A securitisation approach to international energy politics

Energy Research & Social Science 49 (2019) 114–125

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Original research article

A securitisation approach to international energy politics

T

Jeffrey D. Wilson Perth USAsia Centre, University of Western Australia, Australia

A R T I C LE I N FO

A B S T R A C T

Keywords: Energy politics Energy security Securitisation Economic nationalism

Recent years have seen a renewed interest in energy amongst International Relations (IR) scholars. The existing IR literature is characterised by a debate between a realist-inspired ‘geopolitical’ approach that sees energy as a source of zero-sum conflict, and a liberal-influenced ‘global energy governance’ approach which emphasises interdependence and cooperative dynamics. However, by adopting a systemic perspective these IR approaches fail to account for the full range of political dynamics shaping inter-state energy relations. This article consolidates insights from the broader literature on energy politics to develop a new securitisation approach to international energy politics. It argues that energy securitisation – a process where governments frame energy as an existential threat to state interests – is variable and contingent. It occurs in states where energy issues are implicated in economic, regime and/or geopolitical security concerns, and leads governments to adopt nationalistic policy frameworks that result in international conflicts over energy. The utility of this securitisation approach is illustrated with a case study of the divergent energy behaviour of two major energy exporters (Russia and Australia). By accounting for domestic and international dynamics, and explaining rather than assuming the securitisation of energy, this securitisation approach offers more explanatory purchase than existing IR energy theories.

1. Introduction Negotiating inter-state energy relationships is a key issue in contemporary international relations. Energy is an essential input for modern economies, a major source of wealth for resource-rich countries which depend on rents from exports, and a significant expense for resource-poor importers. However, the asymmetric geographic concentration of energy resources means few states can meet their needs from domestic sources alone. This mandates interdependence between producing and consuming countries. Managing energy interdependence is a highly-charged international issue. Governments must negotiate mutually agreeable rules for trade and investment, which have implications for how the benefits and costs of energy interdependence are shared. The risk that international markets may be manipulated for political ends links energy to questions of national security and geopolitics. The ‘global resource boom’ of 2004–13 has also seen the outbreak of diplomatic disputes over energy, as governments have been drawn into inter-state conflicts over which parties get access to energy, from whom, and on whose terms. The question of whether energy interdependence acts as a source of inter-state conflict or cooperation has for many years been a major debate in the field of International Relations (IR). Broadly speaking, two competing theoretical accounts dominate the IR literature. A

geopolitical approach (conceptually linked to IR realism) argues that energy is a securitised domain of zero-sum competition, and therefore a source of inter-state rivalry and conflict. In contrast, a global energy governance approach (drawing on IR liberalism) emphasises positivesum interdependence and cooperation, realised through international markets and institution-building. However, both accounts are limited by their systemic mode of theorising, which excludes from analysis political and economic dynamics at the domestic level. This bias means existing IR theories of energy politics fail to adequately account for the full range of political dynamics influencing inter-state energy relationships. As a result, many scholars have called for the development of new theoretical approaches to international energy politics [1–4]. This article develops a new framework for theorising inter-state energy relations. Its point of departure is to interrogate the conditions under which energy policy becomes ‘securitised’ – the political process whereby governments discursively frame energy security as an existential threat to state interests [5]. It does so by drawing on the extensive literature on energy politics to guide theory building. The article argues that energy securitisation is a multifaceted phenomenon, which occurs due to the role of energy in economic, regime and/or geopolitical security issues that emerge from both domestic and international political structures. It also breaks with systemic approaches by conceptualising securitisation as a contingent, rather than inherent,

E-mail address: [email protected]. https://doi.org/10.1016/j.erss.2018.10.024 Received 14 June 2018; Received in revised form 4 October 2018; Accepted 25 October 2018 2214-6296/ © 2018 Elsevier Ltd. All rights reserved.

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A core question for IR scholarship is whether this coordination game is characterised by patterns of inter-state conflict or cooperation. On one hand, cooperation is essential if governments are to realise shared interests in the energy sphere. It can facilitate information sharing, and reassure parties regarding the policy intentions of others [7]. Cooperation can also help integrate global energy markets by setting standards for national energy policies, which lower transaction costs and improve market transparency [8]. It may also help smooth the transition towards new energy sources such as renewables, in the face of hydrocarbon depletion and climate change imperatives [9]. But on the other, divergent interests between producers and consumers access mean energy can also be a source of inter-state disputes [6]. Producer states have on occasion used the ‘energy weapon’ – where supply is made conditional on certain concessions – as a diplomatic tool to blackmail consumers [10]. For consumers, the importance of reliable supply, and the risks that these may be interrupted by the political actions of producer governments, mean energy is often considered a domain of national security [11]. Accounting for the balance between these cooperative and conflictual tendencies is central to understanding patterns of inter-state energy relations. Energy interdependence has attracted the attention of IR scholarship for many years. It first became an important issue during the 1970s, a decade characterised by producer-consumer conflicts including resource nationalism in developing-world exports and the energy crises of 1973 and 1979. During the 1980s, a collapse in global demand and prices saw the importance of energy wane on the international agenda [2]. However, recent years has seen renewed interests in energy questions, in part due to the decade-long ‘global resource boom’ of the mid-2000s. Energy prices began a period of rapid growth in 2004, and following a temporary collapse during the global financial crisis soon resumed an upward trajectory. By the end of the boom phase in 2013, prices had increased four-fold on their levels only a decade earlier (Fig. 1). Intensifying international efforts to manage energy-related environmental issues – including, but not limited to, climate change – have also contributed. These factors have seen energy reemerge as a key foreign and economic policy concern. For energy-poor consumer states, it has posed a major threat to energy security: a situation where an economy enjoys the continuous availability of appropriate energy inputs at reasonable prices [12]. Conversely, for energyrich countries the boom provided an important boost – both for their economic performance (due to rising export prices) and international standing (as consumers seek closer diplomatic ties with important energy suppliers). One worrying consequence of the global resource boom was an uptick in the number of inter-state energy conflicts. One example has been Russia's use of the energy weapon, where it has withheld (or threatened to withhold) gas supplies to Eastern European neighbours [13,14]. Another is the complex series of territorial disputes emerging in the East and South China Seas, where China, Japan and several Southeast Asian governments have been drawn into maritime clashes to claim ownership of subsea hydrocarbons [15,16]. In Central Asia, analysts have identified an emerging 'great game' between competing powers for ownership and/or pipeline access to the region's rich energy reserves [17–19]. International concerns have also been raised regarding China's aggressive energy diplomacy in Africa, and the fear it may stoke a neo-colonial 'race for African resources' [20,21]. These conflicts have catalysed a renewed interest amongst IR scholars in international energy politics. The IR literature is presently characterised by a debate between two competing theoretical accounts over whether energy interdependence is a source of inter-state conflict or cooperation. The first theoretical account, which is often labelled the geopolitical approach, conceptualises energy as a source of inter-state conflict. Drawing premises from structural realism in IR theory, this account dominates both popular and scholarly debates on energy politics [22]. It adopts an ‘access-based’ view of energy security, which (a) views

feature of international energy politics. Securitisation is important because it encourages governments to adopt economic nationalist policy frameworks domestically, and frame international interdependence as an individualistic/competitive rather than collective/cooperative concern. Adopting a securitisation framework therefore problematises the questions of whether and why energy is securitised policy domain, and the impacts this carries for patterns of intergovernmental conflict and cooperation. This article proceeds in five parts. The first reviews existing IR accounts of international energy politics. Outlining the debate between the realist-inspired geopolitical and liberal-influenced global energy governance approaches, it is argued the systemic bias of these theories leads both to make questionable assumptions regarding energy securitisation. The second part unpacks the political and economic factors behind securitisation, identifying the role of energy in economic, regime and geopolitical concerns as paramount. The third explores the consequences of securitisation for inter-state energy relations, arguing that it predisposes governments to adopt economic nationalist policies and take a rivalrous approach to interdependence. The fourth section consolidates these arguments into an explanatory model, which identifies economic cycles in energy markets and state-specific political issues as the primary drivers of securitisation. The final section illustrates the explanatory utility of this securitisation approach by using it to account for the divergent international energy behaviour of two major energy exporters: Russia and Australia. 2. Theoretical approaches to energy in international relations scholarship Managing international energy relations is a pressing issue for many states. As the input which powers industries and infrastructure, secure and affordable supplies of energy are essential for modern economic life. However, the arbitrary spread of energy resources around the globe – most notably for hydrocarbons, and to a lesser extent renewables such as hydro, wind and biofuels – means energy wealth is concentrated in relatively few jurisdictions. While there are some economies that are both major energy producers and consumers (particularly China and the US), most can be classified as net-importing consumer or net-exporting producer economies. This necessitates interdependence between energy-rich and energy-poor states, and drives a lively international trade in energy commodities worth $1.5 trillion in 20161. From a purely economic perspective, energy interdependence is a clear case of mutually-beneficial complementarity: international trade and investment connects consumers that need to buy with producers who wish to sell. But from an international-political standpoint, there is also perennial tension between their interests. Producers wish to maximise prices and the rents generated from energy exploitation, while consumers prefer lower prices and stable supply to ensure energy security for industry and households. Tensions also exist amongst producer governments (who compete for shares of global markets) and consumer governments (who compete for access to the most desirable sources of energy) [6]. These tensions can lead to inter-state energy conflicts: diplomatic disputes between governments over the rules and relationships for energy interdependence, and how these rules and relationships distribute benefits and costs. These inter-state conflicts span a spectrum of intensities: from contested negotiations over energy pricing, through trade and investment sanctions, to in extreme cases ‘resource wars’ fought to gain and/or deprive access to energy resources relative to adversaries. Energy interdependence is thus a type of international coordination game, where joint gains arising from cooperation are overlaid by tensions over how these joint gains are distributed amongst players. 1 Defined as the commodities in SITC Code 3 (‘Fuels’). Author’s calculations, from ([115]).

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Fig. 1. World energy price indices, 2000–2016. Source: Author’s calculations, from [112].

producers) possess the full range of energy goods their economies require [32]. As a result, there has been a steady increase in the degree of ‘energy globalisation’ since the end of the Cold War, as the intensity, density and diversity of energy trade relationships has steadily grown [33]. Moreover, energy cooperation can potentially stand to benefit all. On the consumer side, constrained supply and high prices negatively impact on energy security. For producers, market volatility makes it difficult to plan investments in energy projects and their associated infrastructure [7]. For both, increasing concerns about scarcity and climate change are the impetus for an ‘energy transition’ – away from reliance on conventional hydrocarbons towards newer sources such as natural gas and renewables [34]. By viewing energy relationships as at least potentially cooperative, insecurity and conflict are framed not as intrinsic features but contingent outcomes resulting from ‘market failures’ of some sort [35]. Importantly, these market failures can potentially be addressed through collective action, of which two mechanisms are identified as important. First, the global energy governance approach adopts what Chester [36] labels a 'market-based' conception of energy security. This is distinct from the access-based perspective of geopolitical approach, and instead views the energy security problem as being about ensuring the efficient functioning of international markets. It is suggested that in competitive and open markets, issues of energy insecurity are addressed by prices, whose upward movement calls forth additional supply from hitherto marginal reserves [37]. Markets can also depoliticise energy interdependence, by facilitating trade and investment between any parties willing to sell and buy [38]. International markets are thus argued to function as a ‘global public good’3, which improves the energy security of all economies [39,40]. Second, there is a strong incentive for governments to take collective action to support and augment these markets. These can include information sharing, the building of trust between governments, policy coordination to correct market failures, and the negotiation of how the costs and benefits of interdependence are shared [41]. Drawing on neoliberal institutionalist insights on international regimes, Colgan et al. [42] argue that these shared interests have led to the creation of an ‘energy regime complex’: a set of formal and informal, governmental and non-governmental institutions dedicated to managing energy interdependence. Taken together, Goldthau

hydrocarbons as scarce assets of existential importance for modern economies and militaries; and (b) considers access to these scarce assets as the key energy security problem [23]. For consumer economies, dependence on foreign producers – particularly the risk that supplies may be interrupted – means risks to energy supply is viewed as a potential security threat [24,25]. Conversely for producing states, the outsized economic importance of energy makes it an important coercive asset in a state's foreign policy arsenal. This can include the energy weapon (where supplies are withheld as a behavioural threat), alongside the use of energy diplomacy (where preferential treatment is offered as a behaviour inducement) [10]. The extensive history of energy sanctions – with Fischhendler et al. [26] identifying sixty-five cases since 1938 – testifies to their importance as a tool of coercive diplomacy. Revealing its conceptual affinities to structural realism, the geopolitical approach further argues that these security implications mean inter-state energy relations are inherently conflictual. World energy reserves are viewed as a fixed and progressively declining asset, over which states engage in zero-sum competition for control and/or access [27]. While the geopolitical approach views conflict as an inherent feature of inter-state energy politics, its frequency and intensity varies. Several factors are identified as drivers of the outbreak of such conflicts. Some consider geopolitical instability the key contemporary driver. They point at emerging patterns of multipolarity associated with rising powers from the developing world and resulting patterns of great power competition [9,23]. Others single out the aggressive energy policy behaviour of several ‘rising powers’. Russia and China are frequently identified as governments whose nationalistic energy policies are contributing to an environment of inter-state energy competition [23,28,29]. World markets cycles are identified as another variable, with anxiety over energy security (and conflict-type behaviour) argued to emerge during booms before subsiding during busts [30,31]. These geopolitical explanations should be viewed as complementary rather than competing, identifying different factors which intensify latent conflict tendencies inherent to energy interdependence. In contrast, a rival theorisation known as the global energy governance approach2 draws on concepts from neoliberal institutionalist IR theory to argue energy is a potentially cooperative international domain. It begins with the observation that interdependence is a defining characteristic of energy security, as very few states (save a few oil

3 Advocates use the term ‘public good’ to describe the energy security benefits offered by international markets. However, it debatable whether international energy markets actually provide public goods (i.e. non-rivalrous and non-excludable benefits), as governments can erect political barriers to participation. They are arguably better described as non-rivalrous but excludable ‘club goods’, whose existence is dependent on cooperation between club members.

2 Use of the term ‘global energy governance’ to denote a conceptual approach to international energy politics (as distinct from an empirical description of global governance systems for energy) was pioneered by Goldthau and Witte [61].

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domain have shaped the energy policy strategies of both the EU and its member states, particularly with respect to Russia [50–53]. But despite these empirical contributions, attempts to theorise international energy politics in a non-systemic manner are scant. In the main, the geopolitical/global energy governance debate has functioned as an organising heuristic for the IR literature on energy politics during the last decade [3,4,22,54]. For this reason, it has become common to criticise existing IR theorisations and call for new explanatory models. Keating et al. [3] derisively characterise the field as having yet to move beyond a ‘states versus markets’ conceptualisation of energy. Reviewing scholarship on EU-Russia energy relations, Judge et al. [55] argue these framework have led to a ‘reductionist’ understanding which solely emphasises power politics and strategic interactions between states. Stoddard [4] links this to the systemic mode of theorising inherited from their structural realist and neoliberal institutionalist progenitors, and suggests a conceptual broadening to capture non-state actors and multiple political scales. Hughes and Lipscy [2] and Thijs van de [54] both emphasise the importance of including both domestic and international dynamics in our understanding of governments’ energy policy behaviour. To achieve these goals, Hancock and Vivoda [1] have suggested that insights should be borrowed from scholarship on the political economy of energy, which can help ‘put politics back in’ to the theoretical account. Collectively, these critiques suggest the need for the development of a new theoretical approach to the international coordination game that is energy interdependence. As securitisation is the process on which conflictual and cooperative outcomes turn, this should provide an explanation of the factors that determine whether and why governments securitise energy policy. To answer this question effectively, it must also move beyond the systemic level to integrate both the domestic and international dynamics behind the securitisation of energy policy. Indeed, moves beyond systemic theorising have precedent in broader IR theory. For example, Moravcsik’s [56] ‘liberal intergovernmentalism’ emphasises the importance of subnational groups in determining a state’s foreign policy preferences. In a similar vein, Putnam’s [57] ‘twolevel game’ theory argues that governments must simultaneously balance domestic pressures and international imperatives during diplomatic negotiations5. While such efforts to ‘bring the domestic back in’ have gained traction in broader IR analysis, IR approaches to energy politics specifically remain (implicitly) derived from systemic theories that exclude domestic factors. And while there have been repeated calls for the IR energy politics literature to make such as ‘post-systemic’ move, an explicit framework that achieves this goals has yet to be developed. The remainder of this article articulates such a framework, by developing a securitisation-based approach to explain inter-state energy politics.

and Witte [8] argue that the presence of international markets and supporting institutions function as ‘rules of the game’ for energy, which ameliorate conflict tendencies and encouraging positive-sum cooperation. Despite their radically different predictions, both IR accounts are united by their systemic mode of theorising. They conceptualise energy politics as a primarily international coordination game played between governments, and state behaviour is explained solely through inference to the debated nature of the ‘energy interdependence game' The debate is over whether the coordination game is zero-sum, securitised and conflictual; or positive-sum, non-securitised and cooperative. In this way, IR theorisations of energy politics reproduce the terms of the socalled ‘neo-neo’ debate between structural realism and neoliberal institutionalism [43]. Theoretically, this puts the IR literature on energy politics out of step with more recent developments in the field. During what Hobson [44] has labelled the ‘second state debate’ of the 1980s, many IR theorists challenged the systemic mode of theorising deployed by structural realism and neoliberal institutionalism. Systemic theories were criticised as being blind to the demonstrable impact of domestic politics on foreign policy, treating state preferences as an exogenous and unexplained given, and failing to pay sufficient attention to the differentiated institutional characteristics of states themselves4. These critiques of systemic IR theories are particularly relevant for the two IR accounts of energy politics. Their exclusion of non-systemic factors is highly problematic, as it means they fail to properly account for full range of dynamics associated with the securitisation of energy. Though debate between centres on whether energy policy is securitised or not, both approaches address this question through assumption rather than argument. The geopolitical approach assumes energy is securitised, solely due to its existential importance for economies and militaries. The global energy governance approach deploys a functionalist logic which assumes away securitisation, by pointing to the fact that markets and cooperation should provide better outcomes. By relying on these assumptions, neither explicitly attempts to theorise nonsystemic factors shaping governments’ decisions to consider energy a securitised issue or not. Indeed, their systemic bias means they lack the very conceptual apparatus needed to address this question. As Krasner [45] argued in an early contribution, national energy interests cannot be assumed logically-deductively from systemic international structures. States are not unitary actors, and energy issues are a highly-politicised domain of domestic politics. The debate between the geopolitical and global energy governance theories arguably hangs on a concept – energy securitisation – which neither has the capacity to properly interrogate. To be sure, these competing theoretical approaches are best considered as ideal types, rather than clearly-established paradigms. As a review by Stoddard [4] demonstrates, few studies of inter-state energy politics engage in explicit theorisation, with ontological premises drawn from broader IR theory often introduced only in an implicit manner. Furthermore, not all IR studies of energy policy fall neatly within this typology. Empirical case studies of particular countries’ energy relations routinely consider how domestic political institutions refract and influence the process of energy securitisation. Analyses of China frequently identify the role of Communist Party bureaucratic structures as a driver of its mercantilistic energy investments abroad [46,47], while those on Russia typically linking its aggressive energy diplomacy with Eastern Europe to the agenda of the Putin regime [28,48]. In contrast, the comparatively cooperative energy behaviour of the European Union [49] and Australia [41] has been linked to their status as liberal democracies, who favour market- rather than-state based approaches to energy interdependence. Several studies of European energy politics have examined how competing imperatives in the energy security

3. The drivers of energy securitisation: economic, regime and geopolitical interests The first step in building this framework is theorising the factors behind the securitisation of energy policy. Securitisation is the process by which a political group frames an issue as an existential threat to political order. This framing is used to legitimise the deployment of ‘extraordinary’ responses to the securitised threat [5]. Importantly, securitisation is a subjective and contingent process, rather than a feature inherent to a particular issue area. It occurs when powerful actors consider an issue as an existential threat to some set of values or interests, and move to discursively frame the issue in these terms [58]. In the case of government policy, the move to securitise an issue is typically undertaken either by policymaking elites directly, or following 5 Indeed, several case studies of international negotiations for energy agreements have made use of Putnam’s two-level game concept – inter alia see ([118]; [119] [120];).

4

For further critique of structural realism and neoliberal institutionalism as blind to domestic political dynamics, see Milner [116] and Powell [117]. 117

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where energy policy is securitised due to its outsized economic importance. Second, energy can also be securitised due to its role in cohering regime security. In energy-rich countries, political regimes often depend on the revenues generated by energy sectors for purposes of societal legitimation. A common example are so-called energy rentier states – whose political institutions are built around the capture of energy rents by the state, and their subsequent distribution amongst competing societal claimants [69]. In authoritarian rentier states, regime security is augmented by strict control over the distribution of resource rents. These allow regimes to engage in neopatrimonialism, finance repressive apparatuses and establish a ‘ruling bargain’ based on appeasement through rent distribution [70,71]. The archetypical example is the Gulf States, where authoritarian regimes’ societal legitimation depends on controlling the distribution of oil revenues [72]. But energy rents are also important for regime legitimacy in democratic rentier states. Many elites use ‘petro-populism’ – the use of energy revenues to ‘buy’ support from important popular constituencies – as an effective electoral strategy. Venezuela, Bolivia, Chile and Ecuador are amongst a group identified as ‘democratic resource rentiers’ in Latin America [73]. In countries with these rentier political institutions, energy securitisation is tied to the process of legitimising and securing political regimes. Third, energy issues also intersect with questions regarding geopolitical security. This is because patterns of energy interdependence can be strategically manipulated by states who hold powerful positions in international markets [74]. For producer states with a high degree of market power over a subsection of international markets, energy wealth can be used as a tool of diplomatic coercion [75]. Sometimes this behaviour manifests in a ‘negative’ form, where a government may withhold – or threaten to withhold – energy supplies in order to coercively demand behavioural changes from a partner. It can also take more ‘positive’ forms, where promises of preferential access to energy supplies are used as a behavioural inducement [10]. Russia’s energy behaviour during the 2000s exemplifies both forms of strategic manipulation. On one hand, it has threatened to withhold energy during a series of ‘gas disputes’ with several European customers. While Russia claims these disputes were commercial in origin, their timing near important diplomatic negotiations have led many to conclude they were an attempt at diplomatic blackmail [13]. On the other, it has also used subsidised energy to bribe friends – most notably in the Commonwealth of Independent States, where Russian-aligned states have been offered discounted prices on gas supplies [76]. The potential for the strategic manipulation of energy markets means consumer states must also take geopolitics seriously. The potentially catastrophic implications of interruptions to energy supply means many consumer governments do not treat energy as a normal economic policy issue. Rather, it becomes bound up with questions over geopolitical alignments and military security [77]. Relying upon energy producers which are perceived as politically ‘unreliable’ can add to the problem. For example, the European Union has become concerned about its heavy dependence on Russian gas, as a result of Russia’s use of energy threats against its neighbours [49]. Poor relations between consumer and producer governments can also stoke security fears. Chinese energy security anxieties partially stem from its dependence on oil supplied by American firms, which the Chinese government fears could be embargoed in the event of a security crisis between the two countries [46]. Oil from the Middle East has also long been considered risky, due to the presence of the OPEC cartel and the risk that terrorism or regional instability might see supplies cut-off. The Japanese government, which is highly dependent on Middle Eastern oil, has for many years been concerned that some form of crisis in that region would lead to an interruption of its energy supplies [78]. In these situations, it becomes impossible to disentangle energy security from broader national security concerns. Read collectively, these insights offer a superior understanding of energy securitisation than that offered by IR theories of energy politics.

pressure from interest groups which are politically-important constituencies for these elites. The implication of securitisation is that it allows for the imposition of policy measures that go beyond practices considered usual and normal for that issue area. Once energy is discursively framed as being a security threat by a government (or group of governments), it is considered ‘special’ and in need of state intervention to address [59]. What, therefore, leads governments to discursively frame energy as a securitised issue? While IR theories of energy politics have failed to unpack the causes of securitisation, there is an extensive body of non-IR literature on the politics of energy that can be drawn upon for theory building (inter alia [51,54,60–62]). Broadly speaking, this literature argues the importance of energy across many policy domains means that under certain conditions governments may elect to securitise energy policy. The causal relationships are complex, as energy has a bidirectional relationship with the broader security concerns of states. As Johansson (2013) has argued, energy systems may be considered both a subject of insecurity (i.e. that energy is a source of threat to certain interests); and/or an object exposed to insecurity (that security developments in other spheres may adversely impact on energy). Contextual conditions – particularly the specific technical and politico-economic features of a government’s own energy systems – also shape the way security threats are constructed by policymakers [50]. Despite these complexities, we can discern three ‘referent objects’ which states often consider to be under existential threat by developments in the energy sphere: their economic, regime and geopolitical security. First, energy is often considered an important economic security matter. In consumer states, this is associated with patterns of ‘external dependence’ upon energy imports and its impacts on domestic economic actors [25]. Relatively few states are sufficiently well-endowed with energy resources to be able to meet their needs from domestic sources, and therefore depend on energy imports from international markets. This leaves these economies dangerously exposed during upswings in global market cycles. Price rises act as a drain on the national balance of payments, pose inflationary pressures for industry, and reduce energy affordability for households. Moreover, the economic interests of a range of powerful interest groups – including energy-consuming industrial sectors, middle class households, and political elites connected to these groups – are threatened by price rises. They frequently exploit their political position to lobby for the securitisation of energy policy, and demand governments deploy protective measures [63]. One of the major demands made by these groups is consumerprotective energy subsidies: policies where governments reduce the price of energy through a range of trade, production and price control measures [64]. These subsidies are widespread across both the developed and developing worlds, with the IEA recently estimating their global value at $260 billion in 2016 [65]. These concerns also manifest in producer states due to the importance of energy for economic performance. Many economies, particularly in the developing world, rely on energy production as a driver of exports, state revenues and growth. This makes energy an almost existential pillar for national economic performance. Some economies are effectively energy-based, such as the Gulf States where oil and gas accounts for just under half of GDP and two-thirds of exports6. Some governments depend on these sectors to finance state budgetary expenditures. For example, during the height of the last global resource boom, approximately half of the Russian state budget came from oil and gas taxes [66]. Other governments use their energy revenues for a range of social and development policy purposes. Brazil has earmarked the proceeds of its ‘pre-sal’ oil reserves for education and poverty-reduction [67], while the Indonesian government has for many years used subsidised domestic fuel as a quasi-welfare measure for the urban middle class [68]. Despite their diversity, what unites these cases is a pattern

6

Author’s calculations, from ([94] various years). 118

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to domestic consumers. It also takes the form of attempts to capture economic rents for public purposes, via changes to fiscal policies which increase the taxation burden of energy firms [30]. By subjecting energy markets to these forms of state control, resource nationalism allows governments to control how energy rents are captured and distributed within an economy. This gives governments a high degree of decisional authority over the operation of energy industries, which can be used to address securitising pressures in the energy sphere. Resource nationalism is widespread amongst many of the world’s energy exporters. The Gulf States – which collectively produce a quarter of global oil supplies – have maintained extremely nationalistic policy regimes since the 1970s. State-owned enterprises (SOEs) dominate their energy sectors, whose revenues are used to finance the rentier institutions that politically-secure the ruling regimes [83]. They also maintain strict trade controls which facilitate participation in the OPEC oil cartel, which provides them considerably more geopolitical leverage than their small-state status would otherwise allow [84]. But during the global resource boom, other producers stepped up their nationalistic efforts. Russia renationalised its energy sector during the mid-2000s, following a tense political struggle between Vladimir Putin and a group of energy ‘oligarchs’. Three SOEs – Gazprom9, Rosneft and Transeft – now account the majority Russian gas production and all transit pipelines. These firms are politically-controlled by the siloviki, a faction of former security officers allied to Putin, who have been instrumental in insulating the regime against political opponents [48,85]. The Brazilian government of Lula da Silva also changed its oil investment regime in 2009, guaranteeing the SOE Petrobras a 30 percent stake in all new oil projects, and creating a ‘social fund’ to channel royalties towards education and welfare projects. These populist policies were designed as an economic security measure, to ensure that rising energy rents would contribute to poverty alleviation and the building of technical capacity in Brazilian industry [86]. However, economic nationalism is not limited to energy producing states. Many consumer governments deploy resource mercantilist strategies to safeguard their energy security. These are designed to lessen dependence on international energy markets, by having ‘national firms’ develop energy supply networks in foreign countries, rather than import from independent suppliers through international markets [87]. This is perceived to act as a hedge against energy insecurity, because national firms can ‘internalise’ price rises during booms (lowering cost pressures), and are expected to preferentially supply output to consumers in their home economy (mitigating supply risks) [88]. Governments support national ownership through a range of interventionist policies. Trade policies promoting the use of ‘equity oil’ supplied by national firms encourages the development of these networks [89]. State financial assistance can be offered, via investment subsidies for the acquisition of energy projects abroad [90]. Diplomatic efforts are also undertaken, which politically smooth the way for such investments by improving bilateral ties with energy-rich governments [91]. The primary objective of these mercantilistic policies is to address energy security concerns by establishing nationally-controlled supply networks abroad. These are perceived to be more reliable, and able to supply lower-cost energy, than reliance on volatile international markets [92]. Mercantilist energy security strategies have a longstanding history. However, during the recent boom they became especially common amongst energy consumers in Asia: Japan, Korea and China. As global price rises threatened their energy security during the mid-2000s, all three governments launched programs to build nationally-controlled supply networks abroad. The Chinese and Korean governments moved first, announcing policies in 2004 where state-owned EXIM banks would provide subsidised loans for the acquisition of mining and energy

First, they disaggregate energy securitisation as a multifaceted process. Governments securitise energy policy for a diverse range of economic, regime and geopolitical reasons; some of which are international in character, but others (particularly regime security) are largely domestic phenomena. These securitisation drivers are not mutually-exclusive, but complementary: some governments may only face one, whereas others may face all three7. Second, they reveal that energy securitisation is a conditional outcome, which depends on the presence of certain predisposing factors. The importance of energy rents to an economy, the nature of domestic political regimes, and a state’s geopolitical environment all bear on governmental decisions over whether to securitise energy policy or not. Third, they suggest that energy securitisation should be conceptualised as a continuous rather than binary variable, measured in terms of degrees rather than absolute presence/absence. As Chester [36] and Judge and Maltby [50] have argued, energy security is a complex concept with multiple meanings: while it is fundamentally about the management of risk, it can refer to a range of referents, which differ across time, markets and stakeholders. In international energy politics, securitisation is not an (assumed) constant but a (contingent) variable, with multidimensional drivers. 4. The consequences of energy securitisation: Economic nationalism and inter-state rivalry The second step in building this framework involves connecting energy securitisation to patterns of inter-state energy relations. One implication of securitisation is that it leads governments to deploy ‘extraordinary’ responses: measures which go beyond the established practices considered normal for a given-issue area [79]. By viewing an issue as posing an urgent threat to core values and interests, securitisation has a ‘mobilising power’ that justifies special intervention by government actors [59]. In the context of economic policy, a securitised issue becomes a ‘quasi-reserved domain’ in which economic logics are subsumed by national security concerns [80]. In the energy sphere, this typically takes the form of economic nationalist8 policy regimes. Governments which have securitised energy do not view these goods as ‘just another commodity’ to be left to market processes. Instead, states intervene extensively in the operation of energy markets, through a variety of discretionary trade, investment and production policies [38]. Governmental preferences for economic nationalism stem from the fact that these interventions give them a large degree of decisional authority over how energy markets operate, which can be used to manage perceived security risks [81]. In broad terms, two forms of economic nationalism can be distinguished: resource nationalism in producing economies, and resource mercantilism amongst consumers. Resource nationalism – a policy strategy based on state control of energy industries – is a common consequence of securitisation in producer states. It is rationalised by the idea that laissez-faire policies will not see energy wealth developed in a way that offers maximum benefits for the national economy, and instead sees states deploy interventionist measures to advance certain national goals [31]. A range of goals might be pursued. Resource nationalism may target the ownership of energy industries, through policies mandating some form of local- and/or stateownership of enterprises [82]. It can also attempt to shape the behaviour of firms through industrial policy interventions, such as local content rules, export restrictions, or the provision of subsidised energy 7 Saudi Arabia offers the archetype of the latter. With an economy dependent on oil rents, a political-regime based on rentier institutions, and geopolitical relationships underpinned by its role as an oil supplier ([121]), it simultaneously faces all three energy securitisation drivers. 8 It should be noted the phrase ‘economic nationalism’ has multiple meanings in the IR and political economy literatures. For the purposes of this article, it is defined as policies utilising state activism and intervention in the economy, through which governments ‘manage’ the operation of markets to achieve some set of politically-defined goals ([122]).

9 Gazprom is the largest of the Russian energy SOEs, and accounts for twothird of Russian production (with Russia itself holding a quarter of world natural gas reserves). See ([123]).

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encourages nationalistic and rivalrous approaches [98]. In a world of widespread energy nationalism, international markets will fail to perform as the mutually-beneficial structures predicted by the global energy governance approach.

projects abroad [93,94]. Japan followed in 2006, issuing a New National Energy Strategy which channelled credit through the state-owned Japan Oil, Gas and Metals Exploration Corporation [95]. All three also launched a series of ‘resource diplomacy’ programs at the same time, designed improve their diplomatic ties with supplier states and smooth the way for investment. Within a few years the governments had each established policy dialogues with a wide range of energy suppliers, including Australia, Brazil, Russia, Kazakhstan and the Gulf Cooperation Council [41]. The Japanese and Korean government have also set formal ‘equity oil’ targets, under which 40 percent of energy imports are by 2030 to come from nationally-owned projects abroad [95,96]. All three governments explained their mercantilistic strategies as a response to energy insecurity, associated with record high prices and ensuing global competition for scarce energy supplies [90]. These economic nationalist policies are significant for international energy politics, because they encourage governments to undertake rivalrous rather than cooperative behaviours. When energy is connected to economic, regime and/or geopolitical security issues, governments become inclined to view energy security as a fundamentally national concern. Adopting what Dubash [97] has labelled an “inwardlooking” perspective, governments address energy insecurity through nationalistic policy responses undertaken independently of others. This involves a reframing of energy security which downplays the benefits of interdependence: rather than approaching it as a collective problem to be resolved through joint action, it is viewed as a national problem to be addressed through ‘go-it-alone’ state interventions. Moreover, this securitised-nationalistic framing can determine the balance between the cooperative and conflictual behavioural identified by the existing IR theories. By prioritising a zero- rather than positive-sum conception of energy interdependence, securitisation can lead to the type of adversarial behaviour between states anticipated by the geopolitical approach [11]. Compounding matters, securitisation can also raise governments’ sovereignty-consciousness in the energy sphere. When energy is securitised, governments become highly protective of their policy autonomy, to ensure they have ‘room to move’ in order to respond to security risks. If cooperative initiatives are based on energy policy liberalisation, they also run up against preferences for economic nationalist policies that allow governments to intervene aggressively in energy sectors [39]. By raising the perceived sovereignty costs of energy cooperation, these dynamics make ‘hard law’ forms of energy cooperation – based on precise and legally-binding agreements with delegated enforcement – almost impossible. Governments instead prefer sovereignty-protective approaches operating along ‘soft law’ lines, which are based on informal processes and voluntary adherence to broadly-defined principles [6]. However, because soft law cooperation lacks mechanisms for monitoring and enforcement, it does little to improve trust between states, or ensure compliance with agreements. By undermining cooperation, sovereignty consciousness creates a poorly-institutionalised environment which is prone to the outbreak of inter-state energy conflicts. These dynamics also have the effect of what Kuzemko [59] labels the ‘politicisation’ of energy markets. Due to economic nationalist policies, international energy markets are subject to a much higher degree of state control than occurs in many other sectors. Trade and industrial policy interventions undermine the openness of markets, by placing restrictions on the production, investment and trade decisions of energy firms [41]. The presence of SOEs weakens transparency, by potentially subjecting international markets to political interference by state agencies [83]. Subsidies similarly distort the operation of price signals, reducing the efficiency of international markets and their ability to act as genuinely ‘public’ goods [68]. Whatever the form of state intervention in question, energy markets become politicised. As a result, governments lose confidence in their openness, reliability and economic efficiency. States become wary about relying on international markets for their energy security, triggering a vicious cycle which further

5. Securitisation as the driver of international energy politics These insights into the politics of energy securitisation enables the articulation of a new theoretical account of inter-state energy politics. Consolidating the previous arguments, we can sketch an explanatory model that causally links energy securitisation to dynamics of interstate conflict and cooperation. When economic, regime and/or geopolitical securitising pressures are high, governments tend to respond with economic nationalist policies in order to manage threats to their security. These nationalistic policies create an international environment prone to the outbreak of inter-state energy conflict, by encouraging rivalrous behaviour, undermining cooperative initiatives and politicising markets. Conversely, when these securitising tendencies are low, governments are more likely to adopt liberal policy frameworks. These instead lead to cooperative behaviour, by augmenting markets and enabling cooperation for shared energy goals. In this way, securitisation is the variable which determines whether state energy behaviour conforms to the two logics predicted by the competing IR approaches. When securitisation is high, the conflictual behavioural logic is dominant; whereas low securitisation enables cooperative outcomes instead. Causally linking securitisation to patterns of international energy politics poses a further explanatory question: Under what conditions are governments likely to securitise energy policy? As noted prior, securitisation is not an inherent feature of energy politics, but a rather a politically- and economically- contingent process. It depends on the extent to which energy issues intersect with the broader security interests of governments, and the political processes through which they perceive these interests to be under some form of existential threat. Here, we can draw two conclusions regarding the conditions under which governments are likely to securitise energy policy. First, energy securitisation is positively correlated with the state of international markets. Energy markets are highly volatile, characterised by boom-and-bust cycles driven by lags between demand, investment and new supply. As Wilson [127] and Vivoda [31] have argued, these economic cycles also create cycles of ‘politicisation’. Booms produce high prices which undermine the energy security of consumers, leading to political pressure on governments to respond with mercantilistic energy security strategies. They also deliver windfall profits to producer groups, which allows energy-rich states scope to demand a greater share of the gains through nationalistic policies. During busts, the logic operates in the reverse direction. As prices fall, producer states are likely to avoid nationalistic interventions that undermine the competitiveness of their energy industries; while in consumer states anxieties over energy insecurity are lessened. Securitising pressures are therefore positively correlated to cycles in world energy markets, rising during booms and falling during busts. However, while energy market cycles create secular tendencies in securitisation, their effects are not uniform across all states. As noted prior, energy security is a polysemic issue with multiple referents. Governmental moves to securitise energy are connected to a diverse set of economic, regime and geopolitical security concerns, which naturally vary between states. National contexts refract securitising pressures which exogenous originate from market cycles, and some governments are therefore more prone to treat energy as a securitised issue than others. Based on the preceding discussion, we can distil a range of statespecific factors that predispose governments to undertake securitising moves:

• Economic-type securitisation is connected to the relative importance

of energy to an economy. Consumer economies which are highly ‘externally dependent’ on imports are more exposed to adverse

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•

•

6. Using securitisation to explain energy behaviour: comparing Australia and Russia

movements in international markets, and sees energy security become an acute policy concern. In producer states where energy makes an especially large contribution to the national economy, governments also consider energy an existential matter. Countries with less external dependence and/or more diversified economies are less exposed to these risks, and thus less prone to securitising energy on economic grounds. Regime-type securitisation is a function of domestic political institutions. It is common in both authoritarian and democratic rentier states, where political regimes depend on energy rents for societal legitimation. Conversely, it is less likely in diversified and developed economies, where there are fewer connections between energy and the security of political regimes. Geopolitical-type securitisation occurs when energy issues intersect with a governments’ broader diplomatic concerns. If producer states use energy as a diplomatic tool – either as a form of coercion or inducement – this can contribute to a politicisation of energy interdependence. For consumer states, rivalries with suppliers and/or reliance on ‘unreliable’ suppliers can see energy and national security concerns become intertwined. When diplomatic producerconsumer relations between producers and consumer are more harmonious, these tendencies are lessened.

A comparison of the international energy behaviour of Australia and Russia illustrates the explanatory utility offered by this securitisation approach. Australia and Russia provide a useful test case, as they occupy similar structural positions in global energy markets (Table 1), yet have displayed quite different international energy strategies. Both are amongst the world’s top ten hydrocarbon producers, with export-oriented coal, gas – and in Russia’s case, oil – sectors. Geographic differences mean they supply slightly different markets: Australia’s location on the Pacific Rim links it primarily to Asia-Pacific markets; whereas Russia’s position at the fulcrum of Eurasia sees it export to both European and Asian customers. Yet despite these similarities, the two countries played dramatically different roles during the global boom of the 2000s. Russia adopted a stridently nationalistic approach to energy policy, and was drawn into intergovernmental disputes over trade and investment with its customers; whereas Australia favoured a liberal policy framework and was able to maintain cordial relations with partners. These divergent outcomes cannot be explained with reference to systemic factors alone. Rather, they are due to state-specific differences between the securitisation drivers in Australia and Russia. First, energy has different economic security significance in the two countries. In Russia, the energy sector is of existential importance for national economic performance. Energy rents accounts for 9 percent of GDP, and almost two-thirds of total exports. Energy is also a major source of government revenue. In 2015, oil and gas royalties accounted for 43 percent of fiscal revenue, and Russia has consistently run a ‘nonoil budget deficit’ in every year since the economic reforms of the late 1990s [66,99]. In this respect, Russia shares features with the ‘oil rentier’ Gulf States, whose economies are structurally dependent on the energy sector for investment, exports and tax revenues. In contrast, Australia has a developed and diversified economy. Energy rents account for only one percent of GDP, and a quarter of exports. Royalties are also a significantly less important source of government revenue, with federal Australian energy taxes accounting for a measly 0.12 percent of GDP [100]. While energy exports make a significant contribution for both, economic dependence on this sector – and the securitisation implications this carries – are far more pronounced in Russia than Australia. Second, the regime security implications of energy are dramatically different. In Russia, the energy sector has been critical to the rise and consolidation of the authoritarian Putin regime. After taking office in 2000, Vladimir Putin was drawn into a political battle against a group of so-called ‘oligarchs’: billionaires which had acquired former state assets (including most energy companies) during Russia’s privatisations

These insights can be combined to explain inter-state energy behaviour as a function of securitising pressures (Fig. 2). Energy securitisation is conceptualised as a variable, which differs due to market cycles and state-specific factors. Where their presence leads a government to securitise energy, they respond with economic nationalist policies. These policies then create an environment conducive to interstate conflict, by encouraging individualistic approaches to energy security, politicising markets, and lowering the likelihood of international cooperation. By corollary, when states do not face these securitising pressures, the alternate logic is at work. Governments are less prone to securitising energy, and instead adopt liberal policies based on market mechanisms. By encouraging collaborative approaches and augmenting the role of mutually-beneficial markets, cooperative energy security strategies become viable. In this way, securitisation is the variable that determines which behavioural logic is dominant. Higher levels of securitisation contribute to the conflictual behaviour expected by the geopolitical approach, while lower securitisation enables the cooperative behaviour predicted by global energy governance approach to occur instead.

Fig. 2. Securitisation and governmental approaches to energy interdependence. 121

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Table 1 Australia and Russia as energy exporters, 2015. Source: Author’s calculations, from [113,114].

Energy production

Energy exports

Total production Share world production Rents share GDP Exports Share world energy exports Share national exports Share GDP Principal customers

Australia

Russia

387 mtoe 3.4% 0.9% $47.5 billion 2.5% 25.3% 3.9% Japan (19%), China (13%), India (9%), Korea (8%), ASEAN (7%)

1245 mtoe 10.8% 9.4% $216.1 billion 11.4% 62.8% 16.3% EU (56%), China (13%), Japan (5%), CIS (6%)

Note: mtoe is ‘million tonnes of oil equivalent’.

during the 1990s. As several oligarchs – most prominently Mikhail Khodorkovsky – had public opposed Putin, the regime sought to eliminate their influence by re-nationalising the energy sector [101]. From 2004 legal pressures were applied to force the oligarchs to cede control of energy firms to the state; while the siloviki, a Putin-aligned faction of former security officials, were rewarded with posts in the newly stateowned energy firms [102]. Khodorkovsky was also charged and jailed for alleged tax-fraud, a move which set an example for the other oligarchs not to oppose Putin’s rule [85]. In Australia, such linkages between the energy sector and regime security is entirely absent. As an established liberal democracy with a privately-owned energy sector, successive Australian governments have not sought to control or manipulate the industry to secure their political fortunes. Third, energy plays a more prominent role in Russia’s geopolitical security. While both governments have sought to leverage the recent global resource boom for diplomatic gain, their strategies are differentiated by objective and degree. Australia’s energy diplomacy has principally economic, directed at developing closer energy relations with its customers in Northeast Asia who were keen to build energy links with important suppliers. These efforts have included the negotiation of free trade agreements with China, Japan and Korea; and in the case of China the promotion of inward foreign investment in the Australian resource sector [103]. For Russia, energy diplomacy has instead served geopolitical goals. Energy is one of Russia’s most significant diplomatic assets, as it currently produces 11 percent of world output and supplies 21 percent10 of Europe’s imports. Since the early 2000s, many officials – including Putin himself – have explicitly described Russia as an ‘energy superpower’, whose international standing is at least partially based on its energy wealth [28,101]. Russia has used energy to ‘bribe friends’, most notably via the provision of subsidised energy to favoured partners in Eastern Europe. However, it has also threatened gas supply suspensions against other Eastern European governments as an economic sanction [76]. Due to these securitising pressures, during the 2000s the Russian government adopted one of the most nationalistic energy policy frameworks in the world. The first step involved the partial or full renationalisation of all the country’s major energy projects. By the completion of this process in 2012, three SOEs – Rosneft (oil), Gazprom (gas) and Transneft (pipelines) – controlled half of national oil production, three quarters of gas production and all domestic and international pipeline infrastructure [104]. Since 2008, energy has been part of group of ‘strategic sectors’ for which government permission is required for foreign investment [105]. Its trade regime gives the state de facto control of energy export flows: with renationalisation seeing Transneft or Gazprom control all pipeline energy movements, and Gazprom holding a legal monopoly over gas exports. For these reasons, the World Trade Organization considers the Russian energy sector as subject to ‘state trading’ [106]. Russia is also the world’s fourth-largest energy subsidiser, with Gazprom supplying local markets at below-

10

world prices while recovering costs from export sales. The value of Russian energy subsidies was $28 billion in 2016, equivalent to 2.2 percent of GDP [65]. This combination of nationalisation, investment, trade and subsidisation policies means the Russian energy sector is subject to very high levels of state intervention. In contrast, the comparative absence of securitising pressures meant the Australian government maintained a decidedly liberal policy framework through the mid-2000s boom. Eschewing the range of interventionist policies deployed in Russia, it is private firms and market mechanisms that determine behaviour in its energy sector. Australia has no rules requiring state ownership in the energy sector, no SOEs, and no history of nationalisation. The Australian government does not impose any restrictions on the private trade activities of energy firms; nor maintains any price controls or subsidy policies. It also has a very open foreign investment regime, and has not rejected a foreign investment in the energy sector for several decades [103]. The Australian government explicitly describes this as a “market-based” approach to energy policy, rationalised by the view that well-functioning markets provide a more efficient, reliable and commercially-attractive energy sector than the more nationalistic alternative [107]. However, this decision also reflects Australia’s distinct political and economic context. As a developed country with democratic political institutions and a market-based economy, it simply does not face the economic, regime or geopolitical forms of securitisation evident in authoritarian and energydependent Russia. Russia’s securitised and nationalistic energy policy has led to several energy disputes with international partners. On the trade front, it has become involved in a series of gas disputes with former Soviet states, where Russia has used the ‘energy weapon’ as a form of sanction. The most notable cases have targeted Ukraine, whose gas supplies from Gazprom were suspended from three days in January 2006 and twenty days in January 2009. However, many others have been threatened with gas suspensions, including Belarus, Czech Republic, Estonia, Georgia, Latvia, Lithuania, Kyrgyzstan and Tajikistan. The timing of these threats during critical diplomatic negotiations have led many to conclude they were a deliberate attempt to blackmail gas customers11. They have also severely harmed Russia’s energy relations with EU governments, who became anxious that dependence on Russian gas may see them also become a target. To mitigate against this risk, the EU’s 2009 Energy Directive contained a so-called ‘Gazprom clause’ which enabled member governments to vet gas transport infrastructure investments to address such supply security risks. Subsequent efforts have also been undertaken to develop new pipelines, including the Nord Stream, South Stream and Southern Corridor projects, which will lessen exposure to Russian gas threats [49]. Russia’s energy trade conflicts with Europe were also matched by investment disputes with Asian customers. In the mid-1990s the Russian government moved to open energy exports from Sakhalin, a hydrocarbon-rich island in the Pacific. Given its proximity to Japan,

11

Author’s calculations, from ([115]). 122

Author’s summary, from ([124]; [102]; [76] [125];).

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two consortia – including both Japanese and international energy companies – signed contracts in 1994 to develop projects aimed at gas exports to the Japanese market. However, as Russia turned toward resource nationalism during the 2000s, the projects quickly ran afoul of Russian objectives to guarantee Gazprom’s monopoly over gas exports [108]. In 2006 the Russian government revoked the projects’ environmental approvals, in a move designed to prevent construction of export infrastructures. The Sakhalin-I project was forced to abandon its export plans, instead building a pipeline connecting it to the Gazprom-controlled domestic grid. In a deal personally-negotiated by Putin, the Sakhalin-II consortium was forced to sell a 50 percent stake to Gazprom in December 2006. Once these concessions to Gazprom’s export monopoly were made, the environmental challenges to both were dropped [48,102]. While these concessions enabled both projects to proceed to production, neither was able to install the required infrastructure to enabled intended exports to their Japan investors, and their trade activities remain under the control of Gazprom. Australia’s liberal energy policy framework has seen it avoid these types of disputes with its partners. Like Russia, Australia became a major gas player during the 2000s boom, developing a series of five massive export-oriented projects aimed at the Japanese and other Asian markets12. But unlike Russia, these gas projects have proven relatively uncontroversial internationally. As Australia has no major restrictions on foreign investment in the energy sector, and no energy SOEs whose market position had to be defended, foreign participation in gas development has been welcomed. All five projects were developed by international consortia, in which Japanese companies (as the principal customer) were represented. Indeed, the imperative of gas cooperation between Australia and Japan has positively contributed to a range of broader diplomatic relations between the countries. It featured in the establishment of ‘Comprehensive Strategic, Security and Economic Partnership’ between the two countries in 2008, and the 2014 decision to upgrade this to a ‘Special Strategic Partnership’ [109,110]. Their bilateral free trade agreement negotiated in 2014 also included an ‘energy and mineral resources’ chapter, which committed the parties to a range of cooperative measures designed to ensure the security and stability of energy trade [111]. Where the natural gas trade politically divided Russia and its customers, it brought Australia closer to its. A comparison of Russian and Australian behaviour during the recent global boom demonstrates the utility of using securitisation to explain international energy relations. Despite occupying structurally-similar positions as exporters, and in the case of gas participating in the same Asian markets, the governments approached energy interdependence in radically different ways. In Russia, energy is a highly securitised policy domain, given its outsized economic importance, its role in the consolidation of the Putin regime, and salience as a diplomatic tool. For Australia, its differing national context meant these securitising pressures were considerably lower, meaning that energy not subject to the same degree of securitisation. This produced opposing policy frameworks and a marked divergence in their international energy relations. Russia’s securitised and nationalistic approach to energy saw it enter into trade and investment disputes with partners in Europe and Asia; while Australia’s liberal policy framework facilitated cooperative relations instead. Importantly, systemic factors alone cannot account for these differences. Differential patterns of energy securitisation, and the forms of international behaviour that result, can only be explained by opening the black box of the state to explore the influence of securitising pressures across different national contexts.

7. Conclusion: the political economy of international energy politics A securitisation approach provides a better and more nuanced understanding of international energy politics than offered by existing IR theorisations. By revealing that energy securitisation is a contingent and multifaceted process, and connecting this to patterns of inter-state energy relations, it provides a toolkit with which changing developments in the international energy sphere can be explained. Adopting the securitisation approach developed in this article offers three advantages for the study of the international politics of energy. First, by explaining international energy relationships as an outcome of securitisation, it rectifies the systemic bias inherent in geopolitical and global energy governance theories. The conceptualisation of energy politics is expanded beyond the systemic level, reflecting the fact that energy is implicated in a diverse range of domestic and international policy concerns. It is sensitive to the fact that governments approach energy interdependence in different ways, due to variations in their economic structures, political institutions and geopolitical relationships. Perhaps most importantly, it fills in a missing variable by explaining – rather than assuming, or assuming away – the securitisation process. Systemic theories, which deduce state behaviour from the claimed structure of the energy coordination game, lack the conceptual apparatus needed to interrogate these state-specific factors. As the cases of Russia and Australia illustrates, these state-specific factors are critical in shaping how governments differentially respond to (otherwise common) exogenous changes in global energy markets. By bringing together both domestic and international dynamics, a securitisation approach opens the black box of the energy policymaking process in a way that systemic IR theories cannot. Second, this offers a ‘middle path’ between the predictions of the existing IR approaches. As noted prior, these theories provide competing and incommensurate accounts. The geopolitical approach claims that the zero-sum and securitised nature of energy interdependence will inevitably drive conflict; while the global energy governance account argues positive-sum dynamics instead enable intergovernmental cooperation. The approach outlined here suggests that both behavioural logics are potentially possible, with the balance determined by presence of securitisation drivers. When these are high – as a result of market cycles, and/or the political features of particular states – conflictual behaviour predicted by the geopolitical approach becomes the norm. When securitisation pressures are lower, the cooperative logic outlined by the global energy governance approach instead become dominant. As the cases demonstrate, the differential presence of securitising factors accounts for why governments in structurally similar positions adopt either conflictual (Russia) or cooperative (Australia) approaches to energy interdependence. Finally, adopting a political economy approach enables a move beyond the reductive and widely-criticised ‘states versus markets’ debate that presently characterises the IR literature on energy. Preceding by assumption, this debate offers little guidance as to how energy politics may develop in the future. By contrast, a securitisation-based approach offers clear predictions. It suggests that market cycles are an important factor, with booms driving conflict and busts supporting cooperative behaviour. But it also suggests that state-specific factors matter in how governments respond to securitising pressures. Rentier states, those with high levels of economic dependence on energy, and those with problematic diplomatic relationships are especially likely to engage in conflictual behaviour. Developed economies, democracies and those with stable geopolitical positions are less prone to these tendencies. This provides a far more nuanced account of international energy politics than the universalising perspective offered by IR theories, by understanding energy politics as a complex and politicallycontested domain of the contemporary international political economy.

12 These included the Wheatstone, Gorgon, Pluto, Prelude and Ichthys projects. Their combined investment value was AUD166 billion, and will install capacity for 40 million tonnes per annum of liquefied natural gas. See ([126]).

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