Download Security Scenarios And The Global Economy

NS4054: Energy Security
Routes to Energy Security:
The Geopolitics of Gas Pipelines between the EU
and Its Southeastern Neighbors
By: LT Dan NeSmith
About the Author
Angel Saz-Carranza
- Director of ESADEgeo Center for Global Economy and
Geopolitics (Madrid)
- Lecturer of the Department of Strategy and General
Management
- PhD Public Management New York University
- Public management research focused on interorganizational relations and performance
management
- Published in numerous journals regarding
collaboration in network management, dynamics of
public networks and governmental contracting.
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Authors Thesis
• European Union is taking measures to further diversify
suppliers, increase domestic extraction, and shift to
alternative energy sources. One main focus has been to
achieve a fourth supplier of Natural Gas through the
construction of the Southern Gas Corridor.
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EU’s Current Energy Breakdown
• EUROSTAT’s EU-27
Energy Mix (2011):
• Petroleum: 35%
• Natural Gas: 23%
• Solid Fuels: 17%
• Nuclear: 14%
• Renewables: 10%
Fig. 2: Total primary energy consumption by energy source in 2009, EU-27
• Forecast: Energy mix to shift gradually; increased natural gas use.
• Cleaner energy
• Backup to intermittent renewable sources
• Replace nuclear
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EU’s Energy for the Future
• Europe 2020 Strategy (20-20-20)
• Established in 2010, three main energy &
climate change targets:
• 20% reduction of Greenhouse emissions
relative to 1990
• Currently 18%
• 20% of energy use from renewable
sources
• Currently 13%
• 20% energy efficiency target (reduction in
energy intensity of EU economy)
• Currently 24% from 1995 to 2011
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EU’s Common Energy Market
• European Commission’s energy policy goal is creation of
a common market.
• EU states governed energy through public monopolies
• Separate state energy providers from transport & supply
organizations
• Desegregate state-owned energy companies of the past in order to
allow for EU-wide integration.
• National governments set up independent regulatory authorities
• Settle contract disputes & access to electricity grids and gas pipelines
• Central broker of all EU national regulators (2009):
• The Agency for the Cooperation of Energy Regulators (ACER)
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Securing Energy Supply
• Three proposed energy policy tracks:
1.
Continue exploiting & increasing indigenous energy sources
• Renewables, domestic fossil fuel reserves, nuclear energy
2.
Diversify supply countries & routes for imported fuels
3.
Improve energy efficiency interconnections
• 10% of all installed production capacity
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Natural Gas in Europe
• Centerpiece of an intricate
geopolitical competition to the
east
• Natural gas is produced, transported, and
traded through regional, fragmented
markets
• Traded good
•
Long-term, oil-index contracts (take-or-pay clauses)
• Minimum, pre-set volume of gas/yr that buyer pays at contract price
regardless of whether volume is taken or not
• Market reliability ensures infrastructure investments required for
natural gas trade
• Downside: mature markets do not need the reliability
• Spot pricing based on hub pricing
• Fosters competition between regional hubs as supply increases
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Natural Gas in Europe
• Transit countries
• Natural gas demand ever increasing
• Production sourcing from landlocked
countries
• Pipelines through transit countries:
• Prone to disruption
• Economic interests
• Diversify imports away from Russia
• Requires transport through additional
transit countries
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EU’s N.G. Demand & Supply
• Natural Gas
• 23.4% of energy mix
• 22.2% electricity needs
• Middle East & Eurasia
• Accounts for ¾ world’s proven reserves
• Grown by 39% in past 20yrs
• Europe & Eurasia
• Account for 31% of world’s natural gas
• EU main producers: UK & Netherlands
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EU’s N.G. Demand & Supply
• Russia & Norway
• EU’s major suppliers
• Norway’s increasing production
competing with Russia for top EU
imports
• EU’s import forecast
• 67% in 2011
• 80% in 2030
• EU holds 2/3 of world’s Int’l gas
pipelines
• €500billion infrastructure
• €70billion more by 2020
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Key N.G. Infrastructure
• European Commission’s Infrastructure Priorities
• Diversify
• Expand southern corridor
• Increase flexibility
• LNG terminals
• Storage capacity
• Increase production
• Eastern Med
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Key N.G. Infrastructure
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N.G. Imported from Russia
• Dependence on Russian Gas among the EU-28 Member States
•
Percent of natural gas imported from Russia, 2012
Austria
Belgium
Bulgaria
Croatia
Cyprus
Czech Republic
Denmark
Estonia
Finland
France
Germany
Greece
Hungary
Ireland
52%
43%
100%
37%
0%
81%
0%
100%
100%
17%
40%
55%
50%
0%
Italy
Latvia
Lithuania
Luxembourg
Malta
Netherlands
Poland
Portugal
Romania
Slovakia
Slovenia
Spain
Sweden
United Kingdom
20%
100%
100%
28%
0%
6%
54%
0%
24%
63%
57%
0%
100%
0%
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The Southern Gas Corridor
• Supply Diversification:
• North Sea
• Algeria
• Russia
• Ukraine – Instability
• South Stream
• Caspian, Central Asia, Middle East (Southern Gas Corridor)
• TAP
• TANAP
• NABUCCO
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The Southern Gas Corridor
• NABUCCO
• 1st proposed Southern Corridor
• 3300-3900km pipeline
• Eastern Turkey to Austria
• 13bcm initial capacity
• 31bcm expansion
• Austria, Turkey, Hungary, Romania, Bulgaria
• Possible gas sources
• Iran
33.8tcm
• Russia
31.3tcm
• Turkmenistan
17.5tcm
• Iraq
3.6tcm
• Kazakhstan
1.5tcm
• Uzbekistan
1.1tcm
• Azerbaijan
1.9tcm
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The Southern Gas Corridor
• NABUCCO’s competition
• The Southern Stream
• Russian pipeline project
• TANAP
• Georgia to Greece
• TAP
• Connects TANAP
• Greece to Italy
• Cheaper
• 20% supplier ownership
• Bypasses competition with
Russia
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Conclusions
•
EU expected to increase imports from 67% to 80% by 2030.
•
EU looking to decrease reliance on Russia for 1/3 of Natural Gas
imports.
•
Increase energy security, efficiency, and construct regasification plants
•
Policy option of diversification of supply and transit routes
•
TANAP / TAP Southern Gas Corridor
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