t. o’donnell, ph.d. | [email protected] | politics of oil & global systems of distribution tom...
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T. O’Donnell, Ph.D. | [email protected] | http://TomOD.com
Politics of oil &
global systems of distribution Tom O’Donnell, Ph.D.The New School University, NYC
T. O’Donnell, Ph.D. | [email protected] | TomOD.com
2
ProjectionsHistory
World Primary Energy Demand
Source: IEA WEA reference scenario 2006
Oil #1
T. O’Donnell, Ph.D. | [email protected] | http://TomOD.com
peak oil alternatives energy independence big oil / IOCs OPEC / NOCs speculation prices resource wars north-south
energy security oil curse rentismo environment global warming development …
Oil Issues
T. O’Donnell, Ph.D. | [email protected] | http://TomOD.com
peak oil alternatives energy independence big oil / IOCs OPEC / NOCs speculation prices resource wars north-south
energy security oil curse rentismo environment global warming development …
Oil Issues
T. O’Donnell, Ph.D. | [email protected] | http://TomOD.com
global political
economy
Approach
• domestic politics• geopolitics• development • environment
T. O’Donnell, Ph.D. | [email protected] | http://TomOD.com
global political
economy
Approach
• domestic politics• geopolitics• development • environment
• resources• technology • production• distribution • governance / ownership• end use / consumption
T. O’Donnell, Ph.D. | [email protected] | http://TomOD.com
global political
economy
Approach
• domestic politics• geopolitics• development • environment
T. O’Donnell, Ph.D. | [email protected] | http://TomOD.com
global political
economy
Approach
• global system • regional / state strategieso US, EU, Japan o China, India o Russia, Caspian, E. Europe o Persian Gulf, Lat. America,
Maghreb, Africa
• domestic politics• geopolitics• development • environment
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 9T. O’Donnell, Ph.D. | [email protected] | TomOD.com 9
Oil
Gas
Coal
Nuclear
Hydro
Biomass
Geothermal
Wind
Solar & Etc.
0 20 40 60 80 100 120 140 160 180
Resource Use – Per Year
Exojoules
IPCC 2007
2004
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 10T. O’Donnell, Ph.D. | [email protected] | TomOD.com 10
Oil
Gas
Coal
Nuclear
Hydro
Biomass
Geothermal
Wind
Solar & Etc.
0 20 40 60 80 100 120 140 160 180
Resource Use – Per Year
Exojoules
IPCC 2007
2004
Non-renewable
Renewable
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Uranium (U235+U238 fertility)
Uranium (U235 once through)
Coal
Gas
Conventional Oil
0 50,000 100,000 150,000 200,000 250,000
Primary Resources - non-renewable
Exojoules
IPCC 2007
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 12
Uranium (U235+U238 fertility)
Uranium (U235 once through)
Coal
Gas
Conventional Oil
0 50,000 100,000 150,000 200,000 250,000
Primary Resources
Exojoules
IPCC 2007
Fossil Fuels
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Uranium (U235+U238 fertility)
Uranium (U235 once through)
Coal
Gas
Conventional Oil
0 50,000 100,000 150,000 200,000 250,000
Primary Resources
Exojoules
IPCC 2007
SuperNova
U235 / U238 = 1 / 138(also Thorium)
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 14T. O’Donnell, Ph.D. | [email protected] | TomOD.com 14
Uranium
Uranium w/ Breeding
Coal
Gas
Conventional Oil
IPCC 2007
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 15
Uranium
Coal
Gas
Conventional Oil
Solar WindGeothermalBiomassHydro
IPCC 2007
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 16
Uranium
Coal
Gas
Conventional Oil
Solar WindGeothermalBiomassHydro
IPCC 2007
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 17
Losses
Buildings
Industry
Transport
IPCC 2007
Two Categories of Primary Energy:
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 18
Global Energy System: - 2004Source: 4th IPCC, from IEA 2006
• Transport – 95% from oil
• Electricity – from diverse sources
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Observation:
Two Categories of Primary Energy:
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Global Energy System: - 2004Source: 4th IPCC, from IEA 2006
Two Categories of Primary Energy:
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Global Energy System: - 2030Source: IPCC from IEA 2006
Thesis #1:
“The stone age did not end for a lack of stone”
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“Peak Oil” not a problem …
or a solution
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Reserves More Uncertain
Potential liquid hydrocarbon production (Gbbl)
Cost $/barrel
Oil & Substitutes
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 24
Reserves More Uncertain
Potential liquid hydrocarbon production (Gbbl)
Cost $/barrel
Oil & Substitutes
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 25
Reserves More Uncertain
Potential liquid hydrocarbon production (Gbbl)
Oil & Substitutes
Cost $/barrel
Thesis #2:
There are no abundant sustainable
“alternative” fuels
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bio-alternativefailure
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0
1
2
3
4
5
6
7
8
9
10
Bil
lio
n g
allo
ns
0
5
10
15
20
25
30
Per
cen
t
Ethanol Share of Corn Production
U.S. Corn Ethanol
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0
1
2
3
4
5
6
7
8
9
10
Bil
lio
n g
allo
ns
0
5
10
15
20
25
30
Per
cen
t
Ethanol Share of Corn Production
9 b gals = 27% corn = 10 days’ oil
U.S. Corn Ethanol
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 29
Oil Consumption per capita
EIA 2003
Gallons per day
per capita
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ethanol
Oil Consumption per capita
Gallons per day
per capita
Thesis #3:
Alternative fuels don’t address
the other crisis …
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 31
* congestion *
Hours Delay per
peak traveler
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City Size
Congestion U.S. Cities – 20 Yrs.
2002
1992
1982
Federal Highway Administration
Net importer
Net importer
2006: 3.5 of 7.3 mbbd or 48%
Slıde: Ed Morse 2006
Recent studies show impact of emerging markets on demand
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Vehicles 2002 to 2030: China: 20x India: 7x México: 2.5x
Brazil: 3xDargay, Gately & Sommer, July 06
History
Projections
Conclusion #1:
Not
alternative fuels …
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 35
but alternative modes
Conclusion #2a:
Meanwhile, (next 20-30 years) …
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 36
oil dependence continues
oil CO2
U.S. Carbon Dioxide Emissions From Energy Use
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 37
US DoE/EIA Annual Energy Review *– 2008 - Figure 65. Carbon Dioxide Emissions From Energy Use Figure source data2007 (December 2008), Tables 6-11; and EIA, Office of Integrated Analysis and Forecasting, estimates.
oil CO2
Conclusion #2b:
Meanwhile, (next 20-30 years) …
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 38
oil dependence means
foreign oil dependence
Analysis:
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 39
Global system: foreign dependencies
shifted to …
$
collective dependence on • the market• spare capacity • strategic reserves
Analysis:
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 40
U.S. geostrategy …
$
collective dependence on • the market• spare capacity • strategic reserves
Analysis:
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 41
China, Venezuela resist …
$
collective dependence on • the market• spare capacity • strategic reserves
Analysis:
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 42
$
OPEC two factions …
collective dependence on • the market• spare capacity • strategic reserves
Analysis:
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 43
price hawks: Iran, Iraq, Libya, Venezuela, …
v. moderates:
Saudis, Kuwait, UAE, Qatar, …
$
collective dependence on • the market• spare capacity • strategic reserves
44
political economy:
Globalized system
v.
Neo-colonial system
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45
Producers
International oil companies
IOCConsumers
No market (“spot market”) or futures market
Neo-Colonial System
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Producers
International oil companies
IOCConsumers
Neo-Colonial System
• control volatility• security of supply
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IOC
Producers
International oil companies
IOC Consumers
integrated
pipelines gas stationsfieldsconcessions
refiineriesships
Neo-Colonial System
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Producers
International oil companies
IOCConsumers
Neo-Colonial System
• IOCs o eliminate marketo concessions o form cartelso produce the oilo decide rateo market oil
• home stateso enforce
concessionso mercantile-likeo contend
• bilateral dependencies
1970’s OPEC Revolution …
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 49
PETRÓLEO
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OPEP Tiene 77% de las Reservas del Crudo Mundial - 2006
85 % reserves nationalized 77% OPEC
Marketplace
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Producers Consumers
NYC WTI London Brent
$
Saudi Arabia
Global System
Marketplace
ships refineries gas stationswells
Producers Consumers
$
IOC & NOC
Saudi Arabia
Global System
NYC WTI London Brent
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Producers ConsumersSPR
$
Security: Saudi excess + SPR
A.S.Saudi Arabia
‘one global barrel’ market
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Elements of “One Global Barrel” system
Collective dependence: • On the market• Saudi spare capacity • IEA strategic reserves
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Elements of “One Global Barrel” system
Collective dependence: • On the market• Saudi spare capacity • IEA strategic reserves
• U.S. dominant playero insures own
domestic oil security by insuring global system
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Elements of “One Global Barrel” system
Security of SupplyThe main elements of today’s “one global barrel” oil security system are as follows:
1. The open market itself that forms a single, common, albeit virtual “global barrel” consisting of the spot and future markets, through which essentially all oil exports are circulated to consumers. This market operates in U.S. dollars.2.The emergency oil capacities of:
a. Saudi Arabia (and occasionally other OPEC states), which can be rapidly brought to market when there is a supply shortfallb. The Strategic Petroleum Reserves (SPR) system of the member states of the International Energy Agency (IEA) of the Organization of Economic Cooperation and Development (OECD), along with any commercial reserves held within these states at a given time, all of which can be brought to market during a severe supply crisis.
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Security of SupplyThe main elements of today’s “one global barrel” oil security system are as follows:
3.The International Energy Forum (IEF) and the IEF’s two standing Secretariats (IEFS): consisting, respectively, of representatives of major commercial oil companies and state energy ministries, involving over 80 states. 4. U.S. Persian-Gulf regional hegemony, with the aim of insuring none of the local major producing states can project sufficient power there to dominate the production of any other(s), thereby undermining the global oil market. Also, protects the Straits of Hormuz
Elements of “One Global Barrel” system
U.S. Gulf hegemony
59
U.S. Gulf hegemony
60
Prof.MichaelKlare,Blood& oil(2005))
US protectorates
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“US Military Forces Surround Iran”
Clinton Admin. into Caspian oil basin
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 62Jan 1, 2005
Petroleum Reserves
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 63Jan 1, 2005
Petroleum Reserves
60% inPersian
Gulf
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 64Jan 1, 2005
Petroleum Reserves
Gulf market share will
grow
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 65
The future -- R/P ratios of producers
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heavy oil
The future -- R/P ratios of producers
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The Iraq – Kuwait occupation paradigm
Greenspan: Ouster Of Hussein Crucial For Oil SecurityBy Bob WoodwardWashington Post Staff WriterMonday, September 17, 2007; A03Alan Greenspan, the former Federal Reserve chairman, said in an interview that the removal of Saddam Hussein had been "essential" to secure world oil supplies, a point he emphasized to the White House in private conversations before the 2003 invasion of Iraq.
… "If Saddam Hussein had been head of Iraq and there was no oil under those sands," Greenspan said, "our response to him would not have been as strong as it was in the first gulf war. And the second gulf war is an extension of the first. My view is that Saddam,
looking over his 30-year history, very clearly was giving evidence of moving towards controlling the Straits of Hormuz, where there are 17, 18, 19 million barrels a day" passing through.
… Given that, "I'm saying taking Saddam out was essential," he said. But he added that he was not implying that the war was an oil grab.
"No, no, no," he said. Getting rid of Hussein achieved the purpose of "making certain that the existing system [of oil markets] continues to work, frankly, until we find other [energy supplies], which ultimately we will.“ [emphasis added – T.O’D.]© 2007 The Washington Post Company
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Aim of US Gulf hegemony
2. basis for two OPEC factionsand
two U.S. policies
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Barriles Exportados Por Capita 2006
0,00
0,10
0,20
0,30
0,40
0,50
0,60
0,70
0,80
Mill
ones
/ m
il
Calculado con cifras de OPEP
Barrels exported per capita, 2006
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Barriles Exportados Por Capita 2006
0,00
0,10
0,20
0,30
0,40
0,50
0,60
0,70
0,80
Mill
ones
/ m
il
High Absorbers
Low Absorbers
Calculado con cifras de OPEP
Barrels exported per capita, 2006
?
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POLITICAL ECONOMY OF GLOBAL OIL ORDER
1 Oil demand up2 Alternatives?
3 Gulf share growing
4 U.S. Gulf hegemony
Value of Petroleum Exports per Capita Real $2006 (CPI-U)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
*
Year
$ U
.S.
Iraq
Source: OPEC Annual Statistical Outlook 2006 (original OPEC and other data)
Iran
Value of Petroleum Exports per Capita Real $2006 (CPI-U)
0
10,000
20,000
30,000
40,000
50,000
60,000
Year
$ U
.S.
Kuwait
Saudi Arabia
Source: OPEC Annual Statistical Outlook 2006 (original OPEC and other data)
UAE
Value of Petroleum Exports per Capita Real $2006 (CPI-U)
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
Year
$ U
.S.
Venezuela
Algeria
Source: OPEC Annual Statistical Outlook 2006 (original OPEC and other data)
I. high absorbers
II. low absorbers
Basis for two OPEC factions
Export revenue / capita
TO’D from OPEC data, Real $2008 (CPU)
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77
Iran’s Oil Production & Consumption 1971 – 2008
06 08
78
2006E
War
Sanctions
1979
Rev
olut
ion
Shah
Rebuild
06 08
Iran’s Oil Production & Consumption 1971 – 2008
79
2006E
War
Sanctions
1979
Rev
olut
ion
Shah
Rebuild
06 08
Iran’s Oil Production & Consumption 1971 – 2008
• IEA Strategic Petroleum Reserves: 4.0 x 10+9 barrels
• Iranian daily exports: 2.4 x 10+6 barrels / day
• So: IEA reserves cover Iran exports: 4.5 years
No oil weapon
80
2006E
War
Sanctions
1979
Rev
olut
ion
Shah
Re-build
• IEA Strategic Petroleum Reserves: 4.0 x 10+9 barrels• Iranian daily exports: 2.4 x 10+6 barrels / day • So: IEA reserves cover Iranian output
for: 4.6 years
06 08
Iran’s Oil Production & Consumption 1971 – 2008
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US MENA Progress Bush added 2 new states
Gulf :Saudi Arabia, Kuwait, UAE & Iraq*
North Africa : Libya, Egypt, Algeria
Remaining :Iran
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“Resource Wars”
~ either ~neo-colonial
mercantilist / privatize for big oil ?
~ or ~ global
market-protection for collective security ?
83
I. OPEC “High Absorber” Faction States
China’s “go abroad” aligns with Chavez’ ‘escape market of el imperio’
yet, not ‘axis of evil’MOU / Accords of Dec 2007, May 2008, Sep 2008, early 2010
Venezuela differentChina – Venezuela – Iran – Algeria
(example from Mommer of PDVSA)
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T. O’Donnell, Ph.D. | [email protected] | TomOD.com 86
T. O’Donnell, Ph.D. | [email protected] | TomOD.com 87
T. O’Donnell, Ph.D. | [email protected] | http://TomOD.com
global political
economy
Approach
• domestic politics• geopolitics• development • environment
• resources,• technology / science• production• distribution • governance / ownership• end use / consumption
T. O’Donnell, Ph.D. | [email protected] | http://TomOD.com
global political
economy
Approach
• domestic politics• geopolitics• development • environment
• resources,• technology / science• production• distribution • governance / ownership• end use / consumption
• capitalist colonial• capitalist neo-colonial• capitalist global• socialist• socialist public /
private• capitalist public /
private