1. Introduction
1.4. Literature Review
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development or not. Capacity of natural gas resources in Central Asia: the author will examine the capacity of natural gas reserves which are located in Central Asian region and which country could be considered as the richest in terms of gas resources.
2. Energy state policy of individual states: the author will describe energy strategies of each country and its implementation.
3. Localization and technical condition of gas transportation infrastructure: old, present, and progress and in future projects. Geopolitical circumstances, transportation projects in implementation that determinates main geopolitical circumstances, which create a significant impact on the results for Central Asian region and rest of the world.
The main research questions of the thesis are:
1. What is the degree of dependency of central Asian States to Russia in frame of natural gas issue?
2. Whether the geopolitical competition between Russia, China, U.S., E.U, and Iran (through the prism of natural gas distribution) is a threat or chance for economic and political development of Central Asian states?
1.4. Literature Review
There are quite an amount of empirical literatures written about Central Asian energy issues such as books, articles, official documents. Below the author will briefly describe the main points of the most substantial works that were used during this research. As well during the research amount of statistical data was implemented.
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examines developments in the Russian gas industry since the late 1990s in a domestic and international context and likely developments over the next two decades. Russian gas deliveries will expand from a domestic, CIS and European focus, to a global role encompassing Asian and global markets. Over the same period Gazprom has the potential to become Russia‘s first multinational energy – oil and gas – company.Eugene Rumer and Dmitri Trenin ―Central Asia: Views from Washington, Moscow, and Beijing‖12 – the book offers a four-part analysis of the region‘s new importance in world affairs. Authors examine the place of Central Asia in a global perspective. They look at the region from the standpoint of traditional hegemon Russia, new player United States and new economic superpower China.
Robert Ebel and Rajan Menon ―Energy Conflict in Central Asia and the Caucasus‖13 – this book examines the relationship between competition for energy resources and the propensity for conflict in the Caspian region, taking the discussion well beyond issues of pipeline politics and the significance of Caspian oil and gas to the global market. The book examines the impact of energy wealth on political life and the economies of Azerbaijan, Kazakhstan, and Turkmenistan. In several chapters authors discuss the ways in which Russia, China, Iran, and Turkey are attempting to uphold their energy interests in the newly independent states, and the impact of competition for production contracts and pipeline routes on regional security.
Adam N. Stulberg ―Well-oiled diplomacy: strategic manipulation and Russia‘s energy statecraft in Eurasia‖14 – this book examines Russia‘s mixed success at
11 Jonathan Stern, The Future of Russian Gas and Gazprom, Oxford: Oxford University Press, 2005.
12 Eugene Rumer and Trenin Dmitri "Central Asia: Views from Washington, Moscow, and Beijing‖, Armonk, N.Y. : M.E.
Sharpe, Inc., 2007.
13 Robert Ebel and Menon Rajan "Energy Conflict in Central Asia and the Caucasus", New York, N.Y. : RoutledgeCurzon, USA 2004.
14 Adam N Stulberg, ―Well-Oiled Diplomacy: Strategic Manipulation and Russia's Energy Statecraft in Eurasia,‖ New York:
State University of New York Press, 2007.
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several case studies, including Russia‘s successful natural gas diplomacy toward Turkmenistan and Kazakhstan.Ian Wybrew-Bond, Jonathan Stern ―Natural Gas in Asia: The Challenges of Growth in China, India, Japan and Korea‖15 – this book assesses the economic opportunities, political obstacles and other challenges to these projects. In order to succeed, huge pipeline infrastructure will need to be built over long distances to bring gas to these markets, as well as significant numbers of new LNG terminals. There are chapters on the major current and potential gas markets in Asia: China, India, Japan and Korea, as well as chapters on the potential supply of pipeline gas and LNG to Asia from: Russia, Siberia, and the Far East the Far East and a number of Central Asian and Middle Eastern countries.
Simon Pirani ―Russian and CIS Gas Markets and their Impact on Europe‖16 – a book dealing with gas markets not only in Russia but in the Commonwealth of Independent States as a whole could not be more timely There are chapters about of the potential fragility of Central Asian gas contracts with Russia and other potential customers. There are also chapters about development of gas production and gas markets in Caspian and Caucasus countries and it substantial importance to any fourth corridor through which additional gas supplies might flow to Europe.
David G. Victor and Mark H. Hayes ―Natural Gas and Geopolitics: From 1970 to 2040‖17 – this book investigates the implications of this shift, utilizing historical case studies as well as advanced economic modeling to examine the interplay between economic and political factors in the development of natural gas resources. The contributors aim to shed light on the political challenges, which may accompany a shift to a gas-fed world.
15 Ian Wybrew-Bond, Jonathan Stern, Natural Gas in Asia: The Challenges of Growth in China, India, Japan and Korea, Oxford: Oxford University Press, 2008.
16Simon Pirani, Russian and CIS Gas Markets and their Impact on Europe, Oxford: Oxford University Press, 2009.
17David Victor and Mark Hayes, Natural Gas and Geopolitics: From 1970 to 2040, Cambridge: Cambridge University Press, 2006.
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Michael P. Croissant and Bulent Aras ―Oil and Geopolitics in the Caspian Sea Region‖18 – this book is describe the scramble for access to the vast energy riches of the Caspian Sea basin on the part of regional and global powers has become one of the most important geopolitical developments of the post-Cold War era. This essay collection offers diverse interpretations of the struggle for Caspian oil and gas.
Akiria Miyamoto ―Natural gas in Central Asia: industries, markets and export options of Kazakhstan, Turkmenistan and Uzbekistan‖ – the book represents a comprehensive study examines the recent development of the three major gas resource countries in Central Asia. The author assesses the strategies likely to be taken by the Central Asian gas industry, especially with regard to pipeline construction.
William Byrd and Martin Raiser ―Economic cooperation in the wider Central Asia region‖19 – this book examines big issues that affect regional cooperation and development in Central Asia region. One of the chapters analyzes the development and trade of energy resources in the wider Central Asia region. The Author focuses on energy security, energy transmission networks, infrastructure and institutions.
Sally Cummings ―Oil, Transition and Security in Central Asia‖20 – by this book the author approaching Central Asia from the perspective of geopolitics, transition, oil and stability, the authors provide a very broad and diverse analysis of the region, examining domestic and international developments since 1991. The book both provides an introduction to the region and presents advanced research on international pipeline projects, political risk and developments.
18Akiria Miyamoto, Natural gas in Central Asia: industries, markets and export options of Kazakhstan, Turkmenistan and Uzbekistan, Oxford: Oxford University Press, 2008.
19William Byrd and Martin Raiser, Economic cooperation in the wider Central Asia region, Washington, D.C. : World Bank, 2006.
20Sally Cummings, Oil, Transition and Security in Central Asia, New York, N.Y. : Routledge, 2003.
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Shamil Midkhatovich Yenikeyeff "Kazakhstan‘s gas: export markets and export routes"21 - the article is focusing on Kazakh gas export potential, also encompassing more general political and energy issues.
Crisis Group Asia Report "Central Asia‘s Energy Risks"22 - the article is about three oil and gas producers in the Central Asia – Kazakhstan, Turkmenistan and Uzbekistan. This overview of energy export, producing raw materials, and internal stability in that region.
Vladimir Paramonov and Aleksey Strokov "Structural Interdependence of Russia & Central Asia in the Oil and Gas Sectors"23 - this article is about the cooperation between Russia and the countries of Central Asia in the oil and gas sphere.
The authors believe that this cooperation is the legacy of structural interdependence between these countries in the oil, gas, water and electricity sectors bequeathed by the centrally-planned command economy of the Soviet Union.
Vladimir Paramonov ―The future supply of gas from central Asia to Russia: an expert assessment"24 - this article is about the supply of gas from Central Asia to Russia; and shows main performance indicators of gas sectors of Central Asian countries and plans for the future.
Stanislav Chernyavsky "Central Asian an Era of Change"25 - this article heightened tensions in Central Asia are due to internal and external factors. The external factors for the rise in tensions include the seizure of local resources by large
21Shamil Midkhatovich Yenikeyeff, "Kazakhstan‘s gas: export markets and export routes", 2008, http://www.oxfordenergy.org/pdfs/NG25.pdf, access July 15 2010.
22 Crisis Group Asia Report "Central Asia‘s Energy Risks‖, Asia Report N°133,
http://www.crisisgroup.org/en/regions/asia/central-asia/133-central-asias-energy-risks.aspx, access July 2011
23Vladimir Paramonov and Strokov Aleksey , The Defense Academy is the United Kingdom "Structural interdependence of Russia & Central Asia in the oil and gas sectors",2008,
http://www.da.mod.uk/colleges/arag/document-listings/ca/07(16)VPEnglish.pdf, access July 15 2010.
24Vladimir Paramonov ―The future supply of gas from central Asia to Russia: an expert assessment", http://www.da.mod.uk/colleges/arag/document-listings/ca/08%2804%29JP.pdf, access July 15 2010
25 Chernyavsky Stanislav "Central Asian an Era of Change", http://eng.globalaffairs.ru/number/n_6188 ,access July 15 2010.
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transnational companies, as well as the direct involvement of new actors on this stage:
the United States, member countries of the European Union, as well as China and Turkey.
Marco Giuli "Nabucco pipeline and the Turkmenistan conundrum"26 - this paper aims to explore the prospects for Turkmen natural gas participation in the Nabucco pipeline project. Article emphases that despite the improved political landscape in Turkmenistan, several obstacles still persist: among them, the commitment of the new leadership to supply Russia and China as well as the weak prospects for the Trans-Caspian pipeline.
Martha Brill Olcott "International Gas Trade in Central Asia: Turkmenistan, Iran, Russia and Afghanistan"27 - this paper explores the reasons why Turkmenistan has found it so difficult to market its gas. It looks at the relative roles played by geopolitical factors, the economics of transport and sale of gas, and how these affected the routes Turkmenistan currently uses, as well as the projects that were put on hold.
Stephen Blank " Energy, Economics, and Security in Central Asia: Russia and Its Rivals"28 - this article attempts to trace the importance of the new forces unleashed by the advent of Central Asian States by focusing on the struggle around energy and security issues involving them.
Aleksandra Jarosiewicz and Maciej Flakowski "The Great Game around Turkmenistan"29 - this article is about competitors in the ‗Great Game‘, to gain political influence in Turkmenistan and access to hitherto unexploited Turkmen deposits of gas and oil. The authors pointed out that a new stage in the Great Game, which has been played for influence in Central Asia and control of access to its energy
26 Giuli Marco "Nabucco pipeline and the Turkmenistan conundrum", http://www.cria-online.org/Journal/4/CRIA_Summer%2008_Whole%20Issue.pdf , access July 15 2011.
27Martha Brill Olcott, "International Gas Trade in Central Asia: Turkmenistan, Iran, Russia and Afghanistan"
http://www.rice.edu/energy/publications/docs/GAS_InternationalGasTradeinCentralAsia.pdf, access July 15 2011.
28 Stephen Blank, 1995, "Energy, Economics, and Security in Central Asia: Russia and Its Rivals", http://www.strategicstudiesinstitute.army.mil/pdffiles/pub119.pdf, access July 2011.
29 Jarosiewicz Aleksandra and Flakowski Maciej, , "The Great Game around Turkmenistan", http://www.osw.waw.pl/sites/default/files/punkt_widzenia_17.pdf , access July 15 2011.
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resources for many years have been launched, and Turkmenistan has become the main setting for it. The major actors involved are Russia, the United States, China and the European Union.
Michael Fredholm "The Russian energy strategy & energy policy: pipeline diplomacy or mutual dependence?"30 - this article is about the Russian energy policy, export of energy and Russia‘s strategic needs with regard to the energy industry (such as pipelines, export ports, and refineries).
Vladimir Paramonov and Aleksey Strokov ―Russian oil and gas projects and investments in Central Asia‖31 - the article represents a review of the current condition of the project and investment activity of Russia and Russian companies.
Dina R. Spechler and Martin C. Spechler "Trade, Energy, and Security in the Central Asian Arena"32 - this article examines whether the economic structures, socio-political conditions, resources, and trade patterns of Central Asia are likely to generate significant regional or international conflict in the coming decade.
1.5. Methodology and Approach
In order to examine the main steps of interaction process between Central Asian countries and main players on international arena such as China, USA, Russia European Union, etc. from 1991 till present, the author will follow by concepts of most geopolitical approach in particular, data analysis, identification of origin date, then evidence of localizations. In frame of this method the interpretation of facts is mainly based on chronological principle in combination with topical. In addition, the author approaches the issues within the historical context in order to provide solid
30Michael Fredholm "The Russian energy strategy & energy policy: pipeline diplomacy or mutual dependence?,‖
http://www.da.mod.uk/colleges/arag/document-listings/russian/05%2841%29-MF.pdf , access July 15 2011.
31Paramonov Vladimir and Aleksey Strokov ―Russian oil and gas projects and investments in Central Asia‖, http://www.da.mod.uk/colleges/arag/document-listings/ca/08%2819%29VP%20English.pdf ,access July 15 2011.
32 Dina R. Spechler and Martin C. Spechler "Trade, Energy, and Security in the Central Asian Arena",
http://www.nbr.org/publications/strategic_asia/pdf/Preview/SA06/SA06_C_Asia_preview.pdf , access July 2011
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foundational background for clarification of examined issues. However the main emphasis is on the current situation and trends linking the historical context with present situation. The location of the resource also acquires importance, in a certain territory and not in others – there lies the specificity of the territory - and to this, its value as a strategic resource has to be added the high degree of incidence in the economic development of a given country due to its direct use of energy in industrial, residential and commercial activities.
The central problem in the regional level is the instability in internal politics of each country and in the relations among countries of the region. It generates legal insecurity and this makes it difficult the regional integration processes. This point of view becomes important to the strategic roll of gas as a critical variable in the regional level and to the facts that it transforms into critic the use of the resource gas in this level. Its use is determinate by concrete political and economic decisions.
As well this study implementing so called qualitative method such as investigation why and how of decision making, not just what, where, when, direct observation case studies, analysis of documents and materials.
In addition, by using comparative method – according: attitude toward another state, economic and political potential of the main actors and the a\mount of natural gas of each state. The author is trying to compare energy strategies of Central Asian countries and their significant partners such as Russia, China, USA and European Union. Author provides with estimation of energy policy of mentioned above countries and analyzes its effectiveness.
1.6. Limitations
Content of this research is limited by the lack of access to some resources due to special permission, which is required by authorities.
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The main scope of covered by this work data and resources are conducted on English, Russian languages. However, the recourses conducted on Central Asian languages remain uncovered due to author‘s limited ability to understand them; and they are still the subjects of exploration.
The limitations of this study includes the difficulties to collect first hand information, such as interview, and access to up to date data, the regulations of volume of the Master‘s thesis; as well as limited possibilities to analyze periodical materials written on Central Asian Languages. However, the author believes there are further theoretical studies should be done on the topic of this research due to its huge influence on the behavior and strategy of the main actors on international arena.
1.7. Structure of Thesis
First component of this study introduces the subject of the thesis and explains its background, motivation, objectives and main research questions, as well as employed methodology and consulted sources.
Next chapter two is describing the capacity of Central Asian states in terms of natural gas resources, surveys related to its geographical conditions and obstacles, like lack of sea or mountainous of terrain. It also tackles the problem of infrastructure – the most fragile base for gas industry in this region and focuses on network of gas pipelines, which is the key to understanding of energy policy in CAS.
Subject of chapter three is Central Asian states‘ dependency on Russia. This old dependency inborn from Soviet era, and is based on ―Central Asia Center‖ gas network and is used by Russia to exploit Central Asian natural gas resources. This chapter tries to answer the question how these states attempt to overcome this old dependency.
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Chapter four introduces the issue of new dependency of Central Asian states, mostly on China. China has become a new sponsor able to build new gas pipelines from Central Asia. This new developed infrastructure allowed Central Asian States to diversify possibilities to sell their gas for better price. In this chapter the other actors mentioned such as USA, European Union and Iran. Even though their plans have not fully developed as yet, they pose a real alternative for the future.
Last part of this paper is a concluding chapter. It discusses the results and provides a combined analysis of theoretical and empirical aspects of this paper and also perspective for future research on this subject.
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Chapter 2 Natural gas in CAS
2.1. Gas Capacity in CAS
Central Asia has significant proven reserves of oil (1–2% of the world total, perhaps more with further exploration) and 3.8% of proven gas reserves33. These totals are approximately the same as those of the North Sea. However Central Asia‘s output will probably never reach that of Norway and the United Kingdom owing to logistical, technical, financial, and political problems. Predicted gas production in 2010 might reach 210 bcm per year, about 2–3% of world consumption34. Though modest, these energy supplies have regional importance and offer alternative sources should other regions falter. See figure 2.1
Sources Statistical Review of World Energy 2010, British Petroleum
Figure 2.1 Central Asia Natural Gas Balances – proven reserves (Tcm)
33 Dina R. Spechler and Martin C. Spechler ―Central Asia. Trade, energy, and security in the Central Asian arena‖, USA:
National Bureau of Asia Research, 2006, p.215
34 Dina R. Spechler and Martin C. Spechler, Central Asia. Trade, energy, and security in the Central Asian arena , Seattle,
34 Dina R. Spechler and Martin C. Spechler, Central Asia. Trade, energy, and security in the Central Asian arena , Seattle,