Yet, despite the benefits of a more interconnected world economy, this new era of globalization and development is not without its own consequences. In particular, the current state of the world’s energy industry and the prospects for its development give great cause for concern. World energy consumption is growing rapidly, by an average of 20% per decade over the past 30 years. Added to this is the fact that the first eight years of the new century were marked by both a deepening of old factors and the appearance of many new ones and trends in the world energy markets and in international relations, primarily on the oil and gas issue, which require thorough analysis and day-to-day observation for the adoption of decisions at the international level.
An additional cause for serious concern came in 2009 from the results of the first comprehensive study by the World Energy Agency (WEA); this study verified the status of more than 800 oil fields in various parts of the world, which account for some 75% of the world’s total “black gold” reserves. The study found that most of these oil fields had already passed their production peak and production was now falling nearly twice as fast as forecast just two years before. According to WEA data, world oil production is declining 6.7% annually, while a similar study in 2007 showed a decline of only 3.7% annually.
The WEA reviews of recent years have consistently raised the question of the serious imbalance of world energy generation in the long-term future. If current world economic trends continue, a possible physical shortage of oil production in 2030 is forecast, amounting to 12.5 million barrels a day (with a demand of 116 million barrels). That is, the oil deficit could exceed 10%. In turn, according to data from the Russian Institute of Energy and Finances, demand for primary energy resources in 2015–2030 will grow at rates that could create difficulties with supply, with a baseline scenario for world economic development that is unsustainable from the standpoint of ensuring energy supply in future decades.
Indeed, the latest WEA study warns that if governments continue present policies, global energy demand in 2030 will be 50% higher than it is today. Developing economies will account for 74% of the growth in demand, with China and India together accounting for 45%. Furthermore, the world’s growing population, which by 2030 will reach 8 billion, will play a considerable role in this process, with developing nations accounting for 97% of population growth.
Such trends will have a substantial economic impact, with the world community having to spend considerable additional financial resources in the foreseeable future to address the problems brought on by declining production and increasing demand. By the most optimistic estimates, energy development through 2030 will cost $22 trillion—more than 1% of the total world GDP over that period.
According to most leading experts, the continuation of current trends in world economics and energy policy, combined with a failure to take proactive steps to improve energy efficiency, could have critical consequences. Furthermore, neither advances in renewable forms of energy nor the revival of nuclear power or a coal renaissance alone can solve the problem of the growing unsustainability of energy markets and the energy deficit.
Thus, the priority for the immediately foreseeable future continues to be the production and discovery of conventional types of hydrocarbon resources: oil, coal, and especially gas.
Yet this is not without its own unique challenges. The effect of nonlinear globalization processes is that at its current stage of development, the world energy market is encountering a whole series of problems, the most important of which are high, unstable oil prices, the growing dependence of many countries on energy exports, the depletion of major hydrocarbon fields, and a lack of investment resources to develop hard-to-reach crude hydrocarbon reserves and other unconventional fuel sources.
At present, the instability of the global oil market is a direct threat to the economy of most countries of the world and the world economy as a whole—and this is why, as the G-8 leaders have repeatedly stressed, the problem of ensuring global energy security is at the top of the world community’s agenda. It is in this respect that mankind now badly needs breakthrough ideas capable of setting a basic course of action into the future in order to outline at least intermediate phases and criteria for assessing this complex process. Several years ago, Russia advanced a real plan for energy security, intended to combine the interests of producers, consumers, and transit states. Like any call for reconciliation, the plan was built on compromise, and strove to ensure transparency, stability, and predictability of national oil and gas market regulation systems. However, there are now serious obstacles on the path to realization of this plan, which unfortunately remain strong in world trade, undermining the principles of globalization.
The leading nations of the world have recently begun actively implementing new energy strategies, which are primarily aimed at protecting national interests and limiting the scale of external impacts. In other words, energy protectionism and nationalism have become the main theme of many countries’ political policy, despite declarations and professed understanding of the need to solve global energy problems together.
The appearance of such attitudes inevitably exacerbates the situation in international relations, forming new international blocs and reinforcing existing ones on whose basis energy interests rest or are integrated. Ideas and plans for “energy alternatives” can often be found in the press and in statements by various political figures. But these proposals are generally unconstructive due to the one-sidedness of the proposed initiatives and sometimes are simply downright utopian.
Today, special responsibility for the world’s fate rests with the Russian Federation, which not only produces a large share of the world’s energy, but also participates actively in international energy cooperation and thereby makes a substantial contribution to ensuring global energy security. Russia currently produces 10.5% of the world’s primary energy and exports about half of its own fuel production.
What is more, our country continues to hold first place in the world in oil production, with 9.91 million barrels a day in July 2009, which incidentally is a record for the past decade.
As a major player on the world oil and gas markets, Russia occupies a key position in the international energy security system. For example, annual deliveries of Russian energy resources to the European Union are equivalent to more than 440 million tons of oil, or nearly a third of EU energy consumption.
Russia’s geographic position, energy potential, and powerful oil and gas transportation system enable it to develop cooperation both with traditional partners in the West and with the countries of central Asia and the Far East, as well as the US and Canada.
It is not a stretch to say that Russia’s transit potential plays an important role in shaping the world’s energy architecture. Today, our country’s trunk pipelines extend nearly 139,000 miles, including 29,000 miles of oil pipelines, 97,500 miles of gas pipelines, and 12,000 miles of petroleum products pipelines. The trunk pipeline system carries 100% of Russia’s produced gas, 99% of its produced oil, and over 50% of its refined petroleum products. The trunk oil pipeline system includes 387 pumping stations, and the petroleum products pipeline system has 100.
At present, deliveries of crude hydrocarbons to Europe and the Central Asian and Caspian regions all pass through Russian territory. Our country is essentially becoming a unique locomotive of the world energy market and a backbone for further development of the global economy and adherence to the principle of sustainable development throughout the world.