A few experts have been projecting the advent of the post-oil era within the next fifty years. They are saying that widespread electric vehicle (EV) use could spell the end of oil. The underlying assumption is that alternatives to oil would have been fully and cheaply developed by then thus ushering the post-oil era. Hardly a day goes by without another media report about the impending demise of the Internal Combustion Engine (ICE) as petroleum-powered cars and trucks are replaced by super-clean EVs. There is no doubt that global energy’s future is in renewables. Solar power along with other alternative energy sources will ultimately provide all the electricity we need, will power water desalination plants and will drive our transport. This chapter will argue that there could never be a post-oil era throughout the 21st century and far beyond because it is very doubtful that an alternative as versatile and practicable as oil, particularly in transport, could totally replace oil in the next 100 years and beyond. It will also argue that oil will continue to be used extensively in the global petrochemical industry and other industries and outlets from pharmaceuticals to plastics, aviation and computers to agriculture and also in transport. The chapter will conclude that oil will continue to reign supreme throughout the 21st century and far beyond.
Mamdouh G. Salameh
Since May 2014, when the Power of Siberia (POS) 1 gas deal was announced, much western media coverage has been focused on the delay of POS 1 development. However, it is safe to say that there is no change of fundamentals of Sino-Russian oil and gas cooperation. Unlike the ESPO (Eastern Siberia-Pacific Ocean) oil line which started its operation in 2009 and made Russia a swing supplier between European and Asian markets, POS 1 line is still under construction and even after completion it will not make Russia a swing supplier. Nonetheless, the impacts of Sino-Russian gas cooperation cannot be underestimated as POS 1 development is only the start of the expanding gas sector cooperation. Another important factor that will affect Sino-Russian gas cooperation is the success of Yamal LNG development. Without the provision of loan for gas, there was not guarantee of the success of Yamal LNG. Importantly, Yamal LNG is set to open a new chapter in Russia’s Arctic onshore gas development in the coming decade and China’s role as the strategic investor and gas market provider will play a pivotal role. As China’s gas expansion in the coming years and decades will continue, China is determined to diversity the pipeline gas and LNG supply sources. Time will tell how important a role Sino-Russian gas co-operation will play in China’s gas expansion.
Se Hyun Ahn
This chapter explores Republic of Korea (ROK)’s energy security priorities and problems. During President Park’s administration, ROK has faced a wide range of energy security problems. The nation’s energy diplomacy has virtually ceased to function for mostly domestic political reasons. Furthermore, the nation’s energy security has been endangered because ROK’s energy security policy has been poorly implemented with no concrete goals and no rational choice of energy mix plan. This chapter seeks to examine ROK’s most urgent energy security agenda and how the country should respond to these specific issues. Moreover, this study will investigate ROK’s energy mix policy in detail according to various energy resources. This chapter contends that the current problems of ROK’s energy security and the deadlock of ROK’s energy diplomacy stemmed from the ignorance of the exact definition of energy security at the national level among policymakers, academia, and various political groups including top leadership. ROK’s energy security is highly likely to experience significant disarray in the upcoming decades since the nation’s energy security clock has been reset to five years earlier during Park’s administration.
The power system is in the midst of the digital revolution, driven by a rapidly evolving technology that is transforming the grid into a “smart grid.” This chapter focuses on this technological revolution and begins by discussing what is the smart grid, what are its drives and its challenges, followed by a framework for analyzing its costs and benefits. Such an evaluation requires taking into account the reliability and resilience of the grid, the flexibility to assimilate distributed energy resources (DER) and the impacts on the workforce, among many variables. This discussion necessarily requires considering the role of different technological innovations that are penetrating the electric system and its impacts on the utilities. We explore what are the utilities of the future and what are the alternative business models that may arise. Finally, we consider the interplay of the different technologies and the new challenges that these revolutions will bring to regulators.
The chapter analyzes the new trend in Russia’s energy policy, i.e. its gradual shift to China and India, and discusses the long-term and short-term reasons, challenges, risks and implications of this Eastern vector. Rosneft, the number one Russian oil company, is the driver of this turn to the East. Initially, it made the focus solely on China acting along several directions: raising Chinese credits, expanding crude exports to PRC within the framework of oil-for-loans deals, providing access to CNPC and Sinopec to Russian upstream, and trying to establish a niche in the Chinese downstream. This growing exposure of Rosneft to China that became even stronger due anti-Russian sanctions was causing concern of Russian politicians and analysts and weakened Rosneft’s positions at negotiations with its Chinese counterparts. However, recently Rosneft signed several strategic deals with the Indian petroleum companies, both partnering with them in the development of Russian oil reserves and buying downstream assets in India. These deals improved the balance of forces between Russia and China, but, probably, created new uncertainties in the Russia-India-China triangle.
Colin J. Campbell
Oil and gas reserves have fuelled the economic expansion of the world for over a century. However, oil and gas are finite natural resources, and as such are subject to depletion. The remarkable oil-driven chapter of history is half over. The second half of the oil age will be marked by economic contraction, and a transition threatened by great tension. It is an important issue with far-reaching economic, social, financial and political consequences. But it is a complex topic, and the data needed for proper analysis are far from reliable. This article written in 2014 provides a useful background with which to analyse the unfolding recent events that affect the world, not all of which were foreseen in detail.
The energy revolution is transforming many nations’ dependence on fuels and imports, but not necessarily in ways that would increase energy security. Wind and solar produce electricity, which relatively few nations import, although they do sometimes displace coal and nuclear power. The latter two, however, have not typically been considered vulnerable. And the increased use of natural gas to offset unreliable renewables means that some countries will actually become more dependent on foreign supplies. However, only a few countries in Europe are heavily dependent on one or two suppliers. And the shale revolution could eventually mean that many smaller countries can reduce oil and gas imports, enhancing their energy security. At present, the boom in U.S. shale gas production has increased supply on the international market and allowed at least some diversification for importers.
Rene Roger Tissot
Sub-Sahara Africa (SSA) has failed to industrialize despite past efforts toward that goal. In fact, the share of Sub-Sahara Africa industrial output is today similar to the one achieved more than 60 years ago. The surge on commodity prices in the last decade brought high levels of growth to many commodity dependent economies from Sub-Sahara Africa, but not industrialization. Since SSA's mineral and hydrocarbon wealth is substantial, expectations of ongoing investments in the extractive sector will continue, despite the more recent decline in commodity prices. In recent years increasing support for an industrialization strategy based on natural resources has gained traction among policymakers. The driver of natural resource industrialization is through linkages that can be created as a result of the investments made from the exploitation of the natural resources. Local Content Policies (LCP) are aimed at creating the development of those linkages. However, the adoption of LCP in SSA appears to have achieved, until now, modest results. A key challenge for building linkages in SSA is the lack of enterprises that can enter the supply chain. What seems to be missing in SSA is a large group of small and medium enterprises, described in the literature as the "missing middle". However, three emerging trends in SSA can offer some hope about the possibilities of LCP: rapid urbanization, growth of working age population and the surge of private Chinese investments in manufacturing activities in SSA.
The trade and pricing nexus that has developed between the Middle East oil producers and its oil importing neighbours ‘East of Suez’ over the past half century is among the most fundamental variables of any global model of energy politics. Key dimensions which characterize the oil trade and pricing nexus between the two regions include Asia’s remarkable oil demand growth and its impact on inter-regional oil trade, the pricing formulas used by Middle East national oil companies (NOCs) in term contract sales to Asia, buyer perceptions of the ‘Asia premium’ alleged to apply to crude oil sales in the region, and the role of price reporting agencies in crude oil price discovery in Asia.
Alberto Cisneros Lavaller
Our subject matter brings attention to a historical perspective of previous oil price downturns. It focuses on three price downturns during the last 30 years. Such an analysis allows us to understand better the implications of the current downturn, particularly with respect to the development of certain oil plays in Latin America. The analysis also evaluates the impact of low prices on development of high cost and non-conventional sources of oil in selected Latin American countries, including deep water, extra heavy oil, pre-salt and shale oil. In this regard, “non-conventional oils” encompasses plays that are difficult and costly to develop in addition to the shale oil that often defines “unconventional” oil. In other words, this article considers “non-conventional oils” to include all oils other than conventional, light, easy-to-develop fields. The article concludes with an uplift epilogue: prices are showing signs of recovery and in due course some of those ¨difficult¨ plays will be able to be developed.