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I had intended to address major energy-related developments from the just completed Windsor Energy Consultation. That will begin in my next installment because something else happened over the weekend at Windsor Castle that we need to discuss today.
For almost a decade, I have been part of the consultation meeting at Windsor outside London. But in all that time, I have never seen anything like it. Over the past weekend, geopolitics was the dominant theme of both plenary and ambassadorial briefings.
But not just any geopolitics. This year, the focus was on one Donald John Trump.
Coming on the heels of a British exit from the EU ("Brexit") that few saw coming – and before contentious elections in France and the Netherlands (where national front" candidates are showing some clout) – Trump's election in the United States has been magnified.
And the way the assembled at Windsor see it, there's a disturbing connection between the populism of recent international events and some far darker considerations…
The Disturbing Parallel in Windsor
Elsewhere around the world, the American presidential election is not simply viewed as populism. Rather, Trump's victory is regarded as another starting volley fired for a race against most things global. As more politicos look domestically for support, the genuine international problems go begging.
Not a good environment for energy, perhaps the most cross-border sector of all.
After years of attending these conclaves, the concern was unexpected. Normally, local political events are encapsulated at Windsor. Not this time. To the assembled participants from six continents, Trump's success at getting elected despite the self-inflicted wounds that doomed traditional candidates in the past pointed to something else entirely.
Yet one matter about Windsor needs to be understood, an important element of these gatherings that set them apart from most other meetings worldwide. The consultation is all about discussing implications, directions, and priorities. This is not an exercise in casting political blame or indulging in political one-upmanship.
Now there is certainly some pointed conversation and disagreement. Yet owing to the hallowed Chatham House Rule, everybody is protected on the outside. The rule allows for mention of themes and subject addressed. However, the identification of who says what – or even who participates in a particular exchange – is never made public.
That allows for some direct and fascinating discussion by some of the leading figures in the energy sector. Those conversations are extended in the famous "ambassadorial briefings" to plenipotentiaries representing some of the principal state partners in energy globally.
Having participated in inter-state negotiations, where national representatives must often balance larger market realities with narrow political interests back home, while avoiding the mine fields of the press corps coverage, I can personally attest to the value of the Windsor approach.
In all my years of experience in energy, I found no other approach that provides more concerted and useful international exchange than the one practiced during the first weekend of March each year at the castle.
Which makes this year's attention to The Donald both unusual and the harbinger of what may come.
Nobody in attendance was interested in defending or criticizing Trump, Brexit, Marine Le Pen in France, Dutch nationalist Geert Wilders, or similar refrains in Greece, Austria, and even Germany. There is more than enough room on TV (either in the states or on the continent) for that.
What Windsor does better than anywhere else is to take what has happened and consider what it means on a broader canvass. It is here that the global weight of the meeting has its biggest impact.
In this case, it has drawn a disturbing parallel. Because the most sensitive part of this year's Windsor consultation directed attention back to a familiar concern-MENA, that is, the Middle East and North Africa.
It is on topics like this that the Chatham House Rule is most indispensable. It allows analysts, practitioners, ambassadors, and ministers to speak openly and frankly. And this year, that discussion painted a very disturbing picture.
The populism reflected in a British vote to leave Europe and an American vote allowing an outside businessman to throw hand grenades at the "establishment" is rising again in MENA.
For some time now here and elsewhere I have been taking about "Arab Spring II." This time, it is intensifying into a much more destabilizing period than the first time around. That first Arab Spring was populist and disconcerting. But two elements tempered its impact.
First, except for events unfolding in Bahrain, it largely kept the Sunni/Shiite religious difference out of the equation. And second, the high price of crude oil at the time (well over $100 a barrel) allowed ruling families and governments to "buy off" opposition by spending oil revenue on enhanced domestic programs.
The former is no longer possible this time around, while the latter does not have the money to fund another expanded social agenda.
This time will be far nastier and far more destabilizing.
Not a single expert or policymaker from any MENA country had an encouraging position to take at Windsor. The Syrian power vacuum is worse than the West understands, the Saudi-Iranian contest more protracted, the Turkish situation more difficult, and the Iraqi fight against ISIS less secure.
A series of powder kegs are about to go off in the apex of the energy world. Each has its own fuse and rationale. But all are being fueled in a familiar way.
The same populism opposed to "establishment" power centers that brought about successful, political opposition movements in the West is pushing Arab Spring II.
There, the contest will destabilize matters well beyond national borders as the lively discussion at Windsor made all too obvious.
About the Author
Dr. Kent Moors is an internationally recognized expert in oil and natural gas policy, risk assessment, and emerging market economic development. He serves as an advisor to many U.S. governors and foreign governments. Kent details his latest global travels in his free Oil & Energy Investor e-letter. He makes specific investment recommendations in his newsletter, the Energy Advantage. For more active investors, he issues shorter-term trades in his Energy Inner Circle.