by Judith Curry
In pondering what might happen in 2012 in terms of energy and climate policy, oilprice.com suggests that stove-piped analysis of individual strategic sectors (e.g. energy) is inadequate, and we need to consider the broad global strategic environment.
The oilprice.com piece is entitled Eight Strategic Factors to Consider for 2012. Some excerpts are provided here, selected for relevance to energy security:
1. Global Economic and Financial Trends: Economic fragility is everywhere, even in fairly robust and growing economies.
2. Global Energy Supply and Demand: 2012 will see the start of a transformation in fossil fuel supply and demand patterns, driven to an increasing extent by technological capabilities (such as the increasing possibility of delivering fuels derived from shale deposits in Europe, North America, and elsewhere). Changing strategic power reach (such as the decline in US influence in the Middle East, Central Asia, and, increasingly, Africa; and the rise in the PRC’s and India’s acquisitiveness) will also change control and logistical patterns for oil and gas distribution. The US has the ability to move much of its fossil fuel dependence away from the Middle East and Africa through transforming political approaches to the exploitation of domestic oil and gas fields and through cooperation with Canada in the exploitation of Alberta’s shale deposits, but is unlikely to make headway in this arena in the short term, due to political inertia. Based on present evidence, the US energy dependence pattern will remain slow to change in 2012, and significant change is only likely to occur with a change in US political leadership, which could occur at the beginning of 2013. As a result, the US will continue to face high costs, and high security vulnerability, because of its ongoing dependence on the maritime delivery of its oil and gas imports. This dependence comes at a time of declining US ability to project power to protect or — through strategic influence — ensure security of supply from, say, the Gulf of Guinea or the Middle East. Declining US strategic reach has already ensured the loss of control over, for example, Central Asian/Caspian oil and gas supplies.
Part of the changing fossil fuel logistical framework which will affect the strategic balance — apart from the exploitation of shale deposits in Europe, North America, and elsewhere — will be the clarity which will begin to emerge during 2012 in the future importance of oil and gas fields being developed in the Eastern Mediterranean. This will be a major driver in determining the economic creditworthiness (and therefore eurozone reliability) of the South-Eastern European countries such as Cyprus and Greece and, potentially, Italy. This will be a significant factor in the strategic behavior of Turkey, which is now seen as being outside the European Union bloc, and which is struggling to retain a major role in the energy marketplace. It lacks control over viable energy fields, and its influence over Central Asian/Caspian energy transportation to European markets (or even to the Mediterranean transshipment market) is, in relative terms, declining. Turkish economic fragility is, as a result, beginning to show, and this has generated an “equal and opposite” rise in Turkish strategic adventurism, designed to ensure a re-growth of neo-Ottoman influence over the Levant (particularly Syria and parts of the Palestinian Authority) and even Egypt. This adventurism seems likely to come to a head in 2012, even though the current Turkish Islamist political leadership is unsure how to effectively realize its adventurism given its concern over the reliability and loyalty of the Turkish Armed Forces to support an approach which goes so strongly against the secularist Kemalism of the Armed Forces.
The growing uncertainty of hydrocarbon supplies from the Persian Gulf, North Africa, and the Gulf of Guinea has sent the EU into an even greater reliance on Russia-origin and Russia-dominated for its energy supplies. What started as an economic driven default option will keep evolving in 2012 into a grand-strategic transformation. Brussels’ ambivalence about continued reliance on the NATO-based Euro-Atlanticism versus shift to the Mackinderian “Common Eurasian Home” doctrine advocated by Berlin and Moscow will be decided in favor of the latter, primarily on energy supply grounds and irrespective of the brewing political instability in Russia. Cognizant, the Kremlin will increasingly trade artificial lowering of energy price for Europe’s political-strategic pliability. This realignment will have major impact on the EU’s policy in key issues outside the immediate bilateral relations such as interventionism in third-party conflicts on the European periphery.
The strategic impact during 2012 of new energy-related technologies, apart from shale cracking, which will be worth watching are those related to energy transmission and storage. On the one hand, fixed, terrestrial electricity grids will become more efficient through interactive energy management computing, but at the same time they will become strategically more vulnerable, as noted repeatedly by this writer. On the other hand, 2012 will see a growth in the development to strategic scale (a significant change) of viable storage devices — batteries — which can act as stand-alone support for increasingly efficient local communications and computing networks, and be sustained by the newly-strategic-scale solar power technologies. It is the growth of these self-sustaining local networks which will serve as the guarantor of stability in the event of widespread interference with conventional terrestrial grids by natural disasters or human-sponsored disruptions.
3. Strategic Recovery by the US. The US will not, in 2012, show signs of any recovery of its global strategic credibility or real strength. Its manufacturing and science and technology sectors will continue to suffer from low (even declining) productivity and difficulty (for political reasons, primarily) in capital formation. A significant US recovery is not feasible in the timeframe given the present political and economic policies and impasse evident.
4. EU/Eurozone Prospects. The unwillingness of eurozone leaders Germany and France to decouple economic and financial issues within the currency zone will continue to extract a growing cost on the Continental European economies. All that this will do will be to further reduce the EU’s diplomatic influence on Turkey, the Middle East, Africa, and on global issues. that engagement and to reduce military
5. Iran-US-Israeli Military Engagement.
6. The Arab “Spring Break”. Concerns over the positive or negative prospects for “democracy” in the Middle East as a result of the rash of examples of popular unrest (Egypt, Tunisia, Libya, Yemen, Bahrain, Syria) should be seen in the light of the removal of a firm superpower authority figure in the region following the collapse of the Cold War and subsequent decline of the US. They should also be seen in light of the reality of the maturing and stagnation of some of the political systems which did not have the flexibility and legitimacy of traditional systems.
The US penchant to encourage and exploit the ascent of Sunni-Islamist blocs in the Middle East (Turkey-Saudi Arabia-Egypt) and South Asia (Pakistan-Afghanistan) in order to stifle Iran might pressure Tehran but would also result in the radicalization of Central Asia and the soft underbelly of Russia to the detriment of vital Western interests such as what remains of its access to the region’s energy resources.
7. A Return to Chaos in Nigeria. What happens in Nigeria affects the global energy market, and the strategic stability of the EU and the US, and other states. By the beginning of 2012, Nigeria was falling rapidly toward civil war, or at least uncontrollable insurgency, and there seems little which Nigeria’s major trading partners can do to prevent the slide.
Here we see the fate of the stability of the Gulf of Guinea — emerging as perhaps the most important fossil fuel export zone in the world after Russia and the Middle East — hinging on the inability of a single man, Goodluck Jonathan, to make a decision: a corrupt and inept politician in fear of an honest and capable figure.
8. Stability on the Korean Peninsula. All indicators point to the probability that the new leadership of the Democratic People’s Republic of (North) Korea (DPRK), under Kim Jong-Un, will pursue a cautious (albeit with strong propaganda) policy toward adventurism on the Korean Peninsula for much or all of 2012.
PRC Pres. Hu Jintao will step down from the Presidency in 2012, and this will trigger a new era in Chinese politics. The watershed changes — such as transforming energy patterns, or the changes in the way most wars are likely to be fought over the coming decades — are, however, the ones which should figure strongly when analyzing global risks and opportunities.
It is worth bearing in mind that 2012 is not expected to be a year of “big wars”, largely because most societies in the world are at a point where they lack the basic resources to sustain such activities on an inter-state scale. This will not prevent “short, sharp wars”, or clashes between sovereign powers, and the danger always exists that these can escalate, regardless of the preparedness levels or economies of the parties.
JC comment: read the whole article, its very interesting, but most of it isn’t relative to energy. Any thoughts on what all this portends for the UNFCCC negotiations, and for national energy policies?