As details of his administration’s global war against terrorists, insurgents, and hostile warlords have become more widely known — a war that involves a mélange of drone attacks, covert operations, and presidentially selected assassinations — President Obama has been compared to President George W. Bush in his appetite for military action.  “As shown through his stepped-up drone campaign,” Aaron David Miller, an advisor to six secretaries of state, wrote at Foreign Policy, “Barack Obama has become George W. Bush on steroids.”

When it comes to international energy politics, however, it is not Bush but his vice president, Dick Cheney, who has been providing the role model for the president.  As recent events have demonstrated, Obama’s energy policies globally bear an eerie likeness to Cheney’s, especially in the way he has engaged in the geopolitics of oil as part of an American global struggle for future dominance among the major powers.

More than any of the other top officials of the Bush administration — many with oil-company backgrounds — Cheney focused on the role of energy in global power politics.  From 1995 to 2000, he served as chairman of the board and chief executive officer of Halliburton, a major supplier of services to the oil industry.  Soon after taking office as vice president he was asked by Bush to devise a new national energy strategy that has largely governed U.S. policy ever since.

Early on, Cheney concluded that the global supply of energy was not growing fast enough to satisfy rising world demand, and that securing control over the world’s remaining oil and natural gas supplies would therefore be an essential task for any state seeking to acquire or retain a paramount position globally.  He similarly grasped that a nation’s rise to prominence could be thwarted by being denied access to essential energy supplies.  As coal was to the architects of the British empire, oil was for Cheney — a critical resource over which it would sometimes be necessary to go to war.

More than any of his peers, Cheney articulated such views on the importance of energy to national wealth and power.  “Oil is unique in that it is so strategic in nature,” he told an audience at an industry conference in London in 1999. “We are not talking about soapflakes or leisurewear here.  Energy is truly fundamental to the world’s economy.  The Gulf War was a reflection of that reality.”

Cheney’s reference to the 1990-1991 Gulf War is particularly revealing.  During that conflict, he was the secretary of defense and so supervised the American war effort.  But while his boss, President George H.W. Bush, played down the role of oil in the fight against Iraq, Cheney made no secret of his belief that energy geopolitics lay at the heart of the matter.  “Once [Iraqi autocrat Saddam Hussein] acquired Kuwait and deployed an army as large as the one he possesses,” Cheney told the Senate Armed Services Committee when asked to justify the administration’s decision to intervene, “he was clearly in a position to be able to dictate the future of worldwide energy policy, and that gave him a stranglehold on our economy.”

This would be exactly the message he delivered in 2002, as the second President Bush girded himself for the invasion of Iraq.  Were Saddam Hussein successful in acquiring weapons of mass destruction, Cheney told a group of veterans that August 25th, “[he] could then be expected to seek domination of the entire Middle East [and] take control of a great portion of the world’s energy supplies.”

For Cheney, the geopolitics of oil lay at the core of international relations, largely determining the rise and fall of nations.  From this, it followed that any steps, including war and environmental devastation, were justified so long as they enhanced America’s power at the expense of its rivals.

Cheney’s World

Through his speeches, Congressional testimony, and actions in office, it is possible to reconstruct the geopolitical blueprint that Cheney followed in his career as a top White House strategist — a blueprint that President Obama, eerily enough, now appears to be implementing, despite the many risks involved.

That blueprint consists of four key features:

1. Promote domestic oil and gas production at any cost to reduce America’s dependence on unfriendly foreign suppliers, thereby increasing Washington’s freedom of action.

2. Keep control over the oil flow from the Persian Gulf (even if the U.S. gets an ever-diminishing share of its own oil supplies from the region) in order to retain an “economic stranglehold” over other major oil importers.

3. Dominate the sea lanes of Asia, so as to control the flow of oil and other raw materials to America’s potential economic rivals, China and Japan.

4. Promote energy “diversification” in Europe, especially through increased reliance on oil and natural gas supplies from the former Soviet republics of the Caspian Sea basin, in order to reduce Europe’s heavy dependence on Russian oil and gas, along with the political influence this brings Moscow.

The first objective, increased reliance on domestic oil and gas, was highlighted in National Energy Policy, the energy strategy Cheney devised for the president in May 2001 in close consultation with representatives of the oil giants.  Although mostly known for its advocacy of increased drilling on federal lands, including the Arctic National Wildlife Refuge, the Cheney Report (as it came to be known) largely focused on the threat of growing U.S. dependence on foreign oil suppliers and the need to achieve greater “energy security” through a damn-the-torpedoes-full-speed-ahead program of accelerated exploitation of domestic energy supplies.

“A primary goal of the National Energy Policy is to add supply from diverse sources,” the report declared.  “This means domestic oil, gas, and coal.  It also means hydropower and nuclear power.”  The plan also called for a concerted drive to increase U.S. reliance on friendly sources of energy in the Western hemisphere, especially Brazil, Canada, and Mexico.

The second objective, control over the flow of oil through the Persian Gulf, was, for Cheney, the principal reason for both the First Gulf War and the 2003 invasion of Iraq.  Although before that invasion, the president and other top officials focused on Saddam Hussein’s supposed weapons of mass destruction, his human rights record, and the need to bring democracy to Iraq, Cheney never wavered in his belief that the basic goal was to ensure that Washington would control the Middle Eastern oil jugular.

After Saddam’s ouster and the occupation of Iraq began, Cheney was especially outspoken in his insistence that neighboring Iran be prevented, by force of arms if need be, from challenging American preeminence in the Gulf.  “We’ll keep the sea lanes open,” he declared from the deck of an aircraft carrier during maneuvers off the coast of Iran in May 2007.  “We’ll stand with others to prevent Iran from gaining nuclear weapons and dominating the region.”

Cheney also focused in a major way on ensuring control over the sea lanes from the Strait of Hormuz, at the mouth of the Persian Gulf (out of which 35% of the world’s tradable oil flows each day) across the Indian Ocean, through the Straits of Malacca, and into the South and East China Seas.  To this day, these maritime corridors remain essential for the economic survival of China, Japan, South Korea, and Taiwan, bringing oil and other raw materials to their industries and carrying manufactured goods to their markets abroad.  By maintaining U.S. control over these vital conduits, Cheney sought to guarantee the loyalty of America’s key Asian allies and constrain the rise of China.  In pursuit of these classic geopolitical objectives, he pushed for an enhanced U.S. naval presence in the Asia-Pacific region and the establishment of a network of military alliances linking Japan, Australia, and India, all aimed at containing China.

Finally, Cheney sought to rein in America’s other major great-power rival, Russia.  While his boss, George W. Bush, spoke of the potential for cooperation with Moscow, Cheney, still an energy cold warrior, viewed Russia as a geopolitical competitor and sought every opportunity to diminish its power and influence.  He particularly feared that Europe’s growing dependence on Russian natural gas could undermine its resolve to resist aggressive Russian moves in Eastern Europe and the Caucasus.

To counter this trend, Cheney tried to persuade the Europeans to get more of their energy from the Caspian Sea basin by building new pipelines to that region via Georgia and Turkey.  The idea was to bypass Russia by persuading Azerbaijan, Kazakhstan, and Turkmenistan to export their gas through these conduits, not those owned by Gazprom, the Russian state-controlled monopoly.  When Georgia came under attack from Russian forces in August 2008, after Georgian troops shelled the pro-Moscow enclave of South Ossetia, Cheney was the first senior U.S. official to visit Tbilisi, bringing a promise of $1 billion in reconstruction assistance, as well as an offer of fast-track entry into NATO.  France and Germany blocked the move, fearing Moscow might respond with actions that could destabilize Europe.

Obama as Cheney

This four-part geopolitical blueprint, relentlessly pursued by Cheney while vice president, is now being implemented in every respect by President Obama.

When it comes to the pursuit of enhanced energy independence, Obama has embraced the ultra-nationalistic orientation of the 2001 Cheney report, with its call for increased reliance on domestic and Western Hemisphere oil and natural gas — no matter the dangers of drilling in environmentally fragile offshore areas or the use of hazardous techniques like hydro-fracking.  In recent speeches, he has boasted of his administration’s efforts to facilitate increased oil and gas drilling at home and promised to speed drilling in new locations, including offshore Alaska and the Gulf of Mexico.

“Over the last three years,” he boasted in his January State of the Union address, “we’ve opened millions of new acres for oil and gas exploration, and tonight, I’m directing my administration to open more than 75% of our potential offshore oil and gas resources.  Right now — right now — American oil production is the highest that it’s been in eight years… Not only that — last year, we relied less on foreign oil than in any of the past 16 years.”  He spoke with particular enthusiasm about the extraction of natural gas via fracking from shale deposits: “We have a supply of natural gas that can last America nearly 100 years.  And my administration will take every possible action to safely develop this energy.”

Obama has also voiced his desire to increase U.S. reliance on Western Hemisphere energy, thereby diminishing its dependence on unreliable and unfriendly suppliers in the Middle East and Africa.  In March 2011, with the Arab Spring gaining momentum, he traveled to Brazil for five days of trade talks, a geopolitical energy pivot noted at the time.  In the eyes of many observers, Obama’s focus on Brazil was inextricably linked to that country’s emergence as a major oil producer, thanks to new discoveries in the “pre-salt” fields off its coast in the depths of the Atlantic Ocean, discoveries that could help the U.S. wean itself off Middle Eastern oil but could also turn out to be pollution nightmares.  Although environmentalists have warned of the risks of drilling in the pre-salt fields, where a Deepwater Horizon-like blowout is an ever-present danger, Obama has made no secret of his geopolitical priorities. “By some estimates, the oil you recently discovered off the shores of Brazil could amount to twice the reserves we have in the United States,” he told Brazilian business leaders in that country’s capital. “When you’re ready to start selling, we want to be one of your best customers.  At a time when we’ve been reminded how easily instability in other parts of the world can affect the price of oil, the United States could not be happier with the potential for a new, stable source of energy.”

At the same time, Obama has made it clear that the U.S. will retain its role as the ultimate guardian of the Persian Gulf sea lanes.  Even while trumpeting the withdrawal of U.S. combat forces from Iraq, he has insisted that the United States will bolster its air, naval, and special operations forces in the Gulf region, so as to remain the preeminent military power there.  “Back to the future,” is how Major General Karl R. Horst, chief of staff of the U.S. Central Command, described the new posture, referring to a time before the Iraq War when the U.S. exercised dominance in the region mainly through its air and naval superiority.

While less conspicuous than “boots on the ground,” the expanded air and naval presence will be kept strong enough to overpower any conceivable adversary.  “We will have a robust continuing presence throughout the region,” Secretary of State Hillary Clinton declared last October.  Such a build-up has in fact been accentuated, in preparation either for a strike on Iranian nuclear facilities, should Obama conclude that negotiations to curb Iranian enrichment activities have reached a dead end, or to clear the Strait of Hormuz, if the Iranians carry out threats to block oil shipping there in retaliation for the even harsher economic sanctions due to be imposed after July 1st.

Like Cheney, Obama also seeks to ensure U.S. control over the vital sea lanes extending from the Strait of Hormuz to the South China Sea.  This is, in fact, the heart of Obama’s much publicized policy “pivot” to Asia and his new military doctrine, first revealed in a speech to the Australian Parliament on November 17th.  “As we plan and budget for the future,” he declared, “we will allocate the resources necessary to maintain our strong military presence in this region.”  A major priority of this effort, he indicated, would be enhanced “maritime security,” especially in the South China Sea.

Central to the Obama plan — like that advanced by Dick Cheney in 2007 — is the construction of a network of bases and alliances encircling China, the globe’s rising power, in an arc stretching from Japan and South Korea in the north to Australia, Vietnam, and the Philippines in the southeast and thence to India in the southwest.  When describing this effort in Canberra, Obama revealed that he had just concluded an agreement with the Australian government to establish a new U.S. military basing facility at Darwin on the country’s northern coast, near the South China Sea.  He also spoke of the ultimate goal of U.S. geopolitics: a region-embracing coalition of anti-Chinese states that would include India.  “We see America’s enhanced presence across Southeast Asia,” both in growing ties with local powers like Australia and “in our welcome of India as it ‘looks east’ and plays a larger role as an Asian power.”

As anyone who follows Asian affairs is aware, a strategy aimed at encircling China — especially one intended to incorporate India into America’s existing Asian alliance system — is certain to produce alarm and pushback from Beijing.  “I don’t think they’re going to be very happy,” said Mark Valencia, a senior researcher at the National Bureau of Asian Research, speaking of China’s reaction.  “I’m not optimistic in the long run as to how this is going to wind up.”

Finally, Obama has followed in Cheney’s footsteps in his efforts to reduce Russia’s influence in Europe and Central Asia by promoting the construction of new oil and gas pipelines from the Caspian via Georgia and Turkey to Europe.  On June 5th, at the Caspian Oil and Gas Conference in Baku, President Ilham Aliyev of Azerbaijan read a message from Obama promising Washington’s support for a proposed Trans-Anatolia gas pipeline, a conduit designed to carry natural gas from Azerbaijan across Georgia and Turkey to Europe — bypassing Russia, naturally.  At the same time, Secretary of State Clinton traveled to Georgia, just as Cheney had, to reaffirm U.S. support and offer increased U.S. military aid.  As during the Bush-Cheney era, these moves are bound to be seen in Moscow as part of a calculated drive to lessen Russia’s influence in the region — and so are certain to elicit a hostile response.

In virtually every respect, then, when it comes to energy geopolitics the Obama administration continues to carry out the strategic blueprint pioneered by Dick Cheney during the two Bush administrations.  What explains this surprising behavior?  Assuming that it doesn’t represent a literal effort to replicate Cheney’s thinking — and there’s no evidence of that — it clearly represents the triumph of imperial geopolitics (and hidebound thinking) over ideology, principle, or even simple openness to new ideas.

When you get two figures as different as Obama and Cheney pursuing the same pathways in the world — and the first time around was anything but a success — it’s a sign of just how closed and airless the world of Washington really has become.  At a time when most Americans are weary of grand ideological crusades, the pursuit of what looks like simple national self-interest — in the form of assured energy supplies — may appear far more attractive as a rationale for military and political involvement abroad.

In addition, Obama and his advisers are no doubt influenced by talk of a new “golden age” of North American oil and gas, made possible by the exploitation of shale deposits and other unconventional — and often dirty — energy resources.  According to projections given by the Department of Energy, U.S. reliance on imported energy is likely to decline in the years ahead (though there is a domestic price to be paid for such “independence”), while China’s will only rise — a seeming geopolitical advantage for the United States that Obama appears to relish.

It is easy enough to grasp the appeal of such energy geopolitics for White House strategists, especially given the woeful state of the U.S. economy and the declining utility of other instruments of state power.  And if you are prepared to overlook the growing environmental risks of reliance on offshore oil, shale gas, and other unconventional forms of energy, rising U.S. energy output conveys certain geopolitical advantages.  But as history suggests, engaging in aggressive global geopolitical confrontations with other determined, well-armed players usually leads to friction, crisis, war, and disaster.

In this regard, Cheney’s geopolitical maneuvering led us into two costly Middle Eastern wars while heightening tensions with both China and Russia.  President Obama claims he seeks to build a more peaceful world, but copying the Cheney energy blueprint is bound to produce the exact opposite.

Michael T. Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and the author most recently of The Race for What’s Left: The Global Scramble for the World’s Last Resources (Metropolitan Books). To listen to Timothy MacBain’s latest Tomcast audio interview in which Klare discusses imperial geopolitics as the default mode for Washington since 1945, click here or download it to your iPod here.

Copyright 2012 Michael Klare

Oil prices are now higher than they have ever been — except for a few frenzied moments before the global economic meltdown of 2008. Many immediate factors are contributing to this surge, including Iran’s threats to block oil shipping in the Persian Gulf, fears of a new Middle Eastern war, and turmoil in energy-rich Nigeria. Some of these pressures could ease in the months ahead, providing temporary relief at the gas pump.  But the principal cause of higher prices — a fundamental shift in the structure of the oil industry — cannot be reversed, and so oil prices are destined to remain high for a long time to come.

In energy terms, we are now entering a world whose grim nature has yet to be fully grasped.  This pivotal shift has been brought about by the disappearance of relatively accessible and inexpensive petroleum — “easy oil,” in the parlance of industry analysts; in other words, the kind of oil that powered a staggering expansion of global wealth over the past 65 years and the creation of endless car-oriented suburban communities. This oil is now nearly gone.

The world still harbors large reserves of petroleum, but these are of the hard-to-reach, hard-to-refine, “tough oil” variety. From now on, every barrel we consume will be more costly to extract, more costly to refine — and so more expensive at the gas pump.

Those who claim that the world remains “awash” in oil are technically correct: the planet still harbors vast reserves of petroleum. But propagandists for the oil industry usually fail to emphasize that not all oil reservoirs are alike: some are located close to the surface or near to shore, and are contained in soft, porous rock; others are located deep underground, far offshore, or trapped in unyielding rock formations. The former sites are relatively easy to exploit and yield a liquid fuel that can readily be refined into usable liquids; the latter can only be exploited through costly, environmentally hazardous techniques, and often result in a product which must be heavily processed before refining can even begin.

The simple truth of the matter is this: most of the world’s easy reserves have already been depleted — except for those in war-torn countries like Iraq.  Virtually all of the oil that’s left is contained in harder-to-reach, tougher reserves. These include deep-offshore oil, Arctic oil, and shale oil, along with Canadian “oil sands” — which are not composed of oil at all, but of mud, sand, and tar-like bitumen. So-called unconventional reserves of these types can be exploited, but often at a staggering price, not just in dollars but also in damage to the environment.

In the oil business, this reality was first acknowledged by the chairman and CEO of Chevron, David O’Reilly, in a 2005 letter published in many American newspapers. “One thing is clear,” he wrote, “the era of easy oil is over.” Not only were many existing oil fields in decline, he noted, but “new energy discoveries are mainly occurring in places where resources are difficult to extract, physically, economically, and even politically.”

Further evidence for this shift was provided by the International Energy Agency (IEA) in a 2010 review of world oil prospects. In preparation for its report, the agency examined historic yields at the world’s largest producing fields — the “easy oil” on which the world still relies for the overwhelming bulk of its energy. The results were astonishing: those fields were expected to lose three-quarters of their productive capacity over the next 25 years, eliminating 52 million barrels per day from the world’s oil supplies, or about 75% of current world crude oil output. The implications were staggering: either find new oil to replace those 52 million barrels or the Age of Petroleum will soon draw to a close and the world economy would collapse.

Of course, as the IEA made clear back in 2010, there will be new oil, but only of the tough variety that will exact a price from us all — and from the planet, too.  To grasp the implications of our growing reliance on tough oil, it’s worth taking a whirlwind tour of some of the more hair-raising and easily damaged spots on Earth.  So fasten your seatbelts: first we’re heading out to sea — way, way out — to survey the “promising” new world of twenty-first-century oil.

Deepwater Oil

Oil companies have been drilling in offshore areas for some time, especially in the Gulf of Mexico and the Caspian Sea. Until recently, however, such endeavors invariably took place in relatively shallow waters — a few hundred feet, at most — allowing oil companies to use conventional drills mounted on extended piers. Deepwater drilling, in depths exceeding 1,000 feet, is an entirely different matter.  It requires specialized, sophisticated, and immensely costly drilling platforms that can run into the billions of dollars to produce.

The Deepwater Horizon, destroyed in the Gulf of Mexico in April 2010 as a result of a catastrophic blowout, is typical enough of this phenomenon. The vessel was built in 2001 for some $500 million, and cost around $1 million per day to staff and maintain. Partly as a result of these high costs, BP was in a hurry to finish work on its ill-fated Macondo well and move the Deepwater Horizon to another drilling location. Such financial considerations, many analysts believe, explain the haste with which the vessel’s crew sealed the well — leading to a leakage of explosive gases into the wellbore and the resulting blast. BP will now have to pay somewhere in excess of $30 billion to satisfy all the claims for the damage done by its massive oil spill.

Following the disaster, the Obama administration imposed a temporary ban on deep-offshore drilling.  Barely two years later, drilling in the Gulf’s deep waters is back to pre-disaster levels. President Obama has also signed an agreement with Mexico allowing drilling in the deepest part of the Gulf, along the U.S.-Mexican maritime boundary.

Meanwhile, deepwater drilling is picking up speed elsewhere. Brazil, for example, is moving to exploit its “pre-salt” fields (so-called because they lie below a layer of shifting salt) in the waters of the Atlantic Ocean far off the coast of Rio de Janeiro. New offshore fields are similarly being developed in deep waters off Ghana, Sierra Leone, and Liberia.

By 2020, says energy analyst John Westwood, such deepwater fields will supply 10% of the world’s oil, up from only 1% in 1995. But that added production will not come cheaply: most of these new fields will cost tens or hundreds of billions of dollars to develop, and will only prove profitable as long as oil continues to sell for $90 or more per barrel.

Brazil’s offshore fields, considered by some experts the most promising new oil discovery of this century, will prove especially pricey, because they lie beneath one and a half miles of water and two and a half miles of sand, rock, and salt.  The world’s most advanced, costly drilling equipment — some of it still being developed — will be needed. Petrobras, the state-controlled energy firm, has already committed $53 billion to the project for 2011-2015, and most analysts believe that will be only a modest down payment on a staggering final price tag.

Arctic Oil

The Arctic is expected to provide a significant share of the world’s future oil supply. Until recently, production in the far north has been very limited. Other than in the Prudhoe Bay area of Alaska and a number of fields in Siberia, the major companies have largely shunned the region. But now, seeing few other options, they are preparing for major forays into a melting Arctic.

From any perspective, the Arctic is the last place you want to go to drill for oil. Storms are frequent, and winter temperatures plunge far below freezing. Most ordinary equipment will not operate under these conditions. Specialized (and costly) replacements are necessary. Working crews cannot live in the region for long. Most basic supplies — food, fuel, construction materials — must be brought in from thousands of miles away at phenomenal cost.

But the Arctic has its attractions: billions of barrels of untapped oil, to be exact. According to the U.S. Geological Survey (USGS), the area north of the Arctic Circle, with just 6% of the planet’s surface, contains an estimated 13% of its remaining oil (and an even larger share of its undeveloped natural gas) — numbers no other region can match.

With few other places left to go, the major energy firms are now gearing up for an energy rush to exploit the Arctic’s riches. This summer, Royal Dutch Shell is expected to begin test drilling in portions of the Beaufort and Chukchi Seas adjacent to northern Alaska. (The Obama administration must still award final operating permits for these activities, but approval is expected.) At the same time, Statoil and other firms are planning extended drilling in the Barents Sea, north of Norway.

As with all such extreme energy scenarios, increased production in the Arctic will significantly boost oil company operating costs. Shell, for example, has already spent $4 billion alone on preparations for test drilling in offshore Alaska, without producing a single barrel of oil. Full-scale development in this ecologically fragile region, fiercely opposed by environmentalists and local Native peoples, will multiply this figure many times over.

Tar Sands and Heavy Oil

Another significant share of the world’s future petroleum supply is expected to come from Canadian tar sands (also called “oil sands”) and the extra-heavy oil of Venezuela. Neither of these is oil as normally understood.  Not being liquid in their natural state, they cannot be extracted by traditional drilling materials, but they do exist in great abundance.  According to the USGS, Canada’s tar sands contain the equivalent of 1.7 trillion barrels of conventional (liquid) oil, while Venezuela’s heavy oil deposits are said to harbor another trillion barrels of oil equivalent — although not all of this material is considered “recoverable” with existing technology.

Those who claim that the Petroleum Age is far from over often point to these reserves as evidence that the world can still draw on immense supplies of untapped fossil fuels. And it is certainly conceivable that, with the application of advanced technologies and a total indifference to environmental consequences, these resources will indeed be harvested. But easy oil this is not.

Until now, Canada’s tar sands have been obtained through a process akin to strip mining, utilizing monster shovels to pry a mixture of sand and bitumen out of the ground. But most of the near-surface bitumen in the tar-sands-rich province of Alberta has now been exhausted, which means all future extraction will require a far more complex and costly process.  Steam will have to be injected into deeper concentrations to melt the bitumen and allow its recovery by massive pumps. This requires a colossal investment of infrastructure and energy, as well as the construction of treatment facilities for all the resulting toxic wastes. According to the Canadian Energy Research Institute, the full development of Alberta’s oil sands would require a minimum investment of $218 billion over the next 25 years, not including the cost of building pipelines to the United States (such as the proposed Keystone XL) for processing in U.S. refineries.

The development of Venezuela’s heavy oil will require investment on a comparable scale. The Orinoco belt, an especially dense concentration of heavy oil adjoining the Orinoco River, is believed to contain recoverable reserves of 513 billion barrels of oil — perhaps the largest source of untapped petroleum on the planet. But converting this molasses-like form of bitumen into a useable liquid fuel far exceeds the technical capacity or financial resources of the state oil company, Petróleos de Venezuela S.A. Accordingly, it is now seeking foreign partners willing to invest the $10-$20 billion needed just to build the necessary facilities.

The Hidden Costs

Tough-oil reserves like these will provide most of the world’s new oil in the years ahead. One thing is clear: even if they can replace easy oil in our lives, the cost of everything oil-related — whether at the gas pump, in oil-based products, in fertilizers, in just about every nook and cranny of our lives — is going to rise.  Get used to it.  If things proceed as presently planned, we will be in hock to big oil for decades to come.

And those are only the most obvious costs in a situation in which hidden costs abound, especially to the environment. As with the Deepwater Horizon disaster, oil extraction in deep-offshore areas and other extreme geographical locations will ensure ever greater environmental risks. After all, approximately five million gallons of oil were discharged into the Gulf of Mexico, thanks to BP’s negligence, causing extensive damage to marine animals and coastal habitats.

Keep in mind that, as catastrophic as it was, it occurred in the Gulf of Mexico, where vast cleanup forces could be mobilized and the ecosystem’s natural recovery capacity was relatively robust. The Arctic and Greenland represent a different story altogether, given their distance from established recovery capabilities and the extreme vulnerability of their ecosystems. Efforts to restore such areas in the wake of massive oil spills would cost many times the $30-$40 billion BP is expected to pay for the Deepwater Horizon damage and be far less effective.

In addition to all this, many of the most promising tough-oil fields lie in Russia, the Caspian Sea basin, and conflict-prone areas of Africa. To operate in these areas, oil companies will be faced not only with the predictably high costs of extraction, but also additional costs involving local systems of bribery and extortion, sabotage by guerrilla groups, and the consequences of civil conflict.

And don’t forget the final cost: If all these barrels of oil and oil-like substances are truly produced from the least inviting of places on this planet, then for decades to come we will continue to massively burn fossil fuels, creating ever more greenhouse gases as if there were no tomorrow.  And here’s the sad truth: if we proceed down the tough-oil path instead of investing as massively in alternative energies, we may foreclose any hope of averting the most catastrophic consequences of a hotter and more turbulent planet.

So yes, there is oil out there. But no, it won’t get cheaper, no matter how much there is. And yes, the oil companies can get it, but looked at realistically, who would want it?

Michael T. Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and author of the just published The Race for What’s Left: The Global Scramble for the World’s Last Resources (Metropolitan Books).  To listen to Timothy MacBain’s latest Tomcast audio interview in which Klare discusses his new book and what it means to rely on extreme energy, click here, or download it to your iPod here.

Copyright 2012 Michael Klare

Ever since December 27th, war clouds have been gathering over the Strait of Hormuz, the narrow body of water connecting the Persian Gulf with the Indian Ocean and the seas beyond.  On that day, Iranian Vice President Mohammad Reza Rahimi warned that Tehran would block the strait and create havoc in international oil markets if the West placed new economic sanctions on his country.

“If they impose sanctions on Iran’s oil exports,” Rahimi declared, “then even one drop of oil cannot flow from the Strait of Hormuz.”  Claiming that such a move would constitute an assault on America’s vital interests, President Obama reportedly informed Iran’s supreme leader Ayatollah Ali Khamenei that Washington would use force to keep the strait open.  To back up their threats, both sides have been bolstering their forces in the area and each has conducted a series of provocative military exercises.

All of a sudden, the Strait of Hormuz has become the most combustible spot on the planet, the most likely place to witness a major conflict between well-armed adversaries.  Why, of all locales, has it become so explosive?

Oil, of course, is a major part of the answer, but — and this may surprise you — only a part.

Petroleum remains the world’s most crucial source of energy, and about one-fifth of the planet’s oil supply travels by tanker through the strait.  “Hormuz is the world’s most important oil chokepoint due to its daily oil flow of almost 17 million barrels in 2011,” the U.S. Department of Energy noted as last year ended.  Because no other area is capable of replacing these 17 million barrels, any extended closure would produce a global shortage of oil, a price spike, and undoubtedly attendant economic panic and disorder.

No one knows just how high oil prices would go under such circumstances, but many energy analysts believe that the price of a barrel might immediately leap by $50 or more.  “You would get an international reaction that would not only be high, but irrationally high,” says Lawrence J. Goldstein, a director of the Energy Policy Research Foundation.  Even though military experts assume the U.S. will use its overwhelming might to clear the strait of Iranian mines and obstructions in a few days or weeks, the chaos to follow in the region might not end quickly, keeping oil prices elevated for a long time.  Indeed, some analysts fear that oil prices, already hovering around $100 per barrel, would quickly double to more than $200, erasing any prospect of economic recovery in the United States and Western Europe, and possibly plunging the planet into a renewed Great Recession. 

The Iranians are well aware of all this, and it is with such a nightmare scenario that they seek to deter Western leaders from further economic sanctions and other more covert acts when they threaten to close the strait.  To calm such fears, U.S. officials have been equally adamant in stressing their determination to keep the strait open.  In such circumstances of heightened tension, one misstep by either side might prove calamitous and turn mutual rhetorical belligerence into actual conflict.

Military Overlord of the Persian Gulf

In other words, oil, which makes the global economy hum, is the most obvious factor in the eruption of war talk, if not war.  Of at least equal significance are allied political factors, which may have their roots in the geopolitics of oil but have acquired a life of their own.

Because so much of the world’s most accessible oil is concentrated in the Persian Gulf region, and because a steady stream of oil is absolutely essential to the well-being of the U.S. and the global economy, it has long been American policy to prevent potentially hostile powers from acquiring the capacity to dominate the Gulf or block the Strait of Hormuz.  President Jimmy Carter first articulated this position in January 1980, following the Islamic Revolution in Iran and the Soviet invasion of Afghanistan.  “Any attempt by an outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America,” he told a joint session of Congress, “and such an assault will be repelled by any means necessary, including military force.”

In accordance with this precept, Washington designated itself the military overlord of the Persian Gulf, equipped with the military might to overpower any potential challenger.  At the time, however, the U.S. military was not well organized to implement the president’s initiative, known ever since as the Carter Doctrine.  In response, the Pentagon created a new organization, the U.S. Central Command (CENTCOM), and quickly endowed it with the wherewithal to crush any rival power or powers in the region and keep the sea lanes under American control.

CENTCOM first went into action in 1987-1988, when Iranian forces attacked Kuwaiti and Saudi oil tankers during the Iran-Iraq War, threatening the flow of oil supplies through the strait.  To protect the tankers, President Reagan ordered that they be “reflagged” as American vessels and escorted by U.S. warships, putting the Navy into potential conflict with the Iranians for the first time.  Out of this action came the disaster of Iran Air Flight 655, a civilian airliner carrying 290 passengers and crew members, all of whom died when the plane was hit by a missile from the USS Vincennes, which mistook it for a hostile fighter plane — a tragedy long forgotten in the United States, but still deeply resented in Iran.

Iraq was America’s de facto ally in the Iran-Iraq war, but when Saddam Hussein invaded Kuwait in 1990 — posing a direct threat to Washington’s dominance of the Gulf — the first President Bush ordered CENTCOM to protect Saudi Arabia and drive Iraqi forces out of Kuwait.  And when Saddam rebuilt his forces, and his very existence again came to pose a latent threat to America’s dominance in the region, the second President Bush ordered CENTCOM to invade Iraq and eliminate his regime altogether (which, as no one is likely to forget, resulted in a string of disasters).

If oil lay at the root of Washington’s domineering role in the Gulf, over time that role evolved into something else: a powerful expression of America’s status as a global superpower.  By becoming the military overlord of the Gulf and the self-appointed guardian of oil traffic through the Strait of Hormuz, Washington said to the world: "We, and we alone, are the ones who can ensure the safety of your daily oil supply and thereby prevent global economic collapse."  Indeed, when the Cold War ended — and with it an American sense of pride and identity as a bulwark against Soviet expansionism in Europe and Asia — protection of the flow of Persian Gulf oil became America’s greatest claim to superpowerdom, and it remains so today.

Every Option on Every Table

With the ouster of Saddam Hussein in 2003, the one potential threat to U.S. domination of the Persian Gulf was, of course, Iran.  Even under the U.S.-backed Shah, long Washington’s man in the Gulf, the Iranians had sought to be the paramount power in the region.  Now, under a militant Shiite Islamic regime, they have proven no less determined and — call it irony — thanks to Saddam’s overthrow and the rise of a Shiite-dominated government in Baghdad, they have managed to extend their political reach in the region.  With Saddam’s fate in mind, they have also built up their defensive military capabilities and — in the view of many Western analysts — embarked on a uranium-enrichment program with the potential to supply fissile material for a nuclear weapon, should the Iranian leadership choose someday to take such a fateful step.

Iran thus poses a double challenge to Washington’s professed status in the Gulf.  It is not only a reasonably well-armed country with significant influence in Iraq and elsewhere, but by promoting its nuclear program, it threatens to vastly complicate America’s future capacity to pull off punishing attacks like those launched against Iraqi forces in 1991 and 2003.

While Iran’s military budget is modest-sized at best and its conventional military capabilities will never come close to matching CENTCOM’s superior forces in a direct confrontation, its potential pursuit of nuclear-arms capabilities greatly complicates the strategic calculus in the region.  Even without taking the final steps of manufacturing actual bomb components — and no evidence has yet surfaced that the Iranians have proceeded to this critical stage — the Iranian nuclear effort has greatly alarmed other countries in the Middle East and called into question the continued robustness of America’s regional dominance.  From Washington’s perspective, an Iranian bomb — whether real or not — poses an existential threat to America’s continued superpower status.

How to prevent Iran not just from going nuclear but from maintaining the threat to go nuclear has, in recent years, become an obsessional focus of American foreign and military policy.  Over and over again, U.S. leaders have considered plans for using military force to cripple the Iranian program though air and missile strikes on known and suspected nuclear facilities.  Presidents Bush and Obama have both refused to take such action “off the table,” as Obama made clear most recently in his State of the Union address.  (The Israelis have also repeatedly indicated their desire to take such action, possibly as a prod to Washington to get the job done.)

Most serious analysts have concluded that military action would prove extremely risky, probably causing numerous civilian casualties and inviting fierce Iranian retaliation.  It might not even achieve the intended goal of halting the Iranian nuclear program, much of which is now being conducted deep underground.  Hence, the consensus view among American and European leaders has been that economic sanctions should instead be employed to force the Iranians to the negotiating table, where they could be induced to abandon their nuclear ambitions in return for various economic benefits.  But those escalating sanctions, which appear to be causing increasing economic pain for ordinary Iranians, have been described by that country’s leaders as an “act of war,” justifying their threats to block the Strait of Hormuz.

To add to tensions, the leaders of both countries are under extreme pressure to vigorously counter the threats of the opposing side.  President Obama, up for re-election, has come under fierce, even hair-raising, attack from the contending Republican presidential candidates (except, of course, Ron Paul) for failing to halt the Iranian nuclear program, though none of them have a credible plan to do so.  He, in turn, has been taking an ever-harsher stance on the issue.  Iranian leaders, for their part, appear increasingly concerned over the deteriorating economic conditions in their country and, no doubt fearing an Arab Spring-like popular upheaval, are becoming more bellicose in their rhetoric.

So oil, the prestige of global dominance, Iran's urge to be a regional power, and domestic political factors are all converging in a combustible mix to make the Strait of Hormuz the most dangerous place on the planet. For both Tehran and Washington, events seem to be moving inexorably toward a situation in which mistakes and miscalculations could become inevitable.  Neither side can appear to give ground without losing prestige and possibly even their jobs.  In other words, an existential test of wills is now under way over geopolitical dominance in a critical part of the globe, and on both sides there seem to be ever fewer doors marked “EXIT.” 

As a result, the Strait of Hormuz will undoubtedly remain the ground zero of potential global conflict in the months ahead.

Michael T. Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and the author, most recently, of Rising Powers, Shrinking Planet. His newest book, The Race for What’s Left: The Global Scramble for the World’s Last Resources (Metropolitan Books), will be published in March. 

Copyright 2012 Michael T. Klare

Welcome to an edgy world where a single incident at an energy “chokepoint” could set a region aflame, provoking bloody encounters, boosting oil prices, and putting the global economy at risk.  With energy demand on the rise and sources of supply dwindling, we are, in fact, entering a new epoch — the Geo-Energy Era — in which disputes over vital resources will dominate world affairs.  In 2012 and beyond, energy and conflict will be bound ever more tightly together, lending increasing importance to the key geographical flashpoints in our resource-constrained world.

Take the Strait of Hormuz, already making headlines and shaking energy markets as 2012 begins.  Connecting the Persian Gulf and the Indian Ocean, it lacks imposing geographical features like the Rock of Gibraltar or the Golden Gate Bridge.  In an energy-conscious world, however, it may possess greater strategic significance than any passageway on the planet.  Every day, according to the U.S. Department of Energy, tankers carrying some 17 million barrels of oil — representing 20% of the world’s daily supply — pass through this vital artery. 

So last month, when a senior Iranian official threatened to block the strait in response to Washington’s tough new economic sanctions, oil prices instantly soared. While the U.S. military has vowed to keep the strait open, doubts about the safety of future oil shipments and worries about a potentially unending, nerve-jangling crisis involving Washington, Tehran, and Tel Aviv have energy experts predicting high oil prices for months to come, meaning further woes for a slowing global economy.

The Strait of Hormuz is, however, only one of several hot spots where energy, politics, and geography are likely to mix in dangerous ways in 2012 and beyond.  Keep your eye as well on the East and South China Seas, the Caspian Sea basin, and an energy-rich Arctic that is losing its sea ice.  In all of these places, countries are disputing control over the production and transportation of energy, and arguing about national boundaries and/or rights of passage.

In the years to come, the location of energy supplies and of energy supply routes — pipelines, oil ports, and tanker routes — will be pivotal landmarks on the global strategic map.  Key producing areas, like the Persian Gulf, will remain critically important, but so will oil chokepoints like the Strait of Hormuz and the Strait of Malacca (between the Indian Ocean and the South China Sea) and the “sea lines of communication,” or SLOCs (as naval strategists like to call them) connecting producing areas to overseas markets.  More and more, the major powers led by the United States, Russia, and China will restructure their militaries to fight in such locales.

You can already see this in the elaborate Defense Strategic Guidance document, “Sustaining U.S. Global Leadership,” unveiled at the Pentagon on January 5th by President Obama and Secretary of Defense Leon Panetta.  While envisioning a smaller Army and Marine Corps, it calls for increased emphasis on air and naval capabilities, especially those geared to the protection or control of international energy and trade networks.  Though it tepidly reaffirmed historic American ties to Europe and the Middle East, overwhelming emphasis was placed on bolstering U.S. power in “the arc extending from the Western Pacific and East Asia into the Indian Ocean and South Asia.”

In the new Geo-Energy Era, the control of energy and of its transport to market will lie at the heart of recurring global crises.  This year, keep your eyes on three energy hot spots in particular: the Strait of Hormuz, the South China Sea, and the Caspian Sea basin. 

The Strait of Hormuz

A narrow stretch of water separating Iran from Oman and the United Arab Emirates (UAE), the strait is the sole maritime link between the oil-rich Persian Gulf region and the rest of the world.  A striking percentage of the oil produced by Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the UAE is carried by tanker through this passageway on a daily basis, making it (in the words of the Department of Energy) “the world’s most important oil chokepoint.”  Some analysts believe that any sustained blockage in the strait could trigger a 50% increase in the price of oil and trigger a full-scale global recession or depression.

American leaders have long viewed the Strait as a strategic fixture in their global plans that must be defended at any cost.  It was an outlook first voiced by President Jimmy Carter in January 1980, on the heels of the Soviet invasion and occupation of Afghanistan which had, he told Congress, “brought Soviet military forces to within 300 miles of the Indian Ocean and close to the Strait of Hormuz, a waterway through which most of the world’s oil must flow.”  The American response, he insisted, must be unequivocal: any attempt by a hostile power to block the waterway would henceforth be viewed as “an assault on the vital interests of the United States of America,” and “repelled by any means necessary, including military force.”

Much has changed in the Gulf region since Carter issued his famous decree, known since as the Carter Doctrine, and established the U.S. Central Command (CENTCOM) to guard the Strait — but not Washington’s determination to ensure the unhindered flow of oil there.  Indeed, President Obama has made it clear that, even if CENTCOM ground forces were to leave Afghanistan, as they have Iraq, there would be no reduction in the command’s air and naval presence in the greater Gulf area. 

It is conceivable that the Iranians will put Washington’s capabilities to the test.  On December 27th, Iran’s first vice president Mohammad-Reza Rahimi said, “If [the Americans] impose sanctions on Iran’s oil exports, then even one drop of oil cannot flow from the Strait of Hormuz.”  Similar statements have since been made by other senior officials (and contradicted as well by yet others).  In addition, the Iranians recently conducted elaborate naval exercises in the Arabian Sea near the eastern mouth of the strait, and more such maneuvers are said to be forthcoming.  At the same time, the commanding general of Iran’s army suggested that the USS John C. Stennis, an American aircraft carrier just leaving the Gulf, should not return.  “The Islamic Republic of Iran,” he added ominously, “will not repeat its warning.”

Might the Iranians actually block the strait?  Many analysts believe that the statements by Rahimi and his colleagues are bluster and bluff meant to rattle Western leaders, send oil prices higher, and win future concessions if negotiations ever recommence over their country’s nuclear program.  Economic conditions in Iran are, however, becoming more desperate, and it is always possible that the country’s hard-pressed hardline leaders may feel the urge to take some dramatic action, even if it invites a powerful U.S. counterstrike.  Whatever the case, the Strait of Hormuz will remain a focus of international attention in 2012, with global oil prices closely following the rise and fall of tensions there.

The South China Sea

The South China Sea is a semi-enclosed portion of the western Pacific bounded by China to the north, Vietnam to the west, the Philippines to the east, and the island of Borneo (shared by Brunei, Indonesia, and Malaysia) to the south.  The sea also incorporates two largely uninhabited island chains, the Paracels and the Spratlys.  Long an important fishing ground, it has also been a major avenue for commercial shipping between East Asia and Europe, the Middle East, and Africa.  More recently, it acquired significance as a potential source of oil and natural gas, large reserves of which are now believed to lie in subsea areas surrounding the Paracels and Spratlys.

With the discovery of oil and gas deposits, the South China Sea has been transformed into a cockpit of international friction.  At least some islands in this energy-rich area are claimed by every one of the surrounding countries, including China — which claims them all, and has demonstrated a willingness to use military force to assert dominance in the region.  Not surprisingly, this has put it in conflict with the other claimants, including several with close military ties to the United States.  As a result, what started out as a regional matter, involving China and various members of the Association of Southeast Asian Nations (ASEAN), has become a prospective tussle between the world’s two leading powers.

To press their claims, Brunei, Malaysia, Vietnam, and the Philippines have all sought to work collectively through ASEAN, believing a multilateral approach will give them greater negotiating clout than one-on-one dealings with China. For their part, the Chinese have insisted that all disputes must be resolved bilaterally, a situation in which they can more easily bring their economic and military power to bear.  Previously preoccupied with Iraq and Afghanistan, the United States has now entered the fray, offering full-throated support to the ASEAN countries in their efforts to negotiate en masse with Beijing.

Chinese Foreign Minister Yang Jiechi promptly warned the United States not to interfere.  Any such move “will only make matters worse and the resolution more difficult,” he declared.  The result was an instant war of words between Beijing and Washington.  During a visit to the Chinese capital in July 2011, Chairman of the Joint Chiefs of Staff Admiral Mike Mullen delivered a barely concealed threat when it came to possible future military action.  “The worry, among others that I have,” he commented, “is that the ongoing incidents could spark a miscalculation, and an outbreak that no one anticipated.”  To drive the point home, the United States has conducted a series of conspicuous military exercises in the South China Sea, including some joint maneuvers with ships from Vietnam and the Philippines.  Not to be outdone, China responded with naval maneuvers of its own.  It’s a perfect formula for future “incidents” at sea.

The South China Sea has long been on the radar screens of those who follow Asian affairs, but it only attracted global attention when, in November, President Obama traveled to Australia and announced, with remarkable bluntness, a new U.S. strategy aimed at confronting Chinese power in Asia and the Pacific.  “As we plan and budget for the future,” he told members of the Australian Parliament in Canberra, “we will allocate the resources necessary to maintain our strong military presence in this region.”  A key feature of this effort would be to ensure “maritime security” in the South China Sea. 

While in Australia, President Obama also announced the establishment of a new U.S. base at Darwin on that country’s northern coast, as well as expanded military ties with Indonesia and the Philippines.  In January, the president similarly placed special emphasis on projecting U.S. power in the region when he went to the Pentagon to discuss changes in the American military posture in the world.

Beijing will undoubtedly take its own set of steps, no less belligerent, to protect its growing interests in the South China Sea.  Where this will lead remains, of course, unknown.  After the Strait of Hormuz, however, the South China Sea may be the global energy chokepoint where small mistakes or provocations could lead to bigger confrontations in 2012 and beyond. 

The Caspian Sea Basin

The Caspian Sea is an inland body of water bordered by Russia, Iran, and three former republics of the USSR: Azerbaijan, Kazakhstan, and Turkmenistan.  In the immediate area as well are the former Soviet lands of Armenia, Georgia, Kyrgyzstan, and Tajikistan.  All of these old SSRs are, to one degree or another, attempting to assert their autonomy from Moscow and establish independent ties with the United States, the European Union, Iran, Turkey, and, increasingly, China.  All are wracked by internal schisms and/or involved in border disputes with their neighbors.  The region would be a hotbed of potential conflict even if the Caspian basin did not harbor some of the world’s largest undeveloped reserves of oil and natural gas, which could easily bring it to a boil.

This is not the first time that the Caspian has been viewed as a major source of oil, and so potential conflict.  In the late nineteenth century, the region around the city of Baku — then part of the Russian empire, now in Azerbaijan — was a prolific source of petroleum and so a major strategic prize.  Future Soviet dictator Joseph Stalin first gained notoriety there as a leader of militant oil workers, and Hitler sought to capture it during his ill-fated 1941 invasion of the USSR.  After World War II, however, the region lost its importance as an oil producer when Baku’s onshore fields dried up.  Now, fresh discoveries are being made in offshore areas of the Caspian itself and in previously undeveloped areas of Kazakhstan and Turkmenistan.

According to energy giant BP, the Caspian area harbors as much as 48 billion barrels of oil (mostly buried in Azerbaijan and Kazakhstan) and 449 trillion cubic feet of natural gas (with the largest supply in Turkmenistan).  This puts the region ahead of North and South America in total gas reserves and Asia in oil reserves.  But producing all this energy and delivering it to foreign markets will be a monumental task.  The region’s energy infrastructure is woefully inadequate and the Caspian itself provides no maritime outlet to other seas, so all that oil and gas must travel by pipeline or rail.

Russia, long the dominant power in the region, is pursuing control over the transportation routes by which Caspian oil and gas will reach markets.  It is upgrading Soviet-era pipelines that link the former SSRs to Russia or building new ones and, to achieve a near monopoly over the marketing of all this energy, bringing traditional diplomacy, strong-arm tactics, and outright bribery to bear on regional leaders (many of whom once served in the Soviet bureaucracy) to ship their energy via Russia.  As recounted in my book Rising Powers, Shrinking Planet, Washington sought to thwart these efforts by sponsoring the construction of alternative pipelines that avoid Russian territory, crossing Azerbaijan, Georgia, and Turkey to the Mediterranean (notably the BTC, or Baku-Tbilisi-Ceyhan pipeline), while Beijing is building its own pipelines linking the Caspian area to western China.

All of these pipelines cross through areas of ethnic unrest and pass near various contested regions like rebellious Chechnya and breakaway South Ossetia.  As a result, both China and the U.S. have wedded their pipeline operations to military assistance for countries along the routes.  Fearful of an American presence, military or otherwise, in the former territories of the Soviet Union, Russia has responded with military moves of its own, including its brief August 2008 war with Georgia, which took place along the BTC route. 

Given the magnitude of the Caspian’s oil and gas reserves, many energy firms are planning new production operations in the region, along with the pipelines needed to bring the oil and gas to market.  The European Union, for example, hopes to build a new natural gas pipeline called Nabucco from Azerbaijan through Turkey to Austria.  Russia has proposed a competing conduit called South Stream.  All of these efforts involve the geopolitical interests of major powers, ensuring that the Caspian region will remain a potential source of international crisis and conflict.

In the new Geo-Energy Era, the Strait of Hormuz, the South China Sea, and the Caspian Basin hardly stand alone as potential energy flashpoints. The East China Sea, where China and Japan are contending for a contested undersea natural gas field, is another, as are the waters surrounding the Falkland Islands, where both Britain and Argentina hold claims to undersea oil reserves, as will be the globally warming Arctic whose resources are claimed by many countries.  One thing is certain: wherever the sparks may fly, there’s oil in the water and danger at hand in 2012.

Michael T. Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and the author, most recently, of Rising Powers, Shrinking Planet. His newest book, The Race for What’s Left: The Global Scramble for the World’s Last Resources, will be published in March.  To listen to Timothy MacBain’s latest Tomcast audio interview in which Klare discusses the crisis in the Strait of Hormuz, click here, or download it to your iPod here.

Copyright 2012 Michael T. Klare

When it comes to China policy, is the Obama administration leaping from the frying pan directly into the fire? In an attempt to turn the page on two disastrous wars in the Greater Middle East, it may have just launched a new Cold War in Asia — once again, viewing oil as the key to global supremacy.

The new policy was signaled by President Obama himself on November 17th in an address to the Australian Parliament in which he laid out an audacious — and extremely dangerous — geopolitical vision.  Instead of focusing on the Greater Middle East, as has been the case for the last decade, the United States will now concentrate its power in Asia and the Pacific.  “My guidance is clear,” he declared in Canberra.  “As we plan and budget for the future, we will allocate the resources necessary to maintain our strong military presence in this region.”  While administration officials insist that this new policy is not aimed specifically at China, the implication is clear enough: from now on, the primary focus of American military strategy will not be counterterrorism, but the containment of that economically booming land — at whatever risk or cost.

The Planet’s New Center of Gravity

The new emphasis on Asia and the containment of China is necessary, top officials insist, because the Asia-Pacific region now constitutes the “center of gravity” of world economic activity.  While the United States was bogged down in Iraq and Afghanistan, the argument goes, China had the leeway to expand its influence in the region.  For the first time since the end of World War II, Washington is no longer the dominant economic actor there.  If the United States is to retain its title as the world’s paramount power, it must, this thinking goes, restore its primacy in the region and roll back Chinese influence.  In the coming decades, no foreign policy task will, it is claimed, be more important than this.

In line with its new strategy, the administration has undertaken a number of moves intended to bolster American power in Asia, and so put China on the defensive.  These include a decision to deploy an initial 250 U.S. Marines — someday to be upped to 2,500 — to an Australian air base in Darwin on that country’s north coast, and the adoption on November 18th of “the Manila Declaration,” a pledge of closer U.S. military ties with the Philippines.

At the same time, the White House announced the sale of 24 F-16 fighter jets to Indonesia and a visit by Hillary Clinton to isolated Burma, long a Chinese ally — the first there by a secretary of state in 56 years.  Clinton has also spoken of increased diplomatic and military ties with Singapore, Thailand, and Vietnam — all countries surrounding China or overlooking key trade routes that China relies on for importing raw materials and exporting manufactured goods.

As portrayed by administration officials, such moves are intended to maximize America’s advantages in the diplomatic and military realm at a time when China dominates the economic realm regionally.  In a recent article in Foreign Policy magazine, Clinton revealingly suggested that an economically weakened United States can no longer hope to prevail in multiple regions simultaneously.  It must choose its battlefields carefully and deploy its limited assets — most of them of a military nature — to maximum advantage.  Given Asia’s strategic centrality to global power, this means concentrating resources there.

“Over the last 10 years,” she writes, “we have allocated immense resources to [Iraq and Afghanistan].  In the next 10 years, we need to be smart and systematic about where we invest time and energy, so that we put ourselves in the best position to sustain our leadership [and] secure our interests… One of the most important tasks of American statecraft over the next decade will therefore be to lock in a substantially increased investment — diplomatic, economic, strategic, and otherwise — in the Asia-Pacific region.”

Such thinking, with its distinctly military focus, appears dangerously provocative.  The steps announced entail an increased military presence in waters bordering China and enhanced military ties with that country’s neighbors — moves certain to arouse alarm in Beijing and strengthen the hand of those in the ruling circle (especially in the Chinese military leadership) who favor a more activist, militarized response to U.S. incursions.  Whatever forms that takes, one thing is certain: the leadership of the globe’s number two economic power is not going to let itself appear weak and indecisive in the face of an American buildup on the periphery of its country.  This, in turn, means that we may be sowing the seeds of a new Cold War in Asia in 2011.

The U.S. military buildup and the potential for a powerful Chinese counter-thrust have already been the subject of discussion in the American and Asian press.  But one crucial dimension of this incipient struggle has received no attention at all: the degree to which Washington’s sudden moves have been dictated by a fresh analysis of the global energy equation, revealing (as the Obama administration sees it) increased vulnerabilities for the Chinese side and new advantages for Washington.

The New Energy Equation

For decades, the United States has been heavily dependent on imported oil, much of it obtained from the Middle East and Africa, while China was largely self-sufficient in oil output.  In 2001, the United States consumed 19.6 million barrels of oil per day, while producing only nine million barrels itself.  The dependency on foreign suppliers for that 10.6 million-barrel shortfall proved a source of enormous concern for Washington policymakers.  They responded by forging ever closer, more militarized ties with Middle Eastern oil producers and going to war on occasion to ensure the safety of U.S. supply lines.

In 2001, China, on the other hand, consumed only five million barrels per day and so, with a domestic output of 3.3 million barrels, needed to import only 1.7 million barrels.  Those cold, hard numbers made its leadership far less concerned about the reliability of the country’s major overseas providers — and so it did not need to duplicate the same sort of foreign policy entanglements that Washington had long been involved in.

Now, so the Obama administration has concluded, the tables are beginning to turn.  As a result of China’s booming economy and the emergence of a sizeable and growing middle class (many of whom have already bought their first cars), the country’s oil consumption is exploding.  Running at about 7.8 million barrels per day in 2008, it will, according to recent projections by the U.S. Department of Energy, reach 13.6 million barrels in 2020, and 16.9 million in 2035.  Domestic oil production, on the other hand, is expected to grow from 4.0 million barrels per day in 2008 to 5.3 million in 2035.  Not surprisingly, then, Chinese imports are expected to skyrocket from 3.8 million barrels per day in 2008 to a projected 11.6 million in 2035 — at which time they will exceed those of the United States.

The U.S., meanwhile, can look forward to an improved energy situation.  Thanks to increased production in “tough oil” areas of the United States, including the Arctic seas off Alaska, the deep waters of the Gulf of Mexico, and shale formations in Montana, North Dakota, and Texas, future imports are expected to decline, even as energy consumption rises.  In addition, more oil is likely to be available from the Western Hemisphere rather than the Middle East or Africa.  Again, this will be thanks to the exploitation of yet more “tough oil” areas, including the Athabasca tar sands of Canada, Brazilian oil fields in the deep Atlantic, and increasingly pacified energy-rich regions of previously war-torn Colombia.  According to the Department of Energy, combined production in the United States, Canada, and Brazil is expected to climb by 10.6 million barrels per day between 2009 and 2035 — an enormous jump, considering that most areas of the world are expecting declining output.

Whose Sea Lanes Are These Anyway?

From a geopolitical perspective, all this seems to confer a genuine advantage on the United States, even as China becomes ever more vulnerable to the vagaries of events in, or along, the sea lanes to distant lands.  It means Washington will be able to contemplate a gradual loosening of its military and political ties to the Middle Eastern oil states that have dominated its foreign policy for so long and have led to those costly, devastating wars.

Indeed, as President Obama said in Canberra, the U.S. is now in a position to begin to refocus its military capabilities elsewhere. “After a decade in which we fought two wars that cost us dearly,” he declared, “the United States is turning our attention to the vast potential of the Asia-Pacific region.”

For China, all this spells potential strategic impairment.  Although some of China’s imported oil will travel overland through pipelines from Kazakhstan and Russia, the great majority of it will still come by tanker from the Middle East, Africa, and Latin America over sea lanes policed by the U.S. Navy.  Indeed, almost every tanker bringing oil to China travels across the South China Sea, a body of water the Obama administration is now seeking to place under effective naval control.

By securing naval dominance of the South China Sea and adjacent waters, the Obama administration evidently aims to acquire the twenty-first century energy equivalent of twentieth-century nuclear blackmail.  Push us too far, the policy implies, and we’ll bring your economy to its knees by blocking your flow of vital energy supplies.  Of course, nothing like this will ever be said in public, but it is inconceivable that senior administration officials are not thinking along just these lines, and there is ample evidence that the Chinese are deeply worried about the risk — as indicated, for example, by their frantic efforts to build staggeringly expensive pipelines across the entire expanse of Asia to the Caspian Sea basin.

As the underlying nature of the new Obama strategic blueprint becomes clearer, there can be no question that the Chinese leadership will, in response, take steps to ensure the safety of China’s energy lifelines.  Some of these moves will undoubtedly be economic and diplomatic, including, for example, efforts to court regional players like Vietnam and Indonesia as well as major oil suppliers like Angola, Nigeria, and Saudi Arabia.  Make no mistake, however: others will be of a military nature.  A significant buildup of the Chinese navy — still small and backward when compared to the fleets of the United States and its principal allies — would seem all but inevitable.  Likewise, closer military ties between China and Russia, as well as with the Central Asian member states of the Shanghai Cooperation Organization (Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan), are assured.

In addition, Washington could now be sparking the beginnings of a genuine Cold-War-style arms race in Asia, which neither country can, in the long run, afford.  All of this is likely to lead to greater tension and a heightened risk of inadvertent escalation arising out of future incidents involving U.S., Chinese, and allied vessels — like the one that occurred in March 2009 when a flotilla of Chinese naval vessels surrounded a U.S. anti-submarine warfare surveillance ship, the Impeccable, and almost precipitated a shooting incident.  As more warships circulate through these waters in an increasingly provocative fashion, the risk that such an incident will result in something far more explosive can only grow.

Nor will the potential risks and costs of such a military-first policy aimed at China be restricted to Asia.  In the drive to promote greater U.S. self-sufficiency in energy output, the Obama administration is giving its approval to production techniques — Arctic drilling, deep-offshore drilling, and hydraulic fracturing — that are guaranteed to lead to further Deepwater Horizon-style environmental catastrophe at home.  Greater reliance on Canadian tar sands, the “dirtiest” of energies, will result in increased greenhouse gas emissions and a multitude of other environmental hazards, while deep Atlantic oil production off the Brazilian coast and elsewhere has its own set of grim dangers.

All of this ensures that, environmentally, militarily, and economically, we will find ourselves in a more, not less, perilous world.  The desire to turn away from disastrous land wars in the Greater Middle East to deal with key issues now simmering in Asia is understandable, but choosing a strategy that puts such an emphasis on military dominance and provocation is bound to provoke a response in kind.  It is hardly a prudent path to head down, nor will it, in the long run, advance America’s interests at a time when global economic cooperation is crucial.  Sacrificing the environment to achieve greater energy independence makes no more sense.

A new Cold War in Asia and a hemispheric energy policy that could endanger the planet: it’s a fatal brew that should be reconsidered before the slide toward confrontation and environmental disaster becomes irreversible.  You don’t have to be a seer to know that this is not the definition of good statesmanship, but of the march of folly.

Michael T. Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and the author, most recently, of Rising Powers, Shrinking Planet. A documentary movie version of his previous book, Blood and Oil, is available from the Media Education Foundation. To listen to Timothy MacBain’s latest Tomcast audio interview in which Klare discusses the American military build-up in the Pacific, click here or download it to your iPod here.

Copyright 2011 Michael T. Klare

America and Oil.  It’s like bacon and eggs, Batman and Robin.  As the old song lyric went, you can’t have one without the other.  Once upon a time, it was also a surefire formula for national greatness and global preeminence.  Now, it’s a guarantee of a trip to hell in a hand basket.  The Chinese know it.  Does Washington?

America’s rise to economic and military supremacy was fueled in no small measure by its control over the world’s supply of oil.  Oil powered the country’s first giant corporations, ensured success in World War II, and underlay the great economic boom of the postwar period.  Even in an era of nuclear weapons, it was the global deployment of oil-powered ships, helicopters, planes, tanks, and missiles that sustained America’s superpower status during and after the Cold War.  It should come as no surprise, then, that the country’s current economic and military decline coincides with the relative decline of oil as a major source of energy.

If you want proof of that economic decline, just check out the way America’s share of the world’s gross domestic product has been steadily dropping, while its once-powerhouse economy now appears incapable of generating forward momentum.  In its place, robust upstarts like China and India are posting annual growth rates of 8% to 10%.  When combined with the growing technological prowess of those countries, the present figures are surely just precursors to a continuing erosion of America’s global economic clout.

Militarily, the picture appears remarkably similar.  Yes, a crack team of SEAL commandos did kill Osama bin Laden, but that single operation — greeted in the United States with a jubilation more appropriate to the ending of a major war — hardly made up for the military’s lackluster performance in two recent wars against ragtag insurgencies in Iraq and Afghanistan.  If anything, almost a decade after the Taliban was overthrown, it has experienced a remarkable resurgence even facing the full might of the U.S., while the assorted insurgent forces in Iraq appear to be holding their own.  Meanwhile, Iran — that bête noire of American power in the Middle East — seem as powerful as ever.  Al Qaeda may be on the run, but as recent developments in Egypt, Libya, Syria, Yemen, and unstable Pakistan suggest, the United States wields far less clout and influence in the region now than it did before it invaded Iraq in 2003.

If American power is in decline, so is the relative status of oil in the global energy equation.  In the 2000 edition of its International Energy Outlook, the Energy Information Administration (EIA) of the U.S. Department of Energy confidently foresaw ever-expanding oil production in Africa, Alaska, the Persian Gulf area, and the Gulf of Mexico, among other areas.  It predicted, in fact, that world oil output would reach 97 million barrels per day in 2010 and a staggering 115 million barrels in 2020.  EIA number-crunchers concluded as well that oil would long retain its position as the world’s leading source of energy.  Its 38% share of the global energy supply, they said, would remain unchanged.

What a difference a decade makes. By 2010, a new understanding about the natural limits of oil production had sunk in at the EIA and its experts were predicting a disappointingly modest petroleum future.  In that year, world oil output had reached just 82 million barrels per day, a stunning 15 million less than expected.  Moreover, in the 2010 edition of its International Energy Outlook, the EIA was now projecting 2020 output at 85 million barrels per day, hardly more than the 2010 level and 30 million barrels below its projections of just a decade earlier, which were relegated to the dustbin of history.  (Such projections, by the way, are for conventional, liquid petroleum and exclude “tough” and “dirty” sources that imply energy desperation — like Canadian tar sands, shale oil, and other “unconventional” fuels.)

The most recent EIA projections also show oil’s share of the world total energy supply — far from remaining constant at 38% — had already dropped to 35% in 2010 and was projected to continue declining to 32% in 2020 and 30% in 2035.  In its place, natural gas and renewable sources of energy are expected to assume ever more prominent roles.

So here’s the question all of us should consider, in part because until now no one has: Are the decline of the United States and the decline of oil connected?  Careful analysis suggests that there are good reasons to believe they are. 

From Standard Oil to the Carter Doctrine

More than 100 years ago, America’s first great economic expansion abroad was spearheaded by its giant oil companies, notably John D. Rockefeller’s Standard Oil Company — a saga told with great panache in Daniel Yergin’s classic book The Prize.  These companies established powerful beachheads in Mexico and Venezuela, and later in parts of Asia, North Africa, and of course the Middle East. As they became ever more dependent on the extraction of oil in distant lands, American foreign policy began to be reorganized around acquiring and protecting U.S. oil concessions in major producing areas. 

With World War II and the Cold War, oil and U.S. national security became thoroughly intertwined.  After all, the United States had prevailed over the Axis powers in significant part because it possessed vast reserves of domestic petroleum while Germany and Japan lacked them, depriving their forces of vital fuel supplies in the final years of the war.  As it happened, though, the United States was using up its domestic reserves so rapidly that, even before World War II was over, Washington turned its attention to finding new overseas sources of crude that could be brought under American control.  As a result, Saudi Arabia, Kuwait, and a host of other Middle Eastern producers would become key U.S. oil suppliers under American military protection.

There can be little question that, for a time, American domination of world oil production would prove a potent source of economic and military power.  After World War II, an abundance of cheap U.S. oil spurred the development of vast new industries, including civilian air travel, highway construction, a flood of suburban housing and commerce, mechanized agriculture, and plastics.

Abundant oil also underlay the global expansion of the country’s military power, as the Pentagon garrisoned the world while becoming one of the planet’s great oil guzzlers.  Its global dominion came to rest on an ever-expanding array of oil-powered ships, planes, tanks, and missiles.  As long as the Middle East — and especially Saudi Arabia — served essentially as an American gas station and oil remained a cheap commodity, all this was relatively painless.

In addition, thanks to its control of Middle Eastern oil, Washington had its hand on the economic jugular of Europe and Japan, both of which remain highly dependent on imports from the region.  Not surprisingly, then, one president after another insisted Washington would not permit any rival to challenge American control of that oil jugular — a principle enshrined in the Carter Doctrine of January 1980, which stated that the United States would go to war if any hostile power threatened the flow of Persian Gulf oil.

The use of military force, in accordance with that doctrine, has been a staple of American foreign policy since 1987, when President Ronald Reagan first applied the “principle” by authorizing U.S. warships to escort Kuwaiti tankers during the Iran-Iraq War.  George H. W. Bush invoked the same principle when he authorized American military intervention during the first Gulf War of 1990-1991, as did Bill Clinton when he ordered missile attacks on Iraq in the late 1990s and George W. Bush when he launched the invasion of Iraq in 2003.

At that moment, the United States and oil seemed at the pinnacle of their power.  As the victor in the Cold War and then the first Gulf War, the American military was ranked supreme, with no conceivable challenger on the horizon.  And nowhere were there more fervent believers in “unilateralist” America’s ability to “shock and awe” the planet than in Washington.  The nation’s economy still appeared relatively robust as a major housing bubble was just beginning to form.  China’s economy was then a paltry 15% as big as ours.  Only seven years later, it would be approximately 40% as large.  By invading Iraq, Secretary of Defense Donald Rumsfeld planned to demonstrate the crushing superiority of America’s new high-tech weaponry, while setting the stage for further military exploits in the region, including a possible attack on Iran.  (A neocon quip caught the mood of the moment: “Everyone wants to go to Baghdad.  Real men want to go to Tehran.”)

The future of oil seemed no less robust in 2003: demand was brisk, crude prices ranged from about $25 to $30 per barrel, and the concept of “peak oil” — the notion that planetary supplies were more limited than imagined, that in the near future production would reach its peak and subsequently contract — was still considered laughable by most industry experts.  By invading Iraq and setting up permanent military bases at the very heart of the global oil heartlands, the White House expected to ensure continued control over the flow of Persian Gulf oil and gain access to Iraq’s voluminous reserves, the largest in the world after those of Saudi Arabia and Iran.

From an imperial point of view, it was a beautiful dream from which Americans were destined to awaken abruptly.  As a start, it quickly became apparent that American technological prowess was no panacea for urban guerrilla warfare, and so a vast occupation army was soon needed to “pacify” Iraq — and then pacify it again, and again, and again.  A similar dilemma arose in Afghanistan, where a tribal-based religious insurgency proved remarkably immune to superior American firepower.  To sustain hundreds of thousands of American soldiers in those distant, often inaccessible areas, the Department of Defense became the world’s single biggest consumer of oil, burning more on a daily basis than the entire nation of Sweden — this, at a time when the price of crude rose to $50, then $80, and finally soared over the $100 mark.  Procuring and delivering ever-increasing amounts of gasoline, diesel, and jet fuel to American forces in Iraq and Afghanistan may not be the principal reason for the wars’ spiraling costs, but it certainly ranks among the major causes.  (Just the price of providing air conditioning to American troops in those two countries is now estimated at approximately $20 billion a year.)

With oil likely to prove increasingly scarce and costly, the Department of Defense is being forced to reexamine its fundamental operating principles when it comes to energy.  Secretary of Defense Rumsfeld’s notion that troops could be replaced by growing numbers of oil-powered super-weapons no longer appears viable, even for a power already garrisoning much of the planet for which “unending” war has become the new norm.

Yes, the Pentagon is looking into the use of biofuels, solar arrays, and other green alternatives to petroleum to power its planes and tanks, but any such future still seems an almost inconceivably long way off.  And yet the thought of more wars involving the commitment of vast numbers of ground troops to protracted counterinsurgency operations in distant parts of the Greater Middle East at $400 or more for every gallon of gas used appears increasingly unpalatable for the globe’s former “sole superpower.”  (Hence, the sudden burst of enthusiasm over drone wars.)  Seen from this perspective, the decline of America and the decline of oil appear closely connected indeed.

Don’t Bet on Washington

And this is hardly the only apparent connection.  Because the American economy is so closely tied to oil, it is especially vulnerable to oil’s growing scarcity, price volatility, and the relative paucity of its suppliers.  Consider this: at present, the United States obtains about 40% of its total energy supply from oil, far more than any other major economic power.  This means that when prices rise or oil supplies are disrupted for any reason — hurricanes in the Gulf of Mexico, war in the Middle East, environmental disasters of any sort — the economy is at particular risk. While a burst housing bubble and financial shenanigans lay behind the Great Recession that began in 2008, it’s worth remembering that it also coincided with the beginning of a stratospheric rise in oil prices.  As anyone who has pulled into a gas station knows, at an average price of nearly $3.70 a gallon for regular gas, the staying power of high-priced oil has crippled what, until recently, was being called a “weak recovery.”

Despite the great debt debate in Washington, oil is a factor seldom mentioned when American indebtedness comes up.  And yet the United States imports 50% to 60% of its oil supply, and with prices averaging at least $80 to $90 per barrel, we’re sending approximately $1 billion every day to foreign oil providers.  These payments constitute the single biggest contribution to the country’s balance-of-payments deficit and so is a major source of the nation’s economic weakness.

Consider for comparison our leading economic rival: China.  That country relies on oil for only about 20% of its total energy supply, about half as much as we do.  Instead, the Chinese have turned to coal, which they possess in great abundance and can produce at a relatively low cost.  (China, of course, pays a heavy environmental price for its coal dependency.)  The Chinese do import some petroleum, but considerably less than the U.S., so their import expenses are considerably smaller.  Nor do its oil-import costs have the same enfeebling effect, since China enjoys a positive balance of trade (in part, at America’s expense).  As a result, when oil prices soared to record heights in 2008 and again in 2011, Beijing experienced none of the trauma felt in Washington.

No doubt many factors explain the startling rise of the Chinese economy, including lower costs of production and weaker environmental regulations.  It is hard, however, to avoid the conclusion that our greater reliance on oil as it begins its decline has played a significant role in the changing balance of economic power between the two countries.

All this leads to a critical question:  How should America respond to these developments in the years ahead?

As a start, there can be no question that the United States needs to move quickly to reduce its reliance on oil and increase the availability of other energy sources, especially renewable ones that pose no threat to the environment.  This is not merely a matter of reducing our reliance on imported oil, as some have suggested.  As long as oil remains our preeminent source of energy, we will be painfully vulnerable to the vicissitudes of the global oil market, wherever problems may arise.  Only by embracing forms of energy immune to international disruption and capable of promoting investment at home can the foundations be laid for future economic progress.  Of course, this is easy enough to write, but with Washington in the grip of near-total political paralysis, it appears that continuing American decline, possibly of a precipitous sort, could be in the cards.

And don’t think that China will get away scot-free either.  If it doesn’t quickly embrace the new energy technologies, the environmental costs of its excessive reliance on coal will, sooner or later, cripple its development as well.  Unlike Washington, however, the Chinese leadership not only recognizes this, but is acting on it by making colossal investments in green energy technologies.  If China succeeds in dominating this field — as has already begun to happen — it could leave the United States in the dust when it comes to economic growth.  Ditching oil for the new energy technologies should be America’s top economic priority, but if you’re in a betting mood, you probably shouldn’t put your money on Washington.

Michael T. Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and the author, most recently, of Rising Powers, Shrinking Planet. A documentary movie version of his previous book, Blood and Oil, is available from the Media Education Foundation.

Copyright 2011 Michael T. Klare

Here’s the good news about energy: thanks to rising oil prices and deteriorating economic conditions worldwide, the International Energy Agency (IEA) reports that global oil demand will not grow this year as much as once assumed, which may provide some temporary price relief at the gas pump.  In its May Oil Market Report, the IEA reduced its 2011 estimate for global oil consumption by 190,000 barrels per day, pegging it at 89.2 million barrels daily.  As a result, retail prices may not reach the stratospheric levels predicted earlier this year, though they will undoubtedly remain higher than at any time since the peak months of 2008, just before the global economic meltdown.  Keep in mind that this is the good news.

As for the bad news: the world faces an array of intractable energy problems that, if anything, have only worsened in recent weeks.  These problems are multiplying on either side of energy’s key geological divide: below ground, once-abundant reserves of easy-to-get “conventional” oil, natural gas, and coal are drying up; above ground, human miscalculation and geopolitics are limiting the production and availability of specific energy supplies.  With troubles mounting in both arenas, our energy prospects are only growing dimmer.

Here’s one simple fact without which our deepening energy crisis makes no sense: the world economy is structured in such a way that standing still in energy production is not an option.  In order to satisfy the staggering needs of older industrial powers like the United States along with the voracious thirst of rising powers like China, global energy must grow substantially every year.  According to the projections of the U.S. Department of Energy (DoE), world energy output, based on 2007 levels, must rise 29% to 640 quadrillion British thermal units by 2025 to meet anticipated demand.  Even if usage grows somewhat more slowly than projected, any failure to satisfy the world’s requirements produces a perception of scarcity, which also means rising fuel prices.  These are precisely the conditions we see today and should expect for the indefinite future.

It is against this backdrop that three crucial developments of 2011 are changing the way we are likely to live on this planet for the foreseeable future.

Tough-Oil Rebels

The first and still most momentous of the year’s energy shocks was the series of events precipitated by the Tunisian and Egyptian rebellions and the ensuing “Arab Spring” in the greater Middle East.  Neither Tunisia nor Egypt was, in fact, a major oil producer, but the political shockwaves these insurrections unleashed has spread to other countries in the region that are, including Libya, Oman, and Saudi Arabia.  At this point, the Saudi and Omani leaderships appear to be keeping a tight lid on protests, but Libyan production, normally averaging approximately 1.7 million barrels per day, has fallen to near zero.

When it comes to the future availability of oil, it is impossible to overstate the importance of this spring’s events in the Middle East, which continue to thoroughly rattle the energy markets. According to all projections of global petroleum output, Saudi Arabia and the other Persian Gulf states are slated to supply an ever-increasing share of the world’s total oil supply as production in key regions elsewhere declines.  Achieving this production increase is essential, but it will not happen unless the rulers of those countries invest colossal sums in the development of new petroleum reserves — especially the heavy, “tough oil” variety that requires far more costly infrastructure than existing “easy oil” deposits. 

In a front-page story entitled “Facing Up to the End of ‘Easy Oil,’” the Wall Street Journal noted that any hope of meeting future world oil requirements rests on a Saudi willingness to sink hundreds of billions of dollars into their remaining heavy-oil deposits.  But right now, faced with a ballooning population and the prospects of an Egyptian-style youth revolt, the Saudi leadership seems intent on using its staggering wealth on employment-generating public-works programs and vast arrays of weaponry, not new tough-oil facilities; the same is largely true of the other monarchical oil states of the Persian Gulf.

Whether such efforts will prove effective is unknown.  If a youthful Saudi population faced with promises of jobs and money, as well as the fierce repression of dissidence, has seemed less confrontational than their Tunisian, Egyptian, and Syrian counterparts, that doesn’t mean that the status quo will remain forever.  “Saudi Arabia is a time bomb,” commented Jaafar Al Taie, managing director of Manaar Energy Consulting (which advises foreign oil firms operating in the region). “I don’t think that what the King is doing now is sufficient to prevent an uprising,” he added, even though the Saudi royals had just announced a $36-billion plan to raise the minimum wage, increase unemployment benefits, and build affordable housing.

At present, the world can accommodate a prolonged loss of Libyan oil.  Saudi Arabia and a few other producers possess sufficient excess capacity to make up the difference.  Should Saudi Arabia ever explode, however, all bets are off.  “If something happens in Saudi Arabia, [oil] will go to $200 to $300 [per barrel],” said Sheikh Zaki Yamani, the kingdom’s former oil minister, on April 5th.  “I don’t expect this for the time being, but who would have expected Tunisia?”

Nuclear Power on the Downward Slope

In terms of the energy markets, the second major development of 2011 occurred on March 11th when an unexpectedly powerful earthquake and tsunami struck Japan.  As a start, nature’s two-fisted attack damaged or destroyed a significant proportion of northern Japan’s energy infrastructure, including refineries, port facilities, pipelines, power plants, and transmission lines.  In addition, of course, it devastated four nuclear plants at Fukushima, resulting, according to the U.S. Department of Energy, in the permanent loss of 6,800 megawatts of electric generating capacity.

This, in turn, has forced Japan to increase its imports of oil, coal, and natural gas, adding to the pressure on global supplies.  With Fukushima and other nuclear plants off line, industry analysts calculate that Japanese oil imports could rise by as much as 238,000 barrels per day, and imports of natural gas by 1.2 billion cubic feet per day (mostly in the form of liquefied natural gas, or LNG).

This is one major short-term effect of the tsunami.  What about the longer-term effects?  The Japanese government now claims it is scrapping plans to build as many as 14 new nuclear reactors over the next two decades.  On May 10th, Prime Minister Naoto Kan announced that the government would have to “start from scratch” in devising a new energy policy for the country.  Though he speaks of replacing the cancelled reactors with renewable energy systems like wind and solar, the sad reality is that a significant part of any future energy expansion will inevitably come from more imported oil, coal, and LNG.

The disaster at Fukushima — and ensuing revelations of design flaws and maintenance failures at the plant — has had a domino effect, causing energy officials in other countries to cancel plans to build new nuclear plants or extend the life of existing ones.  The first to do so was Germany: on March 14th, Chancellor Angela Merkel closed two older plants and suspended plans to extend the life of 15 others.  On May 30th, her government made the suspension permanent.  In the wake of mass antinuclear rallies and an election setback, she promised to shut all existing nuclear plants by 2022, which, experts believe, will result in an increase in fossil-fuel use.

China also acted swiftly, announcing on March 16th that it would stop awarding permits for the construction of new reactors pending a review of safety procedures, though it did not rule out such investments altogether.  Other countries, including India and the United States, similarly undertook reviews of reactor safety procedures, putting ambitious nuclear plans at risk.  Then, on May 25th, the Swiss government announced that it would abandon plans to build three new nuclear power plants, phase out nuclear power, and close the last of its plants by 2034, joining the list of countries that appear to have abandoned nuclear power for good.

How Drought Strangles Energy

The third major energy development of 2011, less obviously energy-connected than the other two, has been a series of persistent, often record, droughts gripping many areas of the planet.  Typically, the most immediate and dramatic effect of prolonged drought is a reduction in grain production, leading to ever-higher food prices and ever more social turmoil.

Intense drought over the past year in Australia, China, Russia, and parts of the Middle East, South America, the United States, and most recently northern Europe has contributed to the current record-breaking price of food — and this, in turn, has been a key factor in the political unrest now sweeping North Africa, East Africa, and the Middle East.  But drought has an energy effect as well.  It can reduce the flow of major river systems, leading to a decline in the output of hydroelectric power plants, as is now happening in several drought-stricken regions.

By far the greatest threat to electricity generation exists in China, which is suffering from one of its worst droughts ever.  Rainfall levels from January to April in the drainage basin of the Yangtze, China's longest and most economically important river, have been 40% lower than the average of the past 50 years, according to China Daily.  This has resulted in a significant decline in hydropower and severe electricity shortages throughout much of central China.

The Chinese are burning more coal to generate electricity, but domestic mines no longer satisfy the country’s needs and so China has become a major coal importer.  Rising demand combined with inadequate supply has led to a spike in coal prices, and with no comparable spurt in electricity rates (set by the government), many Chinese utilities are rationing power rather than buy more expensive coal and operate at a loss.  In response, industries are upping their reliance on diesel-powered backup generators, which in turn increases China’s demand for imported oil, putting yet more pressure on global fuel prices.

Wrecking the Planet

So now we enter June with continuing unrest in the Middle East, a grim outlook for nuclear power, and a severe electricity shortage in China (and possibly elsewhere).  What else do we see on the global energy horizon?

Despite the IEA’s forecast of diminished future oil consumption, global energy demand continues to outpace increases in supply.  From all indications, this imbalance will persist.

Take oil.  A growing number of energy analysts now agree that the era of “easy oil” has ended and that the world must increasingly rely on hard-to-get “tough oil.”  It is widely assumed, moreover, that the planet harbors a lot of this stuff — deep underground, far offshore, in problematic geological formations like Canada’s tar sands, and in the melting Arctic.  However, extracting and processing tough oil will prove ever more costly and involve great human, and even greater environmental, risk.  Think: BP’s Deepwater Horizon disaster of April 2010 in the Gulf of Mexico.

Such is the world’s thirst for oil that a growing amount of this stuff will nonetheless be extracted, even if not, in all likelihood, at a pace and on a scale necessary to replace the disappearance of yesterday’s and today’s easy oil.  Along with continued instability in the Middle East, this tough-oil landscape seems to underlie expectations that the price of oil will only rise in the coming years.  In a poll of global energy company executives conducted this April by the KPMG Global Energy Institute, 64% of those surveyed predicted that crude oil prices will cross the $120 per barrel barrier before the end of 2011.  Approximately one-third of them predicted that the price would go even higher, with 17% believing it would reach $131-$140 per barrel; 9%, $141-$150 per barrel; and 6%, above the $150 mark.

The price of coal, too, has soared in recent months, thanks to mounting worldwide demand as supplies of energy from nuclear power and hydroelectricity have contracted.  Many countries have launched significant efforts to spur the development of renewable energy, but these are not advancing fast enough or on a large enough scale to replace older technologies quickly.  The only bright spot, experts say, is the growing extraction of natural gas from shale rock in the United States through the use of hydraulic fracturing (“hydro-fracking”).

Proponents of shale gas claim it can provide a large share of America’s energy needs in the years ahead, while actually reducing harm to the environment when compared to coal and oil (as gas emits less carbon dioxide per unit of energy released); however, an expanding chorus of opponents are warning of the threat to municipal water supplies posed by the use of toxic chemicals in the fracking process.  These warnings have proven convincing enough to lead lawmakers in a growing number of states to begin placing restrictions on the practice, throwing into doubt the future contribution of shale gas to the nation’s energy supply.  Also, on May 12th, the French National Assembly (the powerful lower house of parliament) voted 287 to 146 to ban hydro-fracking in France, becoming the first nation to do so.

The environmental problems of shale gas are hardly unique.  The fact is that all of the strategies now being considered to extend the life-spans of oil, coal, and natural gas involve severe economic and environmental risks and costs — as, of course, does the very use of fossil fuels of any sort at a moment when the first IEA numbers for 2010 indicate that it was an unexpectedly record-breaking year for humanity when it came to dumping greenhouse gases into the atmosphere.

With the easily accessible mammoth oil fields of Texas, Venezuela, and the Middle East either used up or soon to be significantly depleted, the future of oil rests on third-rate stuff like tar sands, shale oil, and extra-heavy crude that require a lot of energy to extract, processes that emit added greenhouse gases, and as with those tar sands, tend to play havoc with the environment.

Shale gas is typical.  Though plentiful, it can only be pried loose from underground shale formations through the use of explosives and highly pressurized water mixed with toxic chemicals.  In addition, to obtain the necessary quantities of shale oil, many tens of thousands of wells will have to be sunk across the American landscape, any of one of which could prove to be an environmental disaster.

Likewise, the future of coal will rest on increasingly invasive and hazardous techniques, such as the explosive removal of mountaintops and the dispersal of excess rock and toxic wastes in the valleys below.  Any increase in the use of coal will also enhance climate change, since coal emits more carbon dioxide than do oil and natural gas.

Here’s the bottom line: Any expectations that ever-increasing supplies of energy will meet demand in the coming years are destined to be disappointed.  Instead, recurring shortages, rising prices, and mounting discontent are likely to be the thematic drumbeat of the globe’s energy future. 

If we don’t abandon a belief that unrestricted growth is our inalienable birthright and embrace the genuine promise of renewable energy (with the necessary effort and investment that would make such a commitment meaningful), the future is likely to prove grim indeed.  Then, the history of energy, as taught in some late twenty-first-century university, will be labeled: How to Wreck the Planet 101.

Michael T. Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and the author, most recently, of Rising Powers, Shrinking Planet. A documentary movie version of his previous book, Blood and Oil, is available from the Media Education Foundation. To listen to Timothy MacBain’s latest TomCast audio interview in which Klare discusses the U.S., Saudi Arabia, and resource conflicts, click here, or download it to your iPod here.

Copyright 2011 Michael T. Klare

In his 2010 book, Eaarth: Making a Life on a Tough New Planet, environmental scholar and activist Bill McKibben writes of a planet so devastated by global warming that it’s no longer recognizable as the Earth we once inhabited.  This is a planet, he predicts, of “melting poles and dying forests and a heaving, corrosive sea, raked by winds, strafed by storms, scorched by heat.”  Altered as it is from the world in which human civilization was born and thrived, it needs a new name — so he gave it that extra “a” in “Eaarth.”

The Eaarth that McKibben describes is a victim, a casualty of humankind’s unrestrained consumption of resources and its heedless emissions of climate-altering greenhouse gases.  True, this Eaarth will cause pain and suffering to humans as sea levels rise and croplands wither, but as he portrays it, it is essentially a victim of human rapaciousness.

With all due respect to McKibben’s vision, let me offer another perspective on his (and our) Eaarth: as a powerful actor in its own right and as an avenger, rather than simply victim.

It’s not enough to think of Eaarth as an impotent casualty of humanity’s predations.  It is also a complex organic system with many potent defenses against alien intervention — defenses it is already wielding to devastating effect when it comes to human societies.  And keep this in mind: we are only at the beginning of this process.

To grasp our present situation, however, it’s necessary to distinguish between naturally recurring planetary disturbances and the planetary responses to human intervention.  Both need a fresh look, so let’s start with what Earth has always been capable of before we turn to the responses of Eaarth, the avenger.

Overestimating Ourselves

Our planet is a complex natural system, and like all such systems, it is continually evolving.  As that happens — as continents drift apart, as mountain ranges rise and fall, as climate patterns shift — earthquakes, volcanoes, tsunamis, typhoons, prolonged droughts, and other natural disturbances recur, even if on an irregular and unpredictable basis. 

Our predecessors on the planet were deeply aware of this reality.  After all, ancient civilizations were repeatedly shaken, and in some cases shattered, by such disturbances.  For example, it is widely believed that the ancient Minoan civilization of the eastern Mediterranean collapsed following a powerful volcanic eruption on the island of Thera (also called Santorini) in the mid-second millennium BCE.  Archaeological evidence suggests that many other ancient civilizations were weakened or destroyed by intense earthquake activity.  In Apocalypse: Earthquakes, Archaeology, and the Wrath of God, Stanford geophysicist Amos Nur and his co-author Dawn Burgess argue that Troy, Mycenae, ancient Jericho, Tenochtitlan, and the Hittite empire may have fallen in this manner.

Faced with recurring threats of earthquakes and volcanoes, many ancient religions personified the forces of nature as gods and goddesses and called for elaborate human rituals and sacrificial offerings to appease these powerful deities. The ancient Greek sea-god Poseidon (Neptune to the Romans), also called “Earth-Shaker,” was thought to cause earthquakes when provoked or angry.

In more recent times, thinkers have tended to scoff at such primitive notions and the gestures that went with them, suggesting instead that science and technology — the fruits of civilization — offer more than enough help to allow us to triumph over the Earth’s destructive forces.  This shift in consciousness has been impressively documented in Clive Ponting’s 2007 volume, A New Green History of the World.  Quoting from influential thinkers of the post-Medieval world, he shows how Europeans acquired a powerful conviction that humanity should and would rule nature, not the other way around.  The seventeenth century French mathematician René Descartes, for example, wrote of employing science and human knowledge so that “we can… render ourselves the masters and possessors of nature.”

It’s possible that this growing sense of human control over nature was enhanced by a period of a few hundred years in which there may have been less than the usual number of civilization-threatening natural disturbances.  Over those centuries, modern Europe and North America, the two centers of the Industrial Revolution, experienced nothing like the Thera eruption of the Minoan era — or, for that matter, anything akin to the double whammy of the 9.0 earthquake and 50-foot-high tsunami that struck Japan on March 11th.  This relative immunity from such perils was the context within which we created a highly complex, technologically sophisticated civilization that largely takes for granted human supremacy over nature on a seemingly quiescent planet. 

But is this assessment accurate?  Recent events, ranging from the floods that covered 20% of Pakistan and put huge swathes of Australia underwater to the drought-induced fires that burned vast areas of Russia, suggest otherwise.  In the past few years, the planet has been struck by a spate of major natural disturbances, including the recent earthquake-tsunami disaster in Japan (and its many powerful aftershocks), the January 2010 earthquake in Haiti, the February 2010 earthquake in Chile, the February 2011 earthquake in Christchurch, New Zealand, the March 2011 earthquake in Burma, and the devastating 2004 Indian Ocean earthquake-tsunami that killed more than 230,000 people in 14 countries, as well as a series of earthquakes, tsunamis, and volcanic eruptions in and around Indonesia.

If nothing else, these events remind us that the Earth is an ever-evolving natural system; that the past few hundred years are not necessarily predictive of the next few hundred; and that we may, in the last century in particular, have lulled ourselves into a sense of complacency about our planet that is ill-deserved.  More important, they suggest that we may — and I emphasize may — be returning to an era in which the frequency of the incidence of such events is on the rise.

In this context, the folly and hubris with which we’ve treated natural forces comes strongly into focus.  Take what’s happening at the Fukushima Daiichi nuclear power complex in northern Japan, where at least four nuclear reactors and their adjoining containment pools for “spent” nuclear fuel remain dangerously out of control.  The designers and owners of the plant obviously did not cause the earthquake and tsunami that have created the present peril.  This was a result of the planet’s natural evolution — in this case, of the sudden movement of continental plates.  But they do bear responsibility for failing to anticipate the potential for catastrophe — for building a reactor on the site of frequent past tsunamis and assuming that a human-made concrete platform could withstand the worst that nature has to offer.  Much has been said about flaws in design at the Fukushima plant and its inadequate backup systems.  All this, no doubt, is vital, but the ultimate cause of the disaster was never a simple design flaw.  It was hubris: an overestimation of the power of human ingenuity and an underestimation of the power of nature.

What future disasters await us as a result of such hubris?  No one, at this point, can say with certainty, but the Fukushima facility is not the only reactor built near active earthquake zones, or at risk from other natural disturbances.  And don’t just stop with nuclear plants.  Consider, for instance, all those oil platforms in the Gulf of Mexico at risk from increasingly powerful hurricanes or, if cyclones increase in power and frequency, the deep-sea ones Brazil is planning to construct up to 180 miles off its coast in the Atlantic Ocean.  And with recent events in Japan in mind, who knows what damage might be inflicted by a major earthquake in California?  After all, California, too, has nuclear plants sited ominously near earthquake faults. 

Underestimating Eaarth

Hubris of this sort is, however, only one of the ways in which we invite the planet’s ire.  Far more dangerous and provocative is our poisoning of the atmosphere with the residues of our resource consumption, especially of fossil fuels.  According to the U.S. Department of Energy, total carbon emissions from all forms of energy use had already hit 21.2 billion metric tons by 1990 and are projected to rise ominously to 42.4 billion by 2035, a 100% increase in less than half a century.  The more carbon dioxide and other greenhouse gases we dump into the atmosphere, the more we alter the planet’s natural climatic systems and damage other vital ecological assets, including oceans, forests, and glaciers.  These are all components of the planet’s integral makeup, and when damaged in this way, they will trigger defensive feedback mechanisms: rising temperatures, shifting rainfall patterns, and increased sea levels, among other reactions.

The notion of the Earth as a complex natural system with multiple feedback loops was first proposed by environmental scientist James Lovelock in the 1960s and propounded in his 1979 book, Gaia: A New Look at Life on Earth.  (Lovelock appropriated the name of the ancient Greek goddess Gaia, the personification of Mother Earth, for his version of our planet.)  In this and other works, Lovelock and his collaborators argue that all biological organisms and their inorganic surroundings on the planet are closely integrated to form a complex and self-regulating system, maintaining the necessary conditions for life — a concept they termed “the Gaia Hypothesis.”  When any parts of this system are damaged or altered, they contend, the others respond by attempting to repair, or compensate for, the damage in order to restore the essential balance. 

Think of our own bodies when attacked by virulent microorganisms: our temperature rises; we produce more white blood cells and other fluids, sleep a lot, and deploy other defense mechanisms.  When successful, our bodies’ defenses first neutralize and eventually exterminate the invading germs.  This is not a conscious act, but a natural, life-saving process. 

Eaarth is now responding to humanity’s depredations in a similar way: by warming the atmosphere, taking carbon from the air and depositing it in the ocean, increasing rainfall in some areas and decreasing it elsewhere, and in other ways compensating for the massive atmospheric infusion of harmful human emissions.

But what Eaarth does to protect itself from human intervention is unlikely to prove beneficial for human societies.  As the planet warms and glaciers melt, sea levels will rise, inundating coastal areas, destroying cities, and flooding low-lying croplands.  Drought will become endemic in many once-productive farming areas, reducing food supplies for hundreds of millions of people.   Many plant and animal species that are key to human livelihoods, including various species of trees, food crops, and fish, will prove incapable of adjusting to these climate changes and so cease to exist.  Humans may — and again I emphasize that may — prove more successful at adapting to the crisis of global warming than such species, but in the process, multitudes are likely to die of starvation, disease, and attendant warfare.

Bill McKibben is right: we no longer live on the “cozy, taken-for-granted” planet formerly known as Earth.  We inhabit a new place, already changed dramatically by the intervention of humankind.  But we are not acting upon a passive, impotent entity unable to defend itself against human transgression.  Sad to say, we will learn to our dismay of the immense powers available to Eaarth, the Avenger.

Michael T. Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and the author, most recently, of Rising Powers, Shrinking Planet. A documentary movie version of his previous book, Blood and Oil, is available from the Media Education Foundation.

Copyright 2011 Michael T. Klare

Whatever the outcome of the protests, uprisings, and rebellions now sweeping the Middle East, one thing is guaranteed: the world of oil will be permanently transformed.  Consider everything that’s now happening as just the first tremor of an oilquake that will shake our world to its core. 

For a century stretching back to the discovery of oil in southwestern Persia before World War I, Western powers have repeatedly intervened in the Middle East to ensure the survival of authoritarian governments devoted to producing petroleum.  Without such interventions, the expansion of Western economies after World War II and the current affluence of industrialized societies would be inconceivable.

Here, however, is the news that should be on the front pages of newspapers everywhere:  That old oil order is dying, and with its demise we will see the end of cheap and readily accessible petroleum — forever.

Ending the Petroleum Age

Let’s try to take the measure of what exactly is at risk in the current tumult.  As a start, there is almost no way to give full justice to the critical role played by Middle Eastern oil in the world’s energy equation.  Although cheap coal fueled the original Industrial Revolution, powering railroads, steamships, and factories, cheap oil has made possible the automobile, the aviation industry, suburbia, mechanized agriculture, and an explosion of economic globalization.  And while a handful of major oil-producing areas launched the Petroleum Age — the United States, Mexico, Venezuela, Romania, the area around Baku (in what was then the Czarist Russian empire), and the Dutch East Indies — it’s been the Middle East that has quenched the world’s thirst for oil since World War II.

In 2009, the most recent year for which such data is available, BP reported that suppliers in the Middle East and North Africa jointly produced 29 million barrels per day, or 36% of the world’s total oil supply — and even this doesn’t begin to suggest the region’s importance to the petroleum economy.  More than any other area, the Middle East has funneled its production into export markets to satisfy the energy cravings of oil-importing powers like the United States, China, Japan, and the European Union (EU).  We’re talking 20 million barrels funneled into export markets every day.  Compare that to Russia, the world’s top individual producer, at seven million barrels in exportable oil, the continent of Africa at six million, and South America at a mere one million.

As it happens, Middle Eastern producers will be even more important in the years to come because they possess an estimated two-thirds of remaining untapped petroleum reserves.  According to recent projections by the U.S. Department of Energy, the Middle East and North Africa will jointly provide approximately 43% of the world’s crude petroleum supply by 2035 (up from 37% in 2007), and will produce an even greater share of the world’s exportable oil.

To put the matter baldly:  The world economy requires an increasing supply of affordable petroleum.  The Middle East alone can provide that supply.  That’s why Western governments have long supported “stable” authoritarian regimes throughout the region, regularly supplying and training their security forces.  Now, this stultifying, petrified order, whose greatest success was producing oil for the world economy, is disintegrating.  Don’t count on any new order (or disorder) to deliver enough cheap oil to preserve the Petroleum Age.

To appreciate why this will be so, a little history lesson is in order.

The Iranian Coup

After the Anglo-Persian Oil Company (APOC) discovered oil in Iran (then known as Persia) in 1908, the British government sought to exercise imperial control over the Persian state.  A chief architect of this drive was First Lord of the Admiralty Winston Churchill.  Having ordered the conversion of British warships from coal to oil before World War I and determined to put a significant source of oil under London’s control, Churchill orchestrated the nationalization of APOC in 1914.  On the eve of World War II, then-Prime Minister Churchill oversaw the removal of Persia’s pro-German ruler, Shah Reza Pahlavi, and the ascendancy of his 21-year-old son, Mohammed Reza Pahlavi.

Though prone to extolling his (mythical) ties to past Persian empires, Mohammed Reza Pahlavi was a willing tool of the British.  His subjects, however, proved ever less willing to tolerate subservience to imperial overlords in London.  In 1951, democratically elected Prime Minister Mohammed Mossadeq won parliamentary support for the nationalization of APOC, by then renamed the Anglo-Iranian Oil Company (AIOC).  The move was wildly popular in Iran but caused panic in London.  In 1953, to save this great prize, British leaders infamously conspired with President Dwight Eisenhower‘s administration in Washington and the CIA to engineer a coup d’état that deposed Mossadeq and brought Shah Pahlavi back from exile in Rome, a story recently told with great panache by Stephen Kinzer in All the Shah’s Men.

Until he was overthrown in 1979, the Shah exercised ruthless and dictatorial control over Iranian society, thanks in part to lavish U.S. military and police assistance.  First he crushed the secular left, the allies of Mossadeq, and then the religious opposition, headed from exile by the Ayatollah Ruhollah Khomeini.  Given their brutal exposure to police and prison gear supplied by the United States, the shah’s opponents came to loathe his monarchy and Washington in equal measure.  In 1979, of course, the Iranian people took to the streets, the Shah was overthrown, and Ayatollah Khomeini came to power.

Much can be learned from these events that led to the current impasse in U.S.-Iranian relations.  The key point to grasp, however, is that Iranian oil production never recovered from the revolution of 1979-1980.

Between 1973 and 1979, Iran had achieved an output of nearly six million barrels of oil per day, one of the highest in the world.  After the revolution, AIOC (rechristened British Petroleum, or later simply BP) was nationalized for a second time, and Iranian managers again took over the company’s operations.  To punish Iran’s new leaders, Washington imposed tough trade sanctions, hindering the state oil company’s efforts to obtain foreign technology and assistance.  Iranian output plunged to two million barrels per day and, even three decades later, has made it back to only slightly more than four million barrels per day, even though the country possesses the world’s second largest oil reserves after Saudi Arabia.

Dreams of the Invader

Iraq followed an eerily similar trajectory.  Under Saddam Hussein, the state-owned Iraq Petroleum Company (IPC) produced up to 2.8 million barrels per day until 1991, when the First Gulf War with the United States and ensuing sanctions dropped output to half a million barrels daily.  Though by 2001 production had again risen to almost 2.5 million barrels per day, it never reached earlier heights.  As the Pentagon geared up for an invasion of Iraq in late 2002, however, Bush administration insiders and well-connected Iraqi expatriates spoke dreamily of a coming golden age in which foreign oil companies would be invited back into the country, the national oil company would be privatized, and production would reach never before seen levels.

Who can forget the effort the Bush administration and its officials in Baghdad put into making their dream come true?  After all, the first American soldiers to reach the Iraqi capital secured the Oil Ministry building, even as they allowed Iraqi looters free rein in the rest of the city. L. Paul Bremer III, the proconsul later chosen by President Bush to oversee the establishment of a new Iraq, brought in a team of American oil executives to supervise the privatization of the country’s oil industry, while the U.S. Department of Energy confidently predicted in May 2003 that Iraqi production would rise to 3.4 million barrels per day in 2005, 4.1 million barrels by 2010, and 5.6 million by 2020.

None of this, of course, came to pass.  For many ordinary Iraqis, the U.S. decision to immediately head for the Oil Ministry building was an instantaneous turning point that transformed possible support for the overthrow of a tyrant into anger and hostility.  Bremer’s drive to privatize the state oil company similarly produced a fierce nationalist backlash among Iraqi oil engineers, who essentially scuttled the plan.  Soon enough, a full-scale Sunni insurgency broke out. Oil output quickly fell, averaging only 2.0 million barrels daily between 2003 and 2009.  By 2010, it had finally inched back up to the 2.5 million barrel mark — a far cry from those dreamed of 4.1 million barrels.

One conclusion isn’t hard to draw: Efforts by outsiders to control the political order in the Middle East for the sake of higher oil output will inevitably generate countervailing pressures that result in diminished production.  The United States and other powers watching the uprisings, rebellions, and protests blazing through the Middle East should be wary indeed: whatever their political or religious desires, local populations always turn out to harbor a fierce, passionate hostility to foreign domination and, in a crunch, will choose independence and the possibility of freedom over increased oil output.

The experiences of Iran and Iraq may not in the usual sense be comparable to those of Algeria, Bahrain, Egypt, Iraq, Jordan, Libya, Oman, Morocco, Saudi Arabia, Sudan, Tunisia, and Yemen.  However, all of them (and other countries likely to get swept up into the tumult) exhibit some elements of the same authoritarian political mold and all are connected to the old oil order.  Algeria, Egypt, Iraq, Libya, Oman, and Sudan are oil producers; Egypt and Jordan guard vital oil pipelines and, in Egypt’s case, a crucial canal for the transport of oil; Bahrain and Yemen as well as Oman occupy strategic points along major oil sealanes.  All have received substantial U.S. military aid and/or housed important U.S. military bases.  And, in all of these countries, the chant is the same:  “The people want the regime to fall.”

Two of these regimes have already fallen, three are tottering, and others are at risk.  The impact on global oil prices has been swift and merciless: on February 24th, the delivery price for North Brent crude, an industry benchmark, nearly reached $115 per barrel, the highest it’s been since the global economic meltdown of October 2008.  West Texas Intermediate, another benchmark crude, briefly and ominously crossed the $100 threshold.

Why the Saudis are Key

So far, the most important Middle Eastern producer of all, Saudi Arabia, has not exhibited obvious signs of vulnerability, or prices would have soared even higher.  However, the royal house of neighboring Bahrain is already in deep trouble; tens of thousands of protesters — more than 20% of its half million people — have repeatedly taken to the streets, despite the threat of live fire, in a movement for the abolition of the autocratic government of King Hamad ibn Isa al-Khalifa, and its replacement with genuine democratic rule.

These developments are especially worrisome to the Saudi leadership as the drive for change in Bahrain is being directed by that country’s long-abused Shiite population against an entrenched Sunni ruling elite.  Saudi Arabia also contains a large, though not — as in Bahrain — a majority Shiite population that has also suffered discrimination from Sunni rulers.  There is anxiety in Riyadh that the explosion in Bahrain could spill into the adjacent oil-rich Eastern Province of Saudi Arabia — the one area of the kingdom where Shiites do form the majority — producing a major challenge to the regime.  Partly to forestall any youth rebellion, 87-year-old King Abdullah has just promised $10 billion in grants, part of a $36 billion package of changes, to help young Saudi citizens get married and obtain homes and apartments.

Even if rebellion doesn’t reach Saudi Arabia, the old Middle Eastern oil order cannot be reconstructed.  The result is sure to be a long-term decline in the future availability of exportable petroleum.

Three-quarters of the 1.7 million barrels of oil Libya produces daily were quickly taken off the market as turmoil spread in that country.  Much of it may remain off-line and out of the market for the indefinite future.  Egypt and Tunisia can be expected to restore production, modest in both countries, to pre-rebellion levels soon, but are unlikely to embrace the sorts of major joint ventures with foreign firms that might boost production while diluting local control.  Iraq, whose largest oil refinery was badly damaged by insurgents only last week, and Iran exhibit no signs of being able to boost production significantly in the years ahead.

The critical player is Saudi Arabia, which just increased production to compensate for Libyan losses on the global market.  But don’t expect this pattern to hold forever.  Assuming the royal family survives the current round of upheavals, it will undoubtedly have to divert more of its daily oil output to satisfy rising domestic consumption levels and fuel local petrochemical industries that could provide a fast-growing, restive population with better-paying jobs.

From 2005 to 2009, Saudis used about 2.3 million barrels daily, leaving about 8.3 million barrels for export.  Only if Saudi Arabia continues to provide at least this much oil to international markets could the world even meet its anticipated low-end oil needs.  This is not likely to occur.  The Saudi royals have expressed reluctance to raise output much above 10 million barrels per day, fearing damage to their remaining fields and so a decline in future income for their many progeny.  At the same time, rising domestic demand is expected to consume an ever-increasing share of Saudi Arabia’s net output.  In April 2010, the chief executive officer of state-owned Saudi Aramco, Khalid al-Falih, predicted that domestic consumption could reach a staggering 8.3 million barrels per day by 2028, leaving only a few million barrels for export and ensuring that, if the world can’t switch to other energy sources, there will be petroleum starvation.

In other words, if one traces a reasonable trajectory from current developments in the Middle East, the handwriting is already on the wall.  Since no other area is capable of replacing the Middle East as the world’s premier oil exporter, the oil economy will shrivel — and with it, the global economy as a whole.

Consider the recent rise in the price of oil just a faint and early tremor heralding the oilquake to come.  Oil won’t disappear from international markets, but in the coming decades it will never reach the volumes needed to satisfy projected world demand, which means that, sooner rather than later, scarcity will become the dominant market condition.  Only the rapid development of alternative sources of energy and a dramatic reduction in oil consumption might spare the world the most severe economic repercussions.

Michael T. Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and the author, most recently, of Rising Powers, Shrinking Planet.  A documentary film version of his previous book, “Blood and Oil,” is available from the Media Education Foundation. To listen to Timothy MacBain’s latest TomCast audio interview in which Klare explains how resource scarcity is driving protest and much else on our planet, click here, or download it to your iPod here.

Copyright 2011 Michael T. Klare

Get ready for a rocky year.  From now on, rising prices, powerful storms, severe droughts and floods, and other unexpected events are likely to play havoc with the fabric of global society, producing chaos and political unrest. Start with a simple fact: the prices of basic food staples are already approaching or exceeding their 2008 peaks, that year when deadly riots erupted in dozens of countries around the world.

It’s not surprising then that food and energy experts are beginning to warn that 2011 could be the year of living dangerously — and so could 2012, 2013, and on into the future.  Add to the soaring cost of the grains that keep so many impoverished people alive a comparable rise in oil prices — again nearing levels not seen since the peak months of 2008 — and you can already hear the first rumblings about the tenuous economic recovery being in danger of imminent collapse.  Think of those rising energy prices as adding further fuel to global discontent.

Already, combined with staggering levels of youth unemployment and a deep mistrust of autocratic, repressive governments, food prices have sparked riots in Algeria and mass protests in Tunisia that, to the surprise of the world, ousted long-time dictator President Zine al-Abidine Ben Ali and his corrupt extended family.  And many of the social stresses evident in those two countries are present across the Middle East and elsewhere.  No one can predict where the next explosion will occur, but with food prices still climbing and other economic pressures mounting, more upheavals appear inevitable. These may be the first resource revolts to catch our attention, but they won’t be the last.

Put simply, global consumption patterns are now beginning to challenge the planet’s natural resource limits.  Populations are still on the rise, and from Brazil to India, Turkey to China, new powers are rising as well.  With them goes an urge for a more American-style life.  Not surprisingly, the demand for basic commodities is significantly on the rise, even as supplies in many instances are shrinking.  At the same time, climate change, itself a product of unbridled energy use, is adding to the pressure on supplies, and speculators are betting on a situation trending progressively worse.  Add these together and the road ahead appears increasingly rocky.

Breadbaskets without Bread

Let’s begin with food, the most important and volatile of these commodities.  Food prices declined in October 2008 after the onset of the global financial crisis, but that seems to have been an anomaly.  The December 2010 index of global food prices compiled by the U.N.’s Food and Agricultural Organization (FAO) hit a record 215, one point higher than in the spring of 2008.  (In that index, based on a “bundle” of food staples, a baseline of 100 represents average prices in 2002-2004.)  In fact, some food products, including sugar, cooking oils, and fats, are now trading substantially above their 2008 levels; others, including dairy products, grains, and meat, are inching perilously close to record levels.

As 2011 begins, food experts fear that, within months, prices for key staples will climb above the 2008 threshold and stay there, causing extreme hardship for poor people around the world.  “We are at a very high level,” said a worried Abdolreza Abbassian, an economist at the FAO.  “These levels in the previous episode led to problems and riots across the world.” 

Of particular concern to Abbassian and his colleagues is the rising cost of corn, rice, and wheat, the staple crops of billions in many of the poorest countries.  According to the FAO, by the end of 2010 international corn and wheat prices were already approaching their 2008 peak levels (about $260 and $340 per metric ton, respectively).

Analysts attribute the rise in grain prices to growing demand in both developed and developing nations, along with a number of cataclysmic weather-related events and speculation by investors.  An extreme drought and fierce fires last summer destroyed a large percentage of the wheat crop in Russia and Ukraine, while heavy flooding in India and the inundation of 20% of Pakistan damaged significant parts of the grain output of those countries. At the same time, unusually hot and dry weather suppressed production in a number of other key farming areas.

What makes the picture look so worrisome today are indications that the severity and frequency of extreme weather events appear to be on the rise.  In the past few weeks alone, several such events point the way to serious supply problems ahead.  Most significant has been the unprecedented rainfall and flooding in Australia that put an area more than twice the size of California largely underwater, significantly disrupting wheat cultivation there.  Australia is one of the world’s leading wheat producers.  Unusually dry conditions in the American Midwest and Argentina have also hinted at future problems in grain and corn output.  It’s still too early to predict the size of this year’s grain and corn harvests, but many analysts are warning of a shortfall in supplies, along with sky-high prices.

Mainstream analysts and government officials are loathe to attribute this traffic jam of extreme weather events to global warming.  Huge variations in rainfall can be normal, especially in places like Australia that are susceptible to El Niño/La Niña ocean-temperature oscillations, and politicians are fearful of assuming responsibility for a problem as massive as climate change.  But climate change theory has long suggested that the warming trend — 2010 tied 2005 for the warmest year on record and nine of the 10 warmest years have come in the last decade — will be accompanied by an increase in the frequency and severity of storms.  It’s hard to escape the conclusion that recent events, including those Australian floods, are tied to rising global temperatures.

The Energy Crisis Returns

Soaring food prices are being driven as well by speculative investments and the rising price of oil.  Partly in response to the diminishing value of the dollar, some investors are sinking their money into food futures (along with gold and silver) as a speculative hedge.  At the same time, the price of oil is edging toward the $100 mark, making it increasingly profitable for farmers to switch from growing corn for human consumption to growing it for the manufacture of ethanol, which in turn reduces the amount of farm acreage devoted to staples.  Oil would have to fall below $50 per barrel to make the cultivation of corn as a food product competitive with ethanol production — and that’s not likely to happen.  So even if more corn is produced this year, less will be available for food purposes and the price of what remains is bound to rise.

The precipitous rise in oil prices has startled the experts.  Not so long ago, the U.S. Department of Energy (DoE) was projecting a price range of $70-$80 per barrel in 2011, but as the year began oil was already trading above $90 a barrel and some analysts predict that it will reach $100 before the year is out.  A few are even talking about the $150 barrel and gas prices at the pump of $4 or more.  If prices climb above $100, global consumer spending could take another nosedive.

“Oil prices are entering a dangerous zone for the global economy,” says Fatih Birol, the chief economist for the International Energy Agency (IEA).  “The oil import bills are becoming a threat to the economic recovery.”

As with food, the rising cost of oil is a product of growing demand, insufficient supplies, and speculative investments.  According to the most recent projections from the IEA, daily global oil consumption in 2011 will average 87.4 million barrels, an increase of about two million barrels from the first quarter of 2010.  Much of the extra demand is coming from China, where a newly-minted middle class is buying automobiles at a record clip, as well as from the United States, where previously cautious consumers are slowly returning to pre-2008 driving habits.

At a time when the oil industry is experiencing declining rates of output at many existing oil fields and finding it ever more difficult to add production, even two million extra barrels per day can be a daunting challenge (and greater demand is expected in the coming years).  In the United States, for example, much hope was placed in oil exploration in the deep waters of the Gulf of Mexico and offshore Alaska, but in the wake of the BP disaster, this seems like a forlorn prospect.  Production in Mexico and the North Sea, two bright spots of recent years, is facing a sharp decline, while other key producers, including those in the Middle East, are struggling to maintain current output levels at existing fields.

Many energy analysts believe that the world is at (or will soon reach) peak oil — the moment when global petroleum output achieves a maximum sustainable daily rate and begins a long-term, irreversible decline.  Others contend that higher levels of output are still possible.  Whatever the truth of the matter, at this moment the oil industry is finding it increasingly difficult, and ever more costly, to boost output above current levels.  This, combined with insatiable demand, is driving prices skyward.

Under these circumstances, speculators are again being drawn into the oil market as a rare sure bet.  Such speculators helped push oil prices to a record $147 per barrel back in 2008, but fled the market when prices crashed as the American economy headed to a meltdown.  Now, they’re coming back.  “Hedge funds and private investors are buying up financial instruments tied to the price of crude, and thereby helping push up oil prices,” the Wall Street Journal reported in late December.

Most analysts are expecting a price surge this spring or summer when American motorists hit the road.  “We will have a spring rally that will take us to between $3.10 and $3.50 a gallon for gasoline at service stations in the United States,” predicted Tom Kloza, chief oil analyst at the Oil Price Information Service.

The rising price of gas will, in turn, hurt consumers just as they show signs of opening their wallets again.  No less worrisome, oil-importing countries like the United States, Japan, and many in Europe will face soaring bills for fuel imports, further enfeebling economies already suffering from profound weakness. 

According to some calculations, oil prices added another $72 billion to America’s mammoth balance-of-payments deficit last year.  Europe had to cough up an additional $70 billion for imported oil and Japan $27 billion.  “It is a very telling story,” says the IEA’s Fatih Birol of recent oil-price data.  “2010 rang the first alarm bells and 2011 price levels could bring us to the same financial crisis times that we saw in 2008.”

Rising food prices leading to riots, protests, and revolts, mounting oil prices, mammoth worldwide unemployment, and a collapsed recovery — it looks like the perfect set of preconditions for a global tsunami of instability and turmoil.  Events in Algeria and Tunisia give us just an inkling of what this maelstrom might look like, but where and how it will next erupt, and in what form, is anyone’s guess.  A single guarantee: we haven’t seen the last of resource revolts which, in the coming years, could reach an intensity we scarcely imagine today.

Michael T. Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and the author, most recently, of Rising Powers, Shrinking Planet.  To listen to Timothy MacBain’s latest TomCast audio interview in which Klare discusses what rising food prices mean globally, click here or, to download it to your iPod, here.  A documentary movie version of his previous book, “Blood and Oil,” is available from the Media Education Foundation.

Copyright 2011 Michael T. Klare

If you want to know which way the global wind is blowing (or the sun shining or the coal burning), watch China.  That’s the news for our energy future and for the future of great-power politics on planet Earth.  Washington is already watching — with anxiety.

Rarely has a simple press interview said more about the global power shifts taking place in our world.  On July 20th, the chief economist of the International Energy Agency (IEA), Fatih Birol, told the Wall Street Journal that China had overtaken the United States to become the world’s number one energy consumer.  One can read this development in many ways: as evidence of China’s continuing industrial prowess, of the lingering recession in the United States, of the growing popularity of automobiles in China, even of America’s superior energy efficiency as compared to that of China.  All of these observations are valid, but all miss the main point: by becoming the world’s leading energy consumer, China will also become an ever more dominant international actor and so set the pace in shaping our global future.

Because energy is tied to so many aspects of the global economy, and because doubts are growing about the future availability of oil and other vital fuels, the decisions China makes regarding its energy portfolio will have far-reaching consequences.  As the leading player in the global energy market, China will significantly determine not only the prices we will be paying for critical fuels but also the type of energy systems we will come to rely on.  More importantly, China’s decisions on energy preferences will largely determine whether China and the United States can avoid becoming embroiled in a global struggle over imported oil and whether the world will escape catastrophic climate change.

How to Rise to Global Preeminence

You can’t really appreciate the significance of China’s newfound energy prominence if you don’t first grasp the role of energy in America’s rise to global preeminence.

That the northeastern region of the young United States was richly endowed with waterpower and coal deposits was critical to the country’s early industrialization as well as to the North’s eventual victory in the Civil War.  It was the discovery of oil in western Pennsylvania in 1859, however, that would turn the U.S. into the decisive actor on the global stage.  Oil extraction and exports fueled American prosperity in the early twentieth century — a time when the country was the planet’s leading producer — while nurturing the rise of its giant corporations.

It should never be forgotten that the world’s first great transnational corporation — John D. Rockefeller’s Standard Oil Company — was founded on the exploitation and export of American petroleum.  Anti-trust legislation would break up Standard Oil in 1911, but two of its largest descendants, Standard Oil of New York and Standard Oil of New Jersey, were later fused into what is now the world’s wealthiest publicly traded enterprise, ExxonMobil.  Another descendant, Standard Oil of California, became Chevron — today, the third richest American corporation.

Oil also played a key role in the rise of the United States as the world’s preeminent military power.  This country supplied most of the oil consumed by Allied forces in both World War I and World War II.  Among the great powers of the time, the U.S. alone was self-sufficient in oil, which meant it could deploy massive armies to Europe and Asia and overpower the well-equipped (but oil-starved) German and Japanese militaries.  Few realize this today, but for the architects of America’s victory in the Second World War, including President Roosevelt, it was the nation’s superior endowment of petroleum, not the atom bomb, that proved decisive.

Having created an economy and military establishment based on oil, American leaders were compelled to employ ever more costly and desperate measures to ensure that both always had an adequate supply of energy.  After World War II, with domestic reserves already beginning to shrink, a succession of presidents fashioned a global strategy based on ensuring American access to overseas petroleum.

As a start, Saudi Arabia and the other Persian Gulf kingdoms were chosen to serve as overseas “filling stations” for U.S. refiners and military forces.  American oil companies, especially the descendants of Standard Oil, were aided and abetted in establishing a major presence in these countries.  To a considerable extent, in fact, the great postwar strategic pronouncements — the Truman Doctrine, the Eisenhower Doctrine, the Nixon Doctrine, and especially the Carter Doctrine — were all tied to the protection of these “filling stations.”

Today, too, oil plays a critical role in Washington’s global plans and actions.  The Department of State, for example, still maintains an elaborate, costly, and deeply entrenched military capability in the Persian Gulf to ensure the “safety” and “security” of oil exports from the region.  It has also extended its military reach to such key oil-producing regions as the Caspian Sea basin and western Africa.  The need to retain friendly ties and military relationships with key suppliers like Kuwait, Nigeria, and Saudi Arabia continues to dominate U.S. foreign policy.  Similarly, in a globally warming world, a growing American interest in the melting Arctic is being propelled by a desire to exploit the polar region’s untapped hydrocarbon reserves.

Planet Coal?

The fact that China has now overtaken the United States as the world’s leading energy consumer is bound to radically alter its global policies, just as energy predominance once did America’s.  No doubt this will, in turn, alter the course of Sino-American relations, not to speak of world affairs.  With the American experience in mind, what can we expect from China?

As a start, no one reading newspaper business pages could have any doubt that Chinese leaders view energy as a — possibly the — major concern of the country and have been devoting substantial resources and planning to the procurement of adequate future supplies.  In addressing this task, Chinese leaders face two fundamental challenges: securing sufficient energy to meet ever-rising demand and deciding which fuels to rely on in satisfying these requirements.  How China responds to these challenges will have striking implications on the global stage.

According to the most recent projections from the U.S. Department of Energy (DoE), Chinese energy consumption will grow by 133% between 2007 and 2035 — from, that is, 78 to 182 quadrillion British thermal units (BTUs).  Think about it this way: the 104 quadrillion BTUs that China will somehow have to add to its energy supply over the next quarter-century equals the total energy consumption of Europe and the Middle East in 2007.  Finding and funneling so much oil, natural gas, and other fuels to China is undoubtedly going to be the single greatest economic and industrial challenge facing Beijing — and in that challenge lays the possibility of real friction and conflict.

Although most of the country’s energy funds are still expended domestically, what it spends on imported fuels (oil, coal, natural gas, and uranium) and energy equipment (oil refineries, power plants, and nuclear reactors) will significantly determine the global price of these items — a role that, until now, has been largely filled by the United States.  More important, however, will be the decisions China makes about the types of energy it will come to rely on.

If Chinese leaders were to follow their natural inclinations, they would undoubtedly avoid relying on imported fuels altogether, given how vulnerable foreign-energy dependence can make a country to overseas supply disruptions or, in China’s case, a possible U.S. naval blockade (in the event, say, of a prolonged conflict over Taiwan).  Li Junfeng, a senior Chinese energy official, was recently quoted as saying, “Energy supply should be where you can plant your foot on it” — that is, from domestic sources.

China does possess one kind of fuel in abundance: coal.  According to the most recent DoE projections, coal will make up an estimated 62% of China’s net energy supply in 2035, only slightly less than at present.  A heavy reliance on coal, however, will exacerbate the country’s environmental problems, dragging down its economy as health-care costs mount.  In addition, thanks to coal, China is now the world’s leading emitter of climate-altering carbon dioxide.  According to the DoE, China’s share of global carbon-dioxide emissions will jump from 19.6% in 2005, when it barely trailed the U.S. at 21.1%, to 31.4% in 2035, when it will tower over all other countries in net emissions.

As long as Beijing refuses to significantly reduce its reliance on coal, ignore its rhetoric on global-warming negotiations.  It simply won’t be able to take truly meaningful steps to address climate change.  In this way, too, it will alter the face of the planet.

Recently, the country’s leaders seem to have become far more sensitive to the risks of excessive reliance on coal.  Massive emphasis is now being placed on the development of renewable energy systems, especially wind and solar power.  Already, China has become the world’s leading producer of wind turbines and solar panels, and has already begun exporting its technology to the United States.  (Some economists and labor unions, in fact, claim that China is unfairly subsidizing its renewable-energy exports in violation of World Trade Organization rules.)

China’s growing emphasis on renewable energy would be good news, if it resulted in substantial reductions in coal use.  At the same time, the country’s drive to excel at these techniques could push it into the forefront of a technological revolution, just as early American dominance of petroleum technology propelled it to the front ranks of world powers in the twentieth century.  If the United States fails to keep pace, it could find the pace of its decline as a world power quickening.

Whose Saudis Are They?

China’s thirst for added energy could also lead quickly enough to friction and conflict with the United States, especially in the global competition for increasingly scarce supplies of imported petroleum.  As its energy use ramps ever upward, China is using more oil, which can only lead to greater political economic, political, and someday possibly even military involvement in the oil-producing regions — areas long viewed in Washington as constituting America’s private offshore energy preserves.

As recently as 1995, China only consumed about 3.4 million barrels of oil per day — one-fifth the amount used by the United States, the world’s top consumer, and two-thirds of the amount burned by Japan, then number two.  Since China pumped 2.9 million barrels per day from its domestic fields that year, its import burden was a mere 500,000 barrels per day at a time when the U.S. imported 9.4 million barrels and Japan 5.3 million barrels.

By 2009, China was in the number-two spot at 8.6 million barrels per day, which still fell far below America’s 18.7 million barrels.  At 3.8 million barrels per day, however, domestic production wasn’t keeping pace — the very problem the U.S. had faced in the Cold War era.  China was already importing 4.8 million barrels per day, far more than Japan (which had actually reduced its reliance on oil) and nearly half as much as the United States.  In the decades to come, these numbers are guaranteed only to get worse.

According to the DoE, China will overtake the U.S. as the world’s leading oil importer, at an estimated 10.6 million barrels per day, sometime around 2030.  (Some experts believe this shift could occur far sooner.)  Whatever the year, China’s leaders are already enmeshed in the same power “predicament” long faced by their American counterparts, dependent as they are on a vital substance that can only be acquired from a handful of unreliable producers in areas of chronic crisis and conflict.

At present, China obtains most of its imported oil from Saudi Arabia, Iran, Angola, Oman, Sudan, Kuwait, Russia, Kazakhstan, Libya, and Venezuela.  Eager to ensure the reliability of the oil flow from these countries, Beijing has established close ties with their leaders, in some cases providing them with significant economic and military assistance.  This is exactly the path once taken by Washington — and with some of the same countries.

China’s state-controlled energy firms have also forged “strategic partnerships” with counterpart enterprises in these countries and in some cases acquired the right to develop major oil deposits as well.  Especially striking has been the way Beijing has sought to undercut U.S. influence in Saudi Arabia and with other crucial Persian Gulf oil producers.  In 2009, China imported more Saudi oil than the U.S. for the first time, a geopolitical shift of great significance, given the history of U.S.-Saudi relations.  Although not competing with Washington when it comes to military aid, Beijing has been dispatching its top leaders to woo Riyadh, promising to support Saudi aspirations without employing the human rights or pro-democracy rhetoric usually associated with American foreign policy.

Much of this should sound exceedingly familiar.  After all, the United States once wooed the Saudis in a similar way when Washington first began viewing the kingdom as its overseas filling station and turned it into an unofficial military protectorate.  In 1945, while World War II still raged, President Roosevelt made a special trip to meet with King Abdul Aziz of Saudi Arabia and establish a protection-for-oil arrangement that persists to this day.  Not surprisingly, American leaders don’t see (or care to recognize) the analogy; instead, top officials look askance at the way China is poaching on U.S. turf in Saudi Arabia and other petro-states, portraying such moves as antagonistic.

As China’s reliance on these overseas suppliers grows, it is likely to bolster its ties with their leaders, producing further strains in the international political environment.  Already, Beijing’s reluctance to jeopardize its vital energy links with Iran has frustrated U.S. efforts to impose tough new economic sanctions on that country as a way of forcing it to abandon its uranium-enrichment activities.  Likewise, China’s recent loan of $20 billion to the Venezuelan oil industry has boosted the status of President Hugo Chávez at a time when his domestic popularity, and so his ability to counter U.S. policies, was slipping.  The Chinese have also retained friendly ties with President Omar Hassan Ahmad al-Bashir of Sudan, despite U.S. efforts to paint him as an international pariah because of his alleged role in overseeing the massacres in Darfur.

Arms-for-Oil Diplomacy on a Dangerous Planet

Already, China’s efforts to bolster its ties with its foreign-oil providers have produced geopolitical friction with the United States.  There is a risk of far more serious Sino-American conflict as we enter the “tough oil” era and the world supply of easily accessible petroleum rapidly shrinks.  According to the DoE, the global supply of oil and other petroleum liquids in 2035 will be 110.6 million barrels per day – precisely enough to meet anticipated world demand at that time.  Many oil geologists believe, however, that global oil output will reach a peak level of output well below 100 million barrels per day by 2015, and begin declining after that.  In addition, the oil that remains will increasingly be found in difficult places to reach or in highly unstable regions.  If these predictions prove accurate, the United States and China — the world’s two leading oil importers — could become trapped in a zero-sum great-power contest for access to diminishing supplies of exportable petroleum.

What will happen under these circumstances is, of course, impossible to predict, especially since the potential for conflict abounds.  If both countries continue on their current path — arming favored suppliers in a desperate bid to secure long-term advantage — the heavily armed petro-states may also become ever more fearful of, or covetous of, their (equally well-equipped) neighbors.  With both the U.S. and China deploying growing numbers of military advisers and instructors to such countries, the stage could be set for mutual involvement in local wars and border conflicts.  Neither Beijing nor Washington may seek such involvement, but the logic of arms-for-oil diplomacy makes this an unavoidable risk.

It is not hard, then, to picture a future moment when the United States and China are locked in a global struggle over the world’s remaining supplies of oil.  Indeed, many in official Washington believe that such a collision is nearly inevitable.  “China’s near-term focus on preparing for contingencies in the Taiwan Strait… is an important driver of its [military] modernization,” the Department of Defense noted in the 2008 edition of its annual report, The Military Power of the People’s Republic of China.  “However, analysis of China’s military acquisitions and strategic thinking suggests Beijing is also developing capabilities for use in other contingencies, such as a conflict over resources…”

Conflict over planetary oil reserves is not, however, the only path that China’s new energy status could open.  It is possible to imagine a future in which China and the United States cooperate in pursuing oil alternatives that would obviate the need to funnel massive sums into naval and military arms races.  President Obama and his Chinese counterpart, Hu Jintao, seemed to glimpse such a possibility when they agreed last November, during an economic summit in Beijing, to collaborate in the development of alternative fuels and transportation systems.

At this point, only one thing is clear: the greater China’s reliance on imported petroleum, the greater the risk of friction and conflict with the United States, which relies on the same increasingly problematic suppliers of energy.  The greater its reliance on coal, the less comfortable our planet will become.  The greater its emphasis on alternative fuels, the more likely it may make the twenty-first century China’s domain.  At this point, how China will apportion its energy needs among the various candidate fuels remains unknown.  Whatever its choices, however, China’s energy decisions will shake the world.

Michael T. Klare is a professor of peace and world security studies at Hampshire College and the author, most recently, of Rising Powers, Shrinking Planet.  His previous book, Blood and Oil, was made into a documentary film and is available at bloodandoilmovie.com.  To catch Klare discussing China’s energy superpowerdom on Timothy MacBain’s latest TomCast audio interview, click here or, to download it to your iPod, here.

Copyright 2010 Michael T. Klare

Four Scenarios for the Next Energy Mega-Disaster 
By Michael T. Klare

On June 15^th, in their testimony
before the House Energy and Commerce Committee, the chief executives of
America’s leading oil companies argued that BP’s Deepwater Horizon
disaster in the Gulf of Mexico was an aberration — something that
would not have occurred with proper corporate oversight and will not
happen again once proper safeguards are put in place.  This is
fallacious, if not an outright lie.  The Deep Horizon explosion was the
inevitable result of a relentless effort to extract oil from ever
deeper and more hazardous locations.  In fact, as long as the industry
continues its relentless, reckless pursuit of “extreme energy”
— oil, natural gas, coal, and uranium obtained from geologically,
environmentally, and politically unsafe areas — more such calamities
are destined to occur.

At the onset of the modern industrial era, basic fuels were easy to
obtain from large, near-at-hand energy deposits in relatively safe and
friendly locations.  The rise of the automobile and the spread of
suburbia, for example, were made possible by the availability of cheap
and abundant oil from large reservoirs in California, Texas, and
Oklahoma, and from the shallow waters of the Gulf of Mexico.  But these
and equivalent deposits of coal, gas, and uranium have been depleted. 
This means the survival of our energy-centric civilization increasingly
relies on supplies obtained from risky locations — deep underground,
far at sea, north of the Arctic circle, in complex geological
formations, or in unsafe political environments.  That guarantees the
equivalent of two, three, four, or more Gulf-oil-spill-style disasters
in our energy future.

Back in 2005, the CEO of Chevron, David O’Reilly, put the situation
about as bluntly as an oil executive could. “One thing is clear,” he
said, “the era of easy oil is over.  Demand is soaring like never
before… At the same time, many of the world’s oil and gas fields are
maturing.  And new energy discoveries are mainly occurring in places
where resources are difficult to extract, physically, economically, and
even politically.”

O’Reilly promised then that his firm, like the other energy giants,
would do whatever it took to secure this “difficult energy” to satisfy
rising global demand.  And he proved a man of his word.  As a result,
BP, Chevron, Exxon, and the rest of the energy giants launched a drive
to obtain traditional fuels from hazardous locations, setting the stage
for the Gulf of Mexico oil disaster and those sure to follow.  As long
as the industry stays on this course, rather than undertaking the
transition to an alternative energy future, more such catastrophes are
inevitable, no matter how sophisticated the technology or scrupulous
the oversight.

The only question is:  What will the next Deepwater Horizon disaster
look like (other than another Deepwater Horizon disaster)?  The choices
are many, but here are four possible scenarios for future Gulf-scale
energy calamities.  None of these is inevitable, but each has a
plausible basis in fact.

Scenario 1: Newfoundland — Hibernia Platform Destroyed by Iceberg

Approximately 190 miles off the coast of Newfoundland in what locals call “Iceberg Alley” sits the Hibernia oil platform,
the world’s largest offshore drilling facility.  Built at a cost of
some $5 billion, Hibernia consists of a 37,000-ton “topsides” facility
mounted on a 600,000-ton steel-and-concrete gravity base structure
(GBS) resting on the ocean floor, some 260 feet below the surface. 
This mammoth facility, normally manned by 185 crew members, produces
about 135,000 barrels of oil per day.  Four companies (ExxonMobil,
Chevron, Murphy Oil, and Statoil) plus the government of Canada
participate in the joint venture established to operate the platform.

The Hibernia platform is reinforced to withstand a direct impact by
one of the icebergs that regularly sail through this stretch of water,
located just a few hundred miles from where the Titanic infamously hit
an iceberg and sank in 1912.  Sixteen giant steel ribs protrude from
the GBS, positioned in such a way as to absorb the blow of an iceberg
and distribute it over the entire structure.  However, the GBS itself
is hollow, and contains a storage container for 1.3 million barrels of
crude oil — about five times the amount released in the 1989 Exxon
Valdez spill.

The owners of the Hibernia platform insist that the design will
withstand a blow from even the largest iceberg.  As global warming
advances and the Greenland glaciers melt, however, massive chunks of
ice will be sent floating into the North Atlantic on a path past
Hibernia.  Add increased storm activity (another effect of global
warming) to an increase in iceberg frequency and you have a formula for
overwhelming the Hibernia’s defenses.

Here’s the scenario:  It’s the stormy winter of 2018, not an
uncommon situation in the North Atlantic at that time of year.  Winds
exceed 80 miles per hour, visibility is zilch, and iceberg-spotter
planes are grounded.  Towering waves rise to heights of 50 feet or
more, leaving harbor-bound the giant tugs the Hibernia’s owners use to
nudge icebergs from the platform’s path.  Evacuation of the crew by
ship or helicopter is impossible.

Without warning, a gigantic, storm-propelled iceberg strikes the
Hibernia, rupturing the GBS and spilling more than one million barrels
of oil into rough waters.  The topside facility is severed from the
base structure and plunges into the ocean, killing all 185 crew
members.  Every connection to the undersea wells is ruptured, and
135,000 barrels of oil start flowing into the Atlantic every day
(approximately twice the amount now coming from the BP leak in the Gulf
of Mexico).  The area is impossible to reach by plane or ship in the
constant bad weather, meaning emergency repairs can’t be undertaken for
weeks — not until at least five million additional barrels of oil have
poured into the ocean.  As a result, one of the world’s most prolific
fishing grounds — the Grand Banks off Nova Scotia, New Brunswick, and
Cape Cod — is thoroughly poisoned.

Does this sound extreme?  Think again.  On February 15, 1982, a giant drillship, the Ocean Ranger (the “Ocean Danger” to its habitués), was operating in the very spot Hibernia now occupies when it was struck
by 50-foot waves in a storm and sank, taking the lives of 84 crew
members.  Because no drilling was under way at the time, there were no
environmental consequences, but the loss of the Ocean Ranger
— a vessel very much like the Deepwater Horizon — should be a
reminder of just how vulnerable otherwise strong structures can be to
the North Atlantic’s winter fury.

Scenario 2: Nigeria — America’s Oil Quagmire

Nigeria
is now America’s fifth leading supplier of oil (after Canada, Mexico,
Saudi Arabia, and Venezuela).  Long worried about the possibility that
political turmoil in the Middle East might diminish the oil flow from
Saudi Arabia just as Mexico’s major fields were reaching a state of
depletion, American officials have worked hard to increase Nigerian
imports.  However, most of that country’s oil comes from the troubled
Niger Delta region, whose impoverished residents receive few benefits
but all of the environmental damage from the oil extraction there.  As
a result, they have taken up arms in a bid for a greater share of the
revenues the Nigerian government collects from the foreign energy
companies doing the drilling.  Leading this drive is the Movement for the Emancipation for the Niger Delta (MEND), a ragtag guerrilla group that has demonstrated remarkable success in disrupting oil company operations.

The
U.S. Department of Energy (DoE) rates Nigeria’s innate oil-production
capacity at about 2.7 million barrels per day.  Thanks to insurgent
activity in the Delta, however, actual output has fallen significantly
below this.  “Since December 2005, Nigeria has experienced increased
pipeline vandalism, kidnappings, and militant takeovers of oil
facilities in the Niger Delta,” the department reported
in May 2009.  “[K]idnappings of oil workers for ransom are common and
security concerns have led some oil services firms to pull out of the
country.”

Washington views the insurgency as a threat to America’s “energy
security,” and so a reason for aiding the Nigerian military. 
“Disruption of supply from Nigeria would represent a major blow to U.S.
oil security,” the State Department noted in 2006.  In August 2009, on
a visit to Nigeria, Secretary of State Hillary Clinton promised even more military aid for oil protection purposes.

Here, then, is scenario #2:  It’s 2013.  The Delta insurgency has
only grown, driving Nigeria’s oil output down to a third of its
capacity.  Global oil demand is substantially higher and rising, while
production slips everywhere.  Gasoline prices have reached $5 per
gallon in the U.S. with no end in sight, and the economy seems headed
toward yet another deep recession.

The barely functioning civilian government in Abuja, the capital, is
overthrown by a Muslim-dominated military junta that promises to impose
order and restore the oil flow in the Delta.  Some Christian elements
of the military promptly defect, joining MEND.  Oil facilities across
the country are suddenly under attack; oil pipelines are bombed, while
foreign oil workers are kidnapped or killed in record numbers.  The
foreign oil companies running the show begin to shut down operations. 
Global oil prices go through the roof. 

When a dozen American oil workers are executed and a like number
held hostage by a newly announced rebel group, the president addresses
the nation from the Oval Office, declares that U.S. energy security is
at risk, and sends 20,000 Marines and Army troops into the Delta to
join the Special Operations forces already there.  Major port
facilities are quickly secured, but the American expeditionary force
soon finds itself literally in an oil quagmire, an almost unimaginable landscape of oil spills
in which they find themselves fighting a set of interlocked
insurgencies that show no sign of fading.  Casualties rise as they
attempt to protect far-flung pipelines in an impenetrable swamp not
unlike the Mekong Delta of Vietnam War fame.

Sound implausible?  Consider this: in May 2008, the U.S. Army Training and Doctrine Command and the Joint Forces Command conducted
a crisis simulation at the U.S. Army War College in Carlisle,
Pennsylvania, that involved precisely such a scenario, also set in
2013.  The simulation, “Unified Quest 2008,” was linked to the
formation of the U.S. Africa Command (Africom),
the new combat organization established by President Bush in February
2007 to oversee American military operations in Africa.  An oil-related
crisis in Nigeria, it was suggested, represented one of the more likely
scenarios for intervention by U.S. forces assigned to Africom. 
Although the exercise did not explicitly endorse a military move of
this sort, it left little doubt that such a response would be
Washington’s only practical choice.

Scenario 3: Brazil — Cyclone Hits “Pre-Salt” Oil Rigs

In November 2007, Brazil’s state-run oil company, Petróleo Brasileiro (Petrobras), announced a remarkable discovery:
in a tract of the South Atlantic some 180 miles off the coast of Rio de
Janeiro, it had found a giant oil reservoir buried beneath a mile and a
half of water and a thick layer of salt.  Called “pre-salt” oil because
of its unique geological positioning, the deposit was estimated to hold
8 to 12 billion barrels of oil, making this the biggest discovery in
the Western Hemisphere in 40 years.  Further test drilling by Petrobras
and its partners revealed that the initial find — at a field called
Tupi — was linked to other deepwater “pre-salt” reservoirs, bringing
the total offshore potential to 50 billion barrels or more.  (To put
that in perspective, Saudi Arabia is believed to possess reserves of
264 billion barrels and the United States, 30 billion.)

With this discovery, Brazil could “jump from an intermediate
producer to among the world’s largest producers,” said Dilma Rousseff,
chief cabinet official under President Luiz Inácio Lula da Silva and
thought to be his most likely successor.  To ensure that the Brazilian
state exercises ultimate control over the development of these
reservoirs, President da Silva — “Lula,” as he is widely known — and
Rousseff have introduced legislation
in the Brazilian Congress giving Petrobras control over all new fields
in the basin.  In addition, Lula has proposed that profits from the
pre-salt fields be channeled into a new social fund to alleviate
poverty and underdevelopment in the country.  All this has given the
government a huge stake in the accelerated development of the pre-salt
fields.

Extracting oil a mile and half under the water and from beneath
two-and-a-half miles of shifting sand and salt will, however, require
the utilization of technology even more advanced than that employed on
the Deepwater Horizon.  In addition, the pre-salt fields are
interspersed with layers of high-pressure gas (as appears to have been
the case in the Gulf), increasing the risk of a blow-out.  Brazil does
not experience hurricanes as does the Gulf of Mexico, but in 2004, its
coastline was ravaged by a surprise subtropical cyclone
that achieved hurricane strength.  Some climatologists believe that
hurricane-like storms of this sort, once largely unknown in the South
Atlantic, will become more common as global warming only increases.

Which brings us to scenario #3: It’s 2020, by which time the
pre-salt area off Rio will be host to hundreds of deepwater drilling
rigs.  Imagine, then, a subtropical cyclone with hurricane-force winds
and massive waves that suddenly strikes this area, toppling dozens of
the rigs and damaging most of the others, wiping out in a matter of
hours an investment of over $200 billion.  Given a few days warning,
most of the crews of these platforms have been evacuated.  Freak winds,
however, down several helicopters, killing some 50 oil workers and
flight crew members.  Adding to the horror, attempts to seal so many
undersea wells at such depths fail, and oil in historically
unprecedented quantities begins gushing into the South Atlantic.  As
the cyclone grows to full strength, giant waves carry the oil
inexorably toward shore.

Since the storm-driven assault cannot be stopped, Rio de Janeiro’s
famous snow-white beaches are soon blanketed in a layer of sticky black
petroleum, and in a matter of weeks, parts of Brazil’s coastal waters
have become a “dead ocean.”  Clean-up efforts, when finally initiated,
prove exceedingly difficult and costly, adding immeasurably to the
financial burden of the Brazilian state, now saddled with a broken and
bankrupt Petrobras.  Meanwhile, the struggle to seal all the leaking
pre-salt wells in the deep Atlantic proves a Herculean task as, month
after month, oil continues to gush into the Atlantic.

Scenario 4: East China Sea — A Clash Over Subsea Gas

At one time, most wars between states were fought over disputed
borders or contested pieces of land.  Today, most boundaries are fixed
by international treaty and few wars are fought over territory.  But a
new type of conflict is arising: contests over disputed maritime
boundaries in areas that harbor valuable subsea resources, particularly
oil and natural gas deposits.  Such disputes have already occurred in
the Persian Gulf, the Caspian Sea, the East and South China Seas, and
other circumscribed bodies of water.  In each case, the surrounding
states claim vast offshore tracts that overlap, producing — in a world
that may be increasingly starved for energy — potentially explosive
disputes.

One of them is between China and Japan over their mutual boundary
in the East China Sea.  Under the United Nations Convention on the Law
of the Sea, which both countries have signed, each is allowed to
exercise control over an “exclusive economic zone” (EEZ) extending 200
nautical miles (about 230 standard miles) from its coastline.  But the
East China Sea is only about 360 miles across at its widest point
between the two countries.  You see the problem.

In addition, the U.N. convention allows mainland states to claim an
extended EEZ stretching to their outer continental shelf (OCS).  In
China’s case, that means nearly all the way to Japan — or so say the
Chinese.  Japan insists that the offshore boundary between the two
countries should fall midway between them, or about 180 miles from
either shore.  This means that there are now two competing boundaries
in the East China Sea.  As fate would have it, in the gray area between
them houses a promising natural gas field called Chunxiao by the
Chinese and Shirakaba by the Japanese.  Both countries claim that the
field lies within their EEZ, and is theirs alone to exploit.

For years, Chinese and Japanese officials have been meeting to resolve this dispute — to no avail.  In the meantime, each side has taken steps
to begin the exploitation of the undersea gas field.  China has
installed drilling rigs right up to the median line claimed by Japan as
the boundary between them and is now drilling for gas there; Japan has
conducted seismic surveys in the gray area between the two lines. 
China claims that Japan’s actions represent an illegal infringement;
Japan says that the Chinese rigs are sucking up gas from the Japanese
side of the median line, and so stealing their property.  Each side
sees this dispute through a highly nationalistic prism
and appears unwilling to back down.  Both sides have deployed military
forces in the contested area, seeking to demonstrate their resolve to
prevail in the dispute.

Here, then, is Scenario #4:  It’s 2022.  Successive attempts to
resolve the boundary dispute through negotiations have failed.  China
has installed a string of drilling platforms along the median line
claimed by Japan and, according to Japanese officials, has extended
undersea drill pipes deep into Japanese territory.  An
ultra-nationalistic, right-wing government has taken power in Japan,
vowing finally to assert control over Japanese sovereign territory. 
Japanese drill ships, accompanied by naval escorts and fighter planes,
are sent into the area claimed by China.  The Chinese respond with
their warships and order the Japanese to withdraw.  The two fleets
converge and begin to target each other with guns, missiles, and
torpedoes.

At this point, the “fog of war” (in strategic theorist Carl von
Clausewitz’s famous phrase) takes over.  As a Chinese vessel steams
perilously close to a Japanese ship in an attempt to drive it off, the
captain of that vessel panics, and orders his crew to open fire; other
Japanese crews, disobeying orders from superior officers, do the same. 
Before long, a full-scale naval battle ensues, with several sunken
ships and hundreds of casualties.  Japanese aircraft then attack the
nearby Chinese drill rigs, producing hundreds of additional casualties
and yet another deep-sea environmental disaster.  At this point, with
both sides bringing in reinforcements and girding for full-scale war,
the U.S. president makes an emergency visit to the region in a
desperate effort to negotiate a cease-fire.

Such a scenario is hardly implausible.  Since September 2005, China
has deployed a naval squadron in the East China Sea, sending its ships
right up to the median line — a boundary that exists in Japanese
documents, but is not, of course, visible to the naked eye (and so can
be easily overstepped).  On one occasion,
Japanese naval aircraft flew close to a Chinese ship in what must have
seemed a menacing fashion, leading the crew to train its antiaircraft
guns on the approaching plane.  Fortunately, no shots were fired.  But
what would have happened if the Japanese plane had come a little bit
closer, or the Chinese captain was a bit more worried?  One of these
days, as those gas supplies become even more valuable and the
hair-trigger quality of the situation increases, the outcome may not be
so benign.

These are, of course, only a few examples of why, in a world ever
more reliant on energy supplies acquired from remote and hazardous
locations, BP-like catastrophes are sure to occur.  While none of these
specific calamities are guaranteed to happen, something like them
surely will — unless we take dramatic steps now to reduce our
dependence on fossil fuels and speed the transition to a post-carbon
world.  In such a world, most of our energy would come from renewable
wind, solar, and geothermal sources that are commonplace and don’t have
to be tracked down a mile or more under the water or in the icebound
north.  Such resources generally would not be linked to the sort of
disputed boundaries or borderlands that can produce future resource
wars.

Until then, prepare yourselves.  The disaster in the Gulf is no anomaly.  It’s an arrow pointing toward future nightmares. 

Michael T. Klare is a professor of peace and world security studies at Hampshire College, TomDispatch.com regular, and the author, most recently, of Rising Powers, Shrinking Planet.  A documentary movie version of his previous book, Blood and Oil, is available
from the Media Education Foundation.  To catch him discussing our
dystopian energy future on the latest TomCast audio interview, click here, or to download it to your iPod, click here.

Copyright 2010 Michael T. Klare

Yes, the oil spewing up from the floor of the Gulf of Mexico in staggering quantities could prove one of the great ecological disasters of human history.  Think of it, though, as just the prelude to the Age of Tough Oil, a time of ever increasing reliance on problematic, hard-to-reach energy sources.  Make no mistake: we’re entering the danger zone.  And brace yourself, the fate of the planet could be at stake.

It may never be possible to pin down the precise cause of the massive explosion that destroyed the Deepwater Horizon drilling rig on April 20th, killing 11 of its 126 workers.  Possible culprits include a faulty cement plug in the undersea oil bore and a disabled cutoff device known as a blow-out preventer.  Inadequate governmental oversight of safety procedures undoubtedly also contributed to the disaster, which may have been set off by a combination of defective equipment and human error.  But whether or not the immediate trigger of the explosion is ever fully determined, there can be no mistaking the underlying cause: a government-backed corporate drive to exploit oil and natural gas reserves in extreme environments under increasingly hazardous operating conditions.

The New Oil Rush and Its Dangers

The United States entered the hydrocarbon era with one of the world’s largest pools of oil and natural gas.  The exploitation of these valuable and versatile commodities has long contributed to the nation’s wealth and power, as well as to the profitability of giant energy firms like BP and Exxon.  In the process, however, most of our easily accessible onshore oil and gas reservoirs have been depleted, leaving only less accessible reserves in offshore areas, Alaska, and the melting Arctic.  To ensure a continued supply of hydrocarbons — and the continued prosperity of the giant energy companies — successive administrations have promoted the exploitation of these extreme energy options with a striking disregard for the resulting dangers.  By their very nature, such efforts involve an ever increasing risk of human and environmental catastrophe — something that has been far too little acknowledged.

The hunt for oil and gas has always entailed a certain amount of risk.  After all, most energy reserves are trapped deep below the Earth’s surface by overlying rock formations.  When punctured by oil drills, these are likely to erupt in an explosive release of hydrocarbons, the well-known “gusher” effect.  In the swashbuckling early days of the oil industry, this phenomenon — familiar to us from movies like There Will Be Blood — often caused human and environmental injury.  Over the years, however, the oil companies became far more adept at anticipating such events and preventing harm to workers or the surrounding countryside.

Now, in the rush to develop hard-to-reach reserves in Alaska, the Arctic, and deep-offshore waters, we’re returning to a particularly dangerous version of those swashbuckling days.  As energy companies encounter fresh and unexpected hazards, their existing technologies — largely developed in more benign environments — often prove incapable of responding adequately to the new challenges.  And when disasters occur, as is increasingly likely, the resulting environmental damage is sure to prove exponentially more devastating than anything experienced in the industrial annals of the nineteenth and early twentieth centuries.

The Deepwater Horizon operation was characteristic of this trend.  BP, the company which leased the rig and was overseeing the drilling effort, has for some years been in a rush to extract oil from ever greater depths in the Gulf of Mexico.  The well in question, known as Mississippi Canyon 252, was located in 5,000 feet of water, some 50 miles south of the Louisiana coastline; the well bore itself extended another 13,000 feet into the earth.  At depths this great, all work on the ocean floor has to be performed by remotely-controlled robotic devices overseen by technicians on the rig.  There was little margin for error to begin with, and no tolerance for the corner-cutting, penny-pinching, and lax oversight that appears to have characterized the Deepwater Horizon operation.  Once predictable problems did arise, it was, of course, impossible to send human troubleshooters one mile beneath the ocean’s surface to assess the situation and devise a solution.

Drilling in Alaska and the Arctic poses, if anything, even more perilous challenges, given the extreme environmental and climatic conditions to be dealt with.  Any drilling rigs deployed offshore in, say, Alaska’s Beaufort or Chukchi Seas must be hardened to withstand collisions with floating sea ice, a perennial danger, and capable of withstanding extreme temperatures and powerful storms.  In addition, in such hard-to-reach locations, BP-style oil spills, whether at sea or on land, will be even more difficult to deal with than in the Gulf.  In any such situation, an uncontrolled oil flow is likely to prove lethal to many species, endangered or otherwise, which have little tolerance for environmental hazards.

The major energy firms insist that they have adopted ironclad safeguards against such perils, but the disaster in the Gulf has already made mockery of such claims, as does history.  In 2006, for instance, a poorly-maintained pipeline at a BP facility ruptured, spewing 267,000 gallons of crude oil over Alaska’s North Slope in an area frequented by migrating caribou.  (Because the spill occurred in winter, no caribou were present at the time and it was possible to scoop up the oil from surrounding snow banks; had it occurred in summer, the risk to the Caribou herds would have been substantial.)

If It’s Oil, It’s Okay

Despite obvious hazards and dangers, as well as inadequate safety practices, a succession of administrations, including Barack Obama’s, have backed corporate strategies strongly favoring the exploitation of oil and gas reservoirs in the deep waters of the Gulf of Mexico and other environmentally sensitive areas.

On the government’s side, this outlook was first fully articulated in the National Energy Policy (NEP) adopted by President George W. Bush on May 17, 2001.  Led by former Halliburton CEO Vice President Dick Cheney, the framers of the policy warned that the United States was becoming ever more dependent on imported energy, thereby endangering national security.  They called for increased reliance on domestic energy sources, especially oil and natural gas.  “A primary goal of the National Energy Policy is to add supply from diverse sources,” the document declared.  “This means domestic oil, gas, and coal.”

As the NEP made clear, however, the United States was running out of conventional, easily tapped reservoirs of oil and natural gas located on land or in shallow coastal waters.  “U.S. oil production is expected to decline over the next two decades, [while] demand for natural gas will most likely continue to outpace domestic production,” the document noted.  The only solution, it claimed, would be to increase exploitation of unconventional energy reserves — oil and gas found in deep offshore areas of the Gulf of Mexico, the Outer Continental Shelf, Alaska, and the American Arctic, as well as in complex geological formations such as shale oil and gas.  “Producing oil and gas from geologically challenging areas while protecting the environment is important to Americans and to the future of our nation’s energy security,” the policy affirmed.  (The phrase in italics was evidently added by the White House to counter charges — painfully accurate, as it turned out — that the administration was unmindful of the environmental consequences of its energy policies.)

First and foremost among the NEP’s recommendations was the development of the pristine Arctic National Wildlife Refuge, a proposal that generated intense media interest and produced widespread opposition from environmentalists.  Equally significant, however, was its call for increased exploration and drilling in the deep waters of the Gulf, as well as the Beaufort and Chukchi Seas off northern Alaska.

While drilling in the Arctic National Wildlife Refuge was, in the end, blocked by Congress, an oil rush to exploit the other areas proceeded with little governmental opposition.  In fact, as has now become evident, the government’s deeply corrupted regulatory arm, the Minerals Management Service (MMS), has for years facilitated the awarding of leases for exploration and drilling in the Gulf of Mexico while systematically ignoring environmental regulations and concerns.  Common practice during the Bush years, this was not altered when Barack Obama took over the presidency.  Indeed, he gave his own stamp of approval to a potentially massive increase in offshore drilling when on March 30th — three weeks before the Deepwater Horizon disaster — he announced that vast areas of the Atlantic, the eastern Gulf of Mexico, and Alaskan waters would be opened to oil and gas drilling for the first time.

In addition to accelerating the development of the Gulf of Mexico, while overruling government scientists and other officials who warned of the dangers, the MMS also approved offshore drilling in the Chukchi and Beaufort Seas.  This happened despite strong opposition from environmentalists and native peoples who fear a risk to whales and other endangered species crucial to their way of life.  In October, for example, the MMS gave Shell Oil preliminary approval to conduct exploratory drilling on two offshore blocks in the Beaufort Sea.  Opponents of the plan have warned that any oil spills produced by such activities would pose a severe threat to endangered animals, but these concerns were, as usual, ignored.  (On April 30th, 10 days after the Gulf explosion, final approval of the plan was suddenly ordered withheld by President Obama, pending a review of offshore drilling activities.)

A BP Hall of Shame

The major energy firms have their own compelling reasons for a growing involvement in the exploitation of extreme energy options.  Each year, to prevent the value of their shares from falling, these companies must replace the oil extracted from their existing reservoirs with new reserves.  Most of the oil and gas basins in their traditional areas of supply have, however, been depleted, while many promising fields in the Middle East, Latin America, and the former Soviet Union are now under the exclusive control of state-owned national oil companies like Saudi Aramco, Mexico’s Pemex, and Venezuela’s PdVSA.

This leaves the private firms, widely known as international oil companies (IOCs), with ever fewer areas in which to replenish their supplies.  They are now deeply involved in an ongoing oil rush in sub-Saharan Africa, where most countries still allow some participation by IOCs, but there they face dauntingly stiff competition from Chinese companies and other state-backed companies.  The only areas where they still have a virtually free hand are the Arctic, the Gulf of Mexico, the North Atlantic, and the North Sea.  Not surprisingly, this is where they are concentrating their efforts, whatever the dangers to us or to the planet.

Take BP.  Originally known as the Anglo-Persian Oil Company (later the Anglo-Iranian Oil Company, still later British Petroleum), BP got its start in southwestern Iran, where it once enjoyed a monopoly on the production of crude petroleum.  In 1951, its Iranian holdings were nationalized by the democratic government of Mohammed Mossadeq.  The company returned to Iran in 1953, following a U.S.-backed coup that put the Shah in power, and was finally expelled again in 1979 following the Islamic Revolution.  The company still retains a significant foothold in oil-rich but unstable Nigeria, a former British colony, and in Azerbaijan.  However, since its takeover of Amoco (once the Standard Oil Company of Indiana) in 1998, BP has concentrated its energies on the exploitation of Alaskan reserves and tough-oil locations in the deep waters of the Gulf of Mexico and off the African coast.

“Operating at the Energy Frontiers” is the title of BP’s Annual Review for 2009, which proudly began: “BP operates at the frontiers of the energy industry.  From deep beneath the ocean to complex refining environments, from remote tropical islands to next-generation biofuels — a revitalized BP is driving greater efficiency, sustained momentum and business growth.”

Within this mandate, moreover, the Gulf of Mexico held center stage.  “BP is the leading operator in the Gulf of Mexico,” the review asserted.  “We are the biggest producer, the leading resource holder and have the largest exploration acreage position… With new discoveries, successful start-ups, efficient operations, and a strong portfolio of new projects, we are exceptionally well placed to sustain our success in the deepwater Gulf of Mexico over the long run.”

Clearly, BP’s top executives believed that a rapid ramp-up in production in the Gulf was essential to the company’s long-term financial health (and indeed, only days after the Deepwater Horizon explosion, the company announced that it had made $6.1 billion in profits in the first quarter of 2010 alone).  To what degree BP’s corporate culture contributed to the Deepwater Horizon accident has yet to be determined.  There is, however, some indication that the company was in an unseemly rush to complete the cementing of the Mississippi Canyon 252 well — a procedure that would cap it until the company was ready to undertake commercial extraction of the oil stored below.  It could then have moved the rig, rented from Transocean Ltd. at $500,000 per day, to another prospective drill site in search of yet more oil.

While BP may prove to be the principal villain in this case, other large energy firms — egged on by the government and state officials — are engaged in similar reckless drives to extract oil and natural gas from extreme environmental locations.  These companies and their government backers insist that, with proper precautions, it is safe to operate in these conditions, but the Deepwater Horizon incident shows that the more extreme the environment, the more unlikely such statements will prove accurate.

The Deepwater Horizon explosion, we assuredly will be told, was an unfortunate fluke: a confluence of improper management and faulty equipment.  With tightened oversight, it will be said, such accidents can be averted — and so it will be safe to go back into the deep waters again and drill for oil a mile or more beneath the ocean’s surface.

Don’t believe it.  While poor oversight and faulty equipment may have played a critical role in BP’s catastrophe in the Gulf, the ultimate source of the disaster is big oil’s compulsive drive to compensate for the decline in its conventional oil reserves by seeking supplies in inherently hazardous areas — risks be damned.

So long as this compulsion prevails, more such disasters will follow.  Bet on it.

Michael T. Klare is a professor of peace and world security studies at Hampshire College.  His most recent book is Rising Powers, Shrinking Planet: The New Geopolitics of Energy.  A documentary movie version of his previous book, Blood and Oil, is available from the Media Education Foundation.

Copyright 2010 Michael T. Klare

This article was originally posted at TomDispatch.com.

Think of it as a tale of two countries.  When it comes to procuring the resources that make industrial societies run, China is now the shopaholic of planet Earth, while the United States is staying at home.  Hard-hit by the global recession, the United States has experienced a marked decline in the consumption of oil and other key industrial materials.  Not so China.  With the recession’s crippling effects expected to linger in the U.S. for many years, analysts foresee a slow recovery when it comes to resource consumption.  Not so China.

In fact, the Chinese are already experiencing a sharp increase in the use of oil and other commodities.  More than that, anticipating the kind of voracious resource consumption that goes with anticipated future growth, and worried about the availability of adequate supplies, giant Chinese energy and manufacturing firms — many of them state-owned — have been on a veritable spending binge when it comes to locking down resource supplies for the twenty-first century.  They have acquired oil fields, natural gas reserves, mines, pipelines, refineries, and other resource assets in a global buying spree of almost unprecedented proportions.

Like most other countries, China suffered some ill effects from the Great Recession of 2008.  Its exports declined and previously explosive economic growth slowed from record levels.  Thanks to a well-crafted $586 billion stimulus package, however, the worst effects proved remarkably short-lived and growth soon returned to its previous high-octane pace.  Since the beginning of 2009, China has experienced significant jumps in car ownership and home construction — along with worries about the creation of a housing bubble — among signs of returning prosperity.  This, in turn, has generated a rising demand for oil, steel, copper, and other primary materials.

Take oil.  In the United States, oil consumption actually declined by 9% over the past two years, from 20.7 million barrels per day in 2007 to 18.8 million in 2009.  In contrast, China’s oil consumption has risen in this same period, from 7.6 to 8.5 million barrels per day.  According to the most recent projections from the U.S. Department of Energy, this is no fluke.  The Chinese demand for oil is expected to continue climbing throughout the rest of this year and 2011, even as American consumption remains nearly flat.

Like the United States, China obtains a certain amount of oil from domestic wells, but must acquire a growing share from overseas suppliers.  In 2007, the country produced 3.9 million barrels per day and imported 3.7 million barrels, but that proportion is changing rapidly.  By 2020, it is projected to produce only 3.3 million barrels, while importing 9.1 million barrels.  This situation has “strategic vulnerability” written all over it, and so leaves Chinese leaders exceedingly uneasy.  In response, like American officials in decades past, they have moved to gain control over foreign sources of energy — and similarly many other vital materials, including natural gas, iron, copper, and uranium.

China Binging on Energy

Chinese energy companies initially started buying up foreign firms and drilling ventures (or, at least, shares in them) as the twenty-first century began.  Three large state-owned oil companies — the China National Petroleum Corp. (CNPC), the China National Offshore Oil Corp. (CNOOC), and the China Petroleum & Chemical Corp. (Sinopec) — took the lead.  These firms, or their partially privatized subsidiaries – PetroChina in the case of CNPC, and CNOOC International Ltd. in the case of CNOOC — began gobbling up foreign energy assets in Angola, Iran, Kazakhstan, Nigeria, Sudan, and Venezuela.  On the whole, these acquisitions were still dwarfed by those being made by giant Western firms like ExxonMobil, Chevron, Royal Dutch Shell, and BP.  Nonetheless, they represented something new:  a growing Chinese presence in a universe once dominated by the Western “majors.”

Then along came the Great Recession.  Since 2008, Western firms have, for the most part, been reluctant to make major investments in foreign oil ventures, fearing a prolonged downturn in global sales.  The Chinese companies, however, only accelerated their buying efforts.  They were urged on by senior government officials, who saw the moment as perfect for acquiring crucial valuable resources for a potentially energy-starved future at bargain-basement prices.

“The international financial crisis… is equally a challenge and an opportunity,” insisted Zhang Guobao, head of the National Energy Administration, at the beginning of 2009.  “The slowdown… has reduced the price of international energy resources and assets and favors our search for overseas resources.”

As a policy matter, the Chinese government has worked hard to facilitate the accelerating rush to control foreign energy resources.  Among other things, it has provided low-interest, long-term loans to major Chinese resource firms in the hunt for foreign properties, as well as to foreign governments willing to allow Chinese companies to participate in the exploitation of their natural resources.  In 2009, for example, the China Development Bank (CDB) agreed to lend CNPC $30 billion over a five-year period to support its efforts to acquire assets abroad.  Similarly, CBD has loaned $10 billion to Petrobras, Brazil’s state-controlled oil company, to develop deep offshore fields in return for a promise to supply China with up to 160,000 barrels of Brazilian crude per day.

Prodded in this fashion and backed with endless streams of cash, CNPC and the other giant Chinese firms have gone on a global binge, acquiring resource assets of every imaginable type in staggering profusion in Central Asia, Africa, the Middle East, and Latin America.  A very partial list of some of the more important recent deals would include:

* In April 2009, CNPC formed a joint venture with Kazmunaigas, the state oil company of the energy-rich Central Asian state of Kazakhistan, to purchase a Kazakh energy firm, JSC Mangistaumunaigas (MMG), for $3.3 billion.  This was just the latest of a series of deals giving China control over about one-quarter of Kazakhstan’s growing oil output.  A $5 billion loan-for-oil offer from China’s Export-Import Bank made this latest deal possible.

* In October 2009, a consortium led by CNPC and the oil heavyweight BP won a contract to develop the Rumaila oil field in Iraq, potentially one of the world’s biggest oil reservoirs in a country with the third largest reserves on the planet.  Under this agreement, the consortium will invest $15 billion to boost Rumaila’s daily yield from 1.1 to 2.8 million barrels, doubling Iraq’s net output.  CNPC holds a 37% share in the consortium; BP, 38%; and the Iraqi government, the remaining 25%.  If the consortium succeeds, China will have access to one of the world’s most-promising future sources of petroleum and a base for further participation in Iraq’s underdeveloped oil industry.

* In November 2009, Sinopec teamed up with Ecuador’s state-owned Petroecuador in a 40:60 joint venture (with Petroecuador holding the larger share) to develop two oil fields in Ecuador’s eastern Pastaza Province.  Sinopec is already a major producer in Ecuador, having joined with CNPC to acquire the Ecuadorian energy assets of Canada’s EnCana Corp. in 2005 for $1.4 billion.

* In December 2009, CNPC acquired a share of the Boyaca 3 oil block in the Orinoco Belt, a large deposit of extra-heavy oil in eastern Venezuela.  In that month, CNOOC formed a joint venture with the state-owned company Petróleos de Venezuela S.A. to develop the Junin 8 block in the same region.  These moves are seen as part of a strategic effort by Venezuelan President Hugo Chávez to increase his country’s oil exports to China and reduce its reliance on sales to the U.S. market.

* That same December, CNPC signed an agreement with the government of Myanmar (Burma) to build and operate an oil pipeline that will run from Maday Island in the western part of that country to Ruili, in the southwestern Chinese province of Yunnan.  The 460-mile pipeline will permit China-bound tankers from Africa and the Middle East to unload their cargo in Myanmar on the Indian Ocean, thereby avoiding the long voyage to China’s eastern coast via the Strait of Malacca and the South China Sea, areas significantly dominated by the U.S. Navy.

* In March 2010, CNOOC International announced plans to buy 50% of Bridas Corp., a private Argentinean energy firm with oil and gas operations in Argentina, Bolivia, and Chile.  CNOOC will pay $3.1 billion for its share of Bridas, which is owned by the family of Argentinean magnate Carlos Bulgheroni.

* In March, PetroChina joined oil major Shell to acquire Arrow Energy, a major Australian supplier of natural gas derived from coal-bed methane.  The two companies are paying about $1.6 billion each and will form a 50:50 joint venture to operate Arrow’s holdings.

And that’s only in the energy field.  Chinese mining and metals firms have been scouring the world for promising reserves of iron, copper, bauxite, and other key industrial minerals.  In March, for example, Aluminum Corp. of China, or Chinalco, acquired a 44.65% stake in the Simandou iron-ore project in the African country of Guinea.  Chinalco will pay Anglo-Australian mining giant Rio Tinto Ltd. $1.35 billion for this share.  Keep in mind that Chinalco already owns a 9.3% stake in Rio Tinto, and has been prevented from acquiring a larger share mainly thanks to Australian fears that China is absorbing too much of the country’s energy and minerals industries.

Shifting the World’s Resource Balance

Chinese companies like CNPC, Sinopec, and Chinalco are hardly alone in seeking control of valuable foreign resource assets.  Major Western firms as well as state-owned companies in India, Russia, Brazil, and other countries have also been shopping for such properties.  Few, however, have been as determined or single-minded as Chinese firms in taking advantage of the relatively low prices that followed the global recession, and few have the sort of deep pockets available to such companies, thanks to the willingness of the China Development Bank and other government agencies to offer munificent financial backing.

When the United States and other Western nations finally recover from the Great Recession, therefore, they will discover that the global resource chessboard has been tilted strongly in China’s favor.  Energy and mineral producers that once directed their production — and often their political allegiance — to the U.S., Japan, and Western Europe now view China as a major customer and patron.  In one eye-catching sign of this shift, Saudi Arabia announced recently that it had sold more oil to China last year than to the United States, previously its largest and most pampered customer.  “We believe this is a long-term transition,” said Khalid A. al-Falih, president and chief executive of Saudi Aramco, the state-owned oil giant.  “Demographic and economic trends are making it clear — the writing is on the wall.  China is the growth market for petroleum.”

For now, Chinese leaders are avoiding any hint that their recent foreign resource acquisitions entail political or military commitments that could produce friction with the United States or other Western powers.  These are just commercial transactions, they insist.  There is, however, no escaping the fact that growing Chinese resource ties with countries like Angola, Australia, Brazil, Iran, Kazakhstan, Saudi Arabia, Sudan, and Venezuela have geopolitical implications that are unlikely to be ignored in Washington, London, Paris, and Tokyo.  Perhaps more than any other recent developments, China’s global shopping spree reveals how the world’s balance of power is shifting from West to East.

Michael Klare is a professor of peace and world security studies at Hampshire College in Amherst, Mass., and the author, most recently, of Rising Powers, Shrinking Planet.  A documentary movie version of his previous book, Blood and Oil, is available from the Media Education Foundation.

Copyright 2010 Michael T. Klare

The anticipation may be building, but we’ll all have to wait for the 82nd Academy Awards on March 7th to find out just how many Oscars the global box-office smash Avatar will receive. That 3-D sci-fi spectacle, directed by James Cameron, has garnered nine nominations, including ones for Best Picture and Best Director, and it’s already overtaken Titanic, another Cameron global blockbuster, as the top money-maker in movie history.  But there’s an even bigger question absorbing Avatar’s millions of fans:  What will Cameron, who has already indicated that he’s planning to write a novel based on Avatar, do for a screen encore?  As it happens, I have a suggestion: skip the sequels on faraway Pandora’s sister worlds, and do the prequel.

Admittedly, the movie I have in mind (set in a world that Avatar hints at) would lack the blue-skinned Na’vi people, but it would still feature Jake Scully, this time in his real body, on the most intriguing planet of all: Earth.  And given a global audience that can’t get enough of Cameron’s work, how many wouldn’t pay big bucks for a chance to take a Pandora-style, sensory-expanding guided tour of our own planet?  It would be part of a harrowing tale of environmental degradation, resource scarcity, and perennial conflict in the twilight years of humanity’s decline.  Think of it as Avatar: Earth’s Last Stand.

Cameron offers many indications in Avatar that this is the logical direction for him to take.  At a poignant moment before the climactic battle between the Na’vi and the remorseless humans begins, for instance, Scully, the renegade Marine turned native rebel, pleads for help from Eywa, the goddess who rules over Pandora: “See, the world we come from — there’s no green there — they killed their Mother.”  At another point, Colonel Quaritch, the homicidal Marine commander played with gusto by Stephen Lang, refers to Scully’s previous service with the First Marine Reconnaissance unit on Earth, highlighting his three combat tours in Venezuela.  “That was some mean bush,” he says.  Then, speaking of his own combat record, Quaritch alludes to fierce fighting in Nigeria.  For anyone familiar with the present competition for global energy resources, Venezuela and Nigeria stand out as major oil producers with a history of civil strife.

2144 in 3-D

Imagine them, then, on a future, energy-starved planet.  In fact, I can easily picture such a future, so let me take one more step and offer myself to Cameron as a technical consultant on his prequel.  Admittedly, I wouldn’t be the person to write the film’s plot or script — I know my limits — but when it comes to charting future resource wars, I think I could be useful.  Drawing on Cameron’s clues in Avatar and my own books, including Resource Wars, Blood and Oil, and Rising Powers, Shrinking Planet, let me just sketch out the prequel scenario I envision:

It’s the torrid summer of 2144, just a decade before Avatar begins.  (That movie takes place in summer 2154, after a flight from Earth that, we’re told, involves six continuous years of sleep, which helps us backdate Jake Scully’s Venezuelan combat tours.)  As it has been for decades, the world is at war, with competing power blocs fighting bitterly over a diminishing pool of vital resources.

Three great power centers dominate the global resource struggle, all located in the northern latitudes where the climate still remains tolerable and the land still receives sufficient rainfall to support agriculture.  The first of these, in whose legions both Scully and Quaritch fight, is the North American Federation, founded after the United States, facing desertification in its southern half, invaded and absorbed Canada.  The second, Greater China, incorporating northern China, the Korean peninsula, and eastern Siberia (seized from Russia in a series of wars), dominates what’s left of Asia; the third, the North European Alliance, encompassing Germany, Russia (west of the Urals), and Scandinavia, relies heavily on Arctic resources.  As in the world portrayed by George Orwell in 1984, these powers continually jockey for dominance in shifting alliances, while their armies face one another in the torrid, still relatively resource-rich parts of the planet.  In this neo-Orwellian world, warfare and the constant pressure of resource competition are the only constants.

Thanks to global warming, the planet’s tropical and subtropical regions, including large parts of Africa, the Mediterranean basin, the Middle East, and South and Southeast Asia, as well as Mexico and the American Southwest, have become virtually uninhabitable.  Many island nations and coastal areas, including much of Florida, Bangladesh, Vietnam, Sri Lanka, Indonesia, and the Philippines, lie under water.  Critical raw materials like oil, coal, natural gas, uranium, copper, and cobalt are perennially scarce.  Starvation is a constant fear for those not affluent enough to pay for increasingly expensive genetically-modified crops and meat produced on corporate farms with multiple chemical inputs.

Large-scale industrial civilization still persists, but many once-industrialized areas have been abandoned, and what factories and transport systems remain are constantly constrained by limited energy supplies and the lack of steady flows of vital resources.  Oil is particularly hard to come by, and so, in all three power blocs, its use is largely restricted to the military, security forces, emergency services, the largest of corporations, and the very rich.  (If you want to get a sense of such a world, imagine Mel Gibson’s 1979 movie Road Warrior on steroids.)  Other sources of energy, including natural gas and uranium, are also in increasingly scant supply.  Renewable sources, including wind and solar power, help to make up some, but not enough, of the difference, while a shortage of critical minerals — copper, cobalt, tin, manganese, titanium — limits the scale of many industrial undertakings.

For ordinary people — and only somewhat less so for the elites of the planet’s heavily militarized states — survival is a constant struggle.  Outside of the industrialized power centers, life involves a daily search for food, water, and energy of any sort, as well as whatever precious goods (gems, weapons, bits of technology) might be traded to get those basics.  For the big corporations and their government sponsors, as they send the Scullys and Quadritches to the distant corners of the planet to enforce their will, the struggle is no less fierce for control of the world’s few remaining deposits of oil, natural gas, coal, copper, and uranium.

In 2144, only five areas of the world still possess any significant reserves of oil and natural gas: Russia (and contiguous areas of the former Soviet Union), the Persian Gulf, West Africa (including Nigeria), the Orinoco basin of Venezuela, and the now long ice-free Arctic.  Even these areas have been substantially depleted, giving the remaining deposits staggering value to whichever country or company controls them.  If these are not quite as valuable as “unobtanium,” the rare metal being plundered from Pandora and brought back to Earth, they are close enough to be thought of as “barely-obtanium.”

Life (and Death) on a Depleted Planet

For the record, I’m being an optimist here for the sake of Avatar: Earth’s Last Stand.  Based on my own assessment of planetary energy resources, I doubt that any oil or natural gas worth drilling for will remain in 2144.  But for narrative purposes, if such deposits are to be found anywhere almost a century and a half from now, the likely candidates are:  the Persian Gulf area because it still possesses the world’s largest combined reserves of oil and natural gas, and so probably will be the last to run out; Russia, Africa, and the Orinoco basin because they have to date been spared intensive exploitation by the major Western firms, and so still retain substantial recoverable reserves; and the Arctic, which will only become fully accessible to oil producers when global warming has melted the ice cap.

Given the tripartite global power structure of 2144, Russian oil and gas reserves will have been divided between the North European Alliance, controlling western Siberia and the Caucasus, and Greater China, garrisoning eastern Siberia and Central Asia.   The Arctic will be a constant source of conflict among all three blocs, with periodic fighting breaking out concerning overlapping territorial claims in the region.  That leaves the Persian Gulf, West Africa, and Venezuela — the sites of constant warfare between the Na’vi of this planet and the various expeditionary forces sent out by the three big power blocs which, often in temporary alliances of convenience, will also be fighting each other.

Already, we can get a sense of what this might look like.  Under its ultra-nationalist president Hugo Chávez, Venezuela has sought to distance itself from its traditional client, the United States, and bolstered its ties with Russia and China.  As part of this effort, Venezuela has purchased billions of dollars worth of arms from Russia and forged a strategic energy alliance with China.  Claiming evidence of a U.S. plan to invade his country, Chávez has also conducted sizeable self-defense maneuvers and strengthened the military’s control over ports and other infrastructure.

Looking into the future, one can imagine a time, some decades distant, when Venezuela is a satellite of Greater China and its deposits of heavy oil — the largest remaining on the planet — are reserved for China’s exclusive use.  Under these circumstances, it is not hard to imagine a move by the North American Federation to oust the prevailing Venezuelan regime by launching an invasion on a remote stretch of coast and striking out for the capital, Caracas.  The Venezuelans, backed up by Chinese expeditionary forces, might manage to halt the invasion, but fail to dislodge the North Americans, holed up in harsh patches of the countryside.  Brutal fighting might follow — the “mean bush” mentioned by Quaritch in Avatar.  Jake Scully, sent back into this gruesome contest for his third deployment, is gravely wounded and barely survives the trek back to safety.

If Venezuela is still a peaceful land today, Nigeria is already conflict-ridden and certainly destined to be a major battlefield in the unending resource wars of a future planet.  Possessing the largest pool of untapped oil and natural gas in Africa, it is already the site of a fierce competitive economic struggle involving the United States, China, Russia, and the European Union, all of which seek to exploit the nation’s energy riches.  Nigeria’s oil and gas reserves were first developed by Royal Dutch Shell and British Petroleum (now BP) — a legacy of the country’s past as a British colony – but now American, Chinese, and European firms have acquired drilling rights to valuable hydrocarbon deposits.  Russia, too, has entered the scene, promising to help build a natural gas pipeline from the Niger Delta in southern Nigeria across the Sahara to the Mediterranean coast for eventual shipment to Europe.

Nigeria is also a battlefield today.  Disgruntled inhabitants of the Niger Delta area, where most of the country’s oil is produced and few benefits are ever seen, have taken up arms in a struggle to receive a bigger share of the nation’s oil revenues.  Both the United States and China are competing to provide the Nigerian government with military aid to defeat the insurgents, hoping to strengthen their respective positions in the country’s oil fields in the process.

Again, it’s not much of a stretch to imagine a scenario in which, 134 years from now (or a lot sooner), Nigeria has fallen under the sway of Greater China or the North American Federation and Colonel Quaritch and his cohort are carrying out combat operations in the Delta’s jungle regions, a setting not so unlike Pandora’s, with obvious Cameron-esque possibilities.

Where else might Scully, Quaritch, and their buddies be sent to fight?  As a start, don’t assume that the current fighting in Iraq and Afghanistan will simply end or that the United States will ever willingly withdraw its forces from a whole string of bases in the Persian Gulf area.  As long as the United States obtains part of its oil from the region — and the North American Federation might still be fighting to do so in 2144 — U.S. forces are likely to remain.  Given the historic enmities that divide the region and a widespread antipathy to the U.S. presence, don’t be surprised if North American Federation forces are still in battle there deep into the twenty-second century.

Finally, the warming Arctic, not currently on the global conflict map, could also experience warfare as it attracts major oil and gas drilling operations.  The region also houses some of the world’s last remaining indigenous communities that still practice a traditional way of life, and which will undoubtedly face the sort of habitat-destroying invasions pictured in Avatar.

Still, as Cameron imagined, despite constant warfare, the North American Federation (like the other major power centers) will, by 2144, still find itself in desperate need of vital materials, no longer easily available on this planet.  Economic conditions, even for privileged elites, will by then be deteriorating rapidly.  It is in this context that the giant mining corporations might join in a fabulously expensive bid to use space travel to replenish the planet’s resources, voyaging to distant Pandora to extract its precious supply of unobtanium, a miraculous new source of energy.

It’s not that hard to imagine just such a future world if we continue on our present course toward ever greater resource consumption, increased carbon emissions, and the militarization of resource dependency.  Can you doubt that the movie Cameron and I would make, Avatar: Earth’s Last Stand, would be both gripping and spectacular?  It would be an amazing, if tension-producing place to visit in 3-D.  Here’s the only catch: you wouldn’t want to live there.

Michael Klare is a professor of peace and world security studies at Hampshire College in Amherst, Mass., and the author, most recently, of Rising Powers, Shrinking Planet.  A documentary movie version of his previous book, Blood and Oil, is available from the Media Education Foundation.

Copyright 2010 Michael T. Klare