NYT Lets the Truth About Oil Slip, for a Second

(bumped by budhy – promoted by ek hornbeck)

Paragraph 25 of an article in tomorrow’s NYT:

OPEC’s 13 members plan to spend $150 billion to expand their capacity by five million barrels a day by 2012. But OPEC will need to pump 60 million barrels a day by 2030, up from around 36 million barrels a day today, to meet the projected growth in demand. Analysts say that without Iran and Iraq – where nearly 30 years of wars and sanctions have crippled oil production – reaching that level will be impossible.

This is why we are not going to leave Iraq.  The country that controls the future of Iraq and Iran, controls the world for the next 40 or so years.

The issue is not that Iraq and Iran might not be pumping oil in 2030.  One way or another, they will.  The issue is: which military power gets to hold the world at gunpoint in this final fossil-fuel thrill-ride to the edge?  Unless, that is, anyone thinks that the major military powers are going to let Iraq and Iran themselves hold that petrochemical pistol?

According to the New York Times article, world supply of oil is not increasing as it should, in accordance to standard laws of supply and demand, as prices rise to 118 dollars a barrel.  The reason is that supply is simply not available.  OPEC is building infrastructure to keep up, but it’s not enough.  OPEC controls 40% of the world’s current output.  The other 60% is not keeping pace, due to both dwindling fields and lack of pumping infrastructure.

An analyst describes non-OPEC supply as “dead in the water.”  

Some regions are simply running out of reserves. Norway’s production has slumped by 25 percent since its peak in 2001, and in Britain, output has dropped 43 percent in eight years. Production from the giant Prudhoe Bay field in Alaska has dropped by 65 percent from its peak two decades ago.

In many other places, the problems are not below ground, as energy executives like to put it, but above ground. Higher petroleum taxes and more costly licensing agreements, a scarcity of workers and swelling costs, as well as political wrangling and violence, are making it harder to raise production.

All of which is sobering informantion.  But the curious thing about the Times article is that it reports all this as if it were some sort of surprise to the world oil production community.  As if this information has not been known, and well know, for years, by those whose business it is know it.

But the International Energy Agency estimates that current investments will be insufficient to replace declining oil production. The energy agency said it would take $5.4 trillion by 2030 to raise global output. Otherwise, it warned that a crisis before 2015 involving “an abrupt run-up in prices” could not be ruled out.

Well, yes.

Which brings us back to that gun.  

Analysts say that without Iran and Iraq – where nearly 30 years of wars and sanctions have crippled oil production – reaching that level will be impossible.

Iraq and Iran hold the second and fourth largest oil reserves in the world, respectively, and it is possible that Iraq actually holds the largest.  Their reserves have not been needed up to now.  But it does not take a Kreskin to know that they will be needed in the first half of the 21st century.  It does not take a Kreskin, and it did not take a Kreskin in 2003, either, when the US invaded Iraq.

How do you control the 21st century?  You control Iraq and Iran.  It was nice of the NYT to say as much, even if it was in paragraph 25 of the article.

The situation is dire.  The future of the world, the extent to which humanity escapes the 21st century alive, depends to no small extent on the United States deciding it does not need to control the 21st century.  The question is not one of whether the United States will be merely dominant in the 21st century.  There are no reserves left to fuel a superpower in anything like the old paternalistic model.  There is not enough fuel for both the world’s policeman and the world’s citizens.  The question, rather, is one of whether or not the United States, in its desire to be dominant, will find it has no choice but to exclude, to starve, to bomb, to crush.  

The US can either accept that there is no room — and more importantly no time — left for a superpower, or else it can go on one last crusade.  One last globe-trotting, militaristic hurrah.  This one last time, should it come, will be — will have to be — unspeakable in its scope and ruin.

We can become citizens of the world, working together with the rest of the peoples of the world to solve a problem that can no longer be skirted.  Or we can have one final ride; thinking ourselves the world’s superpower, unassailable in our military superiority.  

Will our Presidential candidates address this?  Will Obama, will Clinton, address this?  Clinton has made her position more-or-less clear.  She would put the Middle East under a 21st century Monroe Doctrine — a nuclear “umbrella” purportedly to “protect” the Middle East from Iran; but in reality, to anyone who cares to notice, to signal to the world that the Middle East is ours as the reserves run out.  

Obama?  I honestly don’t know.  He may have the requisite courage and imagination to keep us out of an entirely foreseeable hell.  But then again he may not.  If he does, he may well become the single most important President in the history of the country.  Not just for the country, but for the world.

Or, he won’t.  In that case, the future is clear.  We will continue to pretend that “dominance” is needed for “security” . . . when in fact dreams of dominace in the twilight of the oil age guarentees the end of securtiy.  The United States will hold onto its dominance for as long as it can.  And that will last until, perhaps, 2040.  And then there will be nothing left but hell to pay.

40 comments

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  1. at the Big Orange.

    • pfiore8 on April 29, 2008 at 7:41 am

    with the rest of the world to stop this madness?

  2. The country that controls the future of Iraq and Iran, controls the world for the next 40 or so years.

    Assuming the rest of the world is so stupid as not to get themselves off oil addiction.

  3. Even if he wants to, he will not be able to. Wall Street, Big Oil (Exxon, Chevron, BP and Shell) and the MIC determine our agenda, making sure our “national interests” are maintained. Obama might make their life a bit difficult but he will not be able to make any significant changes in direction. Hillary or McCain would be much more cooperative.

    From The Guardian 28 April: http://www.guardian.co.uk/feed

    BAGHDAD, April 28 (Reuters) – Iraq may have oil reserves of 350 billion barrels, Deputy Prime Minister Barham Salih said on Monday, a massive figure that is triple the country’s proven reserves and which even exceeds the oil in Saudi Arabia.

    Salih said he had seen estimates from “reputable sources, reputable companies” that put Iraq’s reserves at up to 350 billion barrels. He declined to name the sources.

    Iraq’s current proven reserves are 115 billion barrels, already the world’s third largest. The country produces around 2.3 million barrels of oil per day (bpd).

    “The real tragedy of this country is that Iraq is home to possibly the world’s largest oil reserves. Some estimates put it at 350 billion barrels,” Salih, a key player in attempts to finalise a draft national oil law, told Reuters in an interview.

    “Extraction costs are very minimal compared to anywhere else in the world and we are still at 2 million barrels a day of exports. It’s ridiculous.”

    Saudi Arabia has about 264 billion barrels of oil, according to statistics compiled by BP. Iran is next with around 137 billion barrels then Iraq with 115 billion.

    If this is true, Iraq is prize number 1, Iran is prize number 2. Saudi already does as we wish and rumors have it Saudi oil production has already peaked.

    Our intentions were, from the very beginning, to stay – huge new embassy, “enduring” bases and puppet government with an elected parliament that is largely for show, similar to our congress in Washington.

    100 years, indeed – unless there are drastic changes in the US system.  

  4. our way.

    If Obama makes it to the White House and does at least some of what he must know needs to be done, and if we can get enough progressives in Congress over the next 2-3 election cycles, we can limit the damage.

    But it’s hard to be optimistic, there’s so many ticking time bombs–global warming, resource depletion, food shortages, and way too many assholes in government, corporate boardrooms, and  the media.  

    Great essay, LithiumCola.

    • Edger on April 29, 2008 at 1:55 pm

    nor anyone else who might become president, will have any choice about whether the US goes on “on one last crusade.  One last globe-trotting, militaristic hurrah.”  Whoever becomes president may very well be ordered to do it, as all presidents have been ordered for the last 60 odd years or more.

    During and after World War II, the region became a primary object of U.S. foreign policy. It was then that policymakers realized that the Middle East was “a stupendous source of strategic power, and one of the greatest material prizes in world history.”[4]

    Subsequently, as a result of cooperation between the U.S. government and several American oil companies, the United States replaced Great Britain as the chief Western power in the region.[5] In Iran and Saudi Arabia, American gains were British (and French) losses.[6] Originally, the dominant American oil interests had had limited access to Iraqi oil only (through the Iraq Petroleum Company, under the 1928 Red Line Agreement). In 1946, however, Standard Oil of New Jersey and Mobil Oil Corp., seeing the irresistible opportunities in Saudi Arabia, had the agreement voided.[7] When the awakening countries of the Middle East asserted control over their oil resources, the United States found ways to protect its access to the oil. Nearly everything the United States has done in the Middle East can be understood as contributing to the protection of its long-term access to Middle Eastern oil and, through that control, Washington’s claim to world leadership. The U.S. build-up of Israel and Iran as powerful gendarmeries beholden to the United States, and U.S. aid given to “moderate,” pro-Western Arab regimes, such as those in Saudi Arabia, Kuwait, and Jordan, were intended to keep the region in friendly hands. That was always the meaning of the term “regional stability.”



    “The most serious threats may emanate from internal changes in the gulf states,” a congressional report stated in 1977.[9] Robert W. Tucker, the foreign policy analyst who advocated in the 1970s that the United States take over the Middle Eastern oil fields militarily, predicted that the “more likely” threat to U.S. access to the oil would “arise primarily from developments indigenous to the Gulf.“[10] The rise of Arab nationalism or Muslim fundamentalism, or any other force not sufficiently obeisant to U.S. interests, would threaten American economic and worldwide political leadership (and the profits of state-connected corporations). As Tucker wrote, “It is the Gulf that forms the indispen-sable key to the defense of the American global position.”[11] Thus, any challenge to U.S. hegemony had to be prevented or at least contained.[12] As Secretary of State John Foster Dulles said privately during the Lebanese crisis in 1958, the United States “must regard Arab nationalism as a flood which is running strongly. We cannot successfully oppose it, but we could put sand bags around positions we must protect–the first group being Israel and Lebanon and the second being the oil positions around the Persian Gulf.”[13]

    The government sought foreign sources of oil during World War II because it believed U.S. reserves were running out. Loy Henderson, who in 1945 was in charge of Near Eastern affairs for the State Department, said, “There is a need for a stronger role for this Government in the economics and political destinies of the Near and Middle East, especially in view of the oil reserves.”

    –“Ancient History”: U.S. Conduct in the Middle East Since World War II and the Folly of Intervention

    We are not, at the beginning of the fall, but very near the end…

  5. Last I heard, the International Longshore and Warehouse Union (ILWU) is going to strike on May 1 to protest the war:

    On May 1, all 29 ports on the U.S. West Coast are to be shut down by the International Longshore and Warehouse Union (ILWU) in protest against the U.S. war on Afghanistan and Iraq. The Bay Area ILWU local was the first American union to condemn the war. In April 2003, as invading U.S. troops reached Baghdad, six longshoremen were injured and a union official was arrested as police fired on hundreds of antiwar protesters in the port of Oakland.

    Our learned helplessness is what makes imperialism possible.

    Waking up from that is what will stop it.

  6. But the curious thing about the Times article is that it reports all this as if it were some sort of surprise to the world oil production community.  As if this information has not been known, and well know, for years, by those whose business it is know it.

    Any surprise why information about Cheney’s energy task force needed to be kept secret. I think you probably just spelled out the exact conversation pretty clearly.  

  7. in their quiver of reasons to wreck the Alaskan wilderness.

  8. a lot of people. When the war started, I think most knew that it was about the oil. The Munroe Doctrine and Manifest Destiny are both alive and well. The conversations I overheard socially were all about ‘Gotta keep that oil flowing’ from not only the supporters but those who were against it.

    “Lifestyles” were threatened by the reality of unsustainable consumption, and our right to the worlds resources both human and natural. The only hope I see is that it is not working out for anyone but the shortsighted insane profit corporations. The political will is not there yet as people are not willing to give up there cherished dreams, which are destructive both globally and individually. Security my ass.    

             

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