Thursday, January 18, 2007

American Interests in the Middle East

American vital interests in the Middle East, cited in the President's speech on January 10 are really two fold. The first is that uninterrupted oil supplies be available and the second that theocratic states not become so powerful that they pose a challenge to our position as the only superpower. Our military presence in the region is related to the first interest while our support of Israel, Saudi Arabia, Egypt, Jordan, Lebanon, Pakistan, and a number of smaller Arab states is related to the second. They are also intertwined in the sense that our support of those states enables our military presence in the region through bases and ports which support logistics.

The strategic picture changes substantially if our interests change. The ability of theocraticists to imagine a strategically significant state is enabled by the presence of ready cash available through the sale of oil at prices much higher than the cost of production. Saudi oil income is easily diverted to theocratically minded organizations while Iranian oil income is already attached to such a system. In Iraq, oil revenues, such as they are, are also available to those who are sympathetic to the theocratic movement both legitimately and through massive corruption. In short, the theocratic movement is well funded because there is such a large cash flow to skim.

Changing this situation by eliminating our use of Middle East oil can only help. Oil is a global market, so eliminating our use of Middle East oil really means eliminating our use of oil altogether. Taking US demand for oil out of the market reduces the price of oil to much closer to its cost of production which is going up in the Middle East as more elaborate extraction methods are needed. The cartel structure for Middle East oil sales would have a hard time surviving a market with slim profit margins since production quotas would be difficult to allocate.

If America has no demand for oil, then our interests in maintaining the flow of Middle East oil devolve to support of our allies' needs for such a flow. However, our most important allies are already committed to reducing their use of fossil fuels generally (apologies to those down under) so it is not so hard to envision a world where the free navigation of the waters near the Middle East are of little strategic importance.

The technology is available now to eliminate our use of oil and to save money at the same time, so it seems like a strategic approach to the Middle East and Iraq would be preferable to the tactical approach the President is advocating.

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