Why are Americans afraid of gas OPEC?

American's fears are tightened with that any coordinating structures in the sphere of exploring, extraction and export of natural gas in long-term perspective could become transnational monopolies which will be able, from one side, dictate prices on world energy market, and, from the other side, modify economic dominating into political.

In the first case global market economy fundamental principles in the sphere of competition and equal access to energy resources will be destroyed, in the other case - the US could lose its influence in the West security questions decision-making process.

Of course, all mentioned above could be considered as assumption, and probability of possible dictate from the direction of the alliance of so-called "resource countries" - as remote and optional perspective.

International economy development logics could correct Russia's plans and make steps to force gas OPEC loose its actuality before first steps for alliance reforming would be done.

However it is not possible not to count that by now there are forecasts which are able, first of all, stimulate the process of gas OPEC establishment, second of all, make world consumers make steps which stops above-named process.

According to the forecast made by Energy Administration (EIA) at the US Energy Ministry, by 2014 oil barrel may cost USD 49 taking into account the US inflation rate, by 2030 - USD 59. In Russia, as the EIA expects, oil production by 2030 will grow insignificantly, gas production - almost by 1,5 times. Such price level, according to the EIA experts, may bring trade balance deficit to Russia.

EIA publishes demand, consummation, price forecasts for energy resources in the world once a year. The basic variant is based on the fact that world economy will grow annually by 4,1 %, all energy resources consummation will grow by 57 % up to 205 trillion kwh.

Tendencies

The biggest consumer group will be Asia and the Pacific. They will consume annually 80 trillion kwh. The main countries which will define energy demand are China and India. Energy consummation in these countries will grow by 3,5 % and 2,8 % a year correspondingly (in the world - by 1,8 %).

China will appear the second energy consumer in the world by 2030 (42 trillion kwh) after the US (47 trillion), European economies as presumed will notably lag behind stated level.

At this it is underlined that coal and natural gas consumption will grow in advanced. Together with oil share in world energy balance will decrease in 25 years according to basic scenario from 38 to 34 %. At this price for oil will remain as current - in USD of 2005 (with the US inflation rate correction) oil barrel by 2014 will cost USD 49 долларов, by 2030 - USD 59. By 2030 USD oil will cost USD 95.

Different scenarios

The pessimistic scenario assumes that oil in 25 years will be cheaper, about USD 36 (in 2005 USD price). Optimistic scenario predicts USD 100 per barrel, or USD 157 in USD of 2030.

Both scenarios are different in world economy growth rates terms. Besides, oil will be more expensive if it is less produced, for instance, because of extraction nationalization. There are all factors for this scenario. In Venezuela, for instance, oil sphere is being actively nationalized, and once oil demand is growing such tendencies could become stronger.

From the other side, OPEC countries will stricter quote oil extraction not to make world oil market fail, the US intention to provide Middle East oil control could force centrifugal power which aims to put state oil control.

From the third side, Caspian Sea countries will do all the best to control exploring, extraction and oil supply to the world market. One of the most diversified oil markets is in Kazakhstan where together with Kazakh National "KazMunaiGas" company work different transnational companies - also shows a tendency to centralized oil control. Because of natural reserves legislation amendments, "KazMunaiGas" has by now priority right to redeem 50 % share in any oil deals. Talking about Russia, we can say that there is no threat to Russian oil giants' monopoly in the nearest future.

The energy balance has changed

EIA basic forecast for 2014 for Russia means significant trade deficit while keeping the current export structure. The only one way to escape the deficit is to increase share in production and service with high level of processing export. This task is placed in Russia very often, however Russian economy real diversification is not yet visible.

The US, China and India should seriously think about energy resources supply diversification because these countries, according to the EIA forecast, will guarantee the half of oil consummation growth. The earth will need not 82,5 million of oil barrels a day as in 2004, but 117,6 million of barrels. In spite of this and even having high oil price for oil, its share in world energy balance will decrease from 37,7 to 30,8 %.

At this gas consummation will grow from 2,8 to 4,6 trillion of cubic meters. In Europe gas consummation will grow from 509 to 736 billion of cubic meters, its share in European energy balance will increase from 23,8 to 30,9 %.

China once again

Chinese market will grow by leaps and bounds. At this, gas demand in China will grow in geometric series - from 39 to 192 billion of cubic meters. 113 billion of cubic meters out of them will take own extraction. Oil consumption in China will grow more then twice - from 6,4 to 15,7 million of barrels.

As a result China share in Russian export of energy resources will grow but the first place will be kept by the EU.

Similar oil export growth dynamics could be expected for Kazakhstan. If for Russian transport and energy complex the priority remains the European market, for Kazakhstan - Russian export direction if Moscow does not place obstacles and fastly increase taxes for oil transportation through the line of Atyrau - Samara.

Assumed, that oil extraction growth will be guaranteed by OPEC. From overall growth in 35 million barrels a day they will give 22 million.

Russia's perspectives

In EIA forecast on Russia experts state that oil extraction will grow up from 9,5 million barrel a day to 11,5 million, gas - from 623 to 991 billion cubic meters. Key factor of weak oil extraction growth is current Russian government policy based on monopolization of oil extraction. State regulation of the sphere slows down its development and makes oil extraction growth slower.

From the other side, potential oil reserves by now are in Siberia where oil layer location is deeper which means more expensive mining cost. In this connection the policy of constant oil fields exploring is more appropriate to get back to the question on another technological level which will be able to decrease mining costs and make it more profitable. There is no reason for Russia by now to harp0ly increase extraction because in the condition of direct competition with Persian Gulf oil Russian oil will definitely loose.

On post-Soviet area the main oil growth is expected by EIA in Caspian Sea region. Region countries will demonstrate the highest growth temps of the world oil extraction - about 4,3 % a year. Kazakhstan is a leading country where extraction will grow from 1,3 to 3,7 million barrels a year.

Frankly speaking, oil sector analysts think Russia gas extraction forecast as a top-heavy. If taking into account 30 % growth forecast, new fields exploring will need significant investments.

Judging by foreign investments attraction dynamics into gas extraction sphere, Russia will not have such money in the nearest future. From the other side, there are all preconditions that Central Asia will draft on gas extraction to get resources for national economies modernization.

Having strategic pipeline "Middle Asia - Center" together with trilateral agreement on trans-Caspian gas pipeline which will be placed in parallel to existing one Russia does not have a reason to increase extraction on its territory. Central Asian countries will solve this problem if Moscow provides necessary capacities for gas carrying out of the region.

Everything depends on energy resources carrying economic advisability through Russia territory.

The illustrations is provided by http://www.rpmonitor.ru