THE CAR OF THE FUTURE - The Power Surge: Energy, Opportunity, and the Battle for America's Future - page 133

shut ing others out, or choose to sell only to i rms based in countries
that follow their political lead. (h is sort of behavior might ultimately
backi re for those countries undertaking it, but that doesn't mean they
won't pursue it anyhow, to the detriment of others.)
h e United States might also i nd itself increasingly tempted to inter-
vene in distant parts of the world whose stability is critical to the new
energy industries, just as it has in the past in oil-producing regions. h e
vulnerability has certainly crossed the mind of Atul Kapadia. He's wor-
ried about one material in particular: cobalt. “A lot of cobalt is found
in Congo,” he explains. “Congo is an unstable country.” Envia has been
trying to cut down on the amount of cobalt it uses: “Our most active
research program is trying to make it zero percent.”
Worries over dynamics like these have been particularly pronounced
in the area of rare-earth elements, whose production China dominates.
h is is why the incident that pit ed Beijing against Tokyo in 2010
alarmed so many strategists. But was it really a harbinger of things to
come, or were people just overreacting?
Successfully manipulating natural resource supplies to gain control
over energy industries and to use that to inl uence international politics
is possible only if the stars align correctly. Oil has become subject to
successful manipulation for three basic reasons. Much of the world's
production is concentrated within a small number of countries, and
on occasion political circumstances (such as wars against a common
enemy) have helped those countries collude. If production were more
diverse, manipulation would be far more dii cult. Oil also has few
substitutes. Once upon a time, when lots of oil was used to produce
electricity, countries could respond to manipulation by shit ing away,
mostly to coal and nuclear power. Today, with oil used predominantly
in transportation, there are few options for substitution. Oil's special
role is sealed by the fact that most responses to market manipulation,
such as buying more ei cient cars and exploring new oil i elds, take
time to bear fruit. Alas, the pain caused by volatile markets can be
immediate and acute. h

is gives those with inl uence over those mar-

kets more power.
How do rare earth metals stack up? h e top i ve holders of proven
oil reserves as of the end of 2010—Saudi Arabia, Venezuela, Iran, Iraq,