*This article originally appeared in the July 2010 issue of the Journal of Energy Security under the title “Understanding Resource Nationalism in the 21st Century.” This version has the endnotes that were not included in the original publication.
By
Llewelyn Hughes
Assistant Professor of Political Science and International Affairs
George Washington University
Seán J. Kreyling
Research Scientist, Pacific Northwest Center for Global Security
Pacific Northwest National Laboratory
“So we have a choice to make. We can remain one of the world’s leading importers of foreign oil, or we can make the investments that would allow us to become the world’s leading exporter of renewable energy …We can let the jobs of tomorrow be created abroad, or we can create those jobs right here in America and lay the foundation for lasting prosperity.” [1]
Statement on the official web site for the White House and President Barack Obama
1. Introduction
Resource nationalism in oil-importing states appears to be on the rise.[2] Oil price volatility underpinned by demand growth has led China, India and others to increase state support for national-flag firms in order to increase the state’s energy self-sufficiency. Both Chinese and Indian National Oil Companies (NOCs) have made energy investments worldwide, including in Sudan and Iran.[3] Long-standing oil importers such as the United States and Japan have also reenergized policies designed to increase domestic production of crude and crude substitutes, or have subsidized national-flag firms, in the name of energy independence.
A common explanation for this behavior proposes that policymakers view oil imports as a national security and foreign policy risk and decide energy independence is an appropriate response. But are there other ways we might account for these actions? In this paper we suggest that the national security explanation by itself is inadequate, as it ignores the complexity of business-government relations, and the diversity in preferences held by political and corporate decisionmakers. Studies in the politics of trade demonstrate that government intervention is not only driven by public policy goals, but also the interests of domestic constituents.[4] That domestic political interests partially drive energy politics in the United States, may not surprise analysts of U.S. politics. Such considerations are less commonly used in analyses of other countries’ energy policies, however, where explanations tend to focus on resource nationalism as an explanation, rather than the influence of firms, bureaucratic interests, legislators’ responsibilities to their constituents, budgetary politics, the role of industry associations and civil society, or other factors, in explaining energy policy outcomes.[5]
