economist.com/books/displayStory.cfm?story_id=3262246
uk AT THE end of the second world war, President Franklin Roosevelt attended a summit that changed the course of world history. No, not that meeting at Yalta, with Joseph Stalin and Winston Churchill. Immediately after t hat, Roosevelt travelled quietly to the USS Quincy, anchored near the Su ez Canal. The man with whom he met had rarely set foot outside his home country, and insisted on bringing along his household slaves and royal a strologer. In the years before the war, the desert kingdom had gone from sleepy backwater to the most promising oil province in the world. Military planners in America were painfully a ware of the swift decline in their own country's domestic reserves. So, in return for guaranteed access to Saudi Arabia's vast quantities of oil , Roosevelt promised the tribal chieftain America's full military suppor t In the decades since, the vow has proved to be one of the few fixed p oints of global politicsthough for how much longer is an open question. That close military relationship has helped feed a favourite current cons piracy theory, that of blood for oil, ie, that American blood in Iraq is being spilt for the benefit of oil interests. Another popular theory is that the oil is running out altogether. Politicians of both parties i n America have latched on to these ideas, and now champion notions of e nergy independence. and that energy independence is therefore a magic soluti on: all are superficially attractive propositions. Happily, three intelligent new books cut to the quick on these i ssues. The biggest fallacy is that the world is about to run out of oil. A spate of recent books, with such titles as Out of Gas, argue that oil is sc arce, and that an impending crisis will put the crises of the 1970s and early 1980s in the shade. Some see the recent rise in oil prices to $50 a barrel as a dire warning. Nonsense, argues Peter Odell, a grand old man of oil forecasting who prov ed wrong the pessimists of the 1970s. In his new book, he points to two flaws in the argument that a peak in global oil production is coming, fo llowed by decline: both technology and economics are ignored. As experience has shown time and again, oil technology just gets better. The industry now uses tools unavailable in the 1970sranging from seismi c imaging of reservoirs to advanced supercomputingto tap oil from place s unimaginable back then. As a result, proven reserves of oil are actual ly larger today than they were three decades ago. Also, price signals matter: if there were a real scarcity of oil, prices would soar and companies would scramble to find more oil or its alternat ives, while consumers would use less of it. Mr Odell argues, quite reaso nably, that non-conventional oilsuch as that made from Canada's mucky tar sandswill make up for an eventual decline in conventional source s of oil. His conclusion will anger some and surprise others: gas-guzzle rs will have plenty to run on for the rest of this century. The problem with oil is not its scarcity, rather its concentration. That is one powerful conclusion drawn by Michael Klare in Blood and Oil, a thoughtful and well-researched history of oil and geopolitics. Mr Klare is certainly critical of American policy, particularly of the way the Un ited States has cosied up to nasty regimes because of their supplies of oil, helping prop up the House of Saud, for instance. Yet he counters th e claim that the invasion of Iraq was all about oil. Mr Klare provides a service when he puts America's close ties with Saudi Arabia in a historical context that mocks the chargesmade by Michael Mo ore, for example, in his film Fahrenheit 9/11that the Bush clan has d one most to shape the relationship. He starts with that meeting between Roosevelt and Ibn Saud. He notes that it was the doctrine of Jimmy Carte r, a Democrat, explicitly to defend America's access to oil exports from the Persian Gulf by any means necessary.
In short, the militarisation of America's energy policy has been a bipart isan affair. And it is Mr Klare's view that serious problems are in stor e He notes that two-thirds of the world's proven reserves of convention al oil lie in the hands of five countries in the Persian Gulf, with Saud i Arabia atop one-quarter of the world's reserves. As oil gets depleted rapidly in other parts of the world, the West will come to depend ever m ore upon these currently undemocratic and perhaps unreliable countries. For neoconservatives in Washington, that is one more reason for fostering , by force if necessary, liberal values and democracy in the Middle East . For many congressmen, it is a reason to call for energy independence. Yet the phrase has become misleading, for it is used to justify subsidie s for pork-barrel projects or mere sops to the industry, such as drillin g for oil in the Alaskan wilderness. Given that America consumes a quart er of the world's oil but has barely 3% of its proven reserves, it will never be energy-independent until the day it stops using oil altogether. In Win ning the Oil Endgame, a new book funded partly by America's Defence Dep artment, this sparky guru sketches out the mix of market-based policies that he thinks will lead to a good life after oil. First, he argues, America must double the efficiency of its use of oil, t hrough such advances as lighter vehicles. Then, he argues for a big incr ease in the use of advanced biofuels, made from home-grown crops, that can replace petrol. Finally, he shows how the country can greatly incre ase efficiency in its use of natural gas, so freeing up a lot of gas to make hydrogen. That matters, for hydrogen fuel can be used to power cars that have clean fuel cells instead of dirty petrol engines. It would end the century-long reign of the internal-combustion engine fuelled by petrol, ushering in the hydrogen age. And because hydrogen can be made by anybody, anywhere, from windmills or nuclear power or natural gas, there will never be a supplier cartel like OPECnor suspicions of blood for hydrogen.
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