Bad Policies Characterize The Age of Oil
Author Maugeri Details a Century of Mistakes In Oil Geopolitics
To understand the world of the 20th century, we must understand the pivotal role of oil in the world’s politics. There’s no better source for viewing that history than Leonardo Maugeri’s “THE AGE OF OIL: The Mythology, History and Future of the World’s Most Controversial Resource.” (Praeger Publishers, Westport, Connecticut, 2006)
Maugeri, who has written extensively on the dominant and controversial source of the world’s energy, is Group Senior Vice President, Strategies and Development for the Italian energy company Eni, the sixth largest publicly listed oil company in the world.
Oil And Geopolitics
Most of Maugeri’s engaging and somewhat caustic book is devoted to “A History of an Unreliable Market (and the Bad Policies it Prompted).” Many of those issues are rooted in geopolitical grand schemes of a hundred years ago. The exponential growth in demand for industry and transportation drove the efforts to carve a modern-looking map out of the ancient but blurred regions of the Middle East.
“It was the fear of oil shortages,” Maugeri writes, “that moved the great powers to develop their first oil-driven policies at the dawn of the 20th century, leading to British control of Persia (today’s Iran), and to the establishment of today’s Iraq (then Mesopotamia) in the 1920s. Later on, it was the perception of dwindling oil resources in the United States that inspired the close links between the American government and Saudi Arabia’s. And it was the fear that Arab oil would fall under the influence of the Soviet Union that largely shaped American foreign policy in the Middle East after World War II.”
Perhaps the major fear dominating Western consciousness, especially with the rise of Islamic terrorist attacks, is the thought of an apocalyptic clash of civilizations, of Islam vs. rest of world, threatening access to the largest global oil deposits.
Oil And Energy Security
Yet Maugeri characterizes the notion of “oil insecurity” as a myth, although 65 percent of oil reserves are in five Middle Eastern countries – Saudi Arabia, Iraq, Iran, UAE, and Kuwait. Together, they produce 30 percent of global oil, and Maugeri predicts their role will expand in future. But he also declares that they are dependent on the international market, because oil represents 40 percent of their Gross Domestic Product and 85 percent of their exports.
And he cites the 1980 revolution in Iran led by the Ayatollah Khomeini. Maugeri says Khomeini rejected the policies of OPEC (Organization of Petroleum Exporting Countries), and flogged Iranian oil production to generate greater revenues.
But in considering the future, Maugeri essentially shrugs off the issue of alternative energy sources, devoting a scant three pages to the subject of global climate change. The book was written in 2006, before the current primacy of formulating new energy policies, especially in the US. In a sense, Maugeri’s conclusions about the future are irrelevant, given the new debate on energy and energy security. He still focuses on oil as the primary energy of the future.
Arab-Western Relations
“Western governments must overcome their obsession with oil security,” he says, “…otherwise they are doomed to repeat the mistakes and dramas that characterized relations between the West and the Arab peoples in the twentieth century.”
The last part of that conclusion, at least, stands as good advice for the West, and good material for another book – one that includes the paradigm shift to alternative energy sources.
Chronicling An Ureliable Market And Bad Policies
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