by MICHAEL T. KLARE
Welcome to an edgy world where a single incident at an energy
“chokepoint” could set a region aflame, provoking bloody encounters,
boosting oil prices, and putting the global economy at risk. With
energy demand on the rise and sources of supply dwindling, we are, in
fact, entering a new epoch — the
Geo-Energy Era — in which disputes over
vital resources will dominate world affairs. In 2012 and beyond,
energy and conflict will be bound ever more tightly together, lending
increasing importance to the key geographical flashpoints in our
resource-constrained world.
Take the
Strait of Hormuz, already making headlines and shaking
energy markets as 2012 begins. Connecting the Persian Gulf and the
Indian Ocean, it lacks imposing geographical features like the Rock of
Gibraltar or the Golden Gate Bridge. In an energy-conscious world,
however, it may possess greater strategic significance than any
passageway on the planet. Every day, according to the
U.S. Department
of Energy, tankers carrying some
17 million barrels of oil — representing 20% of the world’s daily supply — pass through this vital artery.
So last month, when a senior Iranian official threatened to block the
strait in response to Washington’s tough new economic sanctions, oil
prices instantly soared. While the U.S. military has vowed to keep the
strait open, doubts about the safety of future oil shipments and worries
about a potentially unending, nerve-jangling crisis involving
Washington, Tehran, and Tel Aviv have energy experts predicting high oil
prices for months to come, meaning further woes for a slowing global
economy.
The Strait of Hormuz is, however, only one of several hot spots where
energy, politics, and geography are likely to mix in dangerous ways in
2012 and beyond. Keep your eye as well on the East and South China
Seas, the Caspian Sea basin, and an energy-rich Arctic that is losing
its sea ice. In all of these places, countries are disputing control
over the production and transportation of energy, and arguing about
national boundaries and/or rights of passage.
In the years to come, the location of energy supplies and of energy
supply routes — pipelines, oil ports, and tanker routes — will be
pivotal landmarks on the global strategic map. Key producing areas,
like the Persian Gulf, will remain critically important, but so will oil
chokepoints like the Strait of Hormuz and the Strait of Malacca
(between the Indian Ocean and the South China Sea) and the “sea lines of
communication,” or SLOCs (as naval strategists like to call them)
connecting producing areas to overseas markets. More and more, the
major powers led by the United States, Russia, and China will
restructure their militaries to fight in such locales.
You can already see this in the elaborate
Defense Strategic Guidance document,
“Sustaining U.S. Global Leadership,” unveiled
at the Pentagon on January 5th by President Obama and Secretary of
Defense Leon Panetta. While envisioning a smaller Army and Marine
Corps, it calls for increased emphasis on air and naval capabilities,
especially those geared to the protection or control of international
energy and trade networks. Though it tepidly reaffirmed historic
American ties to Europe and the Middle East, overwhelming emphasis was
placed on bolstering U.S. power in “the arc extending from the Western
Pacific and East Asia into the Indian Ocean and South Asia.”
In the new Geo-Energy Era, the control of energy and of its transport
to market will lie at the heart of recurring global crises. This year,
keep your eyes on three energy hot spots in particular: the Strait of
Hormuz, the South China Sea, and the Caspian Sea basin.
The Strait of Hormuz
A narrow stretch of water separating Iran from Oman and the United Arab Emirates (UAE), the
strait is
the sole maritime link between the oil-rich Persian Gulf region and the
rest of the world. A striking percentage of the oil produced by Iran,
Iraq, Kuwait, Qatar, Saudi Arabia, and the UAE is carried by tanker
through this passageway on a daily basis, making it (in
the words of
the Department of Energy) “the world’s most important oil chokepoint.”
Some analysts believe that any sustained blockage in the strait could
trigger a
50% increase in the price of oil and trigger a full-scale global recession or depression.
American leaders have long viewed the Strait as a strategic fixture
in their global plans that must be defended at any cost. It was an
outlook first voiced by
President Jimmy Carter in January 1980, on the
heels of the Soviet invasion and occupation of Afghanistan which had,
he
told Congress,
“brought Soviet military forces to within 300 miles of the Indian Ocean
and close to the Strait of Hormuz, a waterway through which most of the
world’s oil must flow.”
The American response, he insisted, must be
unequivocal: any attempt by a hostile power to block the waterway would
henceforth be viewed as “an assault on the vital interests of the United
States of America,” and “repelled by any means necessary, including
military force.”
Much has changed in the Gulf region since Carter issued his famous decree, known since as
the Carter Doctrine, and established the
U.S. Central Command (CENTCOM)
to guard the Strait — but not Washington’s determination to ensure the
unhindered flow of oil there. Indeed, President Obama has made it clear
that, even if CENTCOM ground forces were to leave Afghanistan, as they
have Iraq, there would be
no reduction in the command’s air and naval presence in the greater Gulf area.
It
is conceivable that the Iranians will put Washington’s capabilities to
the test. On December 27th, Iran’s first vice president Mohammad-Reza
Rahimi
said,
“If [the Americans] impose sanctions on Iran’s oil exports, then even
one drop of oil cannot flow from the Strait of Hormuz.” Similar
statements have since been made by other senior officials (and
contradicted as well by yet others). In addition, the Iranians recently
conducted elaborate
naval exercises in
the Arabian Sea near the eastern mouth of the strait, and more such
maneuvers are said to be forthcoming. At the same time, the commanding
general of Iran’s army suggested that the USS
John C. Stennis, an American aircraft carrier just leaving the Gulf, should not return. “The Islamic Republic of Iran,”
he added ominously, “will not repeat its warning.”
Might the Iranians actually block the strait? Many analysts believe that the statements by Rahimi and his colleagues are
bluster and bluff meant
to rattle Western leaders, send oil prices higher, and win future
concessions if negotiations ever recommence over their country’s nuclear
program. Economic conditions in Iran are, however, becoming more
desperate, and it is always possible that the country’s hard-pressed
hardline leaders may feel the urge to take some dramatic action, even if
it invites a powerful U.S. counterstrike. Whatever the case, the
Strait of Hormuz will remain a focus of international attention in 2012,
with global oil prices closely following the rise and fall of tensions
there.
The South China Sea
The
South China Sea is
a semi-enclosed portion of the western Pacific bounded by China to the
north, Vietnam to the west, the Philippines to the east, and the island
of Borneo (shared by Brunei, Indonesia, and Malaysia) to the south. The
sea also incorporates two largely uninhabited island chains, the
Paracels and the Spratlys. Long an important fishing ground, it has
also been a major avenue for commercial shipping between East Asia and
Europe, the Middle East, and Africa. More recently, it acquired
significance as a potential source of oil and natural gas, large
reserves of which are now believed to lie in subsea areas surrounding
the Paracels and Spratlys.
With the discovery of oil and gas deposits, the South China Sea has
been transformed into a cockpit of international friction. At least
some islands in this energy-rich area are
claimed by
every one of the surrounding countries, including China — which claims
them all, and has demonstrated a willingness to use military force to
assert dominance in the region. Not surprisingly, this has put it in
conflict with the other claimants, including several with close military
ties to the United States. As a result, what started out as a regional
matter, involving China and various members of the Association of
Southeast Asian Nations (ASEAN), has become a
prospective tussle between the world’s two leading powers.
To press their claims, Brunei, Malaysia, Vietnam, and the Philippines
have all sought to work collectively through ASEAN, believing a
multilateral approach will give them greater negotiating clout than
one-on-one dealings with China. For their part, the Chinese have
insisted that all disputes must be resolved bilaterally, a situation in
which they can more easily bring their economic and military power to
bear. Previously preoccupied with Iraq and Afghanistan, the United
States has now entered the fray, offering
full-throated support to the ASEAN countries in their efforts to negotiate en masse with Beijing.
Chinese Foreign Minister Yang Jiechi promptly warned the United
States not to interfere. Any such move “will only make matters worse
and the resolution more difficult,” he
declared.
The result was an instant war of words between Beijing and Washington.
During a visit to the Chinese capital in July 2011, Chairman of the
Joint Chiefs of Staff Admiral Mike Mullen delivered a barely concealed
threat when it came to possible future military action. “The worry,
among others that I have,” he
commented,
“is that the ongoing incidents could spark a miscalculation, and an
outbreak that no one anticipated.” To drive the point home, the United
States has conducted a series of conspicuous military exercises in the
South China Sea, including some
joint maneuvers with
ships from Vietnam and the Philippines. Not to be outdone, China
responded with naval maneuvers of its own. It’s a perfect formula for
future “incidents” at sea.
The South China Sea has long been on the radar screens of those who
follow Asian affairs, but it only attracted global attention when, in
November, President Obama traveled to Australia and announced, with
remarkable bluntness, a new U.S. strategy aimed at confronting Chinese
power in Asia and the Pacific. “As we plan and budget for the future,”
he
told members
of the Australian Parliament in Canberra, “we will allocate the
resources necessary to maintain our strong military presence in this
region.” A key feature of this effort would be to ensure “maritime
security” in the South China Sea.
While in Australia, President Obama also announced the establishment of a
new U.S. base at
Darwin on that country’s northern coast, as well as expanded military
ties with Indonesia and the Philippines. In January, the president
similarly placed special emphasis on projecting U.S. power in the region
when he went to the Pentagon to discuss changes in the American
military posture in the world.
Beijing will undoubtedly take its own set of steps, no less
belligerent, to protect its growing interests in the South China Sea.
Where this will lead remains, of course, unknown. After the Strait of
Hormuz, however, the South China Sea may be the global energy chokepoint
where small mistakes or provocations could lead to bigger
confrontations in 2012 and beyond.
The Caspian Sea Basin
The
Caspian Sea is
an inland body of water bordered by Russia, Iran, and three former
republics of the USSR: Azerbaijan, Kazakhstan, and Turkmenistan. In the
immediate area as well are the former Soviet lands of Armenia, Georgia,
Kyrgyzstan, and Tajikistan. All of these old SSRs are, to one degree
or another, attempting to assert their autonomy from Moscow and
establish independent ties with the United States, the European Union,
Iran, Turkey, and, increasingly, China. All are wracked by internal
schisms and/or involved in border disputes with their neighbors. The
region would be a hotbed of potential conflict even if the Caspian basin
did not harbor some of the world’s largest undeveloped reserves of oil
and natural gas, which could easily bring it to a boil.
This is not the first time that the Caspian has been viewed as a
major source of oil, and so potential conflict. In the late nineteenth
century, the region around the city of
Baku –
then part of the Russian empire, now in Azerbaijan — was a prolific
source of petroleum and so a major strategic prize. Future Soviet
dictator Joseph Stalin first gained notoriety there as a leader of
militant oil workers, and Hitler sought to capture it during his
ill-fated 1941 invasion of the USSR. After World War II, however, the
region lost its importance as an oil producer when Baku’s onshore fields
dried up. Now, fresh discoveries are being made in offshore areas of
the Caspian itself and in previously undeveloped areas of Kazakhstan and
Turkmenistan.
According to energy giant BP, the Caspian area
harbors as
much as 48 billion barrels of oil (mostly buried in Azerbaijan and
Kazakhstan) and 449 trillion cubic feet of natural gas (with the largest
supply in Turkmenistan). This puts the region ahead of North and South
America in total gas reserves and Asia in oil reserves. But producing
all this energy and delivering it to foreign markets will be a
monumental task. The region’s energy infrastructure is woefully
inadequate and the Caspian itself provides no maritime outlet to other
seas, so all that oil and gas must travel by pipeline or rail.
Russia, long the dominant power in the region, is pursuing control
over the transportation routes by which Caspian oil and gas will reach
markets. It is upgrading Soviet-era pipelines that link the former SSRs
to Russia or building new ones and, to achieve a near monopoly over the
marketing of all this energy, bringing traditional diplomacy,
strong-arm tactics, and outright bribery to bear on regional leaders
(many of whom once served in the Soviet bureaucracy) to ship their
energy via Russia. As recounted in my book
Rising Powers, Shrinking Planet,
Washington sought to thwart these efforts by sponsoring the
construction of alternative pipelines that avoid Russian territory,
crossing Azerbaijan, Georgia, and Turkey to the Mediterranean (notably
the BTC, or Baku-Tbilisi-Ceyhan pipeline), while Beijing is building its
own pipelines linking the Caspian area to western China.
All of
these pipelines cross
through areas of ethnic unrest and pass near various contested regions
like rebellious Chechnya and breakaway South Ossetia. As a result, both
China and the U.S. have wedded their pipeline operations to military
assistance for countries along the routes. Fearful of an American
presence, military or otherwise, in the former territories of the Soviet
Union, Russia has responded with military moves of its own, including
its brief August 2008
war with Georgia, which took place along the BTC route.
Given the magnitude of the Caspian’s oil and gas reserves, many
energy firms are planning new production operations in the region, along
with the
pipelinesneeded to bring the oil and gas to market. The European Union, for example, hopes to build a new natural gas pipeline
called Nabucco from
Azerbaijan through Turkey to Austria. Russia has proposed a competing
conduit called South Stream. All of these efforts involve the
geopolitical interests of major powers, ensuring that the Caspian region
will remain a potential source of international crisis and conflict.
In the new Geo-Energy Era, the Strait of Hormuz, the South China Sea,
and the Caspian Basin hardly stand alone as potential energy
flashpoints. The East China Sea, where China and Japan are contending
for a contested undersea natural gas field, is another, as are the
waters surrounding the Falkland Islands, where both Britain and
Argentina hold claims to undersea oil reserves, as will be the globally
warming Arctic whose resources are claimed by many countries. One thing
is certain: wherever the sparks may fly, there’s oil in the water and
danger at hand in 2012.
