The High Price of Oil (book review)
Blood and Oil: The Dangers and Consequences of America’s Growing Dependency on Imported Petroleum by Michael T. Klare. Metropolitan/Henry Holt; 265 Pages; $25
Oil: Anatomy of an Industry by Matthew Yeomans. The New Press; 246 Pages; $22.95
In April, I traveled to Venezuela to talk to people about oil (of which Venezuela has the world's sixth-largest reserve), but the intellectual I visited wanted to talk about science fiction. "Have you seen 'Mad Max'?" he asked earnestly, nodding his prematurely white Vandyke beard. "That's the world without oil." We were seated in an airy room on a comfortable leather couch, surrounded by colorful folk art. "Mad Max" seemed very far away, but that was not how the academic saw it.
In 50 years, he said, the world's oil reserves would be depleted. "What is Venezuela's Plan B? What is the world's Plan B?" The academic grew animated, emphasizing his childlike proportions and making him seem like an alien prophet in a Spielberg film. "The only Plan B is to take the reserves by war! We are at the zero hour and we've entered a science fiction world."
The academic went on to say that the villain of this sci-fi world was the United States, home to 5 percent of the world's population and gobbler of a quarter of the world's petroleum.
The academic is not alone. Around the world, the image of the United States as an oil-hungry military monster has gained credibility: There is, of course, the war in Iraq, where a confused rationale for invasion has led many to conclude that troops are really there for oil. In the Caspian region, the United States has committed hundreds of millions of dollars to train Azerbaijani and Georgian soldiers to protect oil pipelines. Then there are the U.S. troops sent to guard oil pipelines in Colombia at a cost of nearly $100 million a year. Last year, an unsubstantiated rumor that the United States was sending Marines to guard pipelines in Nigeria got enormous attention in the Nigerian newspapers before it was revealed to be no more than a rumor. But this year, the United States has announced that its Navy will protect oil installations in the Gulf of Guinea, and unnamed officials have told the Wall Street Journal that the United States hopes to "secure" Nigeria's oil fields. And so, what seems like science fiction one year seems to be reality the next.
In March, Venezuela's pugnacious president, Hugo Chavez, made a speech warning the United States not to invade Venezuela for oil because it would trigger a "hundred-year war." This unlikely scenario apparently did not seem outlandish to many Venezuelans. Chavez's positioning of himself as the defender of Venezuela's oil against Yankee designs undoubtedly helped him survive a recent recall. (No doubt he won some points by declaring Bush a pendejo -- a profane term for "idiot" -- in that same speech.)
I left the academic's lovely house, skirting his empty swimming pool, and was soon in a taxi skimming through the sleek freeways of Caracas. We drove past molting modernist skyscrapers from the 1970s, past the preposterous green-mirror-sided building that squats like a robot toad, and past the blue Pepsi ball, revolving like a more hospitable planet. On the distant hills around the city sit rabbit warrens of slums, which slump like wet papier-mache in the rains every year, killing their inhabitants.
The promised future has not worked out for Venezuela, and now the dispossessed have turned their fury northward, toward the United States, that global embodiment of the oil-hungry future: the world's Maddest Max. Along both sides of the highway, graffiti artists have been hard at work, writing hundreds of times: Yankee Go Home! No Yankee Intervention! Gringo Fuera! The landscape became bleak, gray and hopeless as the graffiti went on for more than a mile. In Venezuela, it appeared, science fiction was gaining the upper hand. But in the United States, that world seems remote, even ridiculous. Our gas stations are still decorated in the bright colors of children's birthday parties. The conflicts fueled by oil in Colombia, Sudan, Nigeria, Chechnya and even Iraq seem far afield.
But is the zero hour already upon us?
No, say two recently published books, but it will be soon if Americans continue their high rate of oil consumption and their tendency to use military force to protect that oil supply. "Blood and Oil: The Dangers and Consequences of America's Growing Imported Petroleum Dependency" is by Michael Klare, a professor of political science at Hampshire College. One of Klare's previous books, "Resource Wars," convincingly made the case that many world conflicts are battles over increasingly scarce resources and that these conflicts will proliferate in the future.
Now Klare has turned his attention to oil and the intervention policies of the Bush administration. He lays out a bleak scenario of rapidly escalating and expensive overseas wars if the United States follows its current path. As Klare puts it: "Ensuring a continued supply of foreign petroleum will require an ever-increasing payment in American blood."
The second book, journalist Matthew Yeomans' "Oil: Anatomy of an Industry, " attempts to survey the complex relationship between the American economy and oil. Yeomans reaches a conclusion strikingly similar to Klare's: "Under the current path chosen by the Bush administration, America had made it clear that any threat to oil security is also a threat to its national security and it will protect global oil supplies by any means necessary. ... The net result may ensure America gets the oil it needs but it is a policy that makes America secure, not safer. More U.S. troops will perish protecting oil and the hatred of America will extend far beyond the ravings of Islamic extremists."
The two books vary in their approaches. Klare's, the more satisfying of the two, is a steady poli-sci elaboration of U.S. foreign policy of the past 60 years as viewed through the lens of oil. "Slowly but surely," Klare writes, "the U.S. military is being converted into a global oil-protection service." His book is elaborately sourced and -- if you accept his premise -- dismayingly convincing. (With it you will be amply equipped to lead the conversation at the most strenuous Bay Area cocktail party.)
Yeomans' book is less original. It's more a survey of recent writings in the popular press on oil and has a less focused argument. Also, Yeomans' decision to avoid footnotes and provide instead a narrative of his sources at the back of the book creates confusion about where his statistics come from, undermining his arguments.
What is striking about both books, however, is that they argue that the United States can avoid the petro-military dystopia if Americans (a) get Bush out of office, (b) make a concerted effort to create and exploit alternative fuels, and (c) -- in Klare's words -- "reduce American dependence on imported oil and ... sever the links between our energy behavior and our overseas security commitments."
In this, both works somewhat reflect the Kerry-Edwards position on energy. As Kerry reportedly said at the Democratic convention, "We value an America that controls its own destiny because it's finally and forever independent of Mideast oil ... our energy plan will invest in new technologies and alternative fuels and the cars of the future, so that no young American in uniform will ever be held hostage to our dependence on oil from the Middle East."
There's no doubt that Bush and company's overblown war rhetoric coupled with the invasion of Iraq has made much of the world afraid of the United States. Around the globe -- from Spain to Venezuela to Indonesia -- people are choosing their governments based upon their hatred and fear of U.S. policies.
The Bush-Cheney energy plan has done nothing to allay those fears. As both Klare and Yeomans point out, the Bush administration's 2002 National Energy Policy forecasts that the United States will import two-thirds of its oil within 20 years, causing "increased dependency on foreign powers that do not always have America's interests at heart." While that phrasing appears bland, foreigners (including the Venezuelan academic) have interpreted this as a threat to governments that don't go along with the American agenda.
The Bush policy (which was developed with the help of a panel of industry experts whose names the administration has gone to court to keep secret) sees salvation in getting more oil from more places -- the Arctic, off the coast of California, Africa, Russia and the Caspian. Cheney himself has famously scoffed at the idea of conservation, while Bush has endorsed spending on alternative fuels. Conservative columnists have taken the plan further, suggesting that OPEC should be abolished so that oil is cheaper. "Why must we tolerate collusion abroad against a vital U.S. interest, especially by oil- producing countries whose political existence depends to a large extent on U.S. military power?" wrote Lewis Lehrman in the Weekly Standard last year.
Much as it claims to be pragmatic and hard-nosed, the so-called conservative plan seems infected by a sort of wishful thinking, even a kind of empire dysfunction, in which the United States is at the same time all- powerful and a victim of pip-squeak regimes and cartels.
To be fair, oil-related military spending is not the sole province of Republicans. The Clinton administration spent roughly $50 billion a year on military involvement in the Persian Gulf during what most Americans perceived as peacetime. (During 1994, by comparison, the United States spent $45 billion on imported oil -- from all sources.) Both Democrats and Republicans have accepted the weird calculus of defense spending for oil protection, all the while clamoring for cheaper gasoline and swearing that they will not raise gasoline taxes.
But what is this military spending if not a hidden cost of gasoline? The Bush administration has taken this acquiescence as a green light to raise defense expenses to enormous heights; Klare estimates that the United States is spending $150 billion this year in oil-related military excursions after we shelled out $132 billion on imported oil last year. In other words, in the past 10 years the amount of money Americans are spending on oil and oil defense combined has nearly tripled, but the cost of gasoline has risen only slightly. As energy consumers we have gotten used to eating a virtually limitless meal -- Yeomans writes that the average American consumes 690 gallons of gas a year -- but we leave the table without paying the full tab. You have to wonder exactly who it is who does not "have America's interests at heart."
Meanwhile, the so-called liberal response to oil, elaborated by Kerry, also seems infected by wishful thinking. There is no question that we do need to invest more -- much more -- in alternative fuels. But to make those desirable we also need to discourage the use of oil: Consumers need to pay something closer to what it really costs so that we can make more rational choices for the future. We consumers need to feel the pain when we buy gas. In a culture that thinks of itself as "Born to Run," this will be an unpleasant process. If the tax scheme is managed poorly, it will be more unfair to the working poor, who often have to commute long distances in crummy old clunkers to get to work, than to well-heeled drivers of luxury SUVs. Klare suggests that a tax could pay for the transition to other fuels while reducing the "blood tax" in military protection of oil.
Even so, there is no guarantee that driving a Prius, taking public transportation or cutting back on vacations or transportation-heavy products such as baby lettuce will make our destiny separate from that of the Middle East. In this era of globalization, our destiny is tied up in Mexico, in Canada, in shoe factories in Vietnam, call centers in India and in the places in Africa where AIDS has hit the hardest.
Besides, we've spent 60 years encouraging the Middle East to depend on us. When Franklin D. Roosevelt met with King Saud in 1945, he agreed to trade U.S. money and military protection for Saudi oil. But one of his goals, according to historian Michael A. Palmer, was to fund "increased purchasing power and greater economic and political stability." In short, FDR hoped that oil could create a sort of New Deal in Saudi Arabia, which is not so different from Bush's hope that oil could foster a democratic regime in Iraq. Klare documents how self-interest has dominated our approach to the Middle East, but not how our missionary impulses, often doomed by naivete, have made our policies unpredictable.
In any case, the whole idea of becoming independent of Middle East energy is impossible. As long as there are regimes capable of pumping out oil in the Middle East, and as long as there are customers for petroleum in the United States, we will be buying oil from the Middle East. To say otherwise is like claiming you can eat clam chowder without touching a clam. The Middle East supplies about 20 percent of the oil in the world market; in the future it will inevitably supply more. When Americans buy oil, we buy from the market, where all the oil is mixed together, without control over which country or region it comes from. This strategy has been enormously successful for the United States, as it has essentially prevented oil producers from embargoing us, which has, to some extent, separated our foreign policy objectives from energy needs.
Klare suggests that the United States must repudiate the Carter Doctrine and stop thinking that we have a responsibility (or right) to protect oil fields and oil shipping lanes. Doing this will require that other oil- consuming countries change their militaries and their consumption. (And there's no suggestion that either party is ready to take this drastic step.) Countries such as China, for example, will be forced to form large navies to protect their own oil tankers. Perhaps an organization resembling NATO will arise to escort tankers and pipelines. Regardless, the United States' place in the world will be changed.
But will any of this change the relationship between oil and conflict? Doubtful. As Yeomans points out, a World Bank study showed that oil-producing countries were 40 percent more likely to be involved in a civil war than countries without significant reserves. So whether it's Kerry's "young American in uniform" or villagers in Nigeria or rebels in the Indonesian province of Aceh, it seems likely that violence will continue as long as oil has value and people are willing to fight over the income. For people in those parts of the world, the zero hour is already here.
For the United States, though, there is still time to change the future, but it will require giving up our fantasy -- Democrats and Republicans both -- that the transition will be made of simple moral choices or isolation from the rest of the world. The next National Energy Policy should be hashed out by Congress in bipartisan public hearings until we have an actual plan, maybe a messy one, but a real strategy to carry us through the next decades.
The Venezuelan intellectual had a psychoanalytical take on the whole thing. "We have inhibitions about thinking about oil," he said. "Maybe because we're afraid of thinking about the sources of our lives."
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