- By Steve LeVine<p> Steve LeVine is a contributing editor at Foreign Policy, a Schwartz Fellow at the New America Foundation, and author of The Oil and the Glory. </p>
In a 2006 cover story in FP, the columnist Thomas Friedman described what he called "The First Law of Petropolitics." In it, Friedman revealed an inverse relationship between oil prices and the kindliness of petrocrats: As oil prices surge, the rulers of oil-producing countries tend to become inflated jerks; when prices are low, they are high-minded pussy cats.
Yet for all its genius, Friedman’s law is limited: He was talking about pure petro-states such as Russia, Nigeria and Saudi Arabia. Isn’t the behavior of freely elected leaders in developed economies influenced by any oil commandments?
I raise this question while observing President Barack Obama and oil companies act upon some other mutually understood political principle in the heat of the election-year campaign: Over the last week or so, American oil giants Chevron (see interview below) and ExxonMobil have suggested that Obama wise up and embrace America’s inner-petrostate. Obama has responded by embracing his inner-cudgel, urging oil companies to accept a non-fossil fuel future, and meanwhile surrender $4 billion in tax breaks.
Oil is pivotal in the campaign platform of Obama’s opponents. We see this most recently in finger-pointing over gasoline prices. But gasoline is not the operative hothouse for the top-line political battle. Instead, it is a sideshow to the central backdrop, which is the nation’s high-stakes oil boom, a projected surge in the U.S. oil supply over the coming decade from shale oil, deepwater Gulf of Mexico reserves and imports from Canada’s oil sands.
The opposing sides are capitalizing on high gas prices to advance competing, long-existing agendas — Big Oil to pry open coveted basins underlying coastal and federal areas, and Obama to keep incubating still-early clean-energy technology.
Toward these aims, the oil industry’s strategy is to persuade Americans that these closed-off lands are all that stand between U.S. independence from foreign oil, and continued fealty to those fellows governed by Friedman’s First Law. For Obama, it is to contextualize the oil boom as big but historically ephemeral: Americans can bask in their gas-guzzling ways now, but must also begin to pave the way for the inescapable post-hydrocarbon era.
To state this as a corollary, there is a direct relationship between the vigor of an oil boom, and the temperature of high-flown political rhetoric. (Given the apparent hurt feelings afflicting both sides, one observes another active corollary — a direct association between rising wealth and thinning skin, a sublaw that seems to straddle the oil and financial industries.)
In an interview with the Financial Times’ Ed Crooks and other reporters last week, Chevron CEO John Watson said that, if Obama wants to bring down gas prices, he should open up the coasts, and accelerate drilling permits in the Gulf of Mexico. Earlier this month, ExxonMobil CEO Rex Tillerson said U.S. energy policy is being determined on "two- and four-year electoral cycles" rather than the "10-, 20-, even 30-year time horizons" within which oil companies normally operate.
But is either statement, conveyed at the moment, any more than election-year politics? On the latter, one perceives a butting of bulls, both claiming superior far-sightedness — Obama that clean-energy technology is the 30-year future, and Tillerson who thinks it will remain hydrocarbons. As for the former, no number of newly issued permits nor canceled moratoria will moderate gas prices any time soon. One reason is that the industry is stretched to drill what is already in hand — it lacks the skilled labor, the petroleum engineers, and the equipment to do much or even any more. Another is the long time-horizon described by Tillerson.
According to Chevron’s Kurt Glaubitz, we are talking "a decade from now. It’s to make the right policy decisions so we can develop those for future generations." In that context, I asked Glaubitz what Chevron would do if Obama unleashed every property it sought to unmitigated drilling. His reply is illuminating:
Even if Obama tomorrow opens up the [Outer Continental Shelf], the next step in the process is the comprehensive valuation of the resource potential, and that’s really the seismic work, so there would be a lot of crews that would be active in conducting the seismic surveys in probably the most prospective areas. I think as a nation we have a pretty good idea as to what those areas look like. And you’ve got to interpret the seismic data, and then you have to have a lease round. And then there’s going to be companies that will obtain leased acreage positions. And then they’ll do further seismic work, and exploration work, and eventually drill wells, and then if those wells are successful, then move into production. So even by opening up the [Outer Continental Shelf] tomorrow, it’s not going to resolve our energy situation for quite some time. And that’s also why we believe we need to begin the process now.
What about the personnel and equipment shortage? If these fields were opened tomorrow, and the industry did know precisely what hydrocarbons were in them, could Chevron start drilling right away? Glaubitz:
We don’t need those people tomorrow. We will need them, but we will have the ability to ramp up the number to train up the number of people, have in place the right equipment to make sure we have the right technology in order to accomplish that in time. I don’t see organizational capability as a barrier to development.
The leaders of developed, freely elected petro-states are subject to oil commandments: They can and do become full of themselves, just like the rulers of petrostates, but they usually end up constrained by politics. The Second Law of Petropolitics is that, in oil, there are always politics.
Blake Hounshell is managing editor at Foreign Policy, having formerly been Web editor. Hounshell oversees ForeignPolicy.com and has commissioned and edited numerous cover stories for the print magazine, including National Magazine Award finalist "Why Do They Hate Us?" by Mona Eltahawy. He also edits The Cable, FP's first foray into daily original reporting, and was editor of Colum Lynch's Turtle Bay, which in 2011 won a National Magazine award for best reporting in a digital format.
Blake joined Foreign Policy in 2006 after living in Cairo, where he studied Arabic, missed his Steelers finally win one for the thumb, and worked for the Ibn Khaldun Center for Development Studies. Blake was a 2011 finalist for the Livingston Awards prize for young journalists for his reporting on the Arab uprisings, and his Twitter feed was named one of Time magazine's "140 Best Twitter Feeds of 2011." Under his leadership, in 2008, Passport, FP's flagship blog, won Media Industry Newsletter's "Best of the Web" award in the blog category. Along with Elizabeth Dickinson, he edited Southern Tiger: Chile's Fight for a Democratic and Prosperous Future, the memoirs of former Chilean president Ricardo Lagos, published by Palgrave Macmillan in 2012.
A graduate of Yale University, Blake speaks mangled Arabic and French, is an avid runner, and lives in Washington with his wife, musician Sandy Choi, and their toddler, David. Follow him on Twitter @blakehounshell.| Passport |