1. T. O’Donnell, Ph.D. | twod@umich.edu | http://TomOD.com Politics of oil & global systems of distribution Tom O’Donnell, Ph.D. The New School University, NYC

2. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com 2 ProjectionsHistory World Primary Energy Demand Source: IEA WEA reference scenario 2006 Oil #1

3. T. O’Donnell, Ph.D. | twod@umich.edu | http://TomOD.com peak oil alternatives energy independence big oil / IOCs OPEC / NOCs speculation prices resource wars north-south energy security oil curse rentismo environment global warming development … Oil Issues

4. T. O’Donnell, Ph.D. | twod@umich.edu | http://TomOD.com peak oil alternatives energy independence big oil / IOCs OPEC / NOCs speculation prices resource wars north-south energy security oil curse rentismo environment global warming development … Oil Issues

5. T. O’Donnell, Ph.D. | twod@umich.edu | http://TomOD.com global political economy Approach domestic politics geopolitics development environment

6. T. O’Donnell, Ph.D. | twod@umich.edu | http://TomOD.com global political economy Approach domestic politics geopolitics development environment resources technology production distribution governance / ownership end use / consumption

7. T. O’Donnell, Ph.D. | twod@umich.edu | http://TomOD.com global political economy Approach domestic politics geopolitics development environment

8. T. O’Donnell, Ph.D. | twod@umich.edu | http://TomOD.com global political economy Approach global system regional / state strategies o US, EU, Japan o China, India o Russia, Caspian, E. Europe o Persian Gulf, Lat. America, Maghreb, Africa domestic politics geopolitics development environment

9. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com9 9 IPCC 2007 2004

10. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com10T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com10 IPCC 2007 2004 Non- renewable Renewable

11. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com11 IPCC 2007

12. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com12 IPCC 2007 Fossil Fuels

13. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com13 IPCC 2007 Super Nova U235 / U238 = 1 / 138 (also Thorium)

14. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com14T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com14 Uranium Uranium w/ Breeding Coal Gas Conventional Oil IPCC 2007

15. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com15 Uranium Coal Gas Conventional Oil Solar Wind Geothermal Biomass Hydro IPCC 2007

16. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com16 Uranium Coal Gas Conventional Oil Solar Wind Geothermal Biomass Hydro IPCC 2007

17. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com17 Losses Buildings Industry Transport IPCC 2007

18. Two Categories of Primary Energy: T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com18 Global Energy System: - 2004 Source: 4 th IPCC, from IEA 2006

19. Transport – 95% from oil Electricity – from diverse sources T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com19 Observation:

20. Two Categories of Primary Energy: T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com20 Global Energy System: - 2004 Source: 4 th IPCC, from IEA 2006

21. Two Categories of Primary Energy: T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com21 Global Energy System: - 2030 Source: IPCC from IEA 2006

22. Thesis #1: “The stone age did not end for a lack of stone” T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com22 “Peak Oil” not a problem … or a solution

23. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com23 ReservesMore Uncertain Potential liquid hydrocarbon production (Gbbl) Cost $/barrel Oil & Substitutes

24. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com24 ReservesMore Uncertain Potential liquid hydrocarbon production (Gbbl) Cost $/barrel Oil & Substitutes

25. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com25 ReservesMore Uncertain Potential liquid hydrocarbon production (Gbbl) Oil & Substitutes Cost $/barrel

26. Thesis #2: There are no abundant sustainable “alternative” fuels T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com26 bio-alternative failure

27. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com27 U.S. Corn Ethanol

28. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com28 9 b gals = 27% corn = 10 days’ oil U.S. Corn Ethanol

29. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com29 Oil Consumption per capita EIA 2003 Gallons per day per capita

30. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com30 ethanol Oil Consumption per capita Gallons per day per capita

31. Thesis #3: Alternative fuels don’t address the other crisis … T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com31 * congestion *

32. Hours Delay per peak traveler T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com32 City Size Congestion U.S. Cities – 20 Yrs. 2002 1992 1982 Federal Highway Administration

33. Net importer 2006: 3.5 of 7.3 mbbd or 48% Slıde: Ed Morse 2006 Recent studies show impact of emerging markets on demand

34. twod@umich.edu | TomOD.com 34 Vehicles 2002 to 2030: China: 20x India: 7x México: 2.5x Brazil: 3x Dargay, Gately & Sommer, July 06 History Projections

35. Conclusion #1: Not  alternative fuels … T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com35 but alternative modes 

36. Conclusion #2a: Meanwhile, (next 20-30 years) … T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com36 oil dependence continues oil  CO 2

37. U.S. Carbon Dioxide Emissions From Energy Use T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com37 US DoE/EIA Annual Energy Review *– 2008 - Figure 65. Carbon Dioxide Emissions From Energy Use Figure source data 2007 (December 2008), Tables 6-11; and EIA, Office of Integrated Analysis and Forecasting, estimates.Figure source data oil  CO 2

38. Conclusion #2b: Meanwhile, (next 20-30 years) … T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com38 oil dependence means foreign oil dependence

39. Analysis: T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com39 Global system: foreign dependencies shifted to … $ collective dependence on the market spare capacity strategic reserves

40. Analysis: T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com40 U.S. geostrategy … $ collective dependence on the market spare capacity strategic reserves

41. Analysis: T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com41 China, Venezuela resist … $ collective dependence on the market spare capacity strategic reserves

42. Analysis: T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com42 $ OPEC two factions … collective dependence on the market spare capacity strategic reserves

43. Analysis: T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com43 price hawks: Iran, Iraq, Libya, Venezuela, … v. moderates: Saudis, Kuwait, UAE, Qatar, … $ collective dependence on the market spare capacity strategic reserves

44. 44 political economy: Globalized system v. Neo-colonial system

45. twod@umich.edu | TomOD.com 45 Producers International oil companies IOC Consumers No market (“spot market”) or futures market Neo-Colonial System

46. twod@umich.edu | TomOD.com 46 Producers International oil companies IOC Consumers Neo-Colonial System control volatility security of supply

47. twod@umich.edu | TomOD.com 47 IOC Producers International oil companies IOC Consumers integrated pipelines gas stations fields concessions refiineries ships Neo-Colonial System

48. twod@umich.edu | TomOD.com 48 Producers International oil companies IOC Consumers Neo-Colonial System IOCs o eliminate market o concessions o form cartels o produce the oil o decide rate o market oil home states o enforce concessions o mercantile-like o contend bilateral dependencies

49. 1970’s OPEC Revolution … T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com49 85 % reserves nationalized 77% OPEC

50. Marketplace twod@umich.edu | TomOD.com Producers Consumers NYC WTI London Brent $ Saudi Arabia Global System

51. Marketplace ships refineriesgas stations wells Producers Consumers $ IOC & NOC Saudi Arabia Global System NYC WTI London Brent

52. twod@umich.edu | TomOD.com Producers Consumers SPR $ Security: Saudi excess + SPR A.S. Saudi Arabia ‘one global barrel’ market

53. twod@umich.edu | TomOD.com 53 Elements of “One Global Barrel” system Collective dependence: On the market Saudi spare capacity IEA strategic reserves

54. twod@umich.edu | TomOD.com 54 Elements of “One Global Barrel” system Collective dependence: On the market Saudi spare capacity IEA strategic reserves U.S. dominant player o insures own domestic oil security by insuring global system

55. twod@umich.edu | TomOD.com 55 Elements of “One Global Barrel” system Security of Supply The main elements of today’s “one global barrel” oil security system are as follows: 1. The open market itself that forms a single, common, albeit virtual “global barrel” consisting of the spot and future markets, through which essentially all oil exports are circulated to consumers. This market operates in U.S. dollars. 2.The emergency oil capacities of: a. Saudi Arabia (and occasionally other OPEC states), which can be rapidly brought to market when there is a supply shortfall b. The Strategic Petroleum Reserves (SPR) system of the member states of the International Energy Agency (IEA) of the Organization of Economic Cooperation and Development (OECD), along with any commercial reserves held within these states at a given time, all of which can be brought to market during a severe supply crisis.

56. twod@umich.edu | TomOD.com 56 Security of Supply The main elements of today’s “one global barrel” oil security system are as follows: 3.The International Energy Forum (IEF) and the IEF’s two standing Secretariats (IEFS): consisting, respectively, of representatives of major commercial oil companies and state energy ministries, involving over 80 states. 4. U.S. Persian-Gulf regional hegemony, with the aim of insuring none of the local major producing states can project sufficient power there to dominate the production of any other(s), thereby undermining the global oil market. Also, protects the Straits of Hormuz Elements of “One Global Barrel” system

57. twod@umich.edu | TomOD.com from political economy to geopolitics

58. twod@umich.edu | TomOD.com 58 US Gulf hegemony 1. Iraq – Kuwait paradigm

59. U.S. Gulf hegemony 59

60. U.S. Gulf hegemony 60 Prof. Michael Klare, Blood & oil (2005)) US protectorates

61. twod@umich.edu | TomOD.com 61 “US Military Forces Surround Iran” Clinton Admin. into Caspian oil basin

62. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com62 Jan 1, 2005 Petroleum Reserves

63. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com63 Jan 1, 2005 Petroleum Reserves 60% in Persian Gulf

64. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com64 Jan 1, 2005 Petroleum Reserves Gulf market share will grow

65. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com65 The future -- R/P ratios of producers

66. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com66 heavy oil The future -- R/P ratios of producers

67. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com67 Heavy Oil TO’D

68. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com68 Jan 1, 2005 Petroleum Reserves Iraq + Kuwait

69. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com69 Jan 1, 2005 Petroleum Reserves Iraq + Kuwait

70. twod@umich.edu | TomOD.com 70 The Iraq – Kuwait occupation paradigm Greenspan: Ouster Of Hussein Crucial For Oil Security By Bob Woodward Washington Post Staff Writer Monday, September 17, 2007; A03 Alan Greenspan, the former Federal Reserve chairman, said in an interview that the removal of Saddam Hussein had been "essential" to secure world oil supplies, a point he emphasized to the White House in private conversations before the 2003 invasion of Iraq. … "If Saddam Hussein had been head of Iraq and there was no oil under those sands," Greenspan said, "our response to him would not have been as strong as it was in the first gulf war. And the second gulf war is an extension of the first. My view is that Saddam, looking over his 30-year history, very clearly was giving evidence of moving towards controlling the Straits of Hormuz, where there are 17, 18, 19 million barrels a day" passing through. … Given that, "I'm saying taking Saddam out was essential," he said. But he added that he was not implying that the war was an oil grab. "No, no, no," he said. Getting rid of Hussein achieved the purpose of "making certain that the existing system [of oil markets] continues to work, frankly, until we find other [energy supplies], which ultimately we will.“ [emphasis added – T.O’D.] © 2007 The Washington Post Company

71. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com71 Jan 1, 2005 Petroleum Reserves Iran

72. twod@umich.edu | TomOD.com 72 Aim of US Gulf hegemony 2. basis for two OPEC factions and two U.S. policies

73. twod@umich.edu | TomOD.com 73 Calculado con cifras de OPEP Barrels exported per capita, 2006

74. twod@umich.edu | TomOD.com 74 High Absorbers Low Absorbers Calculado con cifras de OPEP Barrels exported per capita, 2006 ?

75. twod@umich.edu | TomOD.com 75 POLITICAL ECONOMY OF GLOBAL OIL ORDER 1 Oil demand up 2 Alternatives? 3 Gulf share growing 4 U.S. Gulf hegemony I. high absorbers II. low absorbers Basis for two OPEC factions Export revenue / capita TO’D from OPEC data, Real $2008 (CPU)

76. twod@umich.edu | TomOD.com 76

77. 77 Iran’s Oil Production & Consumption 1971 – 2008 06 08

78. 78 2006E War Sanctions 1979 Revolution Shah Rebuild 06 08 Iran’s Oil Production & Consumption 1971 – 2008

79. 79 2006E War Sanctions 1979 Revolution Shah Rebuild 06 08 Iran’s Oil Production & Consumption 1971 – 2008 IEA Strategic Petroleum Reserves: 4.0 x 10+9 barrels Iranian daily exports: 2.4 x 10+6 barrels / day So: IEA reserves cover Iran exports: 4.5 years No oil weapon

80. 80 2006E War Sanctions 1979 Revolution Shah Re-build IEA Strategic Petroleum Reserves: 4.0 x 10+9 barrels Iranian daily exports: 2.4 x 10+6 barrels / day So: IEA reserves cover Iranian output for: 4.6 years 06 08 Iran’s Oil Production & Consumption 1971 – 2008

81. twod@umich.edu | TomOD.com 81 US MENA Progress Bush added 2 new states Gulf : Saudi Arabia, Kuwait, UAE & Iraq* North Africa : Libya, Egypt, Algeria Remaining : Iran

82. twod@umich.edu | TomOD.com 82 “Resource Wars” ~ either ~ neo-colonial mercantilist / privatize for big oil ? ~ or ~ global market-protection for collective security ?

83. 83 I. OPEC “High Absorber” Faction States China’s “go abroad” aligns with Chavez’ ‘escape market of el imperio’ yet, not ‘axis of evil’ MOU / Accords of Dec 2007, May 2008, Sep 2008, early 2010 Venezuela different China – Venezuela – Iran – Algeria (example from Mommer of PDVSA)

84. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com84

85. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com85

86. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com86

87. T. O’Donnell, Ph.D. | twod@umich.edu | TomOD.com87

88. T. O’Donnell, Ph.D. | twod@umich.edu | http://TomOD.com global political economy Approach domestic politics geopolitics development environment resources, technology / science production distribution governance / ownership end use / consumption

89. T. O’Donnell, Ph.D. | twod@umich.edu | http://TomOD.com global political economy Approach domestic politics geopolitics development environment resources, technology / science production distribution governance / ownership end use / consumption capitalist colonial capitalist neo-colonial capitalist global socialist socialist public / private capitalist public / private