Posted by Christian Kim on March 2nd, 2009 Printer-Friendly
In Guiseppe Verdi’s 1841 opera “Nabucco,” the eponymous Babylonian king: destroys Jerusalem and takes the Jews captive; goes mad and regains sanity; then begs the God of the Hebrews for forgiveness and lets the Jews go. Apparently, someone named Europe’s southern gas corridor project after this classic Italian masterpiece, perhaps in the hopes of inspiring a similarly liberating denouement for the EU’s energy woes. But much like King Nabucco-who himself enslaved the Jews before granting them freedom-Europe’s Russian gas shackles are a circumstance of its own making, and Nabucco will do little to change that.
In 2007, the EU consumed approximately 505 billion cubic meters (bcm) of natural gas. The Nabucco pipeline’s proposed maximum throughput of 31 bcm per year would supply the EU with only about 6% of its gas requirements. Given the relatively minor contribution Nabucco would make to total gas supply and its estimated €8 billion price tag, the EU knows it would be paying a hefty premium to build a pipeline circumventing Russian soil. But if Nabucco’s cost were the only issue, the European Commission would have allocated a lot more than the measly €250 million of the €3.5 billion Euro energy investment proposal it unveiled on January 28. The more serious concern is where Nabucco’s gas will come from.
The U.S. State Department keeps insisting Western-friendly Azerbaijan will fill Nabucco’s pipes. That would be nice but for the fact that Azerbaijan produced only 23 bcm in 2008, and its proven gas reserves of a CIA-estimated 850 bcm are not significant enough to make Baku a major gas player. The truth is, gas must come from either or both of two major sources: Iran, which boasts 27.8 trillion cubic meters (tcm) of proven reserves (15.7% of global supply, second-largest after Russia); or Turkmenistan, whose South Yolotan-Osman fields were independently appraised by a Western firm to have anywhere from 4 tcm to 14 tcm of gas (with a best estimate of 6 tcm) and represent the crown jewels of Central Asian gas. For now, Iran is an unpalatable option as long as its nuclear program remains under UN scrutiny. And Turkmen gas would have to be delivered by an underwater, trans-Caspian pipeline, which is infeasible because of the Caspian Sea’s unresolved maritime boundaries—a body of water patrolled mostly by the Russian Navy.
full text >>>
