The Geopolitics of Gas: Common Problems, Disparate Strategies

About the Book

With huge supplies, including from unconventional plays, and its low carbon properties as compared to oil and coal and decreasing transport hurdles, natural gas has what it takes to fulfil the escalating demand for energy. Yet, the promise that it held a few years ago as the fastest growing major source of energy appears to be fading, ironically due to abundant supplies. On the one hand, while the risk of recovering producers’ costs for the high capital investments required for production and liquefaction is increasing, on the other, consumers are demanding lower prices in a market that has turned in favour of the buyer. As a result, geopolitics, which was always in play in the energy market, is growing, as gas producing and exporting countries compete for a larger share of the market, or at the very least, retain their existing ones. More importantly, the entry of new supply sources is also pushing the market from the traditional oil-indexed pricing mechanism that was prevalent in the European and Asian markets, towards a more flexible mechanism, including a hub-based one. As liquidity in the gas market is increasing, there are also signs that a global market, as against the current regional one, may be emerging.

This volume looks at the evolving gas market and the various players who influence it — both as producers and consumers. However, some of the players, such as Australia and the new African producers, as well as Japan and South Korea, the two largest LNG consumers, have not been included as their approach tends to be more commercial than geopolitical in nature.

About the Author

Shebonti Ray Dadwal is a Senior Fellow with the Institute for Defence Studies and Analyses (IDSA), heading the Non-Traditional Security Centre at the Institute.

Prior to joining IDSA, she served as Deputy Secretary at the National Security Council Secretariat and was Senior Editor with The Financial Express.

She is a member of the CSCAP Study Group on Energy Security as well as member of the Core Group on Myanmar of the MEA’s Indian Council of World Affairs (ICWA).

In April 2009, she was awarded a Chevening Fellowship by the Foreign and Commonwealth Office of the UK on completion of a course in Economics of Energy at the Institute for Energy Research and Policy, University of Birmingham, UK. She is also a member of the Editorial Board of IDSA’s flagship journal, Strategic Analysis.

Her research focus is on Energy Security and she has recently published a monograph on The Geopolitics of America’s Energy Independence: Implications for China, India and the Global Energy Market. She has written two books. The first, Rethinking Energy Security in India was published in 2002, and this is her second book. She is also the co-editor of Non-Traditional Security Challenges in Asia: Approaches and Responses, published by Routledge in 2015, and has co-authored the IDSA Report on Security Implications of Climate Change for India (2009), apart from writing several peer-reviewed articles and papers focusing on Energy Security.

Contents

1. The Problem of Plenty
   Natural Gas Trajectory
   Changing Trends in the Gas Market
   LNG as a Harbinger for Change
   Growing Geopolitics
   • The United States of America
   • Russia
   • West Asia (Iran, Qatar)
   • Turkmenistan
   • Australia
   • Arctic
   • China
   • India

   What Lies Ahead?

2. The United States of America – The Game Changer
   A Gas-Based Resurgence
   The ‘Revolution’
   Strategic Benefits of US Gas Exports
   Opportunities and Challenges for US Gas Exports
   Can LNG Exports Achieve US Geopolitical Strategic Goals?
   Impact of Energy Independence on US Foreign Policy
3. Russia – Master of the (Energy) Game
   The Russian Gas Sector
   Natural Gas Exports as a Strategic Tool
   Policies to Retain Markets
   Diversifying Markets
   • Europe Still a Coveted Market
   • Seeking an Asian Market
   • Caspian Reserves
   • Exports to South Asian Markets

   Challenge to Retain Leadership

4. Iran Re-emerges as a Potential Gas Superpower
   Background
   Potential Gas Superpower?
   Market Options
   • Europe
   • West Asia

   The South Asian Market
   The Challenges

5. Qatar – LNG Leader, But for How Long?
   Qatar’s Energy Policy
   Regional Policy
   Energy as Strategic Tool for Foreign Policy
   Impact of a Changing Gas Market
   Qatar’s Options
   Future Challenges for Qatar
6. Turkmenistan – The Old Newcomer
   The Russian Bearhug
   Turning Towards China
   The Search for New Markets – South Asia
   To Europe118Ashgabat’s Quandary
7. Arctic – The Last Gas Frontier
   Russia Raising its Stakes
   The US Turns to the Arctic
   Growing Militarisation
   China’s Arctic Strategy
   India’s Interests
   A New Great Game?
8. China – The Market Driver
   China’s Gas Procurement Strategy
   • Overseas Asset Acquisitions
   • Pipeline Strategy
   • LNG Imports

   China’s Shale Gas Policy
   Offshore Disputes

   • The South China Sea
   • East China Sea

   Strategising Supplies

9. India – A Legacy of Wasted Opportunities
   Challenges for India’s Gas Sector
   • A Curious Pricing Regime
   • Low Production
   • Equity Assets
   • Poor Domestic Gas Infrastructure

   Transnational Pipeline(s) Woes

   • Unconventional Gas

   Can the Inconsistencies be Overcome?

10. What Lies Ahead for Gas in the Future?
    Geopolitics Versus Price
    Changing Market Dynamics
    Moving Towards a More Integrated Gas Market

Index

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