International Energy Security Risk Index and Energy Diplomacy

It has long been recognised that energy supply disruption due to geopolitical issues, forces of nature or transient economic events have far-reaching adverse economic and social effects on energy importing countries and severe effects on producing and transit countries due to the loss of revenues. Several international organisations, including International Energy Agency (IEA), USA Global Energy Institute (GEI), World Economic Forum (WEF), Australian Government (RET) and researchers are engaged in identifying and quantifying the risks indicators, metrics, and indexes. Their objective is to formulate risk mitigation strategies, policies and actions, including increasing the reliance on renewable energy, energy diplomacy, diversification, development of local resources, improving agreements, and economisation on energy use. The energy triangle consisting of secure access to energy, economic growth and environmental degradation will increasingly derive much of the work on energy security. This chapter looks at the energy security risks, risk evaluation metrics, indexes, proposed mitigation strategies and policies, and discusses two of the indexes used to evaluate the energy security risks. In this chapter, the energy security risk is described in similar terms to those used in risk management standards and practices for other applications, not addressed clearly in the energy security literature.