Thursday, October 07, 2004
The oil crisis affects Stuyvesant Town
LOOKING AHEAD by Wally Dobelis
Parking in a Stuyvesant Town garage, I am amazed at the number of SUVs my East Midtown environment-conscious neighbors have. There is even a Humwee, olive green in its military splendor. Naturally this brings up the price of petroleum, a current bugaboo, into our conversations.
Those of us who think that the evil interests of oil companies are at the bottom of US foreign policy are correct, and so are those who see that oil is the primary object of our national economic interests and provides the main thrust of our international relations, regardless of the party is in power.
In fact it was the saintly FDR, who, during WWII recognized that the oil reserves of the US, the nation that lit up the entire world, were shrinking, and in 1946 initiated a friendship with a backwater Arab ruler, Abdul-Aziz ibn Saud, that led to the Saudis, with their 25% of the world’s oil reserves, becoming an economic world power under our protection, assuring us of continuing supply of our lifeblood, petroleum, as long as that unsavory dynasty remains in power. But that family has enemies, mostly the suppressed religious young Islamists, and all that disingenuous Neocon talk of democratizing the Middle East carries a considerable danger that in democratic elections the winners would be the Islamists, enemies of the “corrupt Western culture,” destroying the balance and potentially ruining the Western industrialist nations. No wonder their operative term for us is Crusaders, bringing back Arab vision of the Caliphate of Baghdad and Suleiman the Magnificent ruling the world. You think Osama and al-Zarqavi want any less?
The Democrats do not talk much about energy policy in the 2004 elections, but they are aware. After all it was the Carter Doctrine, pronounced by the much maligned Jimmy in January 1980 after the Iran revolt and the Soviet attack on Afghanistan (“US will use whatever force it needs to ensure continued flow of oil”) that provided the basis for Bush41’s gulf war of 1990-91. By that time we had assured the Shahs of Iran, Kuwait, Bahrain and UAR of our protection, although we failed in Iran. The US Realpolitik meanwhile had set the street Arab populace against us, enhanced by our 1973 defense of Israel, turning even the Sheiks against us and leading to the OPEC petroleum embargo.
To lessen this dependence on Middle East oil, President Clinton initiated talks with the new nations of the Caspian Sea Basin, particularly Azerbaijan, holders of 17-33 Bb (Billion barrels) of actual and 233Bb of potential reserves, signing the $3B BTC pipeline treaty, to connect Baku, via Tbilisi (Georgia) to Ceyhan (Turkey) on the Black Sea. This continues, with US military forces currently helping stabilize the unsavory regimes of Georgia, Uzbekistan and Kyrgyzstan against the Islamist revolutionaries, all this to preserve the rights of Americans to drive SUVs, and to keep our homes and factories functioning at a reasonable energy cost.
US dependence on foreign oil was the subject of the secretive VP Cheney’s meetings with the private energy chiefs, resulting in the NEP (National Energy Policy) of May 17, 2001. It addressed the need to reduce the dependence, but did not suggest conservation and reduction in use (Bush et al: ”conservation threatens the American Way of Life”) It recognized that the US reserves have shrunk, that our production will drop from 8.56Mbd (million barrels/day) to 7Mbd and demand from 19.5 to 25.5Mbd by 2020, with liquid gas demands rising from 11 to 18.5Mbd, and demanded exploration in the Arctic Wild Life Reserve (good for 6mos supply).
Which brings into focus Iraq, 112 Bb reserve, 10% of the world’s and more unexplored, supplier of 5% of US daily import of 10Mb of oil, even during Saddam Hussein’s final days. Saudi and Iraqi oil can supply the US needs, if the countries remain friendly. USDE envisions Saudi (263Bb reserve, 25%of the world) oil production growing from 10Mb to 24Mb a day. But friendly? The modernist Saddam, against whom bin Laden had issued a fatwa, held the Islamists in check. Now they are loose.
What alternative sources does the US have? We have discussed the Caspian. Russia also has oil in Siberia, ogled by heavy users China and Japan powers. West Africa already produces 8.6MBd and satisfies 10% of the world’s demand; USDE expects it to grow to 25% by 2020. US supports the governments of Nigeria and recent enemy Angola, to the tune of $300M, 2002 to 2004. But Nigeria is shaky; locals want to keep the oil. And in Latin America, Venezuela, US' 3rd largest supplier after Canada and the Saudis, and Mexico the 4th, both bar links to US oil companies, and Colombia, 7th, is insurgent-ridden.
So there, fellow Stuy Town garage users, our supply of gasoline is in for some bumps, long-term. Is oil getting scarce, or is increasing demand really exceeding the refining capacity? The Bush plans do not adequately del with alternate sources of energy. Detroit is afraid of losing its competitive position if they raise car prices to pay for retooling to hybrid (petrol/electric, like Prius) energy sources. The Republicans are afraid of insulting their energy chief donors by advocating wind, wave, hydro and other alternate sources. Fuel cell is cost-ineffective; so is hydrogen, the big Bush hope. Nuclear looms. And nobody talks about developing the oil sands of Alberta, 174Bb worth, the safe country next door to us - low profits for the oil chiefs there, hmm?...
Wally thanks Prof. Michael T. Klare and USDE Energy Information Administration.
Parking in a Stuyvesant Town garage, I am amazed at the number of SUVs my East Midtown environment-conscious neighbors have. There is even a Humwee, olive green in its military splendor. Naturally this brings up the price of petroleum, a current bugaboo, into our conversations.
Those of us who think that the evil interests of oil companies are at the bottom of US foreign policy are correct, and so are those who see that oil is the primary object of our national economic interests and provides the main thrust of our international relations, regardless of the party is in power.
In fact it was the saintly FDR, who, during WWII recognized that the oil reserves of the US, the nation that lit up the entire world, were shrinking, and in 1946 initiated a friendship with a backwater Arab ruler, Abdul-Aziz ibn Saud, that led to the Saudis, with their 25% of the world’s oil reserves, becoming an economic world power under our protection, assuring us of continuing supply of our lifeblood, petroleum, as long as that unsavory dynasty remains in power. But that family has enemies, mostly the suppressed religious young Islamists, and all that disingenuous Neocon talk of democratizing the Middle East carries a considerable danger that in democratic elections the winners would be the Islamists, enemies of the “corrupt Western culture,” destroying the balance and potentially ruining the Western industrialist nations. No wonder their operative term for us is Crusaders, bringing back Arab vision of the Caliphate of Baghdad and Suleiman the Magnificent ruling the world. You think Osama and al-Zarqavi want any less?
The Democrats do not talk much about energy policy in the 2004 elections, but they are aware. After all it was the Carter Doctrine, pronounced by the much maligned Jimmy in January 1980 after the Iran revolt and the Soviet attack on Afghanistan (“US will use whatever force it needs to ensure continued flow of oil”) that provided the basis for Bush41’s gulf war of 1990-91. By that time we had assured the Shahs of Iran, Kuwait, Bahrain and UAR of our protection, although we failed in Iran. The US Realpolitik meanwhile had set the street Arab populace against us, enhanced by our 1973 defense of Israel, turning even the Sheiks against us and leading to the OPEC petroleum embargo.
To lessen this dependence on Middle East oil, President Clinton initiated talks with the new nations of the Caspian Sea Basin, particularly Azerbaijan, holders of 17-33 Bb (Billion barrels) of actual and 233Bb of potential reserves, signing the $3B BTC pipeline treaty, to connect Baku, via Tbilisi (Georgia) to Ceyhan (Turkey) on the Black Sea. This continues, with US military forces currently helping stabilize the unsavory regimes of Georgia, Uzbekistan and Kyrgyzstan against the Islamist revolutionaries, all this to preserve the rights of Americans to drive SUVs, and to keep our homes and factories functioning at a reasonable energy cost.
US dependence on foreign oil was the subject of the secretive VP Cheney’s meetings with the private energy chiefs, resulting in the NEP (National Energy Policy) of May 17, 2001. It addressed the need to reduce the dependence, but did not suggest conservation and reduction in use (Bush et al: ”conservation threatens the American Way of Life”) It recognized that the US reserves have shrunk, that our production will drop from 8.56Mbd (million barrels/day) to 7Mbd and demand from 19.5 to 25.5Mbd by 2020, with liquid gas demands rising from 11 to 18.5Mbd, and demanded exploration in the Arctic Wild Life Reserve (good for 6mos supply).
Which brings into focus Iraq, 112 Bb reserve, 10% of the world’s and more unexplored, supplier of 5% of US daily import of 10Mb of oil, even during Saddam Hussein’s final days. Saudi and Iraqi oil can supply the US needs, if the countries remain friendly. USDE envisions Saudi (263Bb reserve, 25%of the world) oil production growing from 10Mb to 24Mb a day. But friendly? The modernist Saddam, against whom bin Laden had issued a fatwa, held the Islamists in check. Now they are loose.
What alternative sources does the US have? We have discussed the Caspian. Russia also has oil in Siberia, ogled by heavy users China and Japan powers. West Africa already produces 8.6MBd and satisfies 10% of the world’s demand; USDE expects it to grow to 25% by 2020. US supports the governments of Nigeria and recent enemy Angola, to the tune of $300M, 2002 to 2004. But Nigeria is shaky; locals want to keep the oil. And in Latin America, Venezuela, US' 3rd largest supplier after Canada and the Saudis, and Mexico the 4th, both bar links to US oil companies, and Colombia, 7th, is insurgent-ridden.
So there, fellow Stuy Town garage users, our supply of gasoline is in for some bumps, long-term. Is oil getting scarce, or is increasing demand really exceeding the refining capacity? The Bush plans do not adequately del with alternate sources of energy. Detroit is afraid of losing its competitive position if they raise car prices to pay for retooling to hybrid (petrol/electric, like Prius) energy sources. The Republicans are afraid of insulting their energy chief donors by advocating wind, wave, hydro and other alternate sources. Fuel cell is cost-ineffective; so is hydrogen, the big Bush hope. Nuclear looms. And nobody talks about developing the oil sands of Alberta, 174Bb worth, the safe country next door to us - low profits for the oil chiefs there, hmm?...
Wally thanks Prof. Michael T. Klare and USDE Energy Information Administration.
# posted by Wally Dobelis @ 4:20 AM 
