Energy: The Dominant Element of the National Instruments of Power

By Mike Benitez, Prichard Keely, and Mark Nexon

Since the 1960s, the US strategic lexicon articulated Diplomacy, Information, Military, and Economics (DIME) as the four instruments of national power. However, following the Cold War’s end, economic globalization, industrial modernization, and the technological revolution have led to the emergence of an element of a nation’s power that underpins them all: energy.

If the stronger economic powerhouses of Europe, specifically Germany, Great Britain, and France, no longer buy the sovereign and private debt of the southern European Union (EU) members, political instability could result in the rise of right-wing governments across Europe, governments more likely to align with Russia. Although Russian military preeminence may no longer draw countries east, Russian energy will most likely attract these economically and politically troubled states.

Energy’s unique characteristics have a distinctive impact on geopolitics. Simply defined, energy is “derived from the utilization of physical or chemical resources, especially to provide light and heat or to work machines.” Energy resources are typically finite in terms of the strategic defense environment. Energy differs from economics in that it is more difficult to extract and less liquid than industrial economic strength. For instance, solar power requires suitable land and climate to build a productive solar farm. Thus, a nation’s geographic reality ultimately determines how much potential energy is domestically available. These natural resources are the substantive backbone of a nation’s economic power. Consequently, energy directly impacts a respective state’s dependence on energy and resource imports. This dependence implies a power imbalance; sizable imbalances risk conflict. However, if the ability to leverage energy is to be considered a measure of a nation’s power, it must first be compared to established national instruments of power.

International relations author Charles P. Schleicher defines power as “the ability to exercise such control as to make others do what they otherwise would not do by rewarding or promising to reward them, or by depriving or threatening to deprive them of something they value.” His definition has further evolved into categories of hard power and soft power. Hard power is the power to coerce, whereas soft power is the power to attract. In the last 50 years, energy has served both types of geopolitical power.

There is little revolutionary about contemplating energy’s impact on international relations, but we must consider how energy influences the instruments of power. Since World War II, negatively impacting energy (typically petroleum) resources has been key to reducing an adversary’s military capacity. Energy availability largely sets the logistical throttle for the tempo of operations, and as such, is essential to projecting military power. More recently, coercive energy policy has had significant economic and diplomatic impacts—consider why you have an energy efficiency sticker on your refrigerator today.

In 1967, in response to American support of Israel during the Six-Day War, a coalition of Arabian States enacted Organization of Petroleum Exporting Countries’ (OPEC’s) first oil embargo. The 87-day embargo had little impact, partly due to OPEC’s haphazard enforcement. In 1973, US support for Israel during the Yom Kippur War resulted in a second. This time, the strict enforcement of the 4-month embargo by the Organization of Arab Petroleum Exporting Countries (OAPEC) achieved drastically different results. The price of gasoline in the US quadrupled, exposing American overreliance on oil imports from a region with collective interests that increasingly diverge from US interests. Several pieces of legislation subsequently aimed to temper the potential impact of future oil embargoes. Over forty years later, the second and third order effects of these domestic policies remain: speed limits (1974 Emergency Highway Energy Conservation Act), the creation of the Strategic Petroleum Reserve (1975), the Department of Energy (1977), and the National Energy Act (1978). The latter provided the premise for today’s Environmental Protection Agency federal tax credits and the energy STAR labels found on virtually all new appliances sold today. The use of energy as hard power produced dramatic—and enduring—results.

energy consumption

Source: https://ourfiniteworld.com/2012/03/12/world-energy-consumption-since-1820-in-charts/

However, energy’s lurking soft power has a potential yet to be realized. Population growth, accelerated by improvements in food production, broader societal advances, and global commerce, has long correlated to increases energy consumption. Since the Cold War, the world population has grown from 5.4 to 7.4 billion people, a 31 percent increase. By the end of the century, the United Nations predicts a world population of 10.8 billion people.

This inevitable increase in demand creates inherent pressures and dependency on supply, an avenue for soft power strategic influence.

Russia Case Study

A case for energy as a national instrument of power is seen when viewing energy from a systems analysis perspective—using European and Russian energy ties as a case study.

Although the hard power threat posed by Russian armor rolling through the Northern European Plain may have dissipated, the Russian Federation limiting the EU’s economic performance is a very real possibility. Russia has gradually shifted its focus from the “Big M,” military power, to the little “E,” economic power, over the past 20 years. Given the recent spotlight on the Baltics and Ukraine, it is perhaps best to begin there.

As a prerequisite for EU membership in 2010, Lithuania shuttered its sole nuclear power plant in Ignalina, which produced 71% of the country’s energy. This was offset by its main power plant in Elektrenai, a natural-gas power plant. Recently, Norway surpassed Russia as Lithunia’s primary gas supplier, but dependency on Russia-sourced natural gas remains. In fact, despite declaring independence from Russia as the iron curtain fell, the Baltic States remain disconnected from continental Europe’s power grid. They continue to receive the majority of their energy from their neighbor to the east—Russia.

Estonia’s unique claim is that it is the only country in the world that is energy self-sufficient through shale oil. In fact, the northern most Baltic nation generates more than enough electricity for its population of 1.3 million, increasingly exporting the surplus to Finland, Latvia, and Lithuania. Excess Estonian electricity export is limited by a lack of electrical grid connections. Finland, the sole standout, imports Estonian energy across the Baltic Sea, through the Estlink 1 and 2 submerged power connections (completed in 2014). Securing access to energy imports from Estonia is of vital interest to Latvia, which is nearly completely dependent on Russia for its fossil fuel energy needs.

The Baltic’s dependency on Russian energy provides insight into the nature of Russian soft power of energy vis-à-vis the EU writ large.

European Energy Dependencies

The EU imports nearly 88% of its oil, a third of which is sourced from the Russian Federation. Six out of the top twelve oil importing countries in the world are European. Included are three of the most powerful NATO countries on the continent: France, Germany, and the United Kingdom (UK).

energy dependency

Source: https://www.cleanenergywire.org/factsheets/germanys-dependence-imported-fossil-fuels

Germany is the largest consumer of energy in Europe as well as the closest significant military power to the Baltic region. It imports nearly all of its oil (97.2% in 2013); the major provider? Russia. Germany (and Poland) possesses an excess of coal, a static energy, which is of little use to power modern military equipment. Furthering its dependency on Russia, German imports of crude oil are refined in 14 refineries within Germany, over a third of which are partly owned by Rosneft, Russia’s largest oil company. While Germany is currently well diversified in terms of static energy sources, this diversification is unlikely to continue. Under an energy policy called Energiewende (energy transformation), Germany intends to divest its nuclear power plants completely by 2022. This will place an increasing burden on indigenous coal processing and necessitate additional natural gas imports from Russia—which also happens to be the EU’s largest natural gas provider.

France’s situation is not any better. Like Germany, it satisfies roughly 98% of its oil consumption through imports. While over a third of that comes from Russia, the remaining crude oil imports are processed through three ports (Marseille, Le Havre, and Saint‐Nazaire) where nearby refineries process the crude oil and then distribute it via pipelines throughout Europe. Although it is highly mobile energy dependent, France is static energy independent. France is unique in that it is the largest user of nuclear energy on the continent. Almost 90% of French-generated electricity comes from 59 domestic nuclear power plants across the country. But until aircraft and armor formations can run on batteries, electricity alone cannot fuel national defense.

Finally, the UK. In the past 15 years, oil production has decreased by over a third. A transition to diesel-fueled transportation in the UK has outpaced refinery conversions and exceeded the infrastructure available to support the demand. As a result, it now exports petrol and natural gas, while importing 60% of its aviation fuel (a close relative of diesel). In addition, the UK is more dependent on electricity imports than at any other time since 1976. Its primary source of electricity generation relies on natural gas imports from Norway. The UK almost exclusively depends on Russia for coal imports (89% in 2012), which it in turn uses for 40% of its electricity production. A 2014 report estimated that both France and the UK will run out of fossil fuels within their sovereign territories by 2020. That includes all three: oil, coal, and gas. Emerging exploration and extraction technologies may smooth or delay shortages, but the other side of the energy equation necessitates an adequate mobile energy alternative.

Reserve Capacity

The EU requires member states maintain a strategic petroleum reserve equal to at least 90 days of average domestic consumption. The largest of these reserves, with an estimated 70 million barrels, is located within the Etzel salt caverns near Wilhelmshaven in northern Germany. The caverns are less than 30 miles from the coast, and Russian bomber sorties over the North Sea have aligned their Russian bomber flight paths over the North Sea with these facilities.

However, this is not a new vulnerability. The NATO Pipeline System, the integration of ten systems across Europe, was born from Cold War requirements to supply allied forces with reliable fuel supplies. The system connects critical infrastructure and military airfields, as well as provides a 29 million barrel storage capacity. This doesn’t quite tell the whole story though.

All oil is not equal. Gasoline (petrol) is a light distillate. Middle distillates refer to a range of purposed refinery products that are kerosene-based. Specifically, middle distillates encompass jet fuel and diesel oils, essential military and industrial commodities. Today’s European refineries capable of producing middle-distillate products are dwindling. Combined with increasingly stringent pollution regulations, many of these refineries have aged beyond their ability to maintain cost-effectively production. Twenty-two refineries have shut down in the past several years, with 10 slated for closure in the near future. In peacetime, economically (and environmentally), it makes sense to import versus refine oil. However, any disruption to this delicate influx of middle distillate fuel—like a military impediment or foreign meddling—would quickly affect prices at the pump across Europe, wreaking havoc on the delicate economies of the EU.

Jet fuel (middle distillate) stockpiles are held in independent storage in Amsterdam-Rotterdam-Antwerp (ARA), Europe’s oil-trading hub, and serve as the economic metric for fuel trade levels in the EU. These storage facilities are a mere 200 miles from Germany’s Wilhelmshaven oil reserve, which translates to under 30 minutes of distance by air. Why air? ARA shares similar proximity to the same North Sea Russian bomber flight paths mentioned above.

The ARA jet fuel reserves fluctuate with demand, but recently averaged 800,000 tons, or 6.2 million barrels. While this sounds like a lot of fuel, it is not when compared to consumption. At the height of Operation Desert Storm, the coalition consumed roughly 1 million barrels of jet fuel every 72 hours. Still, that is not the true measure of this pressure point.

When the Cold War ended in 1991, the EU consumed 650,000 barrels of jet fuel a day. Today, the EU consumes about 1.4 million barrels of jet fuel per day, almost all of which is for commercial aviation. This fragile relationship between supply and demand require a robust and carefully managed supply stream.

The systemic fragility of Europe’s fuel infrastructure was highlighted in 2010 when a volcano eruption in Iceland halted European air traffic for five days, inadvertently showcasing the hard power side of energy. This instantly affected jet fuel reserves, illustrating how the delicate oil influx dependency can affect Europe. Within just a few hours of the air traffic suspension, ARA could no longer accept tankers to offload their jet fuel. This created a traffic jam of tankers in the North Sea and the rerouting of other inbound tankers to extend their transit time to the port to ease congestion. Interestingly, the effect was not felt globally, but restricted to Europe. Globally, in 2010 the world traded 86 million barrels daily, so losing roughly 2% of trade capacity for a few days did nothing for market price fluctuations. However, this interruption in air traffic devoured $4.7 billion in the global economy.

Conclusion

An economically linked and industrialized world has elevated energy as a distinct instrument of power in its own right. Russia, long viewed as a force in quantity and mass, has exercised a new dimension of power through energy; all the EU had to do was provide the environment for Russia to exploit. Now, NATO must face the consequences as this power begins to threaten its member’s economies and military capabilities. Astute actors, like Russia, have matured energy policy and resources into a formidable instrument of power.

There are several ways to reduce, or eliminate, Russian leverage over the rest of Europe. The ideas set forth are by no means all-inclusive, but are instead simply a place to start the necessary strategic discussion. The US may need to create government-driven industry requirements to reinforce greater avenues for US energy connections with the EU. Shale oil via the Keystone pipeline as well as natural gas, which is mostly burned off, could be (with significant investment) shipped to Europe. This is certainly a costly and infrastructure-intensive option, but it supplants Russian influence with a more reliable American partnership and offers the West a path to towards energy independence from Russia. It might take 15 to 20 years to achieve this monumental shift, but in the end, the US would reassert its economic preeminence in Europe and effectively eliminate Russian geoeconomic sway in Europe.

After twenty-five years of steady-state conflict continuously operating from locations in the most oil-rich region of the world, the US has been logistically spoiled. Russian exertion of energy influence could deny the US key regional staging locations that allow the projection of military power, disrupting the American ability to meet its treaty obligations. As the need for energy increases, Russia could easily increase its influence across Eastern and Western Europe. Instead of using its military might, as the Soviet Union did during the Cold War, Russia can exercise soft power by increasingly monopolizing critical energy resources vital to European economies. It is time for US strategic thought to acknowledge energy as a key element of our national might.

Major Mike “Pako” Benitez is an F-15E Strike Eagle Weapons Systems Officer with over 250+ combat missions spanning 20 years in the Marine Corps and Air Force. He is a graduate of the US Air Force Weapons School and is a former Defense Advanced Research Projects Agency (DARPA) Fellow.

Major Prichard “Mule” Keely is a graduate from the USAF Academy, USAF Weapons School, and Embry Riddle Aeronautical University. He is an F-15E Evaluator Weapons Systems Officer with over 2000 hours and 450 combat hours in the F-15E. He is attending Air Command and Staff College with a Multi-Domain Operational Strategist Concentration at Maxwell AFB, Alabama, and serves as a Senior Editor of Over the Horizon.

Major Mark “Dragon” Nexon is a graduate of the USAF Academy and Gonzaga University. He is a KC-135 Instructor Pilot and C-130 Evaluator Pilot with over 3000 hours and 1200 combat hours. He is attending Air Command and Staff College with a Multi-Domain Operational Strategist Concentration at Maxwell AFB, Alabama, and serves as a Senior Editor of Over the Horizon.

The views expressed are those of the author and do not necessarily reflect the official policy or position of the Department of the Air Force or the US government.

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One comment

  1. Thought-provoking article! Energy is often treated like any other commodity, and I’m not sure your article fully considers the market response to Russian oil manipulation. Times of short-term oil transfer disruption have a major short-term impact, but a long-term policy change would seem to allow time for a market solution, especially with a commodity like petroleum whose supply is artificially restricted to prop up the price. All the same, the major point of the article – that energy can and should be thought of as an instrument of national power – is a good one. Interesting that Japan, France and Germany are effectively reducing their own national power with their mindless turn away from nuclear energy.

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