Western policymakers are becoming increasingly anxious about China’s foothold into Greenland, particularly its desire to produce the semi-autonomous island’s rare earth metals – the materials used in high-end electronics, from smart phones and smart bombs to clean energy technologies, including wind turbines and advanced batteries. But policymakers can rest assured that there is more to China’s foray into Greenland than meets the eye – and not as much cause for concern.
A Thawing Frontier
Greenland’s icy frontier is transforming before our eyes. Climate change is contributing to a hastened retreat of the island’s massive ice sheet and ushering in new opportunities for the 57,000 people living in the northern hinterlands.
The island’s extractive industries are poised to be the biggest winner, as the thawed ice reveals new deposits of raw materials, everything from iron ore to aluminum.
(Read More: Rocking the Boat in the Energy Rich South China Sea)
Rare earths are the big prize. The small town of Narsaq sits near one of the world’s largest deposits of rare earths. According to Greenland Minerals and Energy Ltd, one of the island’s leading mineral development companies, that deposit could contain about 10.3 million metric tons of rare earth metals, equivalent to about 10 percent of the known global reserves (which today total about 110 million metric tons, according to the U.S. Geological Survey).
Energy issues ranked among the top international headlines in 2012 – As we look ahead, what are the major energy trends that are likely to take shape and play out in international headlines in 2013?
Increased Domestic Oil & Gas Production, Declining Demand and Shrinking Imports
The American energy revolution is starting to come into focus. Technological breakthroughs in shale gas and tight oil production are poised to make the United States — not Saudi Arabia — the world’s largest producer of crude oil as early as the end of the decade, according to the latest World Energy Outlook published by the International Energy Agency (IEA). The IEA’s analysis found that the United States could even be a net exporter of oil by 2035, a position the United States has not been in since the 1940s, when it had one of the world’s few developed oil industries.
At the same time, U.S. demand for crude oil is in decline and its crude oil imports are shrinking. Higher fuel efficiency standards in U.S. vehicles have contributed largely to depressed demand, with U.S. oil imports falling from 56 percent of total consumption to 46 percent between 2008 and the end of 2011, according to the U.S. Energy Information Agency. By 2035, the United States could be importing less than 2 million barrels a day, down from more than 8 million barrels today, according to the IEA. (Read More: Top 15 Sources for U.S. Crude Oil Imports in 2011)
During her visit to the Asia Pacific last week, Secretary of State Hillary Rodham Clinton spoke to the dispute over the South China Sea, arguably one of the region’s most intractable challenges that, left unmanaged, could uproot stability in East Asia. Those countries at the heart of the dispute — particularly China, Vietnam and the Philippines — need to “establish rules of the road and clear procedures for peacefully addressing disagreements,” Secretary Clinton urged.
High Stakes at Sea
The dispute is complex. States ringing the sea are becoming increasingly assertive in their claims, driven by concerns of nationalism, sovereignty, and even the need to stake claims to the region’s lucrative (but dwindling) fish stocks. And then there are the potential petroleum resources. Estimates of the region’s energy potential ranges widely, according to the independent U.S. Energy Information Agency: U.S. estimates suggest the region could contain roughly 28 billion barrels of oil; while Chinese estimates are much more optimistic, projecting more than 200 billion barrels of oil beneath the sea.
Despite much uncertainty about the size of the region’s oil and natural gas resources, countries in the region are increasingly behaving as though access to those potential petroleum reserves is zero-sum — a winner take all and leave none for the loser approach — that is pitting countries against each other to tap into those resources first. Indeed, China, Vietnam and the Philippines are actively soliciting bids from petroleum companies to explore for oil and gas in contested waters, escalating tensions and reinforcing this zero-sum perspective. This continued competition is destabilizing and countries in the region need to take efforts to tilt the balance of behavior toward cooperation so that countries across the region can benefit from the sea’s potential resource wealth.
Beijing is flexing some more muscle to protect its energy interests in the South China Sea.
Last week, China began combat-ready patrols in the waters around the potentially resource rich Spratly Islands that both China and Vietnam have disputed claims to. And on Friday, China Daily reported that Beijing may develop a military presence in Sansha – a newly incorporated city located on one of the disputed Paracel Islands that was stood up to administer Chinese authority over the country’s South China Sea territories. (The city was established in response to a recent Vietnamese law that claimed sovereignty over the Paracel and Spratly Islands.)
The recent debate over the role of the military in investing in renewable energy technologies, energy efficiency and conservation programs and alternative biofuels has included many voices that sometimes conflate the linked but distinct efforts by defense officials to address energy concerns. The rationale behind the military’s energy programs can be broken down into two efforts:
- Adapting to operational energy requirements and security challenges in Afghanistan and other combat theatres;
- Hedging against future uncertainty in the global petroleum market.
Adapting to Operational Energy Challenges
Military leaders have become increasingly worried about operational energy challenges in Afghanistan and other theatres where U.S. soldiers, sailors and airmen are deployed and are working to reduce the demand for energy that must be transported across volatile terrain.
To date, part of the military’s effort to reduce operational energy requirements includes:
- prioritizing energy efficiency in the acquisitions process for new combat platforms;
- fielding micro-grid technology to more efficiently manage traditional power distribution systems that waste energy;
- replacing — where possible — diesel-fuelled generators with solar panels and other renewable energy sources;
- equipping soldiers with advanced batteries that stay charged longer to help keep them in the fight;
- and increasing awareness among all U.S. military personnel about energy use to help promote conservation practices.
There are clear operational advantages to reducing the fuel required by military personnel in theater. In particular, reducing fuel consumption also curbs the demand for petroleum that has to be trucked across dangerous territory where the fuel and the soldiers and contractors transporting it are vulnerable to insurgent attack.
America’s relationship with Middle East energy resources is changing. Technological breakthroughs in hydraulic fracturing (or “fracking”), renewed drilling in ultra-deep waters in the Gulf of Mexico and, soon, drilling in the Arctic Circle are re-energizing U.S. domestic petroleum production and shrinking the demand for foreign petroleum imports. Meanwhile, oil and natural gas production in the Americas — from Canada in the North, to Brazil and Colombia in the South — are beginning to displace U.S. reliance on Middle East oil. These emerging energy trends will affect America’s relationship with the Middle East in important ways. But do not expect a fundamental shift in U.S. foreign policy in the region any time soon.
The Carter Doctrine and U.S. Energy Interests in the Middle East
The United States has had historical concerns about assured access to Middle East petroleum resources that have shaped U.S. involvement in the region. President Jimmy Carter famously declared in his 1980 State of the Union address that the United States reserved the right to use force to protect the flow of petroleum from the Middle East to the United States: “An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force.”
Although U.S. interests in the Middle East have become more complex since the Carter administration – to include concerns about violent extremism, human rights abuse and nuclear proliferation – it has become almost axiomatic to say that U.S. involvement in the Middle East has been tied solely to concerns about securing access to the region’s petroleum resources. Whether or not one buys that, the perception that U.S. interests in the Middle East are tied solely to concerns about energy supplies raises some questions about whether the United States will lose interest in the Middle East as it becomes less reliant on energy imports from the region.
I am pleased and excited to join the team at Consumer Energy Report. I have been an avid reader of the analysis here and I am looking forward to contributing to the important policy discussions that Andrew, Robert and others routinely engage in on energy, climate change and security policy.
I wanted to take the opportunity with this inaugural post to introduce myself and provide you — the reader — a brief sense of where I am coming from and what you can expect to see here on Choke Points.
First a little about myself. I am a national security and foreign policy analyst in Washington, working largely at the crossroads of science, technology and national security policy. My interests in technology and security policy has given me an opportunity to work on a broad range of issues — from cyber security to the impact of climate change on the U.S. Armed Forces. For the most part, though, my particular focus has been on natural resources and security (energy and climate change in particular), first at the Woodrow Wilson International Center for Scholars, and now at the Center for a New American Security (CNAS), a non-partisan national security and defense policy think tank.