Klare: Less Oil==More Wars

This piece from Michael Klare deserves a read (hat tip: Energy Bulletin):
To explain the current run-up in gasoline prices, pundits throw out many reasons, including concern over a possible war with Iran, insatiable demand from China, inadequate refinery capacity, greedy oil companies and the gradual depletion of the world's oilfields. All of these do bear some degree of responsibility, but they are not the fundamental cause. There has been a historic shift in the center of gravity of world oil production from the global North-the older industrialized countries-to conflict-plagued areas of the global South-the developing world. Because this shift is all-encompassing and irreversible, global oil output will remain vulnerable to overseas instability and gasoline prices will remain high.
"Further global progress is now possible only through a quest for universal consensus in the movement towards a new world order."
~Mikhail Gorbachev, before the UN, December 7, 1988
So geopolitical strategy going forward for industrialized countries should be to invest as many resources as possible to help stabilize the social and economic stability of these developing countries where the oil reserves remain. The neoconservative agenda in the USA clearly recognized and attempted to address this problem through force and domination that have clearly failed as an option to the point that early proponents are recognizing this and abandoning this idealogy. Pragmatic China is investing heavily in many of these countries with economic aid. A sane world would see the G8 nations, Russia and China sitting at the table with institutions like the world bank and NGO's and coming up with strategies to stabilize the social unrest in these countries through development while reducing tensions. The middle east is the quagmire and the road toward stability in the region will be a long one but surely a new paradigm in geopolitical strategy is needed. The same can be said for Nigeria, Venezuela, Ecuador, Bolivia, etc.
I would also like to point out that GNN (which also ahs posted links to TOD) reposted this article on their site this morning.

I love to read articles such as this one, because they represent the kind of dynamic that I built my education around.  The confluence of energy, sepecifically oil, and international political science, is THE defining paradigm of our times.

American non-involvement in the global south is simply not possible.  The neocons who currently dictate policy are well documented as putting forth the concept of "seizing the unipolarity moment" or, projecting force to ensure protection of American interests abroad while we are militarily dominant.

Whether or not you agree with them is irrelevant, because American business agrees with them, overwhelmingly.

That being said, the real issue is that the other developed nations of the global north will not sit idly by as the US breaks the pax of sovereignty and gobbles up the oil-rich regions as protectorates.  Never mind the strife and conflict within the regions we get involved in; the balance of power will shift away from us as other developed nations group together to offset our advantage.  

While there is clearly no one nation that can yet challenge American preponderance of power (economically or militarily) American policymakers have ignored the history of the system of alliances that always arises in reaction to hegemony.  Other countries cannot sit by as their lifeblood (oil) is taken over by just one nation, which holds both economic and military dominance in its grasp.  In effect, the American "colonization" or "imperialism" (whichever term smacks the least of leftist conspiracy theory to you)will ignite another world war, and this is the true, imminent spectre of the energy crunch.

That's my analysis, anyway.

In a sane world you would see some cooperation of nations as this really is the only solution long term. But as we live in an insane world your analysis seems more accurate. I'm only left to wonder on our capability to achieve some sanity as time reveals force and domination as being insane when dealing with global finite resources since the amount of resources the dominator will have to use fighting resource wars will defeat the purpose. At some point sanity will be imposed by geology, right? Or can we be so stupid as a species.
I agree that cooperation is the only real solution, as I am something of an internationalist.

However, in my studies I have never seen any precedent for sustained meaningful cooperation and have seen thousands of examples of agressive responses to resource crises, in both politics and nature.  Political science is even defined as the science of resource allocation!

I would like to think that being human offers us a choice, but the exploitation of advantage is an impulse felt by every living creature on earth.

I wouldn't surprise me that the US eventually develops similar problems due to disparities in sharing the wealth.  I can certainly see people in the GOM region getting really ticked off if "their" oil is being sent some place else while they live in poverty and others get richer.  I think this type of thinking will gain strength as the middle class is destroyed.

In fact, barring a dictatorship, it seems possible (albeit small) that the US will devolve into smaller "countries" built from states that share an area of interest.  We are already seeing states joining together in lawsuits against the Feds.

AlanfromBigEasy (New Orleans native) often says something similar, to the effect of "just let us keep half the oil and we'll fix it ourselves!"
GOM area frustration with the federal government is growing.
Who is "us"?  The oil is already "kept" by the GOM-area-based corporations, but they see themselves as having no responsibility for others in the area.  The feds have nothing directly to do with this arrangement, it's called "capitalism".
It's not my words. shrug
I like to phrase much the same line of thought as: Eventually, all the kids in the playground gang up on the local bully.  Once that happens, predictions go out the nearest window.

Sometimes I think Iran's pres. and Chavez are competing to see who can rattle Bush the most.  And with the US's relations with Russia suddenly turning frosty (thanks to Dick Cheney and his big mouth), there's another "interesting" country in the mix.  Of course, China has a big pile of our debt, but Japan owns about 2.5X as much of our paper as does China, which gives them a terrifying amount of leverage if they should decide to take offense at the US using a nuclear bunker buster or three in Iran.  (Japan, of all countries that would be third-parties to such a war, is uniquely placed in history to take deep offense at such an insane move.)

The next few years on the international front will be a lot of things, but dull ain't on the list.

American business is investing their money in China. The amount of productive capital investment in the USA at this point is minor. Yes, American business interests would like to use the taxpayer's funds to finance a military to look out for their interests, but this is in the context of an international investment paradigm. Basically, the American military is paid by the American worker/taxpayer to protect the interests of American businesses (which are continuing to invest the bulk of their funds in the third world, which has the effect of raising the standard of living in the country that attracts the investment capital). My point is "American businesses" is a misnomer. These are international businesses that happen to be subsidized by the American taxpayer.    
Sure, its a misnomer, but for the sake of the argument it would be best to clarify that these businesses have interests abroad that sometimes can only be realized through the forceful opening of a market by the US military.  The majors may be international companies, but they certainly benefit from the US opening up markets that were previously unavailable to them (Venezuela, Iraq, Iran) and some of them (Shell specifically) were heavily involved in the planning of post-war Iraq.

So in order to appease you, lets say, again - for the sake of the argument, that "american business" means "international corporate lobbies in the United States".  I'm pretty sure most knew what I meant, anyway.  Unfortunately, there is no way around shorthand when describing something like I did, because almost every phrase can be magnified until it is incomprehensible.

International businesses are primarily concerned with short-term profits anyway, and majors realize that the US is their biggest market, so to identify them as "american businesses" or "american business interests (perhaps the preferred term)" within the confines of my statement isn't such a big leap.

I agree with your comment but would like to point out that the US has traditionally been the force that opens up previously impenetrable markets for these companies all over the globe, and especially in the global south.  Their interests are typically so aligned with US policy (they actually dictate US policy) that it makes it possible to qualify them as "american business interests", for the sake of my post.  I assumed most TOD readers were aware of what you stated and I took it for granted.
You appear to be positing that US future intervention in Venezuela or Iran, and past intervention in Iraq, has been a net positive for multinationals (a better shorthand, perhaps, than "American business interests"?) -- or at least that that the multinationals perceive this to be so. Have I got that right?

I find this a frankly astonishing postulate. Where's the evidence?

Is it the economic stimulation due to huge military and reconstruction spending that you are talking about? Specific business opportunities aside (Blackwater, Halliburton...), I would expect rational economic actors to abhor the type of disruption, uncertainty and danger engendered by such adventures.

Or are you talking about sale of consumer goods to Iraq? (previously hampered by UN sanctions, which could have been dropped without a war...) I am not aware of specific trade barriers hampering companies wishing to sell stuff in Venezuela ?

Or when you talk about "impenetrable markets", are you talking about state ownership of such assets as oil, water, electricity distribution?

Good, suscinct article. Thanks Professor Goose.
Other countries cannot sit by as their lifeblood (oil) is taken over by just one nation...

Saw this quote that looked like a Freudian slip to me:

"To become energy independent and no longer rely on foreign oil would be like depriving Dracula of his blood supply: he would shrivel up and die."
- Cal Thomas (conservative columnist), 20 April 2006.

I've posted here an out-of-context snippet, what I think he meant was that the oil-exporting countries (that support Islam and terrorism, he says) will "shrivel up"...  But to me it read like this: if the US would try to live without imported oil it would shrivel up, since we're as addicted as Dracula.  No wonder we're afraid of the sunlight of truth.

don't worry because prices will fall
according to these people:


Someone around here posted a little piece on grain supplies falling:(http://drumbeat.theoildrum.com/story/2006/5/17/952/79161#73)

Which gets me thinking -- has anyone "equated" the value of corn/wheat to the value of oil/naturalgas?  How do European, Middle Eastern, North American, South American countries fare on food import vs energy export?  What is the proper way to look at this exchange?  Are we selling grains too "cheap" on an energy basis?

In terms of war, it seems that if a country gets hungry then they will do almost anything to solve that problem -- and right away! (and war is not a good option at that point)  Whereas, a country short on oil, but not immediately short on food or electricity, has options.  

Actually, Ralph Borsodi attempted to introduce the "Constant" which was based upon a bushel of wheat IIRC.  I know there was some activity on this in the 70's especially in New England.  There were a number of articles about it in The Green Revolution magazine published by the Heathcote commune in Virginia.
Klares talk about "conflict-plagued areas of the global South"  as the main reason for high oil prices is quite common, but only a myth. The center of gravity of the oil production has not shifted during the last 5 years, during the time of rapid price hikes. Everybody should know that.

Middle East oil production has been fairly stable even in times of conflicts - everybody wants to keep the oil and money flowing. There have been disturbances, of course. Worst of them have been caused by the US itself.

We could recall here the oil crises of the '70s, but they were not really caused by political factors after all. Everybody who look at the oil production statistics will see that the OPEC was grossly overproducing before that and something had to be done. They did like the Texas Railroad Commission in the US had done before that.

Sabotage and the like have not had any significant impact on  the global oil production (In Iraq oil is produced in conditions of the war started by the US). Accidents have had  sometimes much bigger effect. All in all, political risks, at least "indigenous" (other than those caused by "the indutrialized North" itself - like the probably coming war against Iran), are not the main threat to the global oil supply.

It is really very odd to read that Canada or Mexico is financing "internationl terrorists" with their oil money. Well, there seems to be a lot of talk about the "oil depenedency" of the US allowing the exporting countries to finance "hostile activity", But most of the oil comes from the Americas and Africa, where no really threats against the US exists.

Klare is just one example of very low level of the mainstream energy discussion in the US.

Back in the 80's one of the main producers of oil, Russia, had a collapse in production, but prices did not jump - because of excess world capacity with SA as the swing producer.  The lack of excess capacity now is what makes the market suseptable to price swings from temporary outages (due to weather or politics or whatever).
well one of the reasons the soviet union did collapse was that we asked suadi Arabia to flood the market with cheap oil to a point at which it cost the ussr more to extract the oil then they could sell it.
oil was one of the main if not the main income of the soviets.
So, now all we have to do is to ask the Saudis to flood the markets once again and Venezuela and Iran will collapse? :)
TI -

The 'center of gravity' of oil production is indeed deep within the Middle East.  But that is exactly the problem.

Many of these countries are highly unstable, and what stability we've been able to impose has been accomplished at great cost - monetarily, politically, and militarily. Our adventure in Iraq, which anyone can see has been a thinly veiled attempt at installing a Shah-like puppet government that would cozy up to the US and provide the US with favorable oil extraction arrangements, has been a total failure.

Many now think we are trying to do the much the same thing with Iran. Time will tell.

So, I think that the word 'stability' and the words the 'Middle East' should not be used in the same sentence.

Regardless of how much oil comes from the Western Hemisphere, the US is still highly dependent upon Middle Eastern oil, and I think that very fact is liable to be the thing that eventually does us in.
Again, time will tell. And time is running out.

Yes, the 'center of gravity' of oil production is indeed deep within the Middle East, but only because we allow it.  Each one of us can take real actions to reduce our oil use significantly.  Go from 2 cars to one.  Ride a bike.  Skip that vacation to Hawaii.  Install a solar water heater.  Insulate your attic space.  

Our government isn't going to act but we can.  The problems are huge but can be fixed if we all take real action.  Dump that second car.  Barbara and I did it (with only a few withdrawal symptoms).  Half the car payments, insurance, gas, pollution and maintenance.

"what stability we've been able to impose has been accomplished at great cost"

right - namely, stability.

The suggestion that what stability there is or has been in the ME is due to and not despite US and England's contributions is a conceit too many westerners have to get over.  We trained and funded OBL (to fight Soviets), we supported (and installed, by JFK) Sadaam Hussein.  Set up the Iranian Theocracy after undercutting their democracy in the 50's, never mind the manipulations and war-crimes committed in the first half of the 20th century.

  You leave out that this region has been plagued by warfare for thousands of years.  It is not an anglo-saxon invention, but a continuation of a bloody history.  The west has had many interactions with ME affairs often with terrible results. The path to hell is paved with good intentions...

Honestly do you believe the region would be more stable without western involvement.  The only thing uniting the arabs is the existence of israel.  If they did not have the US and Israel to hate they would war with each other historically.  

Our hands are not clean but we are not responsible for for the warrior aspect of their culture.

we are not responsible for for the warrior aspect of their culture.

But are we responsible for the warrior aspect of our culture?

I would say we are responsible for all aspects of our culture. Except american idol simons from the UK
As carculture stated above, American business has a major influence over guv policy internationally. American weapons manufacturers (world leaders) make more money with instability and conflict than with stability. In America, the bottom line is the bottom line.
IMHO, Klare has a good grasp of geopolitics and especially of the politics of petroleum.

I've read his books and followed various discussions related to petroleum and geopolitics, and do not find Klare to be typical of the "low level of the mainstream energy discussion in the US."

I think we would do well to heed Klare's analysis.

We would do well to reduce our consumption of petroleum quite radically, and to develop transportation alternatives and especially alternative forms of human settlement.

I recommend a good read of "Blood and Oil" as background to better understand "Less Oil= More War."  

There are a variety of developments in the Americas and Africa, for example, which directly and very significantly affect the USA.  The fact that many US citizens do not comprehend this is a reflection of the low level of understanding of the relationship between energy and geopolitics in the USA.

I am encouraged by Klare's clarity of analysis and expression, and heartened to hear him call for the action needed to navigate the troubled time ahead.

You may not realize that this kind of rant about the political risks and instability in the oil exportng countries is mostly heard in the US. Europe, Japan and China are much more dependent of ME oil than the US, but they are not constantly obsessed by the "instability" of the ME oil producers. That kind of analysis Klare presents here is commonly accepted in the US as a matter of fact, but it is not so self-evident elsewhere.

All oil is not produced in the ME. Even if the US would stop to import any oil from the ME, it would only cause some geographical shifts in the oil trade, but would not reduce the importance of the ME exporters or their oil revenues a bit. The US is not alone in the world. In fact China is doing more to regulate the world oil demand than the US. It seems that oil prices are not so high as we could expect because the Chinese are deliberately curbing their imports.

And of course, the "stabilizing efforts" of the US in the ME have been mostly disastrous. Iraq was a very stable country (sespite the US imposed sanctions) before the present war - now it is almost as unstable as a country can be, and its oil production is down. The problems with Iran, which is also politically very stable, are mostly generated by the US. Americans have now succeeded in restarting the civil war in Somalia (a potential oil producer).

We can say that less oil is causing more wars, but the causality in itself is not simple. "There are a variety of developments in the Americas and Africa, for example, which directly and very significantly affect the USA." Yes, but these developments do not threaten the oil supply. Everybody wants to produce more at these prices, but they want to keep the money. And this is the problem.

One has to wonder whether, if international socialism had struggled on for another 17 years, its time would not finally have come.  Gorbachev: "We can't go on like this."
Remember, China is still a Socialist country. It does have 5 year plans and central planning authorities. It does regulate its energy use and imports, as well as currency and fiancial activity. And in fact, it did have very high GDP growth rates already in the '70s. In fact it did have higher growth before the present "capitalist" system was introdeced in the '90s. The foundation of the present Chinese economy was laid long ago, during the Maoist and Poist-Maoist period.

What can we learn from this? It is not the economic system but energy. The real underlying factor in the Chinese success is abundant coal. If you can increase yor coal production by almost 10% a year at the level of production of about 2 billion tons a year, you cannot avoid being an industrial superpower. It doesn't really matter if you are a Maoist socialist or a neoliberalist.

But be grateful that China is still a Socialist country and can regulate its oil imports. Otherwise we could have $100 oil or worse. In fact, nobody in the world cares what kind of cars the Americans are driving (only the car exporters do). The most important things are now happening elesewhere.

Energy is important, but: 1. China has received the bulk of global fixed capital investment. Without this money, China's economy would be a fraction of its current size. 2.China has received this investment because it treats capital very well- workers rights are nonexistent and wages are very low. Using a socialist label on a country where the gap between rich and poor is as gigantic as in China is ridiculous.  
Socialism has nothing to do with workers rights - in the Socialist countries. China is still in essence a quite strongly centrally planned economy - let's call that Socialism.

But energy - coal - is the real clue of the Chinese growth. Rememeber, there was very rapid growth even before the Chinese economy opened up and before it received any Western investments. Check the Chinese energy statistics and think again about the role of the energy.

Actually the Chinese system would be defined as Fascism. The standard definition of Socialism includes "social programs" which are non-existent in China. Modern Socialist countries include:Japan,France,Germany,Sweden,etc.
The neocons saw an historic window of opportunity for securing resources for the USA...

It looks to me that the window has slammed shut on their fingers. Though the cost (in particular for Iraqis) is enormous, probably it's for the best globally : they have so completely soured the rest of the world against America, that any more attempts at "securing resources" through military domination will either be doomed to failure, or prohibitively expensive.

If American ascendancy in the 20th century can be correlated to the availability of cheap energy (and in particular, domestically produced cheap energy), then it surely is not sustainable in the 21st. There is no other country or region which is faced with such radical transformations.

Get ready for many more wars over dwindling natural resources.

We need to take action now if we are to avoid future wars.

Many say we will see $3.50/gal this summer.  If you factor in Iran, who knows how high it could go. Everyone knows America MUST get off the oil.  After September 11, 2001 I expected our President to call on Americans to GET OFF THE OIL.  I was expecting a speech like the one JFK gave that motivated us to reach for the moon. As you know, this never happened.  Eventually I realized that the only way this is going to happen is for us to do it ourselves.  To that end I created this idea and have been trying to make it a reality..

The EPA is offering a research grant opportunity that I believe is a perfect fit for this idea.  I have sent an e-mail to a hand picked list of university professors who have experience with government research projects.  I'm looking to form a research team to apply for the EPA grant, conduct a social-economic experiment and surveys to determine to what extent the American public will support it, project the economic potential of WPH, and identify logistical, social and political obstacles as well as opportunities.

All government grants are awarded based on merit of the proposed research.  I believe WPH has merit but your help is needed to verify it. You can help by posting your feedback.  Let the professors and the EPA know what you think about WPH.  Do you think this idea is worth pursuing? We need to know if Americans will support a plan like this.

Do you have any ideas to improve the plan?

Share any and all of your thoughts.

Tell your friends and family about this Blog post and ask them to post their thoughts on WPH


Thank you