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51. Post-sanctions Iran: Impacts on energy markets

Author:
Krševan Antun Dujmović
Publication Date:
06-2016
Content Type:
Working Paper
Institution:
Institute for Development and International Relations (IRMO)
Abstract:
The country of Iran has a key position in energy and general security architecture of the Middle East and the world. The Islamic Republic of Iran preserves one of the biggest energy reservoirs in the world, largely still intact – the country has the second biggest gas reserve and the fourth biggest oil reserve in the world. Its geostrategic location for a major oil and gas exported is ideal as it is located between the oil- and gas-rich Caspian Sea and the globally richest region in terms of energy, the Persian Gulf, where the production cost of oil is the lowest in the world. Still, the country has been isolated since the revolution 37 years ago, and the harsh sanctions targeting the country’s energy sector introduced in 2012 have crippled its economy. After years of exclusion from the major developments in the energy markets, Iran is ready to reclaim its role as a major oil and gas producer after the removal of international sanctions in January 2016.
Topic:
Energy Policy, Sanctions, and Gas
Political Geography:
Iraq, Iran, Middle East, and Persian Gulf

52. The Business of Peace through Green Energy: The HomeBiogas Story

Author:
Yair Teller
Publication Date:
03-2016
Content Type:
Video
Institution:
Clarke Forum for Contemporary Issues
Abstract:
Yair Teller discusses how he is using his company, HomeBiogas, as a mechanism for peace building, sustainable development, women’s empowerment, and improvement of the quality of health and life for citizens of developing countries. Yair Teller is chief scientist and co-founder of the HomeBiogas Company based in Netanya, Israel. HomeBiogas produces a household renewable energy appliance that recycles kitchen waste into cooking gas and organic fertilizer. Profits from sales to suburban customers and a successful crowd-funding campaign are used to support donation of HomeBiogas units to economically disadvantaged Bedouin, Palestinian, and Ugandan families for alleviation of poverty. The work of HomeBiogas has been recognized by the UN and the Peres Center for Peace.
Topic:
Development, Environment, Science and Technology, Women, Gas, Business, and Green Technology
Political Geography:
Uganda, Middle East, Israel, Palestine, North America, and United States of America

53. War and the Oil Price Cycle

Author:
Amy Myers and Jaffe Jareer Elass
Publication Date:
01-2016
Content Type:
Journal Article
Journal:
Journal of International Affairs
Institution:
School of International and Public Affairs, Columbia University
Abstract:
Oil has shaped international conflict for decades. According to one estimate, twenty-five to fifty percent of interstate wars between 1973 and 2012 had oil-related linkages. 1 But the cyclical nature of oil’s contribution to global conflict is not well understood. Not only are oil prices cyclical, but the geopolitics of oil are linked inexorably to the same boom and bust price cycle. Military adventurism, proxy wars and regional pathologies in the Middle East expand and contract with the ebb and flow of massive petrodollar accumulations related to the oil price cycle. The massive inflow of petrodollar revenues when oil prices are high creates disposable incomes that can be easily dispensed on regional arms races, especially since oil consuming countries like the United States are incentivized to increase arms sales as a means of solving oil import related trade deficits. Besides transferring wealth from industrialized countries to oil producers in the Middle East and North African (MENA) region and Russia (and stimulating renewed drilling for oil and gas in North America), high global oil and natural gas prices also slow global economic growth and encourage energy conservation. This causes petroleum demand to slow globally, lowering oil prices. Social and political problems in the region reemerge as oil prices recede. Regional governments have fewer resources to spend on restive populations that have become accustomed to generous handouts enabled by high oil prices. Job creation and visible social programs slow, dissatisfaction rises, and the consequences of economic downturns incite support for militants. Ensuing instability forces governments to use newly purchased arms, which ironically begins the cycle yet again, as new conflicts disrupt oil supplies. In this manner, the world experiences perpetuating patterns of military conflict, followed by oil supply crises, and accompanying global financial instability. In effect, the Middle East resource curse has become globalized. The challenges this is presenting on humanitarian, security and economic fronts have become increasingly dangerous. The arms race that has accompanied the rise of oil prices over the 2000s has been no exception and is now all the more complicated due to the violent participation of sub-national radicalized groups that are less susceptible to diplomatic pressures or initiatives. In this emerging geopolitical context, the rise of violent subnational groups like ISIS and Al-Qaeda are increasingly putting oil infrastructure at risk, laying the groundwork for a future oil crisis that may prove harder to solve than in the past. As borders and ruling institutions have become contested, so has control of the region’s major oil and gas facilities. Initially an outgrowth of disunity inside Iraq, the conflict over oil and gas facilities is now accelerating across ungoverned territories, with important long-term consequences for global energy markets. Mideast oil and gas production capacity, along with surface facilities, are increasingly being damaged in ways that will make them hard to repair. Export disruptions, which were once sporadic, are becoming a more permanent feature of the civil war landscape. The level of destroyed capacity is currently estimated at about 2 million b/d and rising.2 The longer Mideast conflicts fester, the more that infrastructure could become at risk. There is an additional element to this oil and war story that links structurally with the oil boom and bust cycle. As oil prices recede, along with a decreased demand for oil and accelerating regional conflict, wealthy oil producers such as Saudi Arabia, the United Arab Emirates, and Kuwait, are often tempted to use large oil production capacity as a strategic asset. They flood the market with increased supplies in order to lower prices, thereby hurting geopolitical rivals. This price war strategy, which was notably present during the prolonged Soviet war in Afghanistan and the eight year Iran-Iraq War, temporarily ameliorates the short run effects of war on surface export facilities through excessive production rates. In addition, it lays the seeds for the future uptick in the oil market, by discouraging investment in future oil productive capacity outside the Middle East when prices are extremely low. In the case of the 2000s, the destruction caused by ISIS on the oil sector in many locations around the Middle East, combined with expected losses in investment in other parts of the world (like Canada’s oil sands and the Arctic due to current low oil prices), may be creating the conditions for a future oil supply crunch. This has major implications on U.S. policy. This article asserts that the United State would be, in light of these circumstances in the Middle East, unwise to dismantle its Strategic Petroleum Reserve (SPR) as has been suggested on Capitol Hill. It would be similarly unwise for the United States to lose focus on the importance of conservation efforts in the transportation sector which has both national security and climate benefits. The United States would benefit strategically from a reevaluation of its ban on oil exports. Finally, the United States should place a greater emphasis on conflict resolution in troubled states. By resolving internal conflicts over the distribution of oil revenues, the United States can better pave the way for long-term solutions whereby those same revenues can be integrated into national budgets in ways that brings economic prosperity to populations instead of rising military expenditure.
Topic:
Energy Policy, Oil, Military Strategy, Gas, and Conflict
Political Geography:
United States, Middle East, North America, and Persian Gulf

54. Regulation, Conversation, and Impact of Shale Gas and Oil in a Low Price Environment

Author:
David Grossman
Publication Date:
11-2015
Content Type:
Policy Brief
Institution:
Aspen Institute
Abstract:
The 2015 Modern Shale Gas and Oil Production Forum, “Regulation, Conversation, and Impact of Shale Gas and Oil in a Low Price Environment,” convened about 60 invited energy leaders, including regulators from leading producing states and representatives from industry and the environmental community. The discussions covered a broad range of environmental and community effects related to shale gas and oil production, including water use and availability, surface and groundwater contamination, air emissions, land use impacts, induced seismicity, and local nuisance issues. The Forum also benefited this year from a meeting of state regulators that took place in the days immediately preceding the Forum. The focus of this meeting was to discuss the concept of a regulatory consultation and assessment process to promote continual regulatory improvement – an idea initially discussed during the 2014 Modern Shale Gas and Oil Production Forum.
Topic:
Energy Policy, Environment, Oil, Global Markets, Gas, and Regulation
Political Geography:
Global Markets

55. The Hour of Truth: The Conflict in Ukraine–Implications for Europe’s Energy Security and the Lessons for the U.S. Army

Author:
Dr. Ariel Cohen and Ivan Benovic
Publication Date:
11-2015
Content Type:
Working Paper
Institution:
The Strategic Studies Institute of the U.S. Army War College
Abstract:
Since the breakup of the Soviet Union, a number of gas disputes between Russia and Central and Eastern European countries have unveiled the strategic dependence of Europe on Russian piped gas. The recent Ukrainian crisis demonstrated that Europe has a desperate need to improve the security of its gas supply. The United States is interested in the economic stability and growth of Europe, because the European Union (EU) is its principal and largest economic partner. The United States and the EU enjoy the largest trade and investment relationship in the world, which should not be jeopardized by disruptive, anti-status-quo powers. Europe’s energy independence is not only an economic interest of America, but also a political and security one. Europe’s dependence on Russian natural gas undermines European unity and weakens the primary U.S. allies in their relations with Russia. U.S. Armed Forces in Europe and the U.S. Army in particular can and should play an important role in promoting energy security. This involvement includes: increased situational awareness; deployment to the sensitive areas; and enhanced training activities, including with the allies of the U.S. military in Central and Eastern Europe.
Topic:
Security, Economics, Energy Policy, Natural Resources, Military Affairs, and Gas
Political Geography:
Russia, Europe, Eastern Europe, and Soviet Union

56. Fracture Lines: Will Canada's Water Be Protected in the Rush to Develop Gas?

Author:
Ben Parfitt
Publication Date:
10-2010
Content Type:
Working Paper
Institution:
Munk School of Global Affairs at the University of Toronto
Abstract:
On October 14, 2010, POWI released a discussion paper and held a conference on Fracture Lines: Will Canada’s Water Be Protected in the Rush to Develop Shale Gas? The conference and the discussion paper were the first major formal public discussion in Canada of the shale gas issue. As supplies of fossil fuel dwindle, oil and gas companies are increasingly looking to unconventional sources such as shale gas to supply energy needs. The Fracture Lines paper outlined the potential impacts of shale gas exploration and production on groundwater resources, and described the paucity of groundwater mapping and lack of effective regulatory oversight. With possible shale gas deposits in BC, Alberta, Saskatchewan, Ontario, Quebec and New Brunswick and a loud public outcry against shale gas drilling in Quebec, the conference attracted a wealth of attention. Because of its availability in both languages and its timeliness, the conference received extensive media coverage and over 500 logins to the webcast. In the wake of the conference, the research contained in the Fracture Lines report was determined to be a major factor in the decision to expand the terms of reference for a Parliamentary Committee studying offshore drilling issues in Canada. The Committee opted to include shale gas in its deliberations. The issue of how to protect groundwater resources from the impacts of shale gas exploration continues to be a burning issue, across Canada and around the world.
Topic:
Climate Change, Environment, Oil, Water, and Gas
Political Geography:
Canada and North America

57. Iran-Pakistan-India pipeline: Is it a peace pipeline?

Author:
Abbas Maleki
Publication Date:
09-2007
Content Type:
Working Paper
Institution:
MIT Center for International Studies
Abstract:
A major natural gas pipeline that would stretch from the fields of southern Iran to Pakistan and India—itself a remarkable prospect—is being planned. But it faces serious hurdles, not least the fierce opposition of the U.S. government.
Topic:
Diplomacy, Energy Policy, Regional Cooperation, and Gas
Political Geography:
Pakistan, United States, India, and Asia