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TEIMUN 2011 11th July – 17th July

NORTH ATLANTIC COUNCIL (NAC) Topic II: NATO & Energy Security


Introduction The European Union (EU), where 22 of NATO‟s 28 member states are located, imports around 60% of its gas and more than 80% oil. 1 Slightly less dependent, the US still imports around 60% of its oil requirements.2 Moreover, as demand continues to outpace domestic production, energy dependency will continue to rise in most NATO member states. Moreover, with developing countries such as China and India determined not to energy scarcity stymie their development, so will competition. At the same time, the political situation in the many of the available sources for all this energy gives ground for concern. Given the considerable potential for political unrest in many exporting regions in Africa, the Middle East and South America, many doubt their reliability in terms of providing NATO members with a stable flow of energy. Russia‟s behaviour in the past years has also raised the alarm bells. Being a major supplier of oil and gas and possessing a near monopoly in the European gas market, it has demonstrated its readiness to use energy as a means tool for achieving political goals. Meanwhile, energy dependency varies from country to country within NATO as well. This leaves some countries feel more vulnerable than others, creating an environment of insecurity which in turn might lead to competition between member states. Consequently, energy security has featured highly on NATO‟s agenda in past years. However, with attention often diverted to causes deemed more imminent, most prominently its involvement in Afghanistan, a clear role for NATO in this field is yet to be found. Intended to give you a short introduction into NATO‟s role and prospects in the field of energy security, we hope this background paper will help you guide you in your further studies into the subject. In doing so, we hope you are able to come up with a new agenda for NATO in this (relatively) unchartered policy terrain. Good luck! Mark van Embden Andres and Peter Jaap Blaakmeer North Atlantic Council Chairs, TEIMUN 2011

1 2

Garibaldi, I., NATO and Energy Security, AIE, March 2008, p. 1 CIA, The World Factbook, United States


NATO’s involvement in energy security The origin of NATO‟s proposed role in energy security stems from two different roots. Firstly, there is the purely military focus, whereby NATO's role could be limited to the protection of energy supplies in order to maintain stability and security of its member states. Such an approach would focus on the security of energy production and transportation facilities, including supply lines and routes. Energy security is viewed by every state as something closely linked to national security. Given the obvious international dimension that potential threats like piracy and terrorism pose to energy security, several states envision a constructive role for NATO.3 However, energy security has an important political component as well, and this is also where the potential for division between member states sets in. The Ukraine-Gazprom dispute that ran between 2005 and 2009 offers of prime example of the potential intertwining of energy and power politics. This dispute, which originates in the renegotiation of the price of Russian gas deliveries to Ukraine, became especially tense in early January 2006, when Gazprom decreased gas supplies to Ukraine leading to a drop in gas supply in several European countries. The Russian government is the majority shareholder in Gazprom, leading some to argue Gazprom‟s actions might be politically motivated. Obviously, the issue is especially contentious in countries formerly occupied by or under the influence of the Soviet Union. The dispute ultimately put energy security on NATO‟s policy agenda, brought forward initially by the United States and backed by the United Kingdom and Germany.4 In February 2006 NATO Secretary General Jaap de Hoop Scheffer announced that energy security needed to be put on NATO‟s agenda for discussion, declaring; „today, for reasons that are obvious – including the potential of terrorists targeting our energy supplies – it makes sense to me that the allies should discuss this issue‟.5 The Riga Summit Declaration of November 2006 included a short paragraph explicitly stating for the first time that energy security is a concern for NATO and that the alliance should explore what role NATO should partake in this matter. It was no longer a matter of if the NATO 3

Energy Security: NATO’s limited, complimentary role, NATO Defense College Research Paper, No. 36, May 2008 4 Ibid. 5 Ibid.


should play a role, but a matter of how. Since this summit, the “political” root became again apparent in light of the oil disputes between Belarus and Russia in December 2006-January 2007. According to the Declaration, dpendence on oil and gas is a '' that some governments will seek to exploit – „the Gazprom crisis demonstrated how easily demand can be manipulated‟. The paragraph included in the Riga Declaration can serve as a starting point for defining how NATO‟s sees its potential role in energy security; “As underscored in NATO‟s Strategic Concept, alliance security interests can also be affected by the disruption of the flow of vital resources. We support a coordinated international effort to assess risks to energy infrastructures and to promote energy infrastructure security. With this in mind, we direct the council in permanent session to consult on the most immediate risks in the field of energy security, in order to define those interests where NATO may add value to safeguard the security interests of the allies and, upon request, assist national and international efforts.”6 This paragraph can serve as an indication for the rol NATO sees for itself. Three important points surface. First, the Alliances expresses it desire to define the nature of the threats more clearly. Second, NATO seeks to „support a coordinated international effort‟, and „upon request assist national and international efforts‟. This signals that NATO wants to provide help to other actors in the debate and without necessarily taking a leading role. Finally, and building upon this, the document outlines the what some would argue rather limited nature of its potential activities, for example role protecting shipping lanes, particularly with regard to liquefied natural gas (LNG) tankers on the high seas, and protecting critical energy infrastructure when there is a specific high level threat‟. The Secretary General made clear that energy security is to be seen as a „collective challenge‟ to which a response which reflects a „multifaceted approach‟ and a „great deal of coordination between national governments and international organizations‟ is in order. Apparently, NATO‟s role should be complementary to that of other organizations, such as the European Union. The principle of subsidiarity can also be derived from it, in the sense that NATO should look for potential niches where they could offer more value than other

6

Riga Summit Declaration: [http://www.nato.int/docu/pr/2006/p06150e.htm] as retrieved 05-03-2011


organizations can and not to interfere with organizations that can handle issues better than NATO can. Current situation and future challenges Nearly every member state will become increasingly dependent on oil and gas imported from countries outside NATO. This oil and gas however will originate from a decreasing number of states. With most of the proven oil and gas reserves located in the Middle East, North Africa and Russia, imports from these regions will make up an increasingly large share of NATO energy consumption.

Oil and gas reserves as of 2005

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Meanwhile, globalization and trade liberalization hardly seems to apply to the energy markets. On the contrary, the role of the state seems to be on the rise in this field. The gas dispute between Ukraine and Russia in January 2006, one of the direct causes for putting energy security on NATO‟s agenda,8 is a clear illustration of this. However, Russia is not the only major supplier of oil and gas that has shown to be ready to use energy as a tool for political gain. Venezuela has voiced similar threats towards the US9. Iran has also shown similar tendencies. Meanwhile, only 4% of proven oil and gas resources are in the hands of „Western‟ corporations like Shell, ExxonMobile or British Petroleum.10 And while the number of energy suppliers may be decreasing, demand, especially from developing countries like China, India and Brazil, will certainly not. One simple statistic is enough to illustrate this potentially painful reality. If per capita car ownership in China (40 cars/1000 citizens) would just near that of the US (765/1000) or

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L. van Geuns en K. Homan, „Energieveiligheid en het Westen‟, June 2007, p. 2 (in Dutch) 8 A. Monaghan, Energy Security: NATO‟s limited, complimentary role, May 2008, p. 1 9 Venezuela‟s Chavez threatens to stop oil sales to the US, Washington Post, July 26 2010 10 L. van Geuns en K. Homan, „Energieveiligheid en het Westen‟, June 2007, p. 3 (in Dutch)


Europe (300/1000)11, implications would be tremendous. However, a simple rise in demand is not the only problem. The nature of the competition seems to be changing as well. China especially engages in intricate deal with potential energy suppliers, for example linking the supply of oil and gas to Chinese-run development projects in infrastructure. Also, it has shown not to shy away from dealing with states under boycott from NATO members for human rights violations, notably Sudan. So, with NATO‟s energy dependency on the rise, competition on the world market stiffened and insecurity concerning the suppliers of oil and gas increased, NATO member states main objective in terms of national security is to minimize the risk of disruptions to its energy supply. The possible threats to energy supplies are numerous. This paper will outline a few potential sources. First of all, domestic political instability in oil producing countries might endanger supply. Political turmoil in these regions nearly always increases energy demand. Riots in the still early stages of the 2011 Egyptian revolution made oil prices soar above $100 dollars for the first time since 2008, despite the fact that Egypt is a relatively small supplier of oil itself. Investors‟ main concerns lied – quite validly, as it turned out – with the fear of political instability spreading to more important oil producing countries in the Middle East. Also, possible disruptions of energy transports through the Suez Canal were of concern to some. Transport hubs like the Suez Canal are a problem in and of themselves. The transportation of a large portion of the world‟s oil and energy supplies run through a small number of pipelines and important transportation routes: the so called choke points. For Europe in particular, gas transportation pipelines are an especially contentious issue. Europe imports more than 30% of its energy needs from Russia. In most Eastern European countries, this percentage is much higher. Oil and gas from Russia flows through a number of pipelines, all of which go through Russian territory.

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„Per Capita Car Ownership in China to Climb 67% by 2010, [http://www.greencarcongress.com/2006/05/percapita_car_o.html] as retrieved on 15-02-2011


To decrease Europe‟s energy dependency on Russia for its, several countries support the construction of the Nabucco pipeline running through Turkey, with Azerbaijan, Iraq and Turkmenistan as its main suppliers. The project is seen to rival with the Russian backed South Stream pipeline running from Russia through the Black Sea into Bulgaria. Though regardless of the success of the Nabucco pipeline, Europe will continue Existing oil and gas pipelines to rely on Russia oil and gas going through Russian pipelines for a significant part of its energy needs. Besides the Suez Canal, other choke points include the Strait of Hormuz between Oman and Iran, the Strait of Malacca between Malaysia and Indonesia. A large portion of the world‟s oil transport currently goes through either one of these choke points at some point. Pipelines and choke points represent a relatively easy window of opportunity for an important potential threat to NATO member states energy supply: terrorist attacks. Between 1990 and 2005 there have been at least 330 terrorist on oil and gas facilities around the world, including in NATO member states.12 The seriousness of these threats begs the question what NATO could do in order to improve its member states‟ energy security. Jamie Shea, NATO‟s director of policy planning, has mentioned four possible roles for the Alliance.13 Firstly, NATO could put its institutional capabilities to use by permanently monitoring and assessing 12

A. Monaghan, Energy Security: NATO‟s limited, complimentary role, May 2008, p. 2 13 Jamie Shea, „Energy security: NATO‟s potential role‟, Nato Review, Autumn 2006


developments related to energy security, sharing national intelligence on energy security amongst its member states, and making energy security an integral part of its Partnership for Peace program. Secondly, NATO could provide the military and logistic support to help its member states protect vulnerable energy-related infrastructure in times of crises, possibly article 4 of the NATO treaty. Thirdly, NATO could engage more heavily in maritime surveillance. This is of course especially relevant for the aforementioned choke points in energy transportation routes. Lastly, Shea suggests NATO could develop interdiction operations: „military operation explicitly designed to secure the supply of oil or gas in an actual crisis or conflict situation.‟14 US Senator Richard Lugar, a staunch advocate of a more active role for NATO in energy security, is willing to go a lot further. Citing the cutoff of Russian gas deliveries to Ukraine, Lugar argues that a politically motivated disruption of energy deliveries should be recognized as a potential ground for invoking article 5 of the NATO treaty.15 Only such a statement, Lugar argues, would deter a powerful state like Russia from using energy policy for political goals. On the short- and mid-term, the American Enterprise Institute, a conservative American think tank advises NATO decrease European energy dependence on Russia by more actively supporting the development of the Nabucco and trans-Caspian pipelines.16 The aforementioned is but a sample of recommendations made by politicians, think tanks, policy makers, etc. The question remains however whether the Alliance will find the resolve to formulate a coherent and constructive policy agenda on energy security in the near future.

Conclusion Dealing with matters vital national security in a constructive and coherent manner has traditionally not been the strongpoint of international organizations. NATO and energy security are no exception in this matter. As this paper has tried to outline, NATO‟s role 14

Ibid. Vladimir Socor, „Lugar urges active role for NATO in energy security policy‟, Eurasia Daily Monitor, vol. 3, no. 222, December 1 2006 16 Garibaldi, I., NATO and Energy Security, AIE, March 2008, p. 5 15


within this issue remains limited despite the fact that the urgency to deal with it seems to increase rather decrease. Different member states have different interest and this is not something that is likely to change radically anytime some. However, the fact that NATO‟s role has been this limited thus far could also be seen as an advantage. Since little has been done yet, it should not be hard to identify possible areas of interest where NATO‟s unique and particular capabilities can have a real added value. Seemingly small but concrete proposals will consolidate its position in this field and possibly lead to a more comprehensive approach. Given the importance of energy security and the increasing potential threats to it, inaction certainly does not seem to be in anyone‟s interest.

Bibliography ●

CIA, The World Factbook, United [https://www.cia.gov/library/publications/the-worldfactbook/geos/us.html] retrieved on February 14, 2011

States,


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Garibaldi, I., NATO and Energy Security, American Enterprise Institute, March 2008 [http://www.aei.org/docLib/20080402_EuONo1_g.pdf] retrieved on February 14, 2011 A. Monaghan, Energy Security: NATO‟s limited, complimentary role, May 2008, p. 1 [http://se2.isn.ch/serviceengine/Files/RESSpecNet/95191/ipublic ationdocument_singledocument/C13183EF-E587-4F47-8C541DD764893053/en/fp_05.pdf] retrieved on February 15 2010 Venezuela‟s Chavez threatens to stop oil sales to the US, Washington Post, July 26 2010 [http://www.washingtonpost.com/wpdyn/content/article/2010/07/25/AR2010072502754.html] retrieved on February 15 2010 L. van Geuns en K. Homan, „Energieveiligheid en het Westen‟, Armex, vol. 93, no. 3, June 2007, pp. 28-31 „Per Capita Car Ownership in China to Climb 67% by 2010, [http://www.greencarcongress.com/2006/05/percapita_car_o.ht ml] as retrieved on 15-02-2011 Vladimir Socor, „Lugar urges active role for NATO in energy security policy‟, Eurasia Daily Monitor, vol. 3, no. 222, December 1 2006 [http://www.jamestown.org/single/?no_cache=1&tx_ttnews%5B tt_news%5D=32287] retrieved on 16-02-2011 Riga Summit Declaration: [http://www.nato.int/docu/pr/2006/p06-150e.htm] as retrieved 05-03-2011 Energy Security: NATO‟s limited, complimentary role, NATO Defense College Research Paper, No. 36, May 2008

NAC 2 - The NATO and Energy Security  

NORTH ATLANTIC COUNCIL (NAC) NATO & Energy Security Topic II: 11 th July – 17 th July

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