Oil and American politics

October 8, 2005

NOTE: Images in this archived article have been removed.

“This is not about oil”, said Donald Rumsfeld, President Bush’s secretary of defence, as America prepared to invade Iraq. Few objects have had greater priority in the Bush administration’s public-relations campaigns than the insistence that the United States invaded, not for any basely selfish or self-aggrandising reason but for one of a series of high-minded motives: to spread American ideas of democracy, to get rid of Saddam Hussein’s weapons of mass destruction, or to take Saddam’s boot off the throats of the Iraqi people.

There is no need to disbelieve any of those idealistic motives. But the fact is that the Bush administration’s foreign policy is indeed “about oil”.

A problem of supply

Culturally, the oil industry and oil executives are one of the strands – along with “American exceptionalist” neo-conservative intellectuals and social conservatives driven by traditional religious faith – that give the Bush circle its characteristic texture. George W Bush, like his father before him, is a Texas oilman, and like his father expanded his interests to include lucrative contacts with Saudi oilmen, including (amazingly!) multiple connections with the family of Osama bin Laden family (on this theme, see Kevin Phillips, American Dynasty: Aristocracy, Fortune and the Politics of Deceit in the House of Bush, 2004).

A powerful influence on both Bush presidents has been James A Baker III, a Houston energy industry superlawyer. The current vice-president and the most powerful figure in the administration, Dick Cheney, was chief executive of Halliburton, the most powerful company in the oilfield service industry (alongside Bechtel, another home for conservative Republican politicians like Reagan’s warring secretaries of state and defence, George Shultz and Caspar Weinberger). Until his fall, no Texan business mogul was closer to George W Bush than Kenneth Lay of Enron, a company which employed a number of other key members of the administration, including the cerebral Robert Zoellick.

Where conservative Republicans are concerned, it is not always easy to separate the domain of policy from the distribution of loaves and fishes, so it is not surprising that the Bush administration has doled out favours to the energy industry – not least in its decision to allow drilling in the vast, virgin Alaska Wildlife Reserve. More strategically, both Bush presidents have constantly fought for energy deregulation. They have achieved some major successes, including the piecemeal deregulation of the natural-gas industry and the Energy Act of 1992; the latter not only mandated the deregulation of electric power at the wholesale level, but also obliged utilities to carry privately-marketed utilities on their transmission lines.

Oil, or more precisely energy policy, has also been the driving force behind American foreign policy under the two Bushes, to a far greater extent than is fully understood – even in Europe, where exaggerated cynicism about American politics is not unusual. Abroad as well as domestically, the administration wants energy to be deregulated.

Many non-Americans have grown up with the idea that American power derives from unlimited reserves of cheap oil, coal and natural gas; the picture of an America which could afford to leave the lights on all night in the skyscrapers and drive SUVs to its hearts’ content dies hard. In fact, the United States is now dangerously dependent on imported energy. To take just two examples: by 2004 US oil production, at 5.4 million barrels a day, was only slightly ahead of the then 5 million barrels in the British and Norwegian sections of the North Sea; in the same year, the US’s natural-gas reserves (189 billion cubic feet) were not much more than 10% of Russia’s.

The point is easily grasped by a simple historical timeline. In 1940, the United States produced over two-thirds of all the world’s oil and natural gas (Saudi Arabia, in contrast, had drilled its first successful well in the previous year, and as late as 1946 Saudi production was only 3% of the US’s):

* in the late 1940s, for the first time, the US began to import oil
* in the 1950s, 10% of US oil consumption was imported
* in the 1960s, 18% of US oil consumption was imported
* in 1972, US oil production began an irreversible decline
* in 1973, the share of imports in US oil consumption reached 30%
* in 1976 imports reached 40%
* by 2000, the year in which George W Bush was elected, imports reached 53%
* by 2004, the end of George W Bush’s first term, imports were 57% of consumption
* the administration’s own experts warn that by around 2025, the United States will have to import more than two-thirds of its oil and gas; current trends suggest that point may be reached even earlier

Conservative politicians in the United States don’t like to talk about these facts, and conservative columnists rarely mention them. After all, what if a “lone superpower” runs out of gas, like a stranded humvee?

The path to a new policy

It would be a mistake, however, to assume that Bush administration insiders do not understand the implications of the nation’s tank running out. On the contrary, they were already making energy policy one of their highest priorities even before George W Bush became president in 2000. But unlike Jimmy Carter, who was president in 1977-1980 when the problem first appeared, the conservatives have no intention of solving the energy crisis by wearing a hair-shirt.

The neo-conservative brotherhood was calling for a military build-up to assure American “global dominance” as early as 1992, when Paul Wolfowitz prepared for then defence secretary Dick Cheney a Defence Planning Guidance document. The need to build up American military power to protect American (and in theory other western) access to middle-eastern oil was implicit in the Project for a New American Century, signed by leading conservatives (including Cheney, Donald Rumsfeld, Wolfowitz and others) in June 1997.

More than two years on, 13 September 1999, Bush made a major speech at the Citadel, the south’s military academy, in Charleston, a location no doubt carefully chosen for its associations with militant conservatism. His call for a “new architecture of American defence” was for nothing less than a revolution: the replacement of cold-war priorities by “agile, lethal, readily deployable” forces that could be projected over long distances in the shortest time.

Within weeks of George W Bush’s election in November 2000, the National Security Council (NSC) staff in the White House were directed to cooperate with the National Energy Policy Development Group in producing a report, duly published on May 17 2001 (see Jane Mayer, “Contract Sport: What did the Vice-President do for Halliburton”, New Yorker 16-23 February 2004).

The item in the report that attracted most press attention was the proposal to allow drilling for oil in the Alaska National Wildlife Reserve. Far more significant was the chapter about “strengthening global alliances”. That meant increasing imports. In effect American military power was to be “projected” so as to induce middle-eastern states to double their production from 22.4 to 45.2 barrels a day by 2025.

Quite apart from the propriety of the United States dictating the fundamental economic policy of supposedly sovereign states, it is far from certain that middle-eastern states are capable of doing so. For example, there is widespread suspicion that Saudi Arabia, which claims the world’s biggest reserves, has overstated those reserves, just as other countries such as Nigeria have almost certainly done.

The NSC acknowledged the need to put pressure on “rogue states” (including Iraq and Iran) to increase American access to their oil production, and also on the possibility that it might be necessary to use military force to seize oilfields or other installations. The sensitivity of American policymakers to the fact that something like two-thirds of all American oil imports passes through the narrow Straits of Hormuz at the entrance to the Persian Gulf cannot be exaggerated.

“In the middle east and Southwest Asia”, the document said, “our overall objective is to remain the predominant outside power in the region and preserve US and western access to the region’s oil.” (Given the Bush Administration’s disregard for the national interests and the views of others, “western” may have been a afterthought or a sop to Europe and Japan.) What was clear from the document was that the United States was preparing forces that could be used to seize oil pipelines, oilfields and oil installations such as refineries by force if necessary, in – among other places – Iraq.

As Michael T Klare writes in a book to which I am greatly indebted – Blood and Oil: The Dangers and Consequences of America’s Growing Dependency on Imported Petroleum (Henry Holt, 2004: “it is getting harder to distinguish US military operations designed to fight terrorism from those designed to protect energy assets”.

American policy has inevitably relied heavily on the alliance with Saudi Arabia, a country with which the current president, his father, and his vice-president all have had intimate oil business connections. Excessive dependence on the kingdom, however, is deeply unpopular, not only with Democrats and liberals, but also with many of the administration’s own conservative loyalists.

Saudi Arabia is not only a potentially unstable politically, with growing unemployment and potential Shi’a resentment of the Wahhabi House of Saud. It is a bitter enemy of Israel, a sensitive matter for many neo-conservatives in particular. And although a long-established ally, it has poured money into the support of the mullahs and madrasas which acted as the recruiters and the academies for terrorists, including many of the 9/11 bombers, most of whom were Saudi citizens.

When news of a Washington Post report saying that an employee of the Rand Corporation had called Saudi Arabia “the most dangerous opponent” of American interests reached the state department, the then secretary of state Colin Powell called King Fahd within minutes; President Bush was on the phone later the same day.

The Bush administration would dearly love to be less dependent on Saudi Arabia. That is part of the motivation for the Iraq war, though distaste for Saddam Hussein and the naive assumption that the invading Americans would be greeted with kisses and roses as the bringers of democracy were genuine too.

A widening arc

The desire to reduce dependence on Saudi Arabia also explains why the administration has tried desperately and will go on trying to find alternative sources of oil imports: in Africa, in Latin America and above all in the ex-Soviet Caspian region. This will not be easy. A high proportion of middle east oil is available for export until the region begins to allow economic development for the benefit of its own people, but most alternative sources of supply export only a small part of their production. Moreover, potential supplier-countries like Kazakhstan, Nigeria, Venezuela and Angola are hardly models of political stability; and the US faces stringent competition for oil supplies from energy-hungry China.

Among the most important recent sources for understanding the connection between US energy policy and its geopolitical ambitions is:

Michael T Klare, Blood and Oil: The Dangers and Consequences of America’s Growing Dependency on Imported Petroleum (Henry Holt, 2004)

The Bush administration cannot be blamed for wanting to take robust and effective action to address the immense strategic vulnerability that results from the widening gap between American energy production and American energy consumption. Given the immense shortfall the United States faces, any government that did not make this a high priority would be rightly blamed.

Where the administration has been at fault is in tackling this problem – as it tackles every other one – in an arrogant, unilateral way. Here as elsewhere it seems more concerned about the profits of American corporations, especially those of the corporations in which its friends and supporters have direct interests, than about the welfare of the American people, let alone anyone else. It would have been one thing to put the United States at the head of a coordinated, international effort to reduce dependence on carbon fuels; it is quite another to send American forces around the world – from Colombia to Uzbekistan, from Angola to the Persian Gulf – to oblige the world to meet an American demand for almost half the world’s oil supplies.

Americans as well as citizens of other countries should be concerned about the United States’s militarisation of its own, and the world’s, energy crisis. As recently as the second world war, the United States could present itself as the disinterested guardian of prosperity and justice for all. Today it prefers the posture of a “lone superpower” – understood as “a country that chooses to spends more on military power than anyone else”.

When such a national leadership seeks to retain a wildly disproportionate share of a dwindling world resource by force and the threat of force, refusing to make any serious effort to restrain its consumption of that resource, it is no surprise that it and the government it leads is far less attractive to others than the great, generous democracy of 1945.

Godfrey Hodgson is the author of More Equal than Others: America from Nixon to the new Century (Princeton University Press, 2004)

Godfrey Hodgson’s informed and insightful analyses of democracy in the United States have appeared on openDemocracy for four years. The first:

“Can America go modest?” (October 2001)

Among the latest:

“The Senate’s filibuster deal: only a truce in the culture wars” (May 2005)
“American media in the firing-line” (June 2005)
“Gimme five! US Republicans’ amoral minority” (June 2005)
“After Katrina, a government adrift” (September 2005)

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Tags: Activism, Geopolitics & Military, Politics