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America and Oil. It’s like bacon and eggs, Batman and Robin. As the old song lyric went, you can’t have one without the other. Once upon a time, it was also a surefire formula for national greatness and global pre-eminence. Now, it’s a guarantee of a trip to hell in a handbasket. The Chinese know it. Does Washington?
America’s rise to economic and military supremacy was fueled in no small measure by its control over the world’s supply of oil. Oil powered the country’s first giant corporations, ensured success in World War II and underlay the great economic boom of the postwar period. Even in an era of nuclear weapons, it was the global deployment of oil-powered ships, helicopters, planes, tanks and missiles that sustained America’s superpower status during and after the cold war. It should come as no surprise, then, that the country’s current economic and military decline coincides with the relative decline of oil as a major source of energy.
If you want proof of that economic decline, just check out the way America’s share of the world’s gross domestic product has been steadily dropping, while its once-powerhouse economy now appears incapable of generating forward momentum. In its place, robust upstarts like China and India are posting annual growth rates of 8 percent to 10 percent. When combined with the growing technological prowess of those countries, the present figures are surely just precursors to a continuing erosion of America’s global economic clout.
Militarily, the picture appears remarkably similar. Yes, a crack team of SEAL commandos did kill Osama bin Laden, but that single operation—greeted in the United States with a jubilation more appropriate to the ending of a major war—hardly made up for the military’s lackluster performance in two recent wars against ragtag insurgencies in Iraq and Afghanistan. If anything, almost a decade after the Taliban was overthrown, it has experienced a remarkable resurgence even facing the full might of the US, while the assorted insurgent forces in Iraq appear to be holding their own. Meanwhile, Iran—that bête noire of American power in the Middle East—seem as powerful as ever. Al Qaeda may be on the run, but as recent developments in Egypt, Libya, Syria, Yemen and unstable Pakistan suggest, the United States wields far less clout and influence in the region now than it did before it invaded Iraq in 2003.
If American power is in decline, so is the relative status of oil in the global energy equation. In the 2000 edition of its International Energy Outlook, the Energy Information Administration (EIA) of the US Department of Energy confidently foresaw ever-expanding oil production in Africa, Alaska, the Persian Gulf area, and the Gulf of Mexico, among other areas. It predicted, in fact, that world oil output would reach 97 million barrels per day in 2010 and a staggering 115 million barrels in 2020. EIA number-crunchers concluded as well that oil would long retain its position as the world’s leading source of energy. Its 38 percent share of the global energy supply, they said, would remain unchanged.