Evaluate the political and social implications of energy supply pathway disruption (15).

Arguably, the most potentially devastating implications are those that have a significant political dimension. Though the economic and political impacts are often closely intertwined, the political aspects raise not only fears of the present, but incapacitating fears for the future too - much more than economic impacts do. One such political impact of energy supply disruption is the intergovernmental turmoil it instigates. Aggressive economic decisions can often lead to an escalation in diplomatic conflict within or between nations, that can sometimes adopt a violent dimension. Take the Russia-Ukraine conflict. As Ukraine’s primary natural gas supplier, Russia felt enabled to assert their hegemony over their neighbouring nation. In 2014, after the EU economically sanctioned two opposing gas TNCs, Gazprom (Russian gas giant) cancelled Ukraine's natural gas discount as agreed in the 2013 Ukrainian–Russian action plan, allegedly because its debt to the company had risen to $1.7 billion since 2013. In 2014, the debts had still not been repaid, and so supply to Ukraine was completely halted, threatening the energy security of Europe in its entirety. Evidently, minor disruption to supplies has much wider implications, and consequently, the EU’s suspicion of Russia has increased, augmenting geopolitical tensions. Politically, disruption to energy supply pathways can also be through public protests and disillusionment with government policies. As a consequence, this can not only undermine state authority, but it can also hinder, and in some cases, halt the construction or maintenance of energy supply pathways. Both the Keystone XL Pipeline and Dakota Access Pipeline (DAPL) in the US were condemned by the public for the potential environmental hazards. At $7 billion, Phase 4 of the XL pipeline was rejected by Obama in 2015 on environmental grounds, despite 3 Phases having already been built. The 1 172 mile long DAPL has met a similar end, despite being 87% complete. In 2016, the project was temporarily suspended due to cultural and environmental based protestations by the native Standing Rock Sioux and Cheyenne River Sioux tribes, as well as famous celebrities like Mark Ruffalo and Shailene Woodley.

In addition, price hikes and natural hazards can cause severe disruption to supplies, and can subsequently result in the prioritisation of searching for alternative energy sources by national governments. However, this can often involve conflict, as multiple nations compete for the same sources. For example, the Arctic holds approximately 412 billion barrels of oil and 30% of the world’s undiscovered gas, and as climate change causes ice packs to melt, these reserves are beginning to become exposed and accessible for exploitation. However, numerous oil and gas TNC’s, including Shell and Conocophillips, as well as various countries, including Russia, Norway and the US, are all interested in exploiting these reserves, which is already leading to diplomatic tensions, and these are expected to increase as more of the ice melts away.

However, the political impacts of disruption are not all negative. In fact, there can be incredibly positive policies that arise from a somewhat negative predicament. Severe disruption can mean a faster and more definitive shift towards renewable energies and changes in energy policies to ensure security. For example, aware of our high dependency on energy imports and the potential for disruption this causes, the UK has adopted a ‘cap and floor’ policy, meaning that investment energy links with other nations are encouraged, but energy imported from them can only be imported when our prices are higher than theirs. Furthermore, the development of the Hinkley Point power station in Southern England is evidence of increasing energy liaison between nations and an awareness of the need for renewables. At £18 billion, the plant alone is expected to deliver 7% of the UK’s energy supply by 2025, evidencing a shift away from energy dependency, to a more sustainable and independent energy future.

In regard to economic impacts of disruption to energy pathways, though they may not be as potentially devastating as political impacts, that is not to say they are not complex and problematic. Firstly, due to political instability in many of the oil producing regions i.e the Middle East, disruption is inevitable, and this means oil prices are incredibly unpredictable, and can fluctuate, which can sometimes mean extortionate price hikes. As a consequence of this initial economic shock, it seems to instigate a negative multiplier effect. Rising inflation and impacts on industry due to insufficient energy supplies means that jobs and lives are put under severe economic strain, particularly apparent in nations heavily reliant on oil. In developing nations, this can be particularly devastating, as with a lack of energy supply, developmental progress will be halted, deterring FDI and investors. For example, 80% of Chinese oil imports currently come through the Strait of Malacca, rendering Chinese oil supply incredibly precarious. The Strait of Malacca and the area surrounding Somalia are both pirate hotspots, with over half of hijackings occurring in Somali waters, and these hijackings often target oil tankers. In fact, in 2008, the MV Sirius Star oil tanker was captured by Somalian pirates en route to the US, the largest ship to be captured by pirates, a $3 million ransom was paid by the US as a result. Japan, too, have an incredibly vulnerable oil supply, with 76% of their oil coming from the politically unstable Middle East. Evidently, energy pathways are incredibly vulnerable, and if disruption occurs, the knock on economic impacts can be severe.