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June 1993

The Persian Gulf: Still Mired

Ever dependent on cheap oil, the United States continues its meddlesome Gulf policy, which is based on an inaccurate picture of tangled Gulf politics

by Alan Tonelson

It's easy enough to understand why Bill Clinton has since early in the presidential campaign emphasized continuity in foreign policy. It has allowed him to pre-empt conservative political attacks, to appear sagacious despite his inexperience, and to remain true to his centrist instincts. In Iraq and the Persian Gulf, however, continuity needs rethinking.

For all the Desert Storm-generated talk about a new world order, the United States has been involved in the Gulf for one main reason: oil. Since the Second World War, America's Gulf policy has been to use military force and diplomacy to secure stable supplies of oil from the region's vast deposits, at reasonable prices. Yet, as shown by the United States-Iraq confrontation last January and the hairline fractures it revealed in the Gulf War coalition, this approach has only the dimmest of long-term prospects. And short-term collapse cannot be ruled out.

In fact, from 1971, when Britain resigned as the international-beat cop east of Suez, to the 1991 Gulf War, America kept the Soviets out of the Gulf only to be burned repeatedly by local actors and events: Islamic zealots, will-o'-the-wisp moderates, feckless allies, hostage seizures, ruinous oil-price shocks, and, finally, Saddam Hussein and his power lust. Even America's successes--mainly Operations Desert Shield and Desert Storm--may backfire, by removing the last local obstacle to Iranian hegemony over the Gulf.

Discuss this article in the Global Views forum of Post & Riposte. More on foreign policy from The Atlantic's archive.

More on defense from The Atlantic's archive.

From Atlantic Unbound:

Flashbacks: "Iraq Considered" (October 1, 2002)
Should the U.S. intervene in Iraq? Articles from 1958 to the present offer a variety of perspectives.

Flashbacks: "The Intervention Question" (April 7, 2000)
Atlantic articles from 1967 to 1996—by George McGovern, Ronald Steel, Jonathan Clarke, John J. Mearsheimer, and Robert D. Kaplan—take up the issue of American interventionism.

Flashbacks: "Who Are the Kurds?" (February 17, 1999)
Two Atlantic articles from the past decade put the "Kurdish problem" in perspective.

Flashbacks: "Oil and Turmoil" (July 11, 1996)
Three Atlantic authors tackle the issues of politics, oil, and the Persian Gulf.

The problem of the Gulf is the diplomatic equivalent of a trick question. Wars, alliances, military aid, and other aspects of conventional foreign policy can't work there. With the exception of pro-Western, democratic Israel, the conditions they require don't exist in the region--specifically, what might be called real countries. For outside powers mired in the Gulf, the only sensible approach to the region is to reduce or eliminate their reasons for involvement. For America, this means finally doing something about its dependence on Gulf oil. Kicking the imported-oil habit won't be easy, as decades of addiction indicate. But that idea is more promising than the ideas currently proposed for securing this vital U.S. interest, all of which assume that the Gulf is basically like regions that do contain real countries or that it can be made so by smart outsiders.

Real countries, of course, can be difficult to deal with. Some, like the former Soviet Union and China, have been military enemies and rivals of the United States. Yet they all have had qualities that at least make possible reasonably successful U.S. policies, mutually acceptable modi vivendi, and even limited cooperation. Their governments and societies have been relatively stable and cohesive for meaningful periods of time. Thus even those countries with aggressive ruling ideologies have not needed to use constant belligerence to distract their populations and shore up their legitimacy. They can also take significant initiatives, pursue sustained courses of action, and (usually) keep commitments if they choose.

To be sure, the Gulf states resemble real countries. They have heads of state, armies, and postage stamps. They send ambassadors abroad. Underneath, however, they are something else entirely: some are legal-political fictions, some family corporations in which the restive immigrant employees greatly outnumber the indigenous owners, others "tribes with flags." All are under constant assault by centrifugal forces ranging from ethnic and religious tensions to Islamic fundamentalism to pan-Arabism. For many regimes, making scapegoats of foreigners and infidels is the only hope of survival.

In other words, the Gulf countries are either terminally insecure or irremediably bellicose. Yet the Bush and Clinton Administrations, along with their leading critics, would all stake America's energy and economic future on various grandiose schemes either to manipulate and stabilize the Gulf's savagely byzantine politics or to turn its various antagonists into real countries. As a result, we have been choosing among an array of Gulf strategies whose successes would be almost as bad as their failures.

America's allies clearly are tiring of the current policy of containing Saddam Hussein and keeping the pressure sufficiently intense to encourage his ouster. Most of the Arab states are troubled about a policy that has defanged the Iraqi military. Although that military threatened their security, it also provided protection against non-Arab Iran, whose size, population, and military-economic potential make it the region's natural hegemon. For this reason Iraq's wealthy neighbors, including Kuwait, lent the Iraqi dictator vast sums to finance his war with Iran in the 1980s.

Even if they did not have Iran to worry about, the Gulf countries' belief that their neighborhood would be more dangerous without Saddam Hussein--or without a strong Iraq--is anything but irrational. Saddam's successors could not easily ignore Iraq's long-standing claims on Iranian and Kuwaiti territory. Nor could America's NATO ally, Turkey, easily ignore its historic claims on Iraq. In addition, the breakup of Iraq--which has existed in its current form only since the end of the First World War--into Kurdish, Shiite, and Sunni entities could embolden minorities throughout the Arab world to try to escape their own national prisons. Indeed, this "glass house" factor in the Middle East should never be underestimated; Iraq's neighbors can hardly support international punishment of Iraq's domestic repression without eventually exposing themselves to judgment.

The Europeans are evidently weary of American versions of the new world order, in which they as well as the United States put soldiers in harm's way. They also fear that the anti-Saddam Hussein campaign is beginning to look like an anti-Arab vendetta to the Arab world, whose oil they need even more than America does, and whose export markets are critical.

Overt American moves to oust Saddam Hussein would encounter not only severe international opposition--for exceeding the UN resolutions that authorized the Gulf War--but also severe regional opposition. For this Americans can be grateful, unless they relish the prospect of militarily occupying a country whose next peaceful transfer of power will be its first.

Indeed, even if Iraq stays together, the best that containment can offer us is open-ended military involvement in a faraway region whose populations are so deeply anti-Western that any government cooperation with America can be the kiss of death, and whose arsenals are likely to contain ever larger numbers of advanced weapons--including nuclear weapons.

Containment's inadequacy is clear from the number of proposals for substitutes for or at least complements to U.S. military power. Unfortunately, none of these measures up. After the Shah fell, Washington turned to the time-honored strategy of balance-of-power politics to bottle up Iran's Islamic Revolution. Yet a balance of power was difficult enough to orchestrate in Europe from the seventeenth-century birth of the modern state system to the end of the Second World War. Most European countries were real countries with limited diplomatic aims. Few of the Gulf powers are as tolerant, and the exceptions (mainly Saudi Arabia) are internally too weak to conduct anything but passive, reactive foreign policies. In fact, the only potential Gulf balancer--Saddam Hussein--has expansionist ambitions himself. To think that Washington could have strengthened the Iraqi dictator just enough to contain Iran but not enough to fuel his own imperialism reflected considerable hubris.

The same problems make fanciful the idea of a regional security system--a "Middle East NATO." Undoubtedly, some paper security arrangement can be drawn up by the State Department, but to be effective the U.S. role would need to be predominant--and the policy would be barely distinguishable from containment.

The various proposals to protect U.S. interests by solving the Gulf's underlying problems simply assume the quandary away. If the prevalence of autocracies and of extremes of wealth and poverty in the Gulf could be solved with a few new programs, clearly these problems would be bad memories by now. But outlandish surrogates continue to be proposed, chief among them one that evidently intrigued Clinton in January, and that his Administration revived two months later--Saddam Hussein himself. If the Iraqi dictator behaves, the argument goes, and abides by the UN resolutions, we could move --cautiously, to be sure--toward normal relations. If only he would start acting rationally.

Unfortunately, our main problem with Saddam Hussein is not his wickedness, his stupidity, or his lunacy. It is that his interests fundamentally conflict with ours. U.S. prosperity has been tied to stable supplies of Gulf oil, the price of which is set by a combination of OPEC production quotas and market forces. To keep this price relatively low, high levels of Gulf production are needed. America's interests here coincide with those of the conservative Gulf kingdoms like Kuwait and Saudi Arabia.

Blessed with staggering oil reserves and holding huge investments in the West, these countries can simultaneously build cushy welfare states for their small populations and buttress Western prosperity by pumping furiously and thus relaxing price pressures. Both Iraq and Iran have much larger populations and need high oil prices to provide for their people, pay off their enormous war debts (in Iraq's case, primarily to the oil kingdoms), and keep themselves armed to the teeth--if only against each other. As long as both Iraq and Iran need huge oil revenues, they will seek control over the Gulf kingdoms' oil policies--by intimidation or outright coercion--no matter who rules them.

Continuing U.S. involvement in the Gulf, therefore, is a losing proposition no matter what we do. And the longer we stay, the sorrier we are likely to be. But what has the United States been doing about the oil addiction that traps us there? Letting it get worse. From 1985 through 1992 U.S. oil imports from the Arab OPEC countries as a share of total oil imports rose from 11 percent to 29 percent. During the same period Arab OPEC imports jumped from three percent to 12 percent of U.S. oil consumption. In 1979, a peak of the oil panic in America, Arab OPEC imports stood at 38 percent of all U.S. oil imports and 17 percent of all U.S. consumption. Just as important, petroleum consumption as a percentage of total U.S. energy consumption fell only a little, from 47 percent in 1973 to 40 percent in 1991.

Part of the blame lies in the inherent difficulty of changing our energy habits. The U.S. economy has been structured around cheap oil for most of this century. Even if we were to launch the most brilliant alternative-fuels strategy conceivable, our dependence on oil would persist for years. But another part of the blame lies in an approach to energy policy that makes much of our dependence on Gulf oil a self-fulfilling prophecy. America depends on Gulf oil not only because we are too stupid and selfish to change but because we have persuaded ourselves that it's a good deal. Oil is, after all, one of the most efficient fuels--a relatively small amount of gasoline powers a car--and Gulf oil is the world's cheapest to produce. Aside from being abundant, it is located very close to the earth's surface, which makes extraction easy and inexpensive.

Even those who believe in relying on Gulf oil admit that switching to other fuels could have major advantages--for example, environmental ones. But switching makes no economic sense so long as other fuels are much costlier than oil. Washington seems to agree with the Saudi Oil Minister, Hisham Nazer, who recently argued, "Oil is cheap, clean, and safe....why penalize this precious gift of God at the expense of the welfare of the people of the world?" Therefore, we have starved the alternative fuels of development funding and then lamented how utopian they are. In fact, Ronald Reagan was so sure that oil was our best energy bet--and perhaps so beholden to domestic oil interests--that he virtually dismantled the federal alternative-energy research programs almost as soon as he became President. Thus, the conventional wisdom concludes, we are simply stuck playing warden in the Gulf insane asylum. Small wonder that we've lost twenty years in the fight for greater energy independence.

Persian Gulf oil is much more expensive than we think. As many environmental specialists have noted recently, the pollution caused by oil is expensive to prevent and to clean up. Pollution also creates disease and may contribute to environmental disruption--like the greenhouse effect--that will be costly to treat as well. The national-security costs of Persian Gulf oil are no doubt lower but easier to quantify. They include the money spent on US. military forces that have protected U.S. access to Gulf oil since the beginning of the Cold War. They also include the tens of billions of dollars that Washington has spent on foreign aid in the region to win friends. Although Pentagon accounting systems and the reality of forces with multiple missions make precise comparisons impossible, adding in these national-security costs alone can raise the real cost of Persian Gulf oil to the American taxpayer to three or four times the world market price even when the region is at peace.

Further, at least partly because we underestimate the real price of Gulf oil, we overestimate the real price of those alternative fuels that can liberate us from permanent entrapment in the Gulf. By the mid-1980s the cost of many of these energy sources was falling rapidly. Today a strong argument can be made that in many cases renewable fuels would be price-competitive with Persian Gulf oil if it were priced realistically. For example, according to conventional oil pricing, oil is capable of producing energy at roughly a nickel per kilowatt-hour. Many renewable energy sources can nearly match that artificially low price in certain locations and circumstances. Where winds are strong and predictable, new high-tech windmills can generate electricity for seven to nine cents per kilowatt-hour, according to the Electric Power Research Institute, the research arm of the nation's electric utilities. In sunny regions solar-thermal systems can do the job for a dime per kilowatt-hour. Photovoltaic cells can produce electricity for low-power "off the grid" equipment, such as highway signs and water pumps on isolated farms, for thirty to forty cents per kilowatt-hour.

If Persian Gulf oil really costs three or four times what the world market tells us it does, renewable sources are clearly among our best energy bargains already, and their desirability is likely to grow in many more contexts by the early twenty-first century. In fact, one 1990 study sponsored by the Energy Department estimates that with the right incentives and regulatory environment, renewable fuels could account for 40 percent of the nation's energy use within forty years. Moreover, according to recent calculations by the U.S. Environmental Protection Agency, properly calculating the price of Persian Gulf oil would make America's abundant, clean-burning natural gas economical even for transportation fuel--which currently consumes two thirds of all the petroleum used by Americans.

It is obvious that America will be stuck militarily protecting the flow of Gulf oil for many years. Although the world energy market is more resilient than was believed when the first OPEC price shocks hit, in the 1970s, American Presidents have, reasonably, judged that the risk of permitting oil prices to be dictated by one or a handful of Gulf autocrats is unacceptable. It is equally obvious, however, that the means of ending this predicament through the use of oil substitutes are close at hand.

Persian Gulf oil has been so important to America for so long that it is understandably difficult even to imagine extricating ourselves from the region. Moreover, during the past fifty years America's need for oil has created a host of other interests and assumed responsibilities that have taken on lives of their own--from stemming the proliferation of advanced weapons to establishing a mutually beneficial relationship with the Islamic world. But without the Gulf's huge oil reserves these objectives, however important and desirable, would fade to secondary importance. Kicking the oil habit need not prevent American involvement in Gulf controversies or in active diplomatic efforts to broker an Arab-Israeli peace. It might even permit deeper involvement. But the United States would have much more control over the terms of its involvement. In the long run such increased freedom of action could be good not only for the United States but for the region's long-exploited peoples as well.

Alan Tonelson is a Research Fellow at the United States Business and Industrial Council Educational Foundation.

Copyright © 1993 by Alan Tonelson. All rights reserved.
The Atlantic Monthly; June 1993; The Persian Gulf: Still Mired; Volume 271, No. 6; pages 48-52.

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