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Escaping Oil's Stranglehold: When Do States Invest in Energy Security?

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Abstract

Modern economies and militaries are fundamentally dependent on oil, but the study of energy security has fallen out of favor in the field of international relations. We develop and test a theory of when and how states invest in energy security. We argue that states implement policies to improve their energy security when they perceive a risk of a militarized dispute and international oil markets are dominated by a small number of Middle Eastern producers. Empirically, we show that industrialized countries with reasons to worry about their security have significantly increased their public investment in energy research and development in response to an increase in the Middle East’s share of the world oil supply.

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... Previous studies have drawn links between national RD&D expenditures for energy-related technology and potential external oil supply risks such as, for example, global oil price level (Cheon and Urpelainen, 2012) or the world market share of oil production from the Middle East (Cheon and Urpelainen, 2015). This suggests that oil-importing countries, indeed, react to certain developments in international energy markets or geopolitical conditions (Yergin, 1991(Yergin, , 2012. ...
... Yet, our interest does not lie with the issues of its definition , measurability (Cohen et al., 2011) or development over time (Matsumoto et al., 2018), but rather in investigating shifts in associated policies. Here, multiple studies have discussed how states could improve their level of energy security (Bielecki, 2002;Mueller-Kraenner, 2008;OECD and IEA, 2014;Yergin, 2006), while systematic analyses of how countries actually react to security concerns are scarce (Cheon and Urpelainen, 2015). Only recently enhanced data collections allowed for the study "of how preferences, institutions, and international interaction combine to shape the politics of energy" (Hughes and Lipscy, 2013, pp. ...
... Among studies on oil supply security close attention has been paid to the political and economic developments in the Middle East (Deese, 1979;Delucchi and Murphy, 2008), a region still hosting the most important oil producers as well as reserve holders alongside crucial transit choke points (Bradshaw, 2009). Here, Cheon and Urpelainen (2015) demonstrate that increases in the share of the Middle Eastern oil production are associated with higher investments in energy security among industrialized countries. Therefore, as importing countries seem well aware of potential 'sovereignty' issues (i.e. ...
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While supply disruptions of oil imports are widely considered a serious threat to a country's energy and overall national security, systematic investigations into the effects of security concerns on investments in energy technology are rare. Complementing existing energy policy literature, this paper investigates the impact of conflict involvement of major oil suppliers on RD&D expenditures in biofuels among import-dependent economies, i.e. geopolitically induced investments. Utilizing the recently released data set on Integrated Crisis Early Warning System (ICEWS), our sample comprises information on 12 EU member states from 1997 to 2014. Among those we find that RD&D expenditures in biofuels are positively associated with the conflict involvement of the respective country's major oil supplier. The results are robust across different model specifications and measurements of conflict. We argue that joining arguments from political economy and conflict research can help to explain the heterogeneous pattern of investments in energy technology in resource-poor European countries. In addition, it increases our understanding of innovation activities within the energy sector.
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... We thank Brendan Green for extended discussions on these points.13 The National Journal rankings from 1981 -the first year the rankings were created -to 2007 were collected. ...
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... In our case and with respect to the broad country sample, sufficient data collection on the KS is not feasible. We thereby follow the example of previous studies and use R&D expenditures aggregated across technologies (see Acs et al. (2002) and Cheon and Urpelainen (2015)). Moreover, Jefferson et al. (2006) showed that recent annual R&D expenditures may serve as a useful proxy for the KS. ...
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... Th e comparative state responses to the oil price shocks of the 1970s was an obvious point of focus (Kohl 1983 ;Ikenberry 1986 ). More recently, some scholars have extended the focus beyond the oil shocks of the 1970s (McGowan 2011 ;Chakarova 2012 ;Cheon and Urpelainen 2014 ;Hughes 2014 ;Duffi eld 2015 ) and to other types of energy shocks, such as the nuclear accident in Fukushima in 2011 (Ramana 2013 ) or the Russian-Ukrainian gas crises in (e.g., Stern 2006. Domestic energy policies that bear signifi cant international consequences have also been studied, such as Ikenberry's ( 1988 ) classic study of the decision to decontrol oil prices by the Carter administration. ...
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In 1973, the United States and other western countries were shocked by the Arab oil embargo. Lines formed at gasoline pumps; fuel stations ran out of supply; prices skyrocketed; and the nation realized its vulnerability to decisions made by leaders of countries half a world away. In response, the U.S. Strategic Petroleum Reserve (SPR), which was signed into law by President Gerald Ford in 1975, has become the nation's primary tool of energy policy. Following its first major use during the Persian Gulf War of 1991, officials and policy makers at the highest levels increasingly turned to the SPR to stave off shortages and mitigate rising energy prices. Author and historian Bruce A. Beaubouef examines, for the first time, the interactions that have shaped the development of the SPR. He argues that the SPR has survived because it is a passive regulatory tool that serves to protect energy consumers and petroleum consumption and does not compete with the American oil industry. Indeed, by the late twentieth century, as American import dependency reached new heights, refiners and transporters increasingly relied upon the SPR as a ready resource to help maintain feedstock when supplies were tight or disrupted. In a time of continued vulnerability, this definitive work will be of interest to those concerned with the history, economy, and politics of the oil and gas industry, as well as to historians and practitioners of oil and energy policy.
Article
While everyone wants energy that is clean, cheap, and secure, these goals often conflict: traditional fossil fuels tend to be cheaper than alternative fuels, but they are hardly clean or (in the case of oil) secure. This timely book provides an easy-to-understand explanation of the issues as well as sensible proposals for a truly sustainable energy policy. Economist James Griffin points out that current energy policies are fatally flawed and that government policies should focus on "getting the prices right" so that the prices of fossil fuels reflect their true costs to society-including greenhouse gas and security costs. By using carbon and security taxes, alternative energy forms will be able to compete on a more even playing field against fossil fuels. This will unleash advances in alternative energy and conservation technologies enabling the marketplace and consumers to find the right balance among energy sources that are cheap, clean, and secure.
Article
This study builds on earlier work on extended (third-party) immediate deterrence. We analyze fifty-eight cases and summarize previous findings that extended deterrence is likely to succeed when the immediate or short-term balance of forces favors the defender, when any previous crisis involving the same adversaries resulted in stalemate rather than clear victory for either, and when the military and diplomatic bargaining process is characterized by tit-for-tat or firm-but-flexible strategies rather than bullying or appeasement. The long-term balance of forces and the defender's possession of nuclear weapons make little difference. We then focus on cases where deterrence has failed and the defender must make a decision whether to fight. The defender is more likely to fight when the short-term balance of forces favors it, when it is bound to the third party by alliance ties or geographic proximity, and when it has followed a firm-but-flexible bargaining strategy during the crisis. Generally, these results emphasize the importance of different interests and perspectives of attackers and defenders. Even clear-sighted vision of its own interests may bring war if a state fails to tread a delicate balance between making credible threats and humiliating its adversary.
Article
The institutions and policies that were set up after the 1973 Arab oil embargo can no longer meet the needs of energy consumers or producers. The definition of energy security needs to be expanded to cope with the challenges of a globalized world.
Article
Investments in energy technology research and development (R&D), and in associated human and institutional capacity, are fundamental to our ability to respond to changing economic and environmental needs. This paper uses data on R&D investments and patent records to examine the relationship between expenditures on R&D and innovation, with a particular focus on the energy sector. We observe that R&D spending and patents, both overall and in the energy sector, have been highly correlated over the past two decades in the US. In addition, we observe that the R&D intensity of the US energy sector is extremely low when compared to other sectors. We argue that the data illustrates the critical role of public policy, as evidenced by the impact of recent technology transfer related legislation on the total number and on the ownership of innovations resulting from federally sponsored R&D. We conclude that there has been a significant and sustained pattern of under-investment in the US energy sector, and that recent declines in energy R&D exacerbate this situation. Innovation for the US energy infrastructure is also a significant driver of the international energy economy. Thus, the spillover from US under-investment detracts from the global capacity to respond to emerging risks such as global warming.
Book
Political scientists have long classified systems of government as parliamentary or presidential, two-party or multiparty, and so on. But such distinctions often fail to provide useful insights. For example, how are we to compare the United States, a presidential bicameral regime with two weak parties, to Denmark, a parliamentary unicameral regime with many strong parties? Veto Players advances an important, new understanding of how governments are structured. The real distinctions between political systems, contends George Tsebelis, are to be found in the extent to which they afford political actors veto power over policy choices. Drawing richly on game theory, he develops a scheme by which governments can thus be classified. He shows why an increase in the number of "veto players," or an increase in their ideological distance from each other, increases policy stability, impeding significant departures from the status quo. Policy stability affects a series of other key characteristics of polities, argues the author. For example, it leads to high judicial and bureaucratic independence, as well as high government instability (in parliamentary systems). The propositions derived from the theoretical framework Tsebelis develops in the first part of the book are tested in the second part with various data sets from advanced industrialized countries, as well as analysis of legislation in the European Union. Representing the first consistent and consequential theory of comparative politics, Veto Players will be welcomed by students and scholars as a defining text of the discipline.
Article
The post-World War II world has seen the transformation of the international system from a configuration with several rival great powers into one with two superpowers and a set of lesser but still substantial powers—second-tier states with democratic politics and mixed economies. One of the recurrent concerns of the latter has been to secure supplies of natural resources. We argue that postwar conditions point to eight elements of prudent resource policy for middle-level powers. Such states should: (i) avoid military means; (2) choose trade partners whose political interests overlap with their own and who enjoy political stability; (3) seek to create in supplier and transit countries a structure of economic interests that will make supply agreements self-enforcing; (4) diversify with respect to commodity dependence, supplier share, and transit bottlenecks; (5) tailor stockpiles to the urgency of demand; (6) exploit technology to reduce dependence and enhance bargaining advantages; (7) encourage the private sector and public enterprises to become intermediaries in the international resource trade; and (8) pursue strategic interdependence among consumer nations by creating multilateral stakes in the maintenance of normal commerce in resources.
Article
The 1990s saw the emergence of a new research agenda focused on enduring rivalries, longstanding competitions between the same pair of states. The original Diehl & Goertz dataset on international rivalries has been perhaps the most widely used collection to study those rivalries. Here, that dataset is extended through 2001, and additional criteria beyond the time-density approach are used to define a population of rivalries. In the first half of the article, the conceptual and operational bases on which the original rivalry collection was based are described. The article explores each of the dimensions of the rivalry concept and the associated operational criteria. The ‘linked conflict’ dimension of the rivalry concept is made more explicit in the discussion of rivalry dimensions. The article then presents and discusses all the major changes made vis-‡-vis the earlier rivalry collection. In the second half of the article, empirical analyses highlight the conceptual dimensions of rivalry. Particular attention is devoted to the issue of rivalry symmetry, with an investigation of rival power capabilities. In an analysis on the linked conflict dimension, the article examines war occurrence and sequence in rivalry (most of which occurs at or near the outset of the rivalry) as well as the outcome and waiting times between disputes. The article concludes with a comparison of this dataset to another prominent rivalry collection.
Article
Why has public investment in R&D on alternatives to fossil fuels decreased in industrialized countries? The conventional wisdom holds that the culprit is electricity deregulation. We test this hypothesis against data on public energy R&D in industrialized countries, 1980–2007. The data show some weak support for it. However, the data show a stronger association between decreasing public energy R&D and the declining economic importance of heavy industry. These findings suggest that policy initiatives aimed to correct deregulation's ills are only partially helpful.
Article
To achieve environmental sustainability and reduce their vulnerability to oil shocks, countries can develop new energy technologies. Technological advances reduce the cost of structural changes in the energy economy, and thus also increase the political feasibility of such changes. But what explains international variation in the form and quality of energy technology innovation? We build on previous theories and offer an integrated account: increasing oil prices reinforce existing sectoral innovation systems, both politically and economically, thus allowing public policymakers and private entrepreneurs to profitably invest in new energy technologies. We test this theoretical argument against data on public R&D expenditures and patents in the domain of renewable energy technology for industrialized countries from 1989 to 2007. We find strong support for the interactive hypothesis. Thus, we contribute to literatures on (i) domestic responses to international shocks, (ii) environmental sustainability and energy security, and (iii) the political economy of technology innovation.
Article
A framework is described that can be used to analyze energy security issues. Five sets of issues horizontal nuclear proliferation, geopolitical implications of resource distribution, energy and military readiness, political change and external intervention in the Persian Gulf, and political change and conflict behavior - are examined along with the responses available to national governments. The interactions of energy economics with domestic politics and international security are examined as they affect the oil-importing developing countries and the Organization of Economic Cooperation and Development countries. Three possible patterns could develop during the 1980s: (1) continued energy price increases with no supply disruptions, (2) a tightening international market with significant market shocks, or (3) a major supply disruption threatening political and military intervention. The author feels that, in spite of the problems involved, the US still has the opportunity to address political instabilities, unsteady alliance structures, and military confrontations aggravated or even caused by energy problems more effectively than it has haudled domestic energy policy. (DCK)
Article
The Prize is a large and ambitious book; it presents a chronicle of events in the oil industry from its beginning in the nineteenth century to Saddam Hussein's invasion of Kuwait in 1990. It is a [open quotes]tour de force[close quotes] packed with characters and assessments of crises, of struggles for oil power and the impact of oil on twentieth century life. It surpasses previous overall oil industry survey books and succeeds in revealing three great themes that the author believes underlies the story of oil, namely, (1) that oil is the world's biggest and most pervasive business where risks and rewards are starkly revealed, (2) that oil is a commodity intertwined with national strategies, global politics, and power relationships, and (3) that the twentieth century is supremely a hydrocarbon society.
Article
Dealing with questions of war and peace and understanding the causes of interstate conflict is a primary goal of the field of international relations. In order to study interstate conflict in a rigorous manner, scholars have relied on established rules and procedures for gathering information into coherent data sets. Among those data sets is the Militarized Interstate Dispute (MID) data. In this paper we first outline the data-collection process for the MID3 data. Second, we introduce two new data sets emerging from the project, “MID-I” and “MID-IP.” Third, we present relatively small changes in coding rules for the new MID3 data and some descriptive statistics. The statistics indicate that the MID3 data are remarkably similar to the MID2.1 version, varying in some minor and predictable ways.
Article
International anarchy and the resulting security dilemma (i.e., policies which increase one state's security tend to decrease that of others) make it difficult for states to realize their common interests. Two approaches are used to show when and why this dilemma operates less strongly and cooperation is more likely. First, the model of the Prisoner's Dilemma is used to demonstrate that cooperation is more likely when the costs of being exploited and the gains of exploiting others are low, when the gains from mutual cooperation and the costs of mutual noncooperation are high, and when each side expects the other to cooperate. Second, the security dilemma is ameliorated when the defense has the advantage over the offense and when defensive postures differ from offensive ones. These two variables, which can generate four possible security worlds, are influenced by geography and technology.
Article
The structure of international trade, identified by the degree of openness for the movement of goods, can best be explained by a state-power theory of international political economy. This theory begins with the assumption that the nature of international economic movements is determined by states acting to maximize national goals. Four goals—aggregate national income, political power, social stability, and economic growth—can be systematically related to the degree of openness in the international trading system for states of different relative sizes and levels of development. This analysis leads to the conclusion that openness is most likely to exist when there is a hegemonic distribution of potential economic power. Time-series data on tariff levels, trade proportions, regional concentration, per capita income, national income, share of world trade, and share of world investment are then presented. The first three are used to describe the degree of openness in the trading system; the last four, the distribution of state power. The data suggest that the state-power theory should be amended to take into consideration domestic political constraints on state action.
Article
I focus on the role of case studies in developing causal explanations. I distinguish between the theoretical purposes of case studies and the case selection strategies or research designs used to advance those objectives. I construct a typology of case studies based on their purposes: idiographic (inductive and theory-guided), hypothesis-generating, hypothesis-testing, and plausibility probe case studies. I then examine different case study research designs, including comparable cases, most and least likely cases, deviant cases, and process tracing, with attention to their different purposes and logics of inference. I address the issue of selection bias and the “single logic” debate, and I emphasize the utility of multi-method research.
Article
China will not stop its drive for energy resources in the Middle East, and it will not be possible for the U.S. to exclude China from the region. The smarter U.S. policy would be to try to work with China to give it both a sense of energy security and a shared interest in a stable Middle East.
Article
Technology and Culture 39.4 (1998) 641-670 A huge body of scholarship in recent decades has convincingly demonstrated the contingent and contextual character of technological development. Technologies are shaped by social factors and thus "mirror our societies." Regional and national characteristics of technological developments can often be explained by their embedment in different cultures and environments. To describe or explain technological differences, historians of technology have employed the loosely defined concept of "technological style," which in recent years has received growing attention. Drawing extensively on this concept, John Staudenmaier has raised the possibility of a "link between technological style and national character." The development of wind technology from 1940 to 1990 in Germany, Denmark, and the United States does at first glance appear to corroborate Staudenmaier's hypothesis. Wind technology in these countries differs in conspicuous ways. The renaissance of wind power technology in California and Denmark in the 1980s contained several notable surprises. California produced scores of unsuccessful turbine designs, poorly performing turbines, and disastrous turbine failures, especially when compared to the clearly superior Danish wind technology. The American failure looks even worse when one considers that between 1975 and 1988 the United States government spent twenty times (and Germany five times) as much for wind power research and development as did Denmark, yet Danish manufacturers made better turbines -- have, indeed, since the early 1980s been the most successful wind turbine producers. Danish wind turbines supplied about 45 percent of the total worldwide wind turbine capacity in 1990. Most U.S. manufacturers failed in the 1980s, and by 1990 only one major manufacturer of commercial turbines (US Windpower) remained. Producers from other countries had little impact on the total wind turbine capacity in the 1980s. The failure of numerous turbine designs and the remarkable contrast between R&D expenditures and commercial success raise important questions. Why did so many designs fail? What made Danish turbines superior? How could small Danish companies outclass large American and German high-tech concerns? Forrest Stoddard, an American engineer, identified characteristic technical differences of Danish and American turbines that he considered responsible for Danish success and American failures. Peter Karnøe, a Danish political scientist, has explained the superiority of Danish wind turbines as a result of Danish manufacturers' "bottom-up" strategy for development: a slow, crafts-oriented, step-by-step process including incremental learning through practical experience. This strategy, Karnøe argues, proved superior to the "top-down" approaches of science-oriented German and American researchers and manufacturers, which aimed at both quick and ambitious full-scale developments. Karnøe has shown that many striking wind turbine failures may be attributed to the disadvantages of top-down development. Stoddard's and Karnøe's interpretations offer interesting explanations for the remarkable Danish success, but they do not answer all the questions posed. Why did the Danish bottom-up strategy prove more successful than American and German top-down approaches, and why did this strategy evolve in Denmark, and only there? Historical analysis shows that technical and conceptual differences in wind turbine development had important roots in the 1940s and 1950s. Individual and collective ideas and working styles can be attributed to individual actors and particular communities, both of which have characteristic patterns of knowledge, actions, and artifacts. These patterns may be called technological styles. The failure of a top-down approach to the development of wind technology reveals the limits of science-oriented technological development, or engineering science, and hints at technological hubris. Big-science and high-tech approaches were in this case mistakenly considered powerful enough to support gigantism, extreme technical sophistication, and immediate full-scale development. Wind power's long and rich history reached its zenith in industrializing western Europe and North America in the late nineteenth century. In the twentieth century the use of wind power declined, and thousands of windmills and wind turbines disappeared within a few decades. By the 1980s, however, oil crises, growing concern over environmental degradation, and nuclear-power protests were contributing to a revival of wind technology. Supported by government subsidies, California and Denmark became by far the biggest markets for wind turbines. By the late 1980s, California accounted for 79 percent...
Article
Ten years ago the US Congress authorized the creation of the Strategic Petroleum Reserve with the intent of bolstering energy security. Today the Reserve stands at over 450 million barrels of oil - a large and potentially powerful policy instrument. The questions surrounding the Reserve, however, are many, complex, and largely unresolved. This paper examines these questions, in the process reviewing the analytial approaches to resolving them.
Article
American national security policy is based on a misunderstanding about U.S. oil interests. Although oil is a vital commodity, potential supply disruptions are less worrisome than scholars, politicians, and pundits presume. This article identifies four adaptive mechanisms that together can compensate for almost all oil shocks, meaning that continuous supply to consumers will limit scarcity-induced price increases. The adaptive mechanisms are not particularly fragile and do not require tremendous foresight by either governments or economic actors. We illustrate these mechanisms at work using evidence from every major oil disruption since 1973. We then identify the small subset of disruptive events that would overwhelm these adaptive mechanisms and therefore seriously harm the United States. Finally, we analyze the utility of U.S. foreign military policy tools in addressing these threats. Our findings suggest that the United States can defend its key interests in the Persian Gulf—the world's most important oil-producing region—with a less-intrusive, “over the horizon” posture.
Article
Given the central role of the concept of material capabilities in international politics models, and the ambiguity of the notion, it is essential that we define and measure it in operational terms. Such efforts have a long history and, given the multiplicity of interpretations as well as the difficulty of validation, we can expect alternative indicators to be put forth with some regularity well into the future. Herein, some of the assumptions, procedures, and implications of the Correlates of War project effort.First, we treat “power” as the generic concept, defined as the capacity of a state (or other actor) both to exercise influence and to resist influence attempts. That capacity is a function of, inter alia, geography, political organization and legitimacy, definition of “interests,” elite competence, and, of course, material capabilities. We see the last of these as falling along three dimensions: demographic, industrial, and military. The paper spells out the measurement problems, theoretic premises, data sources, and combinatorial options of this dataset on national capabilities.
Article
China's shift to a net oil importer has generated much speculation outside China about how China's growing dependence on foreign oil will affect its international behaviour. This discussion is framed by two competing models of China's future approach to energy security: one that foresees deeper integration into global energy markets and another that predicts efforts to minimize reliance on these markets in potentially destabilizing ways. Less attention has been paid, however, to the parallel debate unfolding inside China over how to ensure the country's oil needs are met without undermining national security. This article introduces the main participants in the debate, how the debate relates to energy security decision-making, and some of the measures to enhance energy security under consideration. It concludes with a discussion of some of the factors that will shape China's emerging approach to energy security.
Article
We examine some issues in the estimation of time-series cross-section models, calling into question the conclusions of many published studies, particularly in the field of comparative political economy. We show that the generalized least squares approach of Parks produces standard errors that lead to extreme overconfidence, often underestimating variability by 50% or more. We also provide an alternative estimator of the standard errors that is correct when the error structures show complications found in this type of model. Monte Carlo analysis shows that these "panel-corrected standard errors" perform well. The utility of our approach is demonstrated via a reanalysis of one "social democratic corporatist" model.