The geopolitics of energy in the 21st century
In the second half of my conversation with Daniel Yergin, author of the new and acclaimed best-seller The Quest: Energy, Security and the Remaking of the Modern World, we take a tour of the global horizon, discussing Yergin’s views on the dramatically changing global energy landscape and some of its important implications for international economic development ...
In the second half of my conversation with Daniel Yergin, author of the new and acclaimed best-seller The Quest: Energy, Security and the Remaking of the Modern World, we take a tour of the global horizon, discussing Yergin’s views on the dramatically changing global energy landscape and some of its important implications for international economic development and security.
David Rothkopf: Shifting to the global impact of these changes, one of the things that’s interesting in the context of the book is the rising power of the BRICs. You have Brazil, which was not an energy player, likely to become a major energy power; you have China, which was not an energy player, becoming the leading consumer and also the leading investor in new technology; you have Russia, as the world’s leading net resource exporter; you have India, which is also a producer in some interesting ways. There has been a shift in the geopolitics of energy. What are your thoughts on this?
Daniel Yergin: One of the key features is the idea that I focus on — the “globalization of energy demand.” Energy demand used to be a business of the developed world, and now the growth is all in the emerging world. So, for instance, the Middle East will increasingly look east for its growth markets. That raises interesting geopolitical questions about responsibility for security in the Gulf.
As for China, there is a lot of discussion about its ambitions in terms of a blue-water navy. The U.S. Navy has been the guardian of the global sea lanes. But will China try to have a responsibility — or feel the need — to help protect those sea lanes? This raises questions about what the role of the Chinese navy will be in the future, as well as the security of the Gulf region and the sea lanes.
DR: The Chinese are also involved in the Horn of Africa and West Africa. It poses a real conundrum for the United State: We’d like to have them share the burden, but we don’t want them to actually have the capability to share the burden.
DY: You put it very succinctly. This is a question that will become clearer in the next few years as China’s demand goes up and as the flow of oil increases from the Persian Gulf to East Asia and through the Strait of Malacca. But dealing with the growing piracy is really kind of a joint venture now. The major consuming countries are trying to manage that threat, and that threat has become more and more expansive.
Back to China, though. It is interesting that China hardly played a role in The Prize [Yergin’s prior major book on energy and winner of the Pulitzer Prize]; but in The Quest, China is the only country that gets two chapters. There’s a reason for that: it’s really important to understand the Chinese energy system and what their objectives are and what they’re trying to do — and where they came from. Where they differ from the Japanese, among other things, is that they already had a strong domestic industry on the back of which to go out into the world, and strong capabilities because China still gets half of its energy from its domestic production. And, in fact, until the early 1990s, China was an exporter, which is how it financed the first phases of economic reform. China is now the world’s second-largest oil importer and consumer of oil. If other countries were in China’s shoes they’d be doing the same thing, saying that they want to be global players. It’s important to keep it in perspective. If you take all the production of all the Chinese companies overseas it’s less than that of one of the major international oil companies.
Read the rest of the interview here.