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National Security Strategy (Third Review) Written and Corrected Oral Evidence p JOINT- COMMITTEE ON THE NATIONAL SECURITY S T R AT E G Y The National Security Strategy (Third Review) Written and corrected oral evidence Contents Dr Fatih Birol – oral evidence (QQ 50-67) ............................................................................... 2 Cabinet Office – written evidence ........................................................................................... 17 Professor Mike Clarke, Sir Stewart Eldon and Dr Robin Niblett – oral evidence (QQ 14-30) .................................................................................................................................................. 18 Professor Robert Cooper CMG – written evidence .............................................................. 37 Professor Michael Cox, Xenia Dormandy and Professor Anatol Lieven – oral evidence (QQ 31-49) ....................................................................................................................................... 39 Major General (retired) Vincent Desportes – written evidence ............................................ 62 Xenia Dormandy, Chatham House – written evidence .......................................................... 64 Xenia Dormandy, Professor Michael Cox and Professor Anatol Lieven – oral evidence (QQ 31-49) ....................................................................................................................................... 68 Sir Stewart Eldon, Professor Mike Clarke and Dr Robin Niblett – oral evidence (QQ 14-30) .................................................................................................................................................. 69 Professor Keith Hartley – written evidence ............................................................................ 70 Dr Alexandra de Hoop Scheffer – written evidence............................................................... 76 Professor Anatol Lieven, Professor Michael Cox and Xenia Dormandy – oral evidence (QQ 31-49) ....................................................................................................................................... 82 Sir David Manning, HM Ambassador to the United States 2003-07 – written evidence........ 83 Dr Robin Niblett, The Royal Institute of International Affairs (Chatham House) – written evidence.................................................................................................................................... 87 Dr Robin Niblett, Professor Mike Clarke and Sir Stewart Eldon – oral evidence (QQ 14-30) .................................................................................................................................................. 96 The Polish Institute of International Affairs – written evidence.............................................. 97 Stiftung Wissenschaft und Politik (German Institute for International and Security Affairs) – written evidence..................................................................................................................... 102 Dr Fatih Birol – oral evidence (QQ 50-67) Dr Fatih Birol – oral evidence (QQ 50-67) HC 178 Evidence heard in Public Questions 50 - 67 MONDAY 15 JULY 2013 Members present Margaret Beckett (Chair) Lord Clark of Windermere Lord Lee of Trafford Lord Levene of Portsoken Baroness Neville-Jones Baroness Ramsay of Cartvale Lord Sterling of Plaistow Baroness Taylor of Bolton Mr James Arbuthnot Sir Malcolm Bruce Paul Murphy ________________ Witness Dr Fatih Birol, Chief Economist and Head of the Economic Analysis Division, International Energy Agency Q50 The Chair: Dr Birol, thank you very much for coming. Welcome to this hearing of the Committee. I apologise for having kept you for a moment or two before we could ask you to come in. As you see, there are quite a large number of us. Not everybody will necessarily ask you a specific question; what we will try to do is steer the questions in particular areas. What I would like to do to commence is to say that, of course, we are aware of the work that the organisation does, and that you produce your report looking forward each year. I suppose you are probably about half way, or a little more, through the next session. What I would particularly like to ask you to flag up to us is, on the one hand, what, if anything, you feel has changed—particularly major things—since your last report, and what are the issues in that report that you would particularly highlight to us at this moment in time? Dr Birol: First of all, thank you very much, Madam Chair, for inviting me here. It is a great pleasure and honour. In effect, we are in this forthcoming edition of the World Energy Outlook analysing the impact of a change that has already happened: namely, in our 2009 edition of the World Energy Outlook, we said a silent revolution is starting in North America and it will affect everybody, which was the shale gas revolution in the United States, Canada and Australia. It is affecting everybody now, and there are two major implications of that. First, it is changing the geopolitical map of energy. There are big losers and winners there, 2 Dr Fatih Birol – oral evidence (QQ 50-67) in terms of countries. Secondly, it is redefining the competitiveness of different countries in the world, relative to each other. In this forthcoming World Energy Outlook, we are looking at how the unconventional energy revolution in the United States is affecting the competitiveness of different countries in the world; we are looking at the heavy industries, such as iron, steel, petrochemicals, aluminium, cement and others, and we are looking at how the different countries’ trade balances are affected by that. We look at the US, China, Europe, Japan and the Middle East, and we see that some countries’ competiveness is adversely affected, whereas some countries are enjoying a better position vis-à-vis others in terms of their economies in the years to come. Energy is becoming much cheaper in those countries, whereas it is becoming more expensive in the others, so the cost of energy will be a crucial determinant in the years to come in defining the competiveness of different countries. Among other things, we are analysing this issue, Madam Chair. The Chair: Is this happening to a degree, or in a way, that you did not foresee in 2009? Dr Birol: In fact, to be honest with you, we were the only one who was able to foresee such a silent revolution in the United States. As you rightly implied, many other players— including some key gas-exporting countries—were not able to see that coming, and therefore were not able to position themselves. I would forgive those who did not foresee this happening, but I think that after we indicated that this will affect everybody, the ones who were not able to take our warnings seriously and not able to read the game—what was happening—are the ones who are losing today. It is very important to understand what is happening today in the very dynamic energy markets, and discuss those implications in terms of both economic competitiveness and redrawing the “geopolitics of energy” map. Q51 Lord Lee of Trafford: Dr Birol, obviously we look at this issue through a UK prism and UK eyes. The United Kingdom Government’s Energy Security Strategy projects, as has been stated, a fall by 7% between 2011 and 2020 in total UK energy demand. Do you think, with your knowledge, that is a realistic projection? It does, I have to say, seem rather strange and surprising to a number of my colleagues here. Dr Birol: This should be as a result of a few factors, and most importantly, this should be the result of the UK’s intention to use energy more efficiently. The UK can have the same lifestyle, the same economic situation and the same level of comfort in terms of energy, but use energy more efficiently. The economy and people’s comfort should not suffer from using less energy, but that energy should be used in a more efficient manner. This should be the main driver of why one might see such a trend. In fact, the UK is not the only one. Several other European countries that take energy efficiency seriously expect such trends in the next years to come. Lord Lee of Trafford: Do you believe that to be realistic? Dr Birol: I think energy efficiency policies that are put in place are, in many cases, difficult to implement. I would not say that this will happen, but to aim for such efficiency improvement is a very important policy driver. I would subscribe to that, but whether or not those policies will be 100% implemented and therefore we will see this amount of reduction is something that remains to be seen. Q52 Lord Levene of Portsoken: Has it ever been done before, significantly? Dr Birol: Yes, in many countries. For example, Denmark is a champion of that. Japan is a champion of that. Many countries push very strong energy efficiency policies, and when you 3 Dr Fatih Birol – oral evidence (QQ 50-67) look at the United States today and the President’s Climate Action Plan, the main pillar of it is energy efficiency. Perhaps you might have heard that when we published—as Madam Chair mentioned—our previous World Energy Outlook, we came up with a message: namely, that the United States is making giant steps towards energy independence. This is the message that we came up with, but many people read this message incorrectly. They thought that the United States was making these giant steps towards oil independence mainly or exclusively as a result of increasing oil production in the United States—so­called “unconventional oil”.
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