Energy Security: A Paradigm Shift

Abstract

Since middle of first decade of twenty-first century, security has been among highest priorities in security strategies and policies of developed countries. The potential risks and threats related to security mainly grew out of two circumstances: predicted upcoming production peak of hydrocarbon resources vital for modem economy, and security of their supplies. Two key factors in past years, however, have dramatically changed sector. The first factor is global economic crisis of 2010s, and other is strategic shock from yield of non-conventional hydrocarbon resources. Today, security policy requires a paradigm shift and a new model of factors and conditions for its implementation. This article offers an analysis and assessment of changes demanding a new paradigm of efficient security that is adequate to changed realities of markets and global economic development.The Old Paradigm* 1The concept of security that dominated for almost forty years (following crisis of 1970s) was rooted in relatively plentiful availability of and easy access to fossil fuels, while main threat to global security was considered to be discontinuation of supplies. Thus, old paradigm could be briefly summarized as stable and continuous supplies at affordable prices. The significance of this problem was suggested by common statement of geopolitical strategists, investment bankers, geologists, and physicists on foreseeable depletion of oil and natural gas, and by final countdown that had started in production of hydrocarbon resources at an acceptable energy price.2 This fact, as well as severe competition for resources due to increasing demand and consumption in developed and emerging economies, shaped context of policies.This was a period when major consumers of resources (the U.S., EU, China, and India) were highly dependent on producing countries dominating market from Middle East and Caspian region, Russia, etc. The basic principles of market were nationalism, active role of countries, and domination of producers over consumers.Energy nationalism was major principle that shaped behavior of key participants on market, whether they were producing countries, transit countries, or heavy consumers of resources.3 Energy nationalism created a reality where behavior and decisions of markets and supply of resources ultimately depended not on economic market factors but rather on producers, whereas market turned into an arena of interstate relations. Oil and natural gas were used as geopolitical weapons, while geopolitics and geoeconomics became most essential part of global politics and foreign policy of key players on market.Energy (resource) nationalism is typical of exporting countries rich in hydrocarbon resources. As a rule, they follow scenario of a phenomenon that experts diagnose as the curse,4 or the Dutch disease.5 Its common feature is slow social and economic development of country due to a lack of domestic economic stimuli, and because of local political elites who take advantage of high export revenues to maintain closed political regimes. The main consequences are weak government institutions or authoritarian governments, restriction of civil and political liberties, lack of an independent judicial system and independent political parties, low economic effectiveness, and underdevelopment of economy outside extraction sector.Negative internal economic and socio-political implications of resource curse are main reason for big producers of resources to implement highly accentuated policies of nationalism. …