Dannreuther 2017 - Energy security Ch.3
"Exploring the Dual Narratives of Energy Security: Tool for Prosperity or Source of Tension?"
The history of energy security can be viewed through two narratives: the path towards modernity, which presents energy as a tool for human prosperity and emancipation; or as a source of tension and inequality due to structural global development disparities. The first perspective emphasizes the role of energy in transforming human conditions and its connection to economic and political freedom. The second perspective, influenced by realist tradition, highlights energy access and control as a cause of tension and inequality among individuals, social classes, and nations.
The Evolution of Energy Security: From Structural Inequalities to Global Concerns
The history of energy security is tied to lived experiences of structural inequalities and environmental costs of fossil fuel-based civilization. The concept gained global and political resonance during the 1970s energy crisis, as power shifted from energy-consuming to energy-producing countries. This history will be examined from pre-modern agrarian economies to the industrial coal age, and the resurgence of international concerns in the 2000s.
The Struggle for Energy: A Barrier to Productivity and Equality
Pre-modern societies' energy limitations and constraints, such as reliance on vegetable products and labor, led to a struggle between heating and food production. Woodlands for firewood and agricultural land for food were both needed, resulting in social inequalities and widespread use of slavery. Productivity gains were limited due to the amount of mechanical energy supported by human and animal exertions.
"The Shift to Coal: Igniting Europe's Industrial Revolution"
In pre-modern societies, there was limited equality due to constrained power projection, with monarchs having limited control over subjects' lives. Europe's prosperity and wealth were historically lower than Asia's, but innovations in agriculture and colonization led to progress. The shift to coal as a primary energy source in England, starting in the sixteenth century, allowed them to overcome the need for sustainable forest supplies for heating purposes, setting the stage for the industrial revolution.
Coal and Steam: Catalysts of Power, Dominance, and Ideologies
The industrial revolution facilitated by coal and steam engines revolutionized power production and led to the expansion of iron production, supporting coal production and the development of railways. This mechanization transformed industries and led to an imbalance of power, with coal-rich nations dominating others, resulting in chronic energy insecurity in energy-poor regions and contributing to anti-imperialist and anti-Western ideologies.
The Power and Politics of Coal Mining: Miners as Agents of Social Change
Coal mining has historically been a source of conflict and political insecurity due to its significant role in powering industrial economies. Workers in coal mines maintained bargaining power as their work required skill and individual control. This position allowed them to participate in strikes and contribute to the development of the European welfare state. As a result, miners became symbols of political contestation and threats to domestic security in many countries.
The Shift from Coal to Oil: A Global Transition
Miners' strikes in coal-driven industrial revolution countries challenged government authority, leading to social tensions between capital owners and the proletariat. Coal dominated energy consumption until the post-WWII period, when oil became a major factor in global development. The shift from coal to oil was gradual, with coal still crucial for industrializing nations like China and India.
"Unleashing Mobility: The Oil Age and its Impact on Transportation and Labor"
The oil age brought a revolution in transportation with the development of the internal combustion engine, leading to increased mobility and cheaper oil transportation. The shift to oil was supported by its lesser impact on domestic insecurity compared to coal mining. However, the oil industry saw less significant strikes and labor issues, due to its capital-intensive nature and ease of transportation.
"The Impact of Oil Substitution and Imperialism on Global Power Dynamics"
The substitution of oil for coal reduced the power of labor unions, aiding capitalist development. Oil's strategic vulnerability lies in its concentrated deposits, primarily in the Middle East, which historically exposed European powers to resource insecurity. The British navy's conversion to oil-powered vessels and the subsequent collapse of the Ottoman empire highlighted this vulnerability. In response, Western powers established spheres of influence in the Middle East, allowing US oil companies access to the region's resources, laying the foundation for the US commitment to post-colonial informal liberal hegemony for global oil production and distribution.
Collusion and Subordination: The History of Energy Security
The text discusses the history of energy security, particularly the role of private Western oil companies in securing oil flows from the Middle East. These companies negotiated agreements with key oil-producing states, favoring their interests over those of host states. Western governments tolerated the collusion of major oil companies, ensuring energy security for Western consuming states in the mid-twentieth century. However, this security was based on political subordination of Middle Eastern oil-producing states and a lack of local control over their assets.
The Shift in Power: Understanding the 1970s Oil Crisis
In the 1970s, the global oil market shifted as oil-exporting states gained economic power through OPEC. This caused a crisis, leading to the concept of energy security, which linked feelings of insecurity with the shift of power. The crisis highlighted the balance of economic and political power, leading to nationalizations of foreign oil companies and a four-fold increase in oil prices. The political and military aspect of the crisis was more evident than the underlying economic factors.
"The 1973-74 Oil Crisis: Reshaping Energy Security and Diversification"
The 1973-74 oil crisis led to a confrontation between OPEC and Western oil-importing states, with Henry Kissinger forming the International Energy Agency (IEA). While OPEC gained power, it lacked control over refining, processing, and distribution. The crisis weakened the oil majors' hegemony and diversified production towards non-OPEC fields. OECD countries reduced dependence on oil by diversifying fuel sources, including gas and renewable energy, leading to a broader understanding of energy security.
"The Evolution of Energy Security: From Oil Supplies to a Complex Assessment of Systems"
The shift in energy security focus from oil supplies to a complex assessment of energy systems occurred due to political and economic changes, including the decline of oil prices, the Iranian Revolution, the Saudi-US alliance, and the collapse of the Soviet Union. This change in focus was cemented by cooperation in supporting the Mujahedin opposition and the defeat of Iraq in the first Gulf War. The collapse of the Soviet Union dissolved all challenges to US unipolar hegemony in the Middle East and other parts of the Global South.
"The Liberalization of National Oil Companies: Assessing the Implications of Privatization and Globalization"
During the 80s and 90s, Western countries privatized their national oil companies, diversifying the market and opening up opportunities for private investors. The financialization of the industry led to its liberalization, and many believed that the globalized and liberalized market had resolved energy security issues. Oil was abundant and cheap, leading to a consensus that natural resources should be liberalized, privatized, and open to foreign investment for efficiency and productivity improvements.
Power Structures and Social Justice: A Crucial Component of Effective Energy Security
The 1970s energy crisis highlighted structural inequalities in the global oil industry, which was addressed by the 'third wave' of democratization in the 1980s and 1990s. However, the alternative energy security narrative emphasizes that addressing underlying power structures and social justice is crucial for effective energy security, as demonstrated by the new crisis in the 2000s.
The History of Energy Security
•The history of energy security can be approached through two potential historical narratives, reflecting different theoretical approaches.
•The first narrative focuses on the transition from human power in the traditional pre-modern agrarian economy to the exponential expansion of power in the modern fossil fuel-based industrial economy.
•This narrative highlights how energy was scarce and expensive in the past but has become cheap and abundant, leading to population growth, economic expansion, and increased per capita income.
•The history of energy security in this narrative is seen as a history of human prosperity and emancipation, as modern energy systems relieve people from physical labor.
•Emancipation through modern energy systems is linked to political freedom in economically advanced countries.
•The second historical narrative acknowledges the expansion of modern power through the energy revolution but questions the equity and fairness of resulting economic and political conditions.
•This narrative emphasizes the structural inequalities and unevenness of global development brought about by a modern fossil fuel-based economy.
•The unequal distribution of access and control over energy resources has led to tension and increased relative inequality.
•Both narratives are important in understanding the history of energy security and its impact on society.
The History of Energy Security and its Relationship to Social Inequality and Environmental Impact
•The Marxist tradition highlights how social relations become more alienated during industrialization, leading to increased inequality between owners of capital and labor.
•In international politics, this inequality is expressed through Western imperial and colonial expansion.
•The history of energy security is closely tied to structural inequalities and affects individuals' lived experiences.
•Extreme cases of energy insecurity include the significant poverty of individuals in Sub-Saharan Africa compared to the average person in the pre-modern era, despite the benefits of modern energy systems.
•The expansion of a fossil fuel-based civilization has resulted in environmental costs such as pollution and the destruction of natural ecosystems.
•This chapter focuses on the political dimension of the history of energy security and the linkages between security, power, and justice.
•The chapter is divided into three sections, covering the longue durée from the pre-modern period to the end of the Cold War and the start of the new millennium.
•The first section examines the history of energy security in the pre-modern agrarian economy and the transformations during the first industrial revolution, primarily the shift to coal as the primary energy source.
•The second section investigates energy security during the second industrial revolution, focusing on the shift from coal to the use of oil and electricity, where the association of oil with energy security becomes defined.
•The third section analyzes the energy security crisis of the 1970s, which involved a significant redistribution of power from energy-consuming to energy-producing countries, leading to the global and highly political resonance of the concept of energy security.
•This section concludes with how the challenge to the global political order from the 1970s was seemingly overcome and neutralized during the 1980s and 1990s.
•The following chapter will explore the resurgence of international concerns over energy security from the 2000s onwards.
•Applying the concept of energy security to pre-modern societies requires imagination and a comparison with our own. Judged on their own terms and utilizing available resources and technologies, many pre-modern societies developed sophisticated and advanced civilizations with a favorable quality of life compared to contemporary societies.
Energy Constraints in Pre-Modern Societies
•Pre-modern societies relied on energy obtained from products of the soil, leading to limitations and constraints.
•Wind and water power were inefficiently utilized, with over 95% of energy coming from vegetable products.
•The primary needs of heating and mechanical power required efficient soil cultivation.
•Heating relied on firewood and needed large expanses of woodlands, while mechanical power relied on the exertions of humans or draught animals, necessitating a key source of energy from food.
•The balance between woodlands for heating and agricultural land for food production was crucial.
•Land and labor were the principal constraints on pre-modern societies.
•Population growth could potentially alleviate the constraint of limited available labor, but it faced the limits of available land and the need for sufficient supplies of firewood and food.
•Famine was a constant threat to pre-modern societies.
•Mechanical energy supported by human and animal exertions was limited, resulting in a maximum productivity limit.
•Slavery was widespread as it concentrated power and energy, allowing rulers and leaders to generate surpluses for military and other requirements.
•Social divisions in pre-modern societies were highly unequal, with only a small elite being mobile, educated, and engaged in pursuits unrelated to physical labor.
The Shift to Coal as a Primary Energy Source in England
•The majority of the population, specifically the peasantry, relied on the plough and lived limited lives in a small locality with a physically arduous routine and a daily struggle for food and heating.
•There was a significant degree of equality among those not part of the small elite, as even powerful monarchs and emperors had limited power over their subjects' everyday lives.
•Michael Mann defines this limited power as "despotic power," while the more intense and pervasive power that leaders and governments could exert is called "infrastructural power."
•Comparatively, Europe had less intensive agriculture than Asia, with Europe traditionally having constrained land and population.
•Europe caught up significantly during the 18th century through innovative developments in agriculture, new crops, and colonization, but China and India remained wealthier superpowers.
•England made the decisive breakthrough from renewable energy to fossil fuels, particularly coal, which became the primary energy source.
•England had already been increasingly dependent on coal since the 16th century due to insufficient forests, especially in big cities like London, leading to pollution.
•The advantage of using coal was that it relieved England of the constraint of needing sufficient and sustainable supplies of wood and forests for heating purposes.
The Industrial Revolution and Energy Security Implications
•The use of coal and steam engines during the industrial revolution provided a more efficient way of producing iron than traditional reliance on wood charcoal.
•The expansion of iron production supported the expansion of coal production and deeper mining.
•The invention and development of the steam engine allowed for the generation of mechanical power not limited to human muscle or wind and water.
•Steam engines, combined with ample supplies of iron, led to the development of railways, allowing for the transportation of coal and machines over greater distances and in larger quantities.
•The industrial revolution brought about a revolution in terms of power and energy security.
•Possessing ample supplies of coal and the capability to develop modern industries became a key attribute for countries to become more powerful.
•Countries lacking such supplies and capabilities became defenseless against fossil fuel-fired industrializing powers.
•The expansion of power unleashed by the industrial revolution supported European imperialism, with coal being a key resource.
•The chronic energy insecurity in energy-poor parts of the developing world stems from the imbalance of power caused by the industrial revolution.
•The struggle between imperial powers themselves was fueled by the competition for coal fields in France, Germany, and Belgium.
Coal Mining and Its Impact on Energy Security and Worker's Conditions
•Coal mining became a source of domestic political insecurity due to the increasing inequalities between states.
•In industrial systems, power and wealth shifted towards those who owned machines or factories, devaluing labor.
•The conditions of workers deteriorated as factory owners discovered that children could be as productive as adults but cheaper.
•Coal miners maintained a degree of bargaining power due to their high levels of skill and individual control over their work.
•Miners resisted mechanization that threatened their relative autonomy and the unity of the national industrial complex.
•The vulnerability of the industrial complex was the need for sufficient coal supply and transportation.
•Miners used their strong bargaining position to coordinate strikes and promote general strikes.
•Miners' unions became powerful forces in major coal-producing states and contributed to welfare improvements and collective bargaining.
•The birth and origin of the European welfare state was influenced by the economic and political exertions of European miners.
•Miners were often associated with political contestation, revolution, and threats to domestic security in many states and governments.
The Shift from Coal to Oil in Energy Security
•The coal-driven industrial revolution generated disparities in power that led to structural inequalities in international politics.
•Coal-fueled industrial development created social tensions and conflicts between capital owners and the industrial proletariat.
•Miners, victims of these tensions, had a relatively stronger bargaining position and were traditionally linked to radical politics.
•The shift from coal to oil was a gradual process, with oil gradually challenging the dominance of coal.
•Cheap oil flooded Europe and other parts of the world in the post-World War II period, leading to unprecedented global development and living standards.
•Oil has an advantage over coal as a higher quality energy carrier.
The Impact of the Internal Combustion Engine and Oil on Transportation and Energy Security
•The development of the internal combustion engine revolutionized transportation during the oil age.
•The internal combustion engine was more efficient than steam engines, which were large and bulky.
•The internal combustion engine used petrol (gasoline) as fuel, which had a higher energy density than coal, making it more efficient.
•The car, powered by the internal combustion engine, brought a significant increase in mobility and independence from rail lines.
•The oil age also made shipping more efficient and led to the development of large oil tankers.
•The increased demand for oil as a substitute for coal further reduced the cost of oil.
•The shift to the use of oil was supported by the fact that its production and distribution posed lesser threats to domestic insecurity than coal mining.
•Strikes in the oil industry were less significant compared to the coal industry due to oil production being more capital-intensive and requiring a smaller workforce.
•Oil's liquid form made it easier to transport, with pipelines replacing railways.
•Oil tankers had the advantage of being able to avoid blockades and resist labor regulations that affected coal miners.
The History of Energy Security
•The substitution of oil for coal reduced the power of labor and intensified capitalist development.
•Oil has a strategic vulnerability due to its concentrated deposits, mainly located in the Middle East.
•There is a disjuncture between the most important consumers and producers of oil.
•The United States and Soviet Union had substantial domestic oil production, aiding their rise to power.
•European great powers lacked domestic sources of oil, making them more vulnerable to resource insecurity.
•Winston Churchill's decision to convert the British navy to oil-powered vessels highlighted the dangers of depending on an unstable Middle East for oil.
•The collapse of the Ottoman empire after World War I emphasized the challenge of ensuring uninterrupted supply of oil from foreign non-Western countries.
•Dominant Western countries assumed political and economic control of the Middle East, dividing the region into spheres of influence.
•The US implemented an "open door" policy to ensure American oil companies' access to Middle East oil resources.
•The decision to partition the Middle East cooperatively between Western powers resulted in British, French, and American oil companies controlling major oil-producing regions.
The History of Energy Security
•The private Western oil companies were given the responsibility of securing oil flows from the Middle East.
•These companies negotiated agreements with oil-producing states, favoring their own interests.
•Western governments overlooked collusion among major oil companies to maintain control of the industry.
•Tolerance of collusion was driven by the characteristics of the oil industry, including low short-run marginal costs and chronic overproduction.
•If Middle Eastern oil production and price were determined by market forces, it would have threatened the interests of the US and Western countries.
•Energy security was achieved in the mid-twentieth century, with increased oil production, stable prices, and economic growth.
•However, this structure relied on the political subordination of Middle Eastern oil-producing states and the control of economic rents by oil companies.
•Western oil companies had the support of their home states, as demonstrated by the overthrow of the Iranian government in 1953.
•This system can be seen as neo-colonial energy security governance.
The Shift in Power in the Oligopolistic Global Market and the Emergence of Energy Security
•The dominance of major oil companies in the oligopolistic global market was undermined by the success of oil-exporting states, institutionalized through OPEC.
•The resulting crisis in the 1970s led to the articulation of the concept of energy security, gaining widespread popular resonance.
•Energy security became associated with feelings of insecurity caused by the shift in power from oil-importing consumers to oil-exporting states.
•In 1975, Henry Kissinger recognized the West's relative weakness and the need to avoid political warfare against Saudi Arabia and Iran to reduce oil prices.
•The shift in power was influenced by rapidly growing oil demand in Europe and elsewhere and the erosion of the oil cartel by independent oil companies.
•The critical turning point was in 1969 in Libya, where Muammar Gaddafi played off major and independent companies for a significant increase in prices.
•The rise of the Third World, declining US hegemony, and antipathy towards the US due to its support for Israel also contributed to the power shift.
•Nationalizations of foreign oil companies' installations started in Algeria in 1971, followed by Iraq in 1972 and Libya in 1973.
•The 1973 Arab-Israeli war led to a four-fold increase in oil prices, reflecting the new economic reality.
•The political and military dimensions of the energy security crisis, including the exaggerated threat of the 'oil weapon', were more evident in public and elite perceptions than the economic-induced shifts in power.
The Evolution of Energy Security
•The oil price spike following the 1979 Iranian Revolution reinforced the politically charged understanding of the roots of the crisis.
•Henry Kissinger established the International Energy Agency (IEA) as a counterpart to OPEC to represent the interests of Western oil-importing states.
•More cooperative producer-consumer dialogues, like the Euro-Arab Dialogue, did not gain much momentum.
•OPEC's rise and assertive power disrupted the neo-colonial mode of energy governance in the pre-1970s global oil industry.
•However, OPEC lacked the capacity to control the industry's value chain beyond national production, which led to the fragmentation of the oil industry.
•The fragmentation undermined the industry's vertical integration and led to a mixture of partly nationalized and partly liberalized and globalized sectors.
•The end of the oil majors' hegemony provided an opportunity for the OECD countries to recover their strategic advantage.
•OECD countries encouraged international oil companies to diversify production away from OPEC countries to new oil fields.
•The subsequent increase in non-OPEC production forced OPEC, especially Saudi Arabia, to reduce output and control the oil price, which ultimately became unsustainable.
•In 1985, Saudi Arabia refused to play its role as swing producer for OPEC, leading to a collapse in oil prices.
•The strategy also involved reducing dependence on oil by diversifying fuel sources, such as gas, renewables like wind and solar energy, and considering nuclear energy.
•"Energy security" evolved to encompass a broader and more complex question of the most "secure" energy sources, beyond just oil supplies.
The History of Energy Security
•Energy security shifted from focusing on access to oil supplies to assessing the requirements of energy systems dependent on various energy sources.
•The decline in oil prices in the 1980s weakened oil-exporting states economically and politically.
•The US became a vital security guarantor for oil-exporting states, particularly Saudi Arabia, due to their mutual interest in securing the global supply of oil at affordable prices.
•The Saudi-US alliance was strengthened by their cooperation in supporting the Mujahedin opposition to the Soviet occupation of Afghanistan.
•US hegemony over the Middle East was consolidated after the decisive defeat of Iraq in the first Gulf War.
•The collapse of the Soviet Union in 1991 removed challenges to US unipolar hegemony in the Middle East and other parts of the Global South.
•The dominance of a neo-liberal conceptualization of the international political economy accompanied this shift in global politics.
•The failure of the recycling of OPEC "petro-dollars" to generate economic growth in developing states led to economic crises and the imposition of structural adjustment programs by the North.
•The drop in oil prices in the 1980s also impacted Middle Eastern countries, leading to their own economic liberalization programs.
The Evolution of the Oil and Gas Industry in the Late 20th Century
•During the 1980s and 1990s, many Western countries privatized their national oil companies, leading to a more diversified and competitive market.
•The development of a futures market in oil contributed to the financialization of the industry and its liberalization.
•The opening up of the previously autarchic Soviet oil and gas industry created new opportunities for private investors, with control increasingly concentrated in the hands of Russian oligarchs.
•Other oil-producing states also sought to limit the state's role in their resource sectors and attract Western companies to their markets.
•The Venezuelan government encouraged its national oil company, PDVSA, to become more autonomous and restructure itself along the lines of a Western private oil company.
•By the late 1990s, it was believed that the globalized and liberalized oil market had resolved the issue of energy security, leading to low prices and an era of cheap oil.
•The idea that natural resources should be treated like any other sector of the economy, liberalized, privatized, and open to foreign investment, gained consensus.
•This perspective was supported by the "resource curse" thesis, which posited that oil-exporting states that exert direct state control over their resource industries suffer from poor economic development, authoritarianism, and the potential for conflict.
•The dominant energy security narrative in the late 1990s aligned with the optimistic liberal modernizing narrative presented earlier in the chapter.
•The next chapter will address themes such as the resource curse and discuss the revival of concerns over energy security in the 21st century.
The History of Energy Security
•The 1980s and 1990s marked a successful reversal of the energy security crisis.
•This period, known as the 'third wave' of democratization, saw global economic growth and the expansion of political freedom.
•The end of the Cold War and the collapse of the Soviet Union symbolized the culmination of this wave (Huntington, 1991).
•The key lesson learned was that the energy industry could support progressive development when allowed to operate freely, without economic protectionism or geopolitical intervention.
•The dominant narrative of energy security did not weaken the alternative perspective.
•The alternative perspective emphasizes the need to address structural inequalities and injustices in modern energy systems.
•The energy security crisis of the 1970s exposed some of these underlying inequalities and injustices.
•While some reversals occurred in the following decades, it was not a complete reversal.
•The lesson learned is that energy security cannot be achieved effectively unless power structures and issues of international and social justice are addressed.
•Proponents of the alternative view were confirmed in their analysis by the emergence of a new energy security crisis in the 2000s.