What makes a nation’s energy secure? Imports, minerals, supply chains and factories

Measure a fictional nation’s import dependence and supplier concentration, then stress it with a price spike, a closed strait, a mineral export restriction and a factory fire

A21 of Energy Systems, Step by Step: compute a fictional nation’s import dependence and the concentration of its battery-mineral supply (HHI); stress it with an LNG price spike, a closed shipping strait, a mineral export restriction and a factory fire, alone and together; and test stockpiles, more suppliers, recycling, a second factory site and using less.
  • Analyst · L2
  • 25 min guided · about 30 min practice
  • After F10

The idea in one table: four ways Prairieland's supply can fail

Prairieland is fictional; its numbers are illustrative. With 2025's settings.
Shock What it hits Result
LNG price spike Prices $8.40 billion more paid abroad in a year; $1.28 billion moved at home
Strait closed 8 weeks A route 150.4 PJ of crude lost; 60 days of stocks (161.1 PJ) cover it
Mineral export restriction A supplier the factory makes 23% of its output for 2 years; the first to run short is graphite (anodes)
Factory fire A site 6.0 GWh of cells lost in 6 months
  • Import dependence. 1,400 ÷ 3,500 PJ = 40.0%; 31.0% of primary energy passes one strait.
  • Concentration. Refining HHI from 3,150 to 8,138 (0 to 10,000).

With JavaScript on, you test stockpiles, diversification, recycling and a second factory site yourself.

Prairieland is fictional; its numbers are illustrative. Its imports, stocks, refiners, battery factory and shocks come from the course's shared national data.

Stress tests, not forecasts. Each shock and each lever is set for teaching; the steps state their assumptions.

About 25 guided minutes in ten steps. Helpful first: F10, why every country's energy system looks different.

What you just did, as diagrams

Dependence is a ratio
Net imports ÷ primary energy: 40.0% for Prairieland; its value depends on how primary energy is counted.
Concentration is separate
Coal is 0% imported, yet all of it comes from one county; 31.0% of primary energy passes one strait.
The scarcest input sets output
Graphite (anodes) limits the factory to 23% of its output during the restriction.
Whose money
A price spike sends money abroad for imports and moves money at home between users and producers.
Timing matters when shocks combine
A restriction and a fire cost 18.5 GWh of cells with the fire at the start of the restriction, 19.4 GWh with it in the restriction's last 6 months; added, 24.5 GWh.
Go deeper · AnalystThe measures, in symbols

\[\text{import dependence} = \frac{\text{net imports}}{\text{gross available energy}}, \qquad \mathrm{HHI} = \sum_i (100\, s_i)^2\]

  • Symbols. \(s_i\) is supplier \(i\)’s share of a supply, from 0 to 1; the HHI runs from near 0 (many small suppliers) to 10,000 (one).
  • Equal shares. With \(n\) equal suppliers the HHI is \(10{,}000/n\); four suppliers can never bring it below 2,500.
  • Supply groups. Prairieland lists four supply groups, the last grouping other refiners; counting those firms one by one would lower the index, so the HHI shown is an upper bound.
  • Stock days. The IEA counts oil stocks in days of the previous year’s net imports, not of all oil used.
  • The scarcest input. A factory needing several inputs makes as much as its scarcest input allows: a minimum, not an average.
Go deeper · ModelerSecurity inside a planning model
  • An import-share cap. Imports stay below a share of primary energy in each period; its shadow price is how much modelled cost changes when the cap tightens slightly, not the value of security.
  • Stocks as decisions. A two-stage model chooses stock sizes before it knows which disruption comes, then runs each one.
  • Disruption scenarios. Shocks become scenarios with stated settings, as on this page, so a plan can be tested against them.
  • Next. Modeler lesson M13 adds an import-share cap to Prairieland’s pathway model; capstone C4 tests a pathway against shocks.
Go deeperWhat this lesson leaves out
  • How prices, demand and trade respond during a shock, beyond the levers you set.
  • Shipping, insurance and the cost of holding and refreshing stocks.
  • Mining, refining and trade law, and any judgement of a country's policies.
  • Cybersecurity and the physical security of grids and plants.
  • The odds of any shock: these are stress tests, not forecasts.

Check yourself

Practice, about 30 minutes: four myths, then six exercises with worked answers.

Myth or fact? “A country that imports no energy is secure.”

  • Myth
  • Fact
Answer

Myth. Risk also sits in world prices, single routes, dominant suppliers and single sites: Prairieland's coal is all domestic and all from one county.

Myth or fact? “Ninety days of oil stocks means ninety days of all the oil a country uses.”

  • Myth
  • Fact
Answer

Myth. The IEA counts days of net imports: Prairieland's 60 days are 161.1 PJ, not 60 days of all its crude.

Myth or fact? “More LNG sellers protect a country from a world price spike.”

  • Myth
  • Fact
Answer

Myth. A world price rise reaches every seller, so Prairieland would still pay $8.40 billion more abroad; stored gas cushions that only while it lasts.

Myth or fact? “A high HHI shows that a supplier is likely to cut a country off.”

  • Myth
  • Fact
Answer

Myth. It measures how concentrated supply is, not anyone's intentions; it says how much is at stake if one supplier stops.

Practice · about 30 minutes on your own

  1. Through the strait. What share of primary energy passes the strait?

    Crude oil imports 980 PJ a year, all through the strait
    LNG imports 420 PJ a year, 25% through it
    Primary energy 3,500 PJ
    Answer

    980 + 420 × 0.25 = 1,085 PJ; ÷ 3,500 = 31.0%.

  2. An HHI by hand. What is graphite's HHI?

    Graphite's four supply groups 90%, 5%, 3%, 2%
    Answer

    90² + 5² + 3² + 2² = 8,100 + 25 + 9 + 4 = 8,138.

  3. Whose money. How much more does Prairieland pay abroad?

    LNG price $10.00 per GJ, tripled for a year
    LNG bought 420 PJ (1 PJ is a million GJ)
    Answer

    420 PJ × $10.00 × (3 − 1) = $8,400 million, $8.40 billion.

  4. Stocks against a closure. Does a 9-week closure leave Prairieland short?

    Oil imports, all through the strait 980 PJ a year
    Oil stocks 60 days of net imports
    Closure 9 weeks, 63 days
    Answer

    Lost: 980 × 63 ÷ 365 = 169.2 PJ; stocks: 980 × 60 ÷ 365 = 161.1 PJ; short by 8.1 PJ.

  5. The scarcest mineral. What share of the factory's output can graphite support over the restriction?

    Country R's share of graphite 90%, stopped for 2 years
    Recycled at home 5%
    Mineral stocks 60 days of use
    Answer

    5% + 95% × 10% = 14.5% a year; (2 × 0.145 + 60/365) ÷ 2 = 0.227, about 23%.

  6. A second site. How much output does the fire cost with 30% of the capacity at a second site?

    Output in 2025 12 GWh of cells a year
    Capacity 20 GWh a year
    Fire stops the main site for 6 months
    Answer

    6/12 × (12 − 20 × 0.3) = 3.0 GWh, against 6/12 × 12 = 6.0 GWh with one site.

Prairieland is fictional; its numbers are illustrative. Every number here comes from the page's model.

Numbers, sources and what’s next

Numbers to remember

What Value Source
EU energy import dependency, 2024 57.3% (net imports / gross available energy); gas 85.0%, oil 96.6% Eurostat · updated 16 Jul 2026
Leading refiner of strategic minerals, IEA report of 2025 (latest year available for each mineral; years vary) one country is the leading refiner for 19 of the IEA's 20 strategic minerals, with an average share of about 70% International Energy Agency · 2025
Oil through the Strait of Hormuz, fourth quarter of 2025 21.6 million barrels a day, about 21% of world oil supply U.S. Energy Information Administration · 12 Aug 2026
Oil stocks benchmark IEA members that are net importers hold at least 90 days of net imports International Energy Agency · read 2 Nov 2026 for the course dossier
U.S. reliance on imports from China a major source for 14 of the 33 critical minerals for which the U.S. most depends on imports (2026 Mineral Commodity Summaries) U.S. Geological Survey · 6 Feb 2026
Highly concentrated, in U.S. merger review an HHI above 1,800 U.S. Department of Justice and Federal Trade Commission · 18 Dec 2023
The EU's benchmark for one third country at most 65% of yearly use of each strategic raw material, by 2030 European Commission · read 2 Nov 2026 for the course dossier

Keep going

Back to the course map

In the real world

Oil through the Strait of Hormuz, second quarter of 2026: 4.9 million barrels a day during the 2026 disruption (EIA, 12 Aug 2026).

IEA collective action, 11 March 2026: members agreed to make 400 million barrels of oil stocks available, their largest collective action: an agreement, not a record of deliveries.

Energy also shapes where a new factory is built:

When each facility can install its own wind, solar and storage and trade energy with the grid, a candidate site's renewable resource affects its operating cost.

  • Holds when: stylized networks with synthetic distances and costs, candidate sites in California, Arizona and Nevada, and one year, planned week by week for products and hour by hour for energy.
  • Leaves out: grid outages, which the studies do not model.

The full case: case file CF1.

Sources and further reading

Spotted an error, or stuck? Write to hlli@ksu.edu. Corrections are made in place and dated here.

Text licensed CC BY 4.0, code MIT: teachers and students may reuse and adapt it, with credit to Honglin Li.