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Extreme Energy, Extreme Implications

Commodities / Energy Resources Jun 24, 2013 - 05:35 PM GMT

By: OilPrice_Com

Commodities

If oil and gas is a profoundly dynamic phenomenon, then so too must be environmental risk and conflicts over natural resources--and we are not getting the full picture from the mainstream media, according to Michael T. Klare, professor of peace and world security studies at Hampshire College, TomDispatch blogger, and author of Rising Powers, Shrinking Planet: The New Geopolitics of Energy (Metropolitan Books, 2008). As risk multiply, conventional sources evaporate and we are left with "extreme" energy, renewables may be the only way to avoid war and disaster.


In this exclusive interview with Oilprice.com, Klare discusses:

  • Why we are talking about a "resurgence" of American power
  • Why the issue of US natural gas exports is a geopolitical dilemma
  • Why Myanmar is important but not critical to the US Asia-Pacific "pivot"
  • Why Myanmar IS critical to China
  • Why India and Japan are key to the US' evolving Asia policy
  • Why the shale revolution is the number topic around the world
  • Why unconventional oil and gas has the unfair advantage
  • Why WE don't need Keystone XL, but the tar sands industry is desperate
  • Why the renewables are the only way forward

Interview by. James Stafford of Oilprice.com

James Stafford: In a recent article, you opined that "Militarily, culturally, and even to some extent economically, the US remains surprisingly alone on planet Earth in imperial terms, even if little has worked out as planned in Washington." Can you add to this from the perspective of the unconventional oil and gas boom in the US?

Michael Klare: The United States emerged from the end of the Cold War with the most powerful military force on Earth and, because of the decline of the USSR and its other rivals, was seen as the world's dominant power. In recent years, however, the rise of China has led some analysts to question America's overwhelming superiority, saying that China's accumulation of economic and technological power will allow it to compete on equal terms with the US in the not-too-distant future.

This, combined with the economic toll generated by the economic crisis of 2008 - largely attributed to lax economic oversight in the US - has led some to speak of the eventual "decline" of American power. But now, with the rise in domestic oil and gas production, that talk is disappearing; instead, analysts are speaking of a "resurgence" of American power based on strong oil and gas output.

James Stafford: In terms of the pending decision on whether to expand US natural gas exports, the geopolitical argument for this appears to be trumping the economic arguments. Will the geopolitical argument--natural gas exports to challenge Russia and Iran--win out in Washington?

Michael Klare: This is hard to predict, as the geopolitical argument cuts both ways:

while increased exports bolster American power vis-a-vis Russia and Iran, a revival of domestic manufacturing based on cheap energy also bolsters American power in the global economic equation. I would predict some exports, but not so much as they endanger the expected surge in domestic manufacturing.

James Stafford: How important is Myanmar to Washington's Asia "pivot", and how should we interpret the sudden blossoming of relations here despite the systematic ethnic cleansing that is taking place? China has the foothold here, but can it maintain it?

Michael Klare: Myanmar is important to the Asia-Pacific pivot, especially in symbolic terms (as it was long in the Chinese orbit), but not especially critical. Far more important are US ties with Japan, the Philippines and, above all, India. You can expect a major US drive to bolster military ties with New Delhi - this will really capture the attention of the Chinese!

James Stafford: How important will Myanmar's potential hydrocarbon reserves be against its position as a strategic gateway?

Michael Klare: Myanmar's hydrocarbon reserves are not that important to either China or the US. But it is becoming very important as an alternative delivery route from the Indian Ocean to southwest China, diminishing their reliance on the vulnerable Strait of Malacca, which is largely dominated by the US Navy. China is keenly determined to reduce its reliance on sea lanes controlled by the US Navy.

James Stafford: Iraqi Kurdistan is shaping up to be one of the hottest exploration venues in the Middle East, and while it comes with a lot of political baggage, oil companies show no concern. What do you think the political risk potential is once the Kurds get a new pipeline up and running directly to Turkey by the end of this year or early next year, courtesy of Anglo-Turkish Genel Energy?

Michael Klare: I think it would be very dangerous to make predictions about this, given all the instability in the region. The Iraqis in Baghdad are obviously very unhappy about this, and have various means to make it difficult for companies that invest there. But these companies may feel that the risks can be overcome, or minimized. Given the unrest in Syria and Turkey, I just don't know how all this will play out.

James Stafford: We've written a lot about the petro-politics surrounding the conflict in Syria, both in terms of the Iranian-Qatari race for good pipeline acreage as well as the recent discoveries in the Levant Basin. What role do you think hydrocarbons and hydrocarbon infrastructure are really playing in the end game for this conflict?

Michael Klare: Well, I always tend to look for the role of oil and gas in conflicts like this, and I'm sure that they're present. But I suspect that this is less about oil and gas per se than about the ultimate division of power in the Middle East between long-contending actors - the Iranians, Kuwaitis, Turks, Iraqis, Russians, Americans, and so on. Of course, this has a lot to do with oil and gas in the long run, as the victor in this power struggle will be able to dominate the production and sale of hydrocarbons. But for now I see it as a power game first and foremost.

James Stafford: What is the number one energy topic that grabs your readers, and how does your coverage of it go beyond the depths (or shallows) of the mainstream media?

Michael Klare: Right now the number one topic is how the "Shale gas (and oil) revolution" will alter the power balance between the United States and its major rivals, especially Russia and China. I heard this in Russia, China, and Mexico during visits to universities and think-tanks to these countries last year - it was always the #1 question. They want to know if other countries can replicate the US success in this field, or will be forever dependent on American fracking technology. People also want to know how this "revolution" will affect the future of renewables. Will more gas production prove a "bridge" to renewables, or a "bridge to nowhere?"

James Stafford: In your view, how is the mainstream media being manipulated in the climate change debate? How is the public being cheated out of a rational, smart debate?

Michael Klare: I am concerned that the media is not adequately explaining the difference between conventional and unconventional oil and gas. Proponents of fracking, the Keystone XL pipeline, deep-offshore production, and so on all say that these are just other forms of "oil" and "clean-burning natural gas," without explaining that vastly different production techniques are involved and that these techniques have significantly worse impacts on the environment.

James Stafford: Will we ever get to the real debate, or will interest groups continue to maintain control?

Michael Klare: We can have a fair debate in universities and think-tanks, but the American media are saturated with advertising paid for by the oil and gas industry that distorts the environmental consequences of relying on these fuels - and it's very hard for ordinary people to challenge these accounts.

James Stafford: Recently you have expressed your disappointment over the climate change rallies, focusing on the Keystone XL pipeline. What's gone wrong? Has the movement lost its momentum?

Michael Klare: Perhaps I've expressed some disappointment from time to time but I've been very impressed by the emergence of a new movement on college campuses--including my own--to get colleges and universities to eliminate their investments in big carbon corporations, as a way of persuading them to keep unproduced carbon in the ground.

James Stafford: Do we need the Keystone XL pipeline?

Michael Klare: We Americans do not need Keystone XL - there are plenty of other available sources of energy, and we can reduce our demand through conservation efforts. But the tar sands industry desperately needs KXL, as all other practical conduits for exporting increased tar sands production seem to be closed off (like the Northern Gateway pipeline through British Columbia) - meaning they'll have lots of resources, but no export options. No wonder they're desperate to get Obama to approve the pipeline!

James Stafford: What should we know about Keystone XL that the mainstream media doesn't tell us, or doesn't understand?

Michael Klare: The fact that KXL will not carry "oil" at all--despite their claims--but a heavily polluting mixture of bitumen, diluents, and toxic chemicals that must be processed through extraordinary means before it can be refined into anything resembling a usable fuel.

James Stafford: How do you address the renewable energy-vs-fossil fuels race?

Michael Klare: My argument is that the production of oil and gas is not a static phenomenon but is undergoing profound changes, involving greater risk to the environment and greater risk of conflict over disputed sources of supply (such as offshore and Arctic reserves). These risks are bound to multiply as all sources of "easy" oil disappear and we become increasingly reliant on hard-to-reach, hard-to-process "extreme" energy. Only through the accelerated development of renewables can we avoid an inevitable spiral of war and disaster.

James Stafford: Is there a point at which we will be able to say that the two can help each other?

Michael Klare: Some investments in biofuels may have this capacity, but otherwise I do not see how.

James Stafford: There has been a lot of transparency activity in the US and Europe this year aimed at punishing big oil and its bankers for manipulating energy prices, for which the end consumer eventually foots the bill. Energy price manipulation is a time-honored tradition and usually the giants get a slap on the wrist and a fine that wouldn't even make them blink. Are times changing, though? Will things be different now?

Michael Klare: Well, we can always hope so. But with Chinese, Indian, and Russian state-owned companies playing an ever-increasing role in the extraction of fossil fuels, I'm not optimistic about this!

Source: http://oilprice.com/Interviews/Extreme-Energy-Extreme-Implications-Interview-with-Michael-Klare.html

Interview by. James Stafford of Oilprice.com

© 2013 Copyright OilPrice.com- All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

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