Gulf and European Energy Supply Security - Feem-project.net

Energy Security: Potential for EU-GCC Cooperation
be changed. The interdependence of producers
and consumers is a fundamental feature of EU gas
supplies. On the other hand, if the flow is interrupted
or halted, the consuming country experiences great
difficulties in accessing other suppliers. The situation
becomes particularly dangerous when the country
does not possess sufficient storage capacities. In
that case, the country is left with no gas at all and
is forced to direct its consumption to alternative
energies. This is precisely what happened in the
Balkan region following a dispute between Russia
and Ukraine in 2008-2009.
1.1 Armed Conflicts
So far, no major gas-producing country has been
involved directly in a major inter-state conflict (with
the exception of the Russia-Georgia war of 2008). In
the case of armed conflicts involving oil-producing
countries, the situation has proved potentially
dangerous even for third parties located in the vicinity
of the conflict area. In 1984, for example, during the
Iran-Iraq war, Saudi and Kuwaiti oil tankers were
attacked while crossing the Arabian Gulf. 2 At that
time, Japan was in the first phase of negotiating
an LNG deal with Qatar; the negotiations were
interrupted and only resumed a decade later. During
the 2009 Russia-Georgia war, Georgian officials
claimed that Russian bombing had targeted the Baku-
Tbilisi-Ceyhan oil pipeline. Close to this pipeline also
flows the Baku-Tbilisi-Erzurum gas pipeline (South
Caucasus), while other important proposed pipelines
could follow the same route. Although the allegation
turned out to be false, it caused concern in Europe as
it showed that a supply axis was under the threat of
collateral damage from a conflict.
However, looking only at countries officially
at war gives an incomplete picture as the majority
of ongoing conflicts today do not fall within the
traditional definition of war. 3 Asymmetrical conflicts
appearing within the environment of a civil or intrastate
war represent the most important category
of armed conflicts now. This has repercussions on
the understanding of the security of gas supply,
as a producing or transit country that is not per se
involved in a war can still represent a threat when
a part of its territory is affected by conflict. This is
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particularly the case if the physical infrastructure lies
close to combat zones or within reach of a faction
fighting the central government.
It should be underlined that although no major
gas producer is currently involved in a traditional war,
many are affected in varying degrees by internal
conflicts.
War, therefore, could be an important risk for
gas trade if:
• a producing or transit country is directly involved
in the conflict
• a producing or transit country is located in a
region close to the conflict
•
a gas pipeline takes a route affected by the
conflict
On the basis of historical experience, however,
it can be said that armed conflicts, while they have
greatly impacted prices and the development of new
infrastructure, have rarely been the cause of a major
physical disruption. To come back to the example of
the 2008 Russia-Georgia war, all the variables tended
to indicate a military intervention threatening
the oil and gas transportation infrastructure; but
nothing happened, showing that the effects of an
armed conflict on the gas infrastructure are highly
unpredictable and not always damaging.
1.2 Political Instability
The risk associated with regime change in a
producing country is linked to the possibility of
consequent policy changes affecting gas supplies.
Political instability in gas-producing countries has
never resulted in a cut-off of the physical flow of
gas. However, in some cases, newly-established
governments have forced gas buyers to enter into
a renegotiation of the existing contracts. However,
this is generally the exception as economic interests
take primacy over political or ideological interests.
The governments of producing countries tend to
protect their reputation as reliable suppliers.
To illustrate the risk caused by political instability,
we may refer to two contrasting examples: first,
Algeria after the death of President Boumedienne
and second, Qatar in the mid-1990s.
Following the death of President Boumedienne
in 1978, a new administration took charge. They