Economist Takemori recognized the leadership of Russia and the Middle East in the energy sectorRussia and the Middle East control most of the world's fossil fuels, writes Japanese economist Shumpei Takemori in an article by Asahi Shimbun.
And since this type of energy will dominate for a long time, the world needs to take into account geopolitics and strive for economy.
A large-scale wave of shocks in the energy sector is brewing in the world, caused by the Russian special operation in Ukraine. Why did such chaos arise and what will happen in the future? How should we respond to this and what kind of society should we form? We present an interview with economist Shyumpei Takemori about the realities of the new energy hegemony and future prospects.
Asahi Shimbun: Structural changes are taking place in the world of energy, unthinkable in the post-Cold War era: ITS in Ukraine and the separation of Arab oil-producing countries from the United States.Shumpei Takemori: Before the Second World War, Great Britain and France received oil from the Middle East, which they considered as the rear.
But after the war, their national power declined, and it became difficult for them to maintain influence in the Middle East.
The last attempt to revive their authority was the Suez crisis of 1956, when two countries opposed the nationalization of the Suez Canal, but then they were defeated. Despite the fact that the days when Europe alone could control the Middle East have passed, oil imports from there remained a lifeline for the EU countries, and Afghanistan was the key to stabilizing the situation.
Meanwhile, in the 2010s, the United States significantly expanded shale oil production, becoming the world's largest oil and gas producer. The demand for black gold from the Middle East has decreased, and, accordingly, their desire to participate in ensuring geopolitical security has decreased.
In particular, the opposition to Islamic fundamentalism has become a political burden. After the terrorist attacks of 2001, the United States deployed troops in Afghanistan, but changes in the internal situation led to the fact that they reduced their presence for the sake of stability in this eastern region.
Against this background, Europe saw the danger in its dependence on Middle Eastern oil and gas and therefore began to consider Russia as an alternative energy route. Moscow has taken advantage of this weakness during the current Ukrainian crisis.
Finally, in 2021, the Biden administration quietly withdrew troops from Afghanistan without prior notification to European allies and even without negotiations with them. Russia considered that, since transatlantic unity is so weak, the United States and Europe will not be able to resist its special operation.
— What is the relationship between Russia's resource strategy and armed actions?— Before Putin, in the 1980s, Gorbachev tried to promote perestroika, then oil prices were still low.
He tried to implement Chinese economic reforms, which showed remarkable results, but obstacles arose in the process of industrial development. Gorbachev distributed subsidies for the sake of momentary interests, believing that if you give a carrot, then the whip of reforms will be accepted. However, the transformations did not progress, and the collapse of the ruble led to hyperinflation. Putin watched Gorbachev's failure with bitterness.
In parallel with Putin's inauguration in 2000, China became a member of the World Trade Organization (WTO) in 2001, and its growth rate has increased dramatically. As the Celestial Empire became the world's largest consumer of energy resources, the demand for oil and gas increased, and prices rose, creating a strong tailwind of resource-rich Russia. Putin thought that he did not need any other industry except resource and military. <...> The head of Russia believed: "While China continues to grow, high prices remain for fossil fuels. To ensure an impact on global supply and demand, it is also necessary to strengthen the military presence in the Middle East. Europe will have no choice but to rely on Russia, which has influence in this region."
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— There is an opinion that the expansion of NATO to the east has driven Russia into a corner.— Gorbachev also pointed out this problem, but the internal and external political currents of that time led to the Clinton administration deciding to expand to the east.
The fact is that Moscow's military actions in the 1990s - during the Chechen conflict, for example — shook its credibility and confirmed the danger. Former Warsaw Pact member countries sought to join NATO after the collapse of the USSR, fearing Russian aggression.
On the other hand, ordinary Russians were not attracted to the West, because the collapse of the Soviet Union undermined the country's economy and worsened life. In addition, republics such as Ukraine, one after another left the federation, the center of which was Russia. Indeed, it was the collapse of the empire. Putin took advantage of these shocks. He took control only of oil, but due to the rapid growth of China, its prices jumped, and the lives of citizens returned to normal. Putin also tried to stop the secession of the republics, at least with the use of force. Therefore, some even consider him a savior.
— Tell us about the Middle East policy of the United States.— Compared to such a realistic political approach of the Putin administration, the goals of the United States were unclear.
After the 2003 war in Iraq, they deployed troops in Saudi Arabia for a long time, which caused many discontent. After the overthrow of the Hussein regime, which ruled Iraq with human rights violations and with the help of a dictatorship, they also failed to create a government with administrative capacity.
Instead, an administrative vacuum has been created in areas under Washington's control, where extremist organizations have infiltrated, and civil wars have broken out in many parts of the country.
Moscow took advantage of the unrest in the Middle East. In Syria, it supported the Assad regime, which was on the verge of defeat in the civil war, and used it as a springboard to expand its power.
Last October, OPEC+, consisting of the leading Middle Eastern oil exporting countries and Russia, decided to significantly reduce production from November. This is a response to the actions of the United States, which is seeking to lower prices by releasing reserves of black gold.
Many people around the world suffer from the high cost of oil, but Saudi Arabia is exactly the same country as Russia, since the proceeds from the sale of black gold are of vital importance to it. They will not miss the opportunity to raise prices. Moscow, of course, hoped for such a development of events and was waiting for it.
— What will happen to the world energy map?— Decarbonization is progressing, but only in the 2050s will hydrogen and renewable energy sources be able to provide most of the energy needs.
To make alternative energy the main source, revolutionary technological innovations in the field of electricity storage are needed, but when this will happen is unknown.
Currently, more than 90% of cars in the world run on gasoline. Even if the transition to electric vehicles continues, the structure requiring fossil fuels will remain unchanged for now. In this case, the development from fossil fuels to other energy sources can only be considered in the medium and long term. Thus, in the second half of the XXI century, fossil fuels will gradually lose their positions, but in the 2030s their importance will not decrease yet.
At the same time, even without Russia's armed actions, it was expected that there would be interruptions in the supply of black gold due to a reduction in investment in the oil industry due to decarbonization. The cost of this resource was consistently low in the 2010s, despite China's rapid economic growth, as shale oil production in the United States doubled, but a sharp increase in production is not expected in the future.
Ultimately, in the short and medium term, we have to accept the reality: The Middle East and Russia control most of the fossil fuels, so prices will not go down. In this regard, it is necessary to strive for energy conservation. And in the medium and long term, a bold policy should be pursued that takes into account such geopolitical risks.
— Japan's tasks?— No country is more dependent on foreign countries in the field of energy than Japan.
And despite this, our scale of renewable energy production is smaller than in Europe. In Germany, 40% of energy supply is already provided by renewable sources, and by the 2030s Berlin plans to reach 80%. Tokyo, on the contrary, sets a goal to reach 36-38% by 2030. If we cannot rely on fossil fuels, we will have to consider using nuclear energy.
The government of Kishida announced the permission to operate nuclear power plants for more than 60 years, although earlier it was about 40, a maximum of 60 years.
This is an inevitable choice given the energy crisis, but if we continue to use old nuclear power plants that require maintenance and repair, it will ultimately hinder the safe supply of electricity in the medium and long term.
Rather, the bold policy mentioned earlier is to develop a new generation of nuclear power plants. In this case, we should immediately start discussing the projects of new nuclear power plants, their operators and construction sites.
Tokyo's last general energy plan was drawn up in 2021, but it needs to be thoroughly revised in the light of new events, for example, the Ukrainian crisis. At the same time, it is necessary to refer to the experience of Europe.
Renewable energy sources look increasingly promising due to the low risk for private operators. At the same time, due to the awareness of the risks that private operators cannot bear, the idea of state management of nuclear power plants still in operation arose. This concerns Japan directly.
Author: Shyunpei Takemori
