The many ills that society has suffered through the mechanisms of producing oil scarcity relate largely to the source itself: crude oil is restricted to highly specific, fatedly random sites across the earth, creating vulnerabilities that allow landowners to control distribution. Oil barons have manipulated their control over oil in secrecy, causing reverberations through economic media that have transformed and interrupted everyday life, from restricted leisure to imperialism and civil wars. Naturally scarce renewable energy should not be expected to cause the ills of oil, as these ills are fueled by the production of scarcity rather than by the experience of scarcity itself. Prospects for alternative fuels are bright, as their renewable sources are temporally scarce but distributed equally to all on earth.
While global oil prices are down in 2015 and U.S. production is off its recent highs, net increases in U.S. production over the last decade have impacted economies and oil markets around the world, including oil-rich countries in Africa. Algeria, Angola, and Nigeria, all members of the Organization of the Petroleum Exporting Countries (OPEC), each send a share of their crude oil exports to the United States. This article describes the impact of the U.S. energy boom on Africa, particularly sub-Saharan Africa, and discusses some of the challenges and opportunities that have resulted from the fall in U.S. demand for Africa’s oil resources. Shifts in trade patterns demand a refocusing of U.S. security measures and an increase in strategic collaboration, as opposed to isolation.
Complex rivalries for influence among regional powers, most notably between Saudi Arabia and Iran but also including Turkey, Qatar and the United Arab Emirates, are transforming the Middle East. As local borders and ruling institutions have become contested in the aftermath of the Iraq War and the Arab Spring, so has control of the region’s major oil and gas facilities. Warring militias, the Islamic State of Iraq and Syria (ISIS), Al Qaeda and traditional governments are increasingly focusing on maintaining or gaining control of oil production and refining installations. Additionally, regional conflicts, now complicated by the active military involvement of Russia, have spilled over to affect global oil markets as Saudi Arabia and its Gulf allies, seeking to influence regional military and geopolitical outcomes, have initiated a market share war that has brought about a collapse in oil prices.
This paper examines how conflicts in the Middle East, including the Syrian civil war and the rise of ISIS, are shifting the geopolitics of oil. These conflicts are raising serious new risks to regional oil facilities, making them both strategic assets and spoils of war. Current diplomacy to resolve the conflict in Syria faces serious challenges. In addition to humanitarian grounds, it is imperative to find a durable solution in order to prevent the continued destruction of major regional oil and gas production and export facilities. The ongoing destruction of such infrastructure may represent a major challenge to global energy security in the three to five year time frame.
There is a sizable gulf of perception between many in America and many in the Muslim world. One broad notion is that America seeks to dominate locals in the Middle East, and to exploit and even steal the region’s oil resources. This notion has not been limited to jihadi radicals but has also resonated in lesser doses among many in the Muslim world. The U.S. role in oil-related issues feeds into historical, political, and religious perspectives of an imperialist and power-hungry America.
I argue that the history of America’s role in the region suggests that this broad notion about America is largely a misconception with important consequences. This misconception raises the cost of the use of oil and of American regional intervention. It also stokes terrorism and anti-Americanism, complicates America’s relations with Middle Eastern countries, and affects its image among Muslims.
Traditional views of energy security hold that states without reserves of oil and gas should seek to diversify their supply, therefore reducing dependency on any one supplier. Conversely, this view also holds that states with large reserves are believed to use this advantage as political leverage over their consumers. However, empirically we observe a wide variation in energy security strategies by dependent states. While some states do choose costly diversification, this paper introduces a new concept of energy security strategy: active dependence. Under active dependence, states that are reliant on a single supplier of energy do not succeed at pursuing diversification policies, but rather focus on increasing ties with their main supplier state across a host of issues. This active dependence often manifests through a number of cooperative initiatives with their supplier state and favorable energy contract renegotiations. Given the extreme variation in consumer state behavior, what explains variation in the choice of energy security strategy in energy dependent states? Using the case of European natural gas dependent states in the post-Cold War period, I present a theoretical model that accounts for regional variation in consumer vulnerability and choice of energy security policy. I argue that two main variables contribute to the choice of either diversification or active dependence as an energy security policy: the presence of energy veto players and the presence of weak formal institutions. After presenting the puzzle and model, I provide a preliminary account of the origins of these variables. I then present a case study of Ukraine, with evidence gathered from primary and secondary sources, plus extensive regional fieldwork to elucidate the mechanisms of my theory.
EU-Russia gas relations have come under the spotlight following the annexation of Crimea and the eruption of civil war, with direct Russian involvement, in Eastern Ukraine. Yet tensions in gas relations have been building up for the last two decades, and are primarily related to Europe’s strategic decision to unify the gas markets of the member countries and enforce competitive and transparent trading conditions.
Gazprom, Russia’s state-controlled natural gas company and the largest extractor of natural gas in the world, forcefully opposed this strategy in association with its traditional partners, incumbent gas importing companies. Following a long war of attrition that has evolved over the better part of the last twenty years, it now appears that Gazprom is on the verge of accepting the transformation of the European gas market, and is behaving competitively to preserve its market share. The Ukrainian conflict has been instrumental in precipitating this shift, facilitating the task of the European Commission in coalescing consensus on the need to rein in Gazprom’s excessive market power.
Whether European dependence on Russian gas is bound to diminish, however, is less clear. Russian gas remains an essential component of Europe’s gas supply, and abundant Russian reserves guarantee that the European Union will be able to continue relying on Russia for the foreseeable future.
Energy trade has developed into one of the most contentious and divisive issues between Russia and the EU in the post-Cold War era. It reflects a broader geoeconomic struggle in which economic means are used to advocate geopolitical goals. This article argues that the case of the South Stream Pipeline Project (SSPP)—a grand project abruptly cancelled by Russian President Vladimir Putin in December 2014—epitomizes these power politics. In 2014, Russian leadership advanced both geopolitical and geoeconomic strategies towards the EU: pursuing the former by conducting a military campaign in Crimea and Eastern Ukraine; and pursuing the latter by pushing the construction of SSPP in spite of the EU’s legal and political objections. Due to Russian military aggression in Ukraine, however, the EU was able to harden its line on SSPP. Russian geoeconomic activity has long been successful as a centrifugal, dividing power within the EU. The geopolitical campaign in Ukraine, in stark contrast, has been a centripetal force, resulting in increased EU unity that contributed to the SSPP’s demise. This is evidence that claims of geoeconomics as a continuation of war by other means are potentially misleading. The means of geopolitical power projection and geoeconomic power projection thus have notably different effects in today’s contemporary, interconnected world.
While China’s interest in securing energy resources has garnered much attention in the media lately, its approach to energy security is nothing new, at least in regards to its Central Asian neighbors. The People’s Republic of China (PRC) has always had several interests in common with these Central Asian neighbors, especially dealing with migration, trade, and ideological extremism. Still, its focus on developing stronger energy relationships with these neighbors has gathered momentum over the last two decades, especially as the economy has liberalized and emphasis has shifted away from self-reliance to ensuring affordable and stable supply of energy to meet China’s burgeoning demand. In particular, since 1997 China has given increasingly focused support to its national oil companies to develop strong linkages with their counterparts in Kazakhstan, bolstered by elevated government-to-government ties between the two countries. Chinese expansion into Kazakh oil fields reflects not only the PRC’s interest in maintaining energy security but also its desire to strengthen relations between China’s western regions and Kazakhstan as well as to tighten the economic linkages between China’s Xinjiang region and its own coast. In so doing, the PRC is attempting to strike a delicate balance between coordination with Russia on strategic and security issues and competing with Putin’s new Russia for influence in Central Asia.
This paper will examine three main pricing mechanisms for gas contracts: oil-indexation, gas-gas competition, and netback from final product (e.g. prices linked to Ammonia, etc.) in light of the gas contracts in this region that are oil-indexed or linked to oil prices. It will analyze the long-term viability and competitiveness of this mechanism for South Asia and discuss natural gas demand in South Asia, conventional and unconventional sources of Natural Gas, as well as the effects of geopolitics in the region on Natural Gas contracts. Remaining cognizant of these developments, this paper proposes the creation of a new natural gas trading hub in South Asia.
China is facing serious energy security issues. In recent years, China’s energy structure has undergone major adjustments, while qualitative changes have taken place in the form of energy security. This raises a new question for China’s political, diplomatic, military, technological, and industrial structures: How to safeguard China’s energy security? This paper is intended to analyze approaches to energy imports and bottlenecks of energy development, and proposes that international cooperation, development of new energy sources and improvement in energy efficiency will contribute to resolving the energy crisis, and puts forward policy proposals to achieve China’s strategy of peaceful development.
Ambassador Richard L. Morningstar is the Founding Director of the Global Energy Center at the Atlantic Council. He served as the U.S. Ambassador to the Republic of Azerbaijan from July 2012 to August 2014. He is one of the leading energy experts in the United States. Morningstar provided The Journal with insight on the political results of declining energy prices, new trends in energy, the impacts of the energy abundance in the United States and the nexus of climate change and global security.
Edward Burtynsky, a world-renowned Canadian photographer, is known for his works showing the effects of energy industry on the landscape. His “Oil” project consists of photos taken between 1999-2010 in a number of oil-producing regions in China, Azerbaijan, Canada and the United States. Burtynsky describes the scope of his project; “The car that I drove cross-country began to represent not only freedom, but also something much more conflicted. I began to think about oil itself: as both the source of energy that makes everything possible, and as a source of dread, for its ongoing endangerment of our habitat. I wanted to represent one of the most significant features of this century: the automobile. The automobile is the main basis for our modern industrial world, giving us a certain freedom and changing our world dramatically. The automobile was made possible because of the invention of the internal combustion engine and its utilization of both oil and gasoline.”
A number of issues such as climate change, energy efficiency, renewable energy and energy prices have dominated debates on energy. Students from the Energy and Environment Concentration of the School of International and Public Affairs of Columbia University had summer internships in various sectors of the energy industry. They shared their observations on emerging trends in the energy industry with the Journal.
Integrating renewable energy sources into a common EU energy market presents a key challenge for the EU in the 21st century. With member states anchored to their individual national energy policies and with many obstacles for cooperation on an intergovernmental level, this goal can be achieved only through advanced supranational cooperation. In order to get all 28 member states, as well as all other relevant stakeholders, on-board, tangible gains need to be actively pursued and displayed on a regional scale. By acting as practical examples and references for further harmonization of national energy policies, these projects will actively contribute to integrating the European energy market and the policies linked to it.