Mitigating Oil Supply Disruptions Is Crucial For Global Energy Essay.

At the end of a module students will be expected to be able to:

1. Explain the importance and relevance of global energy outlook within contemporary organisations and evaluate the relationship between these organisation and countries.
2. Analyse the different energy policy frameworks in relation to the impact of the different elements of energy sources and sustainability.
3. Discuss the key global challenges and issues facing the world oil and gas industry and the factors affecting their long-term prospects. 

Security of energy exports and energy transit from the Middle East and North Africa (MENA) region, given its paramount importance to the global economy, has long been a concern. The region has a long history of disruptions to oil and gas production and transport. Transit through the Gulf and Strait of Hormuz has received most attention, but there are other vulnerabilities, with potential disruption scenarios ranging from small-scale local terrorism and sabotage to major interstate conflicts.

The vulnerability of oil transport has received the most attention, given its magnitude, but the security of liquefied natural gas exports and vital imports to the Gulf countries are under-appreciated risks. Energy security threats also occur to local production facilities and to transit routes other than the Persian Gulf and Strait of Hormuz

Two of the approaches to mitigate supply disruptions include
i. Groups of states to devise or strengthen institutions and mechanisms to deal with energy supply disruptions, such as cooperative sharing.
ii. Secondly, construct or upgrade infrastructure to provide alternativee xport routes, protect existing ones, or provide storage to overcome temporary disruption

Critically analyse examples of the two approaches, and how they can be operationalised to mitigate a potential blockade along the Strait of Hormuz. Describing the potential impact that a blockade of Strait of Hormuz will have and using specific examples will aid your arguments.

Importance of global energy outlook in organizations

Global energy outlook is the worldwide publication energy flagship well known as influential sources analysis and prognostications of global energy. It elaborates the forces that shape the world energy alteration over years to come in consideration of hesitations environs that alteration. There is a various number of scenarios to be considered in the outlook which are not predictable of what is to occur but they use the applicable suggestions of various finding and hypothesis by applying the “what if” series. These scenarios do not give a detailed explanation of all future outcomes (Cabeza, et al.2018).

This report reveals that coal plays a continuous role in the global energy supply. In all scenarios, the IEA identify coal continuous significance that’s why WCA is emphasizing about the cleanest and minimize the release of coal technologies present.

Concerning emission reduction, it shows that there is a major drop in carbon dioxide emissions because of the upturn productivities of coal-fired power firm.

An estimate of IEA projects that is three-quarter new plants emerging into the actions will operate either ultra-supercritical or supercritical knowhow. WLA tries a lot to advocate this by setting up the global Platform for Accelerating Coal Efficiency. PACE aids the universal average efficacy to reduce carbon dioxide emissions of the coal-fueled power plants. Thus, the further decreases in the carbon dioxide emission eventually raise the level of finance.

This report elaborates the role of CCS as it is essential to the objectives of worldwide climate and also in ensuring maintainable coal’s future (Child, Koskinen, Linnanen & Breyer, 2018).

The historical origin current universal energy policy framework can be dated back in the beginning seventies. Current energy situation; Nowadays, the crossing of the depletion of the fossils resources and global warming as a result of gas emission from the greenhouse is the best explanation of the global energy situation. The fossils fuels that are coal, oil, gas or uranium needs to make sure there is functioning of the definitive energy supply systems. The reserves of these remains depreciate by time due to the global energy consumption elevations of these fossils decrease fast (Ansell & Cayzer, 2018).

It increases the sustainable development perception. This is a matter of striving to meet the objectives and needs of the current without compromising to attain those of the future.  Naturally, this growth is a balance between environmental features, social and economic compared to the preserved environment and the fairness between persons, generations, peoples and the economic efficiency. The Brundtland report about the United Nations Conference on Environment and Development (UNCED) started in the year 1992 in Rio de Janeiro whereby UNFCC accepted during this conference. In 1997, UNFCC act as the frame of the formation and approval of the Kyoto protocol. This protocol was approved by 191 countries and the main aim of it was to create 37 developed countries and ensure a decrease in greenhouse gas emissions in North East countries thus stimulating sustainable development. It also encourages the invention of new ideas among these countries which can help to reduce their emissions by either minimizing energy consumption or use the renewable source of energy (Davis, Ahiduzzaman & Kumar, 2018).

Analyzing energy policy frameworks for sustainability

This is a source of energy free from carbon compared to the fossils fuels. It mainly originated from the sun e.g. biomass, hydro, wave energies, the gravitation system of Earth-moon-sun (tide), and geothermal energy generated from a high temperature of Earth’s core. The difference between fossils fuels and the renewable resources is the amount of greenhouse gas emissions especially carbon dioxide. For the biomass, carbon dioxide emits during combustion is equalize by the Carbon dioxide used in the course of its progression. Likewise, to the other resources, they can use the system which can’t emit carbon dioxide except those produce indirectly like transport and manufacturing (Davis, et al.2018).

There are convectional reserves in challenging Areas. This mostly affects a political instability regime which can hinder the investment due to insecurity. For instance, Middle East and North Africa where there has been a political conflict for a long time some up to date.

Today there is increase emerging market demand. For the Energy Institute, 51% of the oil and gas defendants making an important investment to attain development in the raising market. A significant risk can be encounter in case of overseas direct investment hence the problems of bargaining power arises of the state making the enactment of emerging markets depend on the government pricing policy (Hu, et al.2018).

The emerging of alternative fuels reduces the dependency on the oil and petroleum. Today, oil companies undergo both market demand and the environmental pressure leading to the creation of new industries that are renewable.  Approximately 47% of the respondent as per petroleum analysis, they had already invested in “cleantech”. This emphasizes the need for company policy, extra resources, and modified strategy (Jewell, et al.2018).

The climate change has brought pressure to be noted which lies on the oil and gas industries; world business has been proposing on the companies that are operating on this oil and gas industry.

The increases in the electrification technology, has reduced the demand of fuel and make the work easier. This is the utilization of natural gas which is abundance in nature due to the improvement of the new technologies and the grid digitalization. Approximately one million of oils are waste in Middle East because of traffic jam thus encourage the use of electrify cars which are fairly cheaper compare to fuels (Levesque, et al.2018).

Technological innovations; in energy sector, there are fast-improving innovations e.g. nanotechnology, big data, and artificial intelligence. These has improve different sectors such grid optimization, reduce human error mistakes, and results the traffic management improvement (Lopez, Biona & Chiu, 2018). 

The sales and marketing department of MENA should undertake a business influence analysis. Every business needs to withstand any potential supply in the chain of distribution. An entrepreneur should be prepared to understand and estimate what challenge any distributions present in the business and plan accordingly. For this to be effective, you must understand the exposure to the chain threat by taking a review methodical of the business, suppliers, customers, people, its process, and market environment(Falkner, 2018).

Challenges facing the oil and gas industry

Ensures there is a proper assessment and supervision of existing and new suppliers. Evaluating new supplier and supervises closely the existing supplier makes a key part of the chain. A new supplier should be assured they assess the key factor of the business that is experiences of the other customers, resources, quality of standard commitment, financial health, and approach to communication and so on. Valuation of new suppliers will aid to decrease the risk in the supply chain and upgrade the service levels, (Valero, et al.2018).

The producer MENA should reduce concretion on supply. To aid diminish the supply chain risk interference, one should depend on many suppliers. This demand one to build an affiliation with different secondary and primary suppliers.

Select suppliers from various geographic locations. Thought the cost will be the main factor to be considered for supplier place but it will aid if a certain region experiences a commotion.

Make sure you are working with your suppliers. Collaborating and communicating strengthen the business at all. Create a teamwork platform to help exchange information concerning business. Apart from avoiding risk it also assists to reduce errors, cut costs and facilitate cooperation on issues like security problems (Katz & Paterson, 2018).   

The wide of the shipping lanes is about six miles through the Strait of Hormuz.  Iran has the fast anti-ship missiles, attacks boats, and mines that can aid them to interrupt almost all tankers passing through the strait for many weeks or even months. A very hostile associated military response is needed to minimize the interruption. According to the Heritage analysis, a closing of the strait it will cause to be more than twice the value of crude oil, eradicating more than one million jobs and reducing hundreds of billions of dollars of national income.

For the HIS scenario, production and transportation of oil get full recovery fast than in the Heritage scenario. As per the economic in these Countries Middle  East and North Africa, the influences are less severe; the price of the petroleum attains its level record in an additional of $200 per barrel and through GDP it still reduces by more than $200 for the first year.

This report outlines the importance of the global outlook that can be put into action to help in minimizing the emissions of GHG gases worldwide. It elaborates the various energy policies of global outlook which can utilize in solving environmental problems.  Further, discuss the challenges and issues facing the world oil and gas industry that can somebody get a clue solution about the same. The oil and gas industries face a lot of challenges on their existence not only because of their impact on the environment but also due to political differences. The emerging of the new technology that’s the use of renewable resources aids in the elimination of fuels which emit CO2. Use of renewable resource ensures the conversation of climate (Valero, et al.2018). 

Reference

Ansell, T. and Cayzer, S., 2018. Limits to growth redux: A system dynamics model for assessing energy and climate change constraints to global growth. Energy Policy, 120, pp.514-525.

Cabeza, L.F., Palacios, A., Serrano, S., Ürge-Vorsatz, D. and Barreneche, C., 2018. Comparison of past projections of global and regional primary and final energy consumption with historical data. Renewable and Sustainable Energy Reviews, 82, pp.681-688.

Child, M., Koskinen, O., Linnanen, L. and Breyer, C., 2018. Sustainability guardrails for energy scenarios of the global energy transition. Renewable and Sustainable Energy Reviews, 91, pp.321-334.

Davis, M., Ahiduzzaman, M. and Kumar, A., 2018. How will Canada’s greenhouse gas emissions change by 2050? A disaggregated analysis of past and future greenhouse gas emissions using bottom-up energy modelling and Sankey diagrams. Applied Energy, 220, pp.754-786.

Davis, S.J., Lewis, N.S., Shaner, M., Aggarwal, S., Arent, D., Azevedo, I.L., Benson, S.M., Bradley, T., Brouwer, J., Chiang, Y.M. and Clack, C.T., 2018. Net-zero emissions energy systems. Science, 360(6396), p.eaas9793.

Falkner, R., 2018. Climate change, international political economy and global energy policy. Handbook of the International Political Economy of Energy and Natural Resources (Cheltenham: Elgar, 2018), pp.77-78.

Hu, Y., Peng, L., Li, X., Yao, X., Lin, H. and Chi, T., 2018. A novel evolution tree for analyzing the global energy consumption structure. Energy, 147, pp.1177-1187.

Jewell, J., McCollum, D., Emmerling, J., Bertram, C., Gernaat, D.E., Krey, V., Paroussos, L., Berger, L., Fragkiadakis, K., Keppo, I. and Saadi, N., 2018. Limited emission reductions from fuel subsidy removal except in energy-exporting regions. Nature, 554(7691), p.229.

Katz-Rosene, R. and Paterson, M., 2018. Thinking Ecologically about the Global Political Economy. Routledge.

Levesque, A., Pietzcker, R.C., Baumstark, L., De Stercke, S., Grübler, A. and Luderer, G., 2018. How much energy will buildings consume in 2100? A global perspective within a scenario framework. Energy, 148, pp.514-527.

Lopez, N.S.A., Biona, J.B.M.M. and Chiu, A.S., 2018. Electricity trading and its effects on global carbon emissions: A decomposition analysis study. Journal of Cleaner Production.

Valero, A., Valero, A., Calvo, G., Ortego, A., Ascaso, S. and Palacios, J.L., 2018. Global material requirements for the energy transition. An exergy flow analysis of decarbonization pathways. Energy.