This is fascinating stuff. It was posted on a Neuro-ophthal list server earlier this week.
Stratfor: Geopolitical Intelligence Report - September 1, 2005
New Orleans: A Geopolitical Prize
By George Friedman
The American political system was founded in Philadelphia, but the
American nation was built on the vast farmlands that stretch from the
Alleghenies to the Rockies. That farmland produced the wealth that
funded American industrialization: It permitted the formation of a
class of small landholders who, amazingly, could produce more than
they could consume. They could sell their excess crops in the east and
in Europe and save that money, which eventually became the founding
capital of American industry.
But it was not the extraordinary land nor the farmers and ranchers who
alone set the process in motion. Rather, it was geography -- the
extraordinary system of rivers that flowed through the Midwest and
allowed them to ship their surplus to the rest of the world. All of
the rivers flowed into one -- the Mississippi -- and the Mississippi
flowed to the ports in and around one city: New Orleans. It was in New
Orleans that the barges from upstream were unloaded and their cargos
stored, sold and reloaded on ocean-going vessels. Until last Sunday,
New Orleans was, in many ways, the pivot of the American economy.
For that reason, the Battle of New Orleans in January 1815 was a key
moment in American history. Even though the battle occurred after the
War of 1812 was over, had the British taken New Orleans, we suspect
they wouldn't have given it back. Without New Orleans, the entire
Louisiana Purchase would have been valueless to the United States. Or,
to state it more precisely, the British would control the region
because, at the end of the day, the value of the Purchase was the land
and the rivers - which all converged on the Mississippi and the
ultimate port of New Orleans. The hero of the battle was Andrew
Jackson, and when he became president, his obsession with Texas had
much to do with keeping the Mexicans away from New Orleans.
During the Cold War, a macabre topic of discussion among bored
graduate students who studied such things was this: If the Soviets
could destroy one city with a large nuclear device, which would it be?
The usual answers were Washington or New York. For me, the answer was
simple: New Orleans. If the Mississippi River was shut to traffic,
then the foundations of the economy would be shattered. The industrial
minerals needed in the factories wouldn't come in, and the
agricultural wealth wouldn't flow out. Alternative routes really
weren't available. The Germans knew it too: A U-boat campaign occurred
near the mouth of the Mississippi during World War II. Both the
Germans and Stratfor have stood with Andy Jackson: New Orleans was the
prize.
Last Sunday, nature took out New Orleans almost as surely as a nuclear
strike. Hurricane Katrina's geopolitical effect was not, in many ways,
distinguishable from a mushroom cloud. The key exit from North America
was closed. The petrochemical industry, which has become an added
value to the region since Jackson's days, was at risk. The
navigability of the Mississippi south of New Orleans was a question
mark. New Orleans as a city and as a port complex had ceased to exist,
and it was not clear that it could recover.
The Ports of South Louisiana and New Orleans, which run north and
south of the city, are as important today as at any point during the
history of the republic. On its own merit, POSL is the largest port in
the United States by tonnage and the fifth-largest in the world. It
exports more than 52 million tons a year, of which more than half are
agricultural products -- corn, soybeans and so on. A large proportion
of U.S. agriculture flows out of the port. Almost as much cargo,
nearly 17 million tons, comes in through the port -- including not
only crude oil, but chemicals and fertilizers, coal, concrete and so
on.
A simple way to think about the New Orleans port complex is that it is
where the bulk commodities of agriculture go out to the world and the
bulk commodities of industrialism come in. The commodity chain of the
global food industry starts here, as does that of American
industrialism. If these facilities are gone, more than the price of
goods shifts: The very physical structure of the global economy would
have to be reshaped. Consider the impact to the U.S. auto industry if
steel doesn't come up the river, or the effect on global food supplies
if U.S. corn and soybeans don't get to the markets.
The problem is that there are no good shipping alternatives. River
transport is cheap, and most of the commodities we are discussing have
low value-to-weight ratios. The U.S. transport system was built on the
assumption that these commodities would travel to and from New Orleans
by barge, where they would be loaded on ships or offloaded. Apart from
port capacity elsewhere in the United States, there aren't enough
trucks or rail cars to handle the long-distance hauling of these
enormous quantities -- assuming for the moment that the economics
could be managed, which they can't be.
The focus in the media has been on the oil industry in Louisiana and
Mississippi. This is not a trivial question, but in a certain sense,
it is dwarfed by the shipping issue. First, Louisiana is the source of
about 15 percent of U.S.-produced petroleum, much of it from the Gulf.
The local refineries are critical to American infrastructure. Were all
of these facilities to be lost, the effect on the price of oil
worldwide would be extraordinarily painful. If the river itself became
unnavigable or if the ports are no longer functioning, however, the
impact to the wider economy would be significantly more severe. In a
sense, there is more flexibility in oil than in the physical transport
of these other commodities.
There is clearly good news as information comes in. By all accounts,
the Louisiana Offshore Oil Port, which services supertankers in the
Gulf, is intact. Port Fourchon, which is the center of extraction
operations in the Gulf, has sustained damage but is recoverable. The
status of the oil platforms is unclear and it is not known what the
underwater systems look like, but on the surface, the damage - though
not trivial -- is manageable.
The news on the river is also far better than would have been expected
on Sunday. The river has not changed its course. No major levees
containing the river have burst. The Mississippi apparently has not
silted up to such an extent that massive dredging would be required to
render it navigable. Even the port facilities, although apparently
damaged in many places and destroyed in few, are still there. The
river, as transport corridor, has not been lost.
What has been lost is the city of New Orleans and many of the
residential suburban areas around it. The population has fled, leaving
behind a relatively small number of people in desperate straits. Some
are dead, others are dying, and the magnitude of the situation dwarfs
the resources required to ameliorate their condition. But it is not
the population that is trapped in New Orleans that is of geopolitical
significance: It is the population that has left and has nowhere to
return to.
The oil fields, pipelines and ports required a skilled workforce in
order to operate. That workforce requires homes. They require stores
to buy food and other supplies. Hospitals and doctors. Schools for
their children. In other words, in order to operate the facilities
critical to the United States, you need a workforce to do it -- and
that workforce is gone. Unlike in other disasters, that workforce
cannot return to the region because they have no place to live. New
Orleans is gone, and the metropolitan area surrounding New Orleans is
either gone or so badly damaged that it will not be inhabitable for a
long time.
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