Not a day goes by without some inauspicious report regarding Chinese, and writ large, emerging market energy demand. The most recent, and ominous, announcement by the IEA this month reports that China has eclipsed the US as the world’s largest energy consumer. While this issue of the JES did not set out to focus on China in particular, it seems that across every corner of the globe China has moved evenly, decisively, and consistently to secure upstream resources for its eventual downstream consumption. In the oil patch, where producers have been unable to replace depleted reserves with new finds (or in the case of OPEC to produce more), this is decidedly significant for international oil markets: putting upward pressure on prices—even in this lingering period of global economic malaise—and challenging the integrity of long-term established energy relations between neighboring states. For the US, this is nowhere more apparent than in US-Latin American energy relations, covered in this issue by Dr. Nancy E. Brune, an energy security specialist at the imminent US Sandia National Laboratory.
Deconstructing how energy security policies are composed and implemented, even in China, contributors Llewelyn Hughes and Sean J. Kreyling put forward a succinct framework for analysis. Their findings suggest that even in states perceived as unitary actors like China, energy policy takes into account multiple variables which must be first understood before ‘energy security’ policies can be taken for granted as such.
In India, that ‘other’ emerging energy behemoth, the evolving nature of India’s natural gas sector may provide succulence in satisfying the demand for energy by this growing population and economy. However, Shebonti Ray Dadwal of India’s Institute for Defence Studies and Analysis in New Delhi points out that even if the gigantic new natural gas deposits of Krishna-Godavari basin play out well, and even if shale gas can be developed on the sub-continent, the country will ultimately have to look elsewhere to satisfy future domestic gas demand. For years, India and Turkmenistan have been seeking cooperation in the gas trade to this end. But while sluggish negotiations continue on projects such as the Turkmenistan-Afghanistan-Pakistan-India pipeline, China has stepped into Central Asia in a meaningful way. As a result, today hydrocarbons from Kazakhstan and Turkmenistan are flowing east to China and not south to India. The same malaise on moving forward with project development can be said for Europe’s Black Sea region, where progress has stalled on new transit routes for bringing Central Asian gas to Europe, while Chinese success is apparent in the form of completed pipelines, pump stations, and throughput. It is important, not the least for the reason of security of supply, that Russian capture of downstream assets be slowed across the Black Sea region. A modicum of diversity in Europe’s natural gas supply away from Russia remains elusive, while Russia’s Gazprom must be more than pleased that Central Asian (read Turkmen) gas flows east without challenging its dominance of Western European markets. Sohbet Karbuz of the Paris-based Observatoire Méditerranéen de l'Energie covers the challenges in the Black Sea and delineates how to kick-start enhanced energy cooperation between the US and EU with its Black Sea partners. Contributors Andrej Nosko and Petr Lang provide a positive case study on how the landlocked Czech Republic has lessened its dependence on Russian gas and in doing so strengthened its national political and economic independence.
Diversifying away from China and Russia, this issue of the JES is rounded off with three salient articles that examine the impact of the discovery of a huge natural gas field off of Israel’s Mediterranean coast and how Hizballah is manipulating the find for political saber-rattling, the role of Iran in India’s energy security calculus, and the propensity of oil rich Arab Gulf States to diversify their economies away from oil dependence through the advent of their sovereign wealth funds (SWFs) with a view towards what impact this may have on global oil supply.
Editor, Journal of Energy Security