Russia and Gas Supply

One of the issues that is often discussed with other fellow strategic foresight practitioners is the future of resource wars.  As Peak Oil emerges, demand for fossil fuels and energy prices increase so too does the political pressure to guarantee supplies for a nation’s population.  This is more critical in the countries surrounding Russia that are reliant on it for supply of gas, particularly for heating during winter.

Geopolitical tensions are re-surfacing with Ukraine which has recently sided more closely with the West and wishes to engage more with the EU.  Current economic difficulties caused by the GFHF (Global Financial Hissy Fit – thanks Kim) are creating slowdowns across the Ukraine economy, increasing this tension.

The recent gas wars are multi-layered across international, national, political and economic segments.  Internationally, Europe has had their gas supplies from Russia reduced as about 80% of Russian supplies pass through Ukraine.  Russia wishes to increase its price of gas to Ukraine (which is currently heavily subsidised) and seek recompense from Ukraine for past debts for gas supplies.  In the meantime, Ukraine siphons off some of the gas for Europe for its own purposes ( which it does not pay for).  While there are some other supply routes to Western Europe through Belarus, these are not as large as those through Ukraine.  And the ante gets upped from this regional geopolitical standoff with Ukraine when it seeks to enlist Western Europe and the US in its dealings with Russia, while Russia in comparison is not seeking to elevate the issues.  The Ukraine is very important politically for Russia as a beach-head against Europe and for access to Russian bases on the Caspian Sea and wishes to keep the problem local and not internationalised.

Compounding all of this further is the location of new growth markets for Russian gas – and they do not lie in Europe but east towards Japan and China.  Why bother with providing gas to Europe when there are exciting possibilities to the East?  And so Russia is building new gas supply lines to China and potentially to India if and when Afghanistan becomes stable.

Perhaps this is a foretaste of what is to come.  Regional conflicts escalating into international confrontations with the initial cause associated with energy supplies (or water).  And perhaps also a weak signal of further tensions between new powers (Russia, India, China) as compared with those of yesteryear (Western Europe and the US).  In particular, it could mean that relationships transform so that enemies of the past are economic allies of the future.


3 Responses to Russia and Gas Supply

  1. innotecture says:

    Luke – Most wars in history have been resource wars – focused on land (agricultural/mineral resources) or , more rarely, people (human resources). One impact of resource wars does affect relationships between sovereign states. Another impact is within states. An example is the quarreling within Australia around the Murray-Darling basin. The 3 states you mention (Russia, China, India) cover vast areas and a variety of geographies and cultures. In the 18th, 19th & 20th centuries, nation states were created on the basis of shared culture (“blood & soil”). Will future state boundaries be drawn around natural resources (“oil & water”).

  2. Thanks Matt – I agree that many wars in history are in some way resource-based – yet often this is to take over land by colonial powers to increase wealth and project power. To conquer and raise taxes from those conquered (as well as bloodlust and other forms of lust).
    I like the idea of future state boundaries being drawn around natural resources but doubt that it will happen. There is too much weight of history to redraw boundaries and they tend to be drawn and maintained on cultural grounds (ethnic groups, language, etc). Things always change and it would be nice to see this occur. But perhaps you are searching for the mystical Shangri-la – nestled in the luxuriant valleys of the Himalayas? What happens to Shangri-la when its waters are diverted by outside forces for hydro or to be used for irrigation elsewhere?

  3. innotecture says:

    Luke – There’s two points I’d make here:

    – State boundaries are actually fairly fluid things. Look at a map of Eastern Europe and Central Asia 20 years – and then compare it with one today. The nation state is a comparatively recent invention and the many of the nations in the world are less than 70 years old. Take the second & fourth most populous states on the plant – India & Indonesia – neither existed as political entities 100 years ago. Ethnicity is one bond that holds people together – but it is only one.

    – “Things always change and it would be nice to see this occur” – I’m not necessarily sure that states built around resources are any better than those based around ethnicity or history. It simply means a new set of winners and losers, a new set of power struggles. Your Shangri-La scenario poses two obvious outcomes – armed conflict or a simmering struggle (with technology used to compete for water) – a dry war rather than a cold one.

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