Guns, butter and petroleum

I recall a little tale told by a U.S. general to illustrate the importance of oil.

Speaking to a military gathering at the Canadian Forces College in Toronto in January 2006, Lt.-Gen. Thomas Metz described how a man operating a chainsaw with a mere pint of gasoline could cut a great deal of wood in very little time.

By comparison, that same man could eat a large breakfast the next morning and head out to cut wood - using only a hand saw. The general noted that the man could spend the whole day cutting wood with the hand saw and end up with nothing but a tiny fraction of his previous day's efforts with the chainsaw.

The general's message was clear: Oil is what powers the modern world.

The point is a simple one, often made by oil analysts. But what was striking about Metz's tale was that it came from a U.S. military leader, not an oil analyst.

And it was part of his presentation about the military challenges America faces.

Metz's deeper message seemed clear: ensuring America's access to oil is not only a vital goal, but one backed up by the full force of the U.S. military.

No one in the audience that day gasped at the implied linkage between oil and the use of U.S. military power. Indeed, ensuring America's access to abundant sources of oil has been regarded as a matter of U.S. national security since World War II, and this has been openly expressed for decades by America's military and political leaders, including U.S. presidents.

As the 1980 Carter Doctrine stated, any move to block America's access to Persian Gulf oil would be regarded as "an assault on the vital interests of America" that would "be repelled by any means necessary, including military force."

The concept that America would use military might to ensure its access to oil has only really become controversial in the last five years because George W. Bush's invasion of Iraq - which just about everyone now concedes had some relationship to that country's massive oil reserves - exposed the sheer aggression inherent in the concept.

Indeed, the Bush presidency brought into sharp relief the regressive nature of U.S. energy policy in the post-war years: America's consumption of a hefty 25 per cent of the world's annual oil production even though Americans make up only 5 per cent of the world's population, and U.S. willingness to use military power to ensure the continuation of this gluttonous level of consumption. (Canada also consumes a notoriously large amount of oil per capita.)

Bush's imminent departure - and his replacement by the more co-operative Barack Obama - inevitably raises the question of whether there is any possibility of change in the decades-old, highly destructive U.S. approach to energy.

Of course, the stark reality of global warming adds new urgency to the problem of U.S. overconsumption of oil. Bush's refusal to co-operate with worldwide efforts to tackle climate change blocked meaningful progress on this file for the past eight years. (With Bush's departure, Prime Minister Stephen Harper emerges as perhaps the leading obstructionist.)

Obama has signalled a willingness to change course, to participate in worldwide efforts against climate change and even to initiate dramatic steps within the United States to reduce oil consumption and invest in alternative energies.

It's unclear, however, whether Obama is willing to put sufficient funds and political capital into the goal of dramatically reducing U.S. greenhouse gas emissions.

Even more uncertain is whether Obama will break with the long-standing U.S. policy of backing up U.S. energy aspirations with military power.

Certainly his reappointment of U.S. Defence Secretary Robert Gates, as well as his choice of hawkish Democrats Hillary Clinton and Joe Biden for key positions in his administration, suggest there may be little fresh thinking around so-called national security issues.

Obama takes over at a time when international competition over oil is sure to intensify in the coming years. This may seem odd, given the recent collapse in oil prices and the economic downturn.

But these lower oil prices are almost certainly a short-term development - and one that threatens to lull us into a false sense of security about future oil supplies. (Even though we need to dramatically reduce oil consumption to ward off climate change, we don't want to run out of oil before we've figured out how to replace it with an alternative energy source.)

The reality remains that oil is a finite resource, a precious one-time inheritance we've used up recklessly over the past century. As a result, we've already consumed most of the Earth's easily accessible oil. Much of what's left can be produced only with great difficulty, at enormous environmental and financial cost - as Alberta's oil sands illustrate.

For years, critics, including leading geologists and economists as well as prominent Houston investment banker Matthew Simmons, have argued that we're rapidly depleting global reserves of conventional oil, creating a potentially dangerous situation for the world. Governments, however, have ignored or played down the problem.

But in a surprising development, the International Energy Agency, the developed world's oil watchdog, has revised its previously reassuring estimates and reported that the world's major oil fields are declining faster than previously thought.

Last year, for the first time, the agency actually conducted a comprehensive study of the world's 800 largest oil fields and concluded that the natural annual rate of output decline is a disturbingly high 9.1 per cent, about double previous estimates.

Meanwhile, the problem of declining output is exacerbated by rising world oil demand, largely due to the extraordinary increase in energy consumption in China and India.

China, second only to the United States in oil consumption, is, like the U.S., highly dependent on oil imports, particularly from war-torn Sudan, and is restlessly searching the globe for new petroleum sources.

China's ravenous oil appetite adds a dangerous new dimension to the U.S. determination to secure control over world oil reserves.

Indeed, Chinese interest in the undeveloped oil fields of Iraq appears to have been on the minds of U.S. strategic planners in the run-up to the 2003 U.S. invasion. Among the secret documents prepared by U.S. Vice-President Dick Cheney's task force on energy was a list of "foreign suitors" - including China - that had been making major oil deals with then-Iraqi dictator Saddam Hussein. (With Iraq now under U.S. occupation, China has been pushed aside and lucrative oil deals have been awarded instead to U.S. and British oil multinationals.)

A potential showdown could well be looming between the world's most populous nation and the world's most heavily armed nation as they race to lock up control of the world's remaining oil supplies - even as global production of that all-precious resource starts to seriously decline.

Will Obama prevent this showdown?

In many ways, the future of the world depends on it. But it may be expecting a bit much from a guy who already has quite a lot on his shoulders.

Linda McQuaig is author of It's the Crude, Dude: War, Big Oil and the Fight for the Planet.

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