| Submit your comments on this article |
| Home Front: Politix |
| Why We're in the Gulf |
| 2007-12-28 |
| A really good background piece on why the U.S. has long concerned itself with the Persian Gulf region, with lots of hard numbers on the production and consumption of oil by America and others. Teaser exerpts -- go read the whole thing. Hat tip Lucianne.com Few subjects matter as much as oil, the Persian Gulf and American foreign policy. But few subjects are less well understood. Even relatively sophisticated observers will attribute American interest in the Persian Gulf to Uncle Sam's insatiable thirst for crude, combined with an effort to gain lucrative contracts for American oil firms. The U.S. on this view is something like a global Count Dracula, roaming the earth in search of fresh bodies, hoping to suck them dry. I'm willing to be known as relatively sophisticated. It's a step up from naive, after all. ;-) The next bit surprised me, but then I'm not terribly knowledgeable about things financial. The U.S. today depends on the Middle East for only a small portion of its energy supplies. Still the world's third largest oil producer and holding large coal reserves, America is significantly less dependent on foreign energy sources than the other great economies. Imports account for 35% of U.S. energy consumption versus 56% for the European Union and 80% for Japan. Nearly half the oil and all the natural gas imported by the U.S. comes from the Western Hemisphere; sub-Saharan Africa supplies most of the balance. Only 17% of U.S. oil imports and less than 0.5% of our natural gas come from the Persian Gulf; 80% of Japan's imports come from the Gulf, and by 2015 70% of China's oil will come from the same source. The oil market, of course, is global, and if something were to happen to the Middle Eastern supplies, prices would rise world-wide, and the U.S. economy would be seriously disrupted. But domestic supply is not the key to American interest in the Gulf. Although I s'pose there are those who'd say that so long as our companies get to pump it out of the ground, we don't care who actually uses it... but I'm under the impression that U.S. companies aren't nearly as much of the pumping in the Gulf as they used to. For the past few centuries, a global economic and political system has been slowly taking shape under first British and then American leadership. As a vital element of that system, the leading global power -- with help from allies and other parties -- maintains the security of world trade over the seas and air while also ensuring that international economic transactions take place in an orderly way. For this system to work, the Americans must prevent any power from dominating the Persian Gulf while retaining the ability to protect the safe passage of ships through its waters. The Soviets had to be kept out during the Cold War, and the security and independence of the oil sheikdoms had to be protected from ambitious Arab leaders like Egypt's Gamal Abdel Nasser and Iraq's Saddam Hussein. During the Cold War Americans forged alliances with Turkey, Israel and (until 1979) Iran, three non-Arab states that had their own reasons for opposing both the Soviets and any pan-Arab state. |
| Posted by:trailing wife |
| #6 But we aren't really in the Gulf for our own need for oil, if currently only 35% of what we use comes from imports, and only 17% of that from the Gulf. (According to my daughter's calculator, that makes 6% coming from the Persian Gulf). Yes, oil is a fungible commodity, but surely that makes U.S. dependence less rather than more, as we buy from abroad when it's cheaper, and use more of our own when more expensive. And certainly we can't force the other major consumers, whose major suppliers are in the Gulf, to stop sending their money there... after all, some are the countries that haven't even tried to meet the Kyoto CO2 reduction commitments they've been so enthusiastic about, and the others are rapidly growing economies. The new battery technologies will likely cut significantly into whatever percent of our oil consumption used for transport and travel, and likely that of the other First World countries... but not that of China and India, until their economies mature to the point where they can afford the upcharge for such fripperies. This piece was printed yesterday on page A-11 of the Wall Street Journal, not exactly the reading material of the financially naive. Why do you suppose the writer decided to so address that particular audience, and why do you suppose the WSJ editors chose to publish it? |
| Posted by: trailing wife 2007-12-28 18:36 |
| #5 Steve and Verlaine are basically correct. The only way to do without oil in its current quantity is be replacing it with technologies (vehicular in particular) that don't need oil but accomplish the same thing. Just like coal replaced wood 200 years or more ago electricity will replace oil. BUT, while nuclear and coal can replace the generation of electicity it is not portable like oil so your car can't run on it efficiently. When the electric vehicle (or hydrogen which is a whole nother topic) infrastructure can match or exceed the oil based infrastructure, then we'll be on to something as demand for oil and its importance will wane. Till then, no and then ain't too soon. |
| Posted by: AlanC 2007-12-28 13:38 |
| #4 Bravo, Verlaine. Well-written! Even if we (the U.S.) built several hundred nuclear reactors in the next twenty years, we'd make only a marginal dent in our need for oil. Sure, we'd have plenty of electricity, but that's a smaller part of the energy need here. We need oil for the vehicles and for industry; coal and nuclear power simply won't do. And 'alternative' energy so far is a pipe-dream and a scam (though a profitable one, ask Archer-Daniels Midland). Oil is fungible. It's a commodity. The profits go to those who pump it cheap and sell it large. And the only way to reduce the money flowing to the Middle East is to discover enough oil elsewhere, oil that can be pumped cheap and sold in millions of barrels a day, to make a difference. That (very likely) isn't happening (don't talk about oil shales). So we're stuck. We're stuck on oil. Question is, are we also stuck on stupid? |
| Posted by: Steve White 2007-12-28 13:13 |
| #3 Anyone who is "relatively sophisticated" who still cannot figure things out suffers from the widespread problems of inability to reason and economic illiteracy. That oil is a global commodity that is key to all industrial economies is enough for anyone who can in fact reason to understand its importance. I can think of no other issue (there must be some - just haven't struck me) like this one, however, in that the conventional public wisdom, from Dubya on down to academic twits and ordinary non-political citizens, is fundamentally illiterate: that we should seek "energy independence", or that such a thing has any real meaning. This made no sense whatsoever (economically, technically, or strategically) before 9/11 - after those attacks, it is simply astonishing that anyone can continue to think that it's a question of physical commodity access, in a globalized economy with proliferation of weapons technologies. It's about power, and security, and prosperity, and the laws of economics apply to energy as to anything else. No feasible transition in energy technologies will change the importance of oil to economic security (including our own) for a very long time, no imaginable changes or policies will make our security less dependent on engagement with the outside world. No conceivable marginal change in oil consumption patterns and prices will produce an effect on producing countries sufficient to "de-fund" their efforts, conventional or otherwise, to oppose and hurt us - Friedman's illiterate ravings notwithstanding. I've not the slightest concern that in fact the US will actually adopt any pointless and wasteful policies in this regard, as people's economic common sense puts a speed bump in the way (same as with the global climate scam). We could impose a net reduction in economic welfare on ourselves by somehow reducing use of the best commodity (oil) other than through market pricing. This sacrifice of wealth-creation would accomplish precisely nothing WRT all the other issues - security, terrorism, global competitiveness, involvement in the MidEast - as the rest of the world continues on the whole to act rationally (using oil as it is currently used) or perversely (using the undiminished proceeds from oil to fund terrorism, anti-US actions in Iraq/Afghanistan/Africa/etc., wahhabi madrassahs). The percentage of our oil imports from the Gulf could triple, or drop to nothing, and there would be no effect on these calculations. If one doesn't see that, then one doesn't even understand the issues under consideration. |
| Posted by: Verlaine 2007-12-28 12:05 |
| #2 When we invaded Iraq and Afghanistan we blocked the Russians from selling there oil cheaply to the Euro's, this is why Putin,France, and Germany are pissed at us. They can only sell to us and buy our high priced crude. Why do you think we sent paratroopers into the north for control of the Russian pipeline and the Brits got basra to protect BP's interest at that port. BP=Standard Oil US company 1 the rest of the world 0. I like it that way. Our nation was once on a Gold Stanard now an oil standard, next is Nuke standard. We have a lockdown on the oil, now we need to control the Nuke standard. |
| Posted by: Ho Chi Theresh4727 2007-12-28 10:44 |
| #1 A world of insecure and suspicious great powers engaged in military competition over vital interests would not be a safe or happy place. Ya, unlike the wonderful World---where Russia and China doing everyng they can to sabotage US in ME---we enjoy now. |
| Posted by: g(r)omgoru 2007-12-28 06:06 |