Sunday, January 15, 2006

THE THINNING THREAD

Oil troubles on the horizon: What if troubles don’t come singly?

Several items in the news the last week seem to me to be linked by the vital black river that powers our lives. None of this is really new, but none of it is improving, either. It might in fact be argued most of it is deteriorating.

What if it all goes to hell at once?

First, Nigeria. FoxNews is reporting on guerrilla attacks on the Nation’s oil industry by a new militant group:

“Nigerian Oil Platform Attacked, Militias Battling Troops”

http://www.foxnews.com/story/0,2933,181721,00.html

Two million barrels a day worth of production on the line here. Production has been down on average 10% due to disruptions.

Then Iraq. The New York Times reports on a very discouraging development in the fledgling Iraqi government:

“Shiite Leader Rejects Big Charter Changes, Frustrating Sunnis”

http://www.nytimes.com/2006/01/12/international/middleeast/12iraq.html?ex=1294722000&en=e03041049e4d745e&ei=5090&partner=rssuserland&emc=rss

Very bad. As I have noted before, this is their Nation to lose, their potential peace to squander. This is surely the way to do it. If the Sunnis are really marginalized and denied a share of Iraq’s oil wealth, strife is certain and outright civil war possible, irrespective of what the US does.

Another two million barrels a day of production currently possible; actual production inconsistent.

And Iran… With Iran’s increasingly bellicose international stance as a backdrop, The Washington Post brings us the President’s remarks:

“Bush Warns Against Nuclear-Armed Iran”

http://www.washingtonpost.com/wp-dyn/content/article/2006/01/13/AR2006011300327.html

It looks like this is going to end up in the hands of the Security Council, and if the Council fails to act… It’s hard to see a happy ending here. If we don’t act, the Israelis will. Best case: Oil production and deliveries intermittently interrupted. Worse case: Major disruptions.

Worst nightmare: Terrorist retaliation or even another embargo triggered by outrage against an Israeli attack. That may be borrowing trouble, but it happened before.

Four million barrels a day on the line… Far more if Iran receives unexpected support.

That’s eight million barrels of production and a bit over six million barrels of exports. Put another way, it’s 20% of the oil imports of the ten largest oil importers.

Toss in opportunists in Mexico and a communist flake running the government in Venezuela… That’s another 4.2 million barrels a day in shaky hands.

Anybody still think we don’t need alternative energy sources?

Comments:
When you get a chance, pop over to the Rocky Mountain Institute, www.rmi.org.

Some very eye-opening information on energy independence.

Also a good slide show presentation at
http://www.oilendgame.com/pdfs/WtOEg_Presentation.pdf

Fascinating stuff, and similar on some points to our past conversations.
 
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