The “Geopolitics of Energy”: Less Than Meets the Eye

Greetings, Faster Times readers! This is my new blog on international energy. I will be making this up as I go along, so I can’t say precisely what the scope of this blog will be other than that suggested by the words “international” and “energy,” with a lot of politics thrown in.

In contrast to me in real life, as a blogger I will try to avoid addressing subjects I know nothing about. This means I will be writing mainly about the things I know: the upstream and midstream parts of the energy business (i.e. finding, producing and transporting oil and gas), and Eurasia, meaning roughly the states of the former USSR plus a bit more. Unfortunately it means I will largely avoid issues related to carbon, the environment, and clean energy. This is not because I do not think that they are extremely important; obviously, they are. But that’s not my field of expertise and thus I can’t add much there.

I think it’s appropriate to get on one of my favorite hobby horses right away: “the geopolitics of energy.” By this I mean the stance or approach that has taken hold in the media, in many think tanks, and to varying extents in governments, which holds that oil and gas supply has emerged (or re-emerged) in the past few years as an important driver of international politics, with regard both to means (the “energy weapon”) and to ends (the “geopolitical competition to secure future energy supplies.”)

In my view, this approach (I suppose it’s a “meme”) is at best problematic, and in the hands of more simpleminded analysts, simply wrong.

Obviously the oil and gas business is highly international, and highly political. Secure energy supplies are a significant national interest for any country that is a net importer of energy, particularly as far as natural gas is concerned (secure supply of oil is less of a problem since oil is physically easier to transport, and because it trades in liquid markets). And for major exporters the management of the oil and gas sector is always a crucial domestic political issue; and it can be a driver of an oil-exporting state’s international relationships.

That being said, the vast majority of analysis one can read about the geopolitics of energy starts with this foundation and then blows it way out of proportion.

For the moment I will back up my position with just one example: German policy toward Russia. A view has taken hold, most notably (but not exclusively) among some American analysts, that Germany is unable or unwilling to get tough with Russia because it buys 42% of its natural gas imports from Russia.

The recent evidence cited for this is (1) the fact that Germany did not support granting a NATO Membership Action Plan to Georgia and Ukraine in April 2008, because of Russian opposition in this interpretation; and (2) Germany’s relatively soft response, seen from this perspective as appeasement, to the Russian invasion of Georgia in August 2008.

The most obvious problem with this analysis is that one does not need to point to gas supply to explain why Germany has a different approach toward Russia than the United States. This is in fact the normal state of affairs and has been so before the first Soviet gas pipelines to Europe were laid. Ostpolitik, anyone?

(I might also add that the decision not to extend a Membership Action Plan invitation to Georgia now looks to have been correct; and that the substantive differences between the US and German reactions to the Russian invasion of Georgia were slight in any case.)

Second, in this reading, what exactly is Germany supposed to be afraid of? Does anyone really think that Gazprom is going to cut off German gas supply for an extended period of time in retaliation for Angela Merkel failing to dance to the Kremlin’s tune in international affairs? For Russia to do this — or even to threaten it — would turn out to be a economic and geopolitical catastrophe of enormous proportions for Russian national interests. To believe that Russia would do such a thing would be to assume not only malign ambitions (which I most certainly do not rule out) but also a level of stupidity that one simply does not find in the Kremlin, even at its short-sighted worst.

It is exceedingly rare, however, for an analysis to make it this far and consider the specific and tangible ways in which energy supply translates into political leverage. The influence of Russian gas on German foreign policy is simply asserted. I was surprised to find such a clear example of this in a respectable online publication (ForeignPolicy.com):

Of course, economic leverage [by which the author here means gas supply] translates seamlessly into political power, and Russia’s sway over German foreign policy has been conspicuous as the recent imbroglio in Georgia has continued to play out.

Admittedly this is a pretty weak straw horse, as the author of this article works for a Washington think tank whose main objective is deny the reality of climate change.

However, the same flaw appears in more sophisticated punditry from more credible sources. This piece, written by Ariel Cohen of the Heritage Foundation, makes the same mistake (if less egregiously). Cohen argues that the U.S. should take a number of steps intended to help reduce Europe’s dependence on Russian energy because Russia will “likely use Europe’s dependence to promote its largely anti-American foreign policy agenda.” How exactly Russia might do this, or indeed how it has done so already (since Europe has depended on Russian gas for three decades), is not addressed.

Cohen too is relying on an implicit and unsupported assertion that there is a direct (and perhaps even “seamless”) relationship between Russian gas supply and Russian influence over European foreign policy. But there is not. And indeed, when one gets down to specifics I think it’s suprisingly difficult even to draw a dotted line.

I am simplifying here too (after all, this is a blog post.) For one thing, the geopolitics of energy meme does have real-world impact to the extent that senior government policymakers believe it. The Russian government obviously does see its oil and gas as a geopolitical lever, and it has attempted to use this leverage in unsubtle ways on a number of occasions. But there is a big difference between bullying small former Soviet states and threatening Germany. I don’t believe for a second that German policy toward NATO expansion or the Russian invasion of Georgia was determined even to the tiniest extent by Germany’s dependence on Russian gas.

Photo by REGIERUNGonline/Kugler