Geopolitical impact of changes in patterns and trends in oil

Energy security depends on:

Resource availability (Domestic and foreign)
Security of supply
Affected by geopolitics
Little excess capacity to ease pressure on energy resources
Energy insecurity is rising
Mainly for non-renewable resources
Energy crisis a serious shortage of energy supplies
As the energy crisis deepens, people will drive less, carpool,
high mileage cars will be in demand
Less and slower driving due to high petrol prices reduces the
number of road accidents
Businesses will turn off advertising lights and more people will
wash their clothes in cold water
But in poor areas, there will be more deaths from heat in the
summer and more deaths from cold in the winter due to
energy costs
Fuel riots could ensue
The energy crisis will also increase illegal immigration from
Mexico to USA where there is already increasing
unemployment.
Increase in social tensions
Chronic heating oil shortages may cause a greater migration
to the Sun Belt
The middle class population will shrink as more people will be
sinking into poverty
More homelessness
Solutions:
USA constructed a Strategic Petroleum Reserve
Oil stored in a string of salt domes and abandoned salt mines
in Louisiana and Texas
It was meant to store one billion barrels of oil which could be
used in the even of a supply discontinuation from the middle
east
Energy pathways the pathway in which energy is exported
The Strait of Hormuz in the narrow body of water between the
Persian Gulf and the Gulf of Oman
About 30% of the worlds oil supply passes through the strait
and it is closely monitored by Iran who warned that it could
block this vital shipping route in the even of serious political
tensions.

In Nigeria, the rebel groups attack the oil installation in the

Niger delta out of frustration at the paucity of the benefits
accruing to the region or in an attempt to gain payouts
The armed rebel group known as the Movement for the
Emancipation of the Niger Delta (MEND) intensified attacks on
oil platforms and pumping stations
An increase of violence has affected the countrys financial
stability
So the ability to supply crude oil to the outside world
decreases
In 2007, Nigeria was the largest oil producer in Africa
USA is the number one buyer of Venezuelan oil and due to the
political turmoil, Venezuelas state oil company stopped selling
crude oil to USA
They are important as they control the flow of energy around
the world

Discuss Russias role in geopolitics:

Russia is the worlds 2nd largest producer and exporters oil and
gas
Oil and gas account for more than 26.5% of Russias GDP
The production of these fossil fuels is vital to the countrys
economic success
The high energy prices of recent years have been of massive
benefits
Russias strategic location, east to the energy hungry Europe
ensures that there is no shortage of the demand for Russian
gas and oil
South of Russia is the rapidly expanding economies of India,
China, Japan and South Korea which requires large amounts of
energy
European countries in particular have become increasingly
reliant on energy supplies from Russia
Countr
Production/
% of
y
billion barrels
world
per day
total
Russia 10.6
14
KSA
9.6
13
USA
7.4
12
China
4.3
5
Russian gas is piped to various countries such as Ukraine,
Bulgaria, Germany and Turkey via an extensive pipeline
network
The pipeline networks for oil ad gas are owned by the state
Gazprom, a state gas energy company has a monopoly on
Russian gas exports of about 23% of gas consumption in the
EU

The Baltic states are almost 100% reliant on Russian oil

25% of Germanys oil is from Russia
96% of Polands imports is Russian oil
The most important pipelines for Russian oil are those crossing
Ukraine, they account for 80% of the gas sent beyond the CIS

In January 2007, Belarus cut off a transit pipeline carrying

Russian oil
The closure of the 4000km pipeline halted the movement of
Russian oil supplies to a number of countries
This prevented 1.2 million barrels a day to be transported
Dispute between Russia and the countries led to the Russian
oil and gas to increase for certain countries
o Belarus US$47/1000 cm3 to US$100
To spite the increase in oil prices, Belarus decided that it
would impose an import duty of $45 a tonne on Russian oil
that was shipped across its territory to western Europe
Such disputes has raised the EU fears about its increasing
reliance on energy supplies from Russia
Some critics argue that Russia has a habit of manipulating gas
and oil supplies for political purposes
Solutions of Russian dispute
o Chancellor Merkel said that the dispute between Russia
and other countries illustrated the fact that Europes
energy sources needed to be more diverse. So the EU is
going to:
o Build interconnecting pipelines and power lines such as
electricity hook-ups between Germany and Poland as
well as France and Spain
o Diversify their supply, Nabucco pipeline which will
connect Europe with gas fields in the Middle East and
Central Asia via Turkey
o Build more terminals for the import of liquefied natural
gas
But there has been doubts about the management and
efficiency of the energy industry in Russia
In 2006, the International Energy Agency, IEA, said that the
Gazprom may not have enough gas to supply Europe over the
next decade
This was because it was not re-investing enough to ensure
continuous adequate supplies in the future
Gazprom relies on limited numbers of large gas fields and has
failed to invest in developing new resources in the Artic
To make up for Gazproms falling output in western Siberia and
its continuous exports of oil to Europe, it increased its imports
from Central Asia

Russia also prevents foreign investors to enter the energy

sector by imposing strict rules and regulations
The country also risks scaring off vital foreign investments as
well as potential oil and gas customers
Because foreign investments are required to keep Russias oil
and gas sector on track
The study by the Economist suggested that Russia could seek
to construct a gas cartel including the countries of Central
Asia, Algeria, Qatar, Libya and even Iran
January 2015
Vladimir Putin ordered the Russian state energy giant
Gazprom to cut supplies to and through Ukraine amid
accusations, according to The Daily Mail, that its neighbor has
been siphoning off and stealing Russian gas. Due to these
"transit risks for European consumers in the territory of
Ukraine," Gazprom cut gas exports to Europe by 60%,
plunging the continent into an energy crisis "within hours."
Perhaps explaining the explosion higher in NatGas prices (and
oil) today, gas companies in Ukraine confirmed that Russia
had cut off supply; and six countries reported a complete
shut-off of Russian gas. The EU raged that the sudden cutoff to some of its member countries was "completely
unacceptable,"
Gazprom CEO added that Russia plans to shift all its
natural gas flows crossing Ukraine to a route via Turkey
Gazprom, the worlds biggest natural gas supplier,
plans to send 63 billion cubic meters through a
proposed link under the Black Sea to Turkey, fully
replacing shipments via Ukraine
About 40 percent of Russias gas exports to Europe and Turkey
travel through Ukraines Soviet-era network.
Gazprom plans to deliver the fuel to Turkeys border with
Greece and its up to the EU to decide what to do with
it further, according to Sefcovic.
Russia cut gas exports to Europe by 60 per cent today,
plunging the continent into an energy crisis 'within
hours' as a dispute with Ukraine escalated.
This morning, gas companies in Ukraine said that Russia had
completely cut off their supply.
Bulgaria, Greece, Macedonia, Romania, Croatia and
Turkey all reported a halt in gas shipments from Russia
through Ukraine.
Gazprom has reduced deliveries via Ukraine after price
and debt disputes with the neighboring country that twice
in the past decade disrupted supplies to the EU during
freezing weather.
Russia wont hurt its image with a shift to Turkey because it
has always been a reliable gas supplier and never violated its
obligations - Russian Energy Minister Alexander Novak

Case Study The Niger Delta: Oil Pollution

Niger Delta covers an area of 70,000km (7.5% of Nigerias land area).
Contains over 75% of Africas remaining mangrove.
A report in 2006 suggested that over 1.5 million tonnes of oil have been spilt
in the delta over the past 50 years.
One of the 5 most polluted places on Earth (according to WWF)
20 million people living in the delta are affected by the pollution.
Pollution damages crops and fishing.
Shell claims 95% of oil discharges in the last 5 years have been caused by
sabotage.
70,000,000m of natural gas is flared off each day.
Equivalent of 40% of Africas natural gas consumption.
Environmental disasters in one of the worlds largest wetlands and Africas
largest remaining mangroves forests.
Oil spills, acid rain from gas flares and the stripping away of mangroves from
pipeline routs have killed fish in the area
Between 1986-2003, more than 2000 hectares of mangroves disappeared of
mangroves disappeared from the coast due to land clearing and canal dredging
for oil.
The oilfields contain large amounts of natural gas, this is generally burnt off as
flares rather than being stored or re-injected into the ground. Hundreds of
flares have burned continuously for decades. (Thus lead to acid rain releasing
greenhouse gases)
The government has recognized 6817 oil spills in the region since the start of
oil production in the area.
Construction and increased ship traffic has changed local wave patterns
causing shore erosion and the migration of fish into deeper water
Various types of construction have taken place without adequate
environmental impact studies.
Case Study Oil Sands in Canada and Venezuela
Critical over the next 50 years as the worlds production of conventional oil
falls. Such synthetic oil which can also be made from coal and natural gas,
could provide a vital bridge to an era of new technologies.

Estimates of economically recoverable oil sand reserves:

180 billion barrels Oil Gas journal estimates

17 billion barrels BP estimates

World consumes close to 30 billion barrels of oil a day

33,000 employees work at Alberta oil sands.

They reach 1 million barrels of oil a day in 2005.

Half of Saudi Arabias current output is less than 5% of the worlds production
in 2030.

In takes 2 tonnes of mined sand to produce one barrel of synthetic crude,

leaving lots of waste sand.

It takes about three times as much energy to produce a barrel of oil-sands

crude as it does a conventional barrel of oil; thus oil sand are larger creators of
greenhouse gas emissions.