IE School of International Relations guest speaker: Dr. Gonzalo Escribano talks about the geopolitics of energy
On Tuesday 6 May, Dr. Gonzalo Escribano , Director of the Energy Programme at the El Cano Royal Institute for International Relations, gave a highly engaging talk on the geopolitics of energy. The first part of his seminar addressed oil and hydrocarbons. MIR students were informed that Saudi Arabia was not only the largest oil producer but also had the largest export surplus in the world. More importantly, they are the only country with a spare capacity of 1,5 mbd to 5 mbd (million barrels a day) which in effect turns them into the “lender of last resort” for oil. If for X reason, Libya or Venezuela decided to cut off their production, Saudi Arabia is the only country that could effectively step in and fill the gap in oil production. This gives them a lot of power and leverage in energy politics as they are the only nation that can provide this public good and essentially stabilize the oil market. The gas market is mostly dominated by Russia and the US with their new shale gas extractions. In all still 82% of the world’s energy consumption is based on hydrocarbons and renewable energy is but a small part of the mix. This is because renewable energies are still not price competitive and also because most countries do not have coherent energy policies. As long as this is the case, hydrocarbons are here to stay. In the coming years most of the energy demand will come Asia, mainly from China and India. Dr. Es cribano also discussed energy poverty ( 20% of the world lacks access to electricity) and the fact that there is a tradeoff between protecting the environment and fighting climate change and providing access to energy in developing countries. The UN is trying to reconcile both aspects of sustainable development and growth and have created an initiative called Sustainable Energy for all. To conclude, Dr. Escribano mentioned a few energy hot spots in the world and focused on Ukraine. Russia is now hesitating between providing energy to Europe or Asia. If it decides to cut off gas from Europe because of the conflict in Ukraine, China will decide that it is not a reliable energy supplier and this could cause tension with Russia’s Asian partners. Putin will have to be very careful and tactical in his energy politics.
Students had many questions for Dr. Escribano and their interest highlighted the importance of energy in geopolitics today.