A report from Michael Totten.
It’s a shame that we can’t wave a wand and make oil worthless. Perhaps the only other solution is to take it away from them. There’s something wrong with a system that gives people so much wealth who have done absolutely nothing to earn it or create it, and use it to subvert the rest of the world.
I vote for making it worthless. Or at least, as close to worthless as we can. Three cheers for massive nuclear investments and algael biotech.
The problem with “taking it away from them” is the standard of review. How do we decide who’s allowed to keep their oil and who isn’t? And even if “we” (US citizens) could agree on such a standard (ha!), the US doesn’t have the power to enforce a global standard – and any international effort would end up looking like a UN Human Rights panel.
The main reason I’m a fan of fusion power (such as the Polywell) isn’t the lack of radioactive waste (although that’s nice), but rather the even spread (globally) and excessive supply of hydrogen and boron. Electrical power would cease to be supply constrained, meaning there’d be no economic advantage to controlling the supply. Even nuclear leaves certain nations holding all the cards, and other nations as beggars.
Actually, the US does have the power to enforce a global standard. What it lacks is the will.
However, there is an alternative that doesn’t require any use of power or will by the US. Give it to China or someone more brutal.
There’s something wrong with a system that gives people so much wealth who have done absolutely nothing to earn it or create it, and use it to subvert the rest of the world.
Of course Muslims nearly universally see it as the gift of Allah to the Muslims. Interesting how “sweet” oil reserves track closely with the most historically significant Islamic locations. And of course the kingdom best suited to profit and proselytize from Oil is the one that contains both Mecca and Medina.
Christian apocalyptics hence see it dually as the work of Satan and God, since Muhammed and his religion are often referred to as best candidate for the anti-Christ, and oil indisputably enables the continuance and even spread of Islam when by rights in the modern era it should be dying or at least marginalized due to Islam’s medieval rigidity. God because, actually, Christian apocalyptics see the triumph of the anti-Christ as necessary to the second coming of Christ so hence a ‘good thing.’ Yikes.
The rest of us just see it and shake our heads…
That some Middle-Eastern autocracies engage in “rent-seeking behavior” has people here commenting about “taking the oil” is crazy talk, which fits into the simplistic understanding of the situation held both by those autocrats and some on Democratic Congressional Leadership.
The Saudis, as far as I can tell, have a rationale rent-seeking strategy in that they use the best petroleum-engineering expertise to husband their resource, neither withholding oil from the market owing to lack of investment nor squandering their oil through overproduction. The main problem the Saudis are causing is their secrecy — were we to “take the oil from them”, we really have no idea of how much oil we are getting.
The problem with just about everyone else, from the Russians to the Iranians to Hugo Chavez is that their rent-seeking leads to serious underinvestment. There is this Beverly Hillbillies understanding of oil production that “Uncle Jed goes a shootin’ for some food, and up comes a bubblin’ crude.” The Clampetts get to live their life in a mansion in Los Angeles on the royalty checks, and anyone trying to get a cut is a con artist and a crook.
The exploration, drilling, pumping, and post-well pre-refinery processing of oil is a very highly technological and capital-intensive activity, and most part of the world with that resource need people with the skills and the capital to come in and help them out. Once an oil resource is developed, the idea becomes that any money going to these “foreign interests” or “big oil companies” is money subtracted from that royalty check and that those entities are out to take the money that rightly belongs to the Venezualan people as administered by their leader, Hugo Chavez.
The “Big Oil (foreign) Oil Company” is needed to tap the oil, but once this is done, said Big Oil Company can go quietly away. This seems to be the pattern as much as in Russia with BP as it is in Venezuala and places in between.
The problem with this is depletion — oil runs out. The Peak Oil people are trying to tell us that indeed oil is running out, but even apart from Peak Oil, a well has a finite production life, and maintaining production and satisfying our appetite for oil requires continued capital expenditure, even in mature oil fields. If you nationalize, threaten to jail, and otherwise make life difficult for the Big Oil Companies, your production will inevitably taper off with time.
Even if oil is that valuable that the BP and others are willing to see their property expropriated, when you threaten their executives with jail time in a Russian prison, you tend not to see them anymore. And production tapers off and it is a grand conspiracy against whomever.
But the only rent seekers are not these Second and Third Worlders. Right here in the USA we have untapped oil and vast amounts of oil shale, and we are told that efforts to put either of these in production are a “distraction” from the “real issues.” How are Washington politicians pandering for support from the Environmental Lobby different from Mr. Chavez pandering to the anti-Yankee resentments in his governing coalition?
No, drilling in ANWR is not going to solve the oil crisis anymore than Russia playing nice with BP anymore than Chavez acting rationally anymore than Mexico letting in more foreign capital to counteract their decline. But if ANWR is off limits to development because of US politics, Mexico is off limits owing to whatever social contract they have in Mexico, Venezuala off limits because of some crazy guy, Russia off limits to BP owing to Medvedev acting as a front for the oligarchs, Iran off limits because of another crazy guy, well, you kind of get the idea of the fix we are in.
I told a friend and colleague who is into “No Blood for Oil” (i.e., no Middle-Eastern war, which is just an excuse for taking the oil) that what oil does is substitute for the much dirtier coal as a fuel and that the bumper sticker slogan should read “No Blood for Cleaner Air”, which of course didn’t go over very well.