America's "unprecedented dependence on foreign oil" easily surpassed by New Core Asia
■"White House May Tap Oil Reserves: Closure of Wells in Region Prompts Capacity Concerns Amid Fragile Global Supply," by Russell Gold, Bhushan Bahree and Thaddeus Herrick, Wall Street Journal, 30 August 2005, p. A2.■"Thailand Tries to Prop Up Economy," by James Hookway, Wall Street Journal, 30 August 2005, p. A9.
Katrina hits the U.S. energy sector hard, because so much of the oil and gas we import comes through Gulf ports. You can't knock those oil refineries down there off-line for any stretch of time and not impact prices. So there is loose talk of the White House tapping government oil reserves.
If that happens, it will only fuel the asinine talk here in the States that the Bush Administration's military efforts in the Gulf have "obviously" been in vain because "Look at the high price of oil!"
There is this uninformed view of the global energy markets that says the tightness currently seen is caused by instability in the Gulf, when in reality it's due to the rising demand for energy in Asia, which is both profound in its growth and very long-term in its unfolding.
More than that, Asia's dependence on oil is far greater than that of the Old Core (captured in the data for OECD countries). If you index oil consumption per unit of GDP, then Asia countries tend to require 2 to 3 times as much consumption as the average OECD country.
No surprise there. Undeveloped countries tend to need the most amount of energy to raise their GDP (far more than a 1:1 ratio of energy consumption growth to GDP growth), whereas emerging markets see that number drop toward that even mark of 1:1 as they mature. An advanced country like the U.S. can grow a percent of GDP at less than a percent growth in energy consumption (typically in the .7-.8 range).
The lesson? If you want better use of energy worldwide, then shrink the Gap. Conversely, if you grow the Core, expect the newest members to be far more dependent on energy security than the most mature members.
We need to remember that when we think about the Middle East. If it's largely their oil, then we need to make it their blood as well.
Not idealistic, but brutally realistic.