A New Energy Age in Pacific Russia: Lessons from the Sakhalin Oil and Gas Projects

A noted British specialist in Russia's economic geography and the Far East region presents a comprehensive account of the development of the onshore and offshore oil and gas deposits of Sakhalin. Following a review of early multinational activity in geological surveying and exploration during the 1970s, he charts subsequent changes in the entities formed to develop and exploit the deposits (Sakhalin-I and -II) later in the Soviet period and during the first two decades of Russian independence. These changes have responded to improved knowledge of the geology of the deposits and changing relations between the Russian central government and Sakhalin regional authorities. Also analyzed are efforts by the Russian side to overturn or otherwise modify terms of previous agreements deemed unfavorable, and maneuvering by China and Japan to secure increasing sources of supply for their markets. With Sakhalin's two core projects now entering the active production phase, the author distills a number of key issues that have shaped the development of the island's offshore hydrocarbon resources and will have a bearing on prospects for a future generation of less spectacular new projects (incremental development); he also outlines wider lessons that have been learned over the life of Sakhalin's projects. Journal of Economic Literature, Classification Numbers: F210, L710, L950, P330, Q400. 4 figures, 2 tables, 45 references.     

Eurasian Natural Gas: Significance and Recent Developments

A noted American specialist on the economies of Russia and major republics of the former Soviet Union explores and discusses the natural gas resources of Central Eurasia and the political and economic issues raised by their general inaccessibility. Central to these issues are the international pipelines required to bring this increasingly important energy source to meet growing world demand, and their intimate connection to the security of all the nations involved. The author explains why they are complicated by the growing, yet still largely potential, competition from a world LNG market driven by new technologies, and hence natural gas sources, outside of Central Eurasia. Each of the major actors in this arena—from the producer states and their national energy companies to the high-income consuming states with an increasing demand for natural gas—are pursuing frequently conflicting strategies to ensure their energy supplies and income security. Addressing the major developments thoroughly, the paper focuses in particular on the strategies of Russia/Gazprom, the Central Asian producers, and the transit states, as well as on the pipelines, both actual and potential, that intertwine them.     

Russian Revenues from Oil and Gas Exports: Flow and Taxation

A senior Japanese economist traces the flows of revenue derived from oil and gas exports through the Russian economy. The author examines the use of revenues and investigates their contribution to Russia's state and regional budgets in the form of taxes. After detailing the methodological difficulties encountered in measuring revenue streams statistically, he proceeds to approximate their magnitude through intensive use of input-output table data and budget statistics provided by the Russian Federation Ministry of Finance. His investigation of the list of destination countries for Russian oil and petroleum products exports has interesting implications for the study of capital flight from Russia to the West. Journal of Economic Literature, Classification Numbers: F14, H20, Q43. 10 tables, 37 references.     

Geophysical signatures associated with fluid flow and gas hydrate occurrence in a tectonically quiescent sequence,Qiongdongnan Basin,South China Sea

Interpretation of high‐resolution two‐dimensional (2D) and three‐dimensional (3D) seismic data collected in the Qiongdongnan Basin, South China Sea reveals the presence of polygonal faults, pockmarks, gas chimneys and slope failure in strata of Pliocene and younger age. The gas chimneys are characterized by low‐amplitude reflections, acoustic turbidity and low P‐wave velocity indicating fluid expulsion pathways. Coherence time slices show that the polygonal faults are restricted to sediments with moderate‐amplitude, continuous reflections. Gas hydrates are identified in seismic data by the presence of bottom simulating reflectors (BSRs), which have high amplitude, reverse polarity and are subparallel to seafloor. Mud diapirism and mounded structures have variable geometry and a great diversity regarding the origin of the fluid and the parent beds. The gas chimneys, mud diapirism, polygonal faults and a seismic facies‐change facilitate the upward migration of thermogenic fluids from underlying sediments. Fluids can be temporarily trapped below the gas hydrate stability zone, but fluid advection may cause gas hydrate dissociation and affect the thickness of gas hydrate zone. The fluid accumulation leads to the generation of excess pore fluids that release along faults, forming pockmarks and mud volcanoes on the seafloor. These features are indicators of fluid flow in a tectonically‐quiescent sequence, Qiongdongnan Basin. Geofluids (2010) 10 , 351–368     

Developments in Russian Gas Production Since 1998: Russia's Evolving Gas Supply Strategy

An American geographer and prominent authority on the oil and natural gas industries and resources of Russia and other former republics of the Soviet Union reports on overall trends in Russia's natural gas production in the years following the country's ruble devaluation and financial crisis. The account—based on systematic in-country observations, discussions/interviews with industry executives, and a review of industry sources—focuses on factors affecting domestic supply and demand as well as export capacity (will Russia have enough gas to meet rising domestic demand while fulfilling its export obligations?), regional patterns of production (and performance of Gazprom regional production enterprises), obstacles to the use of associated gas derived from crude oil extraction, and major pipeline construction projects in West Siberia and the Russian Far East. The paper concludes by outlining CERA's forecast for Russian gas production to 2020, also disaggregated by region. Journal of Economic Literature, Classification Numbers: L71, O13, Q40, Q48. 7 figures, 8 tables, 51 references.     

On the geochemistry of gases and noble gas isotopes (including 222Rn) in deep crustal fluids: the 4000 m KTB-pilot hole fluid production test 2002–03

The concentrations of H₂, O₂, CO₂, and concentrations and isotopic composition of the noble gases (including ²²²Rn), N₂, CH₄, and higher hydrocarbons dissolved in 4000 m deep‐seated fluids from a 12‐month fluid production test in the KTB pilot hole were analyzed. This determination of the gas geochemistry during the test in combination with the knowledge of the hydraulic data provides relevant information about the fluid hydraulics of the deep system. All gas concentrations and isotopic signatures, except for ²²²Rn, showed constancy during the course of the test. This, in combination with large fluid flow rates at a moderate water table drawdown, imply an almost infinite fluid reservoir in 4000 m depth. From the change in ²²²Rn‐activity as a function of pump rate, the contribution of smaller and wider pores to the overall fluid flow in an aquifer can be deduced. This ²²²Rn‐activity monitoring proved therefore to be a valuable instrument for the qualitative observation of the scavenging of pore and fracture surfaces, a hydraulic feature invisible to standard hydraulic testing tools. The observance of this scavenging effect is due to (i) the continuous on‐line geochemical monitoring, (ii) the durability of the test, (iii) a change in pump rate during the course of the test, and (iv) due to the short half‐life of ²²²Rn. The fluids have a 5.9% mantle He component, and a δ²¹Ne excess of 14%, and a noble gas model age of about (5.5–6.2) ± 2.0 Myr. The mean N₂/Ar‐ratio of 516 and δ¹⁵N‐data of about +1.5‰ indicates sedimentary or metamorphic origin of N₂. The hydrocarbons, amounting to 33 vol.% in the gas phase, are derived from thermal decomposition of marine organic matter of low maturity. But a key question, the identification of the potential source region of the fluids and the migration pathway, is still unidentified.     

Seismic evidence for fluid migration pathways from an overpressured system in the South China Sea

Overpressured systems and intense, anomalously hot fluid expulsion in the Yinggehai Basin of the South China Sea offer an opportunity to understand the history of fluid flow and the process of hydrocarbon accumulation in overpressured environments. Fluid migration pathways from overpressured compartments in the basin are largely controlled by the distribution of faults and fractures. Episodic opening of these faults are related to the dynamics of an overpressured system and tectonic movements during basin evolution. At the crests of diapiric structures, fluid expulsion is seismically imaged as chimney‐ or plume‐like features, low to middle seismic amplitudes, and intermittently chaotic and blank reflecting seismic facies. These fluid pathways are controlled by vertical faults, which commonly penetrate overpressured and overlying normally pressured zones. Fluid expulsion is also observed near the main faults, such as the No. 1 Fault at the north‐eastern margin of the basin. Investigation by sidescan sonar on onshore and offshore Hainan Island indicates that there are more than 100 gas seepages adjacent to the No. 1 Fault. Migration pathways in the diapiric structures are controlled by three types of fault and fracture. Penetrative faults formed by dextral strike‐slip movement of the Red River faults commonly occur in the centre of the diapirs, and may have been a triggering factor for the diapirism, and controlled their distribution. Hydrofractures occur in certain mud‐rich layers and may have been generated by hydraulic fracturing. Radial normal faults occur at the top of diapirs and were formed by the intrusive process. These fluid migration pathways played an important role in regional hydrocarbon accumulation.     

Petroleum type determination through homogenization temperature and vapour volume fraction measurements in fluid inclusions

Physical parameters of petroleum‐bearing fluid inclusions such as bulk density (ρ), molar volume (V_m), vapour volume fraction (?_vap) and homogenization temperature (T_h) are essential information to model petroleum composition (x) in inclusions and to reconstruct palaeotemperature and palaeopressure of trapping. For the main petroleum types contained in a fluid inclusion, we can follow how ?_vap and T_h are simultaneously influenced by a change of bulk density in a ?_vap versus T_h projection. We have correlated T_h and ?_vap for different petroleum compositions for a large range of bulk density values. However, postentrapment events under new pressure (P) and temperature (T) conditions can greatly modify the initial fingerprints of physical conditions and chemical composition of fluid inclusions. Re‐equilibration is frequent, especially in the case of fragile minerals. Stretching and leakage phenomenon have been simulated using the Petroleum Inclusion Thermodynamics (pit ) software, from virtual petroleum inclusions with known hydrocarbon composition. The aim of these simulations is to understand how ?_vap and T_h evolve with these re‐equilibration phenomena, with respect to the oil composition. Results of stretching simulations show a characteristic increase of T_h and ?_vap along correlation curves, with the curve shape dependent on petroleum composition. Leakage simulations show an increase of T_h and a smaller increase or even a decrease in ?_vap. Consequently, the better preserved inclusions in a given population can be presumed to be those that have the lowest T_h. Applications of T_h and ?_vap measurements of natural inclusions in calcite and in quartz showed that the fragility of the host mineral is a key factor allowing the recording of post‐entrapment events. Inclusions that have stretched or leaked are identified and the best preserved inclusions selected for evaluation of P–T–x trapping conditions. Moreover, petroleum types trapped in inclusions can be identified from ?_vap and T_h measurements without compositional modelling.     

Managing Policy Dilemmas in South Korea: The Case of the Emissions Trading Scheme

This paper analyses the policy dilemma of South Korea’s Lee Myung-bak government regarding the greenhouse gas Emissions Trading Scheme (ETS), the cornerstone of the government’s Low Carbon Green Growth (GG) policy. The paper analyses policy governance, with a focus on the deliberative nature of the policy process. The ETS was promoted as a way to overcome certain international, political and socioeconomic challenges facing the government, yet the process of its establishment featured severe confrontations between the stakeholders (industrialists and environmentalists), and a lack of effort on the part of the government to pursue deliberation with them, resulting in a significant policy dilemma. The government reacted passively at first, and later responded with a symbolic decision that failed to pursue deliberative processes and exacerbated the situation. This paper addresses the theoretical and policy implications of this policy process by identifying the mechanism that created the policy dilemma. The reliability and validity of the study are substantiated through a multi-strategy approach, including a review of the literature and an in-depth interview with a government economic official.     

Russia’s energy relations with China: passing the strategic threshold?

This article examines Russian energy policies toward China over the past decade as reluctant engagement changed into a priority energy partnership. From 2008 to 2016 Russian and Chinese companies signed several major oil and gas agreements, a period in which Moscow reassessed China as a future energy consumer and lifted bilateral cooperation to a new level. The article utilizes the strategic partnership concept as an analytical framework and finds traditional realist concepts and hedging inadequate for this particular case. The study illuminates Russian geopolitical considerations and acceptance of vulnerability, which combined make long-term Russian energy policies more China dependent. Officially, Russia seeks diversification among Asian energy buyers, but its focus has increasingly been on China. Western sanctions imposed in 2014 for Russia’s role in Ukraine accelerated this trend. Moscow’s energy policies toward Beijing with its pipelines and long-term agreements are permanent arrangements that resemble strategic partnership policies. China is eager to increase energy relations with Russian companies, but Beijing also ensures that it does not become too dependent on one supplier. Russian concern over its increased dependence on China in the East is deemed secondary to expanding Russia’s customer base beyond the still-dominant European market.