ODU professor on oil and security

by | Oct 16, 2015 | Book Reviews

Myths of the Oil Boom
Steve A. Yetiv
Oxford University Press, 2015
251 pages, $29.95
ISBN 978-0-19-021269-8

Does anyone remember (only yesterday?) when “unleaded regular” gasoline approached $4 a gallon? Just this summer, people were grumbling that prices were creeping up from just over $2 a gallon to $2.50. How quickly we have adapted ourselves to the concept of cheap fuel forever; full size Ford pick-up trucks actually lead the market in sales. But will cheaper fuel really last, and what factors weigh on its future?

In The Petroleum Triangle (2011), Steve Yetiv, professor of Political Science and International Studies at Old Dominion University, demonstrated the degree to which the threat of transnational terrorism has been influenced by Middle East oil and the accelerated globalization of the last three decades. Yetiv’s Myths of the Oil Boom, just published, explores and illuminates the series of connections between oil and security. He defines and then examines three aspects of “oil security;” first, in terms of reasonable oil prices; second, in terms of avoiding disruptions in oil supplies due to global events; and third, in terms of the negative effects of oil consumption as it relates to pollution, international relations and terrorism.

Clearly, the oil boom results in some improvement in the United States’ balance of trade, promotes our GDP, and generates federal, state, and local tax revenues. On the diplomatic front, the Saudis are concerned that the somewhat reduced oil dependence of America will allow it to decrease its commitment to the Persian Gulf in particular and the Middle East in general. However, there is a clear pendulum effect as lower oil prices contribute to higher economic growth, which in turn increases demand for oil and pushes prices higher. What are the risks of an environmental backlash against hydraulic fracturing (“fracking”)? If oil prices remain low for the foreseeable future will the pumping of shale oil be unprofitable?

Yetiv asserts that although the oil boom is a game changer there is a tendency to overestimate what long-term influence it can have on American and global oil security. A more synergistic strategy that includes a serious effort to reduce oil consumption is required.

And what of the longer term? Contrary to popular assumptions, the United States, still the largest consumer of oil, gets most of its imported oil from South America. China, on the other hand, currently gets little from that region. The withdrawal of the British “East of Suez” has left the United States with the role of protecting the Middle East oil routes since 1979. Why, despite the fact that our continued presence in the region serves to incite young radical Muslims, must we continue our role of guarantor?

Young drivers, man your hybrids, electrics and hydrogen steeds. Long term, think rising oil prices as most experts agree that the current boom in American oil will likely decline by 2025. The growing thirst of China for oil will spark competition for access to the region that has the most “spare capacity.” And that region, of course, is the Middle East; another reason why reducing our consumption of oil is so important.

Realistically, it may be difficult to seriously diminish our role in the Middle East. However, taking advantage of the present oil boom by an American and global decrease in consumption might make some diminution of our presence possible. “While the boom has enhanced oil security, it should not distract us from the pursuit of more sustainable energy practices,” Yetiv concludes. His research team gives the reader several excellent graphs and charts to support his main arguments and there are extensive footnotes.