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Tomgram: Michael Klare, Tough Oil on Tap

News stories just out report that the Bush administration is planning to designate Iran's entire Revolutionary Guard Corps a "specially designated global terrorist" in order to tighten sanctions on that country. This follows a many-months-long drumbeat of U.S. claims against Iran -- for arming not just Shiite militias (and Sunni insurgents) with the most sophisticated roadside bombs to attack American troops, but the Taliban as well (an especially unlikely charge). It also follows a growing eagerness in Congress for passage of the Iran Counter-Proliferation Act; reports of rising administration frustration over the UN Security Council's unwillingness! to pass a third round of sanctions against Iran; a flurry of insider leaks that the Cheney wing of the administration is again pushing for military action against the Iranians and that the Vice President himself has urged the launching of "airstrikes at suspected training camps in Iran run by the Quds force, a special unit of the Iranian Revolutionary Guard Corps"; reports that neocon think-tanks and pundits are joining the attack-Iran fray; constant claims from the President's commanders and diplomats that the hand of Iran is behind any administration misstep in the Middle East. In this context, it's worth remembering that the President has long claimed he would not leave office with the Iranian nuclear situation! unsettled.

Michael Klare's latest piece offers perhaps the crucial context within which to consider Cheney's urge to launch an air assault on Iran. If we are, as Klare writes, entering a "tough-oil era," if global oil supplies are already under intense pressure and oil prices ready to leap on any hint of possible oil disaster anywhere on the planet, then imagine what a major air assault on Iran before January 2009 might mean. Actually, Secretary of Defense Robert Gates helped us imagine just this at his confirmation hearings back in December 2006 when asked about the effects of such an attack: "It's always awkward to talk about hypotheticals in this case. But I think that while Iran cannot attack us directly militarily, I think that their capacity to potentially close off the Persian Gulf to all e! xports of oil, their potential to unleash a significant wave of terror both in the -- well, in the Middle East and in Europe and even here in this country is very real."

Such an attack would, of course, be a straightforward act of global economic madness; but, given the cast of characters ? a classic neocon quip of the pre-Iraq invasion period was ""Everyone wants to go to Baghdad. Real men want to go to Tehran..." -- that hardly takes the possibly off the hypothetical "table" where all "options" so obdurately remain. An assault on Iran aside, Klare, author of the indispensable Blood and Oil: The Dangers and Consequences of America's Growing Dependence on Imported Petroleum, suggests the nature of the hair-raising energy world we are now entering. Tom

Entering the Tough Oil Era

The New Energy Pessimism
By Michael T. Klare

When "peak oil" theory was first widely publicized in such path breaking books as Kenneth Deffeyes' Hubbert's Peak (2001), Richard Heinberg's The Party's Over (2002), David Goodstein's Out of Gas (2004), and Paul Robert's The End of Oil (2004), energy industry officials and their government associates largely ridiculed the notion. An imminent peak -- and subsequent decline -- in global petroleum output was derided as crackpot science with little geological foundation. "Based on [our] analysis," the U.S. Department of Energy confidently asserted in 2004, "[we] would expect conventional oil to peak closer to the middle than to the beginning of the 21st century."

Recently, however, a spate of high-level government and industry reports have begun to suggest that the original peak-oil theorists were far closer to the grim reality of global-oil availability than industry analysts were willing to admit. Industry optimism regarding long-term energy-supply prospects, these official reports indicate, has now given way to a deep-seated pessimism, even in the biggest of Big Oil corporate headquarters.

The change in outlook is perhaps best suggested by a July 27 article in the Wall Street Journal headlined, "Oil Profits Show Sign of Aging." Although reporting staggering second-quarter profits for oil giants Exxon Mobil and Royal Dutch Shell -- $10.3 billion for the former, $8.7 billion for the latter -- the Journal sadly noted that investors are bracing for disappointing results in future quarters as the cost of new production rises and output at older fields declines. "All the oil companies are struggling to grow production," explained Peter Hitchens, an analyst at the Teather and Greenwood brokerage house. "[Yet] it's becoming more and more difficult to bring projects in on time and on budget."

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Tags: Tom Dispatch, Tomgram, Michael Klare, Tough Oil on Tap, peak-oil