To explain the current run-up in gasoline prices, pundits throw out many reasons, including concern over a possible war with Iran, insatiable demand from China, inadequate refinery capacity, greedy oil companies and the gradual depletion of the world’s oilfields. All of these do bear some degree of responsibility, but they are not the fundamental cause. There has been a historic shift in the center of gravity of world oil production from the global North—the older industrialized countries—to conflict-plagued areas of the global South—the developing world. Because this shift is all-encompassing and irreversible, global oil output will remain vulnerable to overseas instability and gasoline prices will remain high.
What explains this shift in production, and why does it cause perennially high gasoline prices?
Although we tend to think of Middle Eastern deserts when hearing the term “oil production,” the global oil industry arose in the United States in the middle of the 19th century. It then concentrated in other early-to-industrialize nations. Up until 1950, most of the world’s oil was produced in the global North. This meant that the sites of production were located relatively close to the sites of demand, and that any outbreaks of disorder in the oilfields (never entirely absent in the global North) could swiftly be suppressed.
The early concentration of oil production in North America, in particular, had an especially profound impact on critical developments of the 20th century. It helped make possible the early emergence of automobile culture and suburbia in the United States after World War I, and its full-blown effervescence after 1945. During World War II it gave the Allies an enormous advantage over Germany and Japan—neither of which possessed domestic sources of petroleum and had to fight for whatever meager supplies they could acquire from abroad. After the war, North American oil helped rebuild European economies under the Marshall Plan.
Sunday, May 21, 2006
Less Oil, More Wars
Over at TomPaine.com Michael Klare discusses the arrival of energy-based wars. He provides a brief but insightful description of the historical context of cheap oil and it's impact on U.S. development. He also delves into the effects of colonial development/imperialism on the oil rich regions of the world. A thought provoking introduction to just a few aspects of oil, energy, and the politics of development. Here's a bit: