South Atlantic region emerging as new U.S. strategic oil supply flashpoint

Anthony E. Mitchell
American Enterprise Institute for Public Policy Research
Washington, D.C.

Paul Michael Wihbey
Institute for Advanced Strategic & Political Studies
Washington, D.C.

• Changes in U.S. crude oil import patterns [241,629 bytes]
• U.S. regional commanders-in-chief's areas of responsibility [127,421 bytes]

Long ignored by U.S. policy makers, the South Atlantic region is just now emerging as a new energy center of gravity.

Specifically, the increasing discoveries of oil reserves in Atlantic Equatorial Africa combined with already established giant resources in oil-rich South America will soon be recognized as vital U.S. interests.

Unfortunately, U.S. foreign and military policy have unintentionally overlooked the essential need for stability, particularly in Africa-stability that will ensure uninterrupted flow of energy resources to the U.S. throughout the foreseeable future.

Shifting gravity center

With the seeds planted for widespread acceleration of oil exploration after the 1973 Arab oil embargo and 1979-80 Iranian crisis, continuing through the 1991 Persian Gulf War, significant advances in exploration and production technology have accelerated success in finding alternative sources of crude outside the Persian Gulf region.

Those technological advances have facilitated the discovery of vast oil reserves in many new geographic regions. The shift of U.S. reliance away from Persian Gulf oil supplies becomes evident once recent data on reserves, production, and imports are reviewed (see maps, p. 25).¹

At the onset of the Persian Gulf War in 1991, the U.S. depended upon the Persian Gulf region for 27.8% of its oil imports. That figure alone justified the U.S. concern that instability in the region demanded fast, powerful, and decisive U.S. action.

Since the war, aggressive exploration for alternatives to U.S. dependence on the Persian Gulf region for its petroleum needs have been both serious and successful.

The process of exploration and discovery outside the Middle East has fostered a slow but steady shift in the energy resource center of gravity away from the Persian Gulf and toward the South Atlantic.

Significant discoveries in Latin America and Atlantic Equatorial Africa shed new light on the strategic importance of the South Atlantic region. Thus, a shift in the U.S. energy paradigm is essential to bolster the reliability of those newly discovered and/or developed sources of oil.

South Atlantic region

At present, Atlantic Equatorial Africa provides the U.S. with about 1.3 million b/d, or 13.5%, of its total crude oil imports. That figure equals or possibly exceeds current U.S. oil imports from Saudi Arabia and is almost seven times the amount the U.S. imports from Kuwait.

Combining that percentage with imports from South America shows that South Atlantic sources (excluding Mexico) are now providing the U.S. with close to 45% of its imported crude oil (Mexico exports about 1.3 million b/d of crude oil to the U.S.).

That figure is now more than double the amount of U.S. oil imported from the Persian Gulf. The gulf region, now supplying the U.S. with about 18% of its oil imports, is steadily decreasing in its energy importance to the U.S.

Looking only at proven oil reserves, the combined total reserves in South America-most notably those in Brazil, Colombia, Argentina, and Venezuela-are almost 85 billion bbl.

When the Atlantic Equatorial Africa proven reserves figure of more than 25 billion bbl (a figure that continues to grow significantly with accelerating exploration and development) are combined with those of South America, the oil reserves in the South Atlantic region become an astonishing 110 billion bbl, or more than 10% of the world total. To put that figure in perspective, Iran and Kuwait have oil reserves of 93 billion bbl and 97 billion bbl, respectively.

New policies needed

The steady development of energy resources in the South Atlantic is progressively allowing the U.S. to become far less dependent on Persian Gulf sources than it was only 8 years ago.

With that shift of energy dependence comes a shift in the energy center of gravity and so should come a shift in foreign and national military policy.

Unfortunately, the U.S. National Security Strategy and National Military Strategy fail to recognize the emerging importance of the resource-rich South Atlantic region.

Latin American concerns

Latin American policy continues to concentrate on narcotics as the overriding regional issue.

The importance of South American energy resources along with the importance of maintaining regional stability are recognized but understated.

The recent emergence of Hugo Chavez Frias, a popular presidential candidate who earlier attempted an unsuccessful coup in Venezuela, may indicate an intent toward turning back recent moves in opening the nationalized Venezuelan oil industry to private investors. While that action may ultimately prove suicidal to the Venezuelan economy, it also has the potential to destabilize oil flows to the U.S.

Similarly, Colombia and Ecuador, whose combined oil exports to the U.S. are 400,000 b/d and account for over 50% of their export markets, both face serious domestic problems that could lead to internal destabilization and disruption of oil flows.

Those problems are particularly acute in Colombia, which is subject to the increasing political clout of the local drug cartels and whose oil pipelines are prime targets of opportunity for guerrilla groups operating in the country's interior.

A former member of the Organization of Petroleum Exporting Countries, Ecuador faces problems of domestic unrest arising from a series of governmental and political scandals as well as a simmering border dispute with Peru.

Atlantic Equatorial Africa

Oil-producing Atlantic Equatorial Africa (Angola, Nigeria, Gabon, Congo, and Equatorial Guinea) is, for the most part, disregarded as a region containing vital U.S. interests.

That oversight has the potential to plague the U.S. as the global economy continues to grow.

In addition to the vast oil reserves previously mentioned, two other significant factors help in characterizing the importance of U.S. interests in Atlantic Equatorial Africa.

First, the energy potential of that region is not going unnoticed by other world powers. For example, Congo's fledgling oil industry, whose main customers are the U.S. and France, is courting Asian consumers. Congo has participated in sales talks with Chinese oil firms that are also attempting to reduce their Middle East energy dependence. China is also a major participant in an international consortium developing oil resources in Sudan that may be of world-class significance.

Second, regional instability runs rampant. That has the potential to cause significant supply disruptions and imperil American lives and property. The London-based International Institute for Strategic Studies recently reported that the greatest danger to progress in sub-Saharan Africa is political instability and civil unrest.² The importance of regional stability in that part of the world will continue to grow as oil discoveries expand and production levels increase.

Atlantic policy implications

To reiterate, the South Atlantic region, especially Atlantic Equatorial Africa, is becoming a vital U.S. interest because it is emerging as a new energy center of gravity.

In addition, cheap labor and a lower cost to transport crude from a closer source, without the security concerns of the Straits of Hormuz or the fundamentalist regimes found in the Middle East, bolster the growing importance of the region.

The U.S. must reevaluate its engagement, presence, and investment in order to cultivate that emerging market and secure regional stability.

The military dimensions of crisis-response options and regional organization also need reassessment. Currently, the borders of the regional commanders-in-chief (CinC) areas of responsibility are anything but seamless (see map, p. 26). Africa falls under the responsibility of the U.S. European Command (USEUCOM), while the South Atlantic Ocean falls under the responsibility of the U.S. Atlantic Command (USACOM); all of Latin America and the Caribbean is the responsibility of the U.S. Southern Command (USSOUTHCOM).

Africa has long been the unwanted stepchild of USEUCOM, while USSOUTHCOM has been almost totally focused on counter-narcotics operations factors reflected in its organization and structure. USACOM has supported USEUCOM and provided intermittent presence in Atlantic Equatorial Africa through the occasional deployment of a Navy ship to "show the flag" in West African ports. The U.S. now needs a clear and seamless organization that reflects the new requirements of that region. In addition, the U.S. needs a decisive strategy with the ultimate goal being regional stability. Implementing that strategy while at the same time redefining the boundaries of the CinCs' areas of responsibility has the potential to foster even further investment that will continue regional energy development that is sure to benefit the U.S.

Conclusions

The shifting energy center of gravity should in no way cause the U.S. to forget regional friends and allies in the Persian Gulf.

But ignoring the rapidly developing economies of Atlantic Equatorial Africa would be a tragic mistake that other world economic powers will exploit. Weaning America from a dependence on Middle East oil is a smart and healthy development, but there is an expense to incur. Investment and engagement in Atlantic Equatorial Africa should be considered a continual challenge for policy makers and industrialists. As long as political instability exists, American lives and property face an unavoidable threat.

Current U.S. strategy is based on an indecisive (low-profile) approach to a security environment that can only be characterized as volatile. The U.S. needs a new regional security architecture to address and eventually reduce potential threats to U.S. interests. Engagement and conspicuous military-forward presence are essential to enjoy the benefits of the shift in the energy center of gravity. A seamless military area of responsibility in the South Atlantic region with an east-west orientation rather than the traditional north-south orientation could promote a sound and consistent policy focus that supports vital U.S. interests.

Sound economic and security policy in the South Atlantic region can propel the U.S. into the position of being one of the few, if any, industrialized countries enjoying complete energy security. With that in mind, one would reasonably conclude that planning, as well as the American perception of the importance of policy and security strategy for the South Atlantic region, requires immediate attention and adjustment.

References

1. Oil reserves and import figures used for this article are derived from data obtained from the U.S. Energy Information Administration, American Petroleum Institute, and Oil & Gas Journal. Italics represent the authors' best estimate.
2. The Washington Times, May 7, 1998.

The Authors

Anthony E. Mitchell is a commander in the U.S. Navy and a visiting fellow at the American Enterprise Institute for Public Policy Research in Washington, D.C. He has extensive experience in political-miltary affairs and strategic planning. His experience at sea includes numerous deployments to the Middle East, including Operation Desert Storm, and as a commanding officer of a mine counter-measure ship in the Persian Gulf. Mitchell's research and writings deal primarily with Middle East and military policy issues.

Paul Michael Wihbey is an adjunct fellow with the Institute for Advanced Strategic & Political Studies (Iasps) specializing in Middle East energy and security issues. During 1985-89, he was a consultant to the U.S. Department of Defense and several congressional offices. During 1989-95, he was a contributing editor to Security Intelligence Review. Wihbey also has been retained by several major media networks and other businesses on a variety of Middle East issues and is author of an Iasps research paper on royal succession in Saudi Arabia. He currently is researching Russian geopolitical strategy in Central Asia and the Persian Gulf.

Copyright 1998 Oil & Gas Journal. All Rights Reserved.