[Mb-civic] No Escape From Dependency

Thu Dec 9 22:05:55 PST 2004

No Escape From Dependency

By Michael Klare, Tomdispatch.com
 Posted on December 9, 2004, Printed on December 9, 2004
 http://www.alternet.org/story/20701/

When George W. Bush entered the White House in early 2001, the nation was
suffering from a severe "energy crisis" brought on by high gasoline prices,
regional shortages of natural gas and rolling blackouts in California. Most
notable was the artificial scarcity of natural gas orchestrated by the Enron
Corporation in its rapacious drive for mammoth profits. In response, the
president promised to make energy modernization one of his top concerns.

However, aside from proposing the initiation of oil drilling in Alaska's
Arctic National Wildlife Refuge, he did little to ameliorate the country's
energy woes during his first four years in office. Luckily for him, the
energy situation improved slightly as a national economic slowdown depressed
demand, leading to a temporary decline in gasoline prices. But now, as Bush
approaches his second term in office, another energy crisis looms on the
horizon  one not likely to dissipate of its own accord.

The onset of this new energy crisis was first signaled in January 2004, when
Royal Dutch/Shell  one of the world's leading energy firms  revealed that
it had overstated its oil and natural gas reserves by about 20 percent, the
net equivalent of 3.9 billion barrels of oil or the total annual consumption
of China and Japan combined.

Another indication of crisis came only one month later, when the New York
Times revealed that prominent American energy analysts now believe Saudi
Arabia, the world's largest oil producer, had exaggerated its future oil
production capacity and could soon be facing the wholesale exhaustion of
some of its most prolific older fields. Although officials at the U.S.
Department of Energy (DoE) insisted that these developments did not
foreshadow a near-term contraction in the global supply of energy, warnings
increased from energy experts of the imminent arrival of "peak" oil  the
point at which the world's known petroleum fields will attain their highest
sustainable yield and commence a long, irreversible decline.

How imminent that peak-oil moment may in fact be has generated considerable
debate and disagreement within the specialist community, and the topic has
begun to seep into public consciousness. A number of books on peak oil 
"Out of Gas" by David Goodstein, "The End of Oil" by Paul Roberts, and "The
Party's Over" by Richard Heinberg, among others  have appeared in recent
months, and a related documentary film, "The End of Suburbia," has gained a
broad underground audience.

As if to acknowledge the seriousness of this debate, the Wall Street Journal
reported in September that evidence of a global slowdown in petroleum output
can no longer be ignored. While no one can say with certainty that recent
developments portend the imminent arrival of peak oil output, there can be
no question that global supply shortages will prove increasingly common in
the future.

Nor is the evidence of a slowdown in oil output the only sign of an
unfolding energy crisis. Of no less significance is the dramatic increase in
energy demand from newly-industrialized nations  especially China. As
recently as 1990, the older industrialized countries (including the former
Soviet Union) accounted for approximately three-quarters of total worldwide
oil consumption. But the consumption of petroleum in developing nations is
growing so rapidly  at three times the rate for developed countries  that
it is soon expected to draw even.

To meet the needs of their older customers and satisfy the rising demand
from the developing world, the major oil producers will have to boost
production at breakneck speed. According to the DoE, total world petroleum
output will have to grow by approximately 44 million barrels per day between
now and 2025  an increase of 57 percent  to satisfy anticipated world
demand. This increase represents a prodigious amount of oil, the equivalent
to total world consumption in 1970, and it is very difficult to imagine
where it will all come from (especially given indications of a global
slowdown in daily output). If, as appears likely, the world's energy firms
prove incapable of satisfying higher levels of international demand, the
competition among major consumers for access to the remaining supplies will
grow increasingly more severe and stressful.

To further complicate matters, many of the countries the Bush administration
considers potential suppliers of additional petroleum, including Angola,
Azerbaijan, Colombia, Equatorial Guinea, Iran, Iraq, Kazakhstan, Nigeria,
Saudi Arabia and Venezuela, are torn by ethnic and religious conflict or are
buffeted by powerful anti-American currents. Even if these countries possess
sufficient untapped reserves to sustain an increase in output, as long as
they remain chronically unstable, the desired increases are unlikely to
appear.

After all, any significant increase in day-to-day energy output requires
substantial investment in new infrastructure  investment that is not likely
to materialize in countries suffering from perpetual disorder. At best,
production in such countries will remain flat or rise sluggishly; at worst,
as in Iraq today, it may even threaten to fall. Indeed, the persistence of
political turmoil in countries like Angola, Colombia, Iraq, Nigeria and
Venezuela has largely been responsible for the higher gasoline prices still
evident, despite recent modest decreases, at the neighborhood pump.

If anything, the potential for conflict in such countries is likely to grow
as demand for their petroleum rises. The reason is simple. Increased
petroleum output in otherwise impoverished nations tends to widen the gap
between haves and have-nots  a divide that often falls along ethnic and
religious lines  and to sharpen internal political struggles over the
distribution of oil revenues. Because the wealth generated by oil production
is so vast, and because few incumbent leaders are willing to abandon their
positions of privilege, internal struggles of this sort are prone to trigger
violent clashes between competing claimants to national power.

In many cases, these clashes may take the form of attacks on the oil
infrastructure itself, further jeopardizing the global availability of
energy. As shown in Colombia and Iraq, where raids on oil pipelines and
pumping stations have become a near-daily occurrence, such infrastructure 
stretched out over miles and miles of jungle or desert  represents an
unusually vulnerable and inviting target for terrorism. Not only do such
attacks deprive the prevailing regime of vital revenues, but they also
constitute an assault on the United States and the large multinational
corporations that are deemed responsible for so many of the developing
world's afflictions.

With oil demand regularly outpacing supply and disorder spreading in major
producing areas, global shortages and resulting high prices are likely to
become the norm, not the exception. Ideally, the United States could
compensate for any shortfalls in the global availability of petroleum by
increasing its reliance on other sources of energy. When producing
electricity, for example, it is often possible to switch from coal to
natural gas and back again.

But most of our petroleum supplies are used in transportation  mainly to
power cars, trucks, buses, and planes  and, for this purpose, oil has no
readily available substitutes. Indeed, we have so organized our economy and
society around the availability of cheap and abundant petroleum that we are
severely ill-equipped to deal with the sort of shortages and supply
disruptions that are likely to become the norm in the years ahead.

It is here that the performance of the Bush administration should come in
for close scrutiny. In response to the earlier energy crisis of 2001, the
president appointed a National Energy Policy Development Group (NEPDG),
headed by Vice President Dick Cheney, to analyze America's energy
predicament and devise appropriate solutions. The NEPDG issued its final
report, the National Energy Policy (also known as the Cheney Report), in
May, 2001.

How the group arrived at its final assessment is a matter of some
speculation, as the administration has refused to make its deliberations
public, but its conclusions are incontrovertible: rather than stress
conservation and the rapid development of renewable energy sources, the
report called for increased U.S. reliance on petroleum. And because domestic
oil production is in an irreversible decline, any rise in American oil usage
necessarily entails an increased reliance on imported petroleum.

In a crude attempt to mislead the public about the nature of our oil
dependency, the Cheney Report called for increasing U.S. energy
"independence" by exploiting the untapped oil reserves of Alaska's Arctic
National Wildlife Refuge (ANWR) and other protected wilderness areas. But
ANWR only possesses sufficient petroleum to provide this country with (at
most) 1 million barrels per day for an estimated 15-20 years, a tiny
fraction of the 20 million barrels of additional oil that will be needed to
supplement domestic output in 2025.

What this suggests is that the overwhelming bulk of this additional energy
will have to be acquired from foreign sources. To obtain all this imported
energy, the Cheney Report calls on the president and his chief associates to
place a high priority on acquiring additional petroleum from producers in
the Persian Gulf, the Caspian Sea basin, Africa and Latin America  that is,
from regions especially susceptible to instability and anti-Americanism.

As a result, we are more dependent on foreign oil in 2004 than we were in
2001, and all the indicators suggest that this dependency will only become
more pronounced during Bush's second term. Yes, the administration has
proposed modest investment in the development of hydrogen-powered fuel cells
and other new energy systems; but, at current rates of development, these
new technologies will not prove capable of substituting for oil on a
significant scale during the next few decades. This means that we will face
our looming energy crisis with no viable fallback measures in sight. We
remain trapped in our dependence on imported oil. In the long run, the only
conceivable result of this will be sustained crisis and deprivation.

When, and in just what form, the United States enters the coming energy
crisis cannot be foreseen. Perhaps it will be provoked by a coup d'état in
Nigeria, a civil war in Venezuela or a feud among senior princes in the
Saudi royal family (possibly brought on by the impending death of King
Fahd). Or it could be thanks to a major act of terrorism or a catastrophic
climate event. Whatever the case, our existing energy system, already
stretched to its limits, will not be able to absorb a major blow like this
without considerable readjustment and pain  or worse.

While President Bush is likely to respond to a new energy crisis, as he has
in the past, with renewed calls for drilling in ANWR and the further
relaxation of U.S. environmental standards, nothing he has proposed to date
even suggests a viable exit strategy from perpetual crisis.