The "Curse" of Oil and What to Do About It

By: Lowell
Published On: 5/5/2006 7:51:29 AM

In his New York Times column today, Tom Friedman writes about subject that is near and dear to my heart:  the curse of oil.  Rattling off a list of world problems - Iran building nukes and threatening to use them on Israel; Putin's Russia clamping down on Democracy and civil society; Sudan ("awash in oil money") ignoring the world on Darfur, Venezuela's Hugo Chaves ratcheting up anti-Americanism in Latin America, unrest in Nigeria, horrendous human rights abuses in Uzbekistan, and on and on - Friedman cites a common thread: oil.  According to Friedman, with whom I wholeheartedly agree:
There is a pattern here...

[...]

What I would call "petro-ist" states +óGé¼GÇ¥ highly dependent on oil or gas for their G.D.P. and having either weak institutions or outright authoritarian systems +óGé¼GÇ¥ have started asserting themselves. And they are weakening, for now at least, the global democratization trend.

Economists have long taught us about the negative effects that an overabundance of natural resources can have on political and economic reform in any country: the "resource curse..."

I call it the "First Law of Petropolitics," and it posits the following: The price of oil and the pace of freedom always move in opposite directions in petro-ist states.

According to the First Law of Petropolitics, the higher the price of global crude oil, the more erosion we see in petro-ist nations in the right to free speech, a free press, free elections, freedom of assembly, government transparency, an independent judiciary and the rule of law, and in the freedom to form independent political parties and nongovernmental organizations. Such erosion does not occur in healthy democracies with oil.

That oil is a "curse" that harms democracy, human rights, freedom, and the environment is not seriously disputed by any analysts I've come across.  Oh, perhaps the American Petroleum Institute might beg to differ, but who cares what they think, frankly.  Personally, I find Tom Friedman infinitely more credible when he writes:

Given the inverse relationship between the price of oil and the pace of freedom in petro-ist states, any U.S. strategy for promoting democracy in these countries is doomed to fail unless it includes a credible plan for finding alternatives to oil and bringing down the global price of crude.

The price of oil should now be a daily preoccupation of the secretary of state, not just the secretary of energy. Today, you cannot be an effective democracy-promoting idealist without also being an effective energy-conscious environmentalist.

For starters, how about we get serious in this country about our "oil addiction," as President Bush himself calls it?  Imagine if all our vehicles got 40 miles per gallon instead of the low 20s, as they do now?  That would cut our gasoline consumption - 9.3 million barrels per day at present - by roughly half (4-5 million barrels per day).  We have the technology to do this within the next few years, we just lack the political leadership and will, even at a time of war and potentially catastrophic global warming. 

Just imagine, however, if we DID cut our oil consumption by 4-5 million barrels per day over the next few years?  My prediction, as someone who has worked on world oil markets for more than 17 years, is that oil prices would fall sharply.  This would, of course, starve all those authoritarian regimes that Friedman mentions of the ability to maintain their thuggish systems through bloated oil revenues. 

Would it be a sad day if Russia were forced to reverse course and move once again towards democracy, the rule of law, and the community of civilized nations?  Would it be a tragedy if the Iranian President, who calls for nuking Israel, were forced to scale back his apocalyptic ambitions?  Obviously not.

And all we'd have to do in order to encourage these goals is to get off our oil addiction - a goal that is well within reach of current technology (hybrids and even "plug-in hybrids" that get 4 times the mileage of current vehicles). Frankly, if we can't or won't do that, we don't deserve to be called a superpower.  And we won't be one for long, either, as the world turns every more inhospitable to Democracy and American values.

In a speech late last month at Stanford University, former Senator John Edwards had the following to say about Russia, democracy, and oil:

...after a "corrupt and chaotic" bout of democracy after the Soviet Union's collapse, Russian President Vladimir Putin has stabilized Russia's politics and strengthened its economy while severely curtailing democratic institutions such as free press and competitive politics.

The Bush administration's response thus far has been weak, Edwards charged.

Edwards added:

The administration has been "grotesquely irresponsible from the minute they took office," he said. "You can't expect an oilman to move America away from its dependence on oil."

Noting that Wednesday was the 20th anniversary of the Chernobyl nuclear reactor disaster in Ukraine, Edwards called for a stronger focus on conservation and clean alternative energy sources such as solar, wind and biomass along with a strict, 20-year plan for reducing oil dependence.

In sum, Tom Friedman - and many others, like John Edwards - believe we need to get off our oil "addiction" for strong geo-strategic and environmental reasons.  So why aren't we doing it?  As Edwards says, "You can't expect an oilman to move America away from its dependence on oil." 

The answer?  In 2008, replace the "oilman" with someone - Mark Warner, Wesley Clark, John Edwards - who will look out for AMERICAN interests first, not the interests of ExxonMobil.  Even sooner, in November 2006, we need to replace Bush clones like George Allen with leaders who understand geopolitics and energy, people like Jim Webb.  Then, we can start turning this disastrous situation around - before it's too late.


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