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HANSON: The irrelevant Middle East
#1
Quote:The world begins to shun the troubled region as energy resources emerge elsewhere

Since antiquity, the Middle East has been the trading nexus of three continents — Asia, Europe and Africa — and the vibrant birthplace to three of the world’s great religions.
Middle Eastern influence rose again in the 19th century, when the Suez Canal turned the once dead-end eastern Mediterranean Sea into a watery highway from Europe to Asia.
With the 20th-century development of large gas and oil supplies in the Persian Gulf and North Africa, an Arab-led OPEC more or less dictated the foreign policy of thirsty oil importers such as United States and Europe. No wonder U.S. Central Command has remained America’s military command hot spot.
Yet insidiously, the Middle East is becoming irrelevant. The discovery of enormous new oil and gas reserves along with the use of new oil-recovery technology in North America and China is steadily curbing the demand for Middle Eastern oil. Soon, countries such as Kuwait, Saudi Arabia and Iran are going to have less income and geostrategic clout. In both Iran and the Gulf, domestic demand is rising, while there is neither the technical know-how nor the water to master the new art of fracking to sustain exports.
The recent Boston bombings reminded the West that nearly 12 years after Sept. 11, most terrorism still follows the same old, same old script — committed by angry young men with Muslim pedigrees claiming to act on radical Islamist impulses, without much popular rebuke from the Muslim world.
There is not much left to the stale Middle East complaint from the 1960s that Western colonialism and imperialism sidetracked the region’s own natural trajectory to democracy. After the derailed Arab Spring, the world accepted that the mess in the Middle East is not imported, but rather the result of homegrown tribalism, sexual apartheid, religious intolerance, anti-Semitism, illiteracy, statism and authoritarianism.
Revolutionary theocrats always seem to follow the ouster of fossilized thugs. “Reformers” who were “elected” after the fall of the Shah of Iran and Hosni Mubarak in Egypt on speculation conjured up the same old bogeymen as their predecessors, subverted the rule of law in the same old fashion, and wrecked the economy in the same old manner.
President Obama senses that there is no support for American intervention in the Middle East. Even his idea of “leading from behind” in Libya led to the loss of American personnel in Benghazi. After Iraq, the United States will not nation-build in Syria. Apparently, Americans would rather be hated for doing nothing than be despised for spending trillions of dollars and thousands of lives to build Middle East societies.
The United States still worries about tiny democratic Israel surrounded by existential enemies pledged to destroy the Jewish state. But Israel’s own sudden oil and natural-gas bonanza is enriching its economy and will soon offer a source of reliable fuel supplies to nearby Europe.
Most likely, Europe’s past opportunistic disdain of Israel and fawning over Arab autocracies were based entirely on oil politics. In the future, the fair-weather European Union will as likely move away from the Middle East as it will pledge a newfound friendship with the once unpopular but now resource-rich Israel.
Visiting Persepolis, the Egyptian pyramids, Leptis Magna or the Roman and Christian sites in the West Bank, Lebanon and Syria is not worth the madness that is now the price of Middle East tourism. The European Union and the United States are tired of Middle East terrorism — after 50 years of Yasser Arafat’s secular brand and Osama bin Laden’s Islamic bookend.
Europe’s southeastern Mediterranean flank on the Middle East is a financial and political mess. Most of the West is as likely to shun bankrupt Greece as it is to be wary of Recep Tayyip Erdogan’s new Ottoman Turkey.
While the Middle East failed to transform its oil riches of the past half-century into stable, transparent societies, Asia globalized and embraced the free market.
The resulting self-generated riches in the Pacific do not derive from the accident of oil under the ground of Singapore, Hong Kong or Taipei, but rather from global competitiveness and internal reforms. If China, India, Japan, South Korea and Taiwan 60 years ago were as poor as the Middle East, they are now the economic equals to Europe and North America. Their motto is to borrow from and then beat — not envy or blame-game — the West.
For now, Western tourists and students still mostly avoid Amman, Baghdad, Benghazi, Cairo and Damascus. American soldiers are drawing down from the bases of the Middle East. Soon, huge American-bound oil tankers will not crowd each other at the docks of the Persian Gulf.

Build a wall, declare the Middle East a no-fly zone so they can't leave, and let them kill each other.
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#2
While generally he is correct, it is not as clear-cut as he thinks.

for instance, Suez remains important, and will remain important until Europe totally collapses.

also, the anti-Israel attitude in Europe is driven not only by oil dependence (one of the most antisemitic countries is energy-self-sufficient Norway!) but also by growing Islamic population and leftism; these factors remain.

and of course VDH needs to remember about Islamic agents of influence planted in Europe and the US....all these Obamas et al.
Government is necessary because people left unchecked will do evil.

The government is composed of people left unchecked


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#3
What if the Suez Canal was shut?

The impact would be minimal as the cost would easily be absorbed. Cargo vessels are faster and safer today; they would no longer be subject to the twenty-foot equivalent unit (TEU), the equivalent to a round trip cost of around the Cape as well as the cost of anti-piracy measures associated with sailing through the Gulf of Aden. The loss of the TEU would be devastating to the Egyptian economy.
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#4
(05-04-2013, 08:39 AM)WarBicycle Wrote: What if the Suez Canal was shut?

The impact would be minimal as the cost would easily be absorbed. Cargo vessels are faster and safer today; they would no longer be subject to the twenty-foot equivalent unit (TEU), the equivalent to a round trip cost of around the Cape as well as the cost of anti-piracy measures associated with sailing through the Gulf of Aden. The loss of the TEU would be devastating to the Egyptian economy.

One thing left out of the article is the danger of going around the Cape. Most of the reported rogue waves occur in and around there, because of clashing weather/stream patterns.

This would also increase insurance premiums.

But you are right: closing the Suez as a repeat of 1956 would have a far more devastating effect on Egypt than anyone else. Egypt is already unable to properly feed its citizenry, and is forcing greater numbers to seek livelihood in other countries. And the mess is not about to get any better.
___________________________________________________________________________________________________
All men are frauds. The only difference between them is that some admit it. I myself deny it.
H. L. Mencken
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#5
Another quote from the same article:
Quote:Forcing each of the 24 weekly Asia-North Europe services to sail around the Cape instead of through the Suez Canal in both directions would trigger a fall in productivity of up to 17%
I assume this means 17% jump in costs, for instance of imports from China. European economy is barely alive as is, this would be quite serious. the impact on the US seems minimal, but it is not: European meltdown will send shake waves.
As for Egypt: they are fine, they have enough sand and crocs to feed their population (and I really don't care, anyway).
Government is necessary because people left unchecked will do evil.

The government is composed of people left unchecked


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#6
Perhaps more articulate than Hanson is this article, written by Peter C. Glover and Michael J. Economides: The Coming Arab Winter. Things are definitely not looking good for the world of Islam.

Here is just the last part of the article:

Quote:The world is changing and fracking is changing it. So what is the geopolitical fall-out when much of the world no longer thirsts for Middle East Arab oil and gas?

Geologists once believed that two-thirds of the world’s oil and one-third of its gas lay under a handful of Persian Gulf states. Just a few years ago, peak oil alarmism ruled the energy bookshelves. No longer. OPEC’s power in holding the West to ransom – as it did in 1973 in the Arab-Israeli oil embargo affair – is not only diminishing, it will shortly be extinct.

Though the runaway success of the US shale gas would be difficult to emulate elsewhere, the coming age of natural gas is seriously threatening the current conventional oil powers. And that’s not surprising given that, as the EIA reports, for every $4 US citizens pay for energy from natural gas they pay $25 for oil. No wonder the world’s leading players – China’s Sinopec, France’s Total, Shell, BP et al are all falling over themselves to buy a slice of the US shale cake. Not just for the investment in the runaway success that is the US gas industry; but as a key investment in their global fracking futures.

There are other serious implications for the Middle East oil states, too. With the Middle East set to lose its oil-dominant position it will also lose much of its strategic relevance for the United States. So who would ‘police’ the Persian Gulf keeping a lid on regional anarchy if America leaves? The Saudis and other Sunni state heads are already as nervous as Israel about Iran’s regional nuclear ambitions. But even domestically, as the ability of the regimes to bribe their citizens with massively subsidized oil prices courtesy of foreign petro-dollars diminishes, we are likely to see more and more street violence threatening regional stability across the region. As one US national security specialist puts it, “The biggest losers would be the Arab oil states grouped in the Gulf Co-operation Council, most of which are monarchies kept in power by a combination of oil dollars and American military power.” The same specialist predicts that, except for Saudi Arabia, not one of the Sunni Arab states could defend itself against Iran or Iraq, the latter country could quickly lay claim again to the Kuwaiti oil fields once America “leaves the stage”.

Then there’s terrorism. On the upside, there’s little question that global terrorism has (ironically) been sustained by an abundance of petro-dollars. As we see the flow from that particular spigot greatly reduced in coming years, the ability to fund proxy wars and large scale terrorist organizations would be significantly reduced. However, the inherent sense of ‘victimhood’ seemingly embedded in Arab culture – and fomented and used by Islamists – is likely to produce increasing individual acts of terrorist activity, both at home and abroad.

Let’s be clear. No one wants to see increasing poverty spreading through the Arab lands of the Middle East. But ‘victims’ of Western policy the Arab states are not. The misuse of much of oil revenues by the failure to invest in their country and citizens, however, has left the Arab states vulnerable to advancing energy and technological developments. It’s a failure of social policy made abundantly clear in The (Sordid) Tale of Three Arab Countries.

While the global extent of the fracking-induced geopolitical tremors are still to be felt, the shaking up of the Arab Middle East and their tyrannical oil policies is moving the regional tectonic plates as politics never could. And there’s a lesson for the western powers here, especially those still debating whether fracking their domestic shale is ‘green’ or not. In the movies love makes the world go round; in the real world it’s energy.

My guess is that if the world of Islam, especially Arab countries, is backward, just wait and see what happens when they become irrelevant, energy wise.
___________________________________________________________________________________________________
All men are frauds. The only difference between them is that some admit it. I myself deny it.
H. L. Mencken
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#7
And here is another part of that same series: The Collapse of OPEC Power.

Quote:Since its inception in 1960, OPEC has never been shy in flexing its energy-fuelled power over the West. But those days are gone. And it’s not just the US and Israeli shale gas and oil revolution which threatens OPEC decline. OPEC is already grappling with a whole bunch of serious energy problems that are colluding to hasten its demise.

Let’s just focus on the OPEC kingpin and world’s leading oil producer, Saudi Arabia. Even as the Saudis and other OPEC leaders have played down the nascent impact of US shale development on global production (especially America’s growing self-sufficiency), the signs are that the Saudis are increasingly desperate to keep their world no 1 ranking in oil production. But the runes are not falling their way.

In the last decade OPEC has seen a net increase in its total oil production. In 2002 it was 28.97 million barrels per day (mbpd). By 2012 that had risen to 36.64 mbpd. This year OPEC production had been expected to remain stagnant. But a Dow Jones Newswire survey in October 2012 revealed that OPEC production had actually fallen to 31.32 mbpd, and by January 2013 was down to 30.34 mbpd. While the Energy Information Administration (EIA) expects production to rise in the coming year, it anticipates the level will remain below that reported in 2011 and well below the high of 2002.

But the troubles for the Saudis are only just starting. Chief among them: the meteoric rise of US production and the boom in associated technological developments driving it. This includes hydraulic fracturing ‘fracking’ and other enhanced oil recovery techniques (EOR) making more and more formerly non-recoverable oil accessible. As if that weren’t enough, domestic oil demand in Saudi continues to rise threatening Saudi export revenues.

According to a Citigroup report in February 2013, the record surge in US oil production – in the first ten months of 2012 US domestic production met 84 percent of its energy needs – now threatens the very existence of OPEC. The EIA reports that US oil production expanded by a record 790,000 barrels a day last year. According to the Citigroup report, by the middle of 2013 the US Gulf Coast will be supplied with oil from much closer to home – from North Dakota and Texas, displacing imports from Saudi, Iraq and Kuwait. OPEC itself has been forced to downgrade its economic prospects. In OPEC’s World Oil Outlook anticipates a decline in global demand for its oil to 2016 with production falling to 29.7 mpbd. That’s a drop of 1.6 mbpd from the forecast just a year ago. For the moment, much of the consequent fall in demand from the West is likely to be offset by a rise in demand from Asia, especially China and India. But the real fear for the Saudis and for OPEC’s members generally is what would happen to OPEC once US shale fracking technologies are exported worldwide? China’s domestic shale gas and oil reserves may add significantly to the country’s needs. So why import from the Middle East when a bonanza of oil and gas is right under your own feet? All the signs are that both China and India intend to invest heavily in shale development at home.

Last year saw the Saudis rake in a cool £347 billion from oil exports. But like all economically developing OPEC states, Saudi is seeing a steady increase year on year in domestic energy demand – last year by 4 percent. At this pace Saudi will be consuming over 3 mbpd of its own production; production revenue from potential exports that it can ill-afford to lose. More broadly, Exxon Mobil’s energy outlook to 2040 reveals oil consumption in the Middle East generally will rise by 49 percent and natural gas consumption by a massive 97 percent, with the resultant impact on oil export revenues. In addition, Saudi has already committed itself to spending half a trillion dollars worth of oil export cash on domestic social programs, which it may soon find difficult to fund.

These issues are precisely why we have been hearing so much of late about the Saudi Government’s attempts to diversify its energy operations, including the potential exploitation of its own shale gas and oil prospects. But one has to wonder where, in this desert kingdom, it expects to find the enormous quantities of water necessary to the fracking process. The annual water requirement for fracking operations in the West is somewhere between 70 billion and 140 billion gallons. The Saudis simply don’t have the water for that scale of energy production. Saudi has also committed to gambling $100 billion of its oil riches on a 40 gigawatt solar energy project. And in February this year, the Riyadh government also turned to Japan for help in developing nuclear technology that could enable it to build 60 new nuclear power plants. However, the simple fact is that all of this is unlikely to offset the potential losses expected to be suffered by depleting oil reserves and declining oil export revenues. One recent report has suggested that such is the plight of the Saudis, the country could well be a net importer of oil within 20 years.

Plainly, the days when OPEC could hold the West to political ransom – as it did when it ordered an oil embargo after the US supplied Israel with arms during the 1973 Arab-Israeli War – are over. The tables have indeed been turned on the Saudis and on OPEC due in no small part to the development of the fracking (hydraulic fracturing) technique. Fracking may have signalled the collapse of its power in the West, OPECs inherent tyrannical despotism and political hubris will only serve to hasten its global demise.
___________________________________________________________________________________________________
All men are frauds. The only difference between them is that some admit it. I myself deny it.
H. L. Mencken
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#8
The Saudi royal family will probably relocate in Europe leaving its people to starve.
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#9
I suspect things are going to really deteriorate in the near future. Its so unstable that removal of US security forces in the area could lead to one huge food fight, with Iran taking the initiative.
___________________________________________________________________________________________________
All men are frauds. The only difference between them is that some admit it. I myself deny it.
H. L. Mencken
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#10
Bye-Bye Israel. It would be viable in a post Arab collapse, but in the Arab collapse it may well be overwhelmed.

But, as in all things, one must be a bit skeptical of the projections of the new nirvana coming from fracking. For example, the fractured rocks close up quickly requiring constant drilling.
Jefferson: I place economy among the first and important virtues, and public debt as the greatest of dangers. To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our choice between economy and liberty, or profusion and servitude. If we can prevent the government from wasting the labors of the people under the pretense of caring for them, they will be happy.
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