Gas & Geopolitics: The Foreign Policy Implications of Energy Import Dependency

Working Papers

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May 2010

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In recent years, much attention has focused on the dangers of dependency on energy imports. Fears of energy import dependency are particularly acute in Eastern Europe, where most countries remain heavily dependent on Russian gas, but similarly dependent relationships exist across the globe. Most energy security research focuses on exporters; this thesis contributes to the study of energy security by exploring the effects of energy dependence on importers. It examines data from 167 dyadic oil and gas trade relationships (1990-2008) to answer two questions.

First, does gas import dependency have a more profound effect on foreign policy
creation than oil dependency? Structural factors predict it should and the study confirms this empirically.

Second, what factors exacerbate or mitigate the foreign policy effects of gas import
dependency? The study identifies three quantifiable factors that tend to increase the foreign
policy affinity importers display towards their suppliers, and two quantifiable factors that tend to reduce the foreign policy affinity importers show towards their suppliers.

Three case studies (Japan/Indonesia, Argentina/Bolivia, and Poland/Russia) confirm the
plausibility of these statistical findings. They also highlight how the ownership structure of gas production and distribution can mitigate, or exacerbate, the foreign policy effects of gas imports.

This study is intended to be useful to policymakers gauging the impact of gas import

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