For any country globally, having a stable source of energy can greatly boost the country’s economic level. This can also be improved by having alternative sources of energy from gas, oil, and coal to other forms like nuclear energy. For countries in Europe for example, a time came when they got worried of the low probability-high impact likelihood of being cut off from natural gas (Maslova and Savkin, 2017). This led to the proposition of the development of Baltic pipe project, a project that will give Denmark and Poland the right of entry to Norway’s gas. Completion of the project will most likely improve the economic state of the countries that have the access to the gas. Furthermore, other trans-national projects together with strategies meant for renewable energy creation, digitalization and exploration of gas and oil which will become one of the most accomplished projects on energy today have been set up to benefit the EU region in terms of economic boost and to also help increase the level of energy security. While acquiring all the benefits of energy, another factor to consider is the effect the energy will have on the environment (Maslova and Savkin, 2017).
Transnational Energy Projects Impact on Energy Security
In order for the EU to grow economically, its member states have to independently have their own source of energy. For this to happen however, a number of tasks have to be performed including finding of new channels of supplying, coming up with projects that improve the energy security and widening and maintaining existing routes. Different energy projects are started with a different aim, depending on the economic gap or for political gain. Some of the major energy projects include:
Guam; This is intended to diversify sources of energy by the use of liquefied natural gas (LNG). According to (Dawn and Esterly, 2013). In order for GUAM to conserve the environment in the process, it is supposed to focus on renewable energy and reducing its dependency on fossil fuel. With the project involving banks and other financial institutions to the idea of creating clean energy that is efficient and renewable economic stability is created.
Baltic pipe; This will increase the supply of gas to European countries. Apart from getting rid of middle men in the gas supply, EU countries benefiting from the gas will also have political stability and independency. The prices may also reduce considerably now that business is conducted with the supplier directly (Aaltoand Korkmaz Temel, 2013).
The projects are aimed at increasing energy security and production of environment friendly energy. While promoting for energy effectiveness, several other plans had to be laid out. This is however done on a national level, leaving behind the welfare of individual states.
Increasing Energy Security In EU It has been said that “Bio fuel is recognized as an important renewable and sustainable energy source to substitute fossil fuel” (Elsevier 2014, p.2) .The use of indigenous forms of energy can be greatly reduced by raising the use of renewable energy and other forms of energy. From the year 2012 the rate at which renewable sources were used had escalated to around 14%. This is an improvement and with the reduction in the use of imported fuel, by the year 2030 progress would have been made towards cost effective energy secure state. In order for EU to have energy security, member states will have to embrace other alternative forms of energy.
Hydrocarbons and coal; For the EU members to reach the 2020 target, they have to emphasize on the use of renewable energy sources. Over the years, the use of coal has reduced significantly yet the use of carbon capture and storage is what gives hope in the oil and natural gas recovery.
Trans-national Energy Projects Benefits to UK. Despite UK having exited from the EU, they still have an understanding on projects that mutually benefit the region. The energy sector is one of the things UK gets to participate in. In order for long term goals to be accomplished, both the UK and EU need to work together considering that they were strong allies in terms of the development of the energy market. In the process the rewards for UK include a diversified supply source of energy which helps to achieve global energy dominance. This raises the level of competition which in return improves the level of services offered (Baxter, 2005). With also the formation of an alliance, technicalities like having a shortage of supply may rarely occur. With the formation of new supply routes, UK together with other EU states will not only enjoy the diversification of products but also the political stability from not having to depend on another country for survival (Baxter, 2005). With the entry of several suppliers in the market, the UK will benefit from flexible prices and the competition for clients will make it better. By having an integrated energy market, the regional’s trade will grow raising the EU states revenue together with UK. By getting rid of fossil fuels and de carbonizing its energy system UK can benefit from having a clean environment free of CO2 gas from fuels (Anon, 2018).
Global Challenges to oil and gas Industry. The oil and gas industry goes through ups and downs which has an effect on anyone in the business globally. These challenges include:
Political instability; When there are wrangles in oil or gas producing country is torn down by war, there is a reduction or a complete cut off from supplying of oil or gas. A rise in demand eventually leads to a rise in prices of gas, oil and even consumer goods.
Lack of trust; Due to several incidences where the oil and gas industry has been involved in corrupt charges and allegations, it becomes hard for the people and even investors to have faith in the system. This in return leads to poor distribution of resources and even delay of projects. The level of economic growth is also hindered especially where countries having a history of corruption being unable to access funds.
Unavailability of wells; Having the available oil wells drying up is a major problem to the oil and gas industry. Having to find another well, drilling and transporting the oil to the companies location is also a major problem. For this to be done, qualified personnel are to be employed to carry out the work which he needs to be paid for.
Inability to move with the trend; Due to the constant changes that place in the oil industry, a company will need to adjust immediately or face the risk of falling out of business. This may be in form of the level of education of employees or even new methods and drilling ideas.
Government intervention; All over the globe government are pushing for the use of clean energy and the reduction on the amount of carbon emissions. Rules are widely set on ways oil and gas industries should minimise environmental pollution.
Stochastic nature of oil and gas business; For oil business especially in Europe, the prices are not constant and that is a bad thing for investors. The level of risk is so high that no one will want to put their money there.
Having evaluated the EU energy plans, it’s evident how important energy is to the political, social and economical levels of a country. The different transnational energy projects put in place play a major role in making sure that the member states of EU attain an economic development as well as have a secure source of energy. The Baltic pipe project in particular will strengthen the energy security and improve the economic state of the region. Despite facing a number of challenges in the oil and gas production, there is still hope in coming up with a suitable form of energy. With all the projects that are intended to improve the EU economy and promotion of energy security, there is also the need for production of clean energy and avoid pollution of the environment. The projects discussed have all shown to give a positive impact on the EU states and the UK. The initiators of the projects obviously had a long term vision, until the end of the projects to find out the true impact they will have.
Anon, (2018). [online] Available at: https://www.primeast.com/top-5-challenges facing oil industry [Accessed 9 Mar. 2018].
Aalto, P. and Korkmaz Temel, D. (2013). European Energy Security: Natural Gas and the Integration Process. JCMS: Journal of Common Market Studies, 52(4), pp.758-774.
Maslova, O. and Savkin, S. (2017). THE FUNDAMENTAL CHALLENGES FACING OIL AND GAS INVESTMENT PROJECTS. Oil and Gas Business, (2), pp.196-207.
Baxter, M. (2005). Global Challenges Facing the Oil and Gas Industry. Journal of Petroleum Technology, 57(04), pp.14-15.
Amariei, DA and Bachler, JB 2013, Toward a Sustainable Energy Future, 1(1), pp.12-20
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Top-5-Challenges Facing Oil Industry. Available From:
https://www.primeast.com/top-5-challenges facing oil industry [8 March 2018]
Baltic Pipe Project. Available from:
https://www.baltic-pipe.eu. [8 march 2018]