The increasing threat of terrorist attacks on Europe’s energy infrastructure has led to a sharp growth in the energy security industry over the past decade. Judging by results, these millions of euros were well spent, with no major power plant, pipeline, refinery, national grid, gas terminal or other significant facility damaged by terrorists despite numerous warnings and foiled terror plots. But the question remains: are we doing enough, or should we be investing even more to guarantee the security of Europe’s energy supplies?
Investing in energy security is like buying insurance. Buy too little and you risk disaster; buy too much and you are wasting your money because you cannot insure against every possible risk. Take the Fukushima nuclear power plant, for example. The Japanese had planned for a worst case scenario of a 10-metre high tsunami, only to be struck by a 14-metre surge. Chronicles of the world’s worst disruptions to energy supplies reveal that nature, not man, is the biggest threat, with hurricanes, earthquakes, floods and tsunamis causing more damage than terrorists.
When terrorists do strike, their targets are primarily upstream from Europe in places like the Gulf, Russia and Libya, and no amount of investment in Europe’s security architecture can insure against the impacts of terror attacks thousands of kilometres away.
Energy security is generally defined as reliable supplies at affordable prices. In tough economic times we have to be particularly careful to strike the right balance between reliability and affordability. Over-investment in security comes at a cost, with the expense of installing equipment and employing personnel passed on to consumers through higher fuel and electricity bills. Given the current terror threat, and the cost of adding another layer of security, Europeans should feel satisfied that they have the right level of protection in place.