It looks like the Obama administration has set upon who it wants as the secretary of state, but this is going to a thankless job which is facing acute challenges with respect to energy diplomacy.
We don't like to talk about US interests in terms of resource allocations. We want to avoid any discussion of blood for oil but there are some sensitive energy issues which will have to be addressed which will not go away just because current oil prices have hit multi-year lows.
The current environment is one of resource nationalism both on the selling as well as buying of energy resources. Some have called this the new energy statism or the neo-mercantilism. Countries not corporations control the flow of energy and countries not corporations are going to have to play a major role in the acquisition of energy. 14 of the top15 oil companies by proven reserves are national oil companies. They control 79.3% of all proven reserves. Exxon does not matter in this equation.
The era of big oil run by the major oil companies has been over for some time, but the US has not fully recognized, regardless of action in Iraq, that this going to be a more pressing issue in the next decade. Or, at least we are going to have to freely admit that our actions will be driven by the geopolitics of oil regardless of which political party is in control.
There will be five major state changes for US diplomacy:
1. Chindia challenge. China and India will still be some of the fastest growing economies in the world and are taking up more of the energy resource of the world. They will be rivals in the demand for energy but will also compete for resources with he US. We are already seeing both countries try to lock-p reserves and long-term deal for energy. They have made finding ready supplies of energy part of their national objectives.
2. The Russia challenge. Russia represents 6.6% of proven petroleum reserves and 26.3 % of natural gas reserves. Russia represents 12.3% of petroleum production an 21.3% of natural gas production. The have flexed their muscles in the energy area and have decided to use their energy power as means to further their national objectives. The is will continue and may only slow now because of the falling price of oil.
3. The Caspian "stan" challenge. The are that has some of the greatest unexploited oil and natural gas reserves is is the Caspian Sea and the former Soviet republics which have become the "stan" countries. This is an area where China and Russia are trying to control. The US has tried to gain influence in this area but it's land-locked location between Russia and China makes for a difficult area to influence.
4. The African challenge. The US is getting greater portion of its oil from Nigeria and Angola. Algeria is a major player in natural gas. This is also an region which China has made significant strategic investments. The Chinese have been more willing to look the other way on human rights issues which has made it a good partner for some countries like the Sudan.
5. The Middle East challenge. This is an ongoing challenge that will not go away after troops leave Iraq. 20% of world proven reserves are located in Iran and Iraq. 17% of proven natural gas reserves are also in these two countries. Their affairs are important to the US.
The US has spent time and effort in these areas but there has to be even further engagement during the next adminstration to eliminate future energy spikes.
We don't like to talk about US interests in terms of resource allocations. We want to avoid any discussion of blood for oil but there are some sensitive energy issues which will have to be addressed which will not go away just because current oil prices have hit multi-year lows.
The current environment is one of resource nationalism both on the selling as well as buying of energy resources. Some have called this the new energy statism or the neo-mercantilism. Countries not corporations control the flow of energy and countries not corporations are going to have to play a major role in the acquisition of energy. 14 of the top15 oil companies by proven reserves are national oil companies. They control 79.3% of all proven reserves. Exxon does not matter in this equation.
The era of big oil run by the major oil companies has been over for some time, but the US has not fully recognized, regardless of action in Iraq, that this going to be a more pressing issue in the next decade. Or, at least we are going to have to freely admit that our actions will be driven by the geopolitics of oil regardless of which political party is in control.
There will be five major state changes for US diplomacy:
1. Chindia challenge. China and India will still be some of the fastest growing economies in the world and are taking up more of the energy resource of the world. They will be rivals in the demand for energy but will also compete for resources with he US. We are already seeing both countries try to lock-p reserves and long-term deal for energy. They have made finding ready supplies of energy part of their national objectives.
2. The Russia challenge. Russia represents 6.6% of proven petroleum reserves and 26.3 % of natural gas reserves. Russia represents 12.3% of petroleum production an 21.3% of natural gas production. The have flexed their muscles in the energy area and have decided to use their energy power as means to further their national objectives. The is will continue and may only slow now because of the falling price of oil.
3. The Caspian "stan" challenge. The are that has some of the greatest unexploited oil and natural gas reserves is is the Caspian Sea and the former Soviet republics which have become the "stan" countries. This is an area where China and Russia are trying to control. The US has tried to gain influence in this area but it's land-locked location between Russia and China makes for a difficult area to influence.
4. The African challenge. The US is getting greater portion of its oil from Nigeria and Angola. Algeria is a major player in natural gas. This is also an region which China has made significant strategic investments. The Chinese have been more willing to look the other way on human rights issues which has made it a good partner for some countries like the Sudan.
5. The Middle East challenge. This is an ongoing challenge that will not go away after troops leave Iraq. 20% of world proven reserves are located in Iran and Iraq. 17% of proven natural gas reserves are also in these two countries. Their affairs are important to the US.
The US has spent time and effort in these areas but there has to be even further engagement during the next adminstration to eliminate future energy spikes.
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