OPEC, the Petroleum Industry, and United States Energy Policy

By Arabinda Ghosh | Go to book overview

The main reason for this heightened arms race among many of the OPEC countries is a deep-seated, historic animosity, which their professed financial unity does not change. Iran wars with Iraq at regular intervals. Kuwait is suspicious that Iraq intends to grab that tiny land. Saudi Arabia is afraid that radicals will foment crisis in that sparse land. The UAE is busy in quelling its several guerrilla groups in the hills. Above all, the shadow of the Soviet Union, which is so close geographically, and especially with its foothold in South Yemen, falls on the whole Middle East.

There are also the invisible costs of an arms race, which, in fact, depletes industrial competence and stifles innovation in nonmilitary fields. The glamor and encomiums attract the bright young men to the military services, depriving the industrial sector of its vital management pool. Since the main shortage in OPEC nations is human capital, particularly trained personnel, the arms race may produce a lot of specialized maintenance technicians and an excess of automechanics without creating gainful employment for its people. Finally, a country gains little by upgrading its work force for military work and, in the meanwhile, wasting its capital to the point of having to scrap or curtail its civilian development plans.

But the energy crisis and the Middle Eastern oil reserves changed the whole balance of power in the world. This region has become so important geopolitically that great nationalist leaders such as the late Prime Minister Mossadegh of Iran or Nasser of Egypt could never have dreamt of in the heyday of their power. Now all the big powers of the world are currying favor with these oil-rich, strategically located OPEC countries, as do the oil-poor Third World countries, who need real help from the OPEC nations. As a matter of fact, the Third World countries can no longer be characterized as having few industrial plants, low income, and substandard conditions compared to the developed nations, particularly when Abu Dhabi could boast of the highest per capita income in the world--around $50,000 in 1977--about five times higher than the highest European nation. Thus, the oil-rich developing countries have truly become the Third World, while the oil-poor and resource-less underdeveloped countries have become the Fourth World.


NOTES
1.
Wall Street Journal, June 20, 1977.
2.
Ibid.
3.
OPEC, Annual Statistical Bulletin, 1979.
4.
Ibid.
5.
Wall Street Journal, October 22, 1981.
6.
Ibid.
7.
OPEC, Bulletin, July 1981.
8.
Wall Street Journal, September 8, 1975.
9.
Ibid.

-132-

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OPEC, the Petroleum Industry, and United States Energy Policy
Table of contents

Table of contents

  • Title Page iii
  • Contents vii
  • Figures ix
  • Tables xi
  • Preface xv
  • Abbreviations xvii
  • 1 - Introduction 3
  • Notes 16
  • 2 - The Emergence of Opec 17
  • Notes 35
  • 3 - The Pricing Mechanism of Opec 36
  • Notes 49
  • 4 - Opec and the Multinational Oil Companies 50
  • Notes 64
  • 5 - U.S. Oil Industry: Changing Structure and Performance 65
  • Notes 87
  • 6 - U.S. Oil Industry: Acquisition and Diversification 89
  • Notes 106
  • 7 - Petro-Dollars and Economic Change in OPEC Nations 107
  • Notes 132
  • 8 - Opec versus the Oil-Consuming World 133
  • Notes 148
  • 9 - Strategy against Opec: Henry Kissinger and the Energy Crisis 149
  • Notes 160
  • 10 - Facing the Energy Crisis: U.S. Policy under the Nixon-Ford Administration 161
  • Notes 174
  • 11 - Presidents Carter and Reagan and the National Energy Policy 176
  • Notes 187
  • 12 - The Future of Opec 188
  • Notes 197
  • Selected Bibliography 199
  • Index 203
  • About the Author 206
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