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Thesis & Antithesis

A critical perspective on energy, international politics & current affairs

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Location: Washington, D.C.

greekdefaultwatch@gmail.com Natural gas consultant by day, blogger on the Greek economy by night. Trained as an economist and political scientist. I believe in common sense and in data, and my aim is to offer insight written in language that is clear and convincing.

25 January 2006

Russia & energy security

Today’s Financial Times carries an opinion piece by Vladimir Milov, Russia’s former deputy energy minister, on the paradox between Russia’s desire to place energy security on the G8 agenda and its obvious deviation in practice from market mechanisms and from cooperative international ventures. Mr. Milov writes:

“As a Russian, I would welcome it if my country used the G8 presidency to contribute to the improvement of global energy security, encouraging more transparent and assured international energy markets. But you cannot build a global energy security architecture on the basis of non-transparent state-dominated monopolies, destruction of successful private businesses, closing doors to international investment and using energy as a tool of neo-imperial politics.”

I sympathize with this sentiment but I retain an enduring pessimism about its realism. Very few countries have ever managed to depoliticize oil and gas. Those that managed it did so only after turmoil and while resting on a tradition of liberalism (the producers I have in mind are primarily America, Britain, and Norway). It also helps that their foreign policies were sufficiently varied (especially for the Anglo-Saxons) to allow them to make access to energy a mere part, but by no means the dominant one, of their grand strategies.

The question to ask is not whether Russia will go down the path of politics or commerce in its energy market; after all, these trends can be easily reversed, as Russia’s story demonstrates. The more fundamental issue for energy security is whether it is possible to reconcile two competing visions of energy: producers wanting to form political partnerships and exert influence using their natural wealth, and consumers wanting access to that wealth with as few strings attached as possible.

In other words, our energy insecurity emerges, in no small part, from the asymmetry which exists between the producers’ and the consumers’ perceptions of the link between energy and politics. It is to this asymmetry that diplomacy must address itself and not to the energy markets which are its mere byproduct.

References:
Vladimir Milov, “Russia ill-equipped to lead on global security,” Financial Times, 25 Jan 06; an op-ed in the Wall Street Journal today discusses the emergence of a Sino-Saudi relationship based on energy; the article is called, wittingly, “Oil-for-missiles”: Richard L. Russell, “Oil-For-Missiles,” Wall Street Journal, 25 Jan 06

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