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In the Cockburns' recent book, a world-weary diplomat states, "When oil reaches $40/barrel, (the West) will rehabilitate Saddam as Mother Theresa" (approx.). There's an echo of this line in the first article below, which concerns OPEC, our addiction to oil, and its inevitable depletion. The second piece (also by William Rees-Mogg of the London Times) is gloomier still, drawing from a dangerously influential hypothesis against which Edward Said and others have argued (and which Clinton, Indyk, and Talbot have all - publicly, at least - disavowed): Samuel Huntington's 'Clash of Civilizations'. Depressing autumnal reading. Cheers and regards, Drew Hamre Golden Valley, MN USA --- http://www.the-times.co.uk/news/pages/tim/99/08/30/timopnope01004.html?999 August 30 1999 OPINION Black gold has made the modern age possible. The end of the Earth's supplies has often been predicted. Soon those predictions will come true Troubled waters for oil The Times of London by William Rees-Mogg Great issues have long histories. Last Friday was the 140th anniversary of the drilling of the first oilwell at Titusville, Pennsylvania, an event that made the 20th century possible. The use of petroleum products as the main source of energy has given the modern world its character, but the oil business developed quite slowly. In 1898, nearly 40 years after Titusville, Britain imported only £3.7 million of petroleum products, a little more than the value of imports of coffee, and a fifth of the £18.1 million of coal exports. In terms of energy supply, coal was still king. The motor car and the aeroplane changed all that; they also changed the world, in peace and war. The drawback to the petroleum economy of our now departing century is that it is based on a finite resource. No one can be sure when the oil will run out - there have been too many pessimistic forecasts that have already been proved mistaken - but run out it will. The best estimate is that oil will be about a 200-year phenomenon, and that there will be a rapid decline in supplies by the second half of the next century. Some estimates suggest that we are now about halfway through the totality of oil resources, but there are potential technical developments which could defer that, including oil shale, better recovery methods, and even new discoveries. No one expects to find another Saudi Arabia or even another Alaska. The largest reserves of accessible oil have almost certainly been found already. In the 1970s, it looked as though the crunch would come much earlier; in that decade there were oil shocks which, from low to high, raised crude oil prices by no fewer than 20 times. The oil economists of that period expected this trend to continue into the 1980s and 1990s, but it did not. The market did its work. Very high prices led to increasing exploration, to more efficient production and more efficient use. Supply and demand came back into balance and prices fell to unexpectedly low levels. Market forces undermined the Organisation of Petroleum Exporting Countries (Opec), the cartel, which lost control of the oil price. Yet the market cannot overcome depletion. The United States was a huge exporter of oil in the early part of this century, and is now a huge importer. There is no way for the market to put the oil back under Texas. It has been used up. On Friday The Times published a lead letter from Dr David Fleming, the director of the Lean Economy Initiative. He argues that the turning point is with us already. "Next year," he writes, "world oil production, with the exception of the five Middle East Opec members, will reach its halfway mark; in 2001 it will start its steady decline towards depletion." This may be too precise, but in terms of the radical shift between the old and new centuries, it is probably justified; the 20th century was based on oil; the 21st will have to adjust to the decline of the oil economy. The recent rise in the market price supports Dr Fleming's argument, at least in the short term. The price of crude oil has already doubled this year. The Opec cartel has managed to regain a substantial part of its control over the price. But this has been a price recovery from the exceptionally low levels at the end of 1998. Dr Fleming argues that Middle East Opec, whose members are Iraq, Iran, Kuwait, Saudi Arabia and the United Arab Emirates, will from now on have a rapidly rising market share, going above the 30 per cent mark, which he regards as critical. He comments: "The last time it had a share of 30 per cent or more was in the period 1973-79," the period of the great oil price inflation. Last weekend oil ministers from Mexico, Saudi Arabia and Venezuela were meeting in Caracas to discuss mechanisms for maintaining oil prices "within a predetermined range". Opec has already played its part in the doubling of the oil price; obviously, it is better that the new target should be a stable price within a predetermined range. Nevertheless, the renewed power of Opec is disturbing. All cartels work to raise prices; if the underlying market has put Opec back in business, that must mean that the equation of supply and demand has already moved towards higher prices. In the 1970s, oil proved to be the fundamental commodity. The world seemed to move on to an oil standard, as currencies responded to the inflation of the oil price by inflation of their own. There was a global financial battle in the 1970s between the oil cartel, organised by Opec, and the currency cartel, organised by the world's central bankers. In the 1970s, Opec won that battle, only to lose in the 1980s and 1990s. Battle may again be joined in the first decade of the next century. If Dr Fleming is correct, the trump cards may be back in Opec's hand, although painful experience may make Opec play them less aggressively than in the 1970s. In that decade, inflation rose in almost all countries, interest rates rose, real values fell, share prices fell, unemployment rose, governments were turned out. It was a miserable decade. The gold price followed the oil price; as currencies weakened, the historic commodity standard of gold benefited from the victory of the new commodity standard of oil. Whether this year's central bank attack on the gold price has been a pre-emptive strike by the central bankers, fearful of a return to 1970s conditions is an interesting question; probably it is nothing as well considered as that. A return to the oil market conditions of the 1970s would be very damaging for the global economy, for the developing countries of Asia, for Europe, for Japan and for America. Britain would have some protection from North Sea oil; Russia would benefit hugely; sheikhs would again become hyper-rich; oil would be an investment of choice. The United States already has a dangerously large balance of payments deficit; more expensive oil imports would make that worse, although the US dominance in defence would encourage Opec states to recycle their wealth back into dollars. If the price of crude oil rose by a factor of 20, as it did in the 1970s, one would have to expect spectacular consequences. Crude oil would go to $200 a barrel, there might be 20 per cent inflation, or higher, gold at $2,000 or $3,000 an ounce, US reconciliation with Iraq, the break-up of the euro and a Conservative majority of over 100. Yet this all seems quite unlikely. The oil market situation is not as strong as it was in 1973. The political unity of Opec is not as great. There is no new war in the Middle East; in 1973, war with Israel triggered the first oil price shock. I do not believe that anyone can predict the timing of oil depletion, or its effect on oil prices. There are too many variables, in the development of technology, in changing patterns of use, in the effectiveness of Opec, in the response of the consumer governments, in reserves. I suspect that Dr Fleming's forecast will prove to have been premature. Yet the difficulty of forecasting means that he may prove right even in the short term. He will certainly be right in the longer term. Coal was king in 1800; coal was still king in 1900; coal is a dethroned monarch in 2000. Oil is king in 2000; oil will have abdicated before 2100. The best guide is always the market. If the price of crude settles down at about $20 a barrel, the oil doomsday will be postponed. If it continues to rise to $40 a barrel and beyond, the next decade will be facing the return of the oil crisis of the 1970s. Even on the most favourable short run movement of the oil price, Dr Fleming's warning is necessary. When coal was dethroned, oil took over the throne. When oil abdicates, there will be no pretender to take its place. No one knows how the eight or nine billion people who may be living on Earth in 2050 will manage on far less oil than is being used by the six billion who are alive now. --- --- September 20 1999 OPINION Forecasts of worldwide conflict on the Islamic fault-line are chillingly accurate A prophet of doom The Times of London by William Rees-Mogg The world is full of violence. There are the massacres in East Timor; the murder of 300 Russians by terrorist bombs, probably related to Chech-nya; the ethnic cleansing of the Albanians and then of the Serbs in Kosovo; the Nato bombing itself, which has left Serbia devastated and Kosovo polluted with unexploded cluster bombs; the grumbling confrontation in Kashmir between India and Pakistan, both nuclear powers; Saddam Hussein's plans for weapons of mass destruction; the Anglo-American response of sanctions and bombs. However safe we may feel going about our usual business in one of the West's great cities, this century of violence is ending with worldwide violence, and the threat of worse to come. Those episodes of violence which seem of more than local relevance, or have resulted in intervention by the United Nations or the United States, all have something in common that the world is very reluctant to recognise. In one sense, East Timor, Chechnya, Kosovo, Iraq and Kashmir are all parts of a single global problem - they are all conflicts between Islamic countries or ethnic groups and other cultures. They are not all confrontations between Islam and the West, though Iraq is such a confrontation, and is recognised as such throughout the Islamic world. Even the great Arab peacemaker, King Hussain of Jordan, said that the Gulf War was "a war against all Arabs and all Muslims and not against Iraq alone". The West is also deeply involved in the conflict in East Timor; the East Timorese are Roman Catholics, and Australia is the leading peacekeeping nation. Yet the other three conflicts are not of Islam against the West, but of Islam against other world cultures. Kashmir is a conflict between the resurgent Islam of Pakistan and the resurgent Hinduism of India. Chechnya is a conflict between Islam and Russia, the core nation of Slav Orthodoxy. Kosovo is an even more extraordinary situation, a conflict between Islam and Slav Orthodoxy, in which the West intervened on the side of Islam. In 1993 Samuel Huntington, a Professor of International Studies at Harvard, published an article in Foreign Affairs arguing that after the end of the Cold War conflicts between civilisations would dominate the future of world politics. He gave warning of the seriousness of "fault-line conflicts" between civilisations, and was much criticised for his observation that "Islam has bloody borders". East Timor, Chechnya, Kosovo, Iraq and Kashmir seemed to confirm that observation, whether or not one thinks that Islam is the more to blame in any particular case. In 1996 Professor Huntington expanded his argument into a book, The Clash of Civilisations and the Remaking of the World Order (Simon and Schuster, £16.99), which was described by Henry Kissinger as presenting "a challenging framework for understanding the realities of global politics in the next century". To an alarming degree, Professor Huntington's analysis seems to be proving accurate. His thesis is that the people of the world have grouped into separate civilisations which have been a powerful force of cohesion in early human history. "Blood, language, religion, way of life, were what the (Ancient) Greeks had in common . . . of all the elements which define civilisations, however, the most important usually is religion." He identifies several major contemporary civilisations: the Chinese, Japanese, Hindu, Islamic, Orthodox, Western and Latin American, all more than 1,000 years old. The four largest are the Chinese, Hindu, Islamic and Western, each with about a billion people. Each has its founding religion, around which the civilisation is formed: Confucianism, Hinduism, Islam and Christianity. China and India are the core countries of their own civilisation; the West is seen as double-headed between the United States and Europe; Islam has no core country, which makes it more difficult to relate to from the outside. Islam and the West, in different ways, present the world with the greatest difficulties. The West is perceived as claiming a unique dominance; it represents both a universal power, based on American technology, and a universal ideology, based on liberalism, democracy and human rights. The bombing of the Chinese Embassy in Belgrade was seen by the Chinese, and by the other civilisations, as a symbolic exercise of Western arrogance. The other civilisations perceive the West as alarmingly powerful in military and economic terms, while being undermined by social indiscipline, the break-up of the family, loss of religious belief, crime, drugs and the underclass, as well as by ageing populations, low savings and unemployment. The West may see itself as the model for the next century; all the other civilisations see as much to avoid as to emulate. "The West is overwhelmingly dominant now and will remain number one in terms of power well into the 21st century. Gradual, inexorable and fundamental changes, however, are also occurring in the balances of power amongst civilisations, and the power of the West . . . will continue to decline," Huntington says. In the 75 years between 1920 and 1995, the West's share of political control of territory declined by 50 per cent, of world population by 80 per cent, of world manufacturing output by 35 per cent and of military manpower by 60 per cent. Islam is divided into some 45 independent states, but is united by the strongest of the great world religions, in terms of its cultural hold on its followers. It has one great economic advantage - control of much of the world's oil reserves, which are predicted to run out some time in the next century. It is still in a stage of rapid population growth and Muslims are expected to make up about 30 per cent of the world's population by 2025. Already, Islamic immigration has caused a strong political reaction in Western Europe; half of the babies born in Brussels, the headquarters of the European Union, are to Arab mothers. Young, unemployed and disaffected Muslims are a threat both inside their own countries and to the West. "The Islamic resurgence has given Muslims renewed confidence in the distinctive character and worth of their civilisation and values compared to that of the West. The West's simultaneous efforts to universalise its values and institutions . . . and to intervene in conflicts in the Muslim world, generate intense resentment among Muslims." The danger lies in the reaction between this revival of Islamic confidence, backed by a growing population, and the fears of the neighbouring civilisations. All the neighbouring civilisations feel potentially under threat. The West is concerned about oil, nuclear proliferation, immigration,the survival of Israel and human rights. The threat to Russia is even more direct, from the current wave of terrorism and claims for independence. The Serbs fear a greater Albania. India fears Pakistan and potentially the alienation of the 100 million Muslims in India itself. China is concerned about Central Asia and about the Chinese in Indonesia. The non-Muslim population of sub-Saharan Africa has anxieties as well. It cannot be said that Professor Huntington's proposed remedies are as convincing as his analysis. I am more optimistic than he seems to be about the future relationships of three of the four largest civilisations. I expect the West's relationships with China and India, and their relationship with each other, to continue to improve. Islam is the unresolved problem. Certainly the West needs to show much greater insight into the Islamic revival, which will develop further. Arrogance, cultural supremacism or downright hostility must be the worst possible response. Yet, as in Serbia, the neighbours of Islam will find their own populations reacting to Islamic revival. It was fear of the Albanians in 1987 which brought Milosevic to power. The world is not going to find it easy to bind up the "bloody borders" of Islam. -- ------------------------------------------------------------------------- This is a discussion list run by the Campaign Against Sanctions on Iraq. To be removed/added, email email@example.com, NOT the whole list. 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