Thursday, September 22, 2011

A look at energy from Asia

Well, Klare in the Asian Times.

Don't look after your energy needs and bad things happen.  How could it be otherwise—energy is one of the necessary supports for life itself.  To believe otherwise is to be delusional.  Klare wants to discuss things in some sort of end-of-empire generalities but he is essentially correct—the end of the Age of Petroleum means the end of a USA designed to run on petroleum.  How that manifests itself is anyone's guess but Klare has at least tried.  He does wander off into the tall grass, however, when he suggests that lower supplies of oil will somehow make oil less important.

Is Washington out of gas?
By Michael Klare

America and Oil. It's like bacon and eggs, Batman and Robin. As the old song lyric went, you can't have one without the other. Once upon a time, it was also a surefire formula for national greatness and global preeminence. Now, it's a guarantee of a trip to hell in a hand basket. The Chinese know it. Does Washington?  
America's rise to economic and military supremacy was fueled in no small measure by its control over the world's supply of oil. Oil powered the country's first giant corporations, ensured success in World War II, and underlay the great economic boom of the postwar period. Even in an era of nuclear weapons, it was the global deployment of oil-powered ships, helicopters, planes, tanks, and missiles that sustained America's superpower status during and after the Cold War. It should come as no surprise, then, that the country's current economic and military decline coincides with the relative decline of oil as a major source of energy.

If you want proof of that economic decline, just check out the way America's share of the world's gross domestic product has been steadily dropping, while its once-powerhouse economy now appears incapable of generating forward momentum. In its place, robust upstarts like China and India are posting annual growth rates of 8% to 10%. When combined with the growing technological prowess of those countries, the present figures are surely just precursors to a continuing erosion of America's global economic clout.

Militarily, the picture appears remarkably similar. Yes, a crack team of SEAL commandos did kill Osama bin Laden, but that single operation - greeted in the United States with a jubilation more appropriate to the ending of a major war - hardly made up for the military's lackluster performance in two recent wars against ragtag insurgencies in Iraq and Afghanistan.

If anything, almost a decade after the Taliban was overthrown, it has experienced a remarkable resurgence even facing the full might of the US , while the assorted insurgent forces in Iraq appear to be holding their own. Meanwhile, Iran - that bete noire of American power in the Middle East - seem as powerful as ever. Al Qaeda may be on the run, but as recent developments in Egypt, Libya, Syria, Yemen, and unstable Pakistan suggest, the United States wields far less clout and influence in the region now than it did before it invaded Iraq in 2003.

If American power is in decline, so is the relative status of oil in the global energy equation. In the 2000 edition of its International Energy Outlook, the Energy Information Administration (EIA) of the US Department of Energy confidently foresaw ever-expanding oil production in Africa, Alaska, the Persian Gulf area, and the Gulf of Mexico, among other areas. It predicted, in fact, that world oil output would reach 97 million barrels per day in 2010 and a staggering 115 million barrels in 2020. EIA number-crunchers concluded as well that oil would long retain its position as the world's leading source of energy. Its 38% share of the global energy supply, they said, would remain unchanged.

What a difference a decade makes. By 2010, a new understanding about the natural limits of oil production had sunk in at the EIA and its experts were predicting a disappointingly modest petroleum future.

In that year, world oil output had reached just 82 million barrels per day, a stunning 15 million less than expected. Moreover, in the 2010 edition of its International Energy Outlook, the EIA was now projecting 2020 output at 85 million barrels per day, hardly more than the 2010 level and 30 million barrels below its projections of just a decade earlier, which were relegated to the dustbin of history. (Such projections, by the way, are for conventional, liquid petroleum and exclude "tough" and "dirty" sources that imply energy desperation - like Canadian tar sands, shale oil, and other "unconventional" fuels.)

The most recent EIA projections also show oil's share of the world total energy supply - far from remaining constant at 38% - had already dropped to 35% in 2010 and was projected to continue declining to 32% in 2020 and 30% in 2035. In its place, natural gas and renewable sources of energy are expected to assume ever more prominent roles.

So here's the question all of us should consider, in part because until now no one has: are the decline of the United States and the decline of oil connected? Careful analysis suggests that there are good reasons to believe they are. more

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