Offshore oil development and maritime conflict in the 20th century: A statistical analysis of international trends

Energy Research & Social Science 6 (2015) 1–7

Contents lists available at ScienceDirect

Energy Research & Social Science journal homepage: www.elsevier.com/locate/erss

Original research article

Offshore oil development and maritime conflict in the 20th century: A statistical analysis of international trends Elizabeth Nyman ∗ Department of Political Science, University of Louisiana at Lafayette, Lafayette, LA 70504, United States

a r t i c l e

i n f o

Article history: Received 31 July 2014 Received in revised form 23 October 2014 Accepted 24 October 2014 Keywords: Offshore oil Maritime conflict Law of the Sea

a b s t r a c t The breakdown of the 300 year old Grotian regime of freedom of the seas and the subsequent rise in confusion as to acceptable claims for maritime waters is generally reported to date to somewhere towards the middle of the 20th century. It was also around this time that offshore oil developments made states look seriously to protecting their previously mostly ignored continental shelf. The problem looked to be intractable given the failure of the first UN Conference on the Law of the Sea to produce an answer to the question of acceptable territorial sea limits. In this paper, I look to see how the rise in utilization of maritime resources impacted the likelihood of international maritime conflict, focusing in particular on offshore oil and gas. Did the rise in exploitation of these resources (or the fear of such) impact the likelihood of conflict? I examine data on maritime conflicts from the 20th century in the Issue Correlates of War project to determine what, if any, effect the rise of the offshore drilling industry had on the development of maritime conflict. © 2014 Published by Elsevier Ltd.

Offshore oil and gas remain an important part of global energy production. A report by the National Petroleum Council in the United States indicates that the sector has seen high levels of growth in the late 20th century to today, with offshore oil growing from 1% of total production in 1954 to over 25% in 2008, and offshore natural gas seeing a similarly steady though less dramatic rise from 1% to 11% in the same time frame [1]. Likewise, a recent report from Germany’s Bundesanstalt für Geowissenschaften und Rohstoffe [Federal Institute for Geosciences and Natural Resources] shows that additional offshore production is either coming online or is soon to do so in multiple areas of the world [2]. Yet while offshore oil and gas resources continue to grow in importance in various areas around the world, they do so in an international environment which remains somewhat contentious. Many of the world’s maritime boundaries have yet to be definitively demarcated, a product of the difficult and dissenting positions that various states took during the 20th century collapse of a 300 year old governance regime known as “freedom of the seas.” The demise of this regime, and the rise of a new system of marine governance to replace it, occurred at the same time in which we saw the rise of offshore oil and gas extraction. As a result, the discovery and utilization of offshore resources would take place at a time when

∗ Tel.: +1 337 482 5693. E-mail address: [email protected] http://dx.doi.org/10.1016/j.erss.2014.10.006 2214-6296/© 2014 Published by Elsevier Ltd.

maritime holdings were extremely contentious – and sometimes prone to conflict. Developed at the turn of the 17th century by a Dutch jurist named Hugo Grotius, the freedom of the seas doctrine posited that the oceans were free and open to all, because one person’s use of the waves and their resources would not prevent another from using them for himself. This doctrine obviously did not allow for the utilization of nonrenewable offshore resources such as petroleum, since this practice was unknown during Grotius’s lifetime. But during the first half of the 20th century, the relatively new petroleum industry was discovering that water was no permanent impediment to drilling. Rigs were inching out from the coasts, into Louisiana swamps and Venezuelan lakes, into the Caspian Sea and the Pacific Ocean. Thus, by the midpoint of the century, it was clear that the freedom of the seas doctrine was outdated. It simply could not protect states’ offshore resources, and thus many felt that it needed to be updated or replaced. The resultant change in international maritime law and governance was a process that took well over half the century, and produced a miasma of confusion and conflict. The United States claimed ownership over its continental shelf space in the Truman Proclamation of 1945. In so doing, President Truman and others in the US hoped to protect the continental shelf and its petroleum resources without making grandiose claims over marine waters, thus preserving the bulk of the Grotian doctrine. It was not to be. In 1947, Chile and Peru claimed control of the waters up to

2

E. Nyman / Energy Research & Social Science 6 (2015) 1–7

200 nautical miles off of their coasts, with Ecuador following a few years later. This confusion was only partially mitigated by the development of the United Nations Convention on the Law of the Sea (UNCLOS) in 1984. UNCLOS attempted to standardize our understanding of acceptable maritime claims from shore: territorial sea to 12 nm, Exclusive Economic Zone providing access to resources out to 200 nm, continental shelf out to 200 nm with the ability to petition for up to 350 nm [3]. But disagreements in interpretation and rejections of various parts of the treaty mean that much of the world’s maritime boundaries were still in flux after its negotiation and acceptance, and remain so today. A lack of maritime boundaries does not necessarily produce conflict, but when combined with a growth in the profitability in maritime resources such as offshore petroleum, it seems likely to increase the likelihood of international disputes. My paper aims to unpack the general consideration of confusion and disputes over maritime spaces in the 20th century by considering militarized disputes along one major maritime resource, offshore oil/gas. There are many reasons why a closer look at maritime conflict over offshore oil and gas resources may be warranted. First of all, such reserves are intrinsically valuable to states for their economic value and for their potential military applications. But secondly, there are specific events in the development and application of offshore oil technology that can be dated and studied. This means that, if we are interested in development over time, we can pinpoint where and when such resources became accessible, and see if that accessibility led in turn to an increase in global conflict over these particular resources. Given the history of the development of maritime competition, we should see a greater propensity to consider the use of force after access to the resource in question has definitively changed. I focus on the development of the offshore oil industry throughout the 20th century to measure the impact of discrete and observable technological developments on the likelihood for maritime conflict. I find that in the case of maritime claims with offshore oil, that an increase in conflict can be tied to an increasing sense of resource scarcity that is tied to a particular tipping point in time. This tipping point comes in 1947, with the successful creation of an offshore platform that could drill for oil and gas out of sight of shore. Before this first successful offshore rig, the idea of extracting oil and gas from undersea reserves was largely a hypothetical, and as long as rigs were still tied to the shoreline, there would be little reason for international disputes to take place over offshore reserves. But as soon as the first rig freed petroleum companies from their ties to land, the situation changed and states could reliably believe that reserves in disputed waters could someday be accessible. This in turn led to an increase in the likelihood of a militarized interstate dispute over such waters. This article is an attempt to add to the discussion of energy concerns within the social sciences, specifically considering the potential for international conflict over energy resources. As Sovacool [4] notes, a broader discussion is needed about conflict over energy, and this paper helps to add to this growing literature with a focus on international maritime conflict. International relations, the field which generally addresses concerns about international conflict and security, has not addressed energy questions in the kind of thorough, meaningful way that we might expect considering the importance of the resource [5]. Yet, as Colgan [6] points out, we know so much about how energy resources, particularly oil, impact the politics of states which possess them, and that these states tend to utilize different foreign policy strategies. Depending on the type of leader, they also can initiate international conflict at a greater rate than those without these resources [6]. Furthermore, this brings in a discussion of energy politics to the ongoing work on international maritime conflict [7–9]. Thus, my findings can

illustrate the importance of these resources to states, concurring with Colgan and others, while still contributing to a broader question within energy politics, energy studies, and international conflict. 1. Background Oil is not a new discovery. At the beginning of the 20th century, petroleum was already a recognized and standardized commodity. John D. Rockefeller’s Standard Oil had already attracted the interest of muckraker Ida Tarbell by 1900, and her book on the topic would appear just a few years into the century [10,11]. But at the beginning of the century, petroleum was a commodity still in search of a purpose. Throughout the 19th century, engineers, inventors, and scientists had run enough experiments on petroleum to understand its qualities, and even to begin to use some of its derivatives as a replacement for products like whale oil, but there was as yet no driving need to provide the commodity to oil-seeking masses. Of course, that would soon change. The invention of the automobile would soon result in more Americans and Europeans needing petroleum and its distillation, gasoline, as a matter of everyday life. It was the eventual dominance of the internal combustion engine that would prove so important for the oil industry [12]. This dominance, however, was driven less by the incredible efficiency of the engine, though it did perform well, and instead was more a result of historical events. The immense popularity of Henry Ford’s gasoline powered Model T, an affordable and reliable car in the United States, was one such factor. But the outbreak of war was probably the most influential factor in assuring the dominance of the gasoline powered petroleum economy. In World War I, the Allies purchased thousands of trucks and cars – and specified that those with the internal combustion engine were to be favored [12,13]. Similarly, the United Kingdom switched its navy from coal power to gas power during the war as well [14]. A couple of decades later, World War II would highlight this new importance of petroleum that was developing. Battles were fought over important oil fields during the war, as Japan and Germany alike aimed to control their access to petroleum [15]. This access, however, would not prove enough to dominate the oil wealth of their enemy, the United States. Memories of the war would live on in the Cold War years. Access to petroleum was now definitively a security issue for the developed world, as decolonization limited most developed states’ resources despite both military and domestic civilian reliance on the resource. The notable exception to this was the world’s hegemon, the United States – but even their consumption would outgrow production by 1970 [14]. By the time that the Persian Gulf War occurred in the early 1990s, there was an understanding in the US that access to energy was vital to US national security interests [16]. This would not change in the waning days of the century, and was widely expected to continue into the 21st century as well [17]. At the same time, civilian use of petroleum was rising as well. The most notable culprit there was the use of gasoline in cars, as the internal combustion engine was well established as dominant by the latter part of the 20th century. Gasoline use rose in the post-war period as the developed world enjoyed the benefits of peace. This was particularly true in the US, which had been spared the damage that Europe had suffered. According to data from the US Energy Information Agency, US annual consumption of gasoline rose from a little under 600,000 thousand barrels in 1945 to over 3,000,000 thousand barrels by the end of the century [18]. Though their data on world consumption of gasoline and other petroleum products does not date back as far, the USEIA also shows that world consumption of petroleum has risen from just over 63,000 thousand

E. Nyman / Energy Research & Social Science 6 (2015) 1–7

barrels per day in 1980 to close to 77,000 thousand barrels per day in 2000 [19]. This is due not just to a rise in personal automotive ownership and use, but in the incorporation of petroleum products into everyday life in dozens of ways over this period, from jet travel to the ubiquity of plastics. By the end of the 20th century, people everywhere used petroleum, and their states held the resource dear. This growth in use over the 20th century meant that there had to be a continual expansion of places from which petroleum could be successfully located and extracted. States, companies, and inventive individuals had to search for new sources of this nonrenewable resource that would allow for profitable extraction. The ocean was a natural place to look. By the late 19th century, many hydrocarbon deposits had been found near the shore line, and it did not take a great deal of imagination to guess that perhaps that meant that there were deposits out past the shoreline as well. The earliest offshore rigs consisted of drilling platforms that stretched over water by use of docks and piers [20]. These platforms, of course, were not particularly far out to sea. They drilled in a few feet of water, and were never tremendously far from land given the amount of effort necessary to construct the required dock. While the earliest offshore rig in 1896 was off the coast of California [21], early 20th century offshore drilling tended to take place not at sea, but in swamps and over lakes. This was due to the early reliance on docks as staging grounds. But the search for oil and gas submerged under water was global from the beginning – drilling over Caddo Lake between Louisiana and Texas began in 1911, over Lake Erie in 1913, over Lake Maracaibo in Venezuela in 1917, and over the Caspian Sea in 1923 [20]. While there was relatively little drilling in the world’s oceans during this time period except in California, petroleum companies were continually refining their abilities to locate and extract oil and gas from reserves located under water. Lake Maracaibo drilling in particular was influential in moving forward offshore technology. The water in Lake Maracaibo was relatively deep (out to 120 ft), and it was mixed with salt water [21]. This latter meant that shipworms living in the brackish water attacked the common materials used for freshwater lake drilling, like wood pylons, and thus new solutions had to be found [21]. The concrete and steel replacements set the standards for later offshore maritime drilling. Lake Maracaibo was also inspirational for offshore drilling technology improvements in other ways. In 1928, an American named Louis Giliasso came up with what he thought was a better idea to drill for oil in Lake Maracaibo through the use of a barge [20–22]. He had no takers for the idea, though, and gave up on the plan. A few years later, when oil company Texaco considered the exact same idea of drilling from a barge, they found Giliasso’s patent and needed to track down the man to get permission to use his designs [20]. This was easier said than done; having given up on getting Lake Maracaibo drilling companies to try his idea, Giliasso had left the country. Texaco did not find him until 1933 – in Panama, where he’d changed careers and was now operating a bar [21]. Texaco quickly put his ideas to work, and in that same year began drilling in Lake Pelto, Louisiana, in shallow offshore waters [21]. As the 20th century continued, two things became obvious. The first was that the oil and gas industry was eventually going to be able to drill offshore in the open ocean, though where and when that breakthrough would happen remained unknown. And secondly, in the wake of two world wars, it was equally obvious that oil and gas would remain highly valuable commodities. In this atmosphere, then, President Truman entered the ongoing and aforementioned great debate on the future of the world’s ocean regime.

3

The United States was strongly committed to maintaining the original Grotian regime calling for a limited territorial sea combined with absolute freedom on the high seas. This position was a natural result of US naval dominance; as long as the US felt it could protect its own shores, there was no need for a greater enclosure of space. Furthermore, a larger territorial sea could potentially impact the US Navy’s ability to position ships around the world as needed, and thus could interfere with US security interests. The US thus had little desire in seeing the Grotian regime dismantled, and was unwilling to take steps that would lead in that direction. On the other hand, when the Grotian regime was created, the only oceanic resource of interest was fish. Fish are a renewable resource, and at the time of Grotius’s writing, it was perfectly reasonable to think that any fish caught by a ship would be replaced by the birth of new fish over time. However, hydrocarbon resources are obviously not renewable, and this indicates that a different practice may be necessary to manage them. Fish can be caught on a first come, first serve basis – but allowing just anyone to come and drill for oil offshore is a far riskier endeavor. Truman’s solution was the 1945 Truman Proclamation, wherein the US claimed control over the resources of its continental shelf [23]. The Truman Proclamation itself did not give a distance as to the US control of its continental shelf, but a press release that went out with the Proclamation capped US control at the 100-fathom line [24]. The idea behind the Truman Proclamation was not to challenge the Grotian regime, which had worked well for the US, but to put into place a mechanism for managing these new resources. Internationally, the end result would not be what the US wanted – territorialist states like Peru, Ecuador, and Chile who lacked the broad continental shelves of the US used the Truman Proclamation as a justification to make a larger territorial sea claim for themselves. But the Truman Proclamation was not meant to inspire this reaction. It was just a reaction to the understanding that new resources would need a new method of management. And indeed, since the Truman Proclamation no other state has ever managed its hydrocarbon resources in the first come, first served method that applied to fish in the Grotian regime [24]. At the time the Truman Proclamation was put forth, there were still no true offshore oil rigs. However, there was a lot of evidence that such offshore drilling could become a real possibility in the future. By 1945, the Giliasso designed system had been working well for drilling in shallow waters, and many petroleum engineers were working on a better way to drill in deeper offshore waters. Such a success, however, at that time remained in the future; while expectations were high, no one was certain when the first truly offshore rig would be developed. The wait was not long. In 1947, Kerr-McGee Oil Industries’ Rig 16 began operating in the Gulf of Mexico off the coast of Louisiana, 12 miles from the shore. This was the first operable offshore rig in waters out of sight of land [20]. Kermac 16, as the rig was known, had been a hard sell to petroleum companies eager for new technologies but unwilling to make risky investments. The rig was nothing by today’s standards, drilling only in 18 ft of water, but it was a game-changer for the offshore oil industry because it proved that true offshore oil drilling was indeed possible. And Rig 16 was not alone; the 1947 lease sales by the state of Louisiana, encouraging drilling in relatively shallow and protected offshore waters, preceded a number of advances in offshore technology [25]. By 1954, drilling was ongoing in up to 40 ft of water in the Gulf of Mexico, and by 1956, drilling in 350 ft of water was ongoing off the coast of California. Of course, at this time, the maritime regime remained in flux. The advent of successful offshore drilling was hardly a surprise, and yet states seemed unprepared for the reality of the achievement. In the US, for example, even though the federal government had

4

E. Nyman / Energy Research & Social Science 6 (2015) 1–7

claimed jurisdiction over the continental shelf, there were legal disputes with various states – Texas, Louisiana, and California among them – who believed that the seabed off their coasts was state, not federal property. Kerr-McGee’s Rig 16 had won the right to its lease from a Louisiana sale, not a federal one, and drilling in the Gulf would have to be postponed not long after due to a legal case between the state and the federal government. Foreknowledge that something would be possible soon did not mean that governments were necessarily setting the groundwork in place beforehand. Even though the US was foremost in developing offshore technology, the federal government was clearly unprepared. And the US was not the only country experimenting with offshore drilling, either. By 1949, the Soviets were drilling offshore in the Caspian Sea [12]. Canada began experimenting with offshore drilling in the 1940s as well, though they were much less successful than their Soviet and American counterparts [26]. Other countries were interested, but would take longer to move offshore in part because of concerns about where maritime boundaries were drawn. This was a particular concern for the United Kingdom, for example, which did not extend lease sales for drilling until the 1960s due to jurisdictional concerns [27]. The future of offshore oil would be a bright one. The first rig to drill in deepwater (1000–5000 ft of water) was operational in 1979, and within a few decades rigs were operating in ultra deepwater (over 5000 ft). Today, there are oil rigs drilling in over 10,000 ft of water, and oil has only gotten more valuable. It seems likely that states will continue to seek out new offshore reserves and ways to exploit them, and that the technology will evolve to allow them to do so.

2. Hypothesis and method Given that prior to 1947, true marine offshore drilling was a hypothetical, I expect that states became more interested in controlling maritime areas with offshore oil after the successful run of Kerr-McGee’s Rig 16. There was a stronger incentive after 1947 for states to gain control of offshore marine areas, since the hydrocarbon resources in these waters would now be accessible. Therefore, I hypothesize that states were more likely to engage in a militarized interstate dispute over a contested maritime claim with offshore oil after the successful drilling in 1947. I believe that 1947 would have been a turning point for states with regard to their interest in offshore oil and gas reserves, because after the first successful offshore drilling the ability for states to realize gains from those reserves would have gone from a mere possibility to a realizable outcome. From this point on, offshore drilling was a reality, and I predict that this should cause states to alter their behavior accordingly. All states are interested in the acquisition of important resources, and oil was an important resource for much of the 20th century. Given the ability to extract offshore oil, states should be highly interested in maintaining control of any known reserves that were contested by others. This does not mean that we should necessarily see a rush to make additional claims to offshore areas, any more so than was encouraged already by the failing Grotian regime, but that states should make an extra effort in the offshore era to solidify their control over disputed resources. If my hypothesis is correct, then, we should expect to see the likelihood of a militarized interstate dispute over maritime areas with offshore oil increase after 1947, controlling for other variables of interest. This reflects a dual understanding that oil is a valuable resource for states and that offshore reserves were accessible to the state that controlled them.

Hypothesis. The likelihood of a MID over a disputed area with suspected or known offshore oil resources should increase after offshore drilling became generally feasible in 1947. To test this hypothesis, this paper utilizes data from the Issue Correlates of War (ICOW) project, which examines claims between states of territorial, maritime, and riparian areas [8]. Currently the maritime claims data contain information about all marine claims in the Western Hemisphere and Europe from 1900 to 2001. The ICOW Project defines a claim as worthy of inclusion when an official government representative of at least one state makes a claim of ownership over an area controlled or claimed by another state [8]. This definition, when applied to maritime cases, results in 143 internationally contested claims by at least two states and 3229 dyadic maritime claim-years during the time period and geographic area defined above. I limit myself to the consideration of only those claims with suspected or known offshore oil reserves, which reduces the total number of maritime claims to 39 and maritime claim-years to 1347. My dependent variable of interest is the militarized interstate dispute or MID, defined as the “threat, display, or use of force” [28], because I focus on the rhetoric of violence as much as its actualization. Claiming that a state is willing to use force is in and of itself an additional level of commitment to gaining a contested area even if violence is not actually used, and I believe it is a signal that states feel strongly about the area in question. It is, furthermore, a signal that states are more likely to use when they wish others to understand the commitment of their position, and thus reflects the fact that offshore oil resources would have become more valuable to them in an era of offshore drilling. True violence by states is very rare, and thus even the signal of such a possibility has meaning in this context. These data are taken from the Correlates of War Project’s Militarized Interstate Dispute dataset, which records information about the threat, display, and/or use of force by one state against another [29]. Currently the Militarized Interstate Dispute dataset contains information on all disputes from 1816 to 2010, but I only utilized information about disputes in the 20th century time period. My main independent variable of interest is a dummy variable for 1947, the year of the first successful oil rig to operate offshore out of sight of land. I hypothesize that after 1947, states should be more likely to engage in MIDs over offshore spaces given that offshore drilling has made extraction of those resources a reality. This should be indicated by a positive and significant value for my independent variable. Of course, there are other things that might have an impact on the likelihood of a MID over an offshore space containing oil, and I consider four control variables meant to capture these other concerns. First, I consider the price of oil itself. When oil is more valuable, it will be of greater interest to states and corporations alike. The price of oil, however, has greatly fluctuated over the 20th century, and so it is important to understand that oil prices might lead states to both greater and lesser interest over time depending on if the commodity is relatively valuable or relatively cheap. Moreover, the price of oil is also a good proxy for other variables of interest that are more difficult to measure, such as the extent of ongoing and future oil exploration. We can anticipate that higher oil prices will lead to a greater interest in oil exploration, and lower prices will act as a deterrent. This is because higher prices may lead corporations to be interested in taking on riskier projects, such as expensive offshore test sites, rigs, and platforms, and to seek out more opportunities due to the ability to make a profit even with the potential additional expenses. I expect that when the price of oil is higher, we should expect to see the likelihood of a MID increase as well. This is due to the

E. Nyman / Energy Research & Social Science 6 (2015) 1–7

fact that the increased interested noted above should lead states to take a more aggressive approach to the protection of resources that are more valuable, or have recently become so. I take my data on oil prices from the US Energy Information Agency statistics on historical US oil purchase prices, since the standard oil price data date back only to the 1980s [30]. This is the best available data I could locate that would provide information about the yearly price of oil. For comparative purposes, I further standardize that data into constant 2000 dollars using the US Bureau of Labor Statistics’ Consumer Price Index Inflation Calculator, though this only covers the time period from 1913 to the present [31]. I also consider as a control variable the fact that a maritime claim which contains oil might also have other dimensions of interest. The ICOW dataset contains information about several other resources that could increase the value of a maritime claim: fish stocks, migratory fishery stocks, a strategic location, a consideration as homeland by claimant states, and the location of the area in question as being adjacent (or not) to claimant states. Consideration of these factors is highly necessary because almost every maritime claim in the dataset has some resource of value other than the primary one of interest here, offshore oil and gas. Fish, for example, can be found in almost every maritime claim in the database. Only three of the maritime claims with offshore oil in my dataset do not also have fishery resources. Since these other resources might lead to additional interest in uncontested ownership of the claim in question, I include a salience index to account for these. This index ranges from 0 to 11, with higher values indicating a greater level of resources. I expect that higher values of other resources should result in an increased likelihood of a MID over the offshore area in question. In my data, the modal value of this index is 6, with a minimum of 4 and a maximum of 11. This indicates that all maritime claims with offshore oil also have some other resource of potential interest, and thus this needs to be accounted for within the data. Further, I include two control variables relevant to the likelihood of MIDs in general: joint democracy and relative capabilities. This is an important point, because MIDs over marine spaces and/or fishery resources are not rare. They make up about 10% of the Militarized Interstate Dispute dataset [32]. Of these, joint democracy requires the greatest consideration. Democracies are well known in general to refrain from conflict with each other [33]. This finding, known as the democratic peace theory, is one of the most robust correlations in the study of international conflict and thus must be accounted for. However, democracies have been known to engage in MIDs over fishing resources, with evidence indicating that in the rare cases when democracies do engage in MIDs, it is often over marine areas [7]. Because of this latter finding, I expect that joint democracy will likewise fail to be a preventative to conflict over offshore oil resources as well. As for relative capabilities, it is long been suggested that the likelihood of conflict is affected by states’ relative strengths compared to each other [34,35]. To measure this, I consider whether one state is over three times as strong as another, and use data from the Correlates of War’s National Material Capabilities dataset [36]. Strength, as defined in this dataset, is a composite measure of various measurable indicators of interest, such as military size and strength, abundance of relevant natural resources such as iron and steel, and overall population size. Obviously these serve as rough indicators; states have a tendency to keep their exact strengths secret, and it would be difficult to assess all possible dimensions of strength quantitatively. However, it does provide an overall guide as to states’ military capabilities relative to each other. An imbalance of relative capabilities may impact the ability of a state to threaten or use conflict against another, and thus is

5

important to account for in my analysis. Power transition theory posits that war is more likely to occur when two rivals near power parity, meaning that one is not demonstrably or even known to be stronger than the other [37,38]. Balance of power theory indicates the opposite; war is less likely to occur when two opposing sides are nearly equal in strength, and thus uncertain to know who a victor would be [39]. The former theory suggests that the relative capabilities measure should be negative and significant, whereas the latter claims that it will be positive and significant. Lastly, I also account for time dependency. Though my main variable of interest is a temporal one related to the development of offshore drilling, and though my oil prices variable captures the generally growing value of the resource in question, other developments over time may also influence the propensity of states to consider the use of force. These changes could be anything from the alteration of domestic opinions and international norms over time to the progressive development of new weapons technologies. Therefore, I use the Beck et al. [40] method of accounting for time dependency through the use of three evenly spaced splines. 3. Empirics The results of my analysis can be found in Table 1. I find that, as predicted, my main independent variable is positive and significant at the 95% confidence level, indicating that the threat or use of conflict over maritime claims with offshore oil is indeed more likely to occur in the wake of successful offshore drilling. This does not seem, moreover, to be a mere artifact of conflict increasing in the post-World War II period. Such a trend would be captured by the splines used to account for time dependency, so this is a genuine rise found in the post-1947 era. Moreover, a comparative examination of the ICOW territorial data indicates that there is not a similar rise in MIDs in the post-war years over disputed territory; this is a finding unique to maritime MIDs. Likewise, most of my control variables follow predicted patterns as well. The more salient features aside from offshore oil that a claim has, the more likely that that claim will see a MID over it. This makes sense; as anticipated, a maritime claim with more potential resources should garner more actions taken to protect a state’s ownership in the face of dispute. Thus, claims that ranked higher in salient characteristics saw more conflict than those with fewer characteristics. Joint democracy was also insignificant, as predicted. As stated above, this would be a surprising finding over anything accept international maritime disputes. Since such disputes between democracies are known to occur over marine and fishery resources, however, this is the expected finding and is consisted with Mitchell and Prins’ [7] study on democratic conflict. Table 1 Determinants of militarized interstate disputes over maritime claims with oil. MIDs After Rig 16 (1947) Price of oil Other claim salience Joint democracy Relative capabilities Constant N Log-likelihood Robust standard errors given in parentheses. * p < 0.10 (two-tailed). ** p < 0.05 (two-tailed). *** p < 0.01 (two-tailed).

12.591 (0.05)** 0.004 (0.753) 0.215 (0.001)*** 0.142 (0.318) 0.547 (0.317)* −17.272 (6.568)*** 1264 −189.225

6

E. Nyman / Energy Research & Social Science 6 (2015) 1–7

Relative capabilities were likewise significant, though at a lower level of confidence (.08). Claims where one state was three times stronger or more than the other proved more likely to have a threat, display, or use of force occur. This says only that we are more likely to see threats where there is a power imbalance, but not in which direction the threats occur. It is probable that this indicates bullying from the more powerful state towards the weaker, but it could be the annoyance of a weaker state towards a stronger one which would be seen as an aggressor should it reply with its own attack. Either way, this result is in line with the results suggested by balance of power theory, though again the correlations are not particularly strong. Most surprisingly, oil prices were an insignificant predictor of behavior, contrary to my hypothesis. I suspect this has much to do with the fact that oil prices serve not just as an indicator of the value of the commodity in question, but also themselves as a proxy of interest in that commodity. As oil prices rise, for example, so would exploration for new sources of oil, and technology for accessing more difficult reserves. Perhaps oil prices then might be a better predictor of maritime claim onset than militarized disputes.

4. Discussion The findings of my analysis were in line with my hypothesis, for the most part. As expected, conflict over contested maritime areas with oil and gas resources were more likely to see conflict after the extraction of those resources was an accomplished feat. Once those previously unreachable resources could be extracted, it became more important to states to claim them as their own. This importance results in an increased use of the rhetoric or actualization of violence. Why does this happen? After all, states are quite different in their approach to and management of their marine resources, and of their oil and gas resources in particular. Some states maintain state ownership of their extractive industries, while others do not. These latter rely on corporate interests to carry out the investigation and extraction of offshore energy resources. Both, however, seek to claim these resources in the name of the state because to do so brings additional wealth to the government that controls them. This is a direct relationship in the case of the state-owned extractive industries, and an indirect one in the case of those where corporations take on the extractive role. In the latter, the state still makes money from its ownership of the resource through the offshore leasing process and resultant taxation on the corporation and/or its product. The control variable findings are interesting, though for the most part not revolutionary. The most interesting of these is the failure of oil prices to prove a significant variable in the decision by a state to threaten or use violence. As stated above, there could be several reasons for this. One is that oil prices have mostly had an upward trajectory during the 20th century, though with several noticeable downturns. As such, it may be difficult to separate out their impact on the likelihood of conflict in the post-war era, given the many other changes that occurred during this time. More likely, the effect of oil prices on potential conflict is simply more complicated than my straightforward supposition. As suggested above, higher oil prices may also lead to states making new maritime claims in general, and not on more aggressive management of existing claims. As such, the presence or absence of conflict is the wrong dependent variable to consider when seeking to understand the impact of the rise and fall of the monetary value of these resources. It also could be that a greater lag time is necessary to understand the impact of oil prices; if prices are high in year X, for example, research into new technologies for

extraction may be more financially viable, leading to greater and cheaper extraction in year X + n, with n being the number of years taken to develop and perfect the technology. Such suppositions, however, are left for further analysis later. These findings have interesting implications for the future of energy politics research. Oil is and will remain an important part of the global economy, with the developing world increasing its consumption and the developed world continuing its relatively high rate of use. It is, however, also a finite resource, and both states and industry alike must continue to seek out new reserves and develop new technologies to access existing reserves. New discoveries and technologies can bring resources to light; they can also exhaust those that are already known and in production. But, given the value and necessity of oil and gas to state development, states must continue to safeguard potential resources and encourage their exploitation in order to maintain both their economy and their security. Much has been said about the relationship of territorial petroleum resources and the state. This tends to be framed around the discussion of the “petrostate,” a term used to describe a state with access to a bounty of petroleum resources [41]. These petrostates suffer from the “resource curse,” a term used to describe a state which garners most of its economic development from natural resources and yet despite their wealth, produce corrupt and often authoritarian governance [42]. Yet, despite the wealth of literature examining petrostates, the resource curse, and the difficulties of governing a state with a high level of oil and gas income, relatively little has been said about offshore resources. True, offshore development rarely if ever rises to the extent of economic domination that territorial resources do, but more states are turning and will turn to offshore development as territorial resources run out. And, as discussed above, states of all kinds – democracies and dictatorships alike – are likely to consider or use force to protect these resources. This paper represents an early attempt to understand one particular kind of maritime claim, those with offshore oil reserves, and the likelihood of conflict over such claims. There is much left to investigate in this area, however. Drilling offshore for oil and gas is a fixed presence in our world, and is likely to remain as such in the near future. As current reserves continue to be depleted, untapped ones in disputed areas (such as deposits suspected in the South and East China Seas, or offshore areas around the Falkland Islands in the southern Atlantic Ocean) will be likely to grow in importance. Maritime conflict over these disputed claims then will remain a potential threat, perhaps even growing in importance in the next few decades.

References [1] NPC. Offshore oil and gas supply. Washington, DC: National Petroleum Council; 2011. [2] BGR. Reserves, resources and availability of energy resources. Hannover: Federal Institute for Geosciences and Natural Resources (BGR); 2013. [3] UN. United Nations Convention on the Law of the Sea. Kingston, Jamaica: United Nations; 1982. [4] Sovacool BK. What are we doing here? Analyzing fifteen years of energy scholarship and proposing a social science research agenda. Energy Res Soc Sci 2014;1:1–29. [5] Hancock KJ, Vivoda V. International political economy: a field born of the OPEC crisis returns to its energy roots. Energy Res Soc Sci 2014;1:206–16. [6] Colgan Jeff D. Oil, domestic politics, and international conflict. Energy Res Soc Sci 2014;1:198–205. [7] Mitchell SM, Prins B. Beyond territorial contiguity: issues at stake in democratic militarized interstate disputes. Int Stud Quart 1999;43(1):169–83. [8] Hensel PR, Mitchell SM, Sowers TE, Thyne CL. Bones of contention comparing territorial, maritime, and river issues. J Confl Resolut 2008;52(1):117–43. [9] Nyman E. Oceans of conflict: determining potential areas of maritime disputes. SAIS Rev Int Aff 2013;33(2):5–14.

E. Nyman / Energy Research & Social Science 6 (2015) 1–7 [10] Jensen C. Stories that changed America: muckrakers of the 20th century. Seven Stories Press; 2011. [11] Tarbell IM. The history of the standard oil company, vol. 1. McClure Phillips and Company; 1904. [12] Black BC. Crude reality: petroleum in world history. Rowman & Littlefield Publishers; 2012. [13] Kirsch DA. The electric vehicle and the burden of history; 2000. [14] Cherp A, Jewell J. The three perspectives on energy security: intellectual history, disciplinary roots and the potential for integration. Curr Opin Environ Sustain 2011;3(4):202–12. [15] Yergin D. The prize: the epic quest for oil, money & power. Simon and Schuster; 2011. [16] Hall Darwin C. Oil and national security. Energy Policy 1992;20(11):1089–96. [17] Yetiv SA. Crude awakenings: global oil security and American foreign policy. Cornell University Press; 2004. [18] USEIA. US product supplied of finished motor gasoline. US Energy Information Agency; 2014. Available from: http://www.eia.gov/dnav/pet/ hist/LeafHandler.ashx?n=pet&s=mgfupus1&f=a [cited 01.07.14]. [19] USEIA, International energy statistics. United States: US Energy Information Agency. [20] Schempf FJ. Pioneering offshore: the early years. United States of America: PennWell Custom Publishing; 2007. [21] Gramling R. Oil on the edge: offshore development, conflict, gridlock. United States: SUNY Press; 1996. [22] Giliasso L. Submarine drill. USA: U.P. Office; 1928. [23] Truman HS. Policy of the United States with respect to the natural resources of the subsoil and sea bed of the continental shelf. Proclamation 1945;2667:485. [24] Friedheim RL. Negotiating the new ocean regime. Columbia, South Carolina: University of South Carolina Press; 1993. [25] Priest T. The offshore imperative: shell oil’s search for petroleum in postwar America. United States: Texas A&M University Press; 2007. [26] Bott R, Carson DM. Canada’s evolving offshore oil and gas industry. Canada: Canadian Centre for Energy Information; 2007.

7

[27] Kemp AG. The official history of north sea oil and gas. 2 vols, vol. 1. Great Britain: Routledge; 2012. [28] Jones DM, Bremer SA, Singer JD. Militarized interstate disputes, 1816–1992: rationale, coding rules, and empirical patterns. Confl Manag Peace Sci 1996;15(2):163–213. [29] Ghosn F, Palmer G, Bremer SA. The MID3 data set, 1993–2001: procedures, coding rules, and description. Confl Manag Peace Sci 2004;21(2):133–54. [30] USEIA. US crude oil first purchase price. US Energy Information Agency; 2014. Available from: http://www.eia.gov/dnav/pet/hist/LeafHandler. ashx?n=pet&s=f000000 3&f=a [cited 21.02.14]. [31] BLS. CPI inflation calculator. Bureau of Labor Statistics; 2014. Available from: http://www.bls.gov/data/inflation calculator.htm [cited 21.02.14]. [32] Gleditsch NP, Hegre H. Peace and democracy: three levels of analysis. J Confl Resolut 1997;41(2):283–310. [33] Maoz Z, Russett B. Normative and structural causes of democratic peace. Am Polit Sci Rev 1993;87(3):624–38. [34] Kim W, Morrow JD. When do power shifts lead to war? Am J Polit Sci 1992:896–922. [35] Geller DS. Power differentials and war in rival dyads. Int Stud Quart 1993:173–93. [36] Singer JD. Reconstructing the correlates of war dataset on material capabilities of states, 1816–1985. Int Interact 1987;14(2):115–32. [37] Kugler J, Organski AFK. The war ledger. Chicago: University of Chicago Press; 1980. [38] Lemke D. The continuation of history: power transition theory and the end of the cold war. J Peace Res 1997;34(1):23–36. [39] Waltz KN. Theory of international politics. New York: McGraw Hill; 1979. [40] Beck N, Katz JN, Tucker R. Taking time seriously: time-series-cross-section analysis with a binary dependent variable. Am J Polit Sci 1998;42:1260–88. [41] Karl TL. The paradox of plenty: oil booms and petro-states, vol. 26. Univ of California Press; 1997. [42] Humphreys M, Sachs J, Stiglitz JE. Escaping the resource curse. Cambridge University Press; 2007.