Neomercantilism and energy Interdependence: Russian strategies in East Asia

Asian Security

Volumn 6, Issue 1, 2010, Pages 74-93

  Ziegler, Charles E ^a  

^a UNIVERSITY OF LOUISVILLE   (United States)

Author keywords

[No Author keywords available]

Indexed keywords

EID: 79956234472     PISSN: 14799855     EISSN: 15552764     Source Type: Journal    
DOI: 10.1080/14799850903472029     Document Type: Article

References (85)

1. For an extended discussion of Russia's privatization and the origins of the oligarch's wealth, see Marshall I. Goldman, The Piratization of Russia: Russian Reform goes Awry (London: Routledge, 2003).
2. This article will focus primarily on Vladimir Putin's eight years as president, although Putin remained on the scene after as a powerful prime minister, in many ways eclipsing his younger protégé Medvedev.
3. Russian Security Council, "Strategiya natsional'noi bezopastnosti Rossiiskoi Federatsii do 2020 goda" [National Security Strategy of the Russian Federation to 2020], May 12, 2009, articles 9, 11, 12, 55. Available at http://www.scrf.gov.ru
4. To this end, the National Security Strategy also emphasizes the importance of modernizing the Russian military.
5. For a good discussion of the long-term trends in various forms of energy, see Adam E. Siemenski, "World Energy Futures, " in Jan J. Kalicki and David L. Goldwyn, eds., Energy & Security: Toward a New Foreign Policy Strategy (Washington, DC: Woodrow Wilson Center Press, 2005).
6. For a discussion with reference to the Central Asian dimension, see Charles E. Ziegler, "China, Russia, and Energy in the CCA Region and East Asia, " in Richard M. Auty and Indra de Soysa, eds., Energy, Wealth and Governance in the Caucasus and Central Asia (London: Routledge, 2006).
7. This section draws on Rajan Menon and Charles E. Ziegler, "Neo-realism, Neomercantilism, and Great Power Competition in Central Asia, " paper presented to World Conference on International Studies, Ljubljana, Slovenia, July 2008.
8. The classic text on mercantilism is Eli F. Heckscher, Mercantilism, Vols. 1-2, trans. Mendel Shapiro (London Allen & Unwin, 1955).
9. Albert Hirschman, National Power and the Structure of Foreign Trade, Exp. ed. (Berkeley: University of California Press, 1980), pp. 3-5.
10. See, in particular, Robert Gilpin, War and Change in World Politics (Cambridge: Cambridge University Press, 1983).
11. Joanne Gowa, Allies, Adversaries, and International Trade (Princeton, NJ: Princeton University Press, 2004).
12. Joseph M. Grieco, Cooperation among NationsEurope, America, and Non-Tariff Barriers to Trade (Ithaca, NY: Cornell University Press, 1990).
13. However, it should be noted that even Adam Smith accepted mercantilism in the event of war. See An Inquiry into the Nature and Causes of the Wealth of Nations (New York: Modern Library, 1937), Book 4, chap. 2. I am indebted to Michael Desch for calling this to my attention.
14. Early influential proponents of liberal theory in international relations include Robert Keohane, After HegemonyCooperation and Discord in the World Political Economy (Princeton, NJ: Princeton University Press, 1984).
15. Richard Rosecrance, The Rise of the Trading State: Commerce and Conquest in the Modern World (New York: Basic Books, 1986).
16. Stephen D. Krasner, ed., International Regimes (Ithaca, NY: Cornell University Press, 1983).
17. Keohane and Joseph S. Nye, Power and Interdependence (BostonLittle, Brown, 1977).
18. Jonathan Kirshner, "The Political Economy of Realism, " in Ethan B. Kapstein and Michael Mastanduno, eds., Unipolar Politics: Realism and State Strategies after the Cold War (New York: Columbia University Press, 1999).
19. Gilpin, The Political Economy of International Relations (Princeton, NJ: Princeton University Press, 1987), pp. 397-401.
20. Kirshner, "The Political Economy of Realism. "
21. For an argument along these lines as applied to trade policy, see Edward D. Mansfield, Power, Trade, and War (Princeton, NJ: Princeton University Press, 1994).
22. On the question of relative gains and international cooperation, see Duncan Snidal, "Relative Gains and the Pattern of International Cooperation, " American Political Science Review Vol. 85, No. 3 (September 1991), pp. 701-726.
23. and Robert Powell, "Absolute and Relative Gains in International Relations Theory, " American Political Science Review Vol. 85, No. 4 (December 1991), pp. 1303-1320.
24. See Bjorn Hettne, "The Concept of Neomercantilism, " in Lars Magnussen, ed., Mercantilist Economics (Boston: Kluwer, 1993).
25. and Gilpin, Political Economy of International Relations, pp. 31-34.
26. For a good discussion of the cooperative relationship between private Russian energy firms and the state, see Philip Hanson, "The Resistible Rise of State Control in the Russian Oil Industry, " Eurasian Geography and Economics Vol. 50, No. 1 (January/February 2009), pp. 14-27.
27. With reference to China's national oil companies, see Trevor Houser, "The Roots of Chinese Oil Investment Abroad, " Asia Policy No. 5 (January 2008), pp. 141-166.
28. Flemming Splidsboel-Hansen, "Past and Future Meet: Aleksandr Gorchakov and Russian Foreign Policy, " Europe-Asia Studies Vol. 54, No. 3 (May 2002), pp. 377-396.
29. Hirschman, National Power and the Structure of Foreign Trade, p. 33.
30. European Commission Energy Web site. Available at http://ec.europa.eu/energy
31. Keohane and Nye, Power and Interdependence, pp. 10-11.
32. Jonathan P. Stern, The Future of Russian Gas and Gazprom (Oxford: Oxford University Press, 2005), p. 127.
33. Anita Orban, Power, Energy, and the New Russian Imperialism (Westport, CT: Praeger Security International, 2008).
34. Andrew E. Kramer, "With Russia's Help, Gas-Producing Countries Try to Be More Like OPEC, " New York Times, December 24, 2008.
35. Uchenna Izundu, "Pressure's on to Open EU's Energy Markets, " Oil and Gas Journal, February 23, 2009.
36. and Andrei Bely, "After the Oil Boom: Russian Energy Investments in Europe in the Era of Recession, " Russia in Global Affairs Vol. 7, No. 1 (January-March 2009), pp. 128-138.
37. US Energy Information Administration, "Energy Information Administration International Energy Outlook 2008, " Department of Energy. Available at http://www.eia.doe.gov
38. Viktor Khristenko, "Energeticheskaya strategiya Rossii: Proryv no Vostok" [Energy Strategy of Russia: Breakthrough to the East], Vedomosti, February 6, 2006. Available at http://www.vedomosti.ru
39. ExxonMobil holds a 30 percent share in the consortium, Rosneft affiliates Sakhalinmorneftegas Shelf and RN-Astra hold 20 percent jointly, Japan's Sakhalin Oil and Development Company consortium holds 30 percent, and India's Oil and Natural Gas Coorporation-Videsh has a 20 percent share.
40. Michael Bradshaw, "The Energy Saga: Energy, Politics, and the Environment, " Surroundings: A Journal of Politics and Culture, No. 40 (Winter 2008), pp. 56-68.
41. The third PSA is Total's Kharyaga oil project in Nenets autonomous oblast. "State May Squeeze Sakhalin Majors, " Moscow Times, May 26, 2006.
42. Marshall I. Goldman, Petrostate: Putin, Power, and the New Russia (New York: Oxford University Press, 2008), pp. 128-132.
43. Andrew E. Kramer, "Moscow Presses BP to Sell a Big Gas Field to Gazprom, " New York Times, June 23, 2007.
44. The original estimated cost for Sakhalin II was $10 billion. Sakhalin II began limited oil production in 1999 (60,000 bpd in the summer months), and LNG production at Russia's first LNG plant on the southern tip of Sakhalin started in February 2009. All of the LNG from the Sakhalin II plant has been contracted by Japanese and Korean firms.
45. The possibility that the sale to ONGC-Videsh was at least partly political is reinforced by Putin's efforts during his first years in office to restore traditionally warm ties with India. At the Indian government's urging, ONGC-Videsh was seeking upstream assets around the word. In addition, Rosneft had been looking for a buyer for half its share-Sakhalin I at that point was viewed as an expensive and risky investment. Mikhail Yenukov, "India Buys into Sakhalin Project, " The Moscow Times, January 25, 2001.
46. As of late 2008, Rosneft owed about $21 billion to Western creditors. Andrew E. Kramer, "Russia Seeks to Trade Oil for Loans from China, " Oil and Gas Journal, October 29, 2008.
47. "Pact on Oil Pipeline Boosts Energy Links, " China Daily, October 30, 2008.
48. "East Siberian Pipeline Gets New Deadlines, Tariffs, " NEFTE Compass, May 21, 2008.
49. Michael Richardson, "Loans-for-Oil Deal Would Seal Sino-Russian Ties, " Straits Times, February 5, 2009.
50. Nadia Rodova, "Rosneft, Transneft Sign China Loan Contract, " Platts Oilgram News, February 18, 2009.
51. In 2005, about 61 percent of China's imports came from the Middle East. By 2009, China had significantly expanded imports from Russia, Iran, Venezuela, and various African nations.
52. A good discussion of the Russian-Chinese-Japanese maneuvering can be found in Lyle Goldstein and Vitaly Kozyrev, "China, Japan, and the Scramble for Siberia, " Survival Vol. 48, No. 1 (Spring 2006), pp. 163-178.
53. See Charles E. Ziegler, "Competing for Markets and Influence: Asian National Oil Companies in Eurasia, " Asian Perspective Vol. 32, No. 1 (2008), pp. 129-163.
54. and Niklas Norling, "Russia's Energy Leverage over China and the Sinopec-Rosneft Deal, " China and Eurasia Forum Quarterly Vol. 4, No. 4 (2006), pp. 31-38.
55. State Council Information Office, "China's Energy Conditions and Policies, " December 26, 2007. Available at http://www.china.org.cn
56. "China's Power Sector Tests Foreign Investors, " Business Week, June 16, 2008.
57. Vandana Hari, "China Mops up as World Stares at Downturn, " Platts Oilgram News, February 24, 2009.
58. David Zweig and Bi Jianhai, China's Global Hunt for Energy, Foreign Affairs, Vol. 84, No. 5 (September-October 2005), pp. 25-38.
59. Energy Information Administration, US Department of Energy, "Country Analysis Brief-China, " July 2009. Available at http://www.eia.doe.gov. At present, Russia does not supply any natural gas to China.
60. Anatoly Medetsky, "Gazprom Seeks to Bar Exxon's Gas Exports, " The Moscow Times, June 20, 2007.
61. and Anna Shiryaevsky, "Gazprom Calls Gas Supply Talks with China 'Difficult,'" Platts Oilgram News, June 12, 2007.
62. "PetroChina Goes Solo on Gas Line Project, " China Daily, August 5, 2004.
63. "Gazprom, CNPC Discuss Prospects for Russian Gas Supplies to China, " ITAR-TASS, October 28, 2008.
64. For a technical discussion of Russian gas markets, Gazprom, and gas exports, with an assessment of future prospects, see Stern, The Future of Russian Gas and Gazprom.
65. Goldman, Petrostate, pp. 136-145.
66. "Russians Support Putin's Re-Nationalization of Oil, Control of Media, but See Democratic Future, " World Public Opinion. org, July 10, 2006. Available at http://www.worldpublicopinion.org
67. Vladimir Yevtushenko, "A Global Answer to a Global Challenge: Critical Lessons for the Future of the Russian Economy, " Russia in Global Affairs Vol. 7, No. 1 (January/March 2009). Available at http://www.globalaffairs.ru
68. Vlad Grinkievch, "Should Russia Raise Domestic Gas Prices?" RIA Novosti, May 8, 2008. Available at http://en.rian.ru
69. John Helmer, "China Stumbles in Forging Russia Gas Deals, " Asia Times, June 11, 2008.
70. The maximum annual increase is 8 percent. "China Braces for Rising Gas Prices, " Asia Times, January 10, 2007.
71. Catherine Locatelli, "Gazprom's Export Strategies under the Institutional Constraint of the Russian Gas Market, " OPEC Energy Review, Vol. 32, No. 3 (2008), pp. 246-264.
72. See Charles E. Ziegler, "Russia and the CIS in Asia in 2008: Axis of Authoritarianism?" Asian Survey Vol. 49, No. 1 (January/February 2009), pp. 135-145.
73. Indonesia was Japan's largest LNG supplier (at 22 percent), followed by Australia (20 percent), Malaysia (19 percent), and Brunei (10 percent). Energy Information Administration, US Department of Energy, "Country Analysis Brief-Japan, " September 2008. Available at http://www.eia.doe.gov
74. Peter C. Evans, "Japan, " Brookings Foreign Policy Studies Energy Security Series, December 2006. Available at http://www.brookings.edu
75. METI, New National Energy Strategy (Digest), May 2006. Available at http://www.enecho.meti.go.jp/english
76. The deal was concluded during Prime Minister Fukuda Yasuo's visit to Moscow in April 2008. Bruce Gale, "Russia and Japan Paper over Their Differences, " Straits Times (Singapore), May 14, 2008.
77. Sergei Blagov, "Russia Struggles to Encourage Japanese Investments, " Eurasia Daily Monitor, April 29, 2008.
78. Lee Sung-Kyu, "Korea's Energy Strategy in Northeast Asia, " Korea Energy Economics Institute, November 2008. Available at http://www.erina.or.jp
79. US Department of Energy, "Energy Information Administration Country Analysis Brief-South Korea, " June 2007. Available at http://www.eia.doe.gov
80. Seonjou Kang, "Korea's Pursuit of Energy Security, " paper presented to 2008 Northeast Asia Energy Outlook Seminar, Korea Economic Institute Policy Forum, Washington, D.C., May 6, 2008. Available at http://www.keia.org
81. Also, see Ziegler, "Competing for Markets and Influence. "
82. Shin Jung-won, "South Korea, Russia Reach Natural Gas Deal, " Wall Street Journal, September 30, 2008.
83. See Ju Jin-Sook, "The South Korea-Russia Summit and Feasibility of a Roadmap for Energy Diplomacy, " Current Issue No. 129 (Seoul: Korea National Strategy Institute, n.d.). Available at http://www.knsi.org
84. Hirschman, National Power and the Structure of Foreign Trade.
85. Katherine Barbieri, The Liberal Illusion: Does Trade Promote Peace? (Ann Arbor: University of Michigan Press, 2002), p. 31.