What are the impacts of energy insecurity?
Energy insecurity leads to significant social, environmental and economic impacts.
Exploration of sensitive environments
As energy demand increases and availability decreases, exploitation in sensitive environments become more common. Examples include:
- Drilling for oil in Siberia and Alaska threatens the fragile polar and tundra ecosystems.
- Areas of rainforest have been cleared in tropical areas to make way for biofuel.
- The construction of dams and reservoirs has led to valleys being flooded, displacing thousands of people, the loss of farmland and the destruction of ecosystems. An example of this is the construction of the Three Gorges Dam project in China.
- The controversial construction of renewable energy such as wind and solar farms in popular upland areas such as the Scottish Highlands and the Lake District.
Economic and environmental costs
It is expensive to extract energy resources from remote and environmentally sensitive locations, leading to an increase in the price of energy, which will be met by consumers.
As economic development continues across the globe, the demand for energy to increase agricultural output will continue to grow. This is particularly the case in areas devoid of natural energy resources and already experience energy insecurity, leading to an increase in the food prices.
Industrial output can be affected by energy insecurity and fluctuating prices. As a result of this, prices can increase with growing uncertainty. Companies based in countries that experience energy insecurity, therefore, experience considerable challenges in competing with those in countries with energy security, reducing economic output in NEEs.
In countries where there is energy insecurity, there are conflicts between different sectors including industry, domestic users and agriculture. It may be up to the government to prioritise energy users.
Countries that have energy security may flood markets in regions affected by energy insecurity. Tariffs and other controls may be introduced to protect the home market.
Energy insecurity can lead to international political conflicts, such as the disputes along the gas pipeline from Russia to the West.