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President George W. Bush justifies the continued occupation of Iraq on the ridiculous premise that it might become a haven for Al Qaeda terrorists. Iraq is already a magnet for terrorist outfits and not one day passes without a market bombing, a new counter-offensive, or a suicide strike.

No terrorist group can plan a spectacular international operation in such a cauldron. If Osama bin Laden is caught by a wrong Iraqi faction, he may expect a brain-blasting staccato instead of a giddy eulogy. The same goes for his pretenders.

That's the reality.

In some ways, Iraq resembles the Lebanon of the Civil War years, where terrorist strikes were mainly localized. There were Sabra and Shatila, and the Beirut bomb blast of 1983, which killed 241 US marines and 60 French soldiers in their barracks.

When it comes to external operations, more stable havens are needed. Al Qaeda sought theirs in the Taliban Afghanistan while the Black September militants found them in a more hostile Jordan.

What "Mission Accomplished" in reality achieved was an intractable quagmire of bloodletting and a nightmarish prospect of global conflict.

Iraq is neither Vietnam, Lebanon nor Afghanistan rolled into one. It's much more than that. The reason lies in our fragile energy situation.

When Russia cut off gas supplies to Ukraine on Jan 1 over pricing disputes, there were shortages reported throughout Europe the next day, prompting Hungary, Austria, Slovakia and Serbia to contemplate gas rationing before supply was restored on Jan 3. One day alone sent shudders of industrial insecurity throughout Europe.

It sent another unmistakable message: Energy Geopolitics is the weapon of choice today. Whether couched in terms of pricing disputes or the threat of force, the global economy is held hostage to its whims.

The powder keg yet remains Iraq and any future US president will face a moral dilemma. A speedy exit strategy is desired - even morally imperative - but it has the potential to lit up raging fires throughout the world.

For the time being, violence in Iraq takes a steady toll on human lives while Iraqi oil output remains steadily below par. Much of the guaranteed oil flowing from the Middle East comes from Saudi Arabia, the Gulf States and Iran.

With violence continuing unabated, a vacuum created by a US withdrawal might leave an Iraqi government exposed to the ethno-religious geopolitics of the region.

That is why Saddam Hussein was useful to providing some stability to the Middle East. At the height of power, he was propped by US support, European transfer of nuclear and missile technologies, and Soviet arms.

The present mess started long back.

Now, will a US pullout bring stability to the Middle East? Also realistically, does a continuing occupation of Iraq provide stability? The mounting US internal and external debt alone is bringing the wolf to the door; in fact many doors, and they are met with funereal cries in American and Iraqi households.

There can be no exit strategy without stabilization and the omens don't look good.

Apart from outward hostility towards the US presence, Sunni-ruled Gulf States, and in particular Saudi Arabia, are worried about the new Iraq - it is encouraging their own restive Shi'ite populations, long discriminated as they once were in Iraq. The current power-sharing formula in Baghdad - even if it succeeds - will face external pressures.

This crazy drama has already begun. Sunni leaderships are tacitly allowing the flow of funds, arms and militants to battle US soldiers and Shi'ite militants despite knowing the dangers of an Iranian intervention once the US pulls out. This incipient proxy war may spill into neighboring borders.

With hardline president Mahmoud Ahmadinejad at realm, Tehran may view the current situation as an opportunity to realize its revolutionary pan-Islamic vision throughout the Middle East.

Ahmadinejad's recent sabre-rattling towards Israel was more calculated than reckless, more dependent on the energy weapon than nukes or Shahab-3 missiles, though these can be used when the Axis of Fanatics play their end game.

Oil is now hovering around $64 per barrel. Russia's Gazprom seems to have got the $230 per 1,000 cubic meters of gas it demanded out of Ukraine, compared to the $50 rate last year. Expect more tensions on that front alone.

But that front has long become global. Energy geopolitics has becomes energy warfare. The epicenter remains the Middle East, with no shortage of protagonists to lit further sparks.

Benjamin Netanyahu, who might eventually take over from the ailing Ariel Sharon, is one of them. He is both ex-commando and ex-MIT. With such combined genius, and hints of a pre-emptive strike against Iran, expect $75 per barrel in no time.

Ahmadinejad needs no such accreditation and is proving to be the shrewder of the two. He is playing the maximalist oil, Palestine and "destroy Israel" cards for further maneuvers in the region. The Mullahs of Tehran can expect populist sympathy from the Islamic world, and apprehension among neighboring Sunni leaderships and Israel over a nuclear Iran that can only be spawned in an energy starved world.

A pre-emptive strike by either the US or Israel may shoot the price of oil above $100 overnight. Iran is a major supplier of oil to China, the second largest economy and one without much of a strategic petroleum reserve. Currently, it is facing a cold, winter spell.

If the Chinese economy suffers, it will take down the global economy. That's called détente economics.

The most Bush can do now is refer Iran to the UN Security Council with Russia abstaining on a sanctions resolution. China is being lobbied for a similar gesture.

You can blame the current situation on Bush's bizarre foreign policy. It's axis of evil denunciations handed Iran not to moderate, pro-Western Iranians - when there was a real chance - but to the minority of hardliners led by Ahmadinejad. And it was creating a threat out of Venezuelan president Hugo Chavez when none existed.

It is too dangerous to embark on regime changes in a world without much of an energy cushion. US presence in Iraq ensures an explosive sort of détente, which, in French can aptly refer to the trigger of a gun.

If the US Army leaves without a stable Iraqi government in place, the triggers may be pulled in all directions. If a proxy war breaks out, the Shi'ites may grant greater autonomy to the Kurds, to focus on Sunni militias. The Turks maybe tempted to intervene.

Either way one looks at it, there are multiples tensions emerging over energy.

With or without a US pullout, proxy war or not, Tel Aviv and Tehran are fueling further regional tensions. An Osirak-style adventure will destroy any hopes of a stable Iraqi government and tilt the lingering sympathies of pro-US Shi'ite leaders towards Tehran.

With this backcloth, neighboring regimes in Central Asia may undergo upheavals as well, making geopolitical zigzags out of regional pipelines being laid down or on the drawing board. The consequences may depend on how well Washington accommodates itself with Moscow. The US needs a stable Europe for backup and support in any Middle Eastern, Asian, or African engagement. All of these areas are ripe for conflict as oil and gas reserves continue to be gobbled up.

Russia is also part of a power alignment with China and has shared interests with Iran. China has also formed economic relationships with India, Nigeria, and Venezuela (and most recently an opening of talks with the new Bolivian President). Russia may not be too happy with China's competing energy alliances, but it has an historic countervail in India, which, has succeeded in keeping dozens of Russian armaments factories running since the collapse of the USSR. Pakistan is caught right in between. If the energy situation gets worse, Pakistan may start another Kashmir adventure to divert the anger of a hungry population, and serve the geopolitical needs of China to pin India down.

China, on the other hand, will have to deal with maneuvers against its (more prosperous) side of the Amur River while Russia worries about the million or so Chinese camped in Siberia.

The United States, Russia and China will subject Central Asia to conflicting pulls. In fact, hardly a developed space on this planet will be unscathed by energy-related tensions.

In this geopolitical chess game, China is now placing another pawn on the board with its decision to divest itself of some of its dollar investment. Given the amount of US debt China holds, that could indeed deter the Bush administration from precipitous actions like regime change. China can also exert pressure on the central banks of Southeast Asia - its growing zone of influence - to do likewise.

How things shape up in the near future may depend on growing energy tensions, gradual economic consequences, and military escalations. In the meantime, Japan might go nuclear and the two Koreas might unite. There is a clear and present danger here of the first IRBM attack on another nation.

Expect superspikes of $200, $300 and $380 per barrel when that happens.

Further multiple and overlapping forces may reach fission point and blow the current international structure out of shape, bestowing greater powers to the US, EU, Russia, China and India, based on their military, economic and demographic might, and their geographic depth. Japan might be part of the alignment. Oil supplies and industrial manufacturing may concentrated in these major powers to achieve global economies of scale.

When this happens, expect social anarchy and varying degrees of conflict worldwide. Draconian "anti-terror" laws, with sophisticated surveillance systems are already being quietly implemented all over the world and these would be "incidentally" helpful in curbing riots, anarchy and profiteering. They will serve the "stabilizing" dictates of power blocs. There is nothing intrinsically new in this.

The social anarchy that followed the currency crises in Argentina and Indonesia during the past decade can be extrapolated in an energy gutted world. International bodies like the IMF or the World Bank will be dependent on these major powers to stabilize the situation. Minor wars will be relegated to diffuse major showdowns. That's how it works.

Energy warfare may benefit energy corporations in the short-term but the biggest winner under any situation will be the global armaments and surveillance industry. Expect a more militaristic world if this nightmare unfolds.

Solutions?

1) Speed up the implementation of an alternative energy infrastructure now. Those who argue over its "economies of scale" will only offer tyranny in the age of energy warfare. There is a bewildering array of options available, from coal-powered IGCC stations to ethanol-powered cars. If ethanol is not cost-effective, tell it to the hundreds of millions of drinkers and drunkards who imbibe them daily in vintage wines, Jack Daniels, and moonshine. The governor of New York wants more ethanol or biodiesel-powered cars on the road. Venture capitalists are wasting no time in testing out which individual ingenuity or corporate R&D offers the best returns.

There is still solid hope if we act now.

2) If the world wants the Americans out, then a pan-Arab stabilization force should be placed in Iraq. It will still have to include Iran and Syria, regimes hostile to the Gulf Arab states and Riyadh. Instead of stabilization, there is a real possibility here of a regional war spreading from Iraqi soil. The Iraqis are capable of sorting things out themselves. They take immense pride in their shared Babylonian, Mede and Persian heritage. Their biggest problem would be the Bedouins on a Camel and the Mullahs of Tehran. Neither party would lose this chance to turn Iraq into a theocracy.

That might include another solution.

3) Regime change in Riyadh. Much of the Islamic world is already sick of Wahhabi intolerance, and may accept a more benign Hashemite line on the royal throne. The Hashemites indeed ruled Saudi lands till British skullduggery handed it to the House of Saud in 1927. This solution may also provide some lebensraum to Palestinians further east of the West Bank and some kind of joint sovereignty - or a cultural sovereignty - between them and the Israelis in the Occupied Territories.

Realpolitik is indeed a brutal business. (The authors are just framing logical scenarios)

If these fail.

4) Carve up Iraq into Shi'ite, Sunni and Kurdish states. It is a partly viable solution. Even under Saddam, these three parties didn't quite get along very well. Turkey may have to be reigned in. A Shi'te entity may be mildly pro-US but religious provocations from the Sunni Arab world may, again, tilt it towards Iran. Problematically, there are also an intermixing of ethnic groups across Iraq, and significant intermarriages between those groups. Carving up Iraq into three states would leave minorities in each state, as well as significant portions of a population that would not fit anywhere.

A world lit by fire

Unless we sort out our energy needs now, there will be no solution once a graduated global conflict begins. If Robert Aumann, the Game Theorist who co-won the Nobel Prize in Economic Sciences last year, can't find a solution to the Palestinian problem for another 80 years, political answers to the looming energy crisis will tax all of IBM's Blue Genes.

There is some parallel here to events leading up to the Great Depression, with one major difference. For the past 80 years, we have had enough oil to power the engine of modern growth.

Now, that oil is finite, whether it has peaked or not. Without alternative sources of energy, the dragon is emerging out of the Pandora's Box.

If you look at the history of both world wars, there was little in terms of deliberate planning. There were sparks like the murder of Archduke Ferdinand in Sarajevo, resulting in the German occupation of Belgium to outflank a bellicose France, before the French could overrun the Rhine. It was Britain which first declared war in 1914 (Norman Davis). Even today, historians debate why wars are sparked from a particular event in the face of prior provocations.

Once the cascades of fire fall, think of what would happen if Turkey invades a semi-independent Kurdistan, bringing Nato right to the gates of Tehran while the Iranians overrun Riyadh? Russia and China may step in.

You can forget about the $380 superspike at this stage, for you would be in the day after tomorrow.

Written by Mathew Maavak [send him email], who had studied crisis management, media crisis, propaganda and psychological warfare at the University of Leeds, UK.  He is currently a visiting fellow at Jakarta's Centre for Strategic and International Studies.  Find more of Mathew's writings at http://www.maavak.net/ and http://www.populistamerica.com/