CLIMATE CHANGE AND ENERGY SECURITY Major Challenges of European Energy Policy The Case of Russia - PowerPoint PPT Presentation


Title: CLIMATE CHANGE AND ENERGY SECURITY Major Challenges of European Energy Policy The Case of Russia


1
CLIMATE CHANGE AND ENERGY SECURITYMajor
Challenges of European Energy PolicyThe Case of
Russia
  • Shamil Yenikeyeff
  • Oxford Institute for Energy Studies
  • St Antonys College, University of Oxford

Institute of European Studies and Law Faculty of
Louvain University, in partnership with
the Energy Law Research Forum, Brussels, 15
December 2008
2
POLITICAL PERCEPTIONS
  • In Russia The West has betrayed Russia and is
    trying to undermine it
  • In Europe Russia has been seeking to regain its
    superpower status the energy weapon strategy

3
European concerns Security of Supply
  • Gas transit problems and the issue of prices for
    Russian neighbours. Problems with oil pipelines.
    Transit avoidance pipelines
  • Security of supply Russian companies may not be
    able to deliver adequate volumes of energy
    supplies
  • Russias bilateral deals undermine the common EU
    energy strategy
  • Russian attitudes towards foreign companies and
    its independent producers
  • Russian plans to diversify to Asia (and the
    domestic market)

4
Russian concerns Security of Demand
  • Russia should not invest without a clear idea
    about the level of the future EU energy demand
  • EU Barriers to downstream acquisitions
  • EU attempts to diversify - the pipeline projects
    bypassing Russia
  • A potential break-up of energy producing
    companies
  • Third party access gives an advantage to
    competitors and complicates project financing

5
The Energy Charter dilemmas
  • The EU enlargement and the Transit Protocol
    (article 20)
  • The link between transit and internal tariffs
    (article 7.3 of the ECT)
  • Transit dispute resolution (articles 7.6-7.7)
  • Key gas exporters seek to remain beyond EUs
    legal boundaries sovereignty rights

6
Russia and climate change
  • Russias participation in the Kyoto Protocol was
    a major success for the EU-Russia relationship
  • Russia has been encouraged by the financial
    benefits of emission trading and not by climate
    change concerns
  • Russia gave life to the Kyoto protocol and
    benefited from its strong bargaining position
  • Russia has a surplus of emission allowances based
    on the 1990 level

7
Russias doubts
  • Kyoto mechanisms and rules are too bureaucratic.
  • The government does not see much gain from the
    deal as it mainly benefits the private sector
  • Small and medium companies seeking to take part
    in these projects do not have adequate lobbying
    power to push them through
  • Rapid growth and high revenues from exports
    discouraged the government and large companies to
    take emission trading ad Joint Initiative
    projects seriously

8
Post-2012The expanding market?
  • The nature of Russian economy gives the energy
    sector a very large share in future emission
    trading projects
  • Inefficient energy production, transportation and
    consumption give Russia a serous potential to
    handle Joint Implementation projects
  • Current problems of the energy sector could give
    a boost to the emission trading market
  • Gains will be significant with the US and Chinese
    participation in emission trading

9
Financial crisis
  • Price volatility
  • Large corporate debt
  • Russias financial reserves are shrinking
  • Limited financial resources for growth

10
Corporate debt
  • Total (early 2008) around 450 billion
  • Rosnefts capitalisation 41 billion
  • Debt 21.4 billion
  • Gazproms capitalisation 193 billion
  • Debt 54 billion
  • Russian public debt 40 billion

11
Russian reserves in 2008
  • Early August 597,5 billion
  • Early December 437 billion
  • Russia has lost a quarter of its reserves since
    August 2008
  • Current levels up to 70 of Russias projected
    demand for external financing for 2009

12
New level of uncertainty
  • How will Russia finance its long-term,
    large-scale projects new pipelines, new fields,
    LNG?
  • Could China bail Russia out in return for
    low-priced energy supplies?
  • Will Russia change its policies towards the
    domestic energy sector taxation, privatisation,
    access to strategic reserves?
  • Independent producers start exporting gas?
  • Will Russia opt for a full scale diversification
    of its economy?
View by Category
About This Presentation
Title:

CLIMATE CHANGE AND ENERGY SECURITY Major Challenges of European Energy Policy The Case of Russia

Description:

Law Faculty of Louvain University, in partnership with the ... and consumption give Russia a serous potential to handle Joint Implementation projects ... – PowerPoint PPT presentation

Number of Views:112
Avg rating:3.0/5.0
Slides: 13
Provided by: Corr56
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: CLIMATE CHANGE AND ENERGY SECURITY Major Challenges of European Energy Policy The Case of Russia


1
CLIMATE CHANGE AND ENERGY SECURITYMajor
Challenges of European Energy PolicyThe Case of
Russia
  • Shamil Yenikeyeff
  • Oxford Institute for Energy Studies
  • St Antonys College, University of Oxford

Institute of European Studies and Law Faculty of
Louvain University, in partnership with
the Energy Law Research Forum, Brussels, 15
December 2008
2
POLITICAL PERCEPTIONS
  • In Russia The West has betrayed Russia and is
    trying to undermine it
  • In Europe Russia has been seeking to regain its
    superpower status the energy weapon strategy

3
European concerns Security of Supply
  • Gas transit problems and the issue of prices for
    Russian neighbours. Problems with oil pipelines.
    Transit avoidance pipelines
  • Security of supply Russian companies may not be
    able to deliver adequate volumes of energy
    supplies
  • Russias bilateral deals undermine the common EU
    energy strategy
  • Russian attitudes towards foreign companies and
    its independent producers
  • Russian plans to diversify to Asia (and the
    domestic market)

4
Russian concerns Security of Demand
  • Russia should not invest without a clear idea
    about the level of the future EU energy demand
  • EU Barriers to downstream acquisitions
  • EU attempts to diversify - the pipeline projects
    bypassing Russia
  • A potential break-up of energy producing
    companies
  • Third party access gives an advantage to
    competitors and complicates project financing

5
The Energy Charter dilemmas
  • The EU enlargement and the Transit Protocol
    (article 20)
  • The link between transit and internal tariffs
    (article 7.3 of the ECT)
  • Transit dispute resolution (articles 7.6-7.7)
  • Key gas exporters seek to remain beyond EUs
    legal boundaries sovereignty rights

6
Russia and climate change
  • Russias participation in the Kyoto Protocol was
    a major success for the EU-Russia relationship
  • Russia has been encouraged by the financial
    benefits of emission trading and not by climate
    change concerns
  • Russia gave life to the Kyoto protocol and
    benefited from its strong bargaining position
  • Russia has a surplus of emission allowances based
    on the 1990 level

7
Russias doubts
  • Kyoto mechanisms and rules are too bureaucratic.
  • The government does not see much gain from the
    deal as it mainly benefits the private sector
  • Small and medium companies seeking to take part
    in these projects do not have adequate lobbying
    power to push them through
  • Rapid growth and high revenues from exports
    discouraged the government and large companies to
    take emission trading ad Joint Initiative
    projects seriously

8
Post-2012The expanding market?
  • The nature of Russian economy gives the energy
    sector a very large share in future emission
    trading projects
  • Inefficient energy production, transportation and
    consumption give Russia a serous potential to
    handle Joint Implementation projects
  • Current problems of the energy sector could give
    a boost to the emission trading market
  • Gains will be significant with the US and Chinese
    participation in emission trading

9
Financial crisis
  • Price volatility
  • Large corporate debt
  • Russias financial reserves are shrinking
  • Limited financial resources for growth

10
Corporate debt
  • Total (early 2008) around 450 billion
  • Rosnefts capitalisation 41 billion
  • Debt 21.4 billion
  • Gazproms capitalisation 193 billion
  • Debt 54 billion
  • Russian public debt 40 billion

11
Russian reserves in 2008
  • Early August 597,5 billion
  • Early December 437 billion
  • Russia has lost a quarter of its reserves since
    August 2008
  • Current levels up to 70 of Russias projected
    demand for external financing for 2009

12
New level of uncertainty
  • How will Russia finance its long-term,
    large-scale projects new pipelines, new fields,
    LNG?
  • Could China bail Russia out in return for
    low-priced energy supplies?
  • Will Russia change its policies towards the
    domestic energy sector taxation, privatisation,
    access to strategic reserves?
  • Independent producers start exporting gas?
  • Will Russia opt for a full scale diversification
    of its economy?
About PowerShow.com