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Energy Wars of Attrition: The Irony of Oil Abundance
Energy Wars of Attrition: The Irony of Oil Abundance
Three and a half years ago, the International Energy Agency (IEA) triggered headlines around the world by predicting that the United States would overtake Saudi Arabia to become the world’s leading oil producer by 2020 and, together with Canada, would become a net exporter of oil around 2030. Overnight, a new strain of American energy triumphalism appeared and experts began speaking of “Saudi America,” a reinvigorated U.S.A. animated by copious streams of oil and natural gas, much of it obtained through the then-pioneering technique of hydro-fracking. “This is a real energy revolution,” the Wall Street Journal crowed in an editorial heralding the IEA pronouncement.
The most immediate effect of this “revolution,” its boosters proclaimed, would be to banish any likelihood of a “peak” in world oil production and subsequent petroleum scarcity. The peak oil theorists, who flourished in the early years of the twenty-first century, warned that global output was likely to reach its maximum attainable level in the near future, possibly as early as 2012, and then commence an irreversible decline as the major reserves of energy were tapped dry. The proponents of this outlook did not, however, foresee the coming of hydro-fracking and the exploitation of previously inaccessible reserves of oil and natural gas in underground shale formations.
Understandably enough, the stunning increase in North American oil production in the past few years simply wasn’t on their radar. According to the Energy Information Administration (EIA) of the Department of Energy, U.S. crude output rose from 5.5 million barrels per day in 2010 to 9.2 million barrels as 2016 began, an increase of 3.7 million barrels per day in what can only be considered the relative blink of an eye. Similarly unexpected was the success of Canadian producers in extracting oil (in the form of bitumen, a semi-solid petroleum substance) from the tar sands of Alberta.
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Iran Deal is About Staving Off the Coming Oil Shock
Iran Deal is About Staving Off the Coming Oil Shock
The US wants to use Iran to sustain its regional influence in the face of the next global economic recession
The Iran nuclear deal signals a major shift in the geopolitics of the Middle East. Integral to the equation is oil, economics, terror – and US hegemony.
The Bush administration had initiated a long-term covert strategy to undermine Iranian influence in the Middle East and Central Asia, combined with overt pressure through diplomatic initiatives and economic sanctions.
Under Obama, this strategy accelerated, largely in concert with other Gulf powers like Saudi Arabia, Qatar and the UAE, who have long sought to roll-back Iranian influence.
Yet even as the strategy accelerated, unlike its predecessors which openly declared their warmongering hostility to Iran, the Obama administration had used the pressure to forge an unprecedented deal with the country.
Averting regional war
The reasons for the shift are, of course, pragmatic. For years, US intelligence agencies have told the White House that there is simply no evidence Iran is trying to build a nuclear bomb.
And the International Atomic Energy Agency (IAEA) has repeatedly certified that uranium is not being enriched to levels necessary for weaponisation, nor is it being diverted to a secret weapons programme.
Meanwhile, senior US military officials have long warned that the sort of US-Iran military confrontation which frothing neoconservatives have been pining for would likely fail and destabilise the entire region.
What about an Israel-Iran confrontation? A classified Pentagon war simulation held in 2012 found that an Israeli attack on Iran would also lead to a wider regional war.
Unlike the neocons, for the military pragmatists in successive US administrations, war with Iran could never be a preferred option.
The added bonus is that Iran might notch down its involvement in Iraq and Syria.
– See more at: http://www.middleeasteye.net/columns/iran-deal-about-staving-coming-oil-shock-1366649799#sthash.fMD7hQbp.dpuf
Tomgram: Michael Schwartz, Israel, Gaza, and Energy Wars in the Middle East
Tomgram: Michael Schwartz, Israel, Gaza, and Energy Wars in the Middle East
Talk of an oil glut and a potential further price drop seems to be growing. The cost of a barrel of crude now sits at just under $60, only a little more than half what it was at its most recent peak in June 2014. Meanwhile, under a barrel of woes, economies like China’s have slowed and in the process demand for oil has sagged globally. And yet, despite the cancellation of some future plans for exploration and drilling for extreme (and so extremely expensive) forms of fossil fuels, startling numbers of barrels of crude are still pouring onto troubled waters. For this, a thanks should go to the prodigious efforts of “Saudi America” (all that energetic hydraulic fracking, among other things), while the actual Saudis, the original ones, are stillpumping away. We could, in other words, have arrived not at “peak oil” but at “peak oil demand” for at least a significant period of time to come. At Bloomberg View, columnist A. Gary Shilling has even suggested that the price of crude could ultimately simply collapse under the weight of all that production and a global economic slowdown, settling in at $10-$20 a barrel (a level last seen in the 1990s).
And here’s the saddest part of this story: no matter what happens, the great game over energy and the resource conflicts and wars that go with it show little sign of slowing down. One thing is guaranteed: no matter how low the price falls, the scramble for sources of oil and the demand for yet more of them won’t stop. Even in this country, as the price of oil has dropped, the pushfor the construction of the Keystone XL pipeline to bring expensive-to-extract and especially carbon-dirty Canadian “tar sands” to market on the U.S. Gulf Coast has only grown more fervent, while the Obama administration has just opened the country’s southern Atlantic coastal waters to future exploration and drilling. In the oil heartlands of the planet, Iraq and Kurdistan typically continue to fight over who will get the (reduced) revenues from the oil fields around the city of Kirkuk to stanch various financial crises. In the meantime, other oil disputes only heat up.
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