Energy diplomacy and security have emerged as crucial international issues with significant impacts on the states, economies, and geo-political relations. Energy is the critical resource of the modern age and serves as crucial for ensuring national security, driving economic boost, and addressing major environmental challenges. The reliable and secure energy resources supply, combined with effective diplomatic tactics, is important to maintain sustainable development, promote sustainability, and address global energy challenges.
The intersection of statecraft and energy has become an important area of study and application, with significant implications for the economic stability of a state, geopolitical influence, and sustainability of the environment. Here, we will see the significance of energy diplomacy in the shaping the geopolitics.
What Is Energy Diplomacy?
Energy diplomacy involves diplomatic activities that are designed to advance access to energy resources and commodities. It is a system of using diplomatic instruments including lobbying, dialogue, negotiation, advocacy, and other peaceful ways to influence policy actions, resolutions foreign governments conduct, and other global factors. There is a principal-agent relationship between foreign policy and energy diplomacy.
Energy diplomacy describes the diplomatic and foreign policy actions carried out by a consumer state to acquire energy resources access from a producer state to ensure supply security. For instance, The Russia- EU energy relationship comes under this traditional model of energy diplomacy carried out between an energy supplier and consumer, in which Russia faces accusations of using its energy resources to achieve its political agenda in the European Union (EU). Energy diplomacy is defined as the sub-element of energy policy.
The objective of energy diplomacy is to maximize national economic interest in bilateral, multilateral, regional, and international realms of energy demand and supply. In this lens, energy diplomacy is amid a healthy flow of energy, environmental and efficient usage of energy, and a stable international energy market. Energy diplomacy also refers to the diplomatic means that state actors utilize to avoid potential risks that occur due to the exchange within the energy market.
Origin of Energy Diplomacy
The phrase “energy diplomacy” has emerged amid the second oil crisis, to describe the actions taken by OPEC, the effort of the US to achieve energy independence, and the relationship of the Cold War era that exists between the Russian Federation and its satellite nations with a focus on gas and oil exports. Energy diplomacy has majorly emphasized energy supply securitization in a state or regional context and on foreign policy to attain energy security.
Ontologically, the three concepts, foreign policy, national security, and energy security are structured as follows; the most general concept is national security, then comes foreign policy which covers the international component of national security threats, and the bottom on the hierarchy is energy diplomacy. However, Foreign policy is an instrument to implement and ensure national security and national security maintains a direct connection to energy diplomacy. Hence, National security refers to the nation’s capability to balance its external and internal multi-dimensional risks by regulating all tools of state policy by governance. The aim is to protect territorial and security, national independence, and economic and political integrity, and deal with several national security threats.
The Significance of Energy Diplomacy
In today’s world, we primarily rely on traditional hydrocarbon resources and to meet these ends, we manage the effects of these resources on the national interest and the geopolitical influence and power.
- The purpose of energy diplomacy is to accelerate an international energy transition that is inclusive, just, and leaves nobody behind. Among other things, it is promoting renewable technologies, energy efficiency, and competitive global markets.
- Energy diplomacy is important to encourage the supply of stable global energy by engaging with private producers as well as diplomatic partners to preserve supplies, control prices, and present alternate energy sources. This involves working with the diplomatic partners to manage the successful implementation of sanctions, regarding petroleum and petroleum products.
- The energy diplomacy efforts can lead to a boost by supporting the rise of energy resources and methods of transportation and strengthening relations with emerging and new producers of all forms of energy.
- At the international level, the focus of energy diplomacy is the development of nuclear energy, energy transition and savings, oil sharing, research and development, energy exploration, energy transportation, and energy sustainability, and involves political
support for foreign investing in energy businesses.
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GCC Bilateral Energy Diplomacy
In the power sector, energy security and efficiency are the key energy policy issues for the Gulf Cooperation Council (GCC) countries. The electricity trade, nuclear energy, renewable energy, and natural gas supply are important factors in playing a significant role in the bilateral energy diplomacy and the foreign energy policy efforts of the GCC states. The bilateral energy relations among GCC countries are currently restricted to the shipments of Liquified Natural Gas (LNG) to Kuwait and the Dolphin Pipeline which is a natural gas export from Qatar to both Oman and the United Arab Emirates (UAE). GCC countries are working on the development of their indigenous resources of natural gas as well as the installation of clean energy, including both renewables and nuclear, to attain domestic energy security at the lowest feasible cost.
The bilateral energy diplomacy is seen between the UAE and South Korea on the nuclear technology and training agreement signed in 2009. However, both China and Russia have shown their interest in utilizing their nuclear technology capabilities to enhance foreign influence. For that, they are strongly positioned for the proposed nuclear program of Saudi Arabia.
The Case Study of UAE
The energy relationships of the UAE are focused on Hydrocarbon trade with India, China, South Korea, Japan, Thailand, and Singapore. Their relationship does not just depend upon the oil market, but also on extensive energy and economic relations. The core energy relations of UAE with major Asian states have advanced effectively since the establishment of special diplomatic ties; as demonstrated by the Abu Dhabi National Oil Company (ADNOC) that is granting recent onshore and offshore concessions for oil to national oil companies from India, China, South Korea, and Japan.
Additionally, the opening of ADNOC’s first-ever preliminary license cycle is anticipated to bring more Asian investment into the UAE’s oil and gas industry, especially from China. India has been enjoying a special strategic level partnership as a key trade partner of UAE since 2017.
The strength of the UAE’s relations with China has extended beyond those established by ADNOC. The UAE- China Joint Investment Fund was established as a partnership between Mubadala Investment Company of Abu Dhabi whose board Chairman is Sheikh Mohamed bin Zayed Al Nahyan, China’s State Administration of Foreign Exchange, and China Development Bank Capital. Other than investing in the efforts, this fund will demonstrate the second layer of strategic cooperation between GCC states and Asian economies, which is joint infrastructure and investment development.
Furthermore, The UAE has also expanded its energy relations with Japan, which is currently the largest oil export market in the country. Japan has acquired stakes in the onshore and offshore oil concessions of Abu Dhabi and rights for onshore exploration in Abu Dhabi. Under the concessions, Japan will continue to be an oil partner with the UAE at least until 2058. Similar to its deep energy partnership with China, the UAE is building significant investment relationships with Japan as part of the comprehensive strategic partnership between the UAE and Japan.
The strategic bilateral partnership between UAE and Russia was established in June 2018, includes regional and security as basic elements to promote common interests in gas, oil, and nuclear energy, and builds on Mubadala’s USD 2 billion Russian Direct Investment Fund (RDIF) established in 2013. The UAE’s bilateral strategic partnership with Russia is vital because the UAE and Russia share a common interest in extending the economic viability of hydrocarbon energy. Furthermore, Russia is a strong ally for the UAE in maintaining geopolitical stability in the Gulf region, specifically given the influence of Russia with Iran.
Other than UAE’s bilateral energy diplomacy with Asia, its partnerships and strategic relationships with regional and European states should not be overlooked. This plays a significant role in shaping the energy future of the UAE. The UAE’s diplomatic relations with the United Kingdom, Italy, and France are shown in the significant engagement of Total, BP, and Eni in the onshore and offshore oil development of Abu Dhabi. Eni has shown an emphasis on seeing the UAE acquiring significant holdings in ultra-sour gas development of UAE, oil and gas refining and exploration, and petrochemical production activities, in addition to offshore oil development licenses.
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OPEC and Oil Diplomacy
The Organization of the Petroleum Exporting Countries (OPEC) was established in 1960 by five oil-producing countries initially, as an alliance that is based on the oil cooperation between member states. It was meant to regain control and nationalize national fossil fuel resources in several major oil-producing states. The post-WWII oil crisis was a significant factor that played a part in the growth of security concerns and contributed to diplomatic efforts in the sphere of energy.
The primary objective of the organization is, “the coordination and unification of the petroleum policies of Member Countries and the determination of the best means for safeguarding their interests, individually and collectively.” In the next 15 years, other oil-producing countries also joined the OPEC extending its reach to Southeast Asia, North Africa, and West Africa. They ensured stability and order in the global oil market with reasonable prices, secure supply, balanced demand, and fair returns to investors.
The present policy of OPEC is to ensure the secure supply of crude oil with stable and reasonable prices to the international oil market. The aim of the production agreements is at keeping prices of 22-28 dollars per, this range identifies the balancing of the interests of consumers and producers. This flexibility of the system allows the regular fluctuation of the market to be absorbed in an organized way. If prices start expanding outside of the band, OPEC changes its production plan to bring the situation back into accordance. However, non-OPEC producers must back the market stabilization efforts for them to be truly effective, and significant progress has been gained in this respect in recent years.
The OPEC has played a major role in the present and future welfare of the global oil market. Member states are actively preserving the integrity of crude oil as the leading energy source of the world and to reassure OPEC’s consumers of a firm commitment to a stable and secure oil supply. This is strongly coupled with the fact that about four-fifths of the world’s documented crude oil reserves are held by the 11 Member Countries.
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Nations everywhere in the world have always been dependent on each other nation to serve their interests even after hitting their highest level of development. Every state must, therefore, engage in diplomacy with other states or other actors to pursue peaceful relations between them. Participating in international relations encourages countries to cooperate in different spheres including energy, share information, and utilize resources to handle global concerns that exceed national borders. Through their diplomatic efforts and foreign policy, sovereign states participate in international cooperation and communicate with one another, advancing their goals of national interests in bilateral and multilateral partnerships with others.
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Energy is one of the important subjects on the agenda of national security that is responsible for such external risks applied and executed by government departments for foreign relations. Energy diplomacy strongly emphasizes national interests and values, i.e. energy potential and reserves. The Arab States especially the Gulf States, Russian Federation, US, China, EU, and India, and particularly the major players in the international energy landscape. The cooperation among these actors and other states, on these restricted regions established the creation of trans-regional multilateral and bilateral interdependency energy programs almost a must. Energy diplomacy is fundamentally the cement for holding these energy schemes together.
What is the role of diplomacy in energy security?
Foreign policy sets political strategy and overall goals of national interest while energy diplomacy is a means of achieving those goals related to energy security. Energy diplomacy is a form of diplomacy to protect the energy security and the economic interests of the state.
What is the renewable/clean energy diplomacy?
Clean or renewable energy diplomacy aims to describe the innovative significance and scientific connotation of renewable energy. This analyzes how renewable energy such as the development of wind, solar, and biomass has played in the evolution of the world’s power system.
Which state has the most clean energy?
Iceland produces the most renewable energy, reporting that 86.87% of its energy is generated from renewable sources. Following this, Norway is in second place with the most renewable energy, with 71.56% of its energy generated from renewable sources.