Peak Oil News: Getting ready for the last oil wars ... writing on the wall

Friday, June 03, 2005

Getting ready for the last oil wars ... writing on the wall

Andrew McKillop: Getting ready for the last oil wars ... writing on the wall oil industry commentarist Andrew McKillop writes: Experts will forever discuss and dispute the causes of previous wars, both local and civil, either ethnic or religious, for resources or to deny resources to enemies, and will always disagree on the causes of ‘total wars’ such as those of 1914-18 and 1939-45.

But the now accelerating countdown to Peak Oil, or the ultimate peak of world production -- followed by annual and constant fall in amounts available to a hungry world -- will most certainly aggravate existing tensions, while creating new focii for Great Power rivalry and conflict.

Under any hypothesis, declining food surpluses, and ever-higher oil prices will severely test the ‘Teflon-coated’ New Economy and undermine the thrust of Globalization. World economic crisis, as in 1929-36, is always ‘the Mother of War.’

Without oil and fossil energy-based industry and infrastructures, and the social and cultural values enabled, favored or forced by Fossil Energy Civilization, war will yet further trend away from the definitions used by historians and analysts, and what we have known as ‘war’ since about 1900. Some war historians in fact argue that the two World Wars of the 20th century may only have truly ended in 1991 with the formal and real collapse of the Soviet Union or Evil Empire as it was called by President Ron Reagan. In other words, the 20th century was a period of permanent war. The theory of ‘permanent war’ can in fact be traced to late 19th century historians and military strategists (among others including Clausewitz, Marx and Engels).

* Their theory could be summarized as being that under certain conditions, ‘low level permanent war’ occasionally breaks out into paroxysms of total war.

In the 20th century we have experienced numerous inter-imperial ‘brushfire’ wars, including those of the Middle East and Central Asia, sparked or intensified by oil-hunger, and preceded or followed by civil wars. This can be set as the background to the 1918-39 period, these ‘brushfire wars’ breaking out into the paroxysm of World War 2, and then subsiding into the seemingly permanent Cold War of 1948-91. At the same time, and through about 1940-75, there had been a nearly continuous anti-imperial ‘decolonizing’ war, or North/South war.

Thus the 1914-91 period was one of permanent war, and already included dispute, rivalry and open conflict between larger and smaller powers for dominance over oil reserves. One key date in that period was the collapse of the Turkish Ottoman empire in 1917, followed by Germany’s loss of all its colonies in 1918. From 1917-18, to the next outbreak of total war in 1939-45, the British and French empires became destabilized and started their entry into terminal decline, while the Soviet Union, or Evil Empire started its ascension, accompanied by the rapid growth of US economic and political colonialism, euphemistically called ‘influence.’

Germany then regained sweeping but short-lived global reach in the Third Reich of 1936-45. Mussolini’s New Rome rapidly expanded through 1922-36, then collapsed with Nazi Germany. Japan’s Co-Prosperity Sphere was almost overnight extended throughout much of East and SE Asia in the 1933-45 period, then extinguished overnight by the twin suns of Hiroshima and Nagasaki -- the first use of nuclear weapons in Great Power rivalry. By 1949 China's future territorial and political ambitions had been set by Mao Zedong after a civil war costing tens of millions of lives. India’s emergence as a Great Power was to come more slowly and gradually, from the 1960s.

Marking the end of that 1914-91 phase in a near-century of war, historians will some day give 1991 and the ‘Liberation of Kuwait’, or First Gulf War as the first outlyer Oil War. A war that will not only be a model for, but even the cause of those to come. When they come, not one but many nuclear armed ‘players’ -- that is massive oil importers -- will be lined up, on one side or other, to decide who will have the world’s last remaining reserves of oil.

Population, energy and weapons

The expansion of population and energy supplies through the 20th century was a ‘one-shot’ event that will not and cannot be repeated -- unless the impossible miracle of ‘controlled nuclear fusion’, or the entirely hypothetic ‘Hydrogen Economy’ came about -- rather fast.

The downstream and related ‘policy’ or entrained activity of total war will most certainly and surely not stop when we hit the absolute peak of world oil supply, about 2005-2006, but will spillover to the first two or three decades of the 21st century.

This will not only be through rivalry for shrinking oil and gas reserves, but through the ‘stock effect’ of human numbers and weapons supplies.

* Through 1900-1999 world population increased from about 1,450 million to nearly 6,000 million, while fossil fuel production and consumption rose from about 1,100 million tonnes of oil equivalent (Mtoe) to some 9800 Mtoe.

The considerable increase in average efficiency of use, thermal efficiency rising from around 10%-15% in 1900 to over 25% at the end of the century, resulted in actual applied and useful energy increasing not 9-fold but more like 18-fold for about a 4-fold increase in human numbers. These growth numbers were dwarfed by those for industrial output, also including weapons supply.

Key indicators for output of both civil and military equipment, such as automobiles and light artillery showed spectacular increases. While car production increased ‘only’ about 45 times through 1900-1940, (a growth of 4,400%), the production of mortars, mines, grenades, service rifles and small caliber artillery (105 mm and below) increased about 200-fold in the same period (a growth of 19,900%).

Nuclear weapons, since the 1970s, have spread from the Security Council club of 5, to at least 9 proud owner nations. This however entirely excludes one fact that even the most self-satisfied Consumer Citizen has vaguely become aware of, with the Chernobyl catastrophe: the existence of any nuclear reactor, anywhere, places nuclear equivalent targets at reach for any enemy. Nuclear reactors are not designed to resist even the smallest and lightest hand-held antitank missile and, where they are claimed to be ‘terror-proof’, their cooling systems and control systems are entirely vulnerable. In any Great Power rivalry sparked by intense dispute for shrinking oil reserves, the enemy’s ‘civil’ nuclear reactors will the softest of soft target for missile attack.

Declining food supplies

World food production increased regularly and by large amounts until 1991, easily outstripping the rise in human numbers until the last decade of the century (see above).

Peak annual growth, by numbers, of world population also occurred in the 1990s, at about +95 million in 1995, before declining to about +85 or 90 million from 2001-2002, exhibiting all the characteristics of a new, long-term trend for declining annual increases in world population. Population growth, right through the 20th century, always and rapidly compensated any war losses. Estimates of perhaps 60-80 million war deaths in the 1914-18 and 1939-45 total warfare periods or phases of the 20th century’s permanent war, represent less than one year’s increase in human population at the peak rate of 1995.

All other war deaths, and war-related deaths in the 20th century -- perhaps 45 to 75 million depending on the inclusion or not of deaths from epidemics and famine caused by war and conflict -- represent about 8 months of world population growth at the peak rate of 1995.

With abundant population, food supplies and weapons production - all of which finally depend on abundant fossil energy supplies -- everything was therefore in place for a century of war that, as previously mentioned, will without any possible doubt spillover to the first few decades of the 21st century. Underpinning these factors, and in fact their cause, was the discovery and production of oil and gas resources.

US oil discoveries peaked in the 1930s, while discoveries on a world-wide volume basis peaked in the 1955-63 period, due to the intensive mapping, exploration for, proving and production of Middle Eastern oil and gas reserves that had already, in the 1917-39 period, been a focus for rivalry, competition and conflict between Fossil Energy Civilization players.

In that now legendary period of massive discoveries annual discoveries sometimes reached over 80 billion barrels or more than 8 years of world consumption in the late 1950s.

Today, world discoveries rarely exceed 5 billion barrels-per-year or two months of world consumption. The Middle East and Central Asia, which contain about 60% of the world’s remaining oil reserves, in the period from now to about 2025, will without the slightest possible doubt again be the focus for a higher-tech, better-armed and more demographically numerous replay of what was called The Great Game.

In the earlier version of the Great Game, the main rivals were the European powers (notably France, UK, Germany), the USA and the Russian then Soviet empire, the Persian, and the Turkish Ottoman empires. The collapse of this latter in 1917, just before the defeat of its German ally in 1918 led to the immediate proclamation, and initial acceptance by the USA, France and UK, of Independent Kurdistan.

This recognition was repeated at various conferences and meetings held by the US-British-French victors of the ‘Great European civil war’ (or First World war) of 1914-18, these meetings being called the Versailles Treaty. By 1922 however, and unquestionably because Kurdistan was known to have a very large proportion of all oil then-discovered and then-proven in the large region stretching from Turkey to the Persian Gulf, Kurdistan was simply ‘de-recognized’ by the US-British-French victors.

Kurdistan was then split up between Turkey, Iraq, Syria and Iran, all of which had themselves received considerable frontier modifications or had never previously existed as national entities. Another and later national victim, in this region, of influence trading and map drawing exercises in imperial tea rooms, always behind closed doors, was Palestine.

The weakened Persian Empire, shrunken to the present state of Iran, was also for several decades a bone tossed in the air for Soviet, British, American and national players to dispute, to draw ‘definitive’ frontiers for, and in which to find, develop and produce oil and gas.

Today we have the US, British and Italian ‘Iraq liberation war’ as a reminder of how permanently and fundamentally destabilized this region has become: oil and gas have been powerful motors of this process.

The Iraq war of 2003-2005 can at any moment inflame and engulf the entire region.

Great Game 2

With the collapse of the Soviet empire in 1991, after its symbolic defeat in Afghanistan by US-backed mujahadin including Osama bin Laden, the accelerating decline of oil and gas discoveries accompanied by ever-rising oil import demand of China, India, Pakistan and Turkey brings in 3 new nuclear armed players to what will become The Great Game 2.

Imperial or strategic resource map drawing exercises, no longer in tea rooms but in air-conditioned think tanks and bunkers, has re-emerged as a major activity, not only in Washington, Paris and London, but also in Beijing, New Delhi, and Islamabad, and elsewhere.

Troop strengths in the widely-defined Middle Eastern and contiguous strategic region containing around 60% of all remaining world oil reserves have been multiplied at least 6-fold since 2000. Great Game 2 is in fact a continuation and intensification of its previous version that started in 1917, effectively continued through the Second World war, became interlocked with the birth and expansion of Israel, triggered the Iranian Revolution of 1979, and gave birth to the ‘first Gulf War’ for the ‘liberation of Kuwait’ in 1991.

We can call this Oil War 1 ... Great Game 2 has already fathered Oil War 2, or the second Gulf War, but its geographic sweep is now extended, with oil depletion, to focus oil- and gas-bearing territory and contiguous pipeline routes that stretch from ex-Soviet central Asia to Iraq, itself incorporating much of ‘de-recognized’ Kurdistan. This zone then continues, with the oil-bearing source rocks, to Saudi Arabia, Kuwait and the other princely oil-producing states of the Gulf, facing Iran, and extends to Yemen in the west.

Tehran ‘regime change’

It may be a surprise to some policy analysts supplying deep thoughts for Great Game 2 strategists that Iran, which was the ‘Persia’ in the Anglo-Persian Oil Co. of the 1920s and later became BP (by the late 1990s it had given itself the nickname Beyond Petroleum), is an oil exporter a long way past its peak production capacity. This was attained in 1978, only 8 years after the USA attained its ultimate peak of oil production.

Iran’s national or domestic demand continues to grow with population and economic growth, and, after China, Iran has the fastest-growing car fleet in Asia.

Domestic demand is so strong, and Iran’s oil production is so far past its peak that by 2008-2011 (see above), it will likely cease to have any exportable surplus of oil, and will become an importer country. For Iran, other than the siren call to develop nuclear power -- opening the way for nuclear arms and a sure footing for standing firm against the USA and Israel -- the real and effective solution will be to develop gas-to-oil conversion (GTO), enabling Iran to produce synthetic oil from its immense gas resources. Tehran regime change, a favoured call by toothsome Condoleezza Rice, will not in any way favor rapid development of GTO -- further accelerating Iran’s demise as an oil exporter.

Even before the overthrow of Shah Pahlavi by the Khomenei-led revolution of 1979, the country’s oil discovery/production indicators showed that Iran was heading towards that day -- then a long way in the future -- when it would cease to export oil. One consequence was the entirely ‘classic’ economic decision for a program to develop civil nuclear power for electricity production. As amply proven by India and Pakistan, and most recently North Korea, and the real basis of ‘civil’ nuclear energy in the USA, France, UK, Russia, China and Israel, so-called ‘civil’ nuclear energy enables nuclear weapons production.

Any country with ‘civil’ nuclear power is at most ‘two screwdriver turns’ from nuclear weapons capability. Great Game 2 strategists, despite their air-conditioned bunkers, might toy with Indiana Jones images of those long-ago imperial tea rooms and moustachioed strategists with solar toupee hats, of Sopwith biplanes and Lee Enfield or Mauser and Remington rifles left over from the 1914-18 war.

If so, they have gone too far in their reverie: they might imagine they have the time that Great Game 1 players had. They might imagine their strategy game only generates occasional and relatively small skirmishes against lightly armed and disorganized enemies, as US and British media likes to present the 2003-2005 Iraq war. They might above all imagine they will find, and then hold abundant and cheap oil and gas resources in the Golden Triangle centred on present day Saudi Arabia.

The Fast Replay

Sadly for them, the replay will be different, and will come to an accelerated end. It has two-only variants: nuclear war or resource wipeout, the second of which is certain and inevitable, while the other remains an option. Sooner rather than later, this endgame choice will become evident -- any responsible citizen, anywhere, should be concerned.


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