America and Oil and Iraq

Great Debates
21

As for Iraq’s oil reserves, it’s my understanding (I couldn’t find a cite) that Iraq’s oil production capability has been so damaged by war that it won’t be able to produce significant amounts of oil for many years (I think the projection I read was around 5 years). If so, even thought we might “control” that oil now, who the heck knows what the world is going to be like in 5 years?! Especially in that neck of the woods.

So really, as far as foreign oil is concerned, we control two things:

  1. Jack

  2. Sh!t

22

So you don’t have a generator in your house? So what? Why should every house generate its own electricity? It’s more efficient to generate electricity centrally and distribute it over the grid. And this has nothing whatsover to do with oil, the electricity that powers all those devices doesn’t come from oil. And if you don’t like wasting electricity, why in the world can’t you shut the devices off? Or is the real problem not that YOU’RE wasting electricity, but that OTHERS are? How about you take care of your wasteful habits, then you will see clearly to remove the speck in your brother’s eye.

Huh? Yeah, people who come up with new discoveries often make money from those discoveries. And anyway, it HAS NOTHING TO DO WITH OIL. We don’t get our electricity from oil.

Hmmm. How about this. We don’t get our electricity from oil. We aren’t dependent on Saudi Arabia or Canada to generate electricity, it’s all generated domestically from hydro, coal and nuclear.

I don’t understand this non sequitor. People don’t die quick enough for what? For the US to turn into a rogue nation? People don’t die quick enough
for new methods of saving energy to save us enough energy? Huh? Honestly, could you explain this?

23

OK, this thing is going all over the place. Let’s get back to the main propositions the OP has put forward:

“USA would cease to exist” asserted without supporting evidence. Assertion that US “controls” the bulk of global petroleum reserves unsupported by any facts as yet presented by the OP. OP asserts specifically that the the ability of US-based companies to purchase oil from countries such as Saudi Arabia and Canada at market rates demonstrates that US “controls” those countries. OP further asserts that invasion of Iraq allows US to “influence” Iran, and presumably, its oil, knowing that Iran does not currently supply any significant amount of oil to US compainies and without quite having said how he came to this conclusion.

Does not follow from anything the OP has yet provided in support of his first proposition. Assuming this is specific to the invasion of Iraq, IMO it is only possible if a) Iraq magically transforms into a stable political entity nearly overnight or b) US military rules Iraq indefinitely. Since neither a) nor b) appears a practical outcome at present, it seems unlikely that a grateful SUV-driving public will be thanking George W. Bush for the invasion anytime soon.

24

Actually, our influence depends mostly on things other than the use of force. We have many levers of power that we routinely use to get other nations to see things our way, such as economic power, cultural power, and the simple diplomatic power of cajoling.

If you’re going to argue that the only power that matters is military power, then surely the Soviet Union, with its absolutely massive nuclear weapons arsenal and enormous army, was the most influential nation ever known to mankind, far more influential than the United States is today. Which is patently absurd.

And speaking of absurd, this “we use ten times the power that we produce” makes no sense whatsoever. If that were true, we’d have massive blackouts everywhere in the United States and the price of electricity would be many times that what Enron charged Californians several years ago…

Unless the statement is meant that human activities consume more energy than the human body produces, which is just a stupid and meaningless comparison. My lawn also requires more water than my underarms extrete, but who cares?

25

machines don’t run themselves.

There would be no electricity without oil. Why is that hard to understand?

People don’t change quickly enough. We are leaving our problems to subsequent generations. Unfortunately, we don’t have enough oil to last that long.

26

Data on the oil infrastructure in Iraq from the United States Department of Energy: Energy Information Administration may be obtained here:
http://www.eia.doe.gov/emeu/cabs/iraq.html

27

Because it’s not true. A very, very small fraction of the electricity in the United States is produced from burning oil. And the oil that is burned to produce electricity is a fraction that isn’t particularly useful for anything else.

You seem to be advocating asceticism as a means of conserving oil. That’s not an answer. As in all historical instances, when markets run short of a commodity, other commodities are developed to fill the gaps. Market driven increases in price (there’s that measure of value again) are what make alternative commodities feasibly economical; they become cheaper relative to the disappearing commodity.

28

Just to put concrete numbers on what Uncle Beer and others have been trying to tell you, oil currently produces only about 3% of our electricity in the U.S. (see here and click on the little PDF symbol to bring up a readable diagram).

[Hopefully, this can be a simple lesson to you about how you can go and find sources of information rather than simply spouting off incorrectly about things that you appear to know little about.]

29

I don’t think we can afford to complacently assume the magic market is going to conjure alternatives into existence. Exxon for one doesn’t see tar sands as any sort of viable alternative.

Exxon and peak oil in 5 years

30

By the way, if you use my link to go back to the EIA Annual Energy Review and download the entire 15MB PDF file, you will find more information than you ever dreamed of showing where we get our oil from, what we use it for, etc., etc. It is a virtual motherlode of information.

31

Sometimes it does, sometimes it doesn’t. If it doesn’t, and the resource is a necessary one the dependent culture collapses. I suggest we should develop alternatives now, instead of sitting around and hoping the market solves our problems for us.

32

Mebbe so, mebbe so, but I (in my admittedly very narrow historical knowledge) can’t think of any such collapse. If you can help me here, I’d be grateful.

In theory, I agree with you, and in a limited fashion, alternatives are being explored (solar energy*, fuel cells, biomass, etc.). To do more, would likely require large scale manipulations of the incentives and disincentives which govern behavior in the marketplace. And near-term manipulations, such as I believe you are advocating, would require institution and enforcement by governments - something I more or less strongly oppose. So yeah, in theory, I agree with you; but in practice, I’m a’gin it.

Longer term changes in marketplace behavior evolve over time through social pressures, or the self-regulating mechanisms of the market. I am of the opinion (again admittedly without a shred of real substantive proof which can be presented here other than the general tenets of free-market of economic theory), that these pressures and mechanism will prove sufficient.

*I think solar energy could prove a very effective alternative for powering seagoing vessels.

33

Easter Island comes to mind; they ruined their ecology and most of them starved when much of the soil washed away, and lost much of their technology with the lack of wood. IIRC, the Anasazi also overused their soils and collapsed.

Historically, the only really vital resource was food, so most historical collapses came when they lost their food supply. Read Jared Diamond’s book Collapse for some more examples.

One thing the market tends to lack is foresight. If we wait for the market to save us, things will get very bad first IMHO. Unlike you, I have no problem with government intervention, especially if it’s not coerced. Tax breaks/subsidies for renewable energy would be an example of what I mean.

34

That might fit the bill. I’ll hafta think about it.

I was thinking about that very book when I wrote my post. I’ve got a copy in my (too tall) “to read” soon pile.

Along perhaps with removing the current subsidies which cause reliance on oil. On the other hand, relying only on market and social forces, were a large oil company to publicly announce initiation of a determined effort to develop alternatives to distilling petroleum into gasoline and declare their intention to fund this effort through a, say, 10 cent increase in per gallon gas prices, I (and I’d bet quite a few other folks) might be persuaded to purchase their gas over their competitor’s.

I guess this (the desirablity of government supplied vs. free(er)-market incentives/disincentives) is something on which I could be persuaded to “the other side;” on reflection here my position isn’t as firm as I had supposed.

35

I think it’s a bad idea to rely on only one technique, even the market. If you think about it, that was always one of the biggest weaknesses of communism; they insisted the government do everything, whether or not it was good at it. “Free market fundamentalism”, as I’ve heard it called, has the same weakness in the opposite direction.

36

I keep saying this over and over in this type of thread, but no one seems to pay attention. Well, I’ll say it again.

We get most of our energy from coal, nuclear, and hydro. We do use a lot of oil, but NOT TO GENERATE ELECTRICITY. Honestly, why do people believe this? We’ve proven it hundreds of times, but the OP of this thread just refuses to believe us. The vast majority of coal consumed in the US is produced in the US, the vast majority of hyroelectricity consumed in the US is produced in the US, the vast majority of nuclear power consumed in the US is produced in the US. For electrical generation we ARE economically self-sufficient. There is no electrical generation crisis, we have vast reserves of coal, we could ramp up nuclear power generation if we needed to. Hydro we can’t increase much, but so what?

The problem isn’t electricity, the problem is oil. We don’t use oil to generate electricity.

YES, we use oil to power cars, trucks, trains, and airplanes. Oil is used overwhelmingly for the transportation industry. There’s a finite amount of oil in the ground, right? So we’ll eventually run out, right? Except it won’t happen that we’ll tootle along with our heads in the sand until we pump the last drop of oil and then revert to cannibalism. The price for oil will get higher and higher and higher. Yes, it’s true that on the 1-2 year time scale demand for gasoline is pretty inelastic, people have to get to work no matter what the price of gasoline is, and if you just bought a new H2 you usually can’t resell it and buy a fuel-efficient vehicle without taking a huge loss. So. Can we expect gasoline prices to climb in the future? Sure. What does that mean? Well, the next time people are in the market for a car they’re going to put a premium on fuel-efficiency or alternative fuels. Expect the used car lots 5 years from now to be filled with cheap SUVs. It means the next time people move they’re going to attempt to pick housing closer to their work. It means the next time people change jobs they’re going to attempt to choose a job closer to their house. It means that the next time someone has an opportunity to work from home they’ll consider it more strongly. It means the next time they have an opportunity to carpool they’ll consider it more strongly despite the hassle.

“The Market” isn’t some sort of magic cure, people who talk about “market fundamentalists” don’t get it. The market is just the aggregate of millions of consumer and supplier decisions. If the price of gasoline goes up, in the short term consumers are stuck. In the long term consumers aren’t stuck. In the long run…say over five years consumers can respond to the information that prices provide. High prices will “magically” create…conservation! Except it isn’t magic.

As far as government subsidies for alternative fuels, or government subsidized research into alternative fuels, please no. The absolute best and simplest method for encouraging alternative fuel use is simply to raise taxes on gasoline. Slap a $1.00-$2.00 per gallon tax on gasoline and all sorts of alternative fuels become economical. Rather than the government attempting to pick a winning technology and forcing it down our throats, why not let the collective decisions of hundreds of millions of people guide us?

We don’t need a Manhattan project because there won’t ever be one single alternative to gasoline, there are thousands of alternatives to gasoline. We don’t need to replace our existing gasoline vehicle fleet with an entirely new fleet, only now all powered in some other way. It’s highly unlikely that we’ll have a new transportation solution that’s cheaper than gasoline, that’s the reason we’re using gasoline right now…because it’s cheaper than any other alternative, even at $3.00/gallon. Or look at Europe, where people pay the equivalent of $4.00-$5.00 per gallon due to high gasoline taxes. The only “alternative” fuel in heavy use over there is diesel.

37

Does it matter who really “controls” the oil? Because whoever it is, they still need to sell it to realize its value. I’d think the oil will find its consumer one way or another.

I’m not saying an oil embargo is unthinkable, but it couldn’t be maintained very long.

38

Yep. If, say, Saudi Arabia decided to refuse to sell oil to the US, what would happen? Unless they decide to stop oil production entirely, they have to sell the oil somewhere. If they cut back oil production they’re broke. Now, if Saudi were taken over by Al Qaida fundementalists maybe they’d enjoy plunging the country into poverty…but how would they maintain control over a country that’s gotten used to buckets of money from oil sales?

So, assuming Saudi Arabia sells oil, just not to the US, what happens? Well, the Europeans and Japanese and Chinese purchase the oil. As a matter of fact, most Saudi oil already goes to Europe. But that means that Europe buys more Saudi oil…which means they buy less oil from other sources, which means that oil is available for sale on the world market to some other customer…like the US. Even if many oil producers embargoed the US, as long as they sell somewhere why couldn’t those customers resell to the US?

Countries sell oil to the US, not because they’re doing us a favor, but because we pay them money for their oil. Everybody needs money, that’s why they call it money.

39

Yea!!! Today, the SDMB; tomorrow, the world! (Actually, I am not sure we here at SDMB invented this term…and certainly the basic concept is present in other people’s work, such as Tom Frank’s “One Market Under God” and Robert Kuttner’s “Everything for Sale: The Virtues and Limits of Markets”…but we’re doing our best to popularize the term!)

40

You’re not the only one who keeps saying it. But, it seems to take a while to sink in.

Well, yes, we do understand this. However, I could also argue that there is no reason for me to take a parachute when I jump out of an airplane because I won’t keep falling forever…eventually the collision with the ground will stop me. I.e., there is still an argument to potentially be made for having a little more anticipation of impending problems than the market might have. (There is also an argument to be made for accounting for current problems that the market doesn’t currently factor in, like the costs of CO2 emissions from the point of view of how they are changing the climate.)

I pretty much agree with you here…and in fact, I would tend to reserve the term “free market fundamentalists” to those who don’t want to do such things like impose taxes to correct for externalities and so forth. Thinking the market is a good mechanism is not market fundamentalism; thinking it is infallible (or nearly so) is.

The only problem I have is that, unfortunately, taxes like this seem to be non-starters in the U.S. from a political point-of-view. So, while it is certainly the way that I would want to go if I was dictator, I am a little less clear about what to support in the world of the politically-possible.

Well, just to clarify, while it is true that Europe has not developed an alternative fuel for automobiles, we do need to emphasize that they have a less strong reliance on automobiles through less sprawl, greater use of public transportation, trains, etc. (which presumably don’t for the most part run on oil)…and the autos that they do use tend to be more fuel efficient.