Crude Oil Is Living On Borrowed Time

If only the live frog knew better, it would not have died in the shallow pot of cold water that was placed on open fire to cook it. As the heat of the water rose, the frog adapted until it slowly died of something it could easily have jumped out of.

Again this is reflective of the Nigerian condition. We have gotten so used to chaos that we can no longer see danger signals even when they are standing eye ball to eye ball. Crude oil prices have reached previously unimaginable levels with dire forecasts for even more astronomical rises. The effect is that a litre of fuel is sold in excess of £1, $1 and one Euro in Britain , United States and Republic of Ireland respectively. Troubled by these unacceptable price hikes, the United States tried to browbeat OPEC nations notably Saudi Arabia into raising output. When Saudi Arabia eventually blinked, its additional output was so small that within days prices reached new levels.

Speculators and the red hot economies of China and India have been blamed for the rises in crude oil prices but the fact is that the major consumers of crude oil are not taking this issue lightly any more. The result is that there are many people who want to make BankPHB’s advert that ‘some day cars will run on water’ a reality very soon. Not long ago, I read of a man in Japan who invented an automobile engine that uses any water including rain, gutter and river water as fuel, covering 80 kilometres in initial testing..

But the biggest challenge was thrown in June 2008 by John McCain at a town hall style meeting at California’s Fresno State University, to any one who for a prize of $300 million will produce a new type of automotive battery that will have ‘the size, capacity, cost and power to leapfrog the commercially available plug-in hybrids or electric cars…a new power source at 30% of the current cost.’   John McCain’s challenge aims to ‘encourage heroic efforts in engineering…that will break the monopoly of gasoline both lowering gasoline prices and carbon emissions’. Stripped of verbal dressing, McCain wants a new invention that will make the use of crude oil history.

The prize of S300 million for those who will achieve this feat in McCain’s words boils down to ‘$1 for every man, woman or child in the U S- a small price to pay to help break the back of our oil dependency.’ Only fools will think nothing of this challenge until we end up like the frog. The prize of $300 million is pittance when compared to the revenues that will accrue to those who will meet this challenge. The forecast prices for crude oil in excess of $200 a barrel will surely cause unprecedented economic problems especially in the tottering economies of the United States and Europe . This price hike scenario will come to pass by little incidents like blowing up oil fields in Nigeria’s Niger Delta, the expected surge in terrorist activities in Iraq targeting oil fields, within weeks and days of the US presidential election, just to influence its outcome as they did in Spain not so long ago. The price of $200 per barrel will become an overnight reality the moment Israel or the United States attacks Iran ’s nuclear facilities. This consideration may remove from the list of American options a military strike against Iran , blunting the effectiveness of their threats. It is a very uncomfortable position for which America will do anything to redress.

So McCain’s call for heroic efforts in engineering is to protect America and her western allies way of life from being held hostage by OPEC and speculators. It is common knowledge that the US and her allies are enriching nations they would rather not have anything to do with including outright enemies like Iran which earned about $70 billion last year from crude oil and will make even more this year. Dependence on crude oil has made it difficult for America to speak boldly of democracy and human rights in the feudal nations of the Gulf. McCain obviously also hates the fact that the same Russia who has vigorously protested against America’s Eastern Europe based missile shield and is threatening to station its own strategic bombers in Cuba, is getting richer by the minute from petrodollars.  In a nut shell the people America love to hate including Nigeria are getting rich at their expense.

How serious is McCain’s challenge? On May 25, 1961, President J F Kennedy in a special address to a joint session of Congress issued this challenge, ‘First, I believe that this nation should commit itself to achieving the goal, before this decade is out, of landing a man on the Moon and returning him safely to Earth. No single space project in this period will be more impressive to mankind or more important in the long – range exploration of space; and none will be so difficult or expensive to accomplish.’

On September 12, 1962, at Rice University in Houston, President J F Kennedy further buttressed his call with these words, ‘we choose to go to the Moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organise and measure the best of our energies and skills, because that challenge is one that we intend to win, and the others, too.’

At the time President Kennedy issued his challenge, NASA had not launched a man into orbit. But by the end of 1969, the combined efforts of more than 20,000 firms and universities made it possible for a global audience to hear Neil Armstrong proclaim on July 21, 1969, from the surface of the Moon the immortal words ‘that’s one small step for man, one giant leap for mankind,’  almost six years after Kennedy’s assasination. It was a challenge whose impact will be felt for all of eternity.

During the preparation for the invasion of France during the second world war, Britain’s war time Prime Minister Winston Churchill, knowing that German defenders would make it impossible to capture a sea port in useable condition to supplies their troops, gave the order to build a floating harbour that will be towed across the English Channel right behind the Allied invasion forces. Many amongst fellow Britons and Americans laughed derisively at the idea. Persistently, Churchill challenged his engineers to ‘master’ every difficulty.

By the time of the invasion in June 1944, two floating harbours named Mulberry A and B had been built, each one constructed out of 600,000 tons of concrete and with 15 kilometres of floating road ways. They were towed in sections across the English Channel and assembled at the Normandy beaches. One of them was destroyed by a storm ten days after they were put to use. The other one designed to last for three months, saw heavy use for eight months during which it helped to land 2.5 million soldiers, 500,000 vehicles and 4 million tonnes of supplies. According to Germany’s war time ammunition minister, Albert Speer, the concept of the Allied Forces bringing their own harbour was an ‘idea of simple genius’. Neccesity gave birth to this invention just as it will McCain’s challenge.

This presents the Nigerian challenge. Very soon, crude oil will become irrelevant. Several forecasts indicate Nigerian crude oil wells will run out in less than forty five years. Given the McCain challenge, crude oil may become irrelevant in less than a decade. What is the Nigerian government doing to quickly increase production such that we could pump out the oil wells within one decade and use the proceeds along hopefully with soon to be harnessed  agrobased potentials to develop new competences? It is possible that in spite of this warning we may end up like the frog that cooperated with what killed it.

We can not attract the needed investments as long as the Niger Delta remains Nigeria’s most dangerous flash point. There is absolutely no reason whatsoever to continue keeping the crude oil in Anambra State in the ground. Peace must be restored in the Niger Delta by giving them at least 50% of the revenues derived there. Government should go beyond talking to initiating confidence building measures that will prove to all that government is serious in restoring true peace, not peace of the grave yard. These confidence building measures should include massive infrastructural development that will turn the region into an oil and gas hub like the US Gulf coast. The alternative is continued blood shed in a region and terrain that  even the United States Marines will be hard pressed to operate in. As a theatre of war, the creeks of the Niger Delta  will be like no other battle field. The Nigerian Armed Forces are not trained or equipped to fight there. Even if in the unlikely event the Nigerian Army invades and defeats the militants, the Iraqi quagmire will play out here to show that it is easy to win a war and still loose the peace.

The continued arrogance of the North will not help matters. It has infact led to hardening of positions from resource control to yet low level calls for separation. This sickening  arrogance is slowly contaminating the new generation of Northerners who have been made to believe that before the advent of crude oil, the ground nut  pyramids of the North provided funds for the South. This is a deliberate lie, as fictitious as the one that claims that the crude oil in the Niger Delta  flowed there from the North. An all out show down in the Niger Delta will not be like the civil war. I doubt that any Southern soldier will be involved for long. Neither will the people of the South, chaffing under what increasingly looks like colonialism back such an assault. It is becoming increasingly likely that such an action will be actively opposed by a united the South, leading to the dismembering of Nigeria beyond recognition.

Our leaders must emerge from the political sewers where they are on first name terms with rats and provide leadership before it is too late for Nigeria.

CSN: 50624-2008-22-45

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