Global Energy Politics - English

Fading Interest in the Middle East

By Stefano Casertano7.07.2012Global Policy

Global energy supplies are changing rapidly. But one thing must remain: Western commitment to the oil-exporting countries of the Middle East.

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It’s a new dawn for the energy world: Even more than renewables, “unconventional” resources are leading the (fossil fuel powered) way to energy supplies in the 21st century. Traditional gigantic oil reservoirs are increasingly depleted, and the discovery of new reserves seems increasingly unlikely. But although hydrocarbon projects are costly, the lion’s share of new energy supplies does not come from sun and wind. New energy sources increasingly include tar sands, gas shale, and a whole range of economically profitable (and environmentally unfriendly) means of energy sourcing. The impact on geopolitics is evident: The United States is now able to oversupply their gas needs for years to come through the exploitation of shale gas. Car manufacturers are launching new models into the market that can be powered by gas. They foresee an abrupt switch from oil to gas – a dynamic evidenced in the field of electricity generation as well, where gas-powered power plants have become more popular than ever. Canada supplies the US with oil that has been sourced from tar sands in Alberta. And in Europe, gas usage is increasing as well, partially driven by the American push into shale gas. These developments have led some observers to believe that the age of Middle Eastern oil (and, partially, the age of Russian gas) is over. Paul D. Miller just published an egregious article in “The National Interest”:http://nationalinterest.org/print/article/the-fading-arab-oil-empire-7072?page=3, in which he laid out an argument about “the fading Arab oil empire.” This may well be: Traditional hydrocarbon powers have to cope with declining export revenues and – some say – with declining export quantities as nations increasingly replace energy imports with domestically produced oil and gas. A handful of countries, like Bahrain, holds a winning hand nonetheless: They will be able to export gas through sea lanes and liquified natural gas (LNG) regasification plants on the European coasts, although at a lower price than previously expected. Yet this global change must not necessarily represent a step towards a reduction in global tensions related to energy exports. Although oil prices may be declining due to the oversupply of gas, the resource remains in the ground, ready to be extracted and sold. China is already emerging as a new purchaser of oil from the Middle East, and is already buying from Saudi Arabia, Angola, Sudan, and (until the embargo) Iran. As Europe and America withdraw from the region, the East’s rising power will be eager to reap the geopolitical profits. A similar situation developed in the Caspian region in the beginning of the 1990s. Oil abundance convinced the West that few concessions were necessary in energy politics. As a result, little was spent on the development of the Caucasus and “-stan” countries on the other side of the Caspian Sea. Pakistan, then led by Ghulam Ishaq Khan, pushed into the vacuum and created a lasting geopolitical conundrum that resulted in a Western loss of control in the region, the spread of terrorist networks, and the nuclear armament of Pakistan. It took a lot of subsequent effort to reorganize the region, including the exuberant “colored revolutions” in several countries. And recovery still isn’t complete, but remains a hard challenge: Western countries believed that Caspian oil was no priority and let the region fall into a darker period. Casting new light is no easy task. Abandoning the Middle East now, on the grounds of a “lack of interest” for its oil, will prove even more problematic. A fall in oil revenues will generate regional tensions, with rebellions and revolutionary processes that will not necessarily lead to democracy. And our response must not be the imposition of Western forms of government, but the commitment to assist – financially and otherwise – in the installation of open forms of government in a manner preferred by the respective population. Otherwise, structural societal collapse could be seized by ethnic interest groups, through violent means. Western commitment to the Middle East is a requirement: For better or for worse, if shale gas ends up to be a flash in the pan, we may end up needing Mideast oil just as much as before.

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