Energy superpower
Encyclopedia
The term energy superpower
does not have a clear definition. It has come to be used to refer to a nation
that supplies large amounts of energy resources
(crude oil, natural gas
, coal
, uranium
, etc.) to a significant number of other states, and which therefore has the potential to influence world markets to gain a political or economic advantage. This might be exercised, for example, by significantly influencing the price on global markets, or by withholding supplies. The status of "energy superpower" should not be confused with that of "superpower
", as the nature of an energy superpower is defined very differently due to the non-military nature of an energy superpower's power base.
Energy superpowers project greater power than would be otherwise possible due to their lock on the exportable energy markets, and are becoming increasingly valuable to the global economy. In the global commodities' boom
of recent years many of these states have benefited massively from increased production and prices.
has the largest known natural gas
reserves of any state in the world, along with the second largest coal reserves, and the eighth largest oil reserves. Since 2009, Russia has been the world's largest oil producer after overtaking Saudi Arabia
as the world's number one. It is also the world's biggest natural gas producer, with 22.3% of global natural gas production, and also the biggest exporter — with 24.0% of global natural gas export. In recent years Russia has identified the gas sector as being of key strategic importance. Many private oil and natural gas companies, most notably Yukos
and Sibneft, have been consolidated under the control of the state-controlled Rosneft
and Gazprom
organisations respectively.
Gazprom has control over all gas pipelines leading out of Central Asia, a region rich in the resource. Russia has used such gas, primarily that from Turkmenistan
, on occasions where it has found itself unable to meet all delivery obligations from its own domestic production plants. Such circumstances in 2000 led to Gazprom allowing Turkmenistan to use its pipelines to supply gas to the highly-subsidised, low price Russian domestic market - leaving Gazprom free to fulfil its obligations towards European customers. Gazprom sells 33% of its gas to Europe, accounting for nearly 70% of the company's revenue. The remaining 30% is sold for domestic Russian consumption at highly subsidised prices.
As of 2006, Russia supplies over 25% of Europe
's oil and over 40% of its gas. Its energy superpower status has recently become a hot topic in the European Union
. Russia's overwhelmingly large reserves of natural gas have helped give it the title without much debate. Still, Russia's status as an energy superpower has been called into question by some. As Vladimir Milov
, of the Carnegie Endowment for International Peace
, says :
Russia has recently been accused by the West
of using its natural resources as a policy tool to be wielded against states like Georgia
, the Ukraine
, and other countries which it feels "threatened" by. At the beginning of 2006, Russia greatly increased the price of gas for Ukraine, following the country's Orange Revolution
. It later doubled natural gas prices to Georgia, following an international incident. Critics speculated that it was an attempt to undermine the Georgian leadership's defiance of Moscow.
In turn, Russia has accused the West of applying double-standards relating to market principles, pointing out that it has been supplying gas to the states in question (ruled by regimes Moscow considers "unfriendly") at prices that were significantly below world market levels, and in some cases remain so even after the increases. Russia argues that it is not obligated to effectively subsidise the economies of post-Soviet states by offering them resources at below-market prices. Russia has greatly increased the price of gas
for Armenia
and Belarus
, which, unlike Georgia and Ukraine, have been closely allied with Moscow and form a loose union state with Russia.
Despite Russia's vast potential, there had been concerns voiced by TNK-BP
's Viktor Vekselberg
that it would run into grave difficulties in 2007, citing that Russia had not opened up any new gas fields since the fall of the Soviet Union, and those which were currently in operation were rapidly depleting. However, this opinion comes in direct contradiction to known facts, as Russia was not reported to have run into gas shortages during 2007. In October 2001 Gazprom began production at the Zapolyarnoye field in western Siberia measured at 3.2 trillion cubic meters. This puts Zapolyarnoye field in the top 10 largest fields in the world.
Despite this fact, some continue to argue that inefficient plant and aging infrastructure could force Russia to import additional gas from Central Asia. Such a scenario is not inevitable, as Gazprom
has access to vast amounts of gas, and according to Gazprom's Alexey Miller
intends to singlehandedly explore the Shtokman Field
, one of the world's largest natural gas fields.
It is noteworthy that Russian gas imports present a lucrative opportunity for the country. In 2008 Russia planned to import most of its gas from Central Asian republics for a price that ranged between $100 and $150 per 1000 cubic metre. It re-sells most of this gas to Europe for a price that tops $250 per 1000 cubic metres.
According to Manik Talwani, a geophysicist at Rice University, there are two countries that are most likely to attain the status of Oil superpower: Venezuela and Canada. Citing their enormous potential reserves (1.2 trillion potential barrels for Venezuela and 1.75 trillion for Canada's oil sands), Dr. Talwani believes that they have the reserves to become energy superpowers in the next few decades as oil production declines elsewhere. However, as Dr. Talwani notes, both need 100 billion dollars or more to increase their production levels up to those of true energy superpowers.
when it comes to fighting the United States
. Rather than only targeting the U.S. interests directly in an attempt to cripple it, al-Qaeda now believes that cutting off the supply of energy to the U.S. should be a high priority. In particular, several powerful energy producing states like Saudi Arabia & Canada have had their energy industries listed as targets in al-Qaeda's effort to bleed the U.S. dry. In an apparent attempt to carry out this strategy, several masked men attempted to enter and destroy a section of the Saudi Abqaiq oil refinery. As of yet no attempt to attack energy industry infrastructure has succeeded by a known terrorist group, although Nigeria faces disruption of its energy industry by local rebel forces.
Says Ian MacLeod of the CanWest News Service, "A major supply disruption would send energy prices soaring. Had the Abqaiq attack been successful -- guards fired on cars driven by the bombers, detonating the explosives inside -- some experts say oil prices would have likely broken all records. A catastrophic hit could bring transportation and other parts of the U.S. and world economies to a standstill."
Energy superpowers as a result, while blessed with enormous natural wealth, are beginning to be pegged as targets in the worldwide War on Terrorism
. While Saudi facilities are relatively well-protected, there is no consensus as yet as to the seriousness of the threat to other countries nor how well prepared they might be to stop an attack.
Category: Energy by country
Superpower
A superpower is a state with a dominant position in the international system which has the ability to influence events and its own interests and project power on a worldwide scale to protect those interests...
does not have a clear definition. It has come to be used to refer to a nation
Nation
A nation may refer to a community of people who share a common language, culture, ethnicity, descent, and/or history. In this definition, a nation has no physical borders. However, it can also refer to people who share a common territory and government irrespective of their ethnic make-up...
that supplies large amounts of energy resources
Natural resource
Natural resources occur naturally within environments that exist relatively undisturbed by mankind, in a natural form. A natural resource is often characterized by amounts of biodiversity and geodiversity existent in various ecosystems....
(crude oil, natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
, coal
Coal
Coal is a combustible black or brownish-black sedimentary rock usually occurring in rock strata in layers or veins called coal beds or coal seams. The harder forms, such as anthracite coal, can be regarded as metamorphic rock because of later exposure to elevated temperature and pressure...
, uranium
Uranium
Uranium is a silvery-white metallic chemical element in the actinide series of the periodic table, with atomic number 92. It is assigned the chemical symbol U. A uranium atom has 92 protons and 92 electrons, of which 6 are valence electrons...
, etc.) to a significant number of other states, and which therefore has the potential to influence world markets to gain a political or economic advantage. This might be exercised, for example, by significantly influencing the price on global markets, or by withholding supplies. The status of "energy superpower" should not be confused with that of "superpower
Superpower
A superpower is a state with a dominant position in the international system which has the ability to influence events and its own interests and project power on a worldwide scale to protect those interests...
", as the nature of an energy superpower is defined very differently due to the non-military nature of an energy superpower's power base.
Energy superpowers project greater power than would be otherwise possible due to their lock on the exportable energy markets, and are becoming increasingly valuable to the global economy. In the global commodities' boom
2000s commodities boom
The 2000s commodities boom is the rise in many physical commodity prices which occurred during the decade of the 2000s , following the Great Commodities Depression of the 1980s and 1990s...
of recent years many of these states have benefited massively from increased production and prices.
Energy superpower of the world
RussiaRussia
Russia or , officially known as both Russia and the Russian Federation , is a country in northern Eurasia. It is a federal semi-presidential republic, comprising 83 federal subjects...
has the largest known natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
reserves of any state in the world, along with the second largest coal reserves, and the eighth largest oil reserves. Since 2009, Russia has been the world's largest oil producer after overtaking Saudi Arabia
Saudi Arabia
The Kingdom of Saudi Arabia , commonly known in British English as Saudi Arabia and in Arabic as as-Sa‘ūdiyyah , is the largest state in Western Asia by land area, constituting the bulk of the Arabian Peninsula, and the second-largest in the Arab World...
as the world's number one. It is also the world's biggest natural gas producer, with 22.3% of global natural gas production, and also the biggest exporter — with 24.0% of global natural gas export. In recent years Russia has identified the gas sector as being of key strategic importance. Many private oil and natural gas companies, most notably Yukos
YUKOS
OJSC "Yukos Oil Company" was a petroleum company in Russia which, until 2003, was controlled by Russian oligarch Mikhail Khodorkovsky and a number of other prominent Russian businessmen. After Yukos was bankrupted, Khodorkovsky was convicted and sent to prison.Yukos headquarters was located in...
and Sibneft, have been consolidated under the control of the state-controlled Rosneft
Rosneft
Rosneft is an integrated oil company majority owned by the Government of Russia. Rosneft is headquartered in Moscow’s Balchug district near the Kremlin, across the Moskva river...
and Gazprom
Gazprom
Open Joint Stock Company Gazprom is the largest extractor of natural gas in the world and the largest Russian company. Its headquarters are in Cheryomushki District, South-Western Administrative Okrug, Moscow...
organisations respectively.
Gazprom has control over all gas pipelines leading out of Central Asia, a region rich in the resource. Russia has used such gas, primarily that from Turkmenistan
Turkmenistan
Turkmenistan , formerly also known as Turkmenia is one of the Turkic states in Central Asia. Until 1991, it was a constituent republic of the Soviet Union, the Turkmen Soviet Socialist Republic . Turkmenistan is one of the six independent Turkic states...
, on occasions where it has found itself unable to meet all delivery obligations from its own domestic production plants. Such circumstances in 2000 led to Gazprom allowing Turkmenistan to use its pipelines to supply gas to the highly-subsidised, low price Russian domestic market - leaving Gazprom free to fulfil its obligations towards European customers. Gazprom sells 33% of its gas to Europe, accounting for nearly 70% of the company's revenue. The remaining 30% is sold for domestic Russian consumption at highly subsidised prices.
As of 2006, Russia supplies over 25% of Europe
Europe
Europe is, by convention, one of the world's seven continents. Comprising the westernmost peninsula of Eurasia, Europe is generally 'divided' from Asia to its east by the watershed divides of the Ural and Caucasus Mountains, the Ural River, the Caspian and Black Seas, and the waterways connecting...
's oil and over 40% of its gas. Its energy superpower status has recently become a hot topic in the European Union
European Union
The European Union is an economic and political union of 27 independent member states which are located primarily in Europe. The EU traces its origins from the European Coal and Steel Community and the European Economic Community , formed by six countries in 1958...
. Russia's overwhelmingly large reserves of natural gas have helped give it the title without much debate. Still, Russia's status as an energy superpower has been called into question by some. As Vladimir Milov
Vladimir Milov
Vladimir Milov is a Russian politician and the president of the Institute of Energy Policy,a Moscow-based independent think tank. He is the former Deputy Energy Minister of the Russian Federation....
, of the Carnegie Endowment for International Peace
Carnegie Endowment for International Peace
The Carnegie Endowment for International Peace is a foreign-policy think tank based in Washington, D.C. The organization describes itself as being dedicated to advancing cooperation between nations and promoting active international engagement by the United States...
, says :
The “energy superpower" concept is an illusion with no basis in reality. Perhaps most dangerously, it doesn’t recognize the mutual dependence between Russia and energy consumers. Because of political conflicts and declining production, future supply disruptions to Europe are likely. As a result, there will come a day when European gas companies demand elimination of the take-or-pay conditions in their Russian contracts. This will threaten Gazprom’s ability to borrow. Putin’s attempt to use energy to increase Russian influence could backfire in the long run.
Russia has recently been accused by the West
Western world
The Western world, also known as the West and the Occident , is a term referring to the countries of Western Europe , the countries of the Americas, as well all countries of Northern and Central Europe, Australia and New Zealand...
of using its natural resources as a policy tool to be wielded against states like Georgia
Georgia (country)
Georgia is a sovereign state in the Caucasus region of Eurasia. Located at the crossroads of Western Asia and Eastern Europe, it is bounded to the west by the Black Sea, to the north by Russia, to the southwest by Turkey, to the south by Armenia, and to the southeast by Azerbaijan. The capital of...
, the Ukraine
Ukraine
Ukraine is a country in Eastern Europe. It has an area of 603,628 km², making it the second largest contiguous country on the European continent, after Russia...
, and other countries which it feels "threatened" by. At the beginning of 2006, Russia greatly increased the price of gas for Ukraine, following the country's Orange Revolution
Orange Revolution
The Orange Revolution was a series of protests and political events that took place in Ukraine from late November 2004 to January 2005, in the immediate aftermath of the run-off vote of the 2004 Ukrainian presidential election which was claimed to be marred by massive corruption, voter...
. It later doubled natural gas prices to Georgia, following an international incident. Critics speculated that it was an attempt to undermine the Georgian leadership's defiance of Moscow.
In turn, Russia has accused the West of applying double-standards relating to market principles, pointing out that it has been supplying gas to the states in question (ruled by regimes Moscow considers "unfriendly") at prices that were significantly below world market levels, and in some cases remain so even after the increases. Russia argues that it is not obligated to effectively subsidise the economies of post-Soviet states by offering them resources at below-market prices. Russia has greatly increased the price of gas
Russia-Belarus energy dispute
The Russia–Belarus energy dispute began when Russian state-owned gas supplier Gazprom demanded an increase in gas prices paid by Belarus, a country which has been closely allied with Moscow and forms a loose union state with Russia...
for Armenia
Armenia
Armenia , officially the Republic of Armenia , is a landlocked mountainous country in the Caucasus region of Eurasia...
and Belarus
Belarus
Belarus , officially the Republic of Belarus, is a landlocked country in Eastern Europe, bordered clockwise by Russia to the northeast, Ukraine to the south, Poland to the west, and Lithuania and Latvia to the northwest. Its capital is Minsk; other major cities include Brest, Grodno , Gomel ,...
, which, unlike Georgia and Ukraine, have been closely allied with Moscow and form a loose union state with Russia.
Despite Russia's vast potential, there had been concerns voiced by TNK-BP
TNK-BP
TNK-BP is a major vertically integrated Russian oil company. It is Russia's third largest oil producer and among the ten largest private oil companies in the world. TNK-BP is Russia's third largest oil company in terms of reserves and crude oil production...
's Viktor Vekselberg
Viktor Vekselberg
Viktor Felixovich Vekselberg is the owner and president of Renova Group, a large Russian conglomerate.-Business empire:Victor Vekselberg was born in 1957 in Western Ukraine. He graduated from the Moscow Transportation Engineering Institute in 1979...
that it would run into grave difficulties in 2007, citing that Russia had not opened up any new gas fields since the fall of the Soviet Union, and those which were currently in operation were rapidly depleting. However, this opinion comes in direct contradiction to known facts, as Russia was not reported to have run into gas shortages during 2007. In October 2001 Gazprom began production at the Zapolyarnoye field in western Siberia measured at 3.2 trillion cubic meters. This puts Zapolyarnoye field in the top 10 largest fields in the world.
Despite this fact, some continue to argue that inefficient plant and aging infrastructure could force Russia to import additional gas from Central Asia. Such a scenario is not inevitable, as Gazprom
Gazprom
Open Joint Stock Company Gazprom is the largest extractor of natural gas in the world and the largest Russian company. Its headquarters are in Cheryomushki District, South-Western Administrative Okrug, Moscow...
has access to vast amounts of gas, and according to Gazprom's Alexey Miller
Alexei Miller
Alexey Borisovich Miller is Deputy Chairman of the Board of Directors and Chairman of the Management Committee of Russian energy company Gazprom, Russia's largest company and the world's biggest natural gas producer....
intends to singlehandedly explore the Shtokman Field
Shtokman field
The Shtokman field , one of the world's largest natural gas fields, lies in the central part of Russian sector of the Barents Sea, north of Kola Peninsula. Its reserves are estimated at of natural gas and more than 37 million tons of gas condensate.-History:The Shtokman field was discovered...
, one of the world's largest natural gas fields.
It is noteworthy that Russian gas imports present a lucrative opportunity for the country. In 2008 Russia planned to import most of its gas from Central Asian republics for a price that ranged between $100 and $150 per 1000 cubic metre. It re-sells most of this gas to Europe for a price that tops $250 per 1000 cubic metres.
Potential energy superpowers
In addition to the recognized powers, certain states have large or even enormous energy reserves that have not yet been exploited significantly, and which therefore have the potential to become the energy superpowers in the future.According to Manik Talwani, a geophysicist at Rice University, there are two countries that are most likely to attain the status of Oil superpower: Venezuela and Canada. Citing their enormous potential reserves (1.2 trillion potential barrels for Venezuela and 1.75 trillion for Canada's oil sands), Dr. Talwani believes that they have the reserves to become energy superpowers in the next few decades as oil production declines elsewhere. However, as Dr. Talwani notes, both need 100 billion dollars or more to increase their production levels up to those of true energy superpowers.
Threats to energy superpowers
Recently a new strategy has emerged from al-QaedaAl-Qaeda
Al-Qaeda is a global broad-based militant Islamist terrorist organization founded by Osama bin Laden sometime between August 1988 and late 1989. It operates as a network comprising both a multinational, stateless army and a radical Sunni Muslim movement calling for global Jihad...
when it comes to fighting the United States
United States
The United States of America is a federal constitutional republic comprising fifty states and a federal district...
. Rather than only targeting the U.S. interests directly in an attempt to cripple it, al-Qaeda now believes that cutting off the supply of energy to the U.S. should be a high priority. In particular, several powerful energy producing states like Saudi Arabia & Canada have had their energy industries listed as targets in al-Qaeda's effort to bleed the U.S. dry. In an apparent attempt to carry out this strategy, several masked men attempted to enter and destroy a section of the Saudi Abqaiq oil refinery. As of yet no attempt to attack energy industry infrastructure has succeeded by a known terrorist group, although Nigeria faces disruption of its energy industry by local rebel forces.
Says Ian MacLeod of the CanWest News Service, "A major supply disruption would send energy prices soaring. Had the Abqaiq attack been successful -- guards fired on cars driven by the bombers, detonating the explosives inside -- some experts say oil prices would have likely broken all records. A catastrophic hit could bring transportation and other parts of the U.S. and world economies to a standstill."
Energy superpowers as a result, while blessed with enormous natural wealth, are beginning to be pegged as targets in the worldwide War on Terrorism
War on Terrorism
The War on Terror is a term commonly applied to an international military campaign led by the United States and the United Kingdom with the support of other North Atlantic Treaty Organisation as well as non-NATO countries...
. While Saudi facilities are relatively well-protected, there is no consensus as yet as to the seriousness of the threat to other countries nor how well prepared they might be to stop an attack.
See also
- Russia in the European energy sectorRussia in the European energy sectorRussia has a significant role in the European energy sector as the largest exporter of oil and natural gas to the European Union. In 2007, the European Union imported from Russia 185 million tonnes of crude oil, which accounted for 32.6% of total oil import, and 100.7 million tonnes of...
- World energy resources and consumptionWorld energy resources and consumption]World energy consumption in 2010: over 5% growthEnergy markets have combined crisis recovery and strong industry dynamism. Energy consumption in the G20 soared by more than 5% in 2010, after the slight decrease of 2009. This strong increase is the result of two converging trends...
- Oil reservesOil reservesThe total estimated amount of oil in an oil reservoir, including both producible and non-producible oil, is called oil in place. However, because of reservoir characteristics and limitations in petroleum extraction technologies, only a fraction of this oil can be brought to the surface, and it is...
- Russia-Belarus energy disputeRussia-Belarus energy disputeThe Russia–Belarus energy dispute began when Russian state-owned gas supplier Gazprom demanded an increase in gas prices paid by Belarus, a country which has been closely allied with Moscow and forms a loose union state with Russia...
- Russia-Ukraine gas disputeRussia-Ukraine gas disputeThe Russia–Ukraine gas disputes refer to a number of disputes between Ukrainian oil and gas company Naftogaz Ukrainy and Russian gas supplier Gazprom over natural gas supplies, prices, and debts...
Category: Energy by country
- Energy securityEnergy securityEnergy security is a term for an association between national security and the availability of natural resources for energy consumption. Access to cheap energy has become essential to the functioning of modern economies. However, the uneven distribution of energy supplies among countries has led...
- Petroleum politicsPetroleum politicsPetroleum politics have been an increasingly important aspect of diplomacy since the rise of the petroleum industry in the Middle East in the early 20th century...
- Peak oilPeak oilPeak oil is the point in time when the maximum rate of global petroleum extraction is reached, after which the rate of production enters terminal decline. This concept is based on the observed production rates of individual oil wells, projected reserves and the combined production rate of a field...
- Peak coalPeak coalPeak coal is the point in time at which the maximum global coal production rate is reached, after which, according to the theory, the rate of production will enter to a terminal decline. Coal is a fossil fuel formed from plant matter over the course of millions of years...
- Peak copperPeak copperPeak copper is the point in time at which the maximum global copper production rate is reached. Since copper is a finite resource, at some point in the future new production from within the earth will diminish, and at some earlier time production will reach a maximum. When this will occur is a...
- Peak phosphorusPeak phosphorusPeak phosphorus is the point in time at which the maximum global phosphorus production rate is reached. Phosphorus is a scarce finite resource on earth and due to its non-gaseous environmental cycle has resulted in alternative means other than mining being unavailable...
- Peak gasPeak gasPeak gas is the point in time at which the maximum global natural gas production rate is reached, after which the rate of production enters its terminal decline. Natural gas is a fossil fuel formed from plant matter over the course of millions of years. It is a finite resource and thus considered...
- Peak uraniumPeak uraniumPeak uranium is the point in time that the maximum global uranium production rate is reached. After that peak, the rate of production enters a terminal decline. While uranium is used in nuclear weapons, its primary use is for energy generation via nuclear fission of uranium-235 isotope in a nuclear...
- Peak waterPeak waterThe term Peak Water has been put forward as a concept to help understand growing constraints on the availability, quality, and use of freshwater resources...
- Peak wheatPeak wheatPeak wheat is the concept that agricultural production, due to its high use of water and energy inputs, is subject to the same profile as oil and gas production. The central tenet being that a point is reached, the "peak", beyond which agricultural production plateaus and does not grow any further...
- Swing producerSwing producerSwing producer is a supplier or a close oligopolistic group of suppliers of any commodity, controlling its global deposits and possessing large spare manufacturing capacity...