Resource Conflicts
Vol. 5 No. 1 | Summer 2018
TWIN PROBLEMS
The Middle East has several features that distinguish it from the rest of the world. Apart from sitting on the largest proven oil and gas reserves, the region is famous for its complicated politics, challenging demographics and fragile economic structures.
For oil- and gas-rich states, limited economic diversification is acute; this is where we find government dependence on hydrocarbon revenues reaching as high as 95 percent in countries like Iraq. This is also where we find a poorly diversified primary energy mix, which is heavily reliant on oil and gas, in a sharp contrast to the norm elsewhere where local energy needs are met by diverse sources of energy, mainly oil, gas, coal, nuclear, and renewable energy.
The lack of diversification – both in terms of the economy and energy mix – brings serious challenges for the region. The economic performance of the oil- and gas-rich states has simply mimicked the volatile and unpredictable movement in oil prices: when oil prices are high, these economies grow rapidly, but when oil prices go in the other direction, they shrink in tandem. Additionally, the dependence on oil and gas to meet local energy needs has caused two problems: first, the trade-off between the more lucrative exports and the highly subsidized domestic market, and second, the higher carbon footprint because of the absence of greener sources of energy.
In a world where international competition for global market share in oil and gas and the fight against climate change intensify, the region’s leaders seem to be increasingly convinced that the old model of governance is simply not sustainable...
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Dr. Carole Nakhle, CEO, Crystol Energy
An Energy Economist, Dr. Carole Nakhle specializes in international petroleum contractual arrangements and fiscal regimes; upstream oil and gas regulations; petroleum revenue management and governance; energy policy, security and investment; and world oil and gas market developments. She is active on the Governing Board of the Natural Resource Governance Institute and Advisory Board of the Payne Institute at the Colorado School of Mines. She is a program advisor to the Washington based International Tax and Investment Centre, and regular contributor to Geopolitical Intelligence Services and the Executive Sessions on the Political Econo- my of Extractive Industries at Columbia University in New York. She is a non-Resident Scholar at the Carnegie Middle East Centre and a Fellow at the Lebanese Centre for Policy Studies. She is also involved in the OECD Policy Dialogue on Natural Resource-based Development and lectures at the Blavatnik School of Government at Oxford University, University of Surrey in the UK, and Saint Joseph University in Beirut.
The independent development of renewable energy resources — and especially solar energy production, in the short term — may present the best opportunity for both intrastate and interstate autonomy in the South Caucasus, and may particularly benefit the Republic of Armenia, whose current energy portfolio is almost entirely supplied, owned, and, until recently, operated by Russia.
BACKGROUND
Surrounded by the present-day regional powers of Turkey, Russia, and Iran, the South Caucasus has long been a strategic area of conquest and conflict. Once part of the Silk Road, the ancient region was governed by small kingdoms alternately subjected to occupation by various empires throughout the centuries. The existing borders dividing the tiny republics of Georgia, Armenia, and Azerbaijan were drawn when all three nations were under Soviet rule.
Following the dissolution of the USSR, breakaway territories and ethnic identity conflicts have dominated state-level politics in the region. Historically tense relations and triangulated alliances continue to foster a tenuous peace, pockmarked by regular acts of violence in conflict zones, and a normalized, heightened state of anxiety over the looming possibility of seemingly spontaneous and exponential escalation of violence permeates the borders of each country. Particularly along the Line of Contact in Nagorno-Karabakh, the site of the first ethnically motivated territorial conflict in the post-Soviet era, sniper attacks remain common, with occasional shelling that claim civilian casualties (usually villagers)...
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Ursula Kazarian
Ursula Kazarian is the founder and former president of the Armenian Environmental Network (AEN), a project of Earth Island Institute in Berkeley, California, which works to facilitate environmentally focused partnerships among Armenians in Armenia, Armenian diasporans, and the international environmental community. Prior to AEN, she worked for the Caucasus Environmental NGO Network (CENN) in Yerevan, Armenia and Tbilisi, Georgia, where she attended stakeholder meetings regarding construction of the Baku-Tbilisi-Ceyhan (BTC) pipeline and participated in Georgia’s Rose Revolution. She has been involved with a number of Armenian-American political organizations and was a Science and Technology senior fellow with Policy Forum Armenia, a Washington-based think tank, from 2007 to 2014. She received her JD from American University Washington College of Law and holds additional degrees from Universidad Carlos III de Madrid, American University School of International Service, the United Nations-mandated University for Peace, and The George Washington University.
The rapid growth of organized crime in Mexico and the government’s response have driven an unprecedented rise in violence and impelled major structural economic changes, including the recent passage of energy reform. My latest book entitled Los Zetas Inc. asserts that these phenomena are a direct and intended result of the emergence of the brutal Zetas criminal organization and the corporate business model they have advanced in Mexico. Because the Zetas share some characteristics with legal transnational businesses that operate in the energy and private security industries, the criminal corporation is compared in the book with ExxonMobil, Halliburton, and Blackwater (renamed “Academi” and now a Constellis company).[1]
Combining vivid interview commentary with in-depth analysis of organized crime as a transnational and corporate phenomenon, I propose a new theoretical framework for understanding the emerging face, new structure, and economic implications of organized crime in Mexico. Arguing that the armed conflict between criminal corporations (like the Zetas) and the Mexican state resembles a civil war, I identify the key winners and losers of this episode in Mexico’s most recent history. The groups that seem to have benefited — or will potentially benefit — the most (directly or indirectly) from the novel criminal scheme introduced by the Zetas, the Mexican government’s reaction to it, and the resulting brutality appear to be corporate actors in the energy sector, transnational financial companies, private security firms (including private prison companies), and the United States border-security/military-industrial complex.[2]...
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[1]Guadalupe Correa-Cabrera, “Security, Migration, and the Economy in the Tex- as-Tamaulipas Border Region: The ‘Real’ Effects of Mexico’s Drug War,” Politics and Policy 41 (1) (2013a): 65-82.
[2] Ibid.
Guadalupe Correa-Cabrera
Guadalupe Correa-Cabrera (Ph.D. in Political Science, The New School for Social Research) is Associate Professor at the Schar School of Policy and Government, George Mason University. Her areas of expertise are Mexico-U.S. relations, organized crime, immigration, border security, and human trafficking. Her newest book is titled Los Zetas Inc.: Criminal Corporations, Energy, and Civil War in Mexico (University of Texas Press, 2017). She was recently the Principal Investigator of a research grant to study organized crime and trafficking in persons in Central America and along Mexico’s eastern migration routes, supported by the Department of State’s Office to Monitor and Combat Trafficking in Persons. She is now working on a new book project that analyzes the main political, cultural, and ideological aspects of Mexican irregular immigration in the United States entitled Los Trabajadores “Ilegales” Mexicanos en los Estados Unidos: A Human Problem. Dr. Correa-Cabrera is currently the President of the Association for Borderlands Studies (ABS). She is also Global Fellow at the Woodrow Wilson International Center for Scholars and Non-resident Scholar at the Baker Institute’s Mexico Center (Rice University).
Fletcher Security Review: What in your experience have been the biggest challenges of leading an organization with an objective to strengthen relations between the United States and Russia and to promote the development of the private sector in the Russian Federation?
Celeste Wallander: The United States and Russia, at the official level, have very different priorities and very tense relations. Having defined the respective countries’ national interests in very different ways and with so many of the presumptions America had at the end of the Cold War, seeking the room for cooperation, for common interest and for joint problem solving is either no longer relevant or is so problematic that it does not support the relationship. The question for me and the others who are outside of government is how can we invest at a people-to-people level in a Russian generation that will be the leadership in a future Russia? How can we improve their knowledge, their understanding, and leadership in their societies in ways that support their country’s interests and in turn find some common ground to believe that the two countries have some common interests and may again work together?...
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Dr. Celeste Wallander
Celeste Wallander is President and CEO of the U.S.-Russia Foundation. She served as Special Assistant to the President and Senior Director for Russia/Eurasia on the National Security Council (2013-2017), as the Deputy Assistant Secretary of Defense for Russia/Ukraine/Eurasia (2009 to July 2012), professor at American University (2009-2013), visiting professor at Georgetown University (2006-2008), Director for Russia/Eurasia at the Center for Strategic and International Studies (2001-2006), Senior Fellow at the Council on Foreign Relations (2000- 2001), and professor of Government at Harvard (1989-2000). She is the author of over 80 publications on European and Eurasian security issues, focused on Russian foreign and defense strategy. She received her Ph.D. (1990), M.Phil. (1986) and M.A. (1985) degrees from Yale University. She is a member of the Council on Foreign Relations, the Atlantic Council of the United States, and the International Institute for Strategic Studies.
It is encouraging to find a highly competent scholar willing to take on the complexities of a global energy revolution. Agnia Grigas’ book is not just about the political control of oil and gas reservoirs. Rather, it addresses the consequences of a new era in natural gas production that is capable of transforming structural relations in the energy world. Grigas’ geographical and historical context for examining the new politics of natural gas are appropriate: the geography being the northern and eastern parts of Eurasia, while the historical dimension is the emergence of a large pipeline structure connecting the Soviet Union to Europe after 1960, and the challenges it posed after the collapse of Soviet Union in 1991.
Long before Nikita Khushchev (d. 1971), Soviet geologists had discovered large reserves of oil and gas in Central Eurasia. After the end of World War II, the Soviet State proceeded to construct a huge pipeline network to distribute energy within the Soviet Union as well as to Europe. This created an energy management system that favored long pipelines, long-term contracts, fixed prices, and a decision-making environment in which political power often determined the outcome of disputes over prices and costs. Post 1991, with the Russian Union trying to protect its market for gas in Europe on one hand, and emergence of new nation states on the other, severe disputes arose over the price of gas...
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Dr. Andrew C. Hess
Dr. Andrew C. Hess is a Professor of Diplomacy and the Director of the Southwest-Central Asia and Islamic Civilization Program at the Fletcher School of Law and Diplomacy at Tufts University. His expertise is in Central Eurasia and includes the study of energy related issues, with a current focus on the emergence of an Asia-Pacific economy centered around the LNG trade. He is a former manager of Government Affairs for the Arabian American Oil Company (Saudi Aramco). Professor Hess is a former officer in the United States Marine Corps, an expert on the Battle of Lepanto and an enthusiast of the Turkish re-curved bow.