How Risk of Great Power War Could Reshape Energy Security

Michael Levi’s 2013 book The Power Surge: Energy, Opportunity, and the Battle for America’s Future (Oxford), out today in paperback, explores the changes transforming American energy and their economic, environmental, and geopolitical consequences. In the book’s penultimate chapter, he identifies five ‘wild cards’ that could force us to rethink the relationships between energy developments and the broader world. In this excerpt he explores one of those possibilities: rising risks of a major power war.

In 1910, Norman Angell, an English journalist then living in Paris, published The Great Illusion. Europe had become so deeply integrated, he argued, that war had become unthinkable. The British Empire supplied one-fifth of German raw materials and food, and the transactions behind that trade were financed through London. Fully one-third of the rapidly growing sum of foreign investment in Russia came from France. Only a fool would risk war.

Four years later, the Continent would be engulfed in an all-consuming conflagration. World War I would last four years and take more than 16 million lives. It would take nearly half a century, and a second world war, for Europe to start a sustained recovery and for the world to begin to move on.

A similar optimism to the turn of the 20th century pervades modern thinking about the future of international conflict. The United States and China – the leading power and its chief challenger – are as deeply integrated as one could imagine. Americans depend on Chinese products to keep consumer prices and industrial production costs under control. Chinese rely on U.S. markets and American technology for economic growth. U.S. firms have staked massive amounts of capital in major investments in China, and Chinese firms are increasingly doing the same in the United States. Moreover, China relies on the United States to provide a stable global system: U.S. control of the world’s sea lanes assures the stable flow of raw materials and finished products to and from China, while American might deters aggression in Asia and the Middle East. The U.S. Federal Reserve remains the lender of last resort, and while Beijing sometimes chafes at the preeminent role of the U.S. dollar, it remains an essential ingredient to Chinese export-led growth.

The logic of energy can change dramatically in war – and the shadow of possible future conflict, however remote, can shape thinking in peacetime too.

Indeed, the case for optimism appears even stronger than it did amidst similar circumstances a century ago. The new factor is the prospect of nuclear war. Atomic weapons, the argument goes, have made war between major powers unthinkable. A century ago, national leaders could at least delude themselves into foreseeing speedy and relatively painless victory against other great powers. But their contemporary counterparts cannot. It is too easy for the losing side in a conflict to launch a dozen or two nuclear bombs against its adversary, delivering a devastating blow even in defeat. This logic of deterrence, theorists argue, is inescapable: it is an automatic consequence of the atomic bomb, and together with economic interdependence, has banished great power military conflict for good.


Logic of Energy in War

Whether people acknowledge it or not, this optimism undergirds much thinking on all sides of today’s battles over the future of American energy. The logic of energy can change dramatically in war – and the shadow of possible future conflict, however remote, can shape thinking in peacetime too. Global energy markets could well collapse, or at least fracture, if two major powers came to blows; that has certainly been the pattern for commodities trade during past great power wars. In that world, the geography of energy production would suddenly become far more important. North American self-sufficiency, resulting both from increased production and constrained oil consumption, would become far more valuable. This could come into stark contrast with Chinese dependence on imports, all facilitated by sea lanes kept open by U.S. naval power. Chinese dependence on U.S. exports, whether of coal or natural gas, would also redound to the American benefit.

Attenuated fears of Great Power conflict also shape current thinking in subtler ways. Climate change might not receive as much attention as it currently does if the United States and China were locked in a second Cold War – though, if Cold War experience is any guide, its importance might actually rise as the two parties fought for international reputation. At a minimum, optimism about global cooperation to deal with climate change would surely wane.

So are Americans right to be as sanguine as most of them are about the possibility of future conflict with China? Most of the arguments being made today are the same as those that were being made a hundred years ago – and, for the same reasons, they could turn out to be wrong. Leaders may not want to go to war, but miscalculations and miscommunications could take them down that path anyhow. Indeed, political scientists have studied the links between economic interdependence and war intensively over the past few decades, and find that while trade between democracies indeed makes war less likely, economic interdependence among less similar pairs as the United States and China are does little or nothing of the sort.


Energy Security Dilemma?

The big difference, of course, is the advent of nuclear weapons. Indeed the prospect of nuclear conflict is good reason to believe that the United States and China will not go to war over each other’s territory like the European powers did during the twentieth century. But it is not good reason to entirely dismiss the possibility. Leaders can be guilty of wishful thinking even when nuclear weapons are involved. They may believe that they are taking only limited steps, expecting that their adversary will see things similarly, when in fact the other side feels existentially threatened. The result could be escalation to the nuclear level that no one intends.

Perhaps more important, though, is the prospect of proxy battles in distant lands, much like those that occupied the United States and the Soviet Union for more than four decades of the Cold War. Indeed, the past decade has been rife with warnings that the United States and China will clash over control of energy resources in places from Africa to the Arctic. The thesis is suspect: so long as markets function reasonably well, military confrontation looks awfully unattractive. But just as the United States feared that the Soviet Union would move from Afghanistan to Iran and gain control over world oil resources, it could eventually come to fear similar moves from China. At that point, self-sufficiency in energy, and particularly oil, could change the U.S. calculus, sparing the United States harm.

What do these possibilities mean for the future of U.S. energy? Both sides of the fight, as is their wont, will see implications in their favor. Advocates of greater efficiency and alternative fuels can conclude that they would help make the United States independent of global energy systems if need be. Proponents of ramping up domestic oil and gas production will say the same thing. Each side can also find arguments against the other. Partisans of new energy sources can point out that, to borrow a popular phrase from the 1960s, drilling aggressively in the United States might “drain America first,” and argue that the country should instead save its resources for a possible future conflict. Partisans of traditional energy sources could emphasize the fact that the United States is likely to depend on China for many of the new energy technologies that people promote, and warn that that could become dangerous in a more antagonistic relationship.

The bottom line comes down to timing. Intense conflict with China, if it materializes, will not come out of nowhere – it will be apparent a decade away. That would create time to adjust. U.S. firms could shift supply chains for electric cars and wind farms back home or toward friendlier partners. U.S. oil and gas producers could ramp up output and put the United States on more solid ground – if they had not yet depleted U.S. resources in advance.


Reprinted from The Power Surge by Michael Levi with permission from Oxford University Press USA. Copyright © Michael Levi, 2013 and 2014 and published by Oxford University Press USA. (www.oup.com/us). All rights reserved. [Photo of Chinas Ninghai Nuclear Power Plant; Source: Hofman Photos via Flickr Commons]


Michael A. Levi is the David M. Rubenstein senior fellow for energy and the environment at the Council on Foreign Relations, director of the Maurice R. Greenberg Center for Geoeconomic Studies, and director of the CFR program on energy security and climate change. He is author of The Power Surge: Energy, Opportunity, and the Battle for Americas Future (Oxford University Press) and By All Means Necessary: How Chinas Resource Quest is Changing the World (with Elizabeth Economy), (Oxford University Press).


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