No War for Oil: U.S. Dependency and the Middle East

Wednesday, December 7, 2011

Ivan Eland

Publisher: Independent Institute (September 2011)
Pages: 224
Language: English
ISBN-10: 1598130463
ISBN-13: 978-1598130461


Energy policy
Middle East
National security
Persian Gulf Region
Petroleum industry and trade
Petroleum products

Product Description

Oil has a bloody history. The ghost of petroleum hovers in the background even of wars that have liberty and democracy among their rationales. Blatant or veiled, the grab for oil resources has been a major factor behind many conflicts and military deployments. Oil has been deemed a “strategic” commodity. The word “strategic” has come to mean a product so vital to American society that government allegedly must step in, even to the point of war, to ensure adequate supplies and low prices. This book debunks the notion that U.S. military protection is required for oil imports and security and instead proposes solutions based on market-based provision of energy supplies, just as is the case for computers, food, and SUVs. War for oil has led to costly and unnecessary wars with massive losses of human life and the erosion of liberty at home and abroad.

No War for Oil enables educators, government officials, the media, and citizens to sort through the conventional claims about oil and the use of military power to secure it. Eland concludes that the use of U.S. military power to secure oil is not only unneeded and costly, but is counterproductive to U.S. security. Realizing that the alleged need to secure oil with military power is a canard, withdrawing U.S. forces from the Persian Gulf would enhance security, increase access to inexpensive energy resources, and help restore financial solvency for America.

Praise for No War for Oil

“No War for Oil is a tour de force of history, myth-busting, and sturdy policy analysis. It is at once an excellent overview of the development and quirks of the world oil market, a slaying of eleven monstrous but widely believed falsehoods, and a description of how and why our wars for "energy independence" have had quite the opposite effect. At a time when ill-conceived, unwinnable foreign wars are driving runaway deficits, we need more than a mild course correction. We need the facts, the truth, and the analysis to question the foundational assumptions that have driven American foreign policy for the past 60 years. This book could not be more valuable or more timely.”
—Michael C. Munger, Professor of Political Science, Public Policy and Economics, Duke University

“Ivan Eland provides a clear and powerful analysis of a major driver of U.S. foreign policy and military strategy. He offers a fascinating history of oil and its beguiling allure. For anyone with a serious interest in American defense and foreign policies, the Middle East, or the perilous pursuit of 'strategic goods,' the splendid book No War for Oil is a must read.”
—Donald L. Losman, Professor of Economics, Industrial College of the Armed Forces, National Defense University

“Here at long last is a book that explodes all of the myths underlying the use of military force to protect the global flow of oil. No War for Oil not only provides an invaluable account of the misguided policies that have led to ever-increasing U.S. military involvement in the Middle East, but also shows how the de-militarization of U.S. energy policy would better serve the nation's long-term interests.”
—Michael T. Klare, Professor of Peace and World Security Studies, Hampshire College

“In No War for Oil, Ivan Eland shows that U.S. dependence on oil is no big deal; that thinking otherwise has led to huge costs, including at least one war; that we are not running out of oil; that a free market in oil is the best energy policy; and that oil is incredibly cheap compared to the alternatives. Eland beautifully weaves history and economics to tell a compelling and, more important, true story. He has hit a home run.”
—David R. Henderson, Research Fellow with the Hoover Institution, Associate Professor of Economics at the Naval Postgraduate School, and former Senior Economist for Energy Policy with the President’s Council of Economic Advisers

“In No War for Oil, Eland provides a catalog of sharply argued rebuttals of the many myths that pervade Americans understanding of oil and national security. His comprehensive, methodical presentation will be very useful for reorienting the policy debate to firm, analytical ground. Not everyone will agree with every point Eland raises, but he is setting the right ground for crucial foreign policy debates. And the clear preponderance of evidence and analysis in the book convincingly presents the case for substantial changes in American foreign policy.”
—Eugene Gholz, Professor, Lyndon B. Johnson School of Public Affairs, University of Texas

“Ivan Eland has produced a devastating indictment of the ‘oil rationale’ for the intrusive, counterproductive U.S. military presence in the Middle East. No War for Oil should help debunk the most prominent justification for that misguided policy. Eland shows that on this issue, as on so many others, allowing the free market to operate is both less expensive and less disruptive. Abandoning the attempt to police the Muslim world in the name of preserving Western access to oil will end the terrible price that the American people have paid in blood as well as treasure.”
—Ted Galen Carpenter, Senior Fellow, Cato Institute

Table of Contents

1. Trading Blood for Oil


2. American Dominance in Oil
3. Iran, Iraq, World War I and the Interwar Years
4. World War II
5. The Cold War
6. Three Cartels: The Seven Sisters, the Texas Railroad Commission, and OPEC
7. Another Middle East War and Embargo, Shortages, and Price Rises
8. The Carter Doctrine
9. 1980s: European Dependence on Soviet Energy and the Iran-Iraq War
10. The US-Iraq Wars
11. The Oil Market Today


12. Myth 1: No Viable Market Exists for Oil
13. Myth 2: “Big Oil” Colludes with OPEC to Stick Consumers With High Prices
14. Myth 3: Global Oil Production Has Peaked and the World Is Running Out of Oil
15. Myth 4: Oil Is a Special Product or Even Strategic
16. Myth 5: A Strategic Petroleum Reserve Is Needed in Case of Emergency
17. Myth 6: The U.S. Should Become Independent of Oil, Foreign Oil, or Overseas Energy
18. Myth 7: Oil Price Spikes Cause Economic Catastrophes
19. Myth 8: U.S. Policy Is to Maintain the Flow of Oil At the Lowest Possible Price
20. Myth 9: Possession of Oil Means Economic and Political Power
21. Myth 10: The United States Must Defend Autocratic Saudi Arabia because of Oil
22. Myth 11: Dependence of Europe on Russian Energy Is a Threat to U.S. Security


23. Safeguarding Oil with Military Power Is Mercantilism and Imperialism
24. Threats To or From Oil

PART IV / Policy Prescriptions



•The United States devotes more resources to the defense of oil in the Persian Gulf than most people realize—a total of more than $334 billion per year (in 2009 dollars). To ensure the free flow of oil from the Middle East, the United States maintains military facilities in Oman, Bahrain, Qatar, Kuwait, the United Arab Emirates, and Iraq—as well as in nearby Egypt, Djibouti, Turkey, Afghanistan, Pakistan, and Diego Garcia. Despite the large amount of U.S. expenditures to defend the Persian Gulf, the United States gets only about 18 percent of its imported oil from Saudi Arabia.

•“Cheap” foreign oil comes with huge hidden costs that American leaders and the public need to keep in mind when thinking about U.S. foreign policy. According to one estimate, gasoline would cost U.S. consumers $5 more per gallon if federal spending for the defense of Persian Gulf oil were incorporated into gas prices. The U.S. military subsidy for oil means lower prices at the gas pump, but consumers ultimately a pay a steep price for that fake discount (and more) in the form of higher taxes and inflationary deficit financing to help fund a large U.S. military presence abroad. The king’s ransom that the United States spends to defend Persian Gulf oil is more than ten times the value of its annual imports from the Gulf.

•U.S. military protection of the Persian Gulf is unnecessary to ensure access to oil from that region. Without Uncle Sam’s generous help, Persian Gulf oil producers, shippers, and consumers (that latter residing mostly in Europe and East Asia) would have strong incentives to protect the free flow of oil. If the U.S. government eliminated its military subsidy for oil in the Persian Gulf, it could decommission approximately five army divisions, five active air wings of the Air Force, five Marine Expeditionary Brigades, and 144 ships, including six aircraft carriers—roughly half of the U.S. armed forces.

•Because only 10 percent of the oil consumed by the United States comes from the Persian Gulf, U.S. military protection of that region is even more irrational than nineteenth century European imperialism. American taxpayers would enjoy significant savings if the United States were to rely exclusively on markets to obtain oil, just as Europeans became better off as their governments reduced their use of armed forces and protectionist trade policies and relied more on free markets to obtain goods from other countries. Unfortunately, the U.S. government has taken the opposite approach in recent years and has extended its security umbrella over oil-producing regions in West Africa, Latin America, the Caspian Sea region, and Central Asia.

•Several popular myths about oil undermine clear thinking about America’s energy needs and U.S. foreign policy. One long-standing myth is that oil possesses “special” or “strategic” characteristics. Yet, there are many critical products that the market is allowed to supply in abundance at efficient prices, and oil should be no different. Furthermore, more than enough oil is produced in the United States to meet the needs of the U.S. military in time of war, and this supply can be augmented with oil purchased from Canada and Mexico. Thus, oil is not strategic.

•Becoming “energy independent”—a goal promoted by many Democratic and Republican politicians—is not in America’s best interest. In reality, consumers are better off when they are free to buy goods from companies and regions that have a comparative advantage in the production of those goods. Energy independence would serve only special interests such as less-efficient domestic oil suppliers or alternative energy producers that can’t yet thrive without government subsidies or protection from foreign competition.


About the Author

Ivan Eland is Senior Fellow and Director of the Center on Peace & Liberty at The Independent Institute. Dr. Eland is a graduate of Iowa State University and received an M.B.A. in applied economics and a Ph.D. in Public Policy from George Washington University. He has been Director of Defense Policy Studies at the Cato Institute, and he spent 15 years working for Congress on national security issues, including stints as an investigator for the House Foreign Affairs Committee and Principal Defense Analyst at the Congressional Budget Office. He also has served as Evaluator-in-Charge (national security and intelligence) for the U.S. General Accounting Office (now the Government Accountability Office), and has testified on the military and financial aspects of NATO expansion before the Senate Foreign Relations Committee, on CIA oversight before the House Government Reform Committee, and on the creation of the Department of Homeland Security before the Senate Judiciary Committee. Dr. Eland is the author of Partitioning for Peace: An Exit Strategy for Iraq, Recarving Rushmore: Ranking the Presidents on Peace, Prosperity, and Liberty, The Empire Has No Clothes: U.S. Foreign Policy Exposed and Putting “Defense” Back into U.S. Defense Policy, as well as The Efficacy of Economic Sanctions as a Foreign Policy Tool. He is a contributor to numerous volumes and the author of 45 in-depth studies on national security issues.

His articles have appeared in American Prospect, Arms Control Today, Bulletin of the Atomic Scientists, Emory Law Journal, The Independent Review, Issues in Science and Technology (National Academy of Sciences), Mediterranean Quarterly, Middle East and International Review, Middle East Policy, Nexus, Chronicle of Higher Education, American Conservative, International Journal of World Peace, and Northwestern Journal of International Affairs. Dr. Eland's popular writings have appeared in such publications as the Los Angeles Times, San Francisco Chronicle, USA Today, Houston Chronicle, Dallas Morning News, New York Times, Chicago Sun-Times, San Diego Union-Tribune, Miami Herald, St. Louis Post-Dispatch, Newsday, Sacramento Bee, Orange County Register, Washington Times, Providence Journal, The Hill, and Defense News. He has appeared on ABC's World News Tonight, NPR's Talk of the Nation, PBS, Fox News Channel, CNBC, Bloomberg TV, CNN, CNN Crossfire, CNN-fn, C-SPAN, MSNBC, Canadian Broadcasting Corp. (CBC), Canadian TV (CTV), Radio Free Europe, Voice of America, BBC, and other local, national, and international TV and radio programs.

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