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The Next Forty-Seven Years of Oil war

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We know the meaning of this compound word before the fluctuations of petroleum products. Peter means rock oleum oil. The first reason to address rock oil was (Dr Natura Fossilium). The author of this article is a German mineralogist.  It was George Beaver who published this creative work in 1546, naming it Agri-Cola. In modern times, it is also known as crude oil. A mixture of hydrogen and carbon in naturally occurring molecules.  Other organic compounds (nitrogen, oxygen, sulfur) include natural metals (iron, nickel, copper and vanadium).The composition and quantity are as follows: Carbon contains 83 to 87 per cent, hydrogen 10 to 14 per cent, nitrogen 0.1 to 3 per cent, oxygen 0.1 to 1.5 per cent, sulfur 0.5 to 6 per cent and metals less than 1000 ppm. 

Crude oil contains four types of hydrocarbons (alkynes and cycloalcins). Paraffin averages 30 per cent while its content is 15 to 65 per cent, nephrons averages 49 per cent and 30 to 60 per cent, aromatics averages 15 per cent and 3 per cent.  30%, asphaltics average 6% while the rest consists of the same.  In this energy race, the United States managed to run the fastest, capturing Iraq’s purchase of 500 metric tons of uranium from Canada in the blink of an eye. This uranium proved to be a golden hen for the United States.  Eggs were supplied to India by the United States with multiple interest rates.

South Asian countries were thrown into a new marathon race, which ignited the Great War in many countries. Russia and the United States have torn these countries apart for three decades. In the field of strong dollars and investment, the Allies have tested a new weapon that seemed to be a relatively loss-making deal but a double-edged sword. And the most mineral-rich land in the eyes of the United States was shining brightly after the collapse of the Soviet Union. In order to gain ground power, the United States had a golden opportunity to hollow out the Soviet Union internally.  Professor Richard Heinberg of California, Santa Rosa, has created a CIA report that the United States has played with oil prices to subdue the Russian economy.

One author predicted that in the future, Russia would become a buyer of oil from OPEC, not a seller-policy.  Implementation would leave Russia trapped in the international economic system. In the 1980s, the United States pushed Saudi Arabia into a war in which every effort was made to make oil production available on the cheap market. The United States was completely successful. During this period, the United States considered weapons as the source of all its efforts. Russia wanted to compete in this race by selling oil at exorbitant prices, but was unsuccessful and lost. The United States took Saudi Arabia into the alliance because it owned the largest oil reserves in the world.  OPEC countries (1189.80 billion barrels) have 79.4% reserve’s and non-OPEC countries (308.18 billion barrels) have reserves of 20.6%.

 At the end of 2018, Saudi Arabia owned 22.4 percent of them.  Venezuela tops the list with 25.5 (bb) percent. Overall, OPEC countries added 186.2 billion barrels of proven oil to the market from 2009 to 2018, while non-OPEC countries accounted for only 24.6 billion barrels.  Non-OPEC countries’ reserves in production stood at 152.1 billion barrels. On the other hand, OPEC could only touch the graph of 113.8 billion barrels. At the end of 2018, OPEC released the names of the largest exporters of crude oil in its annual report.  Venezuela (302.81 BB) first, Saudi Arabia (267.03 BB) second, Iran (155.60 BB), Iraq (145.02 BB), Kuwait (101.50 BB), UAC (97.80 BB), Libya (48.36) BB), Nigeria (36.9) 7 BB), Algeria (12.20 BB), Ecuador (8.27 BB), Angola (8.16 BB), Congo (2.98 BB), Gabon (2.00 BB) and finally Equatorial Guinea(1.10 BB).  In 2018, the world demanded 98.72 million barrels of oil per day.Non-OECD oil consumption has been higher in terms of cost.

A year is divided into four parts. In 2017, the United States spent the most oil in the world in 2Q and 4Q, but in 2018 its spending rate is 1Q, 3Q and 4Q. The United States ranks first in terms of oil consumption at 19687287 barrels per day, which is 934.3 gallons per capita per year.  Singapore (3679.5 gallons per capita) consumes the most oil per gallon, followed by Saudi Arabia (1560.2 gallons per capita) annually. US oil production is 14.83 billions barrels per year. Saudi Arabia second with 12.4 billion barrels per year, Russia third with 11.26 billion barrels per annum, China fourth with 4.99 billion barrels per year, Canada 4.59 billion barrels per year.  Iraq ranks fifth with 6.44 billion barrels a year.

In 2016, the world’s proven oil reserves were 1.65 trillion barrels and oil consumption was 35.44 billion barrels per year and 97.1 million barrels per day.  According to this calculation, oil reserves will be available for 47 years. The population of 2016 was based on 7 billion 464 million 22 thousand 49 people. Global oil consumption is 5 barrels (199 gallons) per person per year was. But today, on May 7, 2020, the world’s population is 7 billion 78 hundred million 28 million 4 thousand 8 hundred 41 and oil reserves are 15 trillion 9 billion 57 hundred million 16 million 29 thousand 3 hundred 2 barrels.  The person will come. We will be able to use the remaining amount of oil for 47 years, 237 days, 9 hours and 36 minutes. The rapid depletion of oil reserves speaks volumes about human difficulties in the future.  Oil is considered to be the biggest source of human needs in the world. From human transportation to the fertility of the land, the need for oil has made man needy. Expectations of hot wars, not cold wars in the future. There will be a reduction in the need to grow more than food.

Energy

The Maneuvering Of Gas Commodities As Securitization Of Russia’s Geopolitical Position

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Authors: Luky Yusgiantoro and Tri Bagus Prabowo

In 2012, the Yakutia-Khabarovsk-Vladivostok gas pipeline project was redeveloped under The Power of Siberia (News Ykt, 2012). Putin legalized Gazprom (contractors: Gazprom Transgaz Tomsk). The idea named “Power of Siberia” represents the power of gas pipelines to shape and influence Russia’s geopolitical and geoeconomic situation. A new identity will be launched, conveying the Yakutia-Khabarovsk-Vladivostok gas pipeline and gaining international prominence. The Power of Siberia project is an integrated form of GTS (Gas Transmission System) that will bring the Irkutsk gas region in the fertile eastern part of Russia to the Far East and China. The pipeline location is located in the “Far East,” incredibly close to the border with China, and generally in the Asia-Pacific region. Initially, this gas pipeline was built to facilitate gas trade with China and reduce China’s dependence on coal (Pipeline Journal, 2022). What is the value of this project for both countries to become global concerns?

Furthermore, they have the ability or range to carry gas communications for approximately 4000 km. Due to its geographical proximity and shared economic interests, China is Russia’s most progressive partner in terms of a multifaceted regional and international strategy. Russia and China are known as close partners. The aftermath of Russia’s political alliance was to regain global power, status, and influence lost after the collapse of the Union of Soviet Socialist Republics in 1991, which was the driving force behind the end of the Cold War (Oualaalou, 2021 ). Russia has articulated a vision of rebuilding its global reputation using energy, military might, intelligence, and diplomacy. Russia wants to play a crucial role in the global multipolar system because the West rejects Russia’s vision for a new geopolitical order. They saw many important events related to Russia’s moves in the international order, including its response to the actions of the North Atlantic Treaty Organization (NATO) to try to dominate the nations of the world. The former Soviet Union (East), the failures in the Middle East, the annexation of Crimea, and one of Moscow’s recent invasions of Ukraine mark the military as a turning point in Russian geopolitical politics, especially during the Putin era. Russia has three strategic initiative points, including the ability to deploy and interconnect the means (intelligence, diplomacy, military, cyber, and energy) to gain influence and extend Russia’s global footprint. There is.

Moreover, the Fallacies and Western Ties strategy contradicts America First foreign policy tenets (unipolar) and impulsive decisions as a security threat. Russia wants to maintain its lack of regional interests in certain Baltic states (those still under Russian control) and the Balkans (Cooley, 2017). The Balkans (Albania, Bulgaria, Bosnia and Herzegovina, Croatia, Kosovo, Montenegro, North Macedonia, Romania, Slovenia, and Serbia) have been the cornerstones of great power rivalry for centuries. NATO (North Atlantic Treaty Organization) and the EU (European Union) used the momentum of Yugoslavia’s dissolution in the 1990s to integrate the Balkans as geopolitical hotspots on the Western Front (European Policy). War analysts say the ongoing Ukraine conflict is a way for Russia to raise its stakes in the Balkans and reassert its regional influence (McBride, 2022). 

In 2020, natural gas will still be the world’s third-largest primary energy requirement for the global community. Even though the COVID-19 pandemic began in 2019, demand for natural gas increased by 5.3% to 4 trillion cubic meters (TCM) in 2021 (BP, 2022). In 2021, Russia’s total natural gas production will be 701.7 billion cubic meters, the second largest globally, contributing to the strong demand in the global energy market. Russia is essential in the natural gas market (Sonnichsen, 2022). The climate crisis is the most obvious obstacle in the global gas market model. It originates from burning carbon with materials derived from fossil fuels such as oil, natural gas, and coal. However, natural gas is acceptable during the energy transition as it burns the least carbon dioxide (CO2) and pollutants of these three substances (EIA, 2022). It is easier than supplying a gas infrastructure that does not provide infrastructure. Operationally, it is optimal. Talks about climate protection, the climate crisis, and the energy transition are being shaped by Western countries as a way of highlighting Europe’s dependence on gas from Russia, which is geographically accessible and still has gas in other gas reserves. The decision to stop sourcing natural gas from Russia continues to cause European controversy. The pipeline network actively built between Russia and Europe is an essential aspect of why this relationship is used as a tool for Russia to apply pressure—on territorial Europe. Europe uses a climate scenario, and Russia uses a gas-dependent scenario. Efficiency and effectiveness will not be achieved if Europe suddenly has to look for other reserves or switch entirely to this energy mix. Then, with Russia’s eloquence in exploiting the situation and the status quo, natural gas pipelines were used as a form of Russian energy diplomacy to dominate its (European) neighbors. Recognizing that the Western natural gas market is no longer preconditioned, moving target consumers to the Asia-Pacific region is one of the most effective energy plans for Russia’s fossil fuel expansion.

Siberia’s first electricity will cost 770 billion rubles, and the investment in gas production will cost 430 billion rubles. The 1,400 mm natural gas pipeline capacity will increase to 61 billion cubic meters (2.2 trillion cubic feet) of natural gas annually. The pipeline lets the world see natural gas as one of the fossil fuels and does not pollute the air with the carbon and other substances of the climate crisis. , through the capital Beijing and down to Shanghai. According to state media, the intermediate phase will go online in December 2020, with the final southern section expected to start delivering gas in 2025 (Cheng, 2022). Through this agreement, Russia aims to extend its power beyond Mongolia into Siberia 2 in 2030 (IEA, 2022). Conditions for Europe to get 40% of natural gas from Russian pipelines. Germany, in particular, sources about half of its natural gas from Russia (Baldwin, 2022).  Despite international media reports of embargoes and sanctions, the crisis has hit Europe hard. Europe must adapt its economic policies to politically justified policies and coordinate them with each other. However, this is a geopolitical struggle, and we must ensure that the country retains its absolute superiority. Russia chooses to invest in and plan for natural gas markets in regions that require or depend on natural gas in the energy sector, i.e., Asia-Pacific via China. China, influencing the Belt and Road Initiative (BRI) plan, is reshaping the geoeconomic position of Russia’s Siberia 1 and Siberia 2 power markets (Lukin, 2021). “Geopolitics is all about leverage” is one of Thomas Friedman’s influential geopolitical maxims. If a country cannot expand its influence, it remains a loser. Nevertheless, Russia is far from this analogy, as mentioned earlier. Russia continues to secure its geopolitical position. It is the embodiment of growing confidence in the reliability of natural gas. Russia still wants to become a major player in natural gas.

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Remapping the EU’s Energy Partners to Ensure Energy Security and Diversification

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Energy security has been a buzz word in Brussels for a few decades but since Russia’s invasion of Ukraine, followed by sanctions, Russian gas cut-off and physical destruction of North Stream pipelines, forecasts on strained EU energy production due to drought, the stakes have gotten much higher. This was confirmed on March 10th by a joint statement by the US President Joe Biden and European Commission President Ursula von der Leyen, reiterating both parties’ determination to “build clean energy economies and industrial bases”, including clean hydrogen and continue to work together “to advance energy security and sustainability in Europe by diversifying sources, lowering energy consumption, and reducing Europe’s dependence on fossil fuels”.

Last week, the EU energy chief Kadri Simson encouraged all Member States and all companies to “stop buying Russian LNG, and not to sign any new gas contracts with Russia. The EU has pledged to quit Russian fossil fuels by 2027 and replaced around two-thirds of Russian gas last year.

In this context, the Southern Gas Corridor (SGC), delivering Azerbaijani gas through (Trans-Anatolian Pipeline) TANAP and Trans-Adriatic Pipeline (TAP) to the EU, plays a key role in current diversification efforts. The EU increased gas imports via pipelines from Azerbaijan from 8.1 bcm to 11.4 bcm last year. Only two years after its completion, the expansion of the Corridor seems to be likely as the EU and Azerbaijan stroke a deal in July 2021 to double the volume of gas delivery to 20 bcm by 2027 in addition to plans to tap into Azerbaijan’s renewables potential, such as offshore wind and green hydrogen. While encouraging Azerbaijan’s accession to the Global Methane Pledge, the deal aims at collecting natural gas that would otherwise be vented, flared, or released into the atmosphere.

With the opening of the interconnector Greece-Bulgaria (IGB), at least 11.6 bcm of gas is expected to be delivered from Azerbaijan to the EU this year. The IGB has been dubbed as a game-changer for the EU’s energy security, especially as it enabled supplies to Bulgaria and Romania. A Memorandum of Understanding on gas supplies between Azerbaijan and Hungary was also signed this year, which shows that more interconnectors will be needed in the EU if TANAP would be expanded from 16 to 32 bcm and TAP from 10 to 20 bcm.

Moreover, investments will be needed to increase gas production in existing and new gas fields (Shah Deniz, Azeri Chiraq Guneshli, Absheron, Shafaq-Asiman, Umid-Babek, etc.), especially considering growing energy demand in Azerbaijan and its neighbours. Since the Russia-Ukraine war, 10 European countries turned to Azerbaijan to increase existing supplies or to secure new supplies. To meet such growing demands, Azerbaijan is poised to increase cooperation with neighbouring states, such as Turkmenistan, which is home to 50 trillion cubic metres of gas reserves – the world’s 4th largest reserves.

Following the Azerbaijani-Turkmen decision to jointly develop the formerly disputed Dostluq gas field, a trilateral swap deal between Iran, Azerbaijan, and Turkmenistan, and the 2018 Convention on the status of the Caspian Sea by all the littoral states; Azerbaijan, Turkmenistan, and Turkey stated that they were looking “to form a coordinated and multi-option system for delivering energy resources to global markets” on December 14th last year.

These developments could be harbingers of a new Trans-Caspian Gas Pipeline (TCGP), a 180-mile under-sea pipeline that could be integrated into the SGC. Labelled as an EU Project of Common Interest, which could also be eligible for funding under the 2019 US European Energy Security and Diversification Act, this strategic under-sea pipeline project could bring an end to the EU’s energy crisis by securing a cheap source of natural gas, whose price is independent of LNG prices while counterbalancing Chinese, Russian and Iranian influence in Central Asia and beyond. On the other hand, Azerbaijan began the transit of oil from Kazakhstan this year in addition to Turkmenistan, which highlights the potential to use the Middle Corridor for hydrocarbons.

During the 9th Southern Gas Corridor Advisory Council Ministerial Meeting and 1st Green Energy Advisory Council Ministerial Meeting in Baku in February, EU Energy Commissioner Kadri Simson stated “Azerbaijan can potentially become the exporter of renewables and hydrogen to the EU”. At the end of last year Azerbaijan, Georgia, Romania, and Hungary agreed to establish a green corridor to supply the EU with around four gigawatts of electricity generated by windfarms in Azerbaijan with the support of the European Commission.

Over the last several months, Azerbaijan signed documents that will provide investments to create 22 gigawatts of renewable sources of energy, both onshore and offshore. In April 2021, the World Bank started funding the offshore wind development in Azerbaijan, which has a potential of 157 GW. In addition to the Caspian Sea, which ranks second in world for its wind energy potential, Azerbaijan has an estimated 27GW in wind and solar power onshore.The current construction of wind and solar plants in Alat (230 MW), Khizi and Absheron (240 MW) and Jabrayil (240 MW) as well as new investment plans, including in Nakhchivan Autonomous Republic, are expected to further boost renewables production in the Caspian state all by living up to its vast green potential. While the country, with a population of 10 million, accounts for only 0.15% of total global greenhouse gas emissions, it defines green growth as a key priority for 2030. The EU supports the implementation of Baku’s Paris Agreement commitments through the EU4Climate initiative.

The Russia-Ukraine war may create a window opportunity for the EU to engage in concrete actions rather than high-flying buzzwords, pushing the bloc to do more strategic and visionary planning regarding future projects linked to its energy security, such as TCGP, and finally diversify away from Russian energy sources for good. Azerbaijan has proved to be a stable partner in these challenging times, which manifested the vulnerability of certain EU states against Russian economic and political pressure due to Gazprom’s immense infiltration of their gas markets for the past several decades. Now it’s the time to play fair game by a new playbook and to remap the European energy partners while investing in a stable, predictable, affordable, and sustainable energy future for the EU.

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The Implications of the Russian-Ukrainian War on European Energy Security

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Oil and gas prices have skyrocketed since Russia invaded Ukraine in late February 2022, which has already had an impact on the global economy. 30% of global wheat is grown in Russia and Ukraine. Sunflower seed oil accounts for 71%; corn and barley account for 26%; and vegetable oil accounts for 11%. Agricultural fertilizers and raw materials such as sulphur are among Russia’s most important exports. Wheat prices have surged to a record high since the invasion of the Black Sea ports, which has stifled economic activity.

Economic forecasters often foresee higher worldwide inflation and weaker global GDP growth. The International Monetary Fund (IMF) anticipates inflation to rise to 5.7% in developed countries and 8.7% in emerging market and developing economies this year, respectively, representing increases of 1.8% and 2.8% above the predictions made in January. Down 0.8 percent from January, the global economy is forecast to grow at 3.6 percent. There has been a major shock to commodity markets, which will continue to keep prices at historically high levels through the end of 2024, according to the World Bank’s latest Commodity Markets Outlook research.

In 2022, the price of energy is expected to rise by 50% before falling again in the following two years. Price increases in agriculture and metals are predicted to begin in 2022, then fall. Commodity prices are expected to remain above their five-year average for the time being. Prices could rise and become more unpredictable in the event of a prolonged conflict or further sanctions against Russia.

By the end of this year, European leaders hope to reduce EU gas dependency by two-thirds. Initiatives like the IEA’s 10-point strategy are critical to ensuring global energy security. Energy efficiency, delaying the decommissioning of nuclear plants, and significantly expanding the use of renewable energy sources are all viable policy options. Supply and efficiency will rise, but so will the use of coal to replace natural gas and growing commodity prices for electric vehicle batteries and solar PV panels, which are counteracting these trends. The transition is hampered by the lack of energy security.

We don’t know how long the conflict will last, how far it will escalate, or whether or not new countermeasures can prevent Russian oil and gas from reaching the markets. The ease and means of gas replacement vary by industry. The most effective means of reducing the carbon footprint of European energy use is through increased production and increased use of renewable energy sources. In order to replace gas with coal, which is more expensive due to the conflict, they will not suffice. Coal is being phased out for the time being. Six percent of natural gas supply loss in 2024 will be due to coal. Several countries, with the exception of Germany, see a short-term benefit from delaying nuclear retirements and increasing the use of existing nuclear assets. Nuclear power generating accounts for one-third of the shortfall in natural gas.

Due to the war, the cost of bioenergy has not increased, and it is possible to grow bioenergy (primarily from sewage and waste) in the coming years. Bioenergy fills in the energy gap to the tune of 20%. Europe’s main energy independence program, a rapid expansion of renewable energy, has had little impact. Two years is needed to fill Russia’s 10% gas import shortfall. As time goes on, the impact grows more and larger. More than half of the world’s gas needs will be met by renewable energy sources like solar PV and wind power by 2030.

Battery costs will rise, postponing half of new car sales in Europe until 2028 as a result of rising material costs. Long-term decarbonization is hampered and oil decline is postponed as a result. EV subsidies may need to be increased in countries with high 2030 decarbonization goals. By contrast, in 2024, gas use is expected to be 9 percent lower than it was in pre-war time. The use of heat pumps will displace some of the gas currently used in construction by the year 2030, according to our estimates. Improved energy efficiency minimizes the amount of energy needed.

Europe will increase its gas production by 12 percent by 2030 as a result of recent industry responses to rising oil and gas prices and a commitment by the EU to distribute more gas. Global oil use will climb somewhat in the 2030s due to overinvestment that will lower oil and gas prices after 2025. The invasion in Ukraine will delay nuclear retirements, which are a global priority. Faster deployment of renewable energy sources, improved energy efficiency, and slower economic growth are critical over the medium term. Between 2022 and 2030, European emissions are reduced by 580 Mt, or 2.3%, as a result of the Ukraine conflict.

Food, gasoline, and gas costs have all increased as a result of Russia’s war in Ukraine. There is a need for a new agricultural and political economic strategy due to the ongoing conflict in Ukraine and severe supply chain disruptions. To avoid a humanitarian crisis, Kyiv halted food shipments in March. The harvest for this year will be lessened if there is war. In the east, farming infrastructure and equipment have been devastated by the conflict. Ukrainian wheat supplies could be cut by a fifth in 2022, according to the Food and Agriculture Organization of the United Nations. Due to the fact that the next crop will not be cultivated in war, future harvests are in danger. The world’s leading wheat producer, Russia, has had its supply cut back due to sanctions. A productivist development model centred on extractive industries has resulted in environmental deterioration and natural resource exhaustion.

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