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By Christopher King* 5 January 2008 Christopher King argues that underlying the USA’s Middle East policy is the need for cheap oil and that fighting “Islamic terrorism” – a consequence, not a cause of US policy – is simply a fake pretext that has been bought lock, stock and barrel by dishonest and ambitious UK politicians. Great! It’s official! Iran doesn’t have a nuclear weapons programme! The US National Intelligence Estimate confirms what the International Atomic Energy Agency has been saying since 2003 and was castigated by President Bush for saying it. It is a mystery how UK and US politicians thought they might know better than the International Atomic Energy Agency. Anyway, it’s a relief to know that the Iranians won’t launch a sneak nuclear attack on the West. What’s that? It makes no difference! Iran is still a threat to Europe and the USA! President Bush tells us that it is the Iranians’ intention to construct a nuclear arsenal. The president must be a psychic genius. Our own foreign secretary, David Miliband, echos him feebly in lawyers’ language, leaving himself space to reverse if necessary. Now, it is most curious that the US intelligence services should publish an assessment that contradicts their president. Is this a struggle for the soul of the United States, an internal rapprochement or misdirection away from what is really happening? It is also a mystery and source of puzzlement to the American anti-war movement that their Democratic-controlled Congress does nothing to impeach President Bush or pay more than lip service to leaving Iraq, especially given the Republican mauling of President Clinton for a harmless, consensual office grope. There can be only one explanation: Congress agrees with what he is doing. What might it be, that underlies the obvious mayhem in Iraq and Palestine as well as imminent war with Iran and Syria? It would have to be important. Let us attempt to identify such an overriding imperative. Although the 9/11 attack on the World Trade Centre (WTC) brought the Middle East to the USA, the US was already in the Middle East. Earlier, there was the 1991 Gulf War. Following this, US troops remained in Saudi Arabia, the home country of Osama Bin Laden. Next, in 1993, Osama successfully bombed the World Trade Centre but failed to destroy it. Then on 23 February 1998, Osama stated his grievances against the US in a fax to London’s Al-Quds newspaper. Briefly, these are:
I wish now to suggest that we in the UK and Europe do not understand a critical point about US foreign policy. We hear American politicians speak of “always acting in the interests of the United States” and protecting the “vital interests of the US in the Middle East”, but have never understood this. It’s simple. When they say this, that is precisely what they mean. They do not mean that they act in UK interests. They do not mean the best interests of Europe. They mean their own interests. I do not have his prescience but believe that it was on this point that George Bush conned Tony Blair. Blair is despicable but, even so, I’m inclined to believe that he would not have gone into Iraq with Bush unless he believed in a coincidence of national interests. That’s where George got him. Tony wanted to believe it. There was nothing for the UK to gain in invading Iraq, but everything for the USA – as America perceives it. We can now ask ourselves, “Is there a factor that relates Bin Laden’s curious accusation that the US is “plundering Saudi riches (oil)”, the two WTC attacks, the invasion of Iraq, the construction of permanent bases in Iraq and Bush’s fear of Iran – even when Iran is now USA-certified to have no nuclear weapons programme? We can dismiss all White House explanations since this administration consists of proven liars. We must examine the material evidence. Our essential factor is, I suggest, the “price elasticity of demand curve”, poorly understood by business students. In a free market, when the supply of a commodity becomes scarce, its price rises. This is what occurred in the early 1970s when OPEC restricted the supply of oil to the market and Saudi Arabia refused to sell to the US because of its support to Israel. The spot oil market looks like a free market – but it isn’t. It looks like one because one can buy as much as one likes and pay whatever price is set by competition. In a free market, however, producers are free to set their production to their own advantage. That does not appear to be the case for oil. Oil deposits are wasting assets, that is, their value decreases over time. World oil is now at peak production and reserves are falling. This means that it is now in the long-term interests of the oil producing countries to restrict supply, with the effect of maximizing both present price and long-term value of their wasting assets. That is not occurring. In the case of the 1970s restrictions, the oil producers gained massive increases in revenue for a small reduction in production, although short term. Why do they not conserve their reserves now? Osama Bin Laden’s grievance suggests that they are producing under the gun. In 1999 the price of crude was USD 10 per barrel, indicating an extremely high supply level. This was about the time that the 2001 WTC bombers were getting into place. Osama’s remark in this context suggests, therefore, that at that time Saudi Arabia was being forced by the US to produce at a much higher rate than the Saudis would have wished – assuming benevolently that the US was not simply stealing oil. The Saudis’ rational objective is to strike a balance between conserving reserves and maximizing revenues. The US’s rational objective is to keep the oil price as low as possible. The reason for this is easy to see: The powerful USA doesn’t have a strong basis for its economy at all. It’s a fragile, vulnerable economy dependent on massive consumption of cheap oil. The USA’s own oil is insufficient; It is dependent on imported oil for 60 per cent of its needs. Any decline in its imported supply is serious; a major decline means disaster for the US, both political and economic. Commuters would suddenly find their gasoline permanently rationed; their massive SUVs would be immediately obsolete. Heating oil would be rationed or unaffordable to many. Electricity prices and prices generally would soar. Other countries would be much less affected. The Chinese, for example, couldn’t care less about the price of oil. In the global marketplace, their low-cost labour more than compensates for any increased cost of energy and they will still have the lowest overall costs of the industrialized countries. The reason for the continuous US military presence in the Middle East has, therefore been, until now, to keep large volumes of oil flowing. The implication is that any country that attempts to restrict supply will find itself under US invasion to protect it from Islamic extremists and the West from terrorism. An “Islamo-fascist terrorist” will be anyone who wants to restrict his country’s oil production, which will be spun as an attack on Western economies. We’re into realpolitik: if any country is going to conserve its oil supplies it will be the United States. If any country is going to have access to cheap imported oil it will be the United States. That is why US troops are guarding Middle Eastern “democracy”. With US companies backed by US troops operating the oilfields, who knows what production statistics might be or what price the US is paying for oil? Indeed, who knows whether oil consumption and reserves figures are currently being manipulated? That is what Congress knows. It’s just basic economics. This is the “price elasticity of demand curve”, in action in the real world. Tony Blair had never heard of it and was too befuddled anyway with Bush’s and Zionist money, the God stuff and the illusion of the US/UK “special relationship” to realize what his buddy George was really doing. This is the underlying reason for Osama Bin Laden’s objection to the American bases in Saudi Arabia, which he has popularized under the banner of defiling the central shrine of Islam, a cause that has broader street appeal than an academic economic principle. Let us note at this point that US troops have almost completely left Saudi Arabia and gone – to Iraq, where there are permanent bases being built. Osama Bin Laden has succeeded in getting the US out of his home country. Osama’s fax of 23 February 1998 suggests that the 9/11 attack was a message to the USA that continued occupation of Saudi Arabia would mean attacks on the US homeland. Most of the 9/11 attackers were Saudis, Osama is a highly intelligent and experienced guerrilla fighter and strategist, so this would almost certainly have been his objective. This attack, together with attacks on US personnel within Saudi Arabia achieved his objective. There was another country available, after all, to take its place. Since the 9/11 attack there have been no attacks by Al-Qaeda on the US homeland, which is curious given the hatred of the US in the Middle East and in consideration of how easily one may use simple materials and easily available weapons to create a state of terror in a city. It has been done in the past by a single rifleman killing randomly from cover. Is this because the Saudi objective of getting US troops out of their country was agreed soon after 9/11 and has now almost been achieved? Here, it seems, is the reason for the amazing lies about Iraq and the role of Saddam Hussein. It was essential to invade Iraq to lift the UN sactions and have it take over some of Saudi Arabia’s supply to the oil market and the USA. Still, events in Iraq have not gone according to plan and the oil is not flowing as hoped, with the result that the spot oil price has now hit USD 100 per barrel. This is not because of Chinese demand as much publicized, as the Chinese are relatively low net importers of oil (3.4 million barrels/day against US net imports of 12.2 million barrels/day or a mere 9 per cent of world net imports for 2006). It is now possible for the Saudis to cut back production with the onus on the US to get the Iraqi fields producing. Deals have been done. The Iraqi oilfields are now American off-shore fields. Only an objective of this magnitude could have made the Iraq invasion worthwhile and can be keeping Congress on-side. In this context, let’s think about Iran. This is a country possessing enormous undeveloped oil reserves. Outside US control, it can do as it likes with them: restrict production or sell to whomever it wishes. Worse, Iran dislikes the United States and with good reason. It is a historical fact that the CIA, on UK incitement, deposed the democratically-elected Mossadeq government, which had nationalized the country’s oil interests. The Shah, installed by the US, obligingly put US oil companies in control and created a vicious secret police to protect them and himself. This was the foundation of the Iranian Islamic Revolution – laid by the United States and the UK. It is clearly intolerable to the US to have Iran independently able to adopt whatever oil production and sales policy it wishes while all other Middle Eastern countries are under its gun. If Iran should restrict oil production or refuse to sell to the US as Saudi Arabia did in the early 1970s, other countries might follow suit. Congress knows this but pretends that it doesn’t. When George Bush speaks of Iran gaining influence in the Middle East, this is the influence he fears. Not Islamic fundamentalism and a terrorist threat to Europe and the US or even Israel, but the threat of oil production policies in producers’ own long-term interests rather than those of the USA. This is what US politicians mean when they speak of protecting the US’s “vital interests” in the region. Iran is no regional military threat since it has never threatened another country and has no reason to do so. Its war against US-backed Saddam Hussein was entirely defensive. The Iranian threat to the West is a whole-cloth American invention. Let’s examine Iran’s nuclear policy from an economic viewpoint. David Miliband, our foreign secretary and typical on-the-make career politician, says that Iran must be developing nuclear weapons because it is has oil and therefore no need for nuclear energy. It is obvious, however, that the oil-producing countries need alternative economic and energy policies for the time in the near future when their oil runs low. Dubai, for example, wants to be the playground and investment centre for the world’s rich. A doubtful strategy, but good luck to them. Nuclear energy appears to be Iran’s choice as it was for France. This is a major undertaking that will require the training of new generations of physicists and engineers over the next 20 or 30 years. Construction of a nuclear generating plant takes about 10 years to completion, so it is by no means too early to start planning and training. Good economic policy would also require conservation of oil reserves; indeed, nuclear energy can substitute for domestic use of oil, so extending reserves. This seems to be both rational and far-sighted. I suggest that the Iranians simply have the independent nuclear electricity generation policy to which they are entitled under the Nuclear Non-proliferation Treaty. I also suggest that Nancy Pelosi, Democratic Speaker of the US House of Representatives, knows the truth but colludes with President Bush. Our UK politicians are either lying, stupid or both. What of Osama Bin Laden and Al-Qaeda? I wouldn’t look for Osama in the caves of Afghanistan or Pakistan. He’s probably back home in Saudi living in a modest but comfortable villa and honoured in the highest circles. It is probably not considered desirable to catch him as he is much more useful on the loose to both the Saudis and the US. His creation, Al-Qaeda, is now probably operationally independent of him and vastly more dangerous than ever due to US and UK recruitment activity in Iraq and Afghanistan. Neither Blair nor Gordon Brown, our present unelected leader, allegedly an economics whizz and confidant of circles of US power, understand US Middle Eastern policy (given that they have not been simply bought, which is by no means certain). If they did understand it, they might have spent the 7 billion pounds sterling that the war has cost us on building an energy-efficient, UK-wide, public transport system as well as developing alternative sources of energy. The Croydon local tram system, for example, cost a mere 200 million pound sterling. Thirty-five such systems could have been bought for UK cities for the cost of the war. The Iraq war might cost the USA USD 1-2 trillion. That is of an order that might solve the problems of hydrogen fusion power, potentially far better than fission energy. The two most advanced research projects in this area are the CERN Large Hadron Collider in Switzerland, costing about USD 6 billion to build – 170 projects at that cost could be had for one trillion dollars – and the ITER tokamak at Caradache, France, costing about USD 15 billion to build and operate for 20 years, giving about 70 projects at that price for a trillion dollars. In this context these projects can be seen as dirt cheap science giving, moreover, vital knowledge that will be useful as long as civilization lasts. If the scenario sketched here of US aggression in the Gulf is correct, there is no possibility of the US leaving Iraq until the oil runs dry. Efforts to gain direct control of the Iranian reserves will also continue, doubtless with Israeli collaboration. This is clearly in the USA’s “strategic interests”. Despite the setback that the National Intelligence Estimate caused this administration, it seems certain that the USA’s dependence on cheap oil, together with exhaustion of its own reserves, will necessitate more desperate efforts to find a cause for open aggression against Iran. At this point we may easily distinguish the US imperative to gain cheap and plentiful oil from the imperative of Israel to neutralize military threats from neighbouring countries which oppose its land thefts and occupation of Palestine. There is obvious common ground here, as there is also with the Christian fundamentalists and millennialists who identify in various mystical ways with the Israelis. Alan Greenspan has confirmed what we all knew instinctively – that the Iraqi invasion was simply for oil. We in the UK have initiated, with the USA, a stupid oil war masquerading as a “war on terror”, at immense cost and are burning oil and gas as if they will last forever. This is the most visible evidence of what you probably suspected from the Iraq war vote – that the UK Parliament is populated by self-serving hacks who have no idea what they are doing and are easily conned. US politicians are working to a perception of US interests that is short term and merely an energy grab. US Middle Eastern policy is in not the interests of either Europe or the UK. We should detach completely from its policies that have been imposed on us by the stupid, vicious politicians who govern us. The proof is in the choice that they made when faced with the Iraq war vote and their assaults on our civil liberties when faced with bombing on the streets of London, the consequence of their own lies, incompetence and lack of humanity. We have desperate need of a different breed of politician. *Christopher King is a retired consultant and lecturer in management and marketing. He lives in London, UK. Copyright © Redress Information & Analysis. All rights reserved. |
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