April 6, 2011

$4 per gallon gasoline

Perhaps one reason for the Obama Administration starting the Libyan War was to avoid a situation like in Iraq from 1991-2003, where international sanctions reduced oil exports, presumably making gasoline prices higher in America. If Gaddafi had won his civil war, the great and the good would likely have voted sanctions on Libyan oil exports, thus tightening world oil markets, with unfortunate effects on unemployment and Obama's re-election chances.

Of course, gasoline prices were pretty low in absolute terms during much of the 1991-2003 period. And as the Iraq War showed, war isn't really conducive to oil production. The presence of oil in the ground can generate civil war over who will control its future stream of wealth, driving down production in the present due to violence and sabotage.

The problem in Libya with this line of thought is that the lightly populated war zone contested between Gaddafi's westerners and the Benghazi rebel easterners is where most of Libya's oil comes from. This Washington Post graphic  of east/central Libya shows the four major oil shipping ports. At present, the westernmost is controlled by Gaddafi, the easternmost by the rebels and the two in the middle are being fought over.

Now, things can change fast in Libya, as the back-and-forth war of 1940-1943 showed. The Obama Administration seems to be focusing on bribing Tripoli insiders to do something with Gaddafi so Obama can declare victory. The Benghazi rebels, however, as they realize how awful they are at mechanical warfare, are making noises about accepting a partition of Libya with them in control of some of the oil.

In Libya, you have a fundamentally tribal culture growing out of nomadism. If you wander around in the desert your whole life, the most effective way to organize your loyalties is into "segmentary lineages" defined by male ancestry. But the oil doesn't wander around in the desert, it just stays in one place. To paraphrase Winston Churchill on the Pashtuns, the life of the Libyan is thus full of interest.


alonzo portfolio said...

In Spring '93 in Sacramento, I bought Arco gas for 1.03. Yesterday it was 4.15.

Anonymous said...

There have been more killings over the oil spoil in Nigeria, but I don't see any No Fly Zone.

Anonymous said...

Oil vs soil.

Fertile soil in Europe made people put down roots and think territorially.
Deserts of Arabia and North Africa produced nomads since sand didn't grow food. So, Arabs planted roots in blood(kinship) than in soil.

Barbarian Europeans may have been like nomadic Arabs, but once they learned to grow food on a large scale and establish social stability through Christianity, their roots in blood gave to roots in soil as well. They started to think not only in terms of us vs them but our land vs their land.

Arabs had Islam for social order, but their land was still poor, which meant they had to be constantly on the move for water, food, and goods. Camel was their main transport. With humps for storing water, it could travel long distances, much more so than horses and cows.

But then came oil, which brought an element of territorialism to Arabs. But oil isn't like soil. Even a poor farmer can put down his roots on his soil and grow food. Oil, on the other hand, is a complex modern enterprise. In the middle east, the oil industry mainly employed urban professionals and foreign experts. So, the sense of territoriality created by oil was political than socio-cultural, i.e. the political leader of the nation laid claim to the oil while rest of the people hoped for some wealth to trickle down. Since the leader commanded all the oil, the territorial sense was the nation belonged to HIM than to 'all of us'.

This is why Caesar learned to be more generous. Look at him sharing bananas on an equal basis in CONQUEST OF THE PLANET OF THE APES. It's like Jesus handing out fish and bread.

eh said...

They do use a lot of gas.

Anonymous said...

One reason why (especially Western)Europeans developed a more powerful sense of territorialism could be due to the failure of empire building since the fall of Rome. To be sure, Charlemagne and many others tried, but none succeeded. Ironically, Byzantium, the part of the Roman empire that survived, headed for a long decline while the Western Rome that had collapsed and its northern neighbors eventually experienced a long growth, surpassing all previous human achievments.

In a way, the failure to establish a new empire over Western Europe was probably a kind of historical anomaly. Western Europe isn't that big, and its powers weren't that powerful by world standards. But no single side mustered sufficient force to gain mastery like the Romans once nearly did; and much of Western Europe was sufficiently removed or buffered from Asia, North Africa, and Near East to suffer invasion and occupation. Vastness of Russia especially saved it from Mongols and the like.

Byzantine, on the other hand, incorporated huge swathes of Eastern Europe, Southern Europe, Near East, and North Africa. The Persian Empire was also very extensive and diverse. And Mongols and later the Ottomans also held control over vast territories. Empires tend to undermine territoriality because the political center rules over the lands of different peoples. Empire builders can control the land but cannot really lay sacred claim to the land. Ottomans, for example, took pride in the great size of their empire but felt little affinity with many of their subjects. And subject peoples of an empire don't really identity with the center(of power), and they don't develop their own sense of territoriality since they must bow down to the greater power in some distant and glorious capital.
Also, even the people of the same culture and race as the ruling elites in an empire fail to develop a strong sense of territoriality since the rulers claim to represent everyone in the empire. Today, the rise of US as a global 'empire' has undermined a sense of solidarity and pride between the government and the white majority; they feel Uncle Sam is more concerned with freedom of Iraqis than with the problems of Americans.

Following the fall of the Western Roman Empire, Western European peoples could not put Humpty Dumpty back together again. And many became used to the new order. No longer were they subjects of a super-empire. Instead, they were parts of an ethno-kingdom, which would eventually turn into ethno-states. Russia was different, becoming vast empire incorporating diverse peoples, but then Russia, despite its vast resources, remained for the most part as backward as the Byzantine and Ottoman Empires.

In Western Europe, there was no new empire since 450 AD or around the time Rome fell. Germanic Barbarians ran amuck but were too crude and stupid to form any longlasting polity, let alone a stable empire. Eventually, warriors ruled over their turfs, which turned into larger and larger kingdoms. By good fortune, the French king ruled mostly over French people, Spanish king ruled mostly over Spanish people, English king ruled mostly over English people, and German kings and princes ruled mostly over German people. Austrians were an exception with their diverse empire, but then it's not surprising that the poison egg of WWI and all the horrors were hatched in that unnatural empire.

Anonymous said...

Also, because Western Europe had no single dominant imperial power, Brits found it advantageous to deal with the continental powers, sometimes siding with power A over power B, and then power B over power C, and then power C over power A. If China had been similarly divided into several nations, Japan too might have been more engaged in the Asian continent. But Japan saw and felt intimidated by one vast China and shut itself out. If all of Western Europe had been ruled by one mighty empire, Britains too might have been less enthusiastic about 'messing' with continental affairs.

Also, the failure of a new empire to develop in the West meant each kingdom had to compete with others in a 'keeping up with the Joneses' sort of way. This made Europeans not only territorial but competitive, which also led to innovation.
But, even as Europeans kingdoms/states remained independent and differed from one another, they were sufficiently similar in race and culture--Christianity--so they could cooperate and comingle when need be. This was less possible between European Christians and Muslim Arabs/Turks. If Germans and French were rival-friends, Austrians and Turks were(WWI notwithstanding) rival-enemies

Confucian Asia--China, Vietnam, Korea, and Japan may be the only other part of the world where territoriality and ethnicity more or less were in sync, thereby producing more stable territorial mindsets.

Much of the Middle East and North Africa, unlike Western Europe, had been under imperial rule. That of the Byzantines, Persians, Arab dynasties, Ottomans, European imperialists, etc. They finally coalesced into nation-states in the latter part of the 20th century, but even this process wasn't natural since Europeans drew artificial boundaries in the sand.
And the Russian Empire didn't end until the fall of the USSR. It's no wonder that so many people in Eastern Europe and Central Asia are adjusting to the idea of territoriality in the modern nation-state sense. But just as they're figuring that out, the pioneers of nation-state territorialism--US and Western Europe--are crazily experimenting with a new kind of headless global empire of 'human rights'.

sabril said...

Here's what one blogger has to say:

"All these years, I've been trying to pay attention to Mexico when everybody else is obsessing over the Middle East. After all, I reasoned, Mexico is right next door to us, while the Middle East isn't."


Whiskey said...

Bill Clinton got lucky. He could afford to keep Saddam's oil off the market, because well Saddam was running it. China was not the huge consumer of oil it is today.

China's emergence (all pretty much tied to state run enterprises, consumer use has remained relatively low) means tight oil supplies. Bush's Iraq War removed Saddam, has US troops to guard oil wells/pipelines, has a tribal society invested in oil being sold (instead of sitting in the ground earning them nothing). Winning in Libya rapidly was the key. Now its the worst outcome.

Anonymous said...

"China was not the huge consumer of oil it is today. China's emergence (all pretty much tied to state run enterprises, consumer use has remained relatively low) means tight oil supplies."

Rise of China really worries me. There are four basic kinds of economies: the solar, the planetary, lunar, and (dark)spatial.

Solar economy is like the sun. It has self-generating energy and brilliance. It abounds with goods, services, ideas, wealth, markets, etc. US is such an economy. Though world trade is important to the US economy, America possesses bountiful core productivity. So does Western Europe, at least to an extent.

There are two kinds of planetary economies, the solid and the gaseous. The solid kind depends on the sale of its raw materials. Saudi Arabia, Libya, Venezuela, and others. Without selling such goods to solar economies, solid planetary economies would really have nothing going for them. What would the Venezuela or Saudi economy be without advanced economies buying their oil?

The gaseous planetary economies are like those of Japan and Taiwan(and maybe Western Europe too; because the economy of EU is so advanced, it could qualify as solar, but because EU is generally limited in size and raw materials, it could also pass for a planetary economy). A gaseous planetary economy is like the planet jupiter or saturn. Because of its growth and productivity, it has the semblance of a solar economy. They kinda mimic the sun. But their lack of resources prevent them from becoming a true solar economy like the US, which is blessed with land, resources, population, and advanced productivity. Japan is a classic gaseous economy. In the 80s, some thought its gaseous growth would eventually turn it into a sun, but it didn't happen.

If planetary economies, solid and gaseous, depend on solar economies like the US(for export of raw materials, good, or services), lunar economies revolve locally around the planetary giants in its region. Nepal and Bangladesh would be a lunar economies of India.

(Dark)spatial economies are like empty space in the universe. Most subsaharan African economies are spatial economies. No matter how much economic sunlight is poured into them, it vanishes into space. If planetary economies can take the energies from the solar economy and reflect them back somewhat, spatial economies such suck the light and do little with it, which is why most people don't wanna invest in black Africa. It's like flushing money down the toilet or a black hole. Maybe it should be called a black hole economy.

Now, we come to China. Given its size, resources, population, culture, and talent of its people, some people expect China to be the other great solar economy, and that would be a good thing. Then, the Chinese economy would not depend so much on export to the US; it would grow as a result of its own consumer demand and innovation. Chinese economy would expand from its own internal engine/energy and dynamics.

But so far, China has only become an ever expanding planetary economy which depends almost solely on export to US and other advanced nations. Why is this unhealthy? A solar system may tolerate two suns--a rare but natural phenoomenon in the universe--, but it cannot tolerate a situation where a planet is bigger and more massive than the sun.

Chinese economic strategy is still almost wholly planetary--dependent on the core energies/wealth created by solar economies--when such arrangement is no longer be tenable. US can tolerate a planetary economy like Taiwan, with around 25 million people. US buys quality goods and Taiwan makes a profit. But when a nation of 1.3 billion plays a purely planetary role, it's refusing to grow up, and the solar economy of the US cannot keep feeding such a beast. China is like Huey the duckling. It's like a big fat adult that still won't leave home and take on its own responsibilities.

headache said...

if Obummer got into this in order to increase his reelection chances, I think he made a mistake. This was France's war, and if the US and EU had stayed out of it, France would have repeated the Toyota war tactics which so effectively crushed Gadfly in Chad: Mirage air cover coupled with Foreign Legion dressed up as nomads on Toyota pickups with AA guns and Milan anti-tank weapons. This would have been over by now, except Sark would have claimed victory and made Uncle Sucker look stupid.

So instead, coz the US does not want to be seen as a bully, we now have the ineffective and expensive NFZ, make-believe Obamaesque withdrawal of US planes, and musings about partition, arming the incompetent rebels (who include AQ elements) and other blowback which Ron Paul routinely warns against.

Anonymous said...

I think you are chasing a red herring here linking the absurd Libyan intervention with the oil price - yes, I realise the politicians are a load of ruthless snakes, and that the 1991 Gulf War was all about oil ('look George, don't wobble' was Thatcher's quote as she goaded George HW Bush into war), but on this occasion, it's a case of 'events, dear boy', as the entire western political clas and its intelligence systems were caught out unawares by the Arab revolution wave.It was not about oil as such.Certain British politicians with a quick eye to the main chance saw the opprtunity of bigging themselves up by swiftly serving up Gadaffi's head on a silver platter - unfortunately the dumb hotheads never bothered to cool down and reflect and snowball-like momentum (aided as usual by pompous academics and newspaper columnists being 'brave and prinicipled' whilst sitting in comfy armchairs)did the rest.End of.
Anyhow, oil was absurdly cheap by today's standrads in the 90s and 2000s, apparently no one ever bothered to peer around the corner and figure out what would happen if 1,3 billion Chinese started to buy cars.The line being fed to us by the WSJ, 'The Economist' , the globalists, the elitists etc was that that 'free trade' was always a an unmitigated good withi itself and the rise of China (oh! they only live on $1000 a year, they kept telling us - falsely), would somehow 'benefit' Americans by dint of the fact that 'world trade grew'.
Well, world trade did grow.It's just that the Chinese kept all of that growth - and its precious fruit, money, to themselves and used that cash to buy up the tertium quid of any industrial society, oil, for themselves.

Anonymous said...

When I first saw Die Hard I was stunned by the plot, the characters, and the action. Now when I see it on cable I'm stunned by the price of gas posted at the filling station in the scene where Reginald VelJohnson is attacked.

Yesterday I spent $73 to fill up my small tanked sports car. The principal cause of recent price hikes I believe has little to do with the Middle East and more to do with QE2. Quantitative Easing has been a method to devalue the currency and thus transfer some of our debt to our trading partners. It seems to have the effect of inflating the price of gas and the price of food.

Yesterday I also went to the super market and spent $120 on this week's groceries. That certainly wasn't caused by our foreign entanglements.


Difference Maker said...

"In Western Europe, there was no new empire since 450 AD or around the time Rome fell. Germanic Barbarians ran amuck but were too crude and stupid to form any longlasting polity, let alone a stable empire."

The Goths are described as intelligent. Theodoric's rule in Italy was looked upon favorably. It was the East Roman invasion and its consequences that resulted in the destruction of the old order. Charlemagne's empire was the Empire in the West. It is Germanic individualism and freedom that prevented true universal empire.