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7ЭКОНОМИКА (ECONOMICS)
DOI: 10.12731/2070-7568-2015-4-25-39 UDC 339
EU ENERGY policy AND RUssiAN INTERESTS Gokzhaeva E.B.
The article is devoted to the implementation of the energy development plan of the EU which was called «20-20-20 Stra-tegy» and in this context the possible interaction scenarios with Russia.
A number of the article provisions: presented consumption forecast of Russian energy resources to the EU, promising options for the structure of energy consumption in the EU, the development strategy of «Northern latitudinal way» as a response to EU sanctions against Russia in the energy sphere have the scientific novelty.
The paper is exploratory in nature reflecting the proposed strategic and tactical goals of Russia in the energy market of Europe.
Keywords: structure of consumption of Russian energy to the EU; energy market of Europe; Northern latitudinal way.
ЭНЕРГЕТИЧЕСКАЯ ПОЛИТИКА ЕС И РОССИЙСКИЕ ИНТЕРЕСЫ
Гокжаева Е.Б.
Статья посвящена реализации плана развития энергетики ЕС, который получил название «Стратегия 20-2020» и, в этом контексте, возможным сценариям взаимодействия с Россией.
Ряд положений статьи: представленный прогноз структуры потребления российских энергоносителей ЕС, перспективных вариантов структуры потребления энергоносителей в ЕС и стратегия развития «северного широтного пути» как ответ на санкции ЕС против России в сфере энергетики, обладают научной новизной.
Статья имеет исследовательский характер, выражающийся в том, что предложены стратегические и тактические цели России на рынке энергоносителей Европы.
Ключевые слова: структура потребления российских энергоносителей ЕС; рынке энергоносителей Евро-пы;северный широтный путь.
Purpose
The purpose is to determine new energy strategy between the EU and Russia.
Materials and methods of research
The research based on ideas of A. Konoplyanik, V. Esheev, A. Hi-tun, A. Kurdin etc. The information was gathered from literature,
newspapers, the Internet and by interviewing practitioners, official materials like sessions of the Russian Federation State Council Presidium Energy, The Analytical Centre of Strategic Research in Energy under the Government of the Russian Federation etc. Of particular importance for the formation of the author's approach was the study of specialized foreign information resources such as the Independent Oxford Institute for Energy Studies. The following methods were used - analysis, analogy, method of aggregating, synthesis.
Research results and their interpretation
Currently the plan of the energy sector of the EU called «20-20-20 Strategy» is being developed. According to the document by 2020 the emissions of carbon dioxide in the atmosphere should be reduced by 20% (compared with the 1999 level), the share of energy from renewable sources in total energy supply - increase to 20% (the share of re-newables in the energy sector of Europe should increase from 10-15% to 30% in h.), and the total energy consumption is reduced by 20%. The plan will cost the EU dearly - not less than €1 trillion by 2020.
New energy strategy of the EU is dictated not only by the desire to reduce dependence on imported fuel, but also by care for the environment: the transition to alternative sources of energy should radically improve the state of environment in Europe.
If an ambitious target to reduce emissions by 20% is implemented, it will lead to an increase in the share of consumption of the most pure hydrocarbon gas. And this in turn means that in the near future the EU will have to actively search for additional volumes of gas - otherwise, it faces an even greater dependence on Gazprom. But in the long term,
the increase in the share of energy from renewable sources and the desire to minimize the energy consumption can weaken the positions of Russian exporters of hydrocarbons in Europe1.
In Europe gas production will continue to decline - by 2040 the region
will lose 40% of its production. While geological problems and rapid production decline in the largest oil field in the Netherlands will deprive Europe of the main part of flexible offers. Only Norway will be able to maintain current production levels over the studied period due to the development of new offshore fields, however, Norway can't significantly increase it. New discoveries in the Eastern Mediterranean can solve the problem of gas supply to the coastal countries, but also unable to compensate for the drop in production in Europe in General. The share of net imports in consumption of gas from 37% in 2010 will reach 69% in g, is projected to decrease gas consumption by almost 50 billion cubic meters due to sluggish economic growth amid strong energy saving, and to a greater extent as a result of policies promoting alternative fuels.
The EU will use all the tools of the state energy policy to reduce the share of gas in its energy mix. Not only regulation but also interfuel competition will contribute to the reduction of demand in Europe, the gas generation is unattractive in terms of high gas prices, low prices for coal and CO2, as well as subsidizing renewable energy sources (RES). The share of renewables in the energy sector of Europe
1 http://greenevolution.ru/enc/wiki/strategiya-20-20-20/
should increase from 10-15% to 30% in g, approaching 900 tons in absolute terms.
In Europe it is expected to decrease the development of nuclear energy due to the political decisions and public rejection in a number of EU countries (with 135 GW in 2010 to 111 GW in g) retaining, however, a high level, averaging 18% in 2010 to 25% in g.
In general the interests of Europe in the area of energy can be described as follows: the maximum transition to LPG; the development of a network of pipelines, romoting the production and the use of shale gas2 from different regions, excluding Russia.
The Interests of russia
Summarized Russia's interests can be thus: the maximum development of the pipeline infrastructure in Asia; share increase in the world market of liquefied gas through the development of the sector; the construction of tankers and icebreakers for the Northern latitudinal stroke.
Despite the decline in Russian crude supplies to Europe by 2020, domestic suppliers will retain for the period of up to 40% of the European market of raw materials, however, this «stability» will be associated not with the gross increase in Russian supplies in this direction but with the decline in total import needs of the European market under the influence of three key factors:
• significant reduction up to 2020 European volumes of low-margin refining;
2http://www.oxfordenergy.org/wpcms/wp-content/uploads/2014/09/ OEF-97.pdf
• increase of European production due to the commissioning of new Norwegian fields;
• decline in European demand for oil products.
On the European natural gas market Russia will be able in the short term even slightly strengthen its position in 2015 due to a shortage of Russian gas deliveries to maximize the share of imports and consumption in Europe, but then a long decline of this share will begin and only after 2035 with the arrival of the next wave of supply shortages, Russia will begin to recover. While current geopolitical tensions between Russia and the West it is difficult to imagine a complete failure of the EU refuse from Russian energy in the long term.
Of course the decline in exports to Europe (and this is over 100 million tons of petroleum products, more than 180 million tons of oil, accounting for almost 75% of total exports of liquid fuels from R f, and 130 billion cubic meters of gas - or about 60% of total gas exports) will seriously affect the country's budget. In addition with limiting access to technology Russian oil industry will be forced to invest additional funds in their own production equipment, or to increase its purchases in China, expanding the partnership in the energy sector between the two countries. This will have a negative impact on the increase of costs while developing new projects, as well as it will lead in some cases to the postponement of their inputs. It will be the most painful for deep processing of oil and gas and LNG projects -commissioning of the first projects will be pushed a decade back and introduced to new turns, it will be slower than planned, as we will have a domestic production of equipment for production lines of gas liquefaction.
However the negative effect of the possible sanctions will inevitably be mutual. The outgoing volume of Russian exports will inevitably lead to a rise in the European oil prices in the short term. It is important to note that the rise in oil prices in this case will be mostly speculative and from the point of view of the global market economy can succeed without a significant increase in production costs to cover the Europeans shortage of crude oil. In addition the outgoing Russian oil supplies in the short term can only be met with additional production in the volatile Middle East and North Africa. Then these countries will provide up to 70% of total demand for imports of oil (as if the sanctions will affect Kazakh oil supplied through the territory of the RF CPC, and up to 80%). Such imports from the region, where at any time there is a risk of armed confrontation, not in any way tally with the objectives of Europe's energy security and uninterrupted power supply.
An additional risk to the European economy in the event of imposing sanctions on Russia is formed in the oil market where Europe will be forced to obtain additional 100-110 million tons of petroleum products, primarily diesel fuel, all from the same middle Eastern plants. Thus, Europeans in addition to increasing dependence on middle Eastern suppliers will have to invest in the loss-making processing to provide additional volumes of petroleum product production.
Of course possible sanctions could have a significant impact on the economic welfare of Russia within 3-5 years following entry in this case however the Russian economy will produce a complete «reversal» in Asia ensuring the supply of crude oil to the enormous needs of the region. Of course this will require significant investment in
transport infrastructure (the total investment in the construction of the Northern latitudinal stroke» more than a trillion rubles3) and possibly also during the first years after the entry of sanctions - ensure transit corridors shipments to China, for example, through Kazakhstan, but in 5 years this will allow Russian economy to fully turn to the East, but Europe in this case will almost completely lose reliable partner and supplier of raw materials.
The cessation of gas supplies will have even more painful consequences for European consumers - there is no free gas capable of replacing the outgoing volume of Russian exports in the market. Europe will have to urgently switch to coal and more expensive oil products for power plants and domestic consumers, but these opportunities are limited (technically - not more than 70 billion cubic meters). Part of the demand will remain uncovered, likely serious interruption of the power supply in Eastern and Central Europe and gas prices in the European market will grow twice - to 800 dollars/thousand cubic meters. Since Europe will have to join the fierce price competition for an additional LNG to customers in the Asia-Pacific region prices will rise not only at European but also at the Asian LNG market.
Russian redirect gas supplies to Asian market will have the consequence of destabilizing impact on global gas markets which is already facing a shortage. In this case the gas pipeline «Altai» will be introduced as soon as possible and will allow us to redirect some of the gas of Western Siberia for export to China (although, of course, completely restore the volume of supply will not work).
3 http://www.rg.ru/2012/07/23/gaz-site.html
The decline in the supply of crude oil to Europe will intensify competition between pipeline and sea transport in the Western direction. So if in 2010 through a system of pipelines «Druzhba» 55 million tons were delivered, by the year 2040 the loading of the pipeline will be reduced to 45 million tons. The growth of exports through ports on the West is not expected and their current load (more than 125 million tons of oil in 2010) will be reduced more than 3 times to 35-40 million tons per year.
Despite the decline in the export of oil to the West Russia will increase its influence as a transit country passing through the Caspian pipeline Consortium Pipeline system to 65 million tons of Caspian oil (mostly from fields in Kazakhstan).
Export of oil products to the West retains its importance for the Russian oil industry: by 2040 in the country Europe will have up to 90% of the total export of Russian oil products, with an inevitable reduction in the absolute volume of supplies from the current 110 million tons to 65 million tons by 2040.
It is important to note that the decline in the supply of oil products to European markets in different time intervals is influenced by different drivers. Thus in the period from 2015 to 2020 the domestic petroleum products are being squeezed out of the European market with cheaper goods from middle East and Asia (Indian production), resulting in a reduction of the export of Russian oil products by 20 million tons in just 5 years. Interestingly expensive petroleum products of own European production will be displaced from European market from the point of view of costs.
After 2020 the rate of decline of export of oil products in Europe is significantly reduced, as the growing demand for petroleum products in the middle East and Asia makes the producers of these regions refo-cus on the needs of the domestic market, make room for the supplies of Russian oil products and negligible growth in its European refining. However even after 2020 an additional niche for the domestic supply of petroleum products in the European market is not open primarily due to the downward dynamics of demand for oil products in Europe.
The reduction of deliveries of oil products to European countries and the lack of supply growth in other areas may have an economic explanation. Modern ratio of prices in the world markets of oil and oil products, Russian customs duties and excise taxes, as well as the structure for developing products of most domestic refineries are such that the cost of the basket is stamped abroad of petroleum products at 1-3% less than the supply abroad tons ofWest Siberian oil from which they are made. In fact it means a negative value added to oil which leads to the fact that domestic companies are more profitable to export crude oil rather than petroleum products.
In turn for the state reduced (compared to oil) customs duty on petroleum products leads to loss of fiscal revenues from exports. According to estimates, in 2014 the budget is 15% of the extailors revenues less with each exported tons of petroleum products than on crude oil exports. These losses are partially compensated by revenues from excise duties on petroleum products, but also for the state and for companies in the supply of crude oil in the current regulatory conditions remain preferable exports of refined petroleum products.
Thus reduction of the interdependence of the market of liquid fuels from Russia and Europe is expected, while reorienting exports of crude oil to the East.
In principle, the state of the resource base of the gas industry allows significantly increase production, but it will require the involvement of reserves with high production costs). In the period until 2040 mining native and associated gas will increase from 649 billion cubic meters in 2010 to 870-970 billion cubic meters by 2040 (33-49%) -depending on the scenario. Most of the prey's resources and only in the high scenario the «Other Asia» will require additional new discoveries.
Coal exports to Europe is carried out mainly through the Northern ports of Russia (Murmansk, Ust-Luga), Ventspils, etc. Through the Far East ports (Vladivostok, Vanino, Nakhodka, etc.) Russian coal is exported to Japan, South Korea and China. Expansion of infrastructure (Railways and ports) will fold decisive for the development of the industry to export coal to Asia-Pacific market.
In summary Russia's strategic and tactical purposes on European energy market should include:
1) safeguarding investments in infrastructure and energy project manufacturers (Russia needs to invest in the energy industry more than $ 3 million);
2) one of the principal areas is to maintain relations with traditional customers with the simultaneous diversification of markets, for example, in the Asia-Pacific region;
3) it is necessary to increase the competitiveness of Russian fuel and energy complex in the world markets through the
introduction of new technological standards (including the export of technology), development of external and internal infrastructure. Equity participation of Russian companies in the ownership and management of transit infrastructure. Resource-innovative development relies on the coordinated and full use of domestic resources and innovative capabilities through the formation and support of long production chains with their saturation of innovative and knowledge-intensive technologies;
4) development of D.V. East and Siberia, the Yamal Peninsula and the continental shelves of the Arctic and far Eastern seas. Its necessary to shift priorities from production to deep processing and the saturation of the processing and manufacturing industries and knowledge-intensive innovative technologies;
5) the completion of the separation of natural monopoly activities from competitive in the system of JSC «Gazprom»; the transition from regulation of wholesale gas prices to the regulation of tariffs for gas transportation through main gas pipelines;
6) development and/or improvement of mechanisms of exchange trade markets for all types of energy and energy products, including the introduction of trading natural gas and coal. In these circumstances there is a reasonable question of the gradual recovery of the Russian participants from Western exchange trading and entering the Asian trading platform that has the potential to form Russian's own oil marker for Asia
and reduce the influence of Western European Brent on price quotations Urals;
7) increase of energy efficiency in Russia on the basis of the best available technologies;
8) increasing practice of exchange of energy assets; development of the mutually beneficial exchange of energy assets;
9) Russia's exit of on the world market of liquefied gas;
10) to continue the dialogue with major customers and suppliers, the presence in organizations such as OPEC, the Shanghai cooperation organization, the Forum of gas exporting countries, the IEA and others;
11) adaptation to new forms of pricing, caused by new realities in the gas market (the third energy package, the Target model of the natural gas market). Promote positive and non-discriminatory cooperation in the field of energy; the export of services in the field of energy;
12) active participation of Russia in the energy sector of the future (energy tidal, hydrogen and fusion energy). Addressing issues of cross-border cooperation on the territory of the Caspian sea. The creation of the resource and industrial clusters and production chains (nuclear power, gas, chemical, etc.);
13) diversification of export energy markets;
14) the change of the export structure in favour of products with high added value;
15) participation in the formation of common energy markets of the Eurasian economic space on mutually beneficial conditions.
conclusion
Despite the EU sanctions against Russia the dialogue with major customers and suppliers, Russia's active participation in the development of future energy, adaptation to new forms of pricing, including the improvement of mechanisms of exchange trade should be continued.
References / Список литературы
1. http://greenevolution.ru/enc/wiki/strategiya-20-20-20/
2. http://ac.gov.ru/files/pubHcation/a/2194.pdf
3. http://www.oxfordenergy.org/wpcms/wp-content/ uploads/2014/09/OEF-97.pdf
4. http://www.kommersant.ru/doc/2434068
5. http://ac.gov.ru/files/publication/a/2194.pdf
6. http://www.rg.ru/2012/07/23/gaz-site.html
7. http://ac.gov.ru/files/publication/a/2194.pdf
DATA ABoUT THE AUTHoR
Gokzhaeva Elena Borisovna, Doctor of Economics, Senior Researcher
Institute of Contemporary International Studies B. Kozlovskyper., 4/1, Moscow, Russian Federation e-mail: egokzhaeva@mail.ru
данные об авторе
гокжаева Елена Борисовна, доктор экономических наук, старший научный сотрудник
Институт актуальных международных проблем (ИАМП) Дипломатической Академии МИД России
Козловский Б. пер., 4 с. 1, г. Москва, Российская Федерация e-mail: egokzhaeva@mail.ru
