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Energy: Key to International Relations

Posted March. 27, 2008 08:13,   


Some experts predict that Russia will not be able to adhere to its agreement with Europe to export natural gas over the next two years. European nations are facing serious challenges since Russia’s natural gas accounts for 25 percent of their natural gas consumption. Alliances among European nations have also been challenged by energy-related issues.

▽ Lack of Russia’s Natural Gas Supply = Energy organizations including the International Energy Agency have recently predicted that Russia’s domestic demand for natural gas would sharply increase but that its natural gas production and export would decrease. In 2007, the nation’s natural gas production decreased 1.4 percent from a year ago.

Russia declared that it would raise its natural gas production by 2.3 percent this year and increase its export volume to European nations by 3-4 percent each year. However, energy experts in Europe warn that the volume of natural gas has gradually decreased in Russia’s old oil fields while Russia’s large-scale natural gas firms, including Gazprom, delay investment into new fields.”

The biggest obstacle to Russia’s natural gas export is rapidly surging domestic energy consumption. In Russia, some regions suffered from a lack of natural gas in November 2007.

The IEA predicts that Russia will not be able to provide the contracted volume of natural gas to Europe all the way to 2010. It also forecasts that Russia’s gas exports may decrease by more than 25 percent by 2015 unless Gazprom invests $11 billion each year to develop new oil fields.

▽ Shaking Energy Alliance = Former Polish President Aleksander Kwasniewski criticized Nord Stream, a German-Russian joint venture, to build a gas pipeline linking the two nations. He reportedly compared the deal to a Nazi-Soviet pact agreed by Joachim von Ribbentrop, Adolf Hitler’s adviser, and words; Vyacheslav Mikhailovich Molotov, Joseph Stalin’s right-hand man, in 1940. The deal means that Germany intends to bypass European nations and secure natural gas by building a gas pipeline under the Baltic Sea.

Belarus, Poland, Latvia, and Lithuania, which have depended on Russia’s natural gas, are trying to come up with countermeasures to block the two nations’ plan. Russia’s neighbor Belarus is threatening Russia, saying that it would sharply increase gas relay price.

The Baltic states, which have maintained close relations with Germany since joining the European Union, have also stated that they would not cooperate with Nord Stream to conduct site surveys and build gas pipelines.

European nations which agreed to secure natural gas from the Caspian and Black Seas have also seen their alliances shake. Turkey, Romania, Hungary, and Austria all agreed with Nabuco in June 2006 to construct a gas pipeline in order to directly import natural gas from Central Asia.

However, Romania and Hungary cut their connection with Nabuco and sided with Russia immediately after Russia released its ‘South Stream’ project, through which it would deliver natural gas to Europe via a gas pipeline under the Black Sea.

A Turkish gas expert said, “European nations which turned their backs on Russia are signing behind-the-scene agreements with Russia. The old adage, ‘Yesterday’s foe is today’s friend,’ is appropriate here because it best describes recent developments in the global energy market.”