Abstract
Increased shale gas and shale oil production in the USA will affect global geopolitics and national security considerations. An influx of Qatari LNG into Europe and Asia, which is diverted from the USA, erodes the tremendous market share held by the Russian gas company Gazprom and significantly reduces its pricing power. The USA did not begin to import the quantities of LNG from countries like Qatar and Trinidad and Tobago. Those quantities have instead been redirected to other markets, including Europe. As part of the impact of the US shale revolution, Russian energy control over Europe will be greatly reduced. Russia’s power over the region will also be reduced. Russia has earned from US$42 billion to US$60 billion per year from selling gas to Europe. Fewer exports and lower prices will cut those revenues. Given the importance of oil and gas companies to Russia’s economics, it is urgent for Moscow to restrict Central Asian production and infrastructure to mainly or even exclusively Russian channels lest Russian oil and gas become less competitive due to its own high cost and wasteful monopolistic structure and dilapidated infrastructure.
Similar content being viewed by others
Notes
As experts know, when a pipeline goes only to one country, the consumer in effect owns the pipeline as he can determine whether or not to receive supplies at any time, leaving the supplier with no options.
References
Asia Times (2012) Russia ups pressure on Caspian pipeline. July 5
Bershidsky L (2014) Russian pensions paid for Putin’s crimea grab. Bloomberg, June 26, http://www.bloombergview.com/articles/2014-06-26/russian-pensions-paid-for-putin-s-crimea-grab
Bryce R (2014) Russia is Gazprom. National Review Online, March 7. http://www.nationalreview.com/article/372804/russia-gazprom-robert-bryce/page/0/1 Accessed 23 March 2014
Burgess J (2012) Gazprom funds anti-fracking campaigns in Europe? October 1. http://oilprice.com/Latest-Energy-News/World-News/Gazprom-Funds-Anti-Fracking-Campaigns-in-Europe.html. Accessed 23 March 2014
Ebel R (2009) The geopolitics of Russian energy: looking back, looking forward. Center for Strategic and International Studies, Washington, DC
Economist (2012) A better mix: shale gas will improve global security of energy supplies. July 14
Energetika (2013) Moldova to import natural gas from Russia at lower prices in 2014. December 30. http://www.energetika.net/eu/novice/transport/moldova-to-import-natural-gas-from-russia-at-lower-prices-in. Accessed 23 March 2014
Falkowski M (2006) Russia’s policy in the Southern Caucasus and Central Asia. Centre for Eastern Studies Warsaw, www.osw.waw.pl
International Energy Agency, 2014, Paris: OECD and IEA, 2014
Johnson’s Russia List (2012) Russian economy’s dependence on oil might have negative consequences—Kudrin. Interfax, April 9, 2012, April 9, 2012. http://www.russialist.org/archives/russia-economy-oil-negative-consequences-kudrin-754.php Accessed 23 March 2014
Katakey R, Kennedy W (2013) Russia lets China into Arctic rush as energy giants embrace. Bloomberg, March 25
Kremlin (2012) Putin admits Russia trained South Ossetians before 2008 Georgia war—transcript President of Russia. August 10. http://www.kremlin.ru. Accessed 23 March 2014
Kremlin (2013) Vladimir Putin took part in the APEC CEO summit. October 7. http://eng.kremlin.ru/transcripts/6086. Accessed 23 March 2014
Kremlin (2014) Address by President of the Russian Federation. March 18. http://eng.kremlin.ru/news/6889. Accessed 23 March 2014
Larsson R (2006) Russia’s energy policy: security dimensions and Russia’s reliability as an energy supplier. Swedish Defense Research Agency, Stockholm
Larsson R (2007) Nord Stream, Sweden and Baltic Sea security. Swedish Defense Research Agency, Stockholm
Levine S (2014) The US and Russia may be headed for a gas war in Asia. Quartz 5:2014
Luft, Gal (2014) Can America stop Russia’s pivot to Asia? The National Interest, May 13
Makan A (2014) BP Predicts Russia-LatAm shale boom. Financial Times, January 16
Marson J (2013) Russian energy deals with Asia mark shift away from Europe. Wall Street Journal, June 27
McElroy D (2014) Putin mocks the West and threatens to turn off gas supplies. March 7. http://www.telgraph.co.uk. Accessed 23 March 2014
Moscow Times (2013) Rogozin warns Moldova on relations. September 5. http://www.themoscowtimes.com/business/article/rogozin-warns-moldova-on-relations/485526.html. Accessed 23 March 2014
Neff S, LaRose A (2013) North America. In: Kalicki JH, Goldwyn D (eds) Energy and security: strategies for a world in transition, 2nd edn. Woodrow Wilson Center, Washington, pp 327–343
Nygren B (2008) The rebuilding of greater Russia: Putin’s foreign policy towards the CIS countries. Routledge, London
Rostovsky M (2013) Minister Kudrin says urgent change of economic policies needed. http://indrus.in/economics/2013/11/23/former_finance_minister_kudrin_says_urgent_change_of_economic_polic_31091.html, November 25. Accessed 23 March 2014
Socor V (2011) Moscow issues Trans-Caspian Project warning. Asia Times Online. December 2
Stevens P (2010) The shale gas revolution: hype and reality. Chatham House, London
Stevens P (2012) The shale gas revolution: developments and changes. Briefing paper EERG BP 2012/4. Chatham House, London
Stoyanov V (2013) Dissecting the prospects for South Stream beyond the media hype. European Geopolitical Forum, September 25. http://gpf-europe.com/forum/?blog=energy&id=145. Accessed 23 March 2014
Suvorova N (2014) Moscow’s great new gas game: Russia will become a bigger player—but in a bigger market. Energy Post, July 10
Tsygankov S (2009) The energy industry and the crisis. International Affairs (Moscow), No. 4
Turkish Weekly (2012) Moldova rejects Russia’s gas ultimatum. September 26. http://setimes.com/cocoon/setimes/print/en_GB/features/setimes/features/2012/09/26/feature-04. Accessed March 23 2014
Umbach F (2014a) Energy: Ukraine’s cut-price gas deal with Russia is another virtual discount. Geopolitical Information Service, February 14
Umbach F (2014b) Energy: cheap Russian gas deal undermines Ukraine’s energy strategy. Geopolitical information Service, February 24
Varretoni W (2010) Sweetness of the status quo: strategic patience and the technology of Russia’s capture of Crimea. Paper presented to the Annual Convention of the Association for the Study of Nationalities, Columbia University, New York, April 15
Weitz R (2014) The Russia-China gas deal: implications and ramifications. World Affairs 2014:80–86
Zhdannikov D, Soldatkin V (2013) Exclusive: Russia plans $25–30 billion-oil-for-loans deal with China. Reuters, February 13
Acknowledgments
This work was supported by the National Research Foundation of Korean government (NRF 2012S1A3A2033350).
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Kim, Y., Blank, S. US shale revolution and Russia: shifting geopolitics of energy in Europe and Asia. Asia Eur J 13, 95–112 (2015). https://doi.org/10.1007/s10308-014-0400-z
Received:
Revised:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s10308-014-0400-z