Geopolitics and Energy: The 'Great Game'

Underlying the conflicts in Iraq and Afghanistan, and the confrontation with Iran and third-power interest in the insurgency in Pakistan, is a much broader shift in the tectonics of geopolitical influence among the great powers, China, Russia, the US and the emerging European state.  And as usual it is founded on resources, trade and, consequently, the distribution of wealth and power among nations.

It is all about control of the world's dwindling energy resources and their chains of distribution and it is focused on the Middle East and Central Asia.  The world's remaining abundant petroleum resources are localised in the Middle East and while the traditional maritime distribution model places the supply of these resources largely in the Persian Gulf, with the guarantor of delivery the US Navy, this model is slowly changing.  As described by former Turkish Minister of State, Hikmet Uluğbay, we are now entering the final phase of this competition:


The discovery of oil, the popularization of the automotive industry and the introduction of motor vehicles to the army has led industrialized countries, which lacked oil to back the process of industrialization, including Britain, Germany and France, to enter a race for control over oil fields. Considering that its own oil resources may be exhausted, the US also joined the race after the end of World War I. This started the first battle of apportionment over oil resources. Currently, the final fight is taking place to have control over oil and natural gas resources, as well as over routes to deliver these resources. Scholarly studies show that global oil production will peak in the short run, after which oil production will enter a decline. According to the research, during the 2019-2030 period natural gas production will peak. The increase in oil prices to $150 per barrel was a harbinger of this. The current decline in oil prices should not mislead us. This temporary development is a product of expectations that the world economy will soon suffer from stagnation.

Fatih Uğur - World is Witnessing Final Fight For Oil Zaman 5 Oct 08

Partly due to the shift towards reliance on natural gas, pipeline distribution overland to Europe has become a highly competitive undertaking.  Europe is already dependent on Russian natural gas travelling overland from the Caspian region, a situation not lost on US policymakers:


Unfortunately, Russia has shown itself increasingly willing to use energy as a tool of foreign policy, posing a threat to EU energy security. Meanwhile, the fourth largest proven natural gas reserves in the world sit in the Caspian region - including Azerbaijan, Kazakhstan, Turkmenistan, and Uzbekistan - effectively locked away from a natural market in western Europe by Russia's stranglehold over Europe's natural gas pipeline system.

Robert F Winchester - European Energy Security: Wrestling with the Russian Bear for Caspian Natural Gas US Army War College 30 June 2007

And Europe is seeking to establish it's own alternate routes to the Caspian Basin, the Middle East and Iran:


The aftermath of the January energy crisis between Russia and Ukraine, which resulted in the interruption of the natural gas supply to some European countries, has once again made relevant the establishment of alternative energy routes from Russia to supply natural gas to Europe. Additionally, alternatives are also needed to Ukraine, through which Russia transported about 80% of Europe's gas. In this case, the actual construction of the natural gas pipelines `North Stream` and `South Stream` again rise. Both projects will guarantee the unimpeded transit of natural gas through pipelines which will be laid on the seabed (of the Baltic Sea and the Black Sea). But these pipelines do not provide an alternative to Russian gas, and so a possible alternative for Central and Eastern European countries could be the Nabucco gas pipeline project, which plans to export gas from the Caspian Sea basin states and perhaps from Iran, Iraq and Egypt in the future.

Rovshan Ibrahimov - Nabucco Pipeline - I Turkish Weekly 19 Feb 09

Small wonder the US is having trouble getting European partners in it's effort to impose economic sanctions on Iran.  But it is not just a reality affecting our inability to impose sanction on Iran, this competition for energy resources is global, strongly affecting US policy on Gulf and regional alliances, not to mention the invasion and occupation of Iraq and the security crises in Afghanistan and Pakistan, conflicts usually portrayed in terms of threats to our physical security and ideology.  This reality informs the foreign policy of every major power, not to mention the geopolitical motivations of the US in the Middle East and South Asia, now and in the past, for both 'realists' and neoconservatives.

Russia, enjoying the leverage and wealth created by it's position astride the supply of gas to Europe is applying the same strategy to the whole of Asia.  After nationalising the petroleum industry in Russia, Putin set about establishing the regional framework for an energy empire extending from the Baltic to China.  In October 2007, at the height of US tensions with Iran, Vladamir Putin visited Tehran with tangible results, both diplomatic and economic, which forestall US intervention in Iran through lost access to staging areas and potentially change the balance of power regarding access to energy in the Caspian, and the Gulf:


The declaration signed at the end of the summit covers a wide range of subjects in its 25 articles. The document virtually binds the littoral states into a non-aggression commitment, warns the outsiders to refrain from using the Caspian region soil for military operations or interfering in any other way, supports the right of Iran to pursue nuclear technology for peaceful purposes, and defines perimeters for ecological integrity of Caspian.

The summit provided solid foundation for economic cooperation among the coastal states. The Tehran declaration enshrines the North-South corridor as an integral part of the Caspian summit.

The sides agreed that only the civil and military vessels carrying the flags of the littoral states would have the right to navigate in Caspian.

Addressing the press conference at the end of the summit, President Mahmoud Ahmadinejad of Iran said that general understanding had been reached on all issues.

Tehran Summit Unites Caspian States on Major Issues News Central Asia 17 Oct 07

While we were threatening to attack Iran Russia was signing them up as a business and security partner.  Note the proposed Kazakhstan-Iran and Kazahkstan-China oil pipeline links in the map above and consider that this meeting closely followed a warning to the US from the Shanghai Cooperation Organization, a Russia-China security organ:


BISHKEK, Kyrgyzstan The leaders of Russia, China and Iran said Thursday that Central Asia should be left alone to manage its stability and security - an apparent warning to the United States to avoid interfering in the strategic, resource-rich region.

The veiled warning came at a meeting of the Shanghai Cooperation Organization and on the eve of major war games between Russia and China.

The SCO was created 11 years ago to address religious extremism and border security in Central Asia, but in recent years, with countries such as Iran signing on as observers, it has grown into a bloc aimed at defying U.S. interests in the region.

Leila Saralayvena - Russia, China, Iran Warn U.S. at Summit 16 Aug 07

The ultimate aim, of course, is access not only to the Caspian Basin but the vast oil reserves of the Gulf:


To add to all this, American and British [Gulf] allies by their very despotic and self-concerned natures will not hesitate to realign themselves, if presented with the opportunity, with Russia, China, and Iran. These puppet regimes and so-called allies, from Saudi Arabia and Kuwait to Egypt, have no personal loyalties and are fair-weather allies. If they can help it, the moment they believe that they can no longer benefit from their relationships as clients they will try to abandon the Anglo-American camp without hesitation. Any hesitation on their part will be in regards to their own political longevity. Iran, Russia, and China have already been in the long process of courting the leaders of the Arab Sheikhdoms of the Persian Gulf.

The ultimate aim of Russo-Iranian energy cooperation will be the establishment of a north-south energy corridor from the Baltic Sea to the Persian Gulf and with the Caspian Sea as its mid-axis. An east-west corridor from the Caspian Sea, Iran, and Central Asia to India and China will also be linked to this. Iranian oil could also be transported to Europe through Russian territory, hence bypassing the sea and consolidating Russo-Iranian control over international energy security. If other states in the Persian Gulf were included into the equation a dramatic seismic shift in the global balance of power could occur. This is also one of the reasons that the oil-rich Arab Sheikhdoms are being courted by Russia, Iran, and China.

Mahdi Darius Nazemroaya - The "Great Game" Enters the Mediterranean: Gas, Oil, War, and Geo-Politics globalsecurity.ca 16 Oct 07

As for our confrontation with Iran and security issues in Afghanistan and Pakistan, these have forced abandonment of some proposed distribution routes and perhaps created opportunities for Russia and China while we are engaged elsewhere:


A multidimensional network of pipelines has been evolving in the world over the years. There were a lot of options for investor countries to take oil and natural gas assets in the Caspian Basin and the Middle East to global markets. I touched upon why the Russian route was not picked. The least expensive option for the shipment of Caspian Oil to global markets is via Iran.

However, because of US-Iran tensions, this option has not been considered; this is why the Baku-Tbilisi-Ceyhan (BTC) pipeline option was taken into account. The route for Middle Eastern oil and natural gas considered by the Western world was by the Indian Ocean through Afghanistan and Pakistan. However, instability in these countries hampered the realization of this option.

Meanwhile, because of changing energy balances, attempts to take Middle Eastern natural gas and oil to China have also taken their fair share of attention. Like the Western world, China and India are eager to have Iranian natural gas and oil. For this reason, an Iran-India pipeline project is under consideration. China is investing $100 billion in Iranian natural gas and oil.

Fatih Uğur - World is Witnessing Final Fight For Oil Zaman 5 Oct 08

Afghanistan, an alternative route for Caspian gas, was tantalisingly out of reach of US interests by 2001, in spite of every effort by Unocal to strike a deal.  Earlier attempts, cited below, aligned US interest in the pipeline with tacit support for the Taliban, via Pakistan and the ISI:


Several major oil companies have investigated building pipelines from Central Asia through Herat and Kandahar, Afghanistan, and on to Quetta and Karachi, Pakistan, at an estimated cost of $1.9 billion. The distance is relatively short and would bring oil to the Indian subcontinent market. However, Afghanistan is still locked in civil war.  Many area residents feel that Unocal backed the Taliban forces financially in return for future pipeline rights in Afghanistan.  Unocal and other companies have abandoned attempts at establishing this route since the political situation seems unresolvable.

Lester W Grau - Hydrocarbons and a New Strategic Region: The Caspian Sea and Central Asia Military Affairs May-June 2001


The Taliban conquer Kabul, establishing control over much of Afghanistan. A surge in the Taliban's military successes at this time is later attributed to an increase in direct military assistance from Pakistan's ISI [New York Times, 12/8/2001]. The oil company Unocal is hopeful that the Taliban will stabilize Afghanistan and allow its pipeline plans to go forward. According to some reports, "preliminary agreement [on the pipeline] was reached between the [Taliban and Unocal] long before the fall of Kabul. ... Oil industry insiders say the dream of securing a pipeline across Afghanistan is the main reason why Pakistan, a close political ally of America's, has been so supportive of the Taliban, and why America has quietly acquiesced in its conquest of Afghanistan." [Daily Telegraph, 10/11/1996]

Victorious Taliban Supported by Pakistan; Viewed by US, Unocal as Stabilizing Force historycommons.org

In this context it is hard not to see our intervention in Afghanistan as serving a variety of interests at the time.  As for Iraq, it seems now it was merely a clumsy, and costly, US attempt to insure access to a larger volume of Persian Gulf reserves through traditional distribution chains:


Alan Greenspan, the former Federal Reserve chairman, said in an interview that the removal of Saddam Hussein had been "essential" to secure world oil supplies, a point he emphasized to the White House in private conversations before the 2003 invasion of Iraq.

Greenspan, who was the country's top voice on monetary policy at the time Bush decided to go to war in Iraq, has refrained from extensive public comment on it until now, but he made the striking comment in a new memoir out today that "the Iraq War is largely about oil." In the interview, he clarified that sentence in his 531-page book, saying that while securing global oil supplies was "not the administration's motive," he had presented the White House with the case for why removing Hussein was important for the global economy.

"I was not saying that that's the administration's motive," Greenspan said in an interview Saturday, "I'm just saying that if somebody asked me, 'Are we fortunate in taking out Saddam?' I would say it was essential."

He said that in his discussions with President Bush and Vice President Cheney, "I have never heard them basically say, 'We've got to protect the oil supplies of the world,' but that would have been my motive." Greenspan said that he made his economic argument to White House officials and that one lower-level official, whom he declined to identify, told him, "Well, unfortunately, we can't talk about oil."

Bob Woodward - Greenspan: Ouster Of Hussein Crucial For Oil Security Washington Post 17 Sep 07

And if the former Federal Reserve chairman isn't a sufficiently credible witness, take it from the former commander of Central Command:


During a round table discussion on "the Fight for Oil, Water and a Healthy Planet" at Stanford University on Saturday, Gen. John Abizaid (Ret.), the former CENTCOM Commander, said that "of course" the Iraq war is "about oil":

"Of course it's about oil, we can't really deny that," Abizaid said of the Iraq campaign early on in the talk.

`We've Treated The Arab World As A Collection Of Big Gas Stations' thinkprogress.org 15 Oct 07

A sorry epitaph on a sorry episode, one fears.  And with our attention distracted by this fiasco our adversaries have pressed on with their ambitions.  Though we seem to have squandered our opportunities, for now, China may yet emerge as Russia's biggest challenge in gaining access to production in the Caspian:


"In the last year, many analysts have spoken about a Sino-Russian axis. But it is not an axis. It is a tactical alignment against some United States moves," says Federico Bordonaro, a Rome-based analyst with the "Power and Interest News Report.""In the medium term, competition between China and Russia is set to take a more important place in relations between Beijing and Moscow. This is due to the fact that Beijing absolutely needs energy and the same energy is in the strategic interests of Russia."

China's breakneck economic growth -- 11.4 percent last year -- has sparked an insatiable appetite for energy that has led Beijing to eye Central Asia's oil and gas reserves. Beijing imports a large amount of its energy from Russia, but has become increasingly interested in buying directly from Central Asian suppliers -- including oil from Kazakhstan and natural gas from Turkmenistan.

But Russia's state-controlled Gazprom, which is struggling to supply both the domestic market and its European customers, also covets Turkmenistan's gas reserves. Moscow has thus taken steps to ensure that it controls the distribution of Turkmen gas via its network of pipelines.

Brian Whitmore - Central Asia: Behind The Hype, Russia And China Vie For Region's Energy Resources Radio Free Europe 22 Mar 2008

It is interesting to note that Russia has publicy expressed concerns regarding energy security in the region, leaving it to our imagination whether they are talking about keeping the republics in line as producers or confronting China as a consumer, or both:


MOSCOW (Reuters) - Russia may face wars on its borders in the near future over control of energy resources, a Kremlin document on security policy said on Wednesday.

The paper did not name potential adversaries, but Russia, the world's biggest energy producer, shares a border of more than 3,600 km (2,250 miles) with resource-hungry China and a small sea border with the United States.

"In a competition for resources, problems that involve the use of military force cannot be excluded that would destroy the balance of forces close to the borders of the Russian Federation and her allies," said the document, which maps out Russia's security strategy until 2020.

"The attention of international politics in the long-term perspective will be concentrated on the acquisition of energy resources," the paper said.

Guy Faulconbridge - Russia may face wars over energy: Kremlin Reuters 13 May 09

In the meantime there is some evidence that the US may be regretting lost opportunities and taking a different stance behind the scenes, as in the long outstanding natural gas pipeline proposal between Iran and Pakistan, agreed at the recent security conference held among Pakistan, Afghanistan and Iran:


The IPI project was conceived in 1995 and after almost 13 years India finally decided to quit the project in 2008 despite a severe energy crises in that country. Pakistan is also facing severe criticism from the US over any kind of economic deal with Iran.

Official sources say that the sudden change of stance from the Pakistani government and the pace of developments at the project suggest that the strong US opposition has softened.

Pakistan, Iran finally sign gas pipeline accord Dawn Media 24 May 09

A tripartite summit on Afghanistan security in Tehran?  And a pipeline deal?  Does it seem as though the media narratives prepared for domestic consumption are somewhat flawed?  This perception of the Middle East and Central Asia as a vast energy resource chessboard doesn't suggest that we shouldn't act in legitimate self-interest in this competition for resources, quite the contrary, this is a challenge which the US does not meet at it's peril.  But in the context of this competition for influence on energy, and consequently wealth and power, our strategy has been clumsy and our stated intentions wilfully deceptive.  Military confrontation has visibly failed to achieve the outcomes we desired and it is long past time that we rethink our strategy and take the route of investment, diplomacy and 'soft power' persuasion rather than readily wielding military supremacy in our commercial interests.  And surely the argument for alternative energy and conservation as a matter of national security speaks for itself.

Tags: Afghanistan, Iran, pakistan, petropolitics, resource wars, US Foreign Policy (all tags)

Comments

10 Comments

well done shaun.

and provides a lot of food for thought.  one thing...

But in the context of this competition for influence on energy, and consequently wealth and power, our strategy has been clumsy and our stated intentions wilfully deceptive.

this is most certainly true - but i would just note that aside from the clumsy part, this is no different than any nation on earth.

by canadian gal 2009-05-31 09:16PM | 0 recs
Re: well done shaun.

No doubt, but if you are comparing us to the neo-autocratic Russia or the benign tyranny of China I am suggesting that as a democracy we should be able to do better.  And this perception informs our foreign policy in ways which domestic opinion needs to understand if it is to exercise it's right to vote for the nation's genuine best interest.  My main concern is our recent incompetence which has not only tied us up in costly security operations but handed Russia a golden opportunity to consolidate it's position.

We have to consider that the traditional maritime model of oil security is currently challenged, it is very unlikely we will remedy this through military force, as the last eight years amply demonstrate.  I am confident the Obama administration understands this, but they will be preoccupied undoing the damage for quite some time.  In the meantime the argument against neoconservatism seems more pragmatic than ideological, they failed.  Our long-term security has never been more at risk and I'm not talking about terrorism.  

Thanks for your kind words.

by Shaun Appleby 2009-05-31 09:29PM | 0 recs
Re: Geopolitics and Energy: The 'Great Game'

Thankyou for giving us a concise outline of the problem Shaun

Imagine if the US government could summon the courage to be honest enough with its people to simply say 'Yes we have been responding for good or ill to a world in crisis over the future of energy'.  Imagine an informed people backed by this honest government diverting their energy from fear of terrorism/need for oil/no ideaism to the arena of responding to a grounded fear of their own self sufficiency. The worst outcome would be owning actions taken by ones government on your behalf to secure finite resources in the transition to 'free energy'.  

by Fluff Jenkins 2009-06-01 05:25AM | 0 recs
Is this a unique time?

Shaun, excellent post. I have only read your diary once as of yet and it will take two or three more readings for me to gain a better grasp of what you have written.

Our (as in the world) energy chess game today is extremely complicated with nuanced relationships to gain control of not only energy production, but perhaps more importantly, its distribution. As highlighted, the China-Russian relation is less of a bond between two nations and more of a bond to counter US intervention.

I assume control of energy and the challenges associated with it have always been complicated and delicate. In your opinion, are today's challanges of greater concern than in the past or is it just 'status quo' historically speaking?

by oc 2009-06-01 08:06AM | 0 recs
Re: Is this a unique time?

Good question.  The US joined Britiain and the European powers in their worldwide competition for oil shortly after World War I and Japan arguably started the Pacific war to gain access to the petroleum resources of South-East Asia.  But these were largely contests to gain control of the sources of supply, one in which since World War II the US has enjoyed a dominant status quo position due to our maritime power.

What has been happening recently, since the fall of the Soviet Union and the rise of China as a global economy, is an apparent shift to a continental and a maritime power bloc which excludes Europe from our sphere of influence, eerily similar to the Eurasia and Oceania of George Orwell's 1984.  As oil follows gas on these routes from the Persian Gulf to Eurasian consumers our access to energy and control of it's distribution dwindles, along with the geopolitical influence this control confers.

by Shaun Appleby 2009-06-01 01:01PM | 0 recs
Re: Geopolitics and Energy: The 'Great Game'

Ditto on the complements.

In the meantime, the polar ice caps continue their meltdowns.

by MainStreet 2009-06-01 08:23AM | 0 recs
Re: Geopolitics and Energy: The 'Great Game'

Thanks and well said.  Looking on the 'bright' side, however, the prospect of $150/barrel oil probably advances the carbon emissions agenda more than any international agreements, though it no doubt creates a myriad of other problems.  In the meantime a global recession arguably achieves much the same.

Clearly we need to refocus our attention on reducing greenhouse gas emissions and reforesting the planet, not to mention developing alternative sources of energy and lowering consumption, with considerably more enthusiasm than we are currently.

by Shaun Appleby 2009-06-01 01:59PM | 0 recs
Re: Geopolitics and Energy: The 'Great Game'

I have to print this out to read it. It's not formatting right.

In case you missed it, Israel and Turkmenistan exchanged Ambassadors for the first time.

by Charles Lemos 2009-06-02 11:19PM | 0 recs
Re: Geopolitics and Energy: The 'Great Game'

Wow, that's a problem.  Looks great to me on Firefox, hope no other readers are having trouble, I spent a while trying to get it spot on.

by Shaun Appleby 2009-06-03 12:35AM | 0 recs
Re: Geopolitics and Energy: The 'Great Game'

Yeah, and now Russia wants a piece of the Iran-Pakistan pipeline deal.

by Shaun Appleby 2009-06-03 12:36AM | 0 recs

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