I have just returned from a trip to Moscow, for speaking engagements and meetings with officials, academic and think tank experts, and energy executives about the intersection of Russian energy strategy and Russian foreign policy. Upon my return, I also had the pleasant experience of seeing the first hard copies of an article that a French colleague and I have just published in the Summer 2006 issue of The National Interest. Titled “The New Axis of Oil“, the article argues that the political consequences of recent structural shifts in global energy markets are posing the most profound challenge to American hegemony since the end of the Cold War:
The increasing control that state-owned companies exercise over the world’s reserves of crude oil and natural gas is, under current market conditions, enabling some energy exporters to act with escalating boldness against U.S. interests and policies. Perhaps the most immediate example is Venezuela’s efforts to undermine U.S. influence in Latin America. The most strategically significant, though, is Russia’s willingness to use its newfound external leverage to counteract what Moscow considers an unacceptable level of U.S. infringement on its interests. At the same time, rising Asian states, especially China, are seeking to address their perceived energy vulnerability through state-orchestrated strategies to ‘secure’ access to hydrocarbon resources around the world. In the Chinese case, a statist approach to managing external energy relationships is increasingly pitting China against the United States in a competition for influence in the Middle East, Central Asia, and oil-producing parts of Africa… While each of these developments is challenging to U.S. interests, the various threads of petropolitics are now coming together in an emerging “axis of oil” that is acting as a counterweight to American hegemony on a widening range of issues. At the center of this undeclared but increasingly assertive axis is a growing geopolitical partnership between Russia (a major energy producer) and China (the paradigmatic rising consumer) against what both perceive as excessive U.S. unilateralism.
I return from Moscow even more persuaded of the validity of this analytic argument — with regard to Russia, China, and the prospects for increasing Sino-Russian strategic collaboration. Beyond the article, I’d like to offer some additional observations about Russia’s rise as what some describe as an “energy superpower.”
For all of the inefficiencies and conflicting interests and parochial consideration at play in Russian decision-making, the Kremlin under Vladimir Putin is developing a model for deriving external leverage from Russia’s status as a major energy exporter that is in some ways distinct from previous models followed by other major energy suppliers (i.e., Saudi Arabia). This unique Russian model has implications for U.S. interests in a variety of arenas; unfortunately, U.S. policy does not yet reflect a serious strategy for dealing constructively with these challenges.
To illustrate these points, I will table the example of Moscow’s use of investment capital (derived from energy export revenues) and control over access to Russia’s state-owned pipeline system to assume a leading role in the development and marketing of neighboring states’ energy resources. This has been an underappreciated (at least in the United States) but critical part of Russia’s largely successful strategy during the last 2-3 years to roll back U.S. influence in the Eurasian south and reestablish a Russian sphere of influence there. (This approach may also be used to give Russia an important role in developing Iran’s hydrocarbon resources, particularly the Islamic Republic’s enormous potential as a gas exporter, but that is another story.)
The U.S. response has been to intensify longstanding American support for the development of energy export routes from Central Asia and the Caucasus that would be outside Russian control. Russians clearly view this as a deliberate U.S. provocation. As someone who spent most of his career in government service working on the Middle East, I grew accustomed to charges of a “double standard” in U.S. foreign policy, referring to American support for Israel. But Russians now talk about a new “double standard” in U.S. policy — one that criticizes deviations from Western standards of democratic practice in Russia but is silent on authoritarian abuses in Azerbaijan or Kazakhstan. From a Russian perspective, the new double standard reflects a deliberate U.S. effort to isolate and weaken Russia; increasingly, Moscow has the resources and wherewithal to push pack.
If there were a serious prospect of “beating” the Russians in a contest for influence in Central Asia and the Caucasus, the U.S. approach might have a serious strategic rationale. But, the reality is that, even if all the projected non-Russian pipelines out of these areas are built, in 10 years, the percentage of oil and gas exports from states like Kazakhstan and Azerbaijan that will reach foreign markets through Russian-controlled infrastructure will still be staggeringly high. The real policy question is how to engage Moscow so that its inexorably growing influence in critical regions like Central Asia is not turned against U.S. interests, rather than the development of quixotic strategies for seeking to undermine that influence. But that is a policy debate we are not really having.
Managing the many facets of U.S.-Russian relations as Russia’s importance as an energy supplier continues to develop will be a long-term strategic challenge for successive U.S. administrations. The United States will face similar long-term challenges managing the impact of rising energy demand in China and India and the statist strategies that these countries are following as they seek to meet their energy needs, and dealing with major energy producers in the Middle East in a way that encourages these states to expand their own productive capacity. Energy security, in all its aspects, will be, in my view, perhaps the most strategically important foreign policy issue during the next 10-20 years. I am preparing to leave my current position at Brookings and move to the New America Foundation, where I will be senior fellow and director of a new project on the geopolitics and geoeconomics of energy security. From this position, I hope to contribute to a more rigorous and comprehensive debate about energy security as a foreign policy issue. And, I hope to contribute occasionally to this very fine blog. Flynt Leverett
Flynt Leverett will take up his new appointment at the New America Foundation July 1; he has also been appointed visiting professor of political science at the Massachusetts Institute of Technology. He was senior director for Middle East affairs at the National Security Council in 2002-03; prior to that, he served on the Secretary of State’s Policy Planning Staff and as a senior fanalyst at the Central Intelligence Agency.