[War & Business] The Hidden Side of the Peak Oil Theory

[Image source=Reuters Yonhap News]

[Asia Economy Reporter Hyunwoo Lee] One of the environmental slogans that those born in the 1970s and 1980s heard so often that it stuck in their ears was "Oil will be gone from the Earth in 30 years." This slogan, known as the so-called ‘peak oil theory,’ became a global rallying cry after the second oil shock in 1979. However, 42 years later, oil-producing countries are more concerned about falling oil prices than resource depletion. The British major oil company BP revealed in a 2019 survey that even under the most pessimistic outlook, there are still 65 years' worth of oil reserves left on Earth.

In the 2000s, interpretations began to emerge suggesting that the peak oil theory concealed the Cold War between the United States and the Soviet Union. The Cold War did not end with the fall of the Berlin Wall in 1989 but had already ended in September 1985 when international oil prices plummeted from around $30 to $10.

Immediately after the Cold War ended, the free world portrayed the Soviet Union and Eastern Bloc as having failed to adopt capitalism, ending with uprisings by residents who could no longer endure poor living standards. However, in 1985, the Soviet Union's per capita Gross Domestic Product (GDP) was $9,800, much higher than South Korea's less than $5,000 at the time. The Soviet Union's per capita GDP fell below $2,000 by the time of its collapse in 1991, due to the sharp decline in oil prices and the accompanying collapse of the ruble.

Ultimately, it was revealed that the Soviet Union, along with Middle Eastern oil-producing countries, was a representative oil money state, hidden behind the Cold War narrative. The inefficiency and unproductiveness of communist countries, as well as the entire journey of the so-called communist revolution through massive social security systems, were all made possible by huge finances from oil exports.

Later, it became clear that at the time of the Soviet collapse, 70-80% of its finances depended on oil exports. This revealed that the low oil price strategy pursued by the United States and the Western world for alternative energy development not only humbled the pride of oil-producing countries but also brought an end to the Cold War.

Therefore, today, environmental slogans like the peak oil theory are no longer regarded as purely sincere by the international community. This is why there is an interpretation that U.S. President Joe Biden’s inaugural declaration of the ‘Green New Deal’ contains America’s international strategy. China, which has been called the ‘main adversary’ by the U.S. since Biden’s presidential campaign, is the world’s largest carbon emitter, and another adversary, Russia, still relies on oil for nearly half of its finances. The world is watching closely to see if his Green New Deal will become a new weapon to end the new Cold War.

This content was produced with the assistance of AI translation services.