Towards New Energy Infrastructures in Eurasia: A Background Paper

G. Klaassen, A. Gruebler and L. Schrattenholzer

Working Papers from International Institute for Applied Systems Analysis

Abstract: This study explores the concept of new energy infrastructures (in particular gas pipelines) in Eurasia and discusses its implications on future energy systems, gas trade, and the environment. Overall resource availability is not expected to be a real constraint in meeting growing energy demand within the next 100 years, but the geographical concentration of resources is. The expected increase in the use of domestic energy sources (coal) in Asia is associated with severe adverse environmental impacts causing significant damage to human health and the natural environment. In contrast, natural gas could offer an ideal bridge to the post fossil era, but requires the development of new Eurasian energy networks. Up-front investment in gas transit pipelines may constitute a significant portion of future energy investments. The financial risks appear significant and depend on factors such as demand and supply development, technological progress, geographical and political environments and prevailing regulatory regimes. Timely investment and associated cost reductions in the necessary infrastructure could create the potential for FSU gas exports becoming ten-fold as high in 2050 as otherwise would be the case. This would have significant positive impacts on the global, regional and local environment and also entail significant positive economic impacts. In addition, supply diversification would be promoted.

Date: 1999-12
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