Impact on Energy Security

With growing concerns in the internal arena regarding energy and environment impact organisation that operate in the energy industry have been involved in research and development to ensure sustainability in the energy sector. Not only have that, business organisation in various industries involved in energy conservation and awareness programs to make a sustainable future. The Baltic Pipe Project is a planned energy infrastructure development programme which is undertaken in order to provide the European market an opportunity for a new energy supply passage. This project will provide a corridor for the transportation of gas to the Danish and Polish markets from Norway; it will also provide aid to the neighbouring countries in central and Eastern Europe. Simultaneously, this project will facilitate the supply of energy from Poland to the countries such as Denmark and Sweden (Iea.org, 2018). One of the most important and impactful aspect of the pipeline will be the end of an international relation in between Poland and Russia. The countries had a long-term gas supply contract with each other the current contract is with the oil and Gas Company of Russia called Gazprom. Each year Poland, buys approximately 10.2 bcm gas from the Russian oil and Gas Company. The accounting annual consumption of gas in Poland’s is nearly 15 bcm. Therefore it can be said that the majority of the country’s gas consumption was dependent on Russia. The last contract was signed in 1996 and is due to expire in 2022 (Reuters 2016).

The two organisations that is responsible for the project is Energinet which is a Danish national system operator for channelling electricity and natural gas. On the other hand, GAZ-SYSTEM is a Polish organisation that is responsible for gas transmission system operator. 

According to IEA, energy security as the process of continuous and uninterrupted accessibility of energy supply which will also be provided to the consumers at an affordable price (Dockalikova and Klozikova 2014). There are several aspects of energy security: long-term process of energy security essentially caters to the relevant investments and also to the supply of energy aligned with economic developments and environmental sustainable requirements which needs to be focused upon. Conversely, the short-term process of energy security concentrates on the capability of organisations and project is that operate under this industry to combat the dynamics of the market and maintain equilibrium in the supply-demand of the energy systems (Iea.org, 2018).

Impact on Politics, Economy, Society, and Technology

Political: Piotr Nimiski in Eastern Europe Investment Summit at Reuters in 2016, said that If the price of the gas that is supplied by Russia is not an option that is completely being ruled out if the company keeps the price competitive, but this would not mean a long-term contract. The political stability in the European Union is one of the major advantages of these projects. The organisation Polish organisation has a number of projects in the pipeline which will help in improving the energy security of the countries in the European Union. The concept of providing the people with energy security is one of the most essential aspects that are dealt in the process of international relations; the government of the countries acknowledge the fact that in order to help the people with sustainable and affordable energy sources these projects are essential.  There are several guidelines though in the infrastructural process but then The Baltic Pipe Project has received support from the polish, Danish and Swedish government. These transnational energy infrastructure projects will help in the energy sector sustainability for the countries in the central and Eastern Europe. According to Piotr Naimski, Poland will be able to import 10 bcm of energy in a year with the help of the pipeline. Which would somewhat meet the annual consumption of the people (Reuters 2016).

Some of the political aspects that impact this industry as a whole are the Geopolitical conflicts, Political Instability both of these aspects are absent in the European union region except the exit of UK form the union, in that case the country still continues to be a part of the IEA hence facilities from these project will reflect in the UK as well.  

Economic: The energy industry and the global economy have a significant relationship as the economy of a country is heavily impacted with the dynamics of this industry. One of the drivers of global economic growth is the amount of global consumption of energy in various forms. The oil and gas industry is impacted by some of the aspects of the economy such as: global economic crisis, significant bankruptcy in the economy, financial debt in public and private sector in many countries of OECD, shadow banking system in up-and-coming economies also impact the economic aspect.

The countries in the central and Eastern Europe have a developed economy with a stable political scenario, the GDP of these countries are also comparatively higher than many other countries.  The inflation and the currency exchange rate also impact the economic aspect of the industry. According to some of the researches conducted by IEA, international banks, and national energy authorities; the price of energy sources will remain under 80$ till 2020 this information is derived from the supply and demand trend of the energy sources (Weijermars  2013).

Impact on Environment

Society: the society is impacting this project in a large way as there has been an increase in the trend of awareness and sustainability among other industries as well as among the common people. Any kind of cost cut in the energy source is usually welcomed by the society as energy is oil is one of the most extensively used resources. On the other hand there is also increase in usage of alternative and clean energy source this is also lead by the awareness of the impact it has on the environment and on the climate. 

One of the major factors that impact this industry is growing population in these regions; the demand of the energy resources is constantly on the rise with the growing population. Another societal aspect that goes against this project is the fact that awareness among the people is also increasing the ethical dilemma of using such fossil fuel. There will be significant amount of employment opportunity with this project in several positions starting from management to the ground employee level. The pipeline will also incorporate third parties where ever necessary.

Technological this is said to be a lot of uncertainty and barriers in bringing about changes in the technology of this industry. As a heavy industry the installation of large scale technical upgrade involves a lot of risk in terms of finance as well as other resources. Some of the barriers are as listed below:

• Ambiguity over the proceeds that the investment will incur.
• Lack of knowledge among the people due to shortage of skills.
• Heavy cost of the investment.
• For an innovation to make a mark in this industry
• There is also a lack of funds
• The prices of oil and gas keeps fluctuating
• The rules and regulations of these technologies that can be impacted in this region is very strict

Environment: oil and gas industry has been under the scrutiny of many academics and critics regarding the impact the products and services have on the environment. With growing adaptation of the triple bottom line concepts by business organisations oil and gas industry has also realised the responsibilities they have on the society and the environment. According to corresponding regulations, suitable in each state both Poland and Denmark made efforts towards achieving Environmental Impact Assessments (EIA) this is during December 2017. Such infrastructure projects, provides an in-depth analysis of environmental conditions and their potential influence upon the surrounding area before commencing on the process (En.gaz-system.pl 2018).

In Poland Based on information contained in the Project Information Card (an environmental decision), the  Regional Directorate of Environmental Protection this is the authoritative body responsible for issuing environmental decision, is going to identify the capacity and method of the Report on Environmental Impact (En.gaz-system.pl 2018). 

On the other hand, environmental authorization is issued by the national Agency for Environmental Protection (for onshore infrastructure) and the national Energy Agency (for offshore facilities) in Denmark. The EIA procedure will comprise two public hearings, during which all the stakeholders of the project may provide their case and outlook on the possibility of investigations within the procedure and on the final report that will be presented by the EIA (En.gaz-system.pl 2018).

Conclusion

Legal: The organisations in this industry are bound by several legal formalities of the country and of international forum as well.  Aforementioned there are strict rules and regulations in Europe regarding the sustainability and the operations of the process of such a project (Field et al ., 2014). 

Though UK may not be able to gain from this pipeline but then the format of transnational pipeline can be one of the major ways in which the UK can tap the largen oil resources present in Ireland. The different aspects of the laying of the transnational pipeline across different countries will greatly help the economy lowering the cost of transport of the oil as a natural resource to other countries. The pipe has to go through UK for reaching the land mass of Europe from Ireland, and there may be a number of political and legal issues in the way due to the Brexit. Despite this when the understanding is formed between the different governments it will greatly help the economy of UK as it will have direct access to crude oil which is imported to the country. The lowering of the transport and the import costs (Monagan, 2012). The participation of the country in the International energy association will help in forging a proper understanding between the governments. It will be a great project in the long run as it will help the environment and the economy of the country. Moreover, the lowering of the costs of the oil in the country will also help in the reduction in the prices of the oil-based products in the country. The transnational pipeline will also serve as an important assessment for reducing the traffic of the seaways which is used for the transport of the oil. Brexit has provided the government of UK with opportunities to form its own allies and build international relations which will be helpful for the government in terms of its service to the general public.

Thus it can be concluded that the interaction will help United Kingdom a great deal from a political perspective too as it will help in reinstating the transactional relation between UK and European Union. The participation of IEA also makes UK responsible for ascertaining the environmental benefits in the Energy and Gas sectors and the transnational pipeline is one of the best ways to reduce pollution and reduce the chances of oil spillage. 

Reference list:

Dockalikova, I. and Klozikova, J., 2014, November. MCDM Methods in Practice: Determining the Significance of PESTEL Analysis Criteria. In European Conference on Management, Leadership & Governance (p. 418). Academic Conferences International Limited.

En.gaz-system.pl., 2018 . ENVIRONMENTAL PROCEDURES FOR THE BALTIC PIPE PROJECT HAVE BEEN LAUNCHED. [online] en.gaz-system.pl. Available at: https://en.gaz-system.pl/press-centre/news/information-for-the-media/artykul/202647/ [Accessed 25 Mar. 2018].

Field, R.A., Soltis, J. and Murphy, S., 2014. Air quality concerns of unconventional oil and natural gas production. Environmental Science: Processes & Impacts, 16(5), pp.954-969.

iea.org., 2018. Energy security. [online] iea.org. Available at: https://www.iea.org/topics/energysecurity/ [Accessed 25 Mar. 2018].

Monagan , D.,2012. Oil Riches In Ireland Could Be Vast. [online] forbes.com. Available at: https://www.forbes.com/sites/davidmonagan/2012/11/01/black-gold-in-ireland-mindthe-eco-warriors-though/#1dd8a0f71fee [Accessed 25 Mar. 2018].

Reuters., 2016. Poland aims to end long-term gas supplies from Russia after 2022. [online] reuters.com. Available at: https://www.reuters.com/article/us-eeurope-summit/poland-aims-to-end-long-term-gas-supplies-from-russia-after-2022-idUSKCN0YM2QJ [Accessed 29 Mar. 2018].

Weijermars, R., 2013. Economic appraisal of shale gas plays in Continental Europe. Applied Energy, 106, pp.100-115.