Dead Men Left

Wednesday, February 16, 2005

Texas, OPEC, Kyoto

Stumbled across this interesting piece on a peculiar meeting of minds taking place in the US:

But a curious transformation is occurring in Washington, D.C., a split of foreign policy and energy policy: Many of the leading neoconservatives who pushed hard for the Iraq war are going green.

The reason, as you may have guessed, has little to do with defending the planet, but rather a lot to do with defending that little section of it marked "United States": by reducing the US' crippling dependence on oil, they hope to reduce its dependence on the Middle East, and particularly Saudi Arabia.

...the fact that energy efficiency and conservation might help the environment is an unintended side benefit. They want to weaken the Saudis, the Iranians, and the Syrians while also strengthening the Israelis. Whether these ends are achieved with M-16s or hybrid automobiles doesn't seem to matter to them.

The well-known opposition of mainstream Republicans to environmental measures is at least one factor weighing against the success of the "green neo-cons". Their overtly isolationist, security-weighted agenda is another. It's unlikely that a credible green movement could lend much support to energy-efficiency drives as part of the same package as increased efforts to expoit resources in Alaska, Antartica and anywhere else without too many meddlesome Arabs.

However, they have history on their side. As Alan Greenspan pointed out in a speech last year to the US-Saudi Arabian Business Council,

The sharp price increases of the early 1970s brought to an abrupt end the extraordinary period of growth in U.S. oil consumption and the increased intensity of its use that was so evident in the decades immediately following World War II. Between 1945 and 1973, consumption of oil products rose at a startling 4-1/2 percent average annual rate, well in excess of growth of real gross domestic product. However, since 1973, oil consumption has grown, on average, only 1/2 percent per year, far short of the rise in real GDP.

The US' current excessive dependence on oil arose during a period of exceptionally cheap, reliable supplies. With the Texas Railroad Commission, like OPEC today, setting production quotas to regulate prices, the vast, easily-mined oil reserves of the US seemed to be a huge free gift for economic growth. It was only after 1970, when the supply of oil in the US was exceeded by demand, that the costs of this dependence became more apparent. The United States became a net importer of oil, losing its ability to manipulate prices, exposing it to the vagaries of a world market - and, not least, a Middle East disinclined to accept America's jurisdiction.

What we are seeing now is, in part, an attempt to break the US free from the shackles accidentally imposed during the thirty year boom. Blind market forces and the occasional government restriction have removed a significant part of that historic dependency, but at least some in Washington take a more strategic view of the problem: launching a major, and costly, invasion of one oil-producer and developing an obsessional interest in a second displays something a certain bad faith in the possibilities of the free market alone.

As a footnote, the general public in the US is becoming increasingly aware of the environmental consequences flowing from current US policy. This survey, for example, shows the numbers considering the "global environment" to be a "very important" foreign policy goal have risen from 48% in 1998 to 66%, whilst support for Kyoto has risen appreciably: despite four years of concerted Republican efforts in defiance of environmental concerns, they appear to be losing the battle for hearts and minds.