Geoscience Reference
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Similar forces are expected to drive the global oil market to a production peak
in the next decade or two (Kaufmann, 2006), just as consumption levels in China,
India, and other developing countries rise towards those of industrialised nations.
While long-standing Malthusian fears of fossil fuel depletion leading to economic
collapse have not yet materialised (Jevons, 1965[1865]; Meadows and Meadows,
1972), the 1970s demonstrated the vulnerability of the global economy to tighter
oil markets and political instability in oil-producing regions. With two-thirds of all
reserves in a handful of Middle East countries (fi gure 31.2), the strategic importance
and highly uneven geography of oil have vested enormous power in a handful of
state and corporate actors. Watts (2005) traces the evolution of a global oil complex
back to the 1930s and the establishment of Iraq as a British client state serving the
interests of British, French and US oil companies and governmental allies. Following
World War II, nationalist movements in oil-producing countries led eventually to
the 'OPEC revolution [that] ushered cycles of confl ict, militarisation and revolution-
ary upheaval - the so-called energy wars - in the major oil-producing regions'
(Watts, 2005, p. 378). Capital and confl ict continue to cycle as oil-producing elites
reinvest large sums of petro-dollars into Western multinationals that sell weapons
and manage massive construction projects in OPEC nations and elsewhere. This
'virtuous circle' of oil, money and weapons creates an industry in which business
as usual is largely an undertaking of undemocratic multinational corporations and
'petro-states,' with the US engaged to assure the fl ow of oil for strategic, economic
and corporate oil interests. The political economy of oil varies greatly by region,
but oil fi gures heavily in redefi ning the role of state and capital in places as varied
as Russia, Venezuela and Kuwait. Watts (2004) uses experience in Nigeria to argue
that places of oil extraction have become enmeshed in, and reconfi gured by, a dis-
tinctive 'petro-capitalism' that systematically undermines development, democracy
and community.
The resource depletion and uneven locational characteristics of oil increasingly
apply to the natural gas market (fi gure 31.3) that began growing rapidly in the
1980s for heating and electrical generation purposes. Both the USA and the UK
relied heavily on natural gas to meet new electrical power requirements in recent
years, but domestic supplies of this cleaner-burning and lower-carbon alternative
to coal are expected to fall short of future demand (Brown et al., 2006). Meanwhile,
the emerging geopolitical signifi cance of natural gas was demonstrated on New
Year's Day 2006, when Russia cut gas supplies to Ukraine, only to reverse course
under intense pressure from European Union member states whose energy supplies
were also pinched. Ostensibly a dispute over pricing and payment, the disruption
also expressed Russia's opposition to growing ties between Ukraine and western
Europe (Klare, 2006).
The latest Iraq war has prompted a number of geographic analyses of linkages
between the US invasion and 'oil imperialism'. Iraq has the second largest pool
of proven reserves in the world and likely vast undiscovered reserves, as well,
since only one-fi fth of its known, accessible fi elds have been developed (Jhaveri,
2004). The direct profi t potential of these resources is substantial, as is the poten-
tial they confer upon Iraq to join Saudi Arabia as a 'swing producer' capable of
infl uencing global oil prices by managing marginal production. Harvey (2005)
sees the US invasion as an expression of these factors and of the pressure states
and multinational energy corporations feel to constantly expand their territorial
and market reach. The costly, destabilising effect of the Iraq war, however, is
