Hooked on oil

For the foreseeable future, petroleum will power the global economy. There is far too little of it — especially now that 2 billion Chinese and Indians are in the market. The resulting oil scramble warps all reason and common sense.

In our petroleum-paranoid world, “No Blood For Oil” was the common smear against removing oil-rich Saddam Hussein. Yet after the March 2003 invasion of Iraq, the global price skyrocketed. The shady deals of French and Russian oil consortia and the rot of the United Nations oil-for-food program were at last exposed. And Iraq’s oil industry was, for the first time, under democratic control.

No matter. The conspiracy-minded still alleged America always uses its military power to secure corporate petroleum — as if there were oil in Grenada, Panama, Mogadishu, Serbia, Bosnia, Kosovo or Afghanistan.

So when it comes to oil, we create myths and ignore the truth.

If critics wrongly charge the U.S. went into Iraq to steal Saddam’s oil, they nevertheless remain oblivious to other glaring ways petroleum has a lot to do with current threats against the United States.

First, there are the peculiar circumstances of its history and exploitation in the oil-rich Middle East that explain much of the region’s present pathology. Unlike most industries, petroleum in the Arab world and Iran was not the dividend of incremental scientific discoveries or the hard work of an educated middle class. Instead, it came about as a matter of luck — and the Western expertise that discovered and exploited it.

At first Western oil companies propped up dictators in the Gulf to allow a free hand to tap resources without much scrutiny. Later, during the 1970s backlash against foreign oil interests, new state-run companies nationalized the industry as their elites used the enormous profits to buy weapons and billions in Western material goods.

Greedy autocrats in these Middle Eastern nations then masked their new stranglehold on the lucrative industry by perennially citing the past sins of Western oil companies and governments. The Arab Street still saw little of the profits but heard much about how its poverty was supposedly due to Westerners.

Terrorists like Osama bin Laden soon found ways to shake down petro-rich illegitimate governments. Such regimes gave money and help to Islamic radicals, who in turn blamed Middle East misery on the “crusaders” who once created but now supposedly kept “stealing” the wealth of the Arab people. In the Orwellian world of petro-logic, sheikdoms and juntas that gouge 90 percent profits on each barrel pumped from the desert somehow have convinced their people they still are daily victims of beer-bellied and twanged Texans.

Moreover, oil profiteering masks the abject failures of quite odious regimes. Take state Marxism, a crackpot philosophy whose heritage is impoverishment and mass death. But thanks to obscene profits, Venezuela’s Hugo Chavez spreads cash subsidies all over Latin America under the guise of a successful “socialist” state — as if his anti-democratic government, rather than oil luck and foreign expertise, enriched Venezuela. Without $60-a-barrel oil, Mr. Chavez would be just another pathetic blowhard like Fidel Castro lording over a failed state.

In Iran, take away windfall oil profits, and the eighth-century theocrats running the country would be derided as impoverished Taliban clowns, rather than feared for their threats to wipe Israel off the map.

In Russia, worry over oil cut-offs gives Vladimir Putin a pass as he subverts Russian democracy and gives Iran reactor fuel.

And without oil thirst, the world might shun a country like Saudi Arabia for its brutal Sharia law, religious intolerance and subsidies for global anti-Semitic and anti-Western propaganda.

But we the importers also are warped here at home. Gas-guzzling Americans burn far more oil than we produce. That sends billions abroad to these unsavory governments that profit by accident rather than sound economics.

Free-market libertarians reply that our oil is simply a commodity like anything else — oblivious that current U.S. enemies are parasites and cannot even craft the weapons they use against us without a Middle East awash in petrodollars.

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