The Carter Doctrine: Is It Working?

ASPO 2012 presentations have come out on You Tube, and among them is this interesting presentation from Michael Klare entitled, The Geopolitics of Oil and Gas:

As part of his presentation (6:30-8:30 min) Klare talks about the Carter Doctrine:

                                                                                                                     

For all the reasons we have heard in earlier presentations today, oil is so critical to the economies and transportation systems of modern economies, so nations have determined...oil importing nations...must make this a center of their foreign policy, to ensure access to adequate supplies of oil.  And this is the essence of the Carter Doctrine...I gave you the earlier history of the British involvement in Persia, when BP was nationalized, the US conspired with the British to overthrow Mosaddegh to put the Shah in power.  And then the US relied on the Shah for support in the Gulf.  When the Shah was overthrown and the threat to oil became so obvious the United States concluded that it was essential for the US to play a more direct military role. And this is the origin of the Carter Doctrine, which I believe, remains the dominant factor in American thinking in the Middle East today.  It makes it very clear: oil is crucial to the western economy, and therefore, the flow of oil must be preserved at all costs, including the use of military power as needed.  This is the crucial expression of what we call the Carter Doctrine in the United States.  All the other so-called doctrines: the Eisenhower Doctrine, the Truman Doctrine, the Nixon Doctrine, all disappeared with the end of the Cold War.  But not this one, this one remains crucial today. 

     The Carter Doctrine was articulated by Jimmy Carter in his January 23, 1980, state of the Union address, following the Iranian hostage crisis and Soviet Union’s invasion of Afghanistan, which included in part, the following warning, clearly aimed at the Soviet Union:

Let our position be absolutely clear: An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force. (e.g., clip from Blood and Oil - The Carter Doctrine) .

     What are the implications, if, as Kline suggests, the Carter Doctrine, remains the dominant factor in American thinking in the Middle East, and, further requires preserving the flow oil to the USA and its Western allies, at all costs?

     Well, if the Carter Doctrine remains vitally important, and was successful, then I would have expected to see at least a continuation of the same flow rates of oils to the USA, Europe and Japan, if not increases, relative to the flow rates of oils to other regions of the world.

However, I find little support for this notion, based on my analysis (based on data reported in the BP review and starting at Part 1) of the trade flows of petroleum between different regions of the world.

     In reality, the flows of oil to North America, Europe, and Japan from the Middle East have gone down over the last decade, and, the trend is for the proportions of oil to these regions to further decline, in favor of increased flows of oil to China and other Asia Pacific countries, other than Japan. 

     See, for example, my analysis of Middle Eastern exports to other regions, Part 7 in particulat Figure 10 below.      My analysis showed that for the past decade the Middle East has had flat total export contributions.      This translates in to a declining relative total contributions to an expanding total global petroleum export pool (black x's and rhs scale of Figure 10), which has been expanding mainly due to increasing exports from the former Soviet Union countries and Africa, not from the Middle East.

 

     As you can see, the proportion of the global exports coming from the Middle East to North America Europe and Japan are all in decline (Figure 10 las scale).  And, the proportion of the global exports coming from the Middle East to China and the remaining Asia-Pacific countries is increasing.

     Similar trends are present if we just look directly the raw amounts of petroleum being exported from the Middle East to these regions (from Figure 8 of Part 7).

     There are also declining export trends from the Middle East to South America and Africa but the amounts involved are fairly small.

     Finally, I animated my analysis so that it would be easier to see the annually changes and future linearly projected changes.  For some reason, the animation is not very popular, so instead, here are  some time-cuts for animation time-sequence of the Middle East’s exports.  

The thickness of the arrows is proportional to the actual amount of petroleum (in billions of barrels per year) being exported to these and other regions.  The time cut from 2021 is based on the linear extrapolation of the trends shown in Figure 8.  

     Based of these data, can you really see signs of how the USA’s and coalition countries involvement in two Iraq wars, and, continued strong military presence in the Persian Gulf have protected the USA’s vital oil interests in the Middle East?  I don't.

     If the Carter Doctrine is still the policy of the US government, then, either that policy has been a miserable failure over the past decade, or, the policy has morphed into simply ensuring that oil flows out of the Middle East continue, regardless of where the oil actually goes and the hope that fungibility will take care of the rest.

     Or, perhaps the Carter Doctrine is in fact dead, or dying.  In which case, given the decade-long trends such as presented above, the USA and its coalition forces will likely be withdrawing their military presence in the Middle East, as the flows of oils from the Middle East to North America, Europe and Japan correspondingly decline in importance.

Part 12: Inter-Regional Trade Movements of Petroleum: Summary

It probably looks as though I have dropped off the map, posting-wise for the last month, but I having been steadily working on this project for the past weeks, and I am happy now to bring this series to a close.

I started off trying to summarize, in words and charts, the past eleven parts of this series, but, I found that the resulting effort did not satisfy my original goals very well.

Way back in Part 1, I pointed out that BP presented in their “Statistical Review of World Energy” (hereinafter, BP review), a summary of what they called inter-area movements of petroleum, which  just refers to the major imports and exports of oil between different countries or regions of the world.

The trouble with BP's over-complicated presentation was that one couldn’t readily visualize the relative petroleum flows from one region to the next, (i.e., the inter-regional flows).  Additionally, even though they published these data every year, no effort was made to describe or depict to what extent these inter-regional flows have been changing over time.

I wanted to simplify the petroleum trade-movement data so that the yearly relative amounts of the major movements between smaller numbers of regions could be easily visualized and projected into the future.

To accomplish this, I animated my analysis of these inter-regional flows.  The result is the following two video files.

Trade Movements of Petroleum—the movie

If you get through these two video files, you will have seen over the course of about 20 minutes, +700 power point files, showing the inter-regional flows between these nine regions. 

I hope that you find that my efforts were worthwhile.

Part 1 provides some introduction and guidance, and then shows the export and import trends for North America, South America and European region. 

Part 2 starts back up showing the export and import trends for Africa, the Middle East, the former Soviet Union countries, China, Japan, and the remaining Asia-Pacific countries, and ends by showing a combination of major inter-regional petroluem flows for multiple regions combined. (7-7-2012 replacing the videos uploaded directly via blogger with the links to the You Tube videos showing the same) Relative flows from the nine region

Although the time sequences in parts 1 and 2 of these videos nicely shows how petroleum exports have been changing (especially towards Asia), it is still hard to visualize the total inter-regional flows to and from the nine regions.

Figures 1 and 2 compares, on the same vertical scale, the total inter-regional exports from North America, Europe, China, Japan, and the remaining Asia-Pacific countries (Figure 1) versus exports from South America, Africa, the Middle East, and the former Soviet Union countries, and their extrapolated linear trend-lines.

The these two figures make clear, I think, the tiny amount of inter-regional oil exports coming from North America, Europe, China, Japan, and, the vast amount of inter-regional exports coming from the Middle East.  Figure 2 also shows that it is the increases in exports from Africa and the former Soviet Union, that has largely fed the overall increase in global inter-regional exports.

Now, coupling these result with the trends shown in the two videos, and you may start to get a sense of the overall flows of oil exports for the past decade:  Middle Eastern inter-regional exports have shifted away from North America, Europe and to some extent, Japan, towards China and the remaining Asia-Pacific regions.  The loss in exports from the Middle East to North America, Europe, and Japan, have been made up, mainly, by new inter-regional exports from Africa and the former Soviet Union. 

The receiving side of inter-regional exports is shown in Figures 3 and 4: inter-regional imports to these same regions, and the extrapolated linear trend-lines.

Once again, we see the high dependence of North America, Europe, China, Japan, and the remaining Asia-Pacific countries (Figure 3) on inter-regional imports, and, a much lower dependence on such imports for South America, Africa, the Middle East, and the former Soviet Union countries (Figure 4).

The slopes of the trend lines in Figure 3 help show which regions are increasingly dependent upon these inter-regional imports: China has the steepest increase, and therefor greatest increasing rate of dependence, followed by the remaining Asia-Pacific region, and then Europe.  North America’s import trend has been pretty flat, and Japan’s is actually trending down. 

The increased demand for oil imports for China and remaining Asia-Pacific region likely reflects the economic growth and improved western-style standard of living that these regions have experienced over the last decade. 

But what of Europe, why such a strong increase in imports? The answer, of course, lays in the fact that Europe's domestic oil production is well past peak and has been falling steeply (see e.g., Figure 2 of Part 6).  Even though consumption has declined slighly, Europe’s choice has been to import increasingly large amounts of oil from other regions, in particular from the former Soviet Union.  To a large extent, however, these imports have really just been to make-up for the declining imports from the Middle East.

North America, on the other hand, has made-up for the declining imports from the Middle East, and South America, mainly from Africa and the former Soviet Union countries, and from at least slower declines in its petroleum production rates within North America (e.g., from off-shore, tar sands and fracking), as compared to Europe.

The trend for Japan to be importing less oil, of course, is not due to substantial increases in domestic production, which is next to nil.  Rather, I suspect that the decline reflects the demographics trends in Japan with it increasing aging and retiring population.   

Future export and import trends

It should be pretty obvious from Figures 1-4, and the videos, that the overall trend for the past decade has been for increasing inter-regional exports/imports. 

Will this continue, as suggested by the trend-lines, for the next decade and beyond?  

I do have my doubts that the trend for increasing rates of exports can be sustained for another decade, especially for the larger exporting regions like Africa, the Middle East, and the former Soviet Union countries.  Further increases in production rate to support an ever-increasing rate of exports seems doubtful to me.  As an example, consider the former Soviet Union countries, which would have to increase its exports and therefore domestic production rates by ~2 bby (from its present total production rate of 5 bby) over the next decade to continue the last decade's export trend.  Maybe arctic oil and decreased domestic consumption could help continue the trend—but we will see.   Similarly, where will Africa come up with another ~1 bby (from its present total production rate of ~3.7 bby) to continue its increasing export trend over the next decade?

One trend that I think that is more likely continue, is the change in the distributions of exports between these regions.  For instance, I think that it is likely that greater proportions of Middle Eastern exports will continue to be directed to China and the remaining Asia-Pacific region, even if the absolute amount of exports from this region stays flat or declines in the future.  Similarly, the trend for greater proportions of exports from former Soviet Union countries to North America, Japan, China and the remaining Asia-Pacific region, is a trend that I think will continue, even if the absolute amount of exports from this region decline in the future.  But, this is a topic for a future post.   If these exports trends do continue, it will greatly impact how these different regions will fare in an era of declining oil production. 

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At 67 single-spaced pages of analysis, 146 figures, and now, a 20 minute +700 slide video, this turned out to be one whooper of a series.  Next, I plan to use these data to better predict future regional petroleum consumption patterns, in an expanded and enhanced version of my previous effort.