Seen from certain angles, the oil economy is an awesome testament to human progress and achievement. Viewed from the mud shacks beneath the flaring wells of the Niger Delta, or from the roadblocks protecting the Iraqi terminals and pipelines, it can take on a rather different form. For many in the developing world, oil is as much a curse as a blessing.
Developing nations depend on oil more than the West. Their agriculture relies on it, and inefficiency makes their industries thirsty. "Most developing countries have to use twice as much oil as do Western countries to produce US$1 of manufactured goods," says the IEA's Fatih Birol.
For those who need to import oil, the market isn't kind. The very fact that they are 'developing' counts against them--even India, which has a relatively established economy, pays twice what the USA does for its fuel, according to Guardian columnist George Monbiot. "This is for two reasons," he says. "One, transport costs are higher--they don't have huge tanker and pipeline networks to transport their oil cheaply. And two, they don't have the economic and political muscle to bash people down to the price they want."
Even the presence of plentiful domestic oil reserves is no guarantee of prosperity. The West's dependency on cheap, reliable oil invariably leads to inconsistent policies towards unjust regimes. Numerous monarchies, oligarchies and outright dictatorships have been tolerated by the West in return for access to oil, mostly at the expense of the population at large, who suffer disenfranchisement, corruption and repression.
As long as the regime--democratic or not--is friendly to the West and supports its oil interests, says Greg Muttitt of pressure group Platform, the West will turn a blind eye to how the state treats its people. Ultimately, however, this practice frequently has counter-productive results.
"What you get is internal unhappiness at resources being supplied to the West," says Muttitt. "This is followed by unrest, a clamp-down (supported, financed and armed by the West), an ever-worsening human rights situation and, finally, instability." This, in turn, leads to intervention. Saddam Hussein's regime benefited during the 1980s from oil revenues and the tacit support of the West, before its eventual downfall.
The occupation of Iraq, analysts say, provides a foretaste of the way in which production centres will become increasingly pressurised as oil production declines. "By grabbing the Iraqi oil fields," says Dr Mahmoud Salameh, a World Bank oil economist, "the USA gives itself breathing space to find alternative energy sources."
Muttitt believes the West is yet to learn the lessons of Iraq and the Middle East. …