The EU-funded research project Polinares has identified the main challenges facing the EU and the rest of the world in securing supplies of oil, gas and minerals over the next three decades.
In the concluding report, "Accessing oil, gas and minerals in a changing world", which will be published in December, Polinares also makes recommendations on policy approaches to address these challenges.
“We think that there is a problem on the supply side," Peter Buchholz, one of the authors of the report, told a news conference in Brussels on Wednesday (28 November).
"It's not the geological availability, but there are supply restrictions coming from economic, environmental, social and political aspects," added Buchholz, who is head of unit for mineral economics at BGR, the German federal institute for geosciences and natural resources.
"We have intentional supply disruptions via the use of exports pricing as a political instrument for example embargoes restricting exports," Buchholz stated, referring to China's export restrictions on rare earths, which are being challenged by the EU at the World Trade Organization.
Russia has also not hesitated to use its dominant position on the natural gas market to "reward" or "punish" individual countries by applying considerable price differences.
"On top of that we could risk accidental supply disruption or price hikes coming from natural disasters, but also from political instability," Buchholz said.
As a consequence, policy and strategy makers in the public and the private sector have to plan for a high degree of uncertainty in both the short and long-term, the report states.
New strategic and policy approaches will be required on the part of the EU, its member states and its industrial enterprises in order to address these new challenges.
“Each raw material has its own market. This means that each market is different, each raw material is different. We have to look at these markets individually and in detail,” Buchholz said.
State capitalism as an unpredictable obstacle
The authors added that long-standing approaches and assumptions concerning the efficacy of markets in oil, gas and mineral sectors may no longer be valid, especially given the recent rise of state capitalism.
“State capitalism as an approach or as a tendency is really important in understanding how resource-rich countries wish to control, produce and export those resources," said Peter Styles of the University of Dundee in Scotland.
Today, on the one hand there is a mismatch between the criteria and principles which democratic countries may wish to see underlying policy approaches to encourage cooperation in the exploitation of natural resources on the part of state capitalists governments. On the other hand are the values and priorities of those governments.
Buchholz added that the major producers of platinum are South Africa, Russia and Zimbabwe, but that could change overnight.
"In a world in transition, we can see that the supply of platinum group metals, although today it is stable and works, may get problems when regimes change from liberal capitalism to state capitalism, which may occur in South Africa at the moment," he said.
In the future, the EU would need a more constructive approach in the areas of oil, gas and minerals. That could be to build a policy framework around elements of the enlightened self-interest of those governments displaying features of state capitalism, such as China, the report suggests.