Black Gold: The Geopolitics of Oil

I recently read Oil: Money, Politics, and Power in the 21st Century, a book by Tom Bower. Readers of this blog will find the book compelling for many reasons. Even so, Bower’s blind spot on climate change is a serious problem, and still symptomatic of the views of many of the world’s political and business leaders.

Oil – published in 2009 – provides a detailed account of the Western oil majors and their interactions with governments during the 1990s and 2000s. The book profiles a number of key industry executives – notably John Browne (former head of BP), and Lee Raymond (former head of ExxonMobil) – as it paints a nuanced picture of the risks and rewards of extracting “black gold.” Too often, ordinary consumers of oil do not comprehend the challenges associated with oil extraction, transportation, and refining. Companies often drill “dry wells” in the exploration process, which bring significant risk and cost to their operations. In many cases, host governments abandon negotiated contracts, leaving companies like Shell, Chevron, BP, and ExxonMobil in precarious financial situations. At the extreme, governments nationalize resources, as has happened in Russia, Venezuela, and the Middle Eastern states before them. Indeed, after the recent wave of energy nationalism, the Western oil majors (i.e. the world’s main privately held oil companies) now control a surprisingly small fraction of the world’s petroleum reserves.

Vladimir Putin Doll

Russia, more than any other state, has been closely associated with geopolitics and energy nationalism. The main architect of Russia’s energy geopolitics is Vladimir Putin. Photo credit: monkeyatlarge (via Flickr, Creative Commons license).

The most interesting geopolitical coverage in Bower’s excellent book is his discussion of Russia and the post-Soviet region. The book’s account of Russia’s wild 1990s period is stunning for its treatment of (oil) oligarchs such as Mikhail Khodorkovsky and Vladimir Potanin. As this and other cases from the book show, black gold has a way of undermining the rule of law and stimulating pervasive corruption. Bower also does an excellent job detailing the rise of Vladimir Putin and Russia’s resource nationalism. One compelling sub-theme related to Russia is the Clinton administration’s (1993-2001) aggressive efforts to channel Central Asian energy resources to the West, but not by way of Russia.

Now more than ever, the oil business is not for the faint of heart. Added to longstanding cycles of boom and bust are major geopolitical risks associated with unstable and uncooperative oil-producing states. And, critically, there is the core unresolved issue of climate change. Unfortunately, Bower mostly treats climate change as a difficult public relations issue for the oil companies. He seems to pat the companies on the back when they eventually concluded that they could not be both fossil fuel extractors and alternative energy leaders. That might be the right short-term business decision for these companies, but heavy global reliance on fossil fuels is not a wise path for our future. We must settle the climate change debate in the public arena, not in corporate boardrooms.

***  A new book by this blogger:  Failed States: Realities, Risks, and Responses

The Geopolitics of the Keystone XL Pipeline

A tar sands site in Alberta, Canada

Petroleum extraction from “tar sands” – in Alberta Province, Canada (pictured), or elsewhere – is not “clean energy” production. Photo credit: howlmontreal (via Flickr, Creative Commons license).

In the famous words of many politicians, “elections have consequences.” As U.S. President Barack Obama begins his second term in office, he will have a momentous choice to make on whether the proposed Keystone XL Pipeline – to connect Alberta’s huge tar sands deposits with the Gulf of Mexico – will move forward. And, given the recent indications of Obama’s new Secretary of State, a final decision on the pipeline’s fate is looming. There can be no doubt that a Mitt Romney administration would have quickly approved this massive infrastructure project on national security and economic grounds. Given Obama’s recent signals on climate change, though, approval of the Keystone project is in doubt.

Canada, of course, is lobbying hard for U.S. approval of the new pipeline. If connected with potential markets, the tar sands deposits in Alberta could place Canada on par with Saudi Arabia, in terms of fossil fuel exports. And as the energy geopolitics expert Michael Klare argues, the death of the Keystone XL Pipeline could be the death of the Canadian tar sands industry. That is not a minor diplomatic proposition, even among old allies.

The green coalition opposed to the pipeline is right to raise the long-term, global issues associated with climate change. For so many reasons, mobilizing action on climate change in America has been fraught with difficulties. It has now been over twenty years since the Rio Earth Summit placed a spotlight on the negative impacts of climate change. At some point – and soon – elected officials must show some true courage on these issues. Klare is right to identify the Keystone decision as a defining climate policy choice for Obama’s presidency.

So, here is a short list of other geopolitical relationships that Obama should weigh carefully in his decision:

  1. Global food security is at stake. Modestly cheaper energy prices won’t matter much if they are overwhelmed by much more expensive food, caused by climate change. Nor should we overlook the destabilizing effects of higher food prices in weak and failed states.
  2. The geopolitics of climate change is about much more than rising temperatures. One of the central risks of global climate change – already being observed – is restructured precipitation patterns. Though there has been too much hype to date about “water wars,” there are many plausible future scenarios under which states will go to war in a bid for fresh water.
  3. Climate change – barring a reversal of our present global course – is likely to lead to more civil wars and regional conflicts around the world.

Mr. Obama (and Mr. Kerry), the ball is in your court.

Geographic Imaginations and the Volatile Sahara Desert

Recent events in Mali and Algeria have focused attention on the world’s biggest desert. Western intelligence agencies have long been concerned about terrorists and other rogue groups utilizing the vast, barren expanses of the Sahara. In many outsiders’ imaginations, the great desert is primarily a sea of seductive, rippling sand dunes.

Saharan Desert Sand Dunes

Though this is a familiar Sahara Desert landscape for many outsiders, only about 20 percent of the desert looks like this. Photo credit: Brandon Prince (via Flickr, Creative Commons license).

This tourist-friendly landscape is characteristic of North Africa’s drylands, but only in part. Much more common is a rocky landscape strewn with scrub vegetation, and marked with scattered oases.

The Sahara Desert in Algeria

A rocky Saharan landscape in Algeria is punctuated by a desert oasis. Photo credit: Cernavoda (via Flickr, Creative Commons license).

Saharan Desert Scrub

Scrub vegetation in the disputed territory of Western Sahara. Photo credit: bobrayner (via Flickr, Creative Commons license).

These more characteristic landscapes of gravel and undulating terrain share much in common with parts of Afghanistan, although that Central Asian state is far more rugged.

As the world grapples with the effects of state failure, climate change, and other challenges in the Sahara and Sahel regions of Africa, it is helpful to have a more accurate geographic imagination about these lands.

Timbuktu, Mali

The culturally important city of Timbuktu, Mali lies on the southern edge of the Sahara Desert, along the Niger River. Photo credit: emilio labrador (via Flickr, Creative Commons license).

Geopolitical Issues for Obama’s Second Term (2013-2017)

When Time magazine selected Barack Obama as their 2012 person of the year, they noted that the re-elected president is seeking to emphasize domestic issues in his second term. While this emphasis may come about, it is highly likely that foreign affairs will occupy much of Obama’s time after his second inauguration.

Following is a quick preview of seven key geopolitical issues that will likely occupy much of Obama’s agenda. What is remarkable is how few of these issues were intensively debated in the long 2012 election campaign.

  1. America’s fiscal health
    The early January deal on tax rates is only the beginning of efforts to restore balance to America’s public finances. If the president is successful in brokering a grand bargain with Republicans, defense and foreign affairs spending will inevitably decline in a significant way. Contrary to the perceptions of many Americans, the U.S. does not spend a great deal of money on international aid and non-military foreign affairs. It is particularly the Department of Defense that would have to adjust to an earlier era of austerity.
  2. Climate change
    In 2012, candidate Obama was stunningly quiet about the ongoing climate crisis. After the big letdown at the 2009 climate change conference in Copenhagen, world leaders committed to keep working on a comprehensive plan in South Africa in late 2011. Because of the Great Recession, and a market-driven shift to cleaner fuel sources, American greenhouse emissions are now lower than when Obama took office. Much hard work remains, and major battles loom over EPA regulations and U.S. participation in an international climate change framework.
  3. Iran
    It is quite possible that Iran will develop deployable nuclear weapons during the second Obama term. The real threat may be a chaotic nuclear arms race in the Middle East. As Ray Takeyh and others have argued, a nuclear Iran could be contained. Other consequences of a nuclear Iran may be harder to address.
  4. Political reform in China
    China is on track to become the world’s largest economy by 2020, if not several years before. That progress, and China’s growing influence around the world is directly dependent upon the country’s political stability. China’s new leaders will be severely tested over the next four years to manage political dissent and information flows.
  5. Transition in Afghanistan
    Though Obama did not start the war in Afghanistan, he took direct ownership with the surge of 30,000 additional soldiers into this failed state. The key issue is whether political reconciliation can occur with a sufficient number of the Taliban.
  6. Europe’s future
    Europe starts 2013 with some signs of hope. Notably, borrowing rates are sharply lower for most of the region’s governments. Yet, centrifugal forces in the European Union remain strong, and it is quite plausible that President Obama will have to help manage the disintegration of the EU.
  7. Illegal drugs and the Americas
    For now, immigration has receded as a defining issue in relations between the United States and its southern neighbors. It is not clear how interested Obama will be in proposing new solutions for the drug-related violence and instability confronting Latin America.

Hunger and State Failure

Last month, a coalition of organizations released the seventh annual Global Hunger Index report. The report is sobering reading, and highlights ongoing challenges of governance and environmental stresses. The report also includes a revealing summary map that details the most food insecure countries and regions.

What places top the list of the food insecure? The Global Hunger Index identifies three small countries as having the most intense problems:

  1. Haiti
  2. Burundi
  3. Eritrea

Seventeen other countries are also in dire circumstances. Of those states, the main cluster is in Africa, particularly across the Sahel region. The African states include:  Sierra Leone, Niger, Chad, Central African Republic, Sudan, South Sudan, Ethiopia, Djibouti, Angola, Zambia, Mozambique, and Madagascar.

South Asia is the other large cluster of humanity of gravest concern. These states include: India, Nepal, Bhutan, and Bangladesh. (Yemen is the last of the 20.)

Finally, by way of the main summary findings, there are some important weak and failed states that have not yet been mentioned. The report did not classify the Democratic Republic of Congo, Somalia, Iraq, Afghanistan, and Myanmar (Burma), since no data were available for these countries. Limited access to basic data is a fundamental characteristic of weakly governed states. It is quite likely that most of these “no data” states would also be included in the list of most food insecure places, if reliable information were available.

I direct an emergency food pantry, and I have seen the face of hunger in my home area. The magnitude to the challenge is so much greater in places like Haiti and the Sahel. Even as many countries have seen gains over the last 30 years, the effects of climate change and rising energy prices are now significant stressors. Addressing ongoing global hunger issues will require more concerted local and global action.

Solyndra and Somalia

In the United States, energy policy, too, has become a hyper-partisan policy domain. If you’re a Republican, you love carbon-based fuels. If you’re a Democrat, you love wind turbines, solar panels, and biofuels. That, at least, is the caricature.

In late May, the Republican National Committee released a television advertisement that references the now-defunct solar energy company Solyndra. The company received a $500 million loan guarantee from the federal government and soon after went bankrupt. Is there a scandalous dimension to the Solyndra affair? Yes, it does seem as though there may have been improper political motivations in the loan approval.

The Republicans’ spotlight on Solyndra, however, is about more than possible political interference in bureaucratic workings. In highlighting the failure of an alternative energy company, this line of attack suggests that the time is still not right for alternative energy sources (other than nuclear power). But what about the party’s presidential nominee, Mitt Romney? On the candidate’s Web site, the message on energy policy is clear: what America particularly needs right now is more domestic production of oil and coal. Sadly, the “issues” menu on the site does not even have a category for the environment (or environmental issues), or climate change / global warming. The Massachusetts governor who once viewed climate change as a serious threat to the United States and the world is now deferring to the current consensus in his party.

Lest you think that this is an anti-Romney rant, let me insert a bit of personal context here. In fact, I am an undecided voter moving in the direction of the Romney-Ryan ticket. The Democrats are vulnerable on issues of fiscal responsibility, and unlike many voters, social issues like marriage and abortion matter to me as much as the economy.

Now, back to American energy policy and the title of this post. For different reasons, the Republican Party has walked away from the conservationist tradition of Theodore Roosevelt on climate change and energy policy. Instead of following the sensible position of party stalwarts like John McCain and John Warner – bolstered with the support of key business leaders – the party has basically embraced climate change denialism. Yes, the fossil fuel lobby is well-financed and powerful. But, the more important factor is grassroots opposition to climate change action.

This inaction is deeply unfortunate. Instead of a bipartisan politics of vision and action – which we could have – we have a country deeply divided on energy issues. The consequences of climate change are already apparent here in North America. Abroad, the effects of a warming planet will hit weak and failed states especially hard. It may be psychologically comforting to wish these relationships away, but it is intellectually and morally wrong. Drylands like Somalia, Pakistan, and Mali may become more arid in coming decades, adding to the immense challenges these countries already face. Food security crises may be particularly acute in regions such as Africa, the Middle East, and South Asia. And we could go on.

If Mitt is elected in November, Americans of all political persuasions should urge him and his party to lay aside the narrow focus on fossil fuels, and adopt an “all of the above” energy policy that puts us on a pathway to global leadership and environmental sustainability.

*** Did you like what you read here? You might be interested in the new book by this blog’s author, Failed States: Realities, Risks, and Responses.

Climate Change, Food Security, and Geopolitics

On Friday, the U.S. Department of Agriculture revised its forecasts for staple grain harvests. The news was not good. America’s worst drought since 1956 is now set to impose suffering on a much wider segment of the world’s poor. Even in good times, the world’s poorest devote a majority of their monthly budget to food. As the reserves of basic staples decline and prices begin to rise – as they did so remarkably in 2007-2008 – families face tougher choices about school fees, caloric intake, and other essential needs.

What do these recent development have to do with global climate change? Probably a great deal. Droughts have occurred since time immemorial, but the frequency and intensity of droughts is likely changing with global warming. Long-term climatological models – those that forecast out 50 years or more – indicate greater extremes of precipitation, both in terms of spatial pattern, and across years. This year’s drought in the U.S. is not at all the worst case scenario for global food security. Areas least able to cope with intense, widespread droughts are those most likely to see long-term transformations of their regional climates. South Asia, the Middle East, and Sub-Saharan Africa are forecast to become drier and more prone to debilitating droughts over the next decades. These regions have the fastest population growth rates in the world, and South Asia and Africa have few financial resources available to mitigate the effects of these droughts.

Countries like Mali, Chad, and Pakistan still have more than half of their population in agriculture. It is not realistic for these agrarian societies to abruptly shift to urbanized, industrialized economies and societies as a way of addressing new regional climates. Perhaps bio-technology will be of some help. Absent concerted action on global climate change, many of the world’s most fragile states are now staring at more frequent and intense droughts that will bring humanitarian crises and exacerbate other political tensions.

*** Did you like what you read here? You might be interested in the new book by this blog’s author, Failed States: Realities, Risks, and Responses.