Subtle shifts in Chinese energy imports suggest that China may be able to exert influence in the Middle East in alternative and subtle ways that do not involve military or overt economic pressure.
The shifts involve greater dependency of the Gulf states on oil and gas exports to China, the world’s largest importer, at a time that the People’s Republic has been diversifying imports at the expense of Gulf producers.
The shifts first emerged in 2015 when Chinese oil imports from Saudi Arabia rose a mere two percent while purchase of Russian oil jumped almost 30 percent. Russia rather than Saudi Arabia has been for much of the period since China’s biggest crude oil supplier.
The shifts were reinforced by the US shale boom, a resulting drop in US imports from the Gulf, and President Donald J. Trump’s tougher trade policies.
“With the Trump administration, the pressure on China to balance accounts with the U.S. is huge… Buying U.S. oil clearly helps toward that goal to reduce the disbalance,” said Marco Dunand, chief executive and co-founder of commodity trading house Mercuria.
At the same time, China became in 2016 the largest investor in the Arab world with investments worth $29.5 billion, much of which targeted infrastructure, including the construction of industrial parks, pipelines, ports, and roads.
Compounding the impact of shifts in Chinese energy imports is the fact that despite support for Russian policy in the Middle East, Beijing increasingly fears that Moscow’s approach risks escalating conflicts and has complicated China’s ability to safeguard its mushrooming interests in the region.
Viewed from Beijing, the Middle East has deteriorated into a part of the world in which regional cohesion has been shattered, countries are fragmenting, domestic institutions are losing their grip, and political violence threatens to effect security and stability in northwest China.
China’s concern is likely to increase if and when the guns fall silent in Syria and the country begins to focus on reconstruction. Already China worries that Uyghur foreign fighters in Syria and Iraq are heading to areas closer to Xinjiang in Pakistan and Afghanistan.
An end to the war in Syria, moreover, opens up economic opportunity but is also likely to sharpen rivalry between Russia and China as that will play to China’s strength and highlight Russian weaknesses.
China’s interest in Syrian reconstruction goes beyond dollars and cents. “Syria can be a key logistics hub for China. Its history is the key to bringing stability in the Levant, meaning it has to be incorporated into China’s plan in the region. From a security perspective, if Syria is not secure, neither will (be) China’s investment in neighbouring countries,” said Kamal Alam, a Syrian military analyst.
All of this raises the question of how China can best stand up for its interests against the backdrop of a perception among Chinese scholars that China’s unsuccessful efforts to mediate in multiple conflicts in the Middle East, including Israel-Palestine, Syria and the Gulf crisis that pits a United Arab Emirates-Saudi-led alliance against Qatar, have failed to position the People’s Republic as a credible alternative to the United States and Russia.
Pouring fuel on the fire, is the fact that Chinese support for Russian policies in the United Nations Security Council and elsewhere has effectively identified Beijing with Moscow rather than allowed it to differentiate itself.
The Middle East has already forced China to move away from long-standing principles that underwrote its foreign and defense policies for decades like non-interference in the domestic affairs of others and a refusal to establish foreign military bases even if officially they remain valid.
China has in part been able to maintain the dichotomy between theory and practice by evading public discussion on issues such as whether and under what circumstances China should use military force or apply economic pressure as it did for example when it expressed in 2016 discontent with a South Korean decision to deploy a US THAAD (Terminal High Altitude Area Defence) anti-missile system.
Beyond the establishment of China’s first foreign military base in Djibouti, Chinese special forces have been advising Syrian president Bashar al-Assad’s regime in its operations against jihadists that include Uyghurs in their ranks and have operated on the Afghan side of the Central Asian nation’s border with the People’s Republic.
China scholar Andrea Ghiselli noted that Chinese diplomats, scholars and journalists seldom focus on security in public, pointing instead to “the positive elements” of China’s relationships in the Middle East.
Nevertheless, Mr. Ghiselli observed that few Middle Eastern leaders attended last year’s Belt and Road Forum in Beijing that was intended to showcase China’s Eurasian-focused infrastructure investment initiative as “a more open and efficient international cooperation platform; a closer, stronger partnership network; and to push for a more just, reasonable and balanced international governance system.”
The Gulf crisis has rendered the six-nation Gulf Cooperation Council that groups Saudi Arabia, the United Arab Emirates, Qatar, Kuwait, Oman and Bahrain impotent and complicated negotiations for a free trade agreement with China.
Similarly, a potential withdrawal this month of the United States from the 2015 international agreement that curbed Iran’s nuclear program would likely put China at odds with Middle Eastern proponents of a tougher attitude towards the Islamic republic like Saudi Arabia, the UAE and Israel.
The hardening of Middle Eastern fault lines is likely to make it increasingly difficult for China to remain aloof and emphasize economic and trade relationships without getting sucked into the region’s multiple conflicts.
Saudi Arabia has so far refrained from making economics a fixture of its relationships in its effort to counter rising Iranian influence in the Middle East, and together with the UAE, has not attempted to force third countries to abide by its boycott of Qatar.
The question is whether the Gulf states will maintain their caution. Omar Ghobash, the UAE’s ambassador to Russia, suggested last summer that the anti-Qatar alliance could “impose conditions on our own trading partners and say you want to work with us then you have got to make a commercial choice.”
The alliance has so far not acted on Mr. Ghobash’ suggestion, in part because the international community, including China, have called for a negotiated end to the crisis and refused to back the Saudi-UAE position.
The shifts in China’s energy imports coupled with China’s need to protect its interests means that the People’s Republic may be in a position to leverage its power in alternative ways.
“This…gives China significant leverage to impose its preference in oil contracts and improve its own energy security. It also means that China has the capability to greatly determine the economic future of countries currently engaged in all the regional hotspots, a costly endeavour that cannot be sustained without matching capital inflows,” Mr. Ghiselli said.
“Thus far,” he added, “China has bought oil and gas from both Sunni and Shia countries without showing evident preferences. However, were China to do otherwise, its actions might produce deep changes in the region in ways not different from those of a military intervention in favour of one of competing parties.”
We Need a Global Fund to Ensure a Clean Energy Revolution
A radical new approach to energy innovation is needed if the sector is to meet the demands placed on it by the Paris Climate Agreement and play a positive role in the fight against climate change. This is the main finding of a white paper, Accelerating Sustainable Energy Innovation, published today by the World Economic Forum.
With energy consumption and production representing two thirds of global greenhouse gas emissions, business as usual is no longer an option. Increasing the pace at which innovative sustainable energy solutions get to market is critical to diversify the energy technology landscape and to meet the Paris targets at affordable costs.
The white paper, produced with analytical support from KPMG, highlights that while technology and innovation policies have been successful in rapidly scaling up some renewable technologies such as solar, photovoltaics and wind power in the past decade, the breadth of innovation and the way it has been coordinated have been disappointing. Because investments in energy technology typically require long investment horizons and entail high technological risks, the sector has struggled to attract sufficient amounts of funding, or to align the investments of those active in the space.
“Unleashing the full power of entrepreneurship and innovation across the energy system is at the crux of delivering global climate goals and spurring new opportunities for growth. We must take advantage of the Fourth Industrial Revolution to bring about a step change in investments and accelerate the pace at which new technologies are brought to market,” says Cheryl Martin, Managing Director and Head of the Global Centre for Innovation and Entrepreneurship, World Economic Forum.
The paper highlights a set of ideas that were identified to channel more investment into R&D and fast-track the road to commercialization, targeting regulatory frameworks and financial mechanisms. At the international level, the paper calls for a new global fund modelled on successful funds in other sectors to provide a secured and focused financing mechanism to tackle some of tomorrow’s most important energy technology challenges.
As well as increasing the energy sector’s contribution to the fight against climate change, the ideas set out in the paper also have the potential to generate significant employment opportunities and spur sustainable economic growth. The six ideas are in a nutshell:
Establish an independent international sustainable energy innovation accelerator fund to finance innovative energy technology projects, blending public and private sources of capital
Develop instruments for public-private co-investment at the national or regional level to support and finance deep-tech energy innovations, reduce risks and improve the effectiveness of available public and private funding; if properly designed, such instruments would not only stimulate more private money into breakthrough energy projects but also would significantly improve the success rate and impact of public RD&D grants
Mainstreaming energy innovation through strategic public procurement to use the power of public procurement to accelerate development and commercialization by providing first markets for innovative energy technologies and solutions
Create strong national institutions for energy innovation acting as a single voice for public support in energy innovation, bundling responsibilities as the main public funding authority, overlooking and steering the overall sustainable energy innovation process
Co-define energy technology roadmaps through public-private collaboration to align global policy and industrial innovation efforts and create a credible road to scale for technology areas of high potential currently advancing slowly
Super-transparency of government RD&D spending to improve the efficiency of the public R&D funding process and increase the transparency of opportunities and volume of public funding available for entrepreneurs and investors
“The opportunities that exist around energy innovation are incredibly exciting and demonstrate that the industry as a whole is focused on imminent change. However, the pace at which innovation occurs requires a deeper sense of collaboration from all of us as energy stewards to drive the agenda forward, including how we go about funding, access to technology, global energy policy, and research and development,” said Regina Mayor, Global Sector Head, Energy and Natural Resources, KPMG. “It is critical that the industry works to accelerate these discussions among industry players, government, entrepreneurs and investors around the world to address systemic barriers and fully develop and commercialize energy technologies that have the power to change the way we access energy in the future.”
One year since the start of their formal collaboration, the World Economic Forum and Mission Innovation continue to strengthen their partnership. In co-designed sessions at Mission Innovation’s third ministerial in Malmö, the collaboration is bringing together government ministers, industry CEOs and innovation pioneers to move to action on innovation challenges, discuss how to implement ideas, and set a precedent for the public-private partnerships that are required to accelerate sustainable energy innovation.
The bp in Iraq’s Oil Industry: A Comeback to The Historical Role?
The official history of the Iraq’s oil began when a well at Baba Gurgur just north of Kirkuk was struck in the early hours of 14 October 1927 by the Turkish Petroleum Company (TPC) however the early negotiations for an oil concession was started with Ottoman Sultan from the late 19th century.
Indeed, the significant proved reserves of crude oil during the steps of new government installation in the Iraq was enough appealing for giant oil companies to own the shares of TPC. In 1928 the composition of TPC was rearranged through a formal agreement and TPC shareholders were formed by Anglo – Persian Company(the forerunner of the British Petroleum), Royal Dutch-Shell, Compagnie Française des Pétroles (which was named later the Total) and NEDC, an American consortium included Standard Oil of New Jersey (The prior name of Exxon which merged to Mobil and formed Exxon Mobil Company in 1999), Standard Oil Company of New York, Gulf Oil, the Pan-American Petroleum and Transport Company, Atlantic Richfield Co and an Turkish American businessman Calouste Gulbenkian.
Meanwhile by the new structure of TPC shareholders, it was renamed the Iraq Petroleum Company (IPC) and its operational territory was expanded to all the Red Line (except of Kuwait), though by establishing the Bahrain National Petroleum Company and later, the ARAMCO (Saudi Arabia) followed by last two U.S companies’ exit from the NEDC in 1948, the IPC was limited to the Iraq country and left the Iraq after nationalizing the country’s oil industry in 1972.
Of course the bp’s roll in IPC’s achievements was significantly different than another shareholders, not only because of Great Britain Government’s supports, but also by its great perseverance from 1928 until 1972 when Iraq’s oil industry was nationalized completely, the historical character of bp in the Iraqi minds.
bp’s comeback to the Iraq’s oil
Regarding to the high dependence of Iraq’s economy and its public budget on the oil’s income which is on the top of world countries’ level, the Iraqi government in the new era (after 2003) made plans to increase the oil production which was followed by inviting the IOCs’ return to the Iraq’s oil industry, after 40 years of divorce.
While the Iraq’s statement in 2007 declared sharp raises in its proven oil reserves up to 115 billion barrels, 26 international oil companies returned to the Iraq’s oil industry, including the Exxon Mobil, Royal Dutch-Shell, Total and bp, the main shareholders of the IPC. Of course some another famous companies expressed their intend and won some projects, such as Chinese National Petroleum Company (CNPC), Malaysian Petronas, GAZPROM, Turkiye Petroleum Anonim Ortakligi (TPAO), Lukoil or Dragon oil.
Whereas the several International Oil Companies participated in the Iraq’s oil projects and development plans but the bp’s comeback was significantly different, especially when the bp’s strong involvement in the giant Rumaila field enhanced its production rapidly while the most of IOCs stay in studying phases yet.
Afterwards, the bp expressed it’s interest in developing the Kirkuk’s oilfields, where was the first entrance of bp to the Iraq’s oil industry. The negotiations with the Ministry of Oil of Iraq resulted in an agreement in 2013 which was a basis for making common operational team in February 2014 but bp’s operations in Kirkuk was stopped until the October 2017 when the Kirkuk was handed over to the Iraqi federal government.
The preliminary Kirkuk’s production target of 750,000 bpd which it’s not only seemed far to be quickly achieved, but also it’s predictable to be increased up to 1,500,000 bpd until 2021.
Meanwhile, if the bp could has the chance to participate in the development of the big Majnoon oilfield, its historical synergy in the Iraq’s oil industry could be revived again. While the bp would be involved in the fields containing 40% of Iraqi Federal reserves, it will influence on producing more than half of Iraqi federal’s oil production.
Despite the bp’s concern for strong participation in the Iraq’s oil industry, the most of IPC shareholders pulled out or limited their activities in the Iraq’s projects such as ExxonMobile which sold the most of its share in the big field of West Qurna#1 or Royal Dutch-shell which left the critical field of Majnoon. Meanwhile, the Total’s participation in the Iraq’s oil industry limited to the Halfaya field by just 18.75%. In the same approach, some another international oil companies limited their actives or shares in the Iraq’s oil projects, such as the Petronas who left the Majnoon recently or Sonangol which is going to resume it’s operation in Qayara and Najma fields that were stopped from 2015.
The next months when the Iraqi government would make decision about the service companies in the Manoomn oilfield, the perspective of bp in Iraq’s oil industry could be clarified whether it will comeback to the historical rail or continuously run in the limited situation.
Businesses Taking Lead in Climate Response
Spurred by consumer demand for eco-friendly practices, many businesses across the U.S. are moving aggressively to reduce their carbon footprint, including a major embrace of renewable energy and alternative-fueled vehicles, according to Deloitte’s “Resources 2018 Study – Businesses Drive, Households Strive” released today.
The annual survey shows that businesses see addressing climate change as key to long-term industry resilience. Sustainability seems no longer optional – it has become important to fostering business growth and satisfying a wide range of stakeholders, including customers, suppliers, partners, employees and investors.
Although 86 percent of residential consumers believe government should be active in setting a vision and path for energy strategy, it is the private sector that is advancing the cause to manage resources for cleaner, more resilient, secure and affordable energy supplies.
“Businesses are not waiting for government to act on addressing climate change. They have picked up the gauntlet,” said Marlene Motyka, Deloitte U.S. and global renewable energy leader and principal, Deloitte Transactions and Business Analytics LLP. “They are now driven to double down on their energy management efforts as they view their long-term viability through the climate lens.”
- Of the 87 percent of businesses familiar with the U.S. pulling out of the Paris climate agreement, 4 in 10 are reviewing or changing their energy management policies in response, with 75 percent of those increasing their commitment and investment in energy management.
- About 70 percent of customers are demanding companies procure a certain percentage of electricity from renewable sources.
- The number of companies with carbon footprint goals has jumped to 61 percent in 2018, from just over half the year before.
- Sixty-eight percent of residential consumers say they are concerned about climate change and their personal carbon footprints, outpacing the previous high of 65 percent in 2016.
- Nearly three-fourths (74 percent) of residential consumers stated that climate change is caused by human action, up six percentage points from 2017.
Renewables rated key to energy independence, millennials tip the scale
More than three-fourths (76 percent) of survey respondents cited renewables as key for achieving energy independence, jumping five percentage points from 2017. This seems to represent a change in mindset with many respondents now seeing a connection that was once widely thought to be implausible.
In addition, many millennials – greener and “techier” than other generations – see renewables as the answer to their environmental concerns. In fact, 64 percent rank utilizing clean energy sources among their top three most important energy-related issues. Also, they are more likely to adopt new solutions, such as electric vehicles, home automation systems and time-of-use rates.
Businesses making EVs an easy choice
Many businesses not only say reducing their electricity consumption is important to staying competitive but they also are helping to transform the transportation sector as more consumers and employees eye electric vehicles and hybrids as a prime pick for their next vehicle.
Business respondents expect gasoline or diesel vehicles will make up less than half (49 percent) of their transportation fleets by 2020. If so, it would mark the first-time vehicles powered by alternative fuels will constitute a majority of corporate fleets. In fact, businesses are accelerating their efforts to support employees who drive electric vehicles, with well over half (56 percent), offering EV charging stations. Fifty-two percent of these businesses own the charging stations themselves, while 41 percent belong to the building owner.
Businesses Turn to Self-Generation for Greater Control Over Energy
On-site generation also is on the rise as distributed resources are increasingly viewed as being realistic and cost-effective, and as businesses desire greater control over their energy supplies in terms of price, quality and reliability. Fifty-nine percent of businesses now generate some portion of their electricity supply on-site, and of those businesses, 13 percent are using renewables, 13 percent use on-site co-generation and 10 percent are using on-site battery storage.
Nearly half of business respondents are working to procure more electricity from renewable sources, and nearly two-thirds (61 percent) said combining battery storage with renewable sources would motivate them to do more. Additionally, businesses are responding to increased power outages by purchasing backup generators, adding battery storage units, and expanding the amount of electricity they self-generate.
Smart home apps not catching on, cyber concerns cooling interest
Despite support for more innovative energy savings, only 20 percent of respondents have automated home functions, such as smart thermostats. In fact, amid growing reports of hacked home devices, 21 percent of respondents cited privacy and security concerns as a barrier to upgrading their thermostats, compared to 15 percent last year. In addition, penetration of smart thermostats and automation systems remains very low with only 4 percent using a home automation system and just 8 percent utilizing a programmable thermostat.
A majority of both businesses and residential consumers want environmentally responsible, reliable assets, preferably close by, that they can control to optimize reliability, flexibility and cost. However, this year’s survey seems to emphasize that privacy and security concerns should be addressed by providers soon to maintain the momentum for a clean secure energy future.
“Utilities are being challenged to get to know their customers better, and the industry has a long way to go,” said Andrew Slaughter, executive director, Deloitte Center for Energy Solutions, Deloitte Services LP. “What appears clear is that the electric utility sector’s transformation will likely be one of decentralization, digitalization, and decarbonization driven by business and residential consumer demand for a cleaner, more resilient, secure and affordable energy supply.”
African Development Bank and UNIDO join forces to accelerate Africa’s industrialization
The African Development Bank (AfDB) and the United Nations Industrial Development Organization (UNIDO) have signed a Memorandum of Understanding (MoU)...
Only the existence of Emotions make a human being different from machines. Emotions affect everything we do, coloring every thought...
Why America’s Torture-Chief Now Runs the CIA
On May 17th, the U.S. Senate Intelligence Committee voted 10 to 5 to approve Gina Haspel as America’s new chief...
US-EU possible soft tactic to contain Iran
The US withdrawal from the Joint Comprehensive Plan of Action (JCPOA) has created a new rounds of speculations about the...
Circular Economy: New rules will make EU the global front-runner in waste management and recycling
EU Member States approved a set of ambitious measures to make EU waste legislation fit for the future, as part...
We Need a Global Fund to Ensure a Clean Energy Revolution
A radical new approach to energy innovation is needed if the sector is to meet the demands placed on it...
To Fulfill its Mission, ADB Must Prioritize Sustainability
Asia is rapidly evolving as are its development needs. To keep pace with these changing needs and to ensure that...
New Social Compact2 days ago
How Muslim Propagators Swindle the Western Civilization: Islam and Science Expropriation (D)
Africa2 days ago
Is Morocco become China’s freeway to Africa?
Energy2 days ago
The bp in Iraq’s Oil Industry: A Comeback to The Historical Role?
Russia2 days ago
St. Petersburg International Economic Forum 2018
East Asia2 days ago
The battle for the Iranian nuclear deal: China approaches a watershed
Newsdesk2 days ago
EU investment in gas interconnection between Bulgaria and Serbia to enhance energy security in the region
Intelligence1 day ago
The secret dream of all propagandists
Green Planet2 days ago
Women leaders come together to fight climate change