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It's strange that the business and geopolitics of energy takes up so little
space on American front pages -- or that we could conduct an oil war in Iraq
with hardly a mention of the words "oil" and "war" in the same paragraph in
those same papers over the years. Strange indeed. And yet, oil rules our
world and energy lies behind so many of the headlines that might seem to be
about other matters entirely.

Take the food riots now spreading across the planet because the prices of
staples are soaring, while stocks of basics are falling. In the last year,
wheat (think flour) has risen by 130 percent, rice by 74 percent, soya by 87
percent, and corn by 31 percent, while there are now only eight to 12 weeks
of cereal stocks left globally. Governments across the planetary map are
shuddering. This is a fast growing horror story and, though the cry in the
streets of Cairo and Port au Prince might be for bread, this, too, turns out
to be a tale largely ruled by energy: Too many acres turned over to corn
(and sugar cane) for the creation of biofuels; a historic drought in
Australia and other climate-change-induced extremes of weather -- a result
of the burning of fossil fuels -- that have affected crop yields; and many
new middle-class consumers, in China and elsewhere, coming on line, with a
growing desire for meat, the production of which is heavily petroleum based.

From resource wars to oil wars (the subjects of his last two books), Michael
Klare, Tomdispatch's energy expert, has long been ahead of the curve when it
came to ways in which our planet was being reshaped at the most basic level.
Today, he offers Tomdispatch readers a peek into some of the key themes in
his staggering new book, Rising Powers, Shrinking Planet: The New
Geopolitics of Energy. If you want to grasp the true shape of our shaky
world, of where exactly we've been and where we might be going, this is a
book not to be missed. It offers the profile-in-formation of a
shape-shifting planet, a planet in transition and on a road to nowhere
pretty. Check out as well, the latest Tomdispatch brief video (produced by
TD's Brett Story) -- in which Klare discusses key issues in his new book --
by clicking here. Introduction written by TomDispatch editor Tom Engelhardt.

Oil at $110 a barrel. Gasoline at $3.35 (or more) per gallon. Diesel fuel
at $4 per gallon. Independent truckers forced off the road. Home heating oil
rising to unconscionable price levels. Jet fuel so expensive that three
low-cost airlines stopped flying in the past few weeks. This is just a taste
of the latest energy news, signaling a profound change in how all of us, in
this country and around the world, are going to live -- trends that, so far
as anyone can predict, will only become more pronounced as energy supplies
dwindle and the global struggle over their allocation intensifies.

Energy of all sorts was once hugely abundant, making possible the
worldwide economic expansion of the past six decades. This expansion
benefited the United States above all -- along with its "First World" allies
in Europe and the Pacific. Recently, however, a select group of former
"Third World" countries -- China and India in particular -- have sought to
participate in this energy bonanza by industrializing their economies and
selling a wide range of goods to international markets. This, in turn, has
led to an unprecedented spurt in global energy consumption -- a 47 percent
rise in the past 20 years alone, according to the U.S. Department of Energy
(DoE).

An increase of this sort would not be a matter of deep anxiety if the
world's primary energy suppliers were capable of producing the needed
additional fuels. Instead, we face a frightening reality: a marked slowdown
in the expansion of global energy supplies just as demand rises
precipitously. These supplies are not exactly disappearing -- though that
will occur sooner or later -- but they are not growing fast enough to
satisfy soaring global demand.

The combination of rising demand, the emergence of powerful new energy
consumers, and the contraction of the global energy supply is demolishing
the energy-abundant world we are familiar with and creating in its place a
new world order. Think of it as: rising powers/shrinking planet.

This new world order will be characterized by fierce international
competition for dwindling stocks of oil, natural gas, coal, and uranium, as
well as by a tidal shift in power and wealth from energy-deficit states like
China, Japan, and the United States to energy-surplus states like Russia,
Saudi Arabia, and Venezuela. In the process, the lives of everyone will be
affected in one way or another -- with poor and middle-class consumers in
the energy-deficit states experiencing the harshest effects. That's most of
us and our children, in case you hadn't quite taken it in.

Here, in a nutshell, are five key forces in this new world order which will
change our planet:

1. Intense competition between older and newer economic powers for available
supplies of energy: Until very recently, the mature industrial powers of
Europe, Asia, and North America consumed the lion's share of energy and left
the dregs for the developing world. As recently as 1990, the members of the
Organization of Economic Cooperation and Development (OECD), the club of the
world's richest nations, consumed approximately 57 percent of world energy;
the Soviet Union/Warsaw Pact bloc, 14 percent percent; and only 29 percent
was left to the developing world. But that ratio is changing: With strong
economic growth in the developing countries, a greater proportion of the
world's energy is being consumed by them. By 2010, the developing world's
share of energy use is expected to reach 40 percent and, if current trends
persist, 47 percent by 2030.

China plays a critical role in all this. The Chinese alone are projected to
consume 17 percent of world energy by 2015, and 20 percent by 2025 -- by
which time, if trend lines continue, it will have overtaken the United
States as the world's leading energy consumer. India, which, in 2004,
accounted for 3.4 percent of world energy use, is projected to reach 4.4
percent percent by 2025, while consumption in other rapidly industrializing
nations like Brazil, Indonesia, Malaysia, Thailand, and Turkey is expected
to grow as well.

These rising economic dynamos will have to compete with the mature economic
powers for access to remaining untapped reserves of exportable energy -- in
many cases, bought up long ago by the private energy firms of the mature
powers like Exxon Mobil, Chevron, BP, Total of France, and Royal Dutch
Shell. Of necessity, the new contenders have developed a potent strategy for
competing with the Western "majors": they've created state-owned companies
of their own and fashioned strategic alliances with the national oil
companies that now control oil and gas reserves in many of the major
energy-producing nations.

China's Sinopec, for example, has established a strategic alliance with
Saudi Aramco, the nationalized giant once owned by Chevron and Exxon Mobil,
to explore for natural gas in Saudi Arabia and market Saudi crude oil in
China. Likewise, the China National Petroleum Corporation (CNPC) will
collaborate with Gazprom, the massive state-controlled Russian natural gas
monopoly, to build pipelines and deliver Russian gas to China. Several of
these state-owned firms, including CNPC and India's Oil and Natural Gas
Corporation, are now set to collaborate with Petróleos de Venezuela S.A. in
developing the extra-heavy crude of the Orinoco belt once controlled by
Chevron. In this new stage of energy competition, the advantages long
enjoyed by Western energy majors has been eroded by vigorous, state-backed
upstarts from the developing world.

2. The insufficiency of primary energy supplies: The capacity of the global
energy industry to satisfy demand is shrinking. By all accounts, the global
supply of oil will expand for perhaps another half-decade before reaching a
peak and beginning to decline, while supplies of natural gas, coal, and
uranium will probably grow for another decade or two before peaking and
commencing their own inevitable declines. In the meantime, global supplies
of these existing fuels will prove incapable of reaching the elevated levels
demanded.

Take oil. The U.S. Department of Energy claims that world oil demand,
expected to reach 117.6 million barrels per day in 2030, will be matched by
a supply that -- miracle of miracles -- will hit exactly 117.7 million
barrels (including petroleum liquids derived from allied substances like
natural gas and Canadian tar sands) at the same time. Most energy
professionals, however, consider this estimate highly unrealistic. "One
hundred million barrels is now in my view an optimistic case," the CEO of
Total, Christophe de Margerie, typically told a London oil conference in
October 2007. "It is not my view; it is the industry view, or the view of
those who like to speak clearly, honestly, and [are] not just trying to
please people."

Similarly, the authors of the Medium-Term Oil Market Report, published in
July 2007 by the International Energy Agency, an affiliate of the OECD,
concluded that world oil output might hit 96 million barrels per day by
2012, but was unlikely to go much beyond that as a dearth of new discoveries
made future growth impossible.

Daily business-page headlines point to a vortex of clashing trends:
worldwide demand will continue to grow as hundred of millions of
newly-affluent Chinese and Indian consumers line up to purchase their first
automobile (some selling for as little as $2,500); key older "elephant" oil
fields like Ghawar in Saudi Arabia and Canterell in Mexico are already in
decline or expected to be so soon; and the rate of new oil-field discoveries
plunges year after year. So expect global energy shortages and high prices
to be a constant source of hardship.

3. The painfully slow development of energy alternatives: It has long been
evident to policymakers that new sources of energy are desperately needed to
compensate for the eventual disappearance of existing fuels as well as to
slow the buildup of climate-changing "greenhouse gases" in the atmosphere.
In fact, wind and solar power have gained significant footholds in some
parts of the world. A number of other innovative energy solutions have
already been developed and even tested out in university and corporate
laboratories. But these alternatives, which now contribute only a tiny
percentage of the world's net fuel supply, are simply not being developed
fast enough to avert the multifaceted global energy catastrophe that lies
ahead.

According to the U.S. Department of Energy, renewable fuels, including wind,
solar, and hydropower (along with "traditional" fuels like firewood and
dung), supplied but 7.4 percent of global energy in 2004; biofuels added
another 0.3 percent. Meanwhile, fossil fuels -- oil, coal, and natural
gas -- supplied 86 percent percent of world energy, nuclear power another 6
percent. Based on current rates of development and investment, the DoE
offers the following dismal projection: In 2030, fossil fuels will still
account for exactly the same share of world energy as in 2004. The expected
increase in renewables and biofuels is so slight -- a mere 8.1 percent -- as
to be virtually meaningless.

In global warming terms, the implications are nothing short of catastrophic:
Rising reliance on coal (especially in China, India, and the United States)
means that global emissions of carbon dioxide are projected to rise by 59
percent over the next quarter-century, from 26.9 billion metric tons to 42.9
billion tons. The meaning of this is simple. If these figures hold, there is
no hope of averting the worst effects of climate change.

When it comes to global energy supplies, the implications are nearly as
dire. To meet soaring energy demand, we would need a massive influx of
alternative fuels, which would mean equally massive investment -- in the
trillions of dollars -- to ensure that the newest possibilities move rapidly
from laboratory to full-scale commercial production; but that, sad to say,
is not in the cards. Instead, the major energy firms (backed by lavish U.S.
government subsidies and tax breaks) are putting their mega-windfall profits
from rising energy prices into vastly expensive (and environmentally
questionable) schemes to extract oil and gas from Alaska and the Arctic, or
to drill in the deep and difficult waters of the Gulf of Mexico and the
Atlantic Ocean. The result? A few more barrels of oil or cubic feet of
natural gas at exorbitant prices (with accompanying ecological damage),
while non-petroleum alternatives limp along pitifully.

4. A steady migration of power and wealth from energy-deficit to
energy-surplus nations: There are few countries -- perhaps a dozen
altogether -- with enough oil, gas, coal, and uranium (or some combination
thereof) to meet their own energy needs and provide significant surpluses
for export. Not surprisingly, such states will be able to extract
increasingly beneficial terms from the much wider pool of energy-deficit
nations dependent on them for vital supplies of energy. These terms,
primarily of a financial nature, will result in growing mountains of
petrodollars being accumulated by the leading oil producers, but will also
include political and military concessions.

In the case of oil and natural gas, the major energy-surplus states can be
counted on two hands. Ten oil-rich states possess 82.2 percent of the
world's proven reserves. In order of importance, they are: Saudi Arabia,
Iran, Iraq, Kuwait, the United Arab Emirates, Venezuela, Russia, Libya,
Kazakhstan, and Nigeria. The possession of natural gas is even more
concentrated. Three countries -- Russia, Iran, and Qatar -- harbor an
astonishing 55.8 percent of the world supply. All of these countries are in
an enviable position to cash in on the dramatic rise in global energy prices
and to extract from potential customers whatever political concessions they
deem important.

The transfer of wealth alone is already mind-boggling. The oil-exporting
countries collected an estimated $970 billion from the importing countries
in 2006, and the take for 2007, when finally calculated, is expected to be
far higher. A substantial fraction of these dollars, yen, and euros have
been deposited in "sovereign-wealth funds" (SWFs), giant investment accounts
owned by the oil states and deployed for the acquisition of valuable assets
around the world. In recent months, the Persian Gulf SWFs have been taking
advantage of the financial crisis in the United States to purchase large
stakes in strategic sectors of its economy. In November 2007, for example,
the Abu Dhabi Investment Authority (ADIA) acquired a $7.5 billion stake in
Citigroup, America's largest bank holding company; in January, Citigroup
sold an even larger share, worth $12.5 billion, to the Kuwait Investment
Authority (KIA) and several other Middle Eastern investors, including Prince
Walid bin Talal of Saudi Arabia. The managers of ADIA and KIA insist that
they do not intend to use their newly-acquired stakes in Citigroup and other
U.S. banks and corporations to influence U.S. economic or foreign policy,
but it is hard to imagine that a financial shift of this magnitude, which
can only gain momentum in the decades ahead, will not translate into some
form of political leverage.

In the case of Russia, which has risen from the ashes of the Soviet Union as
the world's first energy superpower, it already has. Russia is now the
world's leading supplier of natural gas, the second largest supplier of oil,
and a major producer of coal and uranium. Though many of these assets were
briefly privatized during the reign of Boris Yeltsin, President Vladimir
Putin has brought most of them back under state control -- in some cases, by
exceedingly questionable legal means. He then used these assets in campaigns
to bribe or coerce former Soviet republics on Russia's periphery reliant on
it for the bulk of their oil and gas supplies. European Union countries have
sometimes expressed dismay at Putin's tactics, but they, too, are dependent
on Russian energy supplies, and so have learned to mute their protests to
accommodate growing Russian power in Eurasia. Consider Russia a model for
the new energy world order.

5. A Growing Risk of Conflict: Throughout history, major shifts in power
have normally been accompanied by violence -- in some cases, protracted
violent upheavals. Either states at the pinnacle of power have struggled to
prevent the loss of their privileged status, or challengers have fought to
topple those at the top of the heap. Will that happen now? Will
energy-deficit states launch campaigns to wrest the oil and gas reserves of
surplus states from their control -- the Bush administration's war in Iraq
might already be thought of as one such attempt -- or to eliminate
competitors among their deficit-state rivals?

The high costs and risks of modern warfare are well known and there is a
widespread perception that energy problems can best be solved through
economic means, not military ones. Nevertheless, the major powers are
employing military means in their efforts to gain advantage in the global
struggle for energy, and no one should be deluded on the subject. These
endeavors could easily enough lead to unintended escalation and conflict.

One conspicuous use of military means in the pursuit of energy is
obviously the regular transfer of arms and military-support services by the
major energy-importing states to their principal suppliers. Both the United
States and China, for example, have stepped up their deliveries of arms and
equipment to oil-producing states like Angola, Nigeria, and Sudan in Africa
and, in the Caspian Sea basin, Azerbaijan, Kazakhstan, and Kyrgyzstan. The
United States has placed particular emphasis on suppressing the armed
insurgency in the vital Niger Delta region of Nigeria, where most of the
country's oil is produced; Beijing has emphasized arms aid to Sudan, where
Chinese-led oil operations are threatened by insurgencies in both the South
and Darfur.

Russia is also using arms transfers as an instrument in its efforts to
gain influence in the major oil- and gas-producing regions of the Caspian
Sea basin and the Persian Gulf. Its urge is not to procure energy for its
own use, but to dominate the flow of energy to others. In particular, Moscow
seeks a monopoly on the transportation of Central Asian gas to Europe via
Gazprom's vast pipeline network; it also wants to tap into Iran's mammoth
gas fields, further cementing Russia's control over the trade in natural
gas.

The danger, of course, is that such endeavors, multiplied over time,
will provoke regional arms races, exacerbate regional tensions, and increase
the danger of great-power involvement in any local conflicts that erupt.
History has all too many examples of such miscalculations leading to wars
that spiral out of control. Think of the years leading up to World War I. In
fact, Central Asia and the Caspian today, with their multiple ethnic
disorders and great-power rivalries, bear more than a glancing resemblance
to the Balkans in the years leading up to 1914.

What this adds up to is simple and sobering: the end of the world as
you've known it. In the new, energy-centric world we have all now entered,
the price of oil will dominate our lives and power will reside in the hands
of those who control its global distribution.

In this new world order, energy will govern our lives in new ways and on
a daily basis. It will determine when, and for what purposes, we use our
cars; how high (or low) we turn our thermostats; when, where, or even if, we
travel; increasingly, what foods we eat (given that the price of producing
and distributing many meats and vegetables is profoundly affected by the
cost of oil or the allure of growing corn for ethanol); for some of us,
where to live; for others, what businesses we engage in; for all of us, when
and under what circumstances we go to war or avoid foreign entanglements
that could end in war.

This leads to a final observation: The most pressing decision facing the
next president and Congress may be how best to accelerate the transition
from a fossil-fuel-based energy system to a system based on climate-friendly
energy alternatives.