Challenging the myths of energy security

On both sides of the Atlantic, foreign policy analysts have convinced politicians that the west faces a severe energy security challenge. The 1970s myth of energy independence is back. We hear the same


It is time to challenge this vision. The global oil market is not falling apart. Despite the move towards greater government control, oil is still traded in a globally integrated, highly liquid market. Accessing this market requires no diplomatic or military capacity. The world economy does face a mid-term risk of liquid fuel scarcity and a short-term risk of oil supply disruption, but there is nothing we are ill-equipped to deal with. The answer to the first is higher taxes on oil, tougher fuel-economy standards and increased spending on alternative technologies. As for the higher risk of supply disruption, a new wave of investment is needed in emergency storage, a move the US has already embarked on.

When the risks go up it makes sense to buy more insurance. It is also important to go from a regime based on the Organisation of Economic Co-operation and Development to one that includes the fast-growing energy economies of China and India. Whether that means bringing these countries into the OECD or taking the IEA out of the Paris-based organisation is for governments to decide, but the goal is clear.

Financial Times