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The role of energy in fuelling and resolving global conflict

October 2015

Shahid Hassim

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Abstract
A brief history of post industrial revolution energy growth was presented. The worlds
leading players in the energy market were identified. Past and current energy wars were
summarised. With the threat of peak oil becoming a reality within the next few decades it is
quite possible that our insatiable appetite for energy will fuel global conflict in our attempts
to secure our energy supplies. At the same time rapid advancements in renewable energy
will lessen our dependence on fossil fuels and potentially resolve conflicts around the world.

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Table of Contents
Abstract ................................................................................................................................................... 1
Introduction. ........................................................................................................................................... 4
A short history of energy. ....................................................................................................................... 5
The main players. .................................................................................................................................... 6
America ............................................................................................................................................... 6
China ................................................................................................................................................... 6
European Union .................................................................................................................................. 6
OPEC.................................................................................................................................................... 7
Russia. ................................................................................................................................................. 7
Peak Oil. .............................................................................................................................................. 8
Climate change........................................................................................................................................ 8
Renewable Energy. ................................................................................................................................. 9
Electric cars. .......................................................................................................................................... 10
Oil wars. ................................................................................................................................................ 10
Ukraine. ............................................................................................................................................. 11
Iraq. ................................................................................................................................................... 11
Discussion. ............................................................................................................................................ 12
Conclusion. ............................................................................................................................................ 14
References ............................................................................................................................................ 15

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Introduction.
We live in a modern world. From the moment we wake up in the morning to the time we go
to bed we interact with ubiquitous machines, devices and sensors - all powered by
electricity. Our homes are heated by wood, gas, coal, heating oil and electricity. Our cars run
on petroleum and diesel, both derived from crude oil. Our food originates from distant
places where it is farmed using diesel powered agricultural vehicles and grown using
fertilisers derived from crude oil. It makes its way from source to our supermarket shelves
by cargo ships, trucks or rail, all powered by some form of fossil fuel.
In his now famous state of the union address in February 2008 George Bush strikingly
declared America is addicted to oil. But, the addiction to oil is not, as this report will show,
unique to our American friends. Rapid economic growth in the East has resulted in
unprecedented demand and fierce competition for finite reserves of fossil fuel.
At this critical juncture it is imperative for us to reflect on the role that energy, whether
renewable or not, plays in our modern world. Is it a force for good or for evil? This paper will
explore this topic and examine the broader issues that make up the world of energy.

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A short history of energy.


Prior to the industrial revolution which began in earnest, in the 18th century, mankinds
energy needs were substantially lower than what it is today. [2] Oxen tilled the fields to
produce our food; horses, donkeys and camels transported us and our goods over long and
short distances. We kept warm by burning wood and lit our homes with animal and
vegetable oil. Machinery which produced our cloth and ground our wheat and corn was
powered mostly by fast flowing river water and wind.
The industrial revolution, which began in England, ushered in a new era in energy. Britain
was running out of wood for heating and demand for coal had grown rapidly. Although
there was plenty of coal, most of it had to be mined several hundred meters underground
and was covered in water. The men who worked the mines were struggling to pump the
water out from the shafts. In 1712, Thomas Newcomen solved the problem by inventing a
coal fired steam engine, which although was extremely inefficient still yielded a better result
than any other alternative at the time.[2] Over the next century the steam engine
developed further and transformed the manufacturing industry as well as transportation as
the steam engine was incorporated into locomotives, trucks and ships [1.] The age of coal
had been established.
At the beginning of the 20th century a major oil field was discovered in Spindle top, Texas.
[2]Up to this point, the main derivative for oil was kerosene which was used as lamp fuel.
Although small amounts were available there was not enough of it for commercial
enterprise. All that changed with the Texas oil discovery and within no time more oil fields
had been discovered and this heralded the birth of an oil boom. Entrepreneurs and
investors soon spotted a golden opportunity and the worlds first oil economy came into
being.[2]
Demand for oil grew with the invention of the first motor vehicle in Detroit. Over the next
several decades the popularity of the motor vehicle increased.

Figure 1 : Energy vs Population growth [1]

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The main players.


United States of America
The United States of America, with under 5% of the worlds population consumes 22% of its
total annual oil output [3] Of the 7 billion barrels of oil that it uses per annum about 60% is
used by the transportation sector (cars, planes, agricultural vehicles, trucks and planes),
with the rest being used for heating, asphalt, cosmetics and other products. Transportation
accounts for 28% of Americas energy needs.[4]
The US is the 2nd largest producer of coal in the world. [5] Improvements in hydrological
fracking technology has in the last decade, amidst great controversy due to environmental
pollution, enabled companies to drill thousands of well. The abundant reserves and
booming production are at such a high level that the government has taken steps to reverse
legislation that forbids the country from exporting natural gas. [6] [7]This measure is largely
due as a response to Europes insecurity about its own gas supply.

China
In China millions of farm workers who once toiled the land have migrated to the cities to
provide labour for Chinas booming industry. Chinas phenomenal growth, fuelled largely by
manufacturing and exports, has over the last decade brought prosperity to millions of its
inhabitants. This has led to higher living standards which has spurred a surge in demand for
property, consumer goods and motor vehicles. Since 2009 China has sold more cars per year
than USA, Europe and Japan combined.[8] Yet, the worlds most populous country, relies on
imports for its petroleum needs, accounting for 25% of the global crude oil consumption
growth in 2016. [9] China, already the largest energy user on the planet, is poised to
overtake the USA as the worlds largest importer of oil. Self-sufficient in coal reserves, which
it uses to power its many power stations, China imports most of its natural gas at present
from Qatar, Australia and Myanmar. It plans to pipe gas in from Russia by 2018. [9]
European Union
The worlds second largest economy and its largest importer of energy is the European
Union. [10]Due to very little reserves Europe, is reliant on imports for most of its energy
needs and this places it in a very precarious position. Consuming 12% of the worlds total
energy, the EU imports 30% of its natural gas from the Russian Gas firm Gazprom and 38 %
from Norway. [11] It imports 21% of its coal from USA. [12] 40% of its oil is imported from
some of the countries which made up the former Soviet Union and 14% is imported from
the Middle East. Renewable energy which remains a strategic objective accounts for 28% of
the EUs energy mix.[10]

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Figure 2: Imports of Fossil Fuels by country of origin. [13]


OPEC
The Organisation of Petroleum Exporting Countries OPEC was founded by Iran, Iraq, Kuwait,
Saudi Arabia and Venezuela at the Baghdad conference in September 1961. Nine more
members later joined but 2 have subsequently resigned bringing the total number of
members at present to 12. OPEC claims that it was formed out of a need to exercise
sovereignty over its oil resources. The countries which make up this organisation collectively
own 1,206 billion barrels which represents 80% of the worlds proven reserves. [14] OPEC
also owns 90 billion cubic metres of Natural Gas, representing 80% of the worlds total
reserves. [14]

Russia.
Russia is the largest country in the world. Having recovered from the breakup of the Soviet
Union, Russia has poured billions into developing its oil and natural gas infrastructure. The
country is the worlds biggest exporter of Natural gas, with most of it being piped through
Ukraine, to Europe.[11], [15] Russian oil production stands at 10.9 mb/d.[15] Of that
amount 3.6 mb/d is consumed locally and the rest 7.6 b/pd is available for export. 75 % of
its total export is sold to the EU. The energy relationship between Europe and Russia
although strained by current sanction due to Ukraine, is one of interdependence. Europe
depends on Russia for 30% of its energy needs and Russia, in turn, depends on Europe for
more than 50% of its income.[15]

India.
India is the most populous country in the world after China. Just like its neighbour, India has
experienced significant economic growth rate which ate present stands at 8%. [16] India
lacks sufficient oil reserves, less than 1 billion barrels and in 2012 had to import 2.7 mb/d or
75% of its total oil needs. [16] The country has the third largest coal reserves in the world.

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Peak Oil.
Oil is a non-renewable resource. It took millions of years under specific geographical
conditions for plant and animal matter to be converted into fossil fuels. Oil is a finite
resource which we, in some point of the future, depending on how fast we use it, will no
longer be able to produce.
In 1956 Robert Hubbert, a scientist who worked for Shell, published a paper which predicted
that at some point in the 1970s the USAs oil production will reach a peak and then slowly
decline. [17] Hubbert pointed out that the rate of discovery of new reserves must match the
same rate at which oil is being consumed. Once discoveries start declining then at some
point thereafter oil production will begin to decline as well. [17] Data from the US Energy
Information Administration (EIA) (Refer to table 3) shows that oil production did in fact
peak in 1970 as predicted by Hubbert. Production continued to decline until 2008 when,
due to advancements in hydraulic fracking and horizontal drilling technology, it became
possible to extract oil which was considered to be uneconomical or too difficult to recover.
The peak oil theorists are quick to point out that no new discoveries have been made and
what happened was that technology has enable industry to extract oil beyond the easy oil.
Although oil has peaked in several countries around the world, it has not done so on a global
level yet. There is a glut of it, in fact, on the oil markets, as a result of Saudi Arabia ramping
up production for several reasons which will be discussed later.
Decade
1940's
1950's
1960's
1970's
1980's
1990's
2000's

Year-0
4,107
5,407
7,035
9,637
8,597
7,355
5,822

2010's

5,476

Year-1
3,847
6,158
7,183
9,463
8,572
7,417
5,801

Year-2
3,796
6,256
7,332
9,441
8,649
7,171
5,744

5,637 6,476

Year-3
4,125
6,458
7,542
9,208
8,688
6,847
5,649

Year-4
4,584
6,342
7,614
8,774
8,879
6,662
5,441

Year-5 Year-6 Year-7 Year-8


4,695 4,749 5,088 5,520
6,807 7,151 7,170 6,710
7,804 8,295 8,810 9,096
8,375 8,132 8,245 8,707
8,971 8,680 8,349 8,140
6,560 6,465 6,452 6,252
5,184 5,087 5,077 5,001

Year-9
5,046
7,054
9,238
8,552
7,613
5,881
5,354

7,454 8,719

Table 3: U.S. Field Production of Crude Oil (Thousand Barrels per Day) [18]

Climate change.
We live on an old planet. The place we call home has over millions of years gone through
many cycles of climate change, which brought in either an ice age or a sweltering
greenhouse. [19] These changes are all part of the natural processes which governs the
earth. During the last three decades research in climate change has drastically expanded
and scientists have made significant observations of different phenomena around the globe.
[19] They observed the occurrence of melting ice cups, rising sea levels, warmer
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temperatures and adverse weather conditions.[19] The conclusion was that the earth is
warming due to the gas emissions which emanate from different sources but mostly from
coal fired power stations and motor vehicles. These gases make their way to the upper
atmosphere where they are trapped. Rays from the sun which fall on the earth and which
would normally radiate out of the atmosphere are unable to do so because the gases traps
them in, effectively creating a greenhouse effect. Scientists predict that unless we slow
down the rate at which we are polluting the atmosphere we will be unable to prevent the
devastating effects of climate change.

Efficiency.
In the 1970s in USA with lower fuel prices at the pumps, the trend for many of the affluent
commuters in suburbia was to own large gas guzzling SUVs. Fuel, even though it was
imported, was cheap. All that changed when in 1973 OPEC in response to the USAs support
for Israel during the Yom Kipur war, decided to embargo. The result was high fuel prices and
shortages at the pump. Soon commuters were ditching their SUVs for more efficient motor
vehicles. Europe is one of the world leaders in fuel efficiency vehicles.
Europes relatively cold winters translates into high heating costs which ultimately result in
bigger energy imports. In an attempt to reduce imports of fuel, the Irish government
operates a subsidy program for home owners to insulate their building fabric so that the
loss of heat generated by heating systems is minimised.

Renewable Energy.
Renewable energy is any energy resource that is regenerated by natural means over a short
period of time. Each year the earth receives over 174 Petawatts of irradiation from the sun.
Some of this can be harnessed directly by solar panel to heat water or generate electricity or
it can be harnessed indirectly from the sun via natural phenomena such as hydropower and
wind. The moons gravitational pull on the earth affects the tides and this phenomenon in
turn provides us with the means to harness tidal energy from the sea. Crude oil, natural gas
and uranium are not considered to be renewable due to the time scale in which they take to
regenerate billions of years.
We have used renewable energy for thousands of years. Biomass and wood was used for
heat and cooking. Hydro power was used to grind corn and to drive other mechanical
devices. Wind was harnessed to pump water from the ground and to drive ships across the
waters.
We have made significant progress since then. Wind turbines with a typical power rating of
around 3MW are installed on what is known as wind farms. They are also installed in
offshore locations. The pace at which wind turbine technology is advancing is so rapid that
energy generated from wind is now cheaper than that of fossil fuel.[20]
Solar photovoltaic power stations are being built throughout the world. The biggest one to
date can generate 600MW and projects are in the pipeline for a 1GW installation. A major
challenge with wind and solar power is storage of excess power when demand is low. Eon
Musk, who developed the Tesla electric motor vehicle, launched the Tesla battery in early
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2015. [21] This sleekly designed slim lithium battery is capable of storing 7kWh of power per
day with the potential to increase it for heavier users. The average home in Ireland uses
5kWh. [22]
One of the most significant drivers for renewable energy was, although it was never ratified
by the USA and later rejected by Canada, was the Kyoto protocol which was adopted in
1997 and then enforced in 2005. To demonstrate their commitments to meet emission
reduction targets, signatories had to deploy renewable energy technology such as wind
turbines, solar power, biomass, hydroelectricity and geothermal technology. In Europe,
another driver for renewable energy is the EU Climate and Energy Framework 2030. Europe
is also committed to reaching a global agreement at the 21st Conference of the Parties
(COP21) in Paris in December 2015. It is these policy and legal frameworks that are
somewhat effective to drive Europes commitment to developing its renewable energy
resources.

Electric cars.
Recent advancements in Lithium Battery technology has seen the range for electric vehicles
increase to 185km on a single overnight charge. Most of the large manufacturers have
electric cars that are already on the market, with research and development projects
currently underway. In Ireland, Energy utility companies have responded by installing charge
points around the country.

Oil wars.
The world has become totally reliant on oil for much of its energy needs and with so much
of it in the wrong hands it is inevitable that conflicts will arise as governments flex their
muscles and intervene in foreign countries when their energy interests are under threat.
Researchers at Portsmouth and Essex universities published a paper in January 2015 where,
using statistical modelling techniques, they produced results which shows that intervention
is more or less 100 times more likely to occur when a country that is embroiled in a civil war
has large reserves and the intervening country imports most of its oil, than when the
opposite is true i.e. the country at war has no oil reserves and the other country the one
with potential to intervene has a high volume of reserves. [23] A startling statistic in the
study is that between 1945 and 1969, of 69 countries engaged in civil war, two thirds saw
outside intervention. Several examples are cited. After oil was discovered in Chad in 1969
France intervened repeatedly at times of civil unrest. The report also mentions that France
ignore the Taureg rebellions in the 1990s but intervened in 2012, arguably due to oil
exploration in the preceding years and not due to the Islamic takeover.
Some of the earliest conflict over oil occurred during the 2nd world war in a campaign
between the British and US Air forces to destroy oil facilities that were supplying the
German Army. Refineries in Romania and Norway were also targeted. In 1941 Britain
together with the Soviet Union invaded Iran in what was known as Operation countenance.
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During the five year occupation Britain controlled southern Iran including its oilfields which
supplied the Allied forces during the war. In Germany, the allied forces engaged in a
campaign of bombing the infrastructure which included refineries and oil depots.

Ukraine.
A network of pipes from the gas fields in Russia to Europe run through Ukraine.
This former USSR republic became entangled in a series of disputes with Russia after being
accused of syphoning off oil meant for Europe. The disputes did not result in violent conflict
but Gazprom shut supplies several times, usually in winter, to Ukraine between 2005 and
2009. At one time gas flow to Europe slowed down since the pressure dropped due to the
supply to Ukraine being cut. In 2014 after months political turmoil in Ukraine, Russia
annexed Crimea. Since then many countries have placed sanctions on Russia. Gazprom
decided that, from 2019 it would no longer use the Gas pipelines through Ukraine. It plans
to build pipelines through Turkey with a condition that its European customers build their
own pipes to the border with Turkey. It is not known whether Gazprom will follow through
with this threat or what the European response is.

Iraq.
The land of the two rivers, as it is called, has since 1990 been engaged in several conflicts.
Iraq went to war with Iran soon after the revolution there which saw the Shah, an American
ally, being deposed and replaced by the Ayatollah Khomeini. The war lasted several years
and left Iraq in financial ruins. Under the pretext that Kuwait, its southern neighbour was
drilling horizontally into Iraqi territory and syphoning off its oil, Iraq invaded and deposed
the ruling family. Operation desert steam, led by America, resulted in defeat for the Iraqi
army but the Baath ruling party remained in power. A no fly zone and severe sanctions was
imposed on Iraq for the next 10 year. In 2004 George Bush and Tony Blair, under the pretext
that Iraq had weapons of mass destruction and was planning on attacking the west, invaded
Iraq and occupied it. A brutal insurgency resulted and after a government was installed the
American coalition withdrew. In June 2014, the Islamic State of Iraq and Syria, who had by
then set up base in neighbouring Syria, captured Mosul from the Iraqi Army. They were
planning to capture Baghdad, oil rich Kirkuk and Irbil next, but after massacring hundreds of
Yazidi men and capturing their women as sex slaves, the USA and coalition forces responded
with military force. ISIS, itself a player in the oil industry, albeit a minor one, holds several oil
wells in Iraq and controls almost all of the oil and gas in Syria. [24], [25] The war, which
recently saw Russian forces making an entry into Syria, shows no signs of abatement.
Several analysts accuse the West of intervening only once Erbil and Kirkuk, both major oil
hubs were threatened.

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Discussion.
This report discussed the transition to modern usage of energy and the dependence that
humanity has on it. Statistics from all the main players in the energy economy including
OPEC, USA, Russia, European Union and China were shown. It can be assessed from these
statistics that countries such as India and China have to compete on the world markets for
its natural gas and crude oil needs. America, despite having ramped up production in crude
oil still has to import oil to satisfy its domestic needs. Uncertainty remains whether its shale
oil can survive fiercely competitive market forces or whether it is viable in the medium term.
European countries were shown to be vulnerable to market volatility since most of its
energy has to be imported. At the same time Europe has made important progress in the
transition to Renewable energy which not only fulfils its commitments to curbing its CO2
emissions but also makes it less dependent on fossil fuel for its energy needs. Overall the
crude oil market remains volatile.
Several renewable technologies were introduced. A growth in demand for wind turbines
and solar panels typically results in lower market prices due to economies of scale. This
makes renewable technology more attractive to investors. Coupled with government
incentives and strong lobbying from interest groups who favour renewables the future looks
bright for renewable technology. Significant progress has also been made in the
development of the electric car, yet more needs to be done.
This report has also discussed how much we depend on fossil fuels in aspects of modern life,
like food production, transportation, industry and so. It has shown that, apart from the
negative effects that coal has on our climate, its reserves are much better distributed than
crude oil and natural gas and will last well into the near future. This should keep our power
stations up and running.
The global supply of oil and the volatility of the markets due in part to political upheaval in
the Middle East is of grave concern. Regional oil producing nations are fighting proxy wars in
Yemen, Iraq and Syria. A severe disruption to the global oil market could have potentially
disastrous consequences on our societies. Petrol and diesel prices will increase at the pumps
and this may result in shortages especially as people start to panic buy. Higher fuel prices
will have a knock on effect. Since the production and transportation of food is fully
dependent on fuel, prices at the supermarkets will soar, making even basic necessities like
bread and milk unaffordable to many. Consequently this will lead to food riots and civil
strife. To restore law, order and security governments will be forced to deploy military units
on the street.
Major world powers have demonstrated that they are prepared not only to stage
interventions into sovereign countries but also invade them if necessary in order to secure
their oil supplies. We have seen several cases of interventions by Western powers in
countries with substantial oil deposits.
Inasmuch as energy plays a significant role in fuelling global crisis it also has the potential to,
in fact, resolve global crisis. Modern energy has done tremendous good for humanity. Food
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production is at levels never seen before and is performed by far fewer people. We are able
to travel great distances in very little time. Our homes are warmer during the winters due to
the relative ease at which heating fuels are transported to our homes.
Renewable energy systems borne perhaps out of a need to slow down the effects of climate
change inadvertently results in less dependence on energy imports. It is only when we
compete less for scarce resources that we dont have, that the potential for conflict
diminishes. Renewable energy gives us the opportunity to do just that. It forces us to
develop new technologies as well as improving the efficiencies of existing ones so that we
can better harness the free energy sources that can be found in our skies, river and seas.
Yet, it must be said, renewable energy is mostly used to generate electricity, whereas oil,
the energy component with the most volatile supply, is what fuels the transportation
industry. Thus, more focus should be placed on improving fuel efficiency and developing
vehicles which are powered by solar, hydrogen fuels cell or lithium batteries.

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Conclusion.
Competition for energy resources has played a strong role in fuelling conflicts in several
countries, in Europe, Asia, the Middle East and North Africa and West Africa. There are no
signs that these conflicts will abate as long as the dependency on fossil fuels exists,
particularly in the transportation sector. Renewable energy resource has the potential to
resolve many of the global conflicts but more needs to be done especially in development of
alternative fuel sources in the transportation sector. Overall energy has had a significant
impact in human development and it will continue to have a mostly positive role for the
foreseeable future.

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