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.