Resource Rich, Policy Poor
Reviewed by Lauren Williamson, UK Defence Forum Research Associate
Written by Dr. Boyko Nitzov, the Atlantic Council's issue brief on Eurasian energy illustrates well the nuanced complexities in the international trading of crude oil and natural gas. If the West hopes to achieve energy security, leaders must cultivate free, fair and competitive resource markets and transport routes in some of the most politically difficult regions of the world. And many obstacles – from protectionist policies to conflict zones in the Middle East – lie in the way.
Eurasian Energy: Hot and Cold Atlantic Council January 2011
The issue brief "Eurasian Energy: Hot and Cold," caters specifically to the US's interest in achieving energy security, outlining the geopolitical dynamics of the current oil and gas trading and transport environment while noting the regions, particularly Central Eurasia, that would be key in obtaining this goal. The strategies provided rely heavily on collaboration with Western allies in Europe and throughout the Middle East, who have a similar geopolitical agenda and a vested interest in achieving stability in the energy markets. These markets have seen an increase in volatility in recent years as prices skyrocketed before the global recession, plummeted, then quickly bounced back and are approaching the same high level once more.
High prices are good for the producer and supplier, but politically challenging for governments whose manufacturing sector and citizens are often harmed by the price swings. Dr. Boyko Nitzov, an international energy expert and author of the brief, argues for simple solutions: bring more transport routes and distribution pipes on line, increase the number of independent oil and gas market players and make them commit to a homogenous set of rules that govern market ethics and behaviour. This would inject some much needed transparency, predictability and rationality into market transactions.
But when one considers the Eurasian region, and all the varied and diverse countries and cultures it includes, Nitzov's solutions seem more difficult to achieve. In fact, the international cooperation required for Nitzov's solutions to succeed is unprecedented. And, if the strategies are to be led by the US, it is also unlikely such success will be realized until the US is able to regain its international hegemonic position by proving itself in the Afghanistan and Iraq interventions, a prospect that could take years more – if it happens at all.
Nitzov rightly explains that "the most pressing risks are above the ground, not below it." To that end, however, the brief pays little attention to the countries without significant energy deposits, even though part of their economic development and future needs will necessarily rely on increased energy consumption. Additionally these countries stand to profit by the creation of new pipelines that might run through their lands and could help pressure neighboring states to adopt market friendly policies.











