Today, tomorrow, the day after tomorrow
"The USA supports avoiding monopoly over the natural gas supply to Europe and expects Azerbaijan to play a key role in this regard," said the US Assistant Secretary of State for European and Eurasian Affairs, Daniel Freed.
What do such statements mean for Azerbaijan? Assurance? Reliability? Future?
The structure changes which took place in the world market over the recent period were caused by the issue that the worldwide practice of relations which exist between the producers and consumers don't satisfactorily satisfy each other. The mechanism of forming the energy market which became complicated in the second half of the 20th century became more difficult as a result of the political scandals and economic blackmails.
The situation in the worldwide energy market is characterized through intensification of contradictions which are being maintained in the whole forecasted period. The key reason for the geo-political tension is the conflict potential which is in existence in the distribution of oil resources in the planet.
The number of the regions decreases where the rapid growth in the production of hydrocarbons takes place without using advanced technologies and production methods, as well as many-billion allocations for the infrastructure. As a result, a range of opportunities converges for the maneuver of the key consumers in the market. Particularly it will take place after 2013-2017.
Already demands appeared for the huge investments into the new oil-bearing regions in Western Africa, Central Asia, Caspian, Russia which can replace the retiring capacities. New large centers of consumption, firstly China and India, appeared.
Taking into consideration that the oil is an energy resource of worldwide importance, gas - regional and coal - local, in the new apportionment, Azerbaijan takes the role of alternative supplier of the energy resources to the world market. Taking into account the structure of the confirmed world oil and gas reserves, it is true to speak about Azerbaijan as strategic partner.
In the new complicated situation, Azerbaijan appeared in the world market of energy resources with a position of guarantee for the energy security of its near neighbors (Georgia) and European countries. Thus, by the end of 2006 the share of Western Europe in oil consumption made up 22% and the Germany is the second gas importer in the world (14%). Only 3.5% of the confirmed worldwide gas reserves and less than 2% of the oil reserves are located in the economic zone of the European Union (mainly in Norway and Great Britain). In addition, the oil and gas fields are more intensively developed there than other regions of the world and it bring to the rapid exhaustion of the resources. The key problem of the European Union is the growth of its dependence on the import of the energy resources: by 2030 this figure will be 70% while the oil import may increase from 76% to 90%, gas import - from 40% to 70% and coal from 50% to 70%.
According to the data by the Russian experts, in the next decade, the development dynamic of the situation in the global energy sphere inherits the tendencies of the foregoing period. The share of the traditional energy resources (oil, gas and coal) in the aggregate consumption of the first energy resources is 80% like 2003-205. the role of the oil in the period of up to 2017 will be maximal (decrease in the interest in oil will possibly begin from 2030).
Probably in the near decade, the oil will be remaining as the key energy source, acquiring nearly 40% of the energy consumption. It is followed by gas (28%), coal (20%), re-established sources (7 %) and nuclear energy (5%). The share of the oil and natural gas will be increasing while the share of the coal and nuclear energy will decrease. Possibly by the end of the decade, the level of the nuclear energy consumption will become stabilized and applying alternative sources will be expanded, but it will not affect the base tendencies in the coming 15-25 years.
Probably the structure of the world energy balance in the long-term perspective (by 2067) will try to transform, mainly through two scenarios.
The first one envisages gradual transition from oil to gas. Later a change will take place towards re-establishment of the sources, obviously towards atomic energy. However, the oil will maintain its position as important energy source, probably by the mid 21st century.
According to the second scenario, if progresses are achieved in the next decade with regards to the water technologies which are capable to replace petrol motors, the decrease in the oil consumption will begin earlier, nearly by 2025. However, many experts accept such development of the events skeptically.
The use of the energy resources will increase with rapider rates by 2012 - averagely 1.6-2% per year. Later slowing down will begin, but generally the key development tendencies will be continuing.
The oil production in the Caspian Sea will increase. In the period of up to 2015, Azerbaijan will occupy the first place with its oil fields of Azeri-Chirag-Guneshli and gas field Shah Deniz. From 2015 the base oil source will be Kazakhstan's field of Kashagan. As regards to the gas, by 2017 the key gas suppliers will be Turkmenistan and Kazakhstan while Azerbaijan's share will decrease.
With regards to the geo-political situation in the Caspian region, already Baku-Tbilisi-Ceyhan pipeline and Baku-Tbilisi-Erzurum pipeline are functioning beyond Russia. Most probably by 2015 a gas pipeline will be constructed from Turkey (in the perspective of gas supply from Iran, Kazakhstan and Turkmenistan) to Europe (Nabucco project).
Therefore, it is possible to expect pressures from the USA and European Union on Turkmenistan in order to pre-direct the gas flows towards the planned gas pipeline. At the same time, Kazakhstan and Turkmenistan are realizing pipeline projects to supply oil to China.
Russia's influence will minimize in the Caspian. After putting Baku-Tbilisi-Ceyhan pipeline into full operation, the oil transportation via Baku-Novorossiysk pipeline will be frozen.
In the near decade, the attention will increase towards the alternative and re-established energy resources. The general interest is being directed towards using water energy, hydro-power, etalon. Most probably serious projects will appear with regards to the use of bio-fuel. The key investments in developing alternative energy resources are expected to be allocated by the USA, Japan, China, as well as leading oil and gas concerns such as ВР, ExxonMobil, Royal Dutch/Shell.
The new technologies will increase effectiveness of the energy consumption, but the share of the alternative energy sources will increase insignificantly. It needs to 63 times increase the capacity of the re-established energy sources in order to cover at least half of the required growth of electric power. Realizing such program within ten years is impossible even for the developed countries.
According to the statements of several economists, the share of the nuclear energy in the next decade will decrease up to 5.3% due to the policy of the developed countries to increase security and ecological reliability of the energy system.
There are risks for the significant drop of the worldwide prices in the medium-term perspective due to the deficit with oil and gas, as well as sharp decrease in the interests of the developed countries towards traditional kinds of fuel and appearance of new capacities in the Caspian, Africa and other regions of the world. As a result, part of investors will remove from the raw material market and it makes groundless the speculations price increase for the hydrocarbons.
Azerbaijan owns 0.6% of all confirmed oil reserves in the world. Azerbaijan's share in the gas makes up 0.7%. In addition, according to the forecasts, the confirmed oil reserves of Azerbaijan will be enough for 29.3 years.
Realizing expensive project such as Baku-Tbilisi-Ceyhan pipeline passed a long way from its necessity to the talks on its transit role to export hydrocarbons from the countries Central Asia in future.
As regards to the perspective plans to transport Kazakh oil via Baku-Tbilisi-Ceyhan, they will be realized absolutely. It is testified by the issue that the consortium of Baku-Tbilisi-Ceyhan includes companies participating in the oil projects in Kazakhstan.
As regards to the internal energy security of Azerbaijan, the share of the alternative energy sources in Azerbaijan makes up 1%, but it is intended to increase this figure up to 2.5-3%.
The projects of the wind power stations already in 1960. For the first time during the USSR period, the wind power cadastre was prepared. With regards to the hydro-power stations, the potential of the country's small rivers was studied in 1980. Thus, in November 2003 Azerbaijan's Ministry of Fuel and Energy began devising a national project on use of alternative and re-established energy resources for a period of up to 2012. On 21 October 2004 the President of Azerbaijan signed a relevant order. This State Program envisages constructing 200 mini hydro-power stations in the Country. The first hydro-power stations will appear in Baku and Absheron, as well as in Nakchivan Autonomous Republic of Azerbaijan. In addition, there are plans to construct more than ten small electric power stations, wind collectors.