By Mike Davis
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The View from Hubbert’s Peak

This article is over 17 years, 7 months old
Diminishing oil supplies have epochal implications for the world economy.
Issue 286

Angry truckers celebrated this May Day by blocking freeways in Los Angeles and container terminals in Oakland and Stockton. With diesel fuel prices in California soaring to record levels in recent weeks, the earnings of independent container-haulers have dropped below the poverty line.

Lacking the power of big trucking companies to pass rising fuel costs on to customers, the port drivers – many of them immigrants from Mexico – have had little choice but to share some of their pain with the public. In one action, abandoned big rigs blocked the morning commute just south of downtown Los Angeles on Interstate 5. Tens of thousands of motorists became temporary hostages of the fuel crisis. As one exasperated commuter complained to a radio station, ‘This is really the end of the world.’

Perhaps it is. Although real (inflation-adjusted) fuel prices are still well below their 1981 maximum, a large and ever-growing chorus of voices, ranging from former British environment minister Michael Meacher to National Geographic magazine, are shouting from the rooftops that the age of cheap oil is ending. Even if the current oil prices rises are slowed or reversed by higher Opec outputs, we will soon arrive – petroleum pundits claim – at the genuine summit of ‘Hubbert’s peak’.

M King Hubbert was a celebrated oil geologist who in 1956 correctly prophesied that US petroleum production would peak in the early 1970s, then irreversibly decline. In 1974 he likewise predicted that world oilfields would achieve their maximum output in 2000 – a figure later revised by his acolytes to 2006-10.

If the curve of global oil production is indeed near the point of descent, as these experts believe, it has epochal implications for the world economy. More expensive oil will undercut China’s energy-intensive boom, return OECD countries to the bad old days of stagflation, and accelerate the environmentally destructive exploitation of low-grade oil tars and shales.

Most of all, it will devastate the economies of oil-importing Third World countries. Poor farmers will be unable to afford artificial fertilisers, just as poor urban-dwellers will be unable to afford bus fares. (Already rising oil prices have brought chronic blackouts to cities throughout the South.) The only certain beneficiaries of this coming economic chaos will be the big five oil corporations and their corrupt partners – the Nigerian generals, Saudi princes, Russian kleptocrats and their ilk. Crude oil truly will become black gold.

The rising value of an increasingly scarce resource is a form of monopoly rent, and a permanent regime of $50 per barrel (or higher) crude would transfer at least $1 trillion per decade from final consumers to oil producers. In plain English, this would be the greatest robbery by a rentier elite in world history.

The oilmen in the White House, of course, have the best view of the terrain on the far side of Hubbert’s peak. No wonder, then, that a map of the ‘war on terror’ corresponds with such uncanny accuracy to the geography of oilfields and proposed pipelines. From Kazakhstan to Ecuador, American combat boots are sticky with oil.

To cite two examples; first, the Malaysian foreign minister warned in May that Washington was exaggerating the threat of terrorist piracy in order to justify the deployment of forces in the Straits of Malacca – the chokepoint of East Asia’s oil supply.

Secondly, Christian Miller, reporting in the Los Angeles Times, revealed that US Special Forces, as well as the CIA and private American security contractors, are integrally involved in the ongoing reign of terror in Colombia’s Arauca province. The aim of ‘Operation Red Moon’ is to annihilate the left wing ELN guerrillas threatening the oilfields and pipelines operated by LA-based Occidental Petroleum. The result, Miller reports, has been a slow-motion massacre:

‘Mass arrests of politicians and union leaders have become common. Refugees fleeing combat have streamed into local cities. And killings have soared as right wing paramilitaries have targeted left wing critics.’

Latin America (Mexico, Venezuela, Colombia and Ecuador) supplies more oil to the US than the Middle East and, from the very beginning, the White House has defined the ‘war on terror’ as including counter-insurgency in the western hemisphere.

Is there a pattern here? Indeed, is there a US masterplan for the control of oil in an age of diminishing supply and soaring prices? Obvious questions, but don’t ask a Democrat.

Although many ordinary Americans have little difficulty connecting the dots (to use a currently popular expression) linking blood to oil, the Democrats, with few exceptions, refuse to ask any deep or probing questions about the economic architecture of the New American Empire. Thus John Kerry has waffled back and forth between advocating an energy version of Fortress America (via the integration of Canadian and Mexican oil resources) and complaints that the Bush administration hasn’t put enough pressure on Opec, especially Saudi Arabia, to expand production.

One of the richest members of the Senate in history, Kerry seems congenitally allergic to the kind of anti-corporate populism and bold muck-raking that has made Michael Moore an international anti-Bush icon. Indeed, Kerry so far has refused every opportunity to publicly interrogate the economic interests driving Bush’s foreign policy, or to address public concern about the future of our oil-addicted, SUV-heavy society.

As a result, the presidential campaign has the dismal appearance of a Republican primary, with Kerry running as Bush Lite. As the senator from Massachusetts constantly emphasises, a vote for him will ensure the bipartisan continuity of the ‘war on terror’, the Patriot Act, US support for Likud, the isolation of Cuba and Venezuela, and the military occupations of Iraq and Afghanistan.

At this point, only the Nader campaign genuinely offers political space to demand the US out of Iraq and to contest Washington’s broader interventionist agenda. Only Nader is likely to press the attack on the corporate puppeteers of both political parties.

At the same time, it would be utopian to expect Nader – an old-fashioned progressive who has just won the endorsement of the former Perot voters and Jesse Ventura supporters in the Reform Party – to offer a coherent critique of the brave new world being fashioned in the twilight of cheap oil. That’s a job description for socialists.

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