Book link: Oilcraft by Robert Vitalis

The  book’s subtitle is “The Myths of Scarcity and Security that Haunt U.S. Energy Policy.”

The subtitle sums up the book’s thrust. There are two primary issues. The book’s last chapter addresses the secondary issue: There never was an “oil for security” deal between the U.S. and Saudi Arabia. The famous 1945 meeting between Franklin Roosevelt and Al Saud was primarily about Palestine. Nothing in the record suggests an oil-for-security arrangement. If anything, the oil price shocks of the 1970s (precipitated by OPEC) should have been enough to falsify that myth, yet it persists.

The bulk of the book is about markets. Vitalis’ argument is essentially this: It doesn’t matter who owns the oil in the ground. If there is excess resource for the controlling entity’s needs, then the controlling entity must sell it to realize any benefit. It matters not whether the country is an ally or an enemy; they will sell their oil. If they will not sell it to us, they will sell it to someone else, and that someone else will turn around and sell it to us, or some other oil source will. 

Vitalis contends that oil, extracted from the ground, lives in a market like every other commodity. Except possibly in wartime, it is, and was, never necessary for the U.S. to use military force to defend oil sources—yes, even in the case of Saddam’s annexation of Kuwait—and every such use of the military has never resulted in less expensive or more secure oil imports. Much more important, he claims, is secure control of the means of transporting the oil from source to market. In that context, he might agree that protecting ships in the Persian Gulf from Houthi missiles is justified.

The author extensively documents his claims—the endnotes section is longer than the text.

But Vitalis is wrong about one thing. Oil is not “just like” other commodities. First oil (more generally energy stored as carbon-hydrogen bonds. There are only three natural forms of it: oil, coal, and natural gas—technically also wood, which is “pre-coal”) is the apex commodity. It is an input to everything else. No other commodity has this property (food has some of it, since it is also stored carbon energy, but it is a ubiquitous input only to living systems, and today it also requires oil for planting, harvesting, and market transport). Second, every other commodity is, at least in theory, recyclable. Even food can be recycled into fertilizer. Carbon energy cannot be recycled. You have to destroy it to use it.

What about so-called renewable energy sources? Electricity? Where does it come from? Either carbon or the sun/wind/water, but capturing those sources requires oil for mining, building, deploying, and maintaining. What about uranium, the only natural non-carbon energy source (besides the sun)? Same thing. One must mine and process uranium (carbon for digging, transport, and electricity for processing) and build nuclear power plants (more carbon). 

What about hydrogen? Hydrogen is not a natural energy source but a storage medium like a battery. How does one get electricity into a battery? You make it somewhere else and put it in by charging the battery. Similarly, we make hydrogen using electricity or chemical reactions, storing that energy as hydrogen. Either way, we are back to carbon. Note that in theory, oil, coal, and gas are stored solar energy (like food), but we count them as “sources” rather than “stores” because the sun put the energy in—via plants—millions of years ago.

Does the difference that oil (carbon energy sources) represents make a difference to Vitalis’ thesis that military intervention in oil sources is unnecessary in the absence of a global conflict? I don’t think so, but not because oil isn’t different from everything else. His thesis holds because, apex input or not, like other commodities, it is bought and sold in markets, and there is enough of it from multiple sources (for now) to permit this kind of treatment. 

That brings me to one other small criticism of Oilcraft. Vitalis points out that every time we think we are running out of oil, we find more. He tends to write as if this will always be so, but because carbon energy cannot be recycled, recoverable stocks must eventually be exhausted.