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Just How Addicted to Oil Are We?

Considering the permanent energy crisis

| Fri Feb. 10, 2006 4:00 AM EST

In North America, the supply of natural gas is rapidly disappearing. In a reflection of our desperate (and demented) condition, Canada is now starting to divert some of its remaining natural gas to the manufacture of synthetic oil from tar sands, so as to ease the pressure on supplies of conventional petroleum. Given the prohibitive cost of building gas pipelines from Asia and Africa, the only practical way to get more gas supplies to North America would be to spend several hundred billion dollars (or more) on facilities for converting foreign sources of gas into liquified natural gas (LNG), shipping the LNG in giant doubled-hulled vessels across the Atlantic and Pacific, and then converting it back into a gas in "regasification" plants in American harbors. Although favored by the Bush administration, plans to construct such plants have provoked opposition in many coastal communities because of the risk of accidental explosion as well as the potential for inviting terrorist attacks.

As for renewables -- wind, solar, and biomass -- these are still at a relatively early stage of development. With a trillion dollars or so of added investment they could indeed ease some of the strain on fossil fuels in decades to come; however, at present rates of investment, this is not likely to occur. The same can be said of "safe" nuclear power and "clean" coal -- even if the severe problems associated with both of these energy options could be overcome, it would take several decades and a few trillion dollars before they could possibly replace existing energy systems. The only source of energy that can compensate for a shortage of oil and gas at this time is conventional (unclean) coal, and a rise in its consumption would increase the risk of catastrophic climate change.

The New "Great Game"

With looming energy shortages, the risk of conflict over energy access (and the wealth fossil fuels generate) is certain to grow. Throughout history, competition over the control of key supplies of vital raw materials has been a source of friction between major powers and there is every reason to assume that this will continue to be the case. "Just at it did when the Great Game was played out in the decades leading up to the First World War, ongoing industrialization is setting off a scramble for natural resources," John Gray of the London School of Economics observed in a recent article in the New York Review of Books. "The coming century could be marked by recurrent resource wars, as the great powers struggle for control of the world's hydrocarbons."

As in the Great Game, such conflicts most likely would not arise from head-on clashes between the great powers, but rather through the escalation of local conflicts sustained by great power involvement, as was the case in the Balkans prior to World War I. In their competitive pursuit of assured energy supplies, today's great powers -- led by the United States and China -- are developing or cementing close ties with favored suppliers in the Middle East, Central Asia, and Africa. In many cases, this entails the delivery of large quantities of advanced weaponry, advisors, and military technology -- as the United States has long been doing with Saudi Arabia, Kuwait, and the United Arab Emirates, and China is now doing with Iran and Sudan.

Nor should the possibility of a direct clash over oil and gas between great powers be ruled out. In the East China Sea, for example, China and Japan have both laid claim to an undersea natural gas field that lies in an offshore area also claimed by both of them. In recent months, Chinese and Japanese combat ships and planes deployed in the area have made threatening moves toward one another; so far no shots have been fired, but neither Beijing nor Tokyo have displayed any willingness to compromise on the matter and the risk of escalation is growing with each new encounter.

The likelihood of internal conflict in oil-producing countries is also destined to grow in tandem with the steady rise of energy prices. The higher the price of petroleum, the greater the potential to reap mammoth profits from control of a nation's oil exports -- and so the greater the incentive to seize power in such states or, for those already in power, to prevent the loss of control to a rival clique by any means necessary. Hence the rise of authoritarian petro-regimes in many of the oil-producing countries and the persistence of ethnic conflict between various groups seeking control over state-oil revenues -- a phenomenon notable today in Iraq (where Shiites, Sunnis, and Kurds are battling over the allocation of future oil revenues) and in Nigeria (where competing tribes in the oil-rich Delta region are fighting over measly "development grants" handed out by the major foreign oil firms).

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