Energy Geopolitics Energy Pathway- Gazprom- Geopolitics- LO1: To understand how European gas supply is distributed and things that may have impacted on this LO2: To examine the role of players in supply like OPEC and oil/gas TNCs Energy Pathway- Gazprom- Geopolitics- Transit state- 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 the way from producer to consumer Energy pathway – How energy flows from its producers to the consumer Gazprom – A Russian gas company controlling 92% of Russia’s production, 25% of Europe’s and 4% of the Uks Geopolitics – The study of the ways in which political decisions and processes affect the way space and resources are used Transit state – A state or country through which energy flows on the way from the producer to the consumer A Russian gas company controlling 92% of Russia's production, 25% of Europe’s and 4% of the UK’s How energy flows from its producers to the consumer, including the route it takes on its way

Global gas routes in the past Some LNG routes (noticeably from LICs to HICs or developing countries) Global gas routes in the past

Gas routes in future Many more LNG routes (primary means this is the only route, secondary means it stops off somewhere first) More LNG routes starting in HICs Main pipelines remain – an increase in number but not as significant as LNG

What are the main differences between the past and future gas routes? What can you tell me about the USA? What can you tell me about Europe? What can you tell me about southern Asia?

What does this show? OECD – The Organisation for Economic Cooperation and Development (international organisation to promote policies that improve the economic and social wellbeing of people around the world – there is a specific European group 3 important countries – UK (peak 2001), Netherlands (peak 1975), Norway (peak 2009?) Production is likely past peak and is set to fall in future!

UK getting gas from Norway – Norway are running out?? Netherlands and UK supply each other – both are running out?? Russia are big supplier for a lot of European countries – but their control over gas is a cause for concern…

AND ITS NOT JUST GAS, EITHER!!!

RUSSIA- Europe’s energy Power House?

RUSSIA- Europe’s energy Power House? Russia is the world’s second largest producer of natural gas (USA is number 1) It is the world’s largest exporter, shipping an estimated 196 billion cubic metres each year Gazprom carries the business of extraction, production, transport and sale of natural gas in Russia

GAZPROM Supplies 25% of EU gas 4% OF UK gas Worlds 3rd largest energy company Employs nearly ½ million people Task Produce a quick 5 minute fact file about Gazprom using the photocopied pages of text information. Include detail about- The control it has over gas supply at a local, national and regional/ international level Countries that solely rely on it for gas supply Earnings Recent history employees

Who do you think is unhappy about this connection?

Russia Gazprom and the EU gas supply problem… Russian gas to Europe 'blocked‘?

Background Tensions between Russia and Ukraine have been high since 2004 Pro-Western forces led by President Viktor Yushchenko won control of the government over Viktor Yanukovych, a Moscow ally. Russia also opposes Ukraine’s desire to join the North Atlantic Treaty Organization and the EU (link back to superpowers topic).

What sparked the crisis? Russia cut gas supplies to Ukraine on New Year's Day, saying it would pump only enough for customers further down the pipeline. Ukraine and Russia have faced negotiations over the renewal of gas supply contracts every year, but by midnight on 31 December 2008 they had failed to agree on the price Kiev should pay in 2009. The two countries also failed to agree on a price Russia would pay Ukraine for gas transit to Europe. There were also claims that Ukraine had stolen gas, but they claimed to have already paid fines for that

How did this affect anyone else? 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. Gas supplies were completely halted from 7 January 2015, after Russia accused Ukraine of siphoning off gas meant for European customers This left 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 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.

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. They have 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. http://www.bbc.co.uk/news/business-20639545

How reliant is Europe on Russian gas? Europe could survive a short interruption of a few weeks to the pipelines across Ukraine, assuming that other Russian gas kept flowing. The European Union has built in more resilience since the last upset in Ukraine and now it is hurrying (in some respects) to reduce its reliance further. But measures such as better storage, more interconnectors and diversification of supply will take several years. In the long term Europe could import more liquefied natural gas as new supplies come on stream, chiefly from America. It could also take advantage of abundant Norwegian hydro-power. For now, though, Europe cannot do without Russian gas—but then again, the Kremlin cannot do without its European customers! WHERE DOES BREXIT SIT IN ALL OF THIS? WHAT ARE WE GOING TO DO?!

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. One alternative measure 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. A bilateral contract is a is a reciprocal arrangement between two parties where each promises to perform an act in exchange for the other party's act. Each party is an (a person who is bound to another) to its own promise, and an obligee (a person to whom another is obligated or bound) on the other party's promise.

So, is it all good news for Russia for the time being So, is it all good news for Russia for the time being? Can you think of anything that could impact distribution of Russian gas? Passing through Ukraine, piracy, technical faults (North Sea), fuel protestors…

‘Pinch Points’ Bab El Mandeb Pinch Points are narrow passageways through which the gas (and oil in some cases) must pass on its path from producer to consumer. Several are in notoriously unstable areas and are a cause for concern when considering energy security – task is to look at one each, then share in a group of 4. Bab El Mandeb Piracy off the coast of Somalia is an increasing cause for concern Straits of Malacca Piracy is also an issue here.

‘Pinch Points’ Homework Straits of Hormuz Tensions in Iraq, Iran and Afghanistan make transportation through these straits unreliable. Suez Canal 5% of 2030 oil supply passing through. Suez canal used to be major choke point for crude oil coming from Middle East destined for Europe. Two major incidents (1956 and 1967) caused the canal to be blocked. Introduction of larger ships meant the canal had to be made bigger – this was done using Egyptian citizen’s money which caused uproar – it is now expensive to get through the Suez canal, but the other option is an addition 6 days travel which is also costly. Carry out research on why the Suez Canal is a ‘pinch point’ and look into the Straits of Hormuz and how tensions in Iraq etc. have made transportation through this area difficult.

Use the circles to plan out what you would write for this essay… Task Plan for this essay: Russia uses it’s oil and gas as a political and economic weapon. Discuss. Use the circles to plan out what you would write for this essay…

Planning an exam question...

Step 1 – Break down the question into... Key words and command words. Russia uses it’s oil and gas as a political and economic weapon. Discuss.

Russia uses it’s oil and Step 2 – STRUCTURE Russia uses it’s oil and gas as a political and economic weapon. Discuss.