"A little more than half of the world's oil is in the Middle East. Latin America, from Mexico to Argentina, comes in second with around percent, led by Venezuela, Brazil, and Mexico in that order. Venezuela ... certified an additional 85 billion barrels in reserves early in 2011 which made its reserves officially the biggest in the world at nearly 297 billion barrels." - Andrés Cala and Michael Economides, America's Blind Spot (2012)
The G-7 Energy Ministerial Meeting in Rome made a joint statement on 06/05/2014 about reducing European dependence on Russia oil. Some highlights:
We, the Energy Ministers of Canada, France, Germany, Italy, Japan, the United Kingdom, the United States, and the EU Commissioner for Energy, following The Hague Declaration of G7 Leaders of March 24th, met in Rome on May 5th and 6th to discuss ways to strengthen collective energy security. ...There's boilerplate in there about reducing greenhouse gas emissions, improving energy efficiency, "diversification of the energy mix," blah, blah. But the focus is on reducing Europe's dependency on Russian oil.
Recent events highlight the need to address energy security challenges. Energy should not be used as a means of political coercion nor as a threat to security. Energy disputes should be solved through dialogue based on reciprocity, transparency and continued cooperation. We are extremely concerned by the energy security implications of developments in Ukraine, as a consequence of Russia’s violation of Ukraine’s sovereignty and territorial integrity.
... And we remain united in our determination to provide various types of assistance that Ukraine needs to strengthen its energy security.
- ... We believe that the path to energy security is built on a number of core principles:
- ...Diversification of energy fuels, sources and routes, and encouragement of indigenous sources of energy supply.
- ... Putting in place emergency response systems, including reserves and fuel substitution for importing countries, in case of major energy disruptions.
... In the medium term, the diversification of sources and routes for fossil fuels is essential. No country should depend totally on one supplier. We intend to promote a more integrated LNG market, including through new supplies, the development of transport infrastructures, storage capacities, and LNG terminals. We support the opening of new routes to supply energy, in particular the Southern Corridor, as a route for possible other sources of supply for Europe. We will further promote flexible gas markets, including relaxation of destination clauses and producer-consumer dialogue.
... We welcome the recent signature in Bratislava of the Memorandum of Understanding and the Interconnection Agreement for reverse flows between Slovakia and Ukraine.
... We welcome the efforts of the European Commission to identify possible routes for reverse flow from entry points in existing gas infrastructures, to develop emergency plans for winter 2014-2015 at regional level, and to launch a coordinated action to increase the transparency of gas flows through the Ukrainian network.
...We ask the International Energy Agency, in close relation with the European Commission, to present within six months options for individual and collective actions of the G7 in the field of gas security.
But as Jens Burger points out in Die Gewinner der Ukraine-Krise Nachdenkseiten 07.05.2014, there is no quickly-available alternative to Russian oil and gas at comparable prices. The most likely sources of substitute supplies are Azerbaijan, Iran, Kazakhstan, Qatar and Turkmenistan. Burger notes that in comparison to those nations, "ist Russland in der Tat eine schon fast lupenreine Demokratie" ("Russia really is fine, almost flawless democracy"). The latter is a reference to a famous comment of Gerhard Schröder about Russia when he was Chancellor. It was an obviously overstated comment in defense of his generally friendly policy toward Russia.
But if the Western countries want to reduce dependence on Russia oil, then it would make sense to pursue a pragmatic, realistic policy toward Venezuela of the sort Cala and Economides advocate.
Sanctions on petrostates are two-edged swords. Now would be a good time to rethink pursuing a hostile policy toward Venezuela.
Tags: ukraine, venezuela