Central Asia possesses a significant role within the global geopolitical balance since it comprises numerous trade channels that link many businesses with millions of target customers from China to Portugal and vice-versa. Withal, by having abundant hydrocarbon potentials, the region offers tremendous opportunities to the global and local players.
Throughout the recent period, the preponderance of the energy-based plans and policies triggered the emergence of mega projects in the region, such as the Southern Gas Corridor, Central Asia–China gas pipeline, TAPI, and a possible Trans-Caspian pipeline in the upcoming years. Albeit these intense investment activities are foreshadowing new regional perspectives for economic development, it also generates additional alternatives and realities for the European policymakers.
The new business in the traditional routes
Anciently, the region was home to the legendary Silk Road, which was shaping the vivid economic landscape of the planet. Today, the region’s erstwhile role in trade seems to be revitalized to some extent by the projects such as the Road and Belt Initiative. In contradistinction to the past, energy forms the backbone of modern trade in Central Asia despite some cardinal difficulties of marketing and transportation.
In the last decade, Turkmenistan, Kazakhstan, and Uzbekistan had some attempts to increase their presence in the sector via their involvement in Central Asia–China gas pipeline. Notwithstanding, none of them was able to establish a comprehensive framework of cooperation with the EU as Azerbaijan. Through its unique Southern Gas Corridor project, which enables the transfer of the natural gas from the Shah Deniz field of the Caspian Sea to South Europe, Azerbaijan had radically transformed the pipeline mappings at the Caspian region. Concomitantly this channel provides a tremendous chance to the other landlocked Central Asian countries to be able to meet the rising demand in the European market.
From the European Union perspective, energy can be categorized as a strategic sector since the European economy increasingly relies on international suppliers. Currently, 54% of the energy consumption within the EU is imported mainly from Russia. More specifically, in 2019, Russian stake in the EU’s natural gas import was 44%, and the dependency of EU countries on Russian gas in 2013 as follows: Estonia 100%, Finland 100%, Latvia 100%, Lithuania 100%, Slovakia 100%, Bulgaria 97%, Hungary 83%, Slovenia 72%, Greece 66%, Czech Republic 63%, Austria 62%, Poland 57%, and Germany 46%. These substantial factors are forming the backdrop of the EU’s diversification policy in the concerning field through the establishment of intense diplomatic and economic ties to ensure the sustainability of energy security.
During the anticipated turbulent periods, especially considering the latest exacerbation between Russia and the Western bloc over the Ukraine dispute, the European economy might inevitably face some severe hurdles. Since there is a possibility that the process might be accompanied by the risk of the blockage of the Russian gas by the transit countries.
The viable solution
Geopolitical escalations undoubtedly hasten the energy diversification process within the European Union. Therefore, the essence of the energy policy of the EU can be categorized as a combination of liberal and realist approaches. Although the union intends to achieve its economic goals via the market mechanisms, it also adopts a realist standpoint in International Relations, specifically in the energy context.
As stated by the British Petroleum data published in 2019, proved gas reserves of Azerbaijan, Kazakhstan, Turkmenistan, and Uzbekistan totaled26,2 trillion cubic meters or 13,1% of the world’s known reserve. Undoubtedly, such an enormous potential would significantly contribute to the energy security of the EU.
Given the current situation in the European energy market and the global political climate, the EU cannot ignore its energy security concept, which is the fundamental aim of energy policy. In this sense, Southern Gas Corridor appears like the most convenient alternative by considering the future possibility of the construction of the Trans-Caspian pipeline that would dramatically facilitate the direct transfer of the Central Asian gas to South Europe.
As long as the EU is dependent on the imports of fossil fuels, the necessity of the balance in the energy sector will remain topical. Hence the formulation of a rational approach towards cooperation with potential suppliers, particularly key countries such as Azerbaijan, is essential. Otherwise, the energy notion will remain a risky and problematic political and economic instrument.
Kurdistan – Britain Ties in New Momentum Driven by Energy Supply
One hundred year before, despite world promise for Independent Kurdistan after post world war’s Ottoman division, Britain government’s decision to divide Kurdistan and merge it in new forming Iraq and Turkey, as well as bloodily suppressing the Kurdish rebel movement by using intense bombardment deprived the Kurds of their right to self-determination, built a historical aloofness between the Kurds and Britain, which has been deepened over time, and brought profound bilaterally distrust, it’s still lasting.
While, majority of people in Middle East (M.E) strongly still believe that Britain’s interests or intentions are in behind of most of the sufferings in this region, but Kurds found their fate directly changed by Britain policies in the M.E. Britain’s role in Iraq’s political and economical process of Iraq by 1972 were main obstacle in Kurdish movements for independence. This policy continued then, with no proper reactance by Britain for Iraqi Baathi government’s violences against Kurds, such as chemical attacks and Infal (Massacre of more than 180,000 people) deepened these mutual reluctances, but Britain’s cooperation along with France and the United States in passing UN Security Council’s Resolution 688 to prevent a mass extermination of the Kurds by the Iraqi government in 1991, is unforgettable turning point in Britain’s approach toward Kurdish people.
Twelve years later, when international coalition, led by U.S, Overthrew Baath’s Saddaam Hussein in 2003, British forces focused on south of Iraqi province of Basra, where later in 2009, British giant oil, bp, signed its first oil contract in modern Iraqi era to develop the big field of Rumaila in cooperation with Chines CNPC. Four years later, British bp entered new cooperation with Iraqi federal for redeveloping oil fields in Kurdish city of Kirkuk, where first oil well in Iraq’s history were drilled by British led Iraq Petroleum Company (IPC) in 1927. Kirkuk, where known as heart of Kurdistan, is one of disputed regions between Kurdish government and federal government of Iraq, stipulated in Iraqi constitution (article 140) to be determined by a referendum, so far it has been postponed.
Meanwhile, despite British bp’s interest to Kirkuk, less than 100 km far from Erbil, KRG’s capital, lack of any British giant oil and gas companies’ desire to enter the projects in Kurdish administrated region, raise a doubt over Britain’s support for 2017’s October attacked by Iraqi federal forces on the Kurdish peshmerga’s bases in Kirkuk, in contrast to the close mutual cooperation in the fight against ISIS terrorism in Iraq.
When the distance between the Kurds and Britain was predicted to widen, bike-tour of Erbil streets by Kurdistan President and British ambassador to Iraq, in April 2021, dispatched positive pulses. The improvements in mutual relationship continued, when British foreign minister visited Erbil, June of 2021. Then, Kurdistan President’s visit of No.10 of Downing Street strengthened the ties, brought hopes for more developments.
Russian invasions on Ukraine, which highlighted Europe’s need for reform in Energy policies and diversifying energy sources, mainly for Natural gas supplies, made historical opportunity for Kurdistan, world biggest undeveloped oil and gas reserves. Kurdistan Region of Iraq own about 45 billion barrels of oil reserves and about 5.7 trillion cubic meters of natural gas, while the KRG’s oil production is still below 500,000 bpd and about 15 million cubic meters of natural gas. While Baath government of Iraq left Kurdistan oil and gas reserves undeveloped until end of its rule in 2003, Kurdish semi-autonomous government began development plan of its oil and gas, soon after 2007, when its oil and gas law was passed in region’s parliament. The semi-autonomous region’s oil production is over three OPEC members including Gabon, Congo and Equatorial Guinea, according to OPC Monthly Oil Market Report – April 2022.
Kurdistan government targeted fast raise in natural gas production to 725 million cubic feet by 2023 and more than one billion cubic feet by 2025, which enabled region to start export natural gas in next two years. Kurdish government president and prime minister recently visited regional countries, incising Qatar, UAE and Turkey to receive their support. In next step, Kurdish PM, Mr. Masrour Barzani, showed Kurdistan’s plan to develop the region’s natural gas production and infrastructures to export to Europe, through Turkey, during his Dubai Energy Forum. He also during his meeting at mid of April 2022, with Britain’s PM, Mr. Brouris Johnson, discussed Kurdistan’s interest to connect region’s natural gas to international transmitting pipeline in Turkey, seems supported by British PM, a great chance for more development in mutual economical relationship.
Kurdistan’s ambitiously plan for fast development of its natural gas production to be supported by west, mainly US and UK in several categories. While KRG should internally conduct radical reforms in directing the sector, the international supports to be achieved against threatening of Kurdistan by Baghdad’s view on Kurdistan’s oil and gas sector, seeking to centralize its administration, which is needed to be resolved with federal government swiftly. International racing, is also vital for facing the regional and global competitor’s challenges, seems to be next step facing Kurdish natural gas project.
New era in Kurdistan and Britain ties sparked hopes to bring Britain’s support for Kurdistan’s oil and gas industry, not only technically, but also, politically. British companies would be welcomed in Kurdistan to participate in developing Kurdistan’s oil and gas plan, financially and technically supports. Also, Britain’s political support for Kurdistan’s natural gas, mainly, would be softening Iraq’s position against Kurdistan’s natural gas, which could back Britain’s strategy for diversifying UK and Europe natural gas sources.
The new turning point in Kurdistan and Britain is recently kicked off, would strengthen ties and raise hopes for strategical achievement, if Britain is ready to warmly shake the hands with Kurdish government, mainly for gas policy.
The Development and Geopolitics of New Energy Vehicles in Anglo-American Axis Countries
While the global development of green energy and industries has been an ongoing matter, the war launched by Russia in Ukraine adds a deeper geopolitical dimension to it. In this shift, the “Anglo-American Axis”, comprising the United Kingdom and the United States, may once again lead the way.
Take the UK as an example. In promoting green energy and green industry, and reducing its carbon emissions, a series of seemingly radical policies have been introduced in the past two years. The UK government released the “Ten-Point Plan for a Green Industrial Revolution” in November 2020, proposing the development of offshore wind power, in addition to promoting the development of low-carbon hydrogen, and providing advanced nuclear energy, accelerating the transition to zero-emission vehicles, among others. It also includes action plans for the reduction of 230 million tons of carbon emissions in the transport and construction industries in the next decade.
In the policy paper Energy White Paper: Powering Our Net Zero Future published in December 2020, the UK has planned for the transformation of the energy system, and strive to achieve the goal of ne-zero carbon emissions in the energy system by 2050. On the conventional energy front, it announced a phase-out of existing coal power plants by October 2024. Focusing on the fields of energy, industry, transportation, construction and others, it aims at reducing greenhouse gas emissions by at least 68% by 2030. Additionally, the UK has also launched the Emissions Trading Scheme (ETS) on January 1, 2021, setting a cap on total greenhouse gas emissions for industrial and manufacturing companies, with the objective of achieving a net-zero emissions target by 2050. In March 2021, it took the lead among the G7 countries to launch the Industrial Decarbonization Strategy, supporting the development of low-carbon technologies and improving industrial competitiveness. The plan is to significantly reduce carbon dioxide emissions from manufacturing companies by 2030 and build the world’s first net-zero emissions industrial zone by 2040.
In terms of public transport, there is the March 2021 National Bus Strategy, and a green transformation plan for the bus industry is proposed. In July of the same year, the Transport Decarbonization Plan is announced, further integrating low-carbon transformation in transportation such as railways, buses, and aviation, and promoting the electrification of public and private transportation. At present, there are more than 600,000 plug-in electric vehicles in the UK, and the production of new energy vehicles exceeds one-fifth of the total car production. In the nation’s new car sales for February 2022, electric vehicle sales accounted for 17.7% of the market, the market share of plug-in hybrid vehicle sales is 7.9%. Adding traditional hybrid vehicles, electric vehicles account for more than one-third of the sales.
On April 8, 2022, the UK government announced the annual development goals for new energy vehicles. It is stipulated that by 2024, all-electric vehicles must occupy 22% of the market. This proportion rises to 52% in 2028 and 80% in 2030. The country’s authority hopes that these mandatory policies will force carmakers to, by 2035, increase the share of electric vehicles in sales every year, when all models must achieve zero emissions. It will then ban the sale of new petrol and diesel cars from 2030 and hybrid cars from 2035, under plans unveiled two years ago.
As the world’s largest automobile consumer, the United States has also put forward the development plan for new energy vehicles. It should be pointed out that the marketization forces represented by Tesla have played a strong and spontaneous role in the U.S.’ development of new energy vehicles. On this basis, the supporting policies introduced by the U.S. government will have greater policy flexibility. After the Biden administration came to power, there are changes in the negative attitude of the Trump administration towards the new energy industry, and an agreement returning to the Paris Agreement has been signed. To achieve the goals of the Paris Agreement, the U.S. government plans to increase the sales of new energy vehicles (including plug-in hybrid, pure electric, and fuel cell vehicles) to 40-50% by 2030. The government and industry will provide subsidies for the purchase of these vehicles, improve the charging network, invest in research and development, and provide subsidies for the production of the vehicles and their spare parts. On March 31, 2021, the Biden administration proposed to invest USD 174 billion in supporting the development of the U.S. electric vehicle market, which involves improving the U.S. domestic industrial chain. It targets to construct 500,000 charging stations, electrify school buses, public transport, and federal fleets by 2030. In President Biden’s USD 1.75 trillion stimulus bill passed by the House of Representatives that year, there was a subsidy mechanism for new energy vehicles and additional subsidies for traditional American car companies.
Major U.S. domestic and international automakers, United Auto Workers, Alliance for Automotive Innovation, the California government, the U.S. Climate Alliance, as well as other industrial and governmental agencies have issued a joint statement and support the Biden administration to accelerate the development of the new energy vehicle industry, so as to strengthen the leadership of the U.S. in this field. On the basis of marketization, the strong support of the U.S. to the new energy vehicle industry will greatly promote the development of this particular market in the country.
Researchers at ANBOUND believe that the UK and the American strategies and series of policies for the development of new energy vehicles are not merely concerning industry and green development. Instead, they carry profound influence and significance. Chan Kung, founder of ANBOUND, pointed out that the policy signals given by the Anglo-American axis represent the shape of the things to come. The development of new energy vehicles is not a purely industrial or technological issue. It is conspicuous that such a development means alternative ways of energy utilization have emerged, and this energy revolution has its geopolitical implication, where both the UK and the U.S. will further ditch their dependence on Russian energy. If the future industrial system and consumer market are no longer dependent on oil, then Russia, which is highly dependent on oil resources economically, will be hit greatly in economic sense.
It should be pointed out that due to the complexity and extension of the transportation system, this revolutionary policy of energy substitution will also drive the rapid development of other industries, as well as related technological buildout and the manufacturing of new products. It will not take long for a new manufacturing system to emerge in the countries and societies of the Anglo-American axis.
Chan Kung emphasized that it is also worth noting that from a geopolitical perspective, this large-scale new energy policy is also a measure to share geopolitical risks and pressures. In the past, countries and governments had to address issues caused by geopolitical risks, such as rising oil prices and inflation. These in turn, could lead to political instability if the ruling government failed to address them well. However, the rapid development of industries such as new energy vehicles has made a great change in the situation. The pressure on the government was quickly directed to the private sector, industry, and society. To improve the quality of life, people are spending money to buy new energy vehicles. This is tantamount to common people spending money to solve the geopolitical risks of the Anglo-American axis countries and governments. Once this pattern and market system are formed, the Anglo-American axis countries will not only eliminate the pressure of Russia’s weaponization of energy, they can also generate profits from it, even form a new manufacturing system that can scrap their dependence on the manufacturing industry of third world countries and China. From this ideal logic, the development of new energy vehicles can serve multiple purposes for countries such as the United Kingdom and the United States.
Noticeably, unlike in China, the “electric vehicles” or “new energy vehicles” mentioned in the supporting policies of the Anglo-American axis countries do not have any specific type (such as plug-in hybrid, pure electric, fuel cell vehicle, etc.). This is actually a wise decision in the design of public policy. The technology part is a technical issue, not a public policy issue. Separating public policy from technical issues not only distinguishes the functions of policy and market, but also effectively reduces the influence of interest groups.
China’s Contribution to Bangladesh’s Achievement of 100 Percent Electricity Coverage
With the opening of a China-funded eco-friendly 1320mw’s mega power plant at Payra in Patuakhali district, Bangladesh became the first country in South Asia to achieve 100 percent electricity coverage. That megaproject is a centrepiece of Bangladesh and China’s Belt and Road collaboration. Bangladesh saved $100 million by completing the Payra Thermal Power Plant project ahead of schedule.
Prime Minister Sheikh Hasina also expressed gratitude to the Chinese president and prime minister for their assistance in the construction of the Payra power plant. She claimed that with the inauguration of the project, every residence in the country was now getting electricity and announced 100 percent electricity coverage with the inauguration of the 1,320 MW Payra Thermal Power Plant, the country’s largest of its kind.
She also remarked March – a month of Bengalese Victory, noting that her government was able to open the power plant during this month, which coincides with the “Mujib Borsho,” which commemorates the birth centenary of Bangabandhu Sheikh Mujibur Rahman and the country’s Golden Jubilee.
Chinese Ambassador to Bangladesh Li Jiming quoted on the inauguration ceremony that, “This project serves another major breakthrough in China-Bangladesh cooperation in the Belt and Road Initiative, another splendid symbol of China’s strong commitment to Bangladesh in its development.”
According to the State Minister for Power, Energy and Mineral Resources, Bangladesh has not undertaken such a large-scale, cutting-edge project in the last 50 years, and the Payra plant is Asia’s third and the world’s twelfth to use ultra-supercritical technology.
Bangladesh China Power Company Limited (BCPCL), a 50:50 joint venture between China National Machinery Import and Export Corporation (CMC) and Bangladesh’s state-owned North-West Power Generation Company Ltd (NWPGCL), developed the Payra Thermal Power Plant with $2.48 billion financing from China Exim Bank.
The power generation capacity has rocketed to 25,514 MW in February 2022 from 4,942 MW in January, 2009. Bangladesh is now ahead of India and Pakistan, among the South Asian countries that have brought 98 per cent and 74 per cent of their population under the electricity network, according to data from the World Bank.
Patuakhali district of Bangladesh is set to take the lead in the country’s economic growth following the opening of the country’s first coal-fired Ultra Supercritical Technology power plant in coastal Payra. Within the next 5-10 years, the area will become an energy hub.
The government is also planning to establish a special economic zone and an airport to realize its dream of developing the country, attracting investments to Payra, and establishing besides Kuakata as a world-class eco-tourism centre within the next two decades, according to State Minister for Power Nasrul Hamid, while this powerplant will ensure power coverage of this flagship dreams.
The plant will energize Payra port, which has the potential to become an important sea-based transit point on the Silk Route as well as a global trade hub, as the government plans to develop the region as one of the country’s major economic corridors by establishing direct road and rail connections between Dhaka and the rest of the country, as well as connectivity to Bhutan, china, India, and Sri Lanka. According to the port authorities, a full-scale functioning of the port will result in a 2% boost in the country’s gross domestic product (GDP).
Another active power project, The Barapukuria Coal Fired Power Plant Extension is a 275MW coal-fired power plant in Rangpur, Bangladesh is also developed by CCC Engineering and Harbin Electric. Bangladesh received a US$224 million loan from the Chinese private bank Industrial and Commercial Bank of China (ICBC) in January 2014 to expand the capacity of the 250 MW Barapukuria coal-fired thermal power station by 275 MW.
China’s SEPCOIII Electric Power Construction Corporation has also committed to collaborate with Bangladesh’s S.Alam Group to build coal-fired power facilities in Chittagong with a capacity of 1,320 megawatts, which are targeted to begin operations this year.
Bangladesh joined the flagship BRI in 2016, and its ties with Beijing have grown significantly in recent years as Bangladesh’s largest trading partner is now China. During Chinese President Xi Jinping’s visit to Dhaka in October 2016 different development projects worth around $20 billion were agreed. Among which The Padma Bridge Rail Link, the Karnaphuli Tunnel, the Single Point Mooring project and the Dasherkandhi Sewage Water Treatment Plant are all slated to be finished this year. All of these china funded projects are expected to make a significant contribution to Bangladesh’s economic growth in order to meet the country’s goal of becoming a developed country by 2041.
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