The Oil Drum

155 comments on DrumBeat: August 18, 2007

Comments can no longer be added to this story.

JMG3Y on August 18, 2007 - 11:15am

That profile of the TU-160 looks remarkably like the B1-B, the red stars giving it away. (I was a very small part of the B1 design many years ago)

Given Russia's access to crude oil resources and the facts that 97% of the US government's expenditure for fuel is for the Department of Defense, that 53% of this is for the Air Force, 89% being for aviation, and every $10 per barrel increase in crude oil increasing the aviation costs by $600M per year, what better way is there for Russia to "stick it in the eye" of the US? In the current environment that includes U.S. dependency on foreign crude oil supplies from politically unstable regions, IMO gearing all that cold war stuff all back up, including sufficient stockpiles to mitigate supply disruption, to match this global presence is going to make the U.S. response very, very expensive.

Perhaps with this development the urgent need to convert the civilian wheeled transportation fleet to electricity will begin making a lot more sense to a lot more people and we can begin making serious moves in that direction, including serious initiatives for light rail.

Comments can no longer be added to this story.

JMG3Y on August 18, 2007 - 12:48pm

Prior apologies for pondering without facts and with a feeble understanding of the economics but:

Suppose every dollar Putin "invests" in projecting Russia's nuclear power globally results in a U.S. expenditure of $2 on a resource in a tightening supply and demand situation. This increases global crude oil demand and, given tightening supplies, drives the price up. Given that Russia is a supplier of this resource, Putin gets part of his investment back. Then, if he invests this return in more bombers and naval vessels, Russia can project more power requiring even more U.S. investment to project an equivalent response. Demand increases more rapidly, even more global capital flows into Russian coffers and the chess game continues.

Is this the beginning of the second arms race (really a fuel race) with a high likelihood being the rise rather than the fall of Russia (with China as the trump card) as a world superpower and the U.S. descent this time?

Comments can no longer be added to this story.

The contents below are paid advertisements. Their appearance does not imply an endorsement by The Oil Drum.

“This order [i.e. capitalism] is now bound to the technical and economic conditions of machine production which today determine the lives of all the individuals who are born into this mechanism, not only those directly concerned with the economic acquisition, with irresistible force. Perhaps it will so determine them until the last ton of fossilized coal is burnt.”

—Max Weber, 1905