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Bloviating Zeppelin: The Politics of Oil

Bloviating Zeppelin

(in-ep-toc'-ra-cy) - a system of government where the least capable to lead are elected by the least capable of producing, and where the members of society least likely to sustain themselves or succeed, are rewarded with goods and services paid for by the confiscated wealth of a diminishing number of producers.

Saturday, January 07, 2006

The Politics of Oil


[Note: before we begin, I'd like to apologize to those who have frequented my blog the past week, only to discover a brain-glazing paucity of activity. There are two reasons for this: 1. Work has required a lot of attention (this coming week will as well!) and 2. We had some hellacious storms up where I live (on the other hand, some really great thunderstorms -- and I'm telling you, there's nothing more livening, not to mention loud, than a mountain thunderstorm!), rain that came down positively sideways, and so hard that it got to the point where, driving up the hill on Interstate 80 I had to physically stop the car twice because I couldn't see.

Coming home, I missed getting involved in an accident where one pickup and an SUV collided, crossed both lanes in front of me, and I simply stayed off the brakes and shot the middle, avoiding both vehicles. One vehicle slammed into the concrete K-barrier in the median, and the other rolled up an embankment. This happened directly in front of me and I shot the gap. I think I missed the Nissan Armada by two or three feet. Three persons in the Toyota Tundra, which rolled, were taken to the hospital. They were covered in blood. I directed traffic in the rain until CHP arrived.

Small peripheral rant: If you drive a big SUV or a pickup truck, no, you're not immortal and you cannot overcome the laws of physics. I've been mountain commuting since 1993 and every year I watch stupid people, perched high in their powerful SUVs and trucks, roll, spin, hit each other, collide with thick pines, semis, run off embankments, in the snow, rain, flurries, fog and slush. I chalk it up to the phrase "thinning the herd."

The bottom line is: I lost phone service at the house and, consequently, internet access. Yes, I know, I'm still in the late Pliocene era when it comes to the internet. I have a dialup line. There are no T1 or DSL lines where I live. I communicate with my neighbor by grabbing a nearby Western Redbacked Squirrel, attaching a note to its collar, and then slapping its butt. My phone service was restored today.]

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Where to begin? So much is happening. Ariel Sharon may not survive his massive stroke; he likely has suffered irreversible brain damage. What next for Israel? What of Likud and, of course, what of Sharon's new opposition party, Kadima? Even more importantly, what of Israel's potential reaction to Iran?

What of Tom Delay's official resignation? What of Abramoff and the damage done here? Alito's hearings are coming up. Will he be confirmed? H5N1 bird flu has killed two teenagers in Turkey this week, New Zealand is considering Draconian measures, and the US government urged people to stock up on vital supplies and expect a societal shutdown should a pandemic strike. My governor gave his State of the State speech and yes, as expected, Arnold has moved centrist. Many persons typified the speech as pointedly underwhelming. What does that mean for Fornicalia?

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In The News & What You Aren't Reading: the Politics of Oil

What you may not be reading about are the continuing Politics of Oil -- and I have chosen that subject for this post, prompted by an article in the newest issue of the left-embracing United Kingdom magazine, The Economist.

First, Russian President Vladimir Putin cut off gas supplies to the country of Ukraine earlier last week because of an alleged "price dispute." After US and Euro complaints, Russia backed down two days later. But another benchmark was made by a country that overtly decided to use oil as a weapon, politically and strategically, and the world trembled correspondingly.

Putin said Russia merely asked Ukraine to pay standard market pricing for its petroleum -- as opposed to its former subsidized rate when under the umbrella of the former USSR. But -- huh, imagine this: -- the now-democratic country of Ukraine was expected to pay quadruple its prior rates -- as opposed to the pro-Russian dictatorship of Belarus. Nah. Politics weren't involved. Putin said so. Right?

At a point more than any other, the world and the United States realize just how precarious and precious our energy sources are. There are many factors that have changed the face of petroleum production globally, and include such items as natural disasters (witness the impacted refinery production in our gulf coast states from Katrina, for example), new dictators presiding over oil sources (the nutjob Hugo Chavez from Venzuela comes to my immediate mind), political determinations (Putin and his Ukraine edict), Middle Eastern conflagrations (constant unrest in these nations), the seemingly capricious and arbitrary right-or-left-turning of the OPEC spigot and now, two new and huge flies in the energy consumption ointment: India and China.

At a time when European and American populations are waning and, with them, power and technological influence, Indian and Chinese national determinations are focusing on expansive (yes!) consumerism and with that, technological explosions and their concomitant requirements for energy.

I am again reminded of the 1975 movie "Three Days of the Condor," where the following dialogue stayed glued in my Brain Housing Group for decades:

HIGGINS: It's simple economics, Turner. There's no argument. Oil now. Ten or fifteen years it'll be food or plutonium. Maybe sooner than that. What do you think the people will want us to do then?

TURNER: Ask them!

HIGGINS: Now? (shakes head) Huh-uh. Ask them when they're running out. When it's cold at home and the engines stop and people who aren't used to hunger -- go hungry. They won't want us to ask. (quiet savagery) They'll want us to get it for them.

That scene at the end of the film is as poignant and, more importantly, as true now as then.

No matter what anyone says, no matter their affiliation, political bent, age or mental disease, when convenience stops in America no one will proffer one measly shit as to how we restart the engines -- just that we do.

The newest figures I can locate indicate the following percentile of US petroleum imports from these countries:

17.8% from Saudi Arabia
16.5% from Canada
12.8% from Venezuela
12.0% from Mexico
7.5% from Nigeria

Unofficially, I have read that we now import our greatest amount of oil from Canada, then Mexico, Saudi Arabia, Venezuela, then Nigeria.

Saudi Arabia is still the world's largest producer of oil. It has seemingly repelled any number of al Qaeda attacks and, under new King Abdullah, appears to be more stable, prosperous and willing to reform.

The newest and largest developing player in the world oil game is now China. More than ever, the US will have to compete with China for its oil imports. "Energy security" is the newest suppressed buzz-phrase but oh-so-relevent in today's markets. In 2003 China pushed Japan aside to become the second largest consumer of petroleum, behind the US.

China recognizes its emerging power and, with that, its dependence on energy sourcing. It is in the midst of making as many alliances as possible, regardless of political philosophy. If you recall, last year China's CNOOC attempted to buy Unocal and was fended off by US politicians.

Two-thirds of Middle Eastern oil already flows to Asia. France expects to import 80% of its energy by 2030. The US consumes a quarter of the world's oil but produces, at this point, only 3%.

And yet American politicians are refusing to allow drilling in the Alaskan National Wildlife Reserve (ANWR).

The ANWR site indicates that "most geologists agree that the potential is on the order of billions of barrels of recoverable oil and trillions of cubic feet of recoverable gas and that these resources may rival or exceed the initial reserves at Prudhoe Bay. The validity of these estimates can be proved only by drilling exploratory wells. Authorization for exploration must be given by Congress and the President."

And that's this week.

Next week is up for grabs.

9 Comments:

Blogger TexasFred said...

You'll sleep better getting that OUT of your system...

:)

Sun Jan 08, 01:03:00 AM PST  
Blogger Robosquirrel said...

Wow, BZ, glad you're OK! I don't know about mountain commuting, but I used to live at one of the most dangerous intersections in south Minneapolis. My roommate and I frequently called 911 and ran downstairs to render first aid and direct traffic until the police arrived. Interestingly, after my wife and I started dating she got a job at the clinic across the street and one day while she was working, someone was speeding through the intersection, hit another car and went down the basement stairway of the bar I lived next door to. Anyway, glad you're OK.

You piqued my interest with the oil post, and I'm wondering suddenly why I didn't receive my issue of the Economist yesterday. I was too busy playing poker to think about it until now.

Sun Jan 08, 06:35:00 AM PST  
Blogger Revka said...

Blo,
Glad you weren't involved in the accident. I too, have seen some drivers of large 'mobiles' thinking they are invincible swerving in and out of traffic on snowy days. I would think, however, that in your neck of the woods it is simply foolish and arrogant to think one in an SUV can drive like that and not wreck, or flip.
I am the perfect candidate for an SUV because i am a major grandma behind the wheel. I don't drive too slow, but i set my cruise control for the EXACT speed limit. I know that is obsessive, but I had 2 speeding tickets in school/construction zones within 2 months. I don't need to get one on the highway!
Anyway, your blog is still as wonderfully written as the rest. Keep it up!
I have been trying to get a news ticker on my blog. I have all the info. to do it, but my stupid blog gets all psycho'd out. Even if I try to change the width to match my blog. Oh well...

Sun Jan 08, 09:12:00 AM PST  
Blogger Bloviating Zeppelin said...

The oil situation, with regard to ANWR is, to me, of particular frustration. Here we have a new source, literally in our own back yard, and we can't touch it. Yes, it's nice to say we're fighting terrorism in the Middle East and, of course, yes we are. But energy independence from at least a portion of our import sources -- how incredibly important is that?

Sometimes I just scratch my head and wonder: what is it about this issue that the bulk of the nation and its politicians don't understand? What is so difficult to comprehend? Why can't people do what I call the "logical extension" and see where more dependence on foreign oil sources leads?

And thanks, all, for your well wishes. It was truly a sphincter-tightening experience I'd rather not relive for a while.

I hope to continue making a post or two this coming week -- depending on workload.

Sun Jan 08, 10:16:00 AM PST  
Anonymous Kira Zalan said...

Many are labeling Russia’s pressure on Ukraine to pay market prices for natural gas as “Cold War” tactics. Of course, the Ukrainian government is paying the full price for their anti-Russian rhetoric and pro-Western orientation. Russia is flexing the only muscles she has: natural resources. But, it’s not so much a message to the Ukraine as to the West. And it’s not so much “Cold War” as Realist geo-politics.

Putin quickly realized that Russia only has one card to play in today’s world of growing demand for natural resources. Domestically, this realization became clear with the takeover of the Yukos oil company. Disguised as retribution for legal transgressions, Putin removed the threat of a western-oriented Yukos
by imprisoning its managers, and paved the way for a predictable government takeover of Russia’s oil industry. Today, it is not so clear what the rules of oil investment are (i.e. no foreigner shall hold majority stock in a Russian oil company), but it is very clear who makes the rules.

Sun Jan 08, 12:34:00 PM PST  
Blogger Gayle said...

Excellent post. I am also very glad you weren't hurt! Scary!

Do you suppose the oil in Mexico may be the reason Bush is not dealing with our border problems. Being in Texas, the border problems are of much concern to me. I do not understand why we are not protecting ourselves better.

Sun Jan 08, 03:12:00 PM PST  
Blogger Little Miss Chatterbox said...

Missed you this week. Glad its you and not me driving in the mountains. Yikes!!

Awesome, awesome post. I am soo passionate about the Anwar thing and am soooooo frustrated that the libs are holding it up. My liberal father-in-law took my older son out of town last weekend. He told him that the reason the gas prices were so high was because of Bush. My husband (who is not very engaged in politics, but keeps up to date on basic news and listens to my rants :-)) said for my son to tell his grandad the next time that the reason gas prices are so high is because the democrats won't let us drill in ANWAR. I was very proud of my husband and told my son--yes, you say exactly that :-).

Sun Jan 08, 04:57:00 PM PST  
Blogger Three Score and Ten or more said...

This seems to be the season for car stories. (I am swearing off for a season.) I am really flummoxed about ANWAR. I have been where reindeer live almost in the back yard, and can't yet figure out how anyone sane thinks that a reindeer who really doesn't give a damn is more important than the nation.

Sun Jan 08, 05:20:00 PM PST  
Blogger Bloviating Zeppelin said...

Kira: I would wholeheartedly concur. It is more about somewhat newly discovered muscle and the geopolitical plays to be made over oil -- Putin's diminished number of cards to play globally. We all know and easily recognize why he did what he did -- because he could.

Gayle: Yes, I very much have a belief that, somewhere, GWB has in fact cut some kind of sub-table deal with Pres. Vincente Fox Quesada about that very same thing -- a bit of a glance in the other direction for a time in exchange for the uninterrupted and favorable flow of petroleum to the US.

LMC: yes, your Granddad should be told precisely that. And if we had in fact been to Iraq for the oil, then just where IS the oil and to whom is it going?

3S10: the area potentially subject to drilling is miniscule in ANWR. I am certain that the issue is that of precedence with the Dems, the DEM and various Green organizations. If ANWR drilling were green-lighted, then we might actually follow up with offshore drilling, the construction of more refineries, the construction of more power generation stations and, certainly, we can't have that.

Yet can can, of course, continue to import more and more and more people into the country with an infrastructure that is crumbling before our eyes.

Mon Jan 09, 05:36:00 AM PST  

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