Geopolitics of Gas: An Analysis of Prospective Developments in the Natural Gas Trade and Geopolitical Implications

Transcription

1 Geopolitics of Gas: An Analysis of Prospective Developments in the Natural Gas Trade and Geopolitical Implications David G. Victor, Stanford University & Amy M. Jaffe, Rice University A Joint Study Convened by the Stanford Program on Energy and Sustainable Development and the James A. Baker III Institute for Public Policy of Rice University October 17, 2002

2 Major Points Global natural gas consumption will grow rapidly over next half century What are the geopolitical implications? Economic and political integration between the countries that produce, transport and consume the gas? analogous to European Union 2

3 Increasing Role of Gas in all Regions: Gas as Fraction of Total Primary Energy 50% 40% 30% 20% IIASA-WEC A3* (1998) OECD Latin America (LAM) China (CPA) India/Pakistan (SAS) Non-OECD Pacific (PAS) Africa (AFR) 10% 0% IEA-WEO (2002) Latin America India/Pakistan China *Note: A3 is a high growth scenario that emphasizes renewables, nuclear, as well as gas 3

4 Global Gas Consumption: IPCC Illustrative Scenarios & IIASA-WEC A3 Tcm/y r IIASA-WEC A Tcf / yr Year IPCC SRES (2000) 4

5 Incremental Gas Consumption Growth in Selected Regions IIASA-WEC 98 A3 Bcm / yr x 35x 5x x 10x Africa China Latin America (AFR) (CPA) (LAN) Non-OECD Pacific (PAS) India/Pakistan (SAS) 5 5

6 World Regions Gas of "Surplus" Demand Gas & Resources Reserves Jensen,

7 Natural Gas Reserves By Region Year End Unavailable Reserves Exportable Surplus Committed to Market Tcm North America Latin America Africa Western Europe Russian Pipeline Grid South Asia Southeast Asia Northeast Asia Middle East West Siberia Central Asian Republics Jensen,

8 Projected Gas Demand Requires Major Infrastructure Investment Surplus gas supplies (West Siberia, Central Asia, Middle East) are far removed from demand centers China and India, in particular, do not have reserves to meet projected growth Even conservative projections imply multiple large-scale, cross-border gas transit infrastructures (pipelines or LNG) 8

9 Eurogas,

10 Russian Natural Gas Exports in 2001 (bcm) 1 bcm=35 bcf IEA,

11 Shell,

12 Oil & Gas Journal 12 12

13 Southern Cone: Gas Interconnections Before 1990 Current and Future Venezuela Venezuela Cuiaba 1999 Venezuela-Brazil Peru Brazil Bolivia-Argentina 1972 Peru-Brazil Peru Brazil Santa Cruz-Sao Paulo 1999 Bolivia Peru-Bolivia Bolivia Bermejo-Rámos 1988 Chile Paraguay Argentina Uruguay Bolivia-Chile Atacama 1999 Norandino 1999 GasAndes 1997 del Pacífico 1999 Chile Paraguay Argentina Uruguay Paisandú 1998 Bolivia-Paraguay-Brazil Mercosur Uruguaiana 2000 Montevideo 2001 de la Vega, 2000 Methanex

14 Research Tracks I. Economic Research and Modeling II. Historical case studies III. Looking to the future 14

15 Track I: Economic Modeling Earlier Rice modeling work: Emergence of LNG spot market Many other models: Regional gas markets, short term This project: global gas model Ground truthing Degree of regional detail? Role for scenarios 15

16 Track I: Scenarios for Modeling Gas OPEC? LNG as hedge? Region specific Major geopolitical changes? e.g. Sea power 16

17 Track II: Case Studies Historical analyses of infrastructures (gas and non-gas cases) Approach Research teams (regional expert, economist, legal expert) Methods Case Research Protocol 17

18 Case Studies: Gas Pipelines Pipeline 1. Bolivia to Argentina 2. Lumut LNG Train 3. Transgas Pipeline Network 4. Transmed-1 Pipeline 5. USSR-Turkey 6. Myanmar to Thailand Completed

19 Case Studies: Other Shared Infrastructures Project 1. Dams and canals constructed as a result of the Indus Waters Treaty 2. Itaipu Dam (joint project between Paraguay and Brazil) 3. South African Power Pool Initiated

20 Track III: Looking to the Future Case study insights Reflect on geopolitical implications Scenarios for modeling Apply findings to specific regions: South Asia, Northeast Asia, Middle East 20

21 Study Timeline Synthesize Feedback from Meeting; Commission Case Studies Early Summer 03 Capstone conference at Baker Institute, Houston, Texas Fall 02 Late Fall 03 Preliminary Case Study Results; Modeling Work Cont. Publish Edited Volume of Results 21

22 Previous Studies Drivers and scenarios: IIASA, WEC, IEA, EIA Institutional mechanisms to facilitate investment ESMAP/World Bank/Dundee, APEC Regional studies APERC, Baker, IIASA, ADB What is missing from previous studies? Systematic analysis of political economy Interaction between technological change and politics Synthesis to assess geopolitical developments 22

23 Topics for Discussion 1. Solid Foundations? low gas growth due to enviro/security concerns large indigenous gas reserves (e.g. China) tech change in energy transport (gas or electric) tech change allows coal consumption to continue, grow 2. Best Focus? ramifications of cross-border gas infrastructures, other than impacts on political integration 3. Best Approach? other methods other rollout strategies 23