Pardon Me, But I Think We're Going To Need A Larger Handbasket.

Tonight I would like to take a trip down hypothetical lane, that is to say I would like to look at the very real "what if" dilemma that is facing our world at the moment, and in the not so distant future.

World Without Oil

It started out innocently enough, on a dreary storm filled night, watching honest to goodness cable television, my husband and I caught a special called We Were Warned: Tomorrow's Oil Crisis on CNN. Here is a snippet of what the program offered:

Program Overview

It is September 2009. A Category 5 hurricane roars through Houston, destroying oil refineries, drilling platforms and pipelines--the complex system that provides a quarter of our nation's daily fuel supply. Three days later, terrorists attack two key oil installations in Saudi Arabia, the world's largest supplier. In the days and weeks that follow, gasoline prices hit record highs, food prices soar as trucks cannot afford to make deliveries, and Americans begin to realize that their very way of life is in peril.

In We Were Warned: Tomorrow's Oil Crisis, CNN's Frank Sesno explores the potential ripple effects of this frightening scenario. The events depicted are hypothetical, but oil experts believe the scenario is entirely plausible. His interviews with energy experts reveal that we are nearing the point at which the world, led by the U.S. and China, will begin to consume more oil than can be pumped from the ground and the oceans. Tracking the global race to find new pools of oil, Sesno also considers the viability of alternative fuels, such as ethanol, which is used as fuel for 40% of cars in Brazil. Throughout his investigation, Sesno tries to find out whether any of these ventures can solve our looming energy crisis or whether we are already too late.

We got to thinking about this for a few days. What would an oil crisis, world wide, truly entail? How would it affect us locally, nationally, globally? What role would current politics and foreign relations play?

In 1973 the Untied States and European Allies felt the squeeze of an oil shortage, or more specifically and embargo against us, that lasted for only eight months. In this relatively short period of time the shortage resulted in much higher gas prices, a dramatic loss at the stock exchange, recession, and high rates of unemployment, and in some cases, permanent unemployment. We recovered, due to the lifting of the embargo. It bears mentioning as well, that the crisis directly affected only a few countries, but indirectly affected many others who were not experiencing an oil shortage.

What would happen if the crisis was global? This wouldn't be an embargo that could be lifted. This wouldn't only affect a few countries, while others were still operated relatively smoothly. There wouldn't be anyone, or any country who could really get us, or anyone out of the mess. You can be sure that it would last longer than eight months too. Oil is a non-renewable energy source, so once its gone we would have to wait millions upon millions of years before we could begin to use oil again.

First, and foremost every country would feel the hit of a mass shortage of oil. Starting with energy and utility companies, gasoline companies, and the stock market, sliding over to major industries that rely on oil for production, moving on to shipping and transportation - which would further tighten the noose on industries that make products that need to be shipped to store shelves (as well as needing the parts shipped to make said products) - airlines would become so expensive it would be cost prohibitive for the majority of people to fly, thus restricting any foreign and international business, and finally affecting the Average Joe Citizen, who couldn't afford to get to work, or heat their home.

All of this would have massive economic repercussions mainly because of the stock market and large amounts of shareholders who would panic at the very thought of the losses. It would likely be the perfect set up for another Great Depression, only worse.

At first though,I think people in wealthy countries would be alright. Coworkers would carpool more, people would conserve at home, businesses might cut the workday short, but not shut down altogether. This however, would not be sustainable. On top of tight restrictions and conservation, people would grow weary of it, or get desperate. Crime would rise, unemployment would rise, and in the poorest of countries (who would be hit the hardest at first) death tolls would certainly rise. The shortage of oil would result in a shortage of food, supplies, and other life sustaining necessities. Hospitals couldn't operate properly, homes wouldn't have heat, electricity, perhaps even proper water, garbage collection would eventually cease - it would be a CDC nightmare. Think of how many people died because of shortages due to natural disasters, when supplies were on the way. Think about what will happen if no supplies are on the way?

No country is more than three meals away from a revolution.

World Politics, and The Fight For the Middle East

The oil crisis mentioned above is placed in the year 2009, thats one year, one month, and 22 days away. Provided that this will happen around hurricane season, I'd give it a year and a half, tops. We will still be in Iraq, and will have probably moved on to Iran at this point in time. If you haven't read Confessions of an Economic Hitman by John Perkins, you should. It outlines the use of global economics as a tool for forced political alliances. This is an important topic with regards to the Middle East. The US will have or should start offering monetary reparations, loans, grants and other economic and social developing programs which will enable us to gain some control over oil production, cost, and disbursement. Provided that we are still in a war zone scenario, we will probably have even more control than that. Its a commonplace procedure in war torn countries to make such offers, with stipulations. I see no reason why it won't happen.

In the CNN program it is speculated that if an oil crisis hits, both the US and China will be at odds for oil. The theory is that China will offer Iran Nuclear Weapons (and/or supplies) in return for oil. Obviously, exchanging Nuclear Weapons or technology for oil is a bad idea for the world, regardless of who is giving, and who is receiving. But we are hypothesizing that the US will have a say in the matter, so lets take a look at the possible chain of events that would follow.

If it isn't obvious that the US would block (or attempt to block) the exchange of Nuclear Weapons for oil, it should be. On the surface this seems like a good thing. But that is on the surface, lets dig deeper. China gets denied, because Iran's Big Brother is on the lookout for ne'er do wells, China gets angry because China is the second largest consumer of oil, and they want the oil. What do they do? The Chinese/American trade business has left both a deficit (with US) and a surplus (China) with which the Chinese Banks use to buy American bonds, which helps us recoup our losses, of which the US now borrows upwards of $550 billion annually. China isn't the only contributer, but with the trade disparity, the US could be in a lot of trouble. To see the Numbers Behind US-China Trade just click the link.

So China starts calling the money, and adding insult to injury, further destroys the American economy. In order for America to cough up the money needed, not only are taxes raised (on an already strapped economy) but we make a desperate call to the World Bank, and US loans are called in world wide. There are one hundred, eighty-five countries around the globe that work with or borrow from the US via the World Bank - calling in these loans could cause much more damage to the rest of world on top of an oil crisis than is even remotely reasonable. However, with China on our tails, what is the US to do?

In the meantime, while we're scrambling to get money, Iran, and the rest of the Middle East has decided that they've had enough of the US (don't forget, they have loans that would be called in by us as well) and decides to regain total control of their oil.

The US bankrupts the world, and Iran trades oil for Nuclear Weapons anyway. China gets their money, gets some oil, we've lost control of the Middle East, the rest of the world now hates and despises us for bankrupting them - and World War Three starts with a vengeance.

But this time around, there simply will not be any big players left after the destruction of wars plus famine, plus revolutions, plus natural disasters. There will be no country left with the ability to initiate something like the Marshall Plan. Without it, war torn countries won't be able to rebuild.

Third world countries by this point will have seen the worst of the worst - death toll contributions include everything from famine, and possible pandemics to war and genocide. Wealthy countries will not be exempt from such horrors either. It'll just take longer to get here. Martial law will have been put into play long before actual wars started, just to quiet the revolutionaries and survivalists.

In fact, as corny as it sounds, I envision the world behaving much like the scenes painted in movies like "Children of Men" and "V for Vendetta", only without the reproductive problems and one elite country. There will be immigration crisis all over the world, making it virtually impossible to escape.

It will be Hell on Earth.

What Then?

After the dust settles, and there is no more to fight with, or even fight for, rebuilding will have to begin. The question is who will survive, and exactly what will rebuilding entail? There are a few theories to work with. I think the world will revert to a tribal style of living once again. If you are a Marxist, True Communism would rise from the ashes like a phoenix, sans any real domination of any sort. The wealthy elite and world rulers will have (supposedly) been taken down like royalty during the French Revolution. In other words, they won't be eating any cake, because they won't have their heads.

There is another, less plausible theory, that the wealthy elite will somehow survive, intact, and enslave us. I'm thinking its not likely, but I'll throw it out there anyway.

In the End

This is all theory. It is hypothetical. It is a prediction, but in the sense of a chess game, and not one of prophecy. I have no idea if any of this will come to fruition. I hope not, but it is something to chew on for a while.

In my opinion, I think its best that the US go back to a lightly isolationist state of being for a while. To be frank, I don't think we should start poking the dragon, and we ought to leave the Middle East alone. In the long run, it just doesn't seem to be in anyone's best interest.

Sources:(some sources have been included in the text)

http://www.cnn.com/SPECIALS/cold.war/guides/debate/chats/beveridge/
http://www.consumeraffairs.com/news04/2005/oil_price_probe.html
http://en.wikipedia.org/wiki/1973_oil_crisis
http://eatthestate.org/08-02/RiskyBusinessBorrowing.htm
http://www.atimes.com/atimes/China_Business/HD01Cb05.html
http://news.bbc.co.uk/2/hi/americas/4283768.stm
http://www.eia.doe.gov/kids/energyfacts/sources/whatsenergy.html
http://en.wikipedia.org/wiki/Marshall_Plan
http://en.wikipedia.org/wiki/List_of_World_Bank_members
http://web.worldbank.org/WBSITE/EXTERNAL/COUNTRIES/0,,pagePK:180619~theSitePK:136917,00.html
http://www.cnn.com/2006/EDUCATION/03/14/cnnpce.we.were.warned/index.html
http://www.whitehouse.gov/infocus/developingnations/growthagenda.html
http://books.google.com/books?id=nJFFrLX-924C&dq=John+Perkins&prev=http://www.google.com/search%3Fnum%3D30%26hl%3Den%26lr%3D%26client%3Dfirefox-a%26channel%3Ds%26rls%3Dorg.mozilla%253Aen-US%253Aofficial%26as_qdr%3Dall%26q%3Djohn%2Bperkins%26btnG%3DSearch&sa=X&oi=print&ct=result&cd=2&cad=author-navigational