US energy-security risk expected to rise

A sharp improvement in energy-security risk in the US last year coincided with economic crisis and doesn’t represent the start of a trend, according to an assessment by the Institute for 21st Century Energy.

By OGJ editors
HOUSTON, May 25
-- A sharp improvement in energy-security risk in the US last year coincided with economic crisis and doesn’t represent the start of a trend, according to an assessment by the Institute for 21st Century Energy.

An index of energy-security risk developed by the institute, part of the US Chamber of Commerce, improved by 16.1 points on a scale that assigns 1980, riskiest year for US energy security since 1970, a value of 100 and measures improvement as reductions from that base. The 2009 value: 83.7.

The study points out that the improvement was a “byproduct of a severe financial crisis that exacted an enormous economic toll with a significant drop-off in energy demand that [is] expected to be temporary.”

The institute intends to publish the new index yearly.

Its study assesses four major areas of risk—geopolitical, economic, reliability, and environmental—against 37 factors of supply, end-use, operations, and environmental performance.

Since 1970, the index shows spikes in 1980-81 and 2008, with “one large trough connecting them,” the report says.

Projections show that “as the global economy recovers, the risks to US energy security outlined in the index will approach the highs seen in 1980-81 and 2008 and remain at over 95 through 2030.”

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