Oil and conflict Lecture at HEI, 24 April 2007 Course E 586 Resource and Environmental Conflict

1. Oil and conflictLecture at HEI, 24 April 2007Course E 586 Resource and Environmental Conflict Nils Petter Gleditsch Centre for the Study of Civil War (CSCW at International Peace Research Institute, Oslo (PRIO) & Department of Sociology and Political Science, Norwegian University of Science and Technology

2. Environmental factors in conflict: Five views • Neomalthusianism: Resource scarcity leads to conflict • Political ecology: It's the distribution of resources! • Cornucopianism: There is no inherent resource scarcity • Institutionalism: Cooperation can overcome scarcity • Resource curse: Resource abundance is the problem

3. Resources worth fighting for Territory land territory economic zones at sea Strategic raw materials Sources of energy Water (15 May) Food (Gleditsch, 1998: 382–383) Oil has (at least potentially) a role in all of these Another link between energy and conflict: nuclear (proliferation)

4. Oil and armed conflict I 'increased competition over access to major sources of oil and gas, growing friction over the allocation of shared water supplies, and internal warfare over valuable export commodities ... have produced a new geography of conflict', in which 'resource flows rather than political and ideological divisions constitute the major fault lines‘ Klare (2001a: 52, 2001b)

5. Oil and armed conflict II States are more likely to fight over non-renewable resources such as oil than over renewables. Oil is power. Scarcities over renewables occur mostly in poor countries unable to fight (Homer-Dixon, 1994: 18–19) The scarcity of water is replacing oil as a flashpoint for conflict between nations in an increasingly urbanized world. Water stands today as one of the most critical dangers, one of the most critical breakdowns of peace between nations. It has replaced the threat of war over oil Wally B'Dow, Secretary-General of the UN Habitat II Conference in Istanbul, June 1996

6. Oil and armed conflict III President Roosevelt (1943): I have reached the conclusion that the defense of Saudi Arabia is vital for the defense of the US President Carter (1980): Any attempt by a hostile power to cut off the flow of Persian Gulf oil would be regarded as an assault on the vital interests of the United States of America China has declared the South China Sea as part of its national maritime territory and asserted its right to employ force to protect it (Klare, 2001: 59) Japan has warned of a threat to its vital trade routes (oil by tanker through the South China Sea) and vowed to take appropriate protective measures (ibid.)

7. Oil and armed conflict IV Twelve wars involving natural resources, according to Arthur Westing (1986) * First World War, 1914–18 * Chaco War, 1932–35 World War II, 1939–45 * Algerian War of Independence, 1956–62 Congo Civil War, 1960–64 * Six-day War, 1967 * Nigerian Civil War, 1967–70 The 'Soccer War' between Honduras and El Salvador, 1969 The 'Cod War' between UK and Iceland, 1972–73 * Paracel Islands clash, 1974 Western Sahara revolt, 1976– * Falklands/Malvinas War, 1982 * Wars in part over oil (but Westing cautioned that he was not talking about a cause of war) (The Gran Chaco was incorrectly held to contain oil)

8. On the other hand … • Generally difficult to code wars to a single issue • Stated war aims may not be real war aims • How many countries had war in spite of no oil? • And how many had oil but no war? • Lack of statistical studies for interstate conflict • Better empirical foundation for assessing internal conflict

9. Resources can lead to conflict if … … they are scarce … they are valuable … they are abundant … they can be looted … their ownership is disputed Oil scores positive (in various places) on all five

10. Conflict can be prevented if resources … … are not scarce or declining in value (cornucopians) … are privatized (liberalists) … cannot be looted (realists) … are governed by good institutions (institutionalists)

11. So, is oil … … scarce? … privatized? … governed by good institutions? … a blessing or a curse?

12. Scarcity: Neomalthusian predictions The Limits to Growth (1972): Oil will run out before 1992 Paul Ehrlich (1987): The oil crisis will return in 1992 Beyond the Limits (1992): Oil will run out by 2031 Frank Notestein, Princeton: We've been running out of oil ever since I was a boy'

13. Why such predictions have routinely failed The 'known resources' keep growing Increasing prices will make new fields economical Existing resources are exploited more fully Oil resources are being used more efficiently

14. Hubbert's peaks Marion King Hubbert (1956): US production of oil will peak in 1970; World production of oil will peak around 2006 Source: Nehring (2006)

15. Criticism of peak oil theory Trivial that any limited resource will run out at some point in the event of future spending Peak oil is not a theory but a model that predicted the timing of the US peak quite well However, the volume of the peak was not predicted accurately It remains to be seen if the timing of Hubbert's world peak will be correctly predicted, but leading US oil experts, including modelers at EIA think 2005–06 is too early The modeling has been modified since Hubbert's time; e.g. the curve is unlikely to be symmetric

16. CERA predictions Source: Jackson (2006)

17. Long-term oil prices Source: Oil Price History and Analysis. WTRG Economics, www.wtrg.com/prices; downloaded 15 March 2007

18. Long-term oil prices Source: Oil Price History and Analysis. WTRG Economics, www.wtrg.com/prices; downloaded 15 March 2007

19. Some reasons for current high prices • Oil is running out (Peak Oil movement) • War in the Middle East, this could last • Soviet stagnation, but Russia now recovering • Long-term low prices made the exploitation of unconventional oil resources (tar sands, bio-oil) less economical (Luttwak) For an optimistic view, see Luttwak (2005). For a response, see Aleklett (n.d.)

20. Another cornucopian view '… the stone age came to an end not for a lack of stones, and the oil age will end, but not for the lack of oil.' Sheik Yamani, former oil minister of Saudi Arabia and a founding father of OPEC

21. Ownership • Oil is generally state controlled • Oil exploration generally in waters where national sovereignty is established • Law of the Sea convention in the nick of time • But disputed islands could lead to trouble • Deep-sea oil drilling? • Cross-national finds in areas with weaker institutions

22. An African example Source: Richard Sinding-Larsen (2003)

23. Institutions • Current institutions are geared to the protection of producers (OPEC) and the consumers (IEA); no global agency with a mandate to secure the resource for the long term • UNEP does not have the clout • UN Security Council is not involved (although it recently discussed climate change)

24. Interventions • Interventions studied in the 1970s in the context of imperialism theory (Odell, 1974; Pearson & Baumann, 1977) • Limited support for the interventionist argument • Hammarström (1986, 1997) included oil in a study of interventions - 1951–77 - 15 strategic minerals (metals) - US, UK rarely intervened in important suppliers, while France did - generally, interventions in oil producers rare (less than chance) - few control variables - but results similar to the earlier studies • Oil does not seem to feature prominently in more recent studies of military intervention

25. But what about Iraq? Arthur Westing would certainly have classified the Gulf War (1990–91) and Iraq War (2003– ) as partly to do with oil Johan Galtung (14 January 2003): The US wants control over the Iraqi oil. It wants to improve its own economy by selling stolen Iraqi oil

26. … but - cheaper for the US to buy the oil from Iraq than to conquer it militarily (but the US could have miscalculated) - US producer, not just importer (so low oil prices are not in the interest of all US lobby groups) - other oil-consuming countries (Germany, Japan) have higher import dependence and higher dependence on Middle East (but perhaps they rely on the US to take care of the supply) - US import dependence from Middle East has not changed dramatically, so why the need to invade now? - if US wanted to ensure stable oil prices, a better strategy would have been to support OPEC Anthony Cordesman: trying to direct the oil price by means of a war in Iraq is like trying to create an ice sculpture out of an iceberg by means of Titanic

27. Summing up (1) • Oil is seen as an important strategic commodity • Little systematic evidence of interstate conflict over oil • Most likely to occur as minor clashes over disputed territory • Global oil scarcity and runaway prices unlikely in the short run

28. Oil dependency and intrastate conflict Five mechanisms (Ross, 2006) • Oil increases the value of the state as a target • Oil encourages separatism or movements for autonomy • Oil wealth helps fund rebel organizations • Oil wealth (non-tax revenue) weakens the state • Oil wealth leads to conflict through trade shocks

29. Oil and intrastate conflict onset A number of systematic studies: de Soysa (2002): Oil exporter dummy variable significant in all models of internal armed conflict onset (1989–99) Fearon & Laitin (2003): Oil exporter a significant and substantively important predictor of civil war onset 1945–99 in all models Ross (2004a): Summary of thirteen case studies – oil linked to civil war onset Ross (2004b): Similarly in summary of statistical studies Fearon (2005): Oil exports better predictor than primary commodities/GDP Humphreys (2005): Conflict onset is better predicted by past production than future (wek state) Ross (2006): Oil robustly linked to civil war onset - clear support for the separatism hypothesis - partial support for the others

30. Oil and the onset of intrastate conflict – how robust? Sørli, Gleditsch & Strand (2005): Oil exporter dummy not significant for 1960–2000 when using mineral dependency as a control de Soysa (2002): Oil exporter dummy variable becomes insignificant when introducing a model with % belonging to various religions (Muslims significant) but becomes significant again when introducing an interaction term betwen % Muslims and % Christian Smith (2004): Oil exports/GDP insignificant or negatively (!) related to civil war when using a continuous variable: strong states! Hegre & Sambanis (2006): Oil export variable robust for Uppsala armed conflict, but not for civil war Lujala (2006): Oil production increases the riskof conflict onset only when located on-shore, not off-shore, confirmed by Ross (2006)

31. Oil and the intrastate conflict duration Collier, Hoeffler & Söderbom (2004) - conflict lengthened by low per capita income, high inequality, and moderate degree of ethnic division - conflicts shortened by a decline in the prices of primary commodities exported and external military intervention on the side of the rebels - oil not tested specifically Ross (2006) - contraband (a dummy variable) is the only resource variable at the national level robustly linked to longer conflicts (endogeneity?), oil is not Humphreys (2005) - natural resources (including oil) linked to shorter wars, ending in military victory for one side Lujala et al. (2005) - Petrodata, 890 onshore and 383 offshore locations, geo-referenced, data on discovery and production year - oil in the conflict zone tends to lengthen government conflicts but not territorial conflicts

32. Summing up (2) • Oil is robustly linked to internal conflict • But some conflicting results • Different data (discovery, production, exports) • Disagreements about the mechanisms • Even a zero relationship could hide two opposing mechanisms (Elster/Humphreys)

33. References (1) Aleklett, Kjell, n.d. ‘Review of ^’The Truth about Global Oil Supply’, Association for the Study of Peak Oil and Gas (ASPO), www.peakoil.nei/luttwak.html. B'Dow, Wally, 1996, as quoted in Lonergan (1997: 375) Bloomberg.com, 2007. Energy prices, www.bloomberg.com. Buhaug, Halvard & Scott Gates, 2002. 'The Geography of Civil War', Journal of Peace Research 39(4): 417–433 Claes, Dag Harald, 2003. ‘Oljen som amerikansk motivasjon’ [The Oil as an American Motivation], in Björn Erik Rasch, Janne Haaland Matlary & Per Kristen Mydske, eds, Spillet om Irak [The Game of Iraq]. Oslo: Abstrakt (31–59) Deffeyes, Kenneth, 2002. 'World's Oil production Peak Reckoned in Near Future', Oil and Gas Journal, 100 (46): 46-48, www.ogj.com/articles/article_display.cfm?Section=ARCHI&C=Explo&ARTICLE_ID=161018&KEYWORDS=% 7Bdeffeyes%7D de Soysa, Indra, 2002. 'Paradise Is a Bazaar? Greed, Creed, and Governance on Civil War, 1989–99', Journal of Peace Research 39(4): 395–416 Elster, Jon, 1998, ‘A Plea for mechanisms’, in Peter Hedström & Richard Swedberg, eds. Social Mechanisms: An Analytical Approach to Social Theory. Cambridge: Cambridge University Press (45–73) Fearon, James D. (2005). 'Primary Commodity Export and Civil War', Journal of Conflict Resolution 49(4): 483–507 Fearon, James D. & David D. Laitin, 2003. 'Ethnicity, Insurgency, and Civil War', American Political Science Review 97(1): 75–90 Gleditsch, Nils Petter, 1998. 'Armed Conflict and the Environment. A Critique of the Literature', Journal of Peace Research 35(3): 381–400 Greider, William, 2000. 'Oil on Political Waters', Nation 271(12): 5–6 Hammarström, Mats, 1986. Securing Resources by Force: The Need for Raw Materials and Military Intervention by Major Powers in Less Developed Countries, Report (27). Uppsala: Department of Peace and Conflict Research, Uppsala University. Hammarström, Mats, 1997. 'Military Conflict and Mineral Supplies: Results Relevant to Wider Resource Issues', ch. 8 in Nils Petter Gleditsch et al.,eds, Conflict and the Environment. Dordrecht: Kluwer (127–136) Hegre, Håvard & Nicholas Sambanis, 2006. 'Sensitivity Analysis of Empirical Results on Civil War Onset', Journal of Conflict Resolution 50(4): 508–535

34. References (2) Homer-Dixon, Thomas, 1994. 'Environmental Scarcities and Violent Conflict: Evidence from Cases', International Security 19(1): 5–40 Hubbert, M. King, 1949. ‘Energy from Fossil Fuels’, Science 109(3823): 103–109, scanned on www.hubbertpeak.com/hubbert/ Hubbert, Marion King, 1956. Nuclear Energy and the Fossil Fuels, paper presented at the Spring meeting of the Southern District, American Petroleum Institute, San Antonio, TX, 7–9 March Klare, Michael T., 2001a. 'The New Geography of Conflict', Foreign Affairs 80(3): 49–61 Klare, Michael T., 2001b. Resource Wars: The New Landscape of Global Conflict. New York: Henry Holt Lomborg, Bjorn, 2001. The Skeptical Environmentalist. Measuring the Real State of the World. Cambridge: Cambridge University Press, ch. 11, Energy Lonergan, Steve, 1997. 'Water Resources and Conflict: Examples from the Middle East', in Nils Petter Gleditsch et al., eds, Conflict and the Environment. Dordrecht: Kluwer (374–384) Lujala, Päivi, 2006. 'The Spoils of Nature: Armed Civil Conflict and Rebel Access to Natural Resources', unpublished ms., Department of Economics, Norwegian University of Science and Technology, Trondheim Lujala, Päivi, Jan Ketil Rød & Nadja Thieme, 2007. 'Fighting Over Oil: Introducing a New Dataset', Conflict Management and Peace Science, in press Luttwak, Edward N., 2005. ‘The Truth about Global Oil Suupply’, The First Post, 11 August, www.thefirstpost.co.uk/index.php?menuID=1&subID=18 Meadows, Donella; Dennis Meadows & Jørgen Randers, 1972. The Limits to Growth: A Report for the Club of Rome's Project on the Predicament of Mankind. New York: Universe Meadows, Donella; Dennis Meadows, Jørgen Randers & William Behrens, 1992. Beyond the Limits: Global Collapse or a Sustainable Future. London: Earthscan Nehring, Richard, 2006. 'Hubert's Unreliability – 1: Two Basins Show Hubbert's Method Underestimates Future Oil Production', Oil and Gas Journal 104(13)

35. References (3) Neumayer, Eric, 2001. 'Picking Holes in Litany of Loss', The Times Higher Education Supplement (16 November): 23 Odell, John S., 1974. 'Correlates of US Military Assistance and Military Intervention', in Steve J. Rosen & James R. Kurth, eds, Testing Theories of Economic Imperialism. Lexington, MA: Lexington Books (143–161) Pearson, Frederic & Robert Baumann, 1977. 'Foreign Military Intervention and Changes in United States Business Activity', Journal of Political and Military Sociology 5(1): 79–97 Ross, Michael L., 2001. 'Does Oil Hinder Democracy?', World Politics 53(..): 325–361 Ross, Michael L., 2004a. 'How Do Natural Resources Influence Civil War? Evidence from Thirteen Cases', International Organization 58(1): 35–67 Ross, Michael L., 2004b. 'What Do We Know about Natural Resources and Civil War?', Journal of Peace Research 41(3): 337–356 Ross, Michael L., 2006. 'A Closer Look at Oil, Diamonds, and Civil War', Annual Review of Political Science 9: 265–300 Simon, Julian; L.G. Weinrauch & S. Moore, 1994. 'The Reserves of Extracted Resources: Historical Data', Non-renewable Resources 325-340, www.juliansimon.com/writings/Articles/RESOURCE.txt Smith, Benjamin, 2004. 'Oil Wealth and Regime Survival in the Developing World, 1960–1999', American Journal of Political Science 48(2): 232–246 Sørli, Mirjam; Nils Petter Gleditsch & Håvard Strand, 2005. 'Why Is There So Much Conflict in the Middle East?', Journal of Conflict Resolution 49(1) 141–165 William, James L, 2006. Oil Price History and Analysis. London, AR: WTRG Economics, www.wtrg.com/prices.htm, downloaded 15 March 2007 Yamani, Sheik Ahmed Zaki, n.d., as quoted in Greider (2000)

36. Next week: International Workers’ Day Tuesday 8 May: Diamonds and Conflict, with student presentations by Kaspar Zellweger & Andrea Buetler