NEW DELHI - The dispute between Russia and Ukraine over natural-gas supplies that has rattled Europe has once again brought to focus the geopolitics that revolves around the control, transportation and consumption of energy, and more specifically, natural gas.
Natural gas has emerged as a more environmentally sound, cheaper and more easily available substitute for oil. Compared with oil at more than US$60 a barrel, an energy-equivalent amount of gas costs in the region of only $20. Experts predict that gas, which was once considered a wasteful by-product of oil exploration, will turn into the No 1 fossil fuel. Vying for gas resources are the world's top guzzlers of energy, the United States, Europe, China and India.
The problem is that the US and India, as well as Japan and European Union nations, are all some distance from major reserves of gas in countries such as Iran (with reserves of 971 trillion cubic feet - tcf), Qatar (910 tcf), Yemen, Russia (with the world's largest reserves of more than 1,700 tcf), Central Asia, Nigeria, Angola and Venezuela. There is also the issue of these supplier nations facing unstable political situations, so the gas from fields there has to be carried through disturbed and often dangerous physical and political quarters.
China and India have been quickly tying up with these countries to tide over future requirements, with the US trying to balance growing Asian demand with its own rising requirements. India has signed a $22 billion deal to buy liquefied natural gas (LNG) from Iran over a period of 25 years starting 2009, this after protracted negotiations. India has also signed an LNG deal with Qatar.
However, the tussle will turn more acute. A global energy crisis is brewing as the economic powerhouses continue to consume more oil than they can possibly produce or import. It is estimated that by 2025, today's global demand for 84 million barrels of oil per day will have grown to 121 million to 130 million.