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Energy: Europe’s Escape Routes from Moscow

Jeffrey White, Business Week
The EU hopes that several planned pipelines will provide a way of circumventing Russia’s stranglehold on natural gas supplies
Wary of Moscow’s stranglehold on natural gas supplies, the EU hopes several planned pipelines will provide a way out.

Russia’s threat in early August to nearly halve the amount of gas it exports to Belarus over unpaid bills must have brought back bad memories for many in Europe.

Memories, for instance, of earlier this year, when Russia cut off the gas that flowed through its Druzhba pipeline to Belarus in a dispute over price hikes and tariffs. At that time, a wave of disruption surged down the supply chain.

Within days, the Czech Republic and Slovakia (who rely on Russia for around 65 percent of their natural gas) saw their shipments halved. Poland and Germany began tapping reserves, and other countries looked to increase imports from other suppliers like Norway.

It was not the first time a row between Russia and one of its neighbors had held some of Europe’s energy supply hostage
(13 August 2007)

Energy-hungry Turkey drilling for more oil

Fazile Zahir, Today’s Zaman (Turkey)
You may think that you cannot do without your car and therefore without the automotive industry, or that you can’t live without your computer and consequently the information technology industry.

However, in reality there is just one industry which is more important than any other: the traditional energy industry. Without fuel from crude oil and natural gas, modern society and all its accoutrements would grind to a halt as cars would run out of oil and laptop batteries would never be recharged. Turkey is, sadly, energy poor; that is to say it lacks large fossil fuel reserves and has had to spend millions of YTL to generate power from its limited natural resources by building hydroelectric dams across most major rivers, solar panels on many houses and wind farms on the Aegean coast.

Other alternative supplies like a nuclear power plant at Akkuyu remain unrealized even after a decade of planning. Geothermal energy sources, while significant, have yet to be comprehensively exploited. Alternatives to fossil fuels currently only provide around 15 percent of Turkey’s needs, and global warming has begun to have serious adverse effects on hydroelectric power output.

Fossil fuels supply over two-thirds of Turkey’s energy needs while over 75 percent of its oil for consumption is imported. Unfortunately, much of this is supplied from countries such as Iran and Syria, which have a history of hostility towards Turkey. It has been forced to foster better relations with suppliers like Libya — where there is less bad blood — and become involved in exploration projects in partnership with the Israelis in the Mediterranean.

However, recent surges in the price of international crude oil — which have increased to as high as $78 per barrel — have simultaneously alarmed Turkish politicians and opened new doors of opportunity for the national oil industry
(14 August 2007)

Getting a grip in Iran
The president wants control of the economy

The Economist
The Iranian president, Mahmoud Ahmadinejad, has engineered the removal of Iran’s oil and industry ministers in a move widely interpreted as signalling his push to impose his will and control over core areas of the economy in the lead-up to the parliamentary election scheduled for March 2008.

The oil minister, Kazem Vaziri-Hamaneh, and his industry colleague, Alireza Tahmasebi, were both reported to have tendered their resignation, but it has been widely assumed that Mr Ahmadinejad ordered their removal….

The replacement of the oil minister of one of OPEC’s leading member states-Iran is the second-largest producer in the group, after Saudi Arabia-would normally be expected to cause ripples in the world oil market. However, the reaction of the oil market has been muted, reflecting the dominant view that these moves have more to do with domestic politics than with oil policy. Mr Ahmadinejad seems to be hoping that with parliament distracted with the impending elections, he will be able to force through his new nomination without too much hindrance. Gaining control over the oil ministry is deemed critical for a president who was elected on a pledge to bring oil revenues to each and every Iranian household. Having failed to live up to such promises after almost two years in power, and with sentiment turning against an administration that recently imposed fuel rationing on an unsuspecting population, Mr Ahmadinejad has made his oil minister a convenient scapegoat.
(14 August 2007)