Gas Exporting Countries Research Articles

The Speech of President Qais Sa’id in the Forum of Gas Exporting Countries: A Study Analysis from the Perspective of Aristotle’s Persuasive Rhetoric

The Speech of President Qais Sa’id in the Forum of Gas Exporting Countries: A Study Analysis from the Perspective of Aristotle’s Persuasive Rhetoric

Natural gas rents and institutions as co-growth drivers: evidence from Gas Exporting Countries Forum with a panel 2SLS approach

PurposeThis study aims to investigate the implications of natural gas rents and institutions as co-drivers of economic growth, focusing on the Gas Exporting Countries Forum (GECF) with panel data between 2001 and 2021.Design/methodology/approachThis research paper uses a specialised two stage estimator, the panel instrumental variable technique (panel IV), which takes care of the potential endogeneity issues in the model.FindingsThe findings show that natural gas rent significantly impacts the economic growth of the GECF. On average, natural gas rent increases the sample’s growth rate by about 2.634% percentage points in the short run. The result indicates that the qualities of institutions (political and economic) have a significant positive long-term effect on the economies of the GECF. In addition, the study’s energy price volatility positively correlates with the countries’ growth.Research limitations/implicationsThere might be a need to investigate the effects of natural gas rents and institutions as co-growth drivers in each country within the GECF. The likelihood exists that the impact of natural gas rents and institutions on economic growth at the country’s level may differ from the outcome of such an experiment on the group level. Because of space and time limitations, this study could not carry out the specific country’s investigation of natural gas rents and institutions as a co-growth driver. That limitation may constitute further study to advance this study to a new height.Practical implicationsWith good institutions, natural gas rent is likely to be an alternative growth driver for some economies that rely on fossil fuels like oil as a growth driver. By extension, the GECF has the potential to rival Organisation of Petroleum Exporting Countries (OPEC) in the global energy market, particularly in achieving Sustainable Development Goal number seven. In essence, evidence in this study suggests that natural gas rent has long-term positive effects on the growth of the GECF, conditioned on good institutions. Moreover, the drive of global energy consumption towards sustainable energy usage is an economic blessing for the GECF. By extension, the demand for natural gas would continue to rise, creating opportunities to improve natural gas rents. By implication, the GECF would continue to benefit from the pursuit of sustainability as the world shifts towards energy consumption with less CO2.Originality/valueFirstly, this study models the qualities of institutions for the GECF. Secondly, to the best of the author’s knowledge, this study is the first attempt to examine natural gas rents and the qualities of institutions as co-determinants of economic growth among the GECF (a potential cartel).

Econometric Analysis of Residential Sector Gas Demand Elasticities in Gas Exporting Countries

This paper examines how residential sector gas demand in gas exporting countries response to changes by taking into consideration the economic variables. For this purpose, the short and long-run price and income elasticities of residential sector gas demand in the GECF countries for 2000 and 2019 are measured. Using Cobb-Douglas functional form, this paper applies the bounds testing approach to co-integrate within the framework of ARDL (Autoregressive Distributed Lag). Findings of this research show that there is a significant long-run relationship in nine GECF countries, including Algeria, Egypt, Iran, Malaysia, Norway, Peru, Russia, Trinidad and Tobago and Venezuela, that use gas as a source of energy in their residential sector. On average, long-rung income elasticity for underlying countries is 2.65, while long-run price elasticity is negative and calculated at 0.79. This shows that in considered gas exporting countries, residential sector gas demand is very sensitive to income policies, while the price policies impact on demand is more limited. Furthermore, short-run income and price elasticities are estimated at 6.99 and -0.02 (near zero) respectively, which implies that natural gas is very inelastic to price, as a result,price policies are unable to make significant changes in demand over the short-term. Meanwhile, as expected short-run price elasticity is lower than long-run elasticities, indicating that gas exporting countries are more responsive to price in the long-term than in the short-term. Finally, it was found that most of the preferred models have empirical constancy over the sample period. 

The geopolitics of the European Green Deal

The European Green Deal is a plan to decarbonise the EU economy by 2050, revolutionise the EU’s energy system, profoundly transform the economy and inspire efforts to combat climate change. But the plan will also have profound geopolitical repercussions. The Green Deal will affect geopolitics through its impact on the EU energy balance and global markets; on oil and gas-producing countries in the EU neighbourhood; on European energy security; and on global trade patterns, notably via the carbon border adjustment mechanism. At least some of these changes are likely to impact partner countries adversely. The EU needs to wake up to the consequences abroad of its domestic decisions. It should prepare to help manage the geopolitical aspects of the European Green Deal. Relationships with important neighbourhood countries such as Russia and Algeria, and with global players including the United States, China and Saudi Arabia, are central to this effort, which can be structured around seven actions: 1) Help neighbouring oil and gas-exporting countries manage the repercussions of the European Green Deal. The EU should engage with these countries to foster their economic diversification, including into renewable energy and green hydrogen that could in the future be exported to Europe; 2) Improve the security of critical raw materials supply and limit dependence, first and foremost on China. Essential measures include greater supply diversification, increased recycling volumes and substitution of critical materials; 3) Work with the US and other partners to establish a ‘climate club’ whose members will apply similar carbon border adjustment measures. All countries, including China, would be welcome to join if they commit to abide by the club's objectives and rules; 4) Become a global standard-setter for the energy transition, particularly in hydrogen and green bonds. Requiring compliance with strict environmental regulations as a condition to access the EU market will be strong encouragement to go green for all countries; 5) Internationalise the European Green Deal by mobilising the EU budget, the EU Recovery and Resilience Fund, and EU development policy; 6) Promote global coalitions for climate change mitigation, for example through a global coalition for the permafrost, which would fund measures to contain the permafrost thaw; 7) Promote a global platform on the new economics of climate action to share lessons learned and best practices.

World’s Largest Gas-Producing Nations: Natural Gas Will Keep the Lights on for the Next Generation

Natural gas is almost certain to be the fastest-growing fossil fuel in the global energy mix for decades to come, comprising 28% of the global energy mix by 2050. Together with renewables, natural gas will likely fuel 60% of global electricity production, be it as pipeline gas, liquefied natural gas (LNG), or blue hydrogen. These are among the forecasts that appear in the 2020 edition of the GECF (Gas Exporting Countries Forum) Global Gas Outlook 2050 released in February 2021 and providing short-, medium-, and long-term energy projections based on assumptions regarding macroeconomic conditions, energy prices, and policies. The report is updated yearly and is the flagship publication of the organization, which represents countries that control 71% of global gas reserves. It is unique in that it focuses exclusively on the global gas industry, which today is providing for 23% of global energy needs. Headquartered in Doha, Qatar, the GECF is an intergovernmental organization comprising 11 member countries and nine observer states, established in 2001 by Russia and Iran. Moscow and Tehran had hoped that GECF would eventually morph into a “Gas OPEC” but that never happened. The organization’s analyses and forecasts do, however, present a worthwhile snapshot of how the world’s largest gas producers see the industry. Member states in GECF include Algeria, Bolivia, Egypt, Equatorial Guinea, Iran, Libya, Nigeria, Qatar, Russia, Trinidad and Tobago, and Venezuela. Observer countries are Angola, Azerbaijan, Iraq, Kazakhstan, Malaysia, Norway, Oman, Peru, and the UAE. Unconventional Gas To Play Growing Role In its report, the GECF noted that unconventional resources will be playing a growing role in the market and that gas producers will need to emphasize unconventional projects to satisfy growing demand, as well as to invest heavily into exploration to identify and tap into new gas reserves and develop greenfield projects. “It is also important to highlight the increasing interest in hydrogen as a lever to support the deep decarbonization of the world’s economies,” Yury P. Sentyurin, GECF’s Secretary General, wrote in his introduction to the annual outlook. In mentioning hydrogen, Sentyurin is speaking about “blue hydrogen” which is produced from natural gas, and which, when combined with CCUS (carbon capture, utilization, storage) can marry commercial and environmental interests, further positioning natural gas as a transition fuel to bridge the gap between fossil fuels and renewable sources of energy. Blue hydrogen is in fact expected to satisfy half of the hydrogen demand projected worldwide by 2050, Sentyurin points out. Policies being set by countries in the European Union have focused more on costly “green hydrogen” produced from renewable sources; but not in the policies of other nations in regions of the world where growth in energy demand is expected to be the highest. Growth in European energy demand is largely flat.

Summary of the International Scientific Conference “Energy-21: Sustainable Development And Smart Management” September 7-11, 2020 Irkutsk, Russia

The International Scientific Conference “energy-21: sustainable development and smart management” was held in Irkutsk, Russia, on September 7-11, 2020. The Conference was organized by the Melentiev Energy Systems Institute SB RAS with the financial support of the Russian Foundation for Basic Research (RFBR) and with the participation of the Global Energy Interconnection Development and Cooperation Organization (GEIDCO), the Forum of Gas Exporting Countries, and the Global Energy Association. Over 170 attendees from 18 foreign and 69 Russian organizations from 8 countries (Russia, Qatar, China, Japan, Republic of Korea, Vietnam, Mongolia, Germany, Azerbaijan, and Uzbekistan) took part in the event. The participants presented more than 130 papers.

Do oil and gas price shocks have an impact on bank performance?

The paper examines the impact of oil and gas price shocks on bank performance in the major oil and gas exporting GCC countries, using data for the period 2000–2017. Results indicate that oil and gas price rises have a direct bearing on bank performance through the channel of price-induced bank deposits and related lending to business activities. The negative impact on bank performance due to a drop in oil and gas prices is greater than the positive effect of a rise in prices. Findings suggest that oil and gas price volatility has an asymmetric effect on conventional and Islamic banks. Conventional banks reap more benefit from the increased cash flow created by oil and gas prices, compared to Islamic banks. While Islamic banks are generally vulnerable to adverse oil and gas price shocks, conventional banks tend to benefit more from positive oil and gas price shocks. The association between oil and gas price shocks and bank performance in GCC has been distorted by the global financial crisis, the Arab Spring, and the ongoing Yemen War, which have lowered performance. The findings of the study have significant policy implications for the central banks as well as the governments in the oil and gas-exporting countries.

What Role Will LNG Play in Balancing Gas Demand in the MENA Region?

This article, written by JPT Technology Editor Judy Feder, contains highlights of paper SPE 198054, “The Global LNG Price Trend and the Role of LNG in Balancing the Gas Demand in MENA Region,” by Mohamed El Shahati, Haidar Khadadeh, and Fajer Al-Aradah, Kuwait Foreign Petroleum Exploration Company, prepared for the 2019 SPE Kuwait Oil and Gas Conference and Show, Mishref, Kuwait, 13–16 October. This paper has not been peer reviewed. The complete paper analyzes the role of liquefied natural gas (LNG) in balancing the natural gas demand in the Middle East/North Africa (MENA) region. Natural gas increasingly is becoming a main energy source in the region. Contrary to widely held belief, several countries in MENA could fall into deficit regarding their self-supply of gas, leading to the need to import. The options of supply are through pipeline networks, or LNG. The global LNG pricing mechanism is changing toward flexible market-related methods that might encourage some countries to switch to LNG supplies. The study presented in this paper estimates the future demand of natural gas by country using multivariate regression and then compares it with the availability of gas as estimated by the Gas Exporting Countries Forum. The deficit is derived for each country, and the study indicates how the deficit could be filled through pipeline or LNG. Introduction The MENA area has lagged behind the global energy market during the last three decades in switching from oil and coal to natural gas consumption, despite the huge reserves it owns. During the 1980s, many industrial and financial centers in western Europe attracted gas importation from gas-producing regions such as Russia because of the wide difference between domestic and international values. The oil/gas price spread during the period 1980–2005 did not provide a strong economic incentive to MENA oil producers to substantially switch from oil- to gas-based power generation. Since 2005, oil prices have decoupled from gas prices and registered a wide positive spread, which has exaggerated the loss to oil producers from continued dependence on oil for power generation. LNG Potential in the MENA Region Non-oil MENA oil producers or small oil producers have attempted to minimize oil consumption, particularly in power generation, by switching to gas or even coal. However, this process has been hindered by economic difficulties and financing problems. Limited attempts to import LNG to balance energy needs have been carried out in the region. One possible reason for this is the inability to finance investment requirements for LNG receiving and gas-distributing facilities. While it is tempting to assume that MENA could be a semi-self-contained pipeline-supplied region, many obstacles hinder that realization. The gravity of the European and Asian markets for gas producers is a main reason for gas producers overlapping small consumers in the region by focusing on LNG trading schemes. Also, the political conflicts between neighboring nations complicate establishing an international gas pipeline network to cover the region. The planned economic growth for the region, even considering energy conservation, will require additional energy sources. The economical path forward will require switching to natural gas and possibly renewable energy sources. On average, the MENA region needs an annual economic growth of 5% considering population growth trends.

Comments: Momentum for a Gas OPEC

Editor's column For almost 2 decades, the world’s major gas producers have been trying to form an organization similar to OPEC that would offer stability to gas prices and give producers some control over security of supply and security of demand. With international spot trade of gas increasing and public pressure growing for cleaner fuels, the producers believe the time is finally right to become a major force in global energy markets. The main obstacle to establishing such an influential producers’ group has been the lack of international spot trade that reflects current supply-demand dynamics. Unlike oil, most gas has been traded through medium- and long-term contracts for pipeline delivery, with the gas price usually linked to the price of oil. Gas producers often felt they were leaving money on the table in these deals, which hampered further gas upstream development. But that is changing with the recent growth of liquefied natural gas (LNG) trade on the spot market and the increase in gas output from North America, the Middle East, and Africa. While all eyes were on OPEC-plus members and what they would do about oil production in the coming months, the Gas Exporting Countries Forum (GECF) met in late November in Equatorial Guinea. Members include two of the globe’s top gas exporters, Russia and Qatar, along with 10 other members (including Iran, Libya, and Algeria) and seven “observer members” (including Norway, Iraq, Oman, and Angola). Notably absent from the group are two of the largest LNG exporters responsible for the fledgling gas spot market, the US and Australia, but GECF members control 70% of world gas reserves. One of the group’s worries is that, after years of talk about gas being a solution for cleaner energy, momentum for renewables in the wake of heightened concern over climate change could push gas to the sidelines. The oil and gas industry sees gas not only as a bridge to the future but a mainstay of future energy supply. “This idea of natural gas as a transition fuel to renewables is strange,” Total Chief Executive Patrick Pouyanne said recently at an industry gas conference in Washington. “Natural gas is a solution (to climate change). It’s been scientifically proven.” And Qatar Minister of State for Energy Affairs Saad al-Kaabi told GECF members, “We all have the same objective: to place natural gas at the heart of the energy industry as a fuel of the future, and to affirm our true belief that natural gas is a cornerstone in the energy transition.” BP CEO Bob Dudley said recently that he was “concerned that gas is being increasing marginalized, even vilified and demonized” by environmental groups. But for the industry to sell gas as a “green” fuel, it will need to overcome two obstacles: methane leaks/emissions and flaring. Three of the world’s largest flaring culprits are associated with the GECF—Russia, Iran, and Iraq—and flaring from the Permian Basin in the US is on the rise. In response to these concerns, Qatar—which has ambitious gas growth goals—is touting its plans to adopt more carbon and sequestration projects.

Energy Diplomacy in Contemporary World: Less Economy, More Geopolitics. Interview with Stanislav Zhiznin, Russian diplomat, PhD in Economics, Dr. of Science (Economics), Professor of MGIMO-University, President of the Center of Energy Diplomacy and Geopolitics

Stanislav Zakharovich Zhiznin is the founder of energy diplomacy in Russia and in the world, the author of the term “energy diplomacy”, a leading Russian expert on energy policy, diplomacy and international energy security. Prof. Zhiznin published first Russian textbook on energy diplomacy and many monographs on energy diplomacy, in Russian, English, and Chinese [Zhiznin 2005]. S.Z. Zhiznin graduated from the Kharkiv Aviation Institute in 1969 with a degree in electrical engineering, then - from the Diplomatic Academy of the USSR Ministry of Foreign Affairs in 1977 with a degree in international economic relations. In 1998 he defended his Candidate’s thesis on the issue “Energy diplomacy of Russia at the turn of the 20th - 21st centuries (foreign economic aspects)”, and in 2001 - his Doctor’s dissertation on “Strategic interests of Russia in world energy” and became a Doctor of Science (Economics). He has been working in the Ministry of Foreign Affairs of the Russian Federation since 1977. S. Zhiznin has a Diplomatic Rank of 1st Class Counsellor. Until the end of 2010, he was the chief adviser to the Department of Economic Cooperation of the Russian MFA. S. Zhiznin is currently a professor at the Department of International Dimension of Fuel and Energy Industry named after N.P. Laverov, MGIMO. He contributed to the development of the information materials for the Russian delegation for the meetings of G8 (now G7), OPEC, IEA, Gas Exporting Countries Forum, International Energy Forum, APEC, etc. S.Z. Zhiznin is the President of the Center for Energy Diplomacy and Geopolitics, established in 2003 with the participation of the Union of Oil & Gas Producers of Russia and support of the Russian MFA. In 2011, he became an OSCE expert on energy diplomacy and energy security. The interview presents the formation of energy diplomacy as a science, covers the evolution of the concept of “energy diplomacy”, discusses the energy factor influence on the policies of Russia and other countries, analyses the role of TNCs in shaping the state’s energy policy. Energy diplomacy, as S.Z. Zhiznin points out, is a complex symbiosis of economics, geopolitics, and technological sciences; so, research in energy diplomacy is inextricably linked with these sciences. At present, energy diplomacy is being heavily influenced by the technology development, which makes states take into account this factor while forming their energy strategies.

Prospects for Developing a Forum of Gas-Exporting Countries and Russia’s Role in Creating a Gas Alliance

ABSTRCT This article examines the possibility of creating an institutional organization for the study and forecasting of gas demand and price formation, which has gradually transformed from a utopian ideal into a business concept. We devote particular attention to Russia’s role in creating and participating in this gas alliance. We also examine the ways and prospects of attracting other gas-exporting countries to participate in the forum, as some of its consumers gradually realize the need for coordinating their activity when supplying fuel to foreign markets.

Structuring Chinese Energy Investments Under the Russian Law on Strategic Investments

Abstract As one of the world’s leading oil- and gas-exporting countries, Russia has many of the prerequisites for playing a significant role in achieving some of the energy policy objectives of China’s Belt and Road Initiative (BRI). In fact a number of multi-billion Chinese investments in the Russian energy sector have been made during the past few years. Taking the existing experience of Chinese energy investors into account, this article critically analyzes the legal and regulatory framework governing the production of natural resources and the making of energy investments in Russia. The Russian authorities consider energy as a sector of high strategic importance, necessitating increased attention by its legislator and supervising bodies. The article argues that the restrictions imposed on investors by Russia’s rigid legislation predetermine the participation of state-controlled companies and ensure that all major foreign investments in Russia’s oil and gas sector are assessed primarily for their political significance.

Commodities risk premia and regional integration in gas-exporting countries

This study examines the fundamental driving forces of stock market integration with particular emphasis on major Gas-Exporting Countries (hereafter known as GECs), namely the United Arab Emirates, Qatar, Venezuela, Saudi Arabia, Russia, and Kuwait, over the period from June 2003 to November 2017. The novelty of our study stems from the fact that we examine a dynamic process of international, regional and national stock markets integration using a set of local, regional, global and commodities as driving forces of integration. Particularly, we measure market integration using gas price as a common source of risk in addition to the world, regional and domestic sources of risk based on a conditional version of the International Capital Asset Pricing Model (ICAPM). Our study also differs from past ones in that we investigate the integration of stock markets into the international market as well as in the GECs countries. Our results show that the level of market integration of the major gas-exporting countries varies widely over time and depends on the interest rate spread, the level of market openness and market volatility. It also seems to be still significantly segmented from both the global and GECs markets. Gas risk represents a small part of the global risk in all the countries considered in this study.

Comments: The Golden Age of Gas Revisited

Editor's column Seven years ago, the International Energy Agency (IEA) issued a report on the prospects of natural gas titled, Are We Entering the Golden Age of Gas? The answer appears to be not yet, but the growth in supply and trade, and moves to de-link the price of gas from the price of oil could propel the cleanest-burning hydrocarbon forward as the fuel to the future. Gas supplies are plentiful and exports are surging. Most of this is due to the growth of shale in the US, which has led the country to become a major exporter of liquefied natural gas (LNG) along with Australia. Just as the US shale revolution disrupted the global oil market, it is reshaping the world’s gas trade. The US produced 71.1 Bcf/d of gas in 2017, a 1% increase over the previous year and near its all-time high. US output is now 20% of global production. Russia, the world’s second-largest gas producer, reached output of 61.5 Bcf/d last year. US gas exports, in the form of LNG and mostly to Asia, were 1.7 Bcf/d in 2017, while pipeline exports totaled 6.3 Bcf/d, mostly to Mexico. What has hampered the international growth of gas in the past is its lack of tradability and its relation to a global price marker. Gas has long been linked to oil prices—which have shown sharp volatility the past decade—and tied to long-term contracts, both of which contain risks for both buyers and sellers. But the increase of LNG exports has opened the door to more international trade and discussion of establishing global price markers. Companies are increasingly using US Henry Hub prices as a reference point for international gas trade. And CME Group and Cheniere Energy are developing an LNG futures contract linked to physical delivery at Cheniere’s Sabine Pass, Texas terminal. Before now, gas has been traded regionally or through long-term contracts based on the price of oil. US gas was priced off Henry Hub but trade in Europe used a regional trading hub and Asia, one of the largest importers of gas, preferred contracts linked to crude. De-linking the price of gas from oil would protect buyers and sellers from price movements in oil that do not reflect gas market fundamentals. That stability could give rise to more investment in gas production and infrastructure. Gas proponents argue that gas should be the bridge to the future, as the world transitions from one based heavily on oil to a global energy mix that includes more alternative energy sources. China is relying more on gas as it weans itself from heavy coal use. Major gas producing countries—including Iraq, Russia, Qatar, and Venezuela—have discussed forming a gas-type OPEC organization to create market stability. This Gas Exporting Countries Forum’s goal is to increase the share of gas in the global energy supply. These producers so far appear reluctant to embrace the free-market approach that growth in LNG is bringing about. But, as the IEA recently pointed out, half of the global consumption increase in gas in the medium term will come from emerging economies in Asia. And they stand to benefit most from market-based natural gas pricing.

Impact of oil and gas price shocks on the non-performing loans of banks in an oil and gas-rich economy

PurposeThe purpose of this paper is to examine and compare the impact of oil and gas prices shocks on the non-performing loans (NPLs) of banks at the aggregate as well as at the level of commercial and Islamic banks in Qatar over the period 2000-2016.Design/methodology/approachUsing the West Texas Intermediate Database, BankScope Database, World Bank’s World Development Indicators Database, and International Monetary Fund Database, the authors use a one-step system generalized method of moments dynamic model to examine and compare the association between oil and gas prices shocks with NPLs in Qatari banks. The authors also test the hypotheses of direct and indirect impacts of oil price shocks and gas price shocks on bank NPLs.FindingsThe results indicate that oil price shocks and gas price shocks do not have directly affect NPLs of Qatari banks at the aggregate level, while they have indirect effects that are channeled through the country-specific macroeconomic and institutional factors. The authors find that oil and gas prices shocks affect NPLs of Qatari Islamic banks directly through extended oil and gas-related cash flows, while their impact on the NPLs of Qatari commercial banks is indirect. In other words, Islamic banks in Qatar greatly benefits from increased cash flow caused by the rise in the oil and gas prices, which make their NPLs, much lower than that in commercial banks. Better capital cushion, better managerial efficiency, better risk management, and liquidity management systems should be used by the Islamic banks in Qatar to expand their customer base. The authors also find that positive fiscal stance of the government reduces the NPLs in both commercial and Islamic banks.Practical implicationsThe results of this study necessitate policy measures that can counter the effects of changes in oil and gas prices on the growth of bank NPLs.Originality/valueIt is widely recognized that oil and gas prices and the level of production are of great importance to the economic development of oil and gas-exporting countries. So far, however, no econometric study has been reported in the literature which analyses and compares the impact of oil and gas prices shocks on the NPLs of commercial and Islamic banks and also at the aggregate level in any of the oil economies. Thus, this study provides the first empirical evidence on distinct direct and indirect channels through which oil and gas prices shocks may affect bank NPLs.

China’s Geopolitical Economy of Energy Security

AbstractChina’s transition to an urban-industrial society relies predominantly on its abundant domestic coal supplies and, secondly, on an increase in oil and gas imports. For this reason, China’s strategic investments in the oil and gas industries of resource-rich, energy-exporting countries have vastly increased. Given the high levels of import-dependency, the domestic power-wealth structures in China rely on uninterrupted supplies from beyond state borders. In their search for supply security, major import-dependent actors have two options. One is to reduce dependency by, for instance, higher energy efficiency. Another option is to increase the security of energy imports. This requires improving supply security from resource-rich oil- and gas-exporting countries and regions. The significant growth in the overseas assets and activities of China’s state-led National Oil Companies (nocs) are crucial to China’s energy supply security. In this study we argue that the transnational activities of Chinesenocs are part of the country’s so-called ‘statist’, state-led economic globalization, in the course of which some developing economies have become global political powers.In this paper we outline the approach and the conceptual foundations to understand geopolitical economy of energy security in China based on the following section: [1] the unit of analysis in the Political Economy of Energy. [2] Sequential industrialization and its global impacts, [3] Fossil fuel security and resource-scarcity, [4] China’s power structure, state class, and industrialization, [5] Industrialization, lateral pressure, the geopolitical economy and China’s external relations [6] National oil companies: changing the game.

Iran’s Prospects of Return to the Gas Market and Other Stakeholders

:Soon after the signing of the nuclear deal, foreign companies rushed to Iran to revive their businesses. Sanctions had been imposed on the Islamic Republic post-1979 revolution and soon after expanded in 1995. During the years of sanctions, Iran had to a large extent become self-reliant with no major developments, yet continued to sustain itself to be a promising economy. However, diversification has not changed the face of the country as it remains largely dependent on hydrocarbons. The contention in this article is that the ease of US sanctions on Iran, will see an energy shift that will realign the regional balance of power vis-a-vis other players like Saudi Arabia. The article further evaluates how the Organization of Petroleum Exporting Countries (OPEC)’s concern for the Gas Exporting Countries Forum (GECF), asserting itself as a power, that would dictate future energy share and pricing. GECF accounts for 67% of the world’s proven gas reserves and 64% of global LNG exports. The article will also attempt to identify Qatar’s position, if at all it wishes to facilitate Iran in achieving a gas exporter status. Finally, the article will attempt to analyze Iran in the GECF and whether it can work alongside other gas majors.

Gas Producers Look for Opening

Editor's column While the Organization of Petroleum Exporting Countries (OPEC) has shifted strategy over the past couple of years, losing some of its clout to control oil prices, major natural gas producers are working to create their own cartel that they hope could bring some stability to international gas prices. OPEC, led by Saudi Arabia, decided in late 2014 to stop shoring up oil prices by tweaking global oil supply, leaving it to market dynamics to determine the price of oil. The thinking was to keep market share away from higher-cost producers, such as those in the North American shale. The strategy has basically worked, leaving lots of carnage in its wake. The world’s largest gas producers have a different motive. Because gas is not as tradable as oil, with prices often locked into long-term contracts, gas producers have less ability to influence prices as oil producers do. But the emergence of liquefied natural gas (LNG) trade may provide a potential opening for the gas producers group. Twelve country members and nine observer states met in Iran recently to further develop the strategy of the Gas Exporting Countries Forum (GECF). Participants included Iran, Iraq, Russia, Qatar, Venezuela, Bolivia, Equatorial Guinea, Nigeria, Algeria, Trinidad and Tobago, Egypt, and Libya, among others. It was the largest gathering of the 14-year-old organization, whose members account for almost two-thirds of the world’s gas reserves. Participants discussed the latest trends, developments, and policies affecting natural gas and reaffirmed their support for the objectives of the GECF, which is to support the “collective interests” of its members and encourage cooperation. During the forum, Iran’s president called on gas producers to coordinate policies to increase the share of natural gas in the global energy picture. The GECF lobbied the recent United Nations climate change summit in Paris, noting that gas is a much cleaner-burning energy source than some alternatives. Gas producers are aware that renewables are growing faster than some expected and could undermine gas’ assumed role as the fuel that will bridge oil to future energy supplies. One of the biggest concerns among producers is the pricing mechanism used for gas worldwide. Most of the world’s gas supply is locked in long-term contracts, affecting the seller’s ability to take advantage of market conditions. Although LNG is shipped by tankers and can be priced in short-term contracts, compressed natural gas is shipped via pipeline, making it dependent on long-term deals. Gas producers want what oil producers want—security of demand to fund their economies into the future. But an international gas cartel would face hurdles. Even as LNG trade continues to grow, some of the major LNG exporters—the US, Australia, and Canada—are unlikely to join a cartel. And the volume of global LNG trade still would not approach that of oil, leaving a less transparent market. In addition, the cost of liquefaction infrastructure would likely see players looking for long-term contracts. JPT

The Architecture of International Energy Governance

The study of international energy governance is in its youth. This fact may seem somewhat paradoxical. Many international energy institutions, such as the International Atomic Energy Agency (IAEA) and the Organization of Petroleum Exporting Countries (OPEC), have existed for fifty years or more. Energy has long been a major driver of global crises and national politics. The memory of the Arab oil embargo of 1973-1974 casts a long shadow over global energy debates, and American politics, to take but one example, continually return to the question of the appropriate balance between environmental protection and natural resource extraction. Yet despite energy's centrality to global and national politics, international energy governance--as distinct from national energy policies and international energy politics--has resisted the multilateral governance trend of the past several decades. There is no global World Energy Organization (the International Energy Agency (IEA) is an OECD agency and as such is not open for accession to most nations), and many of the major multilateral legal institutions such as the World Trade Organization (WTO) deal with energy only incidentally. Perhaps for this reason, it is only with surging demand for energy and the problems such demand creates for traditional areas of international cooperation, including trade and climate change, that energy governance has itself become an object of study again. In my remarks, I want to address three questions: Why is international energy governance so fragmented? Why is that fragmentation a problem? And what do we do about it? WHY IS INTERNATIONAL ENERGY GOVERNANCE SO FRAGMENTED? An alphabet soup of international agreements and organizations deals in some way or another with international energy: the WTO, the United Nations Framework Convention on Climate Change (UNFCCC), the Energy Charter Treaty (ECT), OPEC, the Gas Exporting Countries Forum (GECF), the IAEA, the International Energy Program (IEP) Agreement and IEA, and the International Renewable Energy Agency (IRENA), to name but a few. This list includes only intergovernmental organizations and neglects regional institutions such as the European Union or the North America Free Trade Agreement that influence international energy cooperation. The fragmentation in energy governance arises in large part because of path dependence. At no time did negotiators ever sit down and think about what an ideal international energy institution would look like. Instead, institutions were created to deal with issues and crises as they arose. Energy institutions thus tend to have mandates and powers shaped, not by considerations of desirable energy governance, but by historically contingent governance problems. The development of institutions dealing with oil illustrates the role of contingency. In the early 20th century, the most important governmental institution dealing with oil was the Texas Railroad Commission, which was able to influence global oil prices by regulating production levels in Texas. (1) In part to combat the influence on prices of U.S. authorities and multinational oil companies (the so-called Seven Sisters), oil-exporting states formed OPEC with the goal of renegotiating concession agreements with the multinational oil companies. (2) OPEC was wildly successful in this goal, and by the 1970s OPEC (and in particular Saudi Arabia) had emerged as the key swing producer of oil, capable of influencing global prices. Arab members of OPEC deployed this ability during the Arab oil embargo of 1973-1974. That crisis prompted oil-consuming nations to sign the IEP Agreement, which created the IEA and aimed to coordinate emergency response measures in the event of an oil price shock. As the development of oil institutions illustrates, the fragmentation of international energy governance is a result of the fact that many energy institutions have been created to respond to specific contingent governance problems, rather than long-term governance challenges. …

THE GAS EXPORTING COUNTRIES FORUM HAS NO CARTEL AMBITIONS

The Gas Exporting Countries Forum (GECF) is a young international organization which is expected to acquire a great deal of influence on the gas market. It is often compared to OPEC. Are these comparisons really justified? Will the GECF manage to bring some kind of structure into the world market for natural gas, and find the right balance between the interests of the producers and consumers? Finally, what is Russia's role in this new organization? We have put our questions to the Secretary General of the GECF Leonid Bokhanovsky.