The United States of America and the Russian Federation
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Please do not remove this page Energy Diplomacy: the United States of America and the Russian Federation Gasparyan, Arsen https://scholarship.miami.edu/discovery/delivery/01UOML_INST:ResearchRepository/12355413210002976?l#13355503220002976 Gasparyan, A. (2018). Energy Diplomacy: the United States of America and the Russian Federation [University of Miami]. https://scholarship.miami.edu/discovery/fulldisplay/alma991031447748902976/01UOML_INST:ResearchR epository Embargo Downloaded On 2021/09/30 22:11:03 -0400 Please do not remove this page UNIVERSITY OF MIAMI ENERGY DIPLOMACY: THE UNITED STATES OF AMERICA AND THE RUSSIAN FEDERATION By Arsen Gasparyan A DISSERTATION Submitted to the Faculty of the University of Miami in partial fulfillment of the requirements for the degree of Doctor of Philosophy Coral Gables, Florida August 2018 © 2018 Arsen Gasparyan All Rights Reserved UNIVERSITY OF MIAMI A dissertation submitted in partial fulfillment of the requirements for the degree of Doctor of Philosophy ENERGY DIPLOMACY: THE UNITED STATES OF AMERICA AND THE RUSSIAN FEDERATION Arsen Gasparyan Approved: Roger E. Kanet, Ph.D. Bruce M. Bagley, Ph.D. Professor of Political Science Professor of International Studies Department of Political Science Department of International Studies Lilian Yaffe, Ph.D. Guillermo J. Prado, Ph.D. Senior Lecturer Dean of the Graduate School Department of Geography and Regional Studies Edward Glab, Ph.D. Graduate Faculty and Director of Global Energy and Sustainability Forum School of International and Public Affairs Florida International University GASPARYAN, ARSEN (Ph.D., International Studies) Energy Diplomacy: (August 2018) The United States of America and The Russian Federation Abstract of a dissertation at the University of Miami Dissertation supervised by Professor Roger E. Kanet No. of pages in text. (302) New energy opportunities provide effective ways to advance energy superpowers’ foreign policy objectives. Oil and gas are capable of providing producer states with internal order and external influence and are thus a source of relative power. This research examines how energy shapes superpower nations’ foreign policy, analyzing cases of the United States of America and the Russian Federation after the end of the Cold War till the early 21st century with a diachronic selection of the most important developments. More detailed analysis covers the period from 2000 till the present to demonstrate how widely the U.S. and Russian national security and diplomacy are affected by energy concerns. In this project energy refers to crude oil, refined products, and natural gas. Acknowledgments My interest in energy has been influenced by my late friends Blas Ramon Casares, a hero and survivor of the Bay of Pigs and Erwin Arrieta-Valera, the former Minister of Mines and Energy in Venezuela. Their practical knowledge played a pivotal role in helping me understand the business world of energy. I am also grateful to my friend Arman Grigoryan, a member of Lehigh University’s faculty, who is an endless source of inspiration. I owe a profound debt of gratitude to my principal mentors, Professors Roger Kanet and Bruce Bagley. This research benefited immeasurably from their comments. Both of them challenged me to make revisions to improve the quality of my arguments and conclusions. Years ago, after the break-up of the Soviet Union, in the fledgling country of now independent Armenia, I was studying the views of various American scholars who contributed to Roger Kanet’s edited books including The Cold War as Cooperation: Superpower Cooperation in Regional Conflict Management and Coping with Conflict after the Cold War, and later fate decided everything for me here at the University of Miami. Professor Kanet kindly agreed to be my advisor and read and commented on the entire manuscript not only once but parts of it several times. This research also benefited tremendously from a rich and intellectual environment created by Professor Bagley and the Annual Energy Conferences held at our university under his organization and supervision. I am deeply grateful to Dr. Lilian Yaffe and Dr. Edward Glab for their excellent suggestions and comments to improve this study. Moreover, Dr. Yaffe’s course on iii Comparative Politics helped me a lot through my journey. Dr. Glab’s Energy Conferences at Florida International University advanced my knowledge in the energy field. The best comes last. I was encouraged every step of the way by my charming wife Iren. Without her support, there would have been no dissertation. And finally, my eight- year old son Arsen was the wonderful catalyst who pushed me to complete this work, so we can spend more time together. iv CONTENTS Introduction 1 Chapter One. Literature Review 7 Chapter Two. Theoretical Framework and Research Design 16 The Tradition of Neoclassical Realism and Variables of this Research 19 Research Design 33 Chapter Three. Oil and Great Power Politics: Historical Overview of the 20th Century 40 Energy and Foreign Policy of the United States: 1991-2000 59 Russia’s Emergence Out of Chaos: 1991-2000 69 Conclusion 77 Chapter Four. Case Study #1: The United States 81 The Energy Strategy of the Bush Administration 84 Western Hemisphere 87 Middle East 94 Beyond the Latin America and Persian Gulf: Sources of Diversification 100 The Obama Administration and Energy 114 Oil’s Comeback 117 The Institutionalization of U.S. Energy and Foreign Policy Priorities 124 Western Hemisphere and U.S. – Latin America Energy Engagement 126 Middle East Again 131 Africa 135 Russia and Asia 139 Quantitative Approach 149 Conclusion 153 Chapter Five. Case Study # 2: the Russian Federation 169 Taking Control: Energy Assets and the Foreign Policy Concept 174 Russia in the Former Soviet Union Space: Energy and Foreign Policy 182 The EU – Russia Energy Relationship 207 OPEC, Oil Prices, and Russia’s Power Play in the Middle East 226 Russia in Asia: Energy Politics 235 Conclusion 246 Chapter Six. Conclusion 266 Bibliography 278 v LIST OF FIGURES Figure 1. Big Oil 39 Figure 2. Oil Prices and Chronology of the Major Events of the 20th Century 80 Figure 3: U.S. Petroleum Imports from 2000 to 2017 by Main Source Country 151 Figure 4. Top 7 Suppliers of U.S. Oil Imports 2000 161 Figure 5. Average Annual Brent Oil Prices 2000-2008 162 Figure 6. Top 7 Suppliers of U.S. Oil Imports 2008 163 Figure 7. 50 Years of U.S. Crude Oil Production 164 Figure 8. Top 7 Suppliers of U.S. Oil Imports 2016 165 Figure 9. U.S. Petroleum Imports from Saudi Arabia between 2000-2016 166 Figure 10. Average Crude Oil Prices 2008-2016 167 Figure 11. Who Owns “Big Oil” in the United States 168 Figure 12. The Purchase of Natural Gas by Ukraine from Russia 260 Figure 13. Nord Stream 1 and Nord Stream 2 Routes 261 Figure 14. Turk Stream 261 Figure 15. Russian Natural Gas Exports to European Countries 263 Figure 16. Dynamics of the Prices for Brent Crude Oil (2014 – January 2018) 264 vi LIST OF TABLES Table 1. U.S.- Latin America Energy Cooperation Initiatives 130 Table 2. Average Petroleum Supply to the U.S.: Years 2000-2017 150 Table 3. Correlation Analysis Table 151 Table 4. Leading Russian Energy Companies 259 Table 5. Turk Stream and Nord Stream 2 262 Table 6. Sino-Russian Energy Deals (2003-2016) 265 vii Introduction Has energy become a priority in the foreign policy of energy superpowers, such as the United States and Russia? How is energy shaping the foreign policies of these producers, regardless of the political and economic systems of the state? How much is the global oil business an extension of the foreign policy of these countries? How would these energy superpowers meet the challenges of Asian consumption and what would be their oil game plans? These research questions are based on my personal observations and readings and more than ten-year experience of various meetings with high ranking officials of different governments and petroleum industry executives. How energy can impact foreign policy is a puzzle that requires an intensive study of oil, geopolitics, and foreign policy. In this research, energy refers to crude oil, refined products, and natural gas. Many scholars argue that energy resources are a strategic national asset, consolidating the foreign and domestic status of a given state.1 However, oil has only recently come to prominence as a foreign policy factor. Energy development can contribute significantly to foreign policy objectives. Jan Kalicki and David Goldwyn argue that the need to integrate energy and foreign policy should follow from the link between energy and security, and the world’s increasingly risky sources of energy supply.2 Oil and 1 See Hans Morgenthau, Kenneth Thompson, Politics Among Nations: The Struggle for Power and Peace (New York: Alfred A. Knopf, 1985), Sixth Edition, pp.133-136; Daniel Yergin, The Prize: The Epic Quest for Oil, Money and Power (New York - London: Free Press, 2009), pp. xiv-xvii; Kenneth N. Waltz, Theory of International Politics, (Long Grove, IL: Waveland Press. 2010), pp.153-155; Amelia Hadfield, “Energy and Foreign Policy: EU – Russia Energy Dynamics,” in Steve Smith et al eds., Foreign Policy: Theories, Actors, Cases, (New York: Oxford University Press, 2008), pp. 322-324; Øystein Noreng, Crude Power: Politics and the Oil Market (London: I.B. Tauris, 2006), p. 42. 2 Jan Kalicki and David Goldwyn, “Introduction: The Need to Integrate Energy and Foreign Policy” in Jan Kalicki and David Goldwyn eds., Energy and Security: Toward a New Foreign Policy Strategy, (Washington D.C. - Baltimore: Woodrow Wilson Center Press and The Johns Hopkins University Press, 2005), p. 5.! 1 2 natural gas possess particular geographic and tangible attributes which shape their role in the peacetime and direct their use in time of war. Energy has the ability to transform dramatically the fortunes of states: the revenue raised by the sale of energy exports usually prevails over of any other national industry.