Energy

2012 World Proved Reserves(billions of barrels)

 • >200• Saudi Arabia  (267.0)Venezuela  (211.2)•  • 100-200• Canada (173.6) Iran(151.2) Iraq (143.1)Kuwait (104.0)•  • 50-100• United Arab Emirates(97.8) Russia (60.0)•  • 25-50• Libya (47.1) Nigeria(37.2) Kazakhstan (30.0)United States (26.5)Qatar

 (25.4)•  • 10-25• China (20.4) Brazil (14.0)Algeria (12.2) Mexico(10.4)

Natural gas (proved reserves, BP, 2012)

Russia % 18Iran % 17,6Qatar % 13,4Turkmenistan % 9,3The US % 4,5Saudi Arabia % 4,4

Natural gas production• The US % 20,4 681 bln cm• Russia % 17,6 592 bln cm• Iran % 4,8• Qatar % 4,7• Canada % 4,6• Saudi Arabia % 3• Norway % 3,4• China % 3,2• Algeria % 2,4• Indonesia % 2,1• Turkmenistan % 1,964 bln cm• Uzbekistan % 1,7 57 bln cm

• American energy security• European energy security• Chinese energy security• Russian energy security

Question (10 min, 15.23)

• Summarize the main ideas of the assigned reading about energy security and China.

• Since the nineteenth century, Britain had exercised significant influence over the southern coast of the Persian Gulf. After the Second World War, the British Empire went into decline.

• Yet even following the independence of India in 1947 and the Suez Crisis in 1956 Britain’s exclusive influence over the Persian Gulf did not change.

• The Persian Gulf and its surrounding lands provided half of the oil supply used in the western world outside North America.

• Although the protected states accounted for less than 10 per cent of the oil produced in the Gulf, maintaining the stability of the region was vital in order to secure the oil supply.

• Britain had its forces in protected states: Bahrain, Qatar, today’s United Arab Emirates

• In 1968 Britain announced that it will withdraw all of its forces by 1971.

• Accordingly, in 1971, the protected nine states emerged into international society under the names of Bahrain, Qatar and the United Arab Emirates.

• After the withdrawal was completed, Britain maintained a low profile in the region, although it continued to wield a significant degree of influence.

• 1949, NSC concluded that the Middle East is “critically important to American security”, the US should “promote pro-Western ties to prevent Soviet penetration ofthe region”.

Nixon Doctrine

• The Nixon Doctrine (also known as the Guam Doctrine) was put forth in a press conference in Guam on July 25, 1969 by U.S. President Richard Nixon. He stated that the United States henceforth expected its allies to take care of their own military defense, but that the U.S. would aid in defense as requested. The Doctrine argued for the pursuit of peace through a partnership with American allies.

• The doctrine was also applied by the Nixon administration in the Persian Gulf region, with military aid to Iran and Saudi Arabia. According to author Michael Klare,[application of the Nixon Doctrine "opened the floodgates" of U.S. military aid to allies in the Persian Gulf, and helped set the stage for the Carter Doctrine and for the subsequent direct U.S. military involvement of the Gulf War and the Iraq War.

The Carter Doctrine

• The Carter Doctrine was a policy proclaimed by President of the United States Jimmy Carter in his State of the Union Address on January 23, 1980, which stated that the United States would use military force if necessary to defend its national interests in the Persian Gulf.

• It was a response to the Soviet Union's invasion of Afghanistan in 1979, and was intended to deter the Soviet from seeking hegemony in the Gulf.

• “Let our position be absolutely clear: An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.”

1903 British declaration

• British Foreign Secretary Lord Landsdowne warned Russia and Germany that the British would "regard the establishment of a naval base or of a fortified port in the Persian Gulf by any other power as a very grave menace to British interests, and we should certainly resist it with all the means at our disposal"

Chinese energy policy

• Alternative sources of energy• Alternative suppliers• Alternative routes of supply• Domestic sources: coal• Nuclear power• Renewable energy

Russian energy strategy

• Centralisation • Diversification of transportation routes and

clients• Long-term agreements• Dominating in all stages of energy export

chain: from extraction, transportation and production of fuels to final consumption

• Russia holds the world's largest proven reserves of natural gas and continually alternates with Saudi Arabia as the top oil producer. The country supplies a third of Europe's oil and natural gas and is starting to export more to the energy-hungry East Asian markets.

• The energy sector has been one of the pillars of Russia's stabilization and increasing strength for more than a century. The Kremlin has designated energy security as the primary issue for Russia's national security.

• Energy export revenues for the Russian Empire began flowing into government coffers in the late 1800s, with oil export revenues making up 7 percent of the export earnings. These revenues rose to 14 percent in the late 1920s during the early stages of the Soviet Union, and by the 1950s accounted for half of Soviet export earnings.

• Currently, energy revenues make up half of the government's budget. This capital influx was and continues to be instrumental in helping Russia build the military and industrial basis needed to maintain its status as a regional -- if not global -- power. However, as the Russian governments became dependent on energy, the revenues also became a large vulnerability.

• Russia's modern energy strategies began forming after World War II. With the Soviet Union left standing as one of two global hegemons towering over a divided Europe, Moscow saw no barriers to achieving dominance in the global energy field. Between the 1950s and 1960s, Soviet oil output had doubled, making the Soviet Union the second-largest oil producer in the world and primary supplier to both Eastern and Western Europe. Revenues from oil exports started to make up nearly half of Soviet export income.

• But the Soviets were dealt a double blow in the mid-1980s when the price of oil collapsed and the West imposed an embargo on Soviet oil, prompting Saudi Arabia to flood the oil markets.

• The energy liberalization that started under Mikhail Gorbachev in the 1980s was taken to an extreme under Boris Yeltsin in the 1990s. As a result, production fell by half and the Russian energy sector was divided between foreign groups and the emerging Russian oligarch class.

• This changed under Vladimir Putin in 2000. One of the first items on Putin's agenda to help stabilize the country was to consolidate the energy sector under state control.

• The government effectively nationalized the majority of the energy sector under three state behemoths: Gazprom, Rosneft and Transneft. The Kremlin became more aggressive in negotiating supply contracts with the former Soviet states and Europe, locking them into large volumes at extraordinarily high prices because these customers had no alternative energy supplies.

• The construction of the Ust-Luga oil terminal on the Baltic Sea allows Russia to largely bypass the Belarus pipeline system and ship crude and oil products directly to its consumers.

• The construction of the Nord Stream natural gas pipeline under the Baltic Sea -- and eventually its southern counterpart, South Stream, through the Black Sea -- will allow Russian natural gas to bypass the Ukrainian and Belarusian transit systems if necessary.

• These two pipelines primarily will ensure natural gas deliveries to the major European consumer markets in Germany and Italy, with which Russia seeks to maintain long-term strategic partnerships.

• The Russian energy ministry released a draft energy strategy to 2035, which forecasts that 23% of all energy exports will be sent to the Asia-Pacific region by 2035.

Russian energy strategy

• Centralisation • Diversification of transportation routes and

clients• Long-term agreements• Dominating in all stages of energy export

chain: from extraction, transportation and production of fuels to final consumption

World oil chokepoints

• World oil chokepoints for maritime transit of oil are a critical part of global energy security. About half of the world's oil production moves on maritime routes.

• Chokepoints are narrow channels along widely used global sea routes, some so narrow that restrictions are placed on the size of the vessel that can navigate through them. They are a critical part of global energy security due to the high volume of oil traded through their narrow straits.

• By volume of oil transit, the Strait of Hormuz, leading out of the Persian Gulf, and the Strait of Malacca, linking the Indian and Pacific Oceans, are two of the world's most strategic chokepoints.

• The blockage of a chokepoint, even temporarily, can lead to substantial increases in total energy costs. In addition, chokepoints leave oil tankers vulnerable to theft from pirates, terrorist attacks, and political unrest in the form of wars or hostilities as well as shipping accidents that can lead to disastrous oil spills.

Strait of Hormuz

• Located between Oman and Iran, the Strait of Hormuz connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. The Strait of Hormuz is the world's most important oil chokepoint due to its daily oil flow of about 17 million bbl/d in 2011, up from between 15.7-15.9 million bbl/d in 2009-2010. Flows through the Strait in 2011 were roughly 35 percent of all seaborne traded oil, or almost 20 percent of oil traded worldwide. More than 85 percent of these crude oil exports went to Asian markets, with Japan, India, South Korea, and China representing the largest destinations.

• At its narrowest point, the Strait is 21 miles wide, but the width of the shipping lane in either direction is only two miles, separated by a two-mile buffer zone.

• Most potential options to bypass Hormuz are currently not operational. Only Iraq, Saudi Arabia, and the United Arab Emirates (UAE) presently have pipelines able to ship crude oil outside of the Gulf, and only the latter two countries currently have additional pipeline capacity to circumvent Hormuz. At the start of 2012, the total available pipeline capacity from the two countries combined, which is not utilized, was approximately 1 million bbl/d.

Strait of Malacca

• The Strait of Malacca, linking the Indian and Pacific Oceans, is the shortest sea route between the Middle East and growing Asian markets.

• Oil shipments through the Strait of Malacca supply China and Indonesia, two of the world's fastest growing economies. It is the key chokepoint in Asia with an estimated 15.2 million bbl/d flow in 2011, compared to 13.8 million bbl/d in 2007. Crude oil makes up about 90 percent of flows, with the remainder being petroleum products.

• At its narrowest point in the Phillips Channel of the Singapore Strait, Malacca is only 1.7 miles wide creating a natural bottleneck, as well as potential for collisions, grounding, or oil spills. According to the International Maritime Bureau's Piracy Reporting Centre, piracy, including attempted theft and hijackings, is a constant threat to tankers in the Strait of Malacca, although the number of attacks has dropped due to the increased patrols by the littoral states' authorities since July 2005.

Turkish Straits• Increased oil exports from the Caspian Sea region make the Turkish Straits

one of the busiest and most dangerous chokepoints in the world supplying Western and Southern Europe.

• An estimated 2.9 million bbl/d flowed through the Turkish Straits in 2010, almost all of which was crude oil. The ports of the Black Sea are one of the primary oil export routes for Russia and other former Soviet Union republics. Oil shipments through the Turkish Straits decreased from over 3.4 million bbl/d at its peak in 2004 to 2.6 million bbl/d in 2006 asRussia shifted crude oil exports toward the Baltic ports. Traffic through the Straits increased again as crude production and exports from Azerbaijan and Kazakhstan rose in recent years.

• Only half a mile wide at its narrowest point, the Turkish Straits are one of the world's most difficult waterways to navigate due to its sinuous geography.

Danish Straits

• About 3 million bbl/d flowed through this waterway in 2010, with most of this flowing westwards. Russia has increasingly been shifting its crude oil exports to its Baltic ports, especially the relatively new port of Primorsk, which accounted for half of the exports through the Straits.

Obama’s “Pivot to Asia”: Australia Central to American War Plans Against China

• A lengthy report released in November 2013 by the US-based think tank, the Centre for Strategic and Budgetary Assessments (CSBA), provides a detailed assessment of Australia’s central strategic role in the Pentagon’s preparations for war with China.

• The CBSA bills itself as independent and non-partisan, but is closely connected to the American military establishment, receiving the bulk of its funds through Department of Defense research projects.

• It was prominently involved in drawing up the Pentagon’s AirSea Battle strategy for war against China—a devastating missile and air attack on the Chinese mainland aimed at destroying its communications and military infrastructure, supplemented by an economic blockade to cut off vital Chinese imports of energy and raw materials from Africa and the Middle East.

• The US military build-up in the Indo-Pacific region is an integral component of the Obama administration’s “pivot to Asia”—an all-sided diplomatic, economic and strategic offensive aimed at undermining Chinese influence throughout the region and encircling China militarily.

• Australia’s importance was underscored when Obama chose to formally announce the “pivot” or “rebalance” in the Australian parliament in November 2011, and signed an agreement to station US Marines in the northern city of Darwin and open up Australian naval and air bases to American forces.

• The CBSA states: “The United States’ decision to rebalance towards Asia has had a sizeable impact on the Australia-US alliance… Australia’s strategic geography, well-trained armed forces, and highly regarded intelligence complex renders it an increasingly invaluable partner to the United States. Much as Washington’s close alliance with London provided the United States with a strategic vantage point over Europe throughout the troubled 20th century, America’s strong ties with Australia provide it with the means to preserve US influence and military reach across the Indo-Pacific.”

Pay No Attention to that Panda Behind the Curtain

It doesn't matter what Obama says -- his Asia trip is all about China

Stephen walt, FOREIGN POLICY.COM

• This trip, like so many others, takes place amid doubts about U.S. credibility. If the United States and NATO don't do more to help Ukraine, what does that say about our commitment to uphold current territorial arrangements in the South or East China Seas? (Answer: not much, but many people seem to think it does.) But if the United States does do more regarding Ukraine (or Syria), what does that tell U.S. allies about its ability to make Asia a bigger priority and to stick to those priorities when crises emerge elsewhere? No matter what the United States does, its Asian partners are going to raise questions about Washington's staying power and strategic judgment.

• Frankly, this recurring discussion about U.S. credibility -- including the sincerity of the pivot and the subsequent rebalance -- strikes me as silly. For starters, the United States is still the most powerful military actor in the world -- including Asia -- and it will be for some time to come. One can wonder about the regional balance of power at some point in the future, but not right now. And if China's increased military power is really so alarming, why are countries like Japan, South Korea, and Australia doing so little to bolster their own military capabilities? Either they aren't as worried as they pretend, or they have become accustomed to assuming Uncle Sam will take care of them no matter what. It seems to be easier to complain about U.S. credibility than to dig deep and buy some genuine military capacity.

• More than anything else, Obama needs to spend his time in Asia explaining to officials there why it is in the U.S. interest to maintain its security position in Asia. This policy is not an act of strategic philanthropy; it is rooted in U.S. self-interest, geopolitics, and America's longstanding desire to be the only regional hegemon in the world. If China continues to rise and develop its military power, it might one day be in a position to strive for regional hegemony in Asia. The United States would like to prevent this, because a balance of power in Asia forces Beijing to focus a lot of attention on regional affairs and prevents it from meddling in other parts of the world (including the Western hemisphere). It's impolitic to say this out loud, but the long-term purpose of the "rebalancing" policy in Asia is to contain the more powerful China that seems likely to emerge in the decades to come. That's what Chinese leaders think, and they're right.

• Moreover, the United States also has an interest in discouraging nuclear proliferation in Asia. China already has four nuclear-armed powers on its borders (Russia, Pakistan, India, and North Korea), and several other states might go nuclear if they decided they could no longer count on American security guarantees. As long as nuclear non-proliferation remains a core objective of U.S. foreign policy, it will have a strategic interest in remaining in Asia.

• For all of these reasons, America's Asian partners shouldn't question the U.S. commitment to maintain its military presence in Asia and its security commitments to its various Asian partners. This policy is rooted in geopolitics and America's own strategic interests. Obama could do everyone a favor if he explained this to his hosts in simple, clear, and forceful terms, and reminded them that the U.S. security presence has been a powerful bulwark of regional stability for decades.