Gas Pipeline Game in North East Asia Possible game theoretical explanation of the Altay Gas Pipeline story

Transcription

1 Gas Pipeline Game in Norh Eas Asia Possible game heoreical explanaion of he Alay Gas Pipeline sory Dr. Vladislav Savin, ERIRAS, Russian Federaion

2 Preliminary remarks Gas Pipelines in Norh Eas Asia Russia s gas pipeline nework is dreced o Wesern (European) par of Russia Sraegic decision o develop pipeline infrasrucure in Siberia and Far Eas hp:// This insfrasrucure could lead o gas deliveries owards ina and Asian Pacific Region One of he possible pipeline roues could be: Alay gas pipeline hp:// _ shml

3 Hisoria of he Alay pipeline In he former Sovie Union he roue from Wesern Siberia o ina was idenified as one of he mos profiable possibiliies Gazprom developed sraegic vision of he fuure expansion o he Asian Pacific Region Russian inese decision o consruc gas pipeline(s) o ina ha could deliv billion m 3 of naural gas yearly, be 6700 km long (2700 km on Russian and 4000 km on inese erriory) and cos 21 billion USD 2008 world financial (and hen economic) crisis + aciviies of inernaional ecological organizaions in Russia agains he consrucion Resul: The pipeline is no more he par of he Gazprom general scheme for developmen of gas pipelines in Russian Federaion ill 2030.

4 1. Wha kind of raionalizing could lead firs o he discussing he consrucion of he Alay gas pipeline and hen o giving i up? 2. Is he same paern o be expeced in regard of oher gas pipeline projecs beween Russia and ina? MAIN QUESTIONS

5 Game heory as a soluion approach In he language of game heory, a game refers o any social siuaion involving wo or more players (individuals, firms, counries). Russia, ina, USA For consrucing he exensive form game we need o build a ree for players wih se of heir moves and se of heir payoffs. ( build or no o build ) && ( lobby or no o lobby ) Russia s payoff = +150, ina s payoff = +363, USA s payoff = +/ 0 When he game is acually played, he pah ha represens he acual sequence of evens ha will occur is called he pah of play. Our goal was o ry o predic or re consruc he pah of play for he Alay pipeline game. no o build!!!

6 The game ree

7 Remark why o inroduce he USA? Russia is one of he wo mos imporan players on world gas marke ina has significan gas needs The second mos imporan player on he world gas marke is USA % of oal Producion (Ru) % 19.6% Consumpion (Ru) % 13.9% Producion (Cn) % 2.5% Consumpion (Cn) % 2.7% Producion (Us) % 19.3% Consumpion (Us) % 22.0% 601,7 420,2 181,1 76,1 80,7 4,6 rough esimaion for inese impors ,2 657,2 75,0 rough esimaion for Russian expors 2008 rough esimaion for US impors 2008

8 Developmen of he payoffs (formulas) U Ru = P Q C Ru + L + α Ru EcSp Us Payoff Ru T = 1 U Ru, = (1 + i) 0 sales revenues consrucion coss lobbying revenues ecology suppor U = EnEf Q P Q С Сh L Payoff T = 1 U, = (1 + i) 0 inernal valuaion consumpion and consrucions coss lobbying paymens U Us = EcSp Us + k Us ( ΔQ ) Payoff Us T = 1 UUs, = (1 + i) 0 ecology suppor ecology suppor benefis U Ru and U and U Us are yearly uiliies (payoffs) from oucomes for Russia, ina, and USA P is he price of gas for ina, Q is he quaniy of gas ha could be ranspored o ina via Alay pipeline, EcSp Us is he suppor ha environmenal movemens enjoy from USA, Δ Q is he reducion of Russia s gas deliveries o ina because of green proess (Δ Q = 40 bln m 3 ), k Us is a he gloaing coefficien (in billions of GDP dollars per one billion cubic meers of ina s naural gas consumpion reducion), α Ru = 1, and (assumpions).

9 Firs soluion of he game (evl. USA suppors ecology)

10 Second soluion of he game (evl. Russia s view of he game)

11 Third soluion of he game (evl. ina s view of he game)

12 Resuls We have shown wha kind of reasoning could lie behind he non consrucion of he Alay pipeline Any serious hird pary no ineresed in he consrucion of he pipeline could wih success quasi prohibi he building of he Alay pipeline. We have shown ha if Russia and ina would no share he view of he pipeline game framework he same paern could be expeced in oher pipeline projecs. The environmenally friendly policies are becoming he challenge of he fuure energy projecs in Russia we have sill o learn how o balance supply, demand and susainabiliy.