Page 8 - European Energy Innovation - Summer 2015 publication
P. 8
ummer 2015 European Energy Innovation

The New Politics of Energy: Supply,

Demand – and, of course, Power

By Michael Edmund

Human perversity, then, makes divisions of that which by nature is one and simple, and in attempting to
obtain part of something which has no parts, succeeds in getting neither the part- which is nothing- nor the
whole, which they are not interested in.
- Anicius Manlius Severinus Boethius, The Consolation of Philosophy

SUPPLY AND DEMAND; is hardly a revelation that 500 million reserves, of which the largest is in the
PRODUCTION AND CONSUMPTION people inhabiting a technologically Amu Darya basin in south-east of the
EUSEW rightly celebrates Europe’s advanced continent should require country: almost as far from Europe
sustainable energy achievements, its considerable quantities of energy. And as it is possible to be. The other main
technologies and its people: recent neither is it particularly surprising that issue relates to insufficient pipeline
figures indicate that the continent there are energy-producing countries infrastructure or foreign investment.
has already achieved one of the 2020 elsewhere that are eager to satisfy Meanwhile, Azerbaijan’s Shah Deniz
climate and energy goals it set itself, this demand. In an era of large-scale reserves under the Caspian Sea, though
that of deriving 20% of its energy from exploitation of oil, the acronym OPEC smaller (estimated between 50-100
renewable sources. Perhaps even more has become almost synonymous Billion cubic metres) are much closer to
impressively, production of renewable with the word wealth, which in part Europe.
energy grew by no less than 81% explains Russia’s more recent efforts to
between 2002 and 2012. However, develop its own considerable reserves. BIG MARKET, HIGH STAKES: AND SO
when Eurostat informs us that 22.3 % From a European perspective, it is TO THE POLITICS
of total primary energy production interesting to examine gas in a little Having seen Latvia, Lithuania and
in 2012 was renewable, it is perhaps more detail: gas features heavily in Estonia join the EU, Moscow has
salutary to infer that 77.7% was not. the 2020 package because burning it naturally sought to consolidate its
Having remained relatively constant for electricity produces less CO2 than sphere of influence, perhaps with
for five years, energy consumption does the burning of coal. According to particular concern over access to
decreased sharply (by 5.8%) in 2009, Gazprom’s figures, Europe imported the warm water port at Sevastopol in
and rebounded almost as sharply (by 161.5 billion cubic feet (Bcf) of gas the Crimea. It is perhaps no surprise
3.8%) in 2010, followed by further from Russia in 2013, with the vast that energy has become a new
small decreases in 2011 and 2012. majority (127.1 Bcf) going into battleground, and co-incidentally a
Notwithstanding the impact of the the more industrialised countries weapon; and that Ukraine has become
2020 goals, this pattern has largely (Austria, Denmark, Finland, France, the focus of much of the activity.
been attributed to the effects of the Germany, Greece, Italy, Netherlands, Its current Head of State President
financial and economic crisis, rather Switzerland, Turkey and the UK). And Poroshenko declared in a recent
than any fundamental or structural Russia has benefited accordingly: interview with the BBC his desire that
shift in the pattern of European energy the topforeignstocks website notes Ukraine become part of the EU; and
consumption. Oil therefore continues that oil and gas products accounted it is perhaps not an oversimplification
to be our most important energy for two-thirds of the value of all that some parts of Ukraine share
source, while gas remains the second Russian exports in 2013, and about his aspiration while others prefer to
most important. Meanwhile, our 50% of the Russian Federal budget look toward the Kremlin. President
dependency on energy imports in 2012 revenues in 2014. Beyond Europe, of Putin had used the prospect of
stood at over 53%. Indeed, for the last course, the Shale Gas Revolution has cheap gas to encourage Porshenko’s
decade, net imports of energy have transformed the US energy scene, while predecessor President Yanukovych to
been greater than primary production: Turkmenistan, Azerbaijan and now resist Europe’s overtures, but when
put simply, our industry and our lifestyle Uzbekistan are eyeing the European Yanukovych was overthrown, Gazprom
continue to require a great deal of market. Although dwarfed by those of raised its price by 44%, and Ukraine
energy; and we import more than we Russia, Turkmenistan’s proven natural has run up a huge debt. Indeed, it is
produce for ourselves. This is perhaps gas reserves as of December 2012 probably no exaggeration to say that
not an ideal state of affairs. stood at 353.1Trillion cubic feet (Tcf). Ukraine’s finances seem somewhat
The country, however, faces significant precarious. Meanwhile, Russia’s
But before we rush to judgement, it challenges in developing these apparent willingness to use gas as
   3   4   5   6   7   8   9   10   11   12   13