A few weeks ago the Right Honourable Edmund John Philip Browne, Baron Browne of Madingley, took part in a ribbon-cutting ceremony with the presidents of Turkey, Azerbaijan and Georgia. Lord Browne is a president, also. His domain is BP Oil, a corporation of more economic importance than Azerbaijan or Georgia, postage-stamp countries in the Caucasus known, if known at all, as Joseph Stalin’s native land.
The opening of a new pipeline to carry the crude of the Caspian Sea basin to the oil-worried Western world was the reason for these worthies gathering together. All four presidents have their problems, but only Browne’s are worthy of global attention.
BP has been experiencing a series of mishaps to refineries, pumping platforms and, most recently, a small but significant leak of Alaska’s Prudhoe Bay oilfield pipeline. There is also the American government’s accusation that BP has been doing impermissible things to manipulate the price of propane gas to its advantage. But not to worry if you are a BP stockholder: Profits are up 30 percent over this time last year.
Whenever something happens to BP, good or bad, the world’s oil markets react up or down–which might lead you to think that Baron Browne of Madingley controlled the fate of the world. He does not, although he is certainly in a position to cash in on it. There are facts at work that not even an oil baron can change.
The big fact is that the major oilfields around the globe are getting tired and are in decline. In due course, unless somebody finds a lot of undiscovered oil, Browne and his corporate confreres will have an ever-diminishing amount of oil to sell at an ever-increasing price. Additional assistance in driving up the price of oil may come from politicians in the United States and Great Britain and Israel. Since 9/11, prices at the pump have doubled. If these three countries go ahead with their hearts’ desire, an attack on Iran, gasoline at $7 a gallon sounds about right.
Because more people (China and India) with more money want more of a lessening supply of oil, prices will go into zoom mode before long. But how long is before long? It could be three years, it could be ten or it could be fifteen years–or just when your grandchildren will be going to college or hitting the job market.
For all kinds of reasons, the age of cheap, plentiful oil is coming to a rapid close. And that is a greater, surer and more profound threat to Western civilization as we know it than Al Qaeda multiplied by a hundred. It is well to remember that all the Islamo-fastisto-terroristico-jihadi-fanaticos can only blow up a skyscraper full of people or crash a passenger airliner or incinerate 400 people on a subway train or even get lucky and take out a few more doing their Sunday shopping at the mall with a dirty bomb.
We can survive that. We can do better than survive that; we can probably prosper. Remember 9/11. Unless somebody you knew was in the building or your business was affected, that horrific event left little more than a blip on the economic radar screen.
Compare that as a threat to the day when oil flows become lethargic oil drips. Then the passenger airliners will be inoperative, the skyscrapers will be emptied for lack of power to run them and the malls will be deserted because there will be insufficient gasoline to get to them–and they will have little to sell.