Another Oil War? U.K. versus Latin America: Oil discovered off Falklands

Oil has been discovered in the waters around the Falklands. This has revived the decades-old conflict between Argentina and the United Kingdom, both of which claim the islands – and this time the rest of Latin America is united behind Argentina. Will we see the developed world unite behind England?

Given the realities of peak oil, finding more is a good thing. However, as oil becomes more and more precious as the supply dwindles – and as foolish Western governments have failed to prepare – the potential for conflict becomes very high indeed. The United States has a massive military presence in the Middle East to protect its “national interests” there, and the United Kingdom is likely to take the same view of any oil discovered anywhere they can make any sort of claim to.

In the first Falklands War, the U.K. handily prevailed, although not without some losses. This time, Argentina has the pledged support of many Latin nations, including Brazil, a heavyweight contender. The supply line from the U.K. to the Falklands is very long indeed, and the British would need a continuous and very costly naval presence to keep any oil flowing from the Falklands to the U.K.

If Britain were to attempt to secure the Falklands by force and drain them dry of oil – a very long straw – this could easily unite Latin America against Britain and her allies. As a Canadian, it is entirely possible that our ‘conservative’ Prime Minister, who would have sent Canadian troops into Iraq had he been in power, or the main opposition leader, who would also have put Canadians in Iraq, would support Britain. This would be disastrous for Canada and for the developed world.

What will the United States do? It certainly puts Mr. Obama in a tough spot. How could he not support his longest and biggest allies in Iraq in the U.S. war for oil? Now we have the former and current reigning imperial powers (I hope not supported by Canada and others) extracting resources from a faraway land that the locals lay claim to – this time with the support of the entire region.

Imagine that the Arab nations had united behind Iraq; the United States would quite possibly now be a destitute country, starved for oil, while the Arabs shipped oil to the new rising power: China. The last two times the Arab nations restricted the supply of oil, the U.S. was plunged into recession.

It seems a safe bet that any American support for Britain would include a promise to share in the booty…which if the war wasn’t enough, might well be the last straw required to unite Latin America against the United States. (For those who don’t know, the U.S. has a long history of overthrowing democratically-elected Latin American governments and supporting murderous dictators.)

This is a predicament, not a problem. The difference between the two is that the latter has a solution, the former may not. It is such because of the nature of peak oil, itself a predicament from which there is not necessarily any escape. Oil is becoming progressively more valuable, not just in dollars, but in terms of sustaining civilisation. As the supply tightens – oil prices are four times what they were just a few years ago, despite a worldwide recession – it becomes increasingly clear to all just how critical oil is and will be. Without it, severe hardship will result, and few governments will long stand if their people are freezing in the dark, if food and transportation prices double.

The British squandered their North Sea oil on continuing to live the high life, rather than using it to power a transition to conservation and renewable energy. Now they are stuck, and may well attempt to take this new supply – with the help of much of the developed world.