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Durham E-Theses The role of the Persian Gulf's natural gas reserves for the European Union's energy security HOUSHIALSADAT, SEYED MOHAMMAD How to cite: HOUSHIALSADAT, SEYED MOHAMMAD (2013) The role of the Persian Gulf's natural gas reserves for the European Union's energy security , Durham theses, Durham University. Available at Durham E-Theses Online: http://etheses.dur.ac.uk/7751/ Use policy The full-text may be used and/or reproduced, and given to third parties in any format or medium, without prior permission or charge, for personal research or study, educational, or not-for-prot purposes provided that: • a full bibliographic reference is made to the original source • a link is made to the metadata record in Durham E-Theses • the full-text is not changed in any way The full-text must not be sold in any format or medium without the formal permission of the copyright holders. Please consult the full Durham E-Theses policy for further details. Academic Support Oce, Durham University, University Oce, Old Elvet, Durham DH1 3HP e-mail: [email protected] Tel: +44 0191 334 6107 http://etheses.dur.ac.uk 2 The role of the Persian Gulf’s natural gas reserves for the European Union’s energy security Seyed Mohammad Houshialsadat A Doctoral Thesis submitted in fulfilment of the requirement for the award of Doctor of Philosophy at Durham University Institute for Middle Eastern and Islamic Studies School of Government and International Affairs Durham University England 2013 i In the Name of God the Compassionate the Merciful This manuscript is dedicated to: The Gracious Imam Reza (Peace be upon to him) And The universal Saviour Imam Mahdi (May Allah hasten his reappearance) ii Abstract Energy, as a matter of security, is the major challenge during the 21st century. The energy mix in the world will change in the future, predominantly to renewable energy sources, followed by natural gas. Nevertheless, the latter will act as the bridge for the transitional era to the non–hydrocarbon period. The EU will be the foremost gas importer by 2030 and the rate of LNG imports will double by 2020. The UK, France, Spain and Italy are the main EU entries for LNG imports and approximately 80% of the regional terminals are located in these countries importing 87% of the Union LNG needs. Obviously, the mentioned EU member states will be more influential for the regional energy security in the future. Diversification of LNG routes and suppliers is an important objective in the EU’s energy policy and its security of supply. For this reason, it has already been at the top of the EU’s agenda. The Persian Gulf, as the gas richest area worldwide, holds 40% of global gas reserves. Iran and Qatar, as the potential and actual LNG suppliers, embrace nearly 30% global gas deposits or 75% of Middle East reserves. So, this low–cost/ high–risk region could be influential on the EU’s energy security in the future. Therefore, in the current multi–level analysis consisting of the EU and the Persian Gulf, as the macro and micro levels, the role of the natural gas within the Persian Gulf for the energy security of the EU will be examined. The research, furthermore, aims to analyse the role of the actual Qatari LNG and potential Iranian LNG on the UK, France, Spain and Italy in the future. This multiple–case study centres on a comparison of different actual and potential LNG suppliers towards the EU, on the basis of testing the four indicators of the energy security, comprising acceptability, availability, affordability, and accessibility. It will finally to determine the position of the Persian Gulf and its main regional LNG suppliers in the future amongst the main global exporters. iii Positioned in the intersection of the Persian Gulf and the EU, the existing dissertation pursues a multi–level explanation and analysis of energy–related issues of the both regions and their case–studies domestically, regionally and to lesser extent globally. In parallel, the study is a detailed examination of the emerging gas and LNG– related challenges and vulnerabilities in addition to investigate the security of LNG supply–related issues, approaches, and policies of the EU and the main suppliers, particularly within the Persian Gulf. iv Table of Contents Dedication ii Abstract iii Table of Contents v List of figures xi List of tables xiv List of maps xv List of Abbreviations xvi Declaration xvii Statement of Copyright xviii Acknowledgement xix Introduction 1 Research Question(s) 4 Research Hypothesis 5 Methodology, Research Methods and Data Analysis 6 Ethics in the research 9 Original Contribution(s) 11 Value of the work 14 The structure of the thesis 16 Chapter 1: Comprehensive literature review, terminology of the energy security 20 and the theoretical frameworks 1.1. Comprehensive literature review 20 1.1.1. Initial Dip and General Literature Review 21 1.1.2. Critical Literature Review 24 1.2. Terminology of the energy security 41 1.3. Theoretical Frameworks 51 v Chapter 2: The EU energy matters 59 2.1. Introduction 59 2.2. European Energy Background 62 2.3. The EU’s Energy Policy 64 2.4. The EU’s energy mix 67 2.5. Geo–politics of the EU’s indigenous natural gas 79 2.6. The EU’s natural gas demand–supply gap in the future 83 2.7. Various external gas routes toward the EU 92 2.7.1. External gas pipelines toward the EU 94 2.7.2. External LNG routes toward the EU 99 2.8. The EU’s Challenges on natural gas and LNG imports 103 2.9. The four EU’s Case Studies regarding the natural gas and LNG 106 2.9.1. The UK as the first Case Study 106 2.9.1.1. Geo–politics of the UK 106 2.9.1.2. The UK’s energy policy and energy security 106 2.9.1.3. Geo–politics of natural gas and pipelines in the UK 108 2.9.1.4. Total primary energy sources demand and production, past, now and the 111 future 2.9.1.5. The UK, as the leading LNG importer? 114 2.9.2. Italy as the second Case Study 119 2.9.2.1. Geo–politics of Italy 119 2.9.2.2. Italy’s energy policy and energy security 119 2.9.2.3. Geo–politics of natural gas in Italy 119 2.9.2.4. Total primary energy sources demand and production, past, now and the 120 future 2.9.2.5. The Italy’s gas pipelines and LNG projects 122 vi 2.9.2.6. The Italian LNG projects for the future 123 2.9.3. Spain as the third Case Study 127 2.9.3.1. Geo–politics of Spain 127 2.9.3.2. Spain’s energy policy and energy security 127 2.9.3.3. Total primary energy sources demand and production, past, present, and 128 the future in Spain 2.9.3.4. Spain’s gas imports by pipelines and LNG outlook 131 2.9.4. France as the fourth Case Study 135 2.9.4.1. Geo–politics of France 135 2.9.4.2. France’s energy policy and energy security 135 2.9.4.3. Total primary energy sources demand and production in France, past, 137 present, and the future 2.9.4.4. France’s LNG import and its outlook 138 2.10. Perspective of the EU–4 LNG importer 141 2.11. Conclusion 146 Chapter 3: Energy geo–politics of the Persian Gulf’s and the regional security 152 systems 3.1. Introduction 152 3.2. Geo–politics of the Persian Gulf and the presence of the powers 154 3.3. The Persian Gulf’s position after the discovery of hydrocarbons 155 3.3.1 More attention towards the Persian Gulf 155 3.3.2. Regional Delineation 157 3.4. The end of status quo in the Persian Gulf 157 3.4.1. Differences inside the GCC 158 3.4.1.1. Boundary and political disputes 158 3.4.2. Differences between the GCC and Iran 159 3.4.2.1. Regional penetration 160 vii 3.4.2.2. Iran’s nuclear issue 160 3.5. The current security model in the Persian Gulf 162 3.6. The appropriate security model for the Persian Gulf 163 3.7. Conclusion 168 Chapter 4: Geo–politics of natural gas within the Persian Gulf and two case 171 studies 4.1. Introduction 171 4.2. Geo–politics of natural gas in the Persian Gulf 173 4.2.1 Unconventional gas as a rival for Persian Gulf’s conventional gas 175 4.2.2 Comparison of different regions within the World’s natural gas and LNG 180 outlook 4.2.3. Persian Gulf, as the least expensive and largest natural gas region 184 4.2.4. Gas plans within the Persian Gulf states, excluding Iran and Qatar 185 4.2.5. Persian Gulf’s challenges against its natural gas outlook 188 4.3 Geo–politics of natural gas in Islamic Republic of Iran 190 4.3.1. Islamic Republic of Iran’s regional pipeline projects 193 4.3.2. Islamic Republic of Iran’s Grand Energy Outlook Document by 1404/2023 199 4.3.3. LNG projects in Islamic Republic of Iran 201 4.3.4. Islamic Republic of Iran’s main obstacles against its piped gas and LNG 204 targets by 2023 4.3.5. Islamic Republic of Iran’s three major scenarios regarding the two 208 impediments 4.3.6.