Rising Powers, Shrinking Planet: The New Geopolitics of Energy PDF
Preview Rising Powers, Shrinking Planet: The New Geopolitics of Energy
36413_ch00.i-viii.qxd 3/3/08 9:30 AM Page i RISING POWERS, SHRINKING PLANET ‘A brilliant exposition on one of the gigantic problems facing society. Klare is a top expert on the politics of energy and resources. Read him!’ —Paul R. Ehrlich, author of The Dominant Animal ‘Klare articulates his message with sober honesty and appropriate urgency. If knowledge is power, it is also empowering.’ —Amory B. Lovins, Time Magazine ‘Hero of the Environment’ and author of Capitalism as if the World Matters ‘A splendid survey of the new world energy order. A provocative examination of the perilous race to secure energy resources.’ —Carole Nakhle, Research Fellow in Energy at Surrey Energy Economics Centre, UK, and author of Out of the Energy Labyrinth ‘Klare’s superb new book explains, in haunting detail, the trends that will lead us into a series of dangerous traps unless we muster the will to transform the way we use energy. As illuminating as it is unsettling.’ —Bill McKibben, author of Deep Economy 36413_ch00.i-viii.qxd 3/3/08 9:30 AM Page ii also by michael klare Blood and Oil: The Dangers and Consequences of America’s Growing Dependency on Imported Petroleum Resource Wars: The New Landscape of Global Conflict Light Weapons and Civil Conflict: Controlling the Tools of Violence World Security: Challenges for a New Century Rogue States and Nuclear Outlaws: America’s Search for a New Foreign Policy Low Intensity Warfare: Counterinsurgency, Proinsurgency, and Antiterrorism in the Eighties American Arms Supermarket Supplying Repression: U.S. Support for Authoritarian Regimes Abroad War Without End: American Planning for the Next Vietnams 36413_ch00.i-viii.qxd 3/3/08 9:30 AM Page iii R I S I N G P OW E R S, SHRINKING P L A N E T HOW SCARCE ENERGY IS CREATING A NEW WORLD ORDER MICHAEL KLARE 36413_ch00.i-viii.qxd 3/3/08 9:30 AM Page iv A Oneworld Book First published in Great Britain by Oneworld Publications 2008 First published in North America by Metropolitan Books 2008 Copyright © Michael Klare 2008 The right of Michael Klare to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act 1988 All rights reserved Copyright under Berne Convention A CIP record for this title is available from the British Library ISBN 978(cid:150)1(cid:150)85168(cid:150)648(cid:150)3 (Hbk) ISBN 978(cid:150)1(cid:150)85168(cid:150)628(cid:150)5 (Pbk) Cover design by designedbydavid.co.uk Printed and bound in Great Britain by Bell & Bain, Glasgow Oneworld Publications 185 Banbury Road Oxford OX2 7AR England www.oneworld-publications.com Learn more about Oneworld. Join our mailing list to find out about our latest titles and special offers at: www.oneworld-publications.com 36413_ch00.i-viii.qxd 3/3/08 9:30 AM Page v This book is dedicated to my students, past, present, and future, at Hampshire College and the other members of the Five College consortium—Amherst, Mount Holyoke, and Smith Colleges and the University of Massachusetts at Amherst. I am eternally grateful for your energy, enthusiasm, and inspiration. 36413_ch00.i-viii.qxd 3/3/08 9:30 AM Page vi 36413_ch00.i-viii.qxd 3/3/08 9:30 AM Page vii CONTENTS Prologue: 1 1. 9 , 2. 32 3. “” 63 4. 88 5. 115 6. ’ 146 7. “ ” 177 8. 210 9. 238 Notes 263 Acknowledgments 327 Index 331 36413_ch00.i-viii.qxd 3/3/08 9:30 AM Page viii 36413_ch01.qxd 3/3/08 9:35 AM Page 1 PROLOGUE: THE UNOCAL AFFAIR N othing like it had ever occurred before.On June 22,2005,a state- controlled Chinese oil company, CNOOC Limited, announced an $18.5 billion bid for the Unocal Corporation,a 115-year-old Amer- ican energy firm with substantial oil and natural gas reserves in North America and Asia.The unsolicited offer—the largest ever made by a Chinese company for a foreign enterprise—sent shock waves through the international business community. It overshadowed all previous Chinese takeover bids by several billion dollars, represented China’s first attempt to acquire a major American energy producer, and put CNOOC Ltd. in head-to-head competition with the Chevron Corporation—America’s second biggest oil company—which had also put in a bid for Unocal.Although both sides trumpeted the financial advantages of their respective offers,in the end it was geopolitics,not superior price,that determined the outcome.Fearing the loss ofvaluable energy reserves to a state-backed Chinese firm,Republicans in Congress mounted a successful legislative drive to block China’s acquisition of Unocal. In the past,foreign businesses had been allowed to purchase major American energy properties—most notably in 1990,when Venezuela’s state-owned oil company,Petróleos de Venezuela S.A.,acquired Cities Service (now CITGO), along with its refineries and service stations. 36413_ch01.qxd 3/3/08 9:35 AM Page 2 2 rising powers, shrinking planet But CNOOC’s bid came at a moment when Americans were becoming increasingly anxious about China’s growing economic might and the rising price ofgasoline.These issues fused in the popular imagination because China had recently arrived on the scene as a major oil con- sumer and was already being linked to global increases in energy costs. The battle over Unocal also coincided with the emergence ofwide- spread American unease over the adequacy of worldwide oil supplies. Throughout the twentieth century,petroleum output had largely kept pace with rising international demand,as worldwide energy stocks re- mained plentiful—and affordable. Cheap oil had, in fact, fueled the global ascendancy of the United States, which seemed to reach its apogee in 1991 with the disappearance ofthe one other superpower of that epoch,the Soviet Union.Barely a decade later,however,America began to see its dominance challenged—not by a new Great Power ris- ing to match it,but because of an entirely new phenomenon.Though still confident of its military superiority, the United States was faced with an imminent shrinkage in global oil supplies at the same time it was growing more reliant on imported energy—a development that forced it to depend on unfriendly (or unreliable) foreign suppliers and drove it into cutthroat competition with other oil-deficient nations like China.According to numerous energy experts,the global oil indus- try was no longer able to increase output in tandem with rising demand; some were even predicting an imminent downturn in production. “The world will soon start to run out of conventionally produced, cheap oil,”warned P rofessor David L.Goodstein,a physicist at the Cal- ifornia Institute of Technology and author of Out of Gas.1 Though other analysts disputed this pessimistic outlook,Goodstein’s point of view was taken up by enough experts to add urgency to the debate over Unocal’s fate. By 2005,Unocal,the object ofall this agitation,was no longer a ma- jor player in America’s domestic oil market,having long before sold its distinctive “Union 76”chain ofservice stations to ConocoPhillips.How- ever, it still possessed large untapped oil and gas deposits in Asia and North America,making it an appealing takeover target for any company (or country) seeking additional hydrocarbon reserves as a hedge against future scarcity.With relatively few untapped fields available for exploita-
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