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Peace is for losers part, 2
By jquiggin | April 4, 2008
In my last post on Iraq, I concluded with a somewhat snarky reference to pro-war bloggers who reasoned that, since Sadr offered a ceasefire, he must have lost the fight in Basra, and therefore the government must have won. As it turned out, the ceasefire was the product of some days of negotation, brokered by the Iranians, which made the original point moot.
Still, given that the same claim was made by John McCain, who said”Very rarely do I see the winning side declare a ceasefire., I think it’s worth making a more serious point about the fundamental error in pro-war thinking that’s reflected in claims like this.
As usual with McCain’s statements in his alleged area of expertise, the claim is factually dubious (see below). More importantly, the implicit analysis here, and in nearly all pro-war thinking is that of a zero-sum game, in which one side’s gains equal the other side’s losses. The reality is that war is a negative sum game. Invariably, both sides lose relative to an immediate agreement on the final peace terms. Almost invariably, both sides are worse off than if the war had never been fought. With nearly equal certainty, anyone who passes up an opportunity for an early ceasefire will regret it in the end.
The negative sum nature of war is most obvious when, as predictably happened in Basra, the stage of bloody stalemate is reached. At this point, both sides typically want to come out of the fight with some gains to show for the exercise. Fighting on, they sometimes achieve this and sometimes do not. But the losses incurred in the process ensure that both sides are worse than they would have been with an immediate ceasefire.
In this respect, Basra is a microcosm of the whole Iraq war. Six years after the push for war began just about everyone is far worse off than if they had agreed to peace on the most humiliating terms imaginable. Saddam Hussein and most of the Baathist apparatus are mostly dead or one the run, and many of the survivors are glad to take a pittance from the US occupiers. The Shi’ites, despite gaining political power, have suffered more in the years of conflict (with the Americans, the Sunni and among themselves) than they ever did under Saddam. The Americans and British have poured endless blood and treasure into Iraq to no avail and both Bush and Blair are utterly discredited. Even the Kurds have overreached themselves and brought the Turkish army into their territory. The only winners have been the Iranians, as interested bystanders, and merchants of death like Halliburton and KBR, and even these may yet end up worse off
Coming back to McCain’s historical claim, it’s easy to point to cases, like the Indo-Pakistan War of 1971 where the winning side declared a unilateral ceasefire. More pertinently, perhaps, governments fighting insurgent movements have frequently followed up successful military campaigns with unilateral ceasefires and amnesty campaigns, aimed at reintegrating the rebels into civil society. If the government forces had achieved their main goals in Basra within the three-day period initially suggested, it would have made good sense for Maliki to follow this example.
Even more relevant to the argument presented here are the many cases when initial success in war could have been followed by a ceasefire and a peace deal on favorable terms, but was not, with disaster as the common aftermath. Two examples:
* At the end of 1792, the French revolutionary armies were everywhere victorious against the invaders of the First Coalition. Against the arguments of Robespierre and others, the government pressed on, converting a defensive war into one of unlimited expansion. When the fighting ended more than 20 years later, with the restored Bourbons replacing the Bonaparte dictatorship, the millions of dead included nearly all of those who had made the decision to go to war.
* After four months of fighting in Korea, the US/UN forces threw back the North Korean invaders. A peace at least as favorable as the status quo ante could easily have been imposed unilaterally at this point. Instead Macarthur invaded the North and brought the Chinese into the war, resulting in one of the worst defeats ever suffered by US forces (until the greater disaster of Vietnam). Three years and countless deaths later, the prewar boundary was restored.
Finally reaching a conclusion, the central error in pro-war thinking is the belief that every war has a winner. On the contrary, in war there are only losers. Even those who seem to win have usually sowed the seeds of future disaster. The only sane response to war is to end it as soon as possible.
Topics: World Events |
April 4th, 2008 at 9:14 am
Great post.
April 4th, 2008 at 9:33 am
Well, the ‘winners’ are asking for their armoured cars back:
http://www.timesonline.co.uk/tol/news/world/iraq/article3661892.ece
On the contrary, in war there are only losers
Not so sure about this. Of course, if we take the goals of the Coalition at face value, then yes, ongoing war and occupation do see less than ’sane’. Nonetheless, there’s always somebody who turns a profit out of these things. In light of all of the blood and carnage in Iraq, surely some quite concrete benefits are at stake, rather than the heroic invaders suffering for abstract notions of ‘freedom’ and ‘democracy’.
April 4th, 2008 at 9:34 am
There is little doubt that in aggregate war is a negative sum game.
But wars that are sufficiently large and complex offer the possibility to some participants for war to be a positive sum game.
Looking at war from the point of view of individuals, any set of circumstances that materially increases the risk of mortality has to be accounted as a negative sum game. Every individual in Iraq today (both Iraqi and foreigner) is more likely to die today than if she had been in Iraq before Bush’s “Shock nd Awe”.
Yet individuals associate themselves with collectivities to which they often voluntarily devote their efforts despite increasing their risk of mortality in a very material way. These people say that their sacrifice is worthwhile. Other folks are wont to call these people “heroes”.
However, objectively, their self-sacrifice is worthwhile only if their cause is victorious. Do kamikaze pilots get called “heroes” nowadays?
Which brings me to this by JQ:
Certainly, many ordinary Shiites have died. I imagine that most of these Shiite casualties have been only passive supporters of one or other of the Shiite movements. They have died as collateral damage in an ongoing civil war prosecuted by Shiite activists.
In turn, these Shiite activists believe it is a right and proper thing to continue to prosecute their war of ethnic cleansing against Sunni despite (or because of) the atrocities wreaked upon their Shiite co-religionists.
And now there are very few Sunni in large parts of Iraq. That dearth of Sunni would look like victory to many Shiite survivors.
We don’t know what the dead Shiites might think about their sacrifice, but I imagine that the surviving Shiites are busy constructing quite credible myths about the heroism of the sacrifice of Shiites in their war of liberation.
These myths may, objectively, be baseless, like the supposed achievements of the ANZACs at Gallipoli. But like the Gallipoli myth the Shiite myth may serve to drive powerful engines of social and cultural control in Iraq. Such myths are winners’ myths.
Losers contruct other myths. The German “stab in the back” myth of 1918-19 helped to propel Nazism. The US Right constructed similar “stab-in-the-back” myths in the wake of the Vietnam defeat. My guess is that something similar may emerge out of Iraq for the US.
No one likes to own up to defeat. But despite denials, popular myths end up telling who finished a war on the positive side of the ledger.
April 4th, 2008 at 10:14 am
Indeed, Katz, all this is true which is why it is essential to criticise these myths at every opportunity.
April 4th, 2008 at 10:21 am
I assume that lost pride is not a significant cost in your calculation. In life it seems to be given a quite high weighting.
April 4th, 2008 at 10:48 am
‘Pride’ perhaps requires a little exegesis here. Pro-war leaders, here and elsewhere, have spoken of continuing the war, if only for the sake of ‘American prestige’.
What else is this ‘prestige’ other than the perception, illusory or otherwise, that one is the biggest, baddest gangster on the block?
April 4th, 2008 at 11:03 am
JQ “Invariably, both sides lose relative to an immediate agreement on the final peace terms. ”
I suspect you’re probably right - but I imagine that’s exactly what Chamberlain was thinking in the the late 1930s.
Sometimes things are worth fighting for. I’m not sure Iraq qualifies, in fact I’m almost certain it doesn’t. But although I probably agree that war is a negative sum game - sometimes it’s better off to take a little negative pain than a lot.
Interesting game theory exercise - and true in the business world as well.
Think about price war situations - neither party wins, but if market share trumps margin then you’ve got to go to war.
April 4th, 2008 at 11:18 am
While I fully agree with your conclusions, Prof Q, you forgot to mention one thing which really should be considered obligatory in all discussions of this war: OIL.
From the Bush/Cheney point of view, whoever ends up controlling the oil is “the winner”. It doesn’t matter to them how many people die, how much money is lost (insignificant, compared to the potential profits), or even how much international prestige is sacrificed (everyone loves a winner, and the winners write history). No doubt many of the violence-prone power players within Iraq today have the same cynical long-term view.
I see the rich warmongers emerging as “winners”, on their own terms at least. Bush and his friends will all walk away from Iraq with their wallets stuffed, and nobody will ever take that away from them.
Will anyone ever demand that Halliburton repay all their profits to US taxpayers? Or that Blackwater be disbanded and the company assets handed over to Iraqis? Or even that Bush, Blair and Howard go to jail for their War Crimes? Who would ever dare to demand such things?
Only ordinary people like me, people who have no voice.
April 4th, 2008 at 11:32 am
I think that Katz makes a good point. An external observer might adopt a calculus of wins and losses that is quite different to that of the participants in the conflict. I have little doubt that when Cheney claims the Iraqi exercise has been a terrific success he is sincere, because in his (deluded) mind he is fighting a war against aggressive Islamism that wants to establish a new caliphate from Morocco to Indonesia or whatever the nonsense is that he spouts. No signs of it happening yet so he gives the Iraqi exercise the credit … now on to Tehran!!
It’s arguable that the Iraqi occupation has made Israel better off because its protector and great ally will now have powerful conventional forces in the region for an indefinite period. That makes it extremely unlikely that any other nation in the ME would take military action against Israel, and leaves it free to do things like launch air raids against Syria with impunity.
BTW I think that continuing to use the ‘war’ terminology places any discussion of Iraq into a misleading frame. Wars have enemies and so when ‘we’ are fighting in Basra, the people we are fighting are self-evidently The Enemy who must be defeated. If we abandon the war rhetoric and accept that the USA is occupying a conquered territory after establishing a puppet government, a bit like Vichy France in 1941, people might adopt a more considered approach than the reflexive ’support the troops’ jingoism associated with wars.
Final BTW … didn’t George Bush snr declare a unilateral ceasefire in the Gulf War in 1991? What a loser … but I guess McCain probably thought that already.
April 4th, 2008 at 11:34 am
Ohh Gandhi…. when people start blithering on about someone like John Howard committing a war crime it just detracts from any worthwhile points they may be trying to make.
Leave out the nonsense and have another go.
April 4th, 2008 at 11:44 am
“but I imagine that’s exactly what Chamberlain was thinking in the the late 1930s.”
I’m not sure that applies. Chamberlain offered peace. Hitler was the one who rejected it, and paid the price.
April 4th, 2008 at 11:49 am
The point though Swio is that Chamberlain offered peace when perhaps the lower cost outcome would have been to go to war earlier.
April 4th, 2008 at 11:50 am
More generally, I think reasoning for which WWII is the only supporting instance should come under the coverage of Godwin’s Law
April 4th, 2008 at 11:59 am
I have a very low opinion of GWB. However, I am fairly confident to assert that if GWB thought that the only winners to emerge from the Iraq war would be the contractors, then he would never have gone to war.
Haliburton’s huge windfall was an unintended consequence of the war and in no way a motivating factor for war.
It is true to say, however, that Halliburton is one of the few US winners from the war.
I guess it’s up to US citizens and taxpayers to decide what they think about that fact.
April 4th, 2008 at 12:10 pm
I disagree John. Even if WWII is the only example (which I’m sure its not) - it’s a valid example. Godwins has nothing to do with it.
The broad thrust of your argument is that war is a negative sum game therefore we should never go to war. I think the first part is true but the second part isn’t.
There will be instances when turning the other cheek is a major loss, sometimes fighting back will result in a relatively smaller loss. Therefore, rationally we should go to war in those circumstances if all other avenues have been exhausted.
April 4th, 2008 at 12:19 pm
The problem with the WWII analogy is that it is the exception to the rule, at least as far as Australian/US wars go. Secondly, WWII rhetoric has been co-opted in the propaganda effort for this war. Pundits tried to create a false sense of urgency, and demanded a false notion of ‘patriotism’ by demeaning war-opponents as appeasers, a fairly clear allusion to Chamberlain and WWII.
The conflation of violent Islamic movements with those of Hitler and Mussolini (i.e. through the term Islamofascism) is further evidence of the WWII analogy serving as a propaganda tool and rhetorical flourish, rather than as a meaningful precendent.
April 4th, 2008 at 12:48 pm
Ohh Gandhi…. when people start blithering on about someone like John Howard committing a war crime…
Thanks for illustrating my point, Andrew. How could any credible person even think such a thing, let alone say it in public? It goes completely against the narrative which has been so carefully constructed over all these years.
Never mind that Kofi Annan himself said the war was illegal, and that the Nuremberg Trials defined any such unprovoked invasion as “the supreme War Crime”. There must be another explanation.
When the ponies appear, perhaps they’ll tell us.
April 4th, 2008 at 12:53 pm
Ken Lovell,
Wars have enemies and so when ‘we’ are fighting in Basra, the people we are fighting are self-evidently The Enemy who must be defeated.
I think the “war” on terror is a tragic misnomer, but I don’t see how you can call Iraq anything but a “war”. The question is why you would identify yourself as part of that “we” involved in the fighting.
As I see it, “we” (here at least) are just horrified bystanders whose only skin in the game is the prestige our nation loses, the guilt we suffer, and the taxpayer dollars of which we are continually fleeced.
The only group with which I can identify in Iraq are the innocent people struggling to keep their families alive in the midst of all this horror.
April 4th, 2008 at 2:28 pm
”Very rarely do I see the winning side declare a ceasefire”
Rarely do the winning side accept the losing sides offer of ceasefire before they have achieved their objectives.
April 4th, 2008 at 4:04 pm
“The only group with which I can identify in Iraq are the innocent people struggling to keep their families alive in the midst of all this horror.”
Wow Gandhi - where do you live? Identify with Iraqi suffering? You’re clearly not logging in anywhere from Australia. Did you also identify with the Iraqi suffering under Hussein?
Ohh - the name… I get it, you’re logging in from a Mumbai slum.
April 4th, 2008 at 5:25 pm
Andrew, please avoid this kind of pointless snark.
April 4th, 2008 at 8:28 pm
@Ken Miles.
Good point.
April 5th, 2008 at 1:22 am
What did the US - er, allies - do in the first Gulf War after removing Saddam’s army from Kuwait? Isn’t that another contradiction of McCain’s assertion? I think the Polish-Soviet war in 1919-1921 is an additional example in support of JQ. Has the Red Army stopped after defeating the Poles in the Ukraine, it would have been a clear victory. As it is, the episode tends to be remembered as a victory for Poland and a defeat of the Red Army.
April 5th, 2008 at 9:17 am
Rarely do the winning side accept the losing sides offer of ceasefire before they have achieved their objectives.
That’s the whole point isn’t it. What a pathetic fool McCain is and how ridiculously sad that nobody is going to call him on his arse-backward blather. The Successful SURGE narrative must be maintained!
well Sadr isn’t disarmed, is he? And he’s a winner because he proved the point that he CAN’T be disarmed by force. The Iraqi government has conceded the point that it lacks even a monopoly of violence in the capital Baghdad let alone control over Basra’s texas tea. that’s pretty much a win from Sadr’s point of view considering that Maliki’s offensive was done with the aim of retaking Basra’s oil and crushing the “worse than al Qaida” Mahdi army.
I don’t even know the basics of game theory, but to suggest that war is always negative sum seems to suggest that neither side gains out of war. I would argue that looking at it in terms of “sides” misses the point. While America as a whole is obviously much worse off for having embroiled itself in Iraq, it’s been win-win guaranteed profit all the way for GOP-connected military-industrial interests. War is not just a competition between opposing sides but also between the interests within each side. The benefits of war and empire accrue to the overclass, its costs are paid by the plebs. Maintaining a huge, exploitative empire might cost as much wealth as it brings in, but those who benefit and those who pay are rarely the same individuals.
Finally, anyone who cannot see that Howard, Bush and Blair are war criminals must be either appallingly ill informed or indoctrinated beyond the reach of reason.
April 5th, 2008 at 9:31 am
This raises the interesting question of the identity of the winning side.
The Great War was a not unimportant war.
The Germans agreed to an armistice brokered by the US on the basis of Wilson’s 14 Points, which pledged to offer a non-predatory peace to all belligerents.
In November 1918 the British and the French accepted the terms of the Armistice even though the Armistice did not satisfy their war aims, viz., utterly crushing Germany.
In November 1918 the British and the French were successful in tricking Wilson into thinking that that they had signed on to his 14 Points vision.
However, by June 1919, the truth was revealed in the Versailles Treaty in the way in which the British and the French were able to convince Wilson to renege on the basis of the Armistice Agreement and to sign on to a plan to crush Germany utterly.
So the British and the French did indeed accept a ceasefire before their objectives were achieved.
Having failed to win the war, those two nations contented themselves with winning the peace.
April 5th, 2008 at 11:06 am
“Having failed to win the war, those two nations contented themselves with winning the peace.”
Or, more accurately, losing the peace, since Versailles led directly to Hitler, while yielding no sustained benefits to either Britain or France.
April 5th, 2008 at 12:13 pm
Well, yes. It all depends on foreseeability.
There are foreseeable effects of any action but on the other hand there are also unforeseeable effects.
If the British and French had been able to continue to oppress the German nation and had been willing to ensure that the Versailles Treaty was honoured to the letter, then Hitler might have been crushed as soon as he reneged on paying the first scheduled reparations instalment. (All this required was French and British boots being ground into German faces in perpetuity.) [*/end irony]
On the other hand, Britain hemmed and hawed over claiming Corsica as reward for winning the Seven Years War against France.
The British decided not to annex Corsica. Soon after Napoleon was born in Corsica. He might have been a British subject. Think about how much trouble that may have averted!
You tug at a strand of history somewhere and it is very difficult to predict what might unravel.
April 5th, 2008 at 1:11 pm
Honestly people, why keep blogging? What a fruitless endeavour. Ignorance piled on ignorance, stupidity on stupidity, opinions upon opinions going round and round, getting nowhere.
“Full of sound and fury, signifying nothing.”
I hope I find the wisdom to never blog again.
April 5th, 2008 at 3:10 pm
A negative sum game can still have winners and losers.
The definition of a negative sum game is a game where the total assets at the completion are less than the total at the beginning.
One side can still come out ahead of where they started, it just means the losers lose more.
The notion that war always turns out horribly for all parties is obviously false. Take for example the opium war: Britain lost very little, while gaining Hong Kong and exclusive trade rights with China. Britain was a very big winner and China a very big loser.
April 5th, 2008 at 8:57 pm
I’ll probably get skinned alive for saying this but the Mexican American War came close to being a win-win war although I doubt many Mexicans see it that way.
Mexico lost a huge area of land - which it had almost completely failed to exploit or settle.
Roughly 60,000 Mexicans living in the annexed territory became American citizens and most of them ultimately ended up materially better off as a result (apart from some landholders whose title weren’t recognised by the US).
The US settled the land and suppressed Indian tribes such as the apache and the Navajo who had long been raiding inside Mexico. (Given how Mexico has treated many of its indigenous people you could even argue those tribes ultimately benefited.)
Trade with new US settlers in the annexed territory almost definitely provided far greater economic benefits to Mexico than the relatively few pre-war settlers.
April 5th, 2008 at 9:25 pm
“Finally, anyone who cannot see that Howard, Bush and Blair are war criminals must be either appallingly ill informed or indoctrinated beyond the reach of reason.”
Thank you, Gerard, for that. Many millions around the world agree, but most of them are not Westerners.
I simply cannot understand why even passionately anti-war Australians are unable to accept this narrative: the War Criminals must be held to account or our nation’s soul is forever tarnished. We are all complicit in the murder of a million people. This is what we have become. What are we going to DO about it?
Andrew @ 20, I challenge you to watch this video through to the finish (not suitable for children) and tell me which side you identify with.
War is hell, if anyone cares to look closely enough. It brings out the worst in men. And not just those on the field of combat either.
As Terje said at #5 above, we lose more than just blood and treasure: we lose a part of our humanity.
April 5th, 2008 at 11:06 pm
The notion that war always turns out horribly for all parties is obviously false. Take for example the opium war: Britain lost very little, while gaining Hong Kong and exclusive trade rights with China. Britain was a very big winner and China a very big loser.
exactly yobbo.
if only the united states in iraq, like britain in the opium wars, was engaged in a straightforwardly imperialist war of aggression, intent on crushing any meaningful iraqi independence, in order to gain maximum economic advantage by controlling iraqi trade. then we could soberly discuss the ins and outs of whether the united states has acheived its aims and therefore won.
but, sadly, the united states would not fight a war for such base motives. right, yobbo?
April 5th, 2008 at 11:38 pm
The USA spends $2.5 billion per day on oil imports.
The occupation of Iraq costs $300 million per day.
The > 100 billion barrels in Iraq are worth at least $10 trillion.
If the USA imported all Iraq’s oil over the next 4,000 days at 25 million barrels per day(it’s current import figure) then the occupation cost even at present rates would add only $12.50 to the price of each barrel.
This is not an exorbitant price to lock up a major oil field when China and India are out there scouting the globe for their future oil requirements.
Anybody who believes that the war is too expensive for the USA to still, at this stage, consider this a win is, not looking at the figures.
April 6th, 2008 at 7:15 am
But that’s not a realistic description of what would happen to Iraqi oil if the Bush administration got its way and the Maliki government passed the Oil Law thoughtfully drafted for Iraq by the Bush administration.
That oil would be sold on the open market to the highest bidder. Major beneficiaries may include US oil minors who would repatriate their profits from the royalty deals back to Houston.
But the oil itself would be as likely to find its way to Shanghai as to Phoenix.
So this state of affairs does not favour either US producers or consumers over producers and consumers anywhere else, including China.
April 6th, 2008 at 7:57 am
Ghandi, it is well within the definiton of the word to ‘identify’ with the Iraqi’s without personally experiencing their horror.
The actions of Bush, Howard and Blair in the Iraq conflict are well within the definition of ‘War Criminal’.
For many people, the ‘War Criminal’ status of Bush, Howard and Blair is well within the definition of ‘an inconvenient truth’, and they need to be confronted, shirtfronted even, with videos such as that.
April 6th, 2008 at 10:13 am
#27 As regards foreseeability, an obvious test is whether the consequences were foreseen. They were in 1918 by Keynes and in 2003 by many opponents of the war, all of whom were ignored
#28 Yobbo, if you reread the post carefully, you’ll see that your point has been addressed. What I’d be more interested in from you is a comment on the relationship between libertarianism and support for the most coercive of state (or would-be state) actions, namely war.
April 6th, 2008 at 1:11 pm
For pity’s sake Gandhi: if you’re sending us to watch a work of fiction as you just did, especially when it’s on a webpage where it’s presented as fact and never mind that in real life some small number of US and all soldiers is indeed guilty of rape and murder ….. could you please tell us? The video is clipped from Brian de Palma’s “Redacted” which won him “Best Director” at the Venice Film Festival last year. See a promo
here.
That fact matters, in fact.
April 6th, 2008 at 1:36 pm
#31
Gandhi, the footage is a work of fiction, a point that Brian de Palma has emphasised
http://en.wikipedia.org/wiki/Redacted_%28film%29#Political_Controversy
April 6th, 2008 at 2:23 pm
wbb #33, I am not too confident in any of the official oil figures coming out of Iraq. I think a lot is being sold on the black market. We have no way of knowing.
frankis #37 and rog #38, I did not know that video was from De Palma’s film, or I would have noted it.
But I don’t care because it really doesn’t matter: these things (and worse) are happening every day in Iraq. Did you see how those soldiers from Haditha are all being let off the hook? Did you see the latest memo telling Bush he could torture and get away with it using “Executive privilege” and all his torturers could just make false claims about plausible self-defence?
This is totally state-sanctioned horror, our government remains a party to it, and we all just sit here with our fingers in our ears…
We need a Royal Commission into the Iraq War, including the WMDs, the AWB, the ONA, the media coverage, everything.
April 6th, 2008 at 3:10 pm
The Haditha case collapsed, for want of evidence.
April 6th, 2008 at 6:57 pm
JQ, Keynes foresaw bad consequences in 1918, but he did not foresee the specific form they took. At that level of detail, they were not foreseeable. In fact, other of his assessments of the peace treaty were quite wrong, in particular his idea that the Europeans had run rings around Woodrow Wilson. With hindsight we can see that Woodrow Wilson put in things that were very long acting and worked to undercut imperialism as then practised.
April 6th, 2008 at 10:01 pm
Katz Says:
I’m not sure what this means. The “reneging” started to occur in 1921.
Hitler’s rise didn’t really start until the Depression, and only achieved real power in 1933 or 1934.
As I see it, the Depression was as a big a cause of the Hitler’s rise as the reparations. The reparations set the stage for discontent, but it was contained until the Depression came along. Hitler was jailed in 1924 for the inflamatory nature of his speeches.
The Depression was the trigger that enabled popular discontent to turn into an overthow of the existing order.
April 6th, 2008 at 10:46 pm
Here’s journalist Robert J Samuelson on on the Depression:
April 6th, 2008 at 11:03 pm
Australia seems complicit in the OIL as a ‘win’ as it despatched another warship last week for a six month stint in the Arabian Gulf. It strikes me as a little strange that Rudd is terminating the troops in Iraq but keeping the RAN on the job unless you factor in the oil. Keeping a finger on the (oil) pulse with no risk to life (IMO) would seem to constitute a fairly good insurance policy which equates to a ‘win’ I guess. Could be enough to lie behind the Rudd salute to the supreme commander perhaps?
April 7th, 2008 at 12:27 am
Yeah, I know. Just trying to put the occupation costs in context. They may sound big but there are bigger numbers out there.
Still, I stuffed up the (rough) figures. 25mbd is US daily consumption. Only half of that is imported.
The point is that if oil is under the control of unfriendly governments you do not get to buy it at Nymex at world prices. Other unfriendly governments get to buy it under agreement.
Oil is a strategic resource like no other. US oil companies operating foreign fields and US military bases are linked. US foreign policy secures a region thru fair means or foul - and the oil companies come in to do the drilling and selling.
If oil is simply another commodity sold at market then the US wouldn’t have cared if Saddam had invaded Kuwait. The difference in cost between production of oil in Gulf deep sea locations and Iraqi shallow sand deposits is immense. That price gap is the prize. That and the security that comes from knowing that you are able to ship it back to your domestic market. You control the government; the fields, the companies; the piplines; the shipping routes/chokepoints. The oil comes home (at world price ultimately) but with all the gap between production and benchmark price nicely repatriated.
If the US had to start paying in euros for all their oil imports they’d go bust next month.
But they don’t, they pay in USD and as much of that is profit to US oil companies it’s all domestic recycled currency.
April 7th, 2008 at 6:50 am
I would propose that war may end up a positive sum game. Take Blair’s wars. In the early engagements of Operation Desert Fox, NATO in Kosovo and Sierra Leone, the final resolutions are arguably good. Later with Afghanistan Blair leveraged his stockpile of clout for international unification, re Pakistan, India and Karzai. The choice to bomb the heroin trail saved lives (although post-Blair production is up).
I believe in these conflicts Blair had learned that “war has benefits”. At least for his image and ego. He thought he would get a repeat of earlier successes in Iraq, and the Brown administration would deal with the fallout. He urged that by remaining by the side of the US he could influence Bush’s tendencies for unilateralism to push the UN in order to curb the already decided and isolated US cabinet and media.
I believe that if Blair could have convinced Bush to focus on the Afghanistan front and/or rejected to go into Iraq, he would have left office in a much stronger political position. This would have isolated the states, and made them die of thirst. Rather Blair opted for one more war, at the costs of global destabilization and economic ruin in the US. Now it looks as he will forego any shot at the European Presidency because he has taken that teaching job at Yale.
I blogged earlier on the peace dividend and now am advocating war. I feel like I am chasing my own tail and it’s getting closer.
April 7th, 2008 at 7:57 am
It takes the occasional war to make us realize (and be willing) to negotiate a peace.
If everyone accepted that a negotiated cease-fire on unsatisfactory terms was better than a war, then there is always the motivation to be a little more demanding/unreasonable/hawkish in those negotiations, in the hope/belief that the other side will ceed more ground to avoid war. Usually, there has to be some belief, on both sides, that the other side is willing to go to war, for peace negotiations to work.
So I guess I agree with JQ’s point (a cease-fire on perceived bad terms is almost always better than a war), but if this were to become widely accepted, then any remaining hawks would soon push the boundaries of peace settlements to exactly the point where the peace was almost unacceptable even to the doves.
April 7th, 2008 at 8:13 am
25mbd is a truly astonishing amount of oil. At 159 litres per barrel, the USA consumes 3.9 Gigalitres of oil per day, or the entire storage capacity of the Dartmouth reservoir every single day. Lost for words really but disgust is in there.
April 7th, 2008 at 8:27 am
Forget the Dartmouth comparison, it holds 3,900 Gigs. Sorry, early dementure I’m afraid.
April 7th, 2008 at 9:24 am
Possibly the best book on this subject is the following:
Overconfidence and War: The Havoc and Glory of Positive Illusions
By Dominic D. P. Johnson
http://books.google.com.au/books?id=tsKhvsdSXE0C&dq=overconfidence+in+war&pg=PP1&ots=iKzEJmJUSw&sig=x74×41Bg_G9KowQ5ts5nAZDjBxA&hl=en&prev=http://www.google.com.au/search?hl=en&rlz=&q=overconfidence+in+war&btnG=Google+Search&sa=X&oi=print&ct=title&cad=one-book-with-thumbnail#PPA1,M1
Even just the preview of the first chapter answers some of the pro and cons of wars and often why they happen.
Worth a read.
April 7th, 2008 at 12:44 pm
One of the strangest aspects of the Iraq war is that early on in the peace some very intewlligent people in the administration were insisting that they were fully aware of the risks of a quagmire and were taking steps to prevent it.
It’s not so much that they failed to foresee the possibility as it is that having foreseen it they still proved unable to avoid it.
Similarly, the German generals of 1941 were all aware of the disastrous outcomes of Charles the 12th’s and Napoleon’s invasions of Russia.
April 7th, 2008 at 1:32 pm
Gandhi #39 “I did not know that video was from De Palma’s film, or I would have noted it. But I don’t care because it really doesn’t matter”
Never let the facts get in the way of a good story?
Whilst the conspiracy theorists all think the US invasion of Iraq was about oil - I disagree. I think it was just a clumsy attempt by the West to impose democracy in the Middle East. It will be a great result if it succeeds. We’re still a long way off knowing what the final outcome will be.
If the West succeeds in imposing a modern liberal democracy in Iraq, and that subsequently spreads throughout the region - then I imagine that through the prism of history 100 years in the future - the Iraq war will be see as a huge success.
Of course that’s great comfort for those poor unfortunates having to live through the near term impacts of war today.
April 7th, 2008 at 1:47 pm
Andrew: Whilst the conspiracy theorists all think the US invasion of Iraq was about oil
I dont think it’s accurate to marginalize the ‘war for oil’ position by implying that only conspiracy theory nutters embrace it.
Alan Greenspan, who is no conspiracy theorist, and has close contacts with the current and past administrations, gave this blunt assessment:
“I am saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil”
April 7th, 2008 at 1:52 pm
And the current leader of the opposition, Brendan Nelson, has more or less said that ‘resource security’ (i.e. oil) was a consideration.
I dont think its naive to assume that resource security played no part in the consideration to go to war. I think it’s naive to assume otherwise.
April 7th, 2008 at 1:56 pm
Correction (Last poat I got myself tangled up). Last para should read:
I dont think its naive to assume that resource security played a part in the consideration to go to war. I think it’s naive to assume otherwise.
April 7th, 2008 at 2:18 pm
Martin Ferguson doesn’t get it. If he wants oil for Australia we can just buy it on Nymex. What’s the problem?
April 7th, 2008 at 2:22 pm
Andrew,
Never let the facts get in the way of a good story?
I only posted the video to illustrate my point, and I think it illustrates that point very well, even it is only a fictionalised version of what’s really going on in Iraq today.
Folks,
Check this latest McCain gaffe out from Raw Story:
“It was al-Sadr that declared the ceasefire, not Maliki,” said McCain. “With respect, I don’t think Sadr would have declared the ceasefire if he thought he was winning. Most times in history, military engagements, the winning side doesn’t declare the ceasefire. The second point is, overall, the Iraqi military performed pretty well. … The military is functioning very effectively.”
As the blog, Think Progress notes, “it was members of Prime Minister Nouri al-Maliki’s government who brokered the ceasefire, to which Sadr agreed. Experts agree that Sadr’s influence was strengthened — rather than diminished — by the Basra battle.”
April 7th, 2008 at 3:44 pm
Indeed.
“Australia” has been importing 100% of its rubber needs forever. Strangely, the world hasn’t ended.
These transactions are between individuals and private corporations. The market adjusts to changes in patterns of supply and demand.
It’d be nice to find a huge lake of oil, I suppose, simply because the increased economic activity generates taxation revenue. But it probably would not mean that Austalian consumers would pay a lower price than the world market price for oil.
April 7th, 2008 at 5:44 pm
Perhaps so, but there’s an order of magnitude difference in the costs to the economy between oil and rubber imports.
According to the
2008 Australian Year Book, in 2006-07 Australia imported $21051.1 million worth of “Petroleum, petroleum products and related materials” and $2465.5 million worth of “Rubber manufactures, n.e.s”
That differential will only widen courtesy of declining domestic production and continued increasing consumption due to growth. The previous two occasions when oil prices spiked (1973 and 1990), the western economies went into deep recessions.
Given the central role that oil-derived energy and products play in our society and economy, comparing oil to rubber isn’t exactly an aples to apples comparison.
April 7th, 2008 at 6:11 pm
Japan has never produced any more than a tiny fraction of its own oil. Japan is a huge consumer of oil. The Japanese economy has developed to cope with that reality.
The components that make up international trade are immaterial.
However, it is true to say that rapid changes in the components that make up international trade can cause disruption.
And rapid changes in the price of commodities that happen to be a large component of international trade can also cause disruption.
April 7th, 2008 at 6:40 pm
“The Japanese economy has developed to cope with that reality.”
Said “development” including at least five overseas wars of aggression to try and compensate for that lack; widespread famine as recently as the 1930’s; the collapse of Parliamentary democracy and the rise of militarism in the 1930’s and huge sacrifices in the quality of life of several generations of post-war Japanese.
April 7th, 2008 at 7:58 pm
The central role of oil is a myth. Oil is far less economically important than, say, health care or financial services.
It’s striking how thoroughly many war supporters are stuck in a picture of a resource-dominated world that was already obsolete by 1900.
April 7th, 2008 at 9:09 pm
Ah, but… health care and financial services, say, can be resourced locally and their absence wouldn’t have much knock on effect in the medium term (yes, even health care), and there’s little chance of a blockage developing that couldn’t be worked around by new suppliers coming in/being brought in. It’s not a cost issue so much as a strategic resource issue; second sourcing options for oil (including things like coal to oil etc.) would bring it back to the same level as those other things, but those aren’t really in place enough these days.
April 7th, 2008 at 9:22 pm
So why do US politicians harp on about making their country less dependent on foreign oil fields? What’s all that about?
April 7th, 2008 at 9:26 pm
The central role of oil is a myth.
Don’t tell Dick Cheney. LOL
April 7th, 2008 at 9:44 pm
Your point being?
I read this litany of woe as demonstrating that the Japanese went into denial about the most effective means of coping, until Japanese decision makers discovered a more sustainable way of matching aspirations to available means.
April 7th, 2008 at 9:57 pm
1. Peaceniks’ code-words for “let’s withdraw our troops”.
2. Cheap populism aimed at (shock, horror) scaring people into voting for them.
3. There is no doubt that Saudi Arabia especially has used oil as a geopolitical weapon to wrest concessions out of the US. But the US has chosen to play this game.
Here is a mental experiment: what would happen if the US government announced that it is out of the game of attempting to manipulate the economics and politics of oil? What if the US government said, “We are relying on the orderly marketing of oil through the world market. We will not attempt to influence the price or the flow of oil by any means whatsoever, except for those which pertain to the orderly operation of free markets?”
My guess is that the world would be a much more peaceful and relaxed place. And the price of oil would fall significantly in the medium term and would be far less subject to wild fluctuations.
All major oil interests are now driven by the market. Oil geopolitics arose in the era of the Cold War when the Soviet Union was impervious to market signals.
The Cold War is over, but oil politics have never moved on.
April 7th, 2008 at 10:02 pm
The “second sourcing” option for oil is to use less of it/use alternatives. The idea of fighting a war for cheap oil is about as sensible as fighting a war for cheap holidays in Europe. Granted that foreigners control the supply, you either pay the going price or do without.
April 7th, 2008 at 10:56 pm
“The Cold War is over, but oil politics have never moved on.”
Is what I’m saying. Argue your own corner, Katz!
George Bush is a peacenik?
“The idea of fighting a war for cheap oil is about as sensible as fighting a war for cheap holidays in Europe.”
Just coz it’s not sensible doesn’t mean people won’t do it. All very well to point out that alternative energy sources need to be found - it’s another thing entirely to convince large countries run by bull-necked blokes with expensive idle battalions at the ready - advised by energy hawks like Cheney - that you are right.
Gas provides another clear and current example of energy politics.
All the geopolitics over the Iran-Pakistan-India Peace Pipeline for eg.
The US threatened Pakistan with sanctions if it built the pipeline in 2005. In 2007 India went cool on the whole concept (US/India all matey matey over nuclear tech.) Now Iran is threatening to build the pipeline to China instead.
Threatening to trade!
“All major oil interests are now driven by the market.”
Tell that to Hugo Chavez. 6th biggest oil exporter in the world. He’s itching to find a way to sell more oil to China. The only thing stopping him is that China hasn’t yet got the right refineries in number for his heavy crude; the shipping infrastructure; and the reluctance of China itself to provoke the US.
April 7th, 2008 at 11:15 pm
THE POLITICAL ECONOMY OF THE IRAN-PAKISTAN-INDIA GAS PIPELINE is quite a good read.
Geopolitics Cold War style.
April 7th, 2008 at 11:30 pm
Sorry. Last one, I promise. And I’ll take my monomania elsewhere for a bit!
Which very sensible (perhaps too sensible) person said this in 2004?
April 8th, 2008 at 7:45 am
wbb,
I’m guessing the eminently “sensible” Kevin Rudd, and noting that a certain M.E. country was already invaded when he said it.
April 8th, 2008 at 8:20 am
Maliki appears to have done just that, after confused reports of the events in Basra Sadr appears to be on the verge of disbanding the Mahdi militias.
April 8th, 2008 at 8:40 am
wbb, I’m guessing that the person who said this has the same initials as me.
April 8th, 2008 at 8:50 am
WBB,
GWB’s SOTU refs don’t make him a Peacenik.
They do make him a huge spruiker for US domestic oil interests who want to drill everywhere in the US to find oil.
April 8th, 2008 at 10:52 am
Yes, John is correct!
If oil is a small fraction of the economy - eg less than health services - that doesn’t mean it isn’t an essential fraction. Think vitamin C and ships biscuits. The US economy is rickety!
Mar 17, 2008
Why does Cheney care what the oil price is? Surely he understands how markets work.
Below, a quote from an article published today which says that oil becoming likely to be traded at market. More likely to be traded by government agreement.
“Due to increasing competition for a diminishing supply, oil is being bartered or direct access agreements are being made between states. This undermines the petrodollar (dollars reserved for or involved in oil transactions).”
Why the US cannot leave Iraq 8 April 2008.
April 8th, 2008 at 1:28 pm
Thanks for the excellent link, wbb. I thought this bit was highly pertinent:
The question is whether the US people would still think like that if the media did not present facts in such a distorted manner.
We see the same thing happening in Australia, where many people would rather just not talk about the war, either because they have been fed a false story or because they recognise the potential implications for their wallet.
But this narrative ignores one important fact: the USA cannot win in Iraq and will never have full control of Iraq’s oil (let along Iran’s). The pipes will always be sabotaged while the occupiers remain. So all that’s really being achieved is a higher oil price (and higher oil company profits) in the interim.
April 8th, 2008 at 1:34 pm
JQ, using less is not second sourcing, and the alternatives are not in place. That’s the point - if they were in place, then and only then you would have second sourcing.
April 8th, 2008 at 1:40 pm
Most people don’t believe they gain from the war. It’s only crackpots like you and me, Gandhi!
The rest of the world believes that these things happen sometimes (sigh); it’s all for the best (shrug); “they” know what they’re doing; and “they” must be doing it for the right reasons (coz we are the good guys - [subconscious]).
It’s nothing to do with the media, either. You could print this blogpost and comment thread in the middle of the Sports Section in next Saturday’s paper and most people would have no trouble reading right around it without skipping a beat.
April 8th, 2008 at 2:01 pm
It’s only crackpots like you and me, Gandhi!
I’m getting closer and closer to that that whole park bench experience thing, wbb.
OTOH Mark Bahnisch says getting attacked from both Left and Right simultaneously is A Good Thing, so maybe this is Teh Sweet Spot?
April 8th, 2008 at 2:07 pm
Yeah - at least there’s plenty of elbow room.
April 8th, 2008 at 3:29 pm
There no alternatives to oil at the moment. No reasonable alternatives that can be scaled up. Oil is an amazing thing. Enormous amounts of energy in a easily transportable form. Literally nothing else like it.
Used in pharmaceuticals, transportation, manufacturing, agriculture (the main driver of the ‘green revolution’), plastic products,etc.
There no forseeable alternatives for things like aviation fuel.
A lot of economists seem to believe in the just-in-time technology fairy. That if someone throws a lot of money at the problem a technological solution will magically present itself.
If oil prices become too expensive, that other alternative technologies will simply ‘appear’. Dangerously silly thinking in my opinion.
Mind you, I’m no dirty hippie. I’m in the field of engineering, so I quite interested in new technologies. I simply don’t believe a technological solution will simply appear because someone throws a lot of money at it.
April 8th, 2008 at 6:32 pm
“Your point being?
I read this litany of woe as demonstrating that the Japanese went into denial about the most effective means of coping, until Japanese decision makers discovered a more sustainable way of matching aspirations to available means.”
My point being that it is extraordinarily difficult to maintain a modern industrial economy without a decent supply of oil and to blithely suggest that “Australia can do it because Japan did it” is to ignore this fact.
And the “more sustainable” way to wreck the trade union movement, impose huge costs on ordinary consumers and essentially work a couple of generations into the grave.
April 8th, 2008 at 6:59 pm
“Enormous amounts of energy in a easily transportable form”
I believe electricity fits this definition. The great majority of uses of oil can be replaced by electricity, and many of those that remain can be replaced by natural gas. Even oil-based aviation fuels can be replaced by biofuels as Branson’s stunt has shown.
Of course, like oil, all of these fuels have problems. But the claim that oil is essential doesn’t stand up to even perfunctory examination, and I’m amazed at its continued popularity.
For example, IG is generally sensible but manages to contradict himself in a single sentence. Is the claim that “it is extraordinarily difficult to maintain a modern industrial economy without a decent supply of oil ” and then noting that Japan has done so and implying that he’s talking about specific Australian experience.
But, I state again (and hope that PML will think more carefully this time) the best alternative source of oil is using less. Large reductions in oil use could be (and have been in the past) achieved while maintaining strong economic growth.
April 8th, 2008 at 7:13 pm
John, I’m not contradicting myself.
Japanese industrial policy since the 1950’s has largely been directed at keeping wages down and living standards low (in real not nominal terms - the yen is grossly overvalued), suppressing domestic demand and thereby funding imports of oil and other raw materials.
April 8th, 2008 at 7:32 pm
Reducing consumption, if by increasing efficiency, tends to lead to greater competitiveness. For instance, most of the major freight carriers run sophisticated satellite/computer systems monitoring fuel and time and match prime movers with loads. This has led to decreased costs which have helped the consumer but has not decreased the quantum of fuel being used - by being cheaper they can do more runs. These efficiencies are throughout the system and have allowed more people access to goods previously denied to them by cost.
Oil has many valuable functions whereas electricity has only one - energy. I cant imagine a B-double running on electricity and if it has to come by rail - forget it, most freight trains run on oil.
April 8th, 2008 at 10:17 pm
JQ, I was being careful. By no stretch of the imagination is using less the same as second sourcing. The key aspect of second sourcing is having a spare; if one source fails, you can switch to the other. Using less reduces the load on the single source - but it in no respect offers a method of switching if anything cuts that off. You are completely missing the point; it’s not about supply/demand, it’s about alternatives (though even if it were, your advice is on a par with the Beadle’s attitude to Oliver Twist - it’s not addressing the question as posed, much like a complaints department that focusses on making complaints go away rather than fixing what is wrong). Less demand is not a range of supply options. Risk, not price, is the key point (and I’m not talking about that proxy financial risk either).
For similar reasons, ‘“Enormous amounts of energy in a easily transportable form” I believe electricity fits this definition’ is wrong. Electricity can only be transported within the constraints of a transmission system; it cannot substitute for the complete range of uses of transportable energy. For instance, the only way you can run a ship is with that sort of energy - and you can’t do it with electricity unless you have some way of generating it on board. Ditto for road trains, trains on many routes, and much else besides.
There is a lot of abuse of language going on here. Language is a tool, and as with any other tool, its abuse removes its use.
April 8th, 2008 at 10:48 pm
I think PML’s points are good and think that they are validated in the real world by the fact that the US is vainly trying to substitue ethanol for oil.
Given that ethanol is a dud due many reasons including that arable land is just as preciously short as oil, the other alternatives must be real stinkers.
Oil may not be essential in the strictest terms; it is however unique and irreplaceable.
It is liquid energy created over aeons by geologic main force. We will not duplicate it.
April 8th, 2008 at 11:06 pm
PML Says:
wbb Says:
Geologic main force? WTF does that mean?
Fossil fuels are stored solar energy. We still receive solar energy, and we can still store or use the current influx of solar energy, and completely abandon the existing store.
April 9th, 2008 at 12:20 am
Yes - but only with great ingenuity and cost and very little transportability. Petroleum can be used out of the ground after a bit of distillation. The solar energy in petroluem was laid down over a very long time. That’s its unbeatable advantage.
(”Geologic main force” is a lesser example of the non-technical solipsism I seem to have a weakness for, SJ. I believe that after Post Comment #75 house-rules allow their deployment. In moderation, of couse.)
April 9th, 2008 at 5:09 pm
Energy densities of various things including biodiesel (42.2 MJ/kg), ethanol (30.0) and gasoline (46.9). Carry on with your love affair with oil you crazy guys, hope you’re that romantic with your significant others.
April 9th, 2008 at 9:39 pm
wbb Says:
I don’t think biodiesel requires a great deal of ingenuity. The “unbeatable advantage” of fossil fuel can easily be beaten by penalising the use of the stuff - aka carbon tax.
April 9th, 2008 at 9:54 pm
But Japan has had a “decent” supply of oil ever since WWII even though it has no domestic oil.
There is no reason why Australia cannot do the same when domestic supplies run out, or what is more likely to happen, the oil that remains becomes uneconomic to extract.
April 9th, 2008 at 11:22 pm
Frankis, those energy densities are highly misleading, partly because sometimes energy per unit volume is more important but mainly because engines optimised for each fuel have different efficiencies - oddly enough, in reverse order to the energy content, so undoing much of the apparent difference.
Katz, your point doesn’t address the sudden outside event scenarios that call for second sourcing, just the failure of supplies over time allowing for imports and/or alternative technologies like coal to oil to be phased in. A sound strategy would cover both possibilities.
For what it’s worth, the only quickly and currently available substitutes I know of are biomass burning gas producers, biodiesel and butanol from the Weizman bacterium (stockpiling surplus byproducts until Weizman butanol can be phased out by more slowly available substitutes, then selling them off over time). These might be enough to bridge a crisis, but even they wouldn’t be in a time and place without enough reserve agricultural capacity; luckily for Australia, that isn’t so here and now.
April 10th, 2008 at 12:02 am
Katz, the entire industrialised world has had a decent, cheap supply of oil since WWII. That’s the point. Oil was dirt cheap for most of that time.
It’s what happens now that is in question. Oil prices are sky-rocketing. How will Japan fare in the next 50 years? Decent supplies of oil are no longer guaranteed.
I’m not an peak oil apocalypsist - but I do see huge impacts during the transition. We’ve already seen the resource war. And that was bad enough.
April 10th, 2008 at 12:17 am
An example of a country that has not had a decent supply of oil/gas is North Korea since the collapse of the USSR.
They haven’t fared too well without it, either. No, the leadership didn’t help, but the lack of fertiliser made from Soviet hydrocarbons was the killer. Literally. The famine there is as bad as ever right now - North Korea is again requesting rice and fertiliser be sent from South Korea.
Natural gas accounts for 90% of the cost of making fertiliser.
North Korea is a bad example to use in this context I know (too confounded by other issues) - but it is a dramatic one.
(Shortage of oil pushes up gas prices which is why this is relevant. Incitec Pivot are doing well however - thanks to Woodside I suppose.)
April 10th, 2008 at 8:02 am
You’re stretching it too far PML calling fundamental energy density by mass “highly misleading”. The way in which it may be some times less relevant - not misleading - is addressed by example in the first paragraph of the Wikipedia reference.
Romanticisation of crude oil and mistaken claims of its unsubstitutability in the energy economy are more than merely misleading, they’re uncomprehending.
April 10th, 2008 at 9:14 am
In this case you aren’t talking about economic viability over the long term, you are talking about strategic/military issues.
I guess there is a nightmare scenario wherein a major military power sews up sure supply of oil and then uses this synergy to go on a rampage of world conquest.
So what might Australia’s position be within such a scenario? Realistically, for the foreseeable future, the only major military powers capable of such worldwide reach are the US and China. It would appear to me that both nations are constrained by the balance of terror that would become quite prominent were either of these two nations step on the toes of the other. By the time either threatened Australian sovereignty in an unwelcome way some kind of doomsday scenario would likely have kicked in, making access to oil, or anything else, quite irrelevant.
And on a related point, WBB:
No. The entire industrialised world has had equal access to oil at world market prices regardless of how cheap or expensive that oil had been. Most of the time oil has been incredibly cheap. Politics has intruded occasionally to spike the price of oil, but most of the time commercial issues of supply and demand have determined what the world pays for crude oil. (The price of petrol at the bowser is a very different issue dictated by domestic politics.)
This state of affairs will continue into the foreseeable future despite the fact that oil will continue to increase in price over time to a point where other forms of energy become economic. As others have said for many applications there is no ready substitute for oil. The world is destined to become a slower, colder, darker, hungrier place as cheap oil dwindles way.
Imagine that BHP tomorrow discovers an Iraq-sized oil deposit somewhere in the WA desert.
As I said earlier, government revenues would soar as a result of taxation revenues and royalities. But that oil would be sold on the world market.
Would Australia become a benefactor to the western alliance by using this market position to drive down the price of oil? Of course not. BHP would manage supply to benefit its own strategies and the wishes of stockholders.
April 10th, 2008 at 10:21 am
Frankis, it’s not that data that’s misleading in itself - you mention how wikipedia avoids that - it’s presenting them in isolation that’s misleading, as though those alone determined matters. Not the data, the (lack of) context.
Katz, no, your example scenario isn’t the problem. That parallels Australia’s situation after 1942. Rather, the outside event problem is the sort of thing that happened from mid 1940 to late 1941, where outside events interfered with distribution and access rather than production. (I suspect it worked through shortages of shipping capacity and foreign exchange, since Burma and the Dutch East Indies were still on stream - curiously, Middle Eastern waters were war zones much of that time, discouraging shipping there more directly.) The same sort of interruption can come up from all sorts of “Black Swan” events, not needing anything as dire as another Tamurlaine or whatever.
April 10th, 2008 at 12:43 pm
This interested me PML. I consulted my copies of the 1940s Cwth Year Books that I happened to have close handy.
Here’s what I found.
1. Australia produced virtually no oil of its own. Though there was a small shale-oil industry.
2. Australia imported virtually all of the oil it used.
3. Here are the figures (in millions of gallons)
38-39: 345
41-42: 347
43-44: 373
44-45: 287
So you can see that Australia maintained supply during the darkest years of the war. Interestingly, supply was less in the final, victorious years of the war. I have no explanation for this.
4. For 1941, 1942, 1944, 1945 Year Books details on oil imports were suppressed. (These figures were released in 1946.) This was unique among all classifications of trade. Clearly, the authorities were very sensitive about the oil trade.
5. Again, uniquely for all trade classifications there was no indication about the major sources of oil. There is no way from the Cwth Year Books of this era to reconstruct the origins and volume of imports of oil from different sources. This too must have been regarded as highly sensitive information.
However, by eyeballing aggregate figures I guess that the lion’s share of Australian oil imports during the war years came from the US.
Was this (possible) fact highly sensitive at the time? I don’t know.
April 10th, 2008 at 1:23 pm
I’ve got to admit, I was largely going on anecdotal evidence from old people. One described the problems with gas producers, another described an expedient blending paint stripper and similar to get fuel that made the car smell of mothballs. Certainly the government issued publications about how to make gas producers and the charcoal for them.
April 10th, 2008 at 1:27 pm
BTW, 1940 figures would be interesting too.
April 11th, 2008 at 7:59 am
As we know, this won’t happen, but it is a good hypothetical, Katz.
BHP would manage the oil in the interests of its shareholders.
True.
BHP would also become an far more important voice in the body politic. It would fund an Australian Enterprise Institute. It would hire hundreds of lobbyists.
Soon, there would be a fair few less shades of distinction between the interests of BHP shareholders and the interests of the powers that be in Canberra. Australia might start to believe it had some divine mission to manage fossil fuel reserves in PNG etc.
OK, standard politics, but let’s not forget that is the situation that has pertained in the USA for many a long year.
April 11th, 2008 at 9:13 am
As I beleive I have demonstrated, during WWII despite a radical interruption of supply sources and supply lines the like of which we are highly unlikely ever to experience again and yet maintain the material conditions of life, Australia was able to maintain supply of oil to the extent required to meet the national emergency of total war in the Pacific and in Asia.
So the one set of circumstances that have been cited to support an alarmist account of the relationship between geopolitics and oil supply appear to be vastly overstated.
April 13th, 2008 at 10:56 am
Been busy haven’t been back in a while. Couldn’t let this pass.
“I believe electricity fits this definition. The great majority of uses of oil can be replaced by electricity, and many of those that remain can be replaced by natural gas. Even oil-based aviation fuels can be replaced by biofuels as Branson’s stunt has shown.
Of course, like oil, all of these fuels have problems. But the claim that oil is essential doesn’t stand up to even perfunctory examination, and I’m amazed at its continued popularity.”
Can electricity ‘alone’ produce fertilizer? Yes, but its more energy intensive/pollutive than simply petroleum.
I’m not sure how we are supposed to meet our Kyoto requirements by simply moving to more energy intensive and polluting technologies. I suppose we could simply outsource our new polluting industries to a third world country, thus completely negating the whole point of Kyoto(However, making ourselves feel good).
Can electricity be used to produce Aviation fuel? No. Not really.
Biofuels to put it a uniquely Australian manner are a load of bullshit. They are energy negative, they need more energy to produce the actual biofuel than that can actually be gained from biofuels. This is why the biofuel industry has only really been able to survive through subsidies.
The only biofuel method that has been reasonably successful is the capturing of methane from garbage dumps and the use of bacteria to break down garbage and release methane. But like solar energy, the output is tiny (in comparison to our energy needs) and cannot be scaled up.
Can we use electrify for cars? Yes, but since there are about 600 million cars in the world, there is simply not enough platinum (used as a catalyst in fuel cell) to replace the entire global fleet.
People are being misleading when they say there are alternatives to oil. They seem to be suggesting that life will continue on as usual, or the change will be unnoticeable.
Biofuels and Enthonal production have already been driving up the price of food in poor countries.
Oil is king, nothing at the moment can replace it uses without dramatically scaling up the amount of energy we currently use.
It’s hard to believe we blew so much of it so quickly. Future generations will be wondering how we could such nobs.
Countries like Australia will be fine. We have coal, uranium, etc. Other countries, that are not as resource rich may have problems.
April 13th, 2008 at 6:40 pm
Where to begin?
To start with there’s a complete misconception of the point at issue. The question isn’t whether we should replace current uses of oil with equally or more CO2-intensive alternatives, it’s whether oil is the only feasible/practical fuel for various tasks. Considered in this light your claims are, as far as I can see, wrong on most points and debatable on the rest.
* Fertilizer is mainly produced using natural gas, not oil. I’m pretty sure it could be done with coal gas also.
* Biofuel may be literally or metaphorically bullshit but it is liquid fuel, which is the crucial requirement for aircraft. The question of whether there is a net gain in energy is simply not relevant
* Your point on platinum pretty much illustrates the problem with this whole line of arguments. If you confine your technological choices enough it turns out that platinum and not oil is the crucial material we can’t do with out. And I’ve seen similar stuff about tungsten/wolfram and other metals
Of course, none of these things mean that we can go on as we are, and I’m surprised that you would use a non-specific “people go an as if …” in this context. I pretty clearly haven’t said this, and I can’t see anyone else in the thread saying it.
April 13th, 2008 at 8:28 pm
Katz,
The US was, by a large measure, the largest oil producer in the world in the 1940’s.
Prior to Pearl Harbor, Australia would have been getting most of it’s oil from Burma and Malaya (”Imperial Preference” and all that) and would have been under supply pressure due to the demand from Britain and North Africa.
Once the US entered the war, they would have supplied their own forces here (hence the big surge in supply in 1943/4, tailing off as the war shifted north).
I suspect too that if you compared the pattern of consumption in 39 and 42, while total consumption was the same, civilian consumption would have fallen significantly with agricultural, industrial and military use rising dramatically.
April 13th, 2008 at 8:40 pm
“Biofuels to put it a uniquely Australian manner are a load of bullsh*t. They are energy negative, they need more energy to produce the actual biofuel than that can actually be gained from biofuels. This is why the biofuel industry has only really been able to survive through subsidies.”
No, corn-based ethanol in North America MAY be energy negative. (Although there are many experts who dispute this.)
Brazil has demonstrated that large-scale ethanol use is in fact possible and in the right circumstances can considerably reduce greenhouse gas emissions. (Brazil’s per capita emissions are half or less those of Mexico and Argentina.)
“Biofuels and Enthonal production have already been driving up the price of food in poor countries.”
There are a whole range of factors driving up food prices in the developing world.
Let’s start by noting, that food prices are rising rapidly in the rice-consuming countries of South Asia. Rice is not used for ethanol production and these countries are largely self-sufficient in rice.
The principal causes of the price rises are increasing demand for grain for meat production and rising oil and fertiliser prices.
Ethanol is at best a secondary or tertiary contributor to the rise n food prices and anyone who is genuinely concerned about the price of food for the world’s poor can do something about it very simply by reducing their meat consumption or replacing some of it with Kangaroo. (It’s yummy and it’s free range. No grain is used to produce it.)
April 13th, 2008 at 8:50 pm
There wasn’t any oil in Malaya, though there was in other parts of what is now Malaysia and also in Brunei.
April 13th, 2008 at 9:04 pm
Speaking of oil politics.
You know those oil fields Chavez nationalised last year. The ones US oil companies have him in court over. Well, now he’s gone and given them to India.
http://news.bbc.co.uk/2/hi/south_asia/7338383.stm
April 13th, 2008 at 9:15 pm
PM, I didn’t think anyone would be pedantic enough to argue that Sarawak and Sabah weren’t part of Malaya. Evidently, I was mistaken.
April 14th, 2008 at 4:41 pm
That’s not pedantry, they really were distinct political entities, handled differently. It made and still makes a lot of difference. For instance, if someone went and looked up statistical tables from the period, he would find entries for Malaya and Sarawak, but he wouldn’t find “Sabah” at all unless it occurred to him to look up British North Borneo.
April 14th, 2008 at 5:30 pm
I agree with IG about the changing patterns of oil consumption in Australia, 1942-1945.
Re Malaya, Sabah, Borneo, etc., the fascinating thing is that it is now impossible to construct from the public record where Australian oil came from during the war era.
April 15th, 2008 at 1:11 pm
I have heard that Kangaroo is not “yummy” if you cook it enough to be sure of destroying the parasites that free range Kangaroo can get and which also affect people.
April 15th, 2008 at 4:38 pm
PM - on the other hand, you could visit the butchers section of your local Coles.
April 15th, 2008 at 6:17 pm
Sure - I was just commenting on the free range version in the sense of wild.
For what it’s worth, I know some people with two huge cats. They made the mistake of feeding them on kangaroo meat from when they were small, only to find that it promotes growth in cats. I don’t think the same applies to people…