Get ready for an American century: that appears to be the main consequence of the energy revolution that is now causing economic and political experts to tear up their old forecasts all over the world. The new American century won’t be a repeat of the last one, but in some very important ways the world now looks more likely to continue in the direction of global liberal capitalism that the US—like Britain before us—has seen as its geopolitical goal for many years.
Energy was critical to the geopolitics of the 20th century; energy shortages shaped some of the strategic decisions that led both Germany and Japan to defeat in World War II, and the struggle over the energy-rich Middle East played an important role in the Cold War. The assumption that the world was at or near “peak oil” has been a driving force behind predictions that the 21st century would be an era of U.S.-China competition as China’s desperate quest for more energy resources led it to push an aggressive global energy policy that would conflict with vital U.S. interests. The assumption that there were few major discoveries left to be made also led many to forecast that the Middle East and especially the Gulf region would continue to be a major fulcrum in global affairs; indeed, countries like Saudi Arabia, with the ability to increase production to meet the thirst of an oil-starved world, would become more important than ever as the geopolitics of oil scarcity took hold.
But as I’ve been writing recently, none of that looks true anymore. Advances in extraction technology have changed our understanding of the world’s energy future. As I wrote in my last post, the U.S. and Canada each may have more energy potential than the entire Middle East. China also has significant resources. So do Israel and Brazil.
It is too soon to tell just how much of this potential can be unlocked, but for several years now it has begun to look as if much more of these unconventional resources will be available much sooner than thought, and serious people now argue that the US could pass Saudi Arabia to become the world’s leading oil producer by 2020.
Even if some of the new sources prove difficult to extract at a reasonable economic and environmental price, the amount of available energy out there may be even greater than we now think. Because the extraction technology is new, and because it is still developing, much of the world has not been surveyed for these unconventional deposits. Both on land and under the sea, there is a lot of territory still to explore.
It’s going to take time for us to develop a clear picture of what the new energy future looks like, but there is more than enough information already available to start thinking through some of the important consequences of the new energy situation for 21st century politics and policy. In the first of these energy posts I identified some geopolitical losers; in the second I took a look at the domestic implications of the new energy situation for the United States. In this post I’ll sketch out some initial thoughts about how the new energy picture—if it isn’t a mirage—will affect American foreign policy.
The effects won’t be trivial. Changes this profound in the energy outlook imply major changes in world politics and given the unique global role of the United States and the global scale of its interests, those changes matter hugely for American foreign policy. Much of the punditry of the last ten years is looking suddenly obsolete; a number of writers are going to hope that some of the books and articles they’ve recently published will be quickly forgotten. They shouldn’t worry; the public is quick to forget, and most prophets of decline and Malthusian struggle will have little trouble in reinventing themselves as analysts of abundance.
The U.S. may not be the biggest geopolitical winner in the new dispensation; that title may go to Israel if it’s energy potential proves out. If Israel’s potential as an energy superpower is actually realized, the Jewish state will be like a pudgy orphan girl who inherits a billion dollar trust fund and suddenly tranforms from social pariah to belle of the ball. Not only will it replace or supplement Arab countries as a principle source of oil and gas for Europe, it will see the weight of its most serious enemies in world politics decline as the Gulf becomes only one of a number of energy-rich regions.
But on the bigger stage of world politics, it’s the United States that benefits most from the energy revolution. To begin with, the core objective of the United States—a reasonably stable, orderly and liberal global system—is a lot easier to achieve in an era of energy abundance than in one of tough resource competition. Oil is a lubricant, and the more the world has, the more smoothly things are likely to run. A world in which jealous, competing states are trying to elbow each other aside to access the last few remaining pools of oil is a much nastier place than one in which the whole oil question is a lot more laid back.
Abundant energy will also promote global economic growth, an effect that strengthens and stabilizes the world system. It is easier for countries to cooperate when their economies are doing well. There is less nationalist pressure inside countries driving political leaders to take confrontational stands, and it is easier to negotiate win-win solutions and build functioning international institutions when all parties are relatively optimistic about their prospects.
On the whole, a world of energy abundance should be particularly good for U.S.-China relations. If both China and the United States have large energy reserves at home, and if new discoveries globally are making energy more abundant, there is less chance that China and the U.S. will compete for political influence in places like the Middle East. More energy security at home may also lessen the political pressure inside China to build up its naval forces.
Oil may calm the troubled waters around China’s shores. The maritime disputes now causing trouble from Korea and Japan to Malaysia and the Philippines will be easier to manage if the potential undersea energy resources are seen as less vital to national economic security. Nationalist passion will still drive tough stands on the maritime issues, but nationalism is a much stronger force when powerful economic arguments share the agenda of radical nationalist groups. If the South China Sea issue is seen as both a question of national pride and, because of perceived energy supply issues, a vital national interest, Chinese policy will be much tougher than if it is simply a question of pride.
Depending on the size of China’s unconventional domestic reserves (and some analysts think the country could have something like the equivalent of double Saudi Arabia’s oil reserves), China will feel marginally less constrained by Washington’s global naval supremacy. As it now stands, in any serious clash with China, the U.S. could bring Beijing to its knees with a naval blockade. With much larger domestic energy production, China would be less vulnerable to this threat. This could translate into a greater willingness to take a hard line on international issues.
On the other hand, China is unlikely to gain complete energy independence, and in any case it will still need access to the global system for trade and investment. Indeed, assuming that the new energy abundance promotes global economic prosperity, access to the global market will become more attractive for China and its deepening economic independence with world markets would make China less willing to risk cutting off its maritime connections to the rest of the world.
The energy revolution is likely to have profound implications for American policy in the Middle East. American public opinion, already deeply depressed about the prospects for constructive change in the region and deeply weary of war, is likely to welcome any chance to think less about a part of the world in which U.S. initiatives rarely seem to go well. The Gulf in particular will, however, continue to be important to countries like India, China and Japan as well as to Europe. Over time, as the world’s energy picture becomes less Middle East-centric, the U.S. is likely to explore the possibility of becoming more of a balancer, less of a hegemon in the region. It will still be a goal of U.S. policy to prevent any single other power from being able to dominate the region and interrupting the oil flow, but the U.S. will likely look to achieve that more through agreements and power balancing than through overwhelming military superiority by land, sea and air. This will not happen all at once, and may not happen at all if initial U.S. attempts to disengage lead to greater threats, but both public and elite opinion would much rather reduce than increase the U.S. presence in this part of the world, and if the changing world energy picture makes that easier to do, the U.S. will take the opportunity to step back.
India, Russia, Turkey, China, Japan, Israel, Iran and the European powers will all have interests in the Middle East. If the U.S. goal is to manage and limit competition among these players and other local governments, the multiplicity of interests and powers involved in the region could make that a complex but not altogether impossible task. The future of this region remains hard to predict, but the U.S. may well find that its key interests in the Middle East can be achieved with much less sweat in the next fifty years than in the last thirty.
The one exception is likely to be U.S. support for Israel. Israel’s security does not require U.S. ground troops or even naval forces, but U.S. public opinion will likely continue want Israel to be safe. Arms sales, aid and cooperation can be expected to continue, though if Israel’s own potential energy resources come online, Israel may have more friends, more money and fewer and weaker enemies than it now has.
Globally, America’s ambition is not and never has been to be an active, busy hegemon. At its core, America is a lazy power. The world order America wants is liberal, capitalist, predominantly democratic and broadly accepted by the major powers. It wants to prevent the domination of either end of Eurasia by a single power and it doesn’t want any part of the world to close itself off for purposes of investment and trade, but otherwise it is open to a wide range of political and security arrangements.
An American century is one in which the world is moving towards this kind of configuration. The 21st century already appeared to be heading America’s way—less because the U.S. has the will or the power to impose its designs on the world than because American objectives match up reasonably well with the vital interests of most of the world’s important powers. The new energy picture supports that kind of outcome in three ways.
The American economy will gain important advantages that will ease the transition to a post-blue social model and promote social cohesion and public confidence in our economic model.
Energy abundance will promote global economic growth, increasing global acceptance of liberal capitalism as living standards rise.
The new geopolitics of oil will weaken hostile countries, strengthen friendly ones, and promote U.S.-China cooperation.
From all these points of view, the new energy picture is almost completely positive. Oil makes everything better. But the environmental question remains. Will an era of hydrocarbon abundance lead to an environmental catastrophe? Many greens are already warning that exactly this will happen. In the next and concluding post in this energy series, I’ll look at those issues.
The American Interest, 19 July 2012