permitting reform at the top of its agenda for U.S. lawmakers to address this year, noting that “In the past year, the global energy crisis, driven by surging post-pandemic demand outstripping supply and exacerbated by Russia’s invasion of Ukraine, has shown that the world needs American energy leadership now more than ever.”

It’s also a key issue at the World Economic Forum (WEF) going on now in Davos, Switzerland, where the Saudi foreign minister reminded everyone on Tuesday that geopolitical stability is the key. While noting that Saudi Arabia is investing nearly $200 billion in renewable energy, “in the meantime, we need to maintain a supply of traditional energies that are priced in a way that ensures stability …”.

The bottom line, which appears to be supported by Energy Intelligence’s own 2023 outlook report, is that energy security takes top priority. And if it is not given top priority, it would likely serve to undermine a net-zero transition. 


As Davos unfolds, this becomes even clearer. While Putin’s war has sent the world into upheaval and sparked an energy crisis, an article published by WEF warns against blaming the entire crisis on this event, which would mean dangerously “ignoring other underlying risks to energy security”. 

“Even in the absence of the attack, risks to energy security would loom on the horizon as an unprecedented upheaval of the energy sector unfolds in unpredictable ways,” the article notes. “The transition to clean energy is among the most geopolitically disruptive forces of the 21st Century, even while the prospect of a net-zero future will mitigate some traditional energy security risks.”

By Alex Kimani for Oilprice.com

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  • Mamdouh Salameh on January 19 2023 said:
    I start with the premise that the global economy will continue to be driven by oil and gas throughout the 21st century and probably far beyond.

    If this is the case, then energy security (meaning the availability of energy for the proper functioning of the global economy at whatever level of prices) is quintessential. It follows that energy security and the needs of the economy twill always take precedence over the dictates of climate change, energy transition and zero emissions.

    A case in point from the distant past is the Japanese attack on Pearl Harbour which brought the United States into WW2. It was energy security that prompted Japan to attack Pearl Harbour. In July 25, 1941 the United States announced a freeze on Japanese funds in US banks necessary for Japan to buy American crude oil and petroleum products, which in practice meant an embargo on oil thus leading to the attack on Pearl Harbour.

    In 2022 it was energy security that has led the EU to resume its use of coal and to resurrect coal-fired electricity-generation plants despite the fact that before the crisis, the EU never stopped lecturing the world virtually on daily basis about energy transition and climate change.

    Another case in point is China. Energy security occupies China’s strategic thinking all the time. The Chinese government views the country’s dependence on imported oil as a chink in its armour that must be defended at any cost. That is why China currently spending billions of dollars on defending the shipping lanes that are vital to its oil lifeline, namely the Straits of Hormuz and Malacca. It has also been building oil pipelines to enhance its energy security such as the China-Myanmar crude oil pipeline which runs from the port of Kyaukpyu on Myanmar’s west coast and enters China at Ruili in Yunnan Province. China has also been considering a multi-billion-dollar pipeline that would carry crude oil from Pakistan’s coastal port of Gwadar to Western China.

    Dr Mamdouh G Salameh
    International Oil Economist
    Global Energy Expert

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