At different periods throughout history, certain specific issues have come to occupy for a time a focal position in the interplay of power between nations, groups or individuals. Such issues have included land, food, religion, treasure, and trade. Over the last 20 years, and at first unnoticed, energy-more specifically oil-has moved into this central role. While energy cannot be expected to hold such a position forever, over the next several years it will remain at the center of interaction of world forces.
Alberto Quirós Corradi is President and Chief Executive of Maraven, S.A., an operating company of Petróleos de Venezuela, S.A. since nationalization of Venezuela's oil industry in 1976, and successor to Compania Shell de Venezuela, of which he was also President. This article was developed from a working paper presented at the Oxford Energy Policy Club in November 1978, subsequently updated to reflect recent events. While it reflects something of the responses at the Oxford meeting, the views expressed remain, of course, the sole responsibility of the author.
At different periods throughout history, certain specific issues have come to occupy for a time a focal position in the interplay of power between nations, groups or individuals. Such issues have included land, food, religion, treasure, and trade. Over the last 20 years, and at first unnoticed, energy-more specifically oil-has moved into this central role. While energy cannot be expected to hold such a position forever, over the next several years it will remain at the center of interaction of world forces.
It is now some five years since what might be called the energy discontinuity of 1973-74-the abrupt price rise that signaled a massive shift in the power relationships centered on oil. However, the balance of the evidence still indicates that the forces involved are far from completely understood, so that surprises still occur. Consumers and suppliers continue to talk past each other, unable or unwilling to understand each other's positions, let alone to make the necessary accommodations to reduce the tensions of their relationship.
One reason for the lack of understanding is that most of the voluminous discussion and analysis has been concerned with the economics of the situation, as if this were the only major factor involved. To the consumers, who write most, this may be so. For the producers, the politics of energy are vital, and for them the situation is much more complex. Economics is but one of several factors that determine and lie behind the power relationships involved in global energy supply and consumption. What these other factors are and how they affect the exercise of energy-related power are in need of better understanding-which is the objective of this article.
While everyone knows something of power, many find it difficult to define their understanding of such an abstract concept. Bierstedt has compared it to St. Augustine's problem with time: "We all know perfectly well what it is-until someone asks."1 However, Ralf Dahrendorf, in this journal, has provided a practical definition which serves very well: "the capacity to assert interest effectively, or more simply, to make others do what one wants them to do . . . ."2
As we examine how energy has become a focus of power, four key themes emerge:
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The world has grown much more peaceful over the past 15 years -- except for oil-rich countries. Oil wealth often wreaks havoc on a country's economy and politics, helps fund insurgents, and aggravates ethnic grievances. And with oil ever more in demand, the problems it spawns are likely to spread further.
Iran, in the view of Shah Mohammed Reza Pahlavi, has a great imperial past and a greater imperial future. In the next few years it is to assert its dominant role in the Persian Gulf region and the nearby reaches of the Indian Ocean. By 1990 it will attain the status of a Britain or a France in the global hierarchy of powers. Seeing this dream of the future, the Shah is already acting as if it were reality. Meanwhile, his neighbor across the Gulf, Saudi Arabia, talks less of empire but gradually extends its influence through the Arab world. Sheikh Ahmed Zaki Yamani, the Saudi Minister of Oil and Industry, can virtually dictate the world price of oil as long as he speaks for his king. He can lead the Organization of Petroleum Exporting Countries (OPEC) or he can break it. He can please the Americans by being "moderate" on the oil price, and at the same time can remind them that he expects them to move Israel toward a settlement acceptable to the Arabs. The United States worries about its rising imports of oil, which increase its vulnerability to the decisions of OPEC, but takes comfort in the fact that it has a friend in Riyadh.
America's addiction to Middle Eastern oil forces dangerous foreign policy compromises, worsens global warming, and strengthens unreliable Persian Gulf countries. Instead, the United States should get its energy from biomass ethanol, a new fuel that can be produced at home from almost any type of plant or even from agricultural waste. Ethanol is environmentally friendly, compatible with the U.S. transportation system, and as potent a fuel as gasoline. Recent scientific breakthroughs have sharply lowered its production cost. Now Washington must step in with tax breaks and other incentives to encourage further research and development into this homegrown alternative to a dangerous dependence.
