Wednesday, August 10, 2005

Several problems with the Oil article

First, i generally like the article, but here is one glaring problem (I am sure I will have others):

The author contends that we will see more violent conflict for oil as supplies dwindle, and that WW2 and the Gulf War were both significantly about the "pursuit of foreign oil."

I will deal with these points in succession, first the likelihood of future conflict, then the point about WW2, and finally the Gulf War.

The first point is most important, because it underlies other points the author makes about potential future conflicts in the Middle East regarding oil, or more explicitly predictions of conflicts between the U.S. and Saudi Arabia. It needs to be stated very loudly and very clearly for all the anti-petroleum types who are given to wild fantasy about the evilness of oil companies.

NOTHING about the end of a natural resource INHERENTLY leads to conflict.

As I do all too often, I look to history. What great wars for forests did England fight when most of the forests were cut down early in English industrialization? Oh, wait, they didn't, they just started using coal.
What about the great wars that the United States fought as the Whaling industry went under? Oh wait, we were in the Civil War at the time, and we just started using petroleum. Dang.

The supposition that military conflict inherently will result from the end of the oil based economies is faulty because the supposition fails to account for the costliness of military action in light of alternatives. The entire post World War 2 international legal regime is designed to reduce cross border conflict, especially amongst the great powers of the world, by providing a set of norms to which countries can aspire and by providing legitimating language and standards for those instances in which war is necessary. This international legal regime is supported by too many stakeholders in the international system for the regime to be flaunted because of a decline in natural resources. The point: there is one cost not accounted for by "end of oil conflict" types.
Another cost is the simple opportunity costs of spending money on military action versus investing that money in renewable and nuclear sources of energy. Policy makers are smart enough, or at least we must trust them to be smart enough, and help them to be smart enough by organizing and lobbying, to realize that a 100 billion for a military adventure in the Mid-East to secure oil supplies (I don't believe this to be occurring right now, I am using this as an example) forgoes spending that 100 billion on development of bio-diesel hybrid automobiles, and the return on investment of a bio-diesel hybrid automobiles is much higher than another war.
So far we have costs of conflict for oil as 1) damage to an international legal regime we basically founded after the First world war, and actively supported since the end of the second; 2) the lost opportunity, and associated costs thereof, of investing in war instead of other sources of power; 3) The lack of return on investment posed by investing in war instead of renewables.

These costs greatly outweigh the benefits of simply securing more oil, especially in light of the fact that it is possible to transition to a post-oil economy instead of simply trying to prolong the oil economy at greater and greater costs. So the argument right now should be that we begin preparing ourselves for the transition to the post oil economy, which will be cheaper than attempting to prolong the oil economy. Its economics, its capitalism, it works (mostly).

Authors second point: WW2 was primarily driven by the pursuit of foreign oil.
Well, this point is just asinine. If you are after foreign oil, you don't invade Poland, then Denmark, Norway, and France. Now you might be saying to yourself, but WMD Norway has oil, hah! you are wrong!. Yes Norway has some oil, but that oil in Norway wasn't the main goal of the Nazi invasion there. (I could be wrong about that sweet sweet Norwegian crude, I just figured they had some off the North Sea) Furthermore, the Russian invasion didn't turn into an oil grab until after the rest of the offensives failed to knock the Russians out of the war. Basically, Hitler wasn't after the oil of the world.

Finally the Gulf War point:
I should have done this throughout the whole post, but whatever. Occam's Razor folks. "one should not increase, beyond what is necessary, the number of entities required to explain anything" Was the Gulf war about pursuit of foreign oil or about protecting the legal regime I already discussed? It is possible for the answer to be both, but the langauge of the policy makers at the time indicate that the legal regime point had a little more weight. The response that "Of course they wouldn't say we were fighting for oil" is silly. At some point, for politics to function, you have to take seriously what people are saying. It is untenable to claim that politicians always lie because we as the people and ultimate holders of power in this country would be unable to decide how to allocate political power if there was a complete dearth of truth in the policy making process. Was protecting Saudi Oil Fields a significant component of the deployment of the Rapid Deployment Force to Saudi Arabia in August 1990? Yes, but that does not require that therefore the whole operation was about oil. Other factors played a role at least as significant as the oil factor, and the oil factor alone would not have been enough to push this country to war.

That is all I got on that.

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