The Real Crisis Waiting for the World: Oil Problem and Energy Security

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1 Intnational Jounal of Engy Economics and Policy Vol. 3, Spcial Issu, 3, pp.74-7 ISSN: Th Ral Cisis Waiting fo th Wold: Oil Poblm and Engy Scuity Sda Öztük Faculty of Economics and Administativ Scincs, Nvşhi Univsity, 53 Nvşhi, Tuky. Ali Sözdmi Faculty of Economics and Administativ Scincs, Cumhuiyt Univsity, 58 Sivas, Tuky. Özlm Ülg Institut of Social Scincs, Nvşhi Univsity, 53 Nvşhi, Tuky. ABSTRACT: It can b said that th global cisis in th wold in 8 dply affctd all stats and changd almost all balancs. Such ciss xpincd in th wold duing this piod and possibl sam ciss in th futu a impotant. Howv, such ciss hav montay solutions although thy hav sultd in sious dstuction of conomic and social stuctus of th countis. Nvthlss, if th ncssay masus a not takn, a mo sious cisis will ais in a futu not too fa fom now. Th diffnc of this cisis that will ais compad to th fom ons is that th won t b a montay solution fo it. Continuous gowth in th incas of ngy consumption in th wold is an invitabl poblm. This situation maks many countis aound th wold fac th poblm of ngy indpndnc and ngy scuity. In this study, th classification and chaactistics of ngy soucs will b discussd fist. Thn, ngy indpndnc and scuity poblm catd by tmination of ngy soucs and thi bing und contol of spcific countis will b xamind by compaativ analysis mthod basd on statistical data. Kywods: Engy Scuity; Oil Poblm; Engy Cisis; Ral Cisis; Engy Policy JEL Classifications: Q4; Q43; Q48. Intoduction It is sn that th 8 global cisis has affctd all of th govnmnts dply and has naly changd all balancs. Such ciss and possibl futu ciss a impotant. Howv, although ths caus sious avags in conomic and social stuctus of countis, thy can all b solvd by mony. If ncssay pcautions a not takn, a mo sious cisis is awaiting th wold in futu. Th cisis will b a diffnt on, and cannot b solvd by mony. Th cisis awaiting th wold is ngy cisis. In this contxt, th consumption of fossil fuls and ngy scuity a th pimay poblms to b solvd in st cntuy. Th wold is about to fac a cisis which thatns th xistnc of civilization. This is an ngy cisis which will ais whn th a not nough ngy soucs to cop with th dmand of wold as th dmand fo ngy incass. Engy cisis may b dfind as a gat stait in supply of ngy soucs in an conomy. It is vy difficult to say that th solution of this cisis, which will lav th wold in a big conomic cisis, will not b solvd by th tchnology. Th nd fo ngy in th wold incass.6 % in avag annually. If th countis go on with thi psnt politics, th nd fo ngy will b half as much in 3 as it is today (Biol, 7: -). That is, th continuous dvlopmnt in global consumption of ngy is an invitabl poblm. Till today, th dominanc of fossil fuls on ngy poduction has causd sious poblms globally. Ths poblms a; 74

2 Th Ral Cisis Waiting fo th Wold: Oil Poblm and Engy Scuity - Th climat chang causd by gnhous gas mission - Th bakdown of th ozon lay and th incas in lvl of ultaviolt light - Acid ains - Th dcas in biodivsity - Th incas in soil osion - Th contamination causd by wasts in industy and lif styls (Fyf t al., 3: 87 6) Engy is on of th basics of ou ducation, halth, nutition, tanspotation and communication systms. Howv, taking into considation th nvionmntal avag causd by ngy poduction pocss, th poblms in accss to soucs and th dcas in svs, it can b said that th us of fossil fuls today is unsustainabl. Th dcasing fossil ful soucs caus both insufficincy in poviding dmand and incas in pics and it tiggs th stuctual chang in ngy poduction and soucs. In this contxt, th innovations in ncouaging th us of nwabl ngy soucs will mak it possibl to manag th passag fom an unsustainabl stuctu to a mo sustainabl stuctu (Schindl and Zittl, 7: -7). Anoth impotant poblm in ngy is th ngy scuity. This concpt dscibs th lation btwn national scuity and achivmnt of natual soucs fo ngy consumption. It is of vital impotanc to gt ngy soucs continuously and chaply (IEA, 3). A lag potion of mtal oils, gas svs and ptol a in th bods of a goup of county. This maks many countis fac th poblms of ngy indpndnc and ngy scuity. Th gadual aival of ngy soucs into thi bods and th fluctuation it causs on ngy pics incass th ffct of ths countis globally (Hamlinck t al., 5: 4 34).. Classification of Engy Rsoucs and th Futu of Oil Engy soucs can b dividd into two goups: nwabl and nonnwabl ngy soucs. Th nwabl ngy includs th ngy obtaind fom non-consumabl soucs coming fom natual pocss such as sun, wind, biomass, wav, gothmal and hydolctic ngy; nonnwabl ngy includs coal, oil, gas and nucla ngy. Bfo th industial volution, popl usd only nwabl ngy soucs. Howv, in th last 5 yas, popl hav bcom incasingly dpndnt on fossil fuls. In cnt yas, dspit tchnological dvlopmnts, th us of nwabl ngy soucs still holds a vy small plac in th global ngy tabl. Tabl. Annual Wold Elcticity Gnation by Engy Rsoucs Engy Rsoucs (TWh) 73 (%) 4 (%) (%) Coal Natual Gas..5. Nucla Engy Oil Total Amount of Nonnwabl Engy Rsoucs Hydo Engy Oth Total Amount of Rnwabl Engy Rsoucs Souc: Ppad using Intnational Engy Agncy data. Th sha of nwabl ngy soucs in th lctic ngy gnation is sn to b.7% in. Th pat of 8.3% is still mt by nonnwabl ngy soucs that a fossil fuls (Tabl ). Whil th uss of nwabl ngy soucs hav incasd in tms of amount in wold lcticity gnation, it can b said that this incas is not so impotant in tms of sha. It is stimatd that th will not b a significant incas in th na futu. Th sha in lctic gnation of hydolctic ngy potntial, 33% of which is usd globally, is about 6%. Although th uss of oth nwabl ngy oth than hydolctic ngy hav incasd, its sha in lctic gnation in 3 is stimatd not to xcd 5% (TMMOB, ). Th nvionmntal dgadation causd by fossil fuls, th dpltion of svs, high and volatil ngy pics and gowing concns about nwabl ngy soucs a mging as a 75

3 Slctd Paps fom "Intnational Confnc on Engy Economics and Policy, 6-8 May 3, Nvshi, Tuky" majo componnt of ngy consumption all ov th wold (Apgis and Payn, : ). Within th nxt 5-3 ya piod, a lag pat of th incas in ngy dmand and us of fossil ful and thfo th intnsity in gnhous gas mission a xpctd to sult fom dvloping countis. In this sns, it is stimatd that th ngy consumption will b 4% in OECD countis and 84% in non-oecd countis (Wolfam t al., ). Fossil fuls constitut th lag pat of global ngy supply. Ths fuls foming mo than millions of yas a consuming and not nwing. Th ol of fossil fuls in modn conomy is quit vital. Howv, it is ncssay to opn a spaat paagaph on oil (MacKnzi, 8: 7-8). Popl hav bn using natually obtaind cud oil fo thousands of yas. Fo instanc, ancint Chins and Egyptians usd th oil to light thi homs. Bfo th 85s, Amicans usd whal oil to light thi homs. Whn whal oil bcam scac, popl statd to sk oth soucs. Although tchnology and sachs hav dvlopd sinc th fist oil wll dilld by Edwan Dak in th USA in 85, th discovy of oil is still a isky businss fild. Gologists a woking to find nw aas, but only 5-3% of th discovd wlls hav ncssay qualification (Nd Pojct, ). Th oil dmand is continuously gowing all th tim. Th fact that th ptolum will consum som day offs a uniqu isk mthod to th wold about whn th pak point in its poduction will aliz. It can b said that th a numous studis on this subjct in litatu (Hisch t al., 6: ). Th fist study on this subjct was caid out by gologist Maion King Hubbt in 56. In his study, Hubbt mad pdictions on th pak point of oil poduction in th USA (Bay, 5). Th hav bn a numb of pisods ov th last half cntuy in which conflicts in th Middl East hav ld to significant disuptions in poduction of cud oil. Ths includ closu of th Suz Canal following th conflict btwn Egypt, Isal, Bitain, and Fanc in Octob 56, th oil mbago implmntd by th Aab mmbs of OPEC following th Aab-Isali Wa in Octob 73, th Ianian volution bginning in Novmb 78, th Ian-Iaq Wa bginning in Sptmb of 8, and th fist Psian Gulf wa bginning in August (Hamilton, ). In th industial wold dpndnt on th chap cud oil, pics showd continuously incasing inconstant fluctuations following ths vnts. Pics fist tipld in spons to an Aab mbago in 73 and thn naly doubld again whn Ian dthond its Shah, snding th majo conomis sputting into cssion (Campbll and Lahé, 8). In th scond half of, oil pics damatically wnt up again and it incasd fom dollas p bal in Fbuay to 35 dollas p bal in Sptmb (Hinbg, 3). Th mpiical litatu suggsts that th oil shocks hav an impotant ffct on conomic activity (Conaia and Wn, : 3). Th ncssay conditions fo th wold oil supply can b said to nt into a nw a with th incasing dmand pssu. Concns of th main oil-poducing countis about scuity of supply, spculativ factos and cla indications on th supply-sid constaints caus unxpctd high and inconsistnt pic incass. Whn takn into account th fact that th incas in oil poduction is bcoming had, th continuous incas in oil dmand is an indication that th supply will hav mo sious poblms to mt th dmand (Figu ). It is known that almost all of th wold s lagst oil filds w discovd mo than 5 yas ago and th annual oil discovis hav dclind on th sufac sinc 6s (Schindl and Zittl, 7: -44). Dspit th instability in wight of ngy consumption of oil and in wold s dpndnc on this souc, th is no and will not b significant chang in na futu (TMMOB, ). 3. Th Issu of Engy Scuity Anoth sious issu that dvlopd and dvloping countis fac is ngy scuity. Th issu of ngy scuity is sn to bcom a lativly common and pmannt poblm spcially in cnt yas. It is cla that th wold nds to dvlop a long un and coodinatd scuity achitctu on this issu (Elbaadi, 8). Concntation of ngy soucs in ctain aas and militay and civil intvntions fo contolling ths aas hav mad th wold ngy supply snsitiv and mad th ngy pics highly volatil (Figu ). In this contxt, concns about ngy scuity a causd by both dtioation in physical supply and suddn incas in ngy pics (Houss of Paliamnt, ). Rising of wold ngy costs cats incasd dmand fo ngy spcially in nwly dvloping conomis and th poduction soucs of oil and natual gas poducing countis lagging 76

4 Th Ral Cisis Waiting fo th Wold: Oil Poblm and Engy Scuity bhind th incasd dmand pos national and intnational poblms on ngy scuity (Hughs, 7). Th ongoing instability in th Middl East and fluctuation in oil dmand in dvloping and tansition countis, spcially China, hav mad th ngy scuity high political pioity in both th EU and th USA (Fondl and Schmidt, 8). Figu. Wold Oil Supply and Dmand 6- a y D 8 P 7 6 ls 5 a B 4 n 3 ilio M Wold Oil Supply and Dmand Yas 7 8 Total Oil Dm and Total Oil Supply Souc: BP, BP Statistical Rviw of Wold Engy, Jun, bp.com/statisticalviw Figu. Chang of Pics of Cud Oil 76- l a B p s la o D S U Spot Cud Pics Yas Dubai $\bbl Bnt $\bbl Nigian Focados $\bbl Wst Txas Intmdiat $\bbl Souc: BP, BP Statistical Rviw of Wold Engy, Jun, bp.com/statisticalviw Th qust fo ngy scuity can b said to gain acclation aft th oil shock in 73. This and subsqunt shocks hav st th issu of ngy scuity on th cnt of ngy policis of dvlopd and dvloping countis. Th incas in oil pics duing th piod 7-8 causd th ngy scuity policis to shap, and th countis focusd mo on th xpanding of incntivs gading ngy invstmnts and on divsifying of ngy supply soucs (Cohn t al., ). Engy scuity has bcom a sious concn ov a piod of naly a cntuy. Whil th concpt of ngy scuity was closly associatd with ful supply fo th amy in th fist-half of th cntuy that sultd in th Scond Wold Wa, oil did not los its significanc and it bcam mo and 77

5 Slctd Paps fom "Intnational Confnc on Engy Economics and Policy, 6-8 May 3, Nvshi, Tuky" mo impotant fo many industializd socitis. Countis bcam dpndnt on oil in many filds such as passng tanspotation, food poduction, halth, hating, lcticity gnation, mchanizd faming. Howv, a lag pat of th countis did not hav ncssay poduction potntial to mt th incas in oil dpndnc. Th vulnability of this systm mgd with th oil cisis in 7s and th fagility of th oil supply systm w btt undstood. In th last piods of 5-3 yas, anoth lin of thought on this subjct has bn sn to dvlop. Th fist thought on this subjct is that ngy soucs a limitd. Th idas of limitd soucs includ concns about whth th soucs will b sufficint to mt th wold s ngy nd in th coming yas. Th scond thought on this subjct is th scuity vulnability of complx tchnical systms. It is claimd that lctical systms of countis a vulnabl bcaus thy a xhaustibl and usually dpndnt on lag-scal ngy gnation tchnologis fd by impotd ngy soucs (Chp and Jwll, ). Howv, th vulnabilitis of th systms a not limitd to only pow plants basd on fossil fuls. Th ngy gnation spcially povidd by dams on common intnational ivs is usually pcivd to b unsaf in th light of climat chang affcting th sasonal wat availability. Concns about ngy scuity a th main diving foc of ngy policy. Ths concns a latd to th flxibility of ngy systm, potction fom potntial thats causd by xtnal factos and soundnss (GEA, ). Engy scuity has many aspcts: th long-tm ngy scuity is mainly linkd to timly invstmnts to supply ngy in lin with conomic dvlopmnts and nvionmntal nds. On th oth hand, th shot-tm ngy scuity focuss on th ability of th ngy systm to act pomptly to suddn changs in th supply-dmand balanc (Intnational Engy Agncy, 3). Engy scuity is an impotant goal of ngy policy within th famwok of sustainabl ngy dvlopmnt. Th dvlopmnt of sustainabl ngy includs th subjcts of divsification of ngy supply, ngy autonomy, low lvl of ngy impot in ngy supply, fficint us of ngy in ngy industy, th quality of ngy supply, th suitabl cost in ngy supply, sufficint invstmnt financing and nwabl contibution (Bailoch, 8). Th ngy should b both adquat and sustainabl fo social, conomic and militay nds. So, th ngy scuity is a basic pquisit fo sustainabl dvlopmnt. 4. Conclusion Although th diffnt foms of ngy hav gaind impotanc fom tim to tim sinc th wold xistd, th ngy has always bn on of th constons of th continuation of civilization. Whn takn into th account of th nvionmntal dgadation in ngy gnation pocss in th fac of continuous incas in wold ngy dmand, challngs in accss to soucs and dclins in svs, it is sn that th sustainability of today s pow stuctu basd substantially on fossil fuls will b quit difficult in th fatu. ıncasing th sha of nwabl ngy soucs in wold ngy consumption is of vital impotanc in this spct. Anoth impotant issu on ngy is th ngy scuity. Concns about th ngy scuity fist mgd in th USA, Euop and Japan at th bginning of th 7s. Th oil cisis duing this piod vald th waknss of advancd conomis against th oil pic shocks. Du to th ongoing impotanc of fossil fuls in ngy poduction, th ngy scuity occupis an impotanc plac on th agnda of ngy policis. In this sns, th ngy scuity and th incas in wold ngy dmand hav bcom a pioity fo th policis of both dvloping and dvlopd countis. Th ngy scuity is not just about ngy pic shocks. It is also latd to th availability and attainability of th ngy. Howv, it can b said that many poblms about this issu a still uncla. Rfncs Aguia-Conaia, L., Wn, Y. (), OPEC s Oil Expoting Statgy and Macoconomic (In)stability, Engy Economics, 34, Apgis, N., Payn, J.E. (), Rnwabl and Non-Rnwabl Engy Consumption- Gowth Nxus: Evidnc fom a Panl Eo Coction Modl, Engy Economics, 34,

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