Strengths and Weaknesses of the Eurasian Continent

Eurasia is a very large producer of primary energy resources. The 2000 Mtoe it produces per year gives it an 18% share of global production. The region is the third-largest oil producer and the biggest natural gas producer in the world (on par with North America). It produces twice more energy than it consumes, and has up to 25 years of oil and 60 years of natural gas in proven reserves at the current pace of production. Provided the massive investments required to put in operation its retrievable resources are triggered, Eurasia would have around 200 years of production for both oil and natural gas. The investments would add up to 3.2 trillion dollars within the next 20 years (© OECD/IEA, Investment 2014). In comparison, North America plans to invest around 6.4 trillion dollars in primary energies by

Fig. 4.15 Production and Reserves in Eurasia (BP 2014; © OECD/IEA, WEO 2012)

2035. Eurasia also has 470 years of coal production at the current pace of production (equivalent to a little more than 10 years of production in China), and 60 years of uranium, although these reserves are difficult to evaluate because exploration has so far remained limited. Kazakhstan is the leading producer of uranium in the world.

The region has therefore very large reserves of fossil fuel resources. All energies included, it has more resources than the Middle East, and comes second only after North America. Taking into account the growth in its production in the coming years (© OECD/IEA, WEO 2012), its ratio of reserves to production (R/P) should not evolve significantly, with the exception of natural gas, which should drop below 150 years of production, a level which remains comfortable (Fig. 4.15).

Eurasia is a net exporter of energy to the rest of the world. In particular, it exports both oil and natural gas to Europe, with which it has strong economic ties. The “influence ratio” does not exceed 40%, which means that the exports from Eurasia do not exceed 40% of Europe’s total consumption. Europe has been working at reducing this ratio in the past years and is diversifying its procurements. There are as well major differences across countries in terms of energy dependency, with Eastern European countries traditionally much more dependent on Eurasia than countries in the west of Europe. The influence that Eurasia can have over Europe in energy remains therefore limited (Fig. 4.16).

In summary, the Eurasia region is traditionally very connected to Europe, and much less to China, which growing needs are spectacular. Provided the level of investments required can be justified, it is expected that the relationship between China and Eurasia countries (particularly Russia) will be reinforced in the coming years. This would help China diversify its energy procurements and enable its energy transition out of coal. Natural gas from the eastern regions of Russia could play a significant role in this transition.

Fig. 4.16 Energy exports from Eurasia (BP 2009, 2014; © OECD/IEA, WEO 2012)