European Energy Security the New Role of the Atlantic and the Portuguese Speaking Countries of the Region

European Energy Security The new role of the Atlantic and the Portuguese Speaking Countries of the Region The European Union (EU), namely after its expansion in the East, is proportionally much more dependent on Russia and Eurasia than the Middle East/Persian Gulf region, counting on an energy province within it, although facing a decline in production – the North Sea -, and with two regions of proximity – the North of Africa and West Africa. Security of an energy supply encompasses all Member-States, even if some regions are more vulnerable than others; in particularly the less integrated and connected regions, such as the Baltic region and Eastern Europe. Simultaneously, the Atlantic region is becoming the scene of important transformations, such as those arising from the discovery of new energy resources and technological advances that will impact the future. To this effect, the present work focuses its attention on the Atlantic, proposing to observe, analyze, and attempt to comprehend, as much as possible, the future of its influence in geopolitical and geo-economics terms, highlighting the role of Portugal and the Lusophone countries of the Atlantic could potentially take regarding energy as an alternative route to the Russian supply for the EU, allowing for a more energy secure Europe. This research paper consists of five chapters, including a vast bibliography revised. The period studied is from present time until 2030. We begin by presenting the current energy landscape. Following by analyzing the evolution of energy policy in the EU, from the institutionalization of the European Community to present time, especially focusing in more recent developments, namely the “Magic Triangle”, the European Strategy for Energy 1 Security, and the Energy Union Package. The third chapter will consist of a diagnostic view of energy dependency in the EU, drawing attention to the role and influence of Russia in that regard. From there, we present a survey of the energy map in the Atlantic basin, highlighting the shale gas revolution in the U.S. and examining the energy resource potential of the Lusophone countries within the Atlantic region. In the fifth and final chapter we analyze the role Portugal will potentially have in the reinforcement of the Lusophone influence in Europe terms. For final considerations, we present four scenarios subordinate to the focus “The Energy System in the EU for 2030”. Keywords: Atlantic Basin, Lusophone Region, Geo-economy, Energy Resources, Security, European Union. 2 LIST OF ABBREVIATIONS AND ACRONYMS BBPD One Billion Barrels Per Day Bcf Billions of Cubic Feet BCM Billions of Cubic Meters BP British Petroleum CCGT Combined-Cycle Power Plant CPLP Community of Portuguese Language Countries EU European Union GBN Global Business Network IEA International Energy Agency IOC International oil companies KBPD One Thousand Barrels Per Day LPG Liquified Petroleum Gas LNG Liquified Natural Gas LPG Liquified Petroleum Gas NOC National oil companies OECD Organization for Economic Co-operation and Development OGJ Oil and Gas Journal OPEC Organization of the Petroleum Exporting Countries RRP Reserves to Production Ratio Tcf Trillion of Cubic Feet Toe Ton of Oil Equivalent TCM Trillion of Cubic Meters UN United Nations WEO World Energy Outlook 3 INTRODUCTION Since the beginning of the European Communities that energy has been a present topic, as we can see with the early implementation of EURATOM as one of the initial measures of the European integration process. But has time developed since the implementation of the European Communities, energy as essentially been left to the responsibility of each Member-State and to variable geometry Europe projects, moving further away from a common policy. During the first decade of the new millennium, and already under the influence of the deepening of the EU as an institution, triggered by the reunification of Germany, significant steps were made to pave the road to an energy common policy, largely inclined by the EU’s choice to assume the leadership in climate change mitigation. Particularly, the developing stages of a common energy policy for the EU in the new millennium, three key years: 2007, 2010, 2014. With the Lisbon Treaty, energy came to have an autonomous chapter, becoming a shared competence in some areas. Since then, the European energy policy was built on four pillars, namely: (1) to ensure a well function energy market; (2) to ensure a secure energy supply; (3) to promote energy efficiency; and (4) to promote an interlink of energy networks. Currently, the EU imports 53.2% of the energy it consumes. The dependency on energy import occurs in relation to crude oil (near 90%), to natural gas (66%), and, on a smaller scale, to solid fuels (42%), as well as to nuclear fuels (40%). A secure energy supply concerns all Member-States, even if some regions are more vulnerable than others regarding external supply, such as the Baltic region and Eastern Europe. 4 The most pressing question for the EU, in terms of energy supply security, is the accentuated dependency on one external supplier – Russia. This component, is particularly true when it comes to natural gas. Indeed, in 2013, energy supplies from Russia represented 39% of EU natural gas imports or 27% of EU gas consumption: Russia exported 71% of its gas reserves to Europe, its most significant volumes being channeled to Germany and Italy – and the same is applicable to electricity for the three Baltic States. Concomitantly, in the recent past, the Atlantic basin has been the site of important oil and gas discoveries in the Gulf of Mexico, in the offshore of French and Dutch Guiana, in the deep-offshore of Brazil, and, on the other side of the Atlantic, in the Gulf of Guinea, offshore of Ghana, the Niger Delta, in the deep-offshore of Angola. Consequential to this, we have been witnessing the enlargement of the Atlantic energy basins in the offshore component – from the most traditional, the North Sea and the Norwegian Gulf Sea to Mexico, as well as the three basins in Brazil and Western Africa -, expanding its role in the global supply of oil and natural gas. The impact of the Atlantic Ocean´s emergence as a vast energy world region is unavoidable: 91% of the world´s oil reserves are located on the offshore of the Atlantic Ocean. Deep-shore production in the Atlantic represents around 10% of the world´s production, with half to Brazil and Angola. The emergence of the Atlantic basin could also contribute to an important role for the Lusophone region to play in the future, providing Portugal with an opportunity to become a fundamental hub between the Atlantic and Europe. The South Atlantic, as well as being a resourceful platform for the supply of raw materials and energy where the role of offshore resources will tend to grow, will increase its value due to be an open ocean, without blockages that tend to condition energy flows. 5 In this context, through this research paper, we attempt to contribute to the debate and to reflect about the central question of the increasing geopolitical and geo-economic importance of the Atlantic basin in current times and its future perspectives, as well as the increasing role of the Lusophone region in the Atlantic (Angola, Brazil, Guinea-Bissau, Equatorial Guinea, and Sao Tome and Principe) and Portugal´s role, which can be seen as a viable alternative for the supply to EU countries, contributing for a lesser dependency to the supply from the Russian Federation and, simultaneously, to greater European energy security. Our starting issue to tackle is to deduce, given the emergence of a new energy order in the Atlantic Ocean, what will be the geopolitical and geo- economic consequences for the functioning of the European energy system, focusing on the Lusophone region. The object of our research will follow a multicentral concept, that is, the social-international phenomena that cover relations between foreign actors (Westphalian States – Angola, Brazil, Portugal, United States …), the relations between non-sovereign actors (IOC, NOC, OIG, NGOs…) and the relations that all these actors sustain among themselves. Regarding the methodology, we have developed a qualitative bibliographic analysis and an empirical approach through the study of the information gathered on actors involved in the process under studied and a prospective exercise of different possible scenarios. This research paper is organised in five chapters and draws on a large commented bibliography. The period investigated runs from the present until 2030. We begin by completing an analysis on the recent progression of the concept of energy security, along with some non-political assumptions, to present a framework on the international energy system of oil and natural gas, regarding stock, flows and markets. The presentation of the more recent data 6 regarding this system allows for a visualization of the energy status quo, which is essential to develop a substantial basis for extrapolation into the possible and probable future of the energy sector. We then analyze the evolution of energy policy in the EU, since the establishment of the European Communities to present day, with special focus on more recent developments, namely the Magic Triangle, the European Strategy on Energy Security, and the Energy Union Package. In the third chapter, considering the dependency many EU State- Members have on Russia´s natural gas supply, and the implications it causes to the energy security of the EU, we draw attention, on the one hand, to the EU´s oil and natural gas needs and changes in the geography of the potential supply of natural gas to the Union; and, on the other hand, Russia´s position regarding the European energy security. In the following chapter, we survey the energy map of the Atlantic basin, outlining the ongoing shale gas revolution in the United States and analyzing the energy resources of countries in the Lusophone region of the Atlantic.

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