I'm not a big fan of Salon, but they do have a very thoughtful look at the influence of oil on the proposed war on Saddam's regime.
If you don't subscribe to Salon, Michael Totten summarizes it well: The oil companies want stability. It makes no difference to them who owns the oil wells. It could be Satan or Uncle Sam; their profits will not change. The one thing they don't want is upheaval and war.
This is absolutely correct, as far as the large multinational oil companies--Exxon, BP, Standard, and so on--are concerned. But he and countless others miss another crucial point, one I'm constantly surprised that few people seem to get.
Small energy companies, like oh, say, Bush's old company Harken, would stand to reap windfall profits if only we could cut of the supply of oil from the Middle East.
Most Americans over 30 remember the terrible layoffs in the 1970s and 1980s at General Motors, Ford, and Chrysler. The "Big 3" had all kinds of trouble making money, in large part due to Japanese competition. If you're from Michigan or Ohio or other parts of the Rust Belt, you know this especially well.
Similarly, if you're from parts of Texas, Louisiana, or other oil-rich states, you also know that, after Reagan ended all price controls in the early 1980s, the domestic oil industry hemorrhaged money. Prices at the pump dropped like a stone, as did domestic oil industry profits. Countless small oil companies went belly up or were swallowed by bigger companies. Oil workers lost jobs in the 80s the way Dot-Commers did in 2001. Young George W. Bush owned one of those small oil companies, and it nearly went under before it was purchased by Harken Energy.
Those small domestic oil companies that survived did so by eking out what they could by drilling domestically, and otherwise making deals to become importers, to sell and maintain equipment, and so on. These days, it is very difficult to make more than modest profits by drilling for oil in places like Texas.
One of the biggest reasons we import so much oil is that Americans have made it politically impossible to expand oil drilling in almost any part of the United States. Another is that it's just plain cheaper, most of the time, to pull oil out from under Arab sand.
So here's my point: the domestic oil industry, for a very long time, has viewed Arabs and their oil about the same way that the domestic auto industry has viewed Japanese and Koreans and their car companies: as competition they'd rather not have.
Sure, just as companies like Toyota or Chrysler have become multinationals, so too have companies like Exxon. The big huge players no longer care all that much about the fate of people in any one nation. But the American oil industry is still full of smaller players that would make a killing if only we could drastically curb Arab oil imports. But even the multinationals would make more money if we could cut off Arab oil: it's easier to make a profit selling gas at $3.50 per gallon than it does now at $1.75.
Furthermore, guess which trade union is most friendly to Republicans? Teamsters. Also guess which union most American oil workers are members of? Teamsters. Cutting Arab oil imports would create all kinds of jobs in the domestic oil industry, and would make Bush and Cheney mighty popular with the those unions that happen to employ a lot of oil workers in America.
The rest of us would all suffer, but hey, it's all about repressing the little guy to help the rich get richer, right?
So if Bush and Cheney were really cynical, selfish shills to the oil companies, they'd do two things: 1) Help Saddam set his oil fields on fire, and 2) piss on the Saudi Crown Prince Abdullah's shoes and dare him to cut oil production. If they wanted their Texas good old boy pals to get richer, and to make themselves more popular with union workers in that industry, that's exactly what they'd do.
It cannot be disputed that oil is one of the reasons why Saddam Hussein is a problem for us. Without the oil, he would not have so much money for arms and military research. Without the region's oil, we would have no reason to fear the results of allowing a megalomaniac like Saddam to take over Kuwait and Saudi Arabia.
But people who say that Bush and Cheney simply want Iraq's oil are simply not thinking clearly. These men, when they took office, were forced to liquidate their stocks and put their money into blind trusts, just like all Presidents and Vice Presidents are. They stand to gain nothing personally from Arab oil. And if they just wanted to help the domestic oil industry, they could help it best by behaving exactly contrary to the way they are now.
I'm down with most of that analysis, except as regards Halliburton (and Schlumberger, which is French-American, and has a massive presence in Texas). Those 2 companies are 'oilfield services' firms, who will make their (fairly massive) profits either way that things go in the gulf. They are involved in drilling, exploration, and oilfield operation; they'll do almost everything for an oil field rights holder, except transshipment and refining...although come to think of it, if (when?) we go to war in Iraq, Halliburton stands to gain a lot of ground compared to Schlumberger in Iraqi contracts, and they are brutally fierce competitors (I did a short stint as a networking contractor for Schlumberger once...couldn't take the internal politics, and I wasn't even on the staff payroll!)
YOu are so right on, Dean. One of the best kept secrets of Houston is how its oil industry has adapted to this flux by turning its focus to engineering the industry. However, as someone who used to work for a marine survey company, the fact that there hasnt been much exploration and drilling is a bit of a sore point. It doesnt just affect domestic companies either. Teh company I worked for was the British company, Racal, who apparently did the instrument panels for airplanes etc. They were absorbed by British Petroleum, I believe because the contracts for exploration and drilling were dwindling considerably...and our competition was just barely doing better. I worked in the Data Management position, something I am rather proud of, as there was only one other woman in the dept and the rest of the women were in clerical or human resources or sales.
I really liked that job.
YOu are so right on, Dean. One of the best kept secrets of Houston is how its oil industry has adapted to this flux by turning its focus to engineering the industry. However, as someone who used to work for a marine survey company, the fact that there hasnt been much exploration and drilling is a bit of a sore point. It doesnt just affect domestic companies either. Teh company I worked for was the British company, Racal, who apparently did the instrument panels for airplanes etc. They were absorbed by British Petroleum, I believe because the contracts for exploration and drilling were dwindling considerably...and our competition was just barely doing better. I worked in the Data Management position, something I am rather proud of, as there was only one other woman in the dept and the rest of the women were in clerical or human resources or sales.
I really liked that job.
Dean,
You make a good argument although you only tangentially cover the detractors of President Bush. I see the real reason that Begala, Carville, the Dems running for President, and the assorted Clinton apologists proffer this vapid argument is because this is their best argument.
Clintonistas absolved themselves of any burden of proof as I see it, soon after Republicans began attacking Clinton. Some of this is the direct fault of Republicans themselves. It was often shallow, cheap and void of any intellectual merit. In short, we gave Clinton and his apologists exactly what they needed to get his butt out of one sling after another.
However, this does not absolve Democrats of responsibility for telling The Big Lie. They repeatedly tell tall stories believing they will turn into the truth if they only repeat them enough times. Or perhaps, Democrats actually have contempt for average Americans believing us great unwashed are just stupid enough to believe that Bush and Cheney are doing this just for the oil. So far, you provided at least two strong counter arguments that will never see the light of day, Dean.
Maybe they also believed Clinton declared sizeable United States oil reserves off limits for drilling to prop up the oil holding of his Indonesian friend who contributed major bucks to Clinton's Presidential campaigns in 1992 and 1996. Funny that I never heard THAT reported in our booby American mainstream press. Remember Clintonistas repeatedly saying, It's all bout sex?” Well it wasn’t. Perhaps you are correct in believing these people are not thinking clearly Dean, but I doubt it.
I personally believe these clowns know exactly what they are saying. They also know the impact repeated lies have on average citizens the world over. People will tend to believe lies after a while simply because they (Clintonistas) have gotten away with saying them for so long. Lawyers call this the negative precedent. (Please note that Bill, Hillary, Begala, Lanny Davis, and Carville are all lawyers.) What you said so far is just being polite. I do not really care to be too polite with these people much longer. Their adult story telling has to end some time. I prefer it end here and now. These clowns do not care about the truth Dean. It is time we called them on their bluffs. They are hiding behind arguments amounting to no more than a gigantic hall of mirrors.
You are accurate describing these Americans as brainwashed. You can thank the environmental lobby for that. It is impossible to reason with them. Bob Barr described the environmental lobby as very strong. Congressman Nick Smith MI-7 last Saturday described the environmental lobby as strong. These might be understatements. I think the environmental lobby has needlessly hamstrung much industry the way you described. I am not against all regulation. I just have a gut feeling that we have gone overboard on environmental regulations and need to better balance environmental considerations with industrial, and thereby, job creation considerations.
Where we pump oil is a direct result of the current price. At $50 per barrel, domestic reserves will suffice for domestic needs. At half of that, we would prefer to pump Arab, or anybody's, oil. If (when?) oil goes up sufficiently, there are plenty of oil fields in Texas and Oklahoma that could be brought back online.
I know from which I speak. I was in the oil business, briefly, in the 1970s. Oklahoma is fairly floating on oil. These "stripper" wells produce only a few barrels each, and are uneconomic at current prices. (Dirty little secret: for the last couple decades, while these wells have sat idle, they have refilled from below) Let the price rise, and bye bye Arabian Oil. That's why they sell the oil so cheaply in the first place. At a high enough price, oil can be recovered from almost anywhere on the planet. Hydrocarbon is a naturally occurring mineral. Jupiter is almost entirely made of hydrocarbon. Earth, somewhat less....
First of all, allow me to say that I am NOT an anti-war protestor who believes that the coming war is all about oil. In fact I am not anti-war at all. The "blood-for-oil" crowd is taking a excessivley narrow view of the world, I believe.
That said, I have a question that is tangentially involved with your statement:
They stand to gain nothing personally from Arab oil.
Here's the question: When the press asked Cheney about Halliburton's business dealings with Saddam in the post-Gulf War 90's, what did he say?
Again, please don't mis-judge my question. It isn't a "gotcha" type question.
I just want to know.
Dean, what a lovely short essay. Some of the clearest thinking I've seen so far.
As a treat in return, you may find this interesting. It's only slightly off-topic.
http://www.johnbloom.com/specialreports/20020111.html
Well I think it's pretty obvious that Cheney knew that Saddam's oil fields would be destroyed, and knew that Bush would probably lose re-election in 1992. So he lined up a deal where he'd get offered a gig at Halliburton after the election, and then arranged with members of the Clinton campaign to give him a special dispensation in the bidding process when the U.N. decided to allow Saddam to start selling oil again.
It only makes sense. After all, Cheney had ties to the oil industry from way back.
I'm trying hard not to be sarcastic here. But, assuming anyone even asked him such a weird question, what do you think the answer could possibly have been? "Well, I plan on going back to Halliburton, and I've arranged this cushy deal where they'll win the bid to rebuild Saddam's oil fields once the U.N. clears him to start selling oil again, and..."
Dean:
No, I think you misunderstood my question. Allow me to rephrase and clarify:
During the 2000 campaign when the press asked Cheney about Halliburton's business dealings with Saddam in the post-Gulf War 90's, what did he say?
I think it's a valid question. What was Cheney's answer?
Then again, maybe no one asked. Is that possible?
The UN financial interest isn't mentioned often enough in these discussions. According to their website, the UN "Oil for Food" program has recycled $43 billion sinc December 1996, with almost $1 billion paid to the UN for "administration and planning". Not to mention that UN administraters and planners get to award the contracts to their allies . . . .
Nice essay - particularly so because it digs deep with some original material and thoughts.
We should also remember that it is in the Saudis' interests to keep oil prices stable. (I'm not defending them, just bear with me. ) I lived in Houston in the late 70's and early 80's: the boom and the bust. A banker buddy regularly put on a very short happy hour seminar on lending practices in the oil industry: "When oil is at $50 a barrel, there are no rules."
No one in 1980 thought Americans could reduce our dependence on oil. But by 1982 oil prices were dropping, the Texans and Oklahomans and Saudis were in recession, and you had to wait three months and pay a premium to buy a Honda Civic.
Adjusted for inflation, oil prices are still cheaper now than they were 23 years ago. That may not be true in a month but it helps explain why SUV's are so popular.
The Saudis know if prices go up, oil demand will drop, and coal shale in Colorado is economically feasible again. A double whammy.
If anybody chose his position in this Iraq thing for the oil, it is the French and Russians. France is worried it will lose everything if its very large Aquitaine oil company gets its refineries blown up. It may simply lose anything by choosing the wrong side in this war, too. Russia is worried that Iraq will not pay the tens of millions of dollars owed it by Saddam Hussein if Hussein loses this war.