The Politics Of International Oil

Government 365P (#39270)/MES 322K (#42413)	Clement M. Henry
Department of Government, UT at Austin	office: Batts 4.152
Class: RAS 213 MW 3-4:40 p.m.	Office hrs: MW 1-2:45 p.m.

 Fall term 2009 Syllabus 

• course contents and texts
• applied research activities
• international oil conference
• more assignments
• grading
• Schedule of Topics for Class Lectures, Discussion and Readings

Weeks 1, 2, 3, 4, 5, 6, 7, 8, 9, 10, 11, 12, 13, 14, 15

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THE NATIONAL AND INTERNATIONAL POLITICAL COMPLEXITIES OF PETROLEUM; RELATIONSHIP OF TRENDS IN PETROLEUM ECONOMICS TO INTERNATIONAL POLITICAL ALIGNMENTS AND TO THE GLOBAL ECONOMY. . This is an applied course in political economy. We analyze the national and international structures of the petroleum industry, focusing on the Middle East, its American security umbrella, and great power rivalries over the oil "prize" in this critical region of the world. Intra-Arab regional and domestic politics will also be analyzed in light of their possible effects upon their national oil companies and the industry more generally. Oil, geopolitics, and the global economy are all interrelated, and we will explore their interrelationships.

Required Texts

Abel's course pack (available at 715 23rd St.: you must show your student ID and a copy of this syllabus to obtain a copy).

Zbigniew Brzezinski, The Choice (Perseus, 2004) pb for $12 at amazon.com

Valerie Marcel, Oil Titans: National Oil Companies in the Middle East (Brookings, 2006)

Michael Klare, Rising Powers, Shrinking Planet: The New Geopolitics of Energy, Holt pb. 2009

Daniel Yergin, The Prize, Simon and Schuster, 1991 

 

Recommended texts

Mahmoud A. El-Gamal and Amy M. Jaffe, Oil, Dollars, Debt, and Crises: The Global Curse of Black Gold (Cambridge University Press, expected December 2009)

Francisco Parra, Oil Politics: A Modern History of Petroleum (Paperback) (to be released late October 2009)

The 1979 "Oil Shock" Legacy: Legacy, Lessons, Lasting Reverberations, Viewpoints Special Edition (August 2009)

Note: All of the required books are being put on reserve at the PCL.

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Applied Research Activities

All students will engage in some research activity and apply it to exercises in international oil diplomacy. You will be expected to focus on a particular company or country engaged in the international petroleum industry. You may study Iran , or one of the Arab oil-producing countries (Algeria, Egypt, Libya, Iraq, Kuwait, Saudi Arabia, United Arab Emirates, Qatar), or other oil producers such as Russia, other parts of the former USSR, USA, Venezuela, and Mexico, or the major consuming countries, which would include, in addition to the USA, France, Germany, Japan, and China. You could devise business strategies for a multinational company such as Exxon-Mobil, Chevron, British Petroleum, or Royal Dutch Shell, or one of the newer companies founded by the oil exporters, such as Saudi Aramco and the Kuwait Petroleum Company. Each of you will prepare an annotated bibliography , i.e. a brief critical summary of each of the books and sets of articles you have dug up. You may use Daniel Tepper's 1995 work on Russia as your model. Be sure to label the subject of each file carefully, beginning with the name of the country or company you have researched, so that others will get maximum information from the subject title.

To accomplish your research, you should first choose a leader of a company or country, then collect a bibliography providing information about the person and his or her company or country. You will be especially interested in their energy policies and business strategies, but you must also understand the general political, social, and economic contexts in which they make their decisions. Much of your research can be accomplished over the Internet, using files that we have assembled on line. For starters examine our most recent course materials. You may try a LexisNexis search online with UT libraries.

The PCL reference room has a good collection of annual reports of the various companies and the attached reading list complements Yergin's substantial bibliography, pp. 852-873. For companies, seek 10K reports and annual reports for timely information. Current issues of Middle East Economic Digest should also be useful for up-to-date economic information, as is Oil and Gas Journal (try going first to the UT library's online journals to view items reserved for subscribers). There is a petroleum engineering library on the 4th floor of CPE (Chemical and Petroleum Engineering building).

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International Oil Conference:

Once you have accomplished your research, you will be ready to participate in an extended "international" conference on energy policies, including issues of oil production, pricing, and environmental concerns, that will occur in class in the final weeks of this course. You will prepare position papers to present at the conference. They will summarize your research findings that will also be available to the instructor and to other students by Thanksgiving break, so that others will have time to read and criticize your analysis.

Class schedule:

1) brief synopsis of your choice of topic (200 words) due Wednesday, Sept. 9.

2) first midterm, Monday, Sept. 28.

3) annotated bibliography, i.e. annotated with summaries of relevant information, due Wednesday, Oct. 7.

3) draft of introduction and extended outline (500 words) due Wednesday, Oct. 21.

4) second midterm, Wed., Oct. 28.

5) position paper (1000 words) due Wed., Nov. 11.

6) final paper (2500 words) due Monday, Nov. 23.

 

Posting to the discussion boards on Blackboard

A substantial part of your grade will come from your contributions to our Discussion Boards (in Blackboard, under Communication ). You are expected to submit all of your written exercises (bibliographies, drafts. position paper, final paper) to the relevant electronic bulletin boards as well as a hard copy to me in class.

Very important (for your class participation grade): You are also expected to contribute to our virtual on-line class discussion, by writing at least five short, well-reasoned statements to the class "chat" file. The discussion boards on your Blackboard are

Class Chat (5 substantive postings, each of one paragraph - can be about current events, some idea discussed in class, a commentary on an article you think we ought to share, or a comment on one of my online postings)

topic choice (200 words)

Annotated Bibliographies

intro and extended outline of paper

position paper

final paper

Come see me during office hours or after class--we can help you post any readable file to the right bulletin board.

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Grading

Midterm 15% each

Paper topic 5%

Annotated bibliography 10%

Draft introduction 5%

Position paper 5%

Final paper 25%

Class Participation 10% (includes computer "chat" participation as well as class attendance)

Final identifications quiz 10%

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Schedule of Topics for Class Lectures, Discussion and Readings

Week 1 (Aug. 26): Course syllabus is online at http://chenry.webhost.utexas.edu/oil/syllabus.htm

readings:

• Jim Hansen, "The Threat to the Planet," New York Review of Books, 53:12 (July 13, 2006)
• The Civil Heretic: Freeman Dyson (for an alternative viewpoint, New York Times Magazine March 29, 2009

Please get familiar with the course materials by going to http://www.la.utexas.edu/chenry/oil - where you will find much more than is written here. Examine some of the links from the online resources on our home page.

• Why the international focus
• Why Oil? Alternative energy sources?
• the dissymmetries of modernization and legacies of imperialism
• resource nationalism and powerful "addicted" consumers
• research foci for the simulation game: countries and company strategies
• political risks of producers and consumers

Access BP Statistical Review of World Energy 2009 from our WWW home page -or directly from http://www.bp.com/worldenergy/ - and take a look at Hubbert's Peak

readings:

Michael Klare, Rising Powers...Geopolitics of Energy, pp. 1-31

Zbigniew Brzezinski, The Choice, pp. 7-40

Condi's 'New Middle East' by Patrick J. Buchanan, Antiwar.com Aug 8, 2006

 

optional: Yergin, pp. 305-388 (skim these chapters on WW2 to understand the strategic importance of oil)

"Virtual" class discussion ("chat") begins now.

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readings:

Klare, pp. 32-114

Valerie Marcel, Oil Titans, pp. 1-36

BP Statistical Review and @-8 - DOE statistics

Class exercises, Wednesday, Sept 9:

1. Compare US reserves and production at the end of 1988 as percentages of world totals with the most recent data available online. Download the BP data and put the files on oil production and oil reserves into a spreadsheet.
2. Oil paper topic due: You are to write a paragraph explaining what you want to write about, whether an international oil company, a national oil company (see Valery Marcel's book), or a major consumer country, such as the USA or China or Japan, UK, France, Germany etc.). If your main interest is US energy policy, you may choose a major actor or government agency and write a paper about his/her/its policy that sould be of interest to our class. One policy might concern the Strategic Petroleum Reserve. 

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Why the Texas Railroad Commission?
Oil overproduction and issues of conservations: the Prisoner's Dilemma (remember Dallas: JR and Cliff Barnes?). From Terxas to Achnacarry, efforts to resolve dilemmas of common interest.

readings:

@ Prindle, pp. 3-40, 185-214 - please prepare for his lecture to our class on Wed., Sept. 16.

Daniel Yergin, The Prize, pp. 244-265, 510-525

 

Class exercises, Monday, Sept. 14:

critique of TX RR Commission video to be shown in class. Maybe you can download this 175 meg mpeg file.

paper teams (here is the current list of students and topics - please corrdinate if you have both (or 3 of you) chosen Russia, Venezuela, Algeria etc., although you present your work separately with as little duplication as possible) to be working on their annotated bibliographies due Wednesday, Oct. 7 - it may help to give yourself a name and title (eg. Barack Obama, or President Chavez of Venezuela).

 Week 5 (Sept. 21, 23) : Introducing the IOCs and the NOCs: From 7 Sisters oligopoly to US Saudi hegemony

readings:

@ - Theodore H. Moran, "Managing an oligopoly of would-be sovereigns: the dynamics of joint control and self-control in the international oil industry pas, present, and future," International Organization 41:4 (Autumn 1987), pp. 575-607 (you candownload this from PCL via JSTORS)

Marcel, pp. 37-75.

@ Robert Mabro on oil pricing, in Oxford Energy Forum, Dec 1999, pp. 7-9

Yergin, pp. 184-243, 391-422, 450-478. Also pp. 36-47 for understanding Rockefeller's monopoly 1879-1911

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Sept. 30: Free Day No Class! - but this video about Nasser and Mattei is required seeing

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Week 7 (Oct. 5, 7) : Oil and Power: the Stakes of the Game

• The global economy
• China and the Far and Middle East - and Venezuela
• Russia and the EU - common interests and rivalries
• War on Terror - Saudi blowup?  

readings:

Mahmoud El-Gamal and Amy Jaffe, Energy, Financial Contagion and the Dollar (Rice, Baker Institute, 2008)

Klare, pp. 88-114

Brzezinski, pp. 85-130

 

optional: "Beijing's Bolivarian Venture" by Gabe Collins and Carlos Ramos-Mrosovsky

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Wednesday, Oct. 7: Annotated bibliographies due

(By "annotated" is meant that you summarize each source, focusing on those elements that are of relevance to your research . How does the source help you understand your character's politics and policy preferences concerning oil and gas? A carefully annotated bibliography will prepare you to write a good role profiles)
Hard copies in class, electronic copy to Blackboard.

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Week 8 (Oct. 12, 14): "Managing" the Middle East post 911?

readings:

Klare, 115-209

Marcel, pp. 76-105

Greg Muttitt, Crude Designs: The Rip-Off of Iraq's Oil Wealth, Global Policy Forum, November 2005 (2 pp exec summary, the rest available online at http://www.globalpolicy.org/security/oil/2005/crudedesigns.htm )

 

Pipeline issues: Caucasus-Mediterranean, Qatar-Israel? - War for Oil (video 290 megs) in the Caspian

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Week 9 (Oct. 19, 21): Contracting for oil - Product Sharing Agreements (PSAs) and concessions

 

readings:

In your Abel's course pack: Jenik Radon, How to Negotiate an Oil Agreement, in Macartan Humphreys, Jeffrey D. Sachs, and Joseph E. Stiglitz, eds., Escaping the Resource Curse (Columbia UP, 2007), pp. 89-113.

[ optional: The analysis of contracts by Scott Worrall, a former student of this course.] Here is a template from a recent contract.

Marcel, pp. 209-227

"The Perils Facing Big Oil," The Economist, April 28, 2005

Yergin, pp. 715-752.

activities: Draft of introduction and extended outline of your paper (500 words) due Wed., Oct 21 - hard copy to instructor in class, electronic copy to Blackboard.

video Fighting for Oil (over 300 megs) about Iraq and the environment

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Oct. 26: An Arab or Islamic Oil Weapon? Comparing the Middle East wars of 1973 and 2006...Iran 2010?

readings:

@ US Dept of Energy, Chronology of World Oil Market Events, 1970-2005 (downloaded July 15, 2005)

@ OPEC and US Dept of Energy statistics on OPEC quotas and production; LNG exports and imports, 2005

Yergin, pp. 588-652

C. M. Henry, "The United States and Iraq: American Bull in a Middle East China Shop," in Glad and Dolan, Striking First (Palgrave 2005)

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Week 11 (Nov. 2, 4): Dilemmas of the Petro-State Rentiers

 

Guest lectuer Monday: Prof. Mahmoud El-Gamal, Rice University

readings:

Terry Karl, Terry Lynn Karl, Ensuring Fairness: The Case for a Transparent Fiscal Social Contract, in Macartan Humphreys, Jeffrey D. Sachs, and Joseph E. Stiglitz, eds., Escaping the Resource Curse (Columbia UP, 2007), pp. 256-285

Valerie Marcel, Oil Titans, pp. 106-144

Clement M. Henry, Algeria's Agonies: Oil Rent Effects in a Bunker State, Journal of North African Studies, 9:2 (summer 2004), pp. 68-81

 

recommended:

Michael L. Ross, "Does Oil Hinder Democracy?" World Politics 53: 3 (April 2001), 325-361

Michael Herb, "No Representation Without Taxation?" Comparative Politics, April 2005, pp. 297-316.

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Week 12 (Nov. 9, 11) Comparisons of Arab NOCs

 

Readings:

Valerie Marcel, Oil Titans, pp. 145-208.

John Entelis ms. on Sonatrach (October 2009)

 

Supplement on Algeria (optional):

People's Democratic Republic of Algeria, Ministry of Energy and Mining, Hydrocarbons Law: Draft Project (Dec 2002)

"Algeria considers to level competition for Sonatrach," Alexander's Gas and Oil Connection 8:1 (Jan 10, 2003)

Hocine Malti , Opposition To Algeria’s Hydrocarbon Law, Middle East Economic Survey, 11 April 2005.

Francois Krotoff et al, The New 2005 Algerian Hydrocarbons Law (Euromoney, October 2005), updated 2006 version: Hydrocarbons Legislation in Algeria: Back to Square One? (sumnmarized here)

Activities: position paper due Nov. 11

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Readings:

Klare, pp. 210-237

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Week 14 (Nov. 23, 25?): Class Conference

Final paper (2500 words) due Tuesday, Nov. 23 (hard copy in class, electronic copy to Blackboard)

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Week 15 (Nov 30, Dec. 2): Policy Options and Scenarios

Readings:

Klare, pp.238-269

The Kyoto Protocol and World Bank statistics on CO2 emissions (download from PCL by going to indexes, WDI=World Bank, World Development Indicators)

Dec. 2: Final Identifications Quiz (identify and give significance of 20 out of 24 items from final study list)

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