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April 25, 2006

Political Instability And The Price Of Gas Energy  Peak Oil  Politics

As gas prices move higher, Republican politicians are sweating. With good reason. The graph below (from Professor Pollkatz, whom we first linked to back in 2004) plots Bush's approval rating in blue and the price of gasoline (inverted — i.e., lower on the graph means higher in price) in red (click to enlarge). Talk about correlation.

And so we're treated to Republican Bush today posed in front of a backdrop more befitting a granola-eating, Birkenstock-wearing Green, speaking about investigating Big Oil for price-gouging.

Republicans in both houses of Congress are jumping on the bandwagon. WaPo:

Sen. Arlen Specter (R-Pa.) said this week that a windfall-profits tax on oil companies is "worth considering."

Rep. Joe Barton (R-Tex.), chairman of the House Energy and Commerce Committee, joined other lawmakers yesterday in condemning high oil prices by taking aim at oil companies. Barton said his committee will hold hearings into the imbalance of supply and demand. He added that "it troubles me" that Exxon Mobil Corp.'s chief executive received a large pay and retirement package "while refinery capacity continues to lag behind demand in this country."

Republicans talking about taxing profits, of all things.

It would be nice if the Dems would use the opportunity to take the high ground via straight talk about the world supply future and the urgent need to take serious steps on fuel efficiency and development of alternatives. But, as usual, their proposals are mostly Republican Lite. (Although Bill Clinton, at least, did recently acknowledge Peak Oil in a speech in London.)

Meanwhile, the inverse correlation between gas prices and political fortunes bodes ill for our political future. So long as Americans are addicted to oil, the US political picture is going to be increasingly unstable. Billmon has a good post on this. Excerpt:

It's a little disconcerting to think that gas prices — not Iraq, not Katrina, not the extra-constitutional power grabs — could decide whether Shrub's presidency recovers or collapses into complete irrelevancy for the next three years. [...]

[The inverse correlation between gas prices and political fortunes] should be enough to make any would-be president (Demopublican or Republicrat) extremely nervous, since it seems high energy prices are likely to be a major fact of life for years to come — and maybe forever. If that turns out to be the case, then an absolutely necessary condition for future presidential success, or even survival, might be making sure the go juice keeps flowing at prices that won't drive the average American SUV owner onto the war path.

But that isn't going to be easy — not in a world in which everybody and their Chinese cousin is scrambling to lock up the available supply, where a number of major oil producing countries are a coup away from becoming failed states (if they're not there already), and that is already producing about as much of the light, sweet cheap stuff as it ever will.

Given the political incentives, it's possible to look a ways down the road — not a long ways — and see a U.S. military policy (formerly known as a foreign policy) that begins and ends with the protection of the oil lifeline. [...]

America's oil lifeline spans the earth...All of it has to be watched and guarded, stabilized and supervised. Even a partial loss of control could turn into a disaster, since in a global market supply disruptions anywhere can send prices soaring everywhere. And yet some of the most serious threats — like the separatist movement in the Niger delta — are outside the U.S. security "umbrella," traditionally defined.

What this implies, of course, is a terrible case of imperial overstretch, one which technology, firepower and Special Forces mojo may not be able to cure, no matter how much money gets thrown at the Pentagon. When the objective is to protect vital economic infrastructures, rather than blow them up, the U.S. military machine clearly lacks many of the right tools — like an adequate number of combat boots with soldiers' feet inside them.

For those who fear above all else the threat of hostile Middle Eastern regimes armed with WMD, this is potentially very bad news, at least in the long run. Unless stopping the (insert nationality here) Hitler can be done in a way that doesn't jack up the price of a gallon of regular, future U.S. administrations may be unwilling, or politically unable, to risk it.

Unfortunately, in the short run this could be even worse news for those of us who fear a wider war in the Middle East more than the future possibility of a nuclear Iran. Having seen what high gas prices have done to his popularity ratings, Bush may feel confirmed in his reported conviction that no future president will have the guts to take down Tehran. And having fallen into Jimmy Carter territory, he may also feel he has nothing left to lose, at least politically, by doing it himself. [Emphasis added]

Billmon goes on to suggest that Bush's failure may lead future administrations to return to a more cautious and prudent posture. I wonder.

At the end of the film 1975 Three Days of the Condor, Robert Redford's character, a CIA analyst, confronts his superior, played by Cliff Robertson. Remember, this was 1975:

Turner (Robert Redford): "Do we have plans to invade the Middle East?"

Higgins (Cliff Robertson): "Are you crazy?"

Turner: "Am I?"

Higgins: "Look, Turner..."

Turner: "Do we have plans?"

Higgins: "No. Absolutely not. We have games. That's all. We play games. What if? How many men? What would it take? Is there a cheaper way to destabilize a régime? That's what we're paid to do."

Turner: "Go on. So Atwood just took the game too seriously. He was really going to do it, wasn't he?”

Higgins: "It was a renegade operation. Atwood knew 54-12 would never authorize it. There was no way, not with the heat on the Company.”

Turner: "What if there hadn't been any heat? Supposing I hadn't stumbled on a plan? Say nobody had?"

Higgins: "Different ball game. The fact is there was nothing wrong with the plan. Oh, the plan was alright. The plan would have worked."

Turner: "Boy, what is it with you people? You think not getting caught in a lie is the same thing as telling the truth?"

Higgins: "No. It's simple economics. Today it's oil, right? In 10 or 15 years - food, Plutonium. And maybe even sooner. Now what do you think the people are gonna want us to do then?

Turner: "Ask them."

Higgins: "Not now - then. Ask them when they're running out. Ask them when there's no heat in their homes and they're cold. Ask them when their engines stop. Ask them when people who've never known hunger start going hungry. Do you want to know something? They won't want us to ask them. They'll just want us to get it for them." [Emphasis added]

The correlation between oil prices and political fortunes will, as prices inevitably climb higher, open the door to opportunistic demagogues and hardliners, here in the US and throughout the world. Reason number 1,001 why we need to conserve — now.

Posted by Jonathan at April 25, 2006 09:02 PM  del.icio.us digg NewsVine Reddit YahooMyWeb

Comments

Well done, Jonathan! I've linked to you from a post on my blog. Pretty soon Americans will be wearing coats in the ouse in the wintertime, like folks do in Europe. Right now, I buy exactly one gallon of gas a day. I pay for it IN PENNIES. That's my own little way of protesting.

Posted by: Dave Lucas at April 26, 2006 06:26 AM