Assessing Risk in a Global Energy Market
This second edition of the International Index of Energy Security Risk (International Index) provides an updated look at energy security risks across different countries for the years 1980 through 2012. The risk index calculates scores for the United States and 24 other countries that make up the large energy user group: Australia, Brazil, Canada, China, Denmark, France, Germany, India, Indonesia, Italy, Japan, Mexico, Netherlands, New Zealand, Norway, Poland, Russian Federation, South Africa, South Korea, Spain, Thailand, Turkey, Ukraine, and the United Kingdom. The scores for these countries are reported in relation to a reference index representing the average risks for Organization for Economic Co-operation and Development (OECD) member countries.2 The OECD average risk index is calibrated to a 1980 base year figure of 1,000. This calibration enables us to track changes across countries as well as countries across time. Keep in mind that a higher score means higher risk, a lower score means lower risk.
Norway was the most energy secure country in the large energy user group in 2012 and has been since 2001. Its total risk score of 909 was 14% below the oECD average score of 1,051. Mexico was the second ranked country with a score of 928. For the entire period from 1980 to 2012, either Norway or Mexico has occupied the top spot except for 1997, when the United Kingdom was ranked number one. Mexico’s risk scores, however, continue to rise faster than the OECD baseline average. If this trend persists, the country’s ranking would slide in future years. New Zealand, the United Kingdom, and Canada round out the top five for 2012.
The Ukraine was least energy secure country in the large energy user group. With a 2012 score of 2,250, its overall risk was 114% above the oECD average. It has not moved out of the 25th spot since 1992, the first year data for the country became available. Nevertheless, the Ukraine is one of the few countries that has seen its energy security risk score decline since the mid- to late-1990s, both absolutely and relative to the OECD baseline average (from 296% above the OECD average in 1996 to 114% above in 2012). The country’s scores are still so high, however, that much greater progress will be needed for the Ukraine is to break out of the bottom position. Thailand, South Korea, the Netherlands, and India make up the rest of the bottom five.
The United states climbed one place in 2012 and now ranks as the sixth most energy secure country in the group. With a 2012 score of 999, its energy security risk was about 5% below the OECD average. The revolution in domestic unconventional oil and natural gas output in the United States was the biggest factor in the country’s move up the rankings. Since 2002, when it came in at number 10, the United States has climbed four places.