Uncertain Times – Report from the "ONS Summit" on Energy Security in Stavanger

Staggering developments in energy supply and consumption, from abundant sources of shale gas to dramatic demand growth in emerging markets, continue to impact international security. To discuss the most recent challenges, the Munich Security Conference and the Offshore Northern Seas (ONS) Foundation convened over 60 key actors for their second joint "ONS Summit" from August 26 to 27 in Stavanger.

The ONS Summit 2018 in Stavanger (Photo: MSC / Kuhlmann).

The focal points of this year's ONS Summit were twofold: On the one hand, the competing trends of decarbonisation and the renaissance of hydrocarbon fuels are changing the global energy market and inject a new degree of uncertainty. On the other hand, "great power competition" is returning to international politics and constitutes a potential source of insecurity. The summit, co-hosted by the MSC and the ONS Foundation, gathered over 60 high-level representatives from governments, international organisations, militaries, academia and the energy sector. Among the many senior decision-makers participating were the Norwegian Minister of Petroleum and Energy Terje Søviknes, the Latvian Minister of Foreign Affairs Edgars Rinkēvičs, the Lebanese Minister of Energy and Water Cesar Abi Khalil, the Executive Director of the International Energy Agency (IEA) Fatih Birol, as well as several CEOs of major international energy companies.  

"An injection of uncertainty" 

The power structure of energy geopolitics is in flux, participants agreed while discussing "National Challenges on the Global Energy Market" during the first session of the day. Multiple participants pointed out that the degree of uncertainty on the global energy market can hardly be overstated. According to participants, this uncertainty was mainly produced by the following trends: the shale revolution on the gas market, the ostensible return of "great power politics", and interdependencies with less stable countries. However, it was clear to many participants that energy independence was unattainable for any single country – interdependence is an inherent feature of the global energy market.

Participants openly discussed how the shale revolution might shift relations between the U.S. and other players on the energy market, especially in the Middle East. Several noted that despite aiming for "energy independence", the U.S. would necessarily remain intertwined with the global market for many years to come. Another prominent topic were disruptions of global energy supply due to domestic instability of energy supplying states. Participants named the increasing political turmoil in Venezuela and the potential effects of prohibitive sanctions against Iranian oil as phenomena that could strongly impact the global energy market and thus needed to be monitored closely. They argued that to prepare themselves for possible external shocks, both politically and economically, states needed to diversify their energy imports to build resilience. 

"A combustible situation"  

Regional cooperation on energy may help manage uncertainties in supply security, participants agreed when discussing "The Geopolitics of Europe’s Gas Supply" during the day’s second session. As the world’s largest single market, the EU is perhaps both the most critical and most promising frontier for energy policy cooperation. Participants presented differing views on where the EU stands with regards to its declared goal of achieving secure, affordable and sustainable energy for its members. However, there was widespread agreement that Europe would need to further diversify its energy supply to that end. But who should the continent turn to for that purpose – the United States, the Middle East, Africa or Russia? The possibility of importing more liquid natural gas (LNG) from the United States featured prominently. Illustrating its significant potential, one participant posited that half of the gas consumption in the EU could already be served with the existing 40 LNG terminals. A particular focus of the discussion was the controversy surrounding the pipeline project Nord Stream 2. Several participants underlined the potential damage of Nord Stream 2 for energy revenues and security in Eastern Europe; others lamented this critique as attempts to politicise a "purely economic" project. Against the background of this issue, participants recognised the need to better harmonise energy policies between European countries and further diversify supply routes, including to the Mediterranean and Central Asia. A comprehensive European foreign policy, they agreed, should reduce risks and improve certainty. Yet, in order to reach these goals, energy policy needed to become a core component of European strategic thinking. 
The discussions at the ONS Summit in Stavanger threw many of the uncertainties about how to cope with current and predict future trends in global energy security into sharp relief. It underscored the need to better understand the opportunities and challenges of energy innovation and for enhanced regional cooperation on energy policy. Picking up on some of the open questions raised in Stavanger, the Munich Security Conference will continue its event series with a Roundtable on Energy Security in Minsk on October 31, alongside the annual MSC Core Group Meeting.

28 August 2018, by MSC