Online Journal
Front Page 
 Special Reports
 News Media
 Elections & Voting
 Social Security
 Editors' Blog
 Reclaiming America
 The Splendid Failure of Occupation
 The Lighter Side
 The Mailbag
 Online Journal Stores
 Official Merchandise
 Join Mailing List

Analysis Last Updated: Apr 13th, 2007 - 01:18:57

From oil shocks to gas shocks
By Shirzad Azad
Online Journal Contributing Writer

Apr 13, 2007, 01:17

Email this article
 Printer friendly page

The prospect of creating a cartel by major gas-producing giants has become a new source of concern among industrialized nations and energy-hungry developing countries.

The Gas Exporting Countries Forum (GECF), which was established in 2003 to facilitate information exchanges among its members, put on its agenda discussing a plan to launch a body similar to the Organization of Petroleum Exporting Countries (OPEC) during a meeting in Doha early this week.

It is understandable to see how the world�s largest importer of natural gas, Japan, feels worrried about such initiatives. Upon learning of the propose to establish a gas cartel, the Japanese Economy, Trade, and Industry Ministry dispatched a ranking official to Qatar to convey his government�s concerns about the plan.

Basically, energy has long been the Achilles heel of the explosive economic growth and development of East Asian countries, Japan especially, and the rise of new huge energy-consuming customers has clouded the outlook of a long-term supply of a stable and cheap energy.

Global consumption of energy will increase by more than 50 percent during the first quarter of the current century. Oil and gas will account for 65 percent of world energy in 2025, and prosperity, success, and the future health of Asian economic powers rest on their ability to import more and more of these hydrocarbons.

The industrial world could finally overcome the negative consequences of the oil shocks of the last century and adopt policies to counterbalance any possible threat from OPEC.

Are the energy-consuming giants prepared to experience gas shocks? How could it be possible to counterbalance the perils of a gas cartel to these countries?

Creating a cartel would strengthen cooperation among natural gas-producing countries amid a worldwide rise in demand, and increase their influence in determining supply and price.

Sharing the same bed but dreaming differently, Russia and Iran, the first and the second biggest natural gas-producers respectively, have taken the lead in establishing the cartel that, if realized, would account for more than 60 percent of the world�s natural gas production, and enhance their international standing as two key energy suppliers.

Qatar and Algeria, as the world�s third and eighth-largest gas producers respectively, have also given their endorsement to the plan. They all know that an alliance of gas-producing nations would enable them to decisively affect negotiations on prices and the acquisition of concession rights.

What makes the industrialized world and consuming countries worried is that any agreement on this proposed cartel could affect gas supplies to importing countries and keep the prices high, thereby undermining their energy security.

Shirzad Azad is an East-West Asian Relations researcher at the Graduate School of International Politics, Economics and Communication, Aoyama Gakuin University, Tokyo, Japan.

Copyright © 1998-2007 Online Journal
Email Online Journal Editor

Top of Page

Latest Headlines
Heed Russia�s warnings about further NATO expansion
Iraq�s US security charade
Igniting a new cold war: The cost of U.S. hegemony is beyond reach
Maliki and Bush: Conflicting priorities
A peace process that makes peace impossible
Obama�s foreign crises
The truth behind the Citigroup nationalization
You ain�t seen nothing yet
Gaza held hostage should outrage us all
It�s time to move on to �Plan B�
Russian-Western relations: Courting the bear
The G-20 washout
The crisis has hardly begun
Fleeting prosperity, courtesy of our grandchildren
Essential reading for Obama
America�s economic crisis is beyond the reach of traditional solutions
Bush�s last bullet: Why the US attacked Syria
Britain�s digital surveillance: Hiding from Her Majesty�s �black boxes�
Looking under the hood of an Obama administration
Obama: return to elite status quo