Energy Geopolitics and Development

							Economy and Territory Transport, Energy and Territory

Energy: Geopolitics
and Development



Adolfo Calatrava García                     el, is the study of the oil market. Since     though the end of open fighting, in May
Universidad Autónoma                        1970, world energy consumption has            2003, raised hopes that the country
de Madrid                                   almost doubled. Between 2001 and              would be pacified and its oil produc-
                                            2002, primary energy consumption in-          tion would be developed (Iraq is the
Alejandro V. Lorca Corrons
                                            creased 2.6%. In spite of this, oil con-      country with the second largest proven
Jean Monnet Chair
                                            sumption decreased slightly, falling          oil reserves, with more than 10.5% of
Universidad Autónoma
                                            0.7%, and this decrease has continued         world reserves in 2002), the uncertain-
de Madrid
                                            in the first months of 2003. However,         ties continue due to the attacks by re-
                                            the forecasts are for growth in coming        sistance groups. Since the 70’s, the oil
Energy can be viewed as a basic fac-        years. It is vital to take into account in-   markets have undergone a regionali-
tor of any civilization in the course of    creases in energy consumption in any          zation process by which each of the
History. At present, and for more than      analysis of the evolution of the energy       three main centres of energy con-
200 years, our societies’ energy sup-       situation and its geopolitical implica-       sumption, USA, EU and Asia-Pacific
ply is provided mostly by fossil fuels:     tions. The reason is that it is vital that    (basically Japan, China and India),
oil, gas and coal. Between them, they       the energy markets, and the oil market in     have obtained their supplies from the
account for almost 90% of primary en-       particular, be able to cover increases        closest producing markets. In the case
ergy consumption in 2002. Although          in demand. If imbalances should arise         of the United States and the EU, this
the use of nuclear and renewable            due to excessive competition caused           policy sought to decrease the high de-
(wind, hydroelectric, solar…) energies      by a decrease in supply, oil prices           pendence these regions had on im-
has increased in recent years, it is un-    would quickly escalate, triggering se-        ports from the Persian Gulf. These re-
able to cover the demand. In addition,      vere economic crises in net consumer          gions produce less oil than they
nuclear energy is rejected by a large       countries. Another important data for         consume. Even so, North America ac-
part of society because of the danger       analysing the energy markets is the           counts for almost 20% of oil produc-
posed by accidents in nuclear power         evolution of oil prices per barrel. The       tion in 2002 and West Europe almost
plants and the problem of dealing with      prices can be used to measure differ-         10% (EU plus Norway). During the
radioactive waste. Within these fuels,      ent market situations, although they          same period, USA consumed 26% of
the main energy source is oil. This re-     only have a serious impact if the             the world oil production and the EU
source dominates energy geopolitics         changes are abrupt. In July 2002, a           countries almost 18%.
and is an essential factor in general       barrel of Brent costed about 25 dol-          The world’s oil-producing regions are
geopolitics. In 2002, oil accounted for     lars. This price was maintained until the     headed by the Persian Gulf, with 65%
37.5% of the primary energy con-            end of 2002. From then on, the price          of proven reserves in 2002; the Eura-
sumed in the world, compared with           increased until it reached almost 35          sian area (Europe, Russia and the
24.2% and 25.4% for natural gas and         dollars per barrel in July 2003. The oth-     Caspian region) accounted for barely
coal, respectively. However, it should      er types of crude have followed a simi-       10%, with South and Central America
be remembered that oil derivatives are      lar trend. The reasons for this increase      having the same percentage. The North
virtually the only fuel used in a vital     are, first of all, the strike at the State-   American reserves amount to less than
strategic sector: transport. In addition,   run Venezuelan oil company during the         5% while those of Africa account for
at present, the crude oil market is the     first weeks of December 2002, which           7.5%; of this, 4% is concentrated in the
only one that is flexible enough to cre-    drastically reduced oil exports from          South Mediterranean countries. The re-
ate a world trade space, although nat-      Venezuela (the world’s fourth largest         mainder corresponds to Asia-Pacific.
ural gas will become increasingly im-       exporter in 2002, with almost 2.5 mil-        Although these figures may vary as new
portant in coming years.                    lion barrels per day). And, with a deep-      oilfields are found, since late 2002,
Because of this, an indispensable           er impact, the Iraq crisis since the be-      most of the new finds have been con-
component of any geopolitical energy        ginning of 2003, culminating in the           centrated in the Gulf of Guinea. Thus,
study, whether at global or regional lev-   invasion of the country in March. Al-         the fundamental importance of the Mid-
dle East (Persian Gulf and North Africa)            Canal and the Sumed oil pipeline) and        trade has the French, Spanish and
in the world oil market is undeniable. In           from the Russian Black Sea port of           Turkish ports as its main destinations.
2002, the United States imported                    Novorosiisk (through Turkish straits). A     As liquefaction of natural gas becomes
about 11.4 million barrels per day of oil           small proportion of the exports heading      more commonplace, which makes it
and it is the world’s largest importer.             for the United States also passes            much easier to transport, trade of this




                                                                                                                                              Panorama: the Mediterranean Year
20% of this was supplied from the Per-              through the Mediterranean. There is al-      energy source will increase significant-
sian Gulf region, and another 20% from              so a traffic of refined products in the      ly in the Mediterranean. From July
Venezuela, Nigeria and North Africa.                reverse direction, from north to south,      2002 to July 2003, about 21.5% of the
For 40% of its imports, it depends on               although this is decreasing as the Mid-      world’s liquefied gas trade took place
OPEC countries. Another 30% is im-                  dle East oil exporting countries build       around the Mediterranean.
ported from its neighbours Canada and               their own refineries, both to cover do-      These figures alone are ample proof of
Mexico, while the rest is bought from               mestic consumption and to export this        the importance of the Mediterranean
South America, North Sea and various                type of product. Between July 2002           in the energy field. However, we should
African countries. The country’s inten-             and May 2003, about 300,000 barrels          also consider a qualitative value: a two-
tion is to increase its purchases on the            per day of oil crossed the Suez Canal        way dependence is created across the
American continent and the Gulf of                  southwards, of which 80% were re-            Mediterranean, in energy terms, be-
Guinea. However, in spite of this, the              fined products.                              tween its north and south shores. The
foreseeable significant growth in its               During 2002, about 3.5 million barrels       EU, and in particularly the southern EU
demand will inevitably increase its de-             per day entered the Suez Canal and           countries, import a significant percent-
pendence on the Persian Gulf in com-                the Egyptian port of Sidi Kerir on the       age of their energy requirements from
ing years.                                          Mediterranean from the Persian Gulf          the North African countries. At the




                                                                                                                                              Med. 2003
In 2002, Japan imported almost 80%                  region. More than 90% of this was            same time, these countries receive an
of its crude oil from the Persian Gulf.             bound for the EU. During the same pe-        essential cash flow to carry out their
Although the percentages are lower,                 riod, 2.6 million barrels per day were       economic and social development.1
the same trend can be observed for the              exported from the North African coun-        This dual dependence was already ob-
other countries in the Asia-Pacific                 tries, of which 1.75 million barrels per     served in the Declaration of Barcelona
region, due to the lack of reserves in              day were destined for European coun-         in 1995, which gave birth to the Euro-
that region. In 2002, China imported                tries. Finally, about 1.7 million barrels    Mediterranean Partnership, and which
nearly 40% of its oil needs from the                per day crossed the Turkish straits, al-     devotes a specific chapter to the sub-
Persian Gulf. However, in coming                    most all of it bound for the EU. In total,   ject of energy. From that year onwards,




                                                                                                                                              190-191
years, this percentage will increase                the movement of crude oil in the             a series of Ministerial Conferences
drastically.                                        Mediterranean amounted to 7.8 million        have been organised among the asso-
In 2002, the EU imported almost 12                  barrels per day in 2002, somewhat less       ciate countries, stressing security of
million barrels per day, 80% of its total           than 18% of the total world crude oil        supply, free trade and environmental
requirements. According to Eurostat,                trade in 2002. These figures will tend       protection. In May 2003, an Euro-
27.5% of this was supplied from East                to increase, at least in absolute figures,   Mediterranean Ministerial Conference
Europe, mainly from the Russian Fed-                due to the growing demand for oil.           was held in Athens. At this Confer-
eration; 24.6% from the Persian Gulf;               As regards natural gas, Algeria is the       ence, it was agreed to develop the
almost 20% from Norway; 16.4% from                  source of most of the exports sent           goals that had already been proposed,
North Africa; and 4.1% from West                    across the Mediterranean. In 2002,           specifying that all the sectors involved
Africa. In other words, about 45% of                29.3 billion cubic metres were sold          should draw up the «Priorities for the
imports cross the Mediterranean,                    through the gas pipelines that con-          period 2003-2006». These priorities
amounting to almost 5.5 million barrels             nects Algeria with Spain and Italy (and      should include shipping safety prob-
per day.                                            its branches to Portugal and Slovenia).      lems due to the increase in energy traf-
The Mediterranean is one of the plan-               Also, 32.1 billion cubic metres were         fic and the development and funding of
et’s main energy exchange centres,                  exported as liquefied gas in tankers. Of     North-South and South-South trade
concentrating the oil and natural gas               this, 26.8 billion was supplied from Al-     networks. In any case, the priorities will
exports to the EU from North Africa,                geria and the rest from the Persian Gulf     be given final form at the meetings that
the Persian Gulf (through the Suez                  countries (particularly Qatar). This         follow of the Energy Forum.




1   At least in theory, as resources are distributed unequally in each country.