NS4054 Realism and Idealism in the Energy Security Debate

1. NS4054 Realism and Idealism in the Energy Security Debate Jung, Jinhak(Gal Luft and Ann Korin, 2009)

2. Contents Ⅰ. Introduction Ⅱ. Summary 1. Variety but Not Variety Alone 2. Redundancy and Liquidity 3. Realists vs. Idealists 4. Environment and Security 5. The Choice to Have Choice is Ours Ⅲ. Critiques/Questions

3. Introduction Gal Luft & Anne Korin • Co-director of the Institute for the Analysis of Global Security (IAGS) • Washington based think tank focused on energy security • Senior adviser to the United States Energy Security Council Co-author of Energy Security Challenges for the 21st Century (2009) Turning Oil into Salt: Energy Independence through Fuel Choice (2009) Petropoly: the Collapse of America's Energy Security Paradigm (2012)

4. Introduction Thesis Question • How are different actors in the global energy system view energy security? • Why do we face today the gravest risks to our energy supply? The short answer • Every country competes over access to cheap and depleting energy sources • G.W. bush: “Demand for energy is increasing while supplies of oil and natural gas are diminishing

5. Introduction Some No uniform of energy security Importer: Compromising energy security Exporter: Nationalizing China Russia Norway Produce More Energy Secure Supply Secure Demand Environ ment

6. Summary Variety but Not Variety Alone • Variety • Consumers: variety of supplier • Producers: diversify their supply lanes <Few Universal Principle> “Safety and certainty in oil lie in variety and variety alone.” Winston Churchill • The definition of variety • From: geographical variety • To: variety of energy sources

7. Summary Variety but Not Variety Alone Conventional forms of petroleum Nuclear energy Renewable energy Coal-bed methane Tight sandstone gas Shale gas

8. Summary Redundancy and Liquidity • Redundancy • How to secure the supply chain or vast pipeline networks • Liquidity • How to bring the market to equilibrium • Without Redundancy & Liquidity • Only one mechanism for equilibrium is rapid and uncontrolled price increases

9. Summary Liquidity • To compensate for the erosion in OPECs spare capacity • Strategic reserves can create liquidity • Strategic purposes only? (IEA) • Insufficient international cooperation • When and how to fill the stocks • When oil can be released • China & India • Not part of the IEA • Tempted to build massive stockpiles (Caches) • The logic of Security Dilemma: Energy Dilemma

10. Summary Redundancy Persian Gulf Strait of Hormuz Oil Field-Ghawar Caspian Energy Vulnerable to Terrorist Acts

11. Summary Realists vs. Idealists • Realists • Challenges will get worse by time goes by • Energy as a subject of global power politics • Energy is the prime catalysts for armed conflict • Focused on Oil Cartel and Muslim countries’ nationalized resources • States should reduce the strategic value of oil and gas Michael Klare Energy Security Realists • Idealists • View a slightly rosier future • Focused on power of market and interdependence • Market players are rational and motivated by profit maximization • Insulate self-reliance as tension reducers • The idea of “grand bargain” will improve multilateralism on energy security Christopher Fettweis Energy Security Idealists

12. Summary Realists vs. Idealists • Gal luft & Ann Korin: Realists’ view (1/4) • Idealism seems not to work: 2008 tensions between producers and consumers worsened further despite of diversify energy supplies • The belief in the rationality of markets causes idealists to play down the notion that producers would use their energy as a weapon(The Arab oil embargo of 1973) • The notion of energy interdependence do not reduce the risk of conflicts (Japan in the 1920s and Germany in the 1930s: had a high level of energy interdependence, but nonetheless embarked on aggressive imperialism) • National oil companies have wide latitude to shut off the spigot for political reasons (Libya in 2008: stopped oil supply to Switzerland due to the arrest of the son of Muammar Gaddafi) • OPEC countries (and Russia) that rely heavily on energy revenues are inclined to keep price high (by restricting production)

13. Summary Realists vs. Idealists • Gal luft & Ann Korin: Realists’ view (2/4) • Also, trade barriers on alternative fuels are still prevalent in the United States and EU and are blocking the road to the international free and open trade among consumers and producers • Make no mistake! The Middle East remains and will continue to remain the world’s primary supplier of crude oil (Despite of sand oil of Canada, etc.) • Russia would unilaterally claim part of the energy-rich Arctic with the sufficient natural gas • Natural gas emits less CO2. As a result, total natural gas consumption is projected to increase from 104 tcf in 2005 to 158 tcf in 2030 • Russia, Iran, and Qatar together account for about 57 percent of the world natural gas reserves • The possibility of a gas cartel? (OPEC was first formed in 1960, but it did not function as a true cartel until 1999)

14. Summary Realists vs. Idealists • Gal luft & Ann Korin: Realists’ view (3/4) • The collapse of the world’s energy system (since the 2008 GFC) has reduced the volume of investment in renewable energy from $7 billion in 2007 to $5 billion in 2008 and a forecasted $4 billion in 2009 • Globalization countries became increasingly interdependent in a variety of fields? - In Europe, idealism is pervasive. But, European action in face of Russia’s coercion has been week - EU is in capable to diversify its sources from Russian gas - But, “NATO for energy is a dangerous nonsense,” believing that the discussion on energy security in the framework of NATO would send the wrong signal to Russia

15. Summary Realists vs. Idealists • Gal luft & Ann Korin: Realists’ view (4/4) • The Middle East is slow to embrace democracy, but see the Iraqi experiment is a success or not. - Russia? Kazakhstan? Or Venezuela? Democracy are in retreat - The Middle East follow Iran’s path and develop nuclear capabilities, albeit for “peaceful purposes”

16. Summary Environment and Security Sufficient Energy Energy Security Environment Pollution • Energy security at the expense of the environment? Tar-sand oil (Canada) Biodiesel (Indonesia) Vast amounts of CO2 Coal-to-liquids

17. Summary Environment and Security “Phase out the country’s coal-mining industrial sector by 2018.” “Also, phase out nuclear power industry by 2020.” * Today, 80 percent of Germany’s electricity comes from coal and nuclear power Angela Merkel • Replacing these sources with Russian natural gas (environment) could put the German economy (security) at the mercy of the Kremlin • India’s coal power for one billion Indians means a lot of CO2 - India’s decide to power its turbines with natural gas is likely to become increasingly dependent on Iran - India might send right into the welcoming arms of Iran, undermining Western efforts to isolate Iran economically

18. Summary Environment and Security • Investment in efficiency, conservation, and clean technology is desirable and should be promoted • Renewable source of energy like solar, wind, and geothermal are critical • Balance between Security and Environment! • Historically, geopolitical and economic concerns loom larger, but environment concerns was in the back burner Recycle CO2 Usable liquid fuels (Methanol) Biodiesel from algae

19. Summary The Choice to Have Choice is Ours • The current realities leave little room for optimism • Just crimping petroleum demand do not address the roots of the energy vulnerability • Answer: Churchill’s variety doctrine to include variety of fuels Flex-fuel Vehicles Electric cars Break oil’s monopoly in the transportation sector!

20. Summary The Choice to Have Choice is Ours • Maintaining oil’s monopoly in the transformation fuel market might catalyze the conflict between the U.S. and China over access to oil as demand increases • There will be times that aircraft carriers will be put to use in the service of energy security “The Stone Age did not end for lack of stone, and the Oil Age will end long before the world run out of oil.” Sheikh Zaki Yamani (Saudi former oil minister)

21. Summary The Choice to Have Choice is Ours To bring down To raise Who will pull harder?

22. Critiques/Questions • Are flex-fuel and electronic cars competitive with petroleum-based cars? * In terms of price (supply & demand), isn’t it an idealistic viewpoint? • Between Security and Environment, which one is critical? • Authors of this article are Realists (2009). In the 2015 perspective, which arguments are suitable between Realists and Idealists?