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World Focus: Blood and oil
Posted on Thursday, October 17 @ 14:54:30 UTC
Topic: Oil rig and Tanker
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 Guardian UK
Europe and America are taking increasingly divergent approaches to the unreliability of the Middle Eastern petroleum supply - one green, the other unrepentantly black, writes Randeep Ramesh
The question of whether oil is worth spilling blood over has been quietly raised by the foreign office minister, Peter Hain. In a speech today to the Royal United Services Institute in London, Mr Hain notes that the cost of protecting the Middle East's oil reserves, paid for mostly by the US and without which the west would grind to a halt, is as high as $25 (£16) a barrel - about the same as it costs to buy. Mr Hain, seen as an outrider for Blairite thinking, goes on to warn that no amount of money will guarantee petrol supplies to the west and consumers should be weaning themselves off the black stuff.
At present the world remains so dependent on oil for transport, it cannot stand any disruption in supplies. Remember the chaos and gridlock that the fuel protests brought to Britain? Tony Blair does and now recognises the explosive nature of rising petrol prices.
The potency of the oil weapon is not lost on Osama bin Laden, either, who has stated that crude oil should sell at $144 a barrel - about five times the price at which it currently trades. The attack on the Limburg oil tanker off Yemen's coast may prove to be al-Qaida's first targeting of the global economy.
The Bush administration prefers not to discuss the economic effects of the war on terrorism as this could sap support domestically and abroad, especially in the Arab world where critics suspect, with good reason, the US of wanting to seize its vast petroleum riches. Instead the White House prefers to talk about imposing democracy and ridding the world of weapons of mass destruction. These are noble aims, but they are undermined by leaks suggesting a bolder grab for oil riches.
Mr Bush's senior adviser on the Middle East, Zalmay Khalilzad, has pushed the idea of a post-Saddam Iraq as a colonial outpost of the American empire. Its large oil reserves, second only to Saudi Arabia, could be tapped more efficiently than at present and pay for the 75,000 troops required to administer the new Iraq. This both overestimates the ease of producing oil from a battle-scarred Iraq, which only manages to pump 1m barrels a day, and underestimates the risk of a global financial shock, a serious concern given that the last three big global recessions have been preceded first by a crisis in the Middle East followed by a spike in the oil price.
While bombing Iraq would not in itself cause the oil price to rise sharply, an attack by Saddam on Saudi or Kuwaiti oil fields or an uprising in Riyadh would. The loss of, say, 5m barrels a day of oil production cannot be made up quickly or easily. A big crude producer paralysed by revolution can see production fall precipitously because its workforce is out on the streets rather than manning the taps in the terminal. This is what happened in Iran during the 1979 revolution. Iranian oil production fell from 6m barrels a day to 3m and never recovered. If the same happened in Saudi Arabia, the world would see oil prices spurt upwards.
America's addiction to oil is difficult for Europeans to stomach. It is not just the consumption - a US citizen consumes 2.5 times the oil required by a British one - but the differing cultural and political beliefs of two continents. For example, green parties hold power in several nations, notably Germany, whereas Mr Bush's administration prides itself on being drawn from the oil industry. The EU has already committed itself to seeing 12% of all energy by 2010 coming from low-carbon, renewable sources in a bid to prevent climate change. Although the US Congress is considering a proposal to require utilities to supply 10% of power from renewables, the White House is suspicious of the theory of global warming and refuses to sign up to international treaties on climate change.
European politicians are increasingly concerned over the reliance on oil and gas imports from unstable regions. As production from Britain and Norway decreases, Europe will have to import more of its petroleum. More than 92% of the continent's oil and 81% of its gas will come from abroad by 2030 - putting the continent at the mercy of Opec and a nascent gas cartel led by Russia, Iraq and Algeria. The message from Europe is the need to move faster to renewable energies - more than 2bn euros will be spent on green fuels such as hydrogen in the next three years.
The US response is to build up its strategic reserve of oil, prospect for new fields in Alaska and consider launching a war for control of the world's biggest petrol pump. Given the diverging paths taken by the two power blocs, America should be wary of taking Europe's support for its military adventures for granted.
Reproduced from:
http://www.guardian.co.uk/oil/story/0,11319,813965,00.html
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| Article Rating | Average Score: 5
Votes: 1
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Drowning Freedom in Oil (Score: 1)
by Ayinde on Monday, October 21 @ 20:26:53 UTC
(User Info ) http://www.rastatimes.com | By THOMAS L. FRIEDMAN, August 25, 2002 www.nytimes.com
On a recent tour of India, I was visiting with an Indian Muslim community leader, Syed Shahabuddin, and the conversation drifted to the question of why the Muslim world seems so angry with the West. "Whenever I am in America," he said, "people ask me, `Why do they hate us?' They don't hate you. If they hated you, would they send their kids to be educated by you? Would they look up to you as a model? They hate that you are monopolizing all the nonrenewable resources [oil]. And because you want to do that, you need to keep in power all your collaborators. As a consequence, you support feudal elements who are trying to stave off the march of democracy."
The more I've traveled in the Muslim world since 9/11, the more it has struck me how true this statement is: Nothing has subverted Middle East democracy more than the Arab world's and Iran's dependence on oil, and nothing will restrict America's ability to tell the truth in the Middle East and promote democracy there more than our continued dependence on oil.
Yet, since Sept. 11, the Bush-Cheney team has not lifted a finger to make us, or the Arab-Islamic world, less dependent on oil. Too bad. Because politics in countries dependent on oil becomes totally focused on who controls the oil revenues — rather than on how to improve the skills and education of both their men and women, how to build a rule of law and a legitimate state in which people feel some ownership, and how to build an honest economy that is open and attractive to investors.
In short, countries with oil can flourish under repression — as long as they just drill a hole in the right place. Think of Saudi Arabia, Libya or Iraq. Countries without oil can flourish only if they drill their own people's minds and unlock their energies with the keys of freedom. Think of Japan, Taiwan or India.
Do you think the unpopular mullahs in Iran would be able to hold power today if they didn't have huge oil revenues to finance their merchant cronies and security services? Do you think Saudi Arabia would be able to keep most of its women unemployed and behind veils if it didn't have petrodollars to replace their energies? Do you think it is an accident that the most open and democratizing Arab countries — Lebanon, Jordan, Bahrain, Morocco, Dubai and Qatar — are those with either no oil or dwindling oil reserves? They've had to learn how to tap the talents of their people rather than their sand dunes.
The Pentagon is now debating whether Saudi Arabia is our enemy. Yes and no. There is a secularized, U.S.-educated, pro-American elite and middle class in Saudi Arabia, who are not America's enemies. They are good people, and you can't visit Saudi Arabia without meeting them. We should never forget that.
But the Saudi ruling family stays in power not by a democratic vote from these progressives. It stays in power through a bargain with the conservative Wahhabi Muslim religious establishment. The Wahhabi clerics bless the regime and give it legitimacy — in the absence of any democratic elections. In return, the regime gives the Wahhabis oil money, which they use to propagate a puritanical version of Islam that is hostile to the West, to women, to modernity and to all non-Muslim faiths.
This bargain suits the Saudi rulers well. If they empowered the secularized, pro-American Saudis, it would not be long before they demanded things like transparency in budgeting, accountability and representation. The Wahhabi religious establishment, by contrast, doesn't care how corrupt the ruling family is in private — as long it keeps paying off the clerics and gives them a free hand to impose Wahhabi dogma on Saudi society, media and education, and to export it abroad.
So while there are many moderate Saudis who do not threaten us, there is no moderate Saudi ruling bargain. The one that exists does threaten us by giving huge oil resources to the Wahhabi conservatives, which they
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