Seizing Power: The Grab for Global Oil Wealth by Robert Slater (Bloomberg Press, $29.95)

Just when Goldman Sachs had you convinced that Wall Street would be the instrument of global doom, this excellent primer on the future of oil arrives to demonstrate that the specter of diminishing crude reserves could be just as lethal. And not just to the world economy.

The “petroaggressors” of Robert Slater’s new book aren’t the usual Middle Eastern suspects. “Seizing Power” lifts the veil on a major shift in the oil business that brings enormous wealth and power to relatively small dictatorships and represents another tool with which China, for one, has stolen a jump on the United States.

Slater, biographer of hedge-fund kingpin George Soros and former General Electric chief executive Jack Welch, lays out the history of the world oil markets from colonial speculation, to dominance by the massive oil conglomerates known as the “Seven Sisters,” through partial or complete nationalization by developing countries, and on to the current nervous state of flux. He does this with a wealth of statistics, and with case studies of big time petroaggressors, like Venezuelan President Hugo Chavez, and the more common corruption of the hoodlums at the helm of Chad, an African nation whose rulers skim off oil money and aid while its people languish in poverty.

The rise in oil prices in the middle of the last decade — coming after the Sept. 11 attacks and war in Iraq — gave the likes of Chavez even more of a stick with which to beat the West. “The petroaggressors had always been strident, flexing their muscles inordinately, making threats, or delivering ultimatums to the West,” Slater writes. “However, the new oil wealth pouring into their coffers gave them an even greater capacity to throw their weight around.”

Why? Because Western oil companies know the oil is running out — reserves may be played out within 50 years and certainly within a 100, writes Slater, quoting latest estimates. “‘When there’s a lack of oxygen,’” Slater quotes an oil analyst, “‘we all want the tank.’” So oil companies are forced to enter unstable political environments and to pay ever larger fees for doing so. The risks are enormous (though that hasn’t stopped oil companies making equally enormous profits. Yet.)

A couple of cases in point:

Bolivia sent its military to take control of its oil fields in 2006, forcing their international operators to renegotiate deals in the government’s favor.

Venezuela gave its national oil company majority control in its oil fields in 2007, securing $31 billion in revenues from projects previously operated by companies including Exxon and Chevron.

Russia engineered a 2008 takeover of a BP joint-venture on its territory. The company could do little about it, as 25 percent of its output came from Russia and it needed to keep the pipelines open.

“The power shift” — away from Western companies and governments to Russia, Venezuela, Iran and other petroaggressores — “will lead to violence in the short-term,” Slater writes, “as nation fights nation for the last dregs of a fossil fuel that will eventually be used up.”

The fight, in effect, has already begun. In countries where Western oil companies decline to take the risk of investing, China steps in to slake its growing thirst for oil. China invests in developing countries’ oil industries, and also offers massive military and economic aid packages to sweeten the deal and give the economy a double boost. That’s why a hotel room in Luanda, the capital of Angola, the biggest supplier of oil to China, these days costs the same as a room overlooking Times Square.

At the heart of Slater’s argument is the need for alternative sources of energy. He notes that at the height of gasoline price rises in 2008, Americans reined in their consumption, driving 11 billion fewer miles in March that year than in the same period a year earlier. But he adds that Americans might have kept on motoring had the mortgage crisis not crashed the economy in general. In other words, we may be so addicted to oil, we’d rather send our cash to Caracas than drive a Prius.

That flies in the face of the governing idea of oil pricing over the last four decades of the 20th century. The Organization of the Oil Producing Countries (OPEC), the cartel representing the biggest crude pumpers, took the line that prices could be regulated by drilling either more or fewer barrels a day. Saudi Arabia, the most powerful OPEC member, engineered this method so that oil would never rise high enough that Western nations would be impelled to look for alternative energy sources.

But just when non-OPEC producers like Russia took center stage, we showed that we didn’t much care about the price. Meanwhile, alternative energies are portrayed either as counterproductive (ethanol inflates food prices), risky (think nuclear, think Three Mile Island), or untested and incapable of meeting demand efficiently (wind and solar power).

No doubt many readers will shed few tears for our poor oil companies, as they contend with troublesome pseudo-socialists like Chavez. But Slater hammers home the point that Chavez and his ilk don’t pass on the wealth to their people. And though world-domination by a few Western oil companies may have been inequitable, it was at least orderly. Now, “quite the opposite is true,” he writes. “It is instability that characterizes the new oil order.”

Maybe there’s still time to test drive that hybrid.

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