2.

LiteratureReviewandMethodology`

2.1LiteratureReview

Four main elements will be of utmost concern to this paper: Structural

realism/neorealism,Canadaenergysupply,Chinaenergydemand,andCanadianChina

oilrelations.

2.1.1StructuralRealism/Neorealism

Tomany,neorealismandstructuralrealismareinterchangeableterms.However,

in the case of this study these terms are not interchangeable, as I will follow the

definitions as used by Buzan (1993) when dealing with neorealism and structural

realism. Before getting to the distinction of these two terms and the elements within

them,itisbesttogiveabriefsynopsisoftherelevantliteraturedealingwithrealismto

structuralrealism,asrealism,andneorealism,isstillatthecoreofthemainstructural

realistelements.

Kenneth Waltzs Theory of International Politics (1979) is the seminal work on

neorealist thought and thus helped pave the way for neorealisms dominance in the

international relations sphere. Waltz placed added emphasis on the level of structural

analysis when dealing with power politics as a kickstart to classical realist thinking.

Waltzsneorealismhasnotbeenwithoutitscritics,suchasKeohane(1986),yettothis

dayneorealistthoughtisstillthetorchbearerintheinternationalrelationsfield.

 Waltz had regenerated interest in realism; however he still wanted to make

distinctions from classical realism and thus coined neorealism. Yet, what Waltz

proposedwasnotacompleteuniqueframework,ratherareworkingofsomeexisting

ideasblendedwithnewconcepts,hencetheneo.Waltzextendedonthecoreelements

ofrealism(mainlythefocusonconflictintheinternationalsphereascomparedwiththe

neoliberalleaningstowardscooperation)fromthebeginningrealismstagesofHobbes

andMachiavelliupandthroughtoMorgenthauandCarr.

As outlined by Gilpin (in Keohane 1986: 3045) the following elements are all

common realist assumptions: the nature of international affairs is conflict, the main

elementisthegroupasopposedtotheindividualandthekeyimpetusistowardspower

and security. From the same volume Keohane emphasizes the central importance of

states, and that they are unitary rational players, that desire power, and focus their

needsinregardstopower.Waltztooktheseelementsandinstalledastructuraldesign

aroundthisgroupofconflictedstatestofurtherhisframework,byaccentuatingsecurity

andmaintainingthereductionofallpowerdowntopoliticalpower.

InTheLogicofAnarchy(1993)theauthorsattempttotakeWaltzsneorealismand

expand it into a richer framework, which they call structural realism. 2 The following

paragraphs will help to clarify the distinction between neorealism and structural

realismandmyrationaleforchoosingthelatter.

2
I will follow the distinction in Buzan (1993) by referring to Waltzs theory as neo-realism and referring to
Buzans work as structural realism. For the purpose of this study I will focus on structural realism aspects
as designed by Buzan and customized by the author.

 AspointedoutbyRobertCox(inKeohane1986)neorealismappearstooUScentric

and time specific in its cold war focus. By expanding on the main elements of realism

andneorealism,Buzansstructuralrealismhopestogiveawiderviewwithalesstime

andnationspecificbias.

Threefeaturesshowstructuralrealismasfollowingtherealistlead,however,also

lead to some modifications (Buzan 1993). First, is that realism and neorealism place

politicalpowerasthenucleusofallpower,attheexpenseofotherkindsofpowersuch

aseconomicorsocietalpower.Structuralrealismemphasizesthedominanceofpolitical

power,howevernotattheutterexpenseofallotherformsofpower.Secondandthird

arethatstatesarethecrucialelementintheinternationalsystemandthatWaltzsbasic

frameworkoftheinternationalstructureremainsinplace,yetwithsomealteration.

Buzan(1993)pointstothreemaindistinctionsbetweenneorealismandstructural

realism.First,isthatthedefinitionofstructureiswidenedtoenvelopideasbeyondthe

political sphere. Second is that structure is not the only element that can effect the

systemiclevelasthepointsofinteractioncanalsohaveimpactonthesystemandthe

outcome of the structure and lastly structural realism sways from Waltzs

microeconomicsstance.

Thesethreedifferencesmakefourpossibilitiesopentostructuralrealismthatare

unavailabletoneorealismanditisthethirdpossibilitythatisakeycomponentonthe

selectionofthistheoryoverneorealism.Thisthirdelement,astoucheduponbefore,is

that structural realism hopes to break out of the narrow logic of political interaction

thatdominatesneorealismandtolookatthe wholerangeofinteractions(economic,

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societal, as well as military and political) that have shaped both the units and the

structuresoftheinternationalsystem(Buzan1993p.13).IbelieveasBuzandoesthat

military power has lost the distinction as the main element for great powers in

international relations. 3 Globalization and the power of free market economics has

played a large role since the switch from Keynesian control of the markets by

governmentstothemorefreemarketthinkingofHayekandtheAustrianschoolinthe

1970s. As well, environmental and resource security issues have been gathering

momentum, and not just as a passing issue, in international politics and I feel that

environmental concerns and resource scarcity issues are a key element when dealing

with future international sticking points. As such, structural realisms wider viewpoint

allowsamoreaccuratelookatwhatthisstudyhopestoaccomplish.

Along with allowing this interaction between politics, economics, environmental

and other issues Buzans structural realism also states that advocates of power and

interdependencehavebyandlargemadetheirpeace,sothatthetwoconceptsarenow

generallyseenascomplementaryratherthanmutuallyexclusive(Buzan1993p.15)and

thatwe(Buzanetal.)areincompletesympathywiththedesireofKeohaneandNyeto

fuseneorealismandliberalismintoafullsystemstheorythatincorporatesprocessas

wellasstructure(Buzan1993p.17).Thiswiderscope,allowingcooperationandregimes

helpstoconnectthetheorybettertothespecificcases,inthiscasethestudyproposed

within,whilestillbeingbasedonthecoretenetsofrealistandneorealisttheory.

3
Buzan (1993) points out that military power seems to have retained its prominence amongst outsider
states, or outsider states and great powers, citing the second Gulf War as a case in point, however not so
amongst major powers.

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 Along with this main structural realism approach and furthering on the work of

anotherneorealistauthorwillbethelastelementofthecustomizedapproachbasedon

theeconomicworkofHerbertSimonstemmingfromhisworkModelsofMan(1957)and

intheinternationalrelationsfieldthroughthewritingofRobertGilpin(1981).Inhiswork,

Simonusesatermsatisficing,whichdescribesthatinanysituationafirmmaysettlefor

lessthanoptimaloutcomesinselectedareas,duetothefactthattheyareinthepursuit

ofmorethanonegoal.Bydoingitthiswaytheymaybeabletoachieveabetteroverall

level of satisfaction through this tactic than by sacrificing one need for another 4 .

Neorealist scholar Robert Gilpin used satisficing in War and Change in World Politics

(1981) to describe the marginal costs and marginal benefits analysis that states must

makeindeterminingwhethertomakechangesintheinternationalsystem.Changecan

be a benefit to a nation; however they must weigh the costs of a disruption to the

structureoftheirrelationshipsandthesystemswithin.Thiselementofthetheoretical

frameworkwillbeusedinaccordancetotheadditionallensesthatstructuralrealism

allowsoverWaltzsneorealism.Bylookingbeyondthepoliticallensandweighingthe

costs and benefits of the lenses together, a more accurate depiction of the rationale

behindstateschoicesmayoccur.

2.1.2CanadaEnergySupply

4
Satisficing is similar to the economic concept of opportunity cost

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 ThecruxofthispaperisCanadasability(supply)toexpanditsoilsandsexporting

potential(Table1),specificallytoChina.ThevalueoftheAlbertanoilsandshasonlyin

recentyearsbecomeaviabletopicandassuch,thereislittledepthtotheliterature.

Table2.1OverviewofAlbertanOilSandsProjects(2006)
KindsofOilSandsProjects NumberofProjects Value(in$millionsCAD)
Finishedprojects 2 790
Projectsunderdevelopment 13 26,387
(somepartiallyproducing)
ProposedProjects 39 71,180
Total 54 98,357
Source:AlbertaEmployment,ImmigrationandIndustry,PolicyandEconomicAnalysisDivision(2007)
http://www.albertacanada.com/statpub/albertaConstructionProjects/pdf/InventoryOfMajorAlbertaProje
cts_2006_Dec.pdf

As Canadas oil is mostly locked up in the oil sands projects of Alberta, higher oil

costs are needed to make them profitable to exploit. Nonetheless, in recent years,

priceshavemadetheoilsandsprojectsmoreattractivetopotentialinvestorsincluding

the Chinese. Saxton (2006) and Jiang (2005) cite how Canada is becoming one of the

main oil producers in the world and that their reserves are now second behind only

SaudiArabia,duemostlytothetarsandsprojects.Asidefromthesearticlesthemajority

of the literature is from government agencies such as the Alberta Energy and Utilities

Board (2006), Natural Resources Canada (2006) and National Energy Board (2006),

whichallfollowsimilarconclusionsoftheaboveauthorsstatingthatCanadasreserves

andproductionaregrowingtothepointthatCanadasinfluenceintheglobalmarketis

increasing.AllofthesepapersspeakofthesupplysideofCanadianoilasitnowhasthe

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second most proven oil reserves and is currently eighth in overall oil production,

accordingtoEIAstatistics 5 .

McCullum(2006)andBennett(2002)suggeststhatCanadaisAmericasgastankas

the government deregulation of the 1980s and NAFTA have led to many of the

decisionsregardingCanadianoilanditsproductiontobedonethroughtheworkingof

US companies and agencies. Laxer (2006, 2007) and Rowat (2006) reinforce many of

the same issues regarding the US power over Canadian resources and suggests that a

stronger Canadian energy plan is needed. In regards to oil sands history the seminal

source to date is Paul Chastkos 2004 work Developing Alberta's Oil Sands: From Karl

ClarktoKyoto.

2.1.3ChinaEnergyDemand

InregardstothecrushingneedforChineseenergysupplies(demand),thisareahas

receivedmuchscholarlyattention.Zweig(2005),Downs(2006,2004,2000),Crompton

(2005) and others have all written extensively on Chinas past, present and future

energyneeds.Assuchthispaperwillbrieflysummarizetheirfindingsondemand,and

look briefly into some of the more institutional issues behind the increasing energy

demandinChina.

InDowns(2006)sheliststhefollowingtableasanexampleoftheenergycrunch

expectedinChina:

5
See chapter 4 for data and tables

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Table1.2ProjectionsofChina'sOilDemandin2020(millionbarrelsperday)
Source Date Projection
UnitedStatesEnergyInformationAdministration 2006 11.7
NationalDevelopmentandReformCommission(China) 2006 1012
ChinaNationalPetroleumCorporation 2006 10
InstituteforEnergyEconomics,Japan 2005 11.8
InternationalMonetaryFund 2005 13.6
EnergyResearchInstitute(China) 2005 13
InternationalEnergyAgency 2005 11.2
NationalAdministrationofStatistics(China) 2004 12.7
Source:Downs(2006)

Kong (2005) describes the pressures, intensity and inefficiency of the Chinese

energy market. As well, he draws attention to the lack of energy policy institutions in

China,whichexacerbatestheenergydilemmainChinaandthegrowingdependencyon

foreign imports of oil. Kambara (1992) in an earlier work points to many of the same

findingsasdoesmorerecentworksuchasBustelo(2005),Farmer(2006),andDouglas

(2006). The overall summary of the literature remains relatively the same, in that

Chinas demand of energy is only increasing and especially that of foreign import

dependency. The ratios and estimates may vary, but the overall message is the same:

China needs (foreign) oil. Daojiong (2006, 2005) and Christoffersen (2005) delve into

the issue of Chinas governance concerns and international relations in regards to oil

politics,asagaintheconcernisinthelackofinstitutionsandthedeepeningdependence

onforeignimportsofenergy,especiallyoil.InregardstothehistoryofChinasenergy

andoilindustriesZhao(2001)andRosen(2007)havewrittenextensivelyonthistopic

andtheirconclusionswillbesummarizedbrieflyinchapter5.

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2.1.4CanadaandChinaOilRelations

CanadianChinese oil relations have received minimal academic attention as

mentioned above. Prior to 1978, China was an inward looking state, and throughout

muchofitshistoryCanadahasbeenatiertwocountrybehindtheheavyshadowofthe

United States. Jiang (2005) comments directly on the potential for growth as Canada

and China seem a suitable match. Francis (2005) and Rowat (2006) along with others

speak of the potential for Canada to expand with China. Zweig (2005) and Romero

(2004)amongothershavespokenonpotentialconflictsbetweentheUSandChinaover

Canadas oil sands, however, this has not been done from the Canadian perspective,

whichreturnustotherationalebehindthisstudy.

2.2Methodology

This study was done principally through extensive library, internet and field

research.

Thefirstelementwasprimarilyfocusedondatacollectionfromlibraryandinternet

research. Relevant academic journals, business prospectuses, government publications

aswellasbusinesssurveysweresoughtouttoaidwiththiselement.Fortheseelements

keysearchtermswerefocusedaroundthefollowing:

z Structuralrealism,oilpolitics,andgeopolitics

z Canadaenergy/oil

z Chinaenergy/oil

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 After establishing the main criteria of the study, I then proceeded with my field

research in Canada. I visited with various scholars, experts, government agencies,

thinktanksandvisitedtheoilsandsregioninAlbertatoacquireagreaterunderstanding

ofthepotentialgrowthforCanada. Aswell,IattendedtheCanadianEnergyResearch

Institute (CERI) Canada as an Energy Superpower conference in April and have

maintainedcontactwithnumerousofthespeakersanddelegatesofthisconferenceas

theirfirsthandknowledgeandexperiencewereinvaluableinconductingthisstudy.

UponreturningtoTaiwan,Icontinuedwithfurtherdatacollectionandanalyzedthe

fieldresearchdata.ForfurtheringmydatacollectionIsearchedthegovernmentrecords

andlegislativeproceedingsbasedonthefollowingkeywords:

z Oil(includingoilsands/tarsands)

z Energy

z China

z Environment

z NAFTA

z Proportionalityclause

Finally,Ianalyzedallmydata,inmycustomizedstructuralrealismframework,and

finishedwritingthefinalversionofthispaper.

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