Reposted by arrangement with Tom Dispatch
When it comes to China policy, is the Obama administration leaping from the frying pan directly into the fire? In an attempt to turn the page on two disastrous wars in the Greater Middle [...]]]>
Reposted by arrangement with Tom Dispatch
When it comes to China policy, is the Obama administration leaping from the frying pan directly into the fire? In an attempt to turn the page on two disastrous wars in the Greater Middle East, it may have just launched a new Cold War in Asia — once again, viewing oil as the key to global supremacy.
The new policy was signaled by President Obama himself on November 17th in an address to the Australian Parliament in which he laid out an audacious — and extremely dangerous — geopolitical vision. Instead of focusing on the Greater Middle East, as has been the case for the last decade, the United States will now concentrate its power in Asia and the Pacific. “My guidance is clear,” he declared in Canberra. “As we plan and budget for the future, we will allocate the resources necessary to maintain our strong military presence in this region.” While administration officials insist that this new policy is not aimed specifically at China, the implication is clear enough: from now on, the primary focus of American military strategy will not be counterterrorism, but the containment of that economically booming land — at whatever risk or cost.
The Planet’s New Center of Gravity
The new emphasis on Asia and the containment of China is necessary, top officials insist, because the Asia-Pacific region now constitutes the “center of gravity” of world economic activity. While the United States was bogged down in Iraq and Afghanistan, the argument goes, China had the leeway to expand its influence in the region. For the first time since the end of World War II, Washington is no longer the dominant economic actor there. If the United States is to retain its title as the world’s paramount power, it must, this thinking goes, restore its primacy in the region and roll back Chinese influence. In the coming decades, no foreign policy task will, it is claimed, be more important than this.
In line with its new strategy, the administration has undertaken a number of moves intended to bolster American power in Asia, and so put China on the defensive. These include a decision to deploy an initial 250 U.S. Marines — someday to be upped to 2,500 — to an Australian air base in Darwin on that country’s north coast, and the adoption on November 18th of “the Manila Declaration,” a pledge of closer U.S. military ties with the Philippines.
At the same time, the White House announced the sale of 24 F-16 fighter jets to Indonesia and a visit by Hillary Clinton to isolated Burma, long a Chinese ally — the first there by a secretary of state in 56 years. Clinton has also spoken of increased diplomatic and military ties with Singapore, Thailand, and Vietnam — all countries surrounding China or overlooking key trade routes that China relies on for importing raw materials and exporting manufactured goods.
As portrayed by administration officials, such moves are intended to maximize America’s advantages in the diplomatic and military realm at a time when China dominates the economic realm regionally. In a recent article in Foreign Policy magazine, Clinton revealingly suggested that an economically weakened United States can no longer hope to prevail in multiple regions simultaneously. It must choose its battlefields carefully and deploy its limited assets — most of them of a military nature — to maximum advantage. Given Asia’s strategic centrality to global power, this means concentrating resources there.
“Over the last 10 years,” she writes, “we have allocated immense resources to [Iraq and Afghanistan]. In the next 10 years, we need to be smart and systematic about where we invest time and energy, so that we put ourselves in the best position to sustain our leadership [and] secure our interests… One of the most important tasks of American statecraft over the next decade will therefore be to lock in a substantially increased investment — diplomatic, economic, strategic, and otherwise — in the Asia-Pacific region.”
Such thinking, with its distinctly military focus, appears dangerously provocative. The steps announced entail an increased military presence in waters bordering China and enhanced military ties with that country’s neighbors — moves certain to arouse alarm in Beijing and strengthen the hand of those in the ruling circle (especially in the Chinese military leadership) who favor a more activist, militarized response to U.S. incursions. Whatever forms that takes, one thing is certain: the leadership of the globe’s number two economic power is not going to let itself appear weak and indecisive in the face of an American buildup on the periphery of its country. This, in turn, means that we may be sowing the seeds of a new Cold War in Asia in 2011.
The U.S. military buildup and the potential for a powerful Chinese counter-thrust have already been the subject of discussion in the American and Asian press. But one crucial dimension of this incipient struggle has received no attention at all: the degree to which Washington’s sudden moves have been dictated by a fresh analysis of the global energy equation, revealing (as the Obama administration sees it) increased vulnerabilities for the Chinese side and new advantages for Washington.
The New Energy Equation
For decades, the United States has been heavily dependent on imported oil, much of it obtained from the Middle East and Africa, while China was largely self-sufficient in oil output. In 2001, the United States consumed 19.6 million barrels of oil per day, while producing only nine million barrels itself. The dependency on foreign suppliers for that 10.6 million-barrel shortfall proved a source of enormous concern for Washington policymakers. They responded by forging ever closer, more militarized ties with Middle Eastern oil producers and going to war on occasion to ensure the safety of U.S. supply lines.
In 2001, China, on the other hand, consumed only five million barrels per day and so, with a domestic output of 3.3 million barrels, needed to import only 1.7 million barrels. Those cold, hard numbers made its leadership far less concerned about the reliability of the country’s major overseas providers — and so it did not need to duplicate the same sort of foreign policy entanglements that Washington had long been involved in.
Now, so the Obama administration has concluded, the tables are beginning to turn. As a result of China’s booming economy and the emergence of a sizeable and growing middle class (many of whom have already bought their first cars), the country’s oil consumption is exploding. Running at about 7.8 million barrels per day in 2008, it will, according to recent projections by the U.S. Department of Energy, reach 13.6 million barrels in 2020, and 16.9 million in 2035. Domestic oil production, on the other hand, is expected to grow from 4.0 million barrels per day in 2008 to 5.3 million in 2035. Not surprisingly, then, Chinese imports are expected to skyrocket from 3.8 million barrels per day in 2008 to a projected 11.6 million in 2035 — at which time they will exceed those of the United States.
The U.S., meanwhile, can look forward to an improved energy situation. Thanks to increased production in “tough oil” areas of the United States, including the Arctic seas off Alaska, the deep waters of the Gulf of Mexico, and shale formations in Montana, North Dakota, and Texas, future imports are expected to decline, even as energy consumption rises. In addition, more oil is likely to be available from the Western Hemisphere rather than the Middle East or Africa. Again, this will be thanks to the exploitation of yet more “tough oil” areas, including the Athabasca tar sands of Canada, Brazilian oil fields in the deep Atlantic, and increasingly pacified energy-rich regions of previously war-torn Colombia. According to the Department of Energy, combined production in the United States, Canada, and Brazil is expected to climb by 10.6 million barrels per day between 2009 and 2035 — an enormous jump, considering that most areas of the world are expecting declining output.
Whose Sea Lanes Are These Anyway?
From a geopolitical perspective, all this seems to confer a genuine advantage on the United States, even as China becomes ever more vulnerable to the vagaries of events in, or along, the sea lanes to distant lands. It means Washington will be able to contemplate a gradual loosening of its military and political ties to the Middle Eastern oil states that have dominated its foreign policy for so long and have led to those costly, devastating wars.
Indeed, as President Obama said in Canberra, the U.S. is now in a position to begin to refocus its military capabilities elsewhere. “After a decade in which we fought two wars that cost us dearly,” he declared, “the United States is turning our attention to the vast potential of the Asia-Pacific region.”
For China, all this spells potential strategic impairment. Although some of China’s imported oil will travel overland through pipelines from Kazakhstan and Russia, the great majority of it will still come by tanker from the Middle East, Africa, and Latin America over sea lanes policed by the U.S. Navy. Indeed, almost every tanker bringing oil to China travels across the South China Sea, a body of water the Obama administration is now seeking to place under effective naval control.
By securing naval dominance of the South China Sea and adjacent waters, the Obama administration evidently aims to acquire the twenty-first century energy equivalent of twentieth-century nuclear blackmail. Push us too far, the policy implies, and we’ll bring your economy to its knees by blocking your flow of vital energy supplies. Of course, nothing like this will ever be said in public, but it is inconceivable that senior administration officials are not thinking along just these lines, and there is ample evidence that the Chinese are deeply worried about the risk — as indicated, for example, by their frantic efforts to build staggeringly expensive pipelines across the entire expanse of Asia to the Caspian Sea basin.
As the underlying nature of the new Obama strategic blueprint becomes clearer, there can be no question that the Chinese leadership will, in response, take steps to ensure the safety of China’s energy lifelines. Some of these moves will undoubtedly be economic and diplomatic, including, for example, efforts to court regional players like Vietnam and Indonesia as well as major oil suppliers like Angola, Nigeria, and Saudi Arabia. Make no mistake, however: others will be of a military nature. A significant buildup of the Chinese navy — still small and backward when compared to the fleets of the United States and its principal allies — would seem all but inevitable. Likewise, closer military ties between China and Russia, as well as with the Central Asian member states of the Shanghai Cooperation Organization (Kazakhstan, Kyrgyzstan, Tajikistan, and Uzbekistan), are assured.
In addition, Washington could now be sparking the beginnings of a genuine Cold-War-style arms race in Asia, which neither country can, in the long run, afford. All of this is likely to lead to greater tension and a heightened risk of inadvertent escalation arising out of future incidents involving U.S., Chinese, and allied vessels — like the one that occurred in March 2009 when a flotilla of Chinese naval vessels surrounded a U.S. anti-submarine warfare surveillance ship, the Impeccable, and almost precipitated a shooting incident. As more warships circulate through these waters in an increasingly provocative fashion, the risk that such an incident will result in something far more explosive can only grow.
Nor will the potential risks and costs of such a military-first policy aimed at China be restricted to Asia. In the drive to promote greater U.S. self-sufficiency in energy output, the Obama administration is giving its approval to production techniques — Arctic drilling, deep-offshore drilling, and hydraulic fracturing — that are guaranteed to lead to further Deepwater Horizon-style environmental catastrophe at home. Greater reliance on Canadian tar sands, the “dirtiest” of energies, will result in increased greenhouse gas emissions and a multitude of other environmental hazards, while deep Atlantic oil production off the Brazilian coast and elsewhere has its own set of grim dangers.
All of this ensures that, environmentally, militarily, and economically, we will find ourselves in a more, not less, perilous world. The desire to turn away from disastrous land wars in the Greater Middle East to deal with key issues now simmering in Asia is understandable, but choosing a strategy that puts such an emphasis on military dominance and provocation is bound to provoke a response in kind. It is hardly a prudent path to head down, nor will it, in the long run, advance America’s interests at a time when global economic cooperation is crucial. Sacrificing the environment to achieve greater energy independence makes no more sense.
A new Cold War in Asia and a hemispheric energy policy that could endanger the planet: it’s a fatal brew that should be reconsidered before the slide toward confrontation and environmental disaster becomes irreversible. You don’t have to be a seer to know that this is not the definition of good statesmanship, but of the march of folly.
Michael T. Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and the author, most recently, of Rising Powers, Shrinking Planet. A documentary movie version of his previous book, Blood and Oil, is available from the Media Education Foundation. To listen to Timothy MacBain’s latest Tomcast audio interview in which Klare discusses the American military build-up in the Pacific, click here or download it to your iPod here.
Copyright 2011 Michael T. Klare
]]>America and Oil. It’s like bacon and eggs, Batman and Robin. As the old song lyric went, you can’t have one without the other. Once upon a time, it was also a surefire formula for national greatness and global [...]]]>
America and Oil. It’s like bacon and eggs, Batman and Robin. As the old song lyric went, you can’t have one without the other. Once upon a time, it was also a surefire formula for national greatness and global preeminence. Now, it’s a guarantee of a trip to hell in a hand basket. The Chinese know it. Does Washington?
America’s rise to economic and military supremacy was fueled in no small measure by its control over the world’s supply of oil. Oil powered the country’s first giant corporations, ensured success in World War II, and underlay the great economic boom of the postwar period. Even in an era of nuclear weapons, it was the global deployment of oil-powered ships, helicopters, planes, tanks, and missiles that sustained America’s superpower status during and after the Cold War. It should come as no surprise, then, that the country’s current economic and military decline coincides with the relative decline of oil as a major source of energy.
If you want proof of that economic decline, just check out the way America’s share of the world’s gross domestic product has been steadily dropping, while its once-powerhouse economy now appears incapable of generating forward momentum. In its place, robust upstarts like China and India are posting annual growth rates of 8% to 10%. When combined with the growing technological prowess of those countries, the present figures are surely just precursors to a continuing erosion of America’s global economic clout.
Militarily, the picture appears remarkably similar. Yes, a crack team of SEAL commandos did kill Osama bin Laden, but that single operation — greeted in the United States with a jubilation more appropriate to the ending of a major war — hardly made up for the military’s lackluster performance in two recent wars against ragtag insurgencies in Iraq and Afghanistan. If anything, almost a decade after the Taliban was overthrown, it has experienced a remarkable resurgence even facing the full might of the U.S., while the assorted insurgent forces in Iraq appear to be holding their own. Meanwhile, Iran — that bête noire of American power in the Middle East — seem as powerful as ever. Al Qaeda may be on the run, but as recent developments in Egypt, Libya, Syria, Yemen, and unstable Pakistan suggest, the United States wields far less clout and influence in the region now than it did before it invaded Iraq in 2003.
If American power is in decline, so is the relative status of oil in the global energy equation. In the 2000 edition of its International Energy Outlook, the Energy Information Administration (EIA) of the U.S. Department of Energy confidently foresaw ever-expanding oil production in Africa, Alaska, the Persian Gulf area, and the Gulf of Mexico, among other areas. It predicted, in fact, that world oil output would reach 97 million barrels per day in 2010 and a staggering 115 million barrels in 2020. EIA number-crunchers concluded as well that oil would long retain its position as the world’s leading source of energy. Its 38% share of the global energy supply, they said, would remain unchanged.
What a difference a decade makes. By 2010, a new understanding about the natural limits of oil production had sunk in at the EIA and its experts were predicting a disappointingly modest petroleum future. In that year, world oil output had reached just 82 million barrels per day, a stunning 15 million less than expected. Moreover, in the 2010 edition of its International Energy Outlook, the EIA was now projecting 2020 output at 85 million barrels per day, hardly more than the 2010 level and 30 million barrels below its projections of just a decade earlier, which were relegated to the dustbin of history. (Such projections, by the way, are for conventional, liquid petroleum and exclude “tough” and “dirty” sources that imply energy desperation — like Canadian tar sands, shale oil, and other “unconventional” fuels.)
The most recent EIA projections also show oil’s share of the world total energy supply — far from remaining constant at 38% — had already dropped to 35% in 2010 and was projected to continue declining to 32% in 2020 and 30% in 2035. In its place, natural gas and renewable sources of energy are expected to assume ever more prominent roles.
So here’s the question all of us should consider, in part because until now no one has: Are the decline of the United States and the decline of oil connected? Careful analysis suggests that there are good reasons to believe they are.
From Standard Oil to the Carter Doctrine
More than 100 years ago, America’s first great economic expansion abroad was spearheaded by its giant oil companies, notably John D. Rockefeller’s Standard Oil Company — a saga told with great panache in Daniel Yergin’s classic book The Prize. These companies established powerful beachheads in Mexico and Venezuela, and later in parts of Asia, North Africa, and of course the Middle East. As they became ever more dependent on the extraction of oil in distant lands, American foreign policy began to be reorganized around acquiring and protecting U.S. oil concessions in major producing areas.
With World War II and the Cold War, oil and U.S. national security became thoroughly intertwined. After all, the United States had prevailed over the Axis powers in significant part because it possessed vast reserves of domestic petroleum while Germany and Japan lacked them, depriving their forces of vital fuel supplies in the final years of the war. As it happened, though, the United States was using up its domestic reserves so rapidly that, even before World War II was over, Washington turned its attention to finding new overseas sources of crude that could be brought under American control. As a result, Saudi Arabia, Kuwait, and a host of other Middle Eastern producers would become key U.S. oil suppliers under American military protection.
There can be little question that, for a time, American domination of world oil production would prove a potent source of economic and military power. After World War II, an abundance of cheap U.S. oil spurred the development of vast new industries, including civilian air travel, highway construction, a flood of suburban housing and commerce, mechanized agriculture, and plastics.
Abundant oil also underlay the global expansion of the country’s military power, as the Pentagon garrisoned the world while becoming one of the planet’s great oil guzzlers. Its global dominion came to rest on an ever-expanding array of oil-powered ships, planes, tanks, and missiles. As long as the Middle East — and especially Saudi Arabia — served essentially as an American gas station and oil remained a cheap commodity, all this was relatively painless.
In addition, thanks to its control of Middle Eastern oil, Washington had its hand on the economic jugular of Europe and Japan, both of which remain highly dependent on imports from the region. Not surprisingly, then, one president after another insisted Washington would not permit any rival to challenge American control of that oil jugular — a principle enshrined in the Carter Doctrine of January 1980, which stated that the United States would go to war if any hostile power threatened the flow of Persian Gulf oil.
The use of military force, in accordance with that doctrine, has been a staple of American foreign policy since 1987, when President Ronald Reagan first applied the “principle” by authorizing U.S. warships to escort Kuwaiti tankers during the Iran-Iraq War. George H. W. Bush invoked the same principle when he authorized American military intervention during the first Gulf War of 1990-1991, as did Bill Clinton when he ordered missile attacks on Iraq in the late 1990s and George W. Bush when he launched the invasion of Iraq in 2003.
At that moment, the United States and oil seemed at the pinnacle of their power. As the victor in the Cold War and then the first Gulf War, the American military was ranked supreme, with no conceivable challenger on the horizon. And nowhere were there more fervent believers in “unilateralist” America’s ability to “shock and awe” the planet than in Washington. The nation’s economy still appeared relatively robust as a major housing bubble was just beginning to form. China’s economy was then a paltry 15% as big as ours. Only seven years later, it would be approximately 40% as large. By invading Iraq, Secretary of Defense Donald Rumsfeld planned to demonstrate the crushing superiority of America’s new high-tech weaponry, while setting the stage for further military exploits in the region, including a possible attack on Iran. (A neocon quip caught the mood of the moment: “Everyone wants to go to Baghdad. Real men want to go to Tehran.”)
The future of oil seemed no less robust in 2003: demand was brisk, crude prices ranged from about $25 to $30 per barrel, and the concept of “peak oil” — the notion that planetary supplies were more limited than imagined, that in the near future production would reach its peak and subsequently contract — was still considered laughable by most industry experts. By invading Iraq and setting up permanent military bases at the very heart of the global oil heartlands, the White House expected to ensure continued control over the flow of Persian Gulf oil and gain access to Iraq’s voluminous reserves, the largest in the world after those of Saudi Arabia and Iran.
From an imperial point of view, it was a beautiful dream from which Americans were destined to awaken abruptly. As a start, it quickly became apparent that American technological prowess was no panacea for urban guerrilla warfare, and so a vast occupation army was soon needed to “pacify” Iraq — and then pacify it again, and again, and again. A similar dilemma arose in Afghanistan, where a tribal-based religious insurgency proved remarkably immune to superior American firepower. To sustain hundreds of thousands of American soldiers in those distant, often inaccessible areas, the Department of Defense became the world’s single biggest consumer of oil, burning more on a daily basis than the entire nation of Sweden — this, at a time when the price of crude rose to $50, then $80, and finally soared over the $100 mark. Procuring and delivering ever-increasing amounts of gasoline, diesel, and jet fuel to American forces in Iraq and Afghanistan may not be the principal reason for the wars’ spiraling costs, but it certainly ranks among the major causes. (Just the price of providing air conditioning to American troops in those two countries is now estimated at approximately $20 billion a year.)
With oil likely to prove increasingly scarce and costly, the Department of Defense is being forced to reexamine its fundamental operating principles when it comes to energy. Secretary of Defense Rumsfeld’s notion that troops could be replaced by growing numbers of oil-powered super-weapons no longer appears viable, even for a power already garrisoning much of the planet for which “unending” war has become the new norm.
Yes, the Pentagon is looking into the use of biofuels, solar arrays, and other green alternatives to petroleum to power its planes and tanks, but any such future still seems an almost inconceivably long way off. And yet the thought of more wars involving the commitment of vast numbers of ground troops to protracted counterinsurgency operations in distant parts of the Greater Middle East at $400 or more for every gallon of gas used appears increasingly unpalatable for the globe’s former “sole superpower.” (Hence, the sudden burst of enthusiasm over drone wars.) Seen from this perspective, the decline of America and the decline of oil appear closely connected indeed.
Don’t Bet on Washington
And this is hardly the only apparent connection. Because the American economy is so closely tied to oil, it is especially vulnerable to oil’s growing scarcity, price volatility, and the relative paucity of its suppliers. Consider this: at present, the United States obtains about 40% of its total energy supply from oil, far more than any other major economic power. This means that when prices rise or oil supplies are disrupted for any reason — hurricanes in the Gulf of Mexico, war in the Middle East, environmental disasters of any sort — the economy is at particular risk. While a burst housing bubble and financial shenanigans lay behind the Great Recession that began in 2008, it’s worth remembering that it also coincided with the beginning of a stratospheric rise in oil prices. As anyone who has pulled into a gas station knows, at an average price of nearly $3.70 a gallon for regular gas, the staying power of high-priced oil has crippled what, until recently, was being called a “weak recovery.”
Despite the great debt debate in Washington, oil is a factor seldom mentioned when American indebtedness comes up. And yet the United States imports 50% to 60% of its oil supply, and with prices averaging at least $80 to $90 per barrel, we’re sending approximately $1 billion every day to foreign oil providers. These payments constitute the single biggest contribution to the country’s balance-of-payments deficit and so is a major source of the nation’s economic weakness.
Consider for comparison our leading economic rival: China. That country relies on oil for only about 20% of its total energy supply, about half as much as we do. Instead, the Chinese have turned to coal, which they possess in great abundance and can produce at a relatively low cost. (China, of course, pays a heavy environmental price for its coal dependency.) The Chinese do import some petroleum, but considerably less than the U.S., so their import expenses are considerably smaller. Nor do its oil-import costs have the same enfeebling effect, since China enjoys a positive balance of trade (in part, at America’s expense). As a result, when oil prices soared to record heights in 2008 and again in 2011, Beijing experienced none of the trauma felt in Washington.
No doubt many factors explain the startling rise of the Chinese economy, including lower costs of production and weaker environmental regulations. It is hard, however, to avoid the conclusion that our greater reliance on oil as it begins its decline has played a significant role in the changing balance of economic power between the two countries.
All this leads to a critical question: How should America respond to these developments in the years ahead?
As a start, there can be no question that the United States needs to move quickly to reduce its reliance on oil and increase the availability of other energy sources, especially renewable ones that pose no threat to the environment. This is not merely a matter of reducing our reliance on imported oil, as some have suggested. As long as oil remains our preeminent source of energy, we will be painfully vulnerable to the vicissitudes of the global oil market, wherever problems may arise. Only by embracing forms of energy immune to international disruption and capable of promoting investment at home can the foundations be laid for future economic progress. Of course, this is easy enough to write, but with Washington in the grip of near-total political paralysis, it appears that continuing American decline, possibly of a precipitous sort, could be in the cards.
And don’t think that China will get away scot-free either. If it doesn’t quickly embrace the new energy technologies, the environmental costs of its excessive reliance on coal will, sooner or later, cripple its development as well. Unlike Washington, however, the Chinese leadership not only recognizes this, but is acting on it by making colossal investments in green energy technologies. If China succeeds in dominating this field — as has already begun to happen — it could leave the United States in the dust when it comes to economic growth. Ditching oil for the new energy technologies should be America’s top economic priority, but if you’re in a betting mood, you probably shouldn’t put your money on Washington.
Michael T. Klare is a professor of peace and world security studies at Hampshire College, a TomDispatch regular, and the author, most recently, of Rising Powers, Shrinking Planet. A documentary movie version of his previous book, Blood and Oil, is available from the Media Education Foundation.
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