the new petro power paradigm - Diplomat Magazine

ENERGY|Di spatches
greenhouse gases, it also hints at its present-day
dependency on foreign sources
of carbon-based energy and the long-term
environmental impact of this reliance.
The Chinese leadership has responded
to this reality in two ways. Short-term,
China remains committed to a policy of
securing traditional forms of energy, at
home and abroad. Long-term, however,
China seeks to reduce its use by moderating
growth, improving energy efficiencies
and diversifying its energy sources.
China plans to break ground on 40
new nuclear reactors in the next five years
and widen its lead as the world’s largest
manufacturer of solar panels and wind
turbines. This position has not gone unnoticed.
As The New York Times wrote in
2010, “the West may someday trade its
dependence on oil from the Mideast for
a reliance on solar panels, wind turbines
and other gear manufactured in China.”
3. Iran
One form of energy — nuclear power
— has dominated much of the recent discourse
about Iran. Often heard and rarely
believed claims from the Iranian leadership
that the country’s emerging nuclear
program will serve an exclusively civilian
purpose strain credulity. That said, Iran
already has the capacity to project power
across the Middle East thanks to its rank
as one of the world’s top five producers of
both oil and natural gas.
Iran stands to retain this status for some
time as it possesses the third and second
largest-known reserves of oil and natural
gas respectively, according to the CIA
World Factbook. Intriguingly, Iran’s current
influence falls below expectations in light
of its immense energy reserves. For better
or worse, Iran remains under-exploited
with production levels below its potential.
An influx of foreign investment could
remedy this condition, but Byzantine investment
rules and international sanctions
against the ruling Mullahs have damaged
the country’s energy infrastructure.
It is ironic, if not paradoxical, that Shiite
Iran depends on its Sunni Arab neighbour
of Oman and others to refine its oil and
natural gas for domestic consumption.
This condition — which bears the seed of
political instability inside and outside the
country — also exposes Iran as a nation
whose ambitions far exceeds its institutions.
4. Iraq
History will have to decide whether the
United States invaded Iraq in 2003 for the
purpose of securing its oil reserves, said
to be the fourth-largest in the world, according
to the CIA. But no one can deny
that the resource wealth of Iraq remains
grossly under-utilized. The Iran-Iraq War
(1980-1988), the Gulf War (1990-91) and
the economic sanctions that followed it,
and the sectarian conflicts that accompanied
the U.S. invasion and occupation of
Iraq (now winding down) have extensively
damaged Iraq’s political institutions
and infrastructure with obvious social and
economic consequences.
Iraq might possess a princely reservoir
of energy riches, but its citizens will likely
live like paupers for some time compared
to their equally oil-rich Arab neighbours.
The U.S. Energy Information Administration
projects that Iraq’s per-person net
revenue from oil sales reached only $1,686
in 2010 compared with $7,685 for Saudi
Arabia, $21,416 for Kuwait, and $34,110
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