Global resource wars: The Rosetta Stone

A slab of black basalt which now sits in the British Museum contains a decree honoring the Egyptian king, Ptolemy V Epiphanes. The decree was written in three languages: Greek, hieroglyphics, and demotic (a simplified form of hieroglyphics). The black slab is known as the Rosetta Stone and became the key to understanding hieroglyphics because on this stone the ancient pictographs were seen for the first time side-by-side with other better understood languages.

Some 200 years later we find ourselves back in the part of the world where the Rosetta Stone was discovered, trying to figure out another conundrum. What is the nature of the connection between an ill-planned war in Iraq; the steadily increasing pressure on dissent in the United States; the ongoing estrangement between the United States and its traditional allies; the increasing strains with the country's Canadian neighbor; and the forbearance shown to China as opposed to the increasing distrust of Russia? Is there a compelling, overriding theme that connects them all? By lining them up side-by-side the theme becomes clear if you know on what basis to draw in the connections. The one common thread is a global scramble for the remaining energy resources in the world, especially oil and natural gas. Let's take a look at that thread.

By itself the invasion of Iraq seems reckless, even senseless. The avowed mission of the United States was to protect itself from weapons of mass destruction. (Even if Iraq did have them, so do many other countries and they resist using them against us for fear of obliteration.) When that turned out to be baseless, the second publicized mission was to liberate the Iraqis and give them a democracy. Something may come of this yet, but it will probably not be to our liking. The true mission is explained by the unsuccessful attempt of Paul Bremer (the former American administrator in Iraq) to privatize the national Iraqi oil company.

The Bush administration understood that as long as oil in the Middle East and elsewhere is controlled by state-owned companies, it will flow only as fast as they need it to in order to finance social and military spending. Private companies, on the other hand, would seek to exploit the remaining oil reserves as quickly as possible to enrich their shareholders. The result would be more oil flowing at lower prices. If the American military could convince other Middle Eastern oil powers to open their fields to private development (perhaps through the threat of invasion), it could achieve the same goal elsewhere without additional armed conflict.

This, I believe, was the strategy, even if the implementation has been largely disastrous and ineffective. The Iraq invasion was not designed merely to swipe the oil. This would only leave Iraq an impoverished, hostile satellite intent on stopping the flow of that oil. (We've seen some of that sentiment already.) In addition, even if the United States gained effective control of all Middle East oil, hoarding it would ultimately lead to the collapse of America's trading partners or to a war with them. That's why the notion that the U. S. would simply keep the oil for itself makes no sense. In reality, the free flow of cheap oil allows America to remain the dominant military power and the largest, most powerful economy. Hoarding would certainly jeopardize this.

Now why, if this is really the American objective, does the U. S. government need to stifle dissent at home? Don't Americans believe that they have a birthright to cheap energy? While a clear majority of Americans supported the invasion, the dissenters have a strong American ethic of anti-imperialism on their side, an ethic that tends to gain adherents as military engagements drag on. The administration said that we are in a generation-long battle with the forces of militant Islam and so, at the very least, it expected to stay on in Iraq for many years. With that in mind the administration told Americans that we would be out in six months in order to gain support knowing full well that it would have to quell dissent in order to stay on much longer.

Our disagreements with European governments about Iraq are often portrayed as differences over approach, soft versus hard. Or these disagreements are simply put down to French and German greed or corruption. In fact, the Europeans are now competing with us for ever-dwindling supplies of energy. Why didn't they sign on for the Iraq invasion then since they, too, would stand to benefit from larger supplies of cheap oil? The answer has already been given. This would insure continued American dominance. The Europeans are less and less inclined to accept that. They are also far less dependent on oil than America; Europeans use only half as much per unit of economic output. And, they have a ready supplier in Russia which not only has large reserves of oil, but also of natural gas, both of which are already being conveniently piped to its European neighbors. In short, the Europeans have relatively less grim energy prospects than the United States, they have a natural aversion to wars born of experience, and they now see the U. S. as a resource bully who must be resisted.

The frictions between the U. S. and Canada come at a time when natural gas supplies in North America are thought to be peaking. The U. S. imports half of all the natural gas that Canada produces. At some point, Canada will need to keep more for its own use even as America's appetite for methane grows. And so, Canada will also find out that the United States is a resource bully, and the Canadians may regret entering into NAFTA which obliges them to send so much of their precious energy south.

The American forbearance of China (whose rapid growth along with that of India is probably the biggest reason for tight global energy supplies) may seem puzzling to the untrained eye unless it is seen as only a temporary measure. America's current ruling ideologues need Chinese loans to finance the first leg of their global resource war. The Chinese need America's markets in order to modernize the Chinese economy and provide employment for ever-increasing numbers of people coming from the countryside. The contradiction in the Bush administration's tax-cutting, deficit-creating policy is that it leaves the country so vulnerable to blackmail and even economic collapse at the hands of the Chinese. They could simply choose to stop lending to us at any time. They don't do it because right now it would cause huge, perhaps revolutionary, social problems for them. A sudden breakdown in the recycling of dollars back to the United States would surely cause a severe worldwide recession and possibly even a depression. That would lead to dangerously high unemployment in China.

But, someday the Chinese will decide to wean themselves from the American market. That will mean that America would then have to find other lenders (unlikely, in my view) or raise taxes substantially to pay for America's global military presence. By that time, however, the country could be so weakened by the intervening years of war and debt buildup that collapse may be the only possible outcome.

Beyond this America's bases in several former Soviet republics rich in oil are no puzzle. Our threats against Venezuela's populist president, Hugo Chavez, who is signing agreements with the Chinese and openly criticizing U. S. influence in Latin America, are no surprise.

In Iran the concern over nuclear weapons is not really that they will be dropped on America. An Iranian nuclear attack on America would only result in the reduction of Iran to rubble, and the Iranians know this. What American military planners fear is that Iran will frustrate their plan to privatize Middle East oil as Iran acts as an effective counterweight to American power. The Iranians, however, will probably get nuclear weapons even if America bombs its facilities because those facilities are thought to be widely scattered and duplicated, even triplicated.

What makes this fateful global engagement so pitiful is that it has no chance of succeeding at its aim: Guaranteeing the continuance of the energy-intensive American way of life. There are no number of ships or tanks or planes, no size of troop deployments, no buildup of smart missiles or bunker-busting nuclear bombs that can solve this problem because none of these can produce one more drop of oil under the earth. The real problem is depletion and the approach of world peak oil production. In fact, all of America's military activity will only serve to deplete what oil is left even faster without providing us any of the alternatives that we desperately need: massive conservation, development of alternative energy sources, and a complete restructuring of the way we live consistent with a lower energy future.