Experts at the Valdai conference in the Dead Sea, Jordan discussed Monday energy issues. Valdai club brings together academics and political leaders in various regions of the world to convene high level "thinking" discussions aimed at breaking new ground in the public discourse looking to bring fresh ideas and new thinking in particular in conflict areas of the world.
Global Energy Security: The Role of the Middle East – What is the Middle east in the eyes of people in the world – terrorism, conflict and oil. The following sums up the main comments by the key speakers.
The current price of oil is not the price of production but the political price that is agreed upon in the world to keep acceptable level of supplies and investment in development. When the Americans talk about energy security they mean reducing dependence on oil from the Middle East. But OPEC's share in world energy supplies remains pretty constant. The oil from the area of the former Soviet Union is on the rise.
The future will see a significant increase in the use of natural gas, but coal and nuclear will also rise. In two decades the world energy needs will increase reliance on oil and coal. Predictions on future needs continue to reduce (each year now new assessments are being made showing a gradual down trend in the future need assessments). There are no suitable commercial facilities for trapping and storing green gases for reuse. By 2020 Europe will increase its use of renewables, but there will be an almost 50% growth in nuclear energy. Oil prices will increase perhaps not radical fluctuations but there will be increases. Russia not only supplies much of the world's fuel – oil, gas, coal, it is also one of the two suppliers of nuclear fuel. Russia will not be able to work under low prices like in the Middle East. There must be enough time to build new mechanisms and procedures to avoid leaps and jumps in the economy.
Sinan Ogan – Turkey
Turkey is not rich in energy resources. It is not enough to have resources, you must also transport then in safe ways. Turkey's geographic position places it in a key role in energy issues – both oil and gas. Turkey is the natural bridge between regions both in the Middle East and the area of the Caspian sea.
Ariel Cohen – Washington, DC
Asia Pacific and India will be the principle areas of demand for oil, gas and coal. OECD consumption declined by 2% as a result of the economic crisis. China grew during the same period significantly. OPEC today has 6 million barrels a day of excess capacity. There will be more and newer technology for engine propulsion of vehicles. Iraq, if security holds, will become a major supplier in the near future competing against Saudi Arabia in cheap oil. The Heritage Foundation ran various scenarios that are based on radical disruptions of energy supplies. Before the economic crisis, disruption projections very catastrophic. With 6 million barrels a day of excess capacity the disruption is much less catastrophic. Disruption scenarios included all kinds of terrorism, cutting flows in the Gulf, etc. If Iraq increases supply, Turkey's role in pipelines will be crucial. China outbids many because of their increasing demand. There are projected huge increases in the projection of use of cars in China and in India – in China – doubling in the next decade. The piracy of Somalia has more potential of causing energy concerns than the Israeli Arab conflict. There is no strategy for dealing with the piracy. This will affect the price and stability of oil flows than the Middle East conflict.
Shimshon Brokmann – Israel
Israel is a power island. There is no integration of the grids- even though we have peace with Egypt and Jordan – we are not linked. The growth rate for electricity is high in Israel and in the neighborhood. In 1999 44% electricity produced by coal. In 2009 it is 60%, 27% from gas, 1.6% fuel oil and 1.5% diesel. Israel is using 4 BCM of gas this year in electricity production. Israel will continue to buy gas from Egypt. Israel hopes that the Gaza field will be developed. In Gaza, the local power station is using fuel oil which is more expensive and more polluting. Until the Gaza field is developed Israel and/or Egypt should replace it with gas. Egypt wants to export 10 BCM gas a year through the Arab pipeline that will run around Israel and not through it.
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