Bluffing one's way to influence

As in years past, I spent the holidays skiing in Lech am Arlberg, in the Austrian Alps. There was a bit less snow than usual, but plenty for skiing, and I had a lot of fun. I hope everyone else had a nice time during their holidays.
While I was there, I didn't have regular access to the internet, but I bought the Wall Street Journal Europe, which ran an interesting editorial (subs. required; free version here) about Russia's gas reserves:

At first sight the prospect of a significant supply shortage appears improbable. After all, Russia has 47 trillion cubic meters of proven gas reserves. On closer examination, including research by former Russian Deputy Energy Minister Vladimir Milov and the International Energy Agency (IEA), it is clear that Russian gas production is marked by two salient features. First, reliance on three old, declining, Soviet-era supergiant gas fields in the Nadym Pur Taz (NPT) region and the Zapolyarnoye field, a Soviet legacy project. Second, the lack of investment in opening up new major gas fields.
When challenged on this issue, Gazprom responds that it spends $11 billion annually on infrastructure, just as the IEA recommends. The trouble is that it's making the wrong sort of investments. Gazprom is not investing in new gas wells, pipelines and compressor stations, but in export infrastructure such as the North European Pipeline to Germany and the acquisition of foreign downstream energy assets. Taken together, the declining old fields and the lack of investment in new ones create a potentially major supply problem.
Mr. Milov, who now heads the Institute for Energy Policy in Moscow, estimates that by 2010 the deficit between Gazprom's supply and expected demand could be 126 billion cubic meters (bcm). To give that figure some context, the European Union imported approximately 155 bcm from Russia in 2005. Worse still, there are strong grounds for believing that the 126 bcm gap could grow. Mr. Milov assumes that the Central Asian states will be able to deliver 105 bcm annually. Unfortunately, there are doubts as to whether the Central Asian fields, which have seen even less investment than the Russian fields, can produce that amount of gas. And even if they could produce 105 bcm, according to the IEA they could only transport 50 bcm to Russia thanks to decayed pipelines. There are also concerns over the rate at which homes and factories in Russia are being hooked up to the main gas network, further increasing demand, and concerns that as the NPT fields begin to dry up their depletion rate, just as with the U.K. continental shelf fields, will accelerate.
Given the number of variables it is difficult to put a definitive number on the size of the deficit. But it looks as if the gap could be somewhere between 125 bcm and 200 bcm. Even at the lower end, such a deficit would severely strain EU gas supplies. Ironically Russia's greatest Western ally, Germany, stands to suffer most since it is at the end of the Russian supply system and it takes more Russian gas than any other country in Western Europe. The North European Pipeline will not be finished by 2010 -- and even if it were, there is the question of whether there would be enough gas for it.

Do read the whole thing, in which the author also proposes a way in which Europe can minimise the problem.
In a similar vein, there seems to be a growing number of voices arguing that the West should not adapt its foreign policy based on the fear that unsavoury regimes will use their energy supplies to blackmail us, particularly in the case of Iran. In a recent peer-reviewed paper entitled "The Iranian petroleum crisis and United States national security" which is to appear in Proceedings of the National Academy of Sciences, Roger J. Stern, a researcher at Johns Hopkins University sets out a convincing argument that the so-called "oil-weapon" is in reality toothless (see the press release). The Telegraph summarises (via Instapundit; emphasis mine):

Iran's oil exports are plummeting at 10pc a year on lack of investment and could be exhausted within a decade, depriving the world economy of its second-biggest source of crude supplies. A report by the US National Academy of Sciences said rickety infrastructure dating back to the era of the Shah had crippled output, while local fuel use was rising at 6pc a year.
"Their domestic demand is growing at the highest rate of any country in the world," said Prof Roger Stern, an Iran expert at Johns Hopkins University, Baltimore. "They need to invest $2.5bn (£1.28bn) a year just to stand still and they're not doing it because it's politically easier to spend the money on social welfare and the army than to wait four to six years for a return on investment," he said. "They've been running down the industry like this for 20 years."
Prof Stern said Teheran faces impending disaster since it relies on oil revenues for 70pc of its budget. "They cannot afford to carry out their threats to shut off oil supplies," he said. "There is no oil weapon, it's just a bluff."

Meanwhile, M. Simon of Power and Control, who is guest blogging at Classical Values notes (via Instapundit), that the situation is so bad that Iran seems to be having difficulties maintaining supply (in this case of natural gas) even now, as UPI reports:

Iran has stopped exports of natural gas to Turkey due to a tight domestic market caused by cold weather, but vows to restart shipments soon. Iran supplies Turkey from the Tabriz to Ankara pipeline as part of a 1996 contract. This year Turkey was to receive a total of 10 billion cubic meters of Iranian gas, the state-run IRNA news agency reports. "Currently our export to Turkey is zero," Oil Minister Kazem Vaziri-Hamaneh said. He said he called the Turkish energy minister and apologized "and promised to address these problems as soon as possible."

Also see this interesting Power and Control post, about Iran's current internal problems more in general. All this underlines the fact that, as I noted here and here, the West should stop telling itself that nothing can be done to resolve crises in these countries because they will ruin our economies by stopping fuel exports.
This is even more true in light of an interesting prediction made a few days ago by R. James Woolsey in the Wall Street Journal (free link; via Instapundit). After discussing various alternative fuels, he says:

All this is likely to change decisively, because electricity is about to become a major partner with alternative liquid fuels in replacing oil.
The change is being driven by innovations in the batteries that now power modern electronics. If hybrid gasoline-electric cars are provided with advanced batteries (GM's announcement said its choice would be lithium-ion) having improved energy and power density--variants of the ones in our computers and cell phones--dozens of vehicle prototypes are now demonstrating that these "plug-in hybrids" can more than double hybrids' overall (gasoline) mileage. With a plug-in, charging your car overnight from an ordinary 110-volt socket in your garage lets you drive 20 miles or more on the electricity stored in the topped-up battery before the car lapses into its normal hybrid mode. If you forget to charge or exceed 20 miles, no problem, you then just have a regular hybrid with the insurance of liquid fuel in the tank. And during those 20 all-electric miles you will be driving at a cost of between a penny and three cents a mile instead of the current 10-cent-a-mile cost of gasoline.
Utilities are rapidly becoming quite interested in plug-ins because of the substantial benefit to them of being able to sell off-peak power at night. Because off-peak nighttime charging uses unutilized capacity, DOE's Pacific Northwest National Laboratory estimates that adopting plug-ins will not create a need for new base load electricity generation plants until plug-ins constitute over 84% of the country's 220 million passenger vehicles.
[...]
Environmentalists should join this march with enthusiasm. Replacing hydrocarbons with fuels derived from biomass and waste reduces vehicles' carbon emissions very substantially. And replacing gasoline with electricity further brightens the environmental picture. The Environmental and Energy Study Institute has shown that, with today's electricity grid, there would be a national average reduction in carbon emissions by about 60% per vehicle when a plug-in hybrid with 20-mile all-electric range replaces a conventional car.
Subsidizing expensive substitutes for petroleum, ignoring the massive infrastructure costs needed to fuel family cars with hydrogen, searching for a single elegant solution--none of this has worked, nor will it. Instead we should encourage a portfolio of inexpensive fuels, including electricity, that requires very little infrastructure change and let its components work together: A 50 mpg hybrid, once it becomes a plug-in, will likely get solidly over 100 mpg of gasoline (call it "mpgg"); if it is also a flexible fuel vehicle using 85% ethanol, E-85, its mpgg rises to around 500.

Do read the whole thing.