Wednesday, January 19, 2005
It's hard to be politically correct when the world starts to look like “Monty Python's flying Circus.”
It isn't that any US oil company would say “no” to Iraq contracts if the situation shaped up there and contracts came their way. But Iraq is a mess right now, and is there is no security—political, legal or physical—to guarantee a return on a multi-billion dollar investment. It's unlikely that any of these companies asked for this invasion because they all prize stability—the stability of contractual arrangements, of a regular return on capital, of not getting their employees killed and their equipment blown up—above nearly anything else. Even the stability guaranteed by very nasty governments. Dealing with the “devil,” whatever headgear it wears, is pretty common in the oil business.
But there is an oil component to the invasion and occupation, and I believe it is this: the United States, through invading and occupying a nation with significant oil reserves, would show the world especially the up-and-coming consuming nations of China and India—that in the event that push comes to shove, and this resource gets scarce, Americans come first.
A very interesting article on oil production and the predicted “oil peak,” which is that peak oil production after which it's all downhill, may be a myth after all. There are differing types of crude oil—some are easier to obtain gasoline from (and when you hear the price of a barrel of oil quoted, it's that type of oil—the most expensive, sought after type) than others (which are cheaper by barrel, but more expensive to extract gasoline from).
It also goes into some details about oil refinery and NIMBYism of the US that I was unaware of:
Recently, Aramco offered to build and pay for two brand new refineries in the US to help meet that demand on the condition that someone else obtain all the necessary environmental permits first or that the federal, state and local governments involved fast-track the process and protect it from legal challenges. It was a generous, unrealizable, and extremely cynical, offer.
But this bit (funny in and of itself):
(Does anyone remember how funny it was 20 years ago when we all learned that Cuban soldiers fighting on behalf of the Marxist government of Angola were guarding the Chevron concession—the concession that earned Angola the hard currency to pay for those troops?)
Reminded me that I have a similar bit in my personal quotes file:
A few years ago the left-wing government of Angola employed Cuban troops to defend US oil refineries against a Maoist revolutionary supported by the Reagan Administration. It's hard to be politically correct when the world starts to look like “Monty Python's flying Circus.”
R. Shweder, NYT, 9/27/93
So that was Chevron! How about that.
Anyway, I'm bullish on energy futures and the resourcefulness (or despiration, take your pick) of us humans. I for one would like to see nuclear energy used more here (the pebble bed reactor design is quite safe actually) with less dependance on oil for energy production.