The Punctuated Equilibrium of the Energy Regime Complex Lauren Bleakney PEI Grand Energy Challenge

Sponsorship and Overview Woodrow Wilson School Woodrow Wilson School Robert O. Keohane, Jeff D. Colgan, Thijs Van de Graaf Robert O. Keohane, Jeff D. Colgan, Thijs Van de Graaf Goal: Contribute data and analysis to pre- publication scholarly article on the evolution of the energy regime complex Goal: Contribute data and analysis to pre- publication scholarly article on the evolution of the energy regime complex

Energy Regime Complex What is a regime complex? What is a regime complex? Collection of organizations governing the trade and norms in a sector (here: energy trade, specifically oil) Collection of organizations governing the trade and norms in a sector (here: energy trade, specifically oil) Organizations involved in the regime complex: OPEC, IRENA, IAEA, OECD, IEA, G7, IEF, ECT, IPEEC, Oil exporters and importers Organizations involved in the regime complex: OPEC, IRENA, IAEA, OECD, IEA, G7, IEF, ECT, IPEEC, Oil exporters and importers

Measuring Dissatisfaction Differentiate between dissatisfaction of Importers and dissatisfaction of Exporters Differentiate between dissatisfaction of Importers and dissatisfaction of Exporters Dissatisfaction measured in change in oil prices, expressed as percent change from previous year Dissatisfaction measured in change in oil prices, expressed as percent change from previous year Level of dissatisfaction (magnitude of price change) determines response Level of dissatisfaction (magnitude of price change) determines response

Institutional Responses to Dissatisfaction The creation of new organizations and links between organizations The creation of new organizations and links between organizations The inclusion of major new membersthat is, members with the potential to reshape the organization The inclusion of major new membersthat is, members with the potential to reshape the organization Major internal structural changes, such as new operational units or significant changes in voting weights Major internal structural changes, such as new operational units or significant changes in voting weights

Structure of Innovation

Importer Dissatisfaction: OPEC Producing 53.9% of total world output OPEC Producing 53.9% of total world output Preceded by nationalization of oil in much of MENA Preceded by nationalization of oil in much of MENA 1974 oil revenues increase by 191% 1974 oil revenues increase by 191% Western response: Western response: establishment of IEA; Strategic Petroleum Reserve establishment of IEA; Strategic Petroleum Reserve G7 G7 OLADE OLADE Sticky lagging innovation: Sticky lagging innovation: Efficiency Efficiency Shift to Coal Shift to Coal

Importer Dissatisfaction: Oil revenues increased every year from , excepting 2009 Oil revenues increased every year from , excepting 2009 IPEEC (International Partnership for Energy Efficiency Cooperation) established IPEEC (International Partnership for Energy Efficiency Cooperation) established IRENA (International Renewable Energy Agency) established IRENA (International Renewable Energy Agency) established

My Focus: OPEC

Periods of OPEC Dissatisfaction 1980s, dissatisfaction peaking in s, dissatisfaction peaking in 1986 Heterogeneous production preferences Heterogeneous production preferences Reform driven by Saudi Arabia - flooded market Reform driven by Saudi Arabia - flooded market Switch to production quotas (from price setting) Switch to production quotas (from price setting) OPEC tightens adherence to production quotas OPEC tightens adherence to production quotas Restricts total production Restricts total production Forges relationships with non-OPEC actors: Russia, EU Forges relationships with non-OPEC actors: Russia, EU Still to be seen Still to be seen

Additional Findings The role of Saudi Arabia as a unilateral actor within OPEC The role of Saudi Arabia as a unilateral actor within OPEC Failed attempts at linkages between OPEC and EU, Russia, China Failed attempts at linkages between OPEC and EU, Russia, China OPEC as a blame-shifting institution OPEC as a blame-shifting institution Shifts blame to Member Countries Shifts blame to Member Countries Shifts blame to importing countries and non-OPEC exporters Shifts blame to importing countries and non-OPEC exporters Rhetoric of antagonistic relationship between developed and developing countries Rhetoric of antagonistic relationship between developed and developing countries

Skills and Knowledge Gained Institutional innovation; OPEC; Global Economy Institutional innovation; OPEC; Global Economy Use of Princeton library, personnel, and database resources Use of Princeton library, personnel, and database resources Incorporation of quantitative analysis into social science studies Incorporation of quantitative analysis into social science studies Improved analytical abilities and argument-mapping Improved analytical abilities and argument-mapping Time management Time management