t. o’donnell, ph.d. | [email protected] | politics of oil & global systems of distribution tom...

T. O’Donnell, Ph.D. | [email protected] | http://TomOD.com

Politics of oil &

global systems of distribution Tom O’Donnell, Ph.D.The New School University, NYC

http://mesc.osu.edu/




T. O’Donnell, Ph.D. | [email protected] | TomOD.com

2

ProjectionsHistory

World Primary Energy Demand

Source: IEA WEA reference scenario 2006

Oil #1


peak oil alternatives energy independence big oil / IOCs OPEC / NOCs speculation prices resource wars north-south

energy security oil curse rentismo environment global warming development …

Oil Issues






global political

economy

Approach

• domestic politics• geopolitics• development • environment






global political

economy

Approach


• resources• technology • production• distribution • governance / ownership• end use / consumption






global political

economy

Approach







global political

economy

Approach

• global system • regional / state strategieso US, EU, Japan o China, India o Russia, Caspian, E. Europe o Persian Gulf, Lat. America,

Maghreb, Africa






T. O’Donnell, Ph.D. | [email protected] | TomOD.com 9T. O’Donnell, Ph.D. | [email protected] | TomOD.com 9

Oil

Gas

Coal

Nuclear

Hydro

Biomass

Geothermal

Wind

Solar & Etc.

0 20 40 60 80 100 120 140 160 180

Resource Use – Per Year

Exojoules

IPCC 2007

2004


Oil

Gas

Coal

Nuclear

Hydro

Biomass

Geothermal

Wind

Solar & Etc.

0 20 40 60 80 100 120 140 160 180

Resource Use – Per Year

Exojoules

IPCC 2007

2004

Non-renewable

Renewable

T. O’Donnell, Ph.D. | [email protected] | TomOD.com 11

Uranium (U235+U238 fertility)

Uranium (U235 once through)

Coal

Gas

Conventional Oil

0 50,000 100,000 150,000 200,000 250,000

Primary Resources - non-renewable

Exojoules

IPCC 2007




Coal

Gas

Conventional Oil

0 50,000 100,000 150,000 200,000 250,000

Primary Resources

Exojoules

IPCC 2007

Fossil Fuels




Coal

Gas

Conventional Oil

0 50,000 100,000 150,000 200,000 250,000

Primary Resources

Exojoules

IPCC 2007

SuperNova

U235 / U238 = 1 / 138(also Thorium)


Uranium

Uranium w/ Breeding

Coal

Gas

Conventional Oil

IPCC 2007


Uranium

Coal

Gas

Conventional Oil

Solar WindGeothermalBiomassHydro

IPCC 2007


Losses

Buildings

Industry

Transport

IPCC 2007

Two Categories of Primary Energy:


Global Energy System: - 2004Source: 4th IPCC, from IEA 2006

• Transport – 95% from oil

• Electricity – from diverse sources


Observation:



Global Energy System: - 2004Source: 4th IPCC, from IEA 2006



Global Energy System: - 2030Source: IPCC from IEA 2006

Thesis #1:

“The stone age did not end for a lack of stone”


“Peak Oil” not a problem …

or a solution


Reserves More Uncertain

Potential liquid hydrocarbon production (Gbbl)

Cost $/barrel

Oil & Substitutes




Cost $/barrel

Oil & Substitutes




Oil & Substitutes

Cost $/barrel

Thesis #2:

There are no abundant sustainable

“alternative” fuels


bio-alternativefailure


0

1

2

3

4

5

6

7

8

9

10

Bil

lio

n g

allo

ns

0

5

10

15

20

25

30

Per

cen

t

Ethanol Share of Corn Production

U.S. Corn Ethanol


0

1

2

3

4

5

6

7

8

9

10

Bil

lio

n g

allo

ns

0

5

10

15

20

25

30

Per

cen

t

Ethanol Share of Corn Production

9 b gals = 27% corn = 10 days’ oil

U.S. Corn Ethanol


Oil Consumption per capita

EIA 2003

Gallons per day

per capita


ethanol

Oil Consumption per capita

Gallons per day

per capita

Thesis #3:

Alternative fuels don’t address

the other crisis …


* congestion *

Hours Delay per

peak traveler


City Size

Congestion U.S. Cities – 20 Yrs.

2002

1992

1982

Federal Highway Administration

Net importer

Net importer

2006: 3.5 of 7.3 mbbd or 48%

Slıde: Ed Morse 2006

Recent studies show impact of emerging markets on demand

[email protected] | TomOD.com 34

Vehicles 2002 to 2030: China: 20x India: 7x México: 2.5x

Brazil: 3xDargay, Gately & Sommer, July 06

History

Projections

Conclusion #1:

Not

alternative fuels …


but alternative modes

Conclusion #2a:

Meanwhile, (next 20-30 years) …


oil dependence continues

oil CO2

http://en.wikipedia.org/wiki/Image:Iraq_map.png

U.S. Carbon Dioxide Emissions From Energy Use


US DoE/EIA Annual Energy Review *– 2008 - Figure 65. Carbon Dioxide Emissions From Energy Use Figure source data2007 (December 2008), Tables 6-11; and EIA, Office of Integrated Analysis and Forecasting, estimates.

oil CO2

http://www.eia.doe.gov/emeu/aer/txt/ptb1202.html

Conclusion #2b:

Meanwhile, (next 20-30 years) …


oil dependence means

foreign oil dependence


Analysis:


Global system: foreign dependencies

shifted to …

$

collective dependence on • the market• spare capacity • strategic reserves

Analysis:


U.S. geostrategy …

$


Analysis:


China, Venezuela resist …

$


Analysis:


$

OPEC two factions …


Analysis:


price hawks: Iran, Iraq, Libya, Venezuela, …

v. moderates:

Saudis, Kuwait, UAE, Qatar, …

$


44

political economy:

Globalized system

v.

Neo-colonial system

[email protected] | TomOD.com

45

Producers

International oil companies

IOCConsumers

No market (“spot market”) or futures market

Neo-Colonial System


Producers


IOCConsumers

Neo-Colonial System

• control volatility• security of supply

[email protected] | TomOD.com47

IOC

Producers


IOC Consumers

integrated

pipelines gas stationsfieldsconcessions

refiineriesships

Neo-Colonial System


Producers


IOCConsumers

Neo-Colonial System

• IOCs o eliminate marketo concessions o form cartelso produce the oilo decide rateo market oil

• home stateso enforce

concessionso mercantile-likeo contend

• bilateral dependencies

1970’s OPEC Revolution …


PETRÓLEO


OPEP Tiene 77% de las Reservas del Crudo Mundial - 2006

85 % reserves nationalized 77% OPEC

Marketplace


Producers Consumers

NYC WTI London Brent

$

Saudi Arabia

Global System

Marketplace

ships refineries gas stationswells

Producers Consumers

$

IOC & NOC

Saudi Arabia

Global System

NYC WTI London Brent


Producers ConsumersSPR

$

Security: Saudi excess + SPR

A.S.Saudi Arabia

‘one global barrel’ market


Elements of “One Global Barrel” system

Collective dependence: • On the market• Saudi spare capacity • IEA strategic reserves



Collective dependence: • On the market• Saudi spare capacity • IEA strategic reserves

• U.S. dominant playero insures own

domestic oil security by insuring global system



Security of SupplyThe main elements of today’s “one global barrel” oil security system are as follows:

1. The open market itself that forms a single, common, albeit virtual “global barrel” consisting of the spot and future markets, through which essentially all oil exports are circulated to consumers. This market operates in U.S. dollars.2.The emergency oil capacities of:

a. Saudi Arabia (and occasionally other OPEC states), which can be rapidly brought to market when there is a supply shortfallb. The Strategic Petroleum Reserves (SPR) system of the member states of the International Energy Agency (IEA) of the Organization of Economic Cooperation and Development (OECD), along with any commercial reserves held within these states at a given time, all of which can be brought to market during a severe supply crisis.


Security of SupplyThe main elements of today’s “one global barrel” oil security system are as follows:

3.The International Energy Forum (IEF) and the IEF’s two standing Secretariats (IEFS): consisting, respectively, of representatives of major commercial oil companies and state energy ministries, involving over 80 states. 4. U.S. Persian-Gulf regional hegemony, with the aim of insuring none of the local major producing states can project sufficient power there to dominate the production of any other(s), thereby undermining the global oil market. Also, protects the Straits of Hormuz



frompolitical economy

togeopolitics



US Gulf hegemony

1. Iraq – Kuwait paradigm

U.S. Gulf hegemony

59

U.S. Gulf hegemony

60

Prof.MichaelKlare,Blood& oil(2005))

US protectorates


“US Military Forces Surround Iran”

Clinton Admin. into Caspian oil basin

T. O’Donnell, Ph.D. | [email protected] | TomOD.com 62Jan 1, 2005

Petroleum Reserves


Petroleum Reserves

60% inPersian

Gulf


Petroleum Reserves

Gulf market share will

grow


The future -- R/P ratios of producers


heavy oil

The future -- R/P ratios of producers


Heavy Oil TO’D

Heavy Oil TO’D


Petroleum Reserves

Iraq + Kuwait


The Iraq – Kuwait occupation paradigm

Greenspan: Ouster Of Hussein Crucial For Oil SecurityBy Bob WoodwardWashington Post Staff WriterMonday, September 17, 2007; A03Alan Greenspan, the former Federal Reserve chairman, said in an interview that the removal of Saddam Hussein had been "essential" to secure world oil supplies, a point he emphasized to the White House in private conversations before the 2003 invasion of Iraq.

… "If Saddam Hussein had been head of Iraq and there was no oil under those sands," Greenspan said, "our response to him would not have been as strong as it was in the first gulf war. And the second gulf war is an extension of the first. My view is that Saddam,

looking over his 30-year history, very clearly was giving evidence of moving towards controlling the Straits of Hormuz, where there are 17, 18, 19 million barrels a day" passing through.

… Given that, "I'm saying taking Saddam out was essential," he said. But he added that he was not implying that the war was an oil grab.

"No, no, no," he said. Getting rid of Hussein achieved the purpose of "making certain that the existing system [of oil markets] continues to work, frankly, until we find other [energy supplies], which ultimately we will.“ [emphasis added – T.O’D.]© 2007 The Washington Post Company

http://www.washingtonpost.com/?nav=pf


Petroleum Reserves

Iran


Aim of US Gulf hegemony

2. basis for two OPEC factionsand

two U.S. policies


Barriles Exportados Por Capita 2006

0,00

0,10

0,20

0,30

0,40

0,50

0,60

0,70

0,80

Mill

ones

/ m

il

Calculado con cifras de OPEP

Barrels exported per capita, 2006


Barriles Exportados Por Capita 2006

0,00

0,10

0,20

0,30

0,40

0,50

0,60

0,70

0,80

Mill

ones

/ m

il

High Absorbers

Low Absorbers

Calculado con cifras de OPEP

Barrels exported per capita, 2006

?


POLITICAL ECONOMY OF GLOBAL OIL ORDER

1 Oil demand up2 Alternatives?

3 Gulf share growing

4 U.S. Gulf hegemony

Value of Petroleum Exports per Capita Real $2006 (CPI-U)

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

1960

1963

1966

1969

1972

1975

1978

1981

1984

1987

1990

1993

1996

1999

2002

2005

*

Year

$ U

.S.

Iraq

Source: OPEC Annual Statistical Outlook 2006 (original OPEC and other data)

Iran


0

10,000

20,000

30,000

40,000

50,000

60,000

Year

$ U

.S.

Kuwait

Saudi Arabia


UAE


0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

4,500

Year

$ U

.S.

Venezuela

Algeria


I. high absorbers

II. low absorbers

Basis for two OPEC factions

Export revenue / capita

TO’D from OPEC data, Real $2008 (CPU)

77

Iran’s Oil Production & Consumption 1971 – 2008

06 08

78

2006E

War

Sanctions

1979

Rev

olut

ion

Shah

Rebuild

06 08


79

2006E

War

Sanctions

1979

Rev

olut

ion

Shah

Rebuild

06 08


• IEA Strategic Petroleum Reserves: 4.0 x 10+9 barrels

• Iranian daily exports: 2.4 x 10+6 barrels / day

• So: IEA reserves cover Iran exports: 4.5 years

No oil weapon

80

2006E

War

Sanctions

1979

Rev

olut

ion

Shah

Re-build

• IEA Strategic Petroleum Reserves: 4.0 x 10+9 barrels• Iranian daily exports: 2.4 x 10+6 barrels / day • So: IEA reserves cover Iranian output

for: 4.6 years

06 08



US MENA Progress Bush added 2 new states

Gulf :Saudi Arabia, Kuwait, UAE & Iraq*

North Africa : Libya, Egypt, Algeria

Remaining :Iran


“Resource Wars”

~ either ~neo-colonial

mercantilist / privatize for big oil ?

~ or ~ global

market-protection for collective security ?

83

I. OPEC “High Absorber” Faction States

China’s “go abroad” aligns with Chavez’ ‘escape market of el imperio’

yet, not ‘axis of evil’MOU / Accords of Dec 2007, May 2008, Sep 2008, early 2010

Venezuela differentChina – Venezuela – Iran – Algeria

(example from Mommer of PDVSA)


global political

economy

Approach


• resources,• technology / science• production• distribution • governance / ownership• end use / consumption






global political

economy

Approach


• resources,• technology / science• production• distribution • governance / ownership• end use / consumption

• capitalist colonial• capitalist neo-colonial• capitalist global• socialist• socialist public /

private• capitalist public /

private





t. o’donnell, ph.d. | [email protected] | politics of oil & global systems of distribution tom...

Documents

nyc slide

thorium slide

oil electricity

th ipcc

com18 global energy

com20 global energy

com21 global energy

non renewable renewable