Friday 6 November 2009

Ending European Involvement in Afghanistan

Nord Stream has been signed off by Sweden, Finland and Denmark. So energy supplies to Germany and northern Europe generally should be assured by 2011. Bypassing Ukraine was important as it has been manipulated to pressure the EU and Russia. Poland may feel concerned but its manufacturing capacity importance to central European and Russian manufacturing and market plans outweighs any notion of it being isolated from the west of Europe in energy supplies.

Together with South Stream, on which Serbia and then Italy signed off during the summer, energy supplies from the Russian Federation to Europe seem to be secured within the time it takes to build the pipelines.

An agreement last month between the Russian Federation and China for energy supplies, and for payment to be acceptable in roubles, provides diverse markets for Russian energy .

The 'war against terrorism' in Afghanistan (which is really an attempt to impose a pipeline route through Afghanistan for US energy supplies from the Caucasus) costing such a grievous price in lives and ruined families becomes less and less relevant to any European interest.

10 comments:

Nick Drew said...

yes the sooner we (UK) come up with a robust modus vivendi for becoming a large-scale importer of gas from Russia, the better

(we could do a better job of it than Germany and Italy ... but not with Miliband heading the delegation)

BTW, South Stream is just a silly political game by the Russians to prevent Nabucco happening and I fear Italy cannot look to it for any comfort (or warmth) in the forseeable future.

Italian "localism on planning decisions" and other "local factors" (preventing LNG import terminals from being built as easily as in, well, everywhere really, except the USA which doesn't need them anyway) coupled with the Nabucco-South Stream impasse will mean cold winters ahead

(wv = sneturbe, which I believe is an Italian gas company...)

hatfield girl said...

My supervisor always spoke like that comment, ND.

Yes..... judicious pause, then kindly but pallid agreement with some of argument... followed by

all of this needs to be considered...

which unfortunately points to irrelevance in the paper....

All of the above being wrapped in lots of directional information and hints of where to think next.

However might I ask what could be more direct than the Nordstream pipeline for securing German energy supplies. Italy of course is ever-iffy and when coupled with a former Yugoslavia route, even iffier. Better than relying on the French though.

Nick Drew said...

*peers over spectacles, offers glass of sherry*

Nordstream is fairly direct, which is to say it outflanks all of Ukraine, Belarus and Poland**

and had the wholehearted backing of the EC

but the trouble it encountered from the Baltic states, and not just Lith/Lat/Est, is a bit of an eye-opener, is it not ?

then again, the really direct route would be LNG on the high seas (Gazprom keen to get into the LNG exporting business, aleady and LNG trader), but that is not without its own disadvantages

- - -
** classic Soviet military doctrine: 'fix' the obstacle encountered; outflank it; return to thump obstacle at leisure. Watch Out Ukraine when Nordstream is up and running ...

I have a wonderful Gazprom map showing Europe with large red arrows converging on Germany from East to West ! (they signify pipelines of course)

hatfield girl said...

So for next week I should have something to offer on:

LNG.

LNG transport and offloading and storage linked to distribution systems in the UK.

Possibly thoughts on control of distribution systems in general, given that producers often resent not being distributors.

Thoughts on by-passed states, particularly fellow member-states political concerns about Russian strategies.

Unwise energy security assunptions merely because of current supplies avoiding obviously inimical bottlenecks.

Background stuff such as the drive for the Caucasus energy resources in the last century.

Right. Next Week. There's got to be a PHD in here somewhere.

Nick Drew said...

back after the w/end

have a good one HG

Nick Drew said...

producers often resent not being distributors

'mature' producers (Exxon, BP, Shell, Statoil, Total etc al - even the Saudis) have long since ceased fretting after the low (albeit low-risk) utility margins accruing to distributors per se: their business lies in higher-risk, higher-reward parts of the value-chain

Gazprom has often wondered whether it is missing a trick not being a distributor, but (a) nothing stops it except its own lack of capital - it already has a major holding in Wingas, e.g; (b) it would be wrong for their business model, too

Of course there are some distributors who are also local-monopoly suppliers (e.g. many of the Stadtwerke) and they do indeed make a tidy margin - at the expense of their hapless captive customers

Gazprom would love that kind of business - but they ain't for sale ...

interesting aspect of the LNG biz: the receiving terminals for LNG vessels are so cheap, quick & easy to build that their owners don't much mind their being unused for much, if not most of the year: they simply hold them as options

(this often confuses governments)

hatfield girl said...

I expect it has confused ours - they are easily misled and confused. I would be prepared to bet a long cold winter that we haven't enough receiving terminals.

Nick Drew said...

if by 'we' you mean Italy, you win

if you mean UK ... keep your money in your pocket ! (we have significant over-capacity - and all built recently, with unsubsidised private money)

Big H said...

Gas Supply

I'm not convinced that Nordstream or South Stream will result in any additional new supplies reaching Europe - they are merely a means of routing existing supplies around Ukraine.

For the next few years, the world is likely to be awash with LNG and so folks wil stop worrying about supply - until we get to 2013 ish when, with Norway production on plateau and the rest of European production in decline the system will likely tighten up again and we could see high spot prices once more. After that its down to Nigeria and Australia with their new LNG projects. Uncertainty in Nigeria and unionised labour restrictions in Australia could well mean that these new supplies come on too slowly to alleviate price pressures. Beyond 2020 its basically down to the worlds power generation mix. Lots of nuclear and coal with carbon capture could reduce gas demand growth but timing is uncertain. Wind is a threat to gas demand but I have a feeling that supply chain capacity and grid connection issues may slow down the growth of wind in the next few years.

Big H said...

... the UK is more likely to rely on Norwegian gas and LNG than Russian gas - as Central Europe, Germany, Italy, NL, Poland and France will use up the available RUssian supplies before it gets to us. The volumes Gazprom claims to supply the UK at the moment are all bought off the spot market and re-sold as 'Gazprom' volumes.