Energy and the Soviet Bloc

Energy I w h a t are the implications of Soviet energy problems for Soviet-American relations? American minds, when first confronted with that question fouryears ago, understandably leapt first to the Persian Gulf. Now more recent reports appear somewhat less alarming, and so we have a change for more leisurely reflection.2 The Soviet energy problem is more, afterall, than simply a shortage of oil; the other major Soviet energy sources are a concern too (each in its own way). It is more than a crisis of production; issues of consumption, distribution , and substitution of fuels are key elements also. And it is more than a simple problem of penury; for in a couple of decades the SovietUnion could have the most securely abundant energy resources of any major industrial power-if it pays the price, that is, in scarce capital, hard currency, and forgone alternative~.~ In short, the Soviet energy problem is likely to be a An early version of this paper was prepared for the Conference on Energy and National Security, National Defense University, November 5, 1980, and will appear in a volume to be published by the National Defense University Press. The opinions expressed herein are those of the author alone. Thane Gustafson is on the research staff of the Rand Corporation. From 1974 to 1980, he was assistant and associate professor of government at Haruard University. He is the author of Reform in Soviet Politics(Cambridgeuniversity Press, 1981),and Selling the Russians the Rope? Soviet Technological Innovation and US Export Controls (Rand, 1981). 1. The chief catalyst for the debate has been the series of reports issued by the National Foreign Assessment Center of the Central Intelligence Agency, Prospects for Soviet Oil Production, ER 7710270 , April 1977, and Prospects for Soviet Oil Production: a Supplemental Analysis, ER 77-10425, July 1977. For more recent discussions by CIA analysts, see J. Richard Lee and James Lecky, “Soviet Oil Developments,” in U.S. Congress, Joint Economic Committee, Soviet Economy in a Time of Change, Volume 1(Washington, D.C.: USGPO, 1979), pp. 581-600;and Joseph A. Licari, “Linkages between Soviet Energy and Growth Prospects for the 1980s” (Paper presented at the 1981NATO Economics Directorate Colloquium, Brussels, April 8-10, 1981). 2. The implications of the most recent CIA estimates are discussed in an article by Bernard Gwertzman, “CIA Revises Estimate, Sees Soviet as Oil-Independent through 1980’s,”N m York Times, May 19, 1981, p. 1. 3. For recent figures on Soviet performance in the energy field, see Theodore Shabads News Notes in the April 1980 and April 1981 issues of Soviet Geography: Review and Translation, pp. 241-252. For more comprehensive background, see Leslie Dienes and Theodore Shabad, The Soviet Energy System: Resource Use and PoZicies (New York: John Wiley and Sons, 1979). Additional information and analysis will be found in Robert W. Campbell, ”Energy in the USSR to the Year 2O00,” one of a group of essays presented at Airlie House in October 1980 and currently being prepared for publication. Znternationul Security, Winter 1981/82 (Vol. 6, No. 3) 0162-2889/82/03CQ65-25$02.50/0 @ 1982by the President and Fellows of Harvard College and of the Massachusetts Institute of Technology. 65 lnternatwnal Security I 66 major factor in most of the Soviet Union’s foreign relations until the end of the century. But will energy add a fundamentally new element to them? Will the traditional issues of Soviet-Americanrelations be dramatically changed by new dangers and opportunities arising from Soviet energy problems? The aim of this article is to apply these questions to a region that has been for 35 years one of the central concernsin Soviet-Americanrelations, Eastern Europe. Let us first briefly review the overall situation. Over the last decade, four trends stand out in the Soviet Union’s relationship with its East European client states and the West Europeans beyond: 1)a rapid growth in foreign trade, both in absolute terms and as a share of Soviet economic activity; 2) a striking increase in Soviet military presence and power in Europe, against a backdrop of deterioratingeconomic performance at home; 3) a growing Soviet effort to manage its relations...