Energy Security for Australia: Crafting a comprehensive energy security policy By Athol Yates and Neil Greet

ISBN 978-1-922107-46-6 (c) Engineers Australia, 2014 All rights reserved. Other than brief extracts, no part of this publication may be produced in any form without written consent of the publisher.

Energy Security for Australia: Crafting a comprehensive energy security policy

Engineers Australia

Contents

Abstract

Abstract 1

Australia needs a much broader understanding of energy security than the one that policy makers currently use. The existing definition is too narrowly focused on economic harm arising from a loss of supply, and gives insufficient attention to the fact that energy security is a multi–dimensional concept intertwined with issues across the social, political, economic and environmental spectrum. The consequence of this restricted definition means that energy security is framed in a narrow way, limiting energy security policy attention to a few issues. This also reduces the opportunity for systematic engagement with other policy areas that can both worsen energy insecurities or build security. This is because the areas of energy–related concern for these areas, such as agriculture, water, sustainability and social policy, do not commonly fall within the boundaries of what is deemed to be energy security.

Abbreviations 4 1. An inadequate definition of ‘energy security’ 5 Chapter summary 5 1.1 Diversity of perspectives 5 1.2 Energy white papers and the definition of ‘energy security’

7

2. A comprehensive understanding of energy security 12 Chapter summary 13 2.1 Supply and demand dimensions of energy security

17

2.2 The four key dimensions of energy security

17

2.2.1 Energy security, national economic security and national security

21

2.2.2 Energy security, and food and water security

21

2.2.3 Energy security, and sustainable development and environmental security

22

2.2.4 Energy security, and social stability and energy stress

24

3. Energy policy issues that shape energy security 25 Chapter summary 25 3.1 Innovation 25 3.2 Forecasts 26 3.3 Sustainability 26 3.4 The link between economic growth and energy use

26

3.5 Supply chains 27 3.6 Energy sector reform and regulation 27 4. Addressing the key energy security policy challenge 29 Chapter summary 29 4.1 Adopting a comprehensive energy security definition relevant to Australia

29

4.2 Treating energy security as a ‘wicked problem’

30

4.3 Broadening the understanding of threats to energy security

31

4.4 Reducing energy consumption 32 4.5 Securing the energy wealth for future Australians

35

4.6 Integrating energy security and defence policy

36

4.7 Integrating energy security and foreign diplomacy

39

4.8 Addressing liquid fuel insecurity 43 4.9 Addressing energy poverty 45 4.10 Moving beyond energy infrastructure protection 48 4.11 Engaging the community 51 End Notes 53

formation of coalitions that seek to undermine policy decisions because of adverse effects on their interests. This report makes a series of recommendations aimed at implementing a comprehensive approach to energy security policy through the following initiatives: Adopting a comprehensive energy security definition relevant to Australia

Instead, Australia needs a comprehensive understanding of energy security that explicitly recognises both sides of the demand–supply relationship, and that energy insecurities arise across the four key domains of 1) national economic and national security, 2) food and water security, 3) sustainable development and environmental security, and 4) social stabil