It is a mantra of the globalization crowd. In today’s global economy, we are told, all that really matters is which country produces the best brains and skills. The world is flat, after all. The playing field is leveled. Wrong, wrong and wrong. What also matters, we are learning, is who controls the world’s energy resources.
Evo Morales’s abrupt decision earlier this week to nationalize Bolivia’s natural-gas industry was only the latest worrisome move in a long-term trend. Morales, a leftist elected president last December, was apparently influenced by a meeting he had in Havana last Saturday with Venezuelan President Hugo Chavez, who’s rocketed to international prominence by doing much the same thing to his country’s oil industry.
…The would-be czar of this new global energy elite is Vladimir Putin. Having spent the better part of his six years in office wresting control of his nation’s vast oil and gas resources, the Russian president is now playing a brass-knuckle game of power politics.
…Today, oil and gas experts around the world are growing alarmed not just at future scarcity—the idea that the world may have hit “peak oil” seems to be taking hold—but at who’s in control of the precious stuff. As demand for energy explodes worldwide, there is less of it available and less exploration for it.
…What does it all mean? “Welcome to the age of energy insecurity,” says [J. Robinson West, head of Petroleum Finance Corp.], a former Reagan administration official (and friend of Dick Cheney’s, the man who once dismissed energy conservation as a “personal virtue”). “Worldwide production will peak. The result will be skyrocketing prices, with a huge, sustained economic shock. Jobs will be lost. Without action, the crisis will certainly bring energy rivalries, if not energy wars. Vast wealth will be shifted, probably away from the U.S. For the last 20 years, U.S. policy has discouraged production and encouraged consumption. If we dither any more, we will pay a terrible price, the economic equivalent of a Category 5 hurricane. Katrina was Category 4.”
Washington appears as helpless in preparing for this crisis as it did in anticipating Hurricane Katrina. As we have seen in recent weeks, Congress is still dithering over such silly proposals as a $100 rebate to gasoline customers. But Republican leaders are balking at sponsoring proposals that could really make a difference, like a new gasoline tax that would change U.S. consumption habits and a serious increase in CAFE (corporate average fuel-economy) standards, which require automakers to meet an average mileage requirement.
With the GOP facing a bitter fight for control of the Congress later this year, such measures are considered too politically painful. There could be a lot more pain for Americans down the road, however, at the hands of Putin and his energy-rich allies.
