The geopolitics of energy resources

Energy has been the defining factor in human development and determining factor in the hegemonic structure of world politics. The fundamental role of coal and steam, as key ingredients of the Industrial Revolution, and global control of their trade in the 18th and 19th century by the British Empire led the way for its hegemony in international politics. In the 20th century, oil has become the defining raw material, and control of its production and trade jump-started U.S. hegemony. Recent developments and technical innovations in the energy realm require a reassessment of the situation.

The current trend in energy supply and demand still favors fossil fuels - i.e. coal, oil and natural gas- with 80 percent of global energy use. This dominance is expected to continue for the foreseeable future even though investments in nuclear, hydro and renewable energy sources are increasing. BP Energy Outlook predicts that fossil fuels will protect their current share in energy production and use by 2035.

The most striking developments in recent years have been the discovery of shale formations across the world and the transformation of natural gas into its liquefied form (LNG). Gas has been the fastest growing fossil fuel in the last 20 years. In comparison, oil continues to have steady growth while coal production has declined. Even though the conventional production and usage of gas still dominates today's markets, the flexible and practical LNG trade is likely to surpass it by 2035. The discovery of shale petroleum, on the other hand, has already started to change the patterns in global markets.

Energy is a highly strategic determinant beyond its commercial and economic aspects. As a result, great powers have been competing each other to sustain...