The economic significance of energy resources will inevitably result in conflict as it exacerbates political tension to the point of conflict. Through examination of water and oil, the two most significant energy resources, and the role they play in causing conflicts in Yemen and Venezuela respectively, this essay shall prove that conflict over energy resources is more than the result over the issue of dwindling supplies, but rather a result of complex political conditions that that are completely underpinned by economics, both domestically and internationally. Plus, looking through a postcolonial lens, it will be clear to see the impact that ‘big’ economics has upon the common individual and how they are often overlooked in energy conflicts.
Over exploitation of water resources in one of the world’s ten most water-scarce countries are the result the economic reward that can be gained from energy resources in countries where there is not a strong centralised government and large unregulated industry. The trading of energy resources can be lucrative, however, social issues can arise as a result that can lead to conflict between the individual people and the government. In Yemen, “agriculture takes up the lion’s share … sucking up almost 90 percent” (Lichtenthaeler, 31), and although the government has encouraged farmers to plant sustainable crops that require small sums of water to grow, farmers are instead planting cash-crops such as bananas and khat as the economic incentives are greater than what the government offers. Khat produces over 6 percent of the Yemen GDP, which has a negative impact on the water supplies of the country, and in a country where there are between 45,000 and 70,000 privately owned wells, this is a significant requirement for water that cannot be sustained. As a result, water has to be pumped from the Red Sea, over 150 miles away, significantly raising the price of water. This may be sustainable for domestic house use however, but for the agricultural sector, small farmers are suffering as the price of water increases ten-fold. Smaller farmers “eke out a living at the limit of scare resource while the more powerful farmers benefit from non-existent or un-enforced regulation of irrigation water use” (Zeitoun, et al., 55). There is no doubt that this negative economic impact upon small farmers and individuals is resulting in a positive economic impact that benefits large business owners, especially those who control the privately-owned sources of water, in particular the organisation in control of the pipeline that transports water from the Red Sea to the nation’s capital.
For instance, in the Amran Basin, unregulated drilling has led to the creation of new wells, bringing the locals into conflict with the big farmers. More specifically, on the side of an inactive volcano lies the village of Bani Maymoun and holds soil that is perfect for the cultivation of khat. As a result, wealthy farmers have brought in bulldozers, and transported in large tankers of water, increasing the price of water in the area to a level which is unsustainable for the villagers. Althoguh this dispute was resolved by the establishment of a Basin Committee, this example highlights the exploitation of water by wealthier members of Yemen society, for profit, at the expensive of the locals.
Today, the country is in a state of civil war, and a contributing factor for this conflict is because of the energy resource of water, and the negative economic impact that it has upon the people, which only exacerbated previous political unrest to the point of conflict. In an article titled, Water Demand Management in Yemen and Jordan: Addressing Power and Interests, written before the outbreak of the civil war, it is mentioned that, “tensions at the political level in the Yemen water sector derive from the contest between well-established traditional authorities on the one hand, and the rules and organs of the young Yemeni state on the other,” and the Ministry of Agriculture and Irrigation is opposing the policy of water demand management (WDM) (Zeitoun, et al., 57). This shows that conflict was caused not only at the individual level between farmers and the government, but also at the national level, where different departments within the government itself are creating issues that led to the conflict that began in 2015 as a result of a government military crackdown upon protests against government policies.
Therefore, it is clear that the exploitation of water for economic benefit has led to conflict in Yemen on a community and national level. Plus, more significantly, the economic value of water exacerbated the previous fragile political conditions in Yemen to the point of the Yemeni Crisis in 2011, which ultimately led to the ongoing civil war in 2015. It is also clear that the economic significance of energy resources has ignored those on the individual level and places importance to those with significant wealth and power. A postcolonial evaluation would show the vested interests of the government and business owner in energy resources and would ask that further research to examine if there was much discourse at the top level of government about individual cases of water exploitation such as that of the Amran Basin. However, what remains clear is that conflict does inevitably occur over energy resources at it creates and exacerbates political tensions as a result of the economic significance that those resources hold.
Conflict is likely to occur in nations over energy resources as foreign powers interfere in domestic politics. This is especially likely to occur in petrostates, where the economic significance of oil is much larger than most places in the world. For instance, with the current Venezuelan political crisis of leadership, and the increasing discourse from the USA, Russia and China, each foreign nation has a vested interest in Venezuelan oil which will play out politically and result in conflict. Each nation seeks energy security, which shall be defined as the relationship between national security and the availability of natural resources for energy consumption. However, there is an issue of complexity regarding energy security that suggests conflict can occur as increased interdependency can lead to greater consequences if it something goes wrong. As Yergin mentions, “it must be recognised that energy security does not stand by itself but is lodged in the larger relations among nations and how they interact with one another,” (Yergin, 69) suggesting that matters of energy security are intertwined in a complex web, and he goes on to mention that, “different countries interpret what the concept means for them differently” (Yergin, 71). Thus, with many different interpretations of an already complex issue, layered with large interdependency, a situation can arise where if energy security is threatened, there is a greater chance of conflict as for some, energy security can lead to war if it is threatened. As Le Billon mentions, “The resource dimension of foreign military intervention can also be associated with dilemmas between economic interests and strategic objectives,” (Le Billon 2004), and thus for some states, conflict is the best course of action if determined. Therefore, if the economic interests of foreign powers in petrostates are at risk from civil unrest, there is likely to be a conflict on a domestic level as these states promote the interests of opposing groups within domestic politics to protect their own interests, namely the energy resource of oil and the lucrative profits that could be lost. This is the case as Realism determines that as states are power-maximisers, the risk to energy security could become a threat to national security, so actions must be taken to ensure that it does not.
In Venezuela, conflict is inevitable as energy resources become the most significant factor of discourse. Venezuela is the holds the largest reserves of oil in the world, with an estimated amount of 300,878 million barrels of oil untapped (Dillinger 2019) however, it is only the world’s fifteenth largest producer of crude oil (Trading Economics 2019). This is not because Venezuela does not have the capacity to produce its crude oil, but that the current political situation has made it unaffordable to do so. One out of four refineries work, and the state-owned Petróleos de Venezeula (PDVSA) has had to abandon the Isla refinery on the Dutch-owned island of Curacao (Jaffe 2019). Venezuela’s economy looks bleak and that has been one of the defining topics around the political unrest. Currently there is a leadership crisis that has made Venezuela into a pseudo-dictatorship. President Maduro won elections in 2018 that have been deemed unfair as they banned many opposition parties and fraudulent votes were added, however, leader of the opposition, Juan Gauido, has sworn himself in as interim President, whilst gaining much international support and recognition from many nations. However, whilst many nations recognise Gauido’s claim, Russia and China refuse to do so as they deem it to be illegal, however, according to the Washington Post, they both have deep economic investments that would be risked by supporting Gauido. According to the article, the Chinese loaned over $30 billion, “wagering that the production capacity of Venezuela’s state oil company was a sufficient guarantee for debt repayment,” (Kaplan and Penfold 2019), and Russia, through its state-owned oil company, Rosneft, provided $6.5 billion as, “Russia seized an opportunity to signal its return to the global and hemispheric stage with a symbolic move in Venezuela” (Kaplan and Penfold). The US on the other hand, has backed Gauido, publicly stating rhetoric to uphold democracy. However, upon closer inspection, this was done as it would favour US oil interests in the nation. Citgo, a US-based oil refiner, provides 9 percent of US oil production, however, 51 percent of shares are owned by PDVSA, whilst the remaining 49 percent are owned by Rosneft. There is a clear conflict of interest that could occur between the Russians and the US, which could lead to conflict that happens in Venezuela. In fact, according to Reuters, National Security Advisor, John Bolton, has spoken of transferring the funds to the PDVSA from the USA which go directly to the Maduro regime, to Gauido (Holland and Ellsworth). This would create heightened tensions for China as it is owed Venezuelan oil. However, although there would be no international conflict between the US and China, there is a great likelihood that military support would be sent Maduro, to secure his position and ultimately Chinese interests, thus there will be a conflict in Venezuela over energy resources. Colgan argues that violence in petrostates is greater than non-petrostates because, “petrostates spend more on military arms and personnel than non-petrostates” (Colgan, 7), and if Gauido does receive the income from the PDVSA then he would be able to respond to Maduro in kind. Therefore, it is clear that the economic significance of oil has exacerbated political issues to the point of conflict due to the varying interests and investments of foreign nations and their views of energy security.
It is clear that energy resources shall inevitably result in conflict due to the economic significance they have. This conflict can take place at the community or national level as big corporations and nations neglect the position of the individual to preserve their own economic interests. Conflict over energy resources occurs as the complex web of interdependency, foreign investment, and the various meanings nations create for energy security, draws states into, and exacerbates, political crises due to vested economic interests. Although the prediction about Venezuela is largely pessimistic, it is a logical realist prediction. Moving forward, “the challenge to energy security will grow more urgent in the years ahead, because the scale of the global trade in energy will grow substantially as world markets become more integrated,” (Yergin, 79) and it is clear that these economic investments in energy resources shall only become greater, thus increasing the risk and likelihood of conflict.
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