European Energy Security and Russia: are we focussing on the right issues .


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European Energy Security and Russia: are we focussing on the right issues?. Professor Jonathan Stern Director of Gas Research Oxford Institute for Energy Studies Society for International Development Amsterdam, April 28, 2008. OIES* Natural Gas Research Programme.
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European Energy Security and Russia: would we say we are focussing on the right issues? Educator Jonathan Stern Director of Gas Research Oxford Institute for Energy Studies Society for International Development Amsterdam, April 28, 2008

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OIES* Natural Gas Research Program WHO WE ARE : a gas inquire about program at an autonomous scholarly organization, a portion of Oxford University, represent considerable authority in fossil fuel investigate WHO WE ARE NOT : specialists merchants of select, high value business reports WHAT WE PRODUCE : free research on national and worldwide gas issues HOW WE ARE FUNDED: three-year sponsorship by organizations and governments in gas delivering and expending nations Information about our Institute, our Program and its distributions can be found on our site: http://www.oxfordenergy.org/gasprog.shtml *Oxford Institute for Energy Studies is an instructive philanthropy 2

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Recently Published Research Natural Gas Demand in Europe – the significance of force era, Anouk Honore The New Security Environment for European Gas, Jonathan Stern The 2007 Russia-Belarus Gas Agreement , Katja Yafimava and Jonathan Stern US Natural Gas Prices: situations to 2015, Michelle Foss Gas-OPEC: a diversion from vital issues of Russian gas supply to Europe, Jonathan Stern The Potential Contribution of Natural Gas to Sustainable Development in South Eastern Europe, Aleksandar Kovacevic Is there a basis for the proceeding with connection to oil item costs in Continental European gas contracts? Jonathan Stern Ukraine\'s Gas Sector, Simon Pirani The Dolphin Gas Project, Justin Dargin Free downloads from www.oxfordenergy.org 3

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EUROPEAN ENERGY POLICY - AGENDA Energy strategy issues and issues: concurring needs Europe, Russia and vitality Gas in Europe – a contextual analysis of the issues/issues Conclusions

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European Energy Security: what is the present core interest? Europe\'s reliance on imported oil and gas supplies will increment significantly throughout the following 10-20 years Much of the oil and gas which Europe will need to import should originate from the Middle East (oil) and Russia (gas) This offers ascend to two worries: over-reliance prompting the potential for business/political extortion political unsteadiness/struggle inside or between these nations prompting supply disturbance These issues intermittently wrangled in the course of recent years, particularly in connection to Russia

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Urgent European (and Global) Oil and Gas Issues in the late 2000s Oil (and gas) costs at >$100/bbl – and going higher?? Most real oil and gas makers not able or unwilling to expand their creation and fare limit Most OECD pioneers grumbling about: Lack of interest in new limit by makers/exporters Chinese and Indian endeavors to draw in oil and gas towards their quickly developing economies Can Europe get satisfactory oil and gas supplies in the 2010s and at what cost?

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European Energy Security: habitually examined issues Is the issue that Europe will turn out to be increasingly reliant on nations which we don\'t care for and don\'t trust for our vitality supplies? Alternately is the issue that Europe won\'t have the capacity to acquire oil and gas supplies that it will require, or won\'t have the capacity to pay high costs for them? Then again is the issue that the carbon which will be transmitted in the copying of these energizes will make an unsustainable worldwide climatic patterns Europe needs to organize issues and arrangements

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Europe, Russia and Energy: a long running story with the accentuation on gas

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OECD European Oil Product Imports from FSU Countries 1990-2006 Source: IEA 18% of imports and 8% of interest in 2006

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OECD European Crude Oil Imports from FSU Countries 1990-2006 Source: IEA 35% of imports and 32% of interest in 2006

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OECD European Steam Coal Imports from Russia 1990-2006 (thousand tons) 18% of interest in 2006 Source: IEA

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Russian Gas Exports to Europe 1990-2006 Source: Gazprom 27% of "Europe 34" request in 2006

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Gazprom\'s Exports to Europe Long term contracts amplified 20-30 years with most European purchasers well before expiry dates; legitimately authoritative assentions under global assertion with sold harms Gazprom Marketing and Trading builds up significant nearness in north west Europe exchanging (not simply Russian) gas and different items Nord Stream and South Stream pipelines are advancing Gazprom\'s reaction to untrustworthy travel through Ukraine and Belarus is enhancement of pipeline courses

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Existing pipelines taking Russian gas to Europe

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Nord Stream Gas Pipelines Can Baltic restriction stop – or just deferral – improvement?

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Blue Stream/South Stream Gas Pipelines Bulgaria-Serbia-Italy course is set up

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If these pipelines are constructed then, by 2015, Russian gas will have the capacity to move to Europe by means of: a northern course – Nord Stream a focal course – Ukraine/Belarus a southern course – Blue Stream/South Stream Gazprom have the capacity to "arbitrage" between the courses, the force of individual travel nations will be tremendously lessened; security will be enhanced; yet at the same time needs a universal travel administration

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Can Russia contend in Atlantic Basin LNG? Not effectively, rapidly or productively

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China\'s Gas Pipelines and LNG Terminals No Russian pipeline gas before the late 2010s

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Will Russia Have Sufficient Supplies for Europe? Russian gas supplies will be tight from 2010-2015 or until new expansive scale Yamal Peninsula gas gets to be accessible Main effect will be on the Russian and perhaps on the CIS trade showcase European markets will be less influenced in view of lawfully restricting long haul contracts with serious money related punishments for non-conveyance BUT.. Fleeting gas supplies may vanish This is probably going to mean no new long haul contracts for Europe; Russian gas supplies will be constrained to 180-200 Bcm/year

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European Gas: a contextual analysis

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Europe\'s Future Gas Supplies: a risky scene? Ample "stores" exist yet… . what is important are the goals and abilities of providers: European Existing pipeline and LNG providers Possible new providers Future gas "security" is about inspirations of, and associations with, Europe\'s providers

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Projected Decline in European Gas Production 2005-17 (Bcm)

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Availability of African Gas Supplies ALGERIA: real exporter, no real development past right now contracted volumes EGYPT: sold out – minor development potential LIBYA: major LNG development potential however could take 10 years NIGERIA: NLNG Trains 1-6 accomplished NLNG 7/8 + Brass River + OK LNG postponed household (control) request will take need over extra fares EQUATORIAL GUINEA: minor development potential ANGOLA: some development potential

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Middle East/Caspian/Central Asian Pipeline Gas Availability Iran: exceedingly inconsistent gas exporter, real residential request requirements+political instability+conflicts with the global group make real issues; any critical gas pipeline fares will be to Pakistan (India?) Azerbaijan: around 15 Bcm of Shah Deniz gas from 2015(?) Turkmenistan: saves questionable, seaward prospects significant yet not before late 2010s? Kazakhstan: reliant on accessibility of Kashagan gas, and most likely not until late 2010s

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Gas Pipelines From the Caspian Region

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Nabucco: a Caspian Pipeline to Europe Source: OMV A key part of the "4 th Corridor" to Europe

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Problems for the 4 th Corridor: occasions of December 2007-April 2008 December 29th 2007: Turkmenistan slice off gas fares to Iran (supplies not yet recommenced) and accordingly… . Iran slice off gas to Turkey (refering to chilly climate) and therefore… Turkey slice gas supplies to Greece and subsequently… Gazprom provided more gas to Turkey and Greece to compensate for the shortage Diversity does not generally = security

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Geopolitics of Central Asian gas is not (yet) an European amusement China has as of now begun creating Turkmen gas saves under a PSA China as of now has understandings to import (no less than) 30 Bcm/year from a mix of 3 Central Asian nations (however for the most part Turkmenistan) China will spend amazing wholes of cash creating gas fields and pipelines with no hazard ensures The "considerable gas amusement" in Central Asia is amongst Russia and China; Europe (and the US) are conceivable future players

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European LNG Terminals New regas limit progressively rivals North America and Asia for LNG

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Emerging Policies of Producers/Exporters Increased fares are no more drawn out critical and may not be conceivable because of: expanding residential request higher fare costs which implies decreased requirement for incomes LNG fares will be desirable over committed pipeline gas to Europe as a result of: Greater arbitrage potential outcomes in higher esteem advertises Less political presentation to US/Europe These issues are a great deal more imperative than the (genuine or envisioned) danger of a Gas-OPEC

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The key question confronting European gas markets is: from where will generous extra gas post-2015 and particularly post-2020 be accessible? At present the answer resembles: not from Russia or numerous other current real providers CONCLUSION: Europe confronts longer term gas supply instability

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THIS IS NOT A "Catastrophe" BUT IT RAISES IMPORTANT QUESTIONS FOR THE FUTURE OF POWER GENERATION AND CARBON EMISSIONS WITHOUT SUBSTANTIAL INCREMENTAL GAS SUPPLIES, MOST COUNTRIES WILL NEED TO RETAIN/DEVELOP COAL WITH DISASTROUS CONSEQUENCES FOR CARBON TARGETS; THE BEST HOPE FOR CARBON REDUCTION BEFORE 2020 IS A RENEWABLES/GAS COMBINATION

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CONCLUSIONS: European Energy Security ISSUES RECEIVING A LOT OF FOCUS: Can Europe believe the Russians (and different exporters)

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