Prensa Latina: Global Oil Gnaws the Forbidden Apple

Global Oil Gnaws the Forbidden Apple

by Elsy Fors | July 29, 2006

Central Bureau -- A windfall of profits has been announced every quarter over the last three years for big oil companies, but easy money is sure to dig everyone´s graves, including their own.

The war on Iraq in 2003 and its occupation gave way to a new era of conflict and shortage of fossil fuels like the planet had not known since the end of World War II.

Crude oil prices rocketed from the $20-$30 dollar a barrel level to almost $80 dollars. No wonder Exxon Mobil, the largest corporation quoted in stock markets, reported a 36 percent gain in second-quarter earnings, bolstered by robust oil and gas prices, improving refining margins and the start of production in Nigerian waters.

In all, Exxon Mobil reported a profit of $10.36 billion, its second-best quarter ever. That amounts to the GDP of many poor nations.

According to many analysts, a new order is taking form, driven by the greed of the United States and big energy consumers, while developing oil producing countries are more cautious of their sometimes only source of revenue.

The main oil importing countries are having increasing difficulties to meet their wasteful lifestyles. Energy security has become a central issue of foreign policy.

Last May, a subcommittee of the US Congress organized public hearings on how to negotiate with countries using fuel as a weapon.

Jaap de Hoop Scheffer, Secretary General of NATO, declared in May that this grouping would consider the use of force if energy supplies were threatened.

As for oil and gas, said De Hoop Scheffer before the European Parliament, NATO could play a decisive role in the maritime defense of supplies.

According to some estimates, 90% of non exploited oil reserves are controlled by governments or state companies, a greater proportion than 30 years ago. While the planet does not seem to be running out of crude, it has become more difficult for big oil companies to get hold of the reserves.

The International Energy Agency (IEA) forecasts crude demand will go up by 37% from now until 2030, but some producer countries will not or cannot meet the demand.

In addition, countries like Venezuela, Ecuador and Bolivia are not willing to let foreign companies get hold of their natural resources without any consideration for environmental, economic or social issues of the proprietor nations as was the case before.

The new world map depicting the situation of supply and demand of hydrocarbons has made developed countries more vulnerable. The IEA estimates that its 26 member countries will need to import 85% of their energy needs by 2030, compared to the current 63% per cent.

These hard facts have made many analysts fear for the outburst of a new world war. It may already be under way, driven by the conservative and even fascist ideals of the US administration, with the support of its Middle-East bully, Israel.

The goal is control over oil and gas reserves. Iran and Venezuela, however, have warned they would interrupt oil supplies if threatened by the US.

Henry Groppe, founder of an energy consultancy based in Houston, has analyzed the oil industry over half a century and points out three stages in the history of oil.

The first one was the century of easy oil under US control that lasted until the 70s with an average price of $13 dollars a barrel.

The second time was a transition period and the increasing influence of the Organization of Petroleum Exporting Countries (OPEC), which lasted until 2004, and the barrel averaged $36 dollars.

The most recent stage, barely two years old, is more convulsive and prone to supply quakes, where prices are fickle and consumers compete ever more ferociously for supplies, says Groppe.

Alas, the last frontier of energy sources may be the Gulf of Mexico, Alaska or the Orinoco basin, all with their fragile ecosystems whose destruction may put the human species on the list of endangered species.