Whoever controls energy controls the world…
Oil: Iraq secret history of the War REVEALED
It was never exactly rocket science. You didn’t have to be Einstein to figure it out. In early 2003, the Bush administration was visibly preparing to invade Iraq, a nation with a nasty ruler who himself hadn’t hesitated to invade another country, Iran, in the early 1980s for no purpose except self-aggrandissement. (And the Reagan administration had backed him in that disastrous war because then, as now, Washington loathed the Iranians.) There was never the slightest evidence of the involvement of Saddam Hussein’s regime in the 9/11 attacks or in support of al-Qaeda; and despite the Bush administration’s drumbeat of supposed information about Saddam’s nuclear program (which was said, somehow, to threaten to put mushroom clouds over American cities), the evidence was always, at best, beyond thin and at worst, a potage of lies, concoctions, and wishful thinking. The program, of course, proved nonexistent, but too late to matter.
There was only one reason to invade Iraq and it could be captured in a single word, “oil,” even if George W. Bush and his top officials generally went out of their way to avoid mentioning it. (At one point, post-invasion, Deputy Secretary of Defense Paul Wolfowitz did point out that Iraq was indeed afloat “on a sea of oil.”) Unfortunately, oil as a significant factor in invasion planning was considered far too simpleminded for the sophisticated pundits and reporters of the mainstream media. They were unimpressed by it even when, as the looting began in Baghdad, it turned out that U.S. troops only had orders to guard the Oil Ministry and Interior Ministry (which housed Saddam’s dreaded secret police).
Mind you, far more than Iraqi oil was in the administration’s crosshairs, though that country, with its then-crippled energy sector, was considered a giant oil reservoir just waiting for Big Oil to set it free. To conquer and garrison — “liberate” — Iraq would put the U.S. in a position of ultimate domination in the oil heartlands of the planet, or so thought the top officials of the Bush administration, a number of whom had been in or associated with the energy business before scaling the heights of Washington. As Dick Cheney put it to the Institute of Petroleum Engineers in 1999, when he was still running the energy company Halliburton, “The Middle East, with two thirds of the world’s oil and the lowest cost, is still where the prize ultimately lies.”  Read More >>
by Greg Muttitt
The Game Changer
The US oil and gas boom could shake up the global order! Oh, wait! That happens to be the title of an NBC article! Here’s a quote from it:
As detailed in the first two installments of Power Shift, an NBC News/CNBC special report, the United States is reaping the benefits of an energy boom created by new drilling technologies that have unlocked vast domestic oil and natural gas reserves. Coupled with decreasing demand due to energy efficiency and continued cultivation of alternative energy sources, an increasing number of experts believe the U.S. could achieve energy independence by the end of the decade – realizing a dream born during the gas crisis of 1973.
Whoever controls energy controls the world. That led to America’s hegemony at the turn of the 20th Century and after WW II and the rise of Middle Eastern power from the 1970s onward. This is about to change. The dirty little secret is that Saudi Arabia and other countries are lying about how much oil they have. The CIA Fact Book shows reserves by country. The question isn’t how much they had, but how much they have left? It shows Saudi Arabia with 262 billion barrels. If you look it up, you will see that their reserves haven’t changed in the past 30 years. How could that be when they pump 10 million barrels a day?
Other countries such as Mexico, Venezuela, Australia, Canada and Brazil, among others have equally huge finds. Fracking is revitalizing older fields around the world such as the North Sea, Alaska and Russia.
World oil reserves can increase by ten times over the next ten years (so much for “peak oil”).
America has discovered so much oil it will be the number one producer in the world. There are mini-booms all over the country but no thanks to the President who keeps three quarters of the reserves from even being exploited. Played out oil fields in Texas and California have more oil left in them than was ever taken out to begin with. This is thanks to the new technology. There is between 10 and 20 trillion barrels of oil in our shale sands in America alone. The figure on the right shows just three areas with an estimated 2 trillion barrels, more than the entire Middle East combined.
No one knows for sure how much natural gas can be released from fracking in America but it is probably greater than any other nation on earth. So you take oil and gas and combine it with agriculture, minerals, computers and the rest of technology and America is in for a huge boom. As I have said in many articles, no nation on earth is blessed with so many natural resources without the billions that China and India have to take care of. The upside for us is the downside for the Middle East. Whenever supply increases, price falls.
The US will become the largest producer of oil and gas and will soon be the largest exporter as well – in spite of President Obama’s policies.
So much for national debt and trade deficits! China and India are desperate for energy, fresh water and food and we have an abundance of them all – and food galore!
THE MIDDLE EAST
Trends in the Middle East are not good. The strangle hold the Middle East and OPEC has had on the world is just about over as are the artificially high price of oil. The Saudis and other countries have had us over the proverbial barrel for the past 40 years but that is history. Not only have they dominated energy during that time, they have become fabulously wealthy. But did I say “Game Changer”? They are about to have a rude awakening. Saudi Arabia depends on a minimum oil price of $72 a barrel just to break even. If it falls below that they are in trouble and it will fall dramatically. [ Big question is will they and their friends allow this to happen? – see section below about the US and Saudi Arabia ]
by Dene McGriff
The problem is, we are just about out of time and EVENTS WILL OVERTAKE US.
Yes, Israel has these massive oil and gas fields off their coast, and given time they could be developed and Israel become very wealthy. Yes, America has tremendous energy resources but that will take years to develop. Yes, Russia has changed alliances to Israel, America and Europe. And finally, yes, the Middle East will have less income from oil because increased supply will result in a lower price and less income.
But these “game changers” are trumped by political and military events. Syria is boiling out of control and Israel will be forced to intervene to protect itself. Iran will have nuclear weapons within the next year and Israel will have to intervene there as well with the agreement and support of Europe and Russia and the military assistance of the United States. Syria will be first and then Iran. Israel’s attacks on two Muslim countries and her new found wealth will hasten the beginning of the end and precipitate the Treaty with Israel, the agreement to rebuild the temple and the Gog-Magog War.
Meanwhile, the American Administration is under siege on various issues: the IRS scandal, the AP scandal and Benghazi. The pattern of lying and equivocation has even led the liberal press to join the attack on the President. Here is one possible scenario. The Israel attack on Syria and Iran will spark attacks in the United States. This will divert the public attention from these annoying issues. The President will sign a treaty with Israel and the countdown begins. Martial law will be declared, America will go on a war footing and any and all criticism will be squashed.
— Dene McGriff
Is it less expensive to import oil from the Middle East than to extract it locally (in the U.S.)?
How much oil does the U.S. have in the ground?
In the Bakken Oil Field just recently discovered the USA have 8 times the crude of Saudi Arabia; 18 times as much oil as Iraq; 21 times as much as Kuwait; 22 times as much as Iran; and 500 times as much as Yemen.
The U. S. Geological Service issued a report in April 2008 that only scientists and oil men knew was coming, but man was it big. It was a revised report (hadn’t been updated since 1995) on how much oil was in this area of the western 2/3 of North Dakota, western South Dakota, and extreme eastern Montana ….. check THIS out:
The Bakken is the largest domestic oil discovery since Alaska’s Prudhoe Bay and has the potential to eliminate all American dependence on foreign oil. The Energy Information Administration (EIA) estimates it at 503 billion barrels. Even if just 10% of the oil is recoverable( 5 billion barrels)… at $107 a barrel, we’re looking at a resource base worth more than $5…3 trillion.
“When I first briefed legislators on this, you could practically see their jaws hit the floor. They had no idea.” says Terry Johnson, the Montana Legislature’s financial analyst.
“This sizable find is now the highest-producing onshore oil field found in the past 56 years,” reportsThe Pittsburgh Post Gazette. It’s a formation known as the Williston Basin , but is more commonly referred to as the ‘Bakken.’ It stretches from Northern Montana , through North Dakota and into Canada . For years, U. S. oil exploration has been considered a dead end. Even the ‘Big Oil’ companies gave up searching for major oil wells decades ago. However, a recent technological breakthrough has opened up the Bakken’s massive reserves….. and we now have access of up to 500 billion barrels. And because this is light, sweet oil, those billions of barrels will cost Americans just $16 PER BARREL!
That’s enough crude to fully fuel the American economy for 2041 years straight. And if THAT didn’t throw you on the floor, then this next one should – because it’s from 2006!
U. S. Oil Discovery- Largest Reserve in the World
Stansberry Report Online – 4/20/2006
Hidden 1,000 feet beneath the surface of the Rocky Mountains lies the largest untapped oil reserve in the world. It is more than 2 TRILLION barrels. On August 8, 2005 President Bush mandated its extraction. In three and a half years of high oil prices none has been extracted. With this motherload of oil why are we still fighting over off-shore drilling?
They reported this stunning news: We have more oil inside our borders, than all the other proven reserves on earth.. Here are the official estimates:
– 8-times as much oil as Saudi Arabia
– 18-times as much oil as Iraq
– 21-times as much oil as Kuwait
– 22-times as much oil as Iran
– 500-times as much oil as Yemen
– and it’s all right here in the Western United States .
HOW can this BE? HOW can we NOT BE extracting this? Because the environmentalists and others have blocked all efforts to help America become independent of foreign oil! Again, we are letting a small group of people dictate our lives and our economy…..WHY?
James Bartis, lead researcher with the study says we’ve got more oil in this very compact area than the entire Middle East -more than 2 TRILLION barrels untapped. That’s more than all the proven oil reserves of crude oil in the world today, reports The Denver Post.
Don’t think ‘OPEC’ will drop its price – even with this find? Think again! It’s all about the competitive marketplace, – it has to.
Think OPEC just might be funding the environmentalists?
Got your attention yet? Now, while you’re thinking about it, do this:
Pass this along. If you don’t take a little time to do this, then you should stifle yourself the next time you complain about gas prices – by doing NOTHING, you forfeit your right to complain.
Now I just wonder what would happen in this country if every one of you sent this to every one in your address book.
By the way…this can be verified. Check it out at the link below!!!
GOOGLE it, or follow this link. It will blow your mind. http://www.usgs.gov/newsroom/article.asp?ID=1911
US & Saudi Arabia
Google Maps – ©2013 Google
About Saudi Arabia
- The modern Saudi kingdom was founded by the late King Abdul Aziz Al Saud. — State.gov
- Saudi Arabia is the 14th largest country in the world covering around two million square kilometers and has a population of nearly 29 million. –Opec.org
- The politics of Saudi Arabia takes place in a framework of a particular form of absolute monarchy whereby the King of Saudi Arabia is both head of state and the head of government. –Paperbackswap.com
- The Basic Law adopted in 1992 declared that Saudi Arabia is a monarchy ruled by the male descendants of King Abd Al Aziz Al Saud. –Wn.com
Saudi Arabia’s friendly history with America
- The United States recognized the government of King Ibn Saud in 1931, and two years later in 1933, Ibn Saud granted a concession to the U.S. company, Standard Oil of California, allowing them to explore for oil in the country’s Eastern Province, al-Hasa. –Saudi-arabia-united-states-relations.co
- The company gave the Saudi government £35,000 and also paid assorted rental fees and royal payments. —WN.com
- The special relationship with the United States actually dated to World War II. In 1943 the administration of Franklin D. Roosevelt declared that the defense of Saudi Arabia was a vital interest to the United States and dispatched the first United States military mission to the kingdom. —Countrystudies
- In 1951, under a mutual defense agreement, the U.S. established a permanent U.S. Military Training Mission in the kingdom and agreed to provide training support in the use of weapons and other security-related services to the Saudi armed forces. —Pbs.org
- Saudi Arabia is a very important ally for the U.S. because they have a strong role in the region, the world’s largest oil reserves and a strategically important location. However, the U.S. is also an important ally for Saudi Arabia, because their military cooperation provides Saudi forces with training and the best weaponry. —Blogcritics.org
Vice President Dick Cheney walks with newly crowned King Abdullah, former President George H.W. Bush, and former Secretary of State Colin Powell during a retreat at King Abdullah’s Farm in Riyadh. Riyadh, Saudi Arabia, August, 2005.
U.S. President Bush smiles after receiving the King Abdul Aziz Order of Merit from Saudi Arabia’s King Abdullah (C) at a palace in Riyadh January 14, 2008. REUTERS-Kevin Lamarque
US President George W. Bush, on his first visit to this oil-rich kingdom, delivered a major arms sale to a key ally in a region where the US casts neighboring Iran as a menace to stability. Bush’s talks with Saudi King Abdullah, which began over dinner and were continuing with late-night meetings, also were expected to cover peace between Israelis and Palestinians and democracy in the Middle East. Coinciding with Bush’s trip, the Bush administration in Washington notified Congress on Monday that it would offer Saudi Arabia the chance to buy sophisticated Joint Direct Attack Munitions – or “smart bomb” – technology and related equipment, the State Department said. The administration envisions the transfer of 900 of the precision-guided bomb kits, worth US$123 million, that would give the kingdom’s armed forces highly accurate targeting abilities. The proposed deal follows notification of five other packages to Saudi Arabia, the United Arab Emirates and Kuwait, bringing to US$11.5 billion the amount of advanced US weaponry, including Patriot missiles, that the administration has announced it will provide to friendly Arab nations, State Department spokesman Sean McCormack said. Administration officials say the total amount of eventual sales as part of the Gulf Security Dialogue is estimated at $20 billion, a figure subject to actual purchases. The arms packages are an important part of the US strategy to bolster the defenses of oil-producing Gulf nations, such as Saudi Arabia, against threats from Iran.
Obama’s deep bow to the Saudi king
President Obama visit to Saudi Arabia.
Secret deals & the Saudi oil
- A significant portion of the millions of dollars U.S. companies and their politically influential executives have earned in deals with the Saudis has been through military contracts. –Commondreams.org
- The former U.S. president George Bush Sr. remains a senior adviser to the Washington D.C.-based Carlyle Group. That influential investment bank has deep connections to the Saudi royal family as well as financial interests in U.S. defense firms hired by the kingdom to equip and train the Saudi military. –Federalobserver.com
- The Carlyle Group has also served as a paid adviser to the Saudi monarchy on the so-called “Economic Offset Program,” an arrangement that effectively requires U.S. arms manufacturers selling weapons to Saudi Arabia to give back a portion of their revenues in the form of contracts to Saudi businesses, most of whom are connected to the royal family. –Commondreams.org
- The Carlyle Group had a major stake in the large defense contractor B.D.M., which has multimillion-dollar contracts through its subsidiaries to train and manage the Saudi National Guard and the Saudi air force, U.S. Department of Defense records show. –Federalobserver.com
Saudi Arabia-U.S. arms deal
- In 2010, The Obama administration notified Congress of plans to offer advanced aircraft to Saudi Arabia worth up to $60 billion, the largest U.S. arms deal ever, and about talks with the kingdom about potential naval and missile-defense upgrades that could be worth tens of billions of dollars more. — Huffingtonpost.com
- The Wall Street Journal reported that the package would include 84 new Boeing F-15 fighter jets and upgrades to another 70 of them. It would also include three types of helicopters: 72 Black Hawk helicopters, 70 Apaches, and 36 Little Birds. In addition, U.S. officials are discussing a $30 billion package to upgrade Saudi Arabia’s naval forces. –Csmonitor.com
- Besides the new fighters for Saudi Arabia, the U.S. plans to upgrade an additional 70 of the kingdom’s existing F-15s. State Department and Pentagon officials told lawmakers the sales also will include 190 helicopters, as well as an array of missiles, bombs, delivery systems and accessories such as night-vision goggles and radar warning systems. — Cbsnews.com
AP Photo/Charles Dharapak)
– – –
400 Billion Dollar Secret
It cost the United States 400 billion dollars to import oil “last year” , seems a well rounded number given the barrels of oil imported and the 2007 price of oil.
It has consistently, for many years, been the stated goal of the United States to reduce or eliminate its dependence on foreign oil, therefore, if any alternative energy source seems capable of achieving that goal, it should be pursued with the utmost vigor. We have here in the United States the only method known to man which can take any non-nuclear material containing carbon, and using this process, deliver a diesel quality fuel oil in two short hours! The promise inherent in this system is to not only alleviate our dependence on foreign oil, but to do so while contributing to a major degree in cleaning the environment.
Watch this YouTube Video:
FREE ENERGY IS here! http://www.changingworldtech.com/
Is it less expensive to ship oil from the Middle East rather than to bring much cheaper Canadian oil via the new CANADA-US pipeline?
The Keystone Pipeline System
The Keystone Pipeline System is a pipeline system to transport tar sands oil from Canada and the northern United States “primarily to refineries in the Gulf Coast” of Texas. The products to be shipped include synthetic crude oil (syncrude) and dilbit (diluted bitumen) from the Western Canadian Sedimentary Basin in Alberta, Canada, and Bakken synthetic crude oil and light crude oil produced from the Williston Basin (Bakken) region in Montana and North Dakota. Two phases of the project are in operation, a third, from Oklahoma to the Texas Gulf coast, is under construction and the fourth is awaiting U.S. government approval as of mid-March 2013. Upon completion, the Keystone Pipeline System would consist of the completed 2,151-mile (3,462 km) Keystone Pipeline (Phases I and II) and the proposed 1,661-mile (2,673 km) Keystone Gulf Coast Expansion Project (Phases III and IV) . The controversial fourth phase, the Keystone XL Pipeline Project, would begin at the oil distribution hub in Hardisty, Alberta and extend 1,179 miles (1,897 km), to Steele City, Nebraska.
The operational Keystone Pipeline system currently has the capacity to deliver up to 590,000 barrels per day (94,000 m3/d) of Canadian crude oil into the Mid-West refining markets. In the summer of 2010 Phase 1 of the Keystone Pipeline was completed, delivering crude oil from Hardisty, Alberta to Steele City, Nebraska, and then east through Missouri to Wood River refineries and Patoka, Illinois. Phase 2 the Keystone-Cushing extension was completed in February 2011 with the pipeline from Steele City, Nebraska to storage and distribution facilities at Cushing, Oklahoma, a major crude oil marketing/refining and pipeline hub.
The Keystone XL proposal, which would comprise phases 3 and 4, faced lawsuits from oil refineries and criticism from environmentalists and some members of the United States Congress. In January 2012, President Barack Obama rejected the application amid protests about the pipeline’s impact on Nebraska’s environmentally sensitive Sand Hills region. TransCanada changed the original proposed route of Keystone XL to minimize “disturbance of land, water resources and special areas” and the new route was approved by Nebraska Governor Dave Heineman in January 2013. On March 22, 2012, Obama endorsed the building of its southern half that begins in Cushing, Okla. The President said in Cushing OK on March 22, “Today, I’m directing my administration to cut through the red tape, break through the bureaucratic hurdles, and make this project a priority, to go ahead and get it done.”
Proponents for the Keystone XL pipeline argue that it would allow the U.S. to increase its energy security and reduce its dependence on foreign oil. TransCanada CEO Russ Girling has argued that “the U.S. needs 10 million barrels a day of imported oil” and the debate over the proposed pipeline “is not a debate of oil versus alternative energy. This is a debate about whether you want to get your oil from Canada or Venezuela or Nigeria.” However an independent study conducted by the Cornell ILR Global Labor Institute refers to some studies (e.g. a 2011 study by Danielle Droitsch of Pembina Institute) according to which “a good portion of the oil that will gush down the KXL will probably end up being finally consumed beyond the territorial United States”. It also states that the project will increase the heavy crude oil price in the Midwestern United States by diverting oil sands oil from the Midwest refineries to the Gulf Coast and export markets.
TransCanada’s Girling has also argued that if Canadian oil doesn’t reach the Gulf through an environmentally friendly buried pipeline, that the alternative is oil that will be brought in by tanker, a mode of transportation that produces higher greenhouse-gas emissions and that puts the environment at greater risk.
Diane Francis has argued that much of the opposition to the oil sands actually comes from foreign countries such as Nigeria, Venezuela, and Saudi Arabia, all of whom supply oil to the United States and who could be affected if the price of oil drops due to the new availability of oil from the pipeline. She cited as an example an effort by Saudi Arabia to stop pro-oil-sands television commercials. TransCanada had said that development of oil sands will expand regardless of whether the crude oil is exported to the United States or alternatively to Asian markets through Enbridge Northern Gateway Pipelines or Kinder Morgan’s Trans-Mountain line.
“We support and agree with the more than 32,000 scientists of various countries, who have stated before the United Nations,” that there is no scientific proof that “man-made carbon-dioxide [is the cause of] climate variation on the planet,” as well as “the 650 scientists who have testified before the Senate of the United States,” and the 50 NASA scientists who have denounced the lack of evidence for those theories. Pensado went on to challenge the IPCC in particular, saying that “variations of heat emission from the Sun, and in the inclination of the axis of our planet,” are the probable cause of the diverse climatic periods that Earth has undergone. . . This implies a new vies of public policies regarding climate change, seen as cosmic events.” — Dr. Omar Pensado, biologist and director of the Institute of Advanced Sciences of Xalapa, Veracruz
Al Gore is the former Vice President of the United States (1993–2001), the 2000 Democratic Party presidential nominee, and the co-recipient of the 2007 Nobel Peace Prize with the Intergovernmental Panel on Climate Change. He has been involved with the environmental activist movement for a number of decades.
Purchase of Current TV Could Give Arab Network Foothold in U.S.
Al Gore said on Tuesday that tough competition from major U.S. television networks forced him to sell Current TV, a struggling progressive cable channel, to Al Jazeera, and he praised the Arabic news broadcaster’s coverage of climate change.
Gore, a former vice president who won a Nobel Peace Prize for raising awareness about the problems with climate change, said on NBC’s “Today” show that he was proud of the channel and had never thought of it as simply a monetary investment.
“As an independent network … we found it difficult to compete in this age of conglomerates,” he said.
Earlier this month, Qatar-based Al Jazeera announced it was buying Current TV, a move that could enable it to better compete with American news networks like CNN, MSNBC and Fox.
Terms were undisclosed, but analysts estimated the deal could be worth as much as $500 million; Gore has reportedly pocketed roughly $100 million in the deal.
“I’m proud of what my partner Joel Hyatt and I did with Current TV,” said Gore, who served under Democratic President Bill Clinton for eight years before losing his own bid for the presidency in 2000. He and Hyatt started the channel in 2005.
Al Jazeera operates under the patronage of the emir of Qatar and his family. The Middle East country tucked between Saudi Arabia and the Persian Gulf gets much of its wealth from oil and gas. The news network has said it planned a new U.S.-based news channel with the acquisition but has already struggled over distribution issues.
Gore has been criticized for selling the channel to a broadcaster that is partially funded by the Gulf oil state even as he champions efforts to battle global warming.
He has taken U.S. television networks to task, for instance, for accepting advertising dollars from traditional energy companies in his recently published book “The Future,” according to NBC.
But on Tuesday he deflected the criticism, saying Al Jazeera is committed to strong coverage of climate change and the environment.
“By the way, it’s climate coverage has been far more extensive and of high quality than any of the networks here,” he said.
“Virtually every news and political commentary program on television is sponsored in part by oil, coal and gas companies – not just during the campaign seasons, but all the time, year in and year out – with messages designed to soothe and reassure the audience that everything is fine, the global environment is not threatened,” Gore writes in the book, NBC said.
Scientists say emissions from cars and coal-fed power plants are partially to blame for the carbon dioxide warming the planet, but many conservatives challenge that idea and have raised doubts about global warming overall.
The 2006 documentary film “An Inconvenient Truth” that chronicled Gore’s effort to raise awareness about global climate change won numerous awards, including an Academy Award.
Gore, who has said President Barack Obama’s effort on global warming issues during his first term fell short, praised the president’s call to action in his second inaugural address last week.
“He has now put his commitment out there … he’s put his presidency behind this issue,” he said.
PS1 Shale Gas and Pax Americana
By Deepak Lal
Within five years of the United States being written off as a declining economic and imperial power, the shale gas revolution it has pioneered provides it with the energy independence it has sought since the first Organization of Petroleum Exporting Countries (OPEC) oil shock of 1973. It also changes the global future of fossil fuels, which have been the basis of the modern intensive growth — generating a sustained increase in per capita incomes, first in the West and now in the Rest.
One of the periodic fears generated by the Greens is that of the world running out of fossil fuels, of which the discredited “peak oil” theory was the latest. The potential increase in worldwide natural gas resources from currently estimated recoverable reserves of shale gas is 40%, implying that about 250 years of gas supplies are now available. These are also widely distributed, with China and the Americas having the largest assessed reserves. Furthermore, the potential shale oil reserves are even larger. The U.S. government estimates that the Green River Formation in the Western U.S. contains three trillion barrels of shale oil — three times as large as total global oil consumption over the past 100 years.
This increase in cheap natural gas will allow the replacement of coal-fired power stations, which account for 46% of the electricity produced globally, by gas-fired ones, reducing carbon dioxide emissions by half. Moreover, this will happen through normal market processes without any need for the mandates and taxes currently in place to decarbonize the world. The U.S., as a result of the shale revolution, has cut its carbon footprint by 5% this year, well ahead of those hankering after a new Kyoto Protocol on climate change.
However, for the next decade or two this imminent energy revolution is likely to be mainly confined to the US, which shows the robustness of American entrepreneurship, its system of property rights and the depth of its financial markets. The technology of “fracking” was developed by small companies experimenting in the 1980s and 1990s, supported by venture capital from Wall Street, and took off in 2005 when the Barnett Shale in Texas was shown to be commercially viable. Other shale formations were then rapidly developed. These small companies were aided by the unique U.S. system of property rights, whereby owners of land also own rights to subsurface minerals; in much of the rest of the world these belong to the state. The exploration and production companies have to negotiate with these private property owners for the right to drill in return for negotiated royalties. This provides an incentive for the locals to allow “fracking”, overcoming the NIMBYism prevalent in much of the world. The shale gas and oil revolution, thus, attests to the robustness of US capitalism despite its current fiscal woes.
The fall in the price of natural gas in the U.S., from $16 to $3.30 per mBtu, has meant that the U.S. is re-industrializing as petrochemical — and energy — intensive industries shift from Europe, the Gulf and China back to the U.S. All the predictions of the U.S.-related economic decline are soon to be overturned. The renaissance in U.S. manufacturing, particularly in petrochemicals, has been estimated to increase U.S. manufacturing employment by one million by 2025. This increase in high-paying jobs should help mitigate the stagnation of U.S. wages and the attendant rise in its inequality indices. Just as the proponents of “Japan as number one” had written off the U.S. in the 1980s with the stagnation of U.S. productivity, all those rushing to anoint “Chi na as number one” are likely to be nonplussed by the coming resurgence of the U.S. economy.
Moreover, other parts of the world with large shale gas reserves are also unlikely to realize their potential. Argentina, with large reserves, is a pariah when it comes to the direct foreign investment that is needed, after its nationalization of the oil firm YFP. China, with shale reserves greater than the US’, has a shortage of the water needed for “fracking.” Given the continuing “Green” uproar over mining and nuclear energy, India’s polity also seems unlikely to be able to exploit this bounty.
It is the geopolitical consequences of this U.S. economic renaissance and energy independence that are likely to be momentous, allowing greater freedom of manoeuvre in its foreign policy — most importantly, in its relationship with West Asia. Ever since President Franklin D Roosevelt struck the deal with the Saudi King Ibn Saud on the USS Quincy in 1945 promising security to the Saudi dynasty in return for the free flow of oil to the West (to match the leverage provided to Russia by its oil in the Cold War), the U.S. has been unable to counter the fundamentalist Wahhabi poisoning of the Muslim mind. With the ending of its reliance on West Asian oil, the U.S. could cut back on its implicit protection of the Wahhabi state, and its policing functions in the Strait of Hormuz. It only needs to act as an offshore balancer in the coming internecine conflict amongst the Shias and the Sunnis in the region. It wil l be the Chinese, Indians and, above all, the Europeans who will no longer be able to remain free riders relying on U.S. arms to secure their oil supplies from the impending turbulence in West Asia.
Moreover, the prospective global abundance of oil and gas, by spiking the Russian threat to world order based on deploying the rents from these natural resources, could also lead Russia to move from its authoritarian crony capitalism to the advanced liberal market economy that it needs for its future prosperity. Equally important, by allowing a shift of U.S. military resources from West Asia to the Pacific, it might give the other authoritarian capitalist state — China — cause to pause in its recent aggressive attempts to challenge the US Pax in Asia. In conclusion, it is premature to predict the end of the American Imperium.
for The Daily Reckoning
Ed. Note: Deepak Lal is the professor of international development studies at the University of California, Los Angeles, and a senior fellow at the Cato Institute. This article originally appeared in The Business Standard on December 22, 2012.
Subject Related Posts
- USA National Debt and Oil Galore!
- Hypocrisy of War
- 35 Inconvenient Truths – The errors in Al Gore’s movie
- Carbon Dioxide Propaganda Exposed! — World Mysteries Blog
- 51 Billion British Pounds (£)s to be paid in interest in 2013
- just-read-their lips (just for fun)
I speak to them in parables, because seeing they do not see, and hearing they do not hear, nor do they understand. –The Bible, Matthew 13