Key Influences on the Security Politics of Oil - Coursework Example

KEY INFLUENCES ON THE SECURITY POLITICS OF OIL due: Oil is one of the many natural resources on high demand. To safeguard the oil, countries’ producing it has to take caution in the exploration and the sale of their oil. This explains why some oil producing countries in such as Nigeria has found themselves in the scramble with big states like the U.S and the China, which are competing to get a share of the oil. The rush for the oil has attracted new political and economic forces, giving the petroleum industry a stiff-neck competition. Every state is interested in this rare and natural resource. The oil producing countries also is highly dependent on the oil and cannot, therefore, gamble with the idea of putting their economy booster at risk. Oil-producing countries like Nigeria are left with no option but to take great caution when dealing with new scramble for Africa. Nigeria produces large amounts of oil, enabling it to export 10-12 per cent of the oil to the U.S. Without proper evaluation and calculation of their dealings, they stand to lose miserably on their main source of income. The Middle East has over the past 15 years experienced a crisis as a result of interests in their oil by the U.S. In the recent past, however, Nigeria has been hit by cases of political instability resulting in insecurity which has affected some of the oil companies like the Chevron and the Royal Dutch Shell. Escalation of major insurgencies has reduced the revenue obtained from oil as a result of the cut national output. America’s energy security has also been threatened by these insurgencies in the Delta since it depends heavily on the oil from Nigeria. Taking action about the threat, U.S has devised a counter-terrorism training and energy security, focusing on the West African region where Nigeria falls in. Safeguarding the oil supplies and the entire energy infrastructure is considered a concern of all the sovereign nations. Contents Contents 3 Introduction 4 Political affluence 5 Economic growth 8 Maintenance of peace 10 Conclusion 13 Bibliography 14 Introduction Security policies on oil have been set to safeguard the oil reserves and ensure continued, efficient exploration. U.S has been in the forefront of guarding its interest in oil supplies. For instance, the U.S has come up with a policy on energy security under the Department of Defence leading to the creation of African Command AFRICOM. The objective of AFRICOM is to counter terrorism within the Niger Delta. Its primary strategic goal is to secure the Nigerian energy resources. The internal security problems in Nigeria have had adverse effects on the energy security of America. In Nigeria, oil has come with turmoil resulting in both corruption and political instability (Nwajiaku-Dahou 2012: 295-313). These issues ought to be addressed since the oil industry is likely to take a new trend in the next one to two decades; as new players come into the market. Another reason for protecting the oil in Nigeria is because of the looming danger of depletion of petroleum in the Persian Gulf region. The political instability in the Middle East, world’s largest oil reserves, has added to the desperate calls for a security policy. The political instability has been contributed by U.S’s occupation of Iraq, the rivalries between the Sunni-Shi’a and the resistance movements of the Islam (Lubeck, Watts & Lipschutz 2007: 1). The above highlighted reasons coupled with other instabilities such as the Iran’s and Venezuela’s petrol-nationalism and the politically instigated conflicts in the Andean and Caspian oil zones has posed big risks to the energy security of the U.S. Such conflicts has resulted in little oil productions, raising the cost of the oil per barrel. The insecurity surrounding oil has also contributed to the fragmentation of weak policies, like the Iraq and Sudan. This has increased the risk of social violence and intensifying the international competition for reliable resources (Lubeck, Watts & Lipschutz 2007: 1). This paper investigates important factors affecting the thinking, discourse and the practices of protecting oil interests as a way of safeguarding energy security. Political affluence Large states have come to the realization that oil is a non-renewable natural resource. Out of its potential of driving the economy globally, sustainable use of the oil is essential. This has called the think tanks to devise new ideas and better ways of exploiting the oil. The way oil as a natural resource is managed dictates the life of a particular political term in office. Existing governments have, therefore, been challenged to show how well they can maintain their position, depending on the way they manage the energy sector. This means if a particular political regime is able to adopt new oil-rich areas, they will find favour with their people. The politicians will also be assured of an extended term in their political positions (Morse & Richard 2002: 16-31). The survival of the political institutions to some extent depends on their ability to manage the natural resources (Andersen & Aslaksen 2013: 89-106). Anything deemed to derail the oil exploitation is considered a significant threat amongst the big states such as the U.S.A. To stop the threats posed by conflicts in the petroleum industry has driven such states to form water-tight policies. An example is what has been witnessed in the Niger Delta where U.S has moved in to install AFRICOM (Lubeck, Watts & Lipschutz 2007: 2). There is high demand for oil from the Niger Delta by the U.S. This is due to its transport advantage from the fact that it is transported through the oil terminals along the coast of East U.S. The oil also contains less sulphur percentage making it more desirable. Following this, the U.S military developed cooperation with the governments in the Gulf of Guinea to get a firm hold of the oil reserves. The Department of Energy in the U.S has prospected that by 2025, the barrels imported to America will increase from the current 13 million to 18 million per day. This means a lot of political good, something which will guarantee the political leaders a longer period in the office (Lubeck, Watts & Lipschutz 2007: 3). The leaders have to strategize well on where this oil will come from. There is the estimation that two-thirds of this oil will come from the Middle East. Currently, the oil from the Persian Gulf has reduced, partly attributed to the civil wars in Iraq and also the Iran’s nuclear research program (Rovner, & Talmadge 2014: 548-581). The American energy security has also come up with the strategy of redefining the Gulf of Guinea so as to take full advantage of the low-cost and high quality Guinea oil. The West African Oil Triangle is another giant producer of oil. The American political leaders have to devise new and better ways of exploiting the oil. The West African Triangle is currently supplying 15 percent of the daily imports to the U.S, which is predicted could rise to 25 percent by the year 2015. Nigeria forms the main oil producer of the Oil Triangle. America has also expressed interest in the newly discovered oil wells in Nigeria, likely to raise the oil production significantly. Nigeria currently holds more than 60 percent of the total reserves within the Gulf of Guinea; making Nigeria the eleventh largest oil producer globally. In addition, Nigeria also boasts of the largest natural gas reserves in Africa (Abrahamsen & Williams 2009: 1-17). Despite the huge potential of oil to drive economies, there are numerous challenges when it comes to penetrating the oil reserves and controlling the oil markets. For instance, in the Niger Delta, there are lots of complexities within the industry. One of the greatest challenges is democratic governance. Foreign nations want to take full advantage of the oil, but the host countries have to uphold their sovereignty and control what is theirs. Such friction results in disagreements especially between the government and the political leaders in the opposition. This has been happening in the Niger Delta, posing a big challenge to the American energy security and the national security of Nigeria (Lubeck, Watts & Lipschutz 2007: 4). Just like the other oil states such as Venezuela and Indonesia, Nigeria’s political economy is complex. The complexity arises from the competition by the ruling parties to acquire and retain the lion’s share in the oil prospects. An example of the complexities is the Petroleum Act, which was formed in 1969, providing full ownership and control of oil to the land producing the oil. The Act was revised in 1978, taking the control of the land from the local communities. The land ownership transferred to the state and kept in the trust of central government. The complexity adds to the challenges faced by the American energy security and also the Nigerian security interests (Okpanachi & Andrews 2012: 430-450) Contrary to what many may think, oil has neither brought peace nor prosperity to Nigeria as a whole (Abrahamsen & Williams 2009: 1-17). Instead, the heart of Nigeria is filled with political unrest as a result of competition for control of the oil revenues. This has made the giant oil producers like Nigeria fail to build its economy from the oil riches. Instead, the country is socially unjust and forms one of the inequitable political economies (Lubeck, Watts & Lipschutz 2007: 6). According to Transparency International, Nigeria is currently the most corrupt country (Svensson, 2005: 19-42). The political elites have held large amounts of the wealth from oil. The political elites however lack the transparency of managing the wealth, thus failing to form a competitive market for the oil. The lack of transparency has raised a lot of questions among the activists and the ordinary people (Buzan 1991: 230-269). Political interests have also seen the politicians take control of the public property like the oil. For instance, president Obasanjo assumed a direct control of the petroleum industry, something considered unethical for a public office bearer. There are also complaints by the general public of exposure to environmental degradation resulting from the oil production (Watts 2012: 437-467). The political leaders have been blamed of enjoying the proceeds from the oil at the expense of the general public exposed to environmental hazards. Out of such reasons, there have been a lot of public outcries demanding to know where the oil revenues are channelled to. Not ready to risk losing the oil reserves to the conflicts, the U.S policy makers have given support to the governments in the Oil Triangle. Political influence has also contributed to open conflicts between the superpower US and other countries like the oil producing Afghanistan, which has resulted in the latest series of wars (Gokay 2002: 5-13). Interest to control oil can also be attributed to the civil wars in Sudan (Field 2000:5-20). Economic growth Oil is the major natural resource needed for the economic growth of all countries. Oil is a major energy source, and its future remains to be bright. Demand for oil in Nigeria can be attributed to uncertainty in the rate of consuming in the non-oil producing countries. There is also an unclear trend in the conservation of energy as a result of increasing energy efficiency and the changes in lifestyles. The demand for oil is also increased by the unpredictability of the behaviour of oil prices (Ciuta 2010: 123-144). Oil is required to drive the economy of a country as it forms the primary source of energy for driving the industries. Generation of electric power is also dependent on oil. The numerous revenue collected from the sale of oil is ploughed back into the economy to drive all the other sectors. Countries not endowed with this precious natural resource must work hard so as to gain access into one of the oil producing countries and maybe gain some shares in the oil business (Nesadurai 2005: 10). However, the production of oil has been faced with challenges of conflicts such as civil wars as people fight to control their oil producing regions. For instance, countries like Iraq have been badly affected by such civil wars. As a way of peacekeeping, external forces such as the U.S have intervened. Intervention of the U.S in the oil industry in Iraq has badly affected the oil business (Ayoob 1979: 38-58). The main objective of all oil exporting countries is to realize economic growth and to diversify products. When they export oil, such countries in turn import what they do not have in their countries, such as industrial products. The ever rising oil prices mean a continuous growth in the economy of such oil producing countries (Levi 2013: 132-138). This produces the double effect of boosting the non-oil economic activities. The positive increase in the economic growth of these countries can be seen from the period 1974-1980 when the oil prices shot up. In countries like the Libya, Saudi Arabia and United Arab Emirates, increased growth has been witnessed as a result of the oil dealings. The increase in the oil prices in compliance with the financial policies set in the 1979 and 1980 also encouraged private sector investment, helping to raise the growth of the non-oil GDP as well. The economic growth in these oil producing countries can be shown by activities like the expansion in government services, well-developed social amenities as a result of increased GDP. A larger proportion of the revenue collected from oil in these countries has been used to improve the physical and social infrastructure. The other proportion has gone into the development of the other sectors of the economy resulting in a diversified economic activity. The flipside of the increased revenues from the oil has been inflation in such countries. The other defect of the increased oil prices has been seen in the balance of payments. Quadrupling of the oil prices in 1973-1974 resulted in jumping of the surplus from $ 7 billion in 1973 to around $ 68 billion in 1974. The oil revenues accrued to the government is also shared to the persons in the private sector where it is used for development of the GDP. The richer oil-exporting countries like the United Arab Emirates, Qatar, Kuwait and Saudi Arabia are known to offer generous employment opportunities to their citizens and foreigners (Al-Sowayegh 1984: 32-65, Bronson 2006:51-61). However, in the highly populated countries like Iran and Iraq, the governments tend to restrict foreign competition, in an effort to protect their oil reserves. Such countries have; as a result come up with economic policies like the pursuit of competitive exchange rate which has produced overvalued exchange currencies discouraging the development of the non-oil export sector (Askari 2006: 14). The continued economic development has attracted other countries into the oil industry. Increased oil revenues have made foreign corporations enter the oil markets. To strike a balance between the operations in the oil business and intrusion by foreigners, governments have found themselves at a tight corner. This has facilitated the need for a clear security policy as far as the oil business is concerned. The governments in the oil producing countries are not ready to risk their oil and the business partners attracted into the business are not willing to let go of the chase after the oil. Out of this reason, the oil has to be well exploited to ensure a safe deal amongst all the parties involved. Maintenance of peace Formulation of security policies in many countries would also be motivated by the countries’ need to maintain peace. There are many dangers posed by the oil production. Oil is the only most treasured commodity traded on the international markets. Among all the other natural resources such as diamonds and natural gas, oil is the most valuable (Le Billon 2001: 55-80, Ross 2006: 265-300). Since the oil is required by all countries to drive their economies, the countries might go to the extent of war so as to conquer other oil producing nations. This is catastrophic, resulting in an interference with the sovereignty of nations, something which can cause political instabilities globally (Khan 1993: 5). Oil also has the potential to cause poor economic growth and civil wars if not well managed. It can cause both tension and cooperation amongst states, depending on the management. Oil as well, shapes troop commitments globally and the military alliances (Enemark 2008: 5-20). Another risk is the internal conflicts within the local communities. The conflict also exists between different political rivals fighting for their interest in the oil markets. It is out of this interest in the oil business that Africa, and especially the Niger Delta has found itself in a new scramble. The scramble has been brought about by the United States and the China Republic. The new scramble has resulted in the change in economic practices in Africa (Andrews-Speed, , Liao & Dannreuther 2002:10-20, Frynas & Paulo 2007: 229-251, Jakobson & Daojiong 2006 :60-73, Lee 2005: 265-301). There are the obvious implications that will be brought by the scramble especially on the economic front. Africa stands to gain from the dealings with two mentioned states, but ultimately it will lose its control of the oil, with the likelihood of triggering political unrest. There is an increasing need for nations to develop a solid relationship despite the increasing uncertainty of the future of oil, so as to avert collisions amongst states (Colgan 2013: 1). This is because global oil consumption is a potential trigger of international war. The huge incomes from oil can be used by selfish leaders to incite and finance people into war. Aggressive leaders in the oil-rich countries may reduce domestic accountability, taking their countries to war, out of their own selfish gains (Engdahl 2004: 10-35). The other idea is of countries going to war so as to win the oil control. Oil and international security are linked by the petrol competition, making oil aggression so dangerous in the world politics (Colgan 2013: 1). Oil producing states are defined as the states deriving at least ten percent of their GDP (Gross Domestic Product) from oil exports. Such countries form the most violent states globally. Such states engage in militarized interstate disputes (MIDs) at a higher rate as compared to non-oil-producing states. In the modern age of oil, the oil states have played a big role in instigating global military affairs. Since 1970, the oil states have featured a lot in the world’s global conflicts (Moran & Russell 2008: 41). The aggression of these petrol states can be attributed to oil competition. A war is more likely to occur in a state endowed with oil than in the one without oil. For instance, the Iraq invaded Kuwait in 1990. Such an attack explains a resource war, with oil being the resource. Other resource wars include Libya’s invasion of Chad in the 1970s and 1980s and the Venezuela’s invasion of Colombia in 2008. Oil competition seems to occur regardless of how the invading countries are rich in oil (Colgan 2013: 3). It can, therefore, be seen that oil income contributes a lot to in disturbing the international peace, especially when the income flows in an aggressive leader. This is because the income obtained from the oil is normally controlled by the central government, thus falling in the hands of the leader. Such a leader faces little domestic political accountability and cannot, therefore, be easily ejected from his position. Such leaders will use the finances from oil to purchase political goodwill making it hard for them to be ejected from their positions. There are three main ways in which oil contributes to international violence (Bjorvatn, Farzanegan & Schneider 2012: 1308-1316). The first way is providing finances which facilitate the international violence. The second way is the linkage of oil and terrorism especially with the radical Islam. The third way is invasion by non-oil states into oil states as a way of obtaining the control of the oil prospects (Colgan 2013: 3). To ensure global peace, there is a need for international communities to control the above-discussed practices. This way, the oil as the most valuable natural resource will serve its purpose of benefiting everyone globally instead of creating conflicts. Conclusion As discussed above, oil is the most valuable natural resource. Oil holds the largest potential of steering the economy globally. The revenues obtained from the oil are numerous and very crucial in contributing to the Global Domestic Product of the oil producing countries. 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