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The Energy Emergency (opinion by editor)
Mortimer B. Zuckerman, U.S. News & World Report
Oil is America’s Achilles heel. WE are addicted to it. Every American consumer burns about double what a European consumes-26 barrels a year for us, 12 for Europeans. We have 5 percent of the world’s population and consume 25 percent of the world’s oil, and we have only 3 percent of the world’s reserves. If you think there is a gas crunch now, marked by the largest oil price spike in a generation, it will be a bagatelle when China and India bring a couple of billion more people on to their highways: They are replicating our love affair with the automobile. Expect them within a generation to buy 80 million cars.
We are in a new world order. The balance of power has shifted between the fuel-guzzling West and the oil-rich producing countries. They have increasing leverage over us, with political, economic, and military consequences. We are literally over a barrel.
Here’s how the chips fall. After World War II, the oil world was dominated by the “Seven Sisters,” the name given to the oil companies controlling Middle East oil. These have shrunk to four: Chevron, British Petroleum, Exxon Mobil, and Royal Dutch Shell. They have been pushed aside by seven state-owned national companies, Seven Brothers, if you like: Saudi Arabia’s Aramco, Russia’s Gazprom, CNPC of China, NIOC of Iran, Venezuela’s PDVSA, Brazil’s Petrobras, and Petronas of Malaysia. The Seven Brothers control almost a third of the world’s oil and gas production and more than a third of its total oil and gas reserves. By contrast, the survivors of the Seven Sisters control only about 10 percent of output and hold just 3 percent of the reserves. The Brothers are the rule makers, the international oil companies the rule takers. It is not going to change. In the next 40 years, 90 percent of new supplies, according to the International Energy Agency, will come from developing countries. Thirty years ago, 40 percent came from the industrialized nations.
Massive consequences. Nor is oil discovery keeping pace with demand.
…The net effect of all this is that the world is going to be even more energy dependent on the Organization of Petroleum Exporting Countries and Russia. Keeping oil safe for the West once meant safeguarding supply lines from the Middle East. Now we have to build alliances and deploy ships and troops to protect other supply routes outside the Middle East, going as far as the Caspian Sea, the Andean region of South America, and West Africa.
(2 September 2007)
Author Mortimer Zuckerman “is the editor-in-chief of U.S.News & World Report. He is also chairman and copublisher of the New York Daily News and has substantial real-estate holdings, including properties in Boston, New York, Washington, and San Francisco.”
Iraq, Oil, Law And Order (News round-up)
Big Gav, Peak Energy
The Gulf Daily News has a report claiming that the Iraqi deputy PM believes that proposed Iraq oil law will be signed into law shortly – just in time for the conference in Dubai that will carve up the “undiscovered oil” between the various international oil companies.
The International Herald Tribune has a letter from a French reader asking everyone to wake up and understand what this law really means – it means the Iraq invasion was about the oil.
…”The Control Of Oil” is such a commonly used phrase when it comes to the Iraq war that I wish everyone who wants to claim the war isn’t about the oil had read the book before they start sounding off – its almost impossible to convince garden variety neocons that this really is just the latest in a long line of our oil wars in Iraq over the past century (and I’ve tried this on quite a few occasions) – even if they know nothing of the history of oil or the history of Iraq they’ll just parrot the standard propaganda lines about (non existant) weapons of mass destruction or spreading “freedom and democracy” (while still backing any American politician who calls for the new Iraqi government to be replaced whenever it doesn’t do what it is told) and ignore both history and common sense.
There were 3 particular items which came to mind when I first read about the proposed oil law – John Blair’s comments about old oil discoveries in Iraq being suppressed (back in the days when oil was in gross oversupply rather than the more balanced supply / demand situation of recent years), the maps of Iraq that were some of the few artifacts to emerge from Dick Cheney’s secretive “energy taskforce” meetings back in 2000 and Daniel Yergin’s description of Iraq as “the greatest prize in all history”.
(3 September 2007)
A big collection of recent links and article excerpts on the Iraq-oil connection. -BA
