Chapter 7: Energy Security

Introduction

During the Cold War and before, there had been only military oriented security (border-oriented security) approach. However, after the Cold War this approach left its place to a multidimensional approach that includes even social and environmental threats to security.

Hence, energy security also plays a crucial role in the changing security concept. Within this framework; oil, natural gas reserves, pipelines, energy transportation lines, sea lines of communications (SLOCS), and choke points are geopolitically important in the power struggles of states.

The energy resources, which strategically demonstrate the relative power of nations, are concentrated in certain regions of the world- they are unevenly distributed. Therefore, global and regional conflicts may rise for also controlling these resources. Therefore, the Middle East and Latin America (the proven oil reserves in Venezuela are recognized as the largest in the world) are the regions that we should highly take into consideration with regard to energy security issues.

With the increasing dependence on energy resources, the energy security has become one of the most critical national security concerns of states. Energy demand is rising almost hourly because of the increase in global economic activities, population, urbanization, and the advance in technologies.

The Concept of Energy Security

Although the concept of security in international relations varies according to different conditions in different periods, the nature of security threats within the concept also changes. It can be said that energy has an important role in shaping the concept of security in socio-economic and political fields.

These conflicts over resources and the implausible use of resources are the leading causes of increasing security risks and threats in recent years in the political, economic, geographic and environmental dimensions that cross borders. Risks and threats arising within the scope of these dimensions can be listed as follows; global economic and political crises, environmental disasters, terrorism, organized crime, regional conflicts, hunger, poverty, refugee problem etc.

At the top of these threats comes the exhaustion of all non-renewable energy resources. This has been supported by reports and research conducted by several international research institutions. Their findings yielded that unfortunately our world faces the threat that energy sources will be exhausted one day.

According to Brauch, security as a social value refers to a situation that is free from danger, risk, disorder, and fear. Security also refers to a situation with relative protection, certainty, reliability, trust, confidence, and predictability.

However, recently, states have been fighting many new issues such as terrorism, environmental disasters, cyber terrorism, refugee problem, organized crime that have emerged as new threats to national and international security due to rapid globalization.

Economic, social, environmental risks and threats are second-order policy issues. Recently, not only scholars and politicians discuss low political issues but the very low political issues impinge on world politics and national security policies. These issues include environmental disasters, immigration, refugee problems, social injustice, hunger, poverty, epidemics, biodiversity loss, erosion, acid rain, desertification, and global warming.

While discussing security, we should mention its two critical dimensions: national security and international security.

From a wider perspective, national security is the absence of internal and external threats to the integrity and stability of a state. However, in the international system, any measure to protect the national interests of the state is considered an asset to the national security, while any act that may harm the security of that state would be perceived as a threat.

The Importance of Energy Security

Since the dawn of humankind, energy is a vital necessity. Today, both homes and workplaces need energy. This need is increasing day by day due to the increase in population and the advance of technologies. However, energy sources are concentrated in certain regions of the world. In the international system, states’ access to the energy resources has implications for both national and international security policies. Moreover, the energy use in economies, military complexes, and social areas is the most significant indicator for the development level of states.

Developments in the way of economic production made the Industrial Revolution a reality at the beginning of the 19th century. Coal was the main source of energy in the process leading up to the Industrial Revolution. After the invention of steam engines, coal as the crucial source of energy was replaced by oil. In fact, for the British Navy oil was a strategic commodity during World War I. From the early twentieth century on, energy sources such as oil and natural gas have played a major role in the formulation of foreign policies, especially for the major world Powers.

The issue of energy security has emerged in the 1970s when some nations’ access to oil was blocked. This was the era of oil shocks that emerged for two basic reasons: the Arab states’ policies for the nationalization of oil supplies and oil industry, and the Arab-Israeli wars that started with the UN decision on Palestine and occurred in 1948, 1956, 1967, and 1973.

The Middle East, Latin America, the Arctic and the Pacific are critical geographical areas not only because they have almost four-fifths of fossil energy resources but also control the flow of energy, world trade routes, strategic straits, and maritime routes.

One may conclude that if the states that dominate the energy resources also dominate the world politics. Therefore, energy and energy policies have an important place in national and international security policies. Many academic studies emphasize that security concerns and threats arise because of the disagreement in managing or sharing the energy resources.

There is not one single definition of energy security. However, energy security is closely related to products such as electricity, gas, fuel oil are that affect the economic well-being of states, national and foreign policies as well as the welfare of the individual.

Although the continuity of energy services falls in the scope of energy security, the Asia Pacific Energy Research Center (APERC) has made an effective attempt to determine the components of energy security. In a 2007 study, it listed these components as follows: energy efficiency, availability, accessibility, affordability, and sustainability.

Energy security can be further studied from three perspectives: the security of the energy supply, the energy demand security, and the energy transfer safety.

International Institutions and Managing the Energy Securıity

As Wheeler stated, “energy security has been a hot topic of discussion in global capitals and amongst many influential international/intergovernmental organizations for at least a decade. However, despite these extensive discussions, there does not seem to be a consensus for a common understanding of energy security.

The Group of Seven (G7)

The Group of Seven ( G-7) is a forum of the world’s seven most industrialized economies. G-6 was formed in 1975 by France, Germany, Italy, Japan, the United States, and the United Kingdom. Canada was invited to join this group in 1976 that eventually created the Group of Seven. In 1998, the Russian Federation (RF) was accepted by the G-7 countries as a full member, transforming G-7 into the Group of Eight ( G-8 ). However, in 2014, Russia was suspended from G-8 after it had annexed Crimea and created tensions with Ukraine.

“The G-7’s major role is to discuss and resolve global problems. The seven nations represent approximately 50 percent of the global economy.

G-7 has recognized the key role of the energy transition through the development of new markets for clean energy and through non-market-distortive support measures. The enhancement of research and development of innovative technologies are crucial for the future, recognizing that both economic growth and environmental protection could be achieved. The Group of Seven has also continued investing in the energy sector, particularly in promoting the quality of energy infrastructure, upstream development, low emissions, and low carbon technologies.

Ensuring open, transparent, and secure global markets for energy resources and technologies remains a top priority for the G7 countries.

While underlining the strategic role of the existing transit routes for gas deliveries to Europe, the G7 countries agreed to continue to promote gas security through the diversification of sources and routes of supply.

The Group of 20 (G-20)

G-20 “started out in 1999 as a meeting of finance ministers and central bank governors. In 2008, amidst the global financial crisis, it evolved into what it is today: a major forum for dialogue and decision-making attended by world leaders from vital economies. Together, the G20 members represent 85% of global GDP, two-thirds of the world’s population, and 75% of international trade”

G20 acknowledges “the crucial role of energy in shaping the future, within different national circumstances as well as the need for persistent actions to address global challenges, including climate change and energy security.”

The G20 member countries recognize that they have different possible pathways to achieve cleaner energy systems, while promoting sustainability, resilience, and energy security. Each member country, in accordance with its stage of development, has a unique and diverse energy system as a starting point, with different energy resources, demand dynamics, technologies, stock of capital, geographies, and cultures.

The World Energy Council

The World Energy Council is “the oldest energy-related global organization and principal impartial network of leaders and practitioners promoting an affordable, stable and environmentally sensitive energy system for the greatest benefit of all. Formed in 1923, the Council is the UN-accredited global energy body, representing the entire energy spectrum, with more than 3000-member organizations located in over 90 countries and drawn from governments, private and state corporations, academia, NGOs and energy-related stakeholders.

“The World Energy Council’s definition of energy sustainability is based on three core dimensions: energy security, energy equity, and environmental sustainability. These three goals constitute a ‘trilemma’ , entailing complex interwoven links between public and private actors, governments and regulators, economic and social factors, national resources, environmental concerns, and individual behaviors. The ‘Energy Trilemma’ provides a clear framework to deliver the energy transformation and make sustainable energy systems a reality”

“The Council’s definition of a robust (i.e. timely, well managed and global) energy transition reflects the challenge of balancing: energy security, energy equity, and environmental sustainability.

Energy security will be strengthened by increasing the production of oil and natural gas, reducing dependence on imports gas and oil products. As such, the energy supply will be more diversified with increased generation of renewable sources such as solar, wind, and biomass.

The Organization of the Petroleum Exporting Countries (OPEC)

OPEC is a permanent intergovernmental organization that was formed at the Baghdad Conference , held on September 10-14, 1960, by Iran, Iraq, Kuwait, Saudi Arabia, and Venezuela. Today, with 14 Member Countries, “OPEC’s objective is to co-ordinate and unify petroleum policies among Member Countries, in order to secure fair and stable prices for petroleum producers; an efficient, economic and regular supply of petroleum to consuming nations; and a fair return on capital to those investing in the industry”.

In the last 60 years, the oil market has remained adequately supplied thanks to OPEC.

“OPEC rose to international prominence during the 1970s, as its Member Countries took control of their domestic petroleum industries and acquired a major say in the pricing of crude oil on world markets”.

The global economy posed a major risk to the oil market in the early 2010s, “as global macroeconomic uncertainties and heightened risks surrounding the international financial system weighed on economies.

The International Energy Agency (IEA)

The IEA “works to ensure reliable, affordable and clean energy for its 30 member countries and beyond. Its mission is guided by four main areas of focus: energy security, economic development, environmental awareness and engagement worldwide. The history of the IEA began with the 1973-1974 Middle East War crisis and its immediate aftermath. While oil producing countries appeared relatively well organized to utilize their new oil based economic and political power , many OECD countries found themselves inadequately equipped with the information and organization necessary to meet the corresponding challenges”.

“For the most part, these countries permitted excessive and even wasteful and inefficient use of energy - and of oil in particular.

“The policy and institutional lessons of the crisis led swiftly in November 1974 to the establishment of the IEA with a broad mandate on energy security and other questions of energy policy co-operation among Member countries.

The IEA has evolved and expanded over the decades. “Today, the IEA is at the heart of global dialogue on energy, providing authoritative analysis through a wide range of publications, including the flagship World Energy Outlook and the IEA Market Reports; data and statistics, such as Key World Energy Statistics and the Monthly Oil Data Service; and a series of training and capacity building workshops, presentations, and resources”.

The International Energy Forum (IEF)

The IEF “aims to foster greater mutual understanding and awareness of common energy interests among its members. The 72 member countries of the Forum are signatories to the IEF Charter, which outlines the framework of the global energy dialogue through this inter-governmental arrangement. Covering all six continents and accounting for around 90% of global supply and demand for oil and gas, the IEF is unique in that it comprises not only consuming and producing countries of the IEA and OPEC, but also Transit States and major players outside of their memberships.

The International Renewable Energy Agency (IRENA)

IRENA is an “intergovernmental organization that supports countries in their transition to a sustainable energy future, and serves as the principal platform for international cooperation, a center of excellence, and a repository of policy, technology, resource and financial knowledge on renewable energy. IRENA promotes the widespread adoption and sustainable use of all forms of renewable energy, including bioenergy, geothermal, hydropower, ocean, solar and wind energy in the pursuit of sustainable development, energy access, energy security and low-carbon economic growth and prosperity.

The International Energy Charter

The International Energy Charter is a “declaration of political intention aiming at strengthening energy cooperation between the signatory states;” however, the Charter “does not bear any legally binding obligation or financial commitment. It maps out common principles for international cooperation in the field of energy.

The Energy Community

The Energy Community is an “international organization which brings together the European Union and its neighbors to create an integrated pan-European energy market. The key objective of the Energy Community is to extend the EU internal energy market rules and principles to countries in South East Europe, the Black Sea region and beyond on the basis of a legally binding framework.

The North Atlantic Treaty Organization (NATO)

“The disruption of energy supply could affect the security of their societies and have an impact on NATO ’s military operations. While these issues are primarily the responsibility of national governments, NATO continues to consult on energy security and further develops the capacity to contribute to energy security, concentrating on areas where it can add value.

“NATO’s role in energy security was first defined in 2008 at the Bucharest Summit , and since then this role has been strengthened. Energy security is a vital element of resilience and has become more important in the past years due to the new security context.

In the future NATO will seek to further enhance the strategic dialogue, both among Allies and with partner countries, offer more education and training opportunities, and deepen its ties with other international organizations (such as the International Energy Agency), academia, and the private sector.

The Organization for Security and Co-operation in Europe (OSCE)

“Economic and environmental activities incorporate energy security, including the promotion of renewable energy and energy efficiency. As a pan- European and trans-Atlantic platform , the OSCE supports an energy security dialogue among its participating States and other international bodies that deal with energy issues”. “Energy security requires well-functioning international energy markets, stable consumer producer relations, sustainable production and resilient critical energy networks. The OSCE as the world’s largest regional security organization unites some of the world’s most important energy producer, consumer and transit countries”.

The International Atomic Energy Agency (IAEA)

IAEA is “the world’s central intergovernmental forum for scientific and technical co-operation in the nuclear field. It works for the safe, secure and peaceful uses of nuclear science and technology, contributing to international peace and security and the United Nations’ Sustainable Development Goals”.

The Agency also seeks to “accelerate and enlarge the contribution of atomic energy to peace, health and prosperity throughout the world.

UN-Energy

UN-Energy is the United Nations’ mechanism for interagency collaboration in the field of energy. UN-Energy was established in 2004 to “help ensure coherence in the UN system’s multidisciplinary response to the World Summit on Sustainable Development (WSSD), and to ensure the effective engagement of non-UN stakeholders in implementing WSSD energy-related decisions”. The main mission of UN-Energy is “to be the primary agent within the UN for promoting system-wide collaboration in the area of energy, since there is no single entity in the United Nations system that has dedicated responsibility for energy.”

The United Nations Economic Commission for Europe (UNECE)

UNECE was set up in 1947 by ECOSOC. UNECE is “one of five regional commissions of the United Nations. UNECE’s major aim is to promote pan-European economic integration” (www.unece. org). UNECE’s work on sustainable energy is designed to improve access to affordable and clean energy for all and help reduce greenhouse gas emissions and the carbon footprint of the energy sector in the region.

The United Nations Economic and Social Commission for Asia and the Pacific (ESCAP)

ESCAP is “the regional development arm of the United Nations for the Asia-Pacific region. ESCAP works to overcome some of the region’s greatest challenges by providing results-oriented projects, technical assistance and capacity building to member States in the following areas: Macroeconomic Policy, Poverty Reduction and Financing for Development; Trade, Investment and Innovation; Transport; Environment and Development; Information and Communications; Technology and Disaster; Risk Reduction; Social Development; Statistics; Sub regional activities for development; Energy.”

Other Energy Related Organizations

There are some other organizations that deal with the management of energy issues and contribute to managing energy security. Among others, the following organizations stand out: the United Nations Industrial Development Organization (UNIDO), the United Nations Development Program (UNDP), the United Nations Environment Program (UNEP), the World Bank Group, the Global Environment Facility (GEF), and the OPEC Fund for International Development (OFID).

An Overvıew of Energy Issues Through Global and Regional Regimes

In the third year in a row, global energy investment decreased, falling to 1.8 trillion US Dollars in 2017 – a 2% decline in real terms from the previous year. Energy efficiency and investment increased in some industries in 2017, including upstream oil and natural gas. Nevertheless, capital expenditure in fossil fuel supply remained at two-thirds of 2014.

China conquered one-fifth of the global energy sum and continued to be the biggest target of the energy inventory. In addition, the US strengthened its position as the second largest investor in the oil and natural gas sector, thanks to a sharp rebound in gas-fired plants and electricity networks (USGS, 2018).

Europe’s share in global energy investment was around 15%, and there was a modest increase in renewable energy investments, with an increase in spending on energy efficiency and decreases in thermal production (EUP2G, 2018).

Clean energy supply investment in the energy sector is rapidly increasing. In 2017, clean energy sources in production investments (renewable and nuclear) account for over 70%. This rate is less than 50% compared to ten years ago, but it is driven by coal-fired power (IEA, 2018c).

The US continued to be the largest market for energy grid investment after China. Toward increasing the flexibility of energy systems and supporting the integration of renewable resources, investments have been increased in technologies (IEA, 2016).

“Despite the more-than-doubling of thermal coal prices since early 2016, investment in coal supply declined by 13% in 2017 to just below USD 80 billion, mainly due to reduced spending in China.

In 2018, global investments both in shale gas and LNG are expected to reach almost a quarter of total upstream costs.

Electric batteries are expanding into the energy sector, but their impact will depend on cost trends that are largely affected by investments outside the energy sector. The investment in lithium mining has increased almost ten times since 2012, and the investment in battery production capacity has increased more than five times (ANL, 2018).

Threats to Energy Security

During the second half of the 20th century, the structure of the international system went through significant changes. The most influential ones in terms of geopolitics can be listed as follows: the emergence of the “energy security” concept in 1970s, the disappearance of the Soviet Union from the international arena in 1991, and finally, the advancement of globalization at a very quick pace.

Energy Security and Global Power

Energy is one of the most pressing needs of the modern and heavily industrialized world. Although there are many definitions of energy, it is not possible to communicate the importance of this concept in a few sentences, because energy is directly related to the multi-dimensional concept of power. Power has many dimensions such as economic power, military power, and political power.

Therefore, energy has also implications for one state’s economy, domestic politics, technology, and security policies.

It is also important to mention that there are different approaches to energy security. For example, Russia is focusing on reviving the energy geopolitics, whereas the USA concentrates on energy imperialism .

International Relations theories attempt at explaining the interactions among various actors such as nation-states, international organizations and multinational corporations. The main concerns of these actors (such as power, security, economic, military, social, political interests) shape and shove the international system.

Realism was the dominant theory throughout the Cold War years and it provided comprehensive explanation for conflict and war in the system, power struggle, obstacles to cooperation as well as the American-Soviet rivalry. Realism has many variations (Walt, 1998, 31). Among others, the following versions of realism stand out: classical realism, neo-realism (structural realims), offensive realism, and defensive realism.

The Impact of Global Threats on Energy Security

During the Cold War era, the superpowers competition determined the overall direction of global affairs. In the aftermath of World War II, the US and the Soviet Union formed a bipolar order that had worldwide repercussions. Throughout the Cold War, the world witnessed many regional conflicts, from the Horn of Africa to Cuba and from Czechoslovakia to Vietnam.

The issue of energy security emerged during and shortly after the oil crises in the 1970s. Since then, the concept of energy security has begun to gain more and more importance.

For example, prior to 1973 energy policy was not a major concern for the US government or American citizens thanks to the abundant and inexpensive energy supplies (Thompson, 1983, 97). However, this situation changed after the supply shortages and price shocks of 1973.

Certainly, political risks and the negative economic consequences of reliance on foreign energy sources were obvious at that time. With the end of the Cold War, the US emerged as the only superpower- the only power that was capable of creating a new world order.

The US is planning to meet all its energy needs from domestic resources by 2035. Toward this objective, the US is increasing its oil and natural gas production (BP, 2018, 28). In fact, the USA achieved a 5.6 % increase in oil production and recently it has become the largest oil producer (BP, 2018, 14). However, the significant amount of undiscovered oil and natural gas reserves presents a challenge for the Russian-US relations.

Due to the huge energy import of European Countries from Russia, many Central and East European countries fear that Russia may use this energy dependency as a leverage to interfere in their domestic affairs or force them to make foreign policy concessions (Woehrel, 2010, 410). Therefore, the EU has defined some policies toward Russia to improve the bilateral relations from three dimensions: political, economic, and normative.

Given the Russian energy policies toward the EU countries, it is clear that Russia has had specific energy policies for each member state. As the European countries are the primary export market for Russia, it has developed several strategies and scenarios such as fast development of gas production and pipeline capacity that is mainly associated with its long-term gas strategy.

The Emerging Energy Security Issues

Today, shale gas accounts for a significant portion of US natural gas production. The shale gas production may account for about half of US gas output by 2040 (Medlock, 2010, 27, 28, 33). In 2012, the US became the top gas producer in the world, and many major LNG exporters that had spent years in building business plans around a US import market found themselves in a different position. The Forecasts in 2006 predicted that most of the potential US LNG imports would come from suppliers in the Persian Gulf; however today any such dependence has been eliminated (EIA, 2018).

Asia remains a growing consumer, particularly with China’s latest Five-Year Plan calling for an increase in natural gas usage. Japan has been replacing the nuclear capacity with gas-fired plants. Indonesia is committed to increasing the use of gas for power generation as well as in road vehicles and ships. Despite the opportunity for American businesses, how much of the Asian demand will be met by US gas reserves remains an open question.

Energy security is becoming a truly strategic issue, with numerous implications for international security. Even without the concerns arose by the current crises, the political, economic and security challenges surrounding the energy supply of many countries are profound.

Over the past years, however, state’s energy security agenda has become more systematic and focused on the following three major areas: raising strategic awareness of energy developments that have security implications, contributing to the protection of critical energy infrastructure, and enhancing energy efficiency in the military.

The developments in the energy sector affect the international security environment and have implications for states’ security interests. For example, the American shale gas “revolution” and growing volumes of LNG shipped worldwide may raise new maritime security concerns.

The growing energy concerns in international relations suggest that energy security may become a part of national education and training programs.

“Energy infrastructure is a critical part of global energy security, and is subject to a number of vulnerabilities. Around half of the total world oil production is transported by oil tankers on fixed maritime routes, many of which have to pass critical choke points.

As most states depend on energy imports, they have a vested interest in the security of energy infrastructure in the producing countries or transit countries. Accordingly, sharing best practices on the protection of critical energy infrastructure remains an important method for international cooperation on energy security.