Oil... have we got it all wrong?

Jad Mouawad, writing in Friday’s NYT, expresses the CW on the current standoff with the mullahs:

As world leaders and diplomats debate how to deal with Iran’s nuclear ambitions, the worry among analysts these days is the fate of the country’s oil sector. The prospect of sanctions against Iran might have been easily shrugged off a few years ago, when the world sat comfortably on millions of barrels of untapped oil capacity. But the picture today is quite different. Iran exports more oil than the world’s current spare capacity.

Conventional as that thinking is, I would have been prepared to believe it had I not received an email today from Roger Stern of the Johns Hopkins University Department of Geography and Environmental Engineering. Stern was calling my attention to an article he had just published that he thought might be of interest to readers of this blog. I think he’s right – at least it was of interest to me. Science News Daily describes the article:

In a peer-reviewed journal article, Roger J. Stern argues that the decades-old belief that petroleum-rich Persian Gulf nations must be appeased to keep oil flowing is imaginary, and the threat of deployment of an “oil weapon” is toothless. His review of economic and historical data also shows that untapped oil supplies are abundant, not scarce.

Stern’s analysis, titled “Oil market power and United States national security,” appears in the Jan. 16-20 online Early Edition of Proceedings of the National Academy of Sciences. In the article Stern argues that the longstanding U.S. security concern that our oil supply could be threatened is wrong.

I had read this argument before, about the actual abundance (not scarcity) of oil, but I had never seen them fleshed out to the degree they have been in Stern’s article. Of course, if true, the implications of this are many on the global war on terror. Although a scientist and writing, presumably, for his colleagues, Stern does not stint on these observations, pointing out how OPEC is a consortium generating wt (wealth transfer) to states like Saudi Arabia and Iran that export terrorism and may soon turn into nuclear-armed regional super powers. By believing falsely in the scarcity of their product, we have in a sense been suckered into their game.

The article is here. If there was ever a case of “read the whole thing,” this is it. (Warning: Pdf… plus your algebra skills may be tested, if they are, like mine, a little rusty)

UPDATE: Related news.