This thesis describes US national security consequences of oil market power, the political economy of petroleum in one cartel state, Iran, and some security implications of Irani petroleum. We explore a hypothesis relating oil to national security under an assumption of resource abundance. We suggest that an oil cartel exerts market power to keep abundance at bay, commanding monopoly rents (or wealth transfers, wt) that underwrite security threats. We estimate a competitive price for oil from which we derive wt2004 collections by Persian Gulf states ∼{dollar}132-178 109. We find that wt and the behavior of states collecting it interact to actuate security threats. It is therefore oil market power, not oil per se, that actuates threats. We also describe a paradox in the relation of market power to the US defense doctrine of force projection to preempt a Gulf superpower. Since the superpower threat derives from wt, force alone cannot preempt it. A further paradox is that since foreign policy is premised on oil weapon fear, market power is appeased. With respect to Iran, the US presently infers that Iran's nuclear technology program must pertain to weapons development. However, some industry analysts project an Irani oil export decline. If this is occurring Iran's claim to need nuclear power could be genuine. We survey the political economy of Irani petroleum for evidence of such a decline. We define Iran's export decline rate (edr) as its summed rates of depletion and domestic demand growth, which we find = 10-12%. We estimate marginal cost/barrel (b) for additions to Irani production capacity, from which we derive the "standstill" investment required to offset edr. We then compare the standstill investment to actual investment, which has been inadequate to offset edr. Even if a relatively optimistic schedule of future capacity addition is met, the ratio of 2011 to 2006 exports will be only 0.40-0.52. A more probable scenario is that, absent some change in Irani policy, this ratio will be 0.33-0.46 with exports declining to zero by 2014-15. Energy subsidies, hostility to foreign investment and inefficiencies of its state-planned economy underlie Iran's problem.
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