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August 25, 2006

On Chavez Energy  Peak Oil

Policy Pete on Hugo Chavez:

So he likes Fidel, so what? This is business, not personal, as the Corleones used to like to say. The US just lost half a million barrels a day forever to the Chinese. Having managed to tick off every Muslim on the planet, it would have been expecting too much for an unsophisticated presidency to try to mend fences in the southern hemisphere. Why not anger everyone who will be supplying the marginal oil that the US will need pretty desperately in less than a decade? "We're imperious; you're the third world. We get to give you little lectures on Freedom and The Free Market, you get to ship us your crude."

While it is not impossible that this may be the right strategy for a secure US, more than a few foreign offices must be watching Washington with genuine puzzlement. Do the Americans really think that a policy aimed (unsuccessfully) at eradicating terrorists means the rest of the world will supply the US with its petroleum in gratitude?

It's going to be painful to live through, but the US is giving the world a pretty good object lesson on the futility of trying to dictate terms through intimidation and military force in a world that's becoming ever more fragmented, fluid, unconquerable and ungovernable, at an ever-accelerating pace. Bullies get what's coming to them, in the end.

The White House thought the US was the new Rome. They thought they could dominate the world's oil producers by purely military means. Ain't working out too well. For the near term, world oil markets will stay open to the highest bidder and oil will continue to be fungible. But who is to say markets won't begin to break down when the oil picture gets more desperate. Oil producers will have opportunities to exert leverage beyond just getting a good price. We're giving a lot of people a lot of reasons to look for payback.

Posted by Jonathan at August 25, 2006 04:49 PM  del.icio.us digg NewsVine Reddit YahooMyWeb

Comments

This article isn't about Hugo, it's about Bush. Politics always seems to be about Bush. Either we are for Bush or we are against Bush. There doesn't seem to be much else in US Politics. I like the posts related to energy consumption, but leave politics out of it.

The usable worldwide supply of oil may be depleted in 50 years and whoever can afford it will get it. It we are still driving 12 mpg Expeditions in 50 years we will be the fools. The free market will determine what the future holds.

Posted by: StayHome at September 13, 2006 08:06 PM