Avoiding energy ultimatums

by Hugh Cortazzi

LONDON — The recent break in energy supplies to Georgia after a natural gas pipeline and power pylons were blown up inside Russia near the border with Georgia came during a bitter cold wave, causing considerable hardship and the risk of death from hypothermia for some.

It is not yet clear whether these were deliberate acts of sabotage by opponents of the pro-Western president of Georgia, or deliberate acts by the Russians to serve as a sharp warning to Georgia not to veer too close to the policies of America and the European Union.

Separately, Russian gas supplies to Ukraine were cut off Jan. 1 and resumed only after Ukraine agreed to pay a higher price. This too was seen as a warning: Ukraine’s “orange revolution” last year set back Russian attempts to keep Ukraine within its sphere of influence.

When the cutoff in gas supplies to Ukraine also reduced gas pressure for European countries, Europeans viewed this as a Russian warning not to interfere in internal Russian affairs.

These events are relevant to Japan, which has a strong interest in the oil and gas being exploited on Sakhalin as well as in the pipelines planned or under development through Siberia. To what extent can Japan rely on Russian energy supplies?

The recent bizarre allegations of British spying in Moscow and the expulsion of nongovernmental organizations from Russia have added to the impression that President Vladimir Putin — in the very year that Russia holds the presidency of the Group of Eight — is flexing his muscles and will do anything he deems necessary to shore up his autocratic rule and Russia’s position in the world.

In the short run, Russia may be able to use the threat of cutting off energy supplies to force the European Union and America to play down Russia’s appalling human rights record, especially but not solely with regard to Chechnya. European countries need Russian gas not only to meet consumer and industrial demand but also as insurance against disruption of energy supplies from the Middle East.

There is little sign that oil supplies from Iraq can be relied on in the foreseeable future. Iran’s new president, with his call for the destruction of Israel and his determination to pursue nuclear research, shows that supplies from Iran are unreliable. Saudi Arabia and the Persian Gulf States are currently the most reliable sources of oil and gas in the Middle East, but the regime in Saudi Arabia has suffered terrorist attacks and could become more unstable as a result of internal pressures for change and from Islamic extremism.

Other major energy suppliers such as Nigeria and Venezuela are either unstable or unreliable. President Hugo Chavez of Venezuela flaunts his hostility toward Washington.

Increasing the world demand for hydro-carbons is China, whose demand for energy imports will surely continue to grow fast. The Indian economy is also expanding quickly, and demand from it and other industrializing countries will put increasing pressure on prices as competition for supplies grows.

OPEC suppliers will not want the price to go so high that alternative forms of energy become economical and the world slips into recession. The Organization of Petroleum Exporting Countries may be able to keep the price of energy rising within reasonable limits for a time, but they could misjudge the situation.

The politicization of energy supplies also has implications for environmental protection. This is no longer primarily a scientific and economic problem.

One important political issue is the extent to which countries should invest in nuclear power. The British government will soon have to decide whether to resume the development of nuclear power stations. Public consultations have opened. By 2020 Britain may need to import 80 percent of the gas it uses.

Any decision to build new reactors in Britain will arouse fierce opposition on economic, environmental and safety grounds. Would new nuclear power stations be able to compete with other forms of energy, especially gas, without a subsidy? The higher cost of nuclear power may be less relevant in the future as gas supplies either become more expensive or are seen as susceptible to disruption. Operational safety concerns may be allayed by recent improvements in the design of nuclear reactors, but the difficulties in disposing of and storing spent fuel remain and will add to people’s fears.

Other alternative forms of energy also raise environmental issues with implications for elected politicians. Wind farms are being developed on land and offshore around Britain, but are unsightly and noisy. NIMBYs (“Not in my backyard!” people) are vociferous in condemning any plans for windmills near their homes. It is also doubtful that such windmills can ever meet more than a small proportion of British electricity requirements.

Britain has not yet taken to solar power the way that Japan has due to the limited amount of sunlight in Britain. Another reason is the relatively high price of solar panels. Still, as the technology is developed and prices decline, the attractions of solar power will increase.

One alternative source under development is subterranean heat energy, but the technology is relatively expensive and the amount of electricity that could be generated is limited. There is little or no room for increased use of hydro-electricity in Britain, although the technology to harness tidal and wave power seems to have potential.

The economics of developing such resources could improve as energy prices increase. More can be done in Britain to improve energy efficiency through better insulation. Britain can and should reduce dependence on the internal combustion engine by putting more investment in public transport and keeping relatively high taxes on petrol and diesel.

For the sake of our children and grandchildren, and to ensure that we are not subjected to ransom demands by ambitious politicians in Russia or the Middle East, it behooves us to do much more to develop alternative supplies of energy and to reduce waste.