What can we do? After we panic, of course

Want to be really scared? Read this from Tom's Dispatch:

Juan Cole:Back in the 1980s, Saddam Hussein and Khomeini fought a war with one another for eight years, but on the whole they avoided hitting each other's oil facilities. Both understood that doing that would reduce their countries to fourth-world states. So there was a kind of mutually-assured-destruction doctrine between them, which is possible between states. But in the guerrilla war in Iraq, the Sunni guerrillas have already pioneered using pipeline sabotage and oil sabotage…

TD: I'm actually surprised that such sabotage has yet to make it to the Caspian pipelines or elsewhere.

JC: Well, it could still spread. In August of 2004, when the Marines were fighting the Muqtada al-Sadr people in Najaf, the Sadrists in Basra did make threats to start pipeline sabotage in the south, which really would have crippled Iraq. In a regional guerrilla war, there would be a lot of impetus for Sunni guerrillas to hit the Iranian pipelines, and there are some Sunni tribes in the oil-producing areas of Iran who might be enlisted for this purpose. If the Saudis got involved, then the radical Shiites have an impetus to hit the Saudi pipelines, and the Saudi petroleum facilities are in a heavily Shiite area. Basically, what we've learned from Iraq is that petroleum is produced in a human-security environment in which powerful local forces want it to be produced. If some significant proportion of the local forces doesn't want it to be produced, they can spoil it.

TD: As in Nigeria…

JC: We have seen this all over the world. We focus on states, but states can't provide security for hundreds of miles of pipeline. It's literally impossible. So think what you're talking about here. Something on the order of 80-84 million barrels of petroleum are produced every day in the world. Saudi Arabia produces 9 of that reliably, sometimes more. Iran produces 4. On a good day, Iraq used to produce almost 3. Now it's down to somewhere around 1.8 million. If you took all of that off the market, that's about a fifth of world petroleum production. Do you know what that's going to do to prices!

If you don't like three-dollar-a-gallon gasoline, you're going to really hate this kind of world I'm painting. I think the price shock would reduce economic growth globally, plunging some countries into recession or even depression. This would be a world-class catastrophe. And it's also not clear, once it starts, how you stop it.
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I mean, this is one of the great foreign policy debacles of American history. There's an enormous amount at stake in the oil Gulf and Bush is throwing grenades around in the cockpit of the world economy.

There's a bit of a slippery-slope argument here: there's a lot of "inevitable" links in this causal chain. Still, this isn't a terribly unreasonable argument, given the willingness of jihadi and tribal warfare to be self-destrictive and unrestricted, and the concommitant damage to the Western economies a positive side benefit for lots of the people involved. Something to think about.

A lot of the rest of the article is about the no-win aspects of Iraqi occupation, of blogging, of political discourse.... cheerio!