A New Year’s wish – A transparent and honest oil strategy

On Thanksgiving, I had the good fortune to meet a former special operations soldier. We talked about the Middle East. He believed that U.S. and western dependency on Arab oil was one of the key reasons why the nation went to war in Iraq, as well as Afghanistan, and might go to war in Iran. My new friend said that he and many of his buddies didn’t want to believe this, but during and after his service, he realized the relationship was a fact. Growing up as a youngster, I believed that our multiple engagements in the Middle East were making the world safe for democracy. But age and experience made me wiser and, hopefully, more insightful.

I am a card-carrying skeptic of many of the U.S. government’s public justifications for sending troops to Iraq, Kuwait, Libya and, to some extent, Afghanistan. We still depend on the Middle East for nearly 22 percent of our imports and OPEC continues to have a visible
impact on the price of U.S. oil. The dialogue concerning possible war in Iran adds a critical dimension to the “let’s be honest” school of thought about the link between dependency on foreign oil and possible future military involvement in the Middle East. If Iran does secure a nuclear bomb, its capacity to secure hegemony over its neighbors and scare the hell out of Israel will be real. Whether we intervene militarily or not, it will affect the nations and indeed the world’s ability to rely on Arab oil.

Petroleum ImportsClearly, the U.S. would not be as involved in the Middle East if it reduced its dependency on Persian Gulf oil. Just as clearly, our ability to significantly lower the flow of oil from the Middle East will not occur because of “drill, baby, drill” rhetoric and policies. Because oil is and will continue to be traded in a global market, increased drilling will result in somewhat reduced dependency. However, U.S. producers, assuming a return to global economic growth, will continue to buy and sell millions of barrels of oil overseas, including from OPEC nations – if the price is right. The U.S. will need to keep the Strait of Hormuz open and protect nations that have oil in the Middle East, despite their politically challenging regimes.

The relationship between U.S. oil needs and our past and present role in the Middle East was reinforced by John Hannah, a neo-conservative and senior fellow of the Foundation for Defense of Democracies, in a presentation he made at a Capitol Hill meeting in Washington on Dec. 13. It involved foreign affairs, economic and defense experts and senior congressional staff.

Hannah has served in senior positions in both republican and democratic administrations. His comments concerning the security impact of our oil addiction, particularly with respect to the Middle East, are supported by many liberal as well as nonpartisan analysts and by leaders in both major political parties. If you don’t believe me, Google “the impact of U.S. dependence on Middle East Oil on security”!

Hannah provides a different kind of compelling anecdotal evidence. It is of the “I was there or almost there” variety.

  1. Hannah notes that in a 2007 meeting he attended with former President George W. Bush and former Treasury Secretary Henry Paulson, the president wanted to enact sanctions against The Central Bank of Iran to limit Iranian oil sales and revenues. Although limited banking sanctions were ultimately applied, at the time, Secretary Paulson objected. He indicated that sanctions would amount to a “nuclear option” that would hurt global markets, cause a rise in oil prices and inflict major damage to the U.S. markets. Congress enacted more comprehensive sanctions from 2011-2012. The delay granted Iran five years to freely pursue building its nuclear capacity without severe economic penalties. Many senior leaders of the Obama administration expressed doubt about congressional action, at the time, in part, because they viewed it infringed on presidential powers and, in part, because of the likely disruptive impact on oil markets and relatively unstable high U.S. gasoline prices.
  2. Hannah indicates that his very senior administration colleagues told him about an angry, pre-9/11 message from then Crown Prince Abdullah, sent through Prince Bandar, Ambassador to the U.S. , concerning Israel’s response to the Second Intifada. He threatened to abort any and all communications with Washington and to make all political, economic and security decisions without taking into consideration U.S. interests unless the White House muted its support of Israel. Accordingly, the White House and the president, again, because of fears concerning the global oil market, sent a letter to the Crown Prince, pledging renewed support for a two-state solution to the Israeli-Palestinian conflict.

Oil dependency and the impact of tensions in the Middle East on the global economy is a legitimate concern of Washington policymakers. It is a nonpartisan concern. But more transparency as to policymaking and a commitment to lower foreign oil imports, particularly from the Middle East, would permit the U.S. more flexibility to achieve its economic, environmental and, importantly, its security objectives. Leveling with the American people would reduce doubt about U.S. policies and facilitate a push for alternative transitional transportation fuels, a more competitive transportation fuel market, increased production of flex fuel vehicles by Detroit and EPA’s willingness to allow conversion of existing cars to flex fuel vehicles.