The geopolitics of energy resources
Energy has been the defining factor in human development and determining factor in the hegemonic structure of world politics. The fundamental role of coal and steam, as key ingredients of the Industrial Revolution, and global control of their trade in the 18th and 19th century by the British Empire led the way for its hegemony in international politics. In the 20th century, oil has become the defining raw material, and control of its production and trade jump-started U.S. hegemony. Recent developments and technical innovations in the energy realm require a reassessment of the situation.
The current trend in energy supply and demand still favors fossil fuels – i.e. coal, oil and natural gas- with 80 percent of global energy use. This dominance is expected to continue for the foreseeable future even though investments in nuclear, hydro and renewable energy sources are increasing. BP Energy Outlook predicts that fossil fuels will protect their current share in energy production and use by 2035.
The most striking developments in recent years have been the discovery of shale formations across the world and the transformation of natural gas into its liquefied form (LNG). Gas has been the fastest growing fossil fuel in the last 20 years. In comparison, oil continues to have steady growth while coal production has declined. Even though the conventional production and usage of gas still dominates today’s markets, the flexible and practical LNG trade is likely to surpass it by 2035. The discovery of shale petroleum, on the other hand, has already started to change the patterns in global markets.
Energy is a highly strategic determinant beyond its commercial and economic aspects. As a result, great powers have been competing each other to sustain their strategic interests and political gains. While the U.S. has successfully positioned itself as the guardian of the free flow of energy since the Arab oil embargo of 1973, Russia has become more aggressive in recent years in using its energy card for political leverage.
The U.S. is an important actor in both energy production and consumption, and it has been trying hard to be self-sufficient since the 1970s. The recent discoveries of shale resources have enabled it to attain such a position, should it wish to have it. It is now also possible that the U.S. could become a major energy exporter.
The U.S.’ decreasing dependency on imported hydrocarbons has already produced results in global politics, allowing it to focus more on Southeast Asia instead of the Middle East for the first time in decades. The results so far are mixed, but the trend is unmistakable. Although it still emphasizes its commitment for the free flow of energy, especially considering the huge imported energy dependency of its allies, the changing policy line is already showing its effects in world politics: Look at Syria-Iraq and Ukraine.
As one of the leading producers/exporters of energy, it is integral part of the Russian economy, regime, foreign policy and strategic calculations. Thus Russia is active in playing the energy card as a geopolitical tool to extend and/or maintain its influence in its near abroad. With its strategic positioning and infrastructure, Russia controls huge natural gas markets across in Europe and Eurasia. Western sanctions following Russian occupation of Crimea and a decline in oil prices negatively affected Russia. Moreover, the U.S. outstripped it as producer with its recent discovery of shale gas, but Russia was still markets with recent agreements with China and India, balancing the U.S. in the global energy market. No doubt, the increasing demand of India and China, as well as their policies, will be decisive in the future positioning of Russia and the U.S., in addition to shaping the global energy market.