ENERGY SECURITY Prof. Maria G. Burns Director, Logistics & Transportation Policy Program

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1 2017 Joint Annual Meeting of AASHTO Special Committee on Transportation Security and Emergency Management (SCOTSEM) AASHTO Subcommittee on Highway Transport (SCOHT), and TRB Critical Infrastructure Committee (ABR 10) Implementing Arts of Practice ENERGY SECURITY Prof. Maria G. Burns Director, Logistics & Transportation Policy Program Source: Maria Burns (2017) Energy Security Infrastructure, Routledge Publications, CRC TNF. 7/31/2017 M. BURNS-AASHTO.TRB

2 CONTENTS ENERGY SECURITY Contents 1. The Elements of Security 2. Energy Security Threats 3. Risk Types 4. The Change Paradox (7 Areas) Center for Logistics & Transportation Policy Q&A session Sources: Burns (2017) Energy Security Infrastructure Book, Routledge, CRC Press, Taylor & Francis. Burns (2015) Logistics & Transportation Security Book, CRC Press, Taylor & Francis. Burns (2014) Port Management & Operations Book, CRC Press, Taylor & Francis. 7/31/2017 M. BURNS-AASHTO.TRB

3 THE ELEMENTS OF SECURITY ENERGY SECURITY Figure: Energy security affected by economic, commercial & geopolitical changes Energy Security Changes due to: (1) 8 ENERGY MARKETS (i) New Technologies (iii) New Regulations (iii) New Partnerships (2) GEOPOLITICS New alliances New Threats GLOBAL TURMOIL (3) ECONOMICS (i) Oil Price collapse (ii) New Energy Sources (iii) Changes in Supply & Demand Production & Consumption Source: Maria Burns (2017) Energy Security Infrastructure, Routledge Publications, CRC TNF. 7/31/2017 M. BURNS-AASHTO.TRB

4 THE ELEMENTS OF SECURITY Figure: The Pyramid of Energy security ENERGY SECURITY Source: Maria Burns (2017) Energy Security Infrastructure, Routledge Publications, CRC TNF. 7/31/2017 M. BURNS-AASHTO.TRB

5 SHORT VS. LONG TERM ENERGY SECURITY Short-term Security Measures Long-term FORECASTING Laws Policies - Regulations Maritime Transportation Security Act ISPS MarSec Threat Levels Facility Security Plan Detection of Suspicious Activities Detection of HazMat / Dangerous Devices Emergency Response 7/31/2017 M. BURNS-AASHTO.TRB

6 FORECASTING THE MARKET CYCLES ENERGY SECURITY 7/31/2017 M. BURNS-AASHTO.TRB

7 FORECASTING THE MARKET CYCLES ENERGY SECURITY 7/31/2017 M. BURNS-AASHTO.TRB

8 ENERGY SECURITY THREATS TYPE A: SECURITY THREATS => INTENTIONAL DAMAGE TYPE B: SAFETY THREATS => UNINTENTIONAL DAMAGE 7/31/2017 M. BURNS-AASHTO.TRB

9 RISK TYPES ENERGY SECURITY POLITICAL & ECONOMIC AGENDA Taxation & Subsidies HSSQE Laws & Policies Sociopolitical Uncertainty Economy Market Uncertainty ACCESSIBILITY Physical access to reserves Sociopolitical reasons FACTORS OF PRODUCTION Human Factor Capital & Land Innovation: IT * Technologies * Systems Source: Burns (2017) Energy Security Book, Taylor & Francis. 7/31/2017 M. BURNS-AASHTO.TRB

10 OIL PRODUCERS & GEOPOLITICAL RISK roven Reserves (millions U.S. EIA (2016) OPEC (2016) BP (2016) of barrels) Country Rank Reserves Rank Reserves Rank Reserves enezuela 1 298, , ,900. Arabia 2 268, , ,600 anada 3 172, ,118 OPEC excludes mined oil sand ,200 ran 4 157, , ,800 raq 5 144, , ,100 uwait 6 104, , ,500 AE 7 97, , ,800 ussia 8 80, , ,400 ibya 9 48, , ,400.S.A 10 39, , ,000 igeria 11 37, , ,100 azakhstan 12 30, , ,000 atar 13 25, , ,244 hina 14 24, , ,500 razil 15 15, , ,000 lgeria 16 12, , ,200 exico 17 9, , ,800 7/31/2017 M. BURNS-AASHTO.TRB

11 OIL PRODUCERS & GEOPOLITICAL RISK 7/31/2017 M. BURNS-AASHTO.TRB Sources: EIA, Investment Banks, Forbes, WSJ (2016)

12 OIL PRODUCERS & GEOPOLITICAL RISK Sources: EIA, Investment Banks, Forbes, WSJ (2016) 7/31/2017 M. BURNS-AASHTO.TRB

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14 PRICE & NATIONAL SECURITY THREATS For $10 drop in oil price $4.5 billion lost revenue SUPPLY CHAIN VULNERABILITIES (Limited budget & resources) PRICE & NATIONAL SECURITY THREATS SUPPLY CHAIN VULNERABILITIES (Increased budget & resources) 7/31/2017 M. BURNS-AASHTO.TRB

15 CONVENTIONAL VS. RENEWABLE ENERGY COMPETITION While fossil fuels (oil and gas, also known as conventional energy sources ) have represented the primary energy sources for a number of decades, renewable energy sources (such as biomass, wind, solar, geothermal, hydroelectric energy sources) are increasingly being used. 7/31/2017 M. BURNS-AASHTO.TRB

16 Unconventional energy markets will grow for about 8% p.a. for the next decade. (BP Energy Outlook 2030) 7/31/2017 M. BURNS-AASHTO.TRB

17 CONVENTIONAL VS. RENEWABLE ENERGY COMPETITION NEED FOR INVESTMENT: NATIONAL INFRASTRUCTURE NEW TECHNOLOGIES NEW TRADE ROUTES NEW POLICIES NEW SECURITY THREATS 7/31/2017 M. BURNS-AASHTO.TRB

18 NEW SECURITY THREATS 7/31/2017 M. BURNS-AASHTO.TRB

19 Facts and Figures: 33% longer to resolve cyber security issues $1.6 million p.a. = the average cost of resolving a cyber security threat 17 times more attacks into U.S. Critical Infrastructure $113 billion p.a. = the global cost of cyber crime 66% increase in security incidents (PwC, 2016) 83% of companies view cyber threats as a top biz threat but only 38% are prepared (ISACA, 2016) 60-80% of network incidents originate from employees! (Comp.Sec.Inst.CA) 7/31/2017 M. BURNS-AASHTO.TRB

20 Volume = of data per second Velocity = speed Veracity = trustworthiness Variety = of data platforms Value = leverage big data 7/31/2017 M. BURNS-AASHTO.TRB

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22 U.S. Energy Critical infrastructure Private Sector Public Sector 7/31/2017 M. BURNS-AASHTO.TRB

23 Logistics and Transportation Policy Program 1. RESEARCH ACTIVITIES Homeland Security Global Supply Chain Security Critical Infrastructure & Resilience Project Management, Feasibility Studies Market Forecasts 2. TRAINING USCG-Approved Train-The-Trainer Hazardous Materials HSQE: Security * Safety * Quality * Environment Offshore Supply Vessels (OSVs) Emergency Response * Crisis Management * Crowd Management Leadership & Teamwork International Logistics Certificate, focus in Oil & Gas 7/31/2017 M. BURNS-AASHTO.TRB

24 Prof. Maria G. Burns Director, Logistics & Transportation Policy Program (LTPP), University of Houston Cell: Book References: REF.#3: Maria Burns (2017) Energy Security Infrastructure, Routledge Publications, CRC TNF. Thank You. 7/31/2017 M. BURNS-AASHTO.TRB