The People’s Republic of China-European Union-Russian Energy Security Triangle

Abstract

Russia, despite ongoing geopolitical and security conflicts, remains a dominant player in the world’s natural gas markets. However, cheap natural gas supply is finite and decreasing while their customers’ demand is increasing without a correlative price increase. European Union (EU) demand for Russian natural gas presents a complicated picture. The median and mode are decreasing while the mean is increasing due to a small group of countries drastically increasing import volumes. China, too, is seeking to increase their import quantities of Russian natural gas through the construction of multiple pipelines and joint ventures in LNG. This proves essential in their efforts to reduce energy costs in their manufacturing sector. Furthermore it will play a key role in China’s efforts to curb greenhouse gas (GHG) emissions by transitioning from coal to natural gas. This creates an intriguing energy security triangle as EU and Chinese demand-side competition for Russian natural gas as a factor impacting the EU’s price elasticity of demand for Chinese manufactured goods.