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The Militarization of Energy Security II

James A. Russell, International Analyst Network
… The possibility that access to energy resources may become an object of large-scale armed struggle is one of the most alarming prospects facing the current world system. The political stability of advanced societies, and the continued prospects for economic and social improvement in developing countries, are both linked to the operation of international energy markets.

The increasing scale and complexity of these markets since the end of the Second World War has been one of the primary drivers of global economic growth. Like all international markets, the market for energy is sensitive to war and upheaval, whatever the cause. Energy markets are efficient at discounting risk, and there is a long history of price spikes and shortages whenever large-scale violence, chiefly but not exclusively in oil-producing regions, threatens established patterns of production and consumption.

Strategic planners in the United States and elsewhere are well aware of the degree to which the anticipated effect of military operations on the price and availability of oil and natural gas needs to be considered in their work.

… Conclusion

1. War happens through a combination of stupidity, irrationality and miscalculation. But the fact that conflict between developed states hasn’t happened since the end of World War II doesn’t mean it won’t happen again. Calculations over energy are not immune to these considerations or the iron logic of preventive war.

2. Normal functioning of international energy markets may already be compromised. Even if they are not-there is a growing perception that this has in fact happened. Increased prices are not acting as a brake on demand and stimulating new supplies, as economic theory suggests it should. Perhaps more importantly, the future may not be like the past insofar as world energy markets are concerned in that the market may not deliver the “mean reversion” of pricing. Instead, the mean reversion reverts on an upward path-a path that must inevitably shape the cost/benefit calculus of participants in the market.

3. The perceptive chasm in the United States between new market realities and their impact on the global distribution of power will one day close-and when it does, look out. It’s not so far fetched to suggest the creation of a toxic mix of ugly domestic circumstance, bad leadership, and plain stupidity that all cast militarization as a useful option to restore “logic” to a systemically compromised market.”

James Russell teaches in the Department of National Security Affairs at the Naval Postgraduate School in Monterey, CA. The views expressed here are his own.

A speech delivered to the Energy Forum: “The Global Energy Market: Comprehensive Strategies to Meet Geopolitical and Financial Risks,” at the James A. Baker Institute for Public Policy, Rice University, on May 21, 2008.
(13 July 2008)

Russian oil to Czechs slows after U.S. pact

Andrew E. Kramer, International Herald Tribune
Three days after the United States signed an agreement with the Czech Republic to host a tracking radar for an antiballistic missile system that Russia vehemently opposes, the authorities in Prague on Friday said the flow of Russian oil to their country was beginning to dwindle.

The flow of oil can vary for technical reasons, and Czech officials declined to link the reduced supply to the agreement signed Tuesday in Prague, but it was clear that they suspected a connection.

Russia maintains that the antimissile system poses a threat to its own nuclear deterrence; the Bush administration says it is intended to counter the missile threat from Iran.
(11 July 2008)

Pull-out Demand Signals Final Bush Defeat in Iraq

Gareth Porter, Inter Press Service
WASHINGTON – Prime Minister Nouri al-Maliki’s demand for a timetable for complete U.S. military withdrawal from Iraq, confirmed Tuesday by his national security adviser Mowaffak al-Rubaie, has signaled the almost certain defeat of the George W. Bush administration’s aim of establishing a long-term military presence in the country.

The official Iraqi demand for U.S. withdrawal confirms what was becoming increasingly clear in recent months – that the Iraqi regime has decided to shed its military dependence on the United States.
(12 July 2008)
Would the U.S. really accept a withdrawal, without leaving bases in Iraq? -BA

U.S., Iraq Scale Down Negotiations Over Forces

Karen DeYoung, Washington Post
U.S. and Iraqi negotiators have abandoned efforts to conclude a comprehensive agreement governing the long-term status of U.S troops in Iraq before the end of the Bush presidency, according to senior U.S. officials, effectively leaving talks over an extended U.S. military presence there to the next administration.

In place of the formal status-of-forces agreement negotiators had hoped to complete by July 31, the two governments are now working on a “bridge” document, more limited in both time and scope, that would allow basic U.S. military operations to continue beyond the expiration of a U.N. mandate at the end of the year.

The failure of months of negotiations over the more detailed accord — blamed on both the Iraqi refusal to accept U.S. terms and the complexity of the task — deals a blow to the Bush administration’s plans to leave in place a formal military architecture in Iraq that could last for years.
(13 July 2008)