Presidential decisions often turn out to be far less significant than imagined, but every now and then what a president decides actually determines how the world turns. Such is the case with the Keystone XL pipeline, which, if built, is slated to bring some of the “dirtiest,” carbon-rich oil on the planet from Alberta, Canada, to refineries on the U.S. Gulf Coast. In the near future, President Obama is expected to give its construction a definitive thumbs up or thumbs down, and the decision he makes could prove far more important than anyone imagines. It could determine the fate of the Canadian tar-sands industry and, with it, the future well-being of the planet. If that sounds overly dramatic, let me explain.

Sometimes, what starts out as a minor skirmish can wind up determining the outcome of a war — and that seems to be the case when it comes to the mounting battle over the Keystone XL pipeline. If given the go-ahead by President Obama, it will daily carry more than 700,000 barrels of tar-sands oil to those Gulf Coast refineries, providing a desperately needed boost to the Canadian energy industry. If Obama says no, the Canadians (and their American backers) will encounter possibly insuperable difficulties in exporting their heavy crude oil, discouraging further investment and putting the industry’s future in doubt.

The battle over Keystone XL was initially joined in the summer of 2011, when environmental writer and climate activist Bill McKibben and 350.org, which he helped found, organized a series of non-violent anti-pipeline protests in front of the White House to highlight the links between tar-sands production and the accelerating pace of climate change. At the same time, farmers and politicians in Nebraska, through which the pipeline is set to pass, expressed grave concern about its threat to that state’s crucial aquifers. After all, tar-sands crude is highly corrosive, and leaks are a notable risk.

In mid-January 2012, in response to those concerns, other worries about the pipeline, and perhaps a looming presidential campaign season, Obama postponed a decision on completing the controversial project. (He, not Congress, has the final say, since it will cross an international boundary.) Now, he must decide on a suggested new route that will, supposedly, take Keystone XL around those aquifers and so reduce the threat to Nebraska’s water supplies.

Ever since the president postponed the decision on whether to proceed, powerful forces in the energy industry and government have been mobilizing to press ever harder for its approval. Its supporters argue vociferously that the pipeline will bring jobs to America and enhance the nation’s “energy security” by lessening its reliance on Middle Eastern oil suppliers. Their true aim, however, is far simpler: to save the tar-sands industry (and many billions of dollars in U.S. investments) from possible disaster.

Just how critical the fight over Keystone has become in the eyes of the industry is suggested by a recent pro-pipeline editorial in the trade publication Oil & Gas Journal:

Controversy over the Keystone XL project leaves no room for compromise. Fundamental views about the future of energy are in conflict. Approval of the project would acknowledge the rich potential of the next generation of fossil energy and encourage its development. Rejection would foreclose much of that potential in deference to an energy utopia few Americans support when they learn how much it costs.

Opponents of Keystone XL, who are planning a mass demonstration at the White House on Feb. 17, have also come to view the pipeline battle in epic terms. “Alberta’s tar sands are the continent’s biggest carbon bomb,” McKibben wrote at TomDispatch. “If you could burn all the oil in those tar sands, you’d run the atmosphere’s concentration of carbon dioxide from its current 390 parts per million (enough to cause the climate havoc we’re currently seeing) to nearly 600 parts per million, which would mean if not hell, then at least a world with a similar temperature.” Halting Keystone would not by itself prevent those high concentrations, he argued, but would impede the production of tar sands, stop that “carbon bomb” from further heating the atmosphere, and create space for a transition to renewables. “Stopping Keystone will buy time,” he says, “and hopefully that time will be used for the planet to come to its senses around climate change.”

A pipeline with nowhere to go?

Why has the fight over a pipeline, which, if completed, would provide only 4 percent of the U.S. petroleum supply, assumed such strategic significance? As in any major conflict, the answer lies in three factors: logistics, geography, and timing.

Start with logistics and consider the tar sands themselves or, as the industry and its supporters in government prefer to call them, “oil sands.” Neither tar nor oil, the substance in question is a sludge-like mixture of sand, clay, water, and bitumen (a degraded, carbon-rich form of petroleum). Alberta has a colossal supply of the stuff — at least a trillion barrels in known reserves, or the equivalent of all the conventional oil burned by humans since the onset of commercial drilling in 1859. Even if you count only the reserves that are deemed extractible by existing technology, its tar sands reportedly are the equivalent of 170 billion barrels of conventional petroleum — more than the reserves of any nation except Saudi Arabia and Venezuela. The availability of so much untapped energy in a country like Canada, which is private-enterprise-friendly and where the political dangers are few, has been a magnet for major international energy firms. Not surprisingly, many of them, including ExxonMobil, Chevron, ConocoPhillips, and Royal Dutch Shell, have invested heavily in tar-sands operations.

Tar sands, however, bear little resemblance to the conventional oil fields which these companies have long exploited. They must be treated in various energy-intensive ways to be converted into a transportable liquid and then processed even further into usable products. Some tar sands can be strip-mined like coal and then “upgraded” through chemical processing into a synthetic crude oil — SCO, or “syncrude.” Alternatively, the bitumen can be pumped from the ground after the sands are exposed to steam, which liquefies the bitumen and allows its extraction with conventional oil pumps. The latter process, known as steam-assisted gravity drainage (SAGD), produces a heavy crude oil. It must, in turn, be diluted with lighter crudes for transportation by pipeline to specialized refineries equipped to process such oil, most of which are located on the Gulf Coast.

Extracting and processing tar sands is an extraordinarily expensive undertaking, far more so than most conventional oil drilling operations. Considerable energy is needed to dig the sludge out of the ground or heat the water into steam for underground injection; then, additional energy is needed for the various upgrading processes. The environmental risks involved are enormous (even leaving aside the vast amounts of greenhouse gases that the whole process will pump into the atmosphere). The massive quantities of water needed for SAGD and those upgrading processes, for example, become contaminated with toxic substances. Once used, they cannot be returned to any water source that might end up in human drinking supplies — something environmentalists say is already occurring. All of this and the expenses involved mean that the multibillion-dollar investments needed to launch a tar-sands operation can only pay off if the final product fetches a healthy price in the marketplace.

And that’s where geography enters the picture. Alberta is theoretically capable of producing 5 to 6 million barrels of tar-sands oil per day. In 2011, however, Canada itself consumed only 2.3 million barrels of oil per day, much of it supplied by conventional (and cheaper) oil from fields in Saskatchewan and Newfoundland. That number is not expected to rise appreciably in the foreseeable future. No less significant, Canada’s refining capacity for all kinds of oil is limited to 1.9 million barrels per day, and few of its refineries are equipped to process tar-sands-style heavy crude. This leaves the producers with one strategic option: exporting the stuff.

And that’s where the problems really begin. Alberta is an interior province and so cannot export its crude by sea. Given the geography, this leaves only three export options: pipelines heading east across Canada to ports on the Atlantic, pipelines heading west across the Rockies to ports in British Columbia, or pipelines heading south to refineries in the United States.

Alberta’s preferred option is to send the preponderance of its tar-sands oil to its biggest natural market, the United States. At present, Canadian pipeline companies do operate a number of conduits that deliver some of this oil to the U.S., notably the original Keystone conduit extending from Hardisty, Alberta, to Illinois and then southward to Cushing, Okla. But these lines can carry less than 1 million barrels of crude per day, and so will not permit the massive expansion of output the industry is planning for the next decade or so.

In other words, the only pipeline now under development that would significantly expand Albertan tar-sands exports is Keystone XL. It is vitally important to the tar-sands producers because it offers the sole short-term — or possibly even long-term — option for the export and sale of the crude output now coming on line at dozens of projects being developed across northern Alberta. Without it, these projects will languish and Albertan production will have to be sold at a deep discount — at, that is, a per-barrel price that could fall below production costs, making further investment in tar sands unattractive. In January, Canadian tar-sands oil was already selling for $30-$40 less than West Texas Intermediate (WTI), the standard U.S. blend.

The pipelines that weren’t

Like an army bottled up geographically and increasingly at the mercy of enemy forces, the tar-sands producers see the completion of Keystone XL as their sole realistic escape route to survival. “Our biggest problem is that Alberta is landlocked,” the province’s Finance Minister Doug Horner said in January. “In fact, of the world’s major oil-producing jurisdictions, Alberta is the only one with no direct access to the ocean. And until we solve this problem … the [price] differential will remain large.”

Logistics, geography, and finally timing. A presidential stamp of approval on the building of Keystone XL will save the tar-sands industry, ensuring them enough return to justify their massive investments. It would also undoubtedly prompt additional investments in tar-sands projects and further production increases by an industry that assumed opposition to future pipelines had been weakened by this victory.

A presidential thumbs-down and resulting failure to build Keystone XL, however, could have lasting and severe consequences for tar-sands production. After all, no other export link is likely to be completed in the near-term. The other three most widely discussed options – the Northern Gateway pipeline to Kitimat, British Columbia, an expansion of the existing Trans Mountain pipeline to Vancouver, British Columbia, and a plan to use existing, conventional-oil conduits to carry tar-sands oil across Quebec, Vermont, and New Hampshire to Portland, Maine — already face intense opposition, with initial construction at best still years in the future.

The Northern Gateway project, proposed by Canadian pipeline company Enbridge, would stretch from Bruderheim in northern Alberta to Kitimat, a port on Charlotte Sound and the Pacific. If completed, it would allow the export of tar-sands oil to Asia, where Canadian Prime Minister Stephen Harper sees a significant future market (even though few Asian refineries could now process the stuff). But unlike oil-friendly Alberta, British Columbia has a strong pro-environmental bias and many senior provincial officials have expressed fierce opposition to the project. Moreover, under the country’s constitution, native peoples over whose land the pipeline would have to travel must be consulted on the project — and most tribal communities are adamantly opposed to its construction.

Another proposed conduit — an expansion of the existing Trans Mountain pipeline from Edmonton to Vancouver — presents the same set of obstacles and, like the Northern Gateway project, has aroused strong opposition in Vancouver.

This leaves the third option, a plan to pump tar-sands oil to Ontario and Quebec and then employ an existing pipeline now used for oil imports. It connects to a terminal in Casco Bay, near Portland, Maine, where the Albertan crude would begin the long trip by ship to those refineries on the Gulf Coast. Although no official action has yet been taken to allow the use of the U.S. conduit for this purpose, anti-pipeline protests have already erupted in Portland, including one on Jan. 26 that attracted more than 1,400 people.

With no other pipelines in the offing, tar-sands producers are increasing their reliance on deliveries by rail. This is producing boom times for some long-haul freight carriers, but will never prove sufficient to move the millions of barrels in added daily output expected from projects now coming on line.

The conclusion is obvious: Without Keystone XL, the price of tar-sands oil will remain substantially lower than conventional oil (as well as unconventional oil extracted from shale formations in the United States), discouraging future investment and dimming the prospects for increased output. In other words, as Bill McKibben hopes, much of it will stay in the ground.

Industry officials are painfully aware of their predicament. In an Annual Information Form released at the end of 2011, Canadian Oil Sands Limited, owner of the largest share of Syncrude Canada (one of the leading producers of tar-sands oil) noted:

A prolonged period of low crude oil prices could affect the value of our crude oil properties and the level of spending on growth projects and could result in curtailment of production … Any substantial and extended decline in the price of oil or an extended negative differential for SCO compared to either WTI or European Brent Crude would have an adverse effect on the revenues, profitability, and cash flow of Canadian Oil Sands and likely affect the ability of Canadian Oil Sands to pay dividends and repay its debt obligations.

The stakes in this battle could not be higher. If Keystone XL fails to win the president’s approval, the industry will certainly grow at a far slower pace than forecast and possibly witness the failure of costly ventures, resulting in an industry-wide contraction. If approved, however, production will soar and global warming will occur at an even faster rate than previously projected. In this way, a presidential decision will have an unexpectedly decisive and lasting impact on all our lives.

Last winter, fossil-fuel enthusiasts began trumpeting the dawn of a new “golden age of oil” that would kick-start the American economy, generate millions of new jobs, and free this country from its dependence on imported petroleum. Ed Morse, head commodities analyst at Citibank, was typical. In the Wall Street Journal he crowed, “The United States has become the fastest-growing oil and gas producer in the world, and is likely to remain so for the rest of this decade and into the 2020s.”

Once this surge in U.S. energy production was linked to a predicted boom in energy from Canada’s tar-sands reserves, the results seemed obvious and uncontestable. “North America,” he announced, “is becoming the new Middle East.” Many other analysts have elaborated similarly on this rosy scenario, which now provides the foundation for Mitt Romney’s plan to achieve “energy independence” by 2020.

By employing impressive new technologies — notably deepwater drilling and hydraulic fracturing (or fracking) — energy companies were said to be on the verge of unlocking vast new stores of oil in Alaska, the Gulf of Mexico, and shale formations across the United States. “A ‘Great Revival’ in U.S. oil production is taking shape — a major break from the near 40-year trend of falling output,” James Burkhard of IHS Cambridge Energy Research Associates (CERA) told the Senate Committee on Energy and Natural Resources [PDF] in January 2012.

Increased output was also predicted elsewhere in the Western Hemisphere, especially Canada and Brazil. “The outline of a new world oil map is emerging, and it is centered not on the Middle East but on the Western Hemisphere,” Daniel Yergin, chair of CERA, wrote in the Washington Post. “The new energy axis runs from Alberta, Canada, down through North Dakota and South Texas … to huge offshore oil deposits found near Brazil.”

Extreme oil

It turns out, however, that the future may prove far more recalcitrant than these prophets of an American energy cornucopia imagine. To reach their ambitious targets, energy firms will have to overcome severe geological and environmental barriers — and recent developments suggest that they are going to have a tough time doing so.

Consider this: While many analysts and pundits joined in the premature celebration of the new “golden age,” few emphasized that it would rest almost entirely on the exploitation of “unconventional” petroleum resources — shale oil, oil shale, Arctic oil, deep offshore oil, and tar sands (bitumen). As for conventional oil (petroleum substances that emerge from the ground in liquid form and can be extracted using familiar, standardized technology), no one doubts that it will continue its historic decline in North America.

The “unconventional” oil that is to liberate the U.S. and its neighbors from the unreliable producers of the Middle East involves substances too hard or viscous to be extracted using standard technology, or embedded in forbidding locations that require highly specialized equipment for extraction. Think of it as “tough oil.”

Shale oil, for instance, is oil trapped in shale rock. It can only be liberated through the application of concentrated force in a process known as hydraulic fracturing that requires millions of gallons of chemically laced water per “frack,” plus the subsequent disposal of vast quantities of toxic wastewater once the fracking has been completed. Oil shale, or kerogen, is a primitive form of petroleum that must be melted to be useful, a process that itself consumes vast amounts of energy. Tar sands (or “oil sands,” as the industry prefers to call them) must be gouged from the earth using open-pit mining technology or pumped up after first being melted in place by underground steam jets, then treated with various chemicals. Only then can the material be transported to refineries via, for example, the highly controversial Keystone XL pipeline. Similarly, deepwater and Arctic drilling requires the deployment of specialized multimillion-dollar rigs along with enormously costly backup safety systems under the most dangerous of conditions.

All these processes have at least one thing in common: Each pushes the envelope of what is technically possible in extracting oil (or natural gas) from geologically and geographically forbidding environments. They are all, that is, versions of “extreme energy.” To produce them, energy companies will have to drill in extreme temperatures or extreme weather, or use extreme pressures, or operate under extreme danger — or some combination of all of these. In each, accidents, mishaps, and setbacks are guaranteed to be more frequent and their consequences more serious than in conventional drilling operations. The apocalyptic poster child for these processes already played out in 2010 with BP’s Deepwater Horizon disaster in the Gulf of Mexico, and this summer we saw intimations of how it will happen again as a range of major unconventional drilling initiatives — all promising that “golden age” — ran into serious trouble.

Perhaps the most notable example of this was Shell Oil’s costly failure to commence test drilling in the Alaskan Arctic. After investing $4.5 billion and years of preparation, Shell was poised to drill five test wells this summer in the Beaufort and Chukchi seas off Alaska’s northern and northwestern coasts. However, on Sept. 17, a series of accidents and mishaps forced the company to announce that it would suspend operations until next summer — the only time when those waters are largely free of pack ice and so it is safer to drill. [Editor's note: Shell just resumed drilling again this fall, but won't go deep enough to actually hit oil.]

Shell’s problems began early and picked up pace as the summer wore on. On Sept. 10, its Noble Discoverer drill ship was forced to abandon operations at the Burger Prospect, about 70 miles offshore in the Chukchi Sea, when floating sea ice threatened the safety of the ship. A more serious setback occurred later in the month when a containment dome designed to cover any leak that developed at an undersea well malfunctioned during tests in Puget Sound in Washington state. As Clifford Krauss noted in The New York Times, “Shell’s inability to control its containment equipment in calm waters under predictable test conditions suggested that the company would not be able to effectively stop a sudden leak in treacherous Arctic waters, where powerful ice floes and gusty winds would complicate any spill response.”

Shell’s effort was also impeded by persistent opposition from environmentalists and native groups. They have repeatedly brought suit to block its operations on the grounds that Arctic drilling will threaten the survival of marine life essential to native livelihoods and culture. Only after promising to take immensely costly protective measures and winning the support of the Obama administration — fearful of appearing to block “job creation” or “energy independence” during a presidential campaign — did the company obtain the necessary permits to proceed. But some lawsuits remain in play and, with this latest delay, Shell’s opponents will have added time and ammunition.

Officials from Shell insist that the company will overcome all these hurdles and be ready to drill next summer. But many observers view its experience as a deterrent to future drilling in the Arctic. “As long as Shell has not been able to show that they can get the permits and start to drill, we’re a bit skeptical about moving forward,” said Tim Dodson of Norway’s Statoil. That company also owns licenses for drilling in the Chukchi Sea, but has now decided to postpone operations until 2015 at the earliest.

Extreme water

Another unexpected impediment to the arrival of energy’s next “golden age” in North America emerged even more unexpectedly from this summer’s record-breaking drought, which still has 80 percent of U.S. agricultural land in its grip. The energy angle on all this was, however, a surprise.

Any increase in U.S. hydrocarbon output will require greater extraction of oil and gas from shale rock, which can only be accomplished via fracking. More fracking, in turn, means more water consumption. With the planet warming thanks to climate change, such intensive droughts are expected to intensify in many regions, which means rising agricultural demand for less water, including potentially in prime fracking locations like the Bakken formation of North Dakota, the Eagle Ford area of West Texas, and the Marcellus formation in Pennsylvania.

The drought’s impact on fracking became strikingly evident when, in June and July, wells and streams started drying up in many drought-stricken areas and drillers suddenly found themselves competing with hard-pressed food producers for whatever water was available. “The amount of water needed for drilling is a double whammy,” Chris Faulkner, the president and chief executive officer of Breitling Oil & Gas, told Oil & Gas Journal in July. “We’re getting pushback from farmers, and my fear is that it’s going to get worse.” In July, in fact, the situation became so dire in Pennsylvania that the Susquehanna River Basin Commission suspended permits for water withdrawals from the Susquehanna River and its tributaries, forcing some drillers to suspend operations.

If this year’s “endless summer” of unrelenting drought was just a fluke, and we could expect abundant water in the future, the golden age scenario might still be viable. But most climate scientists suggest that severe drought is likely to become the “new normal” in many parts of the United States, putting the fracking boom very much into question. “Bakken and Eagle Ford are our big keys to energy independence,” Faulkner noted.  “Without water, drilling shale gas and oil wells is not possible. A continuing drought could cause our domestic production to decline and derail our road to energy independence in a hurry.”

And then there are those Canadian tar sands. Turning them into “oil” also requires vast amounts of water, and climate-change-related shortages of that vital commodity are also likely in Alberta, Canada, their heartland. In addition, tar-sands production releases far more greenhouse gas emissions than conventional oil production, which has sparked its own fiercely determined opposition in Canada, the United States, and Europe.

In the U.S., opposition to tar sands has until now largely focused on the construction of the Keystone XL pipeline, a $7 billion, 2,000-mile conduit that would carry diluted tar-sands oil from Hardisty, Alberta, to refineries on the U.S. Gulf Coast, thousands of miles away. Parts of the Keystone system are already in place. If completed, the pipeline is designed to carry 1.1 million barrels a day of unrefined liquid across the United States.

Keystone XL opponents charge that the project will contribute to the acceleration of climate change. It also exposes crucial underground water supplies in the Midwest to severe risk of contamination by the highly corrosive tar-sands fluid (and pipeline leaks are commonplace). Citing the closeness of its proposed route to the critical Ogallala Aquifer, Obama denied permission for its construction last January. (Because it will cross an international boundary, the president gets to make the call.) He is, however, expected to grant post-election approval to a new, less aquifer-threatening route; Mitt Romney has vowed to give it his approval on his first day in office.

Even if Keystone XL were in place, the golden age of Canada’s tar sands won’t be in sight — not without yet more pipelines as the bitumen producers face mounting opposition to their extreme operations. As a result of fierce resistance to Keystone XL, led in large part by Grist contributor Bill McKibben, the public has become far more aware of the perils of tar-sands production. Resistance to it, for example, could stymie plans to deliver tar-sands oil to Portland, Maine (for transshipment by ship to refineries elsewhere), via an existing pipeline that runs from Montreal through Vermont and New Hampshire to the Maine coast. Environmentalists in New England are already gearing up to oppose the plan.

If the U.S. proves too tough a nut to crack, Alberta has a backup plan: construction of the Northern Gateway, a proposed pipeline through British Columbia for the export of tar-sands oil to Asia. However, it, too, is running into trouble. Environmentalists and native communities in that province are implacably opposed and have threatened civil disobedience to prevent its construction (with major protests already set for Oct. 22 outside the parliament building in Victoria).

Sending tar-sands oil across the Atlantic is likely to have its own set of problems. The European Union is considering adopting rules that would label it a dirtier form of energy, subjecting it to various penalties when imported into the European Union. All of this, in turn, has forced Albertan authorities to consider tough new environmental regulations that would make it more difficult and costly to extract bitumen, potentially dampening the enthusiasm of investors and so diminishing the future output of tar sands.

Extreme planet

In a sense, while the dreams of the boosters of these new forms of energy may thrill journalists and pundits, their reality could be expressed this way: extreme energy = extreme methods = extreme disasters = extreme opposition.

There are already many indications that the new “golden age” of North American oil is unlikely to materialize as publicized, including an unusually rapid decline in oil output at existing shale oil drilling operations in Montana. (Although Montana is not a major producer, the decline there is significant because it is occurring in part of the Bakken field, widely considered a major source of new oil.) As for the rest of the Western Hemisphere, there is little room for optimism there either when it comes to the “promise” of extreme energy. Typically, for instance, a Brazilian court has ordered Chevron to cease production at its multi-billion-dollar Frade field in the Campos basin of Brazil’s deep and dangerous Atlantic waters because of repeated oil leaks. Doubts have meanwhile arisen over the ability of Petrobras, Brazil’s state-controlled oil company, to develop the immensely challenging Atlantic “pre-salt” fields on its own.

While output from unconventional oil operations in the U.S. and Canada is likely to show some growth in the years ahead, there is no “golden age” on the horizon, only various kinds of potentially disastrous scenarios. Those like Mitt Romney who claim that the United States can achieve energy “independence” by 2020 or any other near-term date are only fooling themselves, and perhaps some elements of the American public. They may indeed employ such claims to gain support for the rollback of what environmental protections exist against the exploitation of extreme energy, but the United States will remain dependent on Middle Eastern and African oil for the foreseeable future.

Of course, were such a publicized golden age to come about, we would be burning vast quantities of the dirtiest energy on the planet with truly disastrous consequences. The truth is this: There is just one possible golden age for U.S. (or any other kind of) energy, and it would be based on a major push to produce breakthroughs in climate-friendly renewables, especially wind, solar, geothermal, wave, and tidal power.

Otherwise the only “golden” sight around is likely to be the sun on an ever hotter, ever dirtier, ever more extreme planet.

The Great Drought of 2012 has yet to come to an end, but we already know that its consequences will be severe. With more than one-half of America’s counties designated as drought disaster areas, the 2012 harvest of corn, soybeans, and other food staples is guaranteed to fall far short of predictions. This, in turn, will boost food prices domestically and abroad, causing increased misery for farmers and low-income Americans and far greater hardship for poor people in countries that rely on imported U.S. grains.

This, however, is just the beginning of the likely consequences: If history is any guide, rising food prices of this sort will also lead to widespread social unrest and violent conflict.

Food — affordable food — is essential to human survival and well-being. Take that away, and people become anxious, desperate, and angry. In the United States, food represents only about 13 percent of the average household budget, a relatively small share, so a boost in food prices in 2013 will probably not prove overly taxing for most middle- and upper-income families. It could, however, produce considerable hardship for poor and unemployed Americans with limited resources. “You are talking about a real bite out of family budgets,” commented Ernie Gross, an agricultural economist at Omaha’s Creighton University. This could add to the discontent already evident in depressed and high-unemployment areas, perhaps prompting an intensified backlash against incumbent politicians and other forms of dissent and unrest.

It is in the international arena, however, that the Great Drought is likely to have its most devastating effects. Because so many nations depend on grain imports from the U.S. to supplement their own harvests, and because intense drought and floods are damaging crops elsewhere as well, food supplies are expected to shrink and prices to rise across the planet. “What happens to the U.S. supply has immense impact around the world,” says Robert Thompson, a food expert at the Chicago Council on Global Affairs. As the crops most affected by the drought, corn and soybeans, disappear from world markets, he noted, the price of all grains, including wheat, is likely to soar, causing immense hardship to those who already have trouble affording enough food to feed their families.

The Hunger Games, 2007-2011

What happens next is, of course, impossible to predict, but if the recent past is any guide, it could turn ugly. In 2007 to 2008, when rice, corn, and wheat experienced prices hikes of 100 percent or more, sharply higher prices — especially for bread — sparked “food riots” in more than two dozen countries, including Bangladesh, Cameroon, Egypt, Haiti, Indonesia, Senegal, and Yemen. In Haiti, the rioting became so violent and public confidence in the government’s ability to address the problem dropped so precipitously that the Haitian Senate voted to oust the country’s prime minister, Jacques-Édouard Alexis. In other countries, angry protestors clashed with army and police forces, leaving scores dead.

Those price increases of 2007 to 2008 were largely attributed to the soaring cost of oil, which made food production more expensive. (Oil’s use is widespread in farming operations, irrigation, food delivery, and pesticide manufacture.) At the same time, increasing amounts of cropland worldwide were being diverted from food crops to the cultivation of plants used in making biofuels.

The next price spike, in 2010 to 2011, was, however, closely associated with climate change. An intense drought gripped much of eastern Russia during the summer of 2010, reducing the wheat harvest in that breadbasket region by one-fifth and prompting Moscow to ban all wheat exports. Drought also hurt China’s grain harvest, while intense flooding destroyed much of Australia’s wheat crop. Together with other extreme-weather-related effects, these disasters sent wheat prices soaring by more than 50 percent and the price of most food staples by 32 percent.

Once again, a surge in food prices resulted in widespread social unrest, this time concentrated in North Africa and the Middle East. The earliest protests arose over the cost of staples in Algeria and then Tunisia, where — no coincidence — the precipitating event was a young food vendor, Mohamed Bouazizi, setting himself on fire to protest government harassment. Anger over rising food and fuel prices combined with long-simmering resentments about government repression and corruption sparked what became known as the Arab Spring. The rising cost of basic staples, especially a loaf of bread, was also a cause of unrest in Egypt, Jordan, and Sudan. Other factors, notably anger at entrenched autocratic regimes, may have proved more powerful in those places, but as the author of Tropic of Chaos, Christian Parenti, wrote, “The initial trouble was traceable, at least in part, to the price of that loaf of bread.”

As for the current drought, analysts are already warning of instability in Africa, where corn is a major staple, and of increased popular unrest in China, where food prices are expected to rise at a time of growing hardship for that country’s vast pool of low-income, migratory workers and poor peasants. Higher food prices in the U.S. and China could also lead to reduced consumer spending on other goods, further contributing to the slowdown in the global economy and producing yet more worldwide misery, with unpredictable social consequences.

The Hunger Games, 2012-?

If this was just one bad harvest, occurring in only one country, the world would undoubtedly absorb the ensuing hardship and expect to bounce back in the years to come. Unfortunately, it’s becoming evident that the Great Drought of 2012 is not a one-off event in a single heartland nation, but rather an inevitable consequence of global warming which is only going to intensify. As a result, we can expect not just more bad years of extreme heat, but worse years, hotter and more often, and not just in the United States, but globally for the indefinite future.

Until recently, most scientists were reluctant to blame particular storms or droughts on global warming. Now, however, a growing number of scientists believe that such links can be demonstrated in certain cases. In one recent study focused on extreme weather events in 2011, for instance, climate specialists at the National Oceanic and Atmospheric Administration and Great Britain’s National Weather Service concluded that human-induced climate change has made intense heat waves of the kind experienced in Texas in 2011 more likely than ever before. Published in the Bulletin of the American Meteorological Society, it reported that global warming had ensured that the incidence of that Texas heat wave was 20 times more likely than it would have been in 1960; similarly, abnormally warm temperatures like those experienced in Britain last November were said to be 62 times as likely because of global warming.

It is still too early to apply the methodology used by these scientists to calculating the effect of global warming on the heat waves of 2012, which are proving to be far more severe, but we can assume the level of correlation will be high. And what can we expect in the future, as the warming gains momentum?

When we think about climate change (if we think about it at all), we envision rising temperatures, prolonged droughts, freakish storms, hellish wildfires, and rising sea levels. Among other things, this will result in damaged infrastructure and diminished food supplies. These are, of course, manifestations of warming in the physical world, not the social world we all inhabit and rely on for so many aspects of our daily well-being and survival. The purely physical effects of climate change will, no doubt, prove catastrophic. But the social effects, including, somewhere down the line, food riots, mass starvation, state collapse, mass migrations, and conflicts of every sort, up to and including full-scale war, could prove even more disruptive and deadly.

In her immensely successful young-adult novel The Hunger Games (and in the movie that followed), Suzanne Collins riveted millions with a portrait of a dystopian, resource-scarce, post-apocalyptic future where once-rebellious “districts” in an impoverished North America must supply two teenagers each year for a series of televised gladiatorial games that end in death for all but one of the youthful contestants. These “hunger games” are intended as recompense for the damage inflicted on the victorious capital of Panem by the rebellious districts during an insurrection. Without specifically mentioning global warming, Collins makes it clear that climate change was significantly responsible for the hunger that shadows the North American continent in this future era. Hence, as the gladiatorial contestants are about to be selected, the mayor of District 12’s principal city describes “the disasters, the droughts, the storms, the fires, the encroaching seas that swallowed up so much of the land [and] the brutal war for what little sustenance remained.”

In this, Collins was prescient, even if her specific vision of the violence on which such a world might be organized is fantasy. While we may never see her version of those hunger games, do not doubt that some version of them will come into existence — that, in fact, hunger wars of many sorts will fill our future. These could include any combination or permutation of the deadly riots that led to the 2008 collapse of Haiti’s government, the pitched battles between massed protesters and security forces that engulfed parts of Cairo as the Arab Spring developed, the ethnic struggles over disputed croplands and water sources that have made Darfur a recurring headline of horror in our world, or the inequitable distribution of agricultural land that continues to fuel the insurgency of the Maoist-inspired Naxalites of India.

Combine such conflicts with another likelihood: that persistent drought and hunger will force millions of people to abandon their traditional lands and flee to the squalor of shantytowns and expanding slums surrounding large cities, sparking hostility from those already living there. One such eruption, with grisly results, occurred in Johannesburg’s shantytowns in 2008 when desperately poor and hungry migrants from Malawi and Zimbabwe were set upon, beaten, and in some cases burned to death by poor South Africans. One terrified Zimbabwean, cowering in a police station from the raging mobs, said she fled her country because “there is no work and no food.” And count on something else: Millions more in the coming decades, pressed by disasters ranging from drought and flood to rising sea levels, will try to migrate to other countries, provoking even greater hostility. And that hardly begins to exhaust the possibilities that lie in our hunger-games future.

At this point, the focus is understandably on the immediate consequences of the still ongoing Great Drought: dying crops, shrunken harvests, and rising food prices. But keep an eye out for the social and political effects that undoubtedly won’t begin to show up here or globally until later this year or 2013.  Better than any academic study, these will offer us a hint of what we can expect in the coming decades from a hunger-games world of rising temperatures, persistent droughts, recurring food shortages, and billions of famished, desperate people.

This essay was originally published on TomDispatch and is republished here with Tom’s kind permission.

Welcome to an edgy world where a single incident at an energy “chokepoint” could set a region aflame, provoking bloody encounters, boosting oil prices, and putting the global economy at risk. With energy demand on the rise and sources of supply dwindling, we are, in fact, entering a new epoch — the Geo-Energy Era — in which disputes over vital resources will dominate world affairs. In 2012 and beyond, energy and conflict will be bound ever more tightly together, lending increasing importance to the key geographical flashpoints in our resource-constrained world.

Take the Strait of Hormuz, already making headlines and shaking energy markets as 2012 begins. Connecting the Persian Gulf and the Indian Ocean, it lacks imposing geographical features like the Rock of Gibraltar or the Golden Gate Bridge. In an energy-conscious world, however, it may possess greater strategic significance than any passageway on the planet. Every day, according to the U.S. Department of Energy, tankers carrying some 17 million barrels of oil — representing 20 percent of the world’s daily supply — pass through this vital artery.

So last month, when a senior Iranian official threatened to block the strait in response to Washington’s tough new economic sanctions, oil prices instantly soared. While the U.S. military has vowed to keep the strait open, doubts about the safety of future oil shipments and worries about a potentially unending, nerve-jangling crisis involving Washington, Tehran, and Tel Aviv have energy experts predicting high oil prices for months to come, meaning further woes for a slowing global economy.

The Strait of Hormuz is, however, only one of several hot spots where energy, politics, and geography are likely to mix in dangerous ways in 2012 and beyond. Keep your eye as well on the East and South China Seas, the Caspian Sea basin, and an energy-rich Arctic that is losing its sea ice. In all of these places, countries are disputing control over the production and transportation of energy, and arguing about national boundaries and/or rights of passage.

In the years to come, the location of energy supplies and of energy supply routes — pipelines, oil ports, and tanker routes — will be pivotal landmarks on the global strategic map. Key producing areas, like the Persian Gulf, will remain critically important, but so will oil chokepoints like the Strait of Hormuz and the Strait of Malacca (between the Indian Ocean and the South China Sea) and the “sea lines of communication,” or SLOCs (as naval strategists like to call them) connecting producing areas to overseas markets. More and more, the major powers led by the United States, Russia, and China will restructure their militaries to fight in such locales.

You can already see this in the elaborate Defense Strategic Guidance document, “Sustaining U.S. Global Leadership,” unveiled at the Pentagon on Jan. 5 by President Obama and Secretary of Defense Leon Panetta. While envisioning a smaller Army and Marine Corps, it calls for increased emphasis on air and naval capabilities, especially those geared to the protection or control of international energy and trade networks. Though it tepidly reaffirmed historic American ties to Europe and the Middle East, overwhelming emphasis was placed on bolstering U.S. power in “the arc extending from the Western Pacific and East Asia into the Indian Ocean and South Asia.”

In the new Geo-Energy Era, the control of energy and of its transport to market will lie at the heart of recurring global crises. This year, keep your eyes on three energy hot spots in particular: the Strait of Hormuz, the South China Sea, and the Caspian Sea basin.

The Strait of Hormuz

A U.S. Navy assault ship crosses the Strait of Hormuz.Photo: Official U.S. Navy ImageryA narrow stretch of water separating Iran from Oman and the United Arab Emirates (UAE), the strait is the sole maritime link between the oil-rich Persian Gulf region and the rest of the world. A striking percentage of the oil produced by Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the UAE is carried by tanker through this passageway on a daily basis, making it (in the words of the Department of Energy) “the world’s most important oil chokepoint.” Some analysts believe that any sustained blockage in the strait could trigger a 50 percent increase in the price of oil and trigger a full-scale global recession or depression.

American leaders have long viewed the Strait as a strategic fixture in their global plans that must be defended at any cost. It was an outlook first voiced by President Jimmy Carter in January 1980, on the heels of the Soviet invasion and occupation of Afghanistan which had, he told Congress, “brought Soviet military forces to within 300 miles of the Indian Ocean and close to the Strait of Hormuz, a waterway through which most of the world’s oil must flow.” The American response, he insisted, must be unequivocal: any attempt by a hostile power to block the waterway would henceforth be viewed as “an assault on the vital interests of the United States of America,” and “repelled by any means necessary, including military force.”

Much has changed in the Gulf region since Carter issued his famous decree, known since as the Carter Doctrine, and established the U.S. Central Command (CENTCOM) to guard the Strait — but not Washington’s determination to ensure the unhindered flow of oil there. Indeed, President Obama has made it clear that, even if CENTCOM ground forces were to leave Afghanistan, as they have Iraq, there would be no reduction in the command’s air and naval presence in the greater Gulf area.

It is conceivable that the Iranians will put Washington’s capabilities to the test. On Dec. 27, Iran’s first Vice President Mohammad-Reza Rahimi said, “If [the Americans] impose sanctions on Iran’s oil exports, then even one drop of oil cannot flow from the Strait of Hormuz.” Similar statements have since been made by other senior officials (and contradicted as well by yet others). In addition, the Iranians recently conducted elaborate naval exercises in the Arabian Sea near the eastern mouth of the strait, and more such maneuvers are said to be forthcoming. At the same time, the commanding general of Iran’s army suggested that the USS John C. Stennis, an American aircraft carrier just leaving the Gulf, should not return. “The Islamic Republic of Iran,” he added ominously, “will not repeat its warning.”

Might the Iranians actually block the strait? Many analysts believe that the statements by Rahimi and his colleagues are bluster and bluff meant to rattle Western leaders, send oil prices higher, and win future concessions if negotiations ever recommence over their country’s nuclear program. Economic conditions in Iran are, however, becoming more desperate, and it is always possible that the country’s hard-pressed hardline leaders may feel the urge to take some dramatic action, even if it invites a powerful U.S. counterstrike. Whatever the case, the Strait of Hormuz will remain a focus of international attention in 2012, with global oil prices closely following the rise and fall of tensions there.

The South China Sea

A boat in the South China Sea.Photo: Jessica GThe South China Sea is a semi-enclosed portion of the western Pacific bounded by China to the north, Vietnam to the west, the Philippines to the east, and the island of Borneo (shared by Brunei, Indonesia, and Malaysia) to the south. The sea also incorporates two largely uninhabited island chains, the Paracels and the Spratlys. Long an important fishing ground, it has also been a major avenue for commercial shipping between East Asia and Europe, the Middle East, and Africa. More recently, it acquired significance as a potential source of oil and natural gas, large reserves of which are now believed to lie in subsea areas surrounding the Paracels and Spratlys.

With the discovery of oil and gas deposits, the South China Sea has been transformed into a cockpit of international friction. At least some islands in this energy-rich area are claimed by every one of the surrounding countries, including China — which claims them all, and has demonstrated a willingness to use military force to assert dominance in the region. Not surprisingly, this has put it in conflict with the other claimants, including several with close military ties to the United States. As a result, what started out as a regional matter, involving China and various members of the Association of Southeast Asian Nations (ASEAN), has become a prospective tussle between the world’s two leading powers.

To press their claims, Brunei, Malaysia, Vietnam, and the Philippines have all sought to work collectively through ASEAN, believing a multilateral approach will give them greater negotiating clout than one-on-one dealings with China. For their part, the Chinese have insisted that all disputes must be resolved bilaterally, a situation in which they can more easily bring their economic and military power to bear. Previously preoccupied with Iraq and Afghanistan, the United States has now entered the fray, offering full-throated support to the ASEAN countries in their efforts to negotiate en masse with Beijing.

Chinese Foreign Minister Yang Jiechi promptly warned the United States not to interfere. Any such move “will only make matters worse and the resolution more difficult,” he declared. The result was an instant war of words between Beijing and Washington. During a visit to the Chinese capital in July 2011, Chairman of the Joint Chiefs of Staff Adm. Mike Mullen delivered a barely concealed threat when it came to possible future military action. “The worry, among others that I have,” he commented, “is that the ongoing incidents could spark a miscalculation, and an outbreak that no one anticipated.” To drive the point home, the United States has conducted a series of conspicuous military exercises in the South China Sea, including some joint maneuvers with ships from Vietnam and the Philippines. Not to be outdone, China responded with naval maneuvers of its own. It’s a perfect formula for future “incidents” at sea.

The South China Sea has long been on the radar screens of those who follow Asian affairs, but it only attracted global attention when, in November, President Obama traveled to Australia and announced, with remarkable bluntness, a new U.S. strategy aimed at confronting Chinese power in Asia and the Pacific. “As we plan and budget for the future,” he told members of the Australian Parliament in Canberra, “we will allocate the resources necessary to maintain our strong military presence in this region.” A key feature of this effort would be to ensure “maritime security” in the South China Sea.

While in Australia, President Obama also announced the establishment of a new U.S. base at Darwin on that country’s northern coast, as well as expanded military ties with Indonesia and the Philippines. In January, the president similarly placed special emphasis on projecting U.S. power in the region when he went to the Pentagon to discuss changes in the American military posture in the world.

Beijing will undoubtedly take its own set of steps, no less belligerent, to protect its growing interests in the South China Sea. Where this will lead remains, of course, unknown. After the Strait of Hormuz, however, the South China Sea may be the global energy chokepoint where small mistakes or provocations could lead to bigger confrontations in 2012 and beyond.

The Caspian Sea Basin

The view from Baku, Azerbaijan: oil drilling in the Caspian Sea.Photo: PierreThe Caspian Sea is an inland body of water bordered by Russia, Iran, and three former republics of the USSR: Azerbaijan, Kazakhstan, and Turkmenistan. In the immediate area as well are the former Soviet lands of Armenia, Georgia, Kyrgyzstan, and Tajikistan. All of these old SSRs are, to one degree or another, attempting to assert their autonomy from Moscow and establish independent ties with the United States, the European Union, Iran, Turkey, and, increasingly, China. All are wracked by internal schisms and/or involved in border disputes with their neighbors. The region would be a hotbed of potential conflict even if the Caspian basin did not harbor some of the world’s largest undeveloped reserves of oil and natural gas, which could easily bring it to a boil.

This is not the first time that the Caspian has been viewed as a major source of oil, and so potential conflict. In the late 19th century, the region around the city of Baku — then part of the Russian empire, now in Azerbaijan — was a prolific source of petroleum and so a major strategic prize. Future Soviet dictator Joseph Stalin first gained notoriety there as a leader of militant oil workers, and Hitler sought to capture it during his ill-fated 1941 invasion of the USSR. After World War II, however, the region lost its importance as an oil producer when Baku’s onshore fields dried up. Now, fresh discoveries are being made in offshore areas of the Caspian itself and in previously undeveloped areas of Kazakhstan and Turkmenistan.

According to energy giant BP, the Caspian area harbors as much as 48 billion barrels of oil (mostly buried in Azerbaijan and Kazakhstan) and 449 trillion cubic feet of natural gas (with the largest supply in Turkmenistan). This puts the region ahead of North and South America in total gas reserves and Asia in oil reserves. But producing all this energy and delivering it to foreign markets will be a monumental task. The region’s energy infrastructure is woefully inadequate and the Caspian itself provides no maritime outlet to other seas, so all that oil and gas must travel by pipeline or rail.

Russia, long the dominant power in the region, is pursuing control over the transportation routes by which Caspian oil and gas will reach markets. It is upgrading Soviet-era pipelines that link the former SSRs to Russia or building new ones and, to achieve a near monopoly over the marketing of all this energy, bringing traditional diplomacy, strong-arm tactics, and outright bribery to bear on regional leaders (many of whom once served in the Soviet bureaucracy) to ship their energy via Russia. As recounted in my book Rising Powers, Shrinking Planet, Washington sought to thwart these efforts by sponsoring the construction of alternative pipelines that avoid Russian territory, crossing Azerbaijan, Georgia, and Turkey to the Mediterranean (notably the BTC, or Baku-Tbilisi-Ceyhan pipeline), while Beijing is building its own pipelines linking the Caspian area to western China.

All of these pipelines cross through areas of ethnic unrest and pass near various contested regions like rebellious Chechnya and breakaway South Ossetia. As a result, both China and the U.S. have wedded their pipeline operations to military assistance for countries along the routes. Fearful of an American presence, military or otherwise, in the former territories of the Soviet Union, Russia has responded with military moves of its own, including its brief August 2008 war with Georgia, which took place along the BTC route.

Given the magnitude of the Caspian’s oil and gas reserves, many energy firms are planning new production operations in the region, along with the pipelines needed to bring the oil and gas to market. The European Union, for example, hopes to build a new natural gas pipeline called Nabucco from Azerbaijan through Turkey to Austria. Russia has proposed a competing conduit called South Stream. All of these efforts involve the geopolitical interests of major powers, ensuring that the Caspian region will remain a potential source of international crisis and conflict.

In the new Geo-Energy Era, the Strait of Hormuz, the South China Sea, and the Caspian Basin hardly stand alone as potential energy flashpoints. The East China Sea, where China and Japan are contending for a contested undersea natural gas field, is another, as are the waters surrounding the Falkland Islands, where both Britain and Argentina hold claims to undersea oil reserves, as will be the globally warming Arctic whose resources are claimed by many countries. One thing is certain: Wherever the sparks may fly, there’s oil in the water and danger at hand in 2012.

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 handbasket. 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 percent. 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 percent 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 percent — had already dropped to 35 percent in 2010 and was projected to continue declining to 32 percent in 2020 and 30 percent 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 percent as big as ours. Only seven years later, it would be approximately 40 percent 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 percent 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 relies on oil for only about 20 percent 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.

World powers will duke it out over fuel sources.

This essay was originally published on TomDispatch and is republished here with Tom’s kind permission.

A 30-year war for energy preeminence? You wouldn’t wish it even on a desperate planet. But that’s where we’re headed and there’s no turning back.

From 1618 to 1648, Europe was engulfed in a series of intensely brutal conflicts known collectively as the Thirty Years’ War. It was, in part, a struggle between an imperial system of governance and the emerging nation-state. Indeed, many historians believe that the modern international system of nation-states was crystallized in the Treaty of Westphalia of 1648, which finally ended the fighting.

Think of us today as embarking on a new Thirty Years’ War. It may not result in as much bloodshed as that of the 1600s, though bloodshed there will be, but it will prove no less momentous for the future of the planet. Over the coming decades, we will be embroiled at a global level in a succeed-or-perish contest among the major forms of energy, the corporations which supply them, and the countries that run on them. The question will be: Which will dominate the world’s energy supply in the second half of the 21st century? The winners will determine how — and how badly — we live, work, and play in those not-so-distant decades, and will profit enormously as a result. The losers will be cast aside and dismembered.

Why 30 years? Because that’s how long it will take for experimental energy systems like hydrogen power, cellulosic ethanol, wave power, algae fuel, and advanced nuclear reactors to make it from the laboratory to full-scale industrial development. Some of these systems (as well, undoubtedly, as others not yet on our radar screens) will survive the winnowing process. Some will not. And there is little way to predict how it will go at this stage in the game. At the same time, the use of existing fuels like oil and coal, which spew carbon dioxide into the atmosphere, is likely to plummet, thanks both to diminished supplies and rising concerns over the growing dangers of carbon emissions.

This will be a war because the future profitability, or even survival, of many of the world’s most powerful and wealthy corporations will be at risk, and because every nation has a potentially life-or-death stake in the contest. For giant oil companies like BP, Chevron, ExxonMobil, and Royal Dutch Shell, an eventual shift away from petroleum will have massive economic consequences. They will be forced to adopt new economic models and attempt to corner new markets, based on the production of alternative energy products, or risk collapse or absorption by more powerful competitors. In these same decades, new companies will arise, some undoubtedly coming to rival the oil giants in wealth and importance.

The fate of nations, too, will be at stake as they place their bets on competing technologies, cling to their existing energy patterns, or compete for global energy sources, markets, and reserves. Because the acquisition of adequate supplies of energy is as basic a matter of national security as can be imagined, struggles over vital resources — oil and natural gas now, perhaps lithium or nickel (for electric-powered vehicles) in the future — will trigger armed violence.

When these three decades are over, as with the Treaty of Westphalia, the planet is likely to have in place the foundations of a new system for organizing itself — this time around energy needs. In the meantime, the struggle for energy resources is guaranteed to grow ever more intense for a simple reason: there is no way the existing energy system can satisfy the world’s future requirements. It must be replaced or supplemented in a major way by a renewable alternative system or, forget Westphalia, the planet will be subject to environmental disaster of a sort hard to imagine today.

The existing energy lineup

To appreciate the nature of our predicament, begin with a quick look at the world’s existing energy portfolio. According to BP, the world consumed 13.2 billion tons of oil-equivalent from all sources in 2010: 33.6 percent from oil, 29.6 percent from coal, 23.8 percent from natural gas, 6.5 percent from hydroelectricity, 5.2 percent from nuclear energy, and a mere 1.3 percent from all renewable forms of energy. Together, fossil fuels — oil, coal, and gas — supplied 10.4 billion tons, or 87 percent of the total.

Even attempting to preserve this level of energy output in 30 years’ time, using the same proportion of fuels, would be a near-hopeless feat. Achieving a 40 percent increase in energy output, as most analysts believe will be needed to satisfy the existing requirements of older industrial powers and rising demand in China and other rapidly developing nations, is simply impossible. 

Two barriers stand in the way of preserving the existing energy profile: eventual oil scarcity and global climate change. Most energy analysts expect conventional oil output — that is, liquid oil derived from fields on land and in shallow coastal waters — to reach a production peak in the next few years and then begin an irreversible decline. Some additional fuel will be provided in the form of “unconventional” oil — that is, liquids derived from the costly, hazardous, and ecologically unsafe extraction processes involved in producing tar sands, shale oil, and deep-offshore oil — but this will only postpone the contraction in petroleum availability, not avert it. By 2041, oil will be far less abundant than it is today and so incapable of meeting anywhere near 33.6 percent of the world’s (much expanded) energy needs.

Meanwhile, the accelerating pace of climate change will produce ever more damage — intense storm activity, rising sea levels, prolonged droughts, lethal heat waves, massive forest fires, and so on — finally forcing reluctant politicians to take remedial action. This will undoubtedly include an imposition of curbs on the release via fossil fuels of carbon dioxide and other greenhouse gases, whether in the form of carbon taxes, cap-and-trade plans, emissions limits, or other restrictive systems as yet not imagined. By 2041, these increasingly restrictive curbs will help ensure that fossil fuels will not be supplying anywhere near 87 percent of world energy.

The leading contenders

If oil and coal are destined to fall from their position as the world’s paramount source of energy, what will replace them? Here are some of the leading contenders.

Natural gas: Many energy experts and political leaders v
iew natural gas as a “transitional” fossil fuel because it releases less carbon dioxide and other greenhouse gases than oil and coal. In addition, global supplies of natural gas are far greater than previously believed, thanks to new technologies — notably horizontal drilling and the controversial procedure of hydraulic fracturing (“fracking”) — that allow for the exploitation of shale gas reserves once considered inaccessible. For example, in 2011, the U.S. Department of Energy predicted that, by 2035, gas would far outpace coal as a source of American energy, though oil would still outpace them both. Some now speak of a “natural gas revolution” that will see it overtake oil as the world’s No. 1 fuel, at least for a time. But fracking poses a threat to the safety of drinking water and so may arouse widespread opposition, while the economics of shale gas may, in the end, prove less attractive than currently assumed. In fact, many experts now believe that the prospects for shale gas have been oversold, and that stepped-up investment will result in ever-diminishing returns.

Nuclear power: Prior to the March 11 earthquake/tsunami disaster and a series of core meltdowns at the Fukushima Daiichi nuclear power complex in Japan, many analysts were speaking of a nuclear “renaissance,” which would see the construction of hundreds of new nuclear reactors over the next few decades. Although some of these plants in China and elsewhere are likely to be built, plans for others — in Italy and Switzerland, for example — already appear to have been scrapped. Despite repeated assurances that U.S. reactors are completely safe, evidence is regularly emerging of safety risks at many of these facilities. Given rising public concern over the risk of catastrophic accident, it is unlikely that nuclear power will be one of the big winners in 2041. 

However, nuclear enthusiasts (including President Obama) are championing the manufacture of small “modular” reactors that, according to their boosters, could be built for far less than current ones and would produce significantly lower levels of radioactive waste. Although the technology for, and safety of, such “assembly-line” reactors has yet to be demonstrated, advocates claim that they would provide an attractive alternative to both large conventional reactors with their piles of nuclear waste and coal-fired power plants that emit so much carbon dioxide.

Wind and solar: Make no mistake, the world will rely on wind and solar power for a greater proportion of its energy 30 years from now. According to the International Energy Agency, those energy sources will go from approximately 1 percent of total world energy consumption in 2008 to a projected 4 percent in 2035. But given the crisis at hand and the hopes that exist for wind and solar, this would prove small potatoes indeed. For these two alternative energy sources to claim a significantly larger share of the energy pie, as so many climate-change activists desire, real breakthroughs will be necessary, including major improvements in the design of wind turbines and solar collectors, improved energy storage (so that power collected during sunny or windy periods can be better used at night or in calm weather), and a far more efficient and expansive electrical grid (so that energy from areas favored by sun and wind can be effectively distributed elsewhere). China, Germany, and Spain have been making the sorts of investments in wind and solar energy that might give them an advantage in the new Thirty Years’ War — but only if the technological breakthroughs actually come.

Biofuels and algae: Many experts see a promising future for biofuels, especially as “first generation” ethanol, based largely on the fermentation of corn and sugar cane, is replaced by second- and third-generation fuels derived from plant cellulose (“cellulosic ethanol”) and bio-engineered algae. Aside from the fact that the fermentation process requires heat (and so consumes energy even while releasing it), many policymakers object to the use of food crops to supply raw materials for motor fuel at a time of rising food prices. However, several promising technologies to produce ethanol by chemical means from the cellulose in non-food crops are now being tested, and one or more of these techniques may well survive the transition to full-scale commercial production. At the same time, a number of companies, including ExxonMobil, are exploring the development of new breeds of algae that reproduce swiftly and can be converted into biofuels. (The U.S. Department of Defense is also investing in some of these experimental methods with an eye toward transforming the American military, a great fossil-fuel guzzler, into a far “greener” outfit.) Again, however, it is too early to know which (if any) biofuel endeavors will pan out.

Hydrogen: A decade ago, many experts were talking about hydrogen’s immense promise as a source of energy. Hydrogen is abundant in many natural substances (including water and natural gas) and produces no carbon emissions when consumed. However, it does not exist by itself in the natural world and so must be extracted from other substances — a process that requires significant amounts of energy in its own right, and so is not, as yet, particularly efficient. Methods for transporting, storing, and consuming hydrogen on a large scale have also proved harder to develop than once imagined. Considerable research is being devoted to each of these problems, and breakthroughs certainly could occur in the decades to come. At present, however, it appears unlikely that hydrogen will prove a major source of energy in 2041.

X the unknown: Many other sources of energy are being tested by scientists and en
gineers at universities and corporate laboratories worldwide. Some are even being evaluated on a larger scale in pilot projects of various sorts. Among the most promising of these are geothermal energy, wave energy, and tidal energy. Each taps into immense natural forces and so, if the necessary breakthroughs were to occur, would have the advantage of being infinitely exploitable, with little risk of producing greenhouse gases. However, with the exception of geothermal, the necessary technologies are still at an early stage of development. How long it may take to harvest them is anybody’s guess. Geothermal energy does show considerable promise, but has run into problems, given the need to tap it by drilling deep into the earth, in some cases triggering small earthquakes.

From time to time, I hear of even less familiar prospects for energy production that possess at least some hint of promise. At present, none appears likely to play a significant role in 2041, but no one should underestimate humanity’s technological and innovative powers. As with all history, surprise can play a major role in energy history, too.

Energy efficiency: Given the lack of an obvious winner among competing transitional or alternative energy sources, one crucial approach to energy consumption in 2041 will surely be efficiency at levels unimaginable today: the ability to achieve maximum economic output for minimum energy input. The lead players three decades from now may be the countries and corporations that have mastered the art of producing the most with the least. Innovations in transportation, building and product design, heating and cooling, and production techniques will all play a role in creating an energy-efficient world. 

When the war is over

Thirty years from now, for better or worse, the world will be a far different place: hotter, stormier, and with less land (given the loss of shoreline and low-lying areas to rising sea levels). Strict limitations on carbon emissions will certainly be universally enforced and the consumption of fossil fuels, except under controlled circumstances, actively discouraged. Oil will still be available to those who can afford it, but will no longer be the world’s paramount fuel. New powers, corporate and otherwise, in new combinations will have risen with a new energy universe. No one can know, of course, what our version of the Treaty of Westphalia will look like or who will be the winners and losers on this planet. In the intervening 30 years, however, that much violence and suffering will have ensued goes without question. Nor can anyone say today which of the contending forms of energy will prove dominant in 2041 and beyond.

Were I to wager a guess, I might place my bet on energy systems that were decentralized, easy to make and install, and required relatively modest levels of up-front investment. For an analogy, think of the laptop computer of 2011 versus the giant mainframes of the 1960s and 1970s. The closer that an energy supplier gets to the laptop model (or so I suspect), the more success will follow.

From this perspective, giant nuclear reactors and coal-fired plants are, in the long run, less likely to thrive, except in places like China where authoritarian governments still call the shots. Far more promising, once the necessary breakthroughs come, will be renewable sources of energy and advanced biofuels that can be produced on a smaller scale with less up-front investment, and so possibly incorporated into daily life even at a community or neighborhood level.

Whichever countries move most swiftly to embrace these or similar energy possibilities will be the likeliest to emerge in 2041 with vibrant economies — and given the state of the planet, if luck holds, just in the nick of time.

Here’s the good news about energy: Thanks to rising oil prices and deteriorating economic conditions worldwide, the International Energy Agency (IEA) reports that global oil demand will not grow this year as much as once assumed, which may provide some temporary price relief at the gas pump. In its May “Oil Market Report,” the IEA reduced its 2011 estimate for global oil consumption by 190,000 barrels per day, pegging it at 89.2 million barrels daily. As a result, retail prices may not reach the stratospheric levels predicted earlier this year, though they will undoubtedly remain higher than at any time since the peak months of 2008, just before the global economic meltdown. Keep in mind that this is the good news.

As for the bad news: The world faces an array of intractable energy problems that, if anything, have only worsened in recent weeks. These problems are multiplying on either side of energy’s key geological divide: below ground, once-abundant reserves of easy-to-get “conventional” oil, natural gas, and coal are drying up; above ground, human miscalculation and geopolitics are limiting the production and availability of specific energy supplies. With troubles mounting in both arenas, our energy prospects are only growing dimmer.

Here’s one simple fact without which our deepening energy crisis makes no sense: The world economy is structured in such a way that standing still in energy production is not an option. In order to satisfy the staggering needs of older industrial powers like the United States along with the voracious thirst of rising powers like China, global energy must grow substantially every year. According to the projections of the U.S. Department of Energy, world energy output, based on 2007 levels, must rise 29 percent to 640 quadrillion British thermal units by 2025 to meet anticipated demand. Even if usage grows somewhat more slowly than projected, any failure to satisfy the world’s requirements produces a perception of scarcity, which also means rising fuel prices. These are precisely the conditions we see today and should expect for the indefinite future.

It is against this backdrop that three crucial developments of 2011 are changing the way we are likely to live on this planet for the foreseeable future.

1. Tough-oil rebels

The first and still most momentous of the year’s energy shocks was the series of events precipitated by the Tunisian and Egyptian rebellions and the ensuing “Arab Spring” in the greater Middle East. Neither Tunisia nor Egypt was, in fact, a major oil producer, but the political shockwaves these insurrections unleashed has spread to other countries in the region that are, including Libya, Oman, and Saudi Arabia. At this point, the Saudi and Omani leaderships appear to be keeping a tight lid on protests, but Libyan production, normally averaging approximately 1.7 million barrels per day, has fallen to near zero.

When it comes to the future availability of oil, it is impossible to overstate the importance of this spring’s events in the Middle East, which continue to thoroughly rattle the energy markets. According to all projections of global petroleum output, Saudi Arabia and the other Persian Gulf states are slated to supply an ever-increasing share of the world’s total oil supply as production in key regions elsewhere declines. Achieving this production increase is essential, but it will not happen unless the rulers of those countries invest colossal sums in the development of new petroleum reserves — especially the heavy, “tough oil” variety that requires far more costly infrastructure than existing “easy oil” deposits. 

In a front-page story entitled “Facing Up to the End of ‘Easy Oil,’” the Wall Street Journal noted that any hope of meeting future world oil requirements rests on a Saudi willingness to sink hundreds of billions of dollars into their remaining heavy-oil deposits. But right now, faced with a ballooning population and the prospects of an Egyptian-style youth revolt, the Saudi leadership seems intent on using its staggering wealth on employment-generating public-works programs and vast arrays of weaponry, not new tough-oil facilities; the same is largely true of the other monarchical oil states of the Persian Gulf.

Whether such efforts will prove effective is unknown. If a youthful Saudi population faced with promises of jobs and money, as well as the fierce repression of dissidence, has seemed less confrontational than their Tunisian, Egyptian, and Syrian counterparts, that doesn’t mean that the status quo will remain forever. “Saudi Arabia is a time bomb,” commented Jaafar Al Taie, managing director of Manaar Energy Consulting (which advises foreign oil firms operating in the region). “I don’t think that what the King is doing now is sufficient to prevent an uprising,” he added, even though the Saudi royals had just announced a $36-billion plan to raise the minimum wage, increase unemployment benefits, and build affordable housing.

At present, the world can accommodate a prolonged loss of Libyan oil. Saudi Arabia and a few other producers possess sufficient excess capacity to make up the difference. Should Saudi Arabia ever explode, however, all bets are off. “If something happens in Saudi Arabia, [oil] will go to $200 to $300 [per barrel],” said Sheikh Zaki Yamani, the kingdom’s former oil minister, on April 5. “I don’t expect this for the time being, but who would have expected Tunisia?”

2. Nuclear power on the downward slope

In terms of the energy markets, the second major development of 2011 occurred on March 11 when an unexpectedly powerful earthquake and tsunami struck Japan. As a start, nature’s two-fisted attack damaged or destroyed a significant proportion of northern Japan’s energy infrastructure, including refineries, port facilities, pipelines, power plants, and transmission lines. In addition, of course, it devastated four nuclear plants at Fukushima, resulting, according to the U.S. Department of Energy, in the permanent loss of 6,800 megawatts of electric generating capacity.

This, in turn, has forced Japan to increase its imports of oil, coal, and natural gas, adding to the pressure on global supplies. With Fukushima and other nuclear plants off-line, industry analysts calculate that Japanese oil imports could rise by as much as 238,000 barrels per day, and imports of natural gas by 1.2 billion cubic feet per day (mostly in the form of liquefied natural gas, or LNG).

This is one major short-term effect of the tsunami. What about the longer-term effects? The Japanese government now claims it is scrapping plans to build as many as 14 new nuclear reactors over the next two decades. On May 10, Prime Minister Naoto Kan announced that the government would have to “start from scratch” in devising a new energy policy for the country. Though he speaks of replacing the cancelled reactors with renewable energy systems like wind and solar, the sad reality is that a significant part of any future energy expansion will inevitably come from more imported oil, coal, and LNG.

The disaster at Fukushima — and ensuing revelations of design flaws and maintenance failures at the plant — has had a domino effect, causing energy officials in other countries to cancel plans to build new nuclear plants or extend the life of existing ones. The first to do so was Germany: on March 14, Chancellor Angela Merkel closed two older plants and suspended plans to extend the life of 15 others. On May 30, her government made the suspension permanent. In the wake of mass anti-nuclear rallies and an election setback, she promised to shut all existing nuclear plants by 2022, which, experts believe, will result in an increase in fossil-fuel use.

China also acted swiftly, announcing on March 16 that it would stop awarding permits for the construction of new reactors pending a review of safety procedures, though it did not rule out such investments altogether. Other countries, including India and the United States, similarly undertook reviews of reactor safety procedures, putting ambitious nuclear plans at risk. Then, on May 25, the Swiss government announced that it would abandon plans to build three new nuclear power plants, phase out nuclear power, and close the last of its plants by 2034, joining the list of countries that appear to have abandoned nuclear power for good.

3. Drought strangles energy

The third major energy development of 2011, less obviously energy-connected than the other two, has been a series of persistent, often record, droughts gripping many areas of the planet. Typically, the most immediate and dramatic effect of prolonged drought is a reduction in grain production, leading to ever-higher food prices and ever more social turmoil.

Intense drought over the past year in Australia, China, Russia, and parts of the Middle East, South America, the United States, and most recently northern Europe [sub. req.] has contributed to the current record-breaking price of food — and this, in turn, has been a key factor in the political unrest now sweeping North Africa, East Africa, and the Middle East. But drought has an energy effect as well. It can reduce the flow of major river systems, leading to a decline in the output of hydroelectric power plants, as is now happening in several drought-stricken regions.

By far the greatest threat to electricity generation exists in China, which is suffering from one of its worst droughts ever. Rainfall levels from January to April in the drainage basin of the Yangtze, China’s longest and most economically important river, have been 40 percent lower than the average of the past 50 years, according to China Daily. This has resulted in a significant decline in hydropower and severe electricity shortages throughout much of central China.

The Chinese are burning more coal to generate electricity, but domestic mines no longer satisfy the country’s needs and so China has become a major coal importer. Rising demand combined with inadequate supply has led to a spike in coal prices, and with no comparable spurt in electricity rates (set by the government), many Chinese utilities are rationing power rather than buy more expensive coal and operate at a loss. In response, industries are upping their reliance on diesel-powered backup generators, which in turn increases China’s demand for imported oil, putting yet more pressure on global fuel prices.

Wrecking the planet

So now we enter June with continuing unrest in the Middle East, a grim outlook for nuclear power, and a severe electricity shortage in China (and possibly elsewhere). What else do we see on the global energy horizon?

Despite the IEA’s forecast of diminished future oil consumption, global energy demand continues to outpace increases in supply. From all indications, this imbalance will persist.

Take oil. A growing number of energy analysts now agree that the era of “easy oil” has ended and that the world must increasingly rely on hard-to-get “tough oil.” It is widely assumed, moreover, that the planet harbors a lot of this stuff — deep underground, far offshore, in problematic geological formations like Canada’s tar sands, and in the melting Arctic. However, extracting and processing tough oil will prove ever more costly and involve great human, and even greater environmental, risk. Think: BP’s Deepwater Horizon disaster of April 2010 in the Gulf of Mexico.

Such is the world’s thirst for oil that a growing amount of this stuff will nonetheless be extracted, even if not, in all likelihood, at a pace and on a scale necessary to replace the disappearance of yesterday’s and today’s easy oil. Along with continued instability in the Middle East, this tough-oil landscape seems to underlie expectations that the price of oil will only rise in the coming years. In a poll of global energy company executives conducted this April by the KPMG Global Energy Institute, 64 percent of those surveyed predicted that crude oil prices will cross the $120 per barrel barrier before the end of 2011. Approximately one-third of them predicted that the price would go even higher, with 17 percent believing it would reach $131-$140 per barrel; 9 percent, $141-$150 per barrel; and 6 percent, above the $150 mark.

The price of coal, too, has soared in recent months, thanks to mounting worldwide demand as supplies of energy from nuclear power and hydroelectricity have contracted. Many countries have launched significant efforts to spur the development of renewable energy, but these are not advancing fast enough or on a large enough scale to replace older technologies quickly. The only bright spot, experts say, is the growing extraction of natural gas from shale rock in the United States through the use of hydraulic fracturing (“hydrofracking”).

Proponents of shale gas claim it can provide a large share of America’s energy needs in the years ahead, while actually reducing harm to the environment when compared to coal and oil (as gas emits less carbon dioxide per unit of energy released); however, an expanding chorus of opponents are warning of the threat to municipal water supplies posed by the use of toxic chemicals in the fracking process. These warnings have proven convincing enough to lead lawmakers in a growing number of states to begin placing restrictions on the practice, throwing into doubt the future contribution of shale gas to the nation’s energy supply. Also, on May 12, the French National Assembly (the powerful lower house of parliament) voted 287 to 146 to ban hydrofracking in France, becoming the first nation to do so.

The environmental problems of shale gas are hardly unique. The fact is that all of the strategies now being considered to extend the life-spans of oil, coal, and natural gas involve severe economic and environmental risks and costs — as, of course, does the very use of fossil fuels of any sort at a moment when the first IEA numbers for 2010 indicate that it was an unexpectedly record-breaking year for humanity when it came to dumping greenhouse gases into the atmosphere.

With the easily accessible mammoth oil fields of Texas, Venezuela, and the Middle East either used up or soon to be significantly depleted, the future of oil rests on third-rate stuff like tar sands, shale oil, and extra-heavy crude that require a lot of energy to extract, processes that emit added greenhouse gases, and as with those tar sands, tend to play havoc with the environment.

Shale gas is typical. Though plentiful, it can only be pried loose from underground shale formations through the use of explosives and highly pressurized water mixed with toxic chemicals. In addition, to obtain the necessary quantities of shale oil, many tens of thousands of wells will have to be sunk across the American landscape, any of one of which could prove to be an environmental disaster.

Likewise, the future of coal will rest on increasingly invasive and hazardous techniques, such as the explosive removal of mountaintops and the dispersal of excess rock and toxic wastes in the valleys below. Any increase in the use of coal will also enhance climate change, since coal emits more carbon dioxide than do oil and natural gas.

Here’s the bottom line: Any expectations that ever-increasing supplies of energy will meet demand in the coming years are destined to be disappointed. Instead, recurring shortages, rising prices, and mounting discontent are likely to be the thematic drumbeat of the globe’s energy future. 

If we don’t abandon a belief that unrestricted growth is our inalienable birthright and embrace the genuine promise of renewable energy (with the necessary effort and investment that would make such a commitment meaningful), the future is likely to prove grim indeed. Then, the history of energy, as taught in some late 21st-century university, will be labeled: How to Wreck the Planet 101.

The Earth may look glum, but it’s not to be messed with.Photo: John LeGear

In his 2010 book Eaarth: Making a Life on a Tough New Planet, environmental scholar and activist Bill McKibben writes of a planet so devastated by global warming that it’s no longer recognizable as the Earth we once inhabited. This is a planet, he predicts, of “melting poles and dying forests and a heaving, corrosive sea, raked by winds, strafed by storms, scorched by heat.” Altered as it is from the world in which human civilization was born and thrived, it needs a new name — so he gave it that extra “a” in “Eaarth.”

The Eaarth that McKibben describes is a victim, a casualty of humankind’s unrestrained consumption of resources and its heedless emissions of climate-altering greenhouse gases. True, this Eaarth will cause pain and suffering to humans as sea levels rise and croplands wither, but as he portrays it, it is essentially a victim of human rapaciousness.

With all due respect to McKibben’s vision, let me offer another perspective on his (and our) Eaarth: as a powerful actor in its own right and as an avenger, rather than simply victim.

It’s not enough to think of Eaarth as an impotent casualty of humanity’s predations. It is also a complex organic system with many potent defenses against alien intervention — defenses it is already wielding to devastating effect when it comes to human societies. And keep this in mind: We are only at the beginning of this process.

To grasp our present situation, however, it’s necessary to distinguish between naturally recurring planetary disturbances and the planetary responses to human intervention. Both need a fresh look, so let’s start with what Earth has always been capable of before we turn to the responses of Eaarth, the avenger.

Overestimating ourselves

Our planet is a complex natural system, and like all such systems, it is continually evolving. As that happens — as continents drift apart, as mountain ranges rise and fall, as climate patterns shift — earthquakes, volcanoes, tsunamis, typhoons, prolonged droughts, and other natural disturbances recur, even if on an irregular and unpredictable basis.

Our predecessors on the planet were deeply aware of this reality. After all, ancient civilizations were repeatedly shaken, and in some cases shattered, by such disturbances. For example, it is widely believed that the ancient Minoan civilization of the eastern Mediterranean collapsed following a powerful volcanic eruption on the island of Thera (also called Santorini) in the mid-second millennium B.C. Archaeological evidence suggests that many other ancient civilizations were weakened or destroyed by intense earthquake activity. In Apocalypse: Earthquakes, Archaeology, and the Wrath of God, Stanford geophysicist Amos Nur and his coauthor Dawn Burgess argue that Troy, Mycenae, ancient Jericho, Tenochtitlan, and the Hittite empire may have fallen in this manner.

Faced with recurring threats of earthquakes and volcanoes, many ancient religions personified the forces of nature as gods and goddesses and called for elaborate human rituals and sacrificial offerings to appease these powerful deities. The ancient Greek sea-god Poseidon (Neptune to the Romans), also called “Earth-Shaker,” was thought to cause earthquakes when provoked or angry.

In more recent times, thinkers have tended to scoff at such primitive notions and the gestures that went with them, suggesting instead that science and technology — the fruits of civilization — offer more than enough help to allow us to triumph over the Earth’s destructive forces. This shift in consciousness has been impressively documented in Clive Ponting’s 2007 volume, A New Green History of the World. Quoting from influential thinkers of the post-Medieval world, he shows how Europeans acquired a powerful conviction that humanity should and would rule nature, not the other way around. The 17th-century French mathematician René Descartes, for example, wrote of employing science and human knowledge so that “we can … render ourselves the masters and possessors of nature.”

It’s possible that this growing sense of human control over nature was enhanced by a period of a few hundred years in which there may have been less than the usual number of civilization-threatening natural disturbances. Over those centuries, modern Europe and North America, the two centers of the Industrial Revolution, experienced nothing like the Thera eruption of the Minoan era — or, for that matter, anything akin to the double whammy of the 9.0 earthquake and 50-foot-high tsunami that struck Japan on March 11. This relative immunity from such perils was the context within which we created a highly complex, technologically sophisticated civilization that largely takes for granted human supremacy over nature on a seemingly quiescent planet.

But is this assessment accurate? Recent events, ranging from the floods that covered 20 percent of Pakistan and put huge swaths of Australia underwater to the drought-induced fires that burned vast areas of Russia, suggest otherwise. In the past few years, the planet has been struck by a spate of major natural disturbances, including the recent earthquake-tsunami disaster in Japan (and its many powerful aftershocks), the Jan. 2010 earthquake in Haiti, the Feb. 2010 earthquake in Christchurch, New Zealand, the March 2011 earthquake in Burma, and the devastating 2004 Indian Ocean earthquake-tsunami that killed more than 230,000 people in 14 countries, as well as a series of earthquakes, tsunamis, and volcanic eruptions in and around Indonesia.

If nothing else, these events remind us that the Earth is an ever-evolving natural system; that the past few hundred years are not necessarily predictive of the next few hundred; and that we may, in the last century in particular, have lulled ourselves into a sense of complacency about our planet that is ill-deserved. More important, they suggest that we may — and I emphasize may — be returning to an era in which the frequency of the incidence of such events is on the rise.

In this context, the folly and hubris with which we’ve treated natural forces comes strongly into focus. Take what’s happening at the Fukushima Daiichi nuclear power complex in northern Japan, where at least four nuclear reactors and their adjoining containment pools for “spent” nuclear fuel remain dangerously out of control. The designers and owners of the plant obviously did not cause the earthquake and tsunami that have created the present peril. This was a result of the planet’s natural evolution — in this case, of the sudden movement of continental plates. But they do bear responsibility for failing to anticipate the potential for catastrophe — for building a reactor on the site of frequent past tsunamis and assuming that a human-made concrete platform could withstand the worst that nature has to offer. Much has been said about flaws in design at the Fukushima plant and its inadequate backup systems. All this, no doubt, is vital, but the ultimate cause of the disaster was never a simple design flaw. It was hubris: an overestimation of the power of human ingenuity and an underestimation of the power of nature.

What future disasters await us as a result of such hubris? No one, at this point, can say with certainty, but the Fukushima facility is not the only reactor built near active earthquake zones, or at risk from other natural disturbances. And don’t just stop with nuclear plants. Consider, for instance, all those oil platforms in the Gulf of Mexico at risk from increasingly powerful hurricanes or, if cyclones increase in power and frequency, the deep-sea ones Brazil is planning to construct up to 180 miles off its coast in the Atlantic Ocean. And with recent events in Japan in mind, who knows what damage might be inflicted by a major earthquake in California? After all, California, too, has nuclear plants sited ominously near earthquake faults.

Underestimating Eaarth

Hubris of this sort is, however, only one of the ways in which we invite the planet’s ire. Far more dangerous and provocative is our poisoning of the atmosphere with the residues of our resource consumption, especially of fossil fuels. According to the U.S. Department of Energy, total carbon emissions from all forms of energy use had already hit 21.2 billion metric tons by 1990 and are projected to rise ominously to 42.4 billion by 2035, a 100 percent increase in less than half a century. The more carbon dioxide and other greenhouse gases we dump into the atmosphere, the more we alter the planet’s natural climatic systems and damage other vital ecological assets, including oceans, forests, and glaciers. These are all components of the planet’s integral makeup, and when damaged in this way, they will trigger defensive feedback mechanisms: rising temperatures, shifting rainfall patterns, and increased sea levels, among other reactions.

The notion of the Earth as a complex natural system with multiple feedback loops was first proposed by environmental scientist James Lovelock in the 1960s and propounded in his 1979 book Gaia: A New Look at Life on Earth. (Lovelock appropriated the name of the ancient Greek goddess Gaia, the personification of Mother Earth, for his version of our planet.) In this and other works, Lovelock and his collaborators argue that all biological organisms and their inorganic surroundings on the planet are closely integrated to form a complex and self-regulating system, maintaining the necessary conditions for life — a concept they termed “the Gaia Hypothesis.” When any parts of this system are damaged or altered, they contend, the others respond by attempting to repair, or compensate for, the damage in order to restore the essential balance.

Think of our own bodies when attacked by virulent microorganisms: our temperature rises; we produce more white blood cells and other fluids, sleep a lot, and deploy other defense mechanisms. When successful, our bodies’ defenses first neutralize and eventually exterminate the invading germs. This is not a conscious act, but a natural, life-saving process.

Eaarth is now responding to humanity’s depredations in a similar way: by warming the atmosphere, taking carbon from the air and depositing it in the ocean, increasing rainfall in some areas and decreasing it elsewhere, and in other ways compensating for the massive atmospheric infusion of harmful human emissions.

But what Eaarth does to protect itself from human intervention is unlikely to prove beneficial for human societies. As the planet warms and glaciers melt, sea levels will rise, inundating coastal areas, destroying cities, and flooding low-lying croplands. Drought will become endemic in many once-productive farming areas, reducing food supplies for hundreds of millions of people. Many plant and animal species that are key to human livelihoods, including various species of trees, food crops, and fish, will prove incapable of adjusting to these climate changes and so cease to exist. Humans may — and again I emphasize that may – prove more successful at adapting to the crisis of global warming than such species, but in the process, multitudes are likely to die of starvation, disease, and attendant warfare.

Bill McKibben is right: We no longer live on the “cozy, taken-for-granted” planet formerly known as Earth. We inhabit a new place, already changed dramatically by the intervention of humankind. But we are not acting upon a passive, impotent entity unable to defend itself against human transgression. Sad to say, we will learn to our dismay of the immense powers available to Eaarth, the Avenger.

No matter what comes of the protests in Iran, it’s unlikely that the country’s oil output will rise significantly.Photo: Hamed Saber

Whatever the outcome of the protests, uprisings, and rebellions now sweeping the Middle East, one thing is guaranteed: The world of oil will be permanently transformed. Consider everything that’s now happening as just the first tremor of an oilquake that will shake our world to its core.

For a century stretching back to the discovery of oil in southwestern Persia before World War I, Western powers have repeatedly intervened in the Middle East to ensure the survival of authoritarian governments devoted to producing petroleum. Without such interventions, the expansion of Western economies after World War II and the current affluence of industrialized societies would be inconceivable.

Here, however, is the news that should be on the front pages of newspapers everywhere: That old oil order is dying, and with its demise we will see the end of cheap and readily accessible petroleum — forever.

Ending the Petroleum Age

Let’s try to take the measure of what exactly is at risk in the current tumult. As a start, there is almost no way to give full justice to the critical role played by Middle Eastern oil in the world’s energy equation. Although cheap coal fueled the original Industrial Revolution, powering railroads, steamships, and factories, cheap oil has made possible the automobile, the aviation industry, suburbia, mechanized agriculture, and an explosion of economic globalization. And while a handful of major oil-producing areas launched the Petroleum Age — the United States, Mexico, Venezuela, Romania, the area around Baku (in what was then the Czarist Russian empire), and the Dutch East Indies — it’s been the Middle East that has quenched the world’s thirst for oil since World War II.

In 2009, the most recent year for which such data is available, BP reported that suppliers in the Middle East and North Africa jointly produced 29 million barrels per day, or 36 percent of the world’s total oil supply — and even this doesn’t begin to suggest the region’s importance to the petroleum economy. More than any other area, the Middle East has funneled its production into export markets to satisfy the energy cravings of oil-importing powers like the United States, China, Japan, and the European Union. We’re talking 20 million barrels funneled into export markets every day. Compare that to Russia, the world’s top individual producer, at 7 million barrels in exportable oil, the continent of Africa at 6 million, and South America at a mere 1 million.

As it happens, Middle Eastern producers will be even more important in the years to come because they possess an estimated two-thirds of remaining untapped petroleum reserves. According to recent projections by the U.S. Department of Energy, the Middle East and North Africa will jointly provide approximately 43 percent of the world’s crude petroleum supply by 2035 (up from 37 percent in 2007), and will produce an even greater share of the world’s exportable oil.

To put the matter baldly: The world economy requires an increasing supply of affordable petroleum. The Middle East alone can provide that supply. That’s why Western governments have long supported “stable” authoritarian regimes throughout the region, regularly supplying and training their security forces. Now, this stultifying, petrified order, whose greatest success was producing oil for the world economy, is disintegrating. Don’t count on any new order (or disorder) to deliver enough cheap oil to preserve the Petroleum Age.

To appreciate why this will be so, a little history lesson is in order.

The Iranian coup

After the Anglo-Persian Oil Company (APOC) discovered oil in Iran (then known as Persia) in 1908, the British government sought to exercise imperial control over the Persian state. A chief architect of this drive was First Lord of the Admiralty Winston Churchill. Having ordered the conversion of British warships from coal to oil before World War I and determined to put a significant source of oil under London’s control, Churchill orchestrated the nationalization of APOC in 1914. On the eve of World War II, then-Prime Minister Churchill oversaw the removal of Persia’s pro-German ruler, Shah Reza Pahlavi, and the ascendancy of his 21-year-old son, Mohammed Reza Pahlavi.

Though prone to extolling his (mythical) ties to past Persian empires, Mohammed Reza Pahlavi was a willing tool of the British. His subjects, however, proved ever less willing to tolerate subservience to imperial overlords in London. In 1951, democratically elected Prime Minister Mohammed Mossadeq won parliamentary support for the nationalization of APOC, by then renamed the Anglo-Iranian Oil Company (AIOC). The move was wildly popular in Iran but caused panic in London. In 1953, to save this great prize, British leaders infamously conspired with President Dwight Eisenhower’s administration in Washington and the CIA to engineer a coup d’état that deposed Mossadeq and brought Shah Pahlavi back from exile in Rome, a story recently told with great panache by Stephen Kinzer in All the Shah’s Men.

Until he was overthrown in 1979, the shah exercised ruthless and dictatorial control over Iranian society, thanks in part to lavish U.S. military and police assistance. First he crushed the secular left, the allies of Mossadeq, and then the religious opposition, headed from exile by the Ayatollah Ruhollah Khomeini. Given their brutal exposure to police and prison gear supplied by the United States, the shah’s opponents came to loathe his monarchy and Washington in equal measure. In 1979, of course, the Iranian people took to the streets, the shah was overthrown, and Ayatollah Khomeini came to power.

Much can be learned from these events that led to the current impasse in U.S.-Iranian relations. The key point to grasp, however, is that Iranian oil production never recovered from the revolution of 1979-1980.

Between 1973 and 1979, Iran had achieved an output of nearly 6 million barrels of oil per day, one of the highest in the world. After the revolution, AIOC (rechristened British Petroleum, or later simply BP) was nationalized for a second time, and Iranian managers again took over the company’s operations. To punish Iran’s new leaders, Washington imposed tough trade sanctions, hindering the state oil company’s efforts to obtain foreign technology and assistance. Iranian output plunged to 2 million barrels per day and, even three decades later, has made it back to only slightly more than 4 million barrels per day, even though the country possesses the world’s second largest oil reserves after Saudi Arabia.

Dreams of the invader

Iraq followed an eerily similar trajectory. Under Saddam Hussein, the state-owned Iraq Petroleum Company (IPC) produced up to 2.8 million barrels per day until 1991, when the First Gulf War with the United States and ensuing sanctions dropped output to half a million barrels daily. Though by 2001, production had again risen to almost 2.5 million barrels per day, it never reached earlier heights. As the Pentagon geared up for an invasion of Iraq in late 2002, however, Bush administration insiders and well-connected Iraqi expatriates spoke dreamily of a coming golden age in which foreign oil companies would be invited back into the country, the national oil company would be privatized, and production would reach never before seen levels.

Who can forget the effort the Bush administration and its officials in Baghdad put into making their dream come true? After all, the first American soldiers to reach the Iraqi capital secured the Oil Ministry building, even as they allowed Iraqi looters free rein in the rest of the city. L. Paul Bremer III, the proconsul later chosen by President Bush to oversee the establishment of a new Iraq, brought in a team of American oil executives to supervise the privatization of the country’s oil industry, while the U.S. Department of Energy confidently predicted in May 2003 that Iraqi production would rise to 3.4 million barrels per day in 2005, 4.1 million barrels by 2010, and 5.6 million by 2020.

None of this, of course, came to pass. For many ordinary Iraqis, the U.S. decision to immediately head for the Oil Ministry building was an instantaneous turning point that transformed possible support for the overthrow of a tyrant into anger and hostility. Bremer’s drive to privatize the state oil company similarly produced a fierce nationalist backlash among Iraqi oil engineers, who essentially scuttled the plan. Soon enough, a full-scale Sunni insurgency broke out. Oil output quickly fell, averaging only 2.0 million barrels daily between 2003 and 2009. By 2010, it had finally inched back up to the 2.5 million barrel mark — a far cry from those dreams of 4.1 million barrels.

One conclusion isn’t hard to draw: Efforts by outsiders to control the political order in the Middle East for the sake of higher oil output will inevitably generate countervailing pressures that result in diminished production. The United States and other powers watching the uprisings, rebellions, and protests blazing through the Middle East should be wary indeed: Whatever their political or religious desires, local populations always turn out to harbor a fierce, passionate hostility to foreign domination and, in a crunch, will choose independence and the possibility of freedom over increased oil output.

The experiences of Iran and Iraq may not in the usual sense be comparable to those of Algeria, Bahrain, Egypt, Iraq, Jordan, Libya, Oman, Morocco, Saudi Arabia, Sudan, Tunisia, and Yemen. However, all of them (and other countries likely to get swept up into the tumult) exhibit some elements of the same authoritarian political mold and all are connected to the old oil order. Algeria, Egypt, Iraq, Libya, Oman, and Sudan are oil producers; Egypt and Jordan guard vital oil pipelines and, in Egypt’s case, a crucial canal for the transport of oil; Bahrain and Yemen as well as Oman occupy strategic points along major oil sealanes. All have received substantial U.S. military aid and/or housed important U.S. military bases. And, in all of these countries, the chant is the same: “The people want the regime to fall.”

Two of these regimes have already fallen, three are tottering, and others are at risk. The impact on global oil prices has been swift and merciless: on Feb. 24, the delivery price for North Brent crude, an industry benchmark, nearly reached $115 per barrel, the highest it’s been since the global economic meltdown of Oct. 2008. West Texas Intermediate, another benchmark crude, briefly and ominously crossed the $100 threshold.

Why the Saudis are key

So far, the most important Middle Eastern producer of all, Saudi Arabia, has not exhibited obvious signs of vulnerability, or prices would have soared even higher. However, the royal house of neighboring Bahrain is already in deep trouble; tens of thousands of protesters – more than 20 percent of its half million people — have repeatedly taken to the streets, despite the threat of live fire, in a movement for the abolition of the autocratic government of King Hamad ibn Isa al-Khalifa, and its replacement with genuine democratic rule.

These developments are especially worrisome to the Saudi leadership as the drive for change in Bahrain is being directed by that country’s long-abused Shiite population against an entrenched Sunni ruling elite. Saudi Arabia also contains a large, though not — as in Bahrain — a majority Shiite population that has also suffered discrimination from Sunni rulers. There is anxiety in Riyadh that the explosion in Bahrain could spill into the adjacent oil-rich Eastern Province of Saudi Arabia — the one area of the kingdom where Shiites do form the majority — producing a major challenge to the regime. Partly to forestall any youth rebellion, 87-year-old King Abdullah has just promised $10 billion in grants, part of a $36 billion package of changes, to help young Saudi citizens get married and obtain homes and apartments.

Even if rebellion doesn’t reach Saudi Arabia, the old Middle Eastern oil order cannot be reconstructed. The result is sure to be a long-term decline in the future availability of exportable petroleum.

Three-quarters of the 1.7 million barrels of oil Libya produces daily were quickly taken off the market as turmoil spread in that country. Much of it may remain off-line and out of the market for the indefinite future. Egypt and Tunisia can be expected to restore production, modest in both countries, to pre-rebellion levels soon, but are unlikely to embrace the sorts of major joint ventures with foreign firms that might boost production while diluting local control. Iraq, whose largest oil refinery was badly damaged by insurgents only last week, and Iran exhibit no signs of being able to boost production significantly in the years ahead.

The critical player is Saudi Arabia, which just increased production to compensate for Libyan losses on the global market. But don’t expect this pattern to hold forever. Assuming the royal family survives the current round of upheavals, it will undoubtedly have to divert more of its daily oil output to satisfy rising domestic consumption levels and fuel local petrochemical industries that could provide a fast-growing, restive population with better-paying jobs.

From 2005 to 2009, Saudis used about 2.3 million barrels daily, leaving about 8.3 million barrels for export. Only if Saudi Arabia continues to provide at least this much oil to international markets could the world even meet its anticipated low-end oil needs. This is not likely to occur. The Saudi royals have expressed reluctance to raise output much above 10 million barrels per day, fearing damage to their remaining fields and so a decline in future income for their many progeny. At the same time, rising domestic demand is expected to consume an ever-increasing share of Saudi Arabia’s net output. In April 2010, the chief executive officer of state-owned Saudi Aramco, Khalid al-Falih, predicted that domestic consumption could reach a staggering 8.3 million barrels per day by 2028, leaving only a few million barrels for export and ensuring that, if the world can’t switch to other energy sources, there will be petroleum starvation.

In other words, if one traces a reasonable trajectory from current developments in the Middle East, the handwriting is already on the wall. Since no other area is capable of replacing the Middle East as the world’s premier oil exporter, the oil economy will shrivel — and with it, the global economy as a whole.

Consider the recent rise in the price of oil just a faint and early tremor heralding the oilquake to come. Oil won’t disappear from international markets, but in the coming decades it will never reach the volumes needed to satisfy projected world demand, which means that, sooner rather than later, scarcity will become the dominant market condition. Only the rapid development of alternative sources of energy and a dramatic reduction in oil consumption might spare the world the most severe economic repercussions.

Get ready for a rocky year. From now on, rising prices, powerful storms, severe droughts and floods, and other unexpected events are likely to play havoc with the fabric of global society, producing chaos and political unrest. Start with a simple fact: The prices of basic food staples are already approaching or exceeding their 2008 peaks, that year when deadly riots erupted in dozens of countries around the world.

It’s not surprising then that food and energy experts are beginning to warn that 2011 could be the year of living dangerously — and so could 2012, 2013, and on into the future. Add to the soaring cost of the grains that keep so many impoverished people alive a comparable rise in oil prices — again nearing levels not seen since the peak months of 2008 — and you can already hear the first rumblings about the tenuous economic recovery being in danger of imminent collapse. Think of those rising energy prices as adding further fuel to global discontent.

Already, combined with staggering levels of youth unemployment and a deep mistrust of autocratic, repressive governments, food prices have sparked riots in Algeria and mass protests in Tunisia that, to the surprise of the world, ousted long-time dictator President Zine al-Abidine Ben Ali and his corrupt extended family. And many of the social stresses evident in those two countries are present across the Middle East and elsewhere. No one can predict where the next explosion will occur, but with food prices still climbing and other economic pressures mounting, more upheavals appear inevitable. These may be the first resource revolts to catch our attention, but they won’t be the last.

Put simply, global consumption patterns are now beginning to challenge the planet’s natural resource limits. Populations are still on the rise, and from Brazil to India, Turkey to China, new powers are rising as well. With them goes an urge for a more American-style life. Not surprisingly, the demand for basic commodities is significantly on the rise, even as supplies in many instances are shrinking. At the same time, climate change, itself a product of unbridled energy use, is adding to the pressure on supplies, and speculators are betting on a situation trending progressively worse.  Add these together and the road ahead appears increasingly rocky.

Breadbaskets without bread

Let’s begin with food, the most important and volatile of these commodities. Food prices declined in October 2008 after the onset of the global financial crisis, but that seems to have been an anomaly. The December 2010 index of global food prices compiled by the U.N.’s Food and Agricultural Organization (FAO) hit a record 215, one point higher than in the spring of 2008. (In that index, based on a “bundle” of food staples, a baseline of 100 represents average prices in 2002-2004.) In fact, some food products, including sugar, cooking oils, and fats, are now trading substantially above their 2008 levels; others, including dairy products, grains, and meat, are inching perilously close to record levels.

As 2011 begins, food experts fear that, within months, prices for key staples will climb above the 2008 threshold and stay there, causing extreme hardship for poor people around the world. “We are at a very high level,” said a worried Abdolreza Abbassian, an economist at the FAO. “These levels in the previous episode led to problems and riots across the world.”

Of particular concern to Abbassian and his colleagues is the rising cost of corn, rice, and wheat, the staple crops of billions in many of the poorest countries. According to the FAO, by the end of 2010 international corn and wheat prices were already approaching their 2008 peak levels (about $260 and $340 per metric ton, respectively).

Analysts attribute the rise in grain prices to growing demand in both developed and developing nations, along with a number of cataclysmic weather-related events and speculation by investors. An extreme drought and fierce fires last summer destroyed a large percentage of the wheat crop in Russia and Ukraine, while heavy flooding in India and the inundation of 20 percent of Pakistan damaged significant parts of the grain output of those countries. At the same time, unusually hot and dry weather suppressed production in a number of other key farming areas.

What makes the picture look so worrisome today are indications that the severity and frequency of extreme weather events appear to be on the rise. In the past few weeks alone, several such events point the way to serious supply problems ahead. Most significant has been the unprecedented rainfall and flooding in Australia that put an area more than twice the size of California largely underwater, significantly disrupting wheat cultivation there. Australia is one of the world’s leading wheat producers. Unusually dry conditions in the American Midwest and Argentina have also hinted at future problems in grain and corn output. It’s still too early to predict the size of this year’s grain and corn harvests, but many analysts are warning of a shortfall in supplies, along with sky-high prices.

Mainstream analysts and government officials are loathe to attribute this traffic jam of extreme weather events to global warming. Huge variations in rainfall can be normal, especially in places like Australia that are susceptible to El Niño/La Niña ocean-temperature oscillations, and politicians are fearful of assuming responsibility for a problem as massive as climate change. But climate change theory has long suggested that the warming trend — 2010 tied 2005 for the warmest year on record and nine of the 10 warmest years have come in the last decade — will be accompanied by an increase in the frequency and severity of storms. It’s hard to escape the conclusion that recent events, including those Australian floods, are tied to rising global temperatures.

The energy crisis returns

Soaring food prices are being driven as well by speculative investments and the rising price of oil. Partly in response to the diminishing value of the dollar, some investors are sinking their money into food futures (along with gold and silver) as a speculative hedge. At the same time, the price of oil is edging toward the $100 mark, making it increasingly profitable for farmers to switch from growing corn for human consumption to growing it for the manufacture of ethanol, which in turn reduces the amount of farm acreage devoted to staples. Oil would have to fall below $50 per barrel to make the cultivation of corn as a food product competitive with ethanol production — and that’s not like
ly to happen. So even if more corn is produced this year, less will be available for food purposes and the price of what remains is bound to rise.

The precipitous rise in oil prices has startled the experts. Not so long ago, the U.S. Department of Energy (DoE) was projecting a price range of $70-$80 per barrel in 2011, but as the year began oil was already trading above $90 a barrel and some analysts predict that it will reach $100 before the year is out. A few are even talking about the $150 barrel and gas prices at the pump of $4 or more. If prices climb above $100, global consumer spending could take another nosedive.

“Oil prices are entering a dangerous zone for the global economy,” says Fatih Birol, the chief economist for the International Energy Agency (IEA). “The oil import bills are becoming a threat to the economic recovery.”

As with food, the rising cost of oil is a product of growing demand, insufficient supplies, and speculative investments. According to the most recent projections from the IEA, daily global oil consumption in 2011 will average 87.4 million barrels, an increase of about two million barrels from the first quarter of 2010. Much of the extra demand is coming from China, where a newly-minted middle class is buying automobiles at a record clip, as well as from the United States, where previously cautious consumers are slowly returning to pre-2008 driving habits.

At a time when the oil industry is experiencing declining rates of output at many existing oil fields and finding it ever more difficult to add production, even two million extra barrels per day can be a daunting challenge (and greater demand is expected in the coming years). In the United States, for example, much hope was placed in oil exploration in the deep waters of the Gulf of Mexico and offshore Alaska, but in the wake of the BP disaster, this seems like a forlorn prospect. Production in Mexico and the North Sea, two bright spots of recent years, is facing a sharp decline, while other key producers, including those in the Middle East, are struggling to maintain current output levels at existing fields.

Many energy analysts believe that the world is at (or will soon reach) peak oil — the moment when global petroleum output achieves a maximum sustainable daily rate and begins a long-term, irreversible decline. Others contend that higher levels of output are still possible. Whatever the truth of the matter, at this moment the oil industry is finding it increasingly difficult, and ever more costly, to boost output above current levels. This, combined with insatiable demand, is driving prices skyward.

Under these circumstances, speculators are again being drawn into the oil market as a rare sure bet. Such speculators helped push oil prices to a record $147 per barrel back in 2008, but fled the market when prices crashed as the American economy headed to a meltdown. Now, they’re coming back. “Hedge funds and private investors are buying up financial instruments tied to the price of crude, and thereby helping push up oil prices,” the Wall Street Journal reported in late December.

Most analysts are expecting a price surge this spring or summer when American motorists hit the road. “We will have a spring rally that will take us to between $3.10 and $3.50 a gallon for gasoline at service stations in the United States,” predicted Tom Kloza, chief oil analyst at the Oil Price Information Service.

The rising price of gas will, in turn, hurt consumers just as they show signs of opening their wallets again. No less worrisome, oil-importing countries like the United States, Japan, and many in Europe will face soaring bills for fuel imports, further enfeebling economies already suffering from profound weakness.

According to some calculations, oil prices added another $72 billion to America’s mammoth balance-of-payments deficit last year. Europe had to cough up an additional $70 billion for imported oil and Japan $27 billion. “It is a very telling story,” says the IEA’s Fatih Birol of recent oil-price data. “2010 rang the first alarm bells and 2011 price levels could bring us to the same financial crisis times that we saw in 2008.”

Rising food prices leading to riots, protests, and revolts, mounting oil prices, mammoth worldwide unemployment, and a collapsed recovery — it looks like the perfect set of preconditions for a global tsunami of instability and turmoil. Events in Algeria and Tunisia give us just an inkling of what this maelstrom might look like, but where and how it will next erupt, and in what form, is anyone’s guess. A single guarantee: We haven’t seen the last of resource revolts which, in the coming years, could reach an intensity we scarcely imagine today.