Notes From the Fieldby Martin Weil

September 6, 2013

“Everything’s better with Bakken.” But We Are Still Poised to Intervene in Syria

Lest anyone have any illusions about the nature of our proposed intervention in Syria – “moral outrage” or “defending international law” – this is about oil. As the FT points out (whence the clever part of the title of this post in quotes), the world’s major energy producers are facing off over Syria, with Russia and Iran on the one hand, Saudi Arabia and the US on the other. Influence in one of the world’s most unnaturally important regions is at stake and the consequences are very real to the world’s major economies.

Thanks to technological advances in “fracking,” the share of US oil consumption represented by producers in the Middle East has fallen from a high of 60% less than ten years ago to 40% today, and is projected to decline even further in the next decade, perhaps even to inconsequential numbers. The gas in your automobile is now almost as likely to come from North Dakota as North Africa. That said, we still import a critical share of our oil from the region today and Europe, Japan and our other major trading partners are likely to be dependent on the region’s output indefinitely.

The price of oil on the international market has risen some 20% in the face of the degrading situation in Syria, from below $90 a barrel to $109 this morning. Were it not for fracking in the Bakken regions of North Dakota and Montana helping to increase supply and keep a lid on prices, the price of a gallon of gas might be much, much higher due to this crisis.

For all the talk of humanitarian interventions, our proposed military intervention is not the sort of activity we generally consider anywhere but the Middle East.  There is plenty of outrageous activity around the globe to choose from if we truly were acting as the world’s policeman. Oil is the lifeblood of developed economies and the vast majority of it comes from the Middle East. This is about protecting our influence and preventing the spread of instability to the oil producing countries. You can forget all the other arguments.

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