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(MENAFN - Arab News) Syed Rashid Husain
Oil is a finite source, everyone concedes.
Even if the issue on crude production has peaked or not is kept aside for the time being, one thing is certain, the galloping global consumption is straining the overall balance.
BP's Statistical Review of World Energy released recently appears to underline that the world still has enough "proven" reserves to provide 40 years of consumption at current rates.
On the other hand, scientists led by the London-based Oil Depletion Analysis Centre, say that global oil production is set to peak in the next four years before entering a steep decline.
One thing is but true. In recent years the once-considerable gap between demand and supply has definitely eroded significantly. Crude demand and supply is now balanced — fairly precariously, one has to accept. No one, not even BP, disagrees that demand is surging. The rapid growth of China, India and other Asian economies matched with the developed world's dependence on oil, means that a lot more oil will be required and it have to come from somewhere.
BP's review shows that world demand for oil has grown faster in the past five years than in the second half of the 1990s. Today we consume an average of 85 million barrels daily. According to the most conservative estimates from the International Energy Agency that figure will rise to 113 million barrels by 2030. Two-thirds of the world's oil reserves lie in the Middle East and this surging demand will have to be met with massive increases in supply from this region.
The major issue here is "that you go from 79 million barrels a day in 2002 to 84.5 million in 2004. You're leaping by two to three million barrels a day" each year. That's like a whole new Saudi Arabia every couple of years. It can't be done indefinitely," former senior Aramco executive Al-Huseini commented.
People have been pointing to the rising consumption in China and other emerging countries for the steep rise in global consumption. There is however, another side of the story, too.
Michael T. Klare, professor of peace and world security studies at Hampshire College in Amherst, Mass., and author of "Blood and Oil: The Dangers" has the following interesting story to tell.
"Sixteen gallons of oil, that's how much the average American soldier in Iraq and Afghanistan consumes on a daily basis — either directly, through the use of Humvees, tanks, trucks, and helicopters, or indirectly, by calling in air strikes. If one multiplies this figure by 162,000 soldiers in Iraq, 24,000 in Afghanistan, and 30,000 in the surrounding region (including sailors aboard US warships in the Gulf), one arrives at the approximate figure of 3.5 million gallons of oil: the daily petroleum tab for US combat operations in the Middle East war zone."
If this is multiplied by 365, one gets 1.3 billion gallons: the estimated annual oil expenditure for US combat operations in Southwest Asia. That's greater than the total annual oil usage of Bangladesh with a population 150 million — and yet it's a gross underestimate of the Pentagon's wartime consumption.
But the figure is still higher. After all, for every soldier stationed "in the theatre," there are two more in transit, in training, or otherwise in line for eventual deployment to the war zone — soldiers who also consume enormous amounts of oil, even if less than their compatriots overseas. Moreover, to sustain an "expeditionary" army located halfway around the world, the US Department of Defense (DoD) must move millions of tons of arms, ammunition, food, fuel, and equipment every year by plane or ship, consuming additional tanker-loads of petroleum. This also needs to be added to the tally.
Foreign wars, however, account for but a small fraction of the Pentagon's total petroleum consumption. Possessing the world's largest fleet of modern aircraft, helicopters, ships, tanks, armored vehicles, and support systems — virtually all powered by oil — the DoD is, in fact, the world's leading consumer of petroleum. It can be difficult to obtain precise details on the DoD's daily oil hit, but an April 2007 report by a defense contractor, LMI Government Consulting, suggests that the Pentagon might consume as much as 340,000 barrels (14 million gallons) every day, Klare said.
During Operation Desert Storm in 1991, the average American soldier consumed only four gallons of oil per day; however, a US soldier in Iraq is now using four times as much. The US war machine cannot grow this way, unless steps are taken to ensure regular flow of oil to fuel this war machinery.
And steps are definitely on the way— despite phenomenal costs.
To ensure itself a "reliable" source of oil in perpetuity, Klare said the Pentagon would be increasing its efforts to maintain control over foreign sources of supply, notably oil fields and refineries in the oil-rich Gulf region.
This helps now explains the recent talk of US plans to retain "enduring" bases in Iraq, along with its already impressive and elaborate basing infrastructure in the region. And the real reasons behind the determination to force Tehran to conform to the wishes of the sole global power are also not hard to fathom, in the light of the above.
And all this has long-term strategic consequences for the entire region, whether one likes it or not.
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