Not a fuels errand, NYT, backstory on Bin Laden and oil

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http://www.nytimes.com/2001/09/26/opinion/26DOWD.html?todaysheadlines

Best quote: "In fact, reduced oil dependence, by putting downward pressure on oil prices, could actually be destabilizing. A quick, unfair summary of the political analyses of the gulf region I've read over the last few days is that oil revenues, which allow the Saudi monarchy to buy off potential opposition, are pretty much the only thing that keeps Saudi Arabia from turning into another Afghanistan. Even before the terrorist attack the Saudi system was looking wobbly, with persistent deficits, mounting debt and growing unemployment. Lower oil prices will only make that situation worse."

September 26, 2001

RECKONINGS Not a Fuels Errand By PAUL KRUGMAN

As the shock of Sept. 11 has faded, we've started to hear a few old slogans. A handful of people on the left claim that we are about to start a "war for oil." A considerably larger and more influential group on the right seems, oddly enough, to agree, though these people draw a different policy conclusion: that the terrorist attack means we should drill in the Arctic National Wildlife Refuge.

But this is not a war on behalf of the oil companies; it's not even a war on behalf of S.U.V.'s and McMansions.

It's true that oil is part of the backstory to the terrorist attack. Apparently the greatest single motivating factor for the terrorists was not, as you might suppose, the Israeli- Palestinian conflict; it was the continuing presence of American soldiers in Saudi Arabia. That presence is a legacy of the gulf war. And while the gulf war did involve defending a small nation against aggression, we probably wouldn't have waged that war, or maintained a permanent military presence in the region, if it weren't for the oil.

But when people suggest that this is in some sense a war for oil, what they are in effect arguing is that by doing something different drilling for oil in more national parks, driving more fuel-efficient cars, whatever we could have avoided putting ourselves in this position. So the question we should ask is whether there are any energy policy proposals on the table that would remove this flashpoint that is, make it a matter of no great concern to the United States who controls the oilfields of the Persian Gulf. And the answer is a clear no.

Drilling in Alaska would make no difference worth mentioning. Right now the United States produces less than half the petroleum it consumes, making us highly vulnerable to disruptions in world oil markets. At its peak, the wildlife refuge would supply only about 5 percent of our consumption. So with it we would depend on imports for 45 percent of our needs instead of 50 percent. Somehow, that doesn't sound like an impressive reduction in vulnerability.

Strong efforts at conservation, which could reduce U.S. per capita oil use to European levels, would make us roughly self-sufficient. But even so, the strategic importance of the Persian Gulf would be only minimally reduced. The reason is that even if the U.S. became self-sufficient, our allies in Europe, Japan and elsewhere would still be highly dependent on imported oil this despite the fact that they use much less oil per person than we do. And if this crisis has taught us one lesson, it is that the United States cannot go it alone; we need to protect not just our own interests but also those of our allies.

So the bottom line is that as long as oil is important to modern economies, the Persian Gulf will remain strategically crucial. This presumably means that the West will have to maintain a military presence in the region, with all the tensions that creates. And I haven't heard any proposals, whether they involve increasing domestic oil production or reducing oil consumption, that would make a difference to that bottom line.

In fact, reduced oil dependence, by putting downward pressure on oil prices, could actually be destabilizing. A quick, unfair summary of the political analyses of the gulf region I've read over the last few days is that oil revenues, which allow the Saudi monarchy to buy off potential opposition, are pretty much the only thing that keeps Saudi Arabia from turning into another Afghanistan. Even before the terrorist attack the Saudi system was looking wobbly, with persistent deficits, mounting debt and growing unemployment. Lower oil prices will only make that situation worse.

So what is the answer? For the present and for some years to come there is no way to escape the awkward reality that the oil reserves of the Middle East are crucial to the world economy. If that dependence is ever to end, we will have to do more than drill in a few more wilderness areas, and it won't even be enough to drive more fuel-efficient cars. We'll have to find a way, through some combination of technological innovation and radical policies, to wean not just the United States but the world economy as a whole from its dependence on oil.

-- robert waldrop (rmwj@soonernet.com), September 26, 2001

Answers

"...downward pressure on oil prices, could actually be destabilizing. ... oil revenues, which allow the Saudi monarchy to buy off potential opposition, are pretty much the only thing that keeps Saudi Arabia from turning into another Afghanistan. ... Lower oil prices will only make that situation worse."

NYMEx Light Sweet Crude Oil Futures are at a Third Millennium low, dropping below $21/barrel for the first time since mid-1999. Are the pro-terrorist networks selling crude oil futures, artificially suppressing the price, to destabilize Saudi Arabia into capitulating to the pro-radical Islamic camp? And if so, why isn't the U.S. Government (and private U.S. entities supporting a moderate Saudi regime, thus supporting the War Against Terrorism) buying these artifically underpriced crude oil futures, to avoid this result?

-- Robert Riggs (rxr.999@worldnet.att.net), September 26, 2001.


Robert, I don't know if there is an answer to the oil problem. I'm familiar with most of the contenders, and I know some long shots with a hope. But there might not be a solution other than dissolution.

The article says "technology and policy" changes are required. I tend to belive that if you build it, they will come. If somebody creates a new energy deriving-process that solves the energy problems, then the world will flock to it. No conspiracy is big enough to stop one country or another from saving its people.

As for policy changes, I don't know if the political will is there in the US .gov. After all, it's being run by a bunch of oil tycoons. (I don't automatically sneer at oil tycoons like my enviro-brethren; I firstly respect them for doing useful work unlike 90% of people. ) ;) BUT, the oil guys in the Whitehouse are gonna see the oil supply problem through "oilguy" eyes. And they're going to follow the traditional path of enlisting imperial troops to secure physical access to world resources.

-- Robert, re Crude oil prices... They've dropped, I think, in reaction to the recent realisation of recession. Same as what the press says. But the possibility you mention is a real possibility. MAybe le terroristes could be one step ahead of ze authorities?

I'm a hardened gloom and doomer, usually immune to fears of the future. I study all the best threats every day, so I'm "excited" about the recent events and new threats, much like a vulcanologist would be "excited" by a huge volcanic event. Doesn't mean the vulcanologist is immune to fear or sadness; Doesn't mean I'm happy about the spectacular catastrophes which strike our fellow man. Honestly wish I could change it yadda yadda.

But recently, I must say, I've actually felt moments where fear awoke in me, contemplating what MIGHT be about to unfold. And any number of horrible things MIGHT be gonna happen, because we each have no information on what's going on behind the scenes. Might be this, might be that, might be nothing.

Possibly the one thought about all this that has shook me the most, is the logical, logistical and strategic possibility that the terrorists MIGHT be in a position to win a war against USA. NOW.

I don't wanna be alarmist about it, and I have no expertise about such things, but it seems possible? If they could pull off that original stunt, then what else???! There are HUUUUGE vulnerabilities in all our societies today. If fighters "take the gloves off" and stoop to warfare via terrorism, then they can actually win if the buggers are organised enough. It's an astonishing thought; and it may be erroneous, but it's been bugging me since I thought it. USA could perhaps be taken out yesterday. Far out!

I'm worried that the angry bear might be about to get it's foot stuck in a hornets nest... I don't want to be anywhere near that, thank you very much.

Casual talk of biowarfare on the 6 o'crock news!!! eeeek!

---

tsk tsk, what IS this world coming to? Or as I prefer it, "WHEN is this World coming to?"

-- nyoomairoh Say (iam_not_a_number@hotmail.com), September 26, 2001.


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