This December 2010 Chatham House report makes interesting reading and confirms what many of us have believed for years:
Extract from the Executive Summary:
"The oil and gas industry is set to undergo a decisive transition over the next 10 years as global balances of demand and investment shift towards Asia and away from Europe and North America. These are sectors where geography matters and such a transition will have major geopolitical implications and a profound effect on industrial strategy. Oil and gas companies and their governments also face unprecedented uncertainties over a growing range of issues, including the development of low-carbon policies, shale gas, questions about Iraqi oil production, and surging demand in China.
Asia will account for 60% of global oil deficits by around 2030. Its oil demand is already beginning to exceed and outstrip the net surpluses available from the Middle East. Europe will no longer be able to rely on Middle East surpluses to meet its oil deficits. It will instead have to look to Russia as its default supplier of oil, while competing with Asian importers for supplies from areas such as West Africa, Northern Iraq, Central Asia and Eastern Siberia which are pivotal between Asian and Atlantic markets. This is a development that will carry major policy implications: the EU needs a stable political and security relationship with Russia within which energy trade and investment can develop, while also developing policies that combine or pre-empt the policies of individual member states in relations affecting gas and oil supply from Russia and the pivotal supply areas...."
Signs that this has been going on for sometime comes from BP who recently agreed a share swap with Rosneft, the Russian government-owned oil company, that will become the owner of 5 per cent of BP's shares in exchange for approximately 9.5 percent of Rosneft shares.
This would appear to be a smart move on BP's part which does much to bolster the company's credibility following the Deepwater Horizon Disaster. However there are caveats to this highlighted by Shadow Justice Minister Chris Bryant who said: "The level of corruption in Russia is completely unchecked." So watch out BP as you enter the lion's den!
European and North American governments will be watching developments very closely as energy supplies and their National Security may be at risk judging from past experience which could raise international tensions. It is essential that the West develop alternative sources of energy that guarantee long term energy security and therefore energy independence. One major source of energy is of course the sun and hopefully this real and present threat to our national security will spur our governments on to not only find ways to mobilise energy efficiency and conservation on a massive scale but accelerate development of Space Based Solar Power which is the most effective way to harvest the freely available constant flow of unlimited clean energy radiating from the sun.