Those who control oil and water will control the world
New superpowers are competing for diminishing resources as Britain becomes a
bit-player. The outcome could be deadly

  by John Gray. The Observer,March 30 2008

History may not repeat itself, but, as Mark Twain observed, it can sometimes
rhyme. The crises and conflicts of the past recur, recognisably similar even
when altered by new conditions. At present, a race for the world's resources
is underway that resembles the Great Game that was played in the decades
leading up to the First World War. Now, as then, the most coveted prize is
oil and the risk is that as the contest heats up it will not always be
peaceful. But this is no simple rerun of the late 19th and early 20th
centuries. Today, there are powerful new players and it is not only oil that
is at stake.

It was Rudyard Kipling who brought the idea of the Great Game into the
public mind in Kim, his cloak-and-dagger novel of espionage and imperial
geopolitics in the time of the Raj. Then, the main players were Britain and
Russia and the object of the game was control of central Asia's oil. Now,
Britain hardly matters and India and China, which were subjugated countries
during the last round of the game, have emerged as key players. The struggle
is no longer focused mainly on central Asian oil. It stretches from the
Persian Gulf to Africa, Latin America, even the polar caps, and it is also a
struggle for water and depleting supplies of vital minerals. Above all,
global warming is increasing the scarcity of natural resources. The Great
Game that is afoot today is more intractable and more dangerous than the

The biggest new player in the game is China and it is there that the
emerging pattern is clearest. China's rulers have staked everything on
economic growth. Without improving living standards, there would be
large-scale unrest, which could pose a threat to their power. Moreover,
China is in the middle of the largest and fastest move from the countryside
to the city in history, a process that cannot be stopped.

There is no alternative to continuing growth, but it comes with deadly
side-effects. Overused in industry and agriculture, and under threat from
the retreat of the Himalayan glaciers, water is becoming a non-renewable
resource. Two-thirds of China's cities face shortages, while deserts are
eating up arable land. Breakneck industrialisation is worsening this
environmental breakdown, as many more power plants are being built and run
on high-polluting coal that accelerates global warming. There is a vicious
circle at work here and not only in China. Because ongoing growth requires
massive inputs of energy and minerals, Chinese companies are scouring the
world for supplies. The result is unstoppable rising demand for resources
that are unalterably finite.

Although oil reserves may not have peaked in any literal sense, the days
when conventional oil was cheap have gone forever. Countries are reacting by
trying to secure the remaining reserves, not least those that are being
opened up by climate change. Canada is building bases to counter Russian
claims on the melting Arctic icecap, parts of which are also claimed by
Norway, Denmark and the US. Britain is staking out claims on areas around
the South Pole.

The scramble for energy is shaping many of the conflicts we can expect in
the present century. The danger is not just another oil shock that impacts
on industrial production, but a threat of famine. Without a drip feed of
petroleum to highly mechanised farms, many of the food shelves in the
supermarkets would be empty. Far from the world weaning itself off oil, it
is more addicted to the stuff than ever. It is hardly surprising that
powerful states are gearing up to seize their share.

This new round of the Great Game did not start yesterday. It began with the
last big conflict of the 20th century, which was an oil war and nothing
else. No one pretended the first Gulf War was fought to combat terrorism or
spread democracy. As George Bush Snr and John Major admitted at the time, it
was aimed at securing global oil supplies, pure and simple. Despite the
denials of a less honest generation of politicians, there can be no doubt
that controlling the country's oil was one of the objectives of the later
invasion of Iraq.

Oil remains at the heart of the game and, if anything, it is even more
important than before. With their complex logistics and heavy reliance on
air power, high-tech armies are extremely energy-intensive. According to a
Pentagon report, the amount of petroleum needed for each soldier each day
increased four times between the Second World War and the Gulf War and
quadrupled again when the US invaded Iraq. Recent estimates suggest the
amount used per soldier has jumped again in the five years since the

Whereas Western countries dominated the last round of the Great Game, this
time they rely on increasingly self-assertive producer countries. Mr Putin's
well-honed contempt for world opinion might grate on European ears, but
Europe is heavily dependent on his energy. Hugo Chávez might be an object of
hate for George W Bush, but Venezuela still supplies around 10 per cent of
America's imported oil. President Ahmadinejad is seen by some as the devil
incarnate, but with oil at more than a $100 a barrel, any Western attempt to
topple him would be horrendously risky.

While Western power declines, the rising powers are at odds with each other.
China and India are rivals for oil and natural gas in central Asia. Taiwan,
Vietnam, Malaysia and Indonesia have clashed over underwater oil reserves in
the South China Sea. Saudi Arabia and Iran are rivals in the Gulf, while
Iran and Turkey are eyeing Iraq. Greater international co-operation seems
the obvious solution, but the reality is that as the resources crunch bites
more deeply, the world is becoming steadily more fragmented and divided.

We are a long way from the fantasy world of only a decade ago, when
fashionable gurus were talking sagely of the knowledge economy. Then, we
were told material resources did not matter any more - it was ideas that
drove economic development. The business cycle had been left behind and an
era of endless growth had arrived. Actually, the knowledge economy was an
illusion created by cheap oil and cheap money and everlasting booms always
end in tears. This is not the end of the world or of global capitalism, just
history as usual.

What is different this time is climate change. Rising sea levels reduce food
and fresh-water supplies, which may trigger large-scale movements of
refugees from Africa and Asia into Europe. Global warming threatens energy
supplies. As the fossil fuels of the past become more expensive, others,
such as tar sands, are becoming more economically viable, but these
alternative fuels are also dirtier than conventional oil.

In this round of the Great Game, energy shortage and global warming are
reinforcing each another. The result can only be a growing risk of conflict.
There were around 1.65 billion people in the world when the last round was
played out. At the start of the 21st century, there are four times as many,
struggling to secure their future in a world being changed out of
recognition by climate change. It would be wise to plan for some more of
history's rhymes.

· John Gray is author of Black Mass: Apocalyptic Religion and the Death of
Utopia, published by Allen Lane in paperback on 24 April

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