Dannreuther 2017 - Energy security Ch.4
"The Rise and Fall of Energy Security: Challenging Political and Economic Orders"
In the late 1990s, energy security improved due to reduced OPEC power, diversified energy sources, and environmental concerns. Western dominance, marked by Francis Fukuyama's "end of history" statement, was linked to overcoming challenges such as the collapse of the Soviet Union's energy sector and the enforcement of Iraqi troop withdrawal from Kuwait, which strengthened the US-Saudi relationship. However, this political and economic order was short-lived due to political resistance and global changes.
"The Complex Relationship Between Energy Security and International Security in the 21st Century"
In the late 20th and early 21st centuries, global energy security concerns resurfaced with similarities to the 1970s, such as high oil prices and political instability in the Middle East. Additionally, new dimensions emerged, including non-Western energy consumers like China and an empowered, anti-Western Russia. These factors highlight the complex relationship between energy security and international security, influenced by power dynamics, resentment, and injustice.
The Strategic Importance of the Middle East's Energy Supplies
The Middle East, particularly the Persian Gulf region, is crucial for global energy supplies due to its significant oil production and reserves, making it a focus for international energy security. The region's volatility, combined with its strategic energy importance, has historically influenced international security, such as the 1990 response to Iraq's invasion of Kuwait. Efforts to resolve regional conflicts and introduce moderate leadership have shown periods of optimism for the region's political development.
"Challenges and Transformations: The Middle East's Path to the 21st Century"
In the 1990s, the Middle East saw some liberalization and economic growth, but also increasing political fragility and radical Islamist politics. Al-Qaeda emerged as a global jihadist movement, and the West grew increasingly concerned about the prospect of weapons of mass destruction in Iran and Iraq. These factors led to the containment of both countries and the rise of the term "rogue states."
"US Policies of Containment and Regime Change: Impact on International Energy Security"
The US implemented policies of containment and regime change in Iran and Iraq, which impacted international energy security. These policies aimed to limit the export and development of their energy sectors, restricting supply and causing oil prices to rise. US sanctions on Iran also hindered the expansion of oil production, isolating it and affecting Central Asian energy politics. Interventions in Afghanistan and Iraq shifted the regional and international balance of power, contributing to growing energy insecurity.
The Geopolitical Shift: Power, Influence, and Instability in the Middle East
The US believed it could transform Afghanistan and Iraq into pro-Western, liberal countries, but its failure to do so weakened its power and prestige. This decline in power allowed for an increase in influence for other major players like China and Russia in the international politics of energy. The occupation of Iraq, in particular, boosted Iran's political influence, intensifying tensions with Saudi Arabia and increasing anxiety over energy security. However, oil is not the sole driver of conflict in the Middle East, with historical state formation injustices also contributing to ongoing instability.
"Beyond Oil: The Multi-Faceted Drivers of United States' Involvement in the Middle East"
The United States' involvement in the Middle East is driven by multiple factors beyond oil interests, including support for Israel, economic interests such as arms sales, and counter-proliferation and counter-terrorism strategies. The region's abundant oil resources contribute to heightened tension and conflict, with revolutionary petro-states being more prone to war. The presence of external powers in the region intensifies competition and exacerbates internal tensions, leading to increased instability and global energy insecurity.
China's Emergence as a Global Energy Importer: Challenges and Implications
China's rapid economic growth in the 1990s and 2000s has led it to become the world's largest energy importer, significantly shifting international energy trade towards the East and particularly towards China. This has resulted in China playing a different role in the energy security crisis compared to the 1970s and facing challenges in fitting into the existing Western governance structure of consuming states.
China's Global Search for Energy: Impact and Exaggerations
The rise of China's global search for energy supplies has significantly impacted international politics, often enhancing bargaining power of emerging energy-rich countries. African states, for instance, gained opportunities to diversify external relations and trade, while Chinese engagement in Central Asia helped reduce dependence on Russia. However, concerns over China's intentions in gaining control of global oil supplies persist, but its impact on global governance and politics is generally considered exaggerated.
The Rise of Resource Nationalism and State-Capitalist Models
Chinese energy security approach differs from Western policies due to the nature of Chinese oil companies as state-owned entities. While aware of political risks, Chinese companies have accepted the need to cooperate with stakeholders and maintain a stable investment environment. However, concerns arise over competitive advantages and free-riding on public goods provided by Western countries, contributing to the rise of resource nationalism and state-capitalist models.
Challenging Paradigms: China's Energy Security and Diplomatic Tensions
The rise of Asian states like China has led to growing concerns over energy security, as their increasing energy consumption contributes to tensions and potential conflicts. China's energy security concerns have influenced its diplomatic and military strategies, causing new tensions and potential conflicts. Its military stance on territorial claims has become more intransigent, challenging existing structures and paradigms of energy security.
"China and Russia: The Power Play in Global Energy Politics"
China's growing energy needs and its international search for securing reliable energy sources have significantly impacted global energy politics, as it seeks to establish its great power status and challenge the global status quo. Meanwhile, Russia has also gained power and influence, openly expressing dissatisfaction with the Western-dominated international order, with Sino-Russian energy relations developing positively over the past decade. While China is an energy-importing state, Russia is a major energy exporter and has relied on its energy resources for strategic and geopolitical ambitions.
Shifting Energy Alliances: The Evolution of Soviet and Post-Soviet Russia
The Soviet Union cooperated with the West in the energy sector, providing a reliable source of gas in exchange for technology and expertise. Post-Soviet Russia changed this strategy due to the legacy of privatizing the oil industry, resulting in a concentration of power among oligarchs. This led to increased state control over the oil industry and asserting political primacy over economic interests. This went against the EU's liberalization agenda, creating friction and mutual suspicions.
"Russia's Energy Influence: Challenges and Consequences"
Russia has been perceived as an energy superpower, with its energy resources being used for economic development and as a tool for internal and foreign policy. This has led to state control of the industry and attempts to influence neighboring countries through gas supply threats and pricing changes. However, the effectiveness of these strategies has been limited, and Russia's reliability as an energy supplier has been challenged due to disputes with Ukraine. Additionally, Russia's strategic value in balancing against Western dominance has been impacted by its relationship with China, which was highlighted by the 2014 gas deal between the two nations.
Russia's Gas Exports to China Remain Limited Amid EU Dependency
Russia's gas exports to China remain a fraction of its trade with the US, Japan, and Europe. The gas flowing to China will largely come from East Siberia, not West Siberia, which supplies European markets. Russia's dependence on Europe for its economic prosperity is unlikely to change due to its delicate relationship with the EU.
The Changing Dynamics of Global Energy Security
The rise of Asian countries as major players in oil-producing regions has changed the global energy security landscape, with post-colonial and non-Western states taking a more prominent role. The increase in oil prices has allowed some countries to implement radical policies, challenging international norms. However, the recent drop in oil prices has put pressure on these countries, affecting their internal security and stability.
Energy Security within Resource-Rich States: Understanding the Complex Political Contestations
The text discusses the importance of energy security in domestic politics, emphasizing that it is not just about inter-state relations. It highlights the complex political contestations surrounding energy security within resource-rich states, including power, history, and justice factors. This will be further examined in the next chapter.
Energy Security and Contemporary International Security
•In the late 1990s, there was a counter-reaction to the social, economic, and political legacies of the energy security crisis in the 1970s.
•Oil prices were at historic lows, dropping to under $10 a barrel in 1998.
•OPEC's power had significantly reduced due to the expansion of non-OPEC production.
•Energy-importing industrialized states had developed a more diversified energy mix, including gas, nuclear, and renewable energy, to create resilience against oil security shocks.
•Concerns over the environment, particularly the negative impacts of climate change, began to dominate discussions on energy security. There was a greater emphasis on reducing the demand for fossil fuels.
•Open and effectively regulated global energy markets were considered the best way to provide energy security, rather than state intervention and geopolitical competition.
•The 1990s marked a period of Western confidence after the end of the Cold War, with a belief in the superiority of liberal democracy and capitalism.
•The collapse of the autarchic state-controlled energy sector in the former Soviet Union allowed for exploration by external actors, leading to a "new great game" in the South Caucasus and Central Asia.
•Russia also reduced its control over the oil and gas sectors, allowing local and foreign private players to gain control.
•The Western intervention to liberate Kuwait from Saddam Hussein's invasion in 1990 enhanced US power and hegemony, solidifying the US-Saudi compact for energy security.
•However, this Western dominance was short-lived, as political resistance and other factors emerged.
Energy Security and Contemporary International Security
•New power configurations emerged quickly, challenging the liberal optimism of the post-Cold War period.
•The confidence of the 1990s in international energy politics was challenged by an energy security crisis similar to the 1970s, including a significant increase in oil prices.
•The 1970s also saw a linkage between global energy security concerns and political instability in the Middle East, with the rise of Islamist extremism and the US-led invasion of Iraq.
•Two new dimensions of anxiety over energy security emerged: the inclusion of non-Western emerging states as key energy consumers, notably China, and the revival of an empowered and anti-Western Russia.
•The chapter will analyze these three geopolitical dimensions (Middle East, China, and Russia) to understand contemporary energy security.
•The focus on energy security offers insight into the complex interconnection between energy security and international security.
•Energy security is deeply interpenetrated with anxieties over international security and shifts in the balance of power.
•Power, resentment, and injustice are powerful drivers influencing energy-related tensions and conflicts in the Middle East, China, and Russia.
Persian Gulf Security and International Energy
•The Middle East is politically and militarily volatile and is vital for global energy supplies.
•The Persian Gulf region holds 28% of world oil production and nearly 50% of the world's oil reserves.
•Saudi Arabia holds over 70% of excess oil productive capacity and has the strategic capacity to be the "swing producer".
•Saddam Hussein's invasion of Kuwait in 1990 threatened the key source of international power in the Middle East and led to a large multinational coalition to liberate Kuwait.
•The coalition demonstrated high levels of international consensus and the US asserted and maintained a hegemonic position in the region.
•The intervention was supported by other Western powers, such as Germany, France, Britain, and Japan, as well as by the Soviet Union, China, India, and other developing countries.
•This intervention led to a brief period of optimism for political development in the Middle East, including efforts to resolve the Arab-Israeli conflict and peace settlements between Israel and the Palestinians, as well as with Jordan.
•The death of Ayatollah Khomeini in Iran in 1989 allowed for a more moderate leadership and some liberalization of society and economy.
•Similar developments occurred in other countries in the Middle East.
Energy Security and Contemporary International Security
•During the 1990s, there was a movement towards greater liberalization and economic privatization.
•Islamist politics shifted towards a global jihad, focusing on the West as the enemy instead of challenging Middle Eastern regimes directly.
•The growth of al-Qaeda reflected this shift, with its commitment to international terrorism.
•Al-Qaeda promoted a "neo-fundamentalist" ideology that rejected the secular nation-state and advocated for an order based on Sharia law.
•The 2001 attacks on the Pentagon and World Trade Center highlighted the threat that al-Qaeda posed to international security.
•Western strategic concerns also focused on Iran and Iraq, with fears of their development of weapons of mass destruction (WMD).
•Iraq's failure to comply fully with UN inspections led to suspicions that it was hiding its WMD program.
•Iran's secret nuclear enrichment program raised similar concerns.
•Iran and Iraq were deemed "rogue states" that posed fundamental challenges to the international system.
•The US implemented dual containment policies, imposing sanctions on both Iran and Iraq during the 1990s.
•This policy required a significant US military presence in Saudi Arabia and the Arab Gulf states.
•The understanding was that without a fundamental change, neither Iran nor Iraq could be fully integrated into the regional and international economy.
The Impact of Domestic and Foreign Policies on Energy Security
•The strategy of containment imposed political and economic costs on Iran and Iraq.
•Dual containment policy involved restricting the export and development of oil and gas from Iraq and Iran, leading to a restriction in the supply of globally available oil and contributing to rising oil prices in the 2000s.
•US sanctions policy on Iran hindered the expansion of oil production during this period.
•The deliberate isolation of Iran had longer-term regional energy security implications.
•Central Asian states were unable to develop energy linkages through Iran due to sanctions, forcing them to remain dependent on Russia or pursue more expensive and politically contentious energy routes.
•The military interventions in Afghanistan and Iraq led to significant shifts in the regional and international balance of power, contributing to growing energy insecurity.
Energy Security and Contemporary International Security
•The US administration initially felt both more vulnerable and more convinced of its capacity to change the world through democratic transformation.
•There was an expectation that Afghanistan and Iraq would be transformed into liberal, pro-Western countries and catalysts for reform in the region.
•The US and Western state-building efforts in both countries failed, leading to a decline in the prestige and relative power of the United States and the West.
•China and Russia have gained increased power and influence in international politics of energy.
•The occupation of Iraq shifted the balance of power in the region and strengthened Iran's political influence.
•Sunni perceptions of the threat posed by Shi'a Iran increased, leading to tensions and rivalries with Saudi Arabia and the United States.
•The tensions between Sunni and Shi'a and other minority communities in the region contributed to the strengthening of radical Islamist forces, particularly ISIS.
•The Middle East is characterized by recurring instability and conflict, creating concerns for energy security.
•Conflict in the Middle East is not solely driven by oil, but also linked to historical state formation processes and injustices in the region.
The Impact of Energy Resources on Regional and International Security
•The Middle East's abundant supplies of energy resources, particularly oil, have a significant impact on regional and international security.
•Unequal distribution of oil and gas within the region generates internal tensions and resentments.
•Revolutionary petro-states, which combine oil wealth with revolutionary change and historical grievances, are more prone to war.
•The presence of external powers in the region is influenced by the energy resources, intensifying competition and conflict.
•The Middle East's strategic importance due to global dependence on its energy resources drives intense external interest.
•The competitive and interventionist nature of external interest contributes to the overall instability of the region and global energy insecurity.
•The 2003 Iraq war marked the peak of the US's perceived power, but China emerged as a serious contender to challenge US hegemony within a few years.
China's Emerging Role in Energy Security
•China is considered a 'rising power' that has the potential to challenge and catch up with the United States.
•The perception of the world shifted from seeing the US as the sole superpower to a multipolar world, with China potentially forming a duopoly.
•China's rise was attributed in part to its fast economic growth during the 1990s and 2000s.
•China's demand for oil steadily grew, transforming it from a net oil exporter to the world's largest energy importer.
•China's increasing energy consumption was driven by its fast export-oriented growth, making it a global manufacturing hub.
•China's energy consumption tripled from 2002 to 2012, contrasting with stagnation or slight decline in the US and EU.
•The emerging economies of the South, including China, were becoming the primary sources of future demand for global oil and gas resources.
•In terms of international energy trade, there was a significant shift from the West towards Asia, especially China.
•China's role in energy security crisis was different from the 1970s, as it became a major consuming state with its own challenges and fears.
•Despite some convergence of interests, China did not easily integrate into the Western governance structure for energy security.
•China's non-Western identity, authoritarianism, and opposition to liberal pluralism posed significant obstacles to deeper cooperation.
China's International Energy Policies
•China's international energy policies have led to Western perceptions of China adopting a neo-mercantilist strategy to gain control of global oil supplies.
•US Deputy Secretary of State Robert Zoellick accused China in 2005 of seeking to 'lock up' energy supplies, causing concern in the US and other parts of the world.
•China's search for oil supplies has changed the international politics of various regions, particularly in Sub-Saharan Africa and Latin America.
•China's presence in Sub-Saharan Africa has allowed African states to diversify their external relations and have greater opportunities for trade and development.
•Similarly, in Latin America, Chinese trade and investment have benefited the economies of the region and reduced their dependence on the US market.
•In Central Asia, China's economic engagement has helped countries reduce their dependence on Russia and diversify their energy exports.
•China's increased presence and influence in global energy markets has changed the content and substance of global energy security.
•Concerns about China's increased economic power projection challenging the West are generally seen as exaggerated, as China has not sought to directly challenge US hegemony and power in Africa, Latin America, and the Middle East.
China's Approach to Energy Security
•Chinese differences with Western policies have been expressed through quiet diplomacy and symbolic opposition.
•Chinese leaders and analysts have realized that a neo-mercantilist approach to energy security is counter-productive and costly.
•Chinese oil companies often sell their equity oil in international markets rather than shipping it back to China.
•The Chinese government is aware of the reputational damage caused by some activities of these companies, such as failure to meet international standards.
•China recognizes the political risks and works cooperatively with external and internal stakeholders for a stable investment environment.
•Chinese oil companies have a different form and nature, being state-owned and benefitting from political and diplomatic support.
•China's oil companies can provide attractive development packages to target countries in exchange for access to resources.
•Agreements with China do not generally include political conditionality, allowing engagement with "pariah" states.
•Western companies fear unfair competition with China's advantages in the global energy markets.
•Chinese engagement has contributed to a shift towards resource nationalism and a state capitalist model.
•Concerns arise that China is "free-riding" on public goods provided by other countries for energy security.
Energy Security and Contemporary International Security
•The rise of emerging non-Western Asian states, such as China, has become a prominent concern in intra-Western debates over burden sharing for NATO and European security.
•China's increasing consideration of energy security in its diplomatic and military strategies is likely to create new tensions and potential conflicts, especially with regards to the vulnerability of Chinese oil imports along sea lines of communication.
•The development of a blue water navy by the People's Liberation Army (PLA) Navy is seen as a means to protect energy imports and has generated concerns among Indian analysts and policymakers, who interpret it as a 'string of pearls' strategy to displace Indian power.
•The Indian Ocean is considered a potential center for international conflict due to economic and political competition, particularly in relation to territorial claims and inter-state rivalry in the South and East China Seas.
•China's growing power and influence have made its military, diplomatic, and political stance on territorial claims more hardline and uncompromising, despite discussions of joint development and cooperation.
•Shifts in the balance of power, such as the rise of China as an energy-consuming state, create their own dynamics and tensions that challenge existing structures and paradigms of energy security.
•China's approach to energy security has shifted towards a more multilateral and market-oriented understanding, though experiences in Sudan and Libya have shown that the Chinese government cannot completely disengage from political issues in relation to its energy investments.
Energy Security and Contemporary International Security
•China's strategic importance has changed global energy politics.
•China's search for reliable energy sources is a critical part of its rise as a great power.
•Russia has also gained power and influence in the energy sector since the early 2000s.
•Russia has expressed dissatisfaction with the Western-dominated international order.
•China and Russia have increasingly converged in their understanding of international relations.
•Sino-Russian energy relations have developed positively with various agreements.
•China relies on Russia for energy security, as it is not threatened by the United States.
•Russia sees China as an important new market for energy exports.
•Russia and China have different energy import/export patterns and political approaches.
•Russia's reliance on energy resources for strategic ambitions is relatively new.
•During the Cold War, energy played a marginal role in the Soviet Union's foreign policy.
Russian Energy Policy Shift and its Impact on Security and Reliability
•In the 1970s and 1980s, the Soviet Union and the West had a significant example of economic and political cooperation in the energy sector
•The Soviet Union provided gas resources from Siberia, while the West provided technology and expertise for building pipelines
•The Soviet Union made efforts to insulate these energy relations from geopolitical developments to demonstrate reliability as an energy supplier
•Post-Soviet Russia deviated from this strategy, causing anxiety in the EU about the security and reliability of Russian energy supplies
•Privatization of the Russian oil industry in the 1990s concentrated power among a small number of oligarchs, leading to perceived corruption and economic/political failures
•With Putin becoming president in 2000, there was a shift towards increased state control, especially after the state takeover of Yukos and imprisonment of its CEO
•This move towards state control was popular and aligned with increasing centralization of power and the development of an authoritarian regime
•Russian energy policy conflicted with the liberalization agenda of the European Union, creating friction and mutual suspicions
•Russian refusal to ratify the European Charter Treaty reflected increasing ideological and practical divergence with the EU
•Under Putin, Russia focused on energy as a key resource to support its great power status, diverging from the Soviet practice
Russia's Geo-economic Use of Energy
•In 2005, Putin expressed the need for Russia to become a leader in global energy, supporting the idea of Russia as an energy superpower.
•Russia's energy resources were seen as politically useful and contributed to the decision for the state to regain control over the industry.
•Energy was used as part of Russia's strategy towards neighboring states potentially aligning with Europe or the US, through threats, pricing changes, and attempts to acquire energy assets.
•The effectiveness of using these geo-economic tools to influence policy among Russia's neighbors has been limited.
•Russia struggles with the balance between subsidizing gas prices and maximizing returns, as well as defending its own interests.
•Disputes between Russia and Ukraine over gas payments have increased European energy security concerns regarding Russia as a reliable supplier.
•Russia has enhanced relations with China as a way to balance against Western dominance, with energy resources being a main attraction for China.
•The 2014 gas deal between China and Russia indicated Russia's pivot to the East, but the reality does not match the rhetoric of a fundamental shift in the global balance of power.
•Both China and Russia cannot afford to risk their key economic partners in the West, resulting in a decline in Sino-Russian trade.
International Energy Security and Russia's Role in Europe
•Bilateral trade between Russia and China is significantly smaller compared to China's trade with the US or Japan, and Russia's trade with Europe.
•Most of the gas supplied to China comes from East Siberia, not West Siberia which supplies the European markets.
•Russia's dependence on European energy markets remains embedded due to its inability to balance gas exports between China and Europe.
•Russia has a delicate relationship with the European Union and relies on access to European energy markets for its economic fortunes.
•Russia has attempted to weaken and divide the EU through bilateral relations and resisting the extension of EU's regulatory regimes.
•The EU has developed "soft power with a hard edge" by utilizing its regulatory power and capacity to deny access to the internal market.
•The EU has engaged in negotiations with Gazprom to ensure compliance with competition rules and supported alternative pipelines to decrease dependence on Russian-sponsored projects.
•The EU market, with over 500 million people, holds significant "hidden" structural power that challenges Russia's ambitions as an "energy superpower."
•The recent period has seen heightened anxiety and concern over international energy security, comparable to the 1970s.
•Conflict, external intervention, and disintegration in the Middle East have caused instability, raising global energy security concerns.
•The US-led invasion of Iraq aimed to bring stability to enhance global energy security, but the opposite occurred, causing increased concern among Asian countries like China and India.
Energy Security and International Power Shifts
•China and other Asian countries have become significant players in the global oil market, changing the geopolitical landscape of energy security.
•The main oil-consuming states now include fast-growing post-colonial and non-Western countries with different perspectives on international energy security.
•Russia and other energy-producing states have also experienced economic and political strengthening, often leading to tensions with the West.
•Oil-exporting states like Venezuela and Iran have implemented radical policies challenging the international status quo.
•Russia, under Putin, aims to regain its status as a great power after the collapse of the Soviet Union.
•Shifts in power have led to an accumulation of perceived historical injustices and continuing inequities, which fuel confrontational and divisive policies.
•The drop in oil prices in 2014 caused internal pressure and tension in major oil-producing states.
•Venezuela, in particular, has been heavily affected by the collapse in prices, leading to social and political conflicts.
•Lower oil prices also pose challenges for all oil-rich states, including those in the Persian Gulf region, as it alters the balance of power and creates economic instability.
The Complex Intra-State and Domestic Arena of Political Contestation Over Energy Security
•Managing a worsening domestic economic situation emphasizes that energy security is not only related to inter-state relations but is also a crucial aspect of domestic politics within states.
•Power, history, and justice play significant roles in relations between resource-producing and resource-consuming states, as well as in the social, economic, and political relations within resource-rich states.
•The next chapter will examine the complex intra-state and domestic arena of political contestation over energy security.