Comrade Wolf Knows Whom To Eat

BOOK REVIEW


Blood of the Earth- The Battle For The World’s Vanishing Oil Resources
Author: Dilip Hiro. Pages 427. Flexiback. Rs. 450/-

Published by Penguin Books India 2008.
Originally published in the USA by Nation Books, an imprint of the Avalon Publishing Group, 2007.


Comrade Wolf Knows Whom To Eat


Distinguished London-based journalist, author and TV commentator, Dilip Hiro, has written an engaging and thought-provoking account on the world’s petroleum geopolitics. Of course, Mr. Hiro wrote Blood of the Earth, implying the finite nature of the resource, when prices were at a seeming impossibly high of USD 78 per barrel. But perhaps Hiro, despite his admirable desk research and travels to the various oil-related “hot-spots”, could not have imagined the 80% spike in crude prices over the last year, some 16.8% of it since the start of 2008 alone.

Crude prices have indeed climbed to USD 114 per barrel already, with some commentators expecting USD 120, even USD 125, shortly. That, it is necessary to view the runaway oil prices in the context of a golden run in commodities and metals of various kinds, after a prolonged, if cyclic, period in the doldrums; exacerbated by a particular weakness in the value of the US dollar in its role as the global currency for all oil trades, is, in effect, another story.

Hiro likens the global quest of oil-deficit nations to secure access to ever larger tranches of oil and gas resources, to an imperative of 21st century survival, growth and dominance. He dwells on the muscularity of attitude of the leading oil producing nations; the knowing “indispensability” of Iran, the “strategic value” of Saudi Arabia, the usefulness of Iraq as a “swing” state to influence oil prices, the “aggression” of Venezuela. He quotes Vladimir Putin, buoyant atop Russia’s oil revenues, speaking of “Comrade Wolf”, without naming names, but America does consume 25% of the world’s hydrocarbon resources and has the highest per capita carbon footprint. American appetite is backed by its overwhelming military superiority. Hiro tells us the US Navy is larger and better armed than that of the next 17 countries combined!

Hiro also points out that spikes in present and future demand for hydrocarbons feature China and India among the new culprits as the fastest growing economies with their present demand dwarfed by the potential demand in years to come. China already consumes 15% more oil and gas year-on-year, and India likewise sucks up 6% more every year.

However, writes Hiro, global oil production will peak by 2017, and then go into a terminal decline. He discounts the probability of substantial new discoveries and says the world’s petroleum reserves will not be able to meet rising demand. And this may be the basic Malthusian-style flaw in Dilip Hiro’s argument. Because, to discount the possibility of substantial new hydrocarbon finds absolutely, and construct an alarmist thesis in its place, may be highly premature. For illustrative purposes, consider the latest news of April 15th 2008 about the probable third largest discovery of oil ever, off Brazil’s Atlantic coast. Of course, it could flatter to deceive, like earlier finds that Hiro mentions, in the Caspian region of Azerbaijan and Kazakhstan. But, present news nevertheless announces that the Carioca field, in the Santos Basin off the coast of Sao Paulo, could have reserves of 33 billion barrels. This, if proven, would rank it most respectably at No.3, behind the No.1 Ghawar fields of Saudi Arabia and Kuwait’s bountiful Burgan fields at No.2 -- and change the geopolitical picture on hydrocarbons, yet again.

Going into the particulars of energy demand --Dilip Hiro says about half of the world’s hydrocarbons go to fuel its transportation needs, and this is where the greatest dependency on petroleum, via its marriage to the internal combustion engine, lies. So to bring about any substantial change, the world will have to climb the technology ladder to other energy sources and other types of engines. Possibilities include Hydrogen Cells, enhanced electric and hybrid technology, and so forth. He also advocates revisiting coal, but converting it to a more efficient, almost non-polluting, gassified or liquefied state for usage.

And as if to echo Hiro’s vision, Reliance Industries announced, as recently as the 16th April 2008, that it seeks to set up an 80,000 barrels per day coal-to-liquid plant using 30 million tonnes of coal annually from three blocks in the Talcher Coal Fields, each with reserves of between 500 and 600 million tonnes.

The other half of present and future global hydrocarbon demand comes from a requirement for electricity and cooking medium, mainly LNG, as the world’s largest populations in India and China begin to grow their economies and prosper. This, even as the energy demand from the West, though high, remains more or less constant.

Hiro calls for a pooling of all energy generating resources going forward. But he does not think nuclear power is a singular panacea, not least because the world, according to Hiro, will run out of Uranium too, as early as 2050. Strangely, Hiro makes no mention of Thorium. Nor does Hiro think non-polluting energy alternates like solar, wind, or water power can make any appreciable difference to burgeoning energy demand.

And lastly, Hiro’s book, quite rightly, attaches the depletion, and over-exploitation, of finite hydrocarbon reserves, to the growing problem of global warming and unsustainable carbon footprints. Comrade Wolf may have to watch his diet.

(850 words)
Gautam Mukherjee
16th April 2008

Also published in the BOOKS page of The Sunday Pioneer on 27th April 2008. "Comrade Wolf Knows Whom to Eat". www.dailypioneer.com