The three-day China (Taiyuan) International Energy Industry Expo, which concluded Saturday, attracted 627 enterprises and government delegations from 18 countries and regions, including GE, ABB, Mercedes-Benz and BMW.

They exhibited their technologies, products, and looked for cooperation in the areas of coal and coal-bed methane, power generation and transmission, petroleum and natural gas, together with new energy and renewable sources.

Among them were 17 coal machine manufacturers from Nordrhein-Westfalen of Germany.

Klaus Stockmann, deputy director of the VDMA (German Engineering Federation) Mining Equipment Association, said China had replaced the United States as the second largest export destination of Germany-made mining machinery in 2009 with a value of 233 million euros, only after Russia with 274 million euros.

“We have noticed that China is stepping up consolidation of coal enterprises, which is an opportunity for us,” Klaus Stockman said, adding he expected stronger business in China.

The growing market of China’s coal machinery has also prompted some VDMA members to plan factories in China, as they said exports could no longer meet China’s market demand.

Maschinenfabrik HESE, one of the leading manufacturers of bulk conveying technology, has seen rising sales since its products’ entry into the Chinese market five years ago. Specific figures were not provided.

Ulrich Goddinger, the company’s chief representative in China, said the company would seek a partner in China in a year. Companies in Shanxi and Inner Mongolia would be on the top of the list because they are close to material and sales market, he added.

China National Offshore Oil Corporation, China Resources (Holding) Ltd., Co. China Power Investment Corporation, and China Datang Corporation signed with the Shanxi provincial government on several key projects during the expo.

The state-owned enterprises will invest more than 450 billion yuan (66.9 billion U.S. dollars) in Shanxi during the next five years — in wind power, electric power, biomass energy, clean utilization of coal, coal-bed methane and coal-to-gas projects, among others.

CNOOC, China’s third largest oil company and biggest offshore energy explorer, plans to develop its inland business. The company will invest up to 100 billion yuan in the next five years in Shanxi mainly in coal gasification.

“The company’s move to develop clean energy inland was in line with the government’s efforts to accelerate economic restructuring and Shanxi needs clean energy for its own restructuring,” CNOOC general manager Fu Chengyu said.

He said China should be more energy efficient. “That’s why CNOOC looks to inland energy development,” he said, adding the company expected to expand its wind power and solar power business.

China has large deposits of coal, which feeds about 70 percent of the country’s total energy needs. However, the massive burning of coal has caused severe pollution, putting great pressure on China to cut fossil fuel emissions.

Last year the government vowed to cut the intensity of carbon dioxide emissions per unit of GDP in 2020 by 40 to 45 percent, compared with the 2005 level.

China also announced earlier, in its 11th Five-year Plan (2006-2010), that it would reduce energy consumption relative to GDP by 20 percent in five years to 2010.

The targets have pushed China to race with developed nations to develop clean use of coal and new energy sources.

According to the government plan, the country would generate at least 15 percent of its energy capacity from wind, solar and other renewable energy sources by 2020, reducing fossil fuel consumption to 85 percent.

The Ministry of Science and Technology said China has allocated more than 10 billion yuan for the research and development of energy conservation and emissions reduction technologies during the 11th Five-year Plan.

China will invest 5 trillion yuan into renewable energy projects over the next decade under an industry development plan, China Securities Journal reported in early August, citing the State Information Center.

Vice Minister of Science and Technology Li Xueyong said the ministry is planning research work on a development strategy for the next five years and new energy industries will be a focal point. There will also be increased support of technology research and development.

To seek an energy-efficient and environment-friendly path for economic growth was a “pressing” task for the country, Gao Hucheng, Vice Minister of Commerce, said.

The new energy sector in China has developed rapidly due to the government’s push, but China still faces difficulties in making clean technology commercial, said experts.

Xi Wenhua, Director of the UNIDO solar technology center, said China could cooperate with other nations on technology in the areas of renewable energy and new energy to lift the development of such energies to cope with climate change together.

He suggested that China should introduce more top technology to the world to develop renewable energies and new energies, which are in urgent need. Channels for technology imports from developed nations should be expanded, he said.

“There is no land boundary in terms of low-carbon and green technology,” Gao said, expecting more international cooperation in this field.

Source: www.english.cri.cn

The contract was signed on the sidelines of Iranian Oil Minister Masoud Mirkazemi’s meeting with Turkish Energy and Natural Resources Minister Taner Yildiz, ILNA News Agency reported.

National Iranian Gas Company’s Managing Director Javad Owji and Turkey’s BOTAS Petroleum Pipeline Corporation Managing Director Fazil Senel signed the contract.

Based on the agreement, the Turkish side will secure 77 percent of the required fund for completing the 660- kilometer pipeline.

It is the 4th section of Iran’s sixth cross-country pipeline which extends from Assalouyeh, southwest of the country, to Bazargan border in the northwest.

In October 2009, during Turkish Prime Minister Recep Tayyip Erdogan’s visit to Tehran, the two countries signed memorandums of understanding on oil and gas cooperation and transferring Iran’s gas to European markets through Turkey.

Iran currently exports 25 million cubic meters of natural gas to Turkey per day and the figure could be increased to 30 million cubic meters a day. Iran has the world’s second largest gas reserves and third largest oil reserves.

Source: www.tehrantimes.com

Common wisdom says that Europe and Russia are bound by an umbilical cord – energy. EU members are dependent on Russia’s oil and gas, while Russia depends on the enormous export revenues that the European market generates.But over the next decade, both sides have more options than commonly assumed. And as the Georgia conflict vividly demonstrates, for geopolitical reasons each might exercise those options.

The current bond is tight. According to EU statistics, Russia in 2006 supplied 33 percent of EU oil imports and 28 percent of consumption. On the gas side, Russia supplied 42 percent of imports and 27 percent of consumption.

The gas numbers have already risen, and EU dependence on imported gas is set to grow to 68 percent by 2030. But the dependence is mutual, as Russian energy exports account for over 60 percent of Moscow’s export revenues.

Most observers argue that neither side has viable alternatives. That’s true for the next few years. But if Russian-EU relations decay and the Europeans develop more political will, both sides have alternatives over the medium term – 5 to 10 years – that could limit their energy relationship.

Europe could take a number of steps, in many cases by accelerating programs that are already well underway. In isolation, each step would make a marginal difference, but in the aggregate and in the medium-term the EU could reduce its hydrocarbon dependence on Moscow.

On the gas side, the EU already has increased supply from Norway at the expense of Russia. In 2000, Russia supplied 49 percent of EU imports, while Norway stood at 21 percent. By 2006, Russia dropped to 42 percent while Norway grew to 24 percent. And Norway has the reserves to provide increasing volumes to the EU.

Europe is also turning to North Africa for gas. Two pipelines from Algeria and one from Libya provide supply, with plans for another line (Algeria-Italy) moving forward. Libya is the wild card here, as the size of its reserves is uncertain.

Liquified Natural Gas is a significant but expensive alternative for the EU. Europe would have to build significantly more regasification terminals, and then would have to outbid Northeast Asian customers for supply.

It’s also a risky option, as many LNG suppliers carry their own political risk – Egypt, Nigeria and Yemen are good examples. Yet the EU countries already had 14 operational LNG regasification terminals at the end of 2007, with 14 more under construction.

The electricity sector is a key area for EU diversification because natural gas consumption for producing electricity offers a wide range of substitutes. This sector accounts for 31 percent of EU natural gas consumption and natural gas-fired power plants produced 20 percent of EU electricity in 2006.

Increased energy efficiency, wind and solar power, and biomass energy could all displace gas power plants. Nuclear power and clean coal (which remains prospective technology) will also play a role in displacing natural gas, especially in markets such as Britain, Eastern Europe and Italy. A significant EU-wide shift would require a change in some nations on the acceptability of nuclear plants, particularly Germany and Spain, and those facilities have a 5-to-7 year lead time.

On the oil side, the EU could more easily diversify, given the global and highly fungible nature of the oil market. Russian pipelines and ports were built to efficiently serve Europe; disruption of Moscow’s oil exports would cause short-term dislocations that could last weeks and cause global market upheaval as EU importers scramble for seaborne alternatives from other suppliers. But the EU would obtain alternative volumes of oil, if at much higher price.

Russia too has other options for diversifying its export markets – if geopolitical developments drives Moscow to exercise them.

A promising diversification strategy would involve Beijing, should Russia finally elect to implement its much-discussed plans and build large new gas pipelines to China with perhaps a 5-year lead time. Using the new China routes, Russia could divert volumes from Europe and supply China without much additional production.

This scenario would likely be expensive for Russia, given the massive costs of infrastructure development. On the positive side, China is showing greater willingness to pay higher prices for LNG, which indicates increasing demand for imported gas and could lead to an agreement with Moscow on price for Russian pipeline gas.

On oil, the new East Siberia Pacific Ocean pipeline will likely help bring 600,000 barrels per day to Asian markets by 2010, and by late in the next decade Phase II of the project could bring an additional 1 million barrels per day to Asian consumers.

Moscow hopes to find most of this volume in the forbidding climate of East Siberia, and not serve Asia at the expense of Europe. But Russia is politically committed to this line, and if tensions increase it could be an attractive outlet for existing volumes. These oil and gas options are not yet as economically attractive for Russia as European markets, but they are options.

What then could motivate the Russians and Europeans to seek an expensive divorce? Several political flash points could drive the EU and Russia apart.

First, Russia will need to convince Europe that Georgia was a one-time event, and that Ukraine is not next in line for a Russia on the march. Moscow will also need to stabilize relations with Poland and the Baltic states to show the EU that its eastern members are not threatened.

Second, Russia must refrain from using energy as an instrument of politics. Much of the international community believes Moscow used the energy card on Jan. 1, 2006, when it reduced supplies through Ukraine to Europe. Russia could reduce oil flows through the Druzhba line to Poland in response to Poland’s decision to host U.S. missile defense installations. That would set off alarm bells.

Third, Russia defines energy security as security of demand for its producers – meaning acquisition of downstream assets in the European Union.

The strategy has worked well with Germany and Italy; for example, BASF and ENI have received access to the Russian upstream in return for Gazprom obtaining access in Europe’s downstream.

But this model has worked less well with Britain and other countries. In the aftermath of Georgia, stiffer governmental reviews of prospective Russian investment are more likely in the United States – and possibly the European Union.

That could well trigger a backlash from Moscow and impair its energy relations with Europe. Finally, the U.S. retains significant influence with the EU. If U.S.-Russian relations decay even further and Washington turns the screws on Europe, that will have an effect.

Both the EU and Russia have what now look like challenging but doable options. If geopolitical relations decay further, the now sacred EU-Russia energy marriage could be in trouble.

Robert Johnston is director for energy and natural resources at Eurasia Group. Clifford Kupchan is a director at Eurasia Group and a former State Department official.

En efecto, para la unión europea es esencial diversificar sus fuentes de energía (especialmente gas que trae en gran cantidad desde Rusia) y una de las vías de salida de gas ajeno a Rusia es precisamente pasando por los países involucrados en el conflicto (Georgia, Osetia del Sur).

Al respecto el presidente de Polonia, Lech Kaczynski hizo duros comentarios respecto a las verdaderas intenciones de Rusia y aseguró que existe un elemento de extorsión en la política energética rusa que se debe tener en cuenta. Agregó que hoy por hoy parece ser que la política energética de europa y la política exterior están demasiado atadas lo que no resulta conveniente.

NABUCO y BTC

Recordemos que el proyecto de Gasoducto Nabucco es uno de los grandes proyectos de diversificación de Europa para sacar gas sin pasar por Rusia (de Azerbaijan pasando por Turquía y Georgia). Además el ducto TBC actualmente en funcionamiento y que ya pasa por Georgia transporta alrededor de 850 barriles de petróleo por día del Caspio al Mediterráneo.