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Saudi Arabia’s Oil Weapon, for How Long?

 

 

Oil hegemony is world hegemony. For Washington, it is important to influence/control the oil politics of Saudi Arabia, the world’s biggest oil exporter and swing producer, not because America needs Saudi oil, but to assert Washington’s superpower status on the world stage. In the hands of Washington, control over a big proportion of global oil exports is like a non-lethal weapon of mass destruction (WMD) in the event of a serious conflict with major oil-importing rivals, China, India, Japan, Continental Europe, among others.

 

The US has for the past seventy years, protected the al-Saud regime, despite its non-representative totalitarianism, human rights abuses, and jihad indoctrination. Not even 9/11 could make G.W. Bush punish Wahhabi culpability for 9/11. Instead, he occupied Iraq, empowering Iran. 

 

China’s national security concerns will drive renewable energy development to end its entire oil imports. Further, two-thirds of global oil is burned in combustion engines. By 2040, selling petrol cars is planned to stop in China, Denmark, France, Germany, Holland, India, Norway, UK... When that happens, US protection of Riyadh will wane, Saudi cash will dwindle, Wahhabi terror will diminish, and democracy will have a chance to take root in Arab lands. In the confrontation against Wahhabi terror, green energy is more effective than guns.


 

 

 

Why Is Saudi Oil So Valuable to Washington's Energy Geopolitics? 

Four factors: First, Saudi oil fields are the world’s biggest and least costly to extract. Saudi Arabia is the world’s biggest oil exporter and the swing producer. Secondly, it is easy for US forces in GCC naval and air force basis to control the oilfields. They are located in a narrow stretch of some 800 miles along the Eastern shore of the Arabian Peninsula (Kuwait, Bahrain, Eastern Province of Saudi Arabia, Qatar, UAE, and Oman). Thirdly, the size of the native population near the oilfields is small, around six million. They are ruled by six archaic absolute tribal Sheikhs. Fourthly, These men are frightened by the hostile and more powerful Shi’ite Iran and Iraq. Washington is their only protector. 

 

US Hegemony Over Global Oil Exports 

In case of war between America and its major oil-importing rival(s), US naval and air force bases in GCC states can control the rich oilfields of Southwest Iran and Southern Iraq; thus, raising America’s control over Middle Eastern oil to around one half of world oil exports. 

 

Beyond the Middle East, in the Americas, around six million bbl./day are exported from Canada, Columbia, Mexico, and Venezuela. In the event of war,these would come under US control. 

 

Oil exports from countries in the North Atlantic Treaty Organization (NATO); Norway and UK would also be under US control, in the event of war

 

In all, from the Middle East, the Americas, and NATO countries, Washington controls around two thirds of global oil exports. The corner stone, however, is Middle Eastern oil.  


Manifesting US Protection of Saudi Arabia

1. American technicians and spare parts keep operational the hundreds of billions of dollars in sophisticated US weapons sold to the Saudi Ministry of Defence and Aviation and the National Guard. Weapon purchases are a form of protection money Saudi Kings pay. President Trump reminds his audiences on every turn that Washington is the protector of Saudi Arabia and the other GCC states.On a campaign rally in Wisconsin on April 2, 2016, during his presidential campaign, Candidate Trump said, “Nobody’s going to mess with Saudi Arabia because we’re watching them.”[1]To loud cheers at a rally in Southaven, Mississippi, on October 2, 2018, Trump said that he warned King Salman: “You might not be there for two weeks without us."[2] 

 

2. Until 2003, the US had maintained a large air force presence outside Riyadh. To “purify” the land of the two holy mosques from the military presence of “infidels”, the force was moved to nearby al-Udeid Air Base in Qatar, a few minutes flying time away. With around 10,000 troops, al-Udeid is the largest US base in the Middle East.[3] Bahrain is home to the US Fifth Fleet, hosting some 7,000 Navy personnel.[4] The air force, operates F-16s, F-18s, and P-3 surveillance aircraft.[5] In Kuwait, there are 15,000 troops in two air force bases[6]and seven camps scattered around this small country.[7] In the UAE, there are about 3,500 US troops with F-22s.[8]

 

US forces protect the world’s richest oilfields in Saudi Arabia’s Eastern Province and the al-Saud regime along with the rest of GCC states. Further, they ensure the uninterrupted shipping of around 17 million barrels of oil per day through the narrow Strait of Hormuz. In case of war, the armada can control oil exports from Iran and Iraq as well.

 

3. While all other countries maintain a single diplomatic mission in Riyadh, the US has always maintained large diplomatic presence in Riyadh, Jeddah, and Dhahran. 

 

4. Former senior Washington officials, captains of industry, media moguls, and lobbyists act on behalf of Riyadh. The Center for International Policy found that registered foreign agents working on behalf of Saudi interests contacted Congress, the White House, the press and think tank analysts more than 2,500 times in 2017.[9]Large endowments to presidential libraries, charitable foundations, universities, think tanks, etc. turned professors  into propagandists for the Saudi regime.[10]

 

In consequence, notwithstanding that Saudi Arabia was designated by the US State Department since 2004 as a Country of Particular Concern for its severe violations of religious freedoms, the US Secretary of State has waived the sanction that comes with such designation due to the important national interest of the US.[11]

 

The War Against Sustainable Energy 

Governments, investors, lenders, and workers in oil, gas, coal, car, and fossil fuel using power plants stand in the way of sustainable energy. They have been lobbying politicians, especially in the US, to water down, even repeal environmental protection laws. global demand for oil between 1980 and 2015 increased by 56% from 61 million barrels per day to 95 million barrels per day,[12] despite environmentalists’ campaigns against the use of fossil fuel and developing sustainable electricity generation from solar and wind technologies.

 

ExxonMobil, the world’s biggest oil company, knew as early as 1981 of climate change – seven years before it became a public issue. However, the firm spent millions over the next 27 years to promote climate denial.[13]Also, Russia has a serious vested interest in prolonging the life of oil and gas.

 

President Trump rolled back 23 environmental rules in his first 100 days in office.[14] His actions are short-sighted. While removing environmental protection rules increases corporate profits and stock market values, such gains are deceitful. They ignore the negative impact of polluting America’s environmental capital. For example, revoking the rule that prevented coal mining companies from dumping debris into local streams (February 16, 2017) or ending the ban on potentially harmful insecticide (March 29, 2017)[15]will burden future generations with the responsibility of cleaning the polluted river or reclaiming the contaminated soil left by their grandparents. 

 

The Trump administration issued its notification that the US intends to withdraw from the 2015 Paris Climate Agreement on August 4, 2017.[16]America is the only country in the world outside the Paris landmark agreement, while 197 countries are in support of the Agreement.[17] In the middle of 2017, the US Interior Secretary directed the Bureau of Land Management to ramp up sales of oil and gas leases on federal land in order to increase oil production on federal lands.[18] In a sign of what’s to come, “Trump Digs Coal” placards are a common sight in rallies in coal states. On avisit to West Virginia on August 21, 2018, Mr. Trump declared: "We love clean beautiful, West Virginia coal ... That's indestructible stuff ... In times of war, in times of conflict, you can blow up those windmills, ... You can blow up those pipelines ... You can do a lot of things to those solar panels ... But you know what you can't hurt? Coal." [19] In an interview on October 15, 2018, with CBS's program “60 Minutes,” Trump accused climate change scientists of having a "political agenda," doubted whether humans were responsible for earth’s rising temperatures, thought that temperatures "could very well go back," and declared that he does not want to give trillions and trillions of dollars and lose millions and millions of jobs.[20] He was oblivious to the employment opportunities green technologies can generate. It was unclear what he meant by “give” trillions and trillions of dollars. 

 

Resistance to Losing Trillions of Dollars Invested in the Oil and Related Industries

Investors, lenders, and politicians lead the war against sustainable energy. According to the Bank for International Settlements, the oil industry had bonds outstanding in 2014 in the amount of $1.4 trillion and $1.6 trillion in syndicated loans, (excluding account repayments or loans that were never drawn).[21]Both numbers are likely to have increased since 2014, in part due to the boom in shale oil and gas extraction in the US.[22]As for equities, the world’s top ten oil and gas companies are estimated to have had a combined equity of $2 trillion in 2015,[23]making the aggregate financial exposure of banks and investors to the oil and gas industry alone $5 trillion.[24]  

 

To put $5 trillion in perspective, if the writing-off period is 20 years, the annual write-off amount would be $250 billion. If the period is 50 years, the annual write-off would still be a huge $100 billion. Additionally, it is necessary to add the bonds, loans, and equities extended to the hundreds of medium and small size oil and gas companies, and the independent oilfield and drilling service companies, pipeline companies, crude oil and product tankers companies, refining companiesand the estimated 400,000 independent gasoline stations worldwide. When these are accounted for, the total would likely double, at least.  

 

Sustainable energy will impact the auto industry’s combustion engine and the thousands of fossil fuel burning electricity-generating plants. The combined financial impact on the oil and gas and auto industries and fossil fuel using power plants might reach $20 trillion, a gigantic exposure, well beyond the capital and reserves of exposed banks and investors, if the changeover is conducted too quickly. Further, the cost of building new green energy power plants and training millions of workers to replace the polluting technologies should be added.

The Bank of England considers that,“the window for an orderly transition is finite and closing.”[25] In a policy proposal document released on October 15, 2018, the Central Bank wants British banks and insurance companies develop credible plans for an orderly market transition to a low-carbon world, including possibly holding more capital.[26]

 

The Hope

The expected demand for oil is not only a function of its physical availability. It is also a function of the speed through which big oil importing rivals of the US would generate sufficient renewable sources of energy to free themselves from the shackles of dependence on imported oil.[27] At the top of the list are China; the world’s biggest oil importer (8.4 million bbl./day in 2017),[28] India (3.789 million bbl./day in 2014),[29] Japan (3.181 million bbl./day in 2016),[30] and EU countries. Aside from environmental benefits, independence from US control over the oil imports of these countries must rank high on their national security priorities. 

 

Sustainable energy is a sharp weapon in the fight against Wahhabi terror. It is only when oil imports by US rivals is replaced by sustainable sources that Washington’s protection of the Saudi regime will vanish, the al-Sauds’ cash will dwindle, Wahhabi indoctrination and proselytization will falter, and Wahhabi terror will eventually be defeated. When that happens, the countries leading the renewable energy drive would have added to world peace a greater contribution than all the raids on terrorists’ hideouts by the world’s armies and air forces. 

 

Which Country Will Lead the Drive Towards Sustainable Energy? 

The answer is China. China is America’s main rival today. The two powers are locked into competition over global markets and political influence. US oil hegemony poses serious national security risk to Beijing.

 

China’s oil imports fuel its cars, motorcycles, and trucksEliminating the internal combustion engine from China’s transportation fleet will eliminate the country’s need to import oil. 

 

In 2007, according to International Energy Agency statistics (IEA), out of a total oil demand of 7.609 million bbl./day, China imported 3.873 million bbl./day (the rest was produced domestically). Significantly, the volume of oil imports that year was almost identical to the 3.844 million bbl./day, which was used to fuel China’s transportation fleet[31] of around 59 million vehicles).[32]

 

In 2009, according to IEA, out of a total oil demand of 8.046 million bbl./day, China imported 4.246 million bbl./day (the rest was produced domestically). The volume of the imported oil that year was, again, almost identical to the 4.254 million bbl./day used to fuelChina’s transportation vehicles[33] of around 76 million vehicles in 2009.[34]

 

In 2017, according to US Energy Information Administration (EIA), out of a total demand of 13.2 million bbl./day, China imported 8.4 million bbl./day,[35] or twice the 2009 level (the rest was produced domestically). The number of vehicles in 2017 was 217 million, or 285% the 2009 level.[36] In the absence of sectorial oil consumption data for 2017, it is reasonable to assume that the degree of correlation in 2007 and 2009 between Chinese oil imports and consumption by Chinese vehicles had also prevailed in 2017. That the doubling of oil imports in 2017 compared to 2009 was matched by a 285% increase in the number of vehicles, is attributable to the fact that post-2009, the internal combustion engines were more fuel efficient than earlier models.  

 

When Are America’s Oil Importing Rivals Likely to Electrify Their Transportation Fleets?

The crystal ball is rather cloudy. Certain actions lead to the conclusion that the Chinese government is serious to ban the production and sale of oil-using vehicles as soon as possible. Indeed, from a modest beginning in 2014, China accounted in 2016, for more than 40% of the 753,000 electric vehicles sold worldwide.[37] In 2017, China was expected to sell 700,000 electric cars.[38]  

 

China plans to build 800,000 charging points, 100,000 of which were installed in 2016.[39] It will build by 2020 a nationwide charging-station network to power 5 million electric vehicles along 14,000 kilometers of highways with an average spacing of 48.6 kilometers.[40] In Beijing and Shanghai, a charging facility can already be found within a radius of less than 5 kilometers.[41] 

 

China’s Deputy Industry Minister stated in September 2017, that the ministry has begun "research on formulating a timetable to stop production and sales of traditional energy vehicles."[42] The chairman of Chinese automaker BYD Co, Ltd. was more specific. He suggested that all cars in China to be “electrified” by 2030.[43] As the transformation evolves, China’s oil imports will progressively decline until they disappear. This assumes that China’s domestic oil production would remain sufficient to meet its non-transport industrial demand. It should be noted that China was a net exporter of oil in 1990 (452,400 bbl./day) and that in 1995 it became a net importer (280,600 bbl./day).[44] 

 

China generates all of its electricity needs from non-oil sources (coal, nuclear, hydro, wind, solar). China is the world leader in wind power.[45] It is the world leader in solar energy capacity,[46]and has the world’s most hydropower capacity.[47]

 

Other countries are diligently electrifying their transportation fleets as well. In Norwayall new passenger cars and vans sold after 2025 should be zero-emission vehicles.[48] India plans after 2030 to sell only electric cars.[49] Similarly, after 2030, Germany,[50] Denmark,[51] and Holland[52] will sell only non-petrol motor-vehicles. France[53] and the UK[54] will end combustion engine sales by 2040. 

 

The shift away from the combustion engine is particularly significant to reducing world’s consumption of oil given that 64% of Global oil consumption in 2012 was in the transport sector.[55]

 

 



[1] Steve Holland, “Donald Trump Calls NATO ‘Obsolete’,” Huffpost, (April 2, 2016).

https://www.huffingtonpost.com/entry/donald-trump-nato_us_570060bce4b0a06d5805e283

[2] Trump says he told Saudi's King Salman that the ruler wouldn't last without US support,” CNBC, (October 3, 2018).

https://www.cnbc.com/2018/10/03/trump-i-told-saudi-king-salman-he-wouldnt-last-without-us-support.html

[3] GlobalSecurity.Org, “Al Udeid Air Base, Qatar”.

http://www.globalsecurity.org/military/facility/udeid.htm 

[4] Ibid.

[5] Ibid.

[6] The Heritage Foundation, “2015 Index of US Military Strength, Assessing the Global Operating Environment, Middle East.” 

http://index.heritage.org/military/2015/chapter/op-environment/middle-east/

[7] Military Bases.com. “Kuwait.” 

https://militarybases.com/kuwait/

[8] Rajiv Chandrasekaran, “In the UAE, the United States Has a Quiet, Potent Ally Nicknamed ‘Little Sparta,’” The Washington Post, (November 9, 2014).

https://www.washingtonpost.com/world/national-security/in-the-uae-the-united-states-has-a-quiet-potent-ally-nicknamed-little-sparta/2014/11/08/3fc6a50c-643a-11e4-836c-83bc4f26eb67_story.html?utm_term=.1e23ef7eb539

[9] Theodoric Meyer, Lorraine Woellert, and Marianne Levine, “Diplomatic crisis spotlights Saudi Arabia’s spending in Washington,” Politico, (October 18, 2018).

https://www.politico.eu/article/jamal-khashoggi-diplomatic-crisis-spotlights-saudi-arabias-spending-in-washington/

[10] Patrick Cockburn, “How Barack Obama turned his back on Saudi Arabia and its Sunni allies,” The Independent,(March 12, 2016).

http://www.independent.co.uk/news/world/middle-east/barack-obama-saudi-arabia-us-foreign-policy-syria-jihadism-isis-a6927646.html

[11] US Department of State, “International Religious Freedom Report for 2015, Saudi Arabia.”

[12] YCHARTS, “World Oil Consumption Historical Data.”

https://ycharts.com/indicators/world_oil_consumption

[13] Suzanne Goldenberg, “Exxon Knew of Climate Change in 1981, Email Says – But It Funded Deniers for 27 More Years,”The Guardian,(July 8, 2015).

https://www.theguardian.com/environment/2015/jul/08/exxon-climate-change-1981-climate-denier-funding

[14] Nadja Popovich and Tatiana Schlossberg, “23 Environmental Rules Rolled Back in Trump’s First 100 Days,” TheNew York Times,(May 2, 2017).

https://www.nytimes.com/interactive/2017/05/02/climate/environmental-rules-reversed-trump-100-days.html

[15] Ibid.

[16] US Notifies UN of Paris Climate Deal Pullout,” BBC,(August 5, 2017).

http://www.bbc.co.uk/news/world-us-canada-40829987

[17] Fiona Harvey, “Syria Signs Paris Climate Agreement and Leaves US Isolated,”The Guardian,November 7, 2017. 

https://www.theguardian.com/environment/2017/nov/07/syria-signs-paris-climate-agreement-and-leaves-us-isolated

[18] Jim Lyons, “The Rush to Develop Oil and Gas We Don’t Need,” TheNew York Times,(August 28, 2017).

https://www.nytimes.com/2017/08/28/opinion/trump-oil-public-lands.html?em_pos=small&emc=edit_ty_20170828&nl=opinion-today&nl_art=4&nlid=18135507&ref=headline&te=1

[19] John Siciliano, “Trump uses dramatic vision of exploding windmills to tout coal's reliability,” Washington Examiner, (August 22, 2018).

https://www.washingtonexaminer.com/policy/energy/trump-uses-dramatic-vision-of-exploding-wind-mills-to-tout-coals-reliability

[20] Trump: Climate change scientists have 'political agenda',” BBC, (October 15, 2018).

https://www.bbc.co.uk/news/world-us-canada-45859325

[21] Phillip Inman and Rob Davies, The Five Fears Stalking the Global Banking Industry,” The Guardian,(February 10, 2016).

https://www.theguardian.com/business/2016/feb/10/banking-shares-under-pressure-as-investors-fear-effects-of-global-downturn

[22] Ibid.

[23] Investopedia, “World’s Top 10 Oil Companies,” (January 7, 2015).

http://www.investopedia.com/articles/personal-finance/010715/worlds-top-10-oil-companies.asp

[24] Syndicated loans (not all loans) of $1.6 trillion + bonds of $1.4 trillion + equities of $2 trillion = $5 trillion.

[25] Huw Jones, “Banks, insurers must have credible plans for climate change: BoE,” Reuters, (October 15, 2018).

https://uk.reuters.com/article/us-britain-boe-climatechange/banks-insurers-must-have-credible-plans-for-climate-change-boe-idUKKCN1MP0YW

[26] Ibid.

[27] Potentially, fusion power could provide the world with limitless clean energy. The new technology could become a reality by December 2025,with fusion plants coming on line as early as 2040. The European Union, China, India, Japan, Korea, Russia and the U.S. are contributing to International Thermonuclear Experimental Reactor (Iter), a £16-billion project, under construction at Saint-Paul-les-Durance in southern France. 

John Von Radowitz, “Fusion power plants could provide energy for homes in just 20 years,” The Independent, (December 30, 2017),

http://www.independent.co.uk/news/world/fusion-power-plants-provide-energy-uk-homes-20-years-reactor-sun-iter-a8134946.html

[28] “China Surpassed the United States as the World’s Largest Oil Importer in 2017,” US Energy Information Administration (EIA), (February 5, 2018).

https://www.eia.gov/todayinenergy/detail.php?id=34812

[29] Country Comparison, Oil – Imports (bbl./day), Index Mundi.

https://www.indexmundi.com/g/r.aspx?v=93&t=10

[30] Ibid.

[31] Oil and Gas Security, Emergency Response of IEA Countries, People’s Republic of China,” International Energy Agency (IEA), (2012).

https://www.iea.org/publications/freepublications/publication/China_2012.pdf

[32] Vehicle population in China from 2007 to 2017 (in millions), Statista.

https://www.statista.com/statistics/285306/number-of-car-owners-in-china/

[33] International Energy Agency (IEA), (2012).

[34] China’s Auto Fleet Expands to 154 Million Vehicles,” ChinaAutoWeb.

http://chinaautoweb.com/2014/11/chinas-auto-fleet-expands-to-154-million-vehicles/

[35] “China Surpassed the United States as the World’s Largest Oil Importer in 2017,” US Energy Information Administration (EIA), (February 5, 2018).

[36] Vehicle population in China from 2007 to 2017 (in millions), Statista.

[37] “China wants to ban gas and diesel cars,” CNN, (September 11, 2017).

https://money.cnn.com/2017/09/11/news/china-gas-electric-car-ban/index.html

[38] Electric Cars in China Are On Track for a Record Year,” Green Tech Media,(October 20, 2017).

https://www.greentechmedia.com/articles/read/electric-cars-in-china-are-on-track-for-a-record-year#gs.9TvginM

[39] China to build more charging points for electric vehicles,” Chinadaily, (February 10, 2017).

http://www.chinadaily.com.cn/business/motoring/2017-02/10/content_28160372.htm

[40] Ibid.

[41] Ibid.

[42] Bred Jones, “China is Working on a Timetable to Ban the Production and Sale of Non-Electric Cars,” Futurism, (September 11, 2017).

https://futurism.com/china-is-working-on-a-timetable-to-ban-the-production-and-sale-of-non-electric-cars/

[43] Don Galeon, “Expert Asserts That All Cars in China Will be Electric by 2030,” Futurism, (September 27, 2017).

https://futurism.com/expert-asserts-that-all-cars-in-china-will-be-electric-by-2030

[44] International Energy Agency (IEA), (2012).

[45] Alex Pashley, “China overtakes EU to become global wind power leader,” The Guardian, (February 11, 2016).

https://www.theguardian.com/environment/2016/feb/11/china-overtakes-eu-to-become-global-wind-power-leader

[46] Feifei Shen, “China Outstrips Germany in Solar Capacity After Record Additions,” Renewable Energy World, (February 8, 2016).

https://www.renewableenergyworld.com/articles/2016/02/china-outstrips-germany-in-solar-capacity-after-record-additions.html

[47] Hydropower Status Report, Sector Trends and Insight, International Hydropower Association,(2018).

https://www.hydropower.org/sites/default/files/publications-docs/iha_2018_hydropower_status_report_4.pdf

[48] Alanna Petroff, “These countries want to ditch gas and diesel cars,” CNN, (July 26, 2017).

https://money.cnn.com/2017/07/26/autos/countries-that-are-banning-gas-cars-for-electric/index.html

[49] Jackie Wattles, “India to sell only electric cars by 2030,” CNN, (June 3, 2017).

https://money.cnn.com/2017/06/03/technology/future/india-electric-cars/index.html

[50] Oscar Willims, “German Lawmakers Vote To Ban Petrol And Diesel Cars By 2030,” Huffington Post,(October 13, 2016).

https://www.huffingtonpost.co.uk/entry/german-lawmakers-vote-to-ban-petrol-and-diesel-cars-by-2030_uk_57fcee9ae4b01fa2b9055c11

[51] Stop selling new petrol and diesel-fuelled cars by 2030: Danish government,” The Local DK, (October 4, 2018).

https://www.thelocal.dk/20181004/stop-selling-new-petrol-and-diesel-fuelled-cars-by-2030-danish-government

[52] Fred Lambert, “The Dutch government confirms plan to ban new petrol and diesel cars by 2030,” 

Electrek, (October 10, 2017).

https://electrek.co/2017/10/10/netherlands-dutch-ban-petrol-diesel-cars-2030-electric-cars/

[53] France to ban sales of petrol and diesel cars by 2040,” The Guardian, (July 6, 2017).

https://www.theguardian.com/business/2017/jul/06/france-ban-petrol-diesel-cars-2040-emmanuel-macron-volvo

[54] Anushka Athsana and Matthew Taylor, “Britain to ban sale of all diesel and petrol cars and vans from 2040,” The Guardian, (July 25, 2017).

https://www.theguardian.com/politics/2017/jul/25/britain-to-ban-sale-of-all-diesel-and-petrol-cars-and-vans-from-2040

[55] Breakdown of oil consumption by sector,” GlobalPetroPrices,com,

https://www.globalpetrolprices.com/articles/39/

 


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