In a world of limited resources to produce energy, fossil fuel and other alternative means to produce energy are vital to the lives of everyone on the planet. Understanding how fuel is turned into energy through the transformation process and how energy is neither created nor destroyed but merely changes its state of energy is paramount when comparing and contrasting multiple energy sources. Fossil fuels are used in almost every facet of transportation, heating, cooling and movement. Alternative fuels are necessary to fill the void of the non-renewable fossil fuels used today. Solar energy and wind energy are two renewable sources which are the current time are only restrained by technological and economic factors due to their near unlimited availability. As other emerging markets become feasible for energy production it becomes not only in intra-country responsibility to harness that ability but it becomes more of a collaborative effort to reign in the energy production capability and ultimately market it to the countries willing to expend their limited resources for the development and distribution.
Energy production and the reliance upon non-renewal energy sources have placed an ever increasing demand on those energy sources. The demand is only increasing as more countries strive to move up the hierarchy of economic power and become more industrialized. There are ways for countries to maximize their ability to produce energy through renewal resources but there are also other opportunities to influence the usage of current energy production outputs, collaborate between the end users and producers of energy and the maximize the effectiveness and efficiency within the production and distribution of energy.
When looking at other opportunities to produce energy the biggest barrier is not finding the resource but also be able to harness the power by building the infrastructure and turn those resources into the desired end state resource. There is also the focus on the security of the energy supply chain. The imports and exports of energy must be heavily guarded and the risk of disruption must be mitigated in order to ensure security to the nation’s goals and objectives. As we move through the understanding of the development of energy resources as well as the increased need in enhanced security measures for the energy supply chain it will become clear that in a globalized economic environment collaboration between countries and groups of countries is crucial in building an environment for sustainable growth.
In order to build those relationships and create the infrastructure for economic growth based on energy production there must be collaboration between countries. Crossing borders encapsulates more than traveling to a different part of the country and seamlessly starting up a project. There are barriers to entry into the market and other potential pitfalls that may hinder the successful implementation of the project. A project is by definition a temporary endeavor to produce a unique deliverable at the conclusion of the endeavor (PMI 2008). Just as the foundation of a house supports the entire home, the definition of the scope of a project establishes the entire trajectory of the project and determines what resources and schedule will be needed to accomplish all of the requirements of that project. During the planning process of the project there is also the time to determine what is within the scope of the project and what risks are associated with that scope. When scoping a project, there are multiple deliverables that need to be understood in order to create the framework of the project and to accurately understand the methodology and process of achieving those requirements. There are also certain deliverables that must be used to incorporate the best practices of project management which include the scope statement, project charter, requirements and risk identification. These are all needed to establish the basis for a project between countries. Establishing a baseline of understands allows a greater understanding between countries and opens the lines of communication. The risks of the project can determine if the project is feasible and what resources may be required to mitigate those risks. Due to limited resources of the company’s country the business may look globally to meet the needs of the business project. If the scope entails business ventures into other countries there will be an associated risk with that plan as well as a level of effort that will be required to learn, understand and execute key tasks to fulfill local and global rules, regulations and policies.
When crossing the borders of other countries to conduct business, there are positives and negatives associated with the implementation of those business efforts. Some of the most common and visible differences include cultural differences, language barriers and time zone disparities.
While there are some large hurdles to overcome when conducting business that are known risks there are also other difficulties that are not easily identifiable and as easy to quantify into a risk measurement tool. These unknown or misunderstood risks will also need to be mitigated and incorporated into the project plan. Some examples of areas of risk that could potentially be harmful to a project’s successful completion include geographic disparities, climate or weather impacts, logistical infrastructure, information technology integration or other hazards that will need to be addressed when they occur during the project’s life cycle. The laws and regulations of the foreign country as well as the treaties and policies between countries play key operational and strategic planning points for the project manager. The project manager will need to manage the relationships between the project teams at home and abroad as well as understand and abide by the policies and treaties between countries. This is an additional effort on the entire project team and should be considered in the cost/benefit analysis.
The key point for the project manager to act upon is to ensure the requirements for the project are aligned with the scope of the project and that each requirement can be met on time, on budget and within the scope of the project. Managing the external forces and variables will take deft knowledge of the project management process but an understanding and awareness of the benefits and potential roadblocks that would face the project. By understanding these factors the project manager can take the necessary actions to mitigate the risks and successfully implement the project.
The demand for energy is increasing based on multiple factors. The population of the world is increasing and an exponential rate, more countries are taking advantage of advancements in technology to increase their economic capabilities and global trade is commonplace. This means that there is an increased demand on a limited resource and the energy sources are becoming diminished. With the diminishment of resources other countries are looking to maximize current energy use, rely more on renewable energy for their energy needs and to seek out and establish new sources for energy production. The increased demand leads countries to take on riskier ventures to garner the energy. For example, in North America, the oil source for their gasoline and diesel comes from very unstable countries. The instability comes from political issues, wars, logistical issues and other macro-economic factors. When importing from areas such as Saudi Arabia, Venezuela and Nigeria there are known risks that the importer must understand and agree to accept in order to meet their energy demands. Collaboration and establishing new ventures may help to mitigate these risks in a couple different ways. The first is mitigating the risk by diversifying the source of the energy supply. By pulling the energy commodities from multiple sources the risk of stoppage or break in supply is lessened due to the mere fact that they are coming from different areas. The next area that mitigates the risk revolves around two parts. If the country needing the energy helps develop the energy source through the provisions of funding, expertise or logistical facilitation there is inherently a relationship built between those supplying the energy and those in need of the resource. The second part of the new development is that the new production of energy may come from a stabilized part of the world. While this is fairly unlikely due to the inherent nature of where certain energy resources come from there is still the potential for a stabilization effort to be incorporated with the new resource generation.
Recently through the research and development on energy production there have been other methods for creating energy and allowing other sources to become sources for fuel. As collaborative opportunities have been sought out multiple countries have come together to develop plans for energy production. An example of this includes bio-fuels. These bio-fuels are being produced by countries in North and South America by the Unites States, Brazil and recently Columbia. The bio-fuels are extracted from corn and sugar cane which by nature are yearly renewable resources. This falls in line with the diversification of energy sources. Instead of looking for an energy source that will completely eliminate the need for such sources such as fossil fuel countries are trying to find multiple methods to supplement the reliance on energy sources that are non-renewable. The benefit of this type of energy portfolio management is based on the diversification of the demand. Each country’s economic and quality of life depends on the energy production that either they create for themselves or that they receive from other countries. The mere dependence on an outside entity for the core way of life pushes countries to develop new and innovative ways to create, manage and consume energy.
The demand of energy incorporates more challenges than some other commodities based on the core purpose of the commodity. Energy fuels economies, lives and everything incorporated into those areas. Collaboration in the production and consumption of the energy is paramount for success but there are still challenges out there that can hinder the collaborative efforts. While the micro-barriers were discussed in the project management portion of collaboration there are other barriers that play a key role in the strategic implementation of global energy production. The first barrier is the trade of energy. There are tariffs, taxes, fees, import concerns, national security, relationship management, and stability issues. The imposition of taxes and tariffs may move a feasible energy resource from the feasible realm to unsustainable source arena. As the movement of energy resources cross borders and the management of that movement is conducted through fees, tariffs and taxes there may be less demand for the renewable or readily available energy sources and a shifted demand back to the older sources. The underutilization would result in less demand for the new source and potentially the lack of interest in creating new and innovative ways to enhance production and reduce overall expenditure to bring that energy to market.
Energy production in unstable countries is a standard operating procedure within the global economic model. Certain countries receive a high level of visibility and the supply chain from those countries are monitored and controlled to the best of the importer and exporter’s ability. There are risk mitigation plans to alleviate some of the burden if the countries production or distribution is disrupted such as holding energy reserves onshore or allowing other smaller but potentially more expensive sources to fulfill the needs of the importer. While these are some of the risk mitigation tools used by importers of energy they are not all inclusive. The other concern for the importer of the energy are those countries that do not have the high level of visibility that could also disrupt the energy consumption supply chain and could potentially have a negative impact on the economic production of the importer. For example, the United States imports a third of its oil from neighboring countries in South America. The relationship between those South American countries are known and managed but do not have the same visibility or management that the relationships of those in Saudi Arabia, Iraq or Kuwait have. There are some obvious reasons such as the tension and instability of the relationships between the United States and countries such as Iraq but with the limited resources of expertise, people and time limited to the high priorities there leaves a gap between the other import/export relationship management.
The security of the energy production and consumption falls into the collaboration of efforts between countries. Mexico is becoming one of the larger suppliers of energy but they have many areas of concern that are hindering their production and distribution. Mexico can be a huge asset to the United States but there are problems that have hindered every area of the Mexican nation. With such a resource like energy the problems of the host country becomes the concern of the country demanding the resource. This is why the collaborative efforts of all the countries involved become a critical part in the supply chain. Mexico has had years of inadequate investment in their energy sector. Production of energy requires a strategic vision as well as a tactical and operational investment to create the foundation required to produce energy in such a way that the limited resource is fully utilized. The country is facing political turmoil and has inadequate capability to focus on economic and supply growth while also conducting internal housekeeping to build a structurally sound government.
Managing the collaboration between nations is a daunting task but there are other factors to understand as well. The relationship between two countries is complicated. This primary relationship is a one-to-one managed relationship that is complicated when secondary and tertiary relationships are introduced. The import or specific pricing of a commodity may be hindered by a secondary or tertiary relationship that either the importer or exporter may have. That is also a risk that is occurring in places such as Mexico and countries that reside in South America. While the United States wants to take advantage of the opportunity for diversification of energy sources so do other countries that have conflicting agendas, beliefs and strategic intentions. The security of the energy source must maintain a diligence and focus so that these newly formed opportunities remain viable and provide the much needed benefits they have the capability to produce.
Energy production, consumption and the supply chain that encapsulates those tasks drives both the importers and exporters to look at new and intricate ways of gaining the same results that the energy can provide but in differing ways. This type of energy usage diversification and risk mitigation focuses on three different areas. The first is the maximizing of the efficiency in which the current energy sources are utilized. The second is finding new ways to supplement the energy production to lessen the burden on the non-renewable energy resources. The third is to develop the production of the same type of energy sources but in new areas of the world. Each one of these focuses relies on management of relationships, collaborative efforts and mitigating risks of the capability ventures. Energy production and consumption transcends other commodities in that it is the source for the way of life of the countries consuming the energy and without it the quality of life is diminished and their security and economic capability cease to exist.
Charles, T. (2011). Recent advances in solar energy and potential applications. Journal for Young Investigators, Volume 22 Issue 5. Print.
Dobson, M. (2004). The triple constraints in project management. Vienna, VA: Management Concepts. Print.
Gray, C. F., & Larson, E. W. (2011). Project management: The managerial process (5th ed.). New York, NY: McGraw-Hill/Irwin. Print.
Prasch, R. (2008) How markets work: supply, demand and the “real world”. Northhampton: Edward Elgar Publishing Limited, 3-13. Print.
Project Management Institute. A guide to the project management body of knowledge. 4th. Newtown Square, PA: Project Management Institute, 2008. Print.