Energy: Economics, Politics, and Security

I O v e r five years since the worlds first energy crisis and well into its second, ”energy security” remains a widely discussed but little understood problem. Iran has accentuated the supposed lesson of the Arab oil embargo of 1973-self-reliance in national energy supply must replace dependence on imported oil. Careful analysis, however, of the meaning of energy security and its role in the range of broader security issues is still lacking. Energy security is defined as a condition in which a nation perceives a high probability that it will have adequate energy supplies (including traditional sources such as firewood, and plant and animal residues that are frequently not traded in the marketplace) at affordable prices. Prices are defined as affordableif they stop short of causing severe disruption of normal social and economic activity. Leaders must perceive months in advance that their countries will have adequate energy supplies at affordable prices. Without such perceptions, normal social and economic activity may be curtailed by market, distribution or planning constraints. There are two principal economic and political components of energy security. First is the set of all actions that affect the quantity and reliability of indigenous energy supplies. The second includes actions affecting external energy supplies. The two components are closely linked, especially in that problems with indigenous supplies create pressure for increasing energy imports. It is the external.component-nergy imports-that poses the most immediate problems for national security.l Energy security is improved by managing energy demand, increasing domestic energy supply, or increasing the reliability of imported or domestic supplies. National and international security may be analyzed in terms of three components: 1)social, cultural and political; 2) economic; and 3) military. Problems of energy security interact with all three components of broader security concerns. Actions taken by countries in pursuit of energy security may increase or The author is grateful for comments and criticisms on earlier drafts from Harzwy Brooks, William Hogan, Robert Klitgaard, Michael Mandelbaum, and Joseph Nye. David A. Deese is a research fellow,Center for Science and International Affairs, Harvard University. 1. The importance of oil imports as the link between the domestic and international problems of energy is described with great clarity in Thomas C . Schelling, Thinking Through the Energy Problem (New York Committee for Economic Development, 1979). 140 Economics, Politics, and Security I 141 decrease overall independence of action and security; the outcome of this interaction may, in turn, feed back and influence the level of energy security. This relationship forms one part of a broader and even more complex interaction among domestic politics, foreign policy and international politics. For present purposes, it is assumed that the influence of international politics on foreign policy (especially for economic and security issues) and domestic politics is just as important as that of domestic political factors on foreign policy and international relations.2 The issues of energy and security are taken to be one component of political economy, or “the reciprocal and dynamic interaction in international relations of the pursuit of wealth and the pursuit of power.”3 Emphasis is placed on the inseparability of economics and politics. Even reaching coherent definitions of the central questions and issues of energy security and some sense of their relative importance remains difficult the lessons of 1973 are still being assimilated. The effects, for example, of past energy price increases and government measures on conservation, inflation and economic growth rates are not fully known. Assuming eventual mastery of the complex set of social, economic, political, legal and technical variables in the energy and security calculus, oil-importingcountries still face formidable obstacles to launching domestic and international responses. Lulled into near apathy by late 1978 (owing to the temporary excess in oil supplies and the seeming resilience of the international monetary and financial systems), many nations were jolted by events in Iran and the realization that the international energy supply system was again stretching toward its limits. 2. This assumption represents a synthesis of the nationalist, realist and neo-liberal paradigms of international relations along the lines of that developed in Robert 0. Keohane and Joseph S . Nye, Power and Interdependence (Boston, Mass.: Little, Brown & Co., 1977) and...