Pipeline Politics: Europe's Stubbornness, and the Virtues of Shale
On the heels of the Obama-Medvedev-Putin summit, five nations will sign what they are calling a breakthrough agreement for a long-troubled natural gas pipeline meant to change the energy equation in Europe. That's code language for reducing a perceived threat of increased Russian influence on the continent.
As Sylvia Westall and Orhan Coskun at Reuters suggest, don’t crack the champagne yet.
The background is this: Washington and the EU are troubled by Russia's domination of Europe's natural gas market; Gazprom provides some 25% of the gas supply, and the West perceives that Moscow will use that market power for political advantage. Russia denies any such intention. Yet the West's persistent concerns are the logic behind Nabucco, a proposed pipeline that would help to diversify Europe's gas supply.
TurkeyBulgaria , Romania , Hungary and Austria
The latter is the situation for the European Union and Washington, Nabucco’s primary backers.
Turkmenistan – originally, Nabucco was meant to build on U.S. efforts to provide Central Asia with an alternative transport route to Russia – has balked at contracting with any serious western players for any fields on-shore, where the large volumes of natural gas are situated.Azerbaijan -- a possible backup player until Turkmenistan possibly changes its mind – last week signed a deal with Russia
The re-election of Mahmoud Ahmadinejad, and the bloody crackdown that has followed, suspends hopes for the medium term at least forIran Europe ’s natural gas.
As No Hot Air blogs, one is new technology that makes shale gas possible and economical to extract from convenient places likeGermany , Hungary and Poland Qatar ; but Europe must build the infrastructure to handle it.
WillEurope and the U.S. shift their focus to these very real alternatives?
As Sylvia Westall and Orhan Coskun at Reuters suggest, don’t crack the champagne yet.
Turkey
The latter is the situation for the European Union and Washington, Nabucco’s primary backers.
Turkmenistan – originally, Nabucco was meant to build on U.S. efforts to provide Central Asia with an alternative transport route to Russia – has balked at contracting with any serious western players for any fields on-shore, where the large volumes of natural gas are situated.
The re-election of Mahmoud Ahmadinejad, and the bloody crackdown that has followed, suspends hopes for the medium term at least for
As No Hot Air blogs, one is new technology that makes shale gas possible and economical to extract from convenient places like
Will
Labels: Gazprom, lng, Nabucco, Russia, shale gas, south stream
9 Comments:
Non-conventional gas requires a lot of drilling over large areas, and this could make its development in heavily-populated Europe difficult. This is already becoming a problem in the Eastern U.S.
Mr. Levine,
Your posting on Nabucco is right on target. The west has taken a very short-sighted approach to long term energy security in its support for Nabucco for the reasons you mention. In addition, support for Nabucco calls into question the European Union’s commitment to its climate targets, particularly in the lead up to the climate summit to be held in Copenhagen in December 2009. It is estimated that if Nabucco reaches its full capacity, in the 2020s it will import into Europe 31 billion cubic meters of natural gas per year, emitting approximately 60 million tons of additional CO2 into the atmosphere in Europe per year. On top of that, methane - the principal component of natural gas – has 20 times higher greenhouse effect potential than CO2. In this sense, natural gas cannot be seen as a low-carbon alternative.
Turkmenistan, one of the likely suppliers of Nabucco, remains one of the most repressive regimes in the world. How can Europe and the United States maintain a principled stance on human rights while simultaneously courting Turkmenistan for its natural gas?
Finally, to those who would claim interaction with Turkmenistan—even in the hydrocarbon sector—is beneficial for Turkmenistan, support for alternative energy, including solar (Turkmenistan is over 90 percent desert), would create opportunities for average citizens, providing them with revenue through small business operations. The lack of transparency and fiscal accountability in Turkmenistan means that hydrocarbon revenues are unlikely to benefit society at large, and, in fact, are more likely to prop up the existing authoritarian regime.
Kate Watters, Executive Director, Crude Accountability
Thanks DDSyes and Kate Watters. Both good and interesting comments. On the former, Exxon is deeply engaged in European shale gas; I wonder how it is dealing with the issue you mention. On the latter -- from Obama's standpoint at least, he has retreated somewhat from this agenda, correct?
Kate-
And what is your alternative to gas?
Nuclear? Maybe helps, but massive investment and whole host of other issues.
Renewables? No way they can fill the need for fuel for power production and heat, even with major investment in energy efficiency.
On the Turkmenistan issue, if we stopped taking energy from repressive regimes (Saudia Arabia or Venezeula anyone?). Incidentally the Turkmen government is actually very interested in solar power-it was discussed most recently when a Turkmen delegation visited the U.S. a month or so ago.
"The question is why the pro-Nabucco forces persist in pushing on a proverbial wet noodle."
Because their hatred of Russia blinds them to plain facts?
Folks, an oilman friend with long-time exposure to the region sent the following in an email, asking that his name be withheld:
Comment if I may - the Gazrpom-SOCAR agreement earlier this month was for 500 million cubic meters (ie half a billion cubic meters) a year only. I don't think that it uses much of SD-1 gas and SD-2 gas is still some years away. More like Mr. Aliyev managing all the parties involved in a very politic way? Nabucco will work! Also see OMV/MOL agreements in Kurdistan which can contribute to Nabucco gas after Azerbaijan.
Rkka: I don't see hatred or any other blinding emotion in play here. Usually, inertia is the dominant motive force in such policies continuing to be followed even after other, possibly better options present themselves. I also point to ddsyes' comment above -- companies such as Exxon that are working European shale gas plays must still traverse political mindfields.
Regarding the Obama administration and Nabucco, Ambassador Morningstar has been very clear in his support for the pipeline. What we find unfortunate is that again, human rights appears to take a back seat to energy policy, even when that policy is as shortsighted as Nabucco and relies on the involvement of authoritarian states like Turkmenistan. Although alternative sources of energy will not fill the gaps immediately, the political will to turn away from a fossil fuel based energy policy must start with governments like the US and those in the EU.
Realm Energy just had a press release on their European shale plays, http://realm-energy.com/realm-energy-makes-aggressive-play-for-european-shale-gas-deposits.htm
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