The Undeclared Oil War
By Paul Roberts
Monday, June 28, 2004
While some debate whether the war in Iraq was or was
not "about oil," another war, this one involving little but oil, has
broken out between two of the world's most powerful nations.
For months China and Japan have been locked in a
diplomatic battle over access to the big oil fields in Siberia. Japan,
which depends entirely on imported oil, is desperately lobbying Moscow
for a 2,300-mile pipeline from Siberia to coastal Japan. But
fast-growing China, now the world's second-largest oil user, after the
United States, sees Russian oil as vital for its own "energy security"
and is pushing for a 1,400-mile pipeline south to Daqing.
The petro-rivalry has become so intense that Japan
has offered to finance the $5 billion pipeline, invest $7 billion in
development of Siberian oil fields and throw in an additional $2 billion
for Russian "social projects" -- this despite the certainty that if
Japan does win Russia's oil, relations between Tokyo and Beijing may
sink to their lowest, potentially most dangerous, levels since World War
Asia's undeclared oil war is but the latest reminder
that in a global economy dependent largely on a single fuel -- oil --
"energy security" means far more than hardening refineries and pipelines
against terrorist attack. At its most basic level, energy security is
the ability to keep the global machine humming -- that is, to produce
enough fuels and electricity at affordable prices that every nation can
keep its economy running, its people fed and its borders defended. A
failure of energy security means that the momentum of industrialization
and modernity grinds to a halt. And by that measure, we are failing.
In the United States and Europe, new demand for
electricity is outpacing the new supply of power and natural gas and
raising the specter of more rolling blackouts. In the "emerging"
economies, such as Brazil, India and especially China, energy demand is
rising so fast it may double by 2020. And this only hints at the energy
crisis facing the developing world, where nearly 2 billion people -- a
third of the world's population -- have almost no access to electricity
or liquid fuels and are thus condemned to a medieval existence that
breeds despair, resentment and, ultimately, conflict.
In other words, we are on the cusp of a new kind of
war -- between those who have enough energy and those who do not but are
increasingly willing to go out and get it. While nations have always
competed for oil, it seems more and more likely that the race for a
piece of the last big reserves of oil and natural gas will be the
dominant geopolitical theme of the 21st century.
Already we can see the outlines. China and Japan are
scrapping over Siberia. In the Caspian Sea region, European, Russian,
Chinese and American governments and oil companies are battling for a
stake in the big oil fields of Kazakhstan and Azerbaijan. In Africa, the
United States is building a network of military bases and diplomatic
missions whose main goal is to protect American access to oilfields in
volatile places such as Nigeria, Cameroon, Chad and tiny Sao Tome --
and, as important, to deny that access to China and other thirsty
The diplomatic tussles only hint at what we'll see in
the Middle East, where most of the world's remaining oil lies. For all
the talk of big new oil discoveries in Russia and Africa -- and of how
this gush of crude will "free" America and other big importers from the
machinations of OPEC -- the geological facts speak otherwise. Even with
the new Russian and African oil, worldwide oil production outside the
Middle East is barely keeping pace with demand.
In the run-up to the Iraq war, Russia and France
clashed noisily with the United States over whose companies would have
access to the oil in post-Saddam Hussein Iraq. Less well known is the
way China has sought to build up its own oil alliances in the Middle
East -- often over Washington's objections. In 2000 Chinese oil
officials visited Iran, a country U.S. companies are forbidden to deal
with; China also has a major interest in Iraqi oil.
But China's most controversial oil overture has been
made to a country America once regarded as its most trusted oil ally:
Saudi Arabia. In recent years, Beijing has been lobbying Riyadh for
access to Saudi reserves, the largest in the world. In return, the
Chinese have offered the Saudis a foothold in what will be the world's
biggest energy market -- and, as a bonus, have thrown in offers of
sophisticated Chinese weaponry, including ballistic missiles and other
hardware, that the United States and Europe have refused to sell to the
Granted, the United States, with its vast economic
and military power, would probably win any direct "hot" war for oil. The
far more worrisome scenario is that an escalating rivalry among other
big consumers will spark new conflicts -- conflicts that might require
U.S. intervention and could easily destabilize the world economy upon
which American power ultimately rests.
As demand for oil becomes sharper, as global oil
production continues to lag (and as producers such as Saudi Arabia and
Nigeria grow more unstable) the struggle to maintain access to adequate
energy supplies, always a critical mission for any nation, will become
even more challenging and uncertain and take up even more resources and
This escalation will not only drive up the risk of
conflict but will make it harder for governments to focus on long-term
energy challenges, such as avoiding climate change, developing
alternative fuels and alleviating Third World energy poverty --
challenges that are themselves critical to long-term energy security but
which, ironically, will be seen as distracting from the current campaign
to keep the oil flowing.
This, ultimately, is the real energy-security
dilemma. The more obvious it becomes that an oil-dominated energy
economy is inherently insecure, the harder it becomes to move on to
something beyond oil.
Paul Roberts is the author of The End of Oil: On
the Edge of a Perilous New World.