Diversify energy to ensure resilience, Jens Meier says

DIVERSIFYING the international energy system is critical to ensure resilience from geopolitical shocks, International Association of Ports and Harbors (IAPH) and Hamburg Port Authority chief executive Jens Meier says.

Delivering a keynote presentation to the Ports Australia Biennial Conference in Sydney, Mr Meier asked the question of how energy supply could be guaranteed during times of geopolitical disruption, noting there was “no single answer”.

“We cannot eliminate geopolitical risk at every choke point or predict every disruption that may affect global trade,” he said, referring to shipping disruption and the partial close of the Strait of Hormuz to shipping since the conflict escalated in February.

“On February 28 this year, the conflict escalated affecting one of the most important energy lifelines, the Strait of Hormuz. The consequences for maritime transport were significant,” he said.

“Transport through the strait that had seen well over 100 vessel transits per day, sharply came to a standstill.

“[It was] the largest disruption in the history of the global oil market. For a global economy that depends upon uninterrupted movement of energy [it became] an issue almost overnight.”

Consequences were felt far beyond the region in terms of higher energy and insurance costs.

Mr Meir said the answer had to be about making systems more resilient.

“We can make our system more resilient by building the infrastructure and partnerships to diversify our energy sources and fuels,” Mr Meier said.

“That gives ports a unique opportunity to contribute to the solution, but none of us can do this alone.

“The energy transition will not be delivered by individual actors acting independently, it will be achieved through strategic cooperation across the entire supply chain,” he said.

“If we build those partnerships now we will be better prepared, not only for the energy system of tomorrow but also for the disruptions we cannot yet foresee.”