Energy: The Missing Link in Globalization

Abstract

Energy resources are transported long distances and create powerful interlinkages between countries. Energy thus contributes to the globalization of the world, but has received little attention in the globalization literature. This article hypothesizes that energy globalization is growing and accelerating. The hypothesis is tested by developing an index to measure changes in the extent of energy globalization during the 20-year period from 1992 to 2011. The following sub-indicators are included in the index: number of energy trade relationships, average distance of energy trade relationships, and energy dependency of the countries in the world. The development of the index encounters a number of conceptual and methodological challenges related to globalization, which, it turns out, have not been addressed properly in the broader literature. Clarification of these issues can help improve the analysis of globalization.

Keywords: globalization, energy, interconnectedness, trade