The September 11 terror attacks could be just the beginning of the bad news for the US. Depending on who you talk to, the world is either heading for a general energy crunch or just plain running out of oil, with potentially devastating implications for the last superpower and its allies.
“[C]haos in the oil industry, in governments, and in national economies” is forecast by Kenneth S. Deffeyes, who this month writes in The American Prospect that “Global oil production will probably reach a peak sometime during this decade. After the peak, the world's production of crude oil will fall, never to rise again.”
Meanwhile, other analysts are predicting a heavy-duty crunch based more on capacity than scarcity. Scott Burns, in an article on Moneycentral.msn.com, writes that the world faces a dire economic crisis because of an overloaded refining and distribution system that cannot keep pace with demand.
“Ironically, even if a valve could be turned in the Middle East, our energy problems would not be solved,” writes Burns. “We'd need new ships to transport it and new refineries to crack it…Basically, there is no slack anywhere because we missed a full decade of investment in new capacity.”
The CIA, long a player in the politics of oil, is said to know about the predicted crisis. One long-standing rumor has it that the US intelligence agency was the largest client of Geneva-based Petroconsultants, according to Deffeyes, who believes the firm’s private database probably held the world’s “best numbers” on the oil industry. “This much is known,” he adds. “The loudest warnings about the predicted peak of world oil production came from Petroconsultants.”
Publicly, however, the CIA is singing a different tune from whatever it might have heard from Petroconsultants. “We don't think the Middle East will run out of oil any time soon,” CIA Assistant Director John Gannon told ABCNEWS.com earlier this year in an online question-and-answer session. “We think that, in terms of world energy supplies, the Persian Gulf will meet the increasing demands of Asia [while]…The energy needs of the United States will be increasingly met by Atlantic basin sources…80 percent of the world's available oil, and 95 percent of its gas, remain underground, so we are not going to run out in the next fifteen years.”
But the looming war in Afghanistan, and its proximity to the rich oil fields of both the Caspian Sea and the Arabian Peninsula, leave open the question of how much US policy makers know — and how far they are willing to go to keep a grip on the global petrochemical industry.
Even before the most recent US military build-up in the Persian Gulf, there were signs that top US officials and the CIA were courting oil-rich Central Asian nations. Turkmenistan’s President Saparmurat Niyazov, for example, received red-carpet treatment in a 1998 state visit, including 45 minutes with then-president Bill Clinton, chats with cabinet officers, and direct consultations with CIA Director George Tenet.
According to Time magazine, “more than two dozen oil and equipment companies kicked in to sponsor a dinner in Niyazov's honor at a downtown hotel, and 300 of America's top government decision makers, business executives and lobbyists thronged the ballroom ”to glad-hand the president, whose nation borders the Caspian Sea, the site of “the last great oil rush of this century.”
If the industry doomsayers turn out to be right, oil-producing nations may expect the CIA to come knocking sooner rather than later. But whether the knock heralds a friendly handshake or a military coup could depend on the compliance of the regime.
Only last year, the New York Times obtained the official report on the coup organized by the CIA in 1953 to topple then-Iranian Prime Minister Mohammad Mossadeq. The nationalist premier’s political organization attracted US ire by working for the nationalization of the British-controlled oil industry and democratization.
The CIA, anxious not to let Iran’s oil wealth slip through US fingers, chose Fazlollah Zahedi, a retired Iranian army general, to replace Mossadeq. According to the Times report, “On April 4 the Tehran CIA station was given one million dollars to be used ‘in any way that would bring about the fall’ of Mossadeq.” Sure enough, the nationalist leader was soon brought down by a CIA-backed uprising.
Perhaps with the CIA’s Iran antics in mind, America’s oil-producing allies appear to be toeing the line in the wake of the September 11 attacks. AFP quoted Saudi Oil Minister Ali Al Naimi as saying late last month that the kingdom and OPEC remained committed to a stable crude market and would fill any shortages in world supply "whenever they happen and for whatever reason."
However, some observers are concerned that the US retaliation against Afghanistan for hosting alleged terror mastermind Usama Bin Ladin could backfire, further rocking both Saudi Arabia and oil prices. According to AFP, “The market is…wary of US military retaliation for the attacks and the possible destabilizing effect on the Middle East where two-thirds of world petroleum reserves lie.”
Already, a Bahraini industry leader has warned that “massive insurance charges” could cripple shipping in the Persian Gulf, which bustles with oil transport traffic. International underwriters have declared their intention to make the Gulf an exclusion zone from normal war risk cover, according to the agency.
Even more tricky for the US will be shoring up its closest Gulf ally, Saudi Arabia, which the agency says is “struggling to come to terms with the anti-terror war Washington is set to unleash on its doorstep against Muslim fanatics, many of them Saudis.” The United States is Saudi's main arms supplier and leading economic partner, particularly as a buyer of the crude oil, which accounts for 80 percent of government revenues. But the thousands of US soldiers and dozens of warplanes based in the kingdom have already aroused simmering discontent, which the Afghanistan war is bound to further inflame.
"Saudi Arabia is in an embarrassing situation without precedent," a Gulf diplomat told AFP on late last month. "There is fear and a wait-and-see attitude at every level, official and public." If the predictions of a coming global energy crisis are true, similar unease must be permeating the CIA headquarters and the White House. — (Mena Report)
© 2001 Mena Report (www.menareport.com)
