University of Colorado Boulder College of Arts and Sciences Department of International Affairs

The Impact of Third-Generation Versus Fossil Fuels on Interstate and Intrastate Conflicts

Ursula Bryn Grunwald

Advisor:

Dr. Steven Vanderheiden (Department of Political Science)

Defense Committee: Dr. Steven Vanderheiden (Department of Political Science) Dr. Daniel Kaffine (Department of Economics) Dr. Shuang Zhang (Department of Economics)

Submitted in part fulfilment of the requirements for the degree of Bachelors of the Arts in International Affairs of the University of Colorado Boulder April 3rd, 2018

Abstract

Oil is the most traded item in the world, and previous research has shown a link between oil and the intensity and duration of conflicts. However, work has not compared and contrasted the impact of oil on interstate versus intrastate conflict. Additionally, the world’s fuel demands will increase in the coming decades, particularly in non-OECD countries. As a way to encourage more peaceful relations, the question was posed if third-generation biofuels - those derived from - could solve some of the problems of fuel demand and conflict over fossil fuel resources. The economic aspect of third-generation biofuels were set aside, and attention was paid to the requirements of algae growth and development. The research found that oil serves as different motivation in interstate and intrastate conflict. In interstate conflict, it tends to be an economic incentive and a reason for third-party countries to interfere. In intrastate conflict, oil and its infrastructure is treated more as a means of political and economic influence, particularly on the part of rebels as a means of exerting control over the central government. Additionally, third- generation biofuels were determined to be capable of production in some capacity in almost every area of the globe. Considerations such as water or land space are minimal in terms of the practicality of this energy source. Currently, cost for the production of algae biofuels is much higher than what would be economically feasible. However, by examining the trajectory of costs for wind and solar - which, even twenty years ago, were considered too expensive to be practical, but are some of cheapest sources of energy today - the timescale for the usefulness of this energy source can be estimated. By the middle of the century, should the research and decline of cost be comparable to other sources, algae-based biofuels should be comparable to conventional sources of energy such as oil or .

i ii Acknowledgements

I would like to express my gratitude to:

• My supervisor, Dr. Steven Vanderheiden, for his advice and thoughtful criticism.

• My second supervisor, Dr. Daniel Kaffine, for his support and approach to quantitative analysis.

• Dr. Shuang Zhang, for her excellent advice and ceaseless support.

• My father and friends, for their boundless enthusiasm, love, and care when I felt over- whelmed with the scope of the work.

• My cats, Frederick and MinBin, who made sure my keyboard was always warm when I went to type and that there was at least one long string of random letters.

iii iv Contents

Abstract i

Acknowledgements iii

1 Introduction 1

1.1 Motivation and Objectives ...... 1

1.2 Contributions ...... 2

1.3 Statement of Originality ...... 2

2 Background 3

2.1 Introduction ...... 3

2.2 Oil and Energy Use ...... 3

2.3 Third-Generation Biofuels ...... 5

2.4 Summary ...... 6

3 Literature Review 7

3.1 Oil and Conflict ...... 7

3.2 Third Generation Biofuels ...... 10

v vi CONTENTS

3.3 Gaps in the Research ...... 11

3.4 My Contributions ...... 12

4 Research Question 13

4.1 Research Question ...... 13

4.2 Hypothesis ...... 14

5 Methodology 15

5.1 Factors ...... 15

5.2 Interstate Conflict ...... 16

5.2.1 Russia and ...... 16

5.2.2 Sudan and South Sudan ...... 18

5.2.3 China and the South China Sea ...... 20

5.2.4 Iraq and the United States ...... 22

5.3 Intrastate Conflict ...... 24

5.3.1 Colombia ...... 25

5.3.2 Nigeria ...... 27

5.3.3 Libya ...... 30

5.3.4 Syria ...... 32

5.3.5 Interstate and Intrastate Case Comparison ...... 35

5.4 Technical Analysis ...... 36

5.4.1 Predicted Oil and Energy Use Analysis ...... 36 CONTENTS vii

5.4.2 Requirements of Algae-Based Biofuels ...... 40

5.5 Cost Projections for Algae Biofuels ...... 46

6 Findings 50

6.1 Impact of Oil on Interstate Conflict Versus Intrastate Conflict ...... 50

6.1.1 Economic Control ...... 50

6.1.2 Severity of Conflict ...... 53

6.2 Considerations with Third-Generation Biofuels ...... 54

6.2.1 Temperature ...... 54

6.2.2 Water ...... 56

6.2.3 Fuel ...... 57

6.2.4 Growth Environments ...... 57

6.3 Analysis ...... 59

6.3.1 Oil Costs ...... 60

6.3.2 Energy Use ...... 60

6.3.3 Projected Costs for Algae ...... 60

7 Findings Discussion 63

7.1 Discussion ...... 63

7.1.1 Oil on Intrastate and Interstate Conflict ...... 63

7.1.2 Oil Versus Algae on Conflict ...... 65

7.1.3 Cost Projections, Timescale, and Impact ...... 66

7.2 Implications ...... 70 8 Conclusion 72

8.1 Summary of Thesis Achievements ...... 72

8.2 Applications ...... 73

8.3 Future Work ...... 73

Bibliography 73

viii List of Tables

5.1 Interstate/Intrastate Conflicts Case Studies ...... 15

6.1 Summary of reserves by conflict ...... 51

6.2 Summary of distance of longest pipeline in intrastate conflict areas ...... 53

6.3 Summary of conflicts, organized by conflict duration ...... 54

6.4 Summary of decline in costs ...... 61

ix x List of Figures

2.1 World energy consumption by type through 2040...... 4

2.2 Refining processes for third and fourth generation biofuels...... 6

3.1 Map of oil countries and associated conflicts...... 9

5.1 Map of oil and gas reserves in Crimea...... 17

5.2 Fossil fuels as Russia’s gross exports in 2013...... 18

5.3 Map of Heglig and other disputed areas in the Sudan conflict...... 19

5.4 Graph of oil production in Sudan before and after independence...... 20

5.5 Disputed land claims in the South China Sea...... 21

5.6 Map of oil reserves in the South China Sea...... 21

5.7 Oil companies operating in Iraq after the US troops pulled out...... 23

5.8 Map of oil reserves and pipelines in Iraq (2016)...... 24

5.9 Map of oil reserves in Colombia (2015)...... 25

5.10 Areas of insurgency activity in Colombia...... 26

5.11 Graph of oil production and disruption after the appearance of the NDA. . . . . 28

5.12 Map of political violence related deaths in Nigeria (2016)...... 29

xi 5.13 Map of oil fields and pipelines in Libya...... 30

5.14 Map of oil fields, pipelines, and areas of control in Libya...... 32

5.15 Map of the proposed Qatari and Iranian pipelines through Syria...... 33

5.16 Oil and gas infrastructure and territories controlled by various state and non- state actors in Syria...... 34

5.17 World energy consumption by type through 2040...... 37

5.18 The World Energy Council’s 2050 jazz and symphony predictions...... 38

5.19 Output of algae pond when grown in waste water...... 41

5.20 Global average temperatures...... 42

5.21 Pro and con comparison of different algae growing environments...... 44

5.22 Summary of algae biofuel production and yield...... 45

5.23 Cost of energy per MWH in 2017...... 47

5.24 Cost decline of wind power, 1980-2015...... 48

5.25 Cost decline of utility-scale solar power...... 49

6.1 Map of global average temperatures...... 55

6.2 Map of water and water scarcity...... 56

6.3 Potential yield from algae...... 58

6.4 Proven global oil reserves in 2016...... 59

6.5 Projected cost of algae biofuels across a thirty year span with four scenarios. . . 61

7.1 Cost of algae biofuel projections...... 68

7.2 Cost of algae biofuel compared to oil...... 69

xii Chapter 1

Introduction

1.1 Motivation and Objectives

The motivation of this work is to better understand aspects of how oil influences conflict, and the impact of switching to third-generation biofuels. This is primarily done through examining modern cases of interstate and intrastate conflict, in which oil and other fossil fuels are present and play some role. Analysis is then conducted to understand the ways in which oil effects interstate and intrastate conflict. Then, the technical requirements of third-generation biofuels are examined.

As the global energy requirements rise, more energy sources are needed to meet the demand. At the same time, there is a push to move away from climate-changing fueling fossil fuels, with an emphasis on renewables. Some work has been done on the geopolitical ramifications, such as potential conflicts over the raw resources that can be used to created solar panels and wind turbines. However, the geopolitical ramifications of third-generation biofuels remain relatively unstudied. This work seeks to understand the current requirements to produce algae-based biofuels, and how that would likely affect existing conflicts in areas with oil.

1 2 Chapter 1. Introduction

1.2 Contributions

The first area that will see a contribution will be an understanding of the impact of fossil fuels on interstate conflict versus civil conflict. A great deal of work has been done on the impact of oil and fossil fuels on civil conflicts, such as how they contribute to the duration or intensity. However, not much work discusses the differences between how fossil fuels impact interstate conflict, or compare and contrast between interstate and intrastate conflicts. This thesis will also attempt to understand conflicts as related to third-generation biofuels. It will be important to determine if they are obstructable a resource as fossil fuels, or as economically motivating as oil and gas have proven to be. It is also important to understand if and how they will contribute to resource conflicts, be this through food, land, energy usage for cultivation, or something else entirely. Finally, it will be important to understand the geopolitical ramifications of third- generation biofuels, and how or if they will carry the same levels of consequences that oil and fossil fuels do.

1.3 Statement of Originality

This is to certify that to the best of my knowledge, the content of this thesis is my own work. I certify that the intellectual content of this thesis is the product of my own work and that all the assistance received in preparing this thesis and sources have been acknowledged. Chapter 2

Background

2.1 Introduction

The following section will detail important information for understanding the complexity of the topic. It will begin by detailing the importance of oil, then move into a discussion of predicted energy growth. Next, the development and uses of third-generation biofuels will be discussed. This is meant to give an overview of the subject.

2.2 Oil and Energy Use

Oil is the most commonly traded item in the world, with over four billion metric tons produced per year. Out of the ten companies with the highest global revenue per year, six of them are in oil and gas, indicating the enormous amounts of money invested in this product. Globally, oil demand is expected to increase until 2035, starting from todays demand of 97.9 billion barrels per day [EIA, 2017b]. This comes as non-OECD countries, such as India, increase their energy demands [EIA, 2017b]. The Energy Information Administration predicts a global rise of 28% in energy demand, increasing the usage of all energy resources, except for coal, the use of which is expected to decline around 2025. The increased demand on all energy sources can be seen in Figure 2.1 [EIA, 2017b].

3 4 Chapter 2. Background

Figure 2.1: World energy consumption by type through 2040.

As can be noted from the graph, renewables and nuclear are expected to grow in demand, yet oil and other liquid fuels will continue to dominate the market. This is a concern, as oil can be used as a means of geopolitical control, such as the oil embargo between the United States and Arab oil producers in 1973. The embargo lead to massive price increases for oil, making transportation exceedingly expensive and slowed economic growth. Fluctuations in oil prices can also lead to severe economic problems, as can be seen in Venezuela currently. Venezuela has the largest supply of crude oil in the world, and while the price of oil was 100USD per barrel, the economy, largely based around the supply of crude oil, could function well. However, improvements in drilling technology in 2014 created an oversupply of crude oil, and the price dropped to 26USD per barrel at its lowest point in 2016. Currently, Venezuela suffers from food shortages, political unrest, economic instability, and hyperinflation, due the changes in price for their only commodity. 2.3. Third-Generation Biofuels 5

2.3 Third-Generation Biofuels

Biofuels have been in development for years, with new developments occurring frequently. There are many different types of biofuels, each with their own considerations. First genera- tion biofuels typically utilize food , such as or corn, and come with their own potential for conflict, as these types of biofuels depend on what would otherwise be a food resource. They can also utilize a great deal of water and land space, and ultimately contribute to carbon emissions overall. Second generation biofuels can be manufactured from various types of , meaning any source of organic carbon that is renewed rapidly as part of the carbon cycle. However, third-generation biofuels spark interest, as these algae-based fuels can be grown on non-arable land with non-potable water. These biofuels can be cultivated in open ponds, closed loop systems, or . They occasionally require some , but they algae-based fuels can be turned into oil, diesel, gas, or even jet-fuel, and is biodegradable. There are also fourth-generation biofuels being researched, which would be carbon negative. These biofuels would sequester with genomically synthesized microbes. However, these are still in development, and are currently very expensive to produce. Costs would be expected to drop with a relevant breakthrough in technology. Figure 2.2 details the processes and differences between third and fourth generation biofuels.

The processes for third and fourth generation biofuels, as can be seen in Figure 2.2, are largely the same, with the added step of genetic modification for higher carbon dioxide capture and lipid production. Ultimately, the results would be used in many different areas, with different types of algae and processing leading to different resulting products. Investing in third-generation biofuels would help find a way to provide many different types of fuel, from a variety of algae sources, at a time when fuel demand is rapidly rising. 6 Chapter 2. Background

Figure 2.2: Refining processes for third and fourth generation biofuels.

2.4 Summary

From the information discussed above, it can be determined that oil and gas increases economic and political instability in a time when the world energy demand is expected to sharply rise, particularly in developing countries. Oil can also be linked to conflicts, and in a world heavily impacted by climate change, it will be vital to neutralize as many sources of conflict as possible. Chapter 3

Literature Review

3.1 Oil and Conflict

Oil and gas have been linked to violent and costly resource conflicts the world over, which benefits the promotion of methods, as these tend to be diffuse in nature, rather than point sources, such as fossil fuels. Fossil fuels and threats to their transportation can be used to extort or control opposing parties. However, as there has been little work into the geopolitics of renewable energy in comparison to the body of work over fossil fuel resource conflicts, it is hard to say whether a switch to a fully renewable society will indeed be a more peaceful one, with minimized exposure to the control that fossil fuels currently offer. Particularly in the case of biofuels, wherein there are some potential resource conflict concerns over the various methods used to produce the fuel. Research has examined the cost of fossil fuel based resource conflicts, as well as some of the conflicts over biofuels, but there remains a gap in between an understanding of how a switch to renewable energy could minimize the conflicts and how to approach and site biofuel production plants to maximize use of the resources there while not contributing to existing conflicts. As the world energy consumption rises, along with greenhouse gas emissions and the correlated climate change concerns, a full understanding of a transformation to a world powered by renewables is vital.

Conflicts concerning point resources such as diamonds, metals, or oil have been well researched

7 8 Chapter 3. Literature Review and discussed. Michael Ross wrote that, while there is conflict in general over point-source resources, not all point-sources are equal, and then discusses how the location, legality, and lootability of these resources contribute to the spark of conflict - in the case of his paper, civil conflict [Ross, 2004]. Previous studies had found that there is a correlation between a country’s dependence on a resource and its likelihood of experiencing civil conflict, as well as the length of time that conflict will persist. In Ross’s work, he found that out of twelve civil conflicts from 1941-2001, oil and gas were linked to seven conflicts, with six of these conflicts being civil wars, and that more conflicts were found in areas that produce oil. Point sources are easy to capture and control. A problem arises when point sources are located far away from the capital, which means that rebel groups can more easily gain control over them, and the government will struggle more in recapturing them [Ross, 2004]. Oil and gas tend to be difficult to loot, however, and tend to cause separatist conflicts rather than nonseparatist conflicts [Ross, 2004]. These types of conflicts also tend to be longer term and more difficult to resolve, according to Rosss research. Unlootable resources also contribute to long-term separatist conflict when they are more prone to obstruction. Onshore gas and oil is highly obstructable, as it tends to need to be transported long distances, often in pipelines [Ross, 2004].

Ross’s research finds that obstructable resources can contribute to the intensity and longevity of conflicts. Weaker parties can exploit the weakness in the transportation, such as in the bombings of the Colombian oil pipeline in 2000, when the pipelines were bombed 98 times in one year, and the attacks were used by the National Liberation Army to extort hundreds of millions of dollars annually. Ross states that obstructable resources can also prompt a government to act preemptively, using terror and repression to suppress local peoples [Ross, 2004]. This is partially the case in Sudan, wherein the government, to guard the oil fields from rebels, has forcibly cleared populations from around the area. The government has utilized executions, rape, ground attacks, and bombings to force people from their homes in locations around the oil fields. Additional work has found that third-party states are more likely to intervene in in civil wars when the conflict takes place in an oil-rich area, or when the intervener has a high oil demand [Bove et al., 2016]. Palvi Lujalas work examined similar themes, with an eye on 3.1. Oil and Conflict 9

Figure 3.1: Map of oil countries and associated conflicts. rebel access to the resources. The research found that if the fossil fuels reserves are located in a conflict zone, the duration of the conflict is doubled in comparison to similar conflicts, whether the reserves are in production or not [Lujala, 2010]. Additionally, onshore oil and fuel reserves increase the risk of conflict, whereas offshore production has no effect[Lujala, 2010]. These results have shown the role natural resources, particularly oil and gas, play in conflict due to their opportunities and incentives. Figure 3.1 details the types of conflicts that is found in oil-producing countries.

Figure 3.1 demonstrates that in oil-producing regions, countries tend to lean more towards hav- ing significant conflict or instability. Klare reaffirms this in his book on resource wars, stating that oil locations are a matter of security as well as economic interest [Klare, 2002]. He details the establishment of permanent military bases in the former USSR territory of the Caspian Sea after the collapse of the Soviet Union as an example of this. He quotes the then-Deputy Secre- 10 Chapter 3. Literature Review tary of State, Strobe Talbott, saying, ”It would matter profoundly to the US if [American] oil companies were denied access to as much as 200 billion barrels of oil.” [Klare, 2002] Past research has clearly demonstrated the incentives oil and gas reserves provide, not only to companies and government, but to rebel groups and insurgencies as well. Bridges and Le Billon have also stated that large oil companies are beginning to have difficulties finding new, low-consequence sources, as states and conflicts prevents access to reserves [Bridge and Billon, 2017].

Higher oil prices also lead to increased aggression and conflict in oil-producing states, partic- ularly in states where oil production makes up more than 10% of the GPD [Hendrix, 2017]. Additionally, it has been determined that when oil prices rise, democracy declines. In other words, oil and democracy are inversely related [Hendrix, 2017]. This has a clear link to conflict and their duration.

3.2 Third Generation Biofuels

Biofuels have sparked interest in terms of energy security, the finitude of fossil fuels, and the necessity of addressing climate change. However, there are some potential concerns and future sources of conflicts that must be considered when it comes to biofuels. Lian Pin Koh and Jaboury Ghazoul found that biofuels could trigger food price increases, conflict over land-use change, and competition for water resources, but indicate that some of the environmental and societal costs could be alleviated with development of next generation biofuel feedstocks and production technology [Koh and Ghazoul, 2008]. Work has been done on increasing the types of biofuels and their means of production as well. Roland Lee and Jean-Michael Lavoie started their paper on the challenges of producing a commodity from a biomass of increasing complexity with a quick overview of the generations of biofuels. The first-generation biofuels are directly related to generally edible , such as corn [Lee and Lavoie, 2013]. These types of biofu- els have concerns of water consumption, net positive greenhouse gas emissions that were worse than the carbon footprint of fossil fuels, land usage, and food security [Lee and Lavoie, 2013]. Second-generation biofuels are fuels produced from a wide array of feedstock, such as municipal 3.3. Gaps in the Research 11 solid waste or lignocellulosic feedstock [Lee and Lavoie, 2013]s.

Second-generation biofuels were shown to be suitable to convert into transportation fuels such as . Yaser and Pallavi have found that 99% of worlds current biofuels are first and second generation, with an estimated 8% of words fuel transportation will be biofuels by 2022 [Yaser and Pallavi, 2013]. Third generation biofuels are typically related to algae, but can also be linked to utilization of carbon dioxide as the feedstock. Algae produces biomass quickly, and requires less landmass. However, the production of algae could be difficult in areas where temperatures are exceedingly low or below freezing for the majority of the year. Lee and Lavoie recommend a combination of biofuels to cope with increased worldwide fuel demand [Lee and Lavoie, 2013]. An additional paper by A. Alaswad, M. Dassisti, T. Prescott and A.G. Olabi [Alaswad et al., 2015] discussed the promise of third-generation algae biofuels, and indicate that since algae can be grown in locations without arable land, they do not need to be in competition with food or feed crops. The paper then discusses versus , and the process of making both from sources such as or micro-algae. Dhaman and Roy affirm that third-generation biofuels can be grown on non-arable land with non-potable water. Moreover, algal biomass does not compete with agricultural food and feed produc- tion [Demirbas, 2007]. However, harvesting algae requires a high energy input, which comes to 20%-30% to the total cost of production [Demirbas, 2007]. The research work indicates that while there are some concerns with biofuels, more recent generations or biofuels show promise in a multitude of areas and could be explored further. Particularly with genetic engineering brought into play, algae-based biofuels could become a significant source of fuel. However, there is little cross-over between biofuels and fossil fuels, in terms of the resource conflicts associated with them and ways to mitigate it.

3.3 Gaps in the Research

As shown, previous research has examined the ways oil and gasoline contribute to conflict, the necessity of understanding the geopolitics of renewable energy, and the technology and 12 Chapter 3. Literature Review potential of biofuels. Work remains to be done in the geopolitical consequences of biofuels, the ways in which they could potentially contribute to or diminish conflict, and possible locations for production. This is particularly relevant in helping fossil-fuel producing states secure an economic future, potentially as producers of biofuels. By examining the requirements of biofuels in comparison to fossil fuels, a clearer view of resource conflicts centered on these fuels can be discerned.

3.4 My Contributions

The first area that will see a contribution will be an understanding of the impact of fossil fuels on interstate conflict versus civil conflict. A great deal of work has been done on the impact of oil and fossil fuels on civil conflicts, such as how they contribute to the duration or intensity. However, not much work discusses the differences between how fossil fuels impact interstate conflict, or compare and contrast between interstate and intrastate conflicts. This thesis will also attempt to understand conflicts as related to third-generation biofuels. It will be important to determine if they are obstructable a resource as fossil fuels, or as economically motivating as oil and gas have proven to be. It is also important to understand if and how they will contribute to resource conflicts, be this through food, land, energy usage for cultivation, or something else entirely. Finally, it will be important to understand the geopolitical ramifications of third-generation biofuels, and how or if they will carry the same levels of consequences that oil and fossil fuels do. It will also be important to understand the timescale on which the benefits of algae biofuels could be realized - such as, could the technology to cost-effectively grow algae be available in a decade, or will be more on the lines towards the end of the century? Understanding the potential timeline for the development of algae biofuel could help policymakers and researchers push for increased funding and development. Chapter 4

Research Question

The following sections begin by detailing the research questions for this thesis. It then follows up with a hypothesis for what the analysis will reveal.

4.1 Research Question

The research and background information above thus gives rise to the following questions, which will be the focus of this thesis:

• How do resource conflicts over fossil fuels impact interstate conflict versus civil conflict?

• How do resource conflicts over third-generation biofuels compare to existing conflicts? What are associated concerns?

• Could increased reliance on biofuels/renewable energy mitigate the costs of dependence and resource conflict over biofuels?

13 14 Chapter 4. Research Question

4.2 Hypothesis

This work predicts that since biofuels are a diffuse source of energy that can be produced anywhere that meets the proper conditions, whereas fossil fuels are point sources obtainable in only one place, conflicts are likely to have more obvious solutions. Concerns will likely be focused on transportation, where, like oil, the biofuel could be obstructed as use as manipulation, such as in the case of the oil pipelines in Columbia. However, biofuels could likely present reasons for mitigating conflict, as it utilizes non-potable water in non-arable land. Some research even suggests that biofuels could be grown out of toxic algae, resulting in even more potential benefits, as this would provide a use for algae sources such as that causing deadzones in the ocean and lakes. Therefore, third-generation biofuels will be less prone to the conflicts caused by point source resources, and could even benefit troubled areas as a cheap means of fuel production. Likely, this would allow for more of the world to become energy-secure and meet the energy needs of its population. This will likely be vital as more and more countries develop and more of their citizens begin to be able to purchase cars, homes, or appliances.

Additionally, oil will likely have highly different impacts and influences in interstate conflict as compared to intrastate. In interstate conflict, it is likely to be more an economic motivator. In intrastate conflict, it will likely be a source of political power or income. Initial overview of current conflict situation sees rebel and militia groups attacking vulnerable pipelines as a means to gain political and economic influence, while the US-Iraq war has long been suspected to be at least partially motivated by oil. Chapter 5

Methodology

This work will use comparison studies on interstate conflict versus civil conflict and the role fossil fuels had in these conflicts. Part of this will entail the use of case studies, with variables concerning their oil resources, conflict duration and severity, Table 6.3 details the case studies chosen for analysis in this thesis.

Table 5.1: Interstate/Intrastate Conflicts Case Studies Interstate Conflict Intrastate Conflict Russia/Ukraine Columbia Sudan/South Sudan Nigeria China/South China Sea Libya Iraq/United States Syria

5.1 Factors

The following factors will be used for the analysis of the case studies. In terms of the impact of oil on the conflict, the amount of oil present will be considered. A comparable factor in terms of biofuels is that of their restrictions and technical considerations. Further factors in conflict cases will look at the duration of the conflict, as well as the severity - determined by death rates and people displaced. Most figures for these are taken from the CIA Country Briefings, or from such sources as Amnesty International or the Internal Displacement Monitoring Centre, which

15 16 Chapter 5. Methodology track the number of individuals impacted by conflict within a country. Most of the figures in these areas are rough, as it is difficult to find reliable information on some of the countries impacted, and so the most reliable and frequently quoted estimations are used.

5.2 Interstate Conflict

The following sections will briefly discuss the conflicts chosen for the interstate conflicts, and an overview of the conflict. This explanation will demonstrate why each conflict was chosen for use in this analysis.

5.2.1 Russia and Ukraine

Russia invaded Crimea in March of 2014, and ultimately annexed it. The invasion was done in the name of concerns over the safety of ethnic Russians residing in Ukraine - Russia claimed that neo-Nazis in the Kiev government threatened the safety of the ethnic Russians in the region. The move was widely unpopular and largely condemned by the international community.

Crimea has huge potential oil and natural gas resources underwater, off the coast of Crimea [Broad, 2014]. Russia’s main exports are and petroleum products, producing approximately 12% of the worlds oil, and is the largest producer in the world of crude oil, with oil and natural gas accounting for 36% of the federal budget revenues in 2016 [EIA, 2017a]. Figure 5.1 show a map of Crimeas oil and gas reserves. Figure 5.2 demonstrates Russia’s gross export sales in 2013. 5.2. Interstate Conflict 17

Figure 5.1: Map of oil and gas reserves in Crimea.

Oil and gas is thusly very important to the Russian economy. The invasion of Crimea thus not only contains trillions of dollars in underwater resources, but also hinders Ukrainian energy inde- pendence attempts as well, thus leaving Ukraine vulnerable to Russian pressure [Broad, 2014]. Without the conflict in Crimea, Ukraine was expected to be energy independent by 2020, and would have no longer required the imports of natural gas from Russia. The resources in the Black Sea could rival those of the North Sea, which lifted the economies of Britain and Norway, among others [Broad, 2014]. Adding in the Crimean reserves will ensure economic stability for years to come, while hindering Ukraines ability to be economically independent. 18 Chapter 5. Methodology

Figure 5.2: Fossil fuels as Russia’s gross exports in 2013.

5.2.2 Sudan and South Sudan

The conflict in Sudan dates back to 1983, when civil war began in the south, involving govern- ment forces and the Sudan Peoples Liberation Movement. Oil was discovered in 1978, in the Bentiu region. Sudan did not begin to export oil until 1999 [BBC, 2018]. When South Sudan gained independence from Sudan in 2011, it was granted the oil fields. The largest of the oil fields is known as Heglig. 5.2. Interstate Conflict 19

Figure 5.3: Map of Heglig and other disputed areas in the Sudan conflict.

Sudan controlled the means of exporting the oil [Mastracci, 2016]. The current conflict in Su- dan has killed more than 50,000 people since December 2013, displaced 2.5 million people, and has created food scarcity for half the population, says the United Nations [Mastracci, 2016]. Much of the conflict focuses on the disputed Heglig oil field [Check and Mdlongwa, 2012]. The Sudanese government is attempting to guard from rebels through forcibly clearing people from their homes in the area [Check and Mdlongwa, 2012]. Methods employed by the government include rape, executions, military attacks, and bombings [Check and Mdlongwa, 2012]. Star- vation has become common as the currency sinks in value [Mastracci, 2016]. Figure 5.4 demon- strates oil production from the region. 20 Chapter 5. Methodology

Figure 5.4: Graph of oil production in Sudan before and after independence.

As can be seen from Figure 5.4, production dropped immediately following the independence of South Sudan. Through independence, Sudan lost 55% of its fiscal revenues and two-thirds of its foreign exchange earnings. Sudans crude oil export revenue dropped from 11 billion USD in 2010 to 1.8 billion USD in 2012. In South Sudan, oil represented 98% of revenue after independence. Before independence, oil was 60% of the Sudanese total government revenue. Following independence, it dropped to 27% [EIA, 2014].

5.2.3 China and the South China Sea

There have been tensions in the South China Sea for decades, with China claiming huge areas of territory by invoking historical territorial principles. There are frequent stand-offs con- cerning the territory, with China taking to building islands to bolster its claims. Beijing has reclaimed 2,900 acres of land between the Paracel and Spratly island chains since December 2013 [Mollman, 2017]. Chinese naval forces have grown more aggressive in patrolling its claims and guarding it against non-Chinese ships [Mollman, 2017].

Part of the territorial dispute is based in economic considerations. The US Energy Information 5.2. Interstate Conflict 21

Agency that there are 11 billion barrels of oil and 190 trillion cubic feet of natural gas available in the South China Sea.

Figure 5.5: Disputed land claims in the South China Sea.

Figure 5.6: Map of oil reserves in the South China Sea.

The conflict in the South China Sea has relatively low risk of outright conflict, but the mil- 22 Chapter 5. Methodology itarization is still considered dangerous, as the disputed waters are heavily trafficked and fished [Mollman, 2017]. International courts have ruled continuously in favor of the Philip- pines, Japan, and Vietnam, but China has ignored the rulings, claiming that the courts have no jurisdiction.

The South China Sea is a major shipping route, with around $2.8 trillion in trade being shipped through the area annually [Panda, 2017]. Five countries rely on the South China Sea for more than 50% of their total trade, these being Vietnam (86%), Indonesia (85%), Thailand (74%), Singapore (66%), and Malaysia (58%) [Panda, 2017]. Vietnam and Malaysia, two of those countries, are engaged in the territorial dispute with China, as can be seen in Figure 5.5. Additionally, the military recently stated that despite stronger ties recently, the conflict remains a security concern for Manila, with a heightened need to improve methods of securing information on the area [Staff, 2018].

China’s growing political and economic influence has begun to sway other countries in the area. Vietnam was engaged in talks to begin a major drilling project off its shores, but canceled the project due to Chinese pressure [Apps, 2018]. China has also begun engaging in more military drills in the area, including reportedly sending its aircraft carrier through the Taiwan Strait and flying jets between Japans southernmost islands [Apps, 2018]. China has stated that it plans to conduct monthly training exercises in the area as well, which represents a defiance towards the United States, which has significant allies in the region who are engaged in the territorial dispute [Apps, 2018]. Currently, China seems to be growing increasingly confident in its ability to defend its territorial claim to the majority of the South China Sea. This would not only have an influence on the control and ownership of the energy resources in the basin, but also on United States’ military supremacy and world trade.

5.2.4 Iraq and the United States

Iraq is the second-largest crude oil producer in the Organization of the Petroleum Exporting Countries (OPEC) after Saudi Arabia, and it holds the world’s fifth-largest proved crude oil reserves after Venezuela, Saudi Arabia, Canada, and Iran. Due to low populated areas and 5.2. Interstate Conflict 23 uncomplicated terrain, producing costs in Iraq are relatively low. Past research has suggested that American foreign policy is partially driven by oil access, and the Iraq war is an infamous example of this.

Figure 5.7: Oil companies operating in Iraq after the US troops pulled out.

Before the war in Iraq began in 2003, oil production in Iraq was nationalized and largely closed to outside companies, particularly Western corporations [Gokay, 2016]. By 2013, oil production was privatized and dominated by foreign firms [Gokay, 2016]. The oil companies operating in Iraq since the end of the war can be seen in Figure 5.7. Oil production has soared, with Iraq producing 4.5 million barrels a day in 2016 [Gokay, 2016]. This made it the world’s sixth- largest oil producer. However, much of this wealth is being absorbed by oil companies, with little economic benefit being seen by the average Iraqi citizen [Gokay, 2016].

Oil was not the sole motivating reason for the war in Iraq, but it cannot be denied that gaining access to rich oil-fields did play a motivating role in the choice to invade. As was mentioned in the Literature Review (Section 3), third-party countries are more likely to intervene in intrastate conflict if oil is involved. Middle Eastern oil has been vital for maintaining American global 24 Chapter 5. Methodology

Figure 5.8: Map of oil reserves and pipelines in Iraq (2016). supremacy since the late 1940s. To maintain power, the United States has needed to control ”the global oil spigot”. By maintaining a strategically important position in the Middle East, the United States can ward off competition, as other major world powers, such as China, have been historically dependent on the oil produced by the Middle East as well. By maintaining control over oil production in the Middle East, the United States can protect its business and political interests of supplying accessible and cheap oil to itself and its allies.

5.3 Intrastate Conflict

The following section details the intrastate conflicts that will be used as case studies. Oil has some role in all of these, but they largely concern developing countries, with conflict primarily occurring between militant rebel groups and government forces. 5.3. Intrastate Conflict 25

Figure 5.9: Map of oil reserves in Colombia (2015).

5.3.1 Colombia

Since the mid-1980s, the National Liberation Army (ELN), and later the FARC, attacked oil pipelines and production throughout Colombia. The guerrillas terrorized oil workers through attacking the oil infrastructure, kidnappings, and extortion [Dunning and Wirpsa, 2004]. In recent years, the government and the insurgents have moved closer towards some sort of peace agreement, but the impact of the insurgents’ activity in the area has left a security-first men- tality that will be difficult to move away from.

During the conflict, the oil infrastructure represented an easy means to gain economic and political control by the guerrillas [Dunning and Wirpsa, 2004]. Repeatedly attacking the oil infrastructure made it difficult for the government to persuade foreign investors to input money into Colombian oil production. A three-month cease-fire was negotiated, but this expired on January 9th, 2018 [Anderson, 2018]. Within hours of the cease-fire expiring, the ELN resumed attacks on the vital oil pipeline that runs through Arauca. This pipeline, also called the Cao Limon-Covenas pipeline, is the second-largest in Colombia, and can produce up to 210,000 barrels a day [Anderson, 2018]. Since 1986, this pipeline has been dynamited on average once 26 Chapter 5. Methodology a week, or over a thousand times [Anderson, 2018]. In total, the attacks have put it out of commission for 3,800 days, according to the state oil company, Ecopetrol SA [Anderson, 2018]. Figure 5.10 shows areas of activity by the guerrillas, as well as vital oil pipelines. The line labeled 1 is the pipeline that has been the focus of attacks in particular.

Figure 5.10: Areas of insurgency activity in Colombia.

During the cease-fire, President Juan Manuel Santos worked to bring in foreign companies to invest in oil production. The Colombian Petroleum Association predicted that there would be an increase in investment of 45% during 2018, or $4.9 billion [Anderson, 2018]. However, the attacks on the pipeline have resumed worries about investing in the region. On February 12th, Ecopetrol shut down operations in oil fields in central Colombia following a violent clash with ELN fighters that left four oil workers injured [Calcuttawala, 2018]. The Cao Limon-Covenas pipeline has been offline since it was struck with a bomb in January of 2018 [Calcuttawala, 2018]. 5.3. Intrastate Conflict 27

These recent attacks have indicated that the guerrilla groups do not intend to give up the fight without more commitment to the promises initially made in the cease-fire by President Santos.

5.3.2 Nigeria

The conflict in the Niger Delta in Nigeria between insurgents and the government has been going on for decades, since concerns were raised about oil production in the 1980s. The insurgents tend to target drill sites, pipelines, tankers and facilities with the goal of hindering oil production, and economically impacting the Nigerian government.

Concerns were initially raised over the oil production that was beginning in the Niger Delta area by indigenous groups. Concerns were raised because multiple local indigenous groups felt that many of the oil companies were extracting a great deal of money from the region, but were seeing little to no economic benefit in return. This led initially to low-level acts of civil disobedience. However, when nine activists were hung in November 1995, the groups began to radicalize and acts of violence became more extreme.

In 2006, the Movement for the Emancipation of the Niger Delta (MEND) formed. They were relatively strategic and utilized modern technology, such as cell phones and email, to better coordinate attacks. The attacks on oil production became very strategic - up until this point, they had been more opportunistic. MEND wanted to have all oil companies leave the Niger Delta region under threat of death. At their peak, MEND was causing losses in the billions of dollars to the Nigerian government. The government reacted with military force, but the terrain is rather inaccessible, and so it is hard to accomplish much effectively in the area.

In 2006, the Niger Delta Avengers (NDA) appeared. They operated with the same stated end goal of driving out oil companies from Nigeria. Figure 5.11 shows the impact of the emergence of the NDA. Ending the conflict has proven difficult. Oil companies, which include Shell and Chevron, are unlikely to leave the area. Military actions taken by the Nigerian government have never been successful in the Niger Delta region. A mix of money, amnesty and military force has been suggested as means of coping with the insurgents, but Nigeria does not have 28 Chapter 5. Methodology

Figure 5.11: Graph of oil production and disruption after the appearance of the NDA. the strongest economy. At the moment, the best way to proceed with the conflict is hard to discern. 5.3. Intrastate Conflict 29

Figure 5.12: Map of political violence related deaths in Nigeria (2016).

Figure 5.12 shows a map of deaths related to political violence in Nigeria across a decade. As can be seen, Boko Haram is currently active in the north-west of Nigeria, clustered in particular in Borneo. However, the other concentrated area of deaths is in the Niger Delta, where the oil fields are located. This indicated the severity of the conflict in the region. Lack of accurate reporting means that it is uncertain how many people have been killed or displaced in the conflict in the Niger Delta area, though estimates are easily in the thousands for the death toll and the hundreds of thousands for the displacement. Conflict over oil has also led to environmental damage when the pipelines are attacked and the oil is spilled. Evidence indicates that the oil in the environment has negative repercussions on infant mortality, with babies whose mothers conceived while living near oil spills twice as likely to die in their first 30 Chapter 5. Methodology month as compared to babies in spill-free areas. This indicates that the deaths in the Niger Delta do not occur just because of the conflict, but also due to the environmental damage of oil.

5.3.3 Libya

Libya has some of the world’s richest reserves of oil. Most of this oil sits on the Eastern Board. Conflict around oil used to largely based around oil workers striking for higher wages and better working conditions. However, in recent years, the oil conflict turned more towards hostility between regional and tribal groups and the central government. This has grown in intensity since the end of the Qaddaffi regime. The oil crescent, located in the Eastern Board, has been a particular focus for the different factions vying for control over the power vacuum left in the wake of Qaddaffi’s death and the Arab Spring in February 2011 [Wintour, 2017].

Figure 5.13: Map of oil fields and pipelines in Libya.

Oil represents a great deal of the wealth presented in Libya. Whoever has control over the oil fields pipelines thus controls the economic power in Libya, while control over Tripoli signifies political power. Before Qaddaffi fell, Libya’s economy was heavily dependent on exports of 5.3. Intrastate Conflict 31 its crude oil, and produced about 1.6 million barrels a day [Wintour, 2017]. That fell to zero during the conflict that ended with Qaddaffi’s death, but rose again after the first elections. The conflict restarted in 2014, and production dropped sharply again. This was largely due to the various militias fighting over control over the key oil facilities. The country’s GDP was very dependent on oil production, and so the ongoing conflicts have caused that to dramatically fluctuate. As the conflict continues, more and more people are exposed to violence and an increasingly unstable economy. The government has been trying to rebuild the oil industry, but this is very difficult, due to the fact that the oil facilities have changed hands multiple times in the past few years. Revenue from oil sales is put into a central bank in Tripoli, but heavy conflict is worrying investors, especially due to the risk to the infrastructure.

Currently, much of the conflict is focused in Tripoli and the oil crescent. The rebels are led by military strongman Khalifa Hafter, fighting against the internationally recognized government that resides in the capital of Tripoli [Press, 2017]. Haftar is a former CIA asset and Ameri- can citizen, who has spoken of overthowing the government in Tripoli and resuming control of the country himself [Press, 2017]. Hafter is backed by Egypt and Russia, and his troops consist of a collection of militias, eastern tribal forces, and remnants of the Libyan National Army [Press, 2017]. His troops took control of the oil facilities in 2016. The government in Tripoli was created in a UN deal to try to resolve the split between the eastern and western governments of Libya. Italy, which is very invested in Libya’s oil production, is a staunch supporter of the government, and has offered a great deal of support to militias fighting on behalf of the official government [Press, 2017]. The Islamic State, or ISIS, also has a presence in Libya. As the terrorist group is forced out of Syria and Iraq, they have been regrouping in the deserts of Libya, thus further complicating an already difficult situation. ISIS has been known to steal and smuggle oil in order to finance their operations. Given the instability due to ongoing fighting, as well as vulnerable oil infrastructure, Libya’s oil fields could represent an opportunity for Libya to begin to refinance their operations. Figure 5.14 shows the areas of control in Libya in 2017. 32 Chapter 5. Methodology

Figure 5.14: Map of oil fields, pipelines, and areas of control in Libya.

The fighting has forced nearly 30,000 people to flee their homes, and many Libyans became frustrated with the lack of action on the part of the government to better handle the ongoing conflict [Abdessadok, 2017]. Many people began to leave the country, with thousands head- ing to Europe. An estimated 11,000 individuals drowned in the sea, fleeing by way of the Mediterranean route to head to Europe. In 2017, 433 people were killed by the various fighting sources [Abdessadok, 2017]. 3.5 million Libyans require immediate humanitarian assistance, with the vast majority of them being internally displaced [Abdessadok, 2017]. Haftar continues to threaten the sovereignty of the government in Tripoli, and claims that he has ”no time for democracy”, leading to fears of another Qaddaffi-like dictator taking control if and when Haftar chooses march on Tripoli.

5.3.4 Syria

Anti-government protests broke out in Syria in March 2011 over demands to an end of the authoritarian government of President Bashar al-Assad. This led to civil war by 2012. The Syrian government is supported by Iran and Russia, along with the Shia militia and Hezbollah. The anti-government rebels draw support from Turkey, the Gulf Arab states, the United States, 5.3. Intrastate Conflict 33 and Jordan.

Before the civil war, there were proposed competing pipelines that would have run through Syria to transport gas to Europe. These pipelines are shown in Figure 5.15. One of these pipelines was proposed by Qatar, the other by Iran. The Qatar pipeline was rejected by al- Assad. The Iranian plan was signed off on. There are complex geopolitics at play here. Russia is believed to have pressured al-Assad to reject the Qatar pipeline, as it would have affected Russia’s own exported gas to Europe. As stated in Section 5.2.1 (Russia and Ukraine), oil and natural gas accounted for 36% of the federal budget revenues in 2016 for Russia. Therefore, the Qatar pipeline would have threatened its business. Qatar is also host to an American airbase, while Iran is not. Russia has tended to have more influence over Iranian policies, and so the Iranian pipeline did not represent the same threat that the Qatari pipeline did.

Figure 5.15: Map of the proposed Qatari and Iranian pipelines through Syria.

Many of the countries involved in the conflict, on both sides, have ties to the proposed pipelines. Qatar is believed to have given $3 billion to the anti-government groups between 2011 and 2013. Iran is believed to be helping the Syrian military by providing it with troops and 34 Chapter 5. Methodology arms [Chang, 2015]. Turkey, a supporter of the anti-government rebels, is vying for membership into the European Union, and could become the best option for facilitating the movement of oil and gas from the Middle East into the United States [Chang, 2015]. Qatar’s pipeline plans had factored in the potential role that Turkey could play in moving Qatari gas into Europe, and Turkey could have benefitted from transit fees and other energy-generated revenue in its role as a hub for pipelines. Major Rob Taylor wrote in the Armed Forces Journal in 2014 that, ”Viewed through a geopolitical and economic lens, the conflict in Syria is not a civil war, but the result of larger international players positioning themselves on the geopolitical chessboard in preparation for the opening of the pipeline.”

Figure 5.16: Oil and gas infrastructure and territories controlled by various state and non-state actors in Syria.

Figure 5.16 shows the territories controlled by the different actors currently in Syria, as well as oil fields and fossil fuel-related infrastructure. The conflict in Syria has been referred to as a ”pipeline war”. That is, it is not Syria’s own gas and oil that necessarily contributes to the 5.3. Intrastate Conflict 35 conflict, although Syria does have reserves of its own [Chang, 2015]. While there is some doubt to the impact the pipeline has had on the decisions of various countries to intervene, there is some evidence that oil has played some role in the conflict that is ongoing in Syria. At the very least, it has been proposed that other countries have been more hesitant to intervene in Syria because it does not have huge oil reserves of its own. As was stated in the Literature Review (Section 3), third-party countries are more likely to intervene in intrastate conflict when there is oil involved.

Syria does have some of its own oil. Before the outbreak of the civil conflict, oil and petroleum products represented about a quarter of the country’s revenue. Most of the oil fields are in the eastern region, Deir ez-Zor [Barnard, 2017]. The government currently controls most of the infrastructure in the area, while the Syrian Democratic Forces (SDF), backed by the United States, have control over the oil fields themselves [Barnard, 2017]. Due to the need to gain access to revenue to begin rebuilding, the oil fields will likely be an extremely important bargaining chip.

5.3.5 Interstate and Intrastate Case Comparison

Initial comparison between the interstate and intrastate conflicts demonstrates some significant trends that will be further explored in Section 6.

First, initial findings seem to show that oil and fossil fuels serve as different motivators in interstate and intrastate conflict. In intrastate conflict, oil tends to serve more as a means for economic and political control by rebel groups, which can be used to manipulate the opposing government. This is best represented by the cases of Colombia and Libya, where pipelines are specifically targeted as a means of political influence. In contrast, oil tends to be more of an economic motivator for interference in otherwise messy conflicts in interstate cases. This is particularly noticeable in the cases of Iraq and the United States, and Crimea, where one party in the conflict noticeably benefits from the oil and fuel reserves within the country. These findings will be further explored in Chapter 6. 36 Chapter 5. Methodology

5.4 Technical Analysis

The following section details some of the technical analysis that is used in this thesis. This includes the physical requirements for third-generation biofuels. Another aspect of the technical analysis is projections of energy costs, oil production, oil use, and the like. This is taken from a composite of many different types of analysis, and used to best understand a full picture of the world’s energy generation and needs.

Not every analysis lists a prediction of oil price, energy usage, and biofuel production. Thus, multiple analyses are needed to fully understand the overall shifts that are coming in the liquid fuel industry.

5.4.1 Predicted Oil and Energy Use Analysis

This works takes an average of several major predictions for energy sources and costs. Some var- ious productions are summarized below. This section finishes with the author’s own prediction on likely energy use and oil trends.

US Energy Information Administration

The Energy Information Administration, or EIA, is one of the foremost agencies for energy usage analysis and predictions. However, the administration as a whole has historically under- estimated the performance and dropping costs of renewable energy sources, while overestimating the performance of sources like coal. Therefore, it is important to balance their projections out with other sources.

Figure 5.17 was also shown in Chapter 2, but is an exceedingly useful and informative image to display. The EIA predicts global energy growth of 28% between 2015 and 2040, with most of the growth occuring in non-OECD countries [EIA, 2017b]. As can be seen in the figure, the EIA expects a great deal of growth from natural gas and petroleum - in other words, liquid fuels. If breakthroughs in algae-based biofuel technology continue to occur, this could take 5.4. Technical Analysis 37

Figure 5.17: World energy consumption by type through 2040.

away from some of the reliance on liquid fossil fuels. However, the EIA does not assume huge growth in biofuel production.

In their Short-Term Energy Outlook report, the EIA predicted that oil will average $62/barrel in 2018 and in 2019 [EIA, 2018]. This comes as oil supplies tighten. Higher oil prices tend to come with consequences ranging from higher food costs for consumers, to spikes in oil prices being associated with recessions, to making it difficult to maintain growth in the oil sector [Tverberg, 2013]. Prices have been volatile thanks to swings in oil supply versus demand, with reasons for this being everything from the OPEC reducing output to put a floor under prices to global demand growing more slowly than anticipated.

There is a chance that oil prices could rise above $200/barrel, which would impact the way people use and purchase oil. Utilities are switching en masse to natural gas and renewable energy sources. 38 Chapter 5. Methodology

The World Energy Council

The World Energy Council presents two different scenarios for energy generation for electricity globally in 2050. The jazz scenario has a focus on energy equity with priority given to achieving individual access and affordability of energy through economic growth. The symphony scenario has a focus on achieving environmental sustainability through internationally coordinated poli- cies and practices. Figure 5.18 shows the makeup of the two predicted scenarios [Council, 2017].

Figure 5.18: The World Energy Council’s 2050 jazz and symphony predictions.

The World Energy Council predicts a rise of energy supply from the 2010 baseline of 61% under the jazz scenario and 27% under the symphony projection [Council, 2017]. The 2010 basline 152PWh, with 144PWh in the jazz scenario and 193PWh in the symphony [Council, 2017]. The World Energy Council also projects that oil demand is likely to peak before 2030, contrary to the hopeful predictions of many oil companies, including Shell and ExxonMobile [Cunningham, 2016].

Additionally, the WEC says that biofuels are the most viable and sustainable option in replacing 5.4. Technical Analysis 39 oil dependency. Their 2017 report recommends investing in biofuel technologies to encourage growth and efficiency in the area.

The International Energy Agency

The International Energy Agency, or IEA, predicts a 75% increase in oil prices by 2020. Under this projection, the global price of crude oil is projected to rise to $82 per barrel by 2020, $127 per barrel by 2030, and $146 per barrel by 2040 [Rapier, 2016]. This is outlined in the IEA’s Current Policy Scenario (CPS), based on policies in place during mid-2016. The IEA also utilizes a scenario known as the New Policies Scenario (NPS), which assumes that government pledges such as those made in response to the Paris Agreement on climate change will be reflected in legislation.

Under current projections, oil costs will begin to ruse dramatically. Yet during this time, oil demand is forecast to grow at a compounded annual rate of 0.5% in the NPS and 1% annually under current policies [Rapier, 2016]. As with the EIA, it is predicted that much of this growth will be from non-OECD countries, particularly in Asia and Africa. The potential for a dramatic rise in price comes from the likelihood of near-term oil price shock, as investment falls short of what is needed to keep up with growing demand.

The IEA also predicts share of biofuels in road transport fuel demand would reach 5% by 2022. Demand for biofuels is projected to more than double from current levels in either the NPS or the CPS.

European Fusion Development Agreement

The European Fusion Development Agreement forecasts that under current policies, oil will be around $140 a barrel by 2035 in their Final Report - World Energy Scenarios. They also foresee countries that wish to enhance their national security turning to developing biofuels to meet fuel needs. 40 Chapter 5. Methodology

Grand View Research, Inc

Grand View Research, Inc projects that algae-based biofuel will reach USD 10.73 billion by 2025. The report predicts that this will occur due to a combination of fossil fuel depletion and growing environmental concern about the repercussions of fossil fuels. The report foresees most of the growth of the use of algae biofuels occurring in the transportation sector.

5.4.2 Requirements of Algae-Based Biofuels

Currently, a large barrier to the use of algae-based biofuels is that of cost. This section does not examine the cost of producing third-generation biofuels, and instead examines the physical requirements of growing biofuels as a means of comparison to oil and fossil fuels. This includes such aspects as water, fuel production, and the environments in which algae best grows. It also discusses aspects such as fuel production and environmental risks. This is to give a full picture of the potential of algae-based biofuel.

Water

One of the large concerns with promoting algae-based biofuels is the amount of water that would be required to grow them. Algae currently requires tremendous amounts of water to grow properly. One proposed solution to this is to reuse the water, but a recent study found that the success of the algae depends on the type of algae that was previously grown using the water. As they grow, the algae secrete molecules into the water, and also break open when they die, which releases their innards to the liquid environment [Loftus, 2017]. This means that specific strains of algae will leave behind better environments for their successors than others. Rotating the type of algae, similar to rotation, did not have beneficial impacts on the success rate of later algae crops [Loftus, 2017].

Algae-based biofuels could also be grown in waste water, such as water that is used to process municipal waste. The in this water could also help feed the algae and help sustain 5.4. Technical Analysis 41 its growth. A comparison of different biofuels and their output per hectare is shown in Fig- ure 5.19 [Deutsch, 2011]. As can be seen, algae biofuels grown in waste water produce 55 times the amount as is produced by the equivalent area of [Deutsch, 2011].

Figure 5.19: Output of algae pond when grown in waste water.

Additionally, some species of algae that could be used for biofuels could grow in seawater, which is a far more abundant resource than freshwater. One of these species is called gaditana, which recently experienced a major breakthrough [Dlouhy, 2017]. A genetic switch known as ZnCys was identified, which regulates the conversion of carbon to oil [Dlouhy, 2017]. This could double the output of oil in the algae biomass [Dlouhy, 2017]. This is a relatively recent breakthrough, but this indicates a growing diversity in the ways in which water can be used in the production of biofuels. Gene-editing through CRISPR could further reduce the impacts of water on growing algae, and increase their output.

Fuel

Algae is a popular competitor for creating clean fuel from because of its ability to absorb carbon dioxide (CO2) from the air, and return clean air. The more CO2 that is fed to algae during their growth periods, the faster and more abundant it grows [Handler et al., 2014]. This is a 42 Chapter 5. Methodology useful feature, as the global scientific community is currently examining methods of removing carbon dioxide from the air artificially, in an attempt to stave off the worst impacts of climate change. The captured carbon could be sold as a means to encourage rapid growth of algae for third-generation biofuels.

Temperature

Oregon State University has found that algae tend to grow best when the surrounding tem- perature is between 60◦F and 80◦F (15.5◦C to 26.6◦C) [Fery, 2007]. It is preferred that they are exposed to ten to fifteen hours of sunlight at the same time [Fery, 2007]. Algae tend to be temperature-sensitive. In order to maintain high levels of productivity, temperature con- trol could be required. Optimizing systems to decrease the energy input into maintaining the growing conditions for algae could be essential with moving forward.

Figure 5.20: Global average temperatures. 5.4. Technical Analysis 43

Figure 5.20 shows the global average temperatures in degrees Celsius. As stated above, algae- based biofuels like growing environments with temperatures between 15.5◦C to 26.6◦C. Areas highlighted in yellow to the lightest red would be the optimal areas to construct algae-based biofuel plants. As climate change continues, these areas are likely to shift, furthering the bandwidth north and south for areas that could be used to grow in, while becoming too hot in other areas.

Growing Environments

Algae can be grown in a myriad of ways. The simplest is open ponds - that is, the algae are put in a pond and exposed to the open air [Handler et al., 2014]. This does lead to some contamination and is not efficient, but can be cost-effective when compared to other methods. Another method is closed-loop systems. These have similar setups to open ponds, but are closed to the atmosphere and have a sterile source of carbon dioxide to feed them [Handler et al., 2014]. This type of setup would likely gain in popularity with the rise of carbon capture. The setups are typically called raceways, due to the fact that they look like a race track for vehicles. A third way to grow algae for biofuels is in photobioreactors, which are an advanced type of closed loop. These systems are expensive, but have unparalleled production [Handler et al., 2014]. A fourth method is that of fermentation. This requires growing the algae in the dark and feeding them high levels of sugars. This type of growing process requires heterotrophic (not reliant on light and photosynthesis) algae, which could further reduce the costs of building production sites. Figure 5.21 shows some of the advantages and disadvantages to the different types of algae growing environments. 44 Chapter 5. Methodology

Figure 5.21: Pro and con comparison of different algae growing environments.

The growing environments thus can be separated from farmlands, and would likely not effect crops. Closed-loop systems and photobioreactors have even been used to grow algae in desert settings. Unlike first and second generation biofuels, which use food products such as soybeans or to create the base for the biofuel, algae-based biofuels would not directly impact the food production line.

Environmental Risks

No fuel source is 100% safe. Although algae is organic in nature, there are still some risks that could occur if a spill were to happen. However, when compared to oil and fossil fuels, the risks are much lower in magnitude [Slade and Bauen, 2013]. Algae spills do have the potential to kill living organisms and contaminate surround soil or water [Slade and Bauen, 2013]. However, as they are biodegradable, they will not persist in the environment for extended periods of time and cause long-term damage in the way of fossil fuels [Slade and Bauen, 2013].

Algae could also create dead-zones if allowed to contaminant open water sources, such as ponds or the ocean [Slade and Bauen, 2013]. Water deadzones are caused when algae, typically fueled by run-off from fertilizers, bloom in the water source, and then die off. This pulls out oxygen from the surrounding water, which has negative repercussions for lifeforms in the water 5.4. Technical Analysis 45 source. However, if grown in closed water sources, such as photobioreactors or fermenting tanks, this is less likely to cause environmental harm [Slade and Bauen, 2013].

Fuel Production

Algae could potentially produce up to 60 times more oil per acre than land-based plants. As was seen in Figure 5.19, algae grown in waste water produces 55 times the amount as the equivalent area of rapeseed.

Figure 5.22: Summary of algae biofuel production and yield.

Figure 5.22 shows a simplified version of the process to creating usable oil from algae. As was shown earlier in this report, many different types of fuel can be obtained from different ways of processing algae - everything from jet fuel to diesel. With algae production, the expensive part is often the process of growing and producing the algae to then run through the fuel production process. Using waste water and waste heat from surrounding buildings could lower 46 Chapter 5. Methodology the cost for production. Yield is another issue that must be addressed, as scaling up the farms tends to lower the productivity and exposes the algae to predators, but increased work in gene modification through CRISPR and growing environments could potentially solve this problem.

5.5 Cost Projections for Algae Biofuels

This section details the attempt to project possible costs for algae biofuels, using the historical cost curves for wind and solar. Until recently, wind and solar were considered too expensive to be integrated reliably into the grid. However, investment and research has caused the cost of these two forms of energy generation to drop sharply, becoming a very cost-effective form of energy production. As a reference, the modern American currently pays an average of $0.12 per kWh for electricity [Geuss, 2018]. This figure includes the cost of generation and transport. The actual cost of energy that generation sources such as wind and solar must compete with subtracts the cost of running a utility or the transport. Generation alone typically costs around $0.02 to $0.04 per kWh, and this is the figure renewable sources must achieve in order to be cost-effective when compared to conventional means of electricity [Fares, 2017]. 5.5. Cost Projections for Algae Biofuels 47

Figure 5.23: Cost of energy per MWH in 2017.

Figure 5.23 shows the current range of costs for most available forms of energy today, from Lazard’s Levelized Cost of Energy Analysis. As can be seen, the cost of wind and utility solar is at or below the cost of conventional energy sources, such as coal, which comes in at $42/MWH on its lowest end. This compares to wind, which comes in at $30/MWH on its lowest end, and $60/MWH on its highest. Utility scale solar is also equally cost-effective as compared to conventional sources of energy, with a range between $43/MWH to $181/MWH, depending on the type of solar technology employed. Residential solar panel costs fall from $0.52/kWh in 2010 to $0.15/kWh in 2017, a decline of 71.15%, or about 10% per year [Geuss, 2018]. 48 Chapter 5. Methodology

Figure 5.24: Cost decline of wind power, 1980-2015.

Figure 5.24 demonstrates the decline in wind cost across a 35 year span, from 1980 to 2015. As can be seen, wind cost nearly $0.60/kWhr in 1980, and fell to about $0.05/kWhr in 2015, a decline of 91.6%. Solar has followed a similar projection. In 2011, the US Department of Energy set a goal that, by 2020, utility-grade solar panels would cost about $0.06/kWh [Hao, 2017]. This goal was achieved in 2017, three years ahead of schedule [Hao, 2017]. This drop is shown in Figure 5.25, in a graph derived from data from the National Renewable Energy Laboratory (NREL). 5.5. Cost Projections for Algae Biofuels 49

Figure 5.25: Cost decline of utility-scale solar power.

As can be seen, the 2010s began with utility-grade solar costing about $6/Watt. By the end of 2017, the cost drops to about $1/Watt. This is a decline of 83% across seven years, which comes to an average decrease of about 12% in cost per year. The dropping costs mean that the presence of solar is expected to grow. The sudden drop of costs in wind and solar indicates that research and development eventually do lead to benefits in terms of cost in the energy sector. This could have potentially important implications for the development of algae-based biofuels.

A 2016 paper stated that the petrol price is about $0.71 per kg ($0.32 per pound), with the cost at that point to produce algae biofuel being ten times that, or $3.20 per pound [Milano et al., 2016]. This will be used as the starting point for determining a potential timeline for cost drops in the production of algae biofuel. Algae biofuel will be cost effective when it is the same - or preferably lower - as oil to produce. Chapter 6

Findings

Several interesting findings were made through analyzing the case studies, technical require- ments of third-generation biofuels, and the predictions of both energy costs and the make-up of energy generation mixes.

6.1 Impact of Oil on Interstate Conflict Versus Intrastate

Conflict

This part will explain some of the differences of how oil affects interstate versus intrastate conflict. It begins with economic control, and then moves onto discussing the impact of the oil on the severity of the conflict.

6.1.1 Economic Control

In the cases of the intrastate conflicts, oil fields and pipelines serve as means of economic control. As can be seen in the cases of Libya and Colombia, rebels and opposing militant groups specifically target the pipelines and production means as a way of strangling the government and military. This is particularly preventable in Libya, where control over oil infrastructure

50 6.1. Impact of Oil on Interstate Conflict Versus Intrastate Conflict 51 has forcibly changed hands several times.

Conflict Type Amount of oil reserves in barrels Iraq/US Interstate 153 billion Libya Civil 46.4 billion Nigeria Civil 37.2 billion South China Sea Interstate 28 billion (minimum) Crimea Interstate 10 billion Sudan Interstate 5 billion Syria Civil 2.5 billion Colombia Civil 1.66 billion

Table 6.1: Summary of reserves by conflict

Table 6.1 shows the reserves of oil available in each conflict area, arranged from the highest number of reserves to the smallest. Crude oil is currently selling for approximately 61USD per barrel, which puts the lowest reserves - those of Colombia - at a value of over 97 billion USD. This indicates a very large economic motivation.

As can be seen in many of the interstate conflicts - Crimea, Sudan and South Sudan, South China Sea, and Iraq and the United States - the profits associated with oil itself are often a draw and a large contributor to the tension. The US-Iraq war is a particularly interesting conflict, given the amount of oil Iraq has as reserves. As was shown in Section 5.2.4, numerous oil companies came in after the American invasion of Iraq, and have made a great deal of money off of the Iraqi oil. The Iraqi invasion was to nominally secure the country from Islamic terrorists, but even from the very beginning of the conflict, many people were considering the oil reserve aspect of the invasion.

Sudanese oil reserves are worth 30.5 billion USD at current market prices. Sudan and South Sudan are struggling countries that are often considered ’failed states’. Access to the oil profits would help both countries achieve some level of economic development. However, the tension comes from South Sudan controlling the oil fields, while Sudan controls the pipelines that could deliver the oil out of the country. An inability to come to an agreement and the ensuing conflict harms the existing infrastructure and ensures that neither country sees any gains. This comes along with further ethnic conflict between warring tribes. 52 Chapter 6. Findings

The South China Sea represents 1.8 trillion USD in potential earnings, at today’s oil market price. Current trends in China’s power and behavior has some experts concerned about the stability of the region, but this has never broken into outright conflict. Individual countries, contracting with governments, have been able to drill for oil in the country’s Exclusive Economic Zone without incident, but China continues to police the waters and construct artificial islands, all the while putting political pressure on its neighbors to stop oil projects. This has led to the halting of a project off the shores of Vietnam, led by the Spanish firm Repsol. This indicates some level of hostility on China’s part towards other countries acting in its perceived territory.

The Crimean conflict has its roots in its oil. The Kremlin claims that the conflict was necessary to protect ethnic Russians from neo-Nazis that the Russian government claimed had infiltrated the government in Kiev. The conflict is estimated to have cost Russia around 57.9 billion USD in lost image building that took place during the Winter Olympics in Sochi, a slump in the Ruble, and a dive in the Russian stock market. Kremlin insiders claim that the Crimea invasion was six years in the making, as by annexing all the land adjoining the Black Sea, Russia would also annex the offshore rights and anything found therein. Russia’s income as a country is based off of its oil supply, and if reserves in the Black Sea are as large as predicted, Ukraine would suddenly be a far more economically influential country [Cumming-Bruce, 2016].

In contrast, oil in civil conflict tends to be more a means of control, rather than an incentive for countries to interfere. As has been seen in Nigeria, Colombia, and Libya, control over the oil pipelines and fields switches hands often. Rebels often attack the pipelines and the fields in an attempt to gain some political influence.

Before the conflict in Syria, oil represented about a quarter of the government revenue. Some consideration has been paid to the remaining reserves, as the 2.5 billion barrels could represent 152 billion USD at today’s market price that could be used to restore the war-torn country. The eastern region of Deir ez-Zor is particularly important for its reserves. Currently, the government controls the western areas around the oil fields that house most of the infrastructure, while the Syrian Democratic Forces (SDF) controls the fields themselves. The oil fields are a particularly important bargaining chip for the rebels to hold against talks with the government. 6.1. Impact of Oil on Interstate Conflict Versus Intrastate Conflict 53

A similar trend can be seen in Libya, where the government and the militias, led by Haftar Khalifa, exchange control over the oil production.

In contrast, rebel groups in Colombia and Nigeria tend to attack the pipelines as a way of controlling the government, rather than attempting to control the production of the oil fields. In this case, violence tends to be the goal, along with disrupting production and the economic gains.

Conflict Longest pipeline length (miles) Colombia 480 Libya 326.2 Syria 280 Nigeria 58.4

Table 6.2: Summary of distance of longest pipeline in intrastate conflict areas

Table 6.2 shows the length of the longest pipelines in the areas with intrastate conflicts. The shortest one is in Nigeria, with nearly sixty miles of pipeline. The length of the pipelines - particularly those in areas like Colombia or Syria, where the terrain surrounding the fields and pipelines is often difficult or harsh, makes it easier for rebel groups to threaten and attack the pipelines. In turn, governments often react violently, and respond with attacks that kill many people besides the rebels, such as in Nigeria and Libya. The wariness from oil companies, who hesitate to invest in conflict-torn areas, can increase the economic instability and the violence between the government and the militias.

6.1.2 Severity of Conflict

Table 6.3 summarizes some of the qualitative aspects of the impact of conflict on the country in which it took place. The results are organized by duration.

China and the South China Sea is somewhat of an outlier in the data, as the political tension has been present for seventy years, but there are no outright deaths or displacement associated with it. However, the indication that the tensions have been present for so long shows the importance of the region, and contributes to the concern of conflict breaking out. 54 Chapter 6. Findings

Conflict Type Dates of Conflict Deaths People Displaced South China Sea Interstate 1947 - Current Unknown Unknown Colombia Civil 1964 - Current 220,000 5.7 million Nigeria Civil Late 1980s - Current Unknown >500,000 Iraq/US Interstate 2003 - 2011 >165,000 3.5-5 million Sudan/South Sudan Interstate 2013 - Current >50,000 2.4 million Syria Civil 2011 - Current 400,000 6.1 million Libya Civil 2014 - Current 17,649 >200,000 Crimea Interstate 2014 9,160 (since 2014) 1.4 million

Table 6.3: Summary of conflicts, organized by conflict duration

The intrastate conflicts tend to have higher levels of displaced individuals, with Colombia having nearly 6 million people displaced from their homes. Death tolls are less clear in the intrastate conflicts, such as in Nigeria, where the estimation is in the thousands, but concrete numbers are not available. Previous research has found that oil tends to lengthen the duration of civil conflicts, and that countries tend to intervene in areas that are rich in oil. The information available would suggest that there is evidence to support this. Bombings and attacks in the areas surrounding oil fields and pipelines are particularly common in the intrastate conflict cases, such as Colombia and Nigeria.

6.2 Considerations with Third-Generation Biofuels

Section 5.4.2 laid out some of the considerations and technical requirements of algae. The fol- lowing subsections analyze the impact of some of the technical requirements of third-generation biofuels on the case studies, and extrapolate for other areas.

6.2.1 Temperature

Figure 6.1 shows a map of the global average annual temperatures, with the case study conflicts highlighted with pink stars. Algae can grow in environments with a range of temperatures 16◦C to 27◦C, but tends to grow best when in environments of 18◦C to 24◦C. With this in mind, areas like Libya, Syria, and Iraq are in optimal areas for biofuel production, while temperatures 6.2. Considerations with Third-Generation Biofuels 55 in Sudan, Colombia, and Nigeria are on the higher end. Areas in surrounding the South China Sea could also be ideal for biofuels, particularly on the Chinese coastlines, and countries such as Vietnam. Crimea is an outlier, in that it is below the ideal temperature to grow biofuels in. Bands of temperature through Colombia could have the ideal temperature for biofuel production.

Figure 6.1: Map of global average temperatures.

This indicates that some of the countries utilized in the case studies could experience success if they choose to pursue means of biofuel production. It would likely be easier for the areas near the equator or further north to use indoor means of growing algae, such as the fermentation method, but temperature would not necessarily hinder most of the countries from developing the means to produce algae-based biofuels. As the climate changes and land temperatures increase, it could become too hot for biofuels to be grown in some of the areas, but in those areas, indoor means of cultivation could be promoted. Although temperature is a meaningful consideration, it is not the largest barrier to algae biofuel development. 56 Chapter 6. Findings

6.2.2 Water

Currently, the majority of algae biofuels are grown in freshwater, ranging from brackish to muncipal wastewater. Some algae biofuels that show promise could utilize saltwater for pro- duction. Figure 6.2 shows areas of the world that could experience water scarcity, with the case study countries marked with a pink star. Areas such as Sudan, Nigeria, Libya, Iraq, and Syria experience either vulnerability, stress, or scarcity. Colombia, the South China Sea region, and Crimea are relatively secure in water.

Figure 6.2: Map of water and water scarcity.

However, the development of biofuels that can tolerate ocean water for their growth environment means that areas that are relatively scarce in freshwater could still engage in biofuel production through the use of their access to the ocean. This would be particularly useful for Nigeria, Libya, and Syria, as they have access to the sea. This would allow for use of saltwater algae biofuel production, which would allow for energy security and biofuel development without 6.2. Considerations with Third-Generation Biofuels 57 increasing the stress on an already strained natural resourced. In this vein, it would be highly recommended to further research the potential of saltwater-based algae for biofuels.

6.2.3 Fuel

Algae grows best with inputs of CO2, and will increase in production with higher inputs of car- bon dioxide. Currently, carbon removal plants are coming online across the world. Climeworks, based in Switzerland, captures the CO2 and sells it to farmers, who pump it into greenhouses to encourage the growth of their crops. This is a scenario that could work well with encouraging the scaling up of algae biofuel production. In any case, carbon dioxide is present in increas- ing quantities in the atmosphere, and so access to the gas is not a huge technical obstacle to overcome. As carbon capture means increase, this will just allow for more fuel sources to grow algae, even in environments such as the fermentation tubes or the photobioreactors.

6.2.4 Growth Environments

Oil is a point-source resource. The infrastructure to access it must be constructed at the point of where it is available, and it then must be transported out of the area for use. In contrast, algae can be grown in any area that meets the temperature and water requirements. A 2014 study found that many regions can potentially meet significant fractions of their transportation fuel requirements through production, without land resource restriction. 58 Chapter 6. Findings

Figure 6.3: Potential lipid yield from algae.

Figure 6.3 shows an example of lipid productivity potential, based on an algae called Nan- nochloropsis that was cultivated in a [W Moody et al., 2014]. As can be seen from the figure, most of the regions of the world that were used as case studies for this work would be on the higher end of production of this particular type of biofuel [W Moody et al., 2014]. This indicates some level of success with varying growth environments. Fermentation could also be useful, as it does not require photosynthesis to occur.

From this figure, it can be understood that biofuel could be produced in a myraid of regions. Comparing Figure 6.3 to Figure 6.4, this indicates that photobioreactors could be used to produce algae to some degree in almost any country. In contrast, many parts of the globe do not have proven crude oil reserves. This would allow more countries to become more energy- independent, as they would be able to produce the energy they would require themselves. 6.3. Analysis 59

Figure 6.4: Proven global oil reserves in 2016.

In addition, this would present another hurdle to algae-based biofuels becoming the same source of economic control that oil has been in intrastate conflict. As production could be shifted to anywhere that met the basic requirements for algae growth, there would be fewer opportunities for militias and rebel groups to gain economic or political control by seizing fuel production or infrastructure. Third-generation biofuel production sites could be set up closer to urban areas, which would not require the same level of infrastructure for extraction and transport that oil currently does.

6.3 Analysis

The following section examines the analysis that was taken from a variety of sources, and uses it to predict the energy future of the globe, along with an attempt to understand oil pricing and the impact of that on the world. 60 Chapter 6. Findings

6.3.1 Oil Costs

Most organizations that try to project oil prices see the price per barrel rising by the end of 2018, with high prices continuing into the following year. Most groups do not attempt to predict past the early 2020s, but some see future oil demand peaking in 2030. Most analyses expect that oil will be selling for $100/barrel within the next few years.

6.3.2 Energy Use

Most analyses also expect world energy demand to rise, and agree that most of the demand increase will come from non-OECD countries. Areas such as China and India will likely expe- rience the most growth. In all of the energy scenarios, biofuels remain a relatively small part of production.

However, breakthroughs in biofuel technology - such as the doubling of oil projection by Exxon- Mobile - would likely draw increased interest in the production of algae biofuel and spur invest- ment. Additionally, if fourth generation biofuels can be manufactured - the biofuels that would remove more CO2 from the air than they emit when burned - it would likely cause a great deal of excitement and investment. Carbon sequestration is currently an important topic, as it is vital for the health of the ecosystem to learn to take out more greenhouse gases from the air than are emitted.

6.3.3 Projected Costs for Algae Biofuel

This section examines the potential timeline for a drop in costs of algae biofuel, using the decreases presented in cost by wind and utility-scale solar. The decline in production for these two energy sources was discussed in Section 5.5.

This indicates that once investment and technology is dedicated to a given area, the costs of the energy technology can decline rapidly in a short period of time. As stated in Section 5.5, 2016 paper stated that the petrol price is about $0.71 per kg ($0.32 per pound), with the cost at that 6.3. Analysis 61

Energy Type Current Price/kWh Percent Drop Years Average Drop Per Year Wind $0.02 91.6% 35 2.6% Residential Solar $0.15 71% 7 10.1% Utility Solar (Fixed Tilt) $0.04 75% 7 10.7%

Table 6.4: Summary of decline in costs point to produce algae biofuel being ten times that, or $3.20 per pound [Milano et al., 2016]. To be cost-competitive, the price per pound would need to decrease by about 90%.

Figure 6.5: Projected cost of algae biofuels across a thirty year span with four scenarios.

Figure 6.5 shows projected costs of algae biofuels under four scenarios, taken from the given information of how costs has declined. The analysis assumed that serious investment would begin in 2020, although there are currently many companies and researchers engaged in finding ways to lower the costs of projection. The smallest cost decrease seen was 4.4% a year in residential solar, while the largest was in 2017, when panel costs dropped 26% [Romm, 2017]. The average scenario takes the average of the minimum and maximum situations, while the maximum solar uses the value listed in Table 6.4 for the decline in fixed-tilt utility scale solar costs since 2010. As stated in Section 5.5, algae biofuel is assumed to be viable once the cost is around $0.32 per pound. Under the maximum scenario (costs drop by 26% per year), this would occur around 2028. Using the percent drop for fixed-tilt utility scale solar (10.7%), the 62 Chapter 6. Findings cost for biofuels would be on-par with current oil production prices by 2040.

The analysis indicates that third-generation cost declines, should it follow a similar path to that of solar and wind, will lead to cost parity in twenty to thirty years. This comes as oil prices are projected to rise, as discussed in Section 5.4.1. It can be difficult to predict the cost of oil and other forms of fossil fuel over an extended period of time, but current trends indicate that development in algae biofuels would likely begin to see cost parity by the middle of the century. Should the maximum drops in cost be achieved, algae biofuels would be cost-effective within ten years. Current technology, such as CRISPR, could make the genetic modification required for the production levels that would make algae biofuel cost effective, but the full application of these technologies is still being explored to determine how impactful it could truly be. Chapter 7

Findings Discussion

The following sections will first of all discuss the findings from Chapter 6. It then discusses the implications of the research.

7.1 Discussion

This section will being by discussing the ways oil influence interstate conflict as compared to intrastate conflict. It then compares the potential influence of algae-based biofuels as compared to oil on conflict zones.

7.1.1 Oil on Intrastate and Interstate Conflict

As was described in Section 6.1, oil serves as highly different motivators in intrastate and interstate conflict. Previous research has found that the presence of oil in a civil conflict enhances the duration and severity of a conflict. Additionally, if oil is in a country that currently is undergoing conflict, third-party countries are more likely to intervene. This is demonstrated with qualitative analysis on these case studies as well.

For example, the conflict in Colombia has been ongoing for about fifty years. The rebels gain control and influence, as well as economic benefit in the form of ransoms and payouts,

63 64 Chapter 7. Findings Discussion by threatening the pipelines. Without the pipelines running through vast areas of land, it is unlikely that the ELN would have the same level of political and economic influence as they currently do. Colombia’s reserves are beginning to fall, with just 1.6 billion barrels available, but continual attacks on the pipelines and fields make it difficult to export and sell the remaining oil. A similar tactic is ongoing in Nigeria, where rebels and dissidents attack the pipelines in an effort to gain some political influence. Likewise, control over the oil fields has been a significant bargaining chip in Libya, and has the potential to be consequential in Syria. Rebels in both countries currently control the oil fields, which means that they control the potential revenue the government could otherwise exploit. However, the rebels and militias seem to act more with the intention of controlling the government through threatening the oil supply.

In the interstate cases - particularly Crimea, Sudan, and Iraq - control over the oil for the economic benefits is a large motivator for at least one side to enter the conflict. Russia was highly motivated to invade Crimea, due to the potential of huge reserves in the Black Sea, while American oil companies have had great success with the oil reserves of Iraq. Sudan and South Sudan are engaged in a conflict that centers largely on the oil fields of Heglig, which would have the resources to allow either state to develop economically if they could be exported. The South China Sea, while it is not an outright conflict, still presents an interesting picture, as China attempts to cement its claim with the building of artificial islands, and pressure on oil companies that deal with countries that have territory that China views as its own. Most of the reasoning presented by these cases are not necessarily on the economic potential of the resources. China’s official position on why it has the right to the South China Sea territory is that it was the first country to discover the islands that are disputed, and thus they are part of the historical territory of China. The Sudanese conflict is a tangled mess of ethnic clashes that just happens to focus around the disputed oil fields. The United States invaded Iraq because of 9/11 and the specter of weapons of mass destruction - yet after the war, American oil companies moved in on the de-nationalized oil fields. Russia supposedly invaded Crimea to keep ethnic Russians safe from neo-Nazis that had taken over the Kiev government, yet Kremlin insiders claimed that the invasion was six years in the making, about the same time that reports of potentially huge fossil fuel reserves in the Black Sea became more widely spread. 7.1. Discussion 65

In summary, oil in interstate conflicts tends to be a large economic motivator for countries to engage with each other. This is most clear in the cases of Crimea and the Iraqi war. Furthermore, in interstate conflict, even if oil and its revenue is a motivation, that tends to be an unspoken one. The official reasons for the conflict are often more grand in nature, ranging from the United States’ claim of dealing with terrorists, to Russia’s supposed protection of ethnic Russians in Ukraine. In contrast, oil tends to be more of a means of control in intrastate conflict. As is seen in Syria, Colombia, and Nigeria, control over the means of production or the pipelines is a significant advantage. As a point-resource, oil is something that has be produced in the area where it is present. In the case of many of these countries - such as Colombia, Syria, Nigeria, Libya, and Iraq - the oil fields are far away from the urban centers where the governments typically reside. This was displayed in Table 6.2, which showed that the pipelines in Colombia, Libya, and Syria stretched for hundreds of miles, often through complicated terrain. This presents an opportunity for militias and rebel groups to gain control over the fields, or to threaten the pipelines that pump the oil into more populated areas. This is an inherent weakness in the use and production of fossil fuels.

7.1.2 Oil Versus Algae on Conflict

Algae does have some specific requirements for growth, which were detailed in Section 5.4.2. However, new breakthroughs in algae biofuel processing and production mean that some of the requirements are less challenging than they were ten years ago. Algae can be grown in anything from municipal wastewater to brackish water to salt water from the sea. Genetic engineering breakthroughs, aided by CRISPR, are allowing for gene modification that has already doubled the output of oil with the same input. Many of the concerns about algae biofuels in the past have been focused on the amount of water it would take to grow them. However, algae have been shown to grow effectively in water that could otherwise not be used for human use, such as wastewater or saltwater. More work shows that, if the species of algae are chosen carefully, water can be reused and encourage growth in later generations. Previous research has already demonstrated that some forms of growth environments, such as biophotoreactors 66 Chapter 7. Findings Discussion and fermentation unites, could grow algae in areas of the world that would be unsuited for conventional open or closed algae growth environment systems.

Thus, algae would not need to be processed hundreds of miles away from the urban centers where they would be used and exported, like oil oftentimes is. This would minimize the control that rebels could have over governments in intrastate conflicts, as there would no longer need to be pipelines that span hundreds of miles to export the fuel. This would likely also affect third-party decisions to intervene in conflicts or engage with a country, as every country would have the technological means to meet their liquid fuel requirements within their own borders. Research has shown that the presence of oil influences the severity and duration of a civil conflict. Removing the inherent weaknesses in oil production and producing liquid fuel closer to the urban areas would likely help mitigate some of the economic and political control.

Additionally, there is the added benefit that any fuel produced from algae is biodegradable. While it could have short-term consequences if spilled into the environment, it will be processed much more quickly than fossil fuels are, and would likely not result in the same level of damage to human life. As was found in Nigeria, oil spills has doubled the risk of death in the first month of life for infants conceived by mothers living near an oil spill. Conflict that is focused in and around oil-producing areas tends to have higher risks of oil spills, and the research in Nigeria shows a very direct link between the spills and infant mortality. Minimizing the health risks that would come with spills is an important consideration in the development and promotion of algae biofuels.

7.1.3 Cost Projections, Timescale, and Impact

The cost projections of algae biofuels, using historical trends from solar and wind, were discussed in Section 6.3.3. From historical trends, it could be assumed that with substantial investment and development beginning in 2020, algae biofuels would be economic when compared to oil around 2040. With massive funding and technical breakthroughs, algae biofuel could be cost- effective by 2028. 7.1. Discussion 67

The research has indicated that oil and other fossil fuels do have an influence on interstate and intrastate conflict. Oil tends to be a significant economic and political motivator and opportunity in both types of cases, and provides funding to groups like the Islamic State on the black market, which at one point made $3 million a day from engaging in illicit oil pro- duction and trade [Al-Khatteeb and Gordts, 2014]. Most agencies that engage in energy price forecasting - such as the International Energy Agency and the European Fusion Development Agreement - have predicted oil prices to increase sharply during the 22nd century, with both agencies projecting a price of $140 per barrel around 2040, or over twice the current price of oil today ($61 per barrel). The higher prices for oil, combined with the likelihood of in- creased difficulties to produce oil - in 2017, discoveries of new conventional oil and gas fields dropped to a 60-year low [Rowell, 2017]. There were only 174 oil and gas discoveries worldwide in 2017, down from the average of 400 to 500 a year until 2013 [Rowell, 2017]. The current difficulties with finding new oil fields demonstrate the likelihood that all ’easy oil’ has been found, with experts expecting that this will mean a shift to ’unconventional’ forms of liquid fuel, such as shale gas [Rowell, 2017]. As stated before, previous research has found that higher oil prices lead to more conflict occurring in the states that produce oil and fossil fuels, or pet- rostates [Hendrix, 2017]. Higher oil prices have a null effect on non-petrostates, as most of the conflict occurring in petrostates is due to their increased likelihood to engaged in aggressive behavior during times of higher prices [Hendrix, 2017]. So it could be assumed that as oil prices increase, conflict in petrostates - such as Libya, Colombia, or Nigeria, to examine a few of the studies used in this work - will likely increase. Oil also increases the duration and severity of the attacks [Ross, 2004]. Additionally, the rise of the Islamic State presents a new complication, as it shows that terrorist organizations can use resources such as fossil fuels to support their activities [Al-Khatteeb and Gordts, 2014]. The link between the rise of oil prices and increased severity and likelihood of intrastate conflict could provide a grander geopolitical incentive for researchers and companies to engage in making algae-based biofuels cost-effective.

With the assumption that oil will cost $140 per barrel by 2040, this would lead to a cost of slightly over $0.45 per pound - a rise of 40.6% from 2016’s cost of $0.32 per pound for crude oil. At the same point, energy use is projected to be 28% higher, according to the EIA [EIA, 2017b], 68 Chapter 7. Findings Discussion which indicates that there will be more individuals around the world using energy on a daily basis. This would require more and very reliable sources of liquid fuels or other energy sources to meet that demand.

Figure 7.1: Cost of algae biofuel projections.

Re-examining the four different projections of the cost of algae biofuels from Section 6.3.3, a more optimistic picture is painted. Should oil increase to $140 per barrel by 2040, algae biofuels would be a cheaper source of liquid fuel under three different scenarios, including the projection of cost decline using the historical data from the decrease in cost from fixed-tilt utility-scale solar.

Figure 7.2 examines further projections for algae biofuel costs per pound, compared to the predicted oil prices in 2040 from the International Energy Agency (IEA) and the European Fusion Development Agreement (EFDA). Three of the projection trends come from data taken from the National Renewable Energy Laboratory (NREL), which published information on cost declines for solar installations. NREL found that compared to the first quarter in 2016, the first quarter in 2017 saw a 29% decline in utility scale solar, 15% decline in commercial, and 6% for residential [Geuss, 2018]. These figures were taken as examples of how sharply the cost could decline. Additionally, the projected trend using the overall cost decline in fixed-tilt utility-scale solar from 2011 to 2018 is also used, this being a figure of roughly 10.7% cost decline per year. 7.1. Discussion 69

Figure 7.2: Cost of algae biofuel compared to oil.

As can be seen from the figure, decline in costs of around 10% per year would lead to cost parity by 2040 under three scenarios if oil costs do rise to about $0.45 per pound. Should oil price not change dramatically from the current price of $0.32 per pound, cost parity would be achieved about five years later in most cases. The figure shows that should investment cause costs to drop by 6% per year, cost parity likely would not be achieved before 2050.

Investment in algae biofuels could likely then become more economically motivating and cost- effective as the century progresses. Energy usage will grow as more and more countries develop and their citizens demand higher standards of living, and oil prices are likely to rise further as the days of easy oil come to an end. Conflicts over oil are likely to increase - whether in interstate wars, such as Crimea or Iraq, or in intrastate conflicts, like Libya and Nigeria. Tensions in oil-rich areas such as the South China Sea are likely to increase, which will also influence global trade and security. Increasing development in algae-based biofuels could trigger the same cost plunge that was seen with wind and solar, where costs could drop by a third in a financial quarter. Extreme declines are very possible, with enough resources and dedication to finding a solution. This factor, combined with rising oil prices, would make algae biofuels an attactive and competitive alternative to traditional sources of liquid fuel. Lowering the cost 70 Chapter 7. Findings Discussion of production for algae biofuels would influence everything from conflict to national security to climate change, and thus would be an extremely important area to invest in. Taking all factors of oil and conflict into consideration, the development of algae biofuels could have a profound impact on the world in the coming decades.

7.2 Implications

There are numerous implications for the findings of this work. One is that the technical require- ments of growing algae-based biofuels are not so stringent as to prevent production in almost any country in the world. This means that most countries could meet liquid fuel needs through the production of biofuels. This would likely have a somewhat positive impact on the intensity and severity of conflict. That is, it would be difficult to gain the same level of economic and political control that has been seen over oil production and infrastructure in civil conflicts that has been a feature of modern-day intrastate clashes. While this would be problematic, in that militias and rebels would lose a bargaining chip in peace talks, the cost of previous wars and skirmishes to human life and environmental health has been prohibitive. Minimizing the po- tential for harm should be an important consideration when discussing the role algae biofuels could play in the energy mix.

Additionally, a switch from a more heavily fossil-fuel run society to a more algae biofuel oriented one would likely impact the willingness of other countries to engage in conflict in areas with oil. As was discussed earlier, the United States, Russia, and the Sudan conflict have reasons besides oil for engaging in the conflict - yet in the case of Russia and the United States, companies associated with those countries have benefited tremendously from access to the resources in the area. The influence of the billions of barrels of reserves in the South China Sea seem to be motivation enough for China to spend a great deal of money on the construction of artificial islands and engage in pressuring countries that do business with oil companies looking to capitalize in the resources within their Exclusive Economic Zones. If every country were capable of producing biofuel to meet the majority of the need of liquid fuel for transportation, 7.2. Implications 71 it would be unlikely that countries would be willing to engage in conflict to the same degree.

Although the timescale is still rather far out - with the highest decline of cost for algae biofuel production meeting cost-parity in 2028 - this is an important area to invest in. The more pessimistic projections would see cost parity being achieved in the 2050s, which would mean that there would be significant influence and impact on conflicts and energy security within thirty years. Yet, as was seen with wind and solar power, once the cost begins to drop, the declines accelerate, with rapid plunges following the initial dip. As technology and the means of genetically editing algae improve in the coming years, the initial drop could be achieved sooner rather than later, letting algae biofuels go through the same, sudden cost drops that other renewable energy sources achieved in the last few years. A new geopolitical landscape might form in its wake, but it is not likely that algae-based biofuels would have the same influence and opportunity that oil and other fossil fuels have presented. Hopefully, the world it would create would be one that would be more peaceful, with a secure, reliable energy source available to all. Chapter 8

Conclusion

8.1 Summary of Thesis Achievements

In summary, this work has found that oil provides different motivations and incentives in interstate and intrastate conflict. In interstate conflict, oil tends to provide a strong economic incentive to engage in conflict that would otherwise not be entered. In intrastate conflict, oil tends to be viewed more as a means of control and influence over the opposing forces. Oftentimes, the oil production sites are far away from urban centers, and must be transported in pipelines. This leaves them vulnerable to exploitation and attacks.

Algae-based biofuels’ technical requirements were then examined to determine the potential im- pact of their production on conflict. The work determined that biofuel technical requirements are not as stringent as they were ten years ago, with work being put into solving the remaining challenges. As a diffusive-source resource, it would be more difficult to exploit biofuel produc- tion in conflict areas, as the production centers could be constructed in urban areas, rather than far away like most oil currently is. Algae biofuels would thus not be suitable for a means of economic and political control like oil is in civil conflicts. Additionally, almost every country on earth could meet liquid fuel needs for transportation with different methods of algae growth systems. This would minimize the desire for countries to engage in interstate conflict over fuel sources.

72 8.2. Applications 73

8.2 Applications

This work would likely be most relevant for policy makers who seek to understand the potential consequences of technological development. It would also be useful in allotting funding towards the development of algae-based biofuels, as this demonstrates an impact beyond that of lowering carbon emissions and decreasing reliance on fossil fuels.

8.3 Future Work

Future research into this area could focus more intently on the different aspects of various algae-based biofuels and their potential impacts on conflict. This work uses an overview of algae biofuels, rather than specific strains. Different could have different impacts on the consequences of biofuels. As oil prices and predictions change, better and updated models could demonstrate the potential cost parity with algae biofuels as well, as well as with different types of energy sources. Additionally, work into the economic potential and complications of algae biofuels could be useful in understanding the full range of consequences for the development of algae biofuels. Bibliography

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