TOO MANY PIPELINES. (Troppe pipeline)

Europe may not be able to sustain all its proposed gas supply pipelines but will need to build at least some soon to ensure security of supply in the latter half of this decade.

Scarred by the Russia-Ukraine gas row of 2009, which cut about a fifth of Europe's supply in mid winter, major European gas consumers plan many pipelines to promising producing regions in central Asia, North Africa and the Middle East.

With China competing to woo producers, Europe will likely struggle to secure enough gas to fill all the new connections and would be unable to use it all if they do get filled.

"If every project that is discussed is built then there will be way too much supply, so I think the best projects will be developed and marginal ones delayed, or not built," said Graham Freedman, a senior analyst at UK consultancy Wood Mackenzie.

"But I don't think anybody doubts the fact that Europe is going to need more gas because domestic production is falling. It is going to be an importer for many years to come," he said.

Wood Mackenzie forecasts that gas demand in the European Union, Turkey and former Yugoslav states could rise from 551 bcm in 2010 to 653 billion cubic metres in 2020.

Under what it says is a bullish demand scenario, this would leave a supply shortfall of 125 bcm by the end of the decade unless far more is produced at home or brought in from overseas.

But if all major new pipelines were built and filled to capacity, gas flows to Europe by 2020 could far outstrip demand.

Since the Russia crisis, Europe has been comfortably supplied with gas for power generation, heating and industry through existing pipelines and an increasing number of liquefied natural gas (LNG) tankers. The Medgaz link from Algeria to Spain could further increase supplies into the Iberian Peninisula by 8 bcm/year, if the repeatedly delayed pipeline opens this winter.

The 55 bcm/year Nord Stream pipeline under the Baltic Sea is expected to bring more Russian gas to western Europe, bypassing Ukraine by the end of next year.

Russia is pushing on with its South Stream project to bring up to another 63 bcm under the Black Sea via the Balkans.

The European Union is also championing the 31 bcm alternative Nabucco plan that would bring Caspian and Middle East gas via Turkey, excluding Russia.

But Italy also hopes that its projects TAP and ITGI for around 10 bcm capacity each can compete for mainly Caspian gas market share with South Stream and Nabucco, giving it more options via the "Southern Corridor" to Europe.

In all, the maximum capacity of these pipelines, some of which were conceived prior to the economic crisis which brought a gas price slump, adds up to 177 bcm to Europe's supply.

Pipeline supplies would also face competition from liquefied natural gas (LNG), which has become much more readily available because of a surge in North American shale gas production, with unconventional gas finds in Europe posing another threat to both types of external supplier.

"Some projects make sense from a security of supply perspective, because of the diversification of gas sources that they would bring," said Nigel Harris of UK consultancy Kingston Energy. "But with plenty of gas available from existing sources, there's no commercial benefit from diversification."

Nord Stream and South Stream are just additional routes for Russian-controlled gas flows, he said, while alternative sources from Azerbaijan, Turkmenistan and Iran remain uncertain.

The International Energy Agency (IEA) thinks global gas demand may recover from 2011, but it still expects supply to outstrip demand until 2020..

Some gas suppliers are more optimistic, pointing to buoyant demand in the Middle East, China and India which could leave less gas for Europe. Phillipe Boisseau, president of France's Total Gas & Power, told the recent European Autumn Gas Conference in Berlin that the "supply bubble will disappear in three years."

Speakers agreed that current gas prices in consuming countries would not support all Europe's proposed supply lines, although they expect demand for power generation to contine to rise as Europe looks to back up its increasing wind power capacity with gas-fired plants.
(FuturesPros.com via Reuters)

IT'S THE END OF THE WEST, AS WE KNOW IT (AND I DON'T KNOW HOW TO FEEL)

A major reason for the U.S.-led invasion and occupation of Afghanistan was the building of a pipeline through the country that would take natural gas from Turkmenistan to India and Pakistan. Canada and the other 44 Western countries occupying Afghanistan are supporting this U.S. objective by bolstering Washington’s military position in the country.

Turkmenistan, which borders Afghanistan, contains the fourth largest reserves of natural gas in the world. The U.S. has been trying to set up the pipeline for a decade, having first negotiated the venture with the ousted Taliban government. Two months after these negotiations broke down, Washington overthrew the Taliban in October 2001 when it invaded Afghanistan.

Since then, the U.S. has persuaded India, Pakistan, Turkmenistan, and Afghanistan to sign an agreement aimed at constructing the pipeline, but the war in Afghanistan and the U.S.’s failure to defeat the Taliban stalled actual work on this project. Washington’s occupation of Afghanistan and pipeline plans are part of its strategy to gain control of Central Asia’s and the Caspian Sea area’s energy riches and divert them away from Russia, China, and Iran.

As Richard Boucher, U.S. Assistant Secretary of State for South and Central Asian Affairs, stated in September 2007: “One of our goals is to stabilize Afghanistan so it can become a conduit and hub between South and Central Asia so that energy can flow to the south… and so that the countries of Central Asia are no longer bottled up between the two enormous powers of China and Russia, but rather that they have outlets to the south as well as to the north and the east and the west.”

However, as the Indian diplomat M.K. Bhadrakumar put it in an article for Asia Times, “The United States' pipeline diplomacy in the Caspian, which strove to bypass Russia, elbow out China and isolate Iran, has foundered.”
Recently, the U.S.’s Turkmen-Afghan pipeline plans have suffered what appears to be a fatal blow. On January 6, Turkmenistan committed its entire gas exports to China, Russia, and Iran with the inauguration of the Dauletabad-Sarakhs-Khangiran (DSK) pipeline which connects Iran's northern Caspian area with Turkmenistan.

As Bhadrakumar explains, Turkmenistan “has no urgent need of the pipelines that the United States and the European Union have been advancing.” The operation of the DSK pipeline, along with the launching of another one between China and Turkmenistan in December 2009, has “virtually redrawn the energy map of Eurasia and the Caspian,” he maintains. “We are witnessing a new pattern of energy cooperation at the regional level that dispenses with Big Oil [private Western multinational oil companies]. Russia traditionally takes the lead. China and Iran follow the example. Russia, Iran, and Turkmenistan hold, respectively, the world's largest, second-largest, and fourth-largest gas reserves. And China will be consumer par excellence in this century. The matter is of profound consequence to U.S. global strategy.”

Bhadrakumar has served in diplomatic posts for India in the Soviet Union, Uzbekistan, Afghanistan, and Pakistan.

Russia and Turkmenistan have also agreed to build an east-west pipeline connecting all of the latter’s gas fields to one network so that the pipelines going to Russia, Iran, and China can take gas from any of the fields. (See the accompanying map for the routes of these new and proposed pipelines.)

Three weeks before the opening of the DSK pipeline, China and Turkmenistan inaugurated a major natural gas pipeline between the two countries. The presidents of China, Turkmenistan, Kazakhstan, and Uzbekistan attended the opening ceremony of the 1,833-kilometre pipeline on December 14, 2009. The pipeline will transport natural gas from the Saman-Depe field in eastern Turkmenistan through Kazakhstan and Uzbekistan to China’s Xinjiang province, from where it will go to 14 Chinese provinces and cities. By 2012, the pipeline will deliver 40 billion cubic metres of gas per year, which is more than half of China’s present gas consumption.

Chinese President Hu Jintao described the pipeline as “another platform for collaboration and cooperation” between China and Central Asia. In return for access to Central Asian gas, China is building infrastructure and giving cheap loans to the area’s republics. According to John Chan, writing on the World Socialist Website: “Beijing’s broader aim is to bring the region within its own political and strategic orbit.”

Turkmenistan President Berdymukhamedov declared that the pipeline has “not only commercial and economic value. It is also political,” and will become “a major contributing factor to security in Asia”.

Uzbekistan President Islam Karimov added: “China, through its wise and farsighted policy, has become one of the key guarantors of global security.”

As Chan puts it, “The opening of a major Chinese pipeline from Turkmenistan alters the Central Asian energy equation. The Financial Times commented last week that the pipeline “deals a blow to the European Union’s plans to win Turkmen supplies for the planned Nabucco pipeline.”
This pipeline is the U.S.’s and E.U.’s attempt at breaking Russia’s dominant role as the leading energy supplier to Europe. Nabucco depends mainly on getting gas from Azerbaijan and Turkmenistan. However, Russia now wants to double its consumption of Azerbaijani gas, and Iran is also becoming a consumer of this gas, further reducing supplies for Nabucco.
In December 2009, Azerbaijan signed an agreement to deliver gas to Iran through the 1,400km Kazi-Magomed-Astara pipeline. Russia's South Stream and North Stream pipelines (the latter’s construction starts in Spring 2010), will supply gas to northern and southern Europe, ensuring Moscow’s continued dominance of energy supplies to Europe.
As Bhadrakumar points out, the DSK pipeline shows that U.S. efforts to demonize, isolate, and terrorize Iran have failed miserably. In open defiance of U.S. policy, President Berdymukhammedov of Turkmenistan is busy creating “a new economic axis” with Iranian president Mahmud Ahmadinejad, whom he considers a valuable partner.

Washington’s and the West’s show of force in Afghanistan has also failed to impress Berdymukhammedov, who is giving all of his country’s natural gas to Russia, China, and Iran. These countries are not currently engaged in imperialist military occupation of another nation. All they had to do to get Turkmenistan’s gas was to offer it a decent economic deal. So, while the West kills thousands of civilians in Afghanistan and Pakistan and ravages both countries, Russia, China and Iran are acquiring the crucial energy riches of Central Asia and the Caspian area without firing a shot.

Russian dominance of Central Asia was further cemented by the recent overthrow of the pro-U.S. government in Kyrgyzstan and its replacement by a pro-Moscow regime. The new government has told Washington that it can no longer use the Manas airbase, which is the main transshipment point for American supplies to Afghanistan.

In light of such major Western energy-related defeats, the continuing occupation of Afghanistan by 46 Western nations must have some other purpose. If their military venture were mainly economic — if they simply wanted greater access to Central Asia’s resources — why did they not offer the region’s countries acceptable prices for them, just as Russia, China, and Iran are doing?

The answer perhaps lies in a memorable remark by the great Palestinian intellectual Edward Said: “At the heart of the Western Idea is imperialism.”

The West did not become rich by offering resource-endowed countries fair and mutually beneficial economic deals. It became rich by subjecting countries in the Global South to 500 years of genocide and plunder through colonialism, neocolonialism, and the endless wars these aggressive actions entail.

The U.S. and its allies do not seem to realize that the dark age of “might-is-right” imperialism is coming to an end. Russia, China, India, and Iran are not countries that can be subdued by displays of military aggression in neighbouring nations. The continuing futile occupation of Afghanistan reflects the failure of the West’s political and military strategists to face this new geopolitical reality.

What possible threat could a financially and politically crippled West — a coalition that can’t even defeat the Taliban after nine years — pose to nuclear-armed Russia, China, and India? Countries like these are busy creating a post-imperial age in which aggression and occupation are not required to secure needed resources.

They are leaving the decadent West in the dust of history.
(RawaNews)