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Home Archive April 2012 Issue

April 2012 Issue

From the Editor: Energy Geopolitics in the 21st Century

In 2012 energy-driven geopolitical considerations are a pronounced, common feature of many countries’ national security policies.  It is easy to say, but hard to substantiate, that energy geopolitics is somehow unique to the global security framework in the 21st century.   

After all, in the 1950s the energy world was catalyzed by US President Eisenhower’s “atoms for peace” program, was driven by the fear of above ground nuclear testing and the proliferation of nuclear weapons.  These developments lead in the 1960s to the nuclear test-ban treaty and the nuclear non proliferation treaty which was opened for signature in 1968.  

In the 1970s the Western industrialized world was awakened to its own oil vulnerability by the Arab oil embargo and to the growing acuity of environmental blight after decades of acid rain.  Oil vulnerabilities lead to the creation of the International Energy Agency and in the US to passage of the Clean Air Act of 1990 designed initially to specifically reduce sulfur dioxide emissions to 50% of their 1980 emissions in order to curtail acid rain.    

The late 1980s saw the collapse of the Soviet empire and its control over Central and Eastern Europe (which had been bolstered by favorable Soviet energy pricing to its Warsaw Pact allies) in return for political subservience; over the last 20 years (from the 1990s onwards) our world has experienced the important emergence of the European Union which got its legs back in the 1950s with the signing of the European Steel and Coal Community and the Euratom treaty both which had energy at their core. 

In 2006 and 2009 the world watched, and Europe shuddered, as the Ukraine and the Russian Federation opted for open energy hostility kindled in part by Ukraine’s refusal to give up the old Soviet pricing mechanism for imported gas while the Russians used the carrot of old Soviet energy price distortions to extract strategic concessions from Ukraine over an agreement to extend the Russian fleet’s access to Ukraine’s Black Sea port in Sevastopol.   In 2012, the European Union chooses to wage the geopolitical battle over Russian gas dependence in Europe by supporting the construction of new infrastructure across the continent that can diversify markets and reverse gas flows through existent pipelines.  There is however a geopolitical price being paid by the EU to the detriment of some of its newer member states for failure to more boldly promote EU security interests. 

Worth considering in 2012, is how the perception of resource availability (driven by real or nominal concerns) is a fundamental cornerstone of any discussion regarding energy security and how resources are often portrayed in geopolitical terms.

In real terms, oil prices are impacted by geopolitical tremors every time there is the perception, real or imagined, that supply may be constricted.  Oil’s leverage  is derived from its virtual monopoly as a transportation fuel and the self-inflicted policy failure of oil consumers to confront this challenge head-on.   The day that drivers can conveniently tank-up on something else other than oil (at a competitive price) will be the day instabilities in oil producing states will be reported in the international media with much less fanfare that this news receives today.  But we are not there yet.   

The domestic agendas of major OPEC producers today appear to driven by the fear of losing control over their own civil societies (the Arab Spring whammy) in spite of their providing citizens increasingly augmented public services and wages garnered from high oil export prices.  This is why the nominal new norm for oil is $100 a barrel.  Prices are unlikely to fall under this floor price,  for any extended period of time,  if producers can do anything about it because they need increasingly higher export revenue simply to balance national budgets.   Former US Speaker of the House Tip O’Neil’s adage that ‘all politics are local’ turns the global geopolitical stage on its head to focus on what is happening in producers’ backyards.  The multitude of civil unrest across the Arab world is indicative of the fate awaiting some OPEC producers if they are unable to address the growing aspirations of their own populations.  One has to wonder if there is enough wealth to keep an indefinite lid on this oil barrel? 

Iran, on the other hand, derives its influence not from the ‘real’ proven reserves it has on its books but by its threat to shut-down the Persian Gulf transit spigot through which 20% of the world’s oil passes daily.  Iran’s oil exports fund its nuclear ambitions paid for with Chinese and Indian dollars and it is from this oily nuclear cocktail that it partially derives its geopolitical influence.        

In other historically apolitical regions of the world, like the Arctic, estimated resource reserves are politicizing its melting polar tundra.  Usually the dialogue that surrounds Arctic resources has been handled by the region’s littoral states but now China wants to get into the act and is building a deep-water ice-breaker capable of navigating a region where it has no sovereign presence.  Energy geopolitics helps explain this development.    

One example of turning real energy insecurity into real security has been the United States in leading its own domestic revolution in unconventional oil and gas development.  Not only has this augmented US gas reserves by 20% (reserves measured as resources which are commercially viable) but it has provided Europe with access to LNG as an alternative to Russian gas.  As a result this largely technologically driven revolution has global geopolitical implications. 

In closing, energy geopolitics in the 21st is partially a legacy of how energy has impacted on nations’ domestic  or foreign policy agendas over the past 50 years.  Energy geopolitics is also driven by real emergent energy concerns.  In the current geopolitical environment the political manifestation of energy access and resources may not appear as a first order of magnitude but they are present if one digs beneath the surface.  When nations’ choose to conveniently ignore or to under-estimate the energy quotient in their own national or collective security equation, vulnerabilities emerge and risks increase for becoming embroiled in a destructive tug-of-war over resource access and acquisition.  Just as real as the threat of conventional war remains for the nation-state so too do unconventional threats challenge peace and security.  And if the sustainability of modern life hinges on economics, as many portend, then what is more central to economic output and performance than energy?  Ask anyone in the developing world and they’ll answer this for you. 

In closing, the Prussian military strategist Carl von Clausewitz is often referred to with (his) phrase, “war is the continuation of politics by other means.” A geopolitical twist on this might be, “energy is the continuation of politics by other means.”   So goes the energy-politic nexus in this the first part of the 21st century. 
 
editor@iags.org
 

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