A great new energy blog called The Crude View has been launched by our friends Derek Brower and Tom Nicholls.  Below is an excerpt of a recent piece they did about a speech at Chatham House by a fundraiser for the Nabucco pipeline – the European Commission’s pet project to break Gazprom’s iron grip on supply flows from Central Asia.

Nothing Nabucco’s supporters say — including grandiose plans to proclaim a “Budapest declaration” at a meeting in Hungary in January — now makes the project any more likely to happen in the near future.

Nabucco is hamstrung by four different problems.

1. Supply. It isn’t making any real progress on finding the gas to fill the pipeline. Forget the other three problems below, this one is seminal, and it isn’t going away — whatever Nabucco’s supporters think. The partners say gas from the Shah Deniz field in Azerbaijan will supply a bulk of the gas. But, privately, Nabucco supporters admit that output from the first phase of that field will only supply a maximum of 10bn cm/y to the pipeline. Even that figure is doubtful, because Turkey’s economy and gas demand are also growing and the country could soak up Shah Deniz phase 1 gas alone, importing it through the South Caucasus Pipeline. A second phase of Shah Deniz could be more promising — but let’s wait to see how the credit crunch affects the developers’ expansion plans in Azerbaijan.