The Push for Petro in the 21st Century

The Push for Petro in the 21st Century

With another interminable presidential campaign approaching, Americans grit their teeth as the aspirants to the White House take turns deploring the country’s dependence on foreign (particularly Middle Eastern) oil. It is a theme as old as disco and the pet rock – vapid and dull, yet forever capable of arousing popular scorn. On the one hand, every president since Jimmy Carter has set the goal of ridding the United States of this scourge, but to no avail, for American consumption of imported petroleum inexorably climbs. On the other hand, volatile gasoline prices, climate change and the specter of terrorism enhance the urgency of finding an alternative, if not to oil, then at least to oil of Middle Eastern provenance. The attacks of Sept. 11, 2001, ensured that no politician can go wrong by pledging to put the dread addiction into permanent remission.

The fact, however, is that demand for oil will continue to rise. It is not just the American appetite that needs sating. Oil is the lifeblood of the global economy, the fuel of military machines, the grease of industry in developing nations, the lubricant of shipping and trucking in an interconnected world, the juice in the automobiles of the burgeoning middle classes in China, India and elsewhere. Oil is what it has been since World War II – the primary strategic commodity, stewardship of which determines the rise and fall of great powers. U.S. hegemony, though frayed, is based in no small part upon Washington’s guarantee of the stability of the oil patches, particularly the largest and richest one in the Persian Gulf. The Obama administration, like its predecessors, is pulling an elaborate bait and switch upon Americans: modest gestures are being made to develop alternative energy sources, but at the same time, U.S. foreign policy is driven to a great extent by the dual imperative to keep access to oil secure and prevent a potentially hostile power from supplanting Washington in this role.

Despite the politicians’ get-off-oil refrain, which might lead one to believe that the precious liquid is losing relevance, the strategic importance of petroleum is increasing in the 21st century. Quite simply, oil is becoming increasingly vital because it is a finite resource. There is no consensus among experts on the precise date of “peak oil” – the moment when fresh discoveries will no longer replace the amounts being pumped out of the ground – but everyone agrees it is imminent. (Some believe it has already passed.) Peak oil does not mean immediate or even near-term shortages; it simply means that the world’s reserves will begin to run out in absolute terms. The market, having seen that supply is not limitless, will value the commodity higher as time goes by, with some industry watchers predicting that each barrel of oil will cost $200 in as few as 10 years.

Were human beings mere calculators of cost and benefit, and global affairs as “rational” as mainstream economists like to think, peak oil might be considered a boon. Higher prices might encourage conservation and massive investment in renewable energy research, accelerating the time when the addiction to fossil fuels could indeed be broken.

But history does not conform to the formulas of economics textbooks. Consumers have proven very tolerant of skyrocketing prices at the pump, for example, during the boom of the mid-2000s. BP advertising blitzes notwithstanding, corporations and governments have not seized the opportunity of high oil prices to redirect research expenditures heavily toward renewables. The capitalist prerogative is to maximize profit, and the incentive of energy conglomerates is to reap the windfall of higher prices as long as possible while searching for more of the stuff that sells in the here and now. Such pecuniary interests shape U.S. energy policy under presidents of both parties, with some variance, and future administrations are just as likely to “drill, baby, drill” as to catch the wind and soak up the sun. Nor should it be forgotten that two generations of renewable energy researchers, however lackadaisical and lightly funded, have failed to find an efficient or cost-effective substitute for the internal combustion engine.

The political and technical challenges of renewable energy are formidable enough, and they pale compared with the juggernaut of consumer preferences. Even in Denmark, a small country with excellent public transportation whose offshore windmills generate enough electricity to meet domestic demand with exports to spare, oil consumption is growing because Danes like to drive. Americans love to drive and, thanks to suburban sprawl and poor public transportation, most of them need to. More to the point, there will be no stopping the emerging middle classes of China, India and other developing nations from slurping up oil like their Western counterparts have for 60 years. The International Energy Agency’s (IEA) World Energy Outlook for 2010 projects one scenario wherein global oil demand grows to 99 million barrels per day in 2035 (15 million more than in 2009), with 93 percent of the total increase in energy demand coming from outside the U.S., Europe and Japan.

This IEA projection is the New Policies Scenario, a fairly optimistic peek into the future positing that demand in the already advanced economies will shrink by 6 million barrels per day by 2035 due to progressive government planning and switching to alternative fuels. There are other scenarios in the document that see much higher demand for hydrocarbons, including in the West. It is worth recalling that IEA outlooks, written by well-meaning U.N. officials, are nudges in the right direction as much as they are predictions. Certainly, anyone appraising the state of U.S. politics today would be hard-pressed to discern the coalition of political, corporate and citizen forces that could effect such a far-reaching transformation of American energy usage in the next 25 years. Such visionaries exist, and they are articulate indeed, but they lack the clout to defeat the partisans of short-term profit who bankroll U.S. elections, not to speak of the reactionary elements that lurk in the wings and, again, are just as likely as progressives to win political office in the restive twilight of the American Dream. Sadly, history counsels that trauma and shock – not foresight – are the most likely drivers of a wiser, less profligate oil policy.

Survey U.S. deployments around the world, in fact, and it becomes clear that Washington is preparing for a future of sharpened competition for the scarcer resource of petroleum and its associated products. First and foremost is the forward-leaning U.S. posture in the Persian Gulf, site of two-thirds of the remaining proven oil reserves on the planet and the supplier of first and last resort. The 2003 invasion of Iraq was rash and ill-conducted from the standpoint of U.S. grand strategy. But in historical terms, it was an extension of the Carter Doctrine announced in 1980, whereby the U.S. undertakes to protect Persian Gulf oil deposits from rival superpowers or uncongenial local powers. Having rendered Iraq unstable with the invasion, the U.S. must now keep a stronger garrison in the Gulf region. Absent some unforeseen force majeure, the Obama administration and its successors will maintain this doctrine, replete with bases in Iraq, to prevent China (or, less plausibly, a resurgent Russia) from asserting hegemony and to deter Iran from trying, as did Saddam Hussein, to acquire more oil and gas fields for itself. U.S. alliances in East Asia are partly propelled by the desire to block China from dominating the South China Sea oil finds and the heavily trafficked straits linking the Pacific and Indian Oceans. Most recently, the Pentagon has established the Africa Command to guard the hydrocarbon treasures of this continent, police the surrounding shipping lanes and stop China from assuming these tasks instead.

Oil, in short, remains the most valuable good on earth and the one most closely tied to war and peace. As it runs out, its value is set to increase, making the world an ever more dangerous place and U.S. foreign policy an ever more ubiquitous irritant in oil-producing areas. A cheap, high-performance electric car, snapped up and marketed by the present oil barons, could alter this trajectory, as could a revolution of resource and power sharing in international relations, but hope is not a plan. §

Chris Toensing is editor of the Middle East Report, published by the Middle East Research and Information Project.

Oil is the lifeblood of the global economy, the fuel of military machines, the grease of industry in developing nations, the lubricant of shipping and trucking in an interconnected world, the juice in the automobiles of the burgeoning middle classes in China, India and elsewhere.

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