Sunday, September 01, 2013

What Syria tells us about world oil supplies

I've been watching old episodes of The West Wing, the acclaimed television series about life and work in the West Wing of the White House. In one sequence of shows, bombers kill two U.S. congressmen and a former chairman of the Joint Chiefs of Staff who are on a fact-finding mission to Gaza. Pressure mounts from both political parties in Congress, from the public and even from the president's own staff for a retaliatory military strike.

But the president doesn't like his options, and he delays. Violence will just beget more violence. Is there a way to bring the bombers to justice without killing innocent civilians and entangling the United States directly in the Israeli/Palestinian conflict as a combatant rather than a broker for peace?

Today, the real president of the United States has the opposite problem. He is getting pressure from many in Congress and the public NOT to make a military assault on Syria. Even the British Parliament rejected a call from Prime Minister David Cameron to join any U.S. military action in Syria. For obvious reasons, Americans are leery of involvement in yet another war in the Middle East. So, why is this president--the same one who opposed the Iraq war when he was a state senator in Illinois--drawing up plans for a military strike?

The ostensible reason is the use of chemical weapons by the Syrian military. President Obama called this heinous act a violation of "international norms." But in a war that has already taken 100,000 lives would "international norms" have been better observed if Syrian soldiers had simply gunned down everyone instead?

I believe that the Syrian regime's use of chemical weapons is merely a pretext for American intervention despite all the hoopla about the president's rather vaguely worded "red line" warning about chemical weapons to Syria last year. (Need I recount the simmering conflicts and resulting tragedies around the world in which the United States chose NOT to intervene?) One always suspects that oil is the real issue when it comes to the Middle East. So, let's see if that's the case here.

According to the U.S. Energy Information Administration (EIA) in 2010 before the civil war drove down oil production, Syria was the 34th largest oil producer in the world--behind Thailand, but just ahead of Vietnam. Syria's oil production of 367,100 barrels per day (bpd) represented about one half of one percent of world oil production--small in the overall picture. But it is more instructive to see what Syria's neighbors produce. (All oil production and ranking numbers are based on EIA figures for crude including lease condensate which is the definition oil.)

Oil producers in Syria's neighborhood ranked against all other countries in the world as of 2012 are as follows: Saudi Arabia (2nd, behind Russia), Iran (5th), Iraq (7th), Kuwait (8th), Egypt (25th), Turkey (54th), Israel (95th), and Jordan (96th). (In the age of jet warfare I am tempted to include the United Arab Emirates (8th) and Qatar (19th).) Turkey is more important than it seems because two major oil pipelines run through the country, one originating in Azerbiajan and the other originating in Iraq, that country's largest crude oil export line.

The general idea that Syria's neighbors hold the keys to a lot of oil certainly comes as little surprise to anyone with a cursory knowledge of the Middle East. But, the salient fact about the Syrian conflict is that it is a civil war. So, why is an American president so concerned about a war within the country?

That question leads to a second and even more salient fact. This civil war has now become a proxy for the Shia-Sunni split in the Muslim faith. Don't think: Catholics and Protestants in the United States. Rather think: Catholics and Protestants in Northern Ireland where a wide range of nonreligious issues sparked violence between the two groups for decades.

The split isn't just between countries that are predominantly Shia and predominately Sunni. It is, as Syria is showing, a split within many Arab nations which have citizens of both sects. So, there is not only the potential for conflict between nations in the Middle East, but also for the spread of civil unrest and civil war to other nations in the region. Iraq continues to demonstrate that this fear is not just hypothetical as bombings perpetrated in the name of minority Sunnis continue to vex a country which has experienced a long civil conflict between Shia and  Sunni after the U.S. invasion.

The spread of that kind of chaos would be very bad for oil supplies. Witness what has happened to Syrian oil production. It has fallen from 367,100 bpd in 2010 to just 157,200 bpd as of the end of last year. That's a decline of 57 percent in two years. That kind of decline in Middle East oil production would have catastrophic effects on an already iffy world economy, one absolutely dependent on oil for its smooth functioning.

The United States, as it turns out, has already been aiding the rebels for some time. The idea behind the aid may have been that the current regime might fall quickly, and the United States and its allies would have a solid relationship with those who take over.

With the stalemate continuing it's not obvious what strategy will work best to achieve America's number one goal in the region: stable oil production. One think tank academic even suggested that an ongoing stalemate was in America's best interests. Clearly, he doesn't believe the Shia-Sunni split will lead to conflict between or within other countries, at least on a scale that would prove troublesome.

But, there is one final consideration. After all we've been hearing about American energy independence, about growing domestic oil production, and about America being able to disengage from oil-exporting dictatorial regimes in the Middle East and elsewhere, the president seems as engaged as ever in the region.

There are three reasons for this: First, right now the United States imports just under half its oil needs. We produce a little over 7 million bpd and consume about 14 million bpd. Second, no realistic nonindustry assessment of future U.S. oil production suggests we'll stop needing substantial imports. Third, oil is traded in a world market, and its price is determined by world supply and demand. Any disruption in Middle Eastern oil supplies would lead to much higher prices which would ripple through the U.S. economy no matter how much we produce domestically.

The worldwide concern over Syria tells us that oil supplies remain tight and consuming nations remain very concerned about disruptions to supply. The oil price continues to hover near all-time highs when compared to the average daily price in 2011 and 2012, both record years. As the United States prepares plans for intervening militarily, there is not only much at stake in human terms, but also most assuredly in terms of critical oil supplies.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

10 comments:

Anonymous said...

Interesting article. I would suggest including the interest of Qatar in running a pipeline for natural gas up though Syria to Turkey and there onto the EU - much to Putin's displeasure. see the Guardians excellent article on this subject http://www.theguardian.com/environment/earth-insight/2013/aug/30/syria-chemical-attack-war-intervention-oil-gas-energy-pipelines

Then there is the US's understandable drive to preserve the Petrodollar for as long as possible.
May I respectfully point out that the Syrian Government has not been proved to have used Sarin Gas. Much opinion suggests that this gas was released by the rebels - perhaps through incompetence.

Lewis Cleverdon said...

Kurt - I'm puzzled by the widespread assumption of "a rush to warfare" as the track record over 2.5yrs of the Syrian slaughter shows the west sitting on its hands.

Apart from a rather minor training effort in Jordan, western aid to the SFA has been restricted to the "non-lethal", and even that is in very grudging amounts. As McCain remarked, there has not been even a single truckload of the weaponry needed to halt Assad's brutality - in 2.5yrs - as over 100,000 have been killed.

That reluctance to lift a finger to help the rebels will not have gone unnoticed in interested capitals - and suddenly America is faced with the challenge of a major chemical attack that imposes a lose-lose dilemma :

Horn 1/. - impose a punitive missile strike to be seen to punish a regime breaking the law against chemical weapons' use,
and face massive global contempt and loss of credibility for doing so without UN mandate, without incontrovertible evidence of Assad's culpability, and with a coalition of just two (maybe);

Horn 2/. - fail to impose a punitive missile strike and face massive global loss of credibility and contempt for no longer being able to impose its will militarily.

I guess we can agree that there are three capitals, Damascus, Tehran and Moscow, that are not unhappy to see the US now caught on those horns. Damascus in particular benefits from the smearing of the rebels' integrity in western publics' view cutting the prospect of future support for them, plus the effective closure of any serious future threat from the US, in return for a worst case of facing a single assault with cruise missiles.

The potential upshot is western states adopting the classic neo-liberal foreign policy of isolationism - if that nation's dictator wants to slaughter its own people, what business is it of ours ?

One solution to the dilemma, which the left will auto-dismiss as far fetched, is for the west to fulfill the moral duty to use its current power responsibly: that is, since Moscow will veto any UN pressure on Assad, to ignore both horns of the lose-lose dilemma and go straight to the core of the issue:

- provide carefully vetted Syrian rebel commanders with the modern weaponry and real-time satellite data with which to bring Assad to the negotiating table.

I know this ain't a fashionable view, but I'd be interested to read your thoughts on it. Given the alternative outcomes : -
- the rebellion is eventually crushed after years more fighting;

- or the Jihadis succeed in hijacking the rebellion and with Wahabi backing eventually crush Assad's army after years more fighting;

I suggest it has much to commend it.

Regards,

Billhook

Lewis Cleverdon said...

Annonymous -

"May I respectfully point out that the Syrian Government has not been proved to have used Sarin Gas. Much opinion suggests that this gas was released by the rebels - perhaps through incompetence."

Your comment is indistinguishable from Syrian govt propaganda.
Do you have any shred of evidence for the rebels' culpability ?
Or are you content to promote Syrian govt propaganda ?

ChemEng said...

The problems in that part of the world appear to be intractable. I really don’t think that it matters what action the United States takes. The experience of the last 20 years would suggest that we will not make a real difference.

Regarding the comment “One think tank academic even suggested that an ongoing stalemate was in America's best interests.” By coincidence, I happened to be reading the book “The Victorians” by A.N. Wilson last night. In the 1880s Lord Salisbury aimed to make the Irish problem “utterly insoluble”. And he was successful for a generation. It is a plausible strategy.

However, a much better strategy would be for our leaders to challenge the American public to reduce oil consumption by 7 million bpd. Is that achievable? Probably not, but it’s worth a try and it possesses greater merit than invading other lands.

Anonymous said...

Anonymous writes

Lewis Cleverdon wrote; Your comment is indistinguishable from Syrian Govt propaganda.
Do you have any shred of evidence for the rebels' culpability ?
Or are you content to promote Syrian govt propaganda?


The key thing which I value with Kurt’s articles on Energy is his strict adherence to ‘fact’s as much as they are humanly known. That combined with good rhetoric makes his articles important as well as interesting.

In this case with Syria, I was simply applying the same rule. There is yet no ‘proof’ that the Assad regime was responsible for the barbaric act of using gas on its own people. That is why we have UN inspectors attempting to examine the evidence. The Syrian regime is certainly a dreadful and despotic one but the opposition I would suggest may well be worse.

I would further suggest that you take a moment to read the Guardian newspaper article – the link which I show in my earlier post. This article is by Dr Nafeez Ahmed is executive director of the Institute for Policy Research & Development – and writes:

Experts are unanimous that the shocking footage of civilians, including children, suffering the effects of some sort of chemical attack, is real - but remain divided on whether it involved military-grade chemical weapons associated with Assad's arsenal, or were a more amateur concoction potentially linked to the rebels.

Now comes the question, would you believe the Obama regime? Ambrose Evans-Pritchard of the Telegraph writes:

Many of us had been through this before. Personally, I was assured by Jack Straw, then Foreign Secretary, at a Nato summit in Brussels just before the invasion of Iraq that the Government had the intelligence on Saddam Hussein’s WMD. “Just trust me, we have the proof but can’t reveal sources,” he said to four of us, all British journalists. We did indeed trust him, and bitter we are too, snake-bitten for ever.

So in answer to your assertion that I am simply promoting Syrian Gov propaganda – then the answer is no – just let us rely on the ‘fact’s of an issue as they become known and then make a judgment.

Kurt Cobb said...

Thanks for all the thoughtful comments. As often happens, other commenters respond in ways that I would have.

First, I agree with Lewis Cleverdon that the U.S. response to the Syrian civil war has been remarkably measured. Bitten twice in Iraq and Afghanistan, the Congress and the country are very reluctant to get involved in any new war.

But, I wonder if his faith in American and possibly French capabilities and judgment is overblown. Previous interventions mentioned above would suggest that the situation might well be made worse by outside bungling. I am reminded of American support for the Mujahideen in the 1980s in Afghanistan, the resulting mess when the Soviets withdrew and American support for the rebels waned which culminated in the takeover by the Taliban.

Unlike a century ago, we are inundated daily with bad news from the far reaches of the globe, complete with video and commentary. Seeing it, we feel bad and imagine that we must do something. In this case, I would suggest that imperial meddling in the Middle East since the breakup of the Ottoman Empire has not "solved" much of anything, i.e., it has not led to stability and peace for very long. And, at the very root of that meddling is oil. That is what the imperial powers were after.

So, I'm inclined to agree with ChemEng on one point. The most intelligent, immediate and easily accomplished response is to radically reduce our need for oil worldwide.

The Middle East is largely what it is today because many of those societies are plagued by what is called the resource curse. Abundant natural resources--in this case, oil--lead to authoritarian and kleptocratic regimes that then mollify their people with handouts financed by the work of the Sun hundreds of millions of years ago in making fossil fuels. These countries have only to build the infrastructure to extract this windfall and that infrastructure doesn't really provide very many jobs. The oil industry is capital-intensive and largely automated.

But since everything in such economies gets crowded out by natural resource extraction and exports, a diverse economy and vibrant civic life independent of government control is stymied.

We can't solve this problem across the Middle East with military action in Syria.

I'm affected like everyone else when I see such carnage. But, unlike many, I don't assume meeting force with force will somehow solve the problem.

With regard to the veracity of reports that the Syrian military used chemical weapons, I can only say whether in the end this proves true or false is really beside the point. Many, many people are being killed every day in a horrific civil war. To debate whether intervention is justified solely on the basis of HOW they are killed seems disingenuous.

The United States and France could invoke any number of reasons for intervention. They've simply chosen this one, I think, because it has the power to shock the public and legislators in a way that cold policy and resource calculations do not. And, keep in mind that this intervention could have taken place any time prior to this. But it's hard to see how public and legislative opinion could have been brought to the place it is now without the horrific reports concerning these deaths from chemical weapons.

Anonymous said...

A look at the past can be very interesting.

In 1973, the U.S. was the World's Biggest Oil Producer.
In 1973, the U.S. imported only 35% of its oil (44.6% in 2011).
Despite this situation, the 1973 oil crisis in the Middle East ended the post-World War II economic boom and the recession in the U.S. lasted from November 1973 to March 1975.
Unemployment rate jumped from 4.9% in 1973 to 8.5% in 1975.

1981-1982 : U.S. oil imports dropped to their lowest level.
In 1981, after the beginning of the Iran–Iraq war, a new recession began and ended in November 1982.
By November 1982, unemployment reached 10.8%, the highest rate since the Depression.

Lewis Cleverdon said...

Kurt - in hopes that it may reach you - and be of interest - I've transferred a response to Bart over at 'Resilience', as it covers the background to the culpability, motivation and response issues in better depth.

Bart - I don’t see your scenario of a long boots-on-the-ground occupation as any less than utterly disastrous, as it would be a magnet for every Jihadi within 2,000 miles, and a perfect recruiting sergeant for the next generation. The sole, rather minor, advantage would be the Jihadis’ absence from their present countries. Moreover, while there are now openings in Iran – for instance Iran’s ex-president Rafsanjani stating on camera his understanding that it was the Syrian govt who ordered the recent Sarin attack - any US invasion would generate a prompt unification behind hardliners.

A very limited brief strike specifically against airfields and planes might be justified in my view as a clear message that breaches of the treaty banning CW will attract a damaging response, but only if it is accompanied by the provision of ample arms to the original democratic rebel forces to bring Assad to the negotiating table for a peaceful settlement. Training in the use of modern portable weaponry will take time, and the rational priority for a brief missile strike by the US would thus be to target Assad’s capacity to bomb civilian targets and resupply his many isolated bases during that period.

OTOH launching a very limited strike without giving the SFA the means to reduce the army would be to allow Assad to slowly crush the rebellion, or to see him overthrown by rising numbers of well funded foreign Jihadis, who seek to impose an equally tyrannical Wahabist theocracy, that would be backed by all of Assad’s munitions.

There do not seem to be any good outcomes from washing our
hands of this conflict.

One that concerns me, and should I think concern everyone, is that if there is no punitive reaction to the Sarin attack, then not only is the CW Ban treaty effectively defunct, but also that against Biological Weapons, particularly as the perpetrator would be usually untraceable. As you will know, with modern genetic science, there are govts interested in agents that will only infect those of a target racial profile. Having got such weapons banned, it would seem utterly absurd to fail to uphold those bans.

With regard to the central issue of just who ordered the Sarin attack, there is substantial evidence available without reliance on intelligence reports. The US claim that Sarin was used is very unlikely in my view be an invention because the UN report is awaited. There are also widespread video and phone records of 12 target sites being hit in four separate rebel-held districts spread across over 10 miles of the city – which makes this a military scale attack, and definitely not an amateur effort. UN inspectors are shown examining the debris of rockets at the target sites, which are very well assessed on the excellent impartial and forensic site
http://brown-moses.blogspot.co.... They are shown there to be effectively indistinguishable from a dual purpose system called Faluq 2 which is quite widely used only by the Syrian Army. (That site is worth a careful look).

Even taken together these lines of evidence are not of course ‘proof’– since in reality proof is that which convinces – “beyond reasonable doubt” in British legal terms. What convinces me without recourse to classified intell is the disparity in motivations and capacities between a false flag op and a Syrian govt op when set alongside those lines of evidence.

Here I would differ with the conclusions of the very interesting article by Polk that you link below. Beside his taking a journalist’s word that “the rocket debris looked homemade” as being evidence of Jihadis’ culpability – when indistinguishable rockets are in Assad’s arsenal - he also declares that ‘Assad had so much to lose and the rebels so much to gain’. On a more cautious examination, this is simply arbitrary and nonsensical.

Continues

Lewis Cleverdon said...

Continued

Given that there has been no report of rebels overrunning a Syrian CW depot and capturing the necessary truck-mounted Faluq 2 launcher, plus enough rockets and warheads, plus a large volume of the precursor chemicals to load into the warheads, plus enough personnel highly trained in the use of the system,
- it follows that any false flag op would have to have been externally arranged - either by Tel Aviv or Riyadh. Their motivation, knowing Obama’s major long-standing reluctance to enter another ME war, and western populations determination not to, would be limited to instigating a brief, indecisive US missile strike as the most likely outcome.

Against that, leaving aside the morality issue and the risk of wrecking their relations with the US, there is the fact not only of killing or maiming hundreds of rebel fighters as well as thousands of civilians (nerve gas does permanent injury) but also of doing so right in the critical areas of the front line in the pivotal fight for Damascus, when any one of fifty local fights across the country could have been targeted to yield the same international outrage.
- There is also the risk of delivering the launcher, rockets, chemicals and trained personnel across hundreds of miles of open desert, with its few roads under full Syrian overflights and Russian satellite monitoring, making the chance of their capture - and the exposure of the criminal plan to western press - just untenably high.
- There is also the fact that the timing of the attack, with the UN in town, was a gift to Assad, as it is widely (and simplistically) quoted as a reason why “he wouldn’t have done it”.
It seems to me that both Tel Aviv and Riyadh are far too astute to make such crass errors as the attack’s location and timing, and far too cautious to take the risk of the plan’s exposure.

The Syrian govt’s motivations are in my view very much stronger, and align perfectly with the interests of both Tehran and Moscow. Beside the local benefit of damaging the SFA’s hold on their front lines in Damascus, there is also a major propaganda coup of persuading a fraction of western opinion that the rebels were culpable (without a scrap of evidence) by playing on the psychology that:
“If the rebels weren’t guilty then perhaps we really ought to go to war, again, which we Really don’t want to do, so maybe the rebels were guilty . . .”
- meaning that western interest in backing the rebels would
be damaged, potentially terminally.

Yet it is the geopolitical consequences of the attack that offer the major motivation. The challenge to US credibility of a massive CW attack has trapped Washington in a lose-lose dilemma. As I pointed out earlier, to launch a large punitive assault without UN backing, without incontestable proof of Assad’s guilt, and with a coalition reduced to just two, would be to watch US credibility get trashed globally in a wave of outrage and contempt.

Yet to fail to launch a punitive strike against a clear violation of the CW ban, and having declared a ‘red line’ on the issue, and with heavy pressure from Damascus and Moscow, would be to watch US credibility get trashed globally, in a wave of contempt and derision, as it seems clear that the US can no longer impose its will militarily even on a tin pot dictator like Assad.

Continues

Lewis Cleverdon said...

Continued

Since empires actually run on credibility within their client states, if this challenge is handled badly and a major loss of global US credibility occurs, it could be seminal in hastening the decline of US hegemony. In my view it would be simply na├»ve to assume that this position has come about by accident. It hasn’t: it is a very astute diplomatic ploy, that has been and is being well orchestrated.

Thus far it would seem that Washington has been badly wrong footed, with hasty ill-considered decisions, such as Kerry being told to try to get the UN inspectors to cut short their work, and the sudden flip into a prolonged limbo while Congress enjoys its holidays, putting the whole issue into the hands of an exceptionally dysfunctional self-absorbed legislature.

Meanwhile players from Putin to Assad to the BRIC nations to the Pope are winding up the pressure, with Putin even dangling a UN mandate “if Assad’s guilt can be proved” while also announcing urgent naval deployments and possible missile shields for Russia’s clients, and with Assad talking up the prospect of a regional conflagration with many nations engaged.

Putting America into this double bind lose-lose dilemma looks to me like the strongest possible motivation for the Sarin attack. It’s a gamble that the cost will be no more than a missile assault, while at best that may even be cancelled if western protestors push hard enough. Unless Obama finds the sense to chose neither of the horns of the credibility-loss dilemma, and instead to go straight to supporting the SFA effectively, then the power Russia and Iran across the Middle East seem likely to be much enhanced at America’s expense.

As you know, I have no interest in seeing American hegemony maintained, any more than in seeing Russian or Iranian power extended - my interest is in solidarity with the people of Syria who rose up in hopes of establishing a democracy in their country, who deserve our support. For once the west's best interests are aligned with such an outcome.

Sorry about the length.

All the best,

Billhook