Table Of Content36413_ch00.i-viii.qxd 3/3/08 9:30 AM Page i
RISING POWERS,
SHRINKING PLANET
‘A brilliant exposition on one of the gigantic problems
facing society. Klare is a top expert on the politics of
energy and resources. Read him!’
—Paul R. Ehrlich, author of The Dominant Animal
‘Klare articulates his message with sober honesty and
appropriate urgency. If knowledge is power,
it is also empowering.’
—Amory B. Lovins, Time Magazine ‘Hero of the Environment’
and author of Capitalism as if the World Matters
‘A splendid survey of the new world energy order.
A provocative examination of the perilous race
to secure energy resources.’
—Carole Nakhle, Research Fellow in Energy at Surrey Energy
Economics Centre, UK, and author of Out of the Energy Labyrinth
‘Klare’s superb new book explains, in haunting detail,
the trends that will lead us into a series of dangerous
traps unless we muster the will to transform the way
we use energy. As illuminating as it is unsettling.’
—Bill McKibben, author of Deep Economy
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also by michael klare
Blood and Oil: The Dangers and Consequences of
America’s Growing Dependency on Imported Petroleum
Resource Wars: The New Landscape of Global Conflict
Light Weapons and Civil Conflict: Controlling
the Tools of Violence
World Security: Challenges for a New Century
Rogue States and Nuclear Outlaws: America’s
Search for a New Foreign Policy
Low Intensity Warfare: Counterinsurgency, Proinsurgency,
and Antiterrorism in the Eighties
American Arms Supermarket
Supplying Repression: U.S. Support for Authoritarian Regimes Abroad
War Without End: American Planning for the Next Vietnams
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R I S I N G
P OW E R S,
SHRINKING
P L A N E T
HOW SCARCE ENERGY IS CREATING
A NEW WORLD ORDER
MICHAEL KLARE
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A Oneworld Book
First published in Great Britain by Oneworld Publications 2008
First published in North America by Metropolitan Books 2008
Copyright © Michael Klare 2008
The right of Michael Klare to be identified as
the author of this work has been asserted by him
in accordance with the Copyright, Designs and
Patents Act 1988
All rights reserved
Copyright under Berne Convention
A CIP record for this title is available
from the British Library
ISBN 978(cid:150)1(cid:150)85168(cid:150)648(cid:150)3 (Hbk)
ISBN 978(cid:150)1(cid:150)85168(cid:150)628(cid:150)5 (Pbk)
Cover design by designedbydavid.co.uk
Printed and bound in Great Britain by Bell & Bain, Glasgow
Oneworld Publications
185 Banbury Road
Oxford OX2 7AR
England
www.oneworld-publications.com
Learn more about Oneworld. Join our mailing list to
find out about our latest titles and special offers at:
www.oneworld-publications.com
36413_ch00.i-viii.qxd 3/3/08 9:30 AM Page v
This book is dedicated to my students, past, present, and future,
at Hampshire College and the other members of the Five College
consortium—Amherst, Mount Holyoke, and Smith Colleges
and the University of Massachusetts at Amherst.
I am eternally grateful for your energy, enthusiasm, and inspiration.
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36413_ch00.i-viii.qxd 3/3/08 9:30 AM Page vii
CONTENTS
Prologue: 1
1. 9
,
2. 32
3. “” 63
4. 88
5. 115
6. ’
146
7. “ ” 177
8. 210
9. 238
Notes 263
Acknowledgments 327
Index 331
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36413_ch01.qxd 3/3/08 9:35 AM Page 1
PROLOGUE:
THE UNOCAL AFFAIR
N
othing like it had ever occurred before.On June 22,2005,a state-
controlled Chinese oil company, CNOOC Limited, announced
an $18.5 billion bid for the Unocal Corporation,a 115-year-old Amer-
ican energy firm with substantial oil and natural gas reserves in North
America and Asia.The unsolicited offer—the largest ever made by a
Chinese company for a foreign enterprise—sent shock waves through
the international business community. It overshadowed all previous
Chinese takeover bids by several billion dollars, represented China’s
first attempt to acquire a major American energy producer, and
put CNOOC Ltd. in head-to-head competition with the Chevron
Corporation—America’s second biggest oil company—which had also
put in a bid for Unocal.Although both sides trumpeted the financial
advantages of their respective offers,in the end it was geopolitics,not
superior price,that determined the outcome.Fearing the loss ofvaluable
energy reserves to a state-backed Chinese firm,Republicans in Congress
mounted a successful legislative drive to block China’s acquisition of
Unocal.
In the past,foreign businesses had been allowed to purchase major
American energy properties—most notably in 1990,when Venezuela’s
state-owned oil company,Petróleos de Venezuela S.A.,acquired Cities
Service (now CITGO), along with its refineries and service stations.
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2 rising powers, shrinking planet
But CNOOC’s bid came at a moment when Americans were becoming
increasingly anxious about China’s growing economic might and the
rising price ofgasoline.These issues fused in the popular imagination
because China had recently arrived on the scene as a major oil con-
sumer and was already being linked to global increases in energy costs.
The battle over Unocal also coincided with the emergence ofwide-
spread American unease over the adequacy of worldwide oil supplies.
Throughout the twentieth century,petroleum output had largely kept
pace with rising international demand,as worldwide energy stocks re-
mained plentiful—and affordable. Cheap oil had, in fact, fueled the
global ascendancy of the United States, which seemed to reach its
apogee in 1991 with the disappearance ofthe one other superpower of
that epoch,the Soviet Union.Barely a decade later,however,America
began to see its dominance challenged—not by a new Great Power ris-
ing to match it,but because of an entirely new phenomenon.Though
still confident of its military superiority, the United States was faced
with an imminent shrinkage in global oil supplies at the same time it
was growing more reliant on imported energy—a development that
forced it to depend on unfriendly (or unreliable) foreign suppliers and
drove it into cutthroat competition with other oil-deficient nations
like China.According to numerous energy experts,the global oil indus-
try was no longer able to increase output in tandem with rising demand;
some were even predicting an imminent downturn in production.
“The world will soon start to run out of conventionally produced,
cheap oil,”warned P rofessor David L.Goodstein,a physicist at the Cal-
ifornia Institute of Technology and author of Out of Gas.1 Though
other analysts disputed this pessimistic outlook,Goodstein’s point of
view was taken up by enough experts to add urgency to the debate over
Unocal’s fate.
By 2005,Unocal,the object ofall this agitation,was no longer a ma-
jor player in America’s domestic oil market,having long before sold its
distinctive “Union 76”chain ofservice stations to ConocoPhillips.How-
ever, it still possessed large untapped oil and gas deposits in Asia and
North America,making it an appealing takeover target for any company
(or country) seeking additional hydrocarbon reserves as a hedge against
future scarcity.With relatively few untapped fields available for exploita-
