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3 RUSSIA'S ENERGY DRIVE, Part
1 Global axis of oil and
gas By W Joseph Stroupe
Russia, officially listed as holder of 27%
of the world's proven natural-gas reserves, but
soon to be upgraded to 35%, and Iran hold more
than 51% of the world's reserves. When Algeria,
Qatar and Indonesia, the world's leaders in the
export of liquefied natural gas (LNG), and the
rest of the 16-member group comprising the Gas
Exporting Countries Forum (GECF) are added in,
then the grouping accounts for more than
three-fourths of the world's
reserves and at least 60% of
world production.
That is a profoundly
disturbing set of facts for the West, as the five
dominant countries share a deepening political
affinity and a similar geopolitical alignment. And
they are increasingly intolerant of what they see
as excessive US global power and aggressiveness.
Evidence strongly indicates they are already in
the process of moving, largely in stealth, to
exert their mounting control in a collective yet
largely undeclared and informal fashion.
Gas is vital in an ever more
industrialized world that is increasingly
concerned about issues of high pollution and the
waning security of oil resources: diversification
into natural gas is rapidly mounting.
Europe is already heavily dependent on
natural gas, and the emerging Asian powers are on
a fast track to becoming so as well. The United
States is also increasingly dependent on gas, but
produces at present most of what it consumes, with
the balance coming from Canada in the form of dry
natural gas and from Qatar and Trinidad and Tobago
as LNG.
However, the US foresees a time
soon when it must rely significantly more on
imports as its own domestic demand grows and
production is inherently endangered by hurricanes
such as Katrina and Rita, which struck at the
heart of the United States' gas-producing regions
in 2005.
Rival concepts of
international energy security The possible
emergence of a global gas cartel or some type of
gas grouping is acutely disturbing from the
perspective of consuming nations in the West.
These countries, since the Arab oil embargo of
1973-74, have created and ushered into global
dominance their own tightly knit, exclusive
consumer groupings, such as the IEA (International
Energy Association) and the OECD (Organization for
Economic Cooperation and Development) and the
so-called "liberal" oil market order they support.
An integral part of this arrangement (now
falling apart) was virtually absolute control of
the markets by the West's oil majors, via their
domination of exploration, reserves, pricing and
production. This arrangement maximized Western
consumer leverage directly at the expense of the
leverage and influence of producers as well as of
key consumers (such as China and India) in the
East, all of which are conveniently excluded from
membership and voice in the IEA and OECD.
Western oil-importing nations, despite
being accustomed to an order excessively slanted
in their favor, recoil at the prospect of either
gas or oil producers deepening and maximizing
their own collective influence - even on an
informal basis.
The recent North Atlantic
Treaty Organization meeting in Riga took up the
subject of what to do in the face of mounting
indications of steadily deepening cooperation
among the globe's key gas producers, notably
Russia, Iran and Algeria.
The prospects of
direct or indirect manipulation of global gas
prices and of a more frequent and widespread use
of gas as a political/geopolitical weapon are
distinct possibilities, they fear. From the
perspective of the US and its closest allies, this
strikes at the heart of their strategic security
interests and imperils the global dominance of the
industrialized powers in the West.
The
West fears that matters are rapidly heading toward
a massive tipping of the balance of global
energy-based leverage in favor of producer regimes
and their favored consumers in the East.
The reasons for this are:
The proliferation of anti-Western regimes in
control of energy.
A greater willingness to use energy as an
economic and therefore also a de facto
geopolitical weapon.
The swift emergence and dominance on the
global markets of powerful state-owned strategic
resources-based corporate monopolies seriously
undercutting the former control of the Western oil
majors.
Unrelenting and deepening Western dependence
on energy imports.
As a new global gas
market emerges, the stakes are understandably very
high. The West is unlikely to acquiesce and will
attempt to limit the leverage of producers while
maximizing its own. Conversely, Russia and its
producer and consumer partners can be counted on
to exert all their leverage, though mostly in
stealth so as to avoid costly exposure, to shape
the order as they see fit.
And Russia now
possesses inherently more influence and leverage
than the West in the sphere of energy.
Official cartel vs undeclared
confederation The cartel model has the
weaknesses of its supposed strength - it lacks
true self-sufficiency, balance and independence
because it excludes consumer states while
including only producers. Therefore, it is an
unbalanced and consequently unstable model
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