Oil producing countries need us, and not just as consumers 4

There are many folks more qualified to comment on geopolitics than yours truly -- swing a dead cat and you'll hit one -- but let me venture a thought.

It is sometimes said that coming shortages will render oil less fungible; the idea is that rather than simply dumping oil into the world market, oil-producing countries will use their leverage for geopolitically nefarious purposes. The leverage they can gain from the oil will come to be worth more than the price of the oil on the market.

Two things weigh against this. One, the more nefarious of the oil-producing countries tend to depend almost entirely on oil revenue. They might could hurt oil consuming countries by shutting off exports, but they'd hurt themselves as much or more.

The other just occurred to me after reading this Christian Science Monitor piece about Kuwait. Here's the nut:

Kuwait's energy sector has survived the past 30 odd years on fields explored and developed in the 1970s and 1980s. With most of these fields aging and declining, the government is eager to open new fields.

To do this, however, it needs the advanced and complex technology that only international oil companies can bring in.

Fields are aging and declining all over, and the need for technological means to squeeze out the last drops is sure to devil any country that depends on oil revenue. They can't just shut the world out -- the world contains not only geopolitical rivals and consumers, but experts.

I'm still inclined to think that oil will be fungible as fungible can be (I sure do like the word "fungible") right up until a) it runs out, or b) nobody needs it any more.

Of course I'm probably muddling all sorts of issues together here and making basic mistakes of ignorance, but hey -- they gave me a blog, so I put words on it.

David Roberts is staff writer for Grist. You can follow his Twitter feed at twitter.com/drgrist.

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  1. Amy Gregory Posted 6:02 am
    17 Mar 2006

    Makes you wonderI'm not particularly knowledgable about the issue either. If it is true, as it seems and as you assert, that countries like Kuwait are largely reliant on multinationals like Shell and ExxonMobil and foreign technology, it makes you wonder why they don't spend much of their wealth trying to develop an independent R&D sector that would enable them with greater independence?

    Maybe it's not as easy as it sounds, who knows... not me.

    Clarence

    GreenpeaceUSA

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  2. Steve Cotuit Posted 6:33 am
    17 Mar 2006

    Oil and the "Free Market"Oil like any other commodity, under most circumstances should be fungible.  There is no question that as oil (and other resources) become increasingly expensive the wealthy will continue to consume while the poor will suffer.  But then, that is as it has always been.  What I don't get, is if you really believe in the free market as all those guys in New York and Washington claim they do, what's with pissing away hundreds of billions every year to "defend" the supply sources?  As long as the US is willing to pay up for oil we will get it. Right?  Or maybe the free market doesn't really work that way?  Perhaps, more or less fungible oil will flow to the powerful - might makes right? But then, that is as it has always been.

    Steve Cotuit

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  3. amazingdrx Posted 11:28 pm
    17 Mar 2006

    Uhhhh..Did you forget that most oil exporting nations are under the thumb of multinational oil corporations already?  And that colonial corporate powers were the ones who drew up the problematic boundaries of mideast "nations" like Iraq?
    Dictator/corporate henchmen like Saddam, "King" Faisal, and the Saudi "royals" were/are the only thing keeping oil flowing through corporate mobs and consumer money flowing back into corporate coffers, with small percentages going into Swiss bank accounts of the tyrants, and infitesimal amounts going to the beleaguered people (victims)of these tyrannies.
    And most of the money going to the people is in the form of genocide enabling machetes and machine guns in Africa, for instance.  And in the form of payments to terror training academies (maddrassahs) and suicide bombers in the case of the mideast.
    Kuwait invest in new oil technology?  Why?  Pumping the oil is the job of the exxon mob, not the tyrant mob.  
    Why do you think hosting exxon mobsters makes a society "open"?  Has that worked in Saudi Arabia?
    Is this a matter of "shutting the world out", or of giving over control of natural resources to multinational corporate monopoly control?
    Corporations do not like doing business with a nation like Venezuala, where the people get a fairer portion  of the benefit from the exploitation of oil resources.  Sign a contract with democracies?
    They would rather sign contracts with easily bribable and replacable tyrants like Saddam.  Maybe they are finding out that some of these dictators, likre Saddam, are not all that easy to replace?
    Their boy Chalabi promised flowers and warm hugs for coalition liberators, we see how that is working out.

    http://amazngdrx.blogharbor.com/blog

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  4. Steve Miller Posted 2:47 am
    19 Mar 2006

    They gave me a blog so I put words on it too.www.overthecoals.blogspot.com

    We keep reelecting Republicans & Democrats.  They're all on the take.

    author JUST CAUSE JUST FACTS see amazon.com I will email a free pdf file for anyone who asks. Learn about corruption you can't imagine.

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