Okay, welcome back to the show, everybody.
It's Anti-War Radio.
I'm your guest host, Zoe Greif, filling in for the real host, Scott Horton.
And I want to welcome our final guest of the day to the show, Mr. Ivan Eland.
Welcome to the show.
How are you doing today?
Thanks for having me on.
Oh, it's my pleasure.
Believe me.
And we're going to talk about your latest book, No War for Oil.
I must admit, Ivan, I haven't read it yet.
I would love to, though.
Why don't you tell me and the audience about your book?
Well, it basically goes through, there's been many myths surrounding the oil industry, and I go through and decimate all the myths.
And the final one is that we need to have war for oil.
That is to say, we need to protect oil with military force.
In fact, that policy is the same policy that Imperial Japan used during World War II, which, of course, we didn't like very much, and we fought against it.
And I would argue that our policy is even worse than theirs, although they committed a lot of atrocities during the war.
But the actual policy, I think we're not trying to safeguard oil supplies to our military or our country like they were, but we're, in fact, trying to put our thumb on everyone else's oil.
And that's really not cost effective.
Empire was proven not to be cost effective by the classical economists of the 18th and 19th century.
And I think we really need to reassess our military presence in the Persian Gulf and in the Middle East.
And I think if we do that, we'll have far less terrorism, because Osama bin Laden's main reason for attacking the United States was that non-Muslim forces in Muslim lands.
And this also drives the conflict in Chechnya with Russian forces.
It has driven the conflict in the Soviet period during Afghanistan, in the British period when they lost three wars in Afghanistan, in the U.S. period in Afghanistan, and, of course, the U.S. period in Iraq.
And, you know, it also drives the Israeli-Palestinian problem as well.
It certainly does.
And, again, I haven't read your book yet, No War for Oil, U.S. Dependency and the Middle East, but I certainly would like to.
And I'm guessing that at some point in your book you come to the conclusion that it would be a lot cheaper just to buy the oil on the open market rather than to invade and occupy with this military colossus.
What do you think about that, Ivan?
Yes.
The market is the best conveyor of the oil at the cheapest possible price.
Now, sometimes the price of oil goes up, and sometimes it goes down.
And it always becomes a big political issue here in the United States.
But there's really no strategic reason that we need to defend oil.
We have plenty of oil for our military.
In fact, even within the borders of the United States, we have between 13 and 14 times the amount of oil we would ever use for our military.
And if you add Canada and Mexico and other friendly Western Hemisphere countries, we have a lot more than that.
As for our economy, the oil price goes up.
One of the episodes I look at in the book is the oil embargo of the 1970s, which still haunts us that these Arabs are going to somehow turn off the oil.
The embargo was a disaster for them.
They haven't tried it since, and there's a reason for that.
And the world oil market has just become more freer and freer as we speak.
With the electronic futures and spot markets in New York and other places around the world, the oil producers really don't have control over the supplies that they ever did, the physical supplies of oil.
And that's what this was really all about, isn't it, Ivan?
It's not that the U.S. is going to use all the oil in the world, but like you say, to keep China and Russia and other interests from having control of it.
It's just about control, right?
Right.
I think it is.
I think it's about empire.
And the reason I say that is because there's no real economic reason that we need to do this.
And our policymakers have convinced themselves that we need to do this.
But in reality, I think below the surface, if it's not cost effective to defend oil using military power, which it's not, then why are they doing it?
Well, I think they want to do it to get advantage over China and other countries, even our allies.
I think it gives us sway over them if we protect their oil supplies, because they get more oil from the Persian Gulf than we do.
We only get 18% of our oil from the Persian Gulf and 11% of our consumption.
So that is to say 18% of our imports and 11% of our consumption from the Persian Gulf, which is fairly low.
Now, there's a worldwide oil market, and anytime you put oil onto the worldwide market, the price goes down.
Anytime you take off oil, the price goes up.
But people have a tremendous incentive, because oil is valuable, to put it on the market and sell it.
And even if Saudi Arabia would be taken over by Islamists, the ultimate, probably the biggest threat to the oil supplies, sooner or later, those Islamists are going to realize that to carry out their agenda, they need money, too.
And the only way they can get it is to pump oil.
And of course, the Iranians were a fairly radical Shiite regime in Iran that took power, and they never stopped the oil.
They realized the oil was what they needed to run their society and carry out their ideology.
So even if Saudi Arabia got taken over by Islamists, which I would argue our military presence makes more likely than not, that is to say our military presence in the Persian Gulf is probably counterproductive to low oil prices and preventing revolutions.
And I think even if that happened, even if the revolution in Saudi Arabia happened, oil would still flow.
Well, like some famous person said, I forget exactly who, but they said, what are the Muslims going to do with their oil but sell it?
I mean, they're not going to drink it, they're going to sell it.
It's literally a liquid commodity.
And so, you know, you sell it to the highest bidder.
That's how this works.
Except that the military keeps getting involved and complicating everything.
And that's one of the myths that you bust in your book, which is called No War for Oil, U.S. Dependency in the Middle East.
What's another myth that you'd like to highlight that you busted on the show today, Ivan?
Well, I think the big one is that one of the few things that both parties can agree on, and you know you have a problem when both parties agree on it, is that we need to be energy independent or oil independent, you know, foreign oil independent of foreign oil.
And those are both myths because what they don't tell the consumer is if you want to be energy independent or oil independent from foreign countries, you're going to pay more, right?
And nobody really wants to pay more for oil, I assure you.
When you go to the gas station, most people want the cheapest gasoline they can or diesel fuel to put in their cars and trucks.
Absolutely.
Everybody knows that.
You're not going to get any votes if you frame it in a different way and tell people, well, yeah, we can have oil independence, but it's not very efficient because of protectionism.
So, you know, we don't like protectionism in textiles or, you know, foreign products or anything else because it raises the price to consumers.
So why would we want to do the same thing in energy?
So let me make sure I got this straight, Ivan.
You're saying that, I mean, I'm here in Austin, Texas, and I remember in the 80s the oil derricks seemed to be pumping or whatever those things are called.
And they're not pumping so much anymore.
But you're saying that it really is cheaper to buy it from elsewhere.
I guess the U.S. gets a lot from Venezuela and places that most people don't really think about.
I'm not so sure about that.
I'm sure you can correct me if I'm wrong.
But it's cheaper to get it from elsewhere than to produce it domestically is what I was trying to say.
A lot of U.S. oil wells are old.
Now, we've got some new technology that's coming in North Dakota and other places to get it, oil and shale rock.
But that's fairly expensive oil, too.
So you have your old wells, and then you have your new wells.
But wells in the U.S. are pretty expensive compared to Saudi Arabia.
I mean, Saudi Arabia, the oil is near the surface, and it just, you know, sort of flows out without much effort.
And so it's very cheap to produce.
So what you want to do, and if you think oil is going up in the future and is going to be permanently scarce, as some people think, then shouldn't we be conserving our oil and pumping others?
And the government used to believe that in the 1940s and 50s.
But, of course, we have the reverse policy now of pumping our oil and not using everyone else's.
So we have the opposite policy.
But I say that both of those policies are wrong.
We should just let the free market decide what oil supplies we use and if we can buy cheaper.
Certainly, we're going to pump more oil.
I'm all for pumping oil here in the United States and maybe even exploring areas that have been prohibited, you know.
But that's not going to solve the problem because it's really not a problem to solve.
We should definitely pump that oil.
But to say we're going to achieve oil independence, first of all, that's probably impossible.
And second of all, it's undesirable.
Well, we've got to take a break now because of the commercials and the realities of radio.
But I'm talking with Ivan Ehlen about his book, No War for Oil, U.S. Dependency in the Middle East.
More on the other side, Antiwar Radio.
Welcome back to the show, Antiwar Radio.
I'm your guest host, Zoe Greif.
And I'm happy to be talking with Ivan Ehlen.
He is a senior fellow at the Independent Institute.
And he's the author of the book, No War for Oil, which drops bombs of truth that explode myths about oil, oil policy, war, economics, etc., etc.
And Ivan was just explaining how his book blows up the myth that war is necessary if we want to have oil.
And then he also blew up the myth that domestic independence of energy supply, however you phrase that, would be a good thing.
Because actually, Ivan, you're saying that it wouldn't be a good thing and it doesn't make sense economically.
Do I have that correct?
Right, right.
We should just let the market provide the oil because it's valuable.
And people – you can't really protect oil because there's so many people involved in getting it out of the ground, putting it into pipelines, shipping it to ports, putting it in tankers, sailing the tankers, and then taking it to a refinery and refining it, and then, of course, distributing it to gasolines and gasoline stations and other outlets.
So how are you going to defend all that sort of thing?
And then you also have to defend the tankers.
I mean, there have been tanker shortages.
There have been shortages of platinum group metals, which are much more valuable than oil, which are used to crack the big oil molecules into smaller diesel fuel and gasoline molecules.
And we don't talk about going to war for platinum group metals or that sort of thing.
We're oil tankers.
So the government starts managing one aspect of this massive web.
All it does is distort the market, and it really can't protect all the links in the chain, as we saw, I think, most dramatically.
During the Iraq War, there was an oil pipeline, and it was shut down and hit by armed explosions every day.
And so that pipeline stretched for hundreds of miles in Iraq.
And, of course, you couldn't protect it, and that's just one link in the chain.
So it's very difficult to protect all this stuff.
But fortunately, we really don't have to because people have economic incentives because of profit to move all this stuff to the market and into our gasoline tank.
Yeah, I'd say let the market work, and it will.
People will just do it.
But no, no, the politicians, the generals, the bureaucrats, they say otherwise.
Well, you know, what you were just talking about with all the middlemen with regard to global oil supply and the whole rigmarole of that, it kind of reminds me of one of your recent articles about oil sanctions with regard to Iran.
And it's titled Smoke and Mirrors in Energy Policy.
And I've just got to say, Ivan, I was stunned, and my jaw was actually hanging open as I read the information that you were talking about, about how these sanctions are leaky, quite literally leaky.
Would you care to comment or expand on that?
Well, when we put sanctions against another country, we kind of have a reverse OPEC cartel.
In other words, when OPEC tried to block oil, they had quotas, and they reduced the amount that they were exporting to the rest of the world.
Well, what happened, it's great, you know, countries like to pretend they're cooperating with each other.
But when it costs them money, what they do is cheat.
And what happened with the OPEC embargo is the price started going up when they started.
Ostensibly, all these countries had lower oil production quotas, so the price was going up because oil was supposedly less of it out there.
Well, what happened is all the countries started producing more oil on the fly to take advantage of the higher prices.
So what happened was the embargo was a sham.
The same thing in reverse, when countries try to lower their imports of Iranian oil, what happens?
The Iranians say, well, you know, I guess we're going to have to discount our oil.
So Iranian oil becomes a great deal.
And oil is very hard to trace, because when a tanker moves out to sea, of course it can just, papers say it's going one place, and it carries along some fake papers, and they show up elsewhere, right?
And so this oil is discounted, and the supplies just reorder, as they did in the reverse on the oil embargo.
And the market still works, even though the sanctions are on.
So all these countries like India and China, they don't really want to cooperate with the U.S. in getting the economic sanctions, because they get a lot of oil from Iran, and it's fairly cheap and good quality oil.
So they would rather not do that.
So they're pretending to cut down their supplies, but if they could run across some cheap oil on the open market somewhere, they would probably snatch it up.
As long as Iran can get the oil to sell it to somebody, which it can do by discounting or, you know, switching manifests on ships and stuff, oil is rather fungible.
What you have is cheating.
Over time, cheating is going to nullify most of these sanctions.
So we'll probably have more oil on the market, and I think as we've seen, oil prices going down.
They were going to reduce Iranian exports through these import restrictions, but Saudi Arabia was going to produce more oil.
Well, Saudi Arabia probably will produce more oil, but then a lot of this Iranian oil will be exported anyway.
So for a while, we may have a glut until the market reacts, and I think that's why you're seeing lower oil prices at the start of the driving season.
Yeah, you know, it's summertime here in Texas, and I'm used to the price of gasoline ticking up a little bit, and yet I notice it seems to be ticking down.
That's unusual, and you're saying it has to do with the Saudi kings and the mullahs of Iran and all this geopolitical struggle?
Well, it's all a show.
I mean, the Saudis are enemies of Iran, so of course they have to pretend to increase production, which then they probably are increasing production because they can make more money.
But at the same time, Iran will probably be able to avoid the sanctions, and Saudi Arabia is supposed to be putting out as much oil as they're taking off the market from Iran.
Thus, the price theoretically should stay the same, but it may be lower because of Iran.
That would be a measure of how much the Iranians can evade, and I think they can evade quite a bit of the sanctions over time.
It's Anti-War Radio.
I'm your guest host, Zoe Greif.
Our guest right now is Ivan Ehlen.
He's a senior fellow at the Independent Institute.
His latest book is No War for Oil.
I'll give you the last word.
Ivan, is there anything you want to go over or anything that we failed to cover that you want to talk about in this last minute or two before this break rudely interrupts us?
Well, ever since 1911, we've regarded oil as being strategic because it's used for military forces.
But we have plenty of oil for that, and I think our military has become essentially an oil protection force.
We have the new Africa Command, and we've never really been interested in Africa.
But now that more of our oil production is coming from West Africa and Nigeria and other countries, Angola, off the African coast, it shows that the military kind of goes where the oil goes.
And I think if we don't need this oil protection force, then perhaps we could reduce the defense budget.
And wouldn't that be nice?
Because then there would be money left over for other things besides killing people elsewhere and making enemies elsewhere and turning property and people into holes in the ground.
That seems much more productive to me, Ivan.
Well, yeah, so we could reduce the gaping federal deficit and that sort of thing as well.
I mean, honestly, I'd rather them just burn a trillion dollars a year in a big bonfire than you spend it on dropping bombs on people around the world.
That would be much less bad.
Well, yeah, it's essentially reducing the productive capacity of the world.
So if you don't have to do that sort of thing, you should probably avoid it not only for the moral reasons but for the economic reasons, because in warfare, it's a zero-sum game.
In economics, we want everybody to do well so they can buy our products, we can buy their products, etc.
So it's good to compete economically.
But I think we should compete with individuals and with companies rather than nations competing for economic advantage using military power.
Yeah, it's not working out for the United States in the long...not in the short term or the long run, is it?
Right, it's just that the empire does not pay.
Yeah, I agree with you absolutely, Ivan.
The taxpayer wants to pay for it, fine, but I think that after the Afghanistan and Iraq War, I think people are sort of saying, yeah, I don't think we ought to do these things anymore.
You know, the Iraq War alone cost probably $4-6 trillion, if you can count for all expenses.
That's humongous.
That's a humongous...
The budget deficit is only $1 trillion.
So I think we've really got to stay out of these quagmires in the Middle East.
Well, you and I know better, but does anyone inside the Pentagon, does anyone in Congress?
There's real marble halls of power.
Do they know this obvious truth that we're talking about?
Well, they don't like to do that because the military...
They don't like to acknowledge it because the military-industrial complex needs some sort of threat, and the other threats are not very great right now, so of course we've got to protect the oil.
And, you know, we really didn't start doing that until the late 1970s when Carter put in the Carter Doctrine, and even then he didn't have the military forces until well into the Reagan administration, toward the end of the Reagan administration, to protect any oil because they built up the forces to do it.
So, you know, what happened before the late 80s, I mean, you know, we relied on the Iranians and the British to patrol and the Saudis to secure the oil.
But I don't really think we need to do that anymore if we pay attention to the facts.
But the military-industrial complex has an incentive of keeping threats to the oil alive because they want something to do.
They want to justify the weapons systems that they have, etc.
So I don't think people in Congress and in the Pentagon really want to hear these arguments.
Yeah, because then the funding would stop flowing, wouldn't it?
And who cares about the morality of it or the practicality of it?
I guess we're all out of time.
We're going to have to leave it there.
This is Ivan Ehlen, Senior Fellow at the Independent Institute.
The book is No War for Oil, and I hope that everyone in the Pentagon and Congress reads it.
Thanks for your time on the show, Ivan.
Thanks for having me on.
