Virtual energy

The 'virtual' resource theory (not strictly an official theory but I had to call it something) is the idea that resources can be embodied within a traded good, reducing the requirement of that resource to exist within the country, independent of population. This theory negates the use of water metrics and indexes, as a country may be listed as water stressed, but if they import all of their food, the existing water supply could be sufficient to sustain a good quality of life. Allen (2001) established the concept of virtual water. He suggested that virtual water provides a mitigation against water stress in the Middle East, as it reduces the dependency on national water supplies. 

Now consider this. Energy could align to the same theory as water.

This idea was quite a shock for me, but something that also makes sense. Similar to water, we have a typical consumption to sustain a certain standard or quality of life. Furthermore, there is energy embedded within devices, food and goods which we do not have to provide when utilising the item. Aluminium is a perfect example. It requires a considerable amount of electricity to turn bauxite ore into aluminium. Similar to the idea that to produce 1Kg of beef requires >10,000l of water.

A recent paper by Bortolamedi (2015) explores this topic. The paper draws upon issues with country-level energy metrics, explaining they are production-orientated (calculated based on energy produced) and neglect to include "indirect foreign energy consumption", which would reflect a fuller understanding of energy consumption.

Deviation in energy intensity from the inclusion of traded goods energy intensity (Bortolamedi, 2015)

Bortolamedi (2015) undertook a study of 25 of 27 EU member states from 1995 to 2009, and included the primary energy consumption within traded goods into the country's energy intensity. This was then collectively summaries. Although the lower quartile shows a negative deviation for each year, the upper 50% and mean are positive, suggesting for over half of the nation states energy intensity of traded goods is not fully considered. The embedded energy intensity metric can be used independently from primary energy consumption and GDP, and would correlate well with trade (net imports would produce a positive deviation, and vice versa for net exports). Although this idea assumes all goods exported or imported consume the same amount of energy (as item based electrical consumption is difficult to calculate) and does not consider industry-specific exports and imports. 

Bortolamedi's (2015) paper provides grounds to suggest that energy security policies are inaccurate due to a lack of consideration of traded energy, raising queries over the reliability of energy security assessments made by countries.

An aspect that Bortolamedi did not consider is the international implications. Although the embedded traded energy is important for national-level energy assessors, it may be more important for assessing the energy consumption of countries during climate talks. There is therefore the potential that countries are under or over predicting their energy consumption. For example, if a country does not produce much electricity, but trades heavily in high-energy goods, they are promoting the generation of electricity elsewhere and this should be considered. However, you then have to ask: do you measure primary energy intensity (where the power is generated) or total energy intensity (power and embedded energy)? If you only consider primary energy consumption, you miss energy included in transporting the goods. 

The concept is in its infancy and the results are geographically restricted. However, the metric could really contribute to a more accurate and fuller understanding of energy consumption globally.