Global Energy Industry: Fill & Download for Free

The launch of the Power of Siberia gas pipeline is another considerable step in attaching Russia to PRC as China’s extractive backyard.The financial details of the project have been kept confidential. However, at least at two occasions, high-placed members of our government indicated unprofitability of it for Russia, which probably explains the persistent secrecy.The Chinese are hard as nails at bargaining, and have a history of successfully re-negotiating prices for our deliveries. The questionable profitability of selling to China puts in doubt Putin’s declared strategy of diversifying our gas exports away from Europe: as per today, selling westward gives us more money in the till.For China, the pipeline is important for diversification of energy supplies, the bulk of which are coming from overseas LNG and from Central Asia. Yet, they make sure not to give Russia too strong a hand as energy supplier. The current deliveries through the pipeline cover as little as 1.6% of their total gas supply. In 2022, when the deliveries are to be increased to the full capacity of 38 Bcm/year in 2022-23, it would account for 9.5% of China's total gas supply (source). However, the Chayanda gas field in Yakutia region can deliver only 25 out of 38 Bcm, while the projected Kovykta field in the Irkutsk region needed to make up the difference isn’t developed yet.Below, a visual commentary of a Russian cartoonist about the direction that the Sino-Russian economic cooperation is taking. Machinery and equipment account for 5% of our exports to China, while almost half of Chinese exports to Russia are electronics, industrial equipment and high-tech items. 20% of our total imports come from China, while in China’s import stats we stand for minuscule 2.5%.

I am going anonymous in order to not create friction with my employer. I work in the oil and gas pipeline industry. The oil and gas companies are chock full of engineers, chemists, physicists, and other scientists. Virtually all of these folks know global warming/climate change is real, and that the hydrocarbon energy industry is the primary cause. The corporation PR departments are not typically so forthcoming. However, the major hydrocarbon companies and countries (think Exxon Mobile and Saudi Aramco) are increasingly investing in alternative energy. The writing is on the wall and they realize it is only a matter of time before significant changes come to the global energy industries.

Great question. My simple answer: energy is moving out of scarcity into abundance.This is true in fossil fuels. America’s shale revolution has undermined the belief in “peak oil”. It shows that new technologies, good governance, and strong property rights can open access to vast new sources of hydrocarbons. It has made natural gas cheaper, which will turn it into a more global commodity. There is almost without doubt more coal than we will ever burn.Thanks to renewables, it’s also true of electricity. Sun and wind are plentiful and cheap, and can produce a much bigger share of our electricity. Provided, that is, there are incentives for additional investment, and mechanisms to cope with intermittency, such as battery storage.This is a whopping change. From the Rockefellers to OPEC to gigantic electric utilities, cartels have sought to induce scarcity to push up prices. This has underpinned the huge up-front investment costs in oil rigs, pipelines, and the electricity grid.There may still be scarcities: will there be enough lithium, copper and cobalt to power the huge potential demands of electric vehicles and batteries? Given the right technologies, governance and legal systems, I’m sure there will be.But the other little-known secret of the energy industry is that The Economist isn’t always right. In 1999, the last time we predicted an era of abundance, we said oil could fall to $5 a barrel. It went on to rise to almost $150 a barrel. Oops.