Rising Powers, Shrinking Planet - Global Fight for Oil
New America Media

(Editor's Note: Oil has far surpassed $100 a barrel. The oil production in Iraq, once meant to pay for the war, is far from doing that. Meanwhile, China and India's rise has come with booming energy needs.)

In 1980, China consumed 1.7 million barrels of oil a day. By 2006, that was up to 7.4 million barrels. Recently, Russian energy giant Gazprom turned off the natural gas to consumers in Ukraine after its government balked at price increases. Is that the future we can look forward to in a world of shrinking resources?

Michael T. Klare is the author of books like "Resource Wars" and "Blood and Oil". His latest book is "Rising Powers, Shrinking Planet: The New Geopolitics of Energy." Klare is the director of the Five College program in Peace and World Security Studies at Hampshire College in Amherst.

He was interviewed by NAM Editor Sandip Roy, who hosts the KALW 91.7 FM talk show UpFront.

During the Cold War the world order was fairly well defined. There's a new international energy order. Who are the players in this version of the great game?

In the Cold War era, the two main poles of power were the Western block, with the United States as the dominant power and the Soviet block. In this new world order, I believe it's bifurcated between energy surplus countries - countries which have enough energy to supply their own needs and to export energy to others - and energy deficit states, countries like the United States, China, Japan and European countries which don't have enough energy to meet their needs and are dependent on imports from other countries and therefore are beholden to them in various ways, economically and increasingly politically.

What about the group of countries who are neither militarily powerful like the United States is, and also deficit in energy? Do they just fall off the order?

Those countries are at the bottom of the barrel, literally speaking and if they're poor developing countries like in Africa and Latin America, they're going to suffer terribly, because among other things, agriculture is an oil dependent activity and the price of agricultural products has risen enormously and as a result, food prices have risen and we've seen terrible consequences of this, with rising food prices, food riots and people facing starvation. This is a product, as much as other things, of the rising price of energy.

Can you give some examples of how the energy consumers like the United States are wooing the energy producers?

Many of these countries in the developing world are themselves facing internal unrest or separatist movements. Nigeria is a good example of this. The government in Abuja, the capital, is the recipient of all the oil wealth, but the majority of its own citizens do not see the benefit of the oil wealth. They live in absolute poverty and often suffer the environmental consequences of oil production, and they're rising up in revolt - especially in the Niger Delta region in the south where the oil comes from. What they want from the United States or other suitors like China is weapons in return for oil. So we are pouring weapons in. The United States is becoming involved indirectly in a counter-insurgency war in the Niger Delta region. Similarly, China is deeply involved in Sudan's counterinsurgency in Darfur and in the southern Sudan region where there is another civil war on the way.

You write in the book that China's net energy use has jumped up to 16 percent of the world's total and it might hit as much as 21 percent by 2030, if it goes on at this rate. Right now, where is China getting most of its needs met from?

Most of China's total energy supply comes from domestic coal production. This is a huge problem because of the environmental consequences of that. But insofar as its petroleum, most of China's petroleum comes from the Middle East and Africa and in the future, from Central Asia. Because the United States also relies on those same sources of supply that means that the United States and China will be increasingly butting heads against each other for access to the same sources of supply. We're both relying on military means, so the United States and China are competing militarily as well as economically, for those same sources of supply.

How is China's energy policy actually different from the United States', human rights issues aside? They want to diversify their energy sources as much as the United States does. Are they following a different approach?

China's approach and the United States' approach is reasonably similar. The one difference is that we recognize a category of states that we call rogue states. This is a manufactured category; it's not a legal term, but American companies can't deal with Iran for example, or Sudan, or Syria. China doesn't have that problem, so China has been benefiting from our boycott of those countries and is the major producer in Sudan; it's signed a lot of energy deals with Iran. That's one way they take advantage of our rejection of the so-called rogue states.

Does it make a difference that China can, because of its location, get oil from overland sources?

The fact that China is pursuing overland routes, especially in Central Asia, is a response to the fact that historically the United States has dominated the sea-lanes. The Chinese are very concerned that the U.S. Navy controls the main sea routes from the Middle East and Africa. They speak of the Persian Gulf as an American lake, a place the U.S. Navy has controlled. They see the U.S. war in Iraq as an attempt by the United States to maintain its control over that region. That's one reason why the Chinese have emphasized building pipelines from Kazakhstan and Uzbekistan and from Russia, to avoid dependence on sea routes that are controlled by the U.S. Navy.

Can you give us some idea of the extent of China's acquisitions, in terms of energy?

China is late to the scene. Let's remember that the Western oil companies were there first. It was the British, the forerunners of BP, the Anglo-Persian Oil Company that was in the Middle East first, in 1902. The Americans came into Saudi Arabia in 1932, so they've been there a very long time. The Chinese are coming along much later in the game and they have to sort of wiggle their way in. But they have become major producers in Sudan and now are trying to become major producers in Angola, Nigeria, Libya and Algeria in Africa. They're trying to cut deals with Iran and they're a major producer in Kazakhstan.

Let's go to the producer side: Russia. Boris Yeltsin presided over the privatization of energy companies. Vladimir Putin has been reversing that. What's the implication of that for energy supplies for the world?

This is one of the most extraordinary stories of the 21st century, because we began this century with everyone writing off Russia as a former great power, as a has-been that would never be heard from again. One of the extraordinary things is Putin has turned Russia into an energy superpower by reasserting state control over Russia's energy assets. One thing that one has to bear in mind is the importance of natural gas in the world energy equation. We think all the time of oil, but oil is running out. In another decade, maybe two, oil will be supplanted by natural gas, and Russia is the world capital of natural gas. Russia has more natural gas than Saudi Arabia has oil. Gazprom, the state monopoly, is the world's largest owner of natural gas. Putin has absolutely and totally dominated the control of Gazprom.

Do you buy the argument that's heard often about Africa and China's influence there: that China seeks to control African oil at the source?

This is somewhat of an exaggeration. What they mean by this is that China seeks to buy up African oil assets, rather than just buy oil from the companies. But American companies also own African oil resources. Actually it's European companies that own more of them: BP, Shell, Total, and ENI. This is a fake issue.

You write that the long-term risk of escalation is growing more potent. If you look into the future, where do you see this race for energy resources tipping over into military conflict?

The place that I worry about the most is in Central Asia and the Caspian Sea. Because there you have three great powers contending for influence: you have the United States and China, which want to extract resources from the area, and you have Russia, which doesn't need the area's resources for its own purpose, but which seeks to control the flow of oil from that area. Russia, which once controlled this when it was part of the Soviet Union, and before that the Czarist Empire, now wants to insure that all of the oil and natural gas flows through Russia through Gazprom's pipelines to Europe.

So, it also seeks to control the area. All three countries are using military means, so you have three great powers contending for influence, all three are supplying weapons, two of them - the United States and Russia - have military bases in this area. Three of them are involved in military aid, military training, military exercises and on top of that it's inherently unstable; there are ethnic conflicts. So this is the kind of situation - if you could picture the Balkans before World War I, it's exactly the same kind of scenario - where a local conflict, an ethnic conflict could explode and bring the great powers into it overnight, without anybody anticipating this, but provoke a great power conflict.