Energy Security
Libyan Oil 2012: Prospects and Implications
Libyan oil production has defied expectations and has already regained pre-revolution levels. While the nation’s “black gold” will provide much-needed revenue for the war-ravaged economy and infrastructure, considerable issues and challenges remain. These considerations should feature prominently as Libya enters the next stage in its post-revolution transition. Fundamentally, institutional reform is required, although doubts remain over the current governments’ ability and conviction to achieve large-scale reform. For Libya to maximise its oil potential and, hence, it’s economic potential, the state must, as a matter of some urgency, develop initiatives to foster commercial confidence, within a stable environment bounded by strong regulatory and legal frameworks.
Developments Bode Well for Biofuel Sector
Developments in, and growth of, “second generation” biofuels have provided increased viability for the sector. The Pilbara region has an existing capability to support projected growth in the industry. Scope, however, exists for the region to also play an enhanced role in both the consumption and production of biofuels.
Western Resolve to Break Iran’s Oil Shield: Implications for Australia
Iran boasts ten per cent of world oil reserves and is currently the third-largest exporter. This strategic share has allowed the Islamic Republic to create an “oil shield”, protecting the government’s survival and alleged nuclear programme. Recently, however, the United States and its allies have invoked strict sanctions aimed at removing Tehran from the international oil market. The immediate impact on Australia will be negligible, although concerns linger over the implications for trade partners. Within this context, Iran’s removal as a competitor in the gas market presents opportunities for Australia to leverage these developments to its advantage.
Cyber-Security Challenges to Australia’s Hydrocarbon Sector
The Australian hydrocarbon sector boasts an advanced emergency management capability. Oil and gas facilities, however, are highly vulnerable to deliberate targeting, particularly from cyber-operations. Hydrocarbon has a complex production and supply chain, including exploration; production; refining; storage; and transportation, which creates significant vulnerabilities. Industry commentators suggest that the threat posed to the sector is real and credible. While Australia’s oil and gas sector has been relatively secure, it is not immune to potential challenges. Accordingly, oil and gas stakeholders must recognise the constantly evolving challenge of cyber-security and work together to develop a framework to counter cyber-operations.
Uranium Could Take India Relationship beyond the Three “Cs”
In an announcement on 15 November 2011, Prime Minister Julia Gillard proposed changes to Australia’s position on uranium exports to India. Despite attempts in the later stages of the Howard Government, India’s status as a non-signatory to the Nuclear Proliferation Treaty (NPT) has precluded the South Asian power from purchasing Australian uranium. The proposed changes have the potential to re-balance and strengthen nascent, and occasionally strained, ties with India. Australia-India ties have long been based on the three “Cs”: cricket, curry and Commonwealth. Uranium, however, could provide a more nuanced dimension of diplomacy, leading to greater economic and security symmetries.
India Seeks Energy Security from Thorium
In early November 2011, India announced ambitious plans to exploit the nation’s abundant thorium reserves as a low-carbon, less radioactive, alternative to uranium. The new “safer” power plant, to come online by the end of the decade, will promote Indian energy autonomy and represents a significant opportunity, within which Australia should aim to create synergies.
Olympic Win For Australia After Mining Approval
In mid-October 2011, the Federal and South Australian Governments gave approval for a massive expansion of BHP Billiton’s Olympic Dam mine. When operational, the proposed 4 km long, 3.5 km wide and 1 km deep copper, gold and uranium mine will create 13,000 jobs and contribute $45 billion to the economy.
Australia Primed to Benefit From Future Energy Demands
In mid-September, the United States’ Energy Information Administration (EIA) released a report outlining global energy trends to 2035. The report titled, International Energy Outlook 2011, forecasts a 53 per cent increase in global energy use over the coming decades. The changing nature and requirements of international energy demand present an opportune space for the Australian sector.
Protectionist Mining Code in Guinea Highlights African Sovereign Risk
In mid-September 2011, lawmakers in the West African republic of Guinea passed a radical new mining code, to increase government ownership of mining operations. Prime Minister Mohamed Said Fofana argued the legislation will curb corruption and stimulate development in the impoverished country. Analysts and mine operators, however, argue that the new laws are restrictive and may halt planned investment.
Trans-Tasman Opportunities from New Zealand Energy Strategy
Australia must position itself to promote its strong energy credentials with New Zealand, as Wellington commits to the long-term future of hydrocarbons for energy production. Conversely, as Australia makes a greater commitment to renewable power generation, New Zealand can provide the requisite expertise and experience.