RUSSIA, THE WEST, AND THE SCO COUNTRIES IN THE CENTRAL EURASIA ENERGY PROJECTS

Yuri MOROZOV


Yuri Morozov, Ph.D. (Military Sciences), professor at the Academy of Military Sciences, chief researcher at the Institute of Far Eastern Studies, RAS (Moscow, Russia)


A Geopolitical Taste of the Central Asian Energy Projects

In the near future energy will remain a geopolitical category. This is especially true of the oil and gas sphere. Indeed, according to the International Energy Agency (IEA), organic fuels will remain the main energy source until 2030 in the world, where the developed countries consume the greater part of the oil and gas produced. In 2006, the United States, which consumes 24.6 percent of the world oil production, imported 60.2 percent of its domestic consumption. The EU members, which in 2006 imported about 80 percent of the oil they consume, depend on oil to a much greater extent. Russia is a unique country in this respect: its proven oil and gas resources are estimated at 74.4 billion barrels (6.2 percent of the worlds total), which makes it the seventh oil-rich country in the world; it comes second after Saudi Arabia as an oil exporter.

The Energy Strategy of Russia until the Year 2020, which envisages that the role of any country on the worlds energy market determines, to a great extent, its geopolitical influence showed a clear understanding of the importance of energy as a geopolitical factor. Today, the European Union is the main exporter of Russias Soviet inheritance, which makes it dependent on European exports86 percent of the exported oil and 92 percent of the exported gas. This explains why the Energy Strategy insisted on diversified exportsto the APR and South Asia, the two regions with the worlds highest growth rates, which have already changed the structure of the worlds oil demand. The APRs share in Russias oil export should increase from the present 3 to 30 percent in 2020, while gas exports are expected to rise to 15 percent. The Strategy describes China, Japan, South Korea, and India as the most promising partners.

On the other hand, the European Union is aware of its great dependence on Russias exports: 28 percent of oil and 40 percent of gas. In the last 35 years the share of Asian gas in Russias oil export to Europe became fairly noticeable in the overall volume of the worlds oil trade: back in 1970 the Soviet oil pipelines moved 46 billion cu m; in 1990, this volume rose 7-fold; and in 2004, twice as much again (680 billion cu m). The transit disagreements with Ukraine in January 2006 and Belarus in January 2007 forced the EU to concentrate on diversifying its gas exports to diminish its dependence on Moscow.

In an effort to push down gas prices Brussels is exploiting the contradictions between the gas producers (Russia and Kazakhstan in particular) by initiating investment projects for building main gas pipelines that would exclude Russia. This means that the SCO gas exporters are competing with Russia on the European gas market.

Viewed through the prism of Russias interests these factors reveal other, relatively recent, geopolitical trends mainly caused by NATOs changed politics in Eurasia and the prospects for..


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