A review of current energy systems and green energy potential in Kazakhstan

Kazakhstan is rich in natural resources including coal, oil, natural gas and uranium and has significant renewable potential from wind, solar, hydro-power and biomass. In spite of this, the country is currently dependent upon fossil fuels for power generation. Coal fired plants account for 75% of total power generation leading to concerns over greenhouse gas emissions and impacts on human health and the environment. Recent economic growth in Kazakhstan has driven increased demand for energy services, making the construction of additional generating capacity necessary for enabling sustained economic growth. In this context, renewable energy resources are becoming an increasingly attractive option to help bridge the demand–supply gap and to decrease national greenhouse gas emissions. This study presents an overview of the existing energy system in Kazakhstan and investigates policy drivers for the energy sector. We review existing studies, national reports, energy strategies and plans, to identify and describe key barriers that prevent diffusion of renewable energy technologies in Kazakhstan. We propose potential measures to overcome specific barriers in order to successfully develop a renewable energy sector in Kazakhstan. It is seen that the likely major contributors to replacing fossil fuel based energy services are likely to be wind power and solar energy technologies, with biomass and hydro energy sources likely to play a lesser role. The barriers to development include low electricity tariffs, transmission losses and inefficient technologies, weak regulatory and legal frameworks and a high-risk business environment

The Oil Supply and Demand Context for Security of Oil Supply to the EU from the GCC Countries

In examining the prospects for oil and gas supply from the GCC countries, we draw on the evidence that the supply of oil and gas from the region has been relatively reliable, notwithstanding the region’s perceived political instability. The approach taken here starts from this empirical observation; namely, that supply from the region will be available when called upon, as it has in the past. Oil and gas are of central importance to the economies of most GCC countries. Hydrocarbons provide the basis on which to gradually diversify GCC economies. Continued hydrocarbon-based economic growth provides the platform for economic diversification which can in turn underpin internal social and political cohesion and stability of these countries. Broadly speaking, Russia and the rest of the FSU will increasingly dominate the world’s oil supply outside OPEC and the Middle East, while China, India and North America will continue to determine oil demand. The political evolution of the FSU and the economic evolution, and macroeconomic policy making in particular, of the big Asian countries and the United States will be the determinants of the prospects for the call of GCC oil. Two scenarios of oil supply and demand; namely, Russia’s oil supply falters while China’s demand soars, versus Russia’s oil supply soars while China’s demand collapses, present two totally different outcomes for the economies of the GCC, and specifically affecting their ability to invest in their comparative advantages and diversify their economies. Paradoxically then, the internal prospects of the Middle East depend on external developments. Thus, this analysis looks outside for a basis to develop propositions for the inside with respect to, for example, ‘How much of the global oil and gas markets can GCC countries count on supplying?’Oil, Demand, Supply, Security, GCC

Multi-Period Natural Gas Market Modeling - Applications, Stochastic Extensions and Solution Approaches

This dissertation develops deterministic and stochastic multi-period mixed complementarity problems (MCP) for the global natural gas market, as well as solution approaches for large-scale stochastic MCP. The deterministic model is unique in the combination of the level of detail of the actors in the natural gas markets and the transport options, the detailed regional and global coverage, the multi-period approach with endogenous capacity expansions for transportation and storage infrastructure, the seasonal variation in demand and the representation of market power according to Nash-Cournot theory. The model is applied to several scenarios for the natural gas market that cover the formation of a cartel by the members of the Gas Exporting Countries Forum, a low availability of unconventional gas in the United States, and cost reductions in long-distance gas transportation. The results provide insights in how different regions are affected by various developments, in terms of production, consumption, traded volumes, prices and profits of market participants. The stochastic MCP is developed and applied to a global natural gas market problem with four scenarios for a time horizon until 2050 with nineteen regions and containing 78,768 variables. The scenarios vary in the possibility of a gas market cartel formation and varying depletion rates of gas reserves in the major gas importing regions. Outcomes for hedging decisions of market participants show some significant shifts in the timing and location of infrastructure investments, thereby affecting local market situations. A first application of Benders decomposition (BD) is presented to solve a large-scale stochastic MCP for the global gas market with many hundreds of first-stage capacity expansion variables and market players exerting various levels of market power. The largest problem solved successfully using BD contained 47,373 variables of which 763 first-stage variables, however using BD did not result in shorter solution times relative to solving the extensive-forms. Larger problems, up to 117,481 variables, were solved in extensive-form, but not when applying BD due to numerical issues. It is discussed how BD could significantly reduce the solution time of large-scale stochastic models, but various challenges remain and more research is needed to assess the potential of Benders decomposition for solving large-scale stochastic MCP

China’s foreign oil policy: genesis, deployment and selected effects

China is a rising global power with a growing role and impact on the world’s energy markets as well as on the Earth’s climate system. China pursues its development in an essentially non-confrontational manner, a vision encapsulated by the notion of peaceful rise which is viewed positively in the world’s major capitals. Nevertheless, China’s rapid growth represents a genuine global challenge and raises many questions. How is China dealing with its growing need for imported crude oil? What is the impact of China’s rise on the global oil market, notably in terms of oil price developments? Are Chinese actions on oil markets different from those of other major importers? What opportunities and risks arise as a result of china’s growing role on the global oil market from the viewpoint of other global players? In this report we seek to offer some answers to those questions with a review of China’s developing energy policy, of the actions and revealed preferences of its national oil companies, and of broader economic and geopolitical analyses of the impact of China’s growing oil consumption on other global players.Crude oil, energy security, oil security, China, foreign oil policy

Energy security with a high external dependence: the strategies of Japan and South Korea

Besides China, Northeast Asia includes other important energy consumers: Japan and South Korea. These OECD-member economies are highly dependent on imports (which account for more than 80% of domestic consumption in both cases), especially of oil and natural gas, and their energy security has been subjected to considerable threats in recent years. This paper briefly reviews the energy situation and prospects of both countries. It also presents an analysis of Tokyo’s and Seoul’s strategic responses to the (perceived o real) worsening of their energy security, in which the strenghts and weaknesses of each approach are highlighted. Finally, the paper lists some of the lessons that other highly energy import-dependent economies might extract from the experience of Japan and South Korea.Japan, South Korea, energy system, energy dependence, energy security, energy policy and strategy, international rivalry and cooperation

What are the Applicable Norms and Principles of International Law Delimitation of the Caspian Sea?

The purpose of this research was to identify the law applicable to the delimitation of the Caspian Sea and selecting the best approach in this regards. In this sense, in the beginning, the geopolitical significance of the Caspian Sea in the region and the importance of the Convention on the Legal Status of the Caspian Sea were reviewed. In order to examine applicable law, international legal resources under Article 38 of statute of international court of justice (ICJ) and the best current approaches, standards, principles and methods for international maritime delimitation were discussed. Furthermore, the main source of current and past legal statutes of the Caspian Sea, Soviet-Iranian agreement, bilateral agreement on the northern part of the Caspian Sea delimitation and the Caspian Sea Convention was considered. In addition, special conditions and circumstance of the Caspian Sea coast were assessed, and the best approach for the demarcation of the Caspian Sea, the three stage approach, was analyzed. It is worthy to mention, this work is a compressed and update version of my Master thesis1 at world maritime university.Keywords: Norm of sea delimitation, Caspian Sea, International law of the sea. Introduction The Caspian Sea is known as the world\u27s largest inland water body, located in a geopolitical location, between Europe and Asia, having an area of ​​390,000 km2, mean and maximum depths of 208 m and 1025 m respectively (Kosarev, 2005)[1]. It is a source of 48 billion barrels of oil, 292 trillion cubic feet (TCF) of gas (Kalanter, et al., 2021)[2], special biodiversity, and species such as sturgeons. According to the report by the Food and Agriculture Organization of the United Nations (FAO)[3], “the Caspian Sea is the traditional home of sturgeon, and the main producers of caviar in the world are four states bordering the Caspian Sea: Azerbaijan, Iran, Kazakhstan and Russia”. After the collapse of the Soviet Union and the independence of three new countries, the number of neighboring countries was increased to five, Azerbaijan, Kazakhstan, Turkmenistan, Iran and Russia, and disputes arose over the legal status of the sea. since, the only way to reach the World Ocean from the Caspian Sea is via the man-made Volga-Don Canal, which lies entirely within Russian territory and connects the Caspian Sea with the Black Sea (karataeva, 2019)[4], the Iran and Russia argued that Article 122 of the United Nations Convention on the Law of the Sea (UNCLOS)[5] does not apply, which defined enclosed and semi-enclosed seas as “gulf, basin or sea surrounded by two or more States and connected to another sea or the ocean by a narrow outlet or consisting entirely or primarily of the territorial seas and exclusive economic zones of two or more coastal States”. Although UNCLOS didn’t explain the type of “narrow outlet” whether it must be natural or artificial, Iran and Russia to reduce the risk of the presence of third parties and due to shorter coastline, insisted, the Caspian Sea is not the sea, semi-enclosed or enclosed sea and it is a lake and common property. Furthermore, Iran was not a member state of UNCLOS since didn’t ratify it and Kazakhstan and Turkmenistan have neither signed nor acceded either the Convention. Lack of co-operation, growing disputes and unilateral action have increased opportunities for pollution, illegal fishing, and drug trafficking and illegal migration. (Zhekenov, 2020)[6]. However, states noticed that the Caspian marine environment became fragile, with excessive exploitation, habitat destruction, invasive species and oil pollution threatening the sea. (Tsutsumi and Robinson, 2008)[7]. In light of this, the Caspian Maritime Environmental Protection Agreement, known as the Tehran Agreement, was signed in 2003 and entered into force in 2006. Apart from the Tehran Convention, four protocols were signed and the uncertain legal status was one of the most important obstacles to the implementation of the protocols.  In addition, the discovery of oil fields in the northern part of the Caspian Sea led to a trend of bilateralism, which Zimnitskaya and Geldern (2011)[8] called an innovative approach to the principle of "common waters, a divided bottom" in the region, and by 2003 the northern part of the Caspian seabed was divided by agreements between three states, the Russian Federation, the Republic of Azerbaijan and the Republic of Kazakhstan, but the agreements concerned only the seabed. Finally, in August 2018, in Aktau, Kazakhstan, five states signed the Convention on the Legal Status of the Caspian Sea[9]. It was a monumental achievement, as the UN Secretary-General welcomed the signing of the Caspian Sea Convention, stated "this historic document illustrating the importance of regional cooperation, which is fundamental to maintaining international peace and security and an important step towards weakening regional tensions”, and, Iranian President Hassan Rouhani remarked[10] “the signing of the Caspian Sea convention is a successful model for guaranteeing peace, stability, friendship, good neighborliness”. From a security point of view, the agreement actually provides regional security since countries have agreed to ban the presence of third parties in the Caspian Sea and brings various political, environmental and economic benefits to the states, as Janusz-Pawletta (2020)[11] believed it is an important factor for sustainable development since it regulates the environment protection and access to energy. However,  there are some negative views toward the convention which for instance argued, some Articles of convention act as obstacles to the exploration of oil and gas in the Caspian Sea and Iran and Russia intentionally put these Articles, such as article 14(2) which declared “The Parties may lay trunk submarine pipelines on the bed of the Caspian Sea, on the condition that their projects comply with environmental standards and requirements embodied in the international agreements to which they are parties” (Gurbanov, 2018; Bayramov, 2020)[12]. In parallel, Prichin and Anschchi (2019)[13] argued the new convention only gives environmental surveillance powers to Russia and Iran. Besides that, there were important issues of dispute that needed to be resolved. Article 8(1) of the new convention states “Delimitation of the Caspian Sea seabed and subsoil into sectors shall be effected by agreement between States with adjacent and opposite coasts, with due regard to the generally recognized principles and norms of international law, to enable those States to exercise their sovereign rights to the subsoil exploitation and other legitimate economic activities related to the development of resources of the seabed and subsoil” and it does not clarify what norms and principles of international law should be applied. In the same vein, Article 7(3) and Article 9(1) of the convention declared delimitation of internal and territorial waters and delimitation of fishery zone between States with adjacent coasts shall be effected by agreement. Additionally, Iran subjected ratification of the Caspian Sea convention to the delimitation agreements.  Since “each maritime delimitation case differs and flexible consideration of relevant factors is required to achieve an equitable result” (Tanaka, 2019)[14] and delimitation of maritime zones is crucial for peaceful relations between neighboring States (Lagoni and Vignes, 2006)[15], defining the norm and principles of delimitation will be a vital factor for the success of the new convention. The Norms and Principles of International Law for Delimitation Before discussing international rules, standards and principles of maritime borders, it is appropriate to introduce the sources of the law of the sea. It is generally accepted that the source of the recognized international law is reflected in the Article 38 of the ICJ Constitution[16] which states: “The court whose function is to decide under international law such disputes as are submitted to it shall apply: general or particular international conventions, establishing rules expressly recognized by the contesting states; international custom, as evidence of a general practice accepted as law the general principle of law recognized by civilized nations, judicial decisions and the teachings of the most highly qualified publicists of the various nations as subsidiary means for the determination of rules of law” This Article lists sources of formal and material international law (Fitzmaurice, 2017)[17].one of the most important one are legal procedures by which legal rules come into existence. Customary law has two categories of public and private or local customary law. Since treaties are binding only on the parties involved, the rules of common law are binding on all countries in the international community as the International Court of Justice (ICJ) stated:  “General customary law must have equal force for all members of the international community and cannot be subject of any right of unilateral exclusion.” (The North Sea Case, 1969)[18]. Tanaka (2015)[19] argued that, customary law comes from two elements, namely an objective element, state practice, and a subjective element, judicial opinion. In addition to state practice, a treaty may also generate a new common law rule. Roach (2014)[20] listed in his study the rules of the UNCLOS that the international court has recognized as customary international sea law, such as Article 15 and 83. The boundary delimitation is governed by legislation, which over time has been expanded by codification given in treaty provisions. Its growth has also been substantially aided by the jurisprudence of the ICJ and ad hoc tribunals. Miron (2020)[21] believed “The law on maritime delimitation is often characterized as judge-made law”. In this regard, the source of maritime delimitation was considered as follows. Conventions Provisions Concerning Maritime Delimitation Three conventions relating to maritime delimitation of sea are, the 1958 Convention on the Territorial Sea and the contiguous Zone[22] (hereinafter referred to as TSC), the Convention on the Continental Shelf and the Convention on the Law of the Sea (UNCLOS) 1982. Paragraph 1 of Article 12 of TSC and Article 15 of UNCLOS provided the triple rule of “agreement- equidistance (median line) special circumstance.” for delimitation of territorial sea. These two provisions are generally considered to reflect customary law, which is consistent by applying the median line method if the states do not reach agreement. However, the conventions did not define the special circumstances and it must be clarified during the development of jurisprudence and state practice in the field of maritime delimitation. In addition, Article 6 of the convention on the continental shelf 1958[23] introduced the notion of a special circumstance, similarly, UNCLOS contains special provisions, Article 74 and 83, for EEZ delimitation and continental shelf which stated: “the delimitation of the exclusive economic zone [the continental shelf] between states with opposite and adjacent coasts shall be effected by agreement based on international law, as referred to in article 38 of the statue of the international court of justice, to achieve an equitable solution.” These two Articles omit any reference to a method of delimitation. However, it is noteworthy that the fundamental procedural principle has been introduced by UNCLOS to sea delimitation is the peaceful settlement of international disputes and emphasis on an agreement in good faith as the ICJ stated: “Any delimitation must be effected by agreement between the states concerned, either by the conclusion of the direct agreement or, by some alternative method which must be based on consent” (the Gulf of Maine, 1984)[24]. The most essential implication of the fundamental rule that maritime border delimitation should be accomplished via agreement is that parties are free to choose any delimitation line they choose based on political, economic, geographic, or other considerations (DOALOS, 2000)[25]. Approaches of Jurisprudence to the Maritime Delimitation Delimitation by judicial process is a legal operation and it is based on consideration of the law and there is the distinction between delimitation based on legal rules and delimitation by states during negotiation which is based on political consideration. There are different approaches towards delimitation as is described in the following parts. Equidistance Equidistance is the predictable method and delimitation line mathematically determined. After 1958 in many cases, governments did the negotiations by considering an equidistance line and the majority of bilateral treaties on maritime delimitation used this method. However, there may be complications if one state uses normal baselines that follow the sinuosity of the coastline while the other uses a straight baseline system that connects the outermost islands, promontories, and rocks (Charney and Alexander, 1993)[26]. The ICJ and arbitral tribunals reduced the equidistance technique\u27s privileged standing as the basis of entitlement to both the EEZ and the CS within 200 nautical, viewing it as a method that, in some situations, may result in inequitable and irrational outcomes. Equity principles The equitable principle stems from court jurisprudence, which is the general guiding principle. It combines two types of principles: procedural and substantive. The procedural principle is that the delimitation is done by agreement, and the substantive include equity. Cottier (2015)[27] believed equity has been a companion of the law ever since rule-based legal systems emerged, and it provides a path to justice if the law is unable to appropriately respond. The equitable principle as customary law became the main aspect of the law of maritime delimitation (Østhagen, 2020)[28]. The principle of equity and relevant circumstances has been stressed in article 59 of UNCLOS as a basis for the resolution of conflicts regarding the attribution of rights and jurisdiction in the EEZ. However, the approaches toward this principle were different as is described in the following parts. A) Result oriented equity approach In the North Sea Case 1969, which involved disputes of the Federal Republic of Germany with the Netherlands and Denmark as regards their continental shelf delimitation, the ICJ held “there is no single method of delimitation the use of which is in all circumstance obligatory” and court decided delimitation should be effected by agreement on the basis of equitable principle. The ICJ stated equidistance line is not appropriate due to the shape of the coasts of the Federal Republic of Germany, which was concave (Guernsey, 2000)[29].  In the same manner in the case of Guinea and Guinea-Bissau before Arbitration Tribunal in 1983, the arbitral decided to reject the application of the equidistance method because of the existence of geographical circumstances, such as the concave coasts of the States (McLarky, 1987)[30]. This approach has been called the result-oriented approach. It, focused on the equitable outcome rather than the techniques to be used and provides the international court and tribunal’s opportunity to do not bind any method and decided each case based on its own circumstance, as the IJC stated: “The result of the application of equitable principles must be equitable and the result which is predominant, the principles are subordinate the goal. The equitable of a principle must be assessed in the light of its usefulness for the purpose of arriving at an equitable result”. (Tunisia v. Libya case, 1978)[31]. B) Corrective Equity Approach In the Libya/Malta case[32] of 1985, the ICJ used the equidistance method just as starting point and equity as a corrective element and shift the equidistance line based on special circumstances. This approach has been called “corrective –equity approach”. In 1993, regrading delimitation of the continental shelf and fishery zone, the court by considering Article 6 of CS convention and customary law held: “Even if it were not appropriate to apply, not Article 6 of CS convention, but customary law concerning the continental shelf as developed in the decided cases, it is in accord with precedents, to begin with, the median line as a provisional line and then to ask whether special circumstance require any adjustment or shifting that of the line” (Greenland v. Jan Mayen case, 1993)[33]. In this case, the court applied this approach as customary law. In the Cameron v. Nigeria case[34], the court adopted a new interpretation, and since there was no particular reference to any technique of delimitation in UNCLOS, it determined that a specific method, namely the equidistance method, should be incorporated into these provisions. C) Three Stage Approach For the first time in the Black sea case 2009 between Romania and Ukraine, the ICJ used new formula which called “three-stage approach”. Based on this approach, establishing the equidistance line is first stage, then court will check the relevant circumstances in order to adjustment of provisional line and at the third stage, to avoid any inequality the disproportionality test has to be applied. This approach also called the equidistance/relevant circumstances method. This approach has made maritime delimitation more predictable and transparent (Miron, 2020)[35]. However, till now courts have not established any recommended technique for disproportionality test calculation (Fietta and Cleverly, 2016)[36]. In 2012, the ITLOS used this approach and held: “At the first stage it will construct a provisional equidistance line, based on the geography of the casts and mathematical calculation, it will proceed to the second stage of the process, which consists of determining whether there are any relevant circumstances to adjustment, if so, it will make an adjustment the produces an equitable result. At the final stage, the tribunal checks whether the adjusted line results in any significant disproportion between the ratio of the respective coastal lengths and the ratio of the relevant maritime areas allocated to each party.” (Bangladesh v. Myanmar, 2012)[37]. Additionally, the ICJ, and arbitration used this approach, the ICJ in the Chile v. Peru case[38], and the arbitration in the Bangladesh V. India case. Nowadays, international courts have transited from the result-oriented-equity approach to the three stage approach (Chuanxiang, 2016)[39].  Relevant Circumstances The relevant circumstances are those circumstances are taken into account in the delimitation process by States and the courts. Most relevant and dominant geographical, historical, political, economic, socio-economic, security, and other kinds of factors can be taken into account by states, open-ended categories, since till today not only the conventions, especially Article 6 of the convention on the continental shelf and Article 15 of UNCLOS but also courts did not provide the list of circumstances. In the Angelo- French case the United Kingdom argued it does not mean there is no limitation for a special circumstance under Article 6 of the convention on the continental shelf but the court rejected this claim (Evans,2018)[40], which means there is no limitation. However, DOALOS (2000)[41], stated “in the delimitation based on legal rule the international court has interpreted “relevant” criteria and factors as directly relevant to the delimitation, therefore, of a non-political or economic nature.”, Consequently  in the negotiation stage, states have the flexibility to influence the outcome in favor of their interest. Sources of International Law for the Caspian Sea Delimitation Agreements  To find the applicable law of maritime delimitation for Caspian Sea, ascertaining whether there is any pre-existing agreements relating to the maritime delimitation is crucial, in this regard Soviet-Iran agreements, additionally, delimitation agreements of the north part of the Caspian Sea will be reviewed.  Soviet –Iran agreements During the era of the USSR, the Caspian Sea was treated based on two agreements between Iran and USSR, the first one was signed on 26 February 1921(Mehdiyoun, 2000)[42], and two parties were given equal shipping rights in the Caspian Sea as well as the right to fly their flags on their commercial vessels and both reaffirmed the 10-nautical mile fishing zone in the Treaty of Commerce and Navigation agreement in 1941 (United Nation, Treaty Series, 1959). After the disintegration of the USSR, these two agreements were inadequate to deal with the presence of the new littoral states and their demand toward delimitation and consequently exploration and exploitation of natural resources in the seabed of the sea. The treaties of 1921 and 1940 solely addressed navigation, fishing, and trade and did not clarify the legal status of the Caspian Sea, and neither provide an official and final delimitation line. In addition, in this period (1921-1940) the concept of EEZ and continental shelf was still some long years away, while its general acceptance in practice and being introduced in the UNCLOS 1982. In this regard riparian states took various measures, which demonstrated that they did not accept the validity of these agreements, nevertheless Turkmenistan in its letter to the UN general assembly (UN General Assembly, 1998)[43] accepted agreements. Additionally, by increasing the heated contention in the region, Iran, and Russia as a party to these agreements, in their joint statement (UN General Assembly, 2000)[44] stated: “until the new legal status is devised for the Caspian Sea, these two treaties retain their full legal validity”. This statement gave the valid duration to

Oil Security Short- and Long-Term Policies

Increasing oil security represents one of the most important policy actions, especially within IEA countries. Short and long term mechanisms could help such goal. On the short term side, revision of IEA emergency response oil stock system has been discussed. The attention is mainly focused on three issues: the high costs of stock management for private industries, the possible use of strategic reserves to smooth price when no high supply disruption has taken, the extension of IEA emergency system to non-OECD countries. The main actions specifically proposed by the European Commission are: an harmonisation of national storage systems, with the institution of public and private agency, a wider co-ordinated use of security stocks, and an increase in the physical amount of oil stocks. Long term measures for enhancing oil supply security can be seen on the demand-side and the supply-side. Main demand-side policies could be the following: energy saving and efficiency, investments in research and technology, and reduction of oil price inelasticity especially for transport sector. Main supply-side policies can be summarized into co-operation and institutional promotion for supply diversification of suppliers/routes. Main factors that could affect described policies could be the liberalization of international trade even in the energy sector and the increasing role of oil demand from developing countries.Oil, Security, Energy

The economic aspects of the energy sector in CIS countries

Final report of a study commissioned by ECFIN to CASE (Centre for Social and Economic Research) This report analyses the macroeconomic aspects of energy sector development in the Commonwealth of Independent States (CIS) countries. It also briefly covers selected aspects of EU-CIS energy relations, looking at the potential of the CIS region as a source of energy supplies for the EU and at energy policy options in the CIS. CIS, EU, Energy, Dutch disease, quasi fiscal activities, oil funds, resource curse, CASE

Globalization of the Natural Gas Market on Natural Gas Prices in Electric Power Generation and Energy Development

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