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Resource Sovereignty
As oil consumption continues its unchecked growth, and the world's remaining oil supplies become ever more concentrated in a small number of countries, oil companies and governments are working to secure their long-term control over those supplies.
See article: The Price of Democracy
The term "energy security" has become a buzzword, referring to the goals of governments of oil-consuming countries (in particular, in North America and Europe, but increasingly now in Asia) to ensure the flow of oil, gas and other fuels to feed their energy-hungry economies.
See article: Energy Security - For whom?
Those governments often feel most "secure" when oil production is controlled by multinational oil corporations based in their countries. This fits closely with the corporations' interest in expanding their own production base, delivering ever greater profits to their shareholders.
This partnership is manifested in a number of ways; most significantly in foreign policy. In Britain, for example, four of the last five Heads of the Diplomatic Service (the most senior civil servant in the Foreign Office) have moved straight from their government jobs into directorships of major oil and gas companies: one in BP, one in BG (formerly British Gas) and two in Shell.
See article: Oil pressure
article: Britain: 90 years as a Petro State
The corporations persistently push for the largest possible share of the revenues from oil production, at the expense of the public purse - through political or economic pressure (including threats to withdraw from the country, or shutting down production), or exploiting governments' weaknesses or lack of information. In many countries, oil corporations have partnered with regimes with poor human rights records, where corruption is high and democracy weak or non-existent. In such countries, the economic costs of unfair oil deals are offset by the political payoff of entrenching the regimes' power.
See book chapter: The Tale of Neutron John: BP's history of tax-ducking
report: The Sakhalin II PSA: A Production Non-sharing agreement
report: Crude Designs: The Rip-off of Iraq's Oil Wealth
In fact, these pressures serve rather to increase global insecurity; as undemocratic governments are supported, and grassroots pressure for a more just distribution ignored.
The corporations' solution has been to protect their profits from less pliant future governments with ever more draconian legal agreements, and backing them up with international institutions or with the threat of international arbitration courts. Contracts such as production sharing agreements frequently even restrict governments from passing new legislation which affects corporate profits.
See paper: Turbo-charging Investor Sovereignty: Investment Agreements and Corporate Colonialism
But the continuation of these trends is far from inevitable. The governments of Venezuela and Bolivia have both recently forced a renegotiation of oil production contracts on more favourable terms. And social movements are increasingly demanding that the communities most affected by the negative impacts of oil development receive a far share of the benefits.
See link: OILWATCH - Statement on energy sovereignty to OPEC meeting, September 2005
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