Assessment of oil and gas geopolitical influence

doi:10.1007/s11442-015-1174-y

Abstract

Abstract:

This paper investigated several stages in the formation of the geopolitical influence of oil and gas, including the basis of its gestation, the means of transformation, and the formation and exercise of power. Based on this theoretical framework, a system for assessing the geopolitical influence of oil and gas was developed. This system is comprised of 13 indicators, each with its own method of measurement. Then 21 representative oil and gas importing, exporting, and transit countries were selected as assessment subjects. A quantitative assessment of the geopolitical influence of oil and gas in the selected countries was carried out using the proposed indicators, and factor analysis was used to obtain the main factors of these indicators and the composite score of each country. The empirical results showed that the 13 indicators could be summarized into five main factors, in the order of contribution rate, specifically comprehensive national strength, energy, transportation, risk, and geopolitics, each with its own variance contribution rate. Results of the assessment indicated that the selected countries could be classified into five categories in terms of oil and gas geopolitical influence: strong, relatively strong, moderate, relatively weak, and weak.

Key words: oil and gas, geopolitics, influence, mechanism

Mengchen GU, Limao WANG. Assessment of oil and gas geopolitical influence[J].Journal of Geographical Sciences, 2015, 25(3): 369-384.

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Process	Mode of action	Indicator
Basis of gestation	Geopolitical environment	Geopolitical environment advantage C₁
	Territory scale	Territorial scale effect C₂
	Resource reserves	Domestic O&G reserves C₃
	Economic strength	Economic capacity C₄
Means of transformation	Military intervention and control	Naval power C₅
	Cross-border M&A and investment	Production by O&G corporations C₆
	Energy diplomacy	[Included under C₁₁]
	Technological innovation	Potential O&G and alternatives C₇
	Major construction projects	New sea-lanes and pipeline expansions C₈
Formation of power	Possession of—and/or control over—major O&G production regions	Net import/export of O&G C₉
Formation of power	Possession of—and/or control over—critical O&G transportation routes	Control over key transportation routes C₁₀
Exercising power	Government’s involvement in international politics	Diplomatic capability C₁₁
	Ability to control risks in the international market	O&G import/export concentration C₁₂
	Support from stable domestic environment	Domestic stability C₁₃

Grade	Description	Ranking	Score
Complex	Has many neighboring countries, both big and small; has past and present disputes with some of these countries; homeland security costs are extremely high.	Ⅴ	2
Relatively complex	Has several neighboring countries, both big and small; has past and present disputes with some of these countries; homeland security costs are relatively high.	Ⅳ	4
Moderate	Has 1-2 strong neighboring countries and a few small neighboring countries; relationship with these countries is relatively good despite past disputes; a certain amount of homeland security costs is expected.	Ⅲ	6
Relatively simple	Has one strong neighboring country and maintains a relatively good relationship with the neighbor; or only has small neighboring countries; natural barrier(s) is present; homeland security costs are relatively low.	Ⅱ	8
Simple	No threats from any strong neighboring countries or interference from problematic countries; natural barrier(s) is present; almost no homeland security costs.	Ⅰ	10

Grade	Description	Representative country(s)	Ranking	Score
Global control	The navy’s core is large aircraft carriers; has large number of nuclear submarines	USA	Ⅰ	10
Global challenge	The navy’s core is cruisers and destroyers supplemented by large aircraft carriers; has large number of nuclear submarines	Russia	Ⅱ	8
Global presence	The navy’s core is aircraft carriers, with destroyers as escorts; has nuclear submarines or submarines	France, UK	Ⅲ	6
Global dispatch	The navy’s core is cruisers or frigates, with universal destroyers as escorts; has considerable number of submarines	Japan, Germany	Ⅳ	4
Regional	The navy’s core is destroyers; has a large number of frigates; has a small number of submarines	South Korea	Ⅴ	2

Grade	Description	Ranking	Score
High	Revolutionary increase in O&G production arising from technological progress or significant discoveries of O&G fields; extremely high O&G reserve-production ratio	Ⅰ	10
Relatively high	Significant increase in O&G production arising from technological progress or significant discoveries of O&G fields; relatively high O&G reserve-production ratio	Ⅱ	8
Moderate	Small- and medium-sized O&G fields are being discovered gradually; relatively high investments in the renewable energy sector	Ⅲ	6
Relatively low	Limited potential for the increase of O&G or its alternatives; certain amounts of investment in renewable energy	Ⅳ	4
Low	No sign of activities in the increase of O&G or its alternatives	Ⅴ	2

Grade	Description	Ranking	Score
High	Transit hub country with a number of major multinational O&G pipelines under construction	Ⅰ	10
Relatively high	Has some control over several major O&G pipelines that are under construction or the future Arctic route	Ⅱ	8
Moderate	Has major multinational O&G pipelines in production or is a country that surrounds the Arctic Circle	Ⅲ	6
Relatively low	Major O&G pipelines under construction pass through the country, or it is in proximity to potential new routes	Ⅳ	4
Low	No sign of O&G pipelines under construction or any new route being established in the surrounding area	Ⅴ	2