Oil and Grand Strategy with Emma Ashford

Today we are celebrating an important milestone for the podcast: our 25th episode. We thank all of our listeners for their support and hope that you continue to enjoy the show.

On this episode, Anita talks with Emma Ashford, a senior fellow with the Reimagining US Grand Strategy program at the Stimson Center. We talk about her new book: Oil, the State, and War: The foreign policies of petrostates. She explains how categorizing the different types of petrostates helps better understand oil’s relationship to violent conflict. We also discuss Russia as a petrostate and the war in Ukraine. We conclude with an assessment of the Biden administration’s National Security Strategy and whether it represents more of the same or a new vision for the future.

We also look back at 2022 and  talk about how the two biggest stories of the year: the Russia-Ukraine war and the complete shift to viewing China as a security threat, have changed the world.

Topics Discussed in this Episode

• 2022 Lookback: Russia-Ukraine War - 06:00
• 2022 Lookback: New Cold War with China - 18:30
• Interview with Emma Ashford - 55:00

Articles and Resources Mentioned in Episode

2022 Lookback: Russia-Ukraine War

• Zelensky Tells Congress ‘You Can Speed Up Our Victory’ (NY Times)
• A whole new global energy system is emerging (The Economist)

2022 Lookback: New Cold War with China

• 5 Things U.S. Policymakers Must Understand About China-Africa Relations (American Progress)
• The response to debt distress in Africa and the role of China (Chatham House)
• Will Biden’s Trade Policy Shift After the Midterms? (CFR)

Interview with Emma Ashford, The Stimson Center

• Stimson Center
• Oil, the State, and War: The Foreign Policies of Petrostates
• Twitter

Follow Us

• Show Website: www.kelloggsglobalpolitics.com
• Show Twitter: @GlobalKellogg
• Anita’s Twitter: @arkellogg
• Show YouTube

Transcript

Anita Kellogg: [00:00:00] Welcome to Global Politics, a podcast on current events in US foreign policy and international affairs. My name is Dr. Anita Kellogg, an international relations scholar specializing in the relationship between economics and national security. I'm here with my co-host, Ryan Kellogg, an expert in energy investment and policy.

Ryan Kellogg: Thanks and glad to be back. So this is episode 25 and we're recording this on December 23rd, 2022. 

Anita Kellogg: Today we are celebrating an important milestone for the podcast, our 25th episode. We thank all of our listeners for their support and hope that you continue to enjoy the show. On this episode, I talk with Emma Ashford, a senior fellow with the Re-imagining US Grand Strategy Program at the Stimson Center.

We talk about her new book, Oil, the State and War: the Foreign Policies of Petro States. She explains how categorizing the different types of petrostates helps better understand oil's relationship to [00:01:00] violent conflict. We also discussed Russia as a petro state and the war in Ukraine. We conclude with an assessment of the Biden administration's national security strategy and whether it represents more of the same or new vision for the future.

First, however, Ryan and I talk about the two biggest stories of the year, the Russia-Ukraine War, and the complete shift to viewing China as a security threat and how these have changed the world. So it’s our 25th episode, I just want to note that because that is a true milestone from any podcast. 

Ryan Kellogg: Yeah, no, I think it's a big deal and I wanted to do a sound effect or something for it. Well, maybe we can add one in . We can add one in post. 

Anita Kellogg: No, I think it's important. I think, you know, you hear all the time, well, everyone has a podcast, but not everyone makes it past the 10th episode, let alone the [00:02:00] 25th. 

Ryan Kellogg: That's true.

Yeah. I think, what is it like only 10% of podcasts make it this far. 

Anita Kellogg: Yeah. I think it's really notable. Yeah, 

Ryan Kellogg: Man, it's a big deal and it's been great seeing you. I mean, you've done such a great job with the interviews. That's a completely new process for you. You've been a real champ and there's been so many informative guests that you've had. Yeah, it's been really, really insightful. Hopefully for our listeners too. But you know, I found it real insightful. 

Anita Kellogg: Well, thank you. That's really sweet of you to say. Well, I also hear there's a holiday coming up. 

Ryan Kellogg: Yeah, so we're recording this on the 23rd, this is two days to Christmas. I think we're more or less ready, have most of the presents, most of the shopping done at this point, which is always good.

Yeah. So we're excited. We're actually getting winter weather. The big, um, geez, what would they called? The bomb cyclone, which froze the Midwest and then made its way to the East coast. We're getting a relatively minor version of it, but we got a little bit of snow flurries.

Everything kind of melted because the grounds are warm. But it's a little bit, it's a little bit Nippy out right now. I think it's going to be drop into the teens by this evening. 

Anita Kellogg: I have a statement though. Yeah. That the problem with winter is not that it's cold outside, but that it's so cold inside our apartment.

Between you and Becca. I'm 

Ryan Kellogg: please. Yeah, I don't know what you talk about. It's like 70 degrees. That's like a perfect, where, how, I mean you have it on 72. I'm looking at the , the thermostat 

Anita Kellogg: right now, but when I, I got up, it was 69 

Ryan Kellogg: degrees. Yeah, that was the nighttime temperature, which you know, sometimes I don't notice, but hey, that is out, out bombing compared to like Rebecca wants it at

Anita Kellogg: Okay. 65. Here's the other problem is my office is next to her bedroom and yes, [00:04:00] Becca would like that area to be 65 all the time. And even if I put a jacket on or no matter how layered up I am, then my hands get really cold and so, you know, it's really hard to time . 

Ryan Kellogg: Yeah. Well, hey, our European counterparts this winter.

Are suffering far worse. Oh. Oh. So in solidarity, I said we turn down that thermostat so we can ship more of that sweet natural gas to them. That makes zero sense. I'll support their mark

Uh, yeah. So the other thing that we have is fantasy football, playoff time now, fantasy football. Hopefully, I feel like we don't even need to explain that anymore, that that's become kind of institutionalized enough that it, it goes without explanation. But we've, we've had a family and friends league for over 10 years now, of which unfortunately, much of the chagrin of everybody else.

Anita has really [00:05:00] dominated, she's won I think six out of the 10 or 11 years that we've been doing it. There's 

Anita Kellogg: only five. I was disappointed. It's only 

Ryan Kellogg: five. All right. It's a lot. It's 

Anita Kellogg: 50% come in second. 

Ryan Kellogg: A lot. Yeah. So we're in the playoffs, the first round of the playoffs. We're playing each other. She has done a rather remarkable job of fighting her way into the playoffs.

At 

Anita Kellogg: one point, like not that long ago, I had a 3% chance in making into the playoffs. 3%. Yeah. And I still made it. 

Yeah. 

Ryan Kellogg: And I had a chance to tank it to keep you from getting in the playoffs, which I now thoroughly regret. That being said, I held up much better in this first week that I thought because we're tied going into the final week.

So everything to play for. Let's go Joe Cool. Joe Burrow on the Bengals. I need you to throw like five TDs. Put me up over the top. 

Anita Kellogg: Disagree. Go Justin Fields, , go Chicago. 

Ryan Kellogg: Yeah, so that's what we'll be doing. It's kind of crazy. Just like wall to wall football both Christmas Eve and Christmas Day. It's gonna be some entertaining fantasy football with big stakes

Anita Kellogg: Okay, well I guess we should get into the show and we are looking back the two biggest stories and the first we're going to look at as we usually do the Russia, Ukraine War. So why don't you get us. Started since this has been the story you've covered the most. 

Ryan Kellogg: Yeah. I mean obviously it's been, uh, I mean, one, it, it's hard to believe that all of this began this year that all the, all the events that we've seen and we've talked about, you know, really began in February.

Because it seems a lot longer in that way just because of the profound implications. Mm-hmm. of the war on, on so many different aspects of US foreign policy on markets, just everything. But I think, you know, number one is going into [00:07:00] it was, I think the thing that that stood out the most was just the fact, the surprise.

of, uh, resilience and ability to withstand that initial Russian assault because everything coming out of, of US intelligence and that, that is one of those things, I mean, US intelligence leading up to the war was really on point in terms mm-hmm. of, despite every other kind of theoretical explanation of Ukrainian leaders themselves saying there's no way that Russia's going to be, there's no way this is going to happen.

US intelligence was spot on that, but that same intelligence also said that, , very likely Ukraine would be defeated within, you know, weeks that Kiev would, would fall almost immediately. So seeing that, that resistance and then by, by April having shattered the Russian assault and limited, you know, the, the gains of the Russian military have been really remarkable.

Mm-hmm. , and I think that's, [00:08:00] that was the, the great thing, seeing this week, seeing Zelensky come to meet directly with Biden and the White House, and then address Congress in a joint session and just that spirit. I think the, probably the two areas of more or less unity within Washington, although, you know, they're definitely were splits and you saw that even in the joint session to Congress, but it, it still, the most annoying Republicans didn't.

Yeah. There were some annoying, you know, the, the usual suspects like Hawley. Yeah. Hawley, Boebert, Matt Gaetz- who should be in jail. I mean, half of these people should be in jail, frankly. But otherwise, yeah, it was, it was standing ovations. It was remarkable support because there's something in it, and I think Zelensky did a great job in the speech. I mean, he's a great diplomat, In English. It was very informal. There were people criticizing him, like, oh, you should at least wear a suit to [00:09:00] visit the president and, and talk to Congress. But, you know, he called on American history, talked about the Battle of the Bulge, and tied that to back Bakmut, which we talked about in the last episode.

He gave the analogy to Saratoga in our own revolution and talked also about that. He doesn't resent the comfort that we have in the United States because of the, the victories and the suffering and sacrifices this country had to make over hundreds of years to build and preserve its own institutions, its own democracy, and that Ukraine was going through the same process and it's very aspirational.

And just from an emotional point of view I think that's what resonates with Ukraine. This is a country that's directly fighting for the values that we say that we stand for, but obviously we've, we haven't always upheld, but in our mind, this is who we view ourselves as. And seeing [00:10:00] Ukraine come together and push back against a much, on paper, a much greater foe, and to be able to successfully fight for their freedom, fight for a future where they’re a democracy, where they're part of the EU, where they're potentially part of NATO and seeing those values being fought for successfully. And I think it obviously has resonated a lot. 

Anita Kellogg: Yeah. I do hope though, that however this war comes to resolution, that Ukraine is fundamentally changed and so that it does represent those values because the Ukrainian government before the invasion. 

Ryan Kellogg: I mean, wow, Zelensky has obviously been compared to Churchill at this point. And I've seen some discussions on after the war, wartime leaders often don't manage the peace very well. But would Zelensky be, would be different, given his unique background, I mean, the background of [00:11:00] Churchill versus Zelensky is completely different. He's such a 21st century leader in terms of coming from an entertainment background running on president, half as a joke.

But that'll be the real test. Will he be their Washington and establish a positive precedence for how an executive should behave, how an executive should behave both in war time and in peace.  Because Ukraine is enormously corrupt. I mean, in its institutions there are so many issues.

But will this war, will Zelensky’s example and then his successor's example, set them on a new course. 

Anita Kellogg: Yes. So I mean, there was a lot of things Zelensky was doing himself that was pretty illiberal. But hopefully this whole fighting for liberal values will mean, [00:12:00] will be a transformation.

Ryan Kellogg: And I think if they're serious about EU membership then you know they're going to have to meet certain bar. Hungary, which does not meet any of those bars currently. But for a new membership, this is certainly something that they have to seek those reforms and I think they'll have the support for it.

I think there will be the support in terms of financial support after the war, I think we're already there. Definitely the talk of making use of the 300 billion in frozen Russian funds to both fund the current support for Ukraine, but then the reconstruction following the war.

Anita Kellogg: Yeah, I've heard a lot about that too.

I guess transitioning. But certainly one important element of this too though, is that Ukraine would not have been able to withstand this Russian assault without incredible support from the US and its Western allies. [00:13:00] 

Ryan Kellogg: Yeah. And that's what's been so remarkable. And that was something that Putin definitely did not bank on.

The idea that the West- decadent concerned with its own economies and supporting its welfare states. Having seen the United States in ignominious retreat from Afghanistan, it estimated a tepid responses from the previous incursions into Ukraine that Putin estimated that there would be no resistance, there would be very little support for Ukraine from NATO.

And so, yeah, I think it's remarkable. I think it's a great testament to the Biden administration. I mean, it's definitely the crown achievement. I think Blinken, the National Security Council, have done a great job in terms of coordinating response with allies. Obviously, Europe really stepped up in terms of the military support, the financial support [00:14:00] they provided, the new commitments to military spending.

Maybe not the best follow through, but verbal commitment, the expansion of NATO with Finland and Sweden joining. All of these are remarkable and a gigantic strategic blow to Russia. I mean, this is exactly all the things that they did not want to see. They complained about NATO expansion before they, you know, they say they felt threatened by NATO, but it's like they've materialized a much stronger NATO, a NATO that contributes more in its individual defense budgets and adds new countries. One of them on Russia's border. But yeah, seeing that unity, seeing it hold, obviously this winter is a real test as you speak with Emma and the interview later in the podcast. Europe's in good position in terms of this winter in terms of having the gas supply, having the energy needs, but nevertheless, [00:15:00] consumers there are paying, three, four times the amount that they were before.

They’ve reduced their consumption by 10%. So they're sacrificing, they're definitely feeling it in these countries. So will that unity that we've seen over the last nine months, is that going to, to remain for a longer term? 

Anita Kellogg: Although Russia cutting off the gas seems to mean that there's not a lot of choice.

Ryan Kellogg: Yeah. That's the other remarkable thing, just from the energy market perspective is yeah, nobody thought that it would, one, that Europe would be in a manageable situation with a complete loss of Russian gas. Or that Russia would kind of go that far as well. So seeing, and then again that's, that's a combination of outbid people on the LNG markets. [00:16:00] Germans constructing in remarkable amount of time the LNG processing ships off their coast to bring in more natural gas.

And then just a kind of luck where China's zero covid policy had reduced demand for natural gas, was able to, to pull more of those shipments away from Asia. And then obviously the impact on the environment where you're turning on these coal plants. Emissions are now instead of going down as part of the net zero policy by 2050, they've reached a new record.

So you've definitely seen a step back in terms of the ESG goals, in terms of emissions. Nevertheless, it's remarkable. They've been able to weather that whole impact. 

Anita Kellogg: I think though it should be mentioned like how other poor countries, when you were talking about being outbid, how much they've been affected and have had to make drastic cuts that are harmful to their population.

So I know when the article mentioned Pakistan, but I know there [00:17:00] are countries in Africa that have struggled to get oil and gas as well. And so there are some, we never mentioned the countries, other countries that are sacrificing whether they want to or not. 

Ryan Kellogg: Right. Yeah, exactly. And yeah, I thought that was, that was an, I'd like to read and understand more the impacts within Pakistan. Was it a matter of increased prices so much that people are having to cut back? Or was is it like a shortfall and there's blackouts, brownouts within the country where, hey, you just don't have the supply of heat or supply of electricity. 

Anita Kellogg: I know that's been true with oil. Yeah. That they, some countries were just not able to get oil, get the supply. And I think the same is with natural gas as well. So I think that's, I don't know, should at least be talked about maybe a little bit more.

Ryan Kellogg: Yeah, and that's something obviously that's not going to go away. I mean, we talked about [00:18:00] before Europe's going to run down its storage over this winter it was receiving up to a third of its gas from Russia. With that completely gone during this whole period, it's going to be pulling hard on those LNG markets. Again, you know, obviously alternative pressures are where alternative sources will take a while to come online.

That's not likely something to make a big dent in over the next year. The markets are going to remain tight for sure. Looking at 2023. 

Anita Kellogg: So the next story that has dominated headlines in different aspects of it is the move from strategic engagement to competition with China. Basically looking at China now, almost purely through the prism of it being a security threat to the United States. There is definitely a danger in this perspective because suddenly everything is zero sum where we [00:19:00] feel the need to win against China and that there's no possibility for both countries to gain anything from trade or any aspect of engagement in global politics that both countries benefit from. And it's not just purely, oh well only one country is winning, whether it's engagement in Africa or Latin America or any other aspect of international policy.

Ryan Kellogg: Absolutely. I mean I think it's one of the other things that was, was surprising because obviously the shift wasn't a sudden shift in terms of the rhetoric itself. It came out of the Trump administration. Trump administration really set the tone. I mean things obviously under Obama, you had the pivot to Asia, which was really about a pivot to China.

But it was never, it was always framed as kind of a competition or maybe even still [00:20:00] framed as strategic engagement. But it was Trump in a very blunt fashion with the economic, the trade war, with the tariffs, with the rhetoric around espionage. So the launch the Department of Justices China Initiative targeted specifically academics within these sectors, accusing them of being spies.

So it's very aggressive stance, which also reflected the growing tone within Washington itself. So you've just kind of seen that, that really emerge. And I, I know a lot of people expected Biden to come in and, well, maybe this would be shifted back towards the Obama administration. And we haven't seen that. We haven't seen that. 

Anita Kellogg: So I think to some extent the things that you say are true in the continuity with Trump. But I was thinking about this because we've had a conversation on it, and in some ways it is at [00:21:00] least a lot more coherent policy because as much as Trump changed the rhetoric, he still professed great affection for Xi.

And that he was not troubled at all by the human rights aspects of what China was doing. It was more really focused on trade and I guess to a certain extent people, the Chinese people. 

Ryan Kellogg: Yeah. He was very close to banning all Chinese students. In fact, that was, that was mentioned as something that he discussed and then they had to explain the economic consequences of it.

But yeah, you're right, it was is, I mean, just because so much is driven by his personality and whatever things he was fixated on. Yeah, it wasn't coherent at all. But yeah, you're right. It's much more coherent, comprehensive. And I mean, when you look at the CHIPS act much more thorough and much more damaging to the Chinese economy [00:22:00] than anything Trump did.

Because ultimately what Trump did was just damage the US economy. 

Anita Kellogg: Right. And so, as you said, people were surprised because I do think people in Washington, China watchers, and pretty much all the people I follow and even have talked to, like Ryan Hass, who was in the Obama administration, really, really thought Biden was going to go back to an era of engagement with China.

That we would focus on the aspects that we were competing. And even Obama administration’s focus on certain security aspects like the building of islands in the South China Sea. But that we would also try to find areas where we could engage in. And a lot of it is about dialogue as well, and the type of rhetoric.

So I think that so many people were shocked that he kept the tariffs. Like no one understands why we still have those tariffs on Chinese goods because they are [00:23:00] not strategic. They would lower prices in an era of inflation. They make no sense at all if you're going to have sort of tariffs or trade policy should be geared toward strategic national security aspects.

And I think emphasis on economic competition as a national security threat is problematic to me and makes this a war rather than containment. And I don't think we want to pursue all our policies as sort of a war on China or winning against China. Yes, China has some unfair trade practices, but the whole idea, we should still believe in trade and in increasing prosperity.

And yes, those benefits are unequal, but there are actually ways to redistribute it that countries just including the United States especially [00:24:00] have not engaged in. 

Ryan Kellogg: Yeah, because that's not politically feasible. The redistribution part, because that's socialism, and there's half of the political parties that we have, there's no way they're going to support that redistribution part of it.

Anita Kellogg: I mean, it really worries me when we see like, oh, well China having any economic engagement in the world makes it more capable of building a military and thus is a direct national security threat to the United States. And more and more just the economic side has been just general economic side.

Not strategic, not like semiconductors, not just rare minerals, but in general like very broad economy as a national security threat. And that's, as I've mentioned like three times now, that's just very, very troubling and I think leads to negative consequences. 

Ryan Kellogg: Yeah, no, it definitely needs to be more focused.

It's a little bit, the only [00:25:00] thing I can think of on why hold onto the tariffs is that they're using it as we're hoping to use it in negotiation points. I don't know what was, we don't know the details of what was discussed between Biden and Xi. In general, it was seen as positive that they had this engagement.

They talked about areas of cooperation, which we've always kind of boiled it down to around health. Obviously preventing sort of future pandemics like we suffered through the past three years, and then around climate change as well. So that seemed positive. So it's not that that there's no engagement or no reach out, but it is, it is a very frosty.

Tough environment to work in. And definitely the rhetoric coming from the majority of leaders within Washington are not conducive to even these two areas of cooperation. But can you say, Hey, we reduce the tariff so you guys are willing to work around [00:26:00] reinstating, the CDC had in terms of that level engagement within China.

Of which there are a million conspiracy theories now, but nevertheless was a, an important check because obviously, you know, there's some sort of coverup at the initial that allowed the, the outbreak to, to spread. But it's important that you have that, that level engagement with China around those issues.

Is it possible that you're holding out, hey, roll back these tariffs? Whereas if they acknowledge that it just damages us anyways. We're the only ones that are going to gain from 

Anita Kellogg: Yeah, I know. So US trade representative in the beginning said we weren't getting rid of the tariff because China wasn't giving us something.

The need to get some concession of some kind from China. Yeah. I don't know if they are considering non-economic concessions from China, such as the re-engagement of the CDC, which wasn't China didn't end that. We ended that. 

Ryan Kellogg: [00:27:00] Yeah. I imagine though, given everything that's happened since then, they wouldn't want the CDC back in there.

Anita Kellogg: I think it is an China had nothing to do with ending that, that Trump ended that six months before Covid. And so there's a lot of talk how maybe we would've known about Covid earlier if still been the CDC still being able to operate in that lab.

Ryan Kellogg: Well, yeah. That's the source of the conspiracy theories is that we were funding gain of function research within the Wuhan. 

Anita Kellogg: Well, okay. I'm not addressing conspiracy, I'm not going to address the conspiracies, but I mean, that's an interesting proposition. I don't have a sense the government is doing that, but I mean, if you really, that still might be difficult to get the problem.

I felt like when she said that about, well we're not getting anything from China, that was the whole problem. Like, Trump did this so he could get something from China and that's everybody since the beginning. That's great. He's cause that trade wars don't work. [00:28:00] Right. And so if you know that going into this and saying, yeah, we know that trade wars do not gain concessions, you know, do not results in this.

Then why keep pressing it and why keep acting like you can get China to do something? It was obviously you're not going to, and you are the one being hurt by it. So why continue a policy that imposes significant pain on yourself. 

Ryan Kellogg: Yeah. I think they're still holding out something that they can frame as, okay, we got this in exchange for that.

That's, even though what was interesting is that, the other thing is reading the articles, I mean, this isn't a surprise, Americans don't care at all about foreign policy. This is what I, but then, but then they also don't even care that much about US-China relationship. 

Anita Kellogg: I saw that point too, and we just had this discussion like last night.

Ryan Kellogg: Yeah. I'm not convinced now with, I mean, I, 

Anita Kellogg: you're not making the argument. Yeah. That you were just yesterday, that you couldn't do it. Yeah, because it would look soft on China and [00:29:00] 

Ryan Kellogg: I mean, I think Republicans would still go hard on that, but the fact, I don't think it would resonate with voters 

Anita Kellogg: It's like we had the argument whether Afghanistan was going to affect elections.

Well, and Ukraine made that a moot point, but it still would not have affected elections. 

Ryan Kellogg: And the tariffs, they're also still going to make a show of it in the House and the investigations, all of these things. But, 

Anita Kellogg: It's not going to, it did not affect you. I don't think it affects votes and I don't think getting rid of the tariffs would affect votes either.

I don't think so either. Yeah. And it would've been an economic gain, right? I mean, so it's only 1% of inflation. Well, that's 1% of inflation that you knocked on. 

Anita Kellogg: I haven't read a single trade or economic person who can, or even most of the China people who have a good explanation or think that this is in any way a good idea. Yeah. Yeah. People are more positive about the sort [00:30:00] of targeted industrial policy and trade approach, such as putting the export controls on advanced semiconductor.

Ryan Kellogg: Yeah, exactly. That makes sense. They have the list of the critical technologies that the White House has put out. You can definitely take a subset of that and, and target that. But the fact that all consumer goods, everything that you can find at Target. And Walmart essentially has a, what, 25%? I think it's 30% additional tariff on it. Okay. Yeah. In a time of high inflation when you know Americans are struggling to make ends meet. 

Anita Kellogg: Yeah, well just imagine you have 7.5% and then the inflation rate is 6.5%. I mean, that's huge. And I think would, I mean the cases, obviously it benefits Americans themselves. And two, when you want Americans to feel better about the economy, then, so I don't, I really, really, really don't understand it.

And it's real frustration [00:31:00] for me from the um, Biden administration because I think they should pursue a more flexible approach to one frustration I have. Cause this is talked about all the time where I work. And of course, The class. I'm teaching industrial mobilization, so it fits into that. But this idea that China's going to cut off these bottlenecks in the supply chain, and the whole problem with this argument is that China sure could cut off bottleneck, but then the whole supply chain itself would be messed up for China as well.

And that would entail a significant cost can be just as significant cost on them than any other cost that they could impose on other countries. And so even with rare earth minerals, they rely on so many parts of the process to be able to process those raw earth minerals on imports from other countries.

So China doesn't own a complete supply chain, and unless [00:32:00] you own the whole supply chain, it never makes sense to cut off just one part of. So I think we talk about all the, all the time supply chain resiliency, and that's why we want to decouple from China and all these policies in case China cuts it off.

But I think there needs to be a better understanding of how trade works and how China has never shown any willingness or ability to absorb significant costs. And it would have to absorb those costs that could be, like I said, detriment, not just costly, but detrimental to the, to the industry itself when it was trying to coerce South Korea to not allow the US to place the bad missile system in Korea.

it never touched the semiconductor industry, which is what? South Korea was a huge export industry. Right. So if it, if it had banned imports of, [00:33:00] of South Korean, uh, semiconductors, that could have had a dramatic impact on South Korea's economy. But for China, it would've been just as dramatic because it would've stopped their entire manufacturing industry, which needed those semiconductors.

Right. So I think we just emphasized all these really negative aspects of what we think China could do in the future without thinking through them completely strategically. And there are issues with IP threats and there are national security areas that need to be addressed, but I don't think we can address them effectively if we keep such a broad brush.

Ryan Kellogg: No, I think that that is the, the issue is just having a more focus, a more targeted approach. Again, the CHIPS Act wasn't perfect, but it's the right direction. It's the right level of focus, what's strategic, what's truly tied to national defense, and let's target those sectors in those [00:34:00] areas and have kind of a, all a government approach around that.

Anita Kellogg: But yeah, the whole broad sledgehammer approach just isn't effective and we're just hurting ourselves and we should look at more where economic statecraft is really successful for them. And it is not in coercion. You know, I'm working on paper that shows all these, you know, attempts at coercion of like 16 countries.

Victor Child writes about this subject in January-February, Foreign Affairs. that they're not successful and yet we consider those the biggest security threat. But China is very successful but is successful in the areas where it is economically engaging, where it is giving loans to countries where it is building infrastructure project, and countries giving these countries be real benefits and real goods.

And that's where you see more convergence on UN votes or other aspects that we could measure. [00:35:00] Supportive foreign policy. So instead of focusing on what China's not done well, I don't understand why we're not focusing more on what China is doing. 

Ryan Kellogg: Well that is true. And you don't. You definitely see that recognition within the administration, but you don't necessarily see the material follow up.

And what I'm thinking specifically of is like the US Africa summit that was held last week. I mean this was seen very much, you know, it was the first time since 2014 when Obama held the, the first one. But it was widely seen as okay, this is the US re-engaging with Africa in order to counter China's influence there.

And in terms of what it brought to the table was good in a sense. You know, it promised 55 billion in investment within Africa. Variety of investment funds. It promised to look at, you know, some sort of trade agreement at the only at the executive [00:36:00] level cuz nothing can get through Congress on, on trade agreements with the Africa Union.

Looked at these, these sort of elements and acknowledged that. , you know, there need to be alternatives to China, but there really wasn't a reworking of these approaches. It was largely using the IMF, the World Bank kind of existing institutions, which have a checkered history on the continent versus China, which is like, yeah, you know, the typical approach around this is like, yeah, of course, you know, China's corrupt, African leaders are corrupt.

They get along because they, you know, there's a lot of graft and exchange, but, you know, it's, it's a lot more nuanced. than that, it's that China provides a lot greater flexibility. It's actually investing in African institutions themselves, cuz Africa's trying to set up financial institutions and things like this while the west, you know, expects you to go [00:37:00] through, you know, based on their rules, based on the IMF or the World Bank criteria.

If you want this money, you have to meet x, y, and z criteria. While China is just, you know, giving loans directly to African institutions. And yeah, I'm sure there's corruption graph, but at the same time this is actually showing up. It's actually building institutions, kind of financial institutions within Africa, giving them that experience.

But then it's getting directly funneled to infrastructure projects. And you see, I mean, watching the, the videos and the, the brand new highway systems, right? Like being installed. I mean these are real material things that. Benefit the growing middle class within Africa. And you know, when you look at demographics, I mean, Africa is gonna be where it's at in the next 30 years.

That's where all the population growth is gonna be. That's where a lot of the economic growth is gonna be. Between that and India, this is gonna be a more and more important area in terms of the, the developing world [00:38:00] going forward. 

Anita Kellogg: Yeah, so I have two thoughts about that. One, I think people underestimate the economic benefits of building a road.

So China builds a road to be able to transport its goods from one place to another, but that enables so many other businesses now that can be built around the transportation system. And so even things that they do for very selfish reasons have. Tremendous benefit to the community, right? Infrastructure is a public good, so that's why we have the government who typically builds roads and things of that nature, and China's coming in and doing that for their own profits.

But it's also then just benefiting these African states and countries tremendously in allowing them to build up their economy. But more than saying, we need a comprehensive China strategy, which is true, but part of that strategy actually has to be more of a [00:39:00] global grand strategy. I think that's the most effective way to address the China challenges, because we need to offer the world something.

We can't just say, well, we stand for democracy in the liberal world order, and that's a good thing and you should support us and not support China. when China's coming in and giving them things that they actually need. We need to be able to offer the world something. We need to be able to say, we are showing up, we are helping contribute to your economy, not just through World Bank loans, but in these other ways, and that we are going to engage positively with other nations in Africa and Latin America, and we're gonna stop just lecturing you about the evils of China.

We, you just have to stop doing that. We like to lecture countries and they don't want to hear it. They don't need some western power to lecture them on what's good for their own country. There's so much paternalism [00:40:00] in a really negative way in what the West does to these other countries saying, this is better for you, this is bad for your country.

When those countries know how to make decisions that are best for themselves, and that's why it's. 

Ryan Kellogg: Encouraging in one sense to see this re-engagement, to see these summits as flawed as they are, as maybe hollow as some of them are. But it's a recognition within the administration, this is what we need to be doing.

But it's part of the limitations by our current dysfunction within Congress in terms of what can be done that won't actually change from administration to administration. So all of this, even the trade stuff is being reliant on executive orders, which can easily be written off by the next president.

So I think that's definitely a challenge and a limitation, but at least, I mean, the engagement I thought was a, a good thing, the recognition. And it's frustrating too because I think [00:41:00] naturally these aren't the greatest histories, you know, between Europe and ourselves with both Latin America and Africa.

But at the same time I think there is a lot of that shared certainly say we're different, you know, make a case for the fact that we're different.

Anita Kellogg: So, and some of that, the problem is some of that would be offering better trade in terms of trade with these countries as well. And that's also one of the aspects of policy that's really disturbing is that there's a lot of political will for any protectionist policy that you want to engage in.

And as of late we're saying, oh, we're going to, we're gonna have protectionism to save the liberal world order. But by the fact that you're going towards protectionism and not deepening trade integration with anywhere else, all you are doing is making one of the effects that you're having is making is less liberal.

Yeah. So like one of the things that we [00:42:00] say is good for the world and we've definitely benefited perhaps unequally from it. We're not then, you know, following up on, instead we're just showing protectionism, which is always easy in some sense to get political will behind. Um, because all you do is have to say, oh, we're saving jobs for Americans or something.

Which I'm not saying the jobs aspect isn't important. What I'm saying is you can't have a liberal world order and then just make it less liberal.

Ryan Kellogg: Yeah. And definitely not for countries either that you're, are your allies, so fellow liberal democracies or people that you, you want in your camp and not in China's camp.

But yeah, it's frustrating. A lot of it comes down to, you know, frankly kind of the dysfunction of Congress and then our inability to redistribute the gains of trade. Yeah. I mean, it comes down to those two things are why we can't get more done on what I think every expert, every economist [00:43:00] agrees that, yeah, of course free trade has enormous benefits.

Anita Kellogg: Yeah, I think so long as those benefits are distributed in an equal way, I would like there to be more acknowledgement of those benefits from the political side as well. And I think one of the dangerous things is the fact that we are constrained in not being able to pass new trade deals. Not having any incentive.

You can talk about friendshoring and ally shoring and stuff, but we're not actually doing anything about that. We're not. 

Ryan Kellogg: Yeah, I know, I would not be surprised at all if we get there with Europe on the IRA provisions, so that European manufacturers also get the tax credits and benefits from renewable energy projects. Because 

Anita Kellogg: Because right now our policy has actually been negative to our allies and partners.  

Ryan Kellogg: Which is ridiculous that like South [00:44:00] Korea and Germany can't benefit from EV subsidies.

Anita Kellogg: They're being provided because we're protect, we're going more towards protectionism.

Ryan Kellogg: Right. Which was again, the only way that politically they could get it through is to get the labor unions in the US on board the limit. I mean that yeah, that's, that's what politics is about, is kind of the limitations of, 

Anita Kellogg: I think we're going to have overall, I think it's this huge negative effect on trying to craft good policy and we will never have a good strategy for China, unless we have a good engagement strategy for the world, you cannot just have a negative strategy on containing China, right? Yeah, yeah. We bring to the table it's, yeah, not the Soviet Union. China is incredibly integrated into the economies of the world, and they're offering real things to people, right?

I mean, this is, they're going to continue to engage. They're going to continue to [00:45:00] grow, and if we just focus on containing China, then we're losing the real battle. 

Ryan Kellogg: I mean, yeah, I definitely agree. To the extent, I mean, you could argue how important strategically are some of these countries. These are countries that there's a reason Western private capital are not attracted to them.

So how important are they to our techno economic supremacy?

Anita Kellogg: All we're doing is trying to keep China from benefiting economically with the us, but that's not stopping them from benefiting economically with the rest of the world. So part of this whole strategy is supposed to be economic competition, but we only focus on what negative things that we can put on China rather than the actual economic competition with the world, which would involve deepening trade integration or building more projects.

Ryan Kellogg: We don't necessarily have a competitive advantage in building these projects. What I'm saying is we might have to subsidize and does that make sense for us to subsidize kind of our corporation so they're willing to provide capital or matching capital for that increased level of risk of operating in these countries.

I think the other, interestingly, and with like the Africa example is private capital is dissuaded from it because there is so much debt currently in these countries. Um, part of it is China, but a lot of it is driven from kind of old I MF debts. So probably the most effective thing we could do within our own controls like debt forgiveness from the World Bank and IMF.

And then maybe that would create enough of a, where we don't have to have such a heavy handed aspect that private capital is naturally more attracted to certain kind of higher level industries. And that's how we kind of. Reengage in these countries is through debt [00:47:00] forgiveness and that that seems like that's a lot easier than messing with markets going in where we don't have a competitive advantage offering subsidies to our corporation so that whoever Verizon can now compete with.

How Huawei can compete in in Africa? Because they currently dominate in telecommunications and we've tried to dissuade Africa from investing in this, but they're like, Hey, this is cheap. They built all our infrastructure over the last 20 years. What's the alternative? 

Anita Kellogg: Well, I mean in some sense the digital belt and road, there is a national security aspect. I mean it's understandable why on one hand the US is saying, look, you know, you're building this infrastructure. It's China could potentially do these negative aspects in controlling so many being able to maybe have back doors, I mean, They may not have it if they were including those into the infrastructure projects that [00:48:00] they're building.

But on the other hand, well we're not offering a competitor, right? And you can't get countries to stop to reject these deals when it means, oh, I'm going to have internet infrastructure or no internet infrastructure. And again, the benefits to businesses and building economies education are tremendous and have all these spillover effects.

And so our strategy, I think is kind of ridiculous without being able to offer a serious global competitor. And I don't know what you have to do to build that competitor. 

Ryan Kellogg: You have to subsidize that private capital to come in because they're not willing to take the risk. But again, you can maybe reduce that risk by debt forgiveness so that the balance sheets and the stability of these countries is better and more attractive to private capital because I mean, these companies exist. It's just they have a lot more profitable, more attractive, less risky projects to [00:49:00] invest in. 

Anita Kellogg: I mean, so I agree with the debt forgiveness. People have been calling on that for years and years. Yeah. But I think you'd still need more than that. And I mean even just our having the capability to do what Huawei is doing, I'm not sure we do. 

Ryan Kellogg: Not with that cost structure. I mean, I think you can. You can do it, but they need to be heavily subsidized. Just like they built that on heavy state subsidies for 20 years. China. 

Anita Kellogg: Yeah. So here's like a real security threat, but that we're not actually addressing in any way. We just keep complaining about it and saying, China's so terrible for doing it.

So if we want to truly contain China, if we truly want some sort of. Strategic plan for China. It has to, it has to include offering a vision for the world that's not just, oh, China is evil, [00:50:00] but here is the ways and a vision that we actually follow up with actions here is, you know what? We are going to do a shift away.

Some of the imperialism, I guess, that we engaged in, particularly with IMF in the nineties, and forcing all these countries into austerity so they could pay back those loans. But here we're offering something positive. We're offering to help build your economies, not just profit, pursue things very narrowly through profit.

Yeah. And then you offer something that China doesn't, I mean, here's the thing is we're so focused on, we can't even offer the same things China does, let alone be able to offer something that China's not. 

Ryan Kellogg: Yeah, I like the idea of the new vision. I mean, looking at it similar to what we did after World War II in terms of core institutions that we set up like the Marshall Plan, the [00:51:00] Berlin airlift, these kind of dramatic actions to support, to support Europe and support liberal democracies during that time. Yeah. I feel like it's almost like this liberal pragmatism where we meet halfway, we don't go to the full extent of corruption I have no doubt exist within China business policies, but we're not going to be as squeaky boy scouts and exploitive too, you know? Ultimately, we're doing these for our interest. So it has to be like a pragmatic, happy medium 

They want alternatives and I think soft power, hands down we kick ass. There's no way the appeal of our model, the appeal of our multicultural accepting model, the fact that [00:52:00] so many ethnicities both in Europe are, are all reflected within these continents and, and countries.

There's no doubt that we can outcompete China on that, but yeah, we have to show up and we have to show up in a real way. I like the idea of something pragmatic that doesn't lecture, that's not focused on neocolonialism, paternalism, but meets them kind of where they're at and helping them kind of on their journey.

Anita Kellogg: Yeah. . I don't see it happening. But if you wanted to contain China, that's what you would've to do. Yeah. Instead 

Ryan Kellogg: of just all the sudden it would be a very serious commitment. It would have to be multilateral coordinated with the G seven essentially. But I 

Anita Kellogg: think there should be more effort into selling that strategy to the US because what it's politically untenable.

There should be effort to, instead of just saying we're the best and China's the worst, that we need to [00:53:00] sell to our own people. 

Ryan Kellogg: That I'm a big, I'm a big proponent of it because there is unity around China. I think you can sell almost anything, if you can frame it around this competition with China, including these very positive things.

If it because isn't that, yeah, there are a lot of damage elements in the Cold War, but it also forces gun the best out, I mean, we all look back at the space. Economist complain, oh, this is horrible use of resources. But it was also the best of America and it was driven because of that competition with the Soviet Union and so many amazing advancements, so many inspiring things inspired so many people to get into STEM around the world.

I think you could have some similar semi-healthy sort of response to this challenge from China and Frame. But I think everything, if it can be framed that way, then it becomes, it's like you're wrapping, you know, you can get like a pet to eat its medicine , you're wrapping China's the peanut butter to get to [00:54:00] get it into the body politic through Congress that you can make these things that otherwise wouldn't be politically feasible.

Cause be like, oh, this is giveaway to, because you have a certain subsets that always play, oh look, all this money that we give away to the UN or we give away to all these things. But you frame it as this is necessary to defeat China in this competition. Then it's like, oh. Maybe. Maybe it becomes more palatable.

I don't know. 

Anita Kellogg: Well, I have to say that that would be one of the few good uses of that 

Ryan Kellogg: rhetoric. Absolutely. Yeah. Yeah. You got to meet. There's only good, there's only two bipartisan things that we agree on as a country. Yeah. One is Ukraine, which isn't a hundred percent, but then China, that's pretty close to a hundred percent that there's, yeah.

These guys are, are bad news and we need to, we need to step 

Anita Kellogg: up. Yeah. So we need more of that. Not just the focus on Okay, semiconductor chips, but, but yes, if we are going to compete with China, if we are going to turn this into, we're [00:55:00] going to win against China, then we need to be fighting that battle where China actually is.

Right. So as we mentioned in the beginning, I had the opportunity to interview Emma Ashford, and I think we had a great discussion about Petro states, about Russia, about grand strategy and the need for grand strategy. And I think a lot of what we're talking about, this new vision touches on what she and I were talking about in that discussion as well.

So here it is. Welcome to Kellogg's Global Politics, a podcast on current events in US foreign Policy and international affairs. My name is Dr. Anita Kellogg and I'm here with Emma Ashford, a senior fellow with the re-imagining US Grant Strategy Program at the Stimson Center. She's the author of Oil, the State and War, the Foreign Policies at Petra States.

Hello, Emma, welcome to the show. Thanks so much for having. It is such a pleasure. So to get into it, one of my favorite [00:56:00] lines of your book is the term petrostate is more anecdotal than practical. And that's so I find that so true. So instead you provide three types of petro states, oil dependent states, oil wealthy states, and super producer states.

How does this topology help us better understand the power of oil on foreign policy, particularly as a source of violent? 

Emma Ashford: Yeah. So, um, thanks for, for having me on to talk about the book. So one of the things that I think, you know, it didn't inform the early stages of writing this book, which was my dissertation a long time ago.

But as I sort of worked on the project over a number of years, I would always run into people who, I would talk to them about the projects and they'd say, oh, but you know, is America Petro State? We're such a big producer, is Canada Petro State? You know, and what I realized is that we actually don't really have any common language to talk about these states.

We, we don't have any way to define them. If you look at a New York Times article that talks about Petro [00:57:00] states is going to be about Russia or Saudi Arabia, or maybe Venezuela, maybe Iran, right? But there are states out there that are also big exporters, big producers that have the resource curse, and we don't apply this language to them.

So one of the things I end up doing in the book, as you say, is, is setting up a bit of a topology. and in simple language, basically I sort of talk about three types of petro states, right? There's the states that are really important to global markets because they export a lot. There are states that, you know, doesn't really matter how much they export, but it really dominates their domestic political economy.

And that's sort of the classic resource curse formulation. And then there's states which again, maybe they export a lot or not. Maybe they have the resource curse, maybe they don't, but they're also just really, really wealthy from it on a per capita basis. And you know, there's some really interesting entries in that category, I think most notably Norway, right?

Which we would not typically think of as a petrostate, but they've been a major [00:58:00] exporter and they've been very, very wealthy as a result of it. So that's kind of the topology I set up at the start of the book to let us try and get at, I think, how oil can impact foreign policy. And just to understand that there might be different ways that can happen because there's different kinds of petro states.

Anita Kellogg: Yeah, exactly. So I want to go to Russia because of course Russia, Ukrainian is one of the biggest news stories and focus, and you have Russia as one of the 14 states that falls into all three of your categories as you defined three possible causal pass of how oil influences foreign policy for each type of petro state.

This means there are nine distinct ways that oil may play a role in Russia's aggressive foreign policy. Do these pathways reinforce each other or do they sometimes contradict? And is there something that distinguishes these 14 countries from the larger group of petro state? Yeah, I 

Emma Ashford: mean, so it's one of [00:59:00] the problems with writing a book like this that's a bit of a survey is that you don't necessarily get to dive down into absolutely every question.

And one of the, the things that I came away from the research, pretty convinced that these, these 14 states, the ones that are big exporters and also resource, Kirsten also incredibly wealthy. I kind of came away convinced that there probably is something pretty unique about these states, but I didn't have the time to sort of dive into that and actually, you know, prove it in any, you know, empirical sense.

So I, I guess I just want to put that caveat out there upfront. But in the context of Russia, you know, I think there's been a few things that I touch on in the book that have become really interesting and. Over the last year of foreign policy, and obviously the book was written prior to the Russian invasion of U Ukraine in February.

So one of those is in the book I talk about military modernization in Petra states, and there's actually a case study of Russia. You know, the ways in which you can use oil wealth to build yourself up a great [01:00:00] military. But in the book, I know one of the caveats there is that doesn't necessarily mean that your military's going to be effective.

And I think that's something we've really seen over the last year is, you know, Russia spent huge amounts of money on reforming its military buying all the new technology, and then performed extremely poorly. And that's a pattern we've seen in other petro states in Libya and elsewhere. So that's one thing that I think is, is really relevant here.

A second thing is if you look at governance issues, you look at institutionalization of foreign policy in petro states, you often find it's very personalized. It's very focused around one specific leader who's an autocrat, who makes decisions without really having strong institutions. Mostly just a legacy of, that's how the resource curse tends to push states towards a certain type of system.

And again, we've seen that I think in the foreign policy space in the last year. You know, Vladimir Putin [01:01:00] not entirely insulated from reality, but you know, he's certainly not getting the full picture when he makes some of these decisions. So that's sort of the second thing that I think comes out of the book.

And then I'll add just one final thing, which is, and we can talk a little more about this cause I, I think you might be interested in it, when a state is such a major global exporter mm-hmm. , um, There are benefits in the international security sense. That is to say if you are a Kuwait and you get invaded by Saddam Hussein, if you're Saudi Arabia and you're threatened by Saddam Hussein in 1991, you may be able to call for other countries to come and protect you because you're such an important part of the global market.

And the same is true in reverse. It's very hard to sanction. Petra states, we've seen this repeatedly with Iran. We've seen it with Venezuela and other states. And what we've seen this year in 2022 is Russia, one of the big three global producers of [01:02:00] oil and gas, really can't be cut off from world markets without sending us into a global recession.

And so policymakers have been walking this fine line between trying to, you know, cut Russia's revenues while not accidentally sending us over that economic cliff. And so again, the, you know, the book written prior to this conflict, but some of those insights I think really helped to explain the strange choices that Russia's made in the last year and some of the ways they've actually weathered those per 

Anita Kellogg: choices.

Yeah, I mean, that's great. And as you know, one of the things that I've written about is how leaders are. Petro state leaders, particularly in this sort of definition, are not constrained by the normal economic actors, which is kind of relevant because in the beginning we tried to focus on sanctioning certain individuals that we thought were close to Putin and how they're able to act really about having to worry about those sort of interest opposing them.

But I'm also really interested, like you said in in [01:03:00] your final comments about the difficulty of sanctioning or cutting them off from global markets. So what do you think about this new price cap, which is at $60 per barrel of oil? 

Emma Ashford: Yeah, so the fundamental problem, as you well know with sanctioning oil exporters is that if you cut their oil off the market and you stop some of it from getting out, the price in the market probably goes up and they're able to sell a bunch of that oil illegally on the black market to people that, two, to countries that aren't involved in the sanctions regime, you could actually end up enriching a Petra state leader by sanctioning their oil.

And so it's very this very counterintuitive way to think about economics. But one of the things we've seen in the last year is that exactly that has happened, right? We saw this big re resorting, I guess you would say, of the global oil market in March and April after the EU said, we won't take Russian oil and oil anymore.

And it really was kind of a game of musical chairs, right? Mm-hmm. oil shipments bound for [01:04:00] Europe, suddenly went to Asia oil shipments, went for Asia, suddenly went to Europe, and everybody paid higher prices. And the Russian. Benefited, which brings us to this price cap idea. I mean, it's incredibly innovative.

It really is. The idea of the price cap is that we use Western financial power and Western dominance in the shipping and insurance right space. To basically say to buyers, you cannot buy Russian oil above a certain price cap. Right? And, and I think they've set it at $65 for the moment, and that's meant to incentivize buyers around the world to try and bargain, engage in hard bargaining with Russia, cut the Kremlin's revenues, but keep that oil flowing to the market for all that.

It's a really innovative idea, though. I have some serious doubts about how it's going to work in practice. We have. The Indians, the Chinese say they're probably not going to abide by it. Maybe some of their companies will bargain, but [01:05:00] it's, it's not going to be, I think it's not going to be as clear cut as the, the architects of the, of this scheme thought it might be.

And then there's a second complication, and this is, this is something I don't talk about a lot in the book because there's been a lot written about it elsewhere that's really good. But the politics of OPEC and these days, OPEC plus are making the price cap more difficult to implement. So OPEC, for example, in some of its recent meetings, purposefully cutting production so that oil markets are tighter.

And with those oil markets being tighter, it's less likely that countries will abide by the price cap when they're dealing with Russia. So, you know, again, I think the bottom line here is it's very innovative. Maybe it'll work the price cap, but I, I have my doubts that it's actually going to compensate for just that huge amount of market power the 

Anita Kellogg: Russians have.

Yeah, I completely share that reservation. And there's some also, I mean in [01:06:00] addition to what you're talking about, ship building, I mean, Russian and oil was already selling below that particular price cap. And then it requires India and China of course, to go along with it. And sort of, as you alluded to, the idea is that they would want the cheaper oil, but they also have different incentives to not go along with it.

And it seems for now that's the case. One thing that's kind of interesting in the oil market is how much it settled down. And I think, you know, the price went up. Pretty dramatically when Europe cut off oil. But I think now that that musical chairs, now that the, that they've really settled into, you know, now China and India buy the oil and, and like I said, Russian oil and kind of moved around.

The prices dropped a lot. So it'd be interesting to see if the OPEC cuts or how they support Russia in that way affects overall oil. 

Emma Ashford: Yeah. And it's, I think it's interesting, I've, I've heard people describe the price cap this way, that it has [01:07:00] two goals. One goal is to cut Russian revenues, but the other goal is to keep Russian oil on the global market.

And my sense is that, you know, those two things are slightly intention. That's kind of the point. But my sense is that in setting the price cap as high as they did, yeah. As you say, that's like Russian oil was already selling kind of under that price. Mm-hmm. . Um, and so in setting that price cap so high, they're really, uh, that the US government has basically chosen to emphasize that keeping the oil on the market Yeah.

Goal rather than the costing the Kremlin revenue goal. Because you could see them setting that price cap a lot lower and suddenly you'd be back to the turmoil we had in, in the early spring where I think now you're right, we're seeing oil markets of cams down a lot, um mm-hmm. , and now most of the game is in the gas space.

Mm-hmm. instead. 

Anita Kellogg: Yeah. Definitely. Definitely. . So I know, I mean, I read your case study on Russian modernization, military modernization. That was really interesting. Does understanding [01:08:00] Russia as a petro state better help us understand the actions that is taken in the war against Ukraine? 

Emma Ashford: I think to some extent, yes, and this is something that I.

that I wrestled with a little in the, um, because it is a question of structure versus agency, right? Mm-hmm. , but the way that I tend to think about structure versus agency in international security and foreign policy is that the structure constrains the actors. It means that they're pushed towards certain choices and that it to some extent determines where we end up, even if it does, even if it's not determinative.

And so I think this is a theme that runs through the book. And so with regard to sort of Vladimir Putin's decision making, right? There are a lot of other things that go into his decision making over the question of whether he's going to mount this invasion of Ukraine in February, right? You know, the 30 years of post Cold War history, NATO expansion, whether he has [01:09:00] imperial ambitions in Eastern Europe, whether he thinks this will be popular at home with the population, whether he is trying to cement his legacy, right?

Those are, those are all. Distinct political factors in the Russian context. But I do think in addition we have to throw in some of these structural factors, right? That Russia has been able to enrich itself and build its economy effectively around resource production and export. Without that, Russia would be a much, much less powerful country.

We can talk about the, the institutional factors. Again, you know that those sort of. You know, perhaps some of those pathologies that Vladimir Putin has himself, um, those are enabled by weak institutionalization as a result of the resource curse. And I, I think again, that the sense that Russia as a major exporter of oil is somewhat insulated from international pressure.

Now in the Russian case, unlike Iran or Venezuela or some of these other cases in the Russian case, you know, there's also that sense that Russia is [01:10:00] insulated because they're a member of the security council and they're questionably a great power, but have been a great power in the past. Mm-hmm. , but, but again, I think there's something about that insulation, like from what we understand from reporting at this point, put and believed that the west would not dare to cut off Russian energy supplies.

And in fact, this is in the gas market more than the oil market. But the Europeans actually were the ones to pull the. On transitioning away from Russian gas. That's not what we, that's not what anyone had assumed for the last 15 to 20 years. We'd always assumed the Russians would use oil as a weapon, and instead it's the Europeans who actually pulled the trigger in and took themselves off Russian gas.

So a lot of these mistaken assumptions, I think, flow to some extent from Russia's position as a, as a resource exporter. And so, so basically what I'm saying here is Russia being a petro state doesn't get you anywhere near the full story, but it is an integral 

Anita Kellogg: part of that story. Yeah, no, I agree. And I think one of the interesting things [01:11:00] about being difficult to predict how Europe would respond to a more gas crisis if they would continue to import gas from Russia, or what would happen if Russia cut off the gas.

Really quite remarkable in how that they have been able to create as much storage for winter as they have. The following year would be difficult, but they actually have plenty of gas for this year. And one of the things about gas, unlike oil that's more difficult is it's hard to play musical chairs because you have liquified natural gas, which allows countries like the US to be able to ship it.

But it's still a complicated process and there's not a lot of excess capacity in being able to do that. I know they're certainly building that up and the US actually quite benefits from it. But that's been certainly something Putin can predict. But also something that even the West was kind of surprised by.

Certainly I have been, so someone 

Emma Ashford: asked me in in, you know, I guess early March it would be, [01:12:00] you know, would Europe be able to get off Russian energy by the end of the year? And I said, no, no way. Absolutely not. And so I was wrong and I think many people were wrong about that, you know? The costs, I think are the question.

I said absolutely not because my assumption was that at a political level, European governments would not be willing to pay the cost to do that. And I have been in many ways astounded by the fact that that even countries that are very wary about spending more on defense that are perhaps backpedaling a little on some of their commitments to Ukraine, they are still pushing ahead with the transition away from Russian gas.

And the results have been, you know, the costs have been extremely high. If you talk to anybody that's living in Europe, basically anywhere this winter, even with government subsidies, they could be paying four or five, six times. To heat their house, what they did a few years ago. The costs have been worse in the industrial sector.

So for example, about 25% of [01:13:00] Germany's industrial capacities just shut down at the moment because they can't afford to power it. And we are somewhat insulated in the United States from this dynamic because as you say, the gas market is not global. in the way the oil market is, although it's trending more in that direction.

And so we're, we're just lucky in the US being a big gas producer, not having as much export capacity, we are not seeing those increased costs in the way people in Europe are. But, so I think this, this ended up being, you know, a question of political will mm-hmm. , um, rather than of practicality. And we've just been, you know, Europe's been very lucky that till this point, it's been a mild winter.

The gas storages were able to be filled before the winter hit. Countries in Asia have gone back on call to enable this. And so a whole host of things went right. I think that enabled Europe to actually do this, but I don't think basically anybody would've called it back in the spring. 

Anita Kellogg: Yeah, I agree. The political will for that is quite extraordinarily given [01:14:00] the cost, although I wonder if some of it was also in.

For the possibility of Russia cutting off that gas, which it ultimately did through gas prom because there was definitely still some importing of Russian gas until that point, and the weariness, or trying to prepare for Russia, maybe using that as a weapon against them. Yeah, 

Emma Ashford: it's actually one of the places I think where the book actually missed the Mark A.

Little is I do have a study of the oil weapon. Mm-hmm. over, I think it's about 20 cases of mm-hmm. of states using oil or gas shutoffs to try and compel policy changes. And in the book, I actually conclude that it's not a particularly effective thing to do because it typically leads states to try and diversify and it's not particularly successful in producing policy change.

So the oil weapon is, you know, in many ways a type of sanction and it has most of the same flaws as we know sanctions do. Mm-hmm. . But what we've seen with the Russia Europe dynamic in this last year is [01:15:00] this is something in order of magnitudes above, I think what most of us thought of as, you know, use of oil or gas for coercion.

This is not that. This is cutting off oil or gas supplies in wartime. , and this is an insight that comes out of some of the other really good work that's been done in this space lately, particularly I think Rosemary colonics work. Mm-hmm. , where she has this central innovation, which basically is market-based approaches to energy security get you most of the way there.

But war is the exception. And so, you know, if I could go back and correct one thing in the book, I would say this, I would say, you know, in peacetime under normal market conditions, use of the oil weapon is not that effective in the context of a major war. Much of that just goes out the 

Anita Kellogg: window. Yeah, exactly.

Hadn't factored as much in consideration, certainly when everyone was talking about what could happen during this war. So on the subject actually had the [01:16:00] opportunity to ask Alexander Binman in an earlier interview how he thought the war would end. But I really like your thoughts on this question. How do you see the war ending?

I'd be 

Emma Ashford: curious to know what he said too, but I guess I think there's a passive least resistance here. Least political resistance, which is that there will probably be some kind of ceasefire next year or the year after. There will probably not be a full political settlement. Of the conflict and it will continue to flare up.

So I guess for, for me, I'm a little pessimistic at this point. I suspect the path of least resistance is a repeat of the Minsk process. So there's some initial framework, but it doesn't get fully implemented. I do think there is a, a much lower chance, but I, I do think there's a possibility that pressure could be brought to bear by some of the bigger European states, by the United States, or even simply by governance changes in the [01:17:00] West that cut off or limit support to Ukraine.

That support for Ukraine declines over time, rather, and that that may push the Ukrainians towards a settlement that the Russians, you know, sort of feeling the immense costs of this hugely mistaken war may be willing to engage in some kind of negotiation. And we. Some kind of peace settlement there and, and I think if that's going to happen, it's actually probably likely to happen sooner rather than later.

So in the next six months to a year rather than, you know, a war that goes on five years. But I do still think, unfortunately, I think right now the political conditions are just not there for either side, the Russians or the Ukrainians to really push for a settlement. And you need both sides to be able to do that before you can talk about an actual peace settlement.

Anita Kellogg: Yeah, I think Venmo's comment was interesting. Basically his argument was that there had to be significant losses on the Russian side to bring [01:18:00] Putin to the table. But on the other hand, I think personally like where's the out for Putin? I, and I think other people have asked this question too, because it feels like to negotiate a full end of the war without having gained something or possibly even lost something is hard to see.

Putin being. Feeling satisfactory or really feeling like maybe his 10 years wouldn't be threatened if sort of that end and that sort of does propel the war to, to continue on as long as, you know, Russia can still maintain its military forces. I mean, obviously there's a question about how many, what supplies they have left of missiles, but then being able to make deals with Iran, I guess on their drones and maybe a, a more stalemate winter.

So I guess it'd be interesting to see how that works out. You know, one of the interesting things you said [01:19:00] about Western support and something that I would've expected to happen, and certainly it's not happened now. Instead, we seem to be increasing the sophistication of the weapons that we are giving to the Ukrainians.

And sort of, that seems definitely a signal that there is no pressure for Ukraine to negotiate. And I guess maybe the hope that there's enough of a victory to force Putin to the negotiating table. But I agree. Yeah, I hadn't really thought about it, but I could definitely see some sort of ceasefire without a resolution of the being the most likely outcome.

But it is, you know, on one hand it's like, it's hard to imagine this war going on for years, but on the other hand, it's just increasingly difficult to see what the ne a negotiation would look like, what a negotiated sentiment would look like. Yeah. And I, 

Emma Ashford: both sides, there's not really, I mean for, for very understandable reasons on the Ukrainian side, there's not, not a willingness to negotiate right now.

[01:20:00] Mm-hmm. and for, again, for totally understandable reasons. I mean, I do think there are. Perhaps slightly more chinks in the armor between Ukraine and the West on some issues. So we're, we're recording this just before Christmas, and you know, I think we're about to see Vladimir, uh, Vladimir Zelensky come to Washington, right?

Which is his first trip abroad. And one of the big issues at stake here is the Biden administration doesn't want to give Ukraine longer range strike weapons because they fear that'll escalate the conflict out Ukrainians a broader war. But the Ukrainians say that they cannot win without these. And so I understand to some extent we are, folks like Alex Vindman are coming from when they say we should give the Ukrainians everything that they need and then that will let them win the war.

But I am, I'm just simply skeptical. That the Russians will fold and go home because this isn't a question of the Ukrainians being able to completely beat the Russians and drive them back out of Ukraine. This is, [01:21:00] this is more a question akin to the US and Afghanistan, the Soviet Union and Afghanistan before them, the US and Vietnam.

It's a question of a great power deciding it's paid enough. I think, and we have already seen from Russian escalations that the Russians are willing to pay just an in an insane amount in lives, in money, in political standing, internationally in standard of living. I mean, Putin is willing to pay so much to continue this war.

I have my doubts that any level of pressure we could, we could apply would make him simply fold. , 

Anita Kellogg: what do you think about the US giving, you know, more weapons to Ukraine and more sophisticated, even if they're not giving the Ukraine everything they want, do you think this is a good thing? Do you think the US should continue to do that?

Should they be giving more like Zelensky would like, just generally, what do you think about that? 

Emma Ashford: I share the administration's [01:22:00] concerns on escalation. I really do. I, I am not sure we should be providing Kiev with the top of the line from our arsenal, the things that we would use as the United States to fight a pure competitor that strikes me as, as potentially extremely escalatory.

And I, I worry still that as long as this war goes on, it could spill out interpreter conflict. So I, I share those concerns. I do think arming. is the right policy. Has been the right policy. I am a little concerned, you know, the administration's stated approach here is that we give the Ukrainians what they need to put them in a better position at the negotiating table.

Mm-hmm. . But I feel like we're slipping a little further away from that, towards we give them everything they ask for, and that's not the same thing. So I, I think, again, I, I wrote a piece of it this a while back, but I, I would like policy makers in the US and in Europe to do a little more thinking about what our actual aim is here.

When do we start to talk about. [01:23:00] Settlement or encouraging Ukrainians to do it, you know, because right now, in addition to all the weapons, we're also providing a significant amount of fiscal support for the Ukrainian economy. I think that's one of the underplayed stories here, and I do wonder genuinely how much popular support there's going to be in the US and particularly in Western Europe, to keep providing that level of financial support when people in Western societies are already suffering or failing to heat their houses or seeing government budgets slashed.

You know, it strikes me that that is going to be a very difficult political conversation over the next year. I'm not, see, I'm not really sure how you continued that out. Four or five. 

Anita Kellogg: Yeah, those are all good perspectives. Good thoughts, and thank you for such insight. So I'm going to switch just before you go to more to grand strategy, and you wrote recently, and I found this really interesting, where you were talking about how the [01:24:00] current administration is really coming up with innovative tools of statecraft, particularly when it comes to economic statecraft.

So for example, the export controls on semiconductors to China, but you're critical because they have not applied that same innovation to foreign policy and that they're doing these things to ma essentially maintain the status quo. So instead, you argue that the administration should be taking advantage of the opportunity of these challenges to rethink the US' place in the world and the goals it should pursue.

So what elements do you think should be included in a new grand strategy for the us and what would the overall picture look like? 

Emma Ashford: Yeah, so I, I mean, I am very clearly on the record at this point saying that the US should have a more restrained or realist grand strategy. And, and to be clear, there have been elements of that in how this administration has approached some problems, the withdrawal from Afghanistan, even the somewhat more realist [01:25:00] constrained approach to arm Ukraine that they've taken.

Right? This, this administration is not the George W. Bush administration. They're not even Obama, right? Who, who invaded Libya and toppled ma Gaddafi, right? They are clearly more restrained, but they don't go far enough in that direction. For me, and I think my complaint in the article that you're talking about is we're seeing a lot of innovation in.

Sort of the, the technical tools that the administration is using, whether it's talking about things with the defense industrial base like ours and expanding that to allies, whether it's innovating around export controls on semiconductors that they've been doing over the last few months. And there's, there's kind of all these policy innovations, but they've not been innovative at all in the, in the strategy space.

And, and if anything, if you look at the interim strategic guidance that they put out a few months into office, which was very vague, but did have like this big picture approach, foreign policy for the middle class. [01:26:00] We're going to center the needs of working Americans, we're going to talk about openness globally.

We're going to integrate domestic informed policy. And then you look at the actual national security strategy that came out almost two years later, the National Security Strategy reads. Basically much more like the Trump National Security Strategy or the Obama National Security Strategy before it than it does like that incident guidance.

So it's almost like the administration is sort of reverting to form, kind of pursuing just incredibly status quo policies on a, on a lot of things. And for me, the Middle East I think is weird. I, I see this dynamic most strongly, right? If you listen to any official in this administration, with one possible exception talking about the Middle East, they'll tell you the US is pulling back from the Middle East.

It's not that important. We understand that this period in, in history is over, but in practice there's a bunch of American troops still in the Middle East. Joe Biden is still going out to Saudi Arabia to fist bump the Crown Prince. And you know, we, we have all this [01:27:00] talk about, you know, building. An anti Shia alignment in the Gulf with Israel and the Gulf States, and the US will backstop all of this with military power that is not pulling back from the Middle East.

That's sort of doubling down on existing strategy. And so that's a, a little bit of a rant, but that is, that is sort of my, my general complaint about this administration is that they're, they're simply not embracing any new approaches. They're really just talking about new tools for old, 

Anita Kellogg: old strategies.

Yeah, I mean, I think that's really insightful because it's been really fascinating to see the type of, one thing that is genuinely new is the, the approach to China. I don't always agree with the way they are going about that necessarily. Just really focusing, and you kind of mentioned focusing on negative aspects of that and sort of leveraging globalization, which ultimately [01:28:00] leads to a less.

Liberal trade order, especially because the US is not, is not deepening economic integration with, with its partners or, or offering that as a carrot to, to potential future allies. But it is interesting. I mean certainly yeah, what we are doing in the Middle East and certainly kind of, I agree, the way we're doubling down and yet saying that we've moved on, I don't think we've reduced troops and certainly we still have this focus on containing Iran or doing something of that nature.

Just real quick, I know China's not your specialty, but I'm curious about what you think. There's two kind of narratives I think going on in Washington about China and, and certainly this, the China itself has destroyed the middle class and there was unfair trade practices and that we need to take this much harder line on China and.[01:29:00] 

Deal with it as a security, almost a security threat more than a potential collaborator or certainly someone we would engage in free trade with. So what do you think of this kind of shift in policy towards China as well as the kind of shift in narrative? . 

Emma Ashford: I mean, you could point to that and see, I guess that it's, this administration's big innovation is it's shifting it's approach to China, but the previous administration did that.

That's true. It, it wasn't this administration. And I think it's funny how if you listen to administration officials talking, when they launched things like the National Defense Strategy, the national Security Strategy, they emphasize continuity with the previous administration on some of these issues.

And that's when you say it instead, as they, they emphasize continuity with the Trump administration, you realize how strange that sounds. Mm-hmm. . Um, because during the Trump era, we had all these conversations about his foreign policy was about control, and it was, you know, but there's just, on China, there's just a lot of continuity.

Washington has, has [01:30:00] shifted from the, the managed rise of China approach, what, whatever you want to call it mm-hmm. . Um, and now we've shifted to containment of China. You know, whether you call it great power competition or, or whatever else, it's containment. And what this administration has done is stick with that policy and then run with some of these economic tools.

And as, as you know, they haven't matched that with sort of the one big difference I would expect to see between the last administration and this one is on. Positive tools of economic statecraft, right? New trade deals, new arrangements with states in the region. And that's not really happened. I is, which is the administration's big plank here is kind of, uh, you know, people basically say there's, there's nothing in it.

So, I mean, I think Washington's approach to China is dialed to some extent. This is going to be a more hostile relationship going forward. I don't even necessarily disagree with that on the, you know, on the [01:31:00] security side of things, because I think China's rise is a security threat to the United States, particularly in East Asia.

But I do worry that the economic protectionism. That's sort of starting to grow as, as you sort of hinted, you know, it's starting to grow around the China question and it's folding in a lot of things that aren't necessarily true. Right? So Washington talking a lot about, you know, ally shorting or fringe shorting, it's about resilient supply chains.

That's not actually what's happening. What's happening is protectionism, right? Um, and it's, you know, US only, and if anything, that's going to make it harder to form coalitions that let us handle the security problems. So I am not particularly thrilled with the way this administration has been moving on, on the trade question even, you know, I mean, I think they're probably broadly right on the security question with China, but the trade side of it is very problematic.

Anita Kellogg: Yeah, I mean I don't think I could agree more on any of those sentiments. Certainly the political mood in the [01:32:00] country favors protectionism, but a lot of it then de emphasizes any of the benefits that, that we have seen through the liberal order. 

Emma Ashford: Just to, just to say is, is particularly interesting actually, because public polling is not protectionist.

Public polling says that people are more supportive of free trade than they ever have been. But you're right that the political environment, the political conversation in both parties is very protectionist. And so it's a, for me, that's a very interesting dichotomy and I, I think, I mean, you know, arguments that that China has hollowed out the middle class and things, you know, that really puts to the side the benefits of free trade.

Like the fact that when we are done recording this podcast, I'm going to go over to Target and buy Christmas presents for far cheaper and than I would be able to if we lived in a protectionist economy. 

Anita Kellogg: Yeah, certainly. And one thing that certainly is frustrated me, I was. Just reading it yesterday and so that's why it's on my mind this idea that China is responsible for the decline in manufacturing and hollowing [01:33:00] up those jobs when all that began in the 1970s and there wasn't like a steeper decline in 2001.

It's just happened where the jobs sort of became more concentrated in China. So for all the things that I think China is responsible for and certainly should be addressed, I think that's a more politically ex expedient sort of plane for China rather than actually true. And I don't know, that sort of frustrates me.

I think in general trade policy, the more protectionist route certainly was also surprise, I think for a lot of people. I mean, almost. Person that I've talked to or even listened to on a regular basis that Biden essentially just decided to continue Trump's policy on China. A lot of people thought that he would reverse the tariffs.

It still is really inexplicable why we have these tariffs other than to make prices higher for everyone, which you would think in a period of inflation that that might have helped to bring down prices. So, yeah, so I [01:34:00] think the way that that's been handled, the trade side, it also, I think, somewhat misunderstands what China does.

Cause we focus so much on Chinese coercion, which I write about and I think is completely ineffective. But we're, China is very effective, I think is in those positive sides, in creating new arrangements with states, new economic arrangements, incentivizing them with infrastructure projects or other type of other type of loans.

And if we really wanted to compete with China in the global space, I feel like. , we should see that as a lesson and also not focus on coercion as much, acting like it's successful when it's not. 

Emma Ashford: Yeah, no abs. Absolutely. I mean, I think that's sort of, we we're really missing an important component here of what our grand strategy should be.

Mm-hmm. . Um, and you know, we, we do risk, you know, I mean at the end of the day, we're not going to lose much if China gets to Azerbaijan [01:35:00] before with a trade deal. Right. But at a repeated level, as we, as this happens over and over and over, it will end up damaging America. 

Anita Kellogg: Yeah, I think so too. And just as you were speaking, I was thinking about, I teach at the National Defense University and there's just this big emphasis on China threat and that what we really need is a comprehensive, you know, really economic statecraft to China.

But sort of talking to you, it sounds like more to me that. Really what we need if we do that is just at least be embedded in sort of a larger strategy, global strategy, and not just focusing on China, but really how the US is, is going to operate in the world more generally. And preserving the liberal order isn't just about thinking about statecraft with China, but more broadly thinking about the US' role and what it can do to whether it's enhancing security or trade economics for both ourselves and other nations.[01:36:00] 

Yeah, I, 

Emma Ashford: I think that's right. And it's funny, it's not just me or you saying that, but you know, various folks who wrote books and went into the Biden administration, Rebecca Lister, mayor, rap Hooper, have a book called an Open World Guy, you might have Haired Off, called Jake Sullivan, wrote several good pieces on this, um, prior to his, his time in governance, all emphasizing the value of global openness as part of a strategy towards China.

But is kind of interesting to see that in the political space, they're going in a very different direction. 

Anita Kellogg: Yeah, I agree. Well, I know that you have to get going and I am so appreciative of the time that you've given me and this has been just a wonderful conversation and you always have so much insight.

I follow you in a lot of various spaces and we will link to that in our episode notes. But you are always, you're such a voice that I love to listen to and you have such great insight and perspective of these things. And then your book was really wonderful [01:37:00] too. My husband was like, looked at it and you know, he's in the oil industry and he was like, oh, this seems like it's something that I really want to read.

So thank you so much. 

Emma Ashford: Well, thanks so much. And I have to say the book all credit to the people that did the graphic design who managed to get a bunch of oil rigs on the front to look like trebuchets. So it's, uh, it's very well themed on the, on the cover. So thank you. Uh, have a wonderful holiday and yeah, 

Anita Kellogg: thanks.

You too. You too. So I hope you enjoyed that interview, and this brings us to the end of this episode of Kellogg's Global Politics. You can visit our website at www.kelloggsglobalpolitics.com and follow us on Twitter @Global Kellogg or me @arkellogg. 

Ryan Kellogg: You can also reach us by email, so anita@kelloggglobal politics.com, and myself, ryan@kelloggglobalpolitics.com.

And as always, please see the show notes for the articles we discussed in this episode and leave a rating and review on your favorite podcast [01:38:00] provider. Thanks everybody. 

Anita Kellogg: Thanks. Bye bye.