Tag Archives: oil

The Warming Russian Arctic: Where Russian and Asian Business and Strategies Converge?

In this new article about the current development of the warming Russian Arctic, The Red (Team) Analysis Society studies how Russia is currently devising an industrial and business grand strategy. This strategy is created through new oil and gas exploitations and the constant opening of the Siberian Northern Sea Route. These new activities are made possible by the rapidly intensifying climate change, which is transforming the Arctic into a continental attractor for energy, business, shipping, land transport, from everywhere in Asia (Jean-Michel Valantin, “The Russian Arctic meets the Chinese New Silk Road”, The Red (Team) Analysis Society, 31 October, 2016).

Arctic mapThe Russian Arctic power of attraction can be identified from the fact that numerous Asian countries are attracted by the Russian Northern Sea Route and by the exploitation of the oil and gas deposits of the Arctic Ocean and of the Siberian ground. The production of liquefied natural gas (LNG), notably, acts as a magnet for the industrial, financial and strategic interest not only of China, India, Japan, South Korea, but also Viet Nam, Singapore and Thailand (US Energy Information Administration, (“Chapter 3. Natural Gas”, International Energy Outlook 2016”). In effect, the Asian countries’ consumption of LNG knows a regular growth, considering their will to enlarge their energy sources while diminishing their coal use (Jean-Michel Valantin, “The Arctic, Russia, and China’s Energy transition“, The Red (Team) Analysis Society, 2 February, 2015).

The massive Russian Arctic maritime and coastal development supports the deployment of an immense industrial, transportation and trade land infrastructure, through the building of railroads and the renewed use of Siberian rivers, from the Siberian coast towards Norway and Central Asia. Some of these new railways are built from Kazakhstan and Mongolia, to connect with the new railroad network that connects western China with Europe through gigantic supply chains, which are deeply interlocking the Russian and Chinese developments (Jean-Michel Valantin, “China, Russia and The New Silk Road in Central Asia: the Great Co-Empowerment”, The Red Team Analysis Society, March 7, 2016).

In other words, the warming Russian Arctic and its industrial and trade development are supporting the development of the Central, Eastern and South Asia countries, by attracting the actors of these Asian developments.

Here, we are going to focus upon the way the warming Russian Arctic is thus becoming the driver of a deep reorganisation of the Asian energy and industrial markets. We will also see how this entails the emergence of continental size maritime and land new supply-chain, while connecting it to China and “arcticised” Asian actors and interests.  At the end of the article we shall present a new feature: a brief summary of some of the major impacts foreseen.

The emerging Russian continental supply-chain: from the Siberian Coast to Kazakhstan … and beyond

The warming of the Russian Arctic is having gigantic geopolitical and business consequences, because the very effects of climate change are turned into an engine of the Russian power of attraction (Joe Romm, “Arctic Death Spiral Update: What Happens in the Arctic Affects Everywhere Else“, Think Progress, May 3, 2016).

In effect, the Russian political, economic and business authorities are turning this immense region into a new energy and minerals development area. Furthermore, the warming of the atmosphere and of the ocnorthernsearouteean stemming from climate change, and the relative retreat of the sea ice it entails, are used to open the Northern Sea Route, which goes from the Bering Strait to Norway along the Siberian coast, with considerable impacts on logistics and trade (Jean-Michel Valantin, “The Russian Arctic: a new Economic and Strategic Paradigm?”,The Red (Team) Analysis Society, October 12, 2016).

A first element of the Arctic Russian attractor is the building of the strong inter-connections between the off- and onshore oil and gas operations and the Northern Sea Route, through the creation of maritime and land industrial and transport infrastructures. Meanwhile, as we have seen “Russian Arctic Oil” and “The Russian Arctic Meets the Chinese New Silk Road”, there is a strong link between the energy, maritime and military offshore development of the Russian Arctic, which are the different drivers of the “Russian attractor”.

This energy and industrial development also takes place onshore, and is pivotal in the intensification of the Russian Arctic power of attraction.

gulf_of_obNotably, in order to turn the Russian Arctic into a sustainable attractor for energy and business partners, the glacial and desolated Yamal Peninsula is industrially developed and transformed into the hub where the energy interests, the Northern Sea Route and the land network of Russian infrastructures are interlocked.

In effect, the Russian energy company Novatek is building the enormous Yamal LNG plant, aiming at producing more than 16,5 millions of tons of LNG annually (Oksana Kobzeva, “Russia’s Yamal LNG is on track and on budget, says Novatek”, Reuters, September 5, 2016). This mammoth project, developed in a glacial region, except during the short summer, is an industrial challenge: it necessitates partnerships with French Total, Chinese National Petroleum Company and the Silk Road Fund. The project has already benefited of more than 12 billions dollars from Russian Banks and 12 billions dollars from Chinese banks (Jack Farchy, “Chinese Lend $12 Bn for Gas Plant in Russian Arctic”, Financial Times, April 29, 2016). Thanks to it, Russia will become one of the main producers of LNG on the international market.

Sabetta, Russia, Arctic, LNG
From “Arctic – Russia’s perspective” – 2014 by Andrey Bondarev, Deputy Head of Economic Office, Embassy of the Russian Federation

This project goes with the rapid development of the Sabetta port on the Yamal coast, located on the Ob river bay, from where LNG carriers will transport the anticipated 16,5 millions annual tons of gas, produced by the Yamal LNG plant, to their destinations in China, India, Japan, and Viet Nam, among others (Atle Staalesen, “This could soon be the world’s biggest Arctic”, The Independent Barents Observer, February 16, 2016). Furthermore, Sabetta will have to be able to handle at least a yearly 30 million tons traffic.

In the same time, Rosneft and Gazprom develop oil and gas projects in the Peninsula, especially the “Novy Port oil field” (Atle Staalesen, “Preparing the Ground for Second LNG Plant in Yamal”, The Independent Barents Observer, November 02, 2016). More than 13000 people have worked for it during the 2015-2016 winter and more than 18000 during the 2016 summer (Atle Staalesen, “Sabetta on Schedule”, The Independent Barents Observer, April 28 2016).

The Novy Port, installed at the mouth of the Ob River, complements the Sabetta port to load and unload the tankers, which navigate this giant river and its affluent throughout the Russian hinterland (Atle Staalesen, “Government opens Ob Bay for foreign vessels”, The yamal_and_other_russian_icebreakers_19593040886Independent Barents Observer, January 8, 2016). The Gulf of Ob and its opening on the Kara Sea and thus on the Northern Sea Route will be kept open in winter thanks to the two icebreakers ordered by Rosneft to the Finnish company Aker Yards. These vessels will be dedicated to the constant opening of the Ob Bay, in order to ensure the permanent continuity between the Northern Sea Route and the river (Atle Staalesen, “First Icebreaker for New Arctic Oil Field”, The Independent Barents Observer, November 03, 2015).

The strategy that consists in making the Yamal project one of the drivers of the Russian Arctic attraction on the rest of the country and on Asian countries goes with the creation of a rail line between the LNG plant, the Gazprom gas hub of Bovanenkovo and Sabetta (Atle Staalesen, “Railway for Sabetta”, The Independent Barents Observer, December 22, 2015).

This railroad is conceived as a part of the planned 707 km long “Northern latitudinal passage” (see map below), which will connect the Yamal Peninsula with the Ural and Western Siberia (“Russian Railways to Complete Latitudinal Railway project to the Arctic”, Think Rail Ways, November 19, 2015). In other words, these new railroads will connect the Yamal LNG plant with the Sabetta port, and with existing railroad networks, which connect the Ural and Western Siberia with the rest of Russia, Kazakhstan, China and Europe, meanwhile also linking these regions and countries with Russia’s Northern Sea Route (Atle Staalesen, “Grand Railway Deal for Yamal”, The Independent Barents Observer, October 20, 2016). As a result, the Northern Sea Route becomes joined with the Russian and Asian hinterland, and thus acquires a continental scale.

Northern Latitudinal Route, railway, Russia, NSR
Northern Latitudinal Route railway ‐ expanded access for Russian regions to the NSR – From “Arctic – Russia’s perspective” – 2014 by Andrey Bondarev, Deputy Head of Economic Office, Embassy of the Russian Federation

The company Russian Railways is already committed to this project, besides the giant national Gazprom, and numerous Russian investors. The Prime Minister and the President oversee those deals themselves, because they are considered strategic projects for Russian national development, as well as for the many partners it attracts (Atle Staalesen, “These are Russia’s top Arctic Investments”, The Independent Barents Observer, March 22, 2016).

The Warming Russian Arctic power of attraction (on Asian business)

The powerful attraction exerted by the Russian strategic combination of the Arctic oil and gas extraction operations and of the development of the Northern Sea Route with its continental integration is felt throughout Asia.

In effect, the combination of access to new energy resources with the Northern Sea Route is turning the Russian Arctic into an immense attractor for energy, shipping, railroad and other business actors, and among them investors from China, India, Japan, South Korea, Thailand, Vietnam.

president_putin_and_pm_modi_in_goa_indiaFor example, during the eighth BRIC’s summit, hosted by India in Goa, more than 20 bilateral deals were signed, among them the acquisition by Oil India Ltd of 23,2 per cent of Vankor Neft, the Rosneft controlled company in charge of the exploitation of the Vankor oil field in Siberia.

At this occasion, the two heads of state talked about the opportunities opened by the exploitation of the Arctic oil and gas, summed up in a common declaration stating that:

“In order to further strengthen our bilateral cooperation in the oil and gas industry, the Russian side expressed its interest in attracting Indian companies to participate in joint projects on the development of the Arctic shelf » (Atle Staalesen, “A Role for India in Russian Arctic”, The Independent Barents Observer, October 18, 2016 and  President of Russia, Russian- Indian Talks).

This Indian interest in and attraction for Northern Russia and the Russian Arctic is no less than the one felt by South Korean government and business. The South

Amanzholov

Korean involvement in the Russian Arctic is expressed, among others, by the shipping of two chemical reactors ordered by the Pavlodar oil plant in Kazakhstan to Hyundai Industries (“First Chemical reactors shipped to Kazakhstan from South Korea”, The Astana Times, 26 July 2016). The supply-chain has been organized by shipping the two reactors from South Korea to Sabetta through the Northern Sea Route, then loaded on barges navigating the transcontinental Ob River to Pavlodar, in Kazakhstan.

South Korea has also officially asserted its interest in an Arctic cooperation with Russia during the first bilateral summit on Arctic issues. 320px-kola_bay_in_murmanskThis summit took place in Murmansk, the home harbour of the Russian icebreakers fleet, on 17 June 2016. Indeed, South Korean industrial, shipping and business actors are most interested in the access offered by the Russian Arctic to Central Asia as well as by the much shorter trip to Europe than through the Red Sea and the Suez Canal (Lee Haye-Ah, “South Korea turns to Arctic for new biz opportunities”, Yonhap News Agency, 17 June 2016).

Prior to South Korea’s moves, Vietnam and Russia agreed to develop partnerships between Petrovietnam and Gazprom Neft to explore together the Arctic Pechora sea to find oil and gas, while the Russian company “tentatively agreed to buy 49%” of Vietnam only refinery (Andy Tully, “Russia reaches oil and gas agreement with Vietnam”, Oil Price.com, April 07, 2015).

As we can see, the Russian Arctic is attracting different Asian powers, and none wants to be left behind the current Arctic race for resources (Michael Klare, The Race for What’s Left, 2012).

Indeed, the Russian Arctic attractiveness is also felt by Japan. For example, the Japanese ambassador for the Arctic stated in March 2016 in Moscow, the interest of its country for an economic, as well as scientific cooperation with Russia, especially about research on climate change and for the Yamal LNG project. At this occasion, the Russian 240px-northern_sea_route_vs_southern_sea_routegas company Novatek, owner of the Yamal LNG plant, has suggested to Japan investors to explore the possibilities offered by its new Yamal project, named “Arctic LNG”, in the Gydan Peninsula (Anna Andriovana, Elena Mazneva, “Japan makes Arctic gas Move with $400 million Yamal LNG Loan”, Bloomberg, September 2, 2016). This takes place in a context defined by growing Japanese imports of Russian oil and LNG (Wrenn Yennie Lindgre, “Energising Russia’s Asia Pivot: Japan-Russia Relations, Post Fukushima, Post-Ukraine“, Norwegian Institute of International Affairs, 4/2015).

However, as we have seen in “The Russian Arctic meets the Chinese New Silk Road” it must be noted that China has taken a significant lead on the other Asian countries in the Russian Arctic.

Chinese companies and financial actors are heavily committed in the Yamal LNG operation and other projects (Atle Staalesen, “More Chinese money for Yamal”, The Independent Barents Observer, 7 January, 2016). This involvement keeps on deepening, through massive Chinese investment in the development of the new Archangelsk deep water port, in order to make it a major maritime hub of the Northern Sea Route (Atle Staalesen, “Chinese money for Arkhangelsk rail and port”, The Independent Barents Observer, December 10, 2015 and “Chinese mega-deals in Yamal LNG”, The Independent Barents Observer, May 02, 2016).

The building of the port will be accompanied by the construction of the Belkomur railway line, which will link the harbour to the mining areas of the south of the Ural, as well as to the existing railway network including the trans-Siberian that connects Russia to China and Europe (Thomas Nilsen, “New mega port in Arkhangelsk with Chinese investments”, The Independent Barents Observer, October 21, 2016).

Hence, it appears that it will soon be easier for Russian oil, gas and mining companies to transport their products to Archangelsk, and from there, to, for example, China. Meanwhile, Chinese trade, as well as other countries shipping and trade companies, will be able to use the Russian maritime and railways infrastructures to reach the Russian, Central Asia and Europe markets (Atle Staalesen, “New tankers for Arctic field”, The Independent Barents Observer, December 23, 2015).

The exponential “Russian Arctic power of attraction”

ice-chart-11-2016-300
Charts of ice conditions – 13 to 15 Nov 2016 by Russia Federation – Northern Sea Route Administration – click to access original

As we have shown, the development of the “Russian Arctic power of attraction” is largely based on the geophysical changes wrought in the Arctic by anthropogenic climate change (Jean-Michel Valantin, “The Planetary Crisis Rules (1)“, The Red (Team) Analysis Society, 25 January 2016). This “power of attraction” is grounded in the Russian capability to exploit not only its oil and gas deposits in the Arctic region, but also to combine it with the implementation of the Northern Sea Route infrastructures with transcontinental land linkages. It goes with a strategic vision that turns the immense Russian continental situation into a space needed by its Asian Partners to access Russia as well as to each other, while answering their growing needs in energy and commerce.

Furthermore, Russia thus obtains to be identified as such a solid and reliable partner that  developing and securing deals with it becomes worthwhile. For example, we have the LNG deals, which are signed for long periods of times (Michael Klare, Rising Powers, Shrinking Planet, 2008 and The Race for What’s Left, 2012). In other words, Russia positions itself as “the necessary partner” for Asian countries in search of energy, commercial, and political stability, in a period of wide geopolitical and geophysical instability (Charles Emmerson, The Future History of the Arctic, 2010). In effect, the way Russia industrially develops the current geophysical changes happening in the Arctic literally creates the need of its Asian partners to access the Arctic, or, as Central Russia, Kazakhstan, Mongolia, to be accessed from the Arctic.

In other terms, the development of its Arctic region helps the Russian political authorities and business community to become “the necessary partner” at a continental scale. This creates a “business partnerships positive feedback loop” because the more investors are attracted to the Russian Arctic, the more the Russian Arctic becomes attractive for business and investment actors, reinforcing the “Russian Arctic power of attraction” on businesses, notably but not only shipping and land transportation companies.

It now remains to be seen how the combination of the intensifying climate change and of the “Russian Arctic power of attraction” is perceived in Northern Europe countries, in the Arctic Council and in Canada, and how the links between these new geophysics and geoeconomics are currently developing.

To be (soon) continued.

Some Foreseen Impacts (short and medium term)

Countries
  • Egypt, because of the very likely competition between the Suez Canal and the Northern Sea Route to attract Asian shipping convoys.
  • Singapore, for the same reasons, knowing that the Malacca Strait could lose part of its traffic due to the use of the Northern Sea Route.
  • Central Asia, connected to the Russian Arctic.
Some business sectors likely to be impacted
  • Shipping companies (including river): among others, they are going to observe if their competitors gain or lose by using the Northern Sea Route, especially the Chinese ones (COSCO has already announced its intent to raise its Arctic traffic).
  • Natural resources extraction and processing
  • Oil and gas field services companies, because of the gigantic challenges related with development of that extreme region.
  • Nuclear sector, because of the development of floating nuclear devices in order to power the new on and off shore energy and maritime infrastructures, as well as the rapid growth in nuclear icebreakers, built by Russia, Finland, South Korea, for Russia and China.
  • Port and logistical infrastructure
  • Railways
  • Sea, air and space companies specialized in observation and navigation services.
  • Agriculture
  • Logistics and transportation
  • Accommodations and Hotels
  • Banking and loans
  • Scientific research

About the author: Jean-Michel Valantin (PhD Paris) is the Director of Environment and Security Analysis at The Red (Team) Analysis Society. He is specialised in strategic studies and defence sociology with a focus on environmental geostrategy.

Featured image: Fair Use – © Sputnik/ Anna Yudina  from article “Finland Equips Arctic Rescue Teams Based on Russian Experience“, Sputnik, 8 Nov 2016.

Scenarios for the Future of Libya – Sc 3.2 A Nationalist Libya

This article focuses on the second of the scenarios depicting a total victory for one Libyan faction, where the nationalist coalition – loyal to a non-Islamist and nationalist government – is victorious and guides Libya towards a secular and nationalist state where Sharia is not a source of governance. In our previous scenario we detailed the scenario of an Islamist victory where the new government gradually, with different paths according to speed, implements Sharia law and puts Libya on the path towards an Islamic state.

Note: Considering the future names of potential factions that would result from a new split between the unity government, we shall use the label nationalist for those that supported the nationalist-dominated Council of Representatives (COR) and any future anti-Islamist factions; Islamist to note those that supported the General National Congress (GNC) and any future pro-political Islamic movements; and Salafist will remain the label of choice for groups that reject democratic institutions and embrace jihadism.

Click to access larger image

Sub-scenario 3.2 A Nationalist Libya

In this scenario, a “real victory” refers to the cessation of major hostilities resulting from a belligerents military domination of the other. Once a belligerent militarily defeats the other, it will be in a position to rebuild Libya as either an Islamist or secular state.

By achieving a real victory against the Islamist-dominated coalition and government, the nationalist coalition sets up its non-Islamist government and endeavours to organize the new Libyan state. This new government projects a secular-nationalist rule of law, and firmly opposes the use of Sharia law as a basis for legislation.

The nationalist government is determined to first secure the porous southern border. It knows it has two major options. Either it makes a deal with the Tuareg and Toubou to increase their representation in government and promises to address their other grievances if they secure the southern province to prevent jihadists from entering the country and assist in stabilization efforts throughout the Fezzan. Or, it exclusively pre-occupies itself with post-civil war affairs in the north and begins to ignore the Tuareg and Toubou. Both minority tribes in the south thus feel abandoned – the Toubou are angry that their alliance with the nationalist coalition did not result in a seat at the power table, or even a request for meaningful post-war assistance, while the Tuareg are afraid that they especially will be left out, considering their opposition to the nationalists during the war. In this case, the odds to see them deciding to split away from the Libyan state in protest and form their own tribal states, or to hold southern Libyan oil resources as collateral for political concessions – thus forcing the government to address the minority tribes increase. Considering both the value of past war alliances and the risks entailed by not doing so, the nationalist government finally chooses the first option.

The nationalist leaders start implementing a strict anti-Islamist agenda. Not wanting to include former adversaries that promoted a system alien to their beliefs and challenged their legitimacy, the new government takes measures to dissolve the Muslim Brotherhood-affiliated Justice and Construction Party. In an effort to completely dismantle Islamist movements in Libya, the government arrests, charges, and prosecutes prominent Islamist politicians and militia leaders. It then welcomes those affiliated with Qaddafi’s regime to be involved in the new state, partly as a means to increase domestic legitimacy among the Qaddafists, but also as a means to consolidate power. This announcement draws much support from former Qaddafi officials and particularly Qaddafi’s tribe – the Qadhadhfa – who felt marginalized after the revolution and whose men and also some elders became a recruiting pool for the Islamic State in Sirte. Seeing this as an opportunity to restore some of their influence in the government, as well as seeing that the Islamist defeat leaves only the Salafist groups left to be targeted (to which many Qadhadhfa fighters belong), the pro-Qaddafi tribes that didn’t originally ally with the nationalists now shift their support to the new government.

Bolstered by the new government’s actions to ignore Sharia law, the Salafist groups denounce Libya as a kafir state and state their intention to destroy it. However, as far as the Islamic State is concerned, they are weakened by the loss of the pro-Qaddafi tribes, which spurs a renewed propaganda push to attract more foreign jihadists. Salafist groups that experience a surge of foreign jihadist recruits renew their insurgency against the Libyan government. Those which do not succeed in either attracting enough foreign recruits or local ones grow weaker and unable to hold territory as they did during the civil war. Thus, they shift from a more centralized semi-state with territory and governance to a decentralized underground terrorist organization that avoids conventional warfare, causes mass civilian casualties through terrorist attacks, and specifically targets security personnel, secular judges, and political and military leaders under the nationalist government. However, this renewed insurgency and its outcome would require new scenarios to fully understand its depth.

Meanwhile, the nationalist coalition and government struggles at first to gain international legitimacy. The Western powers tread lightly in regard to signaling open support for the new government – mostly to see the initial actions made by the new government that signify its national and international intentions. With the migrant crisis still a serious problem for the EU, it opens diplomatic relations with the nationalist government to work out a solution that would stem the flow of migrants from Libya’s shores. In a unilateral move that is the result of unsatisfactory solutions put forth by the EU, the United Kingdom offers assistance to Libya in an effort to counter the human-trafficking networks that significantly contribute to the migrant routes through Libya. (In an alternative sub-scenario, where the migrant crisis is already abated, the EU stands alongside the U.S. as they wait to see how the government sets the tone for stabilization and rebuilding). Meanwhile, Russia expands its ties with the nationalists and quickly negotiates arms deals with the government – knowing that the new Libyan military will need to be outfitted, while it allows Russia to further gaining influence with a new power in the Middle East/North Africa region.

General Haftar represents a strong anti-Islamist ideology in Libya, which appeals to Egypt and the UAE.

Egypt and the United Arab Emirates continue to support the nationalist government as it takes action to exclude Islamists from power and crack down on Muslim Brotherhood-affiliated supporters throughout Libya. Libya’s other neighbors also recognize the legitimacy of the new state and begin working with the government to make sure no insecure borders could lead to renewed insurgency. Having backed the Islamist government – whom they considered the legitimate government – and seeing the new government’s efforts to crack down on Islamist groups, Qatar and Turkey denounce the nationalist government.

Indicators to Monitor

Below are the main indicators we identified that impact the likelihood to see scenario 3.2 occurring. They should thus be monitored.

  1. The government’s level of priority to include minority tribes in the state. Once it begins functioning as the country’s sole political authority, the new government will take measures to first stabilize war-torn Libya, and then begin the rebuilding process. Depending on a variety of factors and agendas, the government could potentially prioritize other issues over the political inclusion of minority tribes; issues such as eliminating terrorist groups, ramping up oil production and exports, developing a new and united military, finding a solution to the massive migration problem, securing financial assets, and mitigating any existing financial crises.
  2. The tribes’ willingness to break away from the state in a partition. If the new government begins passing important legislation or drafts a new constitution without their full representation and blatantly ignores their political grievances, then the tribes could take action to form their own autonomous tribal states. A past indication occurred when the Amazigh tribe refused to recognize a Libyan constitution drafted by a constitutional assembly that lacked sufficient tribal representation because “we do not recognize those who do not recognize us,” (Nationalia, February 21, 2014). The Amazigh Council then announced its intention to create an Amazigh-only Parliament (Ibid.). A similar indication occurred when Toubou and Tuareg militia leaders “threatened to pursue regional autonomy for Fezzan” when one of the former Libyan transitional governments cancelled “fake” ID cards held by the Tuareg and Toubou (Lacher, Security Assessment in North Africa, February 2014).
  3. The tribes’ willingness to hold oil resources as collateral to gain full representation in the new government. An alternative to tribal partition in response to the lack of political inclusion or civil rights could take place in the form of holding resources as collateral. Considering oil production would be a priority for the new government, the takeover of oilfields, pipelines, or production facilities by tribes would impair the government’s ability to control its own resources needed to rebuild the country. The Libya Herald points out that the Amazigh, Toubou, and Tuareg are all “within striking distance from one sort of oil facility or another” (Zaptia, Libya Herald, July 27, 2016), making this action a real possibility for any of the minority tribes. Past indications occurred in October 2013 when armed Toubou tribesmen blockaded the Sharara oilfield (Lacher, Security Assessment in North Africa, February 2014); in late October 2013 when an Amazigh group occupied the Mellitah terminal and threatened to cut the gas flow to Italy if the Amazigh representation in the constitutional drafting committee was not increased (Pack and Cook, Majalla, December 9, 2013); a day later when a Tuareg group shut down the southern Sharara oilfield demanding “greater access to citizenship registration, development of local areas, and the reinstatement of local council members rejected by the central government,” (Pack and Cook, Majalla, December 9, 2013); and in December 2013 and January 2014 when the Toubou occupied the Sarir power station to “demand greater representation in Kufra’s municipal government,” (McGregor, The Jamestown Foundation, January 23, 2014).
  4. The existence of belief systems on the nationalist side that vary from fiercely nationalist to a milder version of the nationalist ideology, as well as the relative strength of their supporting groups. Once the nationalists achieve a real victory, there may be various levels of beliefs that impact the reach of the government’s anti-Islamist agenda. There are certainly those that are fiercely nationalist, like General Haftar, but there may also be factions of the nationalist coalition that see a risk in completely excluding the Islamists from a post-war Libya or view such actions as indicative of a dictatorship. Haftar’s Libyan National Army and Libya’s actual military forces appear to fall under Haftar’s fiercely nationalist ideology. Armed factions from Zintan are strong opponents of both the General National Congress and Islamists in general (Al Jazeera, June 2, 2014), so they too would probably rank closer to the side that wants to rid Libya of Islamist groups altogether. The other end of the spectrum – which fought in the nationalist coalition during the war but exhibits less willingness to embrace the nationalist ideology – is the Petroleum Facilities Guard (PFG), led by Ibrahim Jadhran. In 2014, the government announced its agreement with the Council of Representatives “to work together and defeat Islamist terror,” (CIPPE, September 4, 2014). Two years later, Jadhran – who considers himself a moderate Muslim – has taken a middle ground. “We stood by the government, but at the time the National Congress started to lean toward the Islamists and the parliament [Council of Representatives] leaned towards the militarization of the state and the return of a dictatorship. So we saw that we were the only ones standing in the middle,” (Nathan, Politico, August 25, 2016). If the nationalist coalition defeats the Islamists, the Petroleum Facilities Guard would still exist. Since the PFG protects most of the country’s oil industry, it would probably be coerced into supporting the new government – even though the PFG provides little to no support for the strong nationalist ideology. The PFG has over 20,000 men in its ranks, which does not compare to the combined strength of the stronger nationalist factions (see Mitchell, Nationalist Forces I and II), but does have the potential to force a strong nationalist government to consider a less-extreme stance on an Islamist crackdown – especially considering that the PFG protects Libya’s most important source of income.
  5. Willingness of the new government to go beyond dissolving Islamist parties and crack down on prominent Islamist political and militia leaders. If leaders of the nationalist government are driven by a strict anti-Islamist agenda, they will be more willing to crack down on Islamists – in the same way that Egypt cracked down on Egyptian members of the Muslim Brotherhood (Al Jazeera, December 29, 2013). A past indication highlighting a means of justification occurred when the nationalist government labeled Libya Dawn (the Islamist-dominated armed coalition supporting the General National Congress) as a terrorist group on the same level as Ansar al-Sharia (Wehrey and Lacher, Carnegie Endowment for International Peace, October 6, 2014; St. John, Libya: Continuity and Change, May 15, 2015); which is identical to incidents when Egyptian authorities claimed that Islamists were arrested on suspicion of belonging to a terrorist organization (Al Jazeera, December 29, 2013).
  6. The level of inclusion of former Qaddafi officials. Contrary to an Islamist victory where the government would ban former Qaddafi officials from power, the nationalist government would likely allow Qaddafi officials to participate. During the civil war, the Council of Representatives took legislative action to allow former Qaddafi officials to be involved in politics, and made no effort to purge its military forces of Qaddafi military officers. Past indications occurred when the Council of Representatives revoked the 2013 Political Isolation Law that banned Qaddafi officials from participating in government (BBC News, February 2, 2015); when the nationalist coalition included “elements of the Qaddafi-era armed forces” (Watanabe, Center for Security Studies, June 21, 2016); and when the political advisor of the head of the Council of Representatives, Abdallah Atamna, confirmed that “some officers inside the army led by General Khalifa Haftar are supporters of Qaddafi” and that the Council of Representatives itself included “members and workers who are Qaddafi supporters,” (Libya Prospect, October 26, 2016).
  7. The willingness of pro-Qaddafi tribes to change their allegiance to the nationalist government. If Salafist groups – particularly the Islamic State – are being progressively defeated by the nationalist forces, and if the nationalist government announces its inclusion of former Qaddafi allies, the pro-Qaddafi tribes that had ties to Salafist groups will likely be more willing to shift their allegiance to the government. If the desire to regain political influence in the sole Libyan government (like these tribes had under Qaddafi’s regime) is strong, the likelihood of this scenario increases.
  8. The ability of Salafist groups to reinforce their ranks. By denouncing the new nationalist government, the Salafists can launch a new propaganda campaign calling for jihadists to come to Libya and overthrow the kafir government in hopes of establishing a true Islamic state. Especially if the pro-Qaddafi tribes shift their support to the government, Salafist groups will face a shortage in fighters and may be forced to heavily recruit from outside the country. The ability to increase its ranks of fighters will allow Salafist groups to renew the insurgency.
  9. The level of territorial defeat that cause the Salafists to change strategy. Libya’s complex civil war has fostered an environment where Salafist groups can hold territory and govern the inhabitants as Islamic semi-states (notably Derna and Sirte). However, once the nationalist forces defeat the Islamists, the Salafist groups will be the last remaining opponents that hinder the reconstruction of Libya. If nationalist forces – possibly with the military support of external actors – launch military operations to reclaim Salafist-held areas and begin to make significant progress, there is the possibility that these groups could shift to a more decentralized, state-less strategy driven by assassinations and deadly attacks on civilian populations. Ryan and Johnston discuss the Islamic State’s progressive loss of territory and a similar strategic shift beginning to take shape (War on the Rocks, October 18, 2016). In their report on jihadist strategy and centralized vs. decentralized strategies (War on the Rocks, November 10, 2016), Clarke and Gartenstein-Ross discuss the strategy shift faced by ISIS leaders that Libyan Salafist groups would also face in the midst of territorial loss.
  10. Ability of the new government to integrate militias into the new military. If the new government continues to rely on a mix of military units and militias without integrating the latter under the same chain of command (the militias that were loyal to Operation Dignity) to fulfill the role of the military, the government risks losing the cohesion of its coalition, and therefore will not be able to sufficiently address the Salafist insurgency.
  11. Ability of the government to eliminate, or at least contain, the Salafist groups. In order to contain and eliminate this insurgency, the government will need a strong, centralized military and external assistance. A capable fighting force also needs a leader that can successfully destroy Salafist strongholds. A past indication occurred when General Haftar and his coalition successfully defeated and repelled Salafist groups from areas in eastern Libya, although at the alleged expense of excessive collateral damage (Chorin, Forbes, September 16, 2016).
  12. The level of support offered by external actors to help stabilize Libya. The United States and European Union will likely offer various types of support, particularly to address the massive migration problem stemming from Libya’s shores. Egypt and the United Arab Emirates will also likely assist the new nationalist government as part of their regional interest to undermine and ultimately prevent political Islamic movements from coming to power. The likelihood of a successful nationalist Libya increases as the level of support offered to the new government by the international community increases. However, countries like Turkey and Qatar – who are pro-Islamist and backed the Islamist coalition – will likely denounce the new government as illegitimate when it takes action to ban Islamist movements.
  13. The severity of the migration crisis. Europe’s migrant crisis will play a key role in how quickly the European Union recognizes the government’s legitimacy and offers support. If the number of refugees heading towards Europe significantly decreases by the time the nationalist government takes power, the EU may not be as quick to grant recognition without first seeing what type of government lies just across the Mediterranean (especially focused on the incorporation of democratic values). However, if the migrant flow remains steady or increases, Europe may forsake caution in order to gain the nationalist government’s assistance in mitigating the migrant flow from Libya.
  14. The UK’s willingness to act unilaterally to mitigate the migrant crisis. If the European Union is still experiencing a migrant crisis and has no viable solutions, the United Kingdom may act unilaterally to drastically reduce the number of migrants coming from Libya’s shores. A past indication occurred when the UK offered drones and warships to combat the human smuggling networks in Libya that facilitate the migrant flow (RT, May 18, 2015).
  15. The level of Russia’s desire to be involved in a post-war Libya led by a nationalist government. There are several incentives that could convince Moscow to play a large role in Libya after the nationalists achieve military victory. First, the new Libyan military would need to be rebuilt from the ground up, meaning significant arms deals and military training by foreign advisers. Second, Libya will need new technology to boost its oil production. Third, a friendly Libyan government may offer Russia the chance to expand its oil interests in the country. Fourth, Libya will need help rebuilding its entire country, which could offer Russia the chance to gain influence and acquire a key ally in the region. This could also gain Moscow the use of key Libyan ports in the Mediterranean. Past indications that support Russian incentives occurred when Russian companies had significant investments in Libya’s oil and gas sectors just prior to the 2011 revolution (which highlights the fact that Russia indeed has energy interests there) (Deutsche Welle, August 31, 2011); when Libyan oil producers set a meeting in Moscow with Russian companies to discuss Libya’s need for Russian technology in the oil industry (Sputnik, May 19, 2016); when Russia was the only country that was willing to print currency for the central bank branch under the nationalist government – despite the fact that a unity government already existed (Lewis, Reuters, June 3, 2016); when General Haftar made an official request to the Russian government to supply his military forces with weapons and military equipment (which highlights the serious potential for Russia to be the military supplier of a nationalist government) (Libyan Express, September 28, 2016); and when Russian military advisers allegedly arrived in eastern Libya to support Haftar’s nationalist forces – which may indicate Russia’s preference for General Haftar and the nationalist coalition (The Libya Observer, November 8, 2016).

Bibliography

Feature Photo: Posted on the Council of Representatives Facebook page, May 30, 2016

Adam Nathan, “Militiaman who became Libya’s oil kingpin,” Politico, August 25, 2016

Aidan Lewis, “Separate banknotes symbols of Libyan disunity, financial disarray,” Reuters, June 3, 2016

“Amazigh Supreme Council boycotts Libyan Constitutional Assembly election,” Nationalia, February 21, 2014

Andrew McGregor, “Tripoli Battles Shadowy Qaddafists While Tribal Rivals Fight Over Southern Libya,” The Jamestown Foundation, Terrorism Monitor, January 23, 2014

Colin Clarke and Daveed Gartenstein-Ross, “How Will Jihadist Strategy Evolve as the Islamic State Declines?” War on the Rocks, November 10, 2016

“Egypt widens crackdown on Muslim Brotherhood,” Al Jazeera, December 29, 2013

Ethan Chorin, “A ‘Rogue’ General is Breaking Libya’s Stalemate,” Forbes, September 16, 2016

Frederic Wehrey and Wolfram Lacher, “Libya’s Legitimacy Crisis,” Carnegie Endowment for International Peace, October 6, 2014

“Gaddafi supporters and Haftar” Libya Prospect, October 26, 2016

“Haftar asks Russia to lift arms embargo and to apply the Syrian scenario in Libya,” Libyan Express, September 28, 2016

Jason Pack and Haley Cook, “Breaking the Libyan Oil Blockade,” Majalla, December 9, 2013

“Libya Needs Russian Technology to Return Country’s Oil Industry to Normal,” Sputnik, May 19, 2016

“Libya revokes bill which banned Gaddafi-era officials from office,” BBC News, February 2, 2015

“Libya’s former rebels to keep oil flowing amid Islamist surge,” CIPPE, September 4, 2014

Lisa Watanabe, “Libya – in the Eye of the Storm,” Center for Security Studies, June 2016

“Mapping Libya’s armed groups,” Al Jazeera, June 2, 2014

“Migrant crisis: UK offers drones, warships to help tackle human traffickers in Libya,” RT, August 26, 2015

Patrick Ryan and Patrick B. Johnston, “After the Battle for Mosul, Get Ready for the Islamic State to go Underground,” War on the Rocks, October 18, 2016

Ronald Bruce St. John, Libya: Continuity and Change, Routledge, May 15, 2015

“Russian experts are supporting Haftar’s forces via Egyptian-Emirati assistance,” The Libya Observer, November 8, 2016

“Russian business interests are casualty of Libyan conflict,” Deutsche Welle, August 31, 2011

Sami Zaptia, “A wider political settlement is a prerequisite to increased Libyan oil production? Analysis,” Libya Herald, July 27, 2016

Wolfram Lacher, “Libya’s Fractious South and Regional Instability,” Security Assessment in North Africa, February 2014

The Russian Arctic meets the Chinese New Silk Road

In this article on the development of the energy, business and military nexus of the Arctic by Russia, the Red (Team) Analysis Society studies how the Russian Arctic is becoming a new crucial business and strategic “centre” in the world, through the creation of numerous energy and infrastructure projects and operations, which attract Chinese companies (Jean-Michel Valantin, “Russian Arctic Oil: a New Economic and Security Paradigm?”,The Red (Team) Analysis Society, October 12, 2016).

In effect, the Russian political, industrial and business authorities turn this immense extreme scenario, warning, anticipation, Russia, Arctic, Red (Team) Analysis Society, uncertainty, geopolitics, China, Norwayregion into an international attractor, thanks to the combination of the consequences of climate change and of the natural resources, which become accessible because of the warming of the region and thus relative retreat of ice (see below in part 1, the 28 Oct 2016 NASA video visualising the retreat of the Arctic ice since 1984).

The Russian strategy is efficient with, among others, the Chinese and Norwegian business and strategic actors, as well as interests. The Russian Arctic attractor is deeply dominated by Russia’s understanding and strategic vision of a quickly and massively changing planet (Jean-Michel Valantin, “The Arctic, Russia and China’s Energy Transition“, The Red (Team) Analysis Society, 2 February, 2015) and “The Planetary Crisis Rules (Part 1)”, The Red (Team) Analysis Society, 27 January 2016).

China is sharing with Russia the understanding of the very practical consequences of the current planetary change upon politics and the economy. Consequently, the Chinese political and business authorities take action to turn these changes to their advantage (Valantin, “The Chinese Shaping of the North”, The Red (Team) Analysis Society, 9 June 2014). This goes with the development of commercial and strategic negotiations and partnerships with Russia, the dominant power of the Eurasian Arctic region.

This phenomenon is typical of the new convergence between the current economy, geopolitics, and the emergent “Anthropocene” geological era. (Jean-Michel Valantin, “The Anthropocene Era and economic (in)security”, The Red (Team) Analysis Society, 19 September 2016). The international geophysics community thus qualified this new era because humankind has become the main geological and biological force on the planet, and this immense force is driving a planetary change that affects the atmosphere, the lithosphere, the hydrosphere, the cryosphere and the biosphere (J. R. Mac Neill, Something New Under the Sun, 2000).

In this article, we shall more particularly focus upon the way the current energy, industrial and military development of the Russian changing Arctic is attracting public and private Chinese sectors, meanwhile becoming the new and long-term giant support of economic, business and security development for these two countries. We shall thus see the resulting interlocking of the Russian Arctic strategy with the Chinese “New Silk Road” initiative.

Creating a Russian Eurasian corridor on an extreme planet

Over the last few years, Russia has been accelerating and intensifying the energy, commercial and military development of its land and sea Arctic region. The Russian political, industrial and trade authorities are creating an energy, industry and maritime trade corridor, which connects Asia to Europe. By the same operation, they are turning their Arctic zone into a new oil and gas Eldorado (Charles Emerson, The Future History of the Arctic, 2010).

scenario, warning, anticipation, Russia, Arctic, Red (Team) Analysis Society, uncertainty, geopolitics, China, Norway

What makes this extreme endeavour possible is the fact that this immense region is profoundly affected by the warming wrought by anthropogenic climate change. In effect, during the last fifty years, the Arctic region has known the most rapidly warming on the planet, with a 3° to 4° degrees increase in average temperatures (Thomas Nilsen, “Arctic Russia Warms 2.5 Times Faster Than the Rest of the Globe”, The Independent Barents Observer, November 29, 2015).

The disappearance of the Arctic sea ice is most strikingly shown in this 28 October 2016 animation gathering latest research by NASA below, where “Dr. Walt Meier of NASA Goddard Space Flight Center also describes how the sea ice has undergone fundamental changes during the era of satellite measurements.” (NASA, “See How Arctic Sea Ice Is Losing Its Bulwark Against Warming Summers “, 28 Oct 216).

This mammoth change is profoundly altering the geophysics of the region, and goes with a decrease of the time, extent and thickness of the sea ice and of the land glacial conditions. In thirty years, between the half and two-thirds of the summer Arctic sea ice have disappeared, setting up the conditions for a thermal feed back loop that keeps the ice increasingly melting, while the Arctic ocean absorbs more and more solar radiation, and heats up. This feed back loop is now qualified as “the Arctic death spiral”(Joe Romm, “Arctic Death Spiral Update: What Happens in the Arctic Affects Every Where Else”, Think Progress, May 3, 2016; see also video above).

The Russians translate into geoeconomic and geopolitical opportunities those geophysical changes. Consequently, this extreme region becomes accessible for industrial development, and, as we have seen in “Russian Arctic Oil: a New Economic and Security Paradigm?” (The Red (Team) Analysis Society, October 12, 2016), the Russian oil and gas companies have started to implement onshore and offshore operations for extracting oil in the extreme conditions resulting from the meeting of cold and extreme weather, sea ice and the warming effects of climate change.

Among many examples, a subsidiary the National oil company Rosneft, has started drilling in the Okhotsk Sea, while scenario, warning, anticipation, Russia, Arctic, Red (Team) Analysis Society, uncertainty, geopolitics, China, Norway, Sechin, Rosneft, KremlinRosneft keeps on exploring the area (Atle Staalesen, “No Pause in Arctic Exploration – Igor Sechin”, The Independent Barents Observer, July 18, 2016). Meanwhile, Rosneft continues to buy exploitation licenses. The last to date, but not the least, is the Lisiansky one, which should be operated through a partnership with the Norwegian Statoil, while the drilling itself is done by the Chinese rig “Nanhai 9” (Staalesen, ibid).

If the warming of the Arctic makes the latter more accessible, the summer disaggregation of the ice cap gives birth to numerous icebergs, which are a vital danger to the oil rigs operating in the Russian economic exclusive zone. In order to prevent this risk, Rosneft is investing in systems of protection, while developing systems to “move away” the icebergs from the oil rigs. During the summer 2016, an expedition led to create a scientific basis in the Laptev Sea allowed experimenting with 18 different ways to tug icebergs ( Atle Staalesen, “Rosneft Builds Base on Laptev Sea Coast”, The Independent Barents Observer, August 10, 2016). A one million tons iceberg was moved at one occasion (Atle Staalesen, “Rosneft Moves 1 Million Ton Big Iceberg”, The Independent Barents Observer, October 11, 2016). This operational approach aims at guaranteeing the technical sustainability of the Russian Arctic strategy.

The current relative retreat of the sea ice also incites Russian shipping companies to build a whole new generation of diesel and nuclear giant icebreakers. Those are devoted to the constant opening of the Northern Sea Route (RT, “Russia Floats Out Arktika Icebreaker, set to be world’s largest”, 16 June, 2016).

scenario, warning, anticipation, Russia, Arctic, Red (Team) Analysis Society, uncertainty, geopolitics, China, Norway, claim, border
Latest map (5/8/2015) of Russian claims in the Arctic, as maintained by IBRU: Centre for Borders Research of Durham University.Click here (pdf) to access large map with details and here to access IBRU Center.

However, the Arctic remains an extreme region, with a fragile environment, necessitating the capability to coordinate shipping convoys, harbours and infrastructure security in the context of extreme weather. In order to achieve maximum security and coordination in this extreme environment, the Kremlin decided to put the Russian ministry of Defence in charge of the whole Arctic shipping operations in the Russian Arctic economic exclusive zone. This decision is fully involving the military in the development of the region. To implement this decision, the Ministry of Defence notably created the Oboronlogitika Company in 2011. The company is owned by the Russian ministry of Defence and is in charge of all the civilian and military shipping operations in the area (Atle Staalesen, “Ministry of Defence Takes Charge of Arctic Shipping”, The Independent Barents Observer, July 07, 2016).

scenario, warning, anticipation, Russia, Arctic, Red (Team) Analysis Society, uncertainty, geopolitics, China, Norway, northern fleet, bases

The Arctic space is also developed by the Russian military through the creation of new bases on the Wrangel Island, North of the Bering Strait at the extreme east of the Northern Sea Route as well as on the archipelago of the Franz Joseph Land – north of the Barents Sea – on the north-west coast of Siberia and thus of the Northern sea route (Atle Staalesen, “Arctic Brigade Advances on Franz Joseph Land”, The Independent Barents Observer, October 03, 2016 and (Mathew Bodner, Alexey “Russia Starts Building Military Bases in the ArcticThe Moscow Times, 8 Sept 2014). Meanwhile, the Russian political and economic authorities are using the military in order to push for the creation of new land and sea infrastructures along the Siberian coast, on the islands and on the coasts of the Siberian Archipelago in the Barents Sea, the Kara Sea, the Laptev Sea, the terribly cold and dangerous Chukchi Sea, the Eastern Siberian Sea and the Strait of Bering (Atle Staalesen, “Rosneft Prepares Seismic Mapping of eastern Arctic Waters”, The Independent Barents Observer, April 15, 2016).

The infrastructures, especially harbours, coast guards, and environmental survey, among others, which are needed on the Siberian coast in order to develop the Northern Sea route, also necessitate to bring much more power to the cities, harbours and industries on these northern zones, which were so far quite isolated.

scenario, warning, anticipation, Russia, Arctic, Red (Team) Analysis Society, uncertainty, geopolitics, China, Norway, PevekFor example, the harbour city of Pevek, on the East Siberia Sea, the northernmost Russian city, is preparing the infrastructures that are going to host the first floating nuclear reactor (Atle Staalesen, “Russia’s Northernmost Town Prepares for Nuclear Future”, The Independent Barents Observer, October 04, 2016). This reactor is being built at the Baltic Yards in St. Petersburg, by Rosernergoatom, a subsidiary of the mammoth national company Rosatom (Nick Cunningham, “Russia to Power Arctic Drilling with Floating Nuclear reactors”, OilPrice.com, April 27, 2015). After a whole year of test, the nuclear reactor, the “Akademik Lomonossov” will be transported to Pevek, where it is expected to power the city (Staalesen, ibid).

This floating nuclear reactor, the first of a series, is meant to have the capability to power a 200.000 people city, when Pevek hosts less than 5000 inhabitants. This discrepancy shows the strategic importance given to this city close to the Bering Strait. In effect, Pevek is destined to grow with the increasing number of the international shipping convoys, which will be using the Route (Atle Staalesen, “Aiming for Year Round Sailing on Northern Sea Route”, The Independent Barents Observer, December 14, 2015). Other floating nuclear reactors are meant to be built and used in order to power the numerous onshore and offshore new Russian infrastructures, which are rapidly structuring the Russian Arctic space (Staalesen, ibid).

In other terms, with the development of the Arctic, Russia installs itself into a long game of business and strategy (Emerson, ibid). This goes with the rapidly developing Russo-Chinese cooperation in the Arctic.

The Russo-Chinese energy, industrial and business partnerships in the Arctic

In effect, over the last few years, China has started becoming an important Arctic actor, through its membership as permanent observer at the Arctic Council as a “near-Arctic nation”. China is signing bilateral agreements with all the members of the Arctic council and is particularly interested by the energy and trade potential of the Russian Arctic (Valantin, “Arctic China (2) – The Chinese shaping of the North“, 9 June 2014”, The Red (Team) Analysis Society, 9 June 2014). China is projecting its gigantic influence in the Arctic, through scientific expedition, cargo convoys, trade and science partnerships, as well as financial investments, and has built its first own nuclear icebreaker, the Snow Dragon.

An illustration of this strong dynamic is the fact that, during the summer 2016, the Chinese streamer seismic vessel Hysy 720 has completed an undersea seismic mapping operation, after having been chosen for this task by the Russian giant oil company Rosneft. This operation maps in 3-D images the underground formations through the use of sound waves, in order to identify their geological content, and thus their oil and gas potential. The marine underground is divided into blocks, which are then bought by the energy companies that wish to explore and exploit them. The Chinese ship Hysy 720 is the first grand deepwater seismic vessel not only built in China, but also owned by Chinese oilfield Services Ltd. Rosneft decided to hire this company in April 2016 in order to accomplish the mapping operation of two blocks during the summer 2016, before the return of the winter night and cold. (Atle Staalesen, “Russians Choose Chinese Explorers for Arctic Oil”, The Independent Observer, April 27, 2016). In order to prepare its campaign, the Chinese ship docked in Kirkenes, i.e. the northernmost Norwegian harbour city, and signed a docking agreement with the local Henriksen shipping company.

We should note that the mapping of the second block was done in partnership and close cooperation with the Norwegian Statoil Company for the Norwegian side of the Barents Sea (Atle Staalesen, “First Arctic Summer for Chinese Oil men“, The Independent Observer, September 05, 2016). This shows, as other binational partnerships, the good Arctic relations between Norway, Russia and their companies, regarding the combination of energy development with changes in the Arctic environment.

The Arctic Russian-Chinese partnership of the summer 2016 is just one among many others energy partnerships between Russia and China, as, shows the example of the Yamal LNG plant where the Chinese invested a massive 12 billion dollars along Russian banks which input another 12 billion dollars  (Valantin, “Russian Arctic Oil”, ibid). These partnerships reveal how the energy, shipping, industrial, business and strategic interests of Russia and China are converging in the Arctic.

These operations are only one example of the way Russia, in the current Anthropocene Era, is developing its Arctic region, changed by anthropogenic global warming, while developing partnerships with China as well as Norway and many other countries. scenario, warning, anticipation, Russia, Arctic, Red (Team) Analysis Society, uncertainty, geopolitics, China, Norway, 50 years victory, North PoleAs we observed previously, China’s business operators are gearing towards the Arctic, (See “Jean-Michel Valantin, “Arctic China (1)- The Dragon and the Vikings and Arctic China (2) ibid ”), while Russia is becoming a critical actor in a time when climate change is deeply altering the trade, energy and strategic status balance of the whole Arctic region (Marc Lanteigne, “Policy Brief-One of the Three Roads: The Role of the Northern Sea Road in the Evolving Sino-Russian Strategic Relations”, Norwegian Institute of International Affairs, 2/ 2015).

The Chinese New Silk Road meets the Russian Arctic Long Game

The partnerships between Chinese and Russian businesses are encouraged at the highest level by Russian political authorities, as shown by Russian Deputy Prime minister Dmitri Rogozin 7 December 2015 statement, given in Beijing, when he invited Chinese involvement in the Northern Sea Route (“Moscow invites Beijing to take part in Arctic sea route project”, RT, 7 December, 2015). This invitation is rooted in the nexus of Russo-Chinese political, logistical and business partnerships, heightened by the Chinese “New Silk Road” strategy (Lanteigne, ibid).

The “New Silk Road” is an immense process for the development of land and maritime transportation, as well as energy, mineral and cyber infrastructures, officially launched by Chinese President Xi Jinping in 2013. It is accompanied by legions of commercial contracts and political deals between the Chinese public and private sectors and their counterparts in the different countries and continents belted by the “One Belt, One Road” initiative (Shannon Tiezzi, “China’s New Silk Road” vision revealed – a new series in Xinhua offers the clearest vision yet of China’s ambitious “New Silk Road””, The Diplomat, May 09, 2014). The New Silk Road is conceived as being a gigantic “loop” spanning from the centre of the “Middle Kingdom” to Rotterdam and from the port of Quanzhou in Fujian to Kenya, Egypt and Europe (Tiezzi, ibid). It goes with massive investments made by the Chinese-led Asian Investment and Infrastructures Bank (AIIB).

An example of the involvement of the actors of the maritime New Silk Road in the Russian Arctic is the way the China Shipping Ocean Company (COSCO) has sent more than five of its ships on several voyages along the Northern Sea Route in 2016. Mr Ding Nong, CEO of COSCO, one of the biggest shipping company in the world, announced in October 2016, at the Arctic Circle conference in Reykjavik, capital city of Iceland, that

“As the climate becomes warmer and polar ice melts faster, the Northeast Passage has appeared as a new trunk route connecting Asia and Europe” … “COSCO Shipping is optimistic about the future of the NSR and Arctic shipping” (Atle Staalesen, “COSCO Sends 5 Vessels Through Northern Sea Route”, The Independent Barents Observer, October 10, 2016, and Jean-Michel Valantin, “Arctic China (1)- The Dragon and the Vikings”, The Red (Team) Analysis Society, 24 May, 2014).

scenario, warning, anticipation, Russia, Arctic, Red (Team) Analysis Society, uncertainty, geopolitics, China, Norway

It is interesting to note that, for such an important business actor, climate change is fully recognized and turned into an opportunity, and that climate disruption is in fact turned into a massive commercial advantage.

In other terms, Chinese interests and needs meet the Russian Arctic strategy, and are turning this warming region into a continental-wide hub of commerce, energy and natural resources development, while reinforcing each other: the Russian Arctic becomes the basis for a long game energy, business and military strategy, while the Eurasian corridor it creates becomes a new and essential segment of the New Silk Road.

The strategic convergence of these two Eurasiatic giants is based on the new alliance of the oil, gas, nuclear and finance sectors, and on the will to turn the potentially catastrophic consequences of climate change into a large spectrum support. This shows that potential threats, if understood and anticipated early enough, can be transformed into strategic opportunities (Helene Lavoix, “Business and Geopolitics: Caught Up in the Whirlwinds?”, The Red (Team) Analysis Society, 19 October, 2016).

This convergence has deeply transformative consequences, because it is starting to attract other actors, for example in East Asia, such as Viet Nam, South Korea and Japan to the Arctic, besides historical Arctic actors such as European Norway. Furthermore, railroads are built, through investments and development, to link Russian Arctic harbours to Central Asia (Atle Staalesen, “Chinese money for Archangelsk rail and port”, The Independent Barents Observer, December 10, 2015 and “This Arctic Shipping makes it into the history books: From South Korea to Kazakhstan through the Northern Sea Route”, The Independent Barents Observer, July 25, 2016).

Is the warming Arctic becoming the “centre” of an emerging Eurasian market with related security shift, while the Arctic keeps on warming?

It is the issue the Red (Team) Analysis Society will study in the next part of this series, by continuing to underline how geopolitical and environmental changes are of importance to the business and security communities.

To be (soon) continued.

About the author: Jean-Michel Valantin (PhD Paris) is the Director of Environment and Security Analysis at The Red (Team) Analysis Society. He is specialised in strategic studies and defence sociology with a focus on environmental geostrategy.

Featured image: 50 Years of Victory at North Pole by Christopher Michel 50 Years of Victory North Pole Icebreakers, 12 July 2015, CC BY 2.0 (http://creativecommons.org/licenses/by/2.0), via Wikimedia Commons and Flickr.

The United Arab Emirates: the Rise of a Sustainable Industrial Empire?

Modern societies, economies and businesses become increasingly unsustainable because of the convergence of their complex and in-built vulnerabilities with climate change. However, the United Arab Emirates (U.A.E.) has initiated a very interesting strategy: the experimentation with and promotion of sustainability on a national and international scale, in order to support an adapted way of life as well as a proficient strategic, economic and business model.

This strategy aims at addressing two issues of primary concern to the Emirates. First, the Emirates must find a way to remain viable knowing that climate change is going to turn the Gulf region into a very challenging place (Damian Carrington, “Extreme Heatwaves could push Gulf climate beyond human endurance, study shows”, The Guardian, 26 October 2015). Relatedly, and second, the U.A.E. must find a way to maintain its geopolitical influence, which emerged with oil, when oil and gas reserves risk being depleted by 2050.

261px-Dust_storm_over_Iran,_Iraq

In this framework, it seems that the U.A.E. seeks to become a new kind of geopolitical power through the promotion of renewable energy and sustainability.

In the first part, we shall thus focus on the link being made by the U.A.E.’s political authorities between security and renewable energy. Then, we shall see how the U.A.E., and especially Abu Dhabi, becomes a leader of what we call the sustainability revolution. Finally we shall emphasise how this leadership becomes a new and powerful comparative advantage.

“Renewing” the UAE’s energy security

On 10 February 2015, Abu Dhabi’s Crown Prince Sheikh Mohamed bin Zayed al-Nahyan, one of the most senior officials of the U.A.E.’s security apparatus, declared:

“In 50 years, when we might have the last barrel of oil, the question is: when it is shipped abroad, will we be sad? … If we are investing today in the right sectors, I can tell you we will celebrate at that moment.” (“Sheikh Mohammed bin Zayed inspirational view of a post-oil UAE”, The National, February 10, 2015).

320px-Sheikh_Mohammed_bin_Zayed_Al_Nahyan_on_13_May_2008_Pict_1Sheikh al-Nahyan is, in the same time, the principal adviser to the President of the U.A.E. on energy issues, Deputy Supreme Commander of the Armed Forces and a member of the board of Abu Dhabi’s powerful sovereign fund (“The Mind of Mohamed bin Zayed”, Al Bawaba News, 17-03-2015).

What Sheikh al-Nahyan emphasises is that the coming depletion of oil and gas resources is going to deeply affect the U.A.E., because the country is one the current major energy powers with 6% of the world oil reserves while it “holds the seventh-largest proved reserves of natural gas in the world” (U.S. E.I.A., “U.A.E.”, May 18, 2015), notably through the Emirate of Abu Dhabi (one of  the seven emirates of the Federation called the U.A.E.), which holds 94% of these oil reserves and 92 % of the gas reserves (Oil & Gas Journal, Worldwide Look at Reserves and Production, January 1, 2015).

In other words, the Emirati political authorities, at the highest level, are committed to a national energy transition strategy. Notably, the official in charge of national defence and energy issues is fully integrating into his political thought the peak oil problematic, i.e. the process that drives an oil or gas deposit to depletion, after the maximum of extraction has been reached; as a result, this peak production is followed by an inexorable decline (Gaurav Agnihotri, “Peak oil: Myth or Coming Reality?”, OilPrice.com, June 5, 2015).

The future oil depletion is combined with the dangers stemming from climate change and related rise of temperatures the entire Persian Gulf and its population will face over the coming decades, as seen in “Alberta’s wild mega wild fire and the United Arab Emirates security” (Jean-Michel Valantin, May 23, 2016).

Thus, the U.A.E.’s authorities are grounding their political and strategic thinking in the acceptance of the reality of peak oil and climate change, as opposed to denial and “climate skepticism” (Naomi Klein, This Changes Everything, 2014). This very robust understanding goes with the capability to accept that massive environmental changes are on their way (“Scientific consensus on global warming”, Union of Concerned Scientists).

Acknowledging this difficult reality is what allows the U.A.E.’s authorities to elaborate their thinking to find a way through the challenging times ahead and to construct a new definition of security.

Hence, we witness here an instance of strategic thinking, because their thoughts are based on the acceptance of very inconvenient facts, while the vision this thinking generate allows transforming a potential major security issue for the economic and development model of the Emirates into an opportunity (Edward Luttwak, Strategy, The Logic of War and Peace, 2002).

320px-Oil_Rig_at_Port_Khaled_(Sharjah,_UAE)

In effect, facing these extremely dangerous odds, the U.A.E.’s political authorities are devising a particularly original grand strategy, grounded in the development of its leadership in the field of sustainability, and this on a worldwide scale.

Leading the sustainability revolution?

This strategy has been elaborated and experimented since 2006, when Abu Dhabi launched several major projects based on the development of sustainability and renewable energy, exemplified by the new urban project in the city of Abu Dhabi called Masdar city and covering 5,95 km2 – the overall area for Abu Dhabi city reaches 972 km2 (Patrick Kingsley, “Masdar: the shifting goalposts of Abu Dhabi’s ambitious eco-city”, Wired, 17 December 2013).

Masdar city is an experiment in urban development aiming at zero carbon emission, and powered by renewable energies, especially by solar power. Despite important financial difficulties triggered first by the 2008 global financial crisis then by the violent fall of oil prices starting in August 2014 (Jean-Michel Valantin, “Oil Flood 1- The Kingdom is Back”, The Red Team Analysis Society, December 15, 2014), Masdar now exists (Kingsley, Ibid.).

Masdar has been built by combining traditional desert building with the state of the art “green and smart tech” and with the rediscovery of urban development principles aiming at maximizing the role of shade and wind to naturally temper heat (Kingsley, ibid).

320px-Masdar_city_under_construction_2012

In fact, Masdar is an experiment that aims at adapting the Persian Gulf to the difficult emerging planetary conditions, by integrating the necessity of adaptation to climate change and the philosophy of energy transition to urban and social development, thanks to the meeting between the wisdom of ancestral principles and modern science and technology (Jean-Michel Valantin, “The Planetary Crisis Rules, Part 1”, The Red Team Analysis Society, 25 January 2016).

It must be noted that, despite the technical and financial difficulties and the social challenge of creating a functional and liveable urban development of 5,95 km2 “ex nihilo”, sustainable Masdar has finally been built. Some European and U.S. analysts qualify the project as being a “green ghost town”, as if the delays known were the equivalent of a definitive failure, resulting from the currently very low population (Suzanne Goldenberg, “Masdar’s zero-carbon dream could become world’s first green ghost town”, The Guardian, 16 February 2016).

In fact, by creating Masdar, the U.A.E. is proposing a very different model and approach to the one that has been applied so far in the construction of the world hubs that Dubai or Abu Dhabi have become.

The problem with this European approach that identifies Masdar with a failure, is that it misses the sense of timing and foresight that infuses the project and thus the way Masdar’s development expresses and supports the grand strategy currently being devised by Abu Dhabi. It is also based on a very Eurocentric approach, nowadays based on a systematic short-term view and a tendency to distrust the relative display of central planning and authority necessary to create a place like Masdar.

The rise of a new strategic comparative advantage?

The Emirati grand strategy shines through the political, industrial and business coherence of Abu Dhabi’s investments. While Masdar City was being built, the U.A.E. has invested more than 600 million dollars to build Shams 1, at 120 km from Abu Dhabi city, the world largest concentrated solar power plant, capable to generate more than 100 megawatts, with the capability to power 20.000 homes in the U.A.E. (Wissam Keyrouz, “UAE channels oil money into alternative energy”, Phys.org, 23 November 2015).

320px-Gemasolar2012The Emirate is also a major partner in the Gemasolar 20 megawatts plant in Spain, and has a 20% share in the London Array wind power project, which aims to generate 630 megawatt power, an energy level sufficient to power 500.000 British homes (Keyrouz, ibid). By doing this, the U.A.E. is recreating its capacity to export energy in a very innovative way.

According to Thani al-Zeyoudi, head of the energy and climate change division of the U.A.E. Foreign Ministry, “over the past five years, the U.A.E. channelled more than 840 million dollars into renewable energy projects in 25 countries” (Charis Chang, “Baoding and Masdar City: two of the most unlikely clean technology hubs”, News.com.au, December 2, 2015).

Meanwhile, the U.A.E.’s authorities study a 35 billion dollars investment in various non-oil and gas projects, and 20 billion dollars for a nuclear plant. Added to this, the International Renewable Energy Agency (IRENA) settled in Masdar City, from where it promotes the development of renewable energy all around the world (Adrian Pitts, “How to build a city fit for 50°C heatwaves”, The Fifth Estate, 29 October 2015).

What all these initiatives reveal is the U.A.E.’s grand strategy, which aims to transform the Emirates into an industrial and financial great power of what Jeremy Rifkin calls “the third industrial revolution”, in a world changed by the nexus of the converging climate, the water, and the energy crisis (Jeremy Rifkin, The Third Industrial Revolution, how lateral power is transforming energy, the economy and the world, 2011).

CSIRO_ScienceImage_2143_Solar_tower_at_CSIRO_Energy_Centre_creating_solar_steam

In other words, the U.A.E. is getting ready to become what we could call “an empire of the Anthropocene”. The word “Anthropocene”, to qualify to qualify the current geological era, underlines the fact that humanity, through the way it has developed itself by using and transforming its own environment, has become the dominant geophysical force on Earth (Jan Zalasiewicz,Anthropocene: a new epoch of geological time?, 2011).

There is a fundamental paradox of the Anthropocene: human beings have induced the emergence of a geological epoch that is transforming the Earth into the equivalent of an autonomous global devouring monster, created by industrial societies. However, these dynamics are so powerful and autonomous that our societies find themselves into a planetary situation that could overwhelm them.

Through the adoption of this new model with its worldwide investment strategy, the U.A.E. installs itself at the centre of the rise of the industry of renewable energy. This industry is becoming more and more significant because of the international and national politics of climate change mitigation, some of them led on a massive scale. This change of scale sustains the international trend toward energy transition, as is the case in China (Jean-Michel Valantin, “The Arctic, Russia and China’s energy transition”, The Red Team Analysis Society, updated July 27 2015).

320px-Dunhuang.champs.de.panneaux.solairesThe U.A.E. is devising a grand strategy based on the political, industrial, financial, scientific and technological promotion of renewable energy, in order to keep its affluence and influence in an age of oil decline and climate change. The U.A.E. is getting ready to become a strategic, industrial, and financial hegemon of the rising sustainability industry.

This is why the Red (Team) Analysis Society is devoting time and energy to attract attention about this important evolution, and to support public and private leaders to further develop a prospective vision of what it means and will increasingly imply in terms of strategic and business opportunities.

Featured image: Shams 1 100MW CSP Abu Dhabi, UAE by Masdar Official, Flickr, December 26, 2012, CC BY-NC-SA 2.0.

About the author: Jean-Michel Valantin (PhD Paris) is the Director of Environment and Security Analysis at The Red (Team) Analysis Society. He is specialised in strategic studies and defence sociology with a focus on environmental geostrategy.

The Red (Team) Analysis Weekly – 14 April 2016

Each week our scan collects weak – and less weak – signals… Each section focuses on signals related to a specific theme: world (international politics and geopolitics); economy; science; analysis, strategy and futures; technology and weapons; energy and environment. However, in a complex world, categories are merely a convenient way to present information, when facts and events interact across boundaries.

Read the 14 April 2016 scan  

The Weekly is the scan of The Red (Team) Analysis Society and it focuses on national and international security issues. It was started as an experiment with Paper.li as a way to collect ideas, notably through Twitter. Its success and its usefulness led to its continuation.

The information collected (crowdsourced) does not mean endorsement but points to new, emerging, escalating or stabilizing problems and issues.

If you wish to consult the scan after the end of the week period, use the “archives” directly on The Weekly.

Featured image: “C-band Radar-dish Antenna”. Licensed under Public domain via Wikimedia Commons.

The Red (Team) Analysis Weekly – 10 March 2016

Each week our scan collects weak – and less weak – signals… Each section focuses on signals related to a specific theme: world (international politics and geopolitics); economy; science; analysis, strategy and futures; technology and weapons; energy and environment. However, in a complex world, categories are merely a convenient way to present information, when facts and events interact across boundaries.

Read the 10 March 2016 scan in newspaper format  

The Weekly is the scan of The Red (Team) Analysis Society and it focuses on national and international security issues. It was started as an experiment with Paper.li as a way to collect ideas, notably through Twitter. Its success and its usefulness led to its continuation.

The information collected (crowdsourced) does not mean endorsement but points to new, emerging, escalating or stabilizing problems and issues.

If you wish to consult the scan after the end of the week period, use the “archives” directly on The Weekly.

Featured image: “C-band Radar-dish Antenna”. Licensed under Public domain via Wikimedia Commons.

The Red (Team) Analysis Weekly – 18 February 2016

Each week our scan collects weak – and less weak – signals… Each section focuses on signals related to a specific theme: world (international politics and geopolitics); economy; science; analysis, strategy and futures; technology and weapons; energy and environment. However, in a complex world, categories are merely a convenient way to present information, when facts and events interact across boundaries.

Read the 18 February 2016 scan in newspaper format  

The Weekly is the scan of The Red (Team) Analysis Society and it focuses on national and international security issues. It was started as an experiment with Paper.li as a way to collect ideas, notably through Twitter. Its success and its usefulness led to its continuation.

The information collected (crowdsourced) does not mean endorsement but points to new, emerging, escalating or stabilizing problems and issues.

If you wish to consult the scan after the end of the week period, use the “archives” directly on The Weekly.

Featured image: “C-band Radar-dish Antenna”. Licensed under Public domain via Wikimedia Commons.

The Red (Team) Analysis Weekly – 4 February 2016

Each week our scan collects weak – and less weak – signals… Each section focuses on signals related to a specific theme: world (international politics and geopolitics); economy; science; analysis, strategy and futures; technology and weapons; energy and environment. However, in a complex world, categories are merely a convenient way to present information, when facts and events interact across boundaries.

Read the 4 February 2016 scan  

The Weekly is the scan of The Red (Team) Analysis Society and it focuses on national and international security issues. It was started as an experiment with Paper.li as a way to collect ideas, notably through Twitter. Its success and its usefulness led to its continuation.

The information collected (crowdsourced) does not mean endorsement but points to new, emerging, escalating or stabilizing problems and issues.

If you wish to consult the scan after the end of the week period, use the “archives” directly on The Weekly.

Featured image: “C-band Radar-dish Antenna”. Licensed under Public domain via Wikimedia Commons.

The Red (Team) Analysis Weekly – 14 January 2016

Each week our scan collects weak – and less weak – signals… Each section focuses on signals related to a specific theme: world (international politics and geopolitics); economy; science; analysis, strategy and futures; technology and weapons; energy and environment. However, in a complex world, categories are merely a convenient way to present information, when facts and events interact across boundaries.

Read the 14 January 2016 scan  

The Weekly is the scan of The Red (Team) Analysis Society and it focuses on national and international security issues. It was started as an experiment with Paper.li as a way to collect ideas, notably through Twitter. Its success and its usefulness led to its continuation.

The information collected (crowdsourced) does not mean endorsement but points to new, emerging, escalating or stabilizing problems and issues.

If you wish to consult the scan after the end of the week period, use the “archives” directly on The Weekly.

Featured image: “C-band Radar-dish Antenna”. Licensed under Public domain via Wikimedia Commons.

Iran, China and the New Silk Road

Given the rising tensions between Iran and Saudi Arabia since the beginning of the twenty-first century, reaching new heights in early 2016 with the beheading of a Shi’a Cleric by Saudi political authorities, which generated violences on Saudi diplomatic representations notably in Iran, in turn leading to the Saudi decision to break diplomatic relations with Iran (e.g. BBC News, 4 Jan 2016), understanding the new dynamics existing between Iran and China is even more important, as they may carry new weight, usually not considered as far as the Middle East is concerned.

On 4 March 2013, an Iranian military fleet, which had left the Iranian port of Bandar Abbas, docked at the Chinese port of Zhangjiagang, after a forty days journey (“Thread: Iran 24th fleet heading for Malacca Strait after Chins stop: Navy Cmdr”, Pakistan Affairs, 7th march 2013).

On 5 May 2014, the Chinese Defence minister Chang Wanquan declared, during a meeting with his Iranian counterpart Hossein Dehqan, that Iran was a “strategic partner” of China (Zachary Keck, “China calls Iran a “strategic partner”, The Diplomat, May 06, 2014).

Liaoning_aircraft_carrier_Sept_2012

On 23 September 2014, this declaration was followed by the first joint naval exercise between the Chinese navy and the Iranian one, after the docking of a Chinese military flotilla at the Bandar Abbas port (Ankit Panda, “China and Iran’s historic naval exercise“, The Diplomat, Sept. 23, 2014).

Meanwhile, the Chinese government was having an important role as part of the international negotiations aimed at lifting the sanctions on Iran in exchange for the abandonment by Iran of the part of their nuclear program that could lead to the enrichment of uranium, and thus to military development (Iran sanctions, US Department of State).

China, with Russia, stood up for a rapid sanctions relief once the deal was reached. On 25 July 2015, the deal was endorsed by the UN Security Council, and should start being implemented at the beginning of 2016. Following the vote, the General Secretary of the U.N. called the Chinese foreign minister Wang Yi to praise the role of the Chinese government in the talks (Shannon Tiezi, “ China, Iran, predict closer ties thanks to nuclear deal”, The Diplomat, September 16, 2015).

In the meantime, the Chinese government signed a 46 billion dollars deal with Pakistan, in order to build infrastructure transportation from the Xinjiang region to the Pakistani port of Gwadar on the Arabian Sea ((Katharine Houreld, “China and Pakistan launch economic corridor plan worth 46 billion dollars”, Reuters, April 20, 2015).

Hassan_Rouhani_in_Bishkek

As we saw in “China, Israel and the New Silk Road”, part of that deal will be devoted to the construction, financed by China, of the Pakistani part of a new gas pipeline between Iran and Pakistan, which will be completed as soon as U.S. sanctions on Iran are lifted (“China, Pakistan sign gas pipeline deal key to Iran imports”, Press TV, April 21, 2015). The pipeline, dubbed the “Peace pipeline”, is already completed on the Iranian side, and goes from Assaluyeh, Iran’s energy hub, to the Pakistani frontier (“China, Pakistan sign gas pipeline deal key to Iran imports”, Press TV, April 21, 2015).

In the context of this mutually profitable strategy, the “new silk road” interplays between Iran and China are reinforcing the power and the influence of these two countries.

Iran and the New Silk road            

The military exchanges between China and Iran that we have evoked appear as opportunities to affirm the political will of Beijing and Teheran to work together. So, it is worth noting that on 5 May 2014, the Chinese defence minister Chang Wanquan declared:

“The age-old and historical relations between the two countries which date back to over 2,000 years ago are full of instances of cooperation in cultural, economic, industrial and technological arenas”.

Presumably referring to the Middle East and Central and South Asia, Chang Wanquan added that he:

“Voiced the hope that the two countries will continue to play a positive role in safeguarding regional peace and stability.”

The Iranian defence minister Fars answered him:

“We can remove the two sides’ common security concerns over extremism, terrorism, drug trafficking and piracy by developing military cooperation.” (Zachary Keck, ibid)

Recalling the historical depth of the Chinese-Iranian relations is a reference to the long history of the “Silk Road”, this system of roads that, from antiquity to the end of the M320px-Silk_routeiddle-Age, linked China, India, Central Asia to Europe, through the commerce of precious goods, and, especially, silk (Subhakanta Behera “India’s encounter with the Silk Road”, Economic and Political weekly, Dec 21-27, 2002). Furthermore, during the Cold War and since, China and Iran have maintained important diplomatic, economic, industrial and technological relations.

It is also a political statement about the “new silk road”, also known as the “One belt, One road” initiative, launched by President Xi Jinping in 2013 (Willy Lo-Lap Lam, Chinese politics in the era of Xi Jinping, 2015). 

As we saw in “China and the new Silk Road: From oil wells to the Moon … and beyond”, the “road” is aimed at creating a worldwide “land and sea” system (“Belt and Road Nations account for 26 per cent of China’s trade”, The Beijing Review, April 29, 2015), in order to attract supplies and diverse resources much-needed by the rapidly growing Chinese economy and urban development. Each “segment” of the “belt and road” strategy is aimed at determining a sub-continental area important to China (Valantin, ibid).

The “New Silk Road” approach is grounded in the idea that, in order to turn the “member states” of the Road into a “support” for the “Middle Kingdom”, they must be “supported” by China, through numerous development projects, which are devised to make these countries “sustainable”. Reciprocally, the members of the New Silk Road have the ability to support the Chinese development.

Iran is part and parcel of the “One Belt, One Road” initiative.

Iran and Chinese energy power plays

In this instance, Iran plays an even more major role for China, because it holds the world’s fourth proven oil reserves and second proven natural gas reserves. Teheran is deeply dependent on oil sales, which, from 2006 to today, represent 80% of total exports and 50% of the state’s revenue (Iran, US Energy information administration).

China buys 10% of its oil from Iran, and the Chinese National Offshore Oil Corporation discusses about investing heavily in joint projects with the National Iranian Oil Company.

Iran, China, New Silk Road

These projects are elaborated in order to help the Iranian company to develop its extracting capabilities, after the 50% cut the latter suffered through the international embargo imposed since 2006 (Paasha Mahdavi, “Oil, monarchy, revolution and theocracy: a study on the National Iranian Oil Company”, in Victor, Hults, Thurber, Oil and Governance, 2014).

This means that China is ready to help its old oil supplier to become again an energy power, after having politically supported Iran during the nuclear negotiations. In the same time, Beijing helped finding a balance with the U.S. demands on security, without which its relations with Iran would have risked being hampered by the political reactions in Washington D.C. (Shannon Tiezi, ibid).

This search for an international political balance is implemented in order to secure the flow of oil from Iran towards China. In the Chinese logic of mutually profitable relationship (Valantin, “China and the New Silk road: from oil wells to the Moon … and beyond“, The Red Team Analysis Society, July 6, 2015), it is thus aimed at helping Iran to diversify its sales to Europe and Central Asia, securing the good health of its economy, and thus maintaining each and every reason for Teheran to keep its good relations with the “Middle Kingdom”  in the foreseeable future.

Meanwhile, it also helps supporting the energy development of Pakistan, which plays a cardinal role in the implementation of the “One belt, One road” strategy.

Furthermore, Iran is both an energy power and a maritime power. This conjunction comes with the fact it controls the Strait of Ormuz. Controlling this strait is one of the pillars of its international influence.

In effect, everyday, 17 millions of barrels of oil leave through the Strait of Hormuz, 85% of it being bought by Asian countries. It ensues that the Persian Gulf is one of the most strategic place on Earth for the world energy market.

Persian-Gulf-map.png

The Gulf’s littoral is shared by Iran, Iraq, Kuwait, Saudi Arabia, Bahrain, Qatar, and the United Arab Emirates, i.e. by many of the major players on the world energy scene.  Saudi Arabia, Iran, Iraq, and Qatar are among the most important oil and natural gas producers, thus having a major influence on the world. The Persian Gulf is saturated by oil and gas tankers (“The Strait of Hormuz is the world’s most important oil transit chokepoint”, US Energy information administration, 2012) and is under heavy U.S. military influence through the presence of military bases (Michael Klare, Blood and Oil, 2005) and of the U.S. fifth fleet. Iran exerts a dominant military influence on the Strait of Hormuz through the presence of the Bandar Abbas port, home to the Iranian Naval high command and to a naval Air base.

Having Bandar Abbas welcoming Chinese military ships is an important step both for China and Iran because it reinforces the Chinese force projection (Ankit Panda, ibid), while sending a message to other sea powers, chief among them the U.S. Thus, it reinforces the Iranian strategic capital on the regional and world scene.

This reciprocal reinforcement expresses itself in a very real sense with the development of the presence of the Iranian and the Chinese fleet on the Red Sea, on the south side of the Arabian Peninsula, especially in order to fight piracy (“China seeks anti piracy training from Iran”, Pakistan Defence, November 25, 2015).

Pirates_leave_the_merchant_vessel_MV_Faina_for_the_Somali_shore_Wednesday,_Oct._8,_2008_while_under_observation_by_a_U.S._Navy_shipThis has become of a strategic importance, because the Chinese commercial ships leaving the Pakistani port of Gwadar for Europe will need to pass safely through the Gulf of Aden and all along the Red Sea before to reach the Mediterranean sea through the Suez Canal and (Valantin, “Somali Piracy: a Model for Tomorrow’s Life in the Anthropocene?“, The Red Team Analysis Society, 28 October, 2013).

Meanwhile, the Iranian fleet is very interested by this naval region, where Iranian interests clash with Saudi ones, especially in Yemen (Ahmed Al Omran and Asa Fitch, “Saudi coalition seizes Iranian boat carrying weapons to Yemen”, The Wall Street Journal, Sept. 30, 2015).

The new Silk Road: a game changer in the Middle East?

The integration of Iran into the “One belt, One road” initiative from and to China is also a game changer for the whole Middle East, among others because ties of a political, economic and technological nature between China and Israel are quickly being developed and deepened, as we saw in “China, Israel and the new Silk road” (Valantin, The Red Team Analysis Society, June 8, 2015), when Israel perceives Iran as a major military ad political threat.

For example, Israel has been instrumental in the secret war waged during several years against the Iranian nuclear program (David Crist, The Twilight war, 2012), and Tel Aviv does not hide its displeasure at seeing the sanctions lifted.

In the same time, Israel is becoming a producer of natural gas, thanks to the giant off shore fields named “Leviathan” and to smaller ones. These smaller fields are interesting the Chinese investment group Fosun ( Reuters, “Source: China’s Fosun seeks to buy Israel gas fields from Delek”, Rigzone, December 1, 2015). Thus, natural gas also gives Israel a new energy role for China.

As a result, China and the new Silk Road are of interest to these two Middle East powers.

So, it remains to be seen how the New Silk Road, and related Chinese influence, are going to change, if not to transform, the distribution of power in the Middle East. The first major test could very well be the escalating tension between Saudi Arabia and Iran, intensifying in this beginning of 2016, where China’s role and action will deserve to be closely monitored.

Featured image: The platform Mabot, is littered with shrapnel holes caused during the Iran-Iraq war, close to 15 years ago. (All Hands, September 2003, pg. 25) Photo by PH1 Shane T. McCoy. (RELEASED) – Public Domain.

Jean-Michel Valantin (PhD Paris) leads the Environment and Security Department of The Red (Team) Analysis Society. He is specialised in strategic studies and defence sociology with a focus on environmental geostrategy.