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Thesis & Antithesis

A critical perspective on energy, international politics & current affairs

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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.

30 April 2006

Is the IEA the solution?

In the search for creative ideas to our energy crisis, Jim Hoagland argues that the International Energy Agency needs expanding: “The IEA, founded in 1974 as a counter to OPEC, has been allowed to languish since then and has a professional staff of only about 150. But it has the potential to become the effective advocate and coordinator for oil-importing countries that U.S. officials foresaw at its outset. Western leaders urgently need not only to calm their publics about energy supplies but also to begin a long-term program to reduce their vulnerabilities to foreign upheaval and blackmail. Bush and Merkel should put revitalization and redirection of the IEA at the top of their talks, which should cover a lot more than the price of gas.” (link)

Put aside for now that the IEA already covers more than the price of gas; and put aside too that supply cushions (which is what the IEA does) make more sense for oil and gasoline than for any other commodity—coal and nuclear is not usually traded in international markets, and natural gas is hard to store for strategic reserves. Still, what are the merits of strengthening the IEA as an instrument in the West’s energy strategies?

International institutions work best when there is sufficient common ground for cooperation and when the problem is essentially one of coordination. It is not clear that this description fits the energy situation today. Western countries have different preoccupations and concerns—witness the European reaction to the Ukraine crisis. No common approach was forged not because the institutions for doing so were lacking (though they were), but because countries who felt vulnerable to Russian gas did not want to go too far in alienating their Russian suppliers. No institution can bridge such a gap.

The call for institutional creativity and energy diplomacy reflects a conceptual shortfall in consumer countries. Energy pervades all issues, we are told; but there is little systematic attempt to place energy within a broader foreign policy framework. Energy is a tool for policy, a catalyst for relations between producers and consumers; but energy diplomacy often treats energy problems as energy issues, rather than reflections of broader political trends. Does Russian’s gas diplomacy reflect energy policy or is it rooted in Vladimir Putin’s perceptions of the role Russia should have in the world? I trust the latter.

This brings me back to the IEA. Crisis management and research are two things that the IEA does best because an energy institution can best deal with energy issues. Energy diplomacy is political and hence best left to states that can judge the relative goals and tradeoffs of their policies. This is the reason I am pessimistic about the promise of the IEA and why I doubt it is the proper instrument for policy action.

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