THE GLOBAL POLITICS OF OIL
I. Description of energy sources
A. 80% fossil fuels; 20% renewable (most of which is wood)
B. What are fossil fuels? Oil, coal, gas
Dead plants & animals preserved; coal = trees in swamps;
oil & nat gas = dead organisms deposited on lake & ocean beds
Coal dirtiest, then oil, then gas
C. Oil = dominant form, esp. on global mkts.
Why? easiest to transport
D. Oil reserves: Saudi = 1/4 world's reserves; OPEC = 2/3
Most dependent countries = W. Europe & Japan
E. Oil production
Largest oil producer = SU (now Russia), by far.
--Chechnya & Chevron
2nd largest " " = U.S. (nearly twice Saudi productn)
-- U.S. originally had as much as Saudi, used up in indus'tn.
F. Uneven dist. of energy consumption: Per capita energy use in U.S.
is 80 times greater than in India sub-Saharan Africa.
II. Global economics of oil
A. Legacy of colonialism
Britain & U.S. carved up Ottoman Empire after WWI &
divided oil among 7 sisters:
Exxon, Mobil, Chevron, Texaco, Gulf, BP, & Royal Dutch
B. OPEC: market intervention
Lower prices bad for exporters >> OPEC cartel formed 1960
Initially weak; like all DCs, depend on primary commodities
1. OPEC price revolution
1973 Arab-Israeli conflict = #1 cause
C. OPEC as a classic public goods problem
Each member tries to capture a larger share of mkt, either by
setting prices optimally or raising production.
D. Factions in OPEC
1) Banker countries
2) Poor countries: hit hardest by price fluctuations
3) Radicals: Libya, Iran & Iraq
Q: Were either of the 2 major oil shocks a result of actual shortages?
NO, pol & mil.
1973 exacerbated by oil company hording to keep prices high;
1979 = Fall of Shah -- minor shortages, but prices tripled.
-Social psychology of energy prob: shortages >> short-term
conservation measures & govt attn to energy programs;
as soon as crisis is over, consumption habits resume.
III. Security issues
A. Middle East
Most of world's oil reserves in Mideast >> huge arms transfers
& nuclear proliferation
B. Impact in Third World
DCs supportive of Arab oil embargo: symbolic politics; higher
prices hurt them worst
This, combined w/ petrodollar surplus in banks led to massive
borrowing, wh. led. to debt crisis of 1980s.
C. Russian oil & gas
Perceived by some as security threat to U.S. bec. of potential
for tighter links to Europe. Russia needs capital & W. Europe
needs energy, esp. source besides Mideast.
-- Russian production drastically decreased in last 4 years
D. U.S. responses to oil shocks -- Exclusionist
1. Did not seek energy self-sufficiency or renewable sources
a. Shifted dependence to Latin American exporters
-- part of appeal of NAFTA
b. Expanded domestic exploration
c. Kept prices low
Q: Why is U.S. gasoline about 1/2 the cost in W. Europe?
IV. Pollution from fossil fuels
A. Oil Pollution at sea
Dramatic oil spills, but 90% is spilled as matter of routine
B. Urban air pollution
Ozone, CO, nitrous oxides, particulates.
C. Acid Rain (especially from coal)
D. Climate change
V. The transnational journey of a cup of coffee:
How most Americans become global actors every morning.
A. Beans: Colombia
1. Insecticide: Germany's Rhine River Valley
2. Fertilizer: petroleum-based from Russian oil, manufactured in France
3. Diesel-powered picker: Saudi oil, picker from Detroit
B. Transportation to New Orleans
1. Freighter: Japanese built from S. Korean steel;
iron ore from tribal lands of Papua New Guinea;
Kuwait oil refined in New Jersey
C. Roasting & packaging
Roasted for 10 minutes at 400' in electric ovens, made in Taiwan &
powered by electricity from coal that was strip-mined in Kentucky.
Plastic liner: Texas oil processed in Louisiana's cancer corridor.
Foil package: bauxite from Australia's aboriginal lands,
processed into aluminum in the Pacific Northwest using
hydroelectricity from one of the many dams on the Columbia River
D. Transportation to Seattle
Mercedes deisel truck: German
Oil: Indonesian
E. To your home
Car trip to grocery store: car, oil
Electric grinder & electric heat to boil water.