Don’t mention energy security again

For a while I have been thinking and talking about the need to change the language around energy efficiency because the old language that we grew up with isn’t working well. If it was working we wouldn’t have “low hanging fruit” and huge untapped potential for cost effective investment in energy efficiency. We wouldn’t be hearing the same old objections to energy efficiency we have been hearing for more than 30 years like, “energy efficiency doesn’t work”, “you can’t measure the results” and “it is not strategic” etc etc.

At the recent workshop I attended at KAPSARC (King Abdullah’s Petroleum Studies and Research Center ) one of the participants made an excellent point about changing the language of energy security. As he pointed out we don’t actually want energy we want services like comfort, light etc and therefore we should not talk about ensuring energy security but rather ensuring the security of the services that energy provides. This comment was “a light bulb moment” for me, not about energy services of course – this has long been a given – but about the potential effects of changing the language around energy security.

Think about it – if you say “energy security” you immediately think about how do we physically secure the physical flow of energy commodities – usually oil, gas, LNG or coal. That takes you into trade deals, (there is nothing wrong with trade of course but let’s face it – some energy deals have had a heavy moral price), strategic investments in pipelines and other infrastructure to gain preferential treatment, potentially having to outbid the competition for energy supplies, and of course ultimately military force projection starting with the question all US Presidents supposedly ask whenever there is a crisis, “where are the aircraft carriers?”, to all out invasions and occupations. Historically and to this day much overt military force and of course lots of covert military and espionage work is dedicated to causes related to securing energy supplies.

So how does this change with changing the language to one around securing energy services? First of all it makes you focus closer to home (literally) – the services are needed/consumed here – not in some remote place where we get physical energy supplies from. Next it pushes you towards a strategy in which you look at how to reduce the energy you need to use to deliver the services – energy efficiency gets elevated as a way of securing supply of comfort in people’s homes. Ensuring security of energy services – for example comfort in people’s homes – becomes less about doing deals to buy gas from Russia or elsewhere, or making sure the Straits of Hormuz stay open to ensure the flow of oil, and more about making sure we have as many near zero energy consuming households through super insulating new homes and retrofitting old ones.

So here is an idea – next time someone talks about “energy security” just say “we should not be interested in energy security – only in the security of the services that energy is used to supply”. Then start a conversation about the true cost of “securing energy” as opposed to “securing energy services”. Putting aside the non-financial costs and as a starter on the financial equation the US spent $6.8 trillion between 1976 and 2007 on military force projection in the Persian Gulf[1], an average of $323 billion per annum. Given c.17 million barrels of oil a day go through the Straits of Hormuz[2] this represents a cost of c.$50 per barrel of oil – and only about 10%[3] of this goes to the US so for the US the cost of oil is c.$500 per barrel – on top of the actual price of just over $100 per barrel. Of course that only counts the US contribution and does not count the considerable expenditure in the Persian Gulf by the UK and many other countries.

Of course we could not reduce expenditure on keeping the Straits of Hormuz open to zero even if we didn’t need the oil – which I think we always will if only for petrochemicals – free trade and the idea of free passage on the high seas should be defended as a general principle otherwise the pirates and the terrorists will take over and that is not good for anyone.

[1] Stern, R.J. United States cost of military force projection in the Persian Gulf, 1976–2007.

[2] Energy Information Administration. World oil transit choke points.

[3] Energy Information Administration. U.S. Imports from Persian Gulf Countries of Crude Oil and Petroleum Products.