The Empire at Oil's End

By Mike Davis, Tomdispatch.com. Posted May 29, 2004.

Angry truckers celebrated this May Day by blocking freeways in Los Angeles and container terminals in Oakland and Stockton. With diesel fuel prices in California soaring to record levels in recent weeks, the earnings of independent container-haulers have dropped below the poverty line. Lacking the power of big trucking companies to pass rising fuel costs onto customers, the port drivers -- many of them immigrants from Mexico -- have had little choice but to share some of their pain with the public.

In one action, abandoned big rigs blocked the morning commute just south of downtown Los Angeles on Interstate 5, making tens of thousands of motorists temporary hostages of the fuel crisis. As one exasperated commuter complained to a radio station, "This is really the end of the world."

Perhaps it is. As Venezuela's energy minister Rafael Ramirez told the Financial Times on May 24, "The history of cheap oil may have ended."

Although real (inflation-adjusted) fuel prices are still well below their 1981 maximum, an ever-growing chorus of voices, ranging from former UK environment minister Michael Meacher to National Geographic magazine, echo Ramirez. We will soon arrive, they claim, at the summit of "Hubbert's peak."

M. King Hubbert was a celebrated oil geologist who in 1956 correctly prophesized that U.S. petroleum production would peak in the early 1970s, then irreversibly decline. In 1974 he likewise predicted that world oil fields would achieve their maximum output in 2000; a figure later revised by his acolytes to somewhere between 2006 and 2010.

If the curve of global oil production is indeed near the point of descent, as these experts believe, it has epochal implications for the world economy. More expensive oil will undercut China's energy-intensive boom, return OECD countries to the bad old days of stagflation, and accelerate the environmentally destructive exploitation of low-grade oil tars and shales.

Most of all, it will devastate the economies of oil-importing third-world countries. Poor farmers will be unable to purchase petroleum-based artificial fertilizers just as poor urban-dwellers will be unable to afford bus fares. (Already, rising oil prices have brought chronic blackouts to cities throughout the globe's southern hemisphere.)

The only certain beneficiaries of this coming economic chaos will be the big five oil corporations and their corrupt partners: the Nigerian generals, Saudi princes, Russian kleptocrats, and their ilk. Crude oil truly will become black gold.

The rising value of an increasingly scarce resource is a form of monopoly rent, and a future permanent crude-oil regime of $50 per barrel (or higher) would transfer at least $1 trillion per decade from consumers to oil producers. In plain English, this would be the greatest robbery by a rentier elite in world history. Someday, Enron may seem like the equivalent of a liquor store hold-up by comparison.

The oilmen in the White House, of course, have the best view of the lush terrain on the far side of Hubbert's peak. No wonder, then, that a map of the "war against terrorism" corresponds with such uncanny accuracy to the geography of oil fields and proposed pipelines. From Kazakhstan to Ecuador, American combat boots are sticky with oil.

To cite two recent, almost random examples: First, the Malaysian foreign minister warned in late May that Washington was exaggerating the threat of terrorist piracy in the Straits of Malacca in order to justify the deployment of forces there -- right at the chokepoint of East Asia's oil supply.

Second, T. Christian Miller, reporting in the Los Angeles Times, revealed that U.S. Special Forces, as well as the CIA and private American security contractors, are integrally involved in an ongoing reign of terror in Columbia's Arauca province. The aim of "Operation Red Moon" is to annihilate the leftwing ELN guerrillas threatening the oilfields and pipelines operated by LA-based Occidental Petroleum. The result, Miller reports, has been a slow-motion massacre.

"Mass arrests of politicians and union leaders have become common. Refugees fleeing combat have streamed into local cities. And killings have soared as right-wing paramilitaries have targeted leftwing critics."

Latin America -- Mexico, Venezuela, Columbia and Ecuador -- currently supplies more oil to the United States than the Middle East, and, from the very beginning, the White House has defined the War on Terrorism as including counterinsurgency in the Western Hemisphere.

Is there a pattern here? Indeed, is there a US master plan for the control of oil in an age of diminishing supply and soaring prices? Obvious questions, but don't ask a Democrat. Although many ordinary Americans have little difficulty connecting the dots (to use a currently popular expression) linking blood to oil, the Democrats, with few exceptions, refuse to ask any deep or probing questions about the economic architecture of the New American Empire.

Thus John Kerry has waffled between advocating an energy version of Fortress America (via the integration of Canadian and Mexican oil resources) and complaints that the Bush administration hasn't put enough pressure on OPEC, especially Saudi Arabia, to expand production. One of the richest members of the Senate in history, Kerry seems congenitally allergic to the kind of anti-corporate populism and bold muckraking that has made Michael Moore an international anti-Bush icon.

Too bad. A genuinely progressive candidate might have found a rich precedent in the proceedings of a celebrated 1930s Senate investigation into the role of the international arms trade in fomenting war and intervention. The Nye Committee, named after the senator from North Dakota who chaired it, probed deep into the shadow world of arms dealers and munitions corporations. Is there any less urgent need to call today for congressional hearings into the oil industry's comprehensive corruption of US foreign policy?

Mike Davis is the author of Dead Cities: And Other Tales, Ecology of Fear, and co-author of Under the Perfect Sun: the San Diego Tourists Never See, among other books.

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