The Great Oil Fallac(ies)
April 30, 2013 7:14 AM   Subscribe

Does the US have a national interest in securing Middle Eastern oil? Economist John Quiggin thinks not, and argues that oil is a commodity like any other. Other scholars have questioned the conventional wisdom surrounding oil. Timothy Mitchell says that the problem with oil is not its scarcity, but its abundance, and we simply have too much oil. Eugene Gholz & Daryl Press argue that "American national security policy is based on a misunderstanding about U.S. oil interests. Although oil is a vital commodity, potential supply disruptions are less worrisome than scholars, politicians, and pundits presume."
posted by MisantropicPainforest (31 comments total) 9 users marked this as a favorite
 
All of which is irrelevant. The only thing that matters is that the monied interests funding US elections perceive US involvement in the Middle East to be in THEIR best interests. Therefore, we are there.
posted by ZenMasterThis at 7:19 AM on April 30, 2013 [5 favorites]


The US might not have an interest in securing Middle Eastern oil, but US oil companies do, and American foreign policy is serving their interests perfectly.

See also, the United Fruit Company and US Latin America policy.
posted by 1970s Antihero at 7:26 AM on April 30, 2013 [8 favorites]


How do these US oil companies influence policy? What are the mechanisms by which they exert their influence? What are the limits of their influence?

These are the questions that need to be engaged with before one can conclude that "C.R.E.A.M., ergo Halliburton caused the Iraq war."
posted by MisantropicPainforest at 7:31 AM on April 30, 2013


How do these US oil companies influence policy? What are the mechanisms by which they exert their influence?

Are you serious?
posted by DU at 7:38 AM on April 30, 2013 [10 favorites]


"Although oil is a vital commodity, potential supply disruptions are less worrisome than scholars, politicians, and pundits presume."

If we had a sensible domestic transportation system and policies to support its maintenance and expansion, we could say it like we mean it.
posted by ocschwar at 7:40 AM on April 30, 2013


DU, yes and this is something that both IR scholars and historians argue over.
posted by MisantropicPainforest at 7:41 AM on April 30, 2013


Oil isn't where the money is. Construction, service and maintenance contracts for oil extraction infrastructure, consultant positions and exploration are where the money is - the only rich man in a mining town owns the general store.

Iraq wasn't a war for oil. It was a war for oil infrastructure rebuilding contracts.
posted by Slap*Happy at 7:49 AM on April 30, 2013 [7 favorites]


Here is one example of state capitalism at work in securing US oil supply:
President Roosevelt's decision to aid Saudi Arabia precipitated a major policy debate within his Administration. While the American concession in Arabia had originally been granted without Washington's help, it had become abundantly clear by 1941 that Aramco's existence depended upon the diplomatic and financial assistance of the United States Government. With the advent of direct US Lend Lease aid to Saudi Arabia in 1943, the US Government was faced with the question of how much control it should exercise over a private company whose operations it considered vital to the American national defense. The State Department wanted to limit the government's involvement to the quid pro quo offered in the Rodgers memorandum. But another group headed by Harold Ickes, the Secretary of Interior and Petroleum Administrator for War, argued that the US Government should buy out Aramco. On June 8, l943, the Joint Chiefs of Staff requested President Roosevelt to authorize the Reconstruction Finance Corporation to create a new government corporation to acquire overseas oil reserves as a matter of the greatest national security urgency. The Joint Chiefs recommended that the corporation's first project be the immediate acquisition of controlling interest in Saudi Arabia's oil concessions.--Multinational Oil Corporations and U.S. Foreign Policy - REPORT together with individual views, to the Committee on Foreign Relations, United States Senate, by the Subcommittee on Multinational Corporations; (Washington, January 2, 1975, US Government Printing Office).
posted by No Robots at 8:00 AM on April 30, 2013


If we had a sensible domestic transportation system

We don't really even need that; we could move away from petroleum rather quickly if we needed to. Retrofitting gasoline engines to run on compressed natural gas isn't that hard. The range isn't great, but people would switch by choice when the price of gas went up (probably not much higher than where it is today). You can also make a diesel-ish fuel from coal. And we have a shitload of coal, and a shitload of natural gas in the US.

I'd like it if the end of petroleum meant the end of the private automobile and the end of the car-centric suburbs and the end of superhighways, but that's almost certainly not the case. We can have a totally insensible transportation policy without petroleum, it just happens that petroleum is cheapest at the moment.
posted by Kadin2048 at 8:04 AM on April 30, 2013 [1 favorite]


Does the US have a national interest in securing Middle Eastern oil?

The free flow of Mideast oil at market prices has been a cornerstone of American foreign policy since the end of WW2. Oil is a commodity. What happens on the world market affects US markets. Even if it is not essential for the US to secure its use (Middle Eastern oll that is) for themselves, world trade demands that America see to it that it remains available for others.
posted by three blind mice at 8:04 AM on April 30, 2013


Brit comic Robert Newman has an entertaining 45 minute act/history lesson on the geo-political history of Middle Eastern petroleum, available in its entirety on the tube.
posted by Western Infidels at 8:25 AM on April 30, 2013 [5 favorites]


Sure does. So long as Oil is traded in Dollars other Nations need Dollars to trade that oil, the involvement with oil will keep going.

Being the world trade currency matters. Look at how the Pound is the Pound no longer world round.
posted by rough ashlar at 8:38 AM on April 30, 2013 [1 favorite]


How do these US oil companies influence policy? What are the mechanisms by which they exert their influence?

It's called crony capitalism...it's kind of the defining characteristic of our current age. Also lobbyists, lobbyists, lobbyists....who are usually, but not always, ex congressmen.
posted by AElfwine Evenstar at 9:02 AM on April 30, 2013


How do these US oil companies influence policy? What are the mechanisms by which they exert their influence? What are the limits of their influence?

this is something that both IR scholars and historians argue over.

Do they? Where? I'd love to see some examples.

Meanwhile, from TFA:

So, if the multi-trillion dollar Iraq war really was a “war for oil,” it was exceptionally ill-advised.

This part, at last, is something I think we can all agree on.
posted by ook at 9:03 AM on April 30, 2013


we could move away from petroleum rather quickly if we needed to. Retrofitting gasoline engines to run on compressed natural gas isn't that hard

...infrastructure?
posted by Steely-eyed Missile Man at 9:04 AM on April 30, 2013


Overal global political stability is dependent on economic stability. This can only be sustained if supplies of oil are stable in the medium term. To bring major oil fields online and sustain their output over the life of the field requires that the region have necessary security and political stability to ensure that contracts for delivery are met. The billions of dollars sunk into the infrastructure to extract, transport and refine the various crude oil fields of the middle east is a pretty substantial asset.
The other side of this is that we could simply take the oil delivery from whatever warlord happened to be in power. There are problems with that as well. Those individuals may have goals that conflict with our national values and interests such as limiting nuclear proliferation.
posted by humanfont at 9:06 AM on April 30, 2013


Do they? Where? I'd love to see some examples.

You can start here, where various well known and respected scholars argue over why, how, and to what extent oil interests influenced the decision to invade Iraq.

The free flow of Mideast oil at market prices has been a cornerstone of American foreign policy since the end of WW2.

This isn't really true--Harold Ickes lamented in the late 40s that the US did not have a foreign oil policy. The US had oil interests, to be sure, but the US did not have a clear and distinct foreign oil policy until 1950.
posted by MisantropicPainforest at 9:22 AM on April 30, 2013


Harold Ickes lamented in the late 40s that the US did not have a foreign oil policy.

From the previously quoted document:
[O]n June 30, 1943, the Petroleum Reserves Corporation was born. President Roosevelt instructed Interior Secretary Ickes and Herbert Feis, the State Department's Adviser on International Economic Affairs to begin negotiations with the American concessionaires in Saudi Arabia. To assist in this major undertaking Secretary Ickes hired Alvin Wirtz, a former Under Secretary of Interior, as the Government's special negotiator. On August 2 and 3, Mr. Ickes, Mr. Wirtz and Mr. Feis commenced negotiations with Mr. Collier (Socal) and Mr. Rodgers (Texaco). When Mr. Ickes proposed a complete government ownership, however, the oil executives flatly refused. "They had gone fishing for a cod and had caught a whale." Herbert Feis later said of the companies. Instead of giving the government a separate Petroleum reserve, the Aramco representatives were asked to sell their rich Arabian concession to the US Government at cost. Government ownership, they feared, would place them "at war" with the rest of the industry. Nevertheless, the fact that the US Government had come to their rescue apparently persuaded the Aramco parents to carry on negotiations with the Petroleum Reserves Corporation.
posted by No Robots at 9:28 AM on April 30, 2013


The US economically has an interest in medium term higher energy prices encouraging investment in new technologies and reducing petroleum demand

US politicians have an interest in getting re-elected and the average voter gets pretty pissed off when fuel prices go up.
posted by JPD at 9:40 AM on April 30, 2013 [1 favorite]


No Robots,

And "In 1948, the Former Petroleum Administrator for War, Mr. Ickes, stated that, except for a few local rules and regulations, 'we have never had a national policy on oil and we have never had an international policy on oil.'"

in Needed: A Strategy for Oil, Foreign Affairs, Vol 29, 1951.
posted by MisantropicPainforest at 10:22 AM on April 30, 2013


...infrastructure?

There's already a ton of natural gas infrastructure. CNG filling stations aren't especially complex and don't require the underground tanks that gasoline stations do, and there's no issue of groundwater contamination. I've seen CNG filling stations in Bangladesh and Thailand that were essentially prefabricated.

Keep in mind that the lifespan of petroleum tanks and pumping equipment isn't all that long, and it has to be continually upgraded anyway. So there are ample opportunities to change over at the distribution end, if the demand existed. (You can actually refill a CNG vehicle at home, if you want to.)

The main issue with CNG vehicles is the range. Americans have gotten used to vehicles with very long fuel ranges, and that's the major problem with switching to any number of otherwise-viable but less energy-dense fuels. But people would switch over if the price were right, just as we've seen consumers in other countries switch over due to price. And at least in the case of CNG (as opposed to electric vehicles or other technologies) you can actually retain the ability to use gasoline and switch over on-demand. The price difference just needs to justify the cost of retrofitting the vehicle.

But we've succeeded in keeping the price of petroleum just low enough that it's easier to keep paying for the status quo than to change anything. In large part I think this is political: if the price got high enough to trigger any significant changes, it would doubtless be viewed as a failure of whatever administration happened to be in power to protect the American Way Of Life. The fact that our insane, car-centric, suburb-loving way of life could and probably would go on unmolested is immaterial, and wouldn't require nearly as much involvement in Middle East politics; but it's unacceptable because it would eliminate a facade of stability that we have carefully maintained for decades.
posted by Kadin2048 at 10:32 AM on April 30, 2013 [1 favorite]


MisantropicPainforest, the quotation from Ickes seems to be from a letter he wrote in 1947. It is available in snippet view here. It would be great if you could provide the quotation in context. In any event, it is clear that whatever Ickes said about the lack of a policy, there certainly were actions undertaken by the US government to protect its oil supply.
posted by No Robots at 10:56 AM on April 30, 2013


Have you bought a bike yet? Why not?
posted by bottlebrushtree at 11:01 AM on April 30, 2013


How do these US oil companies influence policy? What are the mechanisms by which they exert their influence? What are the limits of their influence?

This might be a good entry point.
posted by benito.strauss at 11:08 AM on April 30, 2013


Have you bought a bike yet? Why not?

'Cause I live in the United Arab Emirates, where it's filthy hot about five months out of the year, gas is $1.80/gallon and I'm comfortable in my big car with a high-output V8 and a fierce air conditioner.
posted by ambient2 at 11:13 AM on April 30, 2013


The Ickes quote is from the Hearings before the Special Subcommittee on Petroleum of the Committee on Armed Services of the House of Representatives, March 11, 1948. I do not have access to the full quote.
posted by MisantropicPainforest at 11:44 AM on April 30, 2013


Thanks for bringing Ickes to my attention. Fascinating guy.
posted by No Robots at 12:03 PM on April 30, 2013


Doug Little described Ickes as a 'world class curmudgeon'. Stephen Randall also has a very detailed article about him, behind a paywall of course.
posted by MisantropicPainforest at 12:24 PM on April 30, 2013


Western Infidels: "Brit comic Robert Newman has an entertaining 45 minute act/history lesson on the geo-political history of Middle Eastern petroleum, available in its entirety on the tube ."

That was really good. Thanks for posting the link. I appreciate that the man is a comedian, but wouldn't it help more if someone explained and documented what he's talking about in a more serious way? If the points Newman is making are all true, then it seems that it'd be some pretty damning evidence and very hard to dismiss as conspiracy theory.
posted by InsertNiftyNameHere at 9:16 PM on April 30, 2013


End of WW2 or 1950 *shrug*.
Can we agree that oil interests have been a driving force behind US foreign policy for many decades? I personally think the US was very interested in limiting axis powers oil access prior to 1945 too, but I guess technically that was military policy, not foreign?
posted by bystander at 5:11 AM on May 1, 2013


wouldn't it help more if someone explained and documented what he's talking about in a more serious way?

The early stuff is all history, and as far as I am aware true and not in dispute - far from a conspiracy. The euro/dollar bit betrays a fundamental misunderstanding of how the currency markets work, and undermines his point that it was a motivation to invade Iraq, but there is little debate that the Iraq invasion was at least partly motivated to secure global markets access to Iraqi oil. People like Cheney and Greenspan are on the record that it was a consideration, so again no conspiracy, even though Powell, Bush and Blair kept up a fig leaf of morality with claims of democracy.
The peak oil bit, well, Brent has been under $100 a barrel only momentarily for years, if alternative energy supplies are viable, why is it still costly? So draw your own (yes alarming!) conclusions. And sites like the oildrum publish plenty of publicly available figures showing the parlous state of crude supplies. Again, no conspiracy.
I guess what I am asking is, the governments you are voting for, are pursuing your interests for cheap energy, so why do you think documenting this largely undenied fact is going to produce a result?
posted by bystander at 6:00 AM on May 1, 2013


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