Energy Security: A Primer for Students of International Affairs
By Colonel Michael A. Davis, U.S. Army - Retired; and Colonel Jonathan Drake, U.S. Army
“There is no substitute for energy. The whole edifice of modern society is built upon it....it is not ‘just another commodity’ but the precondition of all commodities.”
- E. F. Schumacher
Energy is the lifeblood of our civilization. From the moment when man mastered fire for warmth and harnessed animals to increase plow efficiency and food production, humans have protected sources of energy and sought various means to multiply work value. The energy potential of wood, wind, water, and beasts of burden was eventually surpassed by the power of coal. Later, coal-fueled steam’s potential was dwarfed by oil and most recently by the power of the atom. Throughout these transitions, human development and achievement have fundamentally relied upon ready access to energy as an essential component of economic activity and growth. Indeed, in the modern era fulfillment of the United Nations’ poverty reduction targets have been directly tied to access to energy.[i]
While access to energy is essential for human advancement, control and distribution of energy resources has enabled states and corporations to wield far more power than they would otherwise have. Certainly, Qatar would not have hosted the 2022 World Cup without its realized energy power, nor would Saudi Arabia be a world player. Competition for control of energy resources – including the associated physical, banking, and support infrastructure – has fueled international conflict and threatens more. While the roots of Russia’s invasion of Ukraine are not entirely energy-related, competitive energy politics played a substantial role in fueling the conflict and other hard security disagreements, including the depletion of bank reserves and the physical destruction of energy infrastructure. Events far afield such as the security of energy supplies in Venezuela and the Gulf of Guinea affects global markets and domestic stability in the U.S. homeland. The stability of the global order depends on a stable energy market, and the American way of life is wholly dependent upon the availability of affordable energy.
As future and current political-military advisors to Combatant Commanders and Ambassadors, the Department of Defense’s Foreign Area Officers (FAO) are among the small (but growing) group of front-line practitioners that must have a working knowledge of energy security. Whether FAOs are considering the development needs of populations as they try to stabilize conflict areas in Africa, advising NATO leaders about the real operational impacts of reverse-flow, networked pipelines, or considering Chinese investment in Middle Eastern oil infrastructure, FAOs must be proficient in the security aspects of energy. The following pages will attempt to frame the modern energy security debates by providing a brief, yet comprehensive, presentation of the key components and arguments in the energy arena to spur thought and interest in this important field.
Defining the Problem: Oil is Messy
Securing a safe, reliable, and affordable energy supply has been a goal of governments since the industrial revolution. Just as access to supplies of salt and saltpeter [i] was a vital security interest in the early modern period, access to and security of energy supplies is a vital national security interest for modern governmental leaders. This access to, and security of, energy has either limited or enabled the potential of states to realize their strategic goals in both peacetime and war.[ii]
Yet ensuring one’s own energy security is no simple task. While globalism has created connectivity and interdependence in world markets and has led to greater investment into reliability of energy systems, it has also ensured that disruptions in the system are felt far and wide. Problems in downstream storage systems, damage to pipelines, natural disasters affecting refineries, civil unrest in upstream production areas, price disputes, financial woes of transit countries, corruption, war -- all these have affected the system and degraded the supply security of one nation or another. A secure supply of energy is reliant upon the proper functioning of the entire chain of energy systems. But, what is energy security?
The International Energy Agency (IEA) defines energy security as “reliable, affordable access to all fuels and energy sources.”[iii] In addition to the availability and price aspects, the seminal energy security literature of the previous decades includes the key tenets of affordability, reliability, redundancy, supply control, and diversity.[iv]
The sheer complexity of these variables and energy markets and systems in general has led nations to develop national strategies for reducing vulnerabilities to ensure the livelihoods of their economies and their citizenry. These strategies reflect the national character of their respective political cultures and their philosophical beliefs about economic freedom, private/public ownership, the role of government in society, and the role of the state in utilizing natural endowments. While some nations, such as the Russian Federation, develop comprehensive energy strategies to advance the interests of the state, others, to include the U.S., have no such overarching comprehensive policy or strategy. Despite their strategic perspectives, the very relations between those with and those without indigenous energy resources are often colored by the fact that more than 80% of the world's proven oil reserves are concentrated in just ten countries, nine of which consistently rank in the bottom half of comparative scales of political and democratic stability and freedom. A comparable review of proven gas reserves tells a similar story.
Today, oil remains the world’s largest energy source because of its primary role in fueling transportation. Demand continues to grow, mostly because of increased needs for transportation, especially in the developing world.[v] Oil and other liquid fuels will remain the world’s largest energy source in 2040, meeting about one-third of demand. Globally, demand for liquid fuels will rise by almost 30 percent over the next 30 years.[vi] As the IEA identified in its 2016 report on oil trends, “the largest contribution to the increase in oil demand came from the world’s most consumed fuel, gas/diesel oil.”[vii] Modern nations continue to rely upon natural petroleum products in support of ground transport and aviation, and Chinese demand for oil continues to outpace predictions.[viii] Notwithstanding government investment and preferences, alternative fuels are thus far “playing a very marginal role”.[ix] These trends in developed nations and the continued struggle for advancement in underdeveloped countries demonstrates that oil will remain exceptionally relevant to short-term policy formulation and long-term national power and energy security.
This same reliance upon oil products coupled with the experiences of the 1970s (e.g. the oil crisis of 1973 and the energy crisis of 1979) gave rise to different approaches: ensuring availability of petroleum and improving the efficiency of petroleum use. An offshoot of these approaches was the idea that energy security and overall energy market stability could be achieved through “energy independence”. For many modern scholars, energy independence is synonymous with energy security – that is to say, a nation’s ability to ensure domestic supplies or access at continual affordable levels.[x] These approaches, however, proved more short-term than strategic. Improving efficiency of petroleum-consuming machines, while important to curbing emissions, led to higher demand. Efficiency did not alter oil’s status as the prime mover nor slow the growth of transportation services. National dependence upon oil as a commodity, whether as importer or exporter, creates vulnerabilities which states must account for. This dependence manifests itself either as a total reliance on production and export, rendering a state economically vulnerable to global price downturns, or as a dependency on consumption and import, leaving a nation’s economy at the mercy of global price spikes or the goodwill of the supplier to honor contractual obligations.[xi] Whether a nation has an abundance or dearth of hydrocarbon resources, the resultant issue is often insecurity, real or perceived.[xii]
Given the unique importance of fossil fuels to basic security and human development as well as the unequal distribution of these resources, the hallmark international security issue for the next generations may become the geopolitical competition for these resources and the relative power of the nations wielding them. When it comes to energy, the world appears to tilt toward the Realism side of the International Relations theory spectrum.[xiii]
Threats are in the Eye of the Beholder
For students of foreign policy and energy security, an understanding of Realism is paramount to assessing the actions of states in the energy domain. Realism theory posits that states, like individuals, are rational actors that accumulate power to ensure security. Realists see an anarchic world in a state of perpetual conflict. Realists believe in the primacy of the sovereign state and that states, acting out of self-preservation, will always make decisions out of self-interest. If Realism is a description of the world and the sovereign actors within it, then Realpolitik is the reaction to that world and one manner to prescribe policy responses to it. For scholars of Realism, other than the primacy of self-interest, no universal, guiding principles exist to determine state behavior. Rather, an understanding of the behavior and actions of other states leads to a pragmatic (Realpolitik) approach to avoid and respond to challenges.[xiv]
Government leaders and military practitioners alike often divide perceived threats into two thematic groups: Acute, or fast-moving threats as contrasted to “wicked”, enduring, or slow-moving threats. The modern news cycle focuses on Acute “fast movers”: terrorism, Russian aggression, South China Sea squabbles, etc. The enduring, “wicked” threats, such as aging infrastructure, social imbalances, environmental concerns, energy security, water access, and demographic decline are more difficult for elected officials to focus their energies upon, often because public discourse is primarily focused on fast-moving threats. As Robert Kaplan pointed out, “[t]he political and strategic impact of surging populations, spreading disease, deforestation and soil erosion, water depletion, air pollution, and, possibly, rising sea levels in critical, overcrowded regions...will be the core foreign-policy challenge from which most others will ultimately emanate.”[xv]
Assessing the impact of these challenges on the survival and progress of each nation in its desired political system helps us understand relative national security interests. Many nations, including the US, perceive that the stability and viability of the overall global energy system is a vital national security interest. Other nations, however, give priority to their relative standing in energy politics, which in some circumstances leads to a destabilizing form of competition to attain dominance. Some nations are so reliant on income from petroleum that undesirable market conditions - or even production of other states - violate their own perceptions of national security interest.[xvi]
The very centrality of energy as a means to provide for other forms of security (economic, strategic, and human) demonstrates that energy, and especially oil, is a critical commodity for our civilization, an essential precondition for security writ large, and a core factor in our modern Great Game, or rivalry among nations.[xvii] Departing from this understanding of the complexity of energy security and the high stakes involved, one must next understand the two major schools of thought within the energy security domain. In theoretical terms, we find the pessimists and the optimists.
Doomers and Boomers: The Finite Resource Camp vs. The Power of Mankind Camp
Economists have long debated the challenges of reliance on finite resources.[xviii] The early decades of the 20th century saw the addition of natural sciences to explain the risk inherent in dependence on nonrenewables.[xix] With the oil shock of 1973, the field of resource “pessimism” blossomed even more, as E.F. Schumacher pointed out, “[t]here is no substitute for energy. The whole edifice of modern society is built upon it.... It is not ‘just another commodity’ but the precondition of all commodities, a basic factor equal with air, water, and earth.”[xx] But scholars such as M. King Hubbert believed that these resources have an ultimate depletion point. Hubbert coined the idea of “Peak Oil” and pointed out that “the fortunes of the world's human population, for better or for worse, are inextricably interrelated with the use that is made of energy resources.”[xxi] The basic premise of this argument is that matter is finite. Hubbert’s bell curve design was the starting model for resource pessimists or “Doomers.”[xxii] Following Hubbert’s research, Doomers since have pointed to the challenges inherent with a world economy following an exponential growth model.[xxiii]