Last November the German Bundeswehr published an extraordinary study of the implications of peak oil. An English version of that study – titled Peak Oil: security policy implications of scarce resources – has now been made available, and is posted at Energy Bulletin. The peak oil study is Sub-study I of a two-part study entitled “Armed Forces, Capabilities and Technologies in the 21st Century – Environmental Dimensions of Security”, undertaken by the Bundeswehr Future Analysis Branch addressing the subject of finite resources and their potential security policy implications. The second part of the study will deal with climate change and demography.
The Study begins by accepting the reality that peak oil is upon us . . .
The term “peak oil” stands for the maximum rate of oil production and refers to the point in time at which the rate of a single oil field, of an oil-producing region, or globally reaches its absolute peak. * * * From peak oil, however, this level will irreversibly decline in the long term. Generally speaking, oil will therefore continue to be available and recoverable beyond the 30-year timeframe chosen in this study, albeit in quantities that are possibly too small to fully satisfy global demands and at considerably higher prices.
. . . without quibbling about the exact point in time at which the peak occurs:
The precise global peak oil date is controversial and can only be determined with certainty in retrospect.
The study states the reality that every nation in the world has a vital interest in securing energy supplies. While the world’s leaders may not be talking about peak oil to their publics, that doesn’t mean ruling elites are not fretting and plotting behind the scenes.
It can therefore be stated that against the backdrop of the ever-decreasing availability of fossil fuels, the challenge of ensuring long-term energy supply is reflected in national strategies worldwide, leaving no doubt as to the vital importance attached to this issue. In this context, the fact that energy supply aspects occupy an increasingly important place in the national security strategy documents of various countries is an indication of the increasing securitisation of this area * * * is likely to have consequences on the nature of future energy relations.
It’s impossibly to foresee what the impacts of declining oil supplies will have on our lives. What’s certain is that oil-importing countries will, with increasing desperation, be scrambling to secure their share of ever-diminishing supplies:
Ultimately, it is hardly possible to calculate from today’s perspective how suppliers and consumers will respond to global peak oil. Against this backdrop, the continuous assessment of diversification opportunities seems equally necessary and difficult, particularly with regard to the ousting or competition effects with other oil-importing countries that such efforts would bring about in the face of declining production rates.
If peak oil unfolds in a “moderate” form, global business could proceed more or less as usual, only with producer countries gaining power and influence at the expense of importer countries. There would simply be a re-balancing of the global balance of power. But there’s a darker possibility, where the world devolves into political and economic chaos:
[A]peak oil scenario in which a so-called “tipping point” is exceeded where linear developments become chaotic and finally result in a worst-case scenario in terms of security policy. For example, if the global economy shrinks for an indeterminate period of time, a chain reaction that might destabilise the global economic system is imaginable. Depending on point in time and the level of dependence of the affected society, such a peak-oil-induced, economic tipping point might have such severe systemic implications that only a few general statements as to economic, political, and social developments beyond the tipping point can be made. This will clearly change the analytical framework for all other security policy conclusions. Because of the widely unexplored “tipping point” phenomenon, it is impossible to conduct a comprehensive analysis of possible effects of such a trigger element. Rather, this study is designed to raise awareness of a possible nonlinear economic development due to peak oil and of the related risk of a severe system crisis.
Over time, obtaining oil will become more of a political rather than an economic endeavor, as governments seek to gain or retain control over a scarce and diminishing resource.
The study warns that in the short term, the global economy would respond proportionally to the decline in oil supply. The consequences laid out in the study read like today’s headlines. Increasing oil prices would reduce consumption and economic output, leading to recessions. The increase in transportation costs would cause the prices of all traded goods to rise, lowering trade volumes. For the unfortunate, this means losing income; for the even less fortunate, starvation. National budgets would be under extreme pressure, as revenues plummet as a result of recession and taxes are slashed in an attempt to restart the growth machine.
The study then gets downright apocalyptic: in the medium term, the global economic system and all market-oriented economies would collapse.
What does all of this mean for Germany and German foreign policy? After the global conflagration that was World War II, the rest of the world should be very interested in German thinking.
The study urges Germany to accelerate the transition to unspecified “renewable energies and raw materials” – without inquiry into whether such energies or raw materials actually exist or could serve to supplant oil and the other building blocks of industrial civilization. In the interim, Germany should continue to rely on its traditional energy mainstays: Britain, Norway – and, above all, Russia:
[T]he relationship with Russia is above all essential for Germany’s oil and gas supply alignment. Furthermore, it must be determined to what extent energy partnerships can be established and supply relationships can be developed and consolidated with countries of the Caspian region, the Middle East and Northern Africa.
Germany should seek to diversify its sources of energy, with particular attention to the “strategic ellipse” which contains the bulk of the globe’s remaining energy resources.
The map – which shows up early in the study, as shown by its label “Figure 1? – ominously recalls the theaters of the Second World War, where German strategy was to seize control of the oil fields of the Caucasus and the Middle East. Germans are still sensitive to their peculiar moral dilemma:
In light of global peak oil and efforts to establish strong, reliable relationships with oil-producing countries, value-based concepts of foreign, security and development policy may increasingly become subject to pressure to conform to more pragmatic rival models, like those already pursued by China and India.
A security policy more strongly focused on (economic) self-interest would be subject to special restrictions in Germany and, as evidenced by the discussions surrounding Bundeswehr operations abroad and Horst Köhler’s resignation as Germany’s Federal President, to extensive debate in politics and society. Especially in the Middle East and North Africa, Germany struggles to define its interests, which involve an element of power politics that has strong negative connotations in Germany and is irreconcilable with recent German history. Particularly in these regions, which are most important for future global energy security, Germany is thus mindful to emphasis ethical values as an important motivation.
As push comes to shove, it is realistic to expect that Germany will not reassert its national interest, even if that might be within a greater European context? And the struggle between ethical values and self-interest is not uniquely German. As peak oil begins to bite hard, that same struggle will be played out everywhere, in every nation, even within nations, around the globe.
