The Great Oil Fallacy

That’s the headline for a piece I published in The National Interest last week. Opening paras

Among the unchallenged verities of U.S. politics, the most universally accepted is that of the crucial strategic and economic significance of oil, and particularly Middle Eastern oil. On the right, the need for oil is seen as justifying an expanded and assertive military posture, as well as the removal of restrictions on domestic drilling. On the left, U.S. foreign-policy is seen through the prism of “War for Oil,” while the specter of Peak Oil threatens to bring the whole system down in ruins.
The prosaic reality is that oil is a commodity much like any other. As with every major commodity, oil markets have some special features that affect supply, demand and prices. But oil is no more special or critical than coal, gas or metals—let alone food.

This piece expands on my earlier argument that the US has no national interest at stake in the Middle East, just a set of mutually inconsistent sectional interests and policy agendas. I don’t talk about climate change explicitly, but we’ll never have a sensible debate about climate change until oil is demystified.

117 thoughts on “The Great Oil Fallacy

  1. @Jim Rose

    So tell me Jim, have the Iraq and Afghanistan invasions been a roaring success or a costly quagmire for the US? What have they gained from it?

    Russia and China are playing the game much smarter (which #2 and #3 have to do of course) by letting their proxies engage and deplete the US on the ground.

    The US are very powerful. The trouble is they think they are invincible. That is their big mistake and it makes them careless and over-aggressive.

  2. @Ikonoclast both showed that if you cross the USA on national security, at least when Bush was in charge, he will come after you with everything he has got. Rogue states were afraid of Bush. Who is afraid of Obama and his apology tours?

  3. @Iconoklast re #47
    I would fully agree with #1 point only, everything else acctually follows from #1 since you have to compare the rest of the New Wolrld to succes of the USA. And North America is the one that show early separation from the power of colonial european countries as a point of succes. Whole New World has similar advantage as in rest of your points, only real difference is in timing of independence.
    Having acheived the freedom from Europe and having all the free land accesible for experimentation toward succes. Entering virgin space, settlers would work on establishing the system that works with their needs, whether a whole colony or single household and then more people that acumulated around them, more succesfull system would atract more people toward them. Free evolution of systems but somwhat hampered by need for survival from hostile surrounding and natives. As number in a colony grew it developed its own government and then slowly being overtaken by system of early 13 United States, but it kept some of their original preferences.
    Latin America did not have this way of developing their land but it was done trough military controlled conquests by european countries, which also made it in its preffered way; Strip the riches and haul it away for the Europe’s benefit. Riches of N. America were kept in N.A.. Most everything alse is similar troughout New World.

  4. @Jim Rose

    How is it wise to make a disproportionate response? Some terrorists, from Saudia Arabia actually, knock down the World Trade Centre(s) New York. Current replacement cost is about $2 billion to $3.8 billion. The people who died cannot be replaced of course. “The attacks resulted in the death of 2,996 people, including the 19 hijackers and 2,977 victims. The victims included 246 on the four planes (from which there were no survivors), 2,606 in New York City in the towers and on the ground and 125 at the Pentagon.” – Wikipedia. The victims came from 90 countries.

    Without minimising the crime or the tragedy of individual lives lost, the US annual road toll was 33,808 in 2011 (or 2010). The US annual homicide rate was 12,996 in 2010. US deaths in the “War on Terror” (WOT) in Iraq and Afghanistan now run at about 6,500. This puts the death WTC toll into persepective even from the US side. The US under Bush lost perspective and launched two wars, ongoing costs likely to be realised at $3 trillion dollars and the US casualty toll 6,500 and rising.

    Iraqi and Afghani deaths from the WOT as follows according to Wikipedia;

    – Between 392,979 and 942,636 estimated Iraqi [deaths] (655,000 with a confidence interval of 95%), civilian and combatant, according to the second Lancet survey of mortality.

    – Afghanistan: between 10,960 and 49,600 deaths. (Very difficult to verify precise numbers.)

    – Pakistan: Between 1467 and 2334 people were killed in U.S. drone attacks as of 6 May 2011 (from an unverified or unnamed source).

    How is any of this proportionate or wise or strategic? The Taliban and Mujahideen consider it a victory for them to have enticed the US into an horrendously expensive “quagmire” or perhaps “quicksands” war. Geostrategically the war is a disaster for the US. Oil which could have been purchased for billions has now cost trillions. The US cannot sustain the loss of national “treasure” indefinitely. The opportunity cost (considering what the $3 trillion wasted could have achieved in the US domestic economy) is absolutely staggering.

    China wisely (albeit inhumanely) sits and expands incrementally and quietly along its periphery (think Tibet) while the US bleeds itself white in the Quicksands Wars. The US makes enemies of more than half the world and strengthens the Shanghai Cooperation Organistion’s resolve against the US. The latter puts China, Russia, Iran and even possibly India (to name the main parties) in an alliance against the US and the West.

    This politically and geostrategically disastrous. To misappropriate and re-word H. Norman Schwarzkopf’s quote on Saddam; Bush Junior, Cheney and the rest of their team were neither geostrategists nor schooled in the arts of grand strategy, nor diplomats nor a even a competent government. Obama is really little different from Bush Junior on foreign policy. This seems to show that the entire US system is no longer capable of wise, adaptive decisions.

  5. The ABC has been giving a good run to the report from climate scientists that we are looking at the probability of temperature rises of 4 to 6 degrees C by the end of the century.

    Well thank goodness that by the afternoon they found a rational commentator in the Farmers Federation who to the question is there anything that government should be doing about this threat responded (paraphrased) “they can be spending a lot more in Rand D to reinforce the work done by farmers in reducing water consumption by farmers and irrigators. We’ll have to see how this develops some areas will be less productive while other areas will be less productive”

    Well that is a big relief. Nothing to worry about here, folks, the farmers have the situation under control.

    There was me worrying that Australia would largely dry out and fires would denude much of the country, the Murray Darling would be reduced to a creek, while the Barrier Reef would be fully dead, shell fish would hugely diminished in the shallower seas, ocean currents would begin to stall, huge algal blooms would kill off most fish, and sea level rise would be well underway.

    Thank God that there is nothing to be concerned about.

  6. @BilB
    I will be more interested to see how they balance “Shepherd, A., et al. 2012. A Reconciled Estimate of Ice-Sheet Mass Balance. Science 338, 1183-1189. – if they ever take notice.

    Basically this proves as far as is physically possible that yes Virginia, the icecaps are melting at an increasing rate sufficient to upset Queensland coastal real estate values. This is measurable via among other techniques, microgravity satellites (GRACE). Perhaps the ABC will get some post modernists to explain that gravitational theory is purely dependent on one’s perspective.

  7. Newtownian,

    I suspect that there are too many long words in that paper you refer too. However if there was conclusive proof that football stadiums might be flooded with subsequent risk for cancelled Premier Rugby seasons, then there would be outrage.

  8. @BilB
    The text is moderately technical – but not inaccessible.

    The reason I threw it is as it includes plots of decreased gravitation which are very simple to understand and very hard to object to. I saw them presented by James Hansen here in Sydney a couple of years back. What is impressive is their message is direct and the data are unassailable unless you are a full blown denier of science like a bible literalist.

    You are right about rugby though. Still I thought it might be of interest for discussing with conservative people who do still have some belief in high quality data.

  9. Yep Katz, a stroke is the only explanation I can think of since you’ve done it again. I said Iran has long meddled in Iraq’s affairs and two hours later you this is evidence than I’m unaware of Iranian meddling.

  10. Jim Rose: “@Ikonoclast both showed that if you cross the USA on national security, at least when Bush was in charge, he will come after you with everything he has got. ”

    Actually, Bush was so wounded by events in Iraq and Afghanistan that he showed his belly and purred like a kitten when North Korea Kim Jong Il started sabra rattling. George W Bush has gone down in history as Kim Jong Il’s bitch.

  11. I’m detecting a pattern in GregvP’s comments. Basically everything that GregvP doesn’t like (distributed power) is too hard and costs too much and everything he likes (new approaches to agriculture) is also really hard but because he likes it it’s worth the trouble and extra cost. I read his objections to distributed power and thought “so what, he’s letting his bias rule out a different approach”. Imagine my surprise when a little further on he advocates a wholesale reworking of agricultural systems of production. A textbook example of confirmation bias.

  12. @Mel

    Which proves that your resort to lame ad hominem jibes is more salient than your amateur diagnosis of my cerebrovascular health.

  13. @Jim Rose


    Prior to the invasion I read a little book by Scott Ritter, a former weapons inspector, and he reckoned Iraq’s WMD had largely been eradicated. Since he turned out to be right I can only assume it was common knowledge.

    Whether they were destroyed to avoid the inspectors is neither here nor there. But if that is the case, do you think he would have destroyed them without their presence?

  14. @Mel Bush 43 was re-elected. The Iraq Surge dates from about 2006? imagine what more could have been done without the wounds.

    sdfc, Ritter was probably right despite the insults that Biden levelled at him about his pay grade. Ritter is now in prison on unrelated charges.

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