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Fatemeh Shayan, University of Eshfahan, Iran
University of Tampere, Finland
Guest contributor to EGF
Do such organisations exist beyond the ‘self fulfilling prophecy’ level?
Much research has examined energy relations between the European Union (EU) and Russia,[1] but not the larger picture of energy relations between the EU and the Gas-Troika, made up of members Russia[1], Iran and Qatar. Although the Gas-Troika is in an early stage of development, increasing demand for gas, especially from the EU, has noticed members to attempt to present it as a future gas superpower.
If the Gas-Troika is to exercise energy influence in the short or long term, natural gas must be highly important in energy markets. Therefore, understanding the EU’s future dependence on gas as a clean fuel necessitates examining the constraining and enabling factors of gas relationships between the EU and Gas-Troika. The four-dimensional (geographical, financial, institutional and ecological) social structuration framework proposed by Pami Aalto’s (ed.) Russian Energy Policies (2012) provides a suitable framework to analyse these factors. This article focuses only on the geographical dimension, due to its significance to the Gas-Troika and the EU’s dependence on the group in terms of the gas supply. The article begins with a brief review of the Gas-Troika’s aims, existing cooperation levels with the EU, as well as the relations and mutual perceptions among its three members.
An overture to the Gas-Troika
It is useful to first examine the individual gas relationships that members of the Gas-Troika have with the EU. Official Russia-EU energy relations go back more than 20 years. Russia exports the bulk of its non-domestic gas supplies to the EU market in an energy partnership which aims at securing and expanding gas transportation infrastructure[2].
David Ramin Jalilvand (2013) states that, as the EU seeks to diversify its gas imports beyond Russia, Iran’s gas sector could become a strong alternative. At present, Iran can only export limited amounts of gas to the EU through Turkey. Global political disputes about the Iranian nuclear energy program have hindered Iran from exporting gas directly to EU energy markets[3]. However, with the recent development in negotiations between Iran and P5+1, it is estimated that Iran will become a major gas exporter to Europe in the next decade[4]. Finally, Qatar has become a reliable gas supplier to the EU and might help the EU reduce its dependence on Russia. It is projected that Qatar will become one of the largest gas suppliers to Europe[5].
Moving onto the Gas-Troika as a whole, I begin with their history in the Gas Exporting Countries Forum (GECF). This assembly of 11 leading gas countries first met in Tehran in May 2001. The group’s agenda has focused on supporting mutual interests, engaging in dialogue between producers and consumers, and maintaining a stable, transparent energy market[6]. The GECF reached a turning point in its history at a Tehran meeting on October 21, 2008, when representatives Russia, Iran, and Qatar agreed to create the Gas-Troika[7]. Members of the Gas-Troika are considering setting up a centre for financial affairs in Doha, a technical centre in Tehran, and a market survey centre in Moscow[8].
Iran has consistently been the biggest proponent of establishing the Gas-Troika, adhering to Ayatollah Khamenei’s - the Iranian supreme leader - statement that “our countries [Russia, Iran and Qatar] can establish an organization similar to the Organization of the Petroleum Exporting Countries (OPEC)[9]”. In contrast, Russian leaders have rhetorically insisted that, in practice, the Gas-Troika is ‘not a feasible means’ in order to avoid provoking EU member states[10]. Sharing this view, Alexi Miller - Gazprom Chief Executive Office - avoided comparing the Troika to OPEC and stressed that it would address the extraction, transportation, and sale of gas[11]. Despite these reservations, Russia has agreed to join the Gas-Troika and Russia’s Vladimir Putin has called the idea ‘interesting’[12].
The Gas-Troika, however, has acted to set gas supplies and prices and to review projects best implemented trilaterally[13]. Such trilateral cooperation could serve as the actors’ economic mode in the market and prompt them to take account of others’ interests in the gas industry[14]. Miller states that the Gas-Troika members’ main aim is to coordinate natural gas prices[15]. Valey Yazev, former-long term president of the Russian Gas Society, cautions that such coordination could include the development of major production or transit projects, prices, and strategic planning[16].
What binds the members of the Gas-Troika together is an individual and collective interest to become a driving force in the natural gas market. Miller touches upon the Troika’s collective purpose and interests, stating that “considering the strategic interests of our countries [Russia, Iran (and Qatar)] regarding natural gas as well as the potential and capacities of the three countries in the gas industry, we’ve [Troika members] decided to keep in regular and close touch with each other.[17]” Aalto et al. further explain that such interests have developed from established social practices, many with a long history[18]. For example, Jahangir Karami, Iranian professor of Russian studies at the University of Tehran, in an interview with the Iranian news agency Tabnak, in 2013, notes that in the Yeltsin era, there was no bilateral cooperation between Iran and Russia. Since 2000, under Putin’s leadership, the countries have engaged in active yet temporary (ie, more tactical than long term-strategic) cooperation. Putin is a pragmatist who understands the benefits of Russia’s other international relationships, including those with the EU[19]. This situation, in Karami’s view, has created some distrust between Iran and Russia about permanent cooperation, even though such initiatives need to be strengthened in the gas sector to develop the Gas-Troika.
The geographical dimension
Enabling factors
Turning to geographical influences on the Gas-Troika, one of the most important enabling factors is member countries’ possession of more than half of the world’s proven gas reserves (as of 2011)[20]. Russia alone likely holds one third of world’s natural gas reserves. The International Energy Agency (IEA) projected in 2000 that Russia’s established resources will last for several decades, though investments in supply infrastructure need to be made. With Russia claiming more than a 30 per cent share in the EU gas market, Russia’s gas exports to the EU have decreased slowly[21]. Russian gas production reached 22,213 billion cubic feet in 2011[22] and will rise to between 22,601 billion and 24,367 billion cubic feet in 2015[23]. Such an estimation leads to Aalto’s analysis (2012) that “Russia’s gas production is likely to stay the same as today or rise only modestly”[24].
The Russian government aims to “maximize effective use of natural gas resources and the potential of the energy sector”[25] to become an energy superpower. The alliance with Iran and Qatar in the Gas-Troika could increase the Russian gas industry’s global standing. In 2011, Iran possessed 1,045 trillion cubic feet of proven gas reserves and produced an estimated 5,360 billion cubic feet[26]. In addition, Qatar held an estimated 895 trillion cubic feet of gas reserves and produced an estimated 4,705 billion cubic feet[27]. The Gas-Troika members’ claim to the largest gas reserves in the world gives them the potential to exercise power in the EU and importing countries. In turn, the Gas-Troika’s energy geographical power affects and possibly threatens the EU because of its dependence on gas. For example, the EU prefers for Gazprom to bring gas to the EU’s border and then for EU-partners to transport the gas inside Europe[28]. The Russia-Ukraine gas transit disputes of 2006-09 might have prompted EU members to regard their partners as more reliable than the gas producers and transit countries. Despite the possible risks for and long-term threats to the EU, the alliance of Russia, Iran, and Qatar in the Gas-Troika could acquire geographical power to influence the balance of supply and demand for gas in Asia and Europe. This point requires more elaboration in a further article, however, it would be wise for all involved to consider the geopolitical advantages and constraints offered by this situation (see below).
Constraining factors
In addition to enabling factors involved in the Gas-Troika and the EU’s gas relations, the most important constraining factors also warrant analysis. I will discuss two factors: that Russia is dependent on the EU energy market, and that the Gas-Troika members are geographically diverse. In terms of the first factor, Russia is constrained by its dependence on the European gas market and its geography and current investments have restricted Moscow’s energy geopolitical reach. Historically, the country’s limited sea access has also reduced its revenues[29]. As already mentioned, Russia exports the bulk of its non-domestic and non-CIS gas volumes to the EU market[30], and to reduce this dependence it is diversifying gas exports to the East Asian market. Russia’s gas exports to Asia-Pacific countries is expected to grow from almost nothing in 2008 to 19 to 20 per cent in 2030[31].
Secondly, although the Gas-Troika’s proximity to Asia and possession of the world’s largest gas resources gives them advantages, the organization is limited because members do not occupy the same geographical region. Any plans the Gas-Troika makes to construct transnational pipelines to increase gas exports to Europe should take into account this constraining factor. According to Janeman Latul and Mita Velina Liem, members proposed building a transnational gas pipeline to Europe by early 2016 to fix the geographical limitation of the Troika, but it seems there is not much chance of this actually happening. Latul and Liem assert that the Asian gas network proposed by the Gas-Troika aims to create the most efficient system to transport gas from West Asia and Russia to consumers[32], especially those in Europe. Despite this proposal, Qatar’s RasGas Company uses rail and its access to the Persian Gulf to ship gas to Europe[33]. Although Iran and Qatar lie in the same region with access to the Persian Gulf, Iran exports gas to Turkey, which is transported to the EU by pipeline. Russia is geographically separate from Iran and Qatar and exports gas to the EU through pipelines. Constructing transnational pipelines to the EU would require the Gas-Troika to invest billions[34]. The Gas-Troika has proposed creating a “monetary fund” to provide funding for investment and technology[35]. However, this would be difficult because, for example, Iran suffers from international economic sanctions and has invested much in its nuclear energy program.
Its still very early days
In summary, the Gas-Troika continues to develop gradually. Its emergence presents constraints and benefits for both its members and the EU. The EU is expected to post high demand for gas in the coming decades, and Gas-Troika members have the potential to become gas superpowers if they coordinate in overcoming constraining factors and focusing on their common interests. Notably, not only is Russia dependent on EU gas demand, but the EU also remains geographically tied to Russian energy despite attempts to reduce this dependence. The Gas-Troika could increase the EU’s supply security because it possesses more than half of the gas reserves on the globe and could provide adequate, reliable gas supplies to the EU. On the other hand, mutual gas interdependence might decrease energy security. Since one of the Gas-Troika’s objectives is to set energy prices, a strong Troika might create long term energy security problems for the EU by increasing gas prices. Therefore, further research is required to examine the financial and economic dimensions of gas relations between the EU and Gas-Troika members.
[1] Aalto, Pami (ed.) (2012) Russia’s Energy Policies, National, Interregional and Global Levels, Cheltenham: Edward Elgar Publishing.
[2] European Commission (2011) “EU-Russia Energy Dialogue: 12th Progress Report”, http://ec.europa.eu/energy/international/russia/doc/20111201_eu_russia_report.pdf, accessed 16 November 2013.
[3] Jalilvand, David R. (2013) “Iran’s Gas Exports: Can Past Failure Become Future Success?”, Oxford Institute for Energy Studies NG 78, June 2013, p. 9, http://www.oxfordenergy.org/wpcms/wp-content/uploads/2013/06/NG-78.pdf, accessed 10 November 2013.
[4] Gulf in the Media (2013) “Iran a ‘Decade or More’ from Becoming Major Gas Exporter”, 15 December 2013, http://gitm.kcorp.net/index.php?id=676833&news_type=Economy&lang=en, accessed 9 January 2014. The author is grateful to Dr. Marat Terterov, the Principal Director of the European Geopolitical Forum, for introducing this source to me.
[5] Piebalgs, Andris (2009) ‘Speech by Andris Piebalgs, EU Energy Commissioner, at the 7th Doha Natural Gas Conference, “EU Energy and Climate Policy”’, Doha, 11 March 2009.
[6] Gas Exporting Countries Forum (2013) “Objectives”, http://www.gecf.org/aboutus/gecf-objectives, accessed 11 November 2013.
[7] Kupchinsky, Roman (2008) “The Gas Troika Cartel”, European Daily Monitor, 5/210.
[8] Russian TV Channel (2008) “Gas Troika to Become new Player in Energy”, 22 October 2008, http://rt.com/business/gas-troika-to-become-new-player-in-energy/, accessed 9 November 2013.
[9] Khamenei, Sayyed Ali (2007) ‘Remark by Ayatollah Khamenei reproduced by Bloomberg Business week, “A Gas OPEC? Mostly a Pipe Dream”’, Jason Bush, 2 February 2007, http://www.businessweek.com/stories/2007-02-02/a-gas-opec-mostly-a-pipe-dreambusinessweek-business-news-stock-market-and-financial-advice, accessed 2 November 2007.
[10] Kupchinsky, Roman (2009) “LNG, a wolf in sheep’s clothing”, GPPI Global Energy Governance Project , Policy Paper 2.
[11] Miller quoted in Kuchinsky 2009.
[12] Putin quoted in Ertan, Fikret (2008) “Gas Cartel or Gas Troika”, Today Zaman, 26 October, http://www.todayszaman.com/columnists/fikret-ertan-156927-gas-cartel-or-gas-troika.html, accessed 25 November 2013.
[13] “Russia, Iran, Qatar from ‘Gas Troika’” (2008) Saudi Gazette 22 October 2008, http://www.saudaigazette.com.sa/index.cfm?method=home.regcon&contentid=2008102219826, accessed 19 October 2013.
[14] Aalto, Pami, Dusseault, David, Kennedy, Michael and Kivinen, Markku (2013) “Russia’s Energy Relations in the East and West: Towards a Social Structurationist Approach to Energy Policy Formation”, Journal of International Relations and Development 17/1: 6.
[15] Miller quoted in, “Russia, Iran and Qatar form Gas-Troika, Gazprom Says”, Bloomberg, 21 October 2008. http://www.bloomberg.com/apps/news?pid=newsarchive&sid=aeFP4Z8bWzLE, accessed 14 November 2013.
[16]Blagove, Sergei (2012) “Russia Mulls Gas Opec”, Zurich Centre for Security Studies.
[17] Miller quoted in “Gas Troika to become new player in energy”, RT Network, 22 October 2008, http://rt.com/business/gas-troika-to-become-new-player-in-energy/, accessed 10 October 2013.
[18] Aalto et al. 2013, 7.
[19] Karami, Jahangir (2013) “Security Vulnerability of Iran and Russia”, Interviewed in Tabnak, Iranian News Agency, 28 February 2013.
[20] International Energy Agency (2011) “World Energy Outlook”, p.52, http://www.worldenergyoutlook.org/media/weowebsite/2011/WEO2011_GoldenAgeofGasReport.pdf, accessed 12 November 2013.
[21] Eurostat (2012) “Main Origin of Primary Energy Imports, EU-27, 2002-2010”, 21 October 2012, http://epp.eurostat.ec.europa.eu/statistics_explained/index.php?title=File:Main_origin_of_primary_energy_imports,_EU-27,_2002-2010_(%25_of_extra_EU-27_imports).png&filetimestamp=20121012131852, accessed 9 January 2014.
[1] United State Energy Information (2013) “Overview Data for Russia”, http://www.eia.gov/countries/country-data.cfm?fips=RS&trk=m#ng, updated 22 February 2013.
[23] International Energy Agency (2002) “Russia Energy Survey”, http://www.iea.org/publications/freepublications/publication/russia_energy_survey.pdf, accessed 10 September 2013.
[25] Government of Russian Federation (2009) “Energy Strategy of Russia, for the Period up to 2030”, p. 10, http://www.energystrategy.ru/projects/docs/ES-2030_(Eng).pdf, accessed 14 September 2013.
[26] United States Energy Information (2013) “Overview Data for Iran”, http://www.eia.gov/countries/country-data.cfm?fips=IR&trk=m, updated 12 February 2013
[27] United States Energy Information (2013) “Overview Data for Qatar”, http://www.eia.gov/countries/country-data.cfm?fips=QA&trk=m#ng, updated 12 February 2013.
[28] Gilbert, Spencer (2009) “Gas Politics in Russia and EU”, Journal of Politics and International Affairs 5: 129.
[29] Baker, James A. (2009) “Russia and the Caspian states in the global energy balance”, Baker Institute for Public Policy of Rice University, No. 39, 1.
[30] European Commission 2011.
[31] Tabata, Shinichiro, and Lui, Xu (2012), “Russia Energy Policy in the Far East and East Siberia”, in Aalto, Pami (ed.), Russia’s Energy Policies: National, Interregional and Global Level, p. 160, Cheltenham and Northampton: Edward Elgar.
[32] Latul, Janeman and Liem, Mita Velina (2008) “Asian Countries to build integrated network by 2016”,
http://www.thejakartaglobe.com/business/asian-countries-to-build-integrated-gas-network-by-2016-/301469, accessed 12 November 2013
[33] “Operational Excellence” (2013) Rasgas, http://www.rasgas.com/Operations.html, accessed 12 September 2013.
cf., Ghorban quoted in Sinaiee, Maryam (2008) “Feasibility Casts Doubt on ‘Gas-Troika’”, 23 October 2008, http://www.thenational.ae/news/world/middle-east/feasibility-casts-doubt-on-gas-troika, 10 October 2013
[35] Yunesara, Abdullah (2009), “Power Distribution in Gas Exporting Countries Forum and Iran’s Role in the Forum”, p. 7, National Iranian Gas Company, http://www.nigc.ir/Site.aspx?ParTree=111S19, accessed 16 November 2013.
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