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The Analysis of the Chosen Internal Condition and Prospects of Romania’s Energy Security

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In the age of high pace of technological, economic and social development, stable and uninterrupted energy supply is one of the key components determining the economic sovereignty of the state, its position in international relations, and the quality of human life. Every economy around the world is heavily dependent on its energy sector. Consequently, ensuring energy security is currently one of the most important determinant of every country’s national security and the purpose of its security policy. In this article we focus on Romania’s energy security internal condition and prospects. Our main goal is to present actual state and prospects of Romanian energy sector. In order to achieve that goal, we decided to use various methods, such as descriptive analysis, document analysis and comparative analysis. The article has two parts. The first part consists of a description of energy sources and infrastructure used by Romanian economy. The second part is an analysis of possible chances and threats for both energy sector and energy security level.
Land Forces Academy Review
Vol. XXII, No 1(85), 2017
THE ANALYSIS OF THE CHOSEN
INTERNAL CONDITION AND PROSPECTS
OF ROMANIA’S ENERGY SECURITY
Michał RUTKA
Jagiellonian University in Cracow, Poland
micha.rutka@gmail.com
ABSTRACT
In the age of high pace of technological, economic and social
development, stable and uninterrupted energy supply is one of the key
components determining the economic sovereignty of the state, its
position in international relations, and the quality of human life.
Every economy around the world is heavily dependent on its energy
sector. Consequently, ensuring energy security is currently one of the
most important determinant of every country’s national security and
the purpose of its security policy. In this article we focus on
Romania's energy security internal condition and prospects. Our main
goal is to present actual state and prospects of Romanian energy
sector. In order to achieve that goal, we decided to use various
methods, such as descriptive analysis, document analysis and
comparative analysis. The article has two parts. The first part consists
of a description of energy sources and infrastructure used by
Romanian economy. The second part is an analysis of possible
chances and threats for both energy sector and energy security level.
KEYWORDS: energy, energy security, prospects, resources, Romania
1. Introduction
Romania, a country located at the
crossing point between east-west and north-
south energy transit routes, is in relatively
privileged position compared to other
countries in Central and Eastern Europe.
It is because of its strategic position,
reasonably well-balanced mix of primary
energy resources and relatively low
dependency on imported resources. Taking
into account these factors, Romania is
currently the third most energy-independent
country in the European Union, with
roughly 21 % independency rate (Sobják,
2013, p. 1).
This situation prompted us to undertake
an analysis of the chosen internal conditions
of the Romanian energy security, as well as
the analysis of its possible prospects for the
future. In order to fully understand the
analyzed issues, we must state what is the
definition of energy security. Although there
are many different definitions of this term, we
decided to present the one, which is given by
the International Energy Agency. The IEA
defines energy security as the uninterrupted
availability of energy sources at an
affordable price. Energy security has many
aspects: long-term energy security mainly
deals with timely investments to supply
DOI: 10.1515/raft-2017-0011
© 2017. This work is licensed under the Creative Commons Attribution-NonCommercial-NoDerivatives 3.0 License.
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energy in line with economic developments
and environmental needs. On the other hand,
short-term energy security focuses on the
ability of the energy system to react promptly
to sudden changes in the supply-demand
balance (Gatej et al., 2016, p. 3).
As we can see, energy security is a
very complex term which is associated with
many issues. In order to analyze the topics
of this article, we decided to describe the
current state of production, consumption,
reserves and possible level of import of the
most important energy sources in Romania.
The second part of this article comprises a
description of possible prospects for the
Romanian energy security (threats and
chances).
Chart no. 1 Romanian primary energy consumption by energy source in 2015
2. Crude Oil
In todays world the crude oil is
probably the most important energy
resource because of its utility for
petrochemical industry, which uses crude
oil to get gasoline, kerosene, oil, wax,
grease, asphalt, petroleum residue,
petroleum jelly and many synthetic
materials. Thus, it would be no
exaggeration to say that the availability of
crude oil determines the development of the
entire global economy.
Also for Romania this resource is an
important element of the national energy
system it covers approximately 27.5 % of
the Romanian energy demand. According
to international reports, in 2015 Romania
used 9.1 million tonnes of crude oil. This is
a considerable decrease compared with
2007, in which the average consumption
was about 10.3 million tonnes of oil
(Dudley et al., 2016, p. 11). This effect is
the result of both the EUs energy-saving
policy, which Romania has adopted together
with joining the European Community in
2007, and the global economic crisis, which
also affected Romania in 2007-2008 (Trușcă,
2015, p. 58).
Crude oil is extracted, among others
in the region of Ploieşti (at the mouth of
Prahova valley), in the Moldavian
Subcarpathians in region of Trotus valley
and nearby Bacău (Polish Embassy in
Bucharest, 2015). With 10 working
refineries and an overall refining capacity
of approximately 80,100 cubic meters per
day, Romania has the largest refining
industry in the region. Though there is a
natural decline in crude oil production,
Romania continues to be the fourth largest
oil producing country in the European
Union, and fifth in Europe. Romania
extracts almost 4 million tonnes of oil per
year, however the production is not enough
to cover all domestic demand. As a result,
Romania is a net importer of crude oil
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27.50% 28.10%
18.40%
8%
17.70%
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(in 2014 imports accounted for 57 % of
domestic consumption). In 2014, the major
suppliers of crude oil to Romania were
Kazakhstan with 69 % share and Russia
with 28 % share (The Observatory of
Economic Complexity, 2014).
Proved oil reserves are approximately
100 million tonnes, enough to meet the
needs of Romania for about 23 years. This
is not a solid guarantee if we take into
account the declining domestic production
and rising dependence on the imported oil
(Dudley et al., 2016, p. 6).
3. Natural Gas
Another important pillar of the
Romanian energy is the natural gas. Its
participation in the generation of energy for
the whole country exceeds 28.1 % making it
the most important energy source of the
Romanian economy. Statistics show, that
consumption of natural gas in Romania is
progressively declining in 2012 12.4 billion
cubic meters (bcm) of gas was used, while in
2015 it was already 10.3 bcm. This situation
is favourable for the Romanian economy due
to the fact, that domestic production has
increased relative to 2014 by 5.4 %, reaching
in 2015 a level of 10.3 bcm of gas (Dudley et
al., 2016, pp. 20-23). This means, that in
terms of demand for this raw material,
Romania is almost completely (98 %)
self-sufficient. As a result, imported gas
covers only 2 % of domestic consumption
(Autoritatea Naţională de Reglementare în
domeniul Energiei, 2016, p. 1).
Interestingly, the gas production in
Romania could have reached larger size, if
not the policy pursued by the communist
government in the eighties of the last century,
involving the maximum exploitation of
domestic deposits, simultaneously eliminating
imports. Excessive and uneven operation led
to the impoverishment of deposits, that in turn
greatly reduced the production potential of
Romania, which despite having the second
largest gas market in Central and Eastern
Europe, still has to grapple with this
problem. Currently, natural gas production
is mainly carried out on the Transylvanian
Plateau, near Mediaş and Saroş, and in the
Carpathian region, namely in Suceava
County (Polish Embassy in Bucharest,
2015). The gas transmission systems in
Romania contains of 12,580 kilometres of
pipelines which are operating at low
pressure (Gatej et al., 2016, p. 19).
Proved reserves of natural gas
Romania is estimated at about 100 bcm
which is sufficient to meet its needs for
about 10-15 years. Although proven
reserves are quickly depleted, there is a
chance for obtaining this resource from
another source there are gas deposits
under the Black Sea, whose resources are
estimated at about 42-84 bcm. It is
estimated that the start of gas production
from these deposits could start at the end of
this decade (Gatej et al., 2016, p. 18).
In addition, it is assumed that
Romania has unrecognized deposits of
shale gas. In 2012 the Romanian authorities
decided to grant some concessions to
foreign companies for the exploration of
gas trapped in shale. These actions have not
brought the expected results, while in 2015
the most important entity conducting the
search the US company Chevron (holding
exploration licenses in the region of
Dobrogea and Vaslui) after several
boreholes Chevron announced its decision
to withdraw from the project for shale gas
exploration in Romania. Any exploration of
shale gas in this country is still an open
question (Gatej et al., 2016, p. 18).
4. Coal
The third most important raw material
of the Romanian energy is coal, whose
production for industrial purposes started in
the area of present-day Romania, more than
150 years ago. Romanian hard coal and
lignite output is mainly used for power
generation and heat. Though in recent years
the production of coal had a decreasing
trend, Romania ranks seventh among coal
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producers in the European Union member
countries (Stanciu, 2015).
The share of coal (both hard coal and
lignite) in the production of energy in 2015
accounted for approximately 18.4 % of the
total energy balance. This means that last
year’s coal consumption in Romania stood
at about 6.1 million tonnes of oil equivalent
(toe). It is very interesting that despite the
declared desire to move away from the use
of coal in favour of renewable energy
sources, Romania increased its use by
almost 7 % compared to 2014. A similar
trend is observed in production of this raw
material in 2015 it corresponded to
4.8 million toe, so it is a growth of more
than 8.4 % compared to 2014 (Dudley
et al., 2016, pp. 32-33).
While the lignite mining as a whole
covers the demand for this type of coal, hard
coal production is insufficient and therefore it
is necessary to import it from abroad
(1 million toe (Brown et al, 2015, p. 122).
At present, Romania has four working hard
coal underground mines and two lignite
mines. Coal mining is conducted mainly in
the upper valley of the river Jiu (around
Petroşani, Vulcan and Lupeni). Lignite is
mined in the southern part of the Carpathians,
in areas of Ploieşti and Oltenia (Eurocoal).
Proved reserves of coal are estimated
to be about 291 million tonnes (10 million
tonnes of hard coal and 281 million tonnes
of lignite), which compared to other
similar-area countries of the European
Union, is not a large quantity. It should
however be borne in mind, that if Romania
maintain the current level of consumption
of coal, its reserves will suffice to cover
Romania's need for about 45 years (Dudley
et al., 2016, pp. 32-33).
The current EU laws on
environmental protection oblige the coal
industry to meet several European standards
which necessitates large investments.
According to the EU directives, 78 large
combustion plants need to comply with
stricter environmental requirements by
2017 (Eurocoal). Currently, the Romanian
authorities are in the process of
implementing the plan approved by the
European Commission concerning the
closure or restructuring of the remaining
active coal mine. It is necessary if Romania
is to maintain the important role of fossil
fuels in primary energy generation
(Eurocoal). So far, Romania has decided to
close three hard coal mines deemed
unprofitable. Petrila mine was closed at the
end of October 2015 after 156 years of
operation; the other two Uricani and
Paroşeni shall be closed until the end of
2017 (Polish Embassy in Bucharest, 2015).
5. Nuclear Energy
In addition to the use of the
conventional energy sources, Romania also
benefits from the usage of alternative sources
such as nuclear energy. Romania has only
one nuclear power plant located in
Cernavoda. The first reactor began to work in
1996, and the second one 11 years later.
In the near future, it is planned to launch two
additional nuclear reactors in Cernavoda
nuclear power plant (World Nuclear
Association).
State-owned company Compania
Nationala a Uraniului produces an annual
average of 50 tonnes of uranium from proven
reserves of this raw material located in the
north of the country in Crucea-Botusana.
Production is partly subsidized by the
government of Romania. In 2015, uranium
production was exceptionally 77 tonnes. Used
nuclear fuel is stored for 6 to 10 years in the
same reactor, and then is transferred to the
storage of dry waste, which is also located in
Cerrnavoda. In store this waste will be held
for the next 50 years under the strict
supervision of nuclear power plants
management (World Nuclear Association).
The two currently operating reactors
generate energy, which in 2015 covered
8 % of the total energy demand of
Romania. This means that last year the
value of the used energy coming from
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active reactors was approximately 2.6
million tonnes (Dudley et al., 2016, p. 35).
Despite the relatively small share of
nuclear power in the overall energy balance
of Romania, there are indications that over
the next several years, that source of energy
will be one of the main pillars supporting the
Romanian economy (World Nuclear
Association). That can be expected for two
reasons: the first is the already mentioned
plan of increasing the number of active
reactors, and the second is the low price of
energy from nuclear power plant (only energy
produced in hydroelectric plants is cheaper).
6. Renewable Energy
The above described sources of
energy belong to the non-renewable
sources, which means that their further
exploitation will result in depletion of
deposits in short or longer term. Nowadays,
modern countries are trying to avoid the
situation when the whole economy is based
only on non-renewable sources. In order to
achieve that goal, many countries are
developing new technologies that allow
them to use energy from renewable sources.
The advantage of using renewable energy
sources is also a lack of (or a small amount
of) emissions of harmful chemicals during
the production of energy.
Like many other countries, Romania
is also investing in development and
implementation of technologies for
exploiting renewable energy sources.
An important factor that accelerates these
processes is the environmental policies of
the European Union aiming at reducing
emissions of harmful substances from the
processing of traditional energy sources
such as oil, gas or coal. The energy in
Romania is obtained from several
renewable sources such as water, wind, sun,
and biomass (Gatej et al., 2016, p. 3).
The total share of these sources in the
generation of energy in Romania in 2015
amounted to more than 17.7 %, which means
that about 5.9 million toe had been produced.
The share of each of these sources in the total
energy consumption coming from renewable
energy sources is as follows: water 63 %,
sun 7 %, wind 27 %, biomass in general
(wood, bio-fuel, waste) – 3 % (Dudley et al.,
2016, pp. 36-38). Production of energy from
renewable sources is increasing each year,
indicating that Romanians seriously approach
the issue of use this type of energy. This is a
favourable situation because of the depletion
of resources traditionally used in the
process of obtaining energy.
The dynamic development of
renewables which takes place in Romania
will have a positive impact on the overall
level of energy security of the country.
Also, it cannot be forgotten, that the
intensive development of renewable energy
sources in Romania is dictated not only by
the desire to increase the level of
independence and energy security of the
country, but also by requirements of the
European Union. The purpose of these
requirements is to achieve 24 % share of
energy from renewable energy sources in
the overall energy balance by 2020.
Analyzing the statistics, it can be concluded
that Romania is on the good track to
completing objectives of the EU in terms of
renewable energy sources (Batóg, 2011).
7. Prospects – Threats and Chances
Presently, Romanian energy sector
faces many serious threats which already
have or might have highly negative
consequences for the level of energy
security and thus, for the security of the
Romania itself. Some of the threats come
from the weakness and vulnerabilities of
the energy system, the others come from
the characteristic of the international
markets and policies. That is why we
decided to present the most significant
threats for the Romanian energy security
which are foreseen by the experts:
Projected exhaustion of crude oil,
natural gas and coal. Assuming that the
Romanian energy consumption maintain its
current level over the next few years, we
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should expect a significant increase in
dependence on foreign supplies of required
energy resources. It is estimated that by the
end of the second decade of this century,
increasing share of imported raw materials
in the energy balance of Romania will
become apparent (Gatej et al., p. 4).
The risk of blackout, which might
be caused by physically worn-out and
mortally obsolete energy transport
infrastructure (pipelines, high-voltage lines
etc.), outdated and ineffective power
production facilities (mainly associated
with hard coal (Gatej et al., p. 5)).
Economic and financial crises, the
occurrence of which is practically impossible
to predict. In the case of a worldwide crisis,
Romania has little chance of avoiding its
possible consequences, which is confirmed
by statistics from the period of the global
economic crisis which started in 2008
(Dudley et al., 2016, pp. 36-38).
Further creating inconsistent,
inadequate and unpredictable laws and
regulation which are going to discourage and
hinder potential domestic and international
partners from investing in the Romanian
energy sector (Sobják, 2013, p. 2).
Besides various threats, the energy
sector of Romania faces many various
opportunities, which properly used, can
positively affect both the development of
the energy sector, and raise of the level of
its security. According to many experts and
think-tanks, Romania will face considerable
challenges in the energy sector in the future.
In order to deal with challenges and threats
in short and long term, it seems necessary
for Romania to use the opportunities that
arise. At present, mainly considered
chances are as follow:
Increasing the expenditures for
research that could affect the development of
new technologies to increase the efficiency of
energy production, or to discover new
deposits of strategic raw materials.
Investment in research, might also contribute
to reduction of the energy intensity of the
economy and to increase the level of
environmental protection. Research
institutions have a major impact on
broadening the perspectives and possibilities
of development of the Romanian energy
sector, so it seems reasonable to increase the
outlays earmarked for higher education,
which will provide skilled scientific staff in
the future (Duduială, 2015, p. 141).
Application of modern
technologies in power generation and use
with proper regard for environmental
concerns and development of alternative or
unconventional sources of energy to reduce
the cost of electricity. It should be a part of
general modernization of the whole energy
sector (Gatej et al., p. 5).
Further liberalization and integration
of domestic energy market combined with
simple and encouraging regulation system,
which would create a proper environment for
potential investors, producers and customers
(Sobják, 2013, p. 2).
The opportunity to undertake a more
complex cooperation with foreign partners in
the field of energy. With the new projects of
international pipelines, interconnectors,
power plants and energy storage, the
Romanian energy sector would gain new
opportunities for development and increase
the level of their security. These include new
directions for diversification of imported
crude oil and natural gas. It would allow
Romania to be less reliant on supplies from
Russia and Kazakhstan (Gatej et al., pp. 5-6).
8. Conclusion
The above-mentioned prospects as
well as the current condition of energy
sources issues give us an approximate view
of the actual state of the Romanian energy
sector and its level of energy security. From
this point of view, it seems that the current
state of the Romanian energy sector is not
fully satisfactory. Various structural, political
and technological problems make the
Romanian energy security not be at a high
level. It should take a lot of action and
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corrective measures to overcome the most
serious drawbacks and avoid the threats that
might appear on the path of stable
development of the Romanian energy sector.
However, we cannot ignore the
important issues relating to the current
level of energy independence of the
country. Despite the rather negative
forecasts on exhaustible deposits and
increasing imports, Romania still has one
of the biggest indicators of energy
independence across the European Union.
A balanced and diversified structure of
energy production is relatively good
starting position for the further
development of the energy sector. Another
conclusion to be drawn after this analysis
is that Romania should be more intensively
involved in international cooperation, as
foreign partners have much to offer to the
Romanian energy sector.
The benefits of international co-operation
might be various: increase of the potential for
domestic energy production, development of
critical infrastructure, favourable conditions
for the import of scarce resources, or increase
of international importance of Romania.
In view of the challenges facing the
Romanian energy sector today, it seems
reasonable not to reject the opportunities and
the possibilities offered by the cooperation at
international level.
Despite several significant
advantages and strengths, the Romanian
energy sector still faces many problems
that restrict its development and
functioning. It seems, however, that
through the implementation of a
comprehensive system of actions by
government authorities, and thanks to the
use of available opportunities and chances
for development, the level of energy
security of Romania will rise.
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... The country has large-scale gas and oil resources, and the government attaches great importance to the development of the energy sector and conducts a series of projects to unlock the sector's potential. The success of these projects depends to a great extent on the entry of foreign resources into the country (DTM, 2002) (Rutka, 2017). ...
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In this study, natural gas production and consumption of Turkmenistan has been mentioned for years. Leaving the Soviet system in 1991, Turkmenistan started to take the first steps to move its economy from a closed system to a free market system. To raise its economy to the level of developed states, Turkmenistan has come by implementing new regulations in social and industrial areas within 10 years. Turkmenistan has chosen an international, open, and pluralist economic model since its independence. This model has projected the "10-Year National Development Program" to ensure the economic development of the country and to be carried out according to the targets and plans. The main goal of the development program can be shown as placing the country among the first world countries, a social market economy, managing the country within its means, and encouraging international investors to structural and economic investments. Today, World trade represents the liberalization trend. Liberalization of trade and markets provides the necessary foreign savings and foreign exchange needs to finance economic development with the help of foreign investments in developing countries such as Turkmenistan. Being a country with very rich natural resources, Turkmenistan aims to improve the country's economy by processing these resources and presenting them to the world markets. According to data in 2009, Russia is the largest importer of natural gas, the country's most important export product, while Iran is the second. During this period, exports to China are at a low level. However, while gas exports to Russia and Iran decreased to very low levels over time, China became the biggest consumer of Turkmenistan natural gas. In this, the relations of countries, energy needs, and investments made by demanding countries and the geographical distribution trends of the natural gas consumption-supply demand balance in the world. 2009-2019 is the economic advancement decade in the energy sector of Turkmenistan as a result of exploring and producing new gas reserves in the country, after which consumers gained conscious consumption as well as concluding new agreements with investors.
The Romanian energy strategy for 2014-2020
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