Foreign policy and energy needs

IT is something of an understatement that the foreign policy of nations is heavily influenced by global energy needs. The geographical factor alone emphasises this. Petroleum reserves are extremely localised in their existence. Less than 10 countries hold over 85 per cent of the total global oil and gas reserves.

Securing the desired level of supplies from petroleum-rich countries is therefore at the heart of tough realpolitik, for a number of countries (particularly major global economic and military powers) with rare exceptions are energy deficient. Alliances are formed not with those that are liked, but with those that are needed to meet ever-growing energy requirements.

The pivotal role of energy in the architecture of foreign policy is a phenomenon that surfaced for the first time with the advent of the 20th century. By that time, there was broad realisation of the economic benefits of oil and a desire to control oil resources had begun to feature in western politics.

Just before the First World War, Britain’s decision in 1912 to convert its battleships to run on oil in order to maintain naval hegemony gave birth to a new geopolitical age. The switch-over from coal to oil, the latter a fuel that did not exist inside Britain unlike coal, was a strategic move that demanded a secure supply of oil. Winston Churchill substantiated this in the following terms: “We must become the owners, or at any rate the controllers at the source, of at least a proportion of the oil which we require.”

The vigorous pursuit of oil thus became an important feature of the British campaign in several parts of the world. The same year Britain bought the controlling rights of the Anglo-Persian Oil Company. Having discovered oil in Iran in 1908, the company was formed in 1909 as a subsidiary by another British company, namely Burmah Oil Company.

The powerful role of oil in the make-up of international relations became more evident after the First World War that significantly changed the geopolitical landscape. Apart from Britain and France, a number of other emerging powers including Russia, the US and Japan paid special attention to establishing ties with oil-rich countries. The conclusion of the Second World War presented the US, arguably the most powerful nation, a status that it has maintained thus far.

On the eve of the Second World War the US was self-sufficient in its energy requirements producing over 60 per cent of the world’s oil. With demand on the rise globally, US policymakers were aware of the intense competition for oil in the years ahead. Immediately after the war, the US started manoeuvring to replace the influence in the Middle East of Britain and France, both greatly weakened by the war, by its own. Washington’s motives in this regard not only aimed to contain Russia and become the predominant power but also to be the principal beneficiary of oil wealth. A top US State Department official in 1945 substantiated US policy in this regard: “A review of the diplomatic history of the past 35 years will show that petroleum has historically played a larger part in the external relations of the United States than any other commodity.”

The second half of the last century also witnessed a number of oil-driven geopolitical moves in the world. Although helping strengthen ties among nations, oil also contributed to triggering numerous frictions and conflicts. The use of oil as a weapon during the Arab oil embargo of 1973 — second in history after the US embargo on Japan in 1941 — and Iraq’s invasion of Iran (1980) and Kuwait (1990) are some of the leading paradigms.

The nominated trade secretary in the US president-elect Barack Obama’s cabinet, Bill Richardson, who also served as the secretary of energy with Bill Clinton, in 1999 reflected upon oil’s importance during the last century in the following terms: “Oil has literally made foreign and security policy for decades. Just since the turn of this century, it has provoked the division of the Middle East after World War I; aroused Germany and Japan to extend their tentacles beyond their borders; the Arab oil embargo; Iran versus Iraq; the Gulf War. This is all clear.”

The unfolding geopolitical landscape of the 21st century appears to have an even more prominent role in petroleum resources than that of the last century. Along with oil, gas is also set to become a coveted commodity. Sino-US ties are already under stress over the growing competition for petroleum reserves. For almost a decade now, in order to satisfy its rapidly growing energy requirements, China has been proactively pursuing the goal of increased shares in petroleum resources. In China’s foreign policy towards many parts of the world, particularly Africa, the Middle East and the Caspian Sea region, oil holds a critical status. China’s vibrant policies in these regions are being watchfully monitored in Washington.

Alongside the US and China, there are a few other proactive players on the chessboard of the future energy world. Russia, for instance, holding the largest gas reserves and seventh-largest oil reserves in the world, has emerged as an energy superpower. Particularly in Europe, that imports almost half of its natural gas and 30 per cent of its oil requirements from Russia, there is a growing degree of apprehension that the Kremlin may try to ride on its rich petroleum reserves to regain the powerful status it held during the time of the former USSR.

European countries were reminded of the strong Russian position during the recent Georgia-Russia conflict. Despite a strong push from various member states, the European Union could not impose sanctions on Russia, thanks to Germany that snubbed the proposal for sanctions warning against the dire energy crisis the move would have triggered.

By Dr M. Asif
The writer is a lecturer in renewable energy at the Glasgow Caledonian University, UK.