2 The impacts of energy insecurity- What are the potential impacts of an increasingly ‘energy insecure’ world

1

Energy supply pathways into / within Europe key terms

• Energy Pathway-

• Gazprom-

• Geopolitics-

• Transit state-

How energy flows from its produces to the consumer, including the route it takes on its way

A Russian gas company controlling 92% of Russia's production, 25% of Europe’s and 4% of the UK’s

The study of the ways in which political decisions and processes affect the way space and resources are used. Relationship between geography, economics and politics

A state or country through which energy flows on way from producer to consumer

Energy pathways• The flows of energy from producer to consumer are pathways.• In physical terms, the pathways take the form of gas and oil

pipelines, the sea routes of tankers carrying oil and gas, and electricity power lines

• Demand and availability of energy sources are not equally matched = Countries often rely on imports from the producers to the consumers

• There can be disruptions to these such as piracy, political issues- most of the world’s critical energy pathways are flash points politically-

• Suez canal• Straits of Hormuz• Bab el Mandeb • Straits of Malacca

Only one planned gas pipeline doesn’t rely on Russian supply- instead it relies on Kazakh supply- NABUCCO pipe, BUT Russia is planning a similar route (South Stream)

The North Sea supply (UK and Norway) is running out-

The UK imports some gas supply from former colony Guyana, but transport costs are high

Southern Europe receives much supply from North Africa- obvious issues here- political unrest and Arab springAlgeria has problems with internal unrest and terror attacks- Libya- war

These North African nations are also getting rich fast (Algeria) and so domestic use is increasing- meaning less for export

China is demanding more gas and paying Russia to develop pipelines to ship gas to its borders like the ESPO- China can pay higher prices if Europe wants will have to increase price

East Siberian Pacific Ocean (ESPO)

North Stream

Iranian control- history of dispute

Water controlled by pirates- like a no man’s land- tankers can be held to ransom- risk of leaks or delays to supply

Area suffering from multiple issues- piracy, political unrest and instability- also famine and drought- attacks could increase to get ransom money

A real bottleneck has limited capacity for tankers as space limited

RUSSIA- Europe’s energy Power House?

GAZPROM • Supplies 25% of EU gas• 1/5 of world gas controlled

http://rt.com/news/gazprom-europe-energy-market/

• 2% OF UK gas (10% of business market)

• Worlds 3rd largest energy company• Employs nearly ½ million people• Controversial as majority owned by

Russian government- which means some countries dislike as anti Russian regimes

http://rt.com/news/gazprom-europe-energy-market/ vid clip

• Gazprom controls about a third of the world's gas reserves • The EU gets a quarter of its gas supplies from Russia - 80% of

which passes through Ukraine - and more than 15 countries across central Europe have been hit by the shutdown of Russian supplies.

• This has happened 3 times before but This year, gas supplies were completely halted from 7 January, after Russia accused Ukraine of siphoning off gas meant for European customers, leaving more than a dozen countries without their expected supplies of Russian gas.

• Some, like Bulgaria, Serbia and Bosnia, are almost completely dependent on supplies via Ukraine and so were left with major shortages, during a very cold spell in Europe.

• The European Union called the supply cut "completely unacceptable", demanded immediate restoration and entered into shuttle diplomacy between Kiev and Moscow.

• A deal reached on 12 January, whereby EU and Russian observers would monitor supplies across Ukraine, collapsed within hours. The EU said both sides had failed to meet its terms.

• In the meantime European countries had to shut down industrial plants and domestic heating systems, find alternative sources of gas or switch energy plants to oil. Schools were shut and people had to revert to using log fires to heat their homes. Slovakia and Bulgaria mooted restarting mothballed nuclear reactors.

• http://www.economist.com/world/europe/displaystory.cfm?story_id=12953847 impacts on Slovakia and Bulgaria

• http://news.bbc.co.uk/1/hi/world/europe/7812860.stm impacts on other countries

Is the EU happy about relying on Russian gas?

• Gazprom had already embarked on plans for pipelines that bypass Ukraine and Belarus, former Soviet states which are currently essential for transit.

• Gazprom has two major projects, Nord Stream and South Stream. Nord Stream will run for 1,200km along the bed of the Baltic Sea, and South Stream under the Black Sea. Gazprom has signed up big European partners: Italy's ENI for South Stream, and German companies E.ON Ruhrgas and Wintershall - along with Dutch provider Gasunie - for Nord Stream.

• The EU has major concerns about security of supply and is moving ahead with a pipeline plan of its own. Nabucco will bring gas from Central Asia and the Caspian across Turkey into the European Union. But it will have only enough capacity to provide a small proportion, perhaps 5%, of Europe's needs.

• So Europe needs Gazprom, and that is why European companies and their governments have actively embraced the two projects. Austria is likely to serve as a hub for both. EU officials say that even during the Cold War the Russian gas supply was stable, so it is better to rely on Gazprom than potentially unstable sources such as Turkmenistan and Uzbekistan.

Europe’s Answers- less reliance on Russia

• The real need is for Europe to reduce its dependence on Russia—which would point instead to persisting with Nabucco, a pipeline intended one day to supply gas from Azerbaijan and (perhaps) Central Asia via Turkey, bypassing Russian territory altogether

• In practice, pipelines are hugely expensive, environmentally risky and take years to construct. So other measures are needed in the meantime. One is to press Russia and Ukraine to sign long-term contracts, with accepted pricing formulae, similar to those that Gazprom already has with most EU countries.

• The EU must also continue to object forcefully to the gas cut-off, making clear that it undermines Russia’s credibility as a reliable energy supplier. And it must stress that it will not allow the Russians to pick off individual EU countries through cosy bilateral deals.

• Beyond this, Europe needs to work harder to diversify its sources of energy, something that it must do anyway if it is to meet its ambitious climate-change targets. And it cannot be repeated too often that a fully liberalised energy market, with better linkages between countries, offers all of Europe not only a more efficient energy future but also a more secure one.

Russia Gazprom and the EU gas supply PROBLEM

Does Russia use its natural resources as

political weapon?

Does Russia use gas as a weapon?

In 2006 and 2009 they halted supply over disputes with Ukraine

In 2010 Russia switched off supplies to Belarus

The Nord stream pipe when finished will pipe gas out of Russia under the Baltic sea into Germany- avoiding conflict areas

Russia and Ukraine have very different political ideals, the current Ukraine govt, wants to get closer to EU whereas Russia does not- Russia doesn’t want Ukraine to bring EU to more of its borders

Russia and Western Europe have had a clash of ideals in the past- capitalist Western Europe sided with the USA against communist USSR during the cold war

In 2009 in Winter much of Eastern Europe had no gas supply for 10 days due to Russia /Ukraine dispute over unpaid bills

Currently all except one of the supply routes from Russia to Europe go through Ukraine or Belarus

Russia previously vowed to never do business with neighbouring China as the govts clash but hard economic times have forced Russia to rethink

Russia has conflict with every neighbouring country- through history- it competes with former USSR friends Kazakhstan to try and keep them poor

Every time EU tries to do deals with countries to supply gas and act as transit states