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Norway has made a point of administering its petroleum resources using three distinct government bodies: a national oil company (NOC) engaged in commercial hydrocarbon operations; a government ministry to help set policy; and a regulatory body to provide oversight and technical expertise.  In Norway's case, this institutional design has provided useful checks and balances, helped minimize conflicts of interest, and allowed the NOC, Statoil, to focus on commercial activities while other government agencies regulate oil operators including Statoil itself.  Norway's relative success in managing its hydrocarbon resources has prompted development institutions to consider whether this "Norwegian Model" of separated government functions should be recommended to other oil-producing countries, particularly those whose oil sectors have underperformed. 

Seeking insight into this question, we study eight countries with different political and institutional characteristics, some of which have attempted to separate functions in oil in the manner of Norway and some of which have not.  We conclude that while the Norwegian Model may be a "best practice" of sorts, it is not the best prescription for every ailing oil sector.  The separation of functions approach is most useful and feasible in cases where political competition exists and institutional capacity is relatively strong.  Unchallenged leaders, on the other hand, are often able to adequately discharge commercial and policy/regulatory functions in the oil sector using the same entity, although this approach may not be robust against political changes (nor do we address in this paper any possible development or human welfare implications of this arrangement). 

When technical and regulatory talent is particularly lacking in a country, better outcomes may result from consolidating commercial, policy, and regulatory functions in a single body until institutional capacity has further developed.  Countries like Nigeria with vibrant political competition but limited institutional capacity pose the most significant challenge for oil sector reform: unitary control over the sector is impossible but separation of functions is often impossible to implement.  In such cases reformers are wise to focus on incremental but sustainable improvements in technical and institutional capacity.

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Mark C. Thurber
Mark C. Thurber
David Hults
David Hults
Patrick R. P. Heller
Patrick Heller
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Abstract
In order to eliminate nuclear weapons, the world will first have to pass through a regime of "low numbers" in which the US and Russian arsenals contain hundreds of weapons. The conclusion of the New START agreement, along with President Medvedev and President Obama's intention to work on a successor treaty, have brought this prospect forward. Many Western and Russian analysts worry that such a world might be unstable. However, in spite of these fears, the "low numbers problem" has attracted surprisingly little attention in the past (perhaps because the prospect of deep reductions always seemed so remote). In this talk, I will argue that the most likely type of instability is rearmament. I will examine potential drivers of rearmament and discuss steps to ensure that its likelihood can be minimized.

James M. Acton is an associate in the Nuclear Policy Program at the Carnegie Endowment specializing in nonproliferation and disarmament. A physicist by training, Acton’s research focuses on the interface of technical and political issues, with special attention to the civilian nuclear industry, IAEA safeguards, and practical solutions to strengthening the nonproliferation regime.

Before joining the Endowment in October 2008, Acton was a lecturer at the Centre for Science and Security Studies in the Department of War Studies at King’s College London. There he co-authored the Adelphi Paper, Abolishing Nuclear Weapons, with George Perkovich and was a consultant to the Norwegian government on disarmament issues. Prior to that, Acton was the science and technology researcher at the Verification Research, Training and Information Centre (VERTIC), where he was a participant in the UK–Norway dialogue on verifying the dismantlement of warheads.

Acton’s other previous research projects include analyses of IAEA safeguards in Iran, verifying disarmament in North Korea, preventing novel forms of radiological terrorism, and the capability of Middle Eastern states to develop nuclear energy. He has published in Jane’s Intelligence Review, Nonproliferation Review, Bulletin of the Atomic Scientists, Survival, and the New York Times. In the UK, he appeared regularly on TV and radio, including on the BBC programs Newsnight, Horizon, and the Six O’clock News.

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James Acton Associate, Nuclear Policy Program, Carnegie Endowment for International Peace Speaker
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The 100th Conference of the Society for the Advancement of Scandinavian Study (SASS) and the 22nd Conference of the Association for the Advancement of Baltic Studies (AABS): "Region, State, Nation, Community: New Research in Scandinavian and Baltic Studies" taking place April 22 – 24, 2010 in Seattle, Washington.

AABS welcomes papers, panels, and roundtable presentations for the first joint conference of Scandinavian and Baltic Studies in the United States.  The conference aims to highlight and foster academic inquiry that draws comparisons between Scandinavia (Iceland, Denmark, Norway, Sweden, and Finland) and the Baltic states (Estonia, Latvia, and Lithuania).  Papers that examine stateless peoples and those left outside of the Scandinavian/Baltic approach, but sharing the same geographic space, are equally welcome.  Papers and panels devoted to individual states are also welcome.  Contributions are encouraged from disciplines including (but not limited to): anthropology, architecture, communication, cultural studies, demography, economics, education, environment, ethnic relations, film studies, fine arts, gender studies, geography, history, international relations, law, linguistics, literature, memory, political science, psychology, public health, religion, sociology, tourism, and advancing Baltic and Scandinavian studies.  Presentations are not to exceed 20 minutes in length.
 
Proposals from Ph.D. students will be considered for a Presidents’ Panel on Scandinavian and Baltic Studies that recognizes the most accomplished and innovative work of new scholars.
 
Paper and panel proposals must include an abstract (no more than 250 words) and a one to two-page curriculum vitae.  Send this material embedded in the body of an e-mail (no attachments) to Aldis Purs at (aldisp@u.washington.edu) by December 11, 2009.  Paper submissions can be mailed to:
 
22nd AABS Conference Chair
University of Washington,
Box 353420
Seattle, WA 98195-3420
 
Conference Website: http://depts.washington.edu/aabs/
Date: April 22-24, 2010
Location:  Crowne Plaza Hotel, 1113 Sixth Ave., Seattle, Washington 98101
 
Registration information will be available on the website.  All presenters must be SASS or AABS members in good standing.   If you are in need of assistance in finding potential co-panelists from either Scandinavian studies or Baltic Studies, please contact the conference organizer (listed above) to help with such networking by November 1, 2009.

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Professor Joseph previously taught at Emory University, Dartmouth College, the University of California at Los Angeles, the University of Ibadan (Nigeria), and the University of Khartoum (Sudan). He has held research fellowships at Harvard University, Boston University, the Massachusetts Institute of Technology, the Institute of Development Studies (Sussex, UK), Chr. Michelsen Institute (Norway), and the Ecole des Hautes Etudes en Sciences Sociales (France). Joseph has devoted his scholarly career to the study of politics and governance in Africa with a special focus on democratic transitions, state building and state collapse, and conflict resolution.

He directed the African Governance Program at the Carter Center (1988-1994) and coordinated elections missions in Zambia (1991), Ghana (1992), and peace initiatives in Liberia (1991-1994). He has been a longtime member of the Council of Foreign Relations. Joseph is the recipient of numerous fellowships and awards including a Rhodes Scholarship, a Kent Fellowship, and a Guggenheim Fellowship. In 2002-03, he held visiting fellowships at the U.S. Institute of Peace and the National Endowment for Democracy. He was a Fulbright Scholar in France and a Fulbright Professor in Nigeria.

He has written and edited dozens of scholarly books and articles including Radical Nationalism in Cameroun (1977); Gaullist Africa: Cameroon Under Ahmadu Ahidjo (1978); Democracy and Prebendal Politics in Nigeria (1987); State, Conflict, and Democracy in Africa (1999); Smart Aid for African Development (2009) and the Africa Demos series (1990-94). His article, "Africa's Predicament and Academe", was published as a cover story by The Chronicle of Higher Education (March 7, 2003). One of his recent articles is "Challenges of a ‘Frontier' Region," Journal of Democracy, April 2008. Others are posted at www.brookings.edu/experts/josephr.aspx

» Joseph, Richard, "The Nigerian predicament" (NGR Guardian News)

Reuben W. Hills Conference Room

Richard Joseph John Evans Professor of Political Science Speaker Northwestern University
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117 Encina Commons
Stanford, CA 94305

(650) 804-5398
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Currently Dr. Kaarboe is working as an associate professor in economics at Department of Economics, University of Bergen, Norway. He also serves as the research director of the research group Health Economics Bergen (HEB).

Dr. Kaarboe's research has mainly been focused on developing and implementing financing models in the health care sector. This includes i) theoretical work, ii) developing remuneration models at the nation level, and iii) developing and implementing remuneration models at the regional level in Norway. He has also been involved in a WHO-project on implementing decentralization in health care. Recently Dr. Kaarboe was the Principal Investigator (PI) for a project on evaluation of a Norwegian hospital reform. This reform concerns a major change in the governance structure of the hospital sector in Norway. Currently Dr. Kaarboe is the PI of a project on prioritization in the hospital sector. The main purpose of the project is to develop a surveillance system to monitor prioritization of hospital patients. One part of the project includes a comparative analysis of prioritization practices in Norway and Scotland. He is also involved in a project about the relationship between social capital and health.

The health economics group in Bergen is one of the larger health research groups in Europe. The research group is based within economics and business administration but emphasizes multidisciplinary research cooperation with medicine, health care institutions and other social sciences. It has a broad international (European) network. Well known health economics like Professors Andrew Jones, (York), Carol Propper (Imperial College/Bristol University), John Cairns (London School of Hygiene and Tropical Medicine), Matt Sutton (University of Manchester), Sherman Folland (Oakland University) and Maarten Lindeboom (Vrije University) are all affiliated with the health group.

Adjunct Affiliate at the Center for Health Policy and the Department of Health Policy
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This lecture deals with the strategies of reconstructing the suppressed memory of traumatic events in Kosova, Afghanistan, and Bosnia and Herzegovina at the end of the 20th century. In this period of transitions and changes, history has become a key conflict arena in which identity and memory are being waged. Milica Tomic's work addresses these issues in an unconventional way that challenges traditional ‘representation’ (or lack of thereof) of the past events. By combining three of her exhibited projects xy-üngelost, container and Srebrenica – this talk attempts to investigate the ways in which we can engage with the past to confront the drives to forget. Thus re-constructed material and social network of events critically investigate the politics of rights to narrate traumatic events from the past. Proceeding from the fact that what we cannot remember tells us about that which we cannot forget, Milica Tomic interprets the syntagm “politics of memory” as a demand for a renewal of politics. Stated in the negative form, it goes: There is no memory without politics!/There is no oblivion without politics!

Milica Tomic works and lives in Belgrade as a visual artist, primarily video, film, photography, performance, action, light and sound installation, web projects, discussions etc. Tomic's work centers on issues of political violence, nationality and identity, with particular attention to the tensions between personal experience and media constructed images. Milica Tomic's has exhibited globally since 1998 and participated in numerous exhibitions including Venice Biennale in 2001 and 2003, Sao Paulo Biennale in1998, Istanbul Biennale in 2003 and Sidney Biennale in 2006, Prague Biennale in 2007, Gyumri Biennale in 2008. Tomic's work was exhibited in a wide international context including the Museum voor Moderne Kunst, Arnhem, Holland, Kunsthalle Wien, Austria, Moderna Museet, Stockholm, Sweden, MUMOK- Museum Moderner Kunst Stiftung Ludwig Wien, Vienna, Austria, Fundacio Joan Miro, Barcelona, Spain, Ludwig Museum Budapest, Hungary, Malmo Konsthall, Malmo, Sweden, Palazzo Della Triennale Milano, Milan, Italy, Museum of Contamporary Art Belgrade, Serbia, GfZK- Galerie fur Zeitgenussische Kunst, Leipzig, Germany, State Museum of Contemporary Art Thessaloniki, Greece, Kunsthalle Fridericianum, Kassel, Germany, Copenhagen Contemporary Art Center, Copenhagen, Denmark, Brooklyn Museum of Art, New York, USA, Freud Museum, London, UK, KIASMA Nykytaiteen Museo, Helsinki, Finland, Nasjonalmuseet for Kunst, Arkitektur og Design, Oslo, Norway, Stedelijk Museum, Amsterdam, Holland etc.

A founder and member of the Monument Group, Tomic is a organizer of numerous international art projects and workshops, as well as lecturer at international institutions of contemporary art, such as: NIFCA (Nordic Institute for Contemporary Art), Kuvataideakatemia / Academy of Fine Arts, Helsinki, Finland, Piet Zwart Institut, Rotterdam, Holland, Akademie der bildenden Künste, Vienna, Austria and others.

Jointly sponsored by the Forum on Contemporary Europe, Archaeology Center, Department of Art and Art History, and Center for Russian, East European and Eurasian Studies.

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Stanford University

Milica Tomic Visual Artist, Belgrade Speaker
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This event is co-sponsored by the Consulate General of Japan, San Francisco and the US-Asia Technology Management Center, Stanford University

The United States ushered in new leadership at the same time as an economic crisis swept over the globe. Responding to today’s crisis is an urgent task, but we simultaneously face the question of what kind of world order to create after the crisis. What is Japan’s core orientation as it looks to the future? Can America resume its role as moral leader once again?

About the Speaker

Yotaro Kobayashi is former Chairman of the Board, Fuji Xerox Co., Ltd. and serves on the boards of Callaway Golf Company, Nippon Telegraph and Telephone Corporation (NTT), American Productivity & Quality Center (APQC) and Sony Corporation. He is also the Pacific Asia Chairman of the Trilateral Commission, Chairman of the Aspen Institute Japan, and Chairman of International University of Japan.

After receiving his B.A. in economics from Keio University and his M.B.A. from the University of Pennsylvania’s Wharton School of Finance and Commerce, he joined Fuji Photo Film Co., Ltd., in 1958 from where he was assigned to Fuji Xerox Co., Ltd. in 1963. He became President and CEO in 1978, and Chairman and CEO in 1992. He served as Chairman of the Board from 1999 till March 2006 to become Chief Corporate Advisor in April the same year, and retired from that position in March 2009.

Mr. Kobayashi was awarded the Medal with Blue Ribbon (Japan) in 1991, the Insignia of Commander First Class of the Royal Order of the Polar Star (Sweden) in 1995, and the Royal Norwegian Order of Merit (Norway) in 1997.

Philippines Conference Room

Yotaro Kobayashi Former Chief Corporate Advisor and Chairman of the Board Speaker Fuji Xerox Co., Ltd.
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Many resource dependent states have to varying degrees, failed to provide for the welfare of their own populations, could threaten global energy markets, and could pose security risks for the United States and other countries.  Many are in Africa, but also Central Asia (Turkmenistan, Kazakhstan, Azerbaijan), Southeast Asia (Cambodia, Burma, East Timor), and South America (Bolivia, Colombia, Ecuador) Some have only recently become – or are about to become – significant resource exporters.  Many have histories of conflict and poor governance.  The recent boom and decline in commodity prices – the largest price shock since the 1970s – will almost certainly cause them special difficulties.  The growing role of India and China, as commodity importers and investors, makes the policy landscape even more challenging.

We believe there is much the new administration can learn from both academic research, and recent global initiatives, about how to address the challenge of poorly governed states that are dependent on oil, gas, and mineral exports.  Over the last eight years there has been a wealth of new research on the special problems that resource dependence can cause in low-income countries – including violent conflict, authoritarian rule, economic volatility, and disappointing growth.  The better we understand the causes of these problems, the more we can learn about how to mitigate them.

There has also been a new set of policy initiatives to address these issues: the Kimberley Process, the Extractive Industries Transparency Initiative, the World Bank’s new “EITI plus plus,” Norway’s Oil for Development initiative, and the incipient Resource Charter.  NGOs have played an important role in most of these initiatives; key players include Global Witness, the Publish What You Pay campaign, the Revenue Watch Institute, Oxfam America, and an extensive network of civil society organizations in the resource-rich countries themselves.

Some of these initiatives have been remarkably successful.  The campaign against ‘blood diamonds,’ through the Kimberley Process, has reduced the trade in illicit diamonds to a fraction of its former level, and may have helped curtail conflicts in Angola, Liberia, and Sierra Leone.  Many other initiatives are so new they have not been have not been carefully evaluated.

This workshop is designed to bring together people in the academic and policy worlds to identify lessons from this research, and from these policy initiatives, that can inform US policy towards resource-dependent poorly states in the new administration.

» Workshop memos (password protected)

Philippines Conference Room

Stephen Haber Speaker Stanford
Brian Phipps Speaker State Department
Petter Nore Speaker Norad
Nilmini Gunaratne Rubin Speaker Senate Foreign Relations
Michael Ross Moderator UCLA
Macartan Humphreys Speaker Columbia
Kevin Morrison Speaker Cornell

CISAC
Stanford University
Encina Hall
Stanford, CA 94305-6165

(650) 725-1314
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Senior Fellow at the Freeman Spogli Institute for International Studies
Theodore and Frances Geballe Professor in the School of Humanities and Sciences
Professor of Political Science
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PhD

James Fearon is the Theodore and Frances Geballe Professor in the School of Humanities and Sciences and a professor of political science. He is a Senior Fellow at FSI, affiliated with CISAC and CDDRL. His research interests include civil and interstate war, ethnic conflict, the international spread of democracy and the evaluation of foreign aid projects promoting improved governance. Fearon was elected to the National Academy of Sciences in 2012 and the American Academy of Arts and Sciences in 2002. Some of his current research projects include work on the costs of collective and interpersonal violence, democratization and conflict in Myanmar, nuclear weapons and U.S. foreign policy, and the long-run persistence of armed conflict.

Affiliated faculty at the Center for International Security and Cooperation
Affiliated faculty at the Center on Democracy, Development, and the Rule of Law
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James D. Fearon Speaker Stanford
Karin Lissakers Speaker Revenue Watch Institute
Basil Zavoico Speaker International Monetary Fund (former)

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CDDRL Postdoctoral Fellow 2008-2009
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Desha Girod is a postdoctoral fellow at the Center on Democracy, Development and Rule of Law at Stanford University where she manages the program Evaluating International Influences on Democratic Development.  Her research focuses on the influence of external actors on political and economic development.  In 2009, she will join the faculty of the Department of Government at Georgetown University.
Desha Girod Speaker Stanford
Ian Gary Speaker Oxfam

CDDRL
Stanford University
Encina Hall
Stanford, CA 94305-6055

(650) 723-0676 (650) 724-2996
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Senior Fellow at the Freeman Spogli Institute for International Studies, Emeritus
Graham H. Stuart Professor of International Relations
Senior Fellow at the Hoover Institution, Emeritus
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MA, PhD

Stephen Krasner is the Graham H. Stuart Professor of International Relations. A former director of CDDRL, Krasner is also an FSI senior fellow, and a fellow of the Hoover Institution.

From February 2005 to April 2007 he served as the Director of Policy Planning at the US State Department. While at the State Department, Krasner was a driving force behind foreign assistance reform designed to more effectively target American foreign aid. He was also involved in activities related to the promotion of good governance and democratic institutions around the world.

At CDDRL, Krasner was the coordinator of the Program on Sovereignty. His work has dealt primarily with sovereignty, American foreign policy, and the political determinants of international economic relations. Before coming to Stanford in 1981 he taught at Harvard University and UCLA. At Stanford, he was chair of the political science department from 1984 to 1991, and he served as the editor of International Organization from 1986 to 1992.

He has been a fellow at the Center for Advanced Studies in the Behavioral Sciences (1987-88) and at the Wissenschaftskolleg zu Berlin (2000-2001). In 2002 he served as director for governance and development at the National Security Council. He is a fellow of the American Academy of Arts and Sciences and a member of the Council on Foreign Relations.

His major publications include Defending the National Interest: Raw Materials Investment and American Foreign Policy (1978), Structural Conflict: The Third World Against Global Liberalism (1985), Sovereignty: Organized Hypocrisy (1999), and How to Make Love to a Despot (2020). Publications he has edited include International Regimes (1983), Exploration and Contestation in the Study of World Politics (co-editor, 1999),  Problematic Sovereignty: Contested Rules and Political Possibilities (2001), and Power, the State, and Sovereignty: Essays on International Relations (2009). He received a BA in history from Cornell University, an MA in international affairs from Columbia University and a PhD in political science from Harvard.

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Stephen D. Krasner Moderator Stanford
Corinna Gilfillan Speaker Global Witness
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Mark C. Thurber
Mark Thurber
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As oil prices surge through $140/barrel at the time of writing, surely one can at least count on the invisible hand of the market to drive further exploration and production and ultimately bring more supplies on line, right? Or perhaps, more ominously, high oil prices presage a darker future of shortage and conflict as global oil fields pass their geological “peak”? In fact, both positions miss a crucial point about the dynamics of the world oil market — that it is increasingly animated by the counterintuitive behavior of the state-owned oil and gas giants that now control the vast majority of the world’s hydrocarbon resources.

“On average national oil companies (NOCs) extract resources at a far lower rate than international oil companies (IOCs), leaving about 700 billion barrels of oil effectively ‘dead’ to the world market.”So-called “national oil companies,” or NOCs, own about 80 percent of the world’s proven reserves of oil, a percentage that has been on the rise as the persistent high price environment encourages countries to assert even tighter control over the rent streams flowing from their resources. NOCs are curious and variegated beasts, and, contrary to the popular imagination, some are highly capable both technically and organizationally. Brazil’s Petrobras is an acknowledged world leader in deepwater drilling, while Norway’s StatoilHydro is highly regarded for its competence and transparent business practices. Saudi Arabia’s national champion, SaudiAramco, is secretive to the outside world but generally considered to be a well-run, technically capable organization. At the other end of the continuum, government infighting and micromanagement hobble Mexico’s Pemex and Kuwait’s KPC. Once-independent PDVSA in Venezuela has been remade by President Hugo Chávez into a government puppet that spends liberally on social programs but consistently undershoots its production targets. And indeed some national oil companies are hardly oil companies at all — Nigeria’s NNPC, for example, is mostly a rent-seeking bureaucracy.

What NOCs do share in common as distinct from the familiar international oil companies (IOCs) is being answerable to a host government, which inevitably brings with it some focus on objectives other than simple profit maximization. Typically, an NOC arises originally from the desire of resource-rich governments (“principals”) to gain more effective control over resource extractors (“agents”) by creating an oil champion owned by the state. Prior to NOC formation, governments are frequently (and often justifiably) wary of exploitation by the foreign oil operators providing hydrocarbon extraction services. Lacking a deep understanding of the costs of production, states are simply unable to be sure they are taxing their agents appropriately. In addition to enhancing control over the hydrocarbon sector and the revenue it brings, states may hope for other benefits from the NOC: cheap energy to fuel a growing economy, employment and development of local industry to support the hydrocarbon sector, or even foreign policy leverage derived from control of key resources.

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Unfortunately for the states, relationships with their NOCs are rarely straightforward, with implications for performance. Some national oil companies evolve into barely controllable “states within a state”— PDVSA pre-Chávez was an example of this — while others see their initiative smothered by excessive government intervention as in the case of Pemex and KPC. Fraught state-NOC interactions can take their toll on company effectiveness; in other cases, NOCs may simply appear less efficient than their IOC brethren because they are serving state purposes beyond simple monetization of hydrocarbon resources. Irrespective of cause, the result is that on average NOCs extract resources at a far lower rate than IOCs, leaving about 700 billion barrels of oil effectively “dead” to the world market. A far more immediate concern than whether oil fields are passing their geological “peak” is who is sitting on top of those fields!

A detailed study of NOC performance and strategy at the Program on Energy and Sustainable Development at FSI suggests a useful way of thinking about the effects of NOC resource domination on world oil and gas markets. Price versus quantity supply curves from classical economics assume that increased price will spur efforts to expand supply. Unfortunately, the counterintuitive reality for NOCs is that, when it comes to expanding supply in the current high-price environment, most either 1) can but don’t want to or 2) want to but can’t. The end result is what one could call a “backward-bending” supply curve — additional price increases do little or nothing to boost supply.

“The world has plentiful hydrocarbons in the ground, but that’s where many of them are going to stay due to the unique organizational and political dynamics of the NOCs.”In the “can but don’t want to” category are resourcerich governments that have decided they cannot assimilate any more money. Already, their investments are running into political resistance around the globe — witness Dubai’s failed attempt to purchase U.S. port management contracts, CNOOC’s failed bid for Unocal, or the increasing calls for curbs on the activities of sovereign wealth funds. Nations may decide they have enough cash and are better off leaving resources in the ground where they safely await monetization at a later date.

In the “want to but can’t” camp are countries and their NOCs that are simply unable to provide the stable political and regulatory climate to support additional build-out of expensive production and transport infrastructure. This situation is particularly common for natural gas, where long investor time horizons are needed to bankroll the multibilliondollar capital costs of pipelines or liquefied natural gas (LNG) terminals.

Meanwhile, international oil companies are left on the sidelines salivating helplessly over the vast reserves in NOC hands. Venezuela’s Orinoco region could yield hundreds of billions of barrels of heavy crude, but the government and a nowpliant PDVSA invite favored countries and their NOCs to explore rather than selecting the operators most capable of extracting the challenging but plentiful resource. Technical expertise and massive investment are required to fully develop vast Russian gas fields including Kovykta, Shtokman, and Yamal, but IOCs already burned by nationalizations and shifting rules in these and other Russian ventures are unlikely to be in a position to supply enough of either. In the face of dwindling resources they can tap, IOCs will need to diversify their business models, perhaps tackling technologically challenging options like oil sands or liquids from coal in conjunction with the carbon storage techniques that could make these palatable from a climate change perspective. Ironically, the only “easy” oil for IOCs has become oil that is geologically and technologically difficult.

While oil price is dependent on many factors (including global economic health) and is impossible to forecast with certainty, one can confidently predict continued tight supply of oil and gas, especially given global demand that will be propped up indefinitely by rising consumption in China and India. The world has plentiful hydrocarbons in the ground, but that’s where many of them are going to stay due to the unique organizational and political dynamics of the NOCs. Leverage over the market is weak; measures to reduce demand for oil and gas (though politically unpopular) or to spur development of alternative fuels and associated infrastructure (though slow to develop at scale) may be all that we have.

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A Wall Street Journal op-ed by former Secretaries of State George Shultz and Henry Kissinger, former Defense Secretary William Perry, former Senator Sam Nunn and other leading security experts advancing the vision of a world free of nuclear weapons and the concrete steps needed to make progress in that direction.

The accelerating spread of nuclear weapons, nuclear know-how and nuclear material has brought us to a nuclear tipping point. We face a very real possibility that the deadliest weapons ever invented could fall into dangerous hands.

The steps we are taking now to address these threats are not adequate to the danger. With nuclear weapons more widely available, deterrence is decreasingly effective and increasingly hazardous.

One year ago, in an essay in this paper, we called for a global effort to reduce reliance on nuclear weapons, to prevent their spread into potentially dangerous hands, and ultimately to end them as a threat to the world. The interest, momentum and growing political space that has been created to address these issues over the past year has been extraordinary, with strong positive responses from people all over the world.

Mikhail Gorbachev wrote in January 2007 that, as someone who signed the first treaties on real reductions in nuclear weapons, he thought it his duty to support our call for urgent action: "It is becoming clearer that nuclear weapons are no longer a means of achieving security; in fact, with every passing year they make our security more precarious."

In June, the United Kingdom's foreign secretary, Margaret Beckett, signaled her government's support, stating: "What we need is both a vision -- a scenario for a world free of nuclear weapons -- and action -- progressive steps to reduce warhead numbers and to limit the role of nuclear weapons in security policy. These two strands are separate but they are mutually reinforcing. Both are necessary, but at the moment too weak."

We have also been encouraged by additional indications of general support for this project from other former U.S. officials with extensive experience as secretaries of state and defense and national security advisors. These include: Madeleine Albright, Richard V. Allen, James A. Baker III, Samuel R. Berger, Zbigniew Brzezinski, Frank Carlucci, Warren Christopher, William Cohen, Lawrence Eagleburger, Melvin Laird, Anthony Lake, Robert McFarlane, Robert McNamara and Colin Powell.

Inspired by this reaction, in October 2007, we convened veterans of the past six administrations, along with a number of other experts on nuclear issues, for a conference at Stanford University's Hoover Institution. There was general agreement about the importance of the vision of a world free of nuclear weapons as a guide to our thinking about nuclear policies, and about the importance of a series of steps that will pull us back from the nuclear precipice.

The U.S. and Russia, which possess close to 95% of the world's nuclear warheads, have a special responsibility, obligation and experience to demonstrate leadership, but other nations must join.

Some steps are already in progress, such as the ongoing reductions in the number of nuclear warheads deployed on long-range, or strategic, bombers and missiles. Other near-term steps that the U.S. and Russia could take, beginning in 2008, can in and of themselves dramatically reduce nuclear dangers. They include:

  • Extend key provisions of the Strategic Arms Reduction Treaty of 1991. Much has been learned about the vital task of verification from the application of these provisions. The treaty is scheduled to expire on Dec. 5, 2009. The key provisions of this treaty, including their essential monitoring and verification requirements, should be extended, and the further reductions agreed upon in the 2002 Moscow Treaty on Strategic Offensive Reductions should be completed as soon as possible.
  • Take steps to increase the warning and decision times for the launch of all nuclear-armed ballistic missiles, thereby reducing risks of accidental or unauthorized attacks. Reliance on launch procedures that deny command authorities sufficient time to make careful and prudent decisions is unnecessary and dangerous in today's environment. Furthermore, developments in cyber-warfare pose new threats that could have disastrous consequences if the command-and-control systems of any nuclear-weapons state were compromised by mischievous or hostile hackers. Further steps could be implemented in time, as trust grows in the U.S.-Russian relationship, by introducing mutually agreed and verified physical barriers in the command-and-control sequence.
  • Discard any existing operational plans for massive attacks that still remain from the Cold War days. Interpreting deterrence as requiring mutual assured destruction (MAD) is an obsolete policy in today's world, with the U.S. and Russia formally having declared that they are allied against terrorism and no longer perceive each other as enemies.
  • Undertake negotiations toward developing cooperative multilateral ballistic-missile defense and early warning systems, as proposed by Presidents Bush and Putin at their 2002 Moscow summit meeting. This should include agreement on plans for countering missile threats to Europe, Russia and the U.S. from the Middle East, along with completion of work to establish the Joint Data Exchange Center in Moscow. Reducing tensions over missile defense will enhance the possibility of progress on the broader range of nuclear issues so essential to our security. Failure to do so will make broader nuclear cooperation much more difficult.
  • Dramatically accelerate work to provide the highest possible standards of security for nuclear weapons, as well as for nuclear materials everywhere in the world, to prevent terrorists from acquiring a nuclear bomb. There are nuclear weapons materials in more than 40 countries around the world, and there are recent reports of alleged attempts to smuggle nuclear material in Eastern Europe and the Caucasus. The U.S., Russia and other nations that have worked with the Nunn-Lugar programs, in cooperation with the International Atomic Energy Agency (IAEA), should play a key role in helping to implement United Nations Security Council Resolution 1540 relating to improving nuclear security -- by offering teams to assist jointly any nation in meeting its obligations under this resolution to provide for appropriate, effective security of these materials.

As Gov. Arnold Schwarzenegger put it in his address at our October conference, "Mistakes are made in every other human endeavor. Why should nuclear weapons be exempt?" To underline the governor's point, on Aug. 29-30, 2007, six cruise missiles armed with nuclear warheads were loaded on a U.S. Air Force plane, flown across the country and unloaded. For 36 hours, no one knew where the warheads were, or even that they were missing.

  • Start a dialogue, including within NATO and with Russia, on consolidating the nuclear weapons designed for forward deployment to enhance their security, and as a first step toward careful accounting for them and their eventual elimination. These smaller and more portable nuclear weapons are, given their characteristics, inviting acquisition targets for terrorist groups.
  • Strengthen the means of monitoring compliance with the nuclear Non-Proliferation Treaty (NPT) as a counter to the global spread of advanced technologies. More progress in this direction is urgent, and could be achieved through requiring the application of monitoring provisions (Additional Protocols) designed by the IAEA to all signatories of the NPT.
  • Adopt a process for bringing the Comprehensive Test Ban Treaty (CTBT) into effect, which would strengthen the NPT and aid international monitoring of nuclear activities. This calls for a bipartisan review, first, to examine improvements over the past decade of the international monitoring system to identify and locate explosive underground nuclear tests in violation of the CTBT; and, second, to assess the technical progress made over the past decade in maintaining high confidence in the reliability, safety and effectiveness of the nation's nuclear arsenal under a test ban. The Comprehensive Test Ban Treaty Organization is putting in place new monitoring stations to detect nuclear tests -- an effort the U.S should urgently support even prior to ratification.

In parallel with these steps by the U.S. and Russia, the dialogue must broaden on an international scale, including non-nuclear as well as nuclear nations.

Key subjects include turning the goal of a world without nuclear weapons into a practical enterprise among nations, by applying the necessary political will to build an international consensus on priorities. The government of Norway will sponsor a conference in February that will contribute to this process.

Another subject: Developing an international system to manage the risks of the nuclear fuel cycle. With the growing global interest in developing nuclear energy and the potential proliferation of nuclear enrichment capabilities, an international program should be created by advanced nuclear countries and a strengthened IAEA. The purpose should be to provide for reliable supplies of nuclear fuel, reserves of enriched uranium, infrastructure assistance, financing, and spent fuel management -- to ensure that the means to make nuclear weapons materials isn't spread around the globe.

There should also be an agreement to undertake further substantial reductions in U.S. and Russian nuclear forces beyond those recorded in the U.S.-Russia Strategic Offensive Reductions Treaty. As the reductions proceed, other nuclear nations would become involved.

President Reagan's maxim of "trust but verify" should be reaffirmed. Completing a verifiable treaty to prevent nations from producing nuclear materials for weapons would contribute to a more rigorous system of accounting and security for nuclear materials.

We should also build an international consensus on ways to deter or, when required, to respond to, secret attempts by countries to break out of agreements.

Progress must be facilitated by a clear statement of our ultimate goal. Indeed, this is the only way to build the kind of international trust and broad cooperation that will be required to effectively address today's threats. Without the vision of moving toward zero, we will not find the essential cooperation required to stop our downward spiral.

In some respects, the goal of a world free of nuclear weapons is like the top of a very tall mountain. From the vantage point of our troubled world today, we can't even see the top of the mountain, and it is tempting and easy to say we can't get there from here. But the risks from continuing to go down the mountain or standing pat are too real to ignore. We must chart a course to higher ground where the mountaintop becomes more visible.


Mr. Shultz was secretary of state from 1982 to 1989. Mr. Perry was secretary of defense from 1994 to 1997. Mr. Kissinger was secretary of state from 1973 to 1977. Mr. Nunn is former chairman of the Senate Armed Services Committee.

The following participants in the Hoover-NTI conference also endorse the view in this statement: General John Abizaid, Graham Allison, Brooke Anderson, Martin Anderson, Steve Andreasen, Mike Armacost, Bruce Blair, Matt Bunn, Ashton Carter, Sidney Drell, General Vladimir Dvorkin, Bob Einhorn, Mark Fitzpatrick, James Goodby, Rose Gottemoeller, Tom Graham, David Hamburg, Siegfried Hecker, Tom Henriksen, David Holloway, Raymond Jeanloz, Ray Juzaitis, Max Kampelman, Jack Matlock, Michael McFaul, John McLaughlin, Don Oberdorfer, Pavel Podvig, William Potter, Richard Rhodes, Joan Rohlfing, Harry Rowen, Scott Sagan, Roald Sagdeev, Abe Sofaer, Richard Solomon, and Philip Zelikow.

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