2 February 2006
“Addicted to Oil”
By Gwynne Dyer
“America is addicted to oil, which is often imported from unstable parts of the world,” said President George W. Bush in his State of the Union speech on Wednesday. And his solution? He’s going to cut US oil imports from the Middle East by 75 percent, and replace the missing oil with ethanol made from fermented plant waste: “If…being dependent upon oil is a problem for the long term, why don’t we figure out how to drive our cars using a different type of fuel?”
Not a word from Mr Bush about attacking the demand side of the equation by burning less oil (although after the1973-74 oil embargo the US managed to cut its oil consumption by almost 30 percent strictly by energy conservation). Not a word about the consequences for climate change of burning so much oil, or about the implications of soaring oil demand in the emerging Asian giants, China and India, for prices and supply. Just a promise to cut American oil imports from the Middle East by three-quarters — by 2025.
As so often with President Bush, it’s hard to tell whether he is trying to fool us, or just fooling himself. Sixty percent of the oil that the United States consumes is imported (up from 53 percent when Bush came into office). Last year, less than one-fifth of that imported oil came from the Middle East, so achieving Bush’s stated goal would only bring the share of imported oil in US consumption back to the level of 2001. And much of it would still come from “unstable parts of the world.”
Actually, Mr Bush is being unfair to the Middle East, which is the most stable part of the planet in terms of the longevity of its regimes. Perhaps he is afraid that his vaunted democratic revolutions will actually come to pass, for free elections almost anywhere in the region would produce governments much more hostile to the American presence than the current regimes. (See Hamas’s recent victory in the Palestinian occupied territories, for example.) But he is also barking up the wrong tree: the real vulnerabilities of the US lie elsewhere.
The three largest sources of American oil imports are Canada, Venezuela and Nigeria. Canada is stable, but Venezuela is definitely not, mainly because the US keeps trying to destabilise it. The Bush administration loathes President Hugo Chavez for his socialism and his closeness to Fidel Castro, and has already been implicated in one attempted coup against him in 2002. If there were to be another attempt, and Chavez suspected American involvement, an embargo on Venezuelan oil exports to the United States would be pretty much a certainty. As for Nigeria….
“It must be clear that the Nigerian government cannot protect your workers or assets,” declared the Movement for the Emancipation of the Niger Delta (MEND) in an e-mail last month to oil companies working in the region. “Leave our land while you can, or die in it. Our aim is to totally destroy the capacity of the Nigerian government to export oil.”
Since mid-December two major pipelines have been blown up in the Niger Delta, home to all of Nigeria’s oil. Nine people were killed in an attack on the Italian oil company Agip. Four foreigners were kidnapped from an offshore rig (and later released, presumably on payment of a large ransom). And at least seventeen people died in a motorboat raid on a Shell flow station in the swamps around Warri.
MEND is the latest expression of the seething dissatisfaction of the region’s 20 million people with the fact that all that oil has brought them so little prosperity. In fact, all of Nigeria’s 129 million people have a legitimate grievance, for most of the $350 billion that the country has earned from oil exports in the past fifty years has been stolen by a narrow politico-military elite, but only the people of the Delta live amidst the pollution that the oil causes, and only they can take direct action.
Moreover, the protest groups and the guerillas are often tangled up with the criminal gangs who siphon off oil from the pipelines (“bunkering”, as it is known). The major foreign oil companies operating in the Delta (Royal Dutch Shell, Chevron, ENI and Exxon) have long turned a blind eye to the bunkering in return for being left alone to get on with their operations, and the gangs restricted their stealing to about ten percent of Nigeria’s oil. But with the passage of time they have got richer, more heavily armed, and greedier.
The Nigerian government seems helpless to do anything about the security situation in the Delta (as it is about most things). The double threat of political guerillas and criminal gangs has got so severe that Stakeholder Democracy Network, an anti-corruption group active in the area, suggested in a report last month that “Shell and (other) foreign oil operators may have to go offshore altogether by 2008 as security and public order deteriorate.”
And who would then buy the onshore oil facilities, assuming that MEND had not destroyed them? Probably China, which is willing to accept higher levels of risk than strictly commercial companies in order to have secure long-term oil supplies. If Mr Bush insists on treating oil as a supply rather than a demand problem, he should at least find the right trees to bark up.
To shorten to 725 words, omit paragraphs 4 and 9. (“Actually…elsewhere”; and “Moreover…greedier”)