Political instability in Nigeria, Iran and other nations is a major factor contributing to the high cost of crude oil. But is U.S. foreign policy to blame for the volatility of some of the world's top oil-producing nations? During today's E&ETV Event Coverage, Michael Klare, a professor at Hampshire College and author of the book "Blood and Oil: The Dangers and Consequences of America's Growing Dependency on Imported Petroleum," discusses the history of U.S. oil imports, foreign policy and the use of military force to solve energy-related conflicts. Klare, speaking at the Sustainable Energy Forum 2006, also explains the importance of considering oil as a matter of national security, and why scarcity and high prices will only increase the instability of oil-producing nations.
Michael Klare: It's really wonderful for me to be here. I'm not a geologist or an economist or a member of Congress. I'm a political scientist and my field of study is war and peace. And it's in that guise that I'm going to be speaking with you this morning. And of course you saw the Four Horsemen of the Apocalypse in the final slide that Kenneth Deffeyes showed. One of those was war.
And I'm going to talk about the geopolitics of the post-peak moment. I don't think in this room we need to have more of a debate about when peak oil is going to come. I know there's still some debate around the margins on that topic. I just think we should all assume we're there. Maybe the summit is a few feet higher up and we'll be getting there in the next few months or maybe we're there, but we could see what's on the other side now.
And it's the other side that I want to talk about. What is life going to be like on the other side of that peak moment? And all of you, I'm sure from the earlier presentations and your reading, know that one dimension of that is going to be scarcity and the economic effects of scarcity.
So I don't have to talk about that. But I think that you have to be aware that there will be geopolitical implications of being on the other side of the peak of the summit. And that those geopolitical considerations may prove, at least in the short term, to be the most significant in how we actually experience this new post-peak moment.
Because I think, although eventually global warming is going to affect our world even more seriously down the road in a few decades, but between now and then it's the geopolitical effects of oil scarcity that will affect us the most. And that's what I want to speak about today and why that's so.
First of all something very important to understand about oil, it is not just another commodity that could be bought and traded on international markets and market forces solve the problem. My economist friends insist that it's just another commodity, that markets will solve the problem. If we allow the markets to do their work prices will rise. People will use more efficient automobiles. New technologies would come along and equilibrium somehow will be reached.
And that's perfectly fine and good in the classroom and on textbooks and economic theory. But it bears no resemblance whatsoever to the world oil. Oil is different! And it's difference that you have to grasp more than anything else. What makes oil different is that it's viewed as a strategic commodity, a commodity that bears on the survival of nations, the well-being of nations. And because it bears on the survival and well-being of nations it has been securitized. It has been made a matter of national security.
And when you say that something is a matter of national security, when you formally say that oil is a matter of national security, as President Carter did in 1980; that means you're prepared to use force to protect your access to that vital resource. And that's exactly what President Carter said on January 3, 1980 with the Carter doctrine.
And he followed that up in his briefings after his famous speech, that was his State of the Union address for 1980, by announcing the formation of what became the U.S. Central Command, originally called the Rapid Deployment Joint Task Force in 1983. Elevated to be the US Central Command with headquarters in Tampa, but with responsibility for all US military action in the area of the greater Persian Gulf, North Africa and now Central Asia as well.
And if you go back to the formation of the central command you will find that its purpose in creating this military command, which now has more soldiers in combat than any of our other commands, the purpose was to protect the flow of oil from the Persian Gulf. So the use of military force to protect the flow of oil has been institutionalized in the US military. It is the mission of dedicated commands, forces and military units.
So this is what makes oil different. And I want to make clear this is not a new phenomenon. In the United States-well, in the case of Great Britain, the first country to securitize oil, it began in 1912 when Winston Churchill converted the British fleet from coal to oil propulsion to give them an advantage in what he pictured as the coming, well, what became World War I with the Germans.
And for that reason Churchville determines, with others in the British cabinet, that it was essential for Britain to have a guaranteed overseas source of supply. And because at that time the North Sea hadn't been developed, Britain had no oil supplies. And so the British government nationalized the Anglo Persian Oil Company, in what's now southwestern Iran, and more or less colonized Iran.
And after World War I Britain sought to expand its overseas oil empire by colonizing the former Ottoman provinces of Basra, Baghdad and Mosul and created the fictitious state of Iraq by forcing those three peoples to live together under an imported king in the Kingdom of Iraq.
Our young men and women in uniform pay a painful price for the history of British oil imperialism in Iraq. If I have time I'd like to see more about how we're paying the heavy price for that. We pay the price in Iran as well.
So the securitization of oil has a history. In the case of United States it was Franklin Roosevelt who first made this a matter of national security during World War II when he became personally concerned about the supply, America's supply of oil.
He anticipated, to some degree, the research of then the king of Hubbard in the sense that he consulted with the geologists of the day and they warned him that the United States would reach a peak moment, that we were using our oil at such a rapid pace to support the Allies during World War II.
Remember, the United States was then the world's leading oil producer and continued to be so for another decade or so. But his geologists told him at that rate the United States would soon exhaust its supply. They were wrong a little bit about the timing of the events, but Roosevelt plainly anticipated the Hubbert peak for the United States.
And he determined that the United States had to have a foreign source of oil that would be safe and under American control, just as the British had under their control Iran, Kuwait and Iraq and a number of other places as well.
And his geologists told him that the one place that wasn't under British imperial control, that had the promise of great oil, was Saudi Arabia. And so it was Roosevelt who made the determination that the United States should form a military protectorate over Saudi Arabia. And offered to provide military support for the Kingdom, for the House of Saud and its oil, as part of the deal by which the United States would become the principal developer of Saudi Arabia's oil. This was in 1945.
And President Roosevelt met, as many of you know, with King Abdul Aziz, the father of the current king, on February 14, 1945, aboard the USS Quincy in the Great Bitter Lake by the Nile canal. And the two met for four hours, just the two of them, and essentially formed the bond between the House of Washington, the White House, and the House of Saud that persists to this day.
And in my view is the most central feature of US ties to the Middle East to this very day. And that bond was just recently, a year ago, reinforced when President Bush, the current occupant of the House of Washington, met with then Crown Prince, now King Abdullah at his ranch in Crawford and embraced the head of the House of Saud and toured him around.
And essentially reaffirmed the alliance that was made by President Roosevelt in 1945. This embrace of Saudi Arabia is probably the most central feature in the history of United States over the past 50 years, in all of its manifestations, certainly in the past 20 or 30 years. It was what led President Carter, in 1980, to issue his famous Carter doctrine speech, when just before that time the Iranian Shah, the Shah of Iran, had been overthrown by radical Shiites. This again, a legacy of the British imperial presence in Iran and should be mentioned because the Shah was put in power by the British and the Americans in 1953 after the CIA helped engineer the overthrow of the democratically elected government of Iran under Mohammed Mosaddeq, who had nationalized the Anglo Persian Oil Company, now British Petroleum.
And we put the Shah in power and kept him in power. He used his dictatorial powers to suppress the Shiite clergy, torturing many of them, killing some, exiling others, and created a legacy of deep hatred and bitterness towards the United States because of our association with the Shah's regime among the Shiite clergy.
So it's hardly surprising that the current rulers of Iran bear this intense hatred to the United States. If you do not understand this past, the legacy of oil imperialism in Iran, you cannot understand the intensity of the hostility of Iran's current leaders to this country, which is making it so difficult to resolve, what is arguably, the most dangerous international crisis we face at this moment in time.
This is a very severe crisis we face over Iran. It's very closely related to the price of oil, as I'm sure you know. And we have yet to see any hope of a peaceful solution to this. All of this goes back to this time.
We face-well, coming back to the narrative of time, it was the overthrow of the Shah in 1979 that led President Carter to announce his doctrine and to establish the U.S. Central Command. Then it was President Bush Sr. who told the American public, on August 8, 1990, after the Iraqis had invaded Kuwait, that this posed a threat to Saudi Arabia. It triggered the Carter doctrine.
Saudi Arabia's oil was vital to US national security. Therefore we would send troops to Saudi Arabia to protect the Kingdom and ultimately to drive the Iraqis out of Kuwait. And I believe that set the stage first the encirclement of Iraq under President Bush Sr. and President Clinton, and then the decision to invade Iraq and eliminate the threat posed by Saddam Hussein to Saudi Arabia and Kuwait and the other royal countries altogether.
And that's where we stand today. And by no means is that the end of the story. It's just the first part of the story shows you how deeply oil has been securitized. Now we come to the second half of the story, the post-peak moment. And here's where I fear that this history of securitizing oil is now going to face the realities of post-peak petroleum and put us in a much more dangerous world. Now why is that so? I want to take just a few minutes to explain why the current situation beyond the peak is so dangerous.
The first thing is that you have to understand, you've all seen the picture of peak oil. And you know that the peak rises when we've used up the first half of the world's oil. That still leaves the second half of the world's oil and we know all of the issues involved in developing it. What's not as well understood is there's a difference between the first half and the second half.
The first half was the easy oil. It was the close to the surface in big reservoirs. And more importantly it was in the United States and its allies where most of the oil was used in this first half of the petroleum era or the first half of the world's oil usage I should say. It was the easy to get oil in safe friendly countries, many of them democracies. As recently as 1950 two thirds of the world's oil came from what we call the Global North; United States, Canada, Europe and the European part of the former Soviet Union.
Two thirds of the world's oil came from those areas, only a third from the Global South. But because those fields in the Global North were developed earliest they were also depleted earliest. Virtually all of those fields are now in decline and have been for a while.
What's left of the world's oil, the second half, is almost exclusively found in what we call the Global South. We used to call it the Third World, the formerly colonialized areas of the world. This is where virtually all of the remaining oil is located. And it's a relatively small number of countries. It's no more than this many, one or two, maybe a dozen altogether.
Five in the Persian Gulf area; Iran, Iraq, Kuwait, Saudi Arabia and the United Arab Emirates. A few in the former Soviet Union; Kazakhstan, where Vice President Cheney was last week begging for oil. And Azerbaijan, where President Bush, down the street here, embraced the dictator of Azerbaijan while he gives speeches about how America supports freedom and democracy around the world. Those two. A few in Africa; Nigeria, Equatorial Guinea and Angola. And a few in Latin America; Colombia and Venezuela in particular. These are the countries that have what is left of the world's oil and that have any potential of satisfying our needs in the coming years and decades. To say that these countries are unstable, corrupt, dangerous and autocratic is an understatement. They are all, in some ways or another, deformed and difficult and dangerous. This is not a coincidence. This is a product, to a great degree, of their imperial past.
It was the imperial powers, whether in Bonn, I should say in Berlin or in Paris or in London or in Moscow during the Soviet empire that often set their boundaries, often with little regard for the ethnic identity of the peoples involved. The Kurds were forced to cohabitate with the Arabs, the Sunnis and Shiites in Iraq.
Parts of Armenia were loped off and given to Azerbaijan. Nigeria was invented out of parts of various ethnic kingdoms. So they all bear a history with internal ethnic and religious divisions, with inequitable distribution of power in many cases, with a history of corruption in weak governments.
All of them bear some element of the scars of the colonial period. So they're inherently dangerous. They also bear a history of anti-imperialism in many cases, directed, of course, against the British and the French and the Soviets, the Spanish and Portuguese to be sure. But these are countries that many of them fought for their independence and have a deep suspicion of Western or non-Western powers coming in, pursuing their oil interests, establishing a dominant position in their society, bringing in foreigners to pump the oil. These countries all have a history, many of them, of resistance to imperialism and colonialism. And many of them view, rightly or wrongly, the symbols for Exxon, Mobil and Royal Dutch Shell and the others as symbols of imperialism. And we see this in Venezuela as well as in the others, this deep abiding suspicion of the Western oil companies.
So the fact that these countries that we are coming to rely on in our addiction are unfriendly and unstable is not an accident. It is a product of their history and often the pursuit of oil in these countries. So more and more we're becoming dependent on these unfriendly places.
Now on top of that there's yet another element of danger in the current period. And that is scarcity and the high price of oil makes these countries more unstable and dangerous. The production of oil, which especially when it's so valuable to produce, in countries that have few other sources of wealth tends to intensify the struggle between competing factions of the population for control over this extremely valuable resource.
So if you look around the world, why we have such high prices today, to a considerable extends it's a reflection of this internal struggle often going on over who will be the beneficiaries of the production of this valuable resource. And the more valuable it becomes the more intense these conflicts are likely to occur.
In Nigeria, where we've lost something like 20 percent or more of production because of internal unrest, this is entirely the product of a battle over the distribution of the oil rents that are being paid by the oil companies to the central government in Abuja; and rarely trickled down to the poor people in the delta region, which has been ravaged by oil production and tremendous environmental damage. They see very, very little benefit of the wealth that pours into the country, which stays in the capital. And it's not surprising therefore that they are now in armed revolt against the central government and the oil companies. And that's one of the reasons we're in difficulty.
We're in difficulty in Iraq because the constituent parts of the fictitious Kingdom of Iraq, created by the British in their wisdom, are now fighting to achieve as much autonomy as possible. And they're fighting also to retain control over the oil fields in their respective territories.
And because the Sunni area in the middle has virtually no oil, or very little of it in comparison to the Kurdish areas and the Shiite areas, they're the ones who are rejecting, for the most part, the trend, the political trend in supporting the insurgency that our poor soldiers are trapped in. So here again we see how our oil addiction is feeding violence and conflict in the areas that we're coming to depend on.
So the point to understand here is that the more we pay for oil the higher the price goes, the more likely this is going to stimulate more conflict in the areas in which we depend as competing factions fight to get control over the oil pump and all of the money that it brings in.
So here we are, we're becoming increasingly dependent on a resource that can only be obtained from areas that are inherently dangerous. And through our pursuit of their resource they are becoming more dangerous by the day.
And then finally, the last factor that makes this time so worrisome, and Kenneth Deffeyes alluded to this earlier, and that is we are not alone in our addiction to petroleum. Other countries have acquired this addiction as well. And some are becoming addicted at an astonishing rate.
In China and in India and in other developing countries, where there's a new rising middle class, many of them seeking to duplicate what we call the American way of life, which is a family with an SUV that drives 50 miles or so a day to and from work and to school and to church and to shopping and everything else, by recreating that way of life in their own societies by buying automobiles and building suburban homes.
Creating a huge increase in demand for petroleum just at the time that we've reached this peak moment in which we know the supply is not going to increase. But the competition, the demand is certainly going to increase. Meaning that the global struggle over what's left will become increasingly intense and fierce and cutthroat.
And all of these addicts, all of us, the Americans, the Russians and the Chinese and the Indians and the Japanese and the others and the Europeans, all have to go to the same dangerous unstable parts of the world to supply our addiction, virtually all of them I should say. Russia has its own fuel, but the others must go to these same countries.
And like the United States they have chosen to securitize the pursuit of oil by establishing military ties with their suppliers, at least in the case of the Chinese. They formed the military ties with the government of Sudan, which is one of their major suppliers in Africa.
And they formed a military relationship with the government of Iran, another major supplier. Just as the United States have formed military ties with its major suppliers, Saudi Arabia, Kuwait, United Arab Emirates, Nigeria and the others.
So on top of the destabilizing effect of our mutual pursuit of this resource in these inherently unstable areas, all of us addicts are paying for it with weapons and military supplies and military assistance, military troops and bases. And it's this aspect of the equation that makes the situation, in my mind, so dangerous.
Think about how World War I came about. It came about because of the geopolitical competition between the great empires of the day for control of areas like the Balkans. All of these countries struggling for geopolitical advantage in an inherently dangerous area that blew up and started World War I.
That's the kind of geopolitical competition the US and Russia and China are now engaged in in the caucuses in Central Asia and the Persian Gulf and increasingly in Africa. That's exactly the kind of behavior that all of those governments are engaging in. And I see no sign whatsoever that any of them are prepared to step back from the brink.
All of us are increasing our military, all of us addicts are increasing our military activity in these dangerous oil-producing regions. So in my mind it's this aspect of the post-peak moment that should worry us the most. At least until the global warming effects become more profound.
These are the effects that we will experience when we pick up the newspaper every day and read what's happening in the world. So I think it's the geopolitical effects this command our attention. And I want to finish by saying that not only is the securitization of our oil addiction increasing the risk of our involvement in one oil war after the other.
Not only is it increasing the sacrifice that we will be asking of young men and women in uniform who bravely go off to these countries to serve their nations and find themselves being used essentially as mercenaries for the oil companies to protect their pipelines and their refineries and their loading platforms, they're being used essentially as taxpayer paid oil security guards.
That's what our military is being converted into, a global oil protection service, so that we can protect, to some degree, our supplies from these areas, something that I find fundamentally immoral and unpatriotic. On top of that to pay for this, to pay for the militarization of our foreign energy policy, our addiction, we are using up all the money that could theoretically be used to develop the energy alternatives that Kenneth Deffeyes and Representative Bartlett told us about.
These energy alternatives, which are essential, are costly. They will be costly to develop, in the many trillions of dollars. We have the wealth in this country to pay for those innovations, but we are squandering that wealth by the hour in Iraq and in the militarization of our oil policy in other areas of the world.
If we spend the next 20 years seeking to solve our addiction through military force there will be no money left 20 years from now to make the energy transition that our children and grandchildren… and I'm getting to the age where I'm thinking about children, grandchildren. And he's absolutely right, if we had a shred of integrity in this country they would be our priority.
And we are depriving them through our military policy of using force to solve our addiction. We are depriving them of the funds that will be needed to make this change. So for all of these reasons I think in addition to the very real concerns we all have about global warming.
And we're going to hear more about that and I completely agree with the importance of addressing that problem, for other environmental reasons, but for reasons of basic morality and decency and well-being we have to reject the militarization of our energy addiction and make curing this addiction our major national priority. Thank you very much.
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