Friday, October 11, 2013

Major Oil Market Shift of Colossal Importance to DOD and DOD Energy Planners

From this morning's WSJ.  You don't need my help to quickly understand how the shift described below will impact US and DOD policymakers in the years ahead.

The article is titled: Middle East Oil Fuels Fresh China-U.S. Tensions and here's an excerpt that boils is down to the essence:
The turnabout has added to tensions because it leaves the U.S. military securing China's growing oil shipments in the region at a time Beijing resists U.S. pressure on it to back American foreign policy in the Middle East.
For years, China and other oil-consuming nations have benefited as Washington spent billions of dollars a year to police choke points like the Strait of Hormuz and other volatile parts of the Middle East to ensure oil flowed around the globe. 

But the rise of North America's shale oil and gas industry has put the U.S. on track to pass Russia this year as the world's largest combined producer of oil and gas, if it hasn't done so already, according to a recent analysis of global data by The Wall Street Journal. 
That rise, combined with flat U.S. oil consumption, is making America far less dependent on imported oil, including from the Middle East, even as China's reliance on the region's oil grows.
Thomas Barnett has been predicting a bigger role for China in the Middle East for years.  We're going to have to not be threatened by it. Increasingly, it's their oil now.  We can't disengage from the Middle East. But with our energy needs being met increasingly by domestic supplies, DoD's got other fish to fry besides protecting oil routes for those who can and should be doing more.

1 comment:

Gerry Runte said...

Before the second Iraq war, with some effort, it was possible to parse the various unit missions and identify that portion of the DOD budget that was purely to protect oil. Today things are probably too blurry to do that analysis. Nonetheless, whatever that figure is, it is a true cost of the energy delivered, it is substantial, but it is a cost absorbed by the general public and not the end user. We, and the other countries that patrol oil routes, ought to come up with a way to bill those who benefit but do not contribute. The net ought to be collected at the pump.