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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.

08 July 2006

Steps to energy security

(This is a letter that the Washington Post published on July 8. Link to the letter and to the original story)
Sebastian Mallaby ["What 'Energy Security' Really Means," op-ed, July 3] provides a sensible contrast to the hype that often accompanies energy discussions. Yet he errs on two counts. The first is in describing China's energy security strategy solely as "buying stakes in foreign oil fields." China is not driven by a false sense of security (at least not fully). Chinese oil companies are involved in exploration and production, helping to bring oil to market. Given that lagging investment is one reason oil prices are so high, this is not an unreasonable policy.

The second error is to assume that producers and consumers have identical interests. At one level, this surely exists: Producers and co
nsumers have a common interest in energy markets. But producers tend to want political benefits from their energy, while consumers prefer access to energy with few strings attached. This divergence produces tensions; for Russia and Iran, for Venezuela and Bolivia, oil and gas will never be just commodities. Energy security can build on common bonds, but there are inherent limits to a purely commercial approach to energy.


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