Re: Will the oil run out ? Reflections from a layman

[soula avramidis]

The state is the guarantor of capital. corporate America may think in the short term but when greenspan reports to congress on energy he uses the words long term average costs and security.

that oil will run out is inevitable. by now we have probably mined the whole weight of the earth in some estimates. but oil will not run out suddenly, it reaches a peak and then declines slowly. that is the issue ….I think. It is how to manage the transition during the decline.

water on the other hand if it dries up it dries up for the poor not the rich and in today's value scale it does not matter.

World oil demand is on the rise (anywhere between 1.5 and 2 percent on average every year). Assuming the US is moving from influence to control over oil as the recent occupation of Iraq points to. What happens?

1) On the global level, the U.S. wields control over the oil wells for some time to come and this would place it in a better competitive position vis-à-vis partners in the Western World. 2) The outstanding distribution of resources between the oil producing region and the oil multinational sector would have to shift in favor of the latter. This last point would indeed represent a rolling back of oil nationalization into privatization and/or a change in oil rent distribution in the disfavor of the oil producing countries.***

Viewed in its totality, the oil dollar nexus and, in particular, the dollar priced barrel facet of modern accumulation represents a necessary mediation of the receding economic power of the U.S. The U.S. is no longer the global competitive economic force it used to be. Its chronic trade deficit, as large as 500 billion dollars a year, has recently incorporated a declining competitiveness in the areas where the US has been a leader such as the high-tech industries. Many argue that its global economic supremacy has to be guaranteed via its political military weight where one relevant manifestation of which remains that of pricing the oil by the dollar and, subsequently, by calibrating the level it infuses stability or instability in the Near East, at least, to a degree to which it assures itself the circular flow of petrodollars for T-bills or weapons.

The oil/dollar connection is but one of the concrete but central manifestations of the failure in the application of an unrestrained market mechanism to global development. Reversing the trend implies resorting to a path of equitable global development. It is evident that a combination of low oil prices with peace is much preferred to a combination of high oil prices with war.

***Denationalization alone may not be sufficient, there might also need be a redistribution of rent in favor of oil multinationals even in Arab states where supposedly pliant or malleable regimes preside e.g. Saudi.

 

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