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Kurdistan Natural Gas Knocks EU Market, If Could Withstand The Challenges

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One week after Putin’s troops launches invasion of Ukraine, the west is cautiously whisper the sanctions against Russia, as the European countries, even who believes necessity of those sanctions, couldn’t suspend importing the energy fossil resources from Russia. Selecting coldest days of winter for attacking on Ukraine, shows not only the deeply dependence of Europe’s energy security to Russia’s natural gas, but proved the west leaders’ fault in diversifying EU’s energy suppliers. Russia’s Natural Gas share in EU market, raised to 40% in 2021, against only 27% in 2011, which could be hiked to 50%, if U.S concerns didn’t ban gas flow in the Nord Stream II pipeline. Despite EU countries are avoiding to remove all of Russian banks from SWIFT, mainly to avoid risk of even a short shutoff in Russia’s gas flow, which could shake their energy market, but now, U.S and European countries, more loudly think about new more reliable gas sources، but the choices are not abundant, or need long time for developing their infrastructures to reach Europe.

While, expanding current suppliers’ capacity, mainly Iran and Azerbayjan, could be technically complicated, developing the recent growing Mediterranean natural gas reservoirs, such as North Africa, Israel and Cyprus-Greece, is facing reserve ownership challenges, bilaterally and with Turkey. Another reliable option, is Kurdistan’s natural gas, rich semi-autonomous region in northern Iraq. Developing of the Kurdistan’s gas reserves, which is estimated to about 3 TCM (2% of world total), kicked off at 2007, but advanced after 2019. Kurdistan’s main gas field, has been developed by PEARL Petroleum, an international consortium, mainly directed by U.A.E gas companies, Crescent Petroleum and Dana Gas. The field’s production is reached to more than 450 MMSCUFPD and planned to more than 700 MMSCUFTPD by 2023 and double of current amount, by 2025. The consortium, recently secured $250 million in financing from the U.S. International Development Finance Corp (DFC) for its development plan. This boosting plans, enabled the KRG to evaluate different scenarios, including supply internal demands (mainly for Power Generation, Industrial and Residential consumers), or feed Iraq’s Power Plants, which now are mainly receive natural gas from Iran, or eventually think the foreign markets, including Turkey and Europe.  Kurdistan’s geopolitical advantages, is a key factor in easy reach to Turkey and European markets. Also, the KRG’s natural gas reservoirs’ characteristics, which enabled its fast development, enhanced chance of this region in joining European strategic plan for diversifying their gas sources.

While, Iraqi federal government has failed during last 18 years in developing its natural gas fields, and even gathering and treating its huge associated gas capacities, which are second world flared amount (about 1.7 Billion Cubic feet per day), supplying fuels for the power plants becomes a crisis. Iraq’s current demand for Electricity is estimated above 40,000 MW/hr, while current potential  capacity is less than 30,000 MW/hr, but about one third of this amount are missed, mainly for lack of fuel. That’s why the Iraq’s acting electricity minister visited Qatar, at February 7, 2022, to talk importing natural gas from Qatar. This plan, not only could satisfy the Iraq’s increasingly demand for natural gas, from one of biggest producer, in parallel with their current pipeline from Iran, but could makes Qatar – Turkey’s pipeline dream come true, that has been archived by Syrian internal war. Kurdistan’s geopolitical location, connecting Iraq to Turkey, could expedite development of Kurdistan natural gas infrastructure and production plan, if could be connected to the Qatar pipeline. In future, Kurdistan’s natural gas network, could joint Iran’s gas pipeline in the role of regional gas hub to EU and Turkey. 

Despite Kurdistan Gas have significant advantages, but should pass through a rocky road. The main challenge is Iraqi federal government’s view on Kurdistan’s oil and gas. Obese government, heavy public payroll, undeveloped private sectors and endemic corruption are the main encourages for Iraqi federal government to be greedy for Kurdistan’s oil and gas. While, about one trillion dollar of Iraqi federal government incomes from oil revenue, during last 18 years, are without significant improvement in public welfare or economical growth have been achieved, the Iraqi parties continuously attacking the Kurdistan’s oil and gas, but with no plan for more effective directing of federal oil sector, which is producing more than 4,000,000 barrels of oil per a day.

On the other hand, though, the second part of article 112 of Iraqi federal constitution, which was approved in 2005, clearly authorized the Iraqi semi-autonomous regions, still only includes the Kurdistan Regional Government, to manage the non-producing and future fields of oil and gas, but Iraqi central governments has continuously sought ways to undertake the Kurdistan’s oil and gas. Several claims in internal and international courts, threatening International Oil Companies s (IOCs) working in Kurdistan, and complaints against Turkey, are only some attempts in pushing KRG to hand over Kurdistan’s oil and gas dossier to central government. The last step against the region’s oil and gas, was taken recently by federal court. The court’s decision, 15 years after region’s oil and gas law approval and 10 years of registering the complaint in the court, found the law to be “unconstitutional,” and therefore struck down the legal basis for the independence of the Kurdistan Region’s oil and gas sector, Rudaw English reported. Moat of analysis on the main causes for this court’s approach, which named “unconstitutional” and “unjust” by KRG, addressing the momentous step in Kurdistan’s gas industry. The court’s decision comes some days after visit of the KRG’s President, Mr. Nechirvan Barzani, from Turkey’s President, Erdogan, at February 2nd, 2022, where they discussed mutually the opportunities for Kurdistan’s natural gas in Turkey’s and European markets. The Erdogan’s interview after his visit from Ukraine, two days after his meeting with President Barzani, ignited objections against Kurdistan’s natural gas industry in Baghdad, especially when it followed by the KRG’s Prime Minister, Mr. Masrror Barzani’s visit to Qatar, where he met with Qatar’s Emir, Sheikh Tamim Bin Hamad, only some weeks after he met with AbuDhabi’s crown prince, Sheikh Mohammed Bin Zaed.

While, the Kurdistan’s natural gas requires rapid and radical improvements in administration, as well as fast expansion of infrastructures, to meet the export requirements, but the recent confrontation of Baghdad, could slow down the Kurdistan gas’ development plan. Natural gas role in EU energy security and main suppliers’ stiff competitions on the market share, which interpreted as main cause of the Syria’s destiny, when were nominated as potential gas route to Europe, could make Kurdish leaders more cautious on their gas expert project.

Abandoning of Kurdish people in the Erbil and Baghdad’s conflicts against controlling Kurdish region outside the KRG, mainly the rich oil city of Kirkuk, clearly could shows unfriendly relationship between two capitals and lack of Kurds to west supports for geopolitical conflicts. Then, the potential confrontation against natural gas, not only could deepened the bilateral conflicts, but could threaten the plans for supplying natural gas to EU, from both of Kurdistan and Qatar. Now, it’s time that US and EU to bring the two governments more closer and resolve main constitutional disputes, as they have done during last two decades. Calming down the conflicts, could accelerate expansion of the oil and gas field in disputed areas, according to article 140 of Iraqi federal constitution, releasing significant potential to supply EU’s market.

Conducting this arrangement, of course, would be opposed by Russia, who has critical position in Iraqi and KRG’s oil and gas sector. The Russia’s Rosneft and Gasprom giant companies have significant share in big oil and gas fields of the both areas, which could be considered in any export or transit of gas from Iraq. Scaling down the US and EU involvement in the Iraq’s oil and gas, sought as a strategic plan, opened the door for Russian and Chinese companies to Iraq’s oil and gas industry, what’s currently to be managed if west looks Iraq to play a role in their European energy puzzle.

The Kurdistan’s natural gas could be a reliable and stable source for Turkey and EU, only if US and EU are serious in withstanding the challenges, internally or with the competitors. Next, months could be vital for the EU’s energy security, to be diversified or depended to Russia…. 

Shahriar Sheikhlar is an independent energy security and strategic development analyst, in Erbil, Kurdistan Region of Iraq. Mr. Sheikhlar, holds postgraduate in Management, Strategy. He is giving advices and services to some local and international think tanks and news agencies.

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Kurdistan – Britain Ties in New Momentum Driven by Energy Supply

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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.

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The Development and Geopolitics of New Energy Vehicles in Anglo-American Axis Countries

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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.

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China’s Contribution to Bangladesh’s Achievement of 100 Percent Electricity Coverage

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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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