Iraq, Peak Oil, and the American Empire

It is easy to think of your opponents as evil, insane, or idiotic. The alternative is to consider that people, like you, have views that you do not share. This inevitably leads to the hard questions about why this is so. The current people in the American administration are not evil, insane, or idiotic. They are pursing an intelligent and highly successful foreign policy campaign that includes, as one of its goals, the destabilisation of the Middle East. Why? Their current economic situations leaves them little choice but to precipitate an oil shortage while they still maintain a dominant world position. Failure to do this would leave America in a precariously vulnerable position.

America's economic situation is dangerously unsound. They are maintaining huge trade deficits compounded with equally huge federal deficits. Ordinarily, trade deficits would cause the associated currency to devalue to the point where the trade imbalance would equalise. This has not happened with America because other nations, most notably China, have been creating an artificial balance by purchasing American currency. China has many reasons to do this but the situation will not last forever. Eventually, China will use its already-massive American dollar holdings to further its foreign policy goals. American policy makers, fully aware that they cannot compete with Chinese manufacturing capability, have reorientated the American economy increasingly towards high-tech weapons production, an area where America already has a formidable lead. Instability is good for such an economy.

Oil is often considered the life-blood of the American economy. However, only 20% of America's oil comes from the Middle East. 60% is produced domestically and another 20% comes from Venezuela, Mexico, and increasingly Canada. The world supply of oil will eventually not be able to meet the increasing demands on it. At that point, often termed 'Peak Oil', the price of oil will increase significantly. World economies will suffer as they transition to less-efficient alternatives. Environmental impacts aside, oil is an incredibly efficient energy source. Oil fueled America's rise to world dominance and it is also fueling Chinese expansion. If peak-oil were to happen after China's economy rivaled America's, both nations would be equally effected and the economic imbalances would continue in China's favour. However, if peak-oil were to happen now, effectively shutting down Chinese expansion, America would retain the advantages it currently still has. Another factor to consider is that while America only imports 20% of its oil from the Middle East, China imports much more. If the Middle East happened to fall into chaos in the near future, the American economy would suffer, but not as much as China's.

When the world reaches the point of peak-oil there will be significant impacts on most every country. However, the effects will be mixed. Countries that produce oil will benefit even while other parts of their economies are damaged. In America, for instance, when the price of oil doubled the economy was only mildly slowed. At the same time, American oil companies recorded record profits. American oil companies heavily support the current US administration and will not fault conditions that double their profits. However, American oil reserves are old and will not last forever; over time, America will become increasingly dependent on foreign oil. World oil production will peak and economies will have to adjust. The longer it takes to peak, the more dependent America will be on foreign oil when it happens.

Should the current trends continue to their logical conclusion, America will face significant hardship. America's economy is heading for a fall while its competitors are rising. Once America has lost its dominant financial position, many countries around the world will no longer feel compelled to support the American dollar. Once the American dollar loses it's current artificial support, the US economy will crash, and crash hard. A weakened America, so often the bully of the world, will gather very little international support and this will further damage its economy. At the same time, diminished American oil reserves would result in increased imports, further damaging the economy. About when the US economy is in full scale depression, the world oil reserves would likely hit their peak. This would throw the entire world into financial turmoil, a turmoil that is likely to leave a weakened America far below its current position of dominance. Eventually, with a diminished economy and world impact, America, like Old Europe, will fade into past-empire irrelevance. The current American administration appears unwilling to let this happen.

Faced with the choice between orchestrating a graceful decline or continuing to fight for world dominance, the current American administration appears to have chosen the latter. To understand their strategy, simply ask what would happen if Peak-Oil happened now, rather than later. As with the previous scenario, the world economy would be thrown into a turmoil. However, the US economy is still dominant and most countries, already struggling with rising oil prices, would be unwilling to stop supporting the American dollar; doing so would further erode their primary export market and exacerbate their own weakened economies. As the world adjusted to alternative, less efficient, energy sources, America would retain its current dominance. It may even benefit by supplying much of the new energy technology; this being another area where it still, for the time being, holds an advantage. At the same time, American oil company profits would skyrocket.

Inducing peak-oil early involves artificially reducing the world oil supply. To do this, while causing the least effect on itself, America needs only create conflict in the Middle East, a major world oil supplier. While many people feel the American involvement in Iraq is a failure, taken with this goal in mind it is a spectacular success. America has fomented sectarian rivalries between and even within various groups to the point of civil war. As this war progresses, neighbouring countries will be drawn in, especially Iran. Once Iran is actively participating, the Arabian Gulf will be effectively closed to oil tanker traffic and peak-oil will hit. With a significant military presence in the area, the American administration will be capable of regulating the actual oil shortage level by escorting variable amounts of tanker traffic through the area. It is an excellent plan, from an American perspective.

Everything appears to be in place. Iraq is in turmoil and ready to explode. There is a new pipeline-fed Mediterranean oil terminal in Turkey, around the norther border of Lebanon. Syria is tied down with a strong NATO force in Lebanon. Iran is ostracised and surrounded with forces in Kuwait, Afghanistan, and Iraq. Formidable US army, navy, and air forces are present in the area. Most oil-producing Arabian Gulf countries have large numbers of US forces stationed in them. All that remains is for the American administration to pull the trigger, or set the final trap that will paste Iran as the aggressor. The plan, brilliantly executed, is in its final stages. It is only a matter of time.