The risks associated with the production and transportation of energy are changing, with diminishing supply creating an even greater demand for its protection and insurance.
That was the message to attendees at the Lloyd’s and NATO energy security dinner on Thursday 23 October.
Co-hosted with the Economist, the dinner brought together senior figures from insurance, business and diplomacy to hear Lloyd’s Chairman, Lord Levene, and NATO Secretary General, Jaap de Hoop Scheffer, discuss energy security and the risks it presents.
Welcoming NATO to Lloyd’s, Lord Levene stated that energy security was a shared concern for both the public and private sectors. He outlined Lloyd’s role in insuring production, storage, transport of energy resources and helping to support the exploration of new resources.
“Exploration is taking place in more remote and difficult environments – deeper drilling, smaller fields, and more remote environments. This is only possible through the use of increasingly sophisticated and complex technologies, which in turn need insurers to help manage the risks,” Levene said.
The Secretary General echoed these concerns, giving examples of recent risks and threats that have been faced.
“More oil and gas is extracted from under the sea rather than under the land. Tankers criss-cross the oceans delivering these products from one continent to another. Pipelines are getting longer and often pass through unstable areas. And over the past few months we have seen several examples of how easily these sophisticated supply networks can be threatened – in the Nigerian Delta, off the coast of Somalia, and in the Southern Caucasus,” he said.
The Secretary General went on to outline how NATO can help manage these risks, including protecting essential choke points and navigation routes that energy transports take, and monitoring specific ships and areas.
Thanking the Secretary General for taking the time to speak at Lloyd’s, Lord Levene noted that co-operation between business and governments was key in securing energy supply.
“There is no doubt that industry, as a key stakeholder, must play its part to encourage dialogue between producing countries and consuming countries on one hand, and to drive action by national governments and organisations such as NATO on the other hand,” Levene said.
“It’s all about understanding the risks, planning for them, and managing them better. To do so effectively requires both dialogue and collaboration. I hope that our discussion today – across a wide spectrum of industry and with the insight of the Secretary General of NATO – will help us to do just that.”
