ISPI Energy Watch Geopolitics of energy Scuola Superiore Sant'Anna, Pisa – 24 April 2015 Matteo...

ISPI Energy Watch

Geopolitics of energy

Scuola Superiore Sant'Anna, Pisa – 24 April 2015

Matteo VerdaIstituto per gli Studi di Politica Internazionale - Milano

ISPI Energy Watch

CONTENTS

Introduction

Geopolitics of oilCase: North America

Case: Sovereign Wealth Funds

Geopolitics of natural gasCase: Europe and Russia

Geopolitics of other sources

Geopolitics of GHG emissions

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INTRO / BASICS

What is energy? Energy is the ability to do work.

Energy can be produced from a variety of sources.

Energy can be also transformed into other forms of energy.

The amount of energy we can use depends on the availability of technology and external inputs.

Geopolitics is politics (esp. relations between states) as influenced by geographical factors (OED).

Geopolitics of energy is based on the uneven distribution of energy sources, technology, and final consumption.

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Mtoe

INTRO / ENERGY CONSUMPTION

Source: elaboration on IEA.

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Mtoe


INTRO / ENERGY MIX

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INTRO / ENERGY MIX, PER COUNTRY


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INTRO / ENERGY SOURCES

SOURCE PRO CONTRA

coal - availability- costs

- local emissions- GHG emissions

oil - calorific value- existing stock of technology

- costs- GHG emissions- concentration of reserves

natural gas - costs- GHG emissions

- GHG emissions- concentration of reserves

nuclear- reliability of supply- GHG emissions- duality

- investment costs- dismantling costs- social issues

renewables - reliability of supply- GHG emissions

- costs- discontinuity of supply

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GEOPOLITICS OF OIL

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COUNTRYRESERVES(TH. MBBL)

SHARE Σ SHAREAREA(MKM2)

ENDOWMENT

(KBBL/KM2)

1 Venezuela 298,3 17,7% 17,7% 0,9 327,1

2 Saudi Arabia 265,9 15,8% 33,4% 2,1 123,7

3 Canada 174,3 10,3% 43,8% 10,0 17,5

4 Iran 157,0 9,3% 53,1% 1,6 95,3

5 Iraq 150,0 8,9% 61,9% 0,4 342,2

6 Kuwait 101,5 6,0% 68,0% 0,0 5.696,5

7 United Arab Emirates 97,8 5,8% 73,7% 0,1 1.169,9

8 Russian Federation 93,0 5,5% 79,3% 17,1 5,4

9 Libya 48,5 2,9% 82,1% 1,8 27,5

10 USA 44,2 2,6% 84,8% 9,8 4,5

World 1.687,9 136,4 12,4

OIL / RESERVES AND GEOGRAPHICAL DISTRIBUTION

Source: elaboration on BP and CIA.

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OIL / MAJOR PRODUCERS

Source: Eni.

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Kazakhstan

Iran

Canada

Norway

Qatar

Venezuela

Kuwait

UAE

Russia

Saudi Arabia

0 1 2 3 4 5 6 7 8 9

Source: elaboration on BP.

Mbbl/d

OIL / MAJOR EXPORTERS

The World Top 10 (2013)

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OIL / GLOBAL TRADE

Source: BP.

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OIL / MARITIME CHOKEPOINTS

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OIL / RESERVES DISTRIBUTION

Source: Eni.

ISPI Energy WatchSource: Eni.

OIL / YEARS OF PRODUCTION LEFT, PER COUNTRY


OIL / YEARS OF PRODUCTION LEFT, PER REGION

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OIL / RESERVES HOLDERS

Source: Eni.

Majors: Eni, BP, Repsol, Total, Shell, Chevron, ExxonMobil.


OIL / RESERVES HOLDERS PER REGION

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OIL / PRICE TRENDS

Brent Spot Price (USD/bbl), monthly average – Source: EIA.

$/bbl

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OIL / LONG-TERM PRICE TRENDS

Brent Spot Price, yearly average – Source: EIA and BP.

$/bbl

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CASE: NORTH AMERICA

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USA USA + Canada

Source: elaboration on BP and IEA.

OIL / AMERICAN TRENDS

ISPI Energy WatchSource: elaboration on IEA.

OIL / US IMPORTS

Mbbl/d

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CASE: ENERGY, ECONOMY AND POLITICAL

STABILITY

ISPI Energy WatchSource: elaboration on World Bank.

RENTS / DEPENDENCE ON EXPORT

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RENTS / ENERGY RENTS AND POLITICAL STABILITY

$/bbl

Source: elaboration on IMF and Deutsche Bank.

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RENTS / SOVEREIGN WEALTH FUND IN THE MENA REGION

FUND COUNTRYRESERVES

(BN$)

1 Abu Dhabi Investment Authority UAE 589

2 Kuwait Investment Authority Kuwait 548

3 Qatar Investment Authority Qatar 305

4 Saudi Arabian Monetary Agency Investment Portfolio Saudi Arabia 230

5 Abu Dhabi Investment Council UAE 90

6 International Petroleum Investment Company UAE 69

7 Mubadala Development Co. UAE 61

8 Libyan Investment Authority Libya 60

9 State General Reserve Fund of the Sultanate of Oman Oman 35

10 Emirates Investment Authority UAE 22

11 Oman Investment Fund Oman 17

12 Bahrain Mumtalakat Holding Company Bahrain 11

Source: elaboration on official statistics by Antonino Alì.

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GEOPOLITICS OF NATURAL GAS

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GEOPOLITICS OF NATURAL GAS

COUNTRYRESERVES

(TMC)SHARE Σ SHARE

AREA(MKM2)

ENDOWMENT

(MCM/KM2)

1 Iran 36,3 18,2% 18,2% 1,6 22,0

2 Russian Federation 33,5 16,8% 35,0% 17,1 2,0

3 Qatar 26,5 13,3% 48,3% 0,0 2.286,6

4 Turkmenistan 18,8 9,4% 57,7% 0,5 38,4

5 USA 10,0 5,0% 62,8% 9,8 1,0

6 Saudi Arabia 8,8 4,4% 67,2% 2,1 4,1

7 United Arab Emirates 6,5 3,3% 70,5% 0,1 78,2

8 Venezuela 6,0 3,0% 73,5% 0,9 6,6

9 Nigeria 5,5 2,7% 76,2% 0,9 5,9

10 Algeria 4,8 2,4% 78,6% 2,4 2,0

World 199,4 136,4 1,5

Source: elaboration on BP and CIA.


GAS / PRODUCERS


GAS / CONSUMERS


GAS / EXPORTERS


GAS / IMPORTERS

ISPI Energy WatchSource: BP.

GAS / TRADE FLOWS

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GAS / LIQUEFIED NATURAL GAS EXPORTS

Source: GIIGNL.

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GAS / REGIONAL MARKETS

ISPI Energy WatchSource: European Commission.

GAS / REGIONAL MARKETS AND PRICE TRENDS

$/MMBTU


GAS / RESERVES

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GAS / YEARS OF PRODUCTION LEFT, PER REGION

Source: Eni.


GAS / YEARS OF PRODUCTION LEFT, PER COUNTRY

ISPI Energy Watch

Majors: Eni, BP, Repsol, Total, Shell, Chevron, ExxonMobil.

Source: Eni.

GAS / RESERVES HOLDERS


GAS / RESERVES HOLDERS, PER REGION

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CASE:EUROPE AND RUSSIA

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GAS / EU SUPPPLY

2014 – Source: elaboration on Eurostat.

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Gazprom Export

Gazprom Export

Ukrainetransit

Ukrainetransit

transit/total

transit /total

Russian gas

/consump.2012 2013 2012 2013 2012 2013 2013

Italy 14,3 24,1 14,3 24,1 100% 100% 35%Germany 31,5 38,2 20,0 11,1 63% 29% 43%Cezch Rep. 6,9 7,0 6,9 7,0 100% 100% 86%Hungary 5,0 5,7 5,0 5,7 100% 100% 61%Slovakia 4,0 5,1 4,0 5,1 100% 100% 100%Austria 5,0 5,0 5,0 5,0 100% 100% 60%France 7,6 7,8 2,9 3,0 38% 39% 17%Bulgaria 2,4 2,6 2,4 2,6 100% 100% 94%Greece 2,4 2,5 2,4 2,5 100% 100% 66%Romania 2,1 1,1 2,1 1,1 100% 100% 10%Slovenia 0,5 0,5 0,5 0,5 100% 100% 73%other EU 23,0 26,9 0,0 0,0 - - 13%tot. EU 104,7 126,5 65,5 67,7 62% 54% 27%Turkey 25,7 25,3 13,3 12,4 52% 49% 58%other Europe 1,3 1,7 1,3 1,7 100% 100%tot. Europe 131,7 153,5 80,1 81,8 61% 53%

GAS / RUSSIAN CUSTOMERS IN EUROPE

Billiion cubic meters – Source: elaboration on GazpromExport, Eurostat, Eurogas, BP and Pirani (2014).

ISPI Energy Watch

Entry pointdaily max yearly max

(Mmc) (Bmc)

Ukrainian system 452 148Slovakia 281 92Romania 103 34Hungary 55 18Poland 12 4

Nord Stream Germany 160 53

Yamal-Europe Poland 102 34

Blue Stream Turkey 49 16

other Finland, Baltics 72 24

total 835 274

GAS / RUSSIAN EXPORT INFRASTRUCTURE

2014. Yearly max based on a 90% utilisation factor – Source: elaboration on ENTSOG.

ISPI Energy Watch

GAS / EU DEMAND DECLINE

Bcm

Source: elaboration on European Commission.

ISPI Energy Watch2014 – Source: UNCTAD, FT, IMF, BBC, EBRD.

RUSSIA / DEPENDENCE ON ENERGY PRODUCTION

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GEOPOLITICS OF OTHER SOURCES

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Mtoe


NUCLEAR / CONSUMPTION

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NUCLEAR / STATUS OF NUCLEAR POWER PROGRAMMES

End-2013 – Source: IEA.


COAL / CONSUMPTION

Mtoe

ISPI Energy WatchSource: elaboration on BP.

COAL / RESERVES

COUNTRYRESERVES

(MT)SHARE Σ SHARE P/R RATIO

1 USA 237.295 27% 27% 266

2 Russian Federation 157.010 18% 44% 452

3 China 114.500 13% 57% 31

4 Australia 76.400 9% 66% 160

5 India 60.600 7% 72% 100

6 EU 56.082 6% 79% 103

7 Ukraine 33.873 4% 83% 384

8 Kazakhstan 33.600 4% 86% 293

9 South Africa 30.156 3% 90% 117

10 Indonesia 28.017 3% 93% 67

World 891.531 113


RENEWABLES / CONSUMPTION

Mtoe

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GEOPOLITICS OF GHG EMISSIONS


GHG EMISSIONS / EXPECTED TRENDS

Mt CO2


GHG EMISSIONS / EU AND THE REST OF THE WORLD


GHG EMISSIONS / EU AND THE REST OF THE WORLD

Mt CO2

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GHG EMISSIONS / COP-21 COMMITMENTS

EU: 40% emission reduction commitment by 2030 compared to 1990.

China: peak of emissions in 2030, wihtout any quantitative commitment.

USA: 26-28% emission reduction commitment by 2025 compared to 2005.

India: no commitment on emissions; perspective increase of taxation on coal.

Russia: 25-30% emission reduction commitment by 2030 compared to 1990.

Japan: 20% emission reduction commitment by 2030 compared to 2005.

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Matteo VerdaIstituto per gli Studi di Politica Internazionale (ISPI) – Milano

mail: [email protected]

blog: www.sicurezzaenergetica.it

twitter: @matteoverda

linkedin: Linkedin.com/in/matteoverda

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