1. CH. 2 “ENERGY AND GEOPOLITICS” FROM THE RISK PIVOT: GREAT POWERS, INTERNATIONAL SECURITY, AND THE ENERGY REVOLUTION BY BRUCE JONES & DAVID STEVEN AMY ROZNOWSKI

2. ENERGY & GEOPOLITICS GLOBAL ENERGY MKT: STRUGGLE BETWEEN ESTABLISHED AND EMERGING POWERS DOES ENERGY INSECURITY MAGNIFY DISPUTES OR CAN THE PRESSURE BE MANAGED? KEY ARGUMENTS: ENERGY INSECURITY FUNDAMENTAL CHALLENGE FOR CHINA AND INDIA PRE-EXISTING RIVALRIES ENHANCE GEOPOLITICAL PRESSURE (SOUTH CHINA SEA) ACCESS AND TRANSPORT ROUTE COMPETITION CAN BE MANAGED (ARCTIC) US STRATEGIC OPTIONS: INCREASED ENERGY SECURITY OF US USED TO WEAKEN/MAGINALIZE CHINA ALLOW ROOM FOR CHINA TO PARTICIPATE IN GLOBAL ENERGY MARKET ROLE MODEL FOR GLOBAL STANDARD BUILD SHARED ENERGY SECURITY

3. CHINA’S ENERGY INSECURITY ECONOMY FUELED BY ACCESS TO CHEAP ENERGY & INCREASINGLY DEPENDENT ON ENERGY IMPORTS “GOING OUT STRATEGY” IMPROVING RELATIONS WITH THE MIDDLE EAST AND AFRICA ACCEPT INCREASED INVESTMENT RISK “NON-INTERFERENCE”

4. CHINA’S STRATEGIC OPTIONS INCREASE DOMESTIC CAPACITY WHILE RESTRAINING DEMAND NEW ROUTES OF SUPPLY EXPAND NAVY AND MILITARY CAPACITY TO SECURE SUPPLY/TRADE ROUTES

5. ROUGH SEAS OR COOLER WATERS? SIGNALING FUTURE RELATIONS VIA THE SOUTH & EAST CHINA SEAS OR THE ARCTIC ENERGY SECURITY IMPLICATIONS OF CONTROL SOUTH CHINA SEA: $5.3TRILLION/YR TRADE ROUTE 1/3 OF WORLD OIL AND 50% OF NG (MALACCA) INCREASED ENERGY IMPORTS MEANS MORE VULNERABLE TO INSECURITY OF SUPPLY ROUTES EIA EST. 11B BARRELS OF OIL & 190T FT3 NG (PROVEN & PROBABLE) EAST CHINA SEA: “9-DASH” LINE & EXTENSION OF ECONOMIC EXCLUSION ZONE SENKAKU/DAIOYU ISLAND DISPUTE FANS ENERGY INSECURITY AND NATIONALISM FLAMES PERCEPTION OF INCREASED SECURITY AT THE EXPENSE OF COMPETITOR’S INSECURITY CORNER THE SUPPLY MARKET AND TRANSPORT ROUTES

6. ROUGH SEAS?

7. OR COOLER WATERS? GLACIAL MELT AND CLIMATE CHANGE IS CREATING THE NEXT MAJOR EMERGING ENERGY MARKET POTENTIAL CONFLICT? PROVEN YIELDS EXPLOITED BY US, CANADA, & RUSSIA INCREASED PRIVATE SECTOR INTEREST NEW SUPPLY ROUTES AND CHOKE POINTS

8. CURRENT ARCTIC REALITY ARCTIC 5 DISPUTE RESOLUTION AGREEMENT: INCREASED WILLINGNESS TO COOPERATE ILULISSAT DECLARATION UN PESSIMISTIC

9. CURRENT RISKS & VULNERABILITIES GLOBAL RISKS SEARCH FOR ENERGY AMPLIFYING TENSIONS EMERGING POWERS INCREASED EXPOSURE TO RISKS FROM RESOURCE IMPORTS COMBINED DEVELOPED AND EMERGING POWER CONSUMPTION EFFECTS ON CLIMATE US VULNERABILITY COMMODITY SHOCK MORE RESILIENT TO PRICE SHOCKS LESS RELIANT ON CHEAP ENERGY FOR HEAVY INDUSTRY SHALE OIL/GAS MILITARY CAPACITY

10. US STRATEGIC OPTIONS “BOOT ON THE THROAT” - “PRESSURE FOR COMPLIANCE” - “STRATEGIC REASSURANCE” CONFRONTATIONAL; USE ENERGY AND RESOURCES TO WEAKEN CHINA’S GEOPOLITICAL POSITION AND SLOW RATE OF GROWTH POTENTIAL COAs REDUCE/CUT ENERGY SUPPLY – BLOCKADE DIPLOMATICALLY SQUEEZE CHINA OUT OF NEW MARKETS – BLOCK INVESTMENTS INCREASE PERCEPTION OF ENERGY INSECURITY – SELF-SUFFICIENCY & ABLE TO ACCEPT MORE INSTABILITY & HIGHER PRICES (CHINA HURT MORE)

11. PITFALLS “BOOT ON THE THROAT” - “PRESSURE FOR COMPLIANCE” - “STRATEGIC REASSURANCE” INCREASED GLOBAL ENERGY PRICES DAMAGE GLOBAL TRADE SYSTEM & HINDER GLOBALIZATION DETERIORATION OF US-CHINA &/OR US-RUSSIA RELATIONS ENERGY USED AS POLITICAL WEAPON POTENTIALLY INCREASE CHINA-RUSSIA RELATIONS REDUCES CHINESE LONG-TERM ENERGY SECURITY HARDENING OF POLICY TOWARD CHINA

12. US STRATEGIC OPTIONS “BOOT ON THE THROAT” - “PRESSURE FOR COMPLIANCE” - “STRATEGIC REASSURANCE” INCREASE PRESSURE THROUGH COMMODITIES BUT ALLOW FOR CHINESE PARTICIPATION IN INT’L ENERGY MARKET – “RACE TO THE TOP” POTENTIAL COAs USE ENERGY TO STRENGTHEN POSITION OF ALLIES – DEVELOP DOM ENERGY RESERVES & INCREASE EFFICIENCY TECH TRANSFER MAINTAIN POSITION IN SoH & STAND-UP TO CHINESE “MARCH WEST” FOUNDATION OF INT’L ORDER & RESTRICT CHINA & RUSSIA ACCESS SET HIGH STANDARDS FOR ENERGY, FOOD, & MINING INVESTMENTS LEVERAGE CLIMATE CHANGE – LIMIT CARBON SPACE/CARBON TAX PROTECT INDIA

13. PITFALLS “BOOT ON THE THROAT” - “PRESSURE FOR COMPLIANCE” - “STRATEGIC REASSURANCE” MISALIGNMENT OF CONGRESS AND INDUSTRY – INEFFICIENT/INEFFECTIVE POLICY TAX INCENTIVES, AID SPENDING, DIRECT SUBSIDIES INCREASED PERCEPTION OF THREAT FROM CHINA – BENEFIT WORTH RISK?

14. US STRATEGIC OPTIONS “BOOT ON THE THROAT” - “PRESSURE FOR COMPLIANCE” - “STRATEGIC REASSURANCE” RESOURCE SECURITY AS GLOBAL MARKET INCENTIVE; INCREASE BURDEN SHARING WITH EMERGING POWERS AS INCENTIVE TO PARTICIPATE IN INT’L ORDER POTENTIAL COAs MAINTAIN SECURITY POSTURE IN MIDDLE EAST & ENCOURAGE BURDEN SHARING WITH CHINA ELSEWHERE (REDUCE NON-INTERFERENCE POSTURE) ALIGN DOMESTIC AND INT’L POLICIES IN COORDINATION WITH PRIVATE INDUSTRY & UNDER INT’L GOVERNANCE AGREEMENTS

15. PITFALLS “BOOT ON THE THROAT” - “PRESSURE FOR COMPLIANCE” - “STRATEGIC REASSURANCE” OVERLAPPING INTERESTS REDUCE GROWTH RATE OF DEVELOPING COUNTRIES CAREFUL MANAGEMENT OF INCREASED CHINESE INFLUENCE IN CENTRAL & SOUTH ASIA INCREASED & UNMITIGATED CHINESE SECURITY PRESENCE IN INDIAN OCEAN WEAKENS CHINA-INDIA RELATIONS

16. CONCLUSION KEY TAKE AWAY: US RESOURCE SECURITY USED FOR GLOBAL STABILITY WITH US AS LEADER EFFECTS OF GEOPOLITICAL SHIFT: CHINA – STRUGGLE WITH HIGH DEMAND, IMPORT VULNERABILITY, SLOWING GROWTH, AND RELIANCE ON US INDIA – STRUGGLING INTERNAL POLITICAL ECONOMY AFFECTING ENERGY SECURITY RUSSIA – POTENTIAL ENERGY MARKET SPOILER BUT FACED WITH INTERNAL STRESSES US – EXPOSED TO GLOBAL RISKS; DIRECT EFFECTS FROM ECONOMIC DECLINE OF ASIA; CANNOT INSULATE ITSELF FROM SHOCKS EVEN WITH INCREASED DOMESTIC SUPPLY

17. QUESTIONS