Political Economy of International Crisis
THE ENERGY CRISIS
During the 1970s (and perhaps somewhat in the early
1990s), in ways quite similar to the increase of food prices in the
developed countries, the energy crisis played a central role in the
inflationary strategy of attacking the real wage and in the process
of industrial restructuring through which business sought to regain
control over work and productivity.
The initial lectures in this section will deal with the
vanalysis of the social meaning of energy for workers and for
business and the conflicts between the two groups. This discussion
will include the question of entropy and the relationship of the
problems of thermodynamics to capitalist social relations.
The subsequent lectures will deal with the history of the
energy crisis and its role within the overall socio-economic crisis.
This will include a discussion of the relationship between the
energy crisis and social relations in the industrial countries as well
as a consideration of the relationship between the energy crisis and
growing social unrest in the energy exporting countries.
Theoretically as well as concretely, the energy crisis is
closely related to the food crisis, in as much as the latter is, in part,
a crisis of the energy needs of human beings. The energy crisis is
also, in ways to be discussed in Part VI, closely related to the
international debt crisis -partly because much of the debt, which
subsequently fell into defacto default, was acquired to finance the
importation of higher priced oil (and food). Therefore this Part V
should be studied in close relation to Parts IV (food) and
A. SOME THEORETICAL CONSIDERATIONS ON ENERGY
Barry Commoner, The Poverty of Power: Energy and the
Economic Crisis, Alfred A. Knopf, New York, 1976,
Chapter 2: "Thermodynamics, The Science of Energy."
- This chapter from Commoner's book is a simple
introduction, by a scientist, to the subject of thermodynamics.
Here you will find a discussion of fundamental concepts such as:
work (force exerted through distance), the First
Law of Thermodynamics (energy can be neither created nor
destroyed), the Second Law of Thermodynamics (the
universe is constantly, irreversibly becoming less ordered), and
entropy (a measure of the unavailability of energy for
work, of disorder). Commoner was basically concerned with
questions of efficiency in energy utilization, especially in
maximizing work. His description of the Second Law revealed his
basic orientation: The Second Law "explains how work -which is
the only value that energy has for us- is gotten out of the flow of
energy from one place to another." p. 5. His summing-up towards
the end of the second chapter pretty much defines his position vis à
vis the environmental-energy movment he was interested in
influencing: "The First Law gives us the meaning of measuring
amounts of energy, regardless of their form or their availability to
do work. It enables us to count up our stores of energy, the
amounts represented by a tank of gasoline or by the huyge beds of
coal in the Western states. Using these measures, we have begun
to worry about budgeting the use of these stores. We have begun
to think about "conserving" energy -saving so many BTU
(British Thermal Units) of energy by home installation and so
many by driving at fifty-five miles per hour. But the Second Law
tells us that it is not energy which needs to be conserved, because
in fact energy is never consumed. What does need to be conserved
is a certain quality that is associated with energy, but which it may
possess in differing degrees. This quality -the available work
that can be obtained from the energy- is not
conserved; it is irretrievably lost whenever energy is used to
produce work. The science encompassed in the Second Law, if we
would use it, is specifically designed to show how we can
maximize the amount of work, the power, the value, that can be
gotten out of using a given amount of energy. It is not the First
Law, but the Second that ought to govern the campaign to
conserve energy." pp. 28-28.
Amory Lovins & Hunter Lovins,
"Fools Gold in Alaska,"
Foreign Affairs, July/August 2001,
Article against drilling in Alaskan North Slope based on "efficiency"
arguments of the Commoner sort, ie. far more energy can be saved than produced
using more efficient methods of utilizing energy. Compare with Lovins
"soft energy paths" below. Also, unlikelihood of prices being high enough to
making drilling profitable.
"The Work/Energy Crisis And The
Apocalypse",  [pdf version]
, reprinted in Midnight Notes Collective,
Midnight Oil: Work, Energy, War, 1973-1992,
Boston: Autonomedia, 1992.
- This radical analysis of the energy crisis, written
by an ex-editor of the journal Zerowork, includes both
a political economic analysis of the overall character of the crisis
and a specific discussion of the relation of the energy crisis to the
crisis of capitalist command over labor. Here, unlike Commoner's
discussion, entropy is seen as a positive phenomena --the
increasing unavailability of peoples' energy to business for work.
The history of thermodynamics is briefly located in the rise of
capitalism and a class analysis is presented for the role of energy in
capitalism. From this point of departure there is an attempt to
draw conclusions as to both capitalist needs --e.g. to sort out low
entropy from high entropy workers, and to get rid of the latter--
and working class needs to gain more control over the utilization
of its own energy. p. 20.
B. Crises in the U.S. Coal and Nuclear Power Industries
"Wildcats in the Appalachian Coal Fields,"
Zerowork #1, 1975.
[pdf version] Reprinted in Midnight Notes
Collective, Midnight Oil: Work, Energy, War, 1973-
1992, Boston: Autonomedia, 1992, pp. 169-183.
*Harlan County: a film.
- Background analysis of the crisis of managerial
control in the coal industry which the nuclear industry and oil were
supposed to outflank. This article traces the development of labor-
social relations in the Eastern coal fields through the post-WWII
period to the wide spread wildcats that threw the industry into
crisis in the late 1960s. Of particular note in this article are: 1. the
relationship between the control over labor and the control over
coal, i.e., non-human energy, 2., the related breakdowns of the
producitivity deals and the ability of the union to control labor,
and 3. the close connections between conflicts at the point of
production (in the mines) and those in the community. The "coal
fields" understood broadly constitute a microcosm of the "social
factory". Compare this discussion with that of Robert Stobaugh
and Daniel Yergin below.
To complement and better understand the
above article on the wildcats, you should watch this documentary film
about the 1973 coal miners' strike in Harlan County, Kentucky. The film
is dramatic and unforgetable. It is also available in both the FAC and
Tarlton Law Libraries on the UT campus.
*Midnight Notes, Strange Victories: The Anti-Nuclear
Movement In The US and Europe, 1979.
Midnight Notes Collective, Midnight Oil: Work, Energy,
War, 1973-1992, Boston: Autonomedia, 1992, pp. 193-
Harlan County. / New York / 1990(1976)
VIDCASS 5918 Audio Visual Library FAC 341
Harlan County. / Harlan County U.S.A. / New York, NY (153 Wa / 1996
LAW VIDEO- CASSETTE HD 5325 M63 1973 H378 1996 Law Library Media Center
"Chapter 3: The Rise of the Antinuclear Power
Movement: 1957 to 1989," from The Antinuclear Power
Movement and the Crisis of the U.S. Nuclear Power Industry,
1953 to 1989, Ph.D. Dissertation, University of Texas at
Austin, May 1990.
- This article presents a class analysis of the anti-nuke movement, that is to say an assessment of the social
background of those who were active and an evaluation of the
connection between that background and the structure, activities
and limitations of the movement.
- One chapter from a disseration that shows how
the nuclear power industry was constructed by the state and
utilities and then undermined by popular struggles. Chapter 1: The
Crisis of the Nuclear Power Industry, Chapter 2: The Rise of the
Nuclear Industry, Chapter 4. The Fall of the Nuclear Industry,
Chapter 5, Class Analysis of the Antinuclear Movement. This
treatment of the anti-nuclear power movement builds on and
extends that begun by Midnight Notes in Strange
C. The First Energy Shock
1. Western Views
Walter J. Levy,
"Oil Power," Foreign Affairs, July
James E. Akins, "The Oil Crisis: This time the Wolf is Here,"
Foreign Affairs, April 1973.
- An early reaction to the new surge of OPEC
demands in 1970-71 that only glimpses oil company/oil producing
country common interests and calls for energy development in
consuming countries. p. 50.
*V. H. Oppenheim,
"Why Oil Prices Go Up: The Past: We
Pushed Them," Foreign Policy, No. 25, Winter 1976-
77. Available through
- Official statement on U.S. analysis and actions
by the director of the Office of Fuels and Energy, Department of
State. Akins reviews changes of 1969-73 (pre-war) and defends
State Department actions on price changes and recycling
cooperation with Europe. p. 94.
G. A. Pollack, "The Economic Consequences of the Energy Crisis,
" Foreign Affairs, April 1974.
- Very important article on how U. S. government
policy supported the rise in the price of oil in order to undercut
Europe, benefit the U. S. and stabilize the Persian Gulf. As
opposed to the usual view propagated by the mass media and the
White House, this article begins: "Since 1971, the United States
has encouraged Middle East oil-producing states to raise the price
of oil and keep it up."
Oppenheim traces the history: In December 1970 "OPEC
anounced that, for the first time, it would seek a world wide price
increase." The oil companies responded collectively and called for
negotiations. "Had the U.S. government held the line, most
observers fell that the 1971 OPEC demands could have been
tuirned away. But the U.S. State Department was not willing to
insist (as the companies did) that single set of negotiations cover
the Persian Gulf and the Mediterranean . . . without prior
notification to the companies, a split was announced in the talks in
Teheran by a special U.S. envory, then-Under Secretary of State
John Irwin, accompanied there by James Akins, a key State
Department man on oil [interviewed by Oppenheim, on the record,
for this article]. . . . the real lesson of the split in negotiations with
OPEC was that higher prices were not terribly worrisome to
representatives of the State Department. . . . the whole subject of
what the negotiations were about began to focus not on holding the
price line but on ensuring security of supply."
Oppenheim then goes on to quote extensively from an article
by an advisor to the Libyan government on how the U.S. actions
undercut Europe with higher prices, i.e., undercut European
competitiveness which had contributed, as we have seen, to US
trade problems. Europe was more vulnerable because it imported
virtually all of its oil -which the US did not. Oppenheim
continues: "In fact, the prediction of -and advocacy of- higher
oil prices became a common feature of statements from the Nixon
administration" and goes on to give examples. Then, in 1972,
Akins gave a speech at the Eight Petroleum Congress of the
League of Arab States in which he told "his listeners that oil prices
could be 'expected to go up sharply due to lack of short-term
alternatives to Arab oil'" -which was interpreted by them as a US
go-ahead on oil price increases. [Note the similarity with April
Glaspie's comments to Saddam Hussein about $25 oil in the
summer of 1990.]
By this time the oil companies were profiting greatly by the
higher prices and the National Petroleum Council published "a
voluminous series of studies calling for a doubling of US oil and
gas prices by 1985" to spur production and limit import
dependence." Akins went on to be nominated as Ambassador to
Saudi Arabia and his testimony made clear the US was not
opposed to price increases. "The United States, in fact, was
preoccupied with luring into the United States for investment the
now swollen (and soon to be more swollen) OPEC spare cash.
[which would become "recycled petrodollars" to finance
investment and ultimately the debt crisis] To prove the point,
Oppenheim cites the 1973 annual report of the White House
Council on International Economic Policy which "noted that the
United States stood to gain from higher oil prices and the resulting
surplus of OPEC's investible funds . . The United States is likely to
receive a large share of those funds." All this, BEFORE, the Arab-
Isreali conflict and the oil embargo! Moreover, in support of the
contention that the US was doing this, at least in part, to undercut
the Europeans, Oppenheim shows how the US refused "to go
along with a series of initiatives proposed in various open and
secret groups meeting in Paris at the OECD" which were trying to
work out oil sharing arrangements in the event of an embargo.
Finally, Kissinger's National Security Council "ruled out" any
US military intervention in the case of a new Middle East war.
When war did come, Kissinger continued to secretly support Saudi
Arabia and OPEC price increases and promised foreign aid and US
investment -in the midst of the embargo.
By early 1974, the administration was "openly committed to
raising U.S. oil prices in order to achieve 'independence'". When
chief of the Federal Energy Administration, John Sawhill, tried to
counter the price increases he was blocked by higher-ups in the
Nixon administration and fired in Ford's. Akins later testified that
Kissinger, in 1975, was telling the Shah to go ahead with further
In his conclusions, Oppenheim cites Akins in suport of the
view that the US was trying to undercut Europe and Japan; he
notes the desire for recycled petrodollars; he notes US support for
higher prices supported regimes of region which the US depended
on for local control and stability; he minimizes the influence of the
oil companies (mostly pointing to some differences) and blasts the
erroneous predictions of the effects of price increases: US did not
become more independent of foreign oil, companies explored
more, but mostly abroad, US production did not rise appreciably,
and arguments that more highly priced oil would stimulate the
development of alternatives were ill founded -e.g., oil companies
also own all our coal and wouldn't shift production from one to the
other just because coal became relatively cheaper, they run their
business by the bottom line not for national cost
J. C. Campbell, et.al.,
Energy: The Imperative For A
Trilateral Approach, Trilateral Papers No. 5, Trilateral
- Exxon economist. Early analysis of trade,
investment and money imbalances after the quadrupling of oil
prices. Overview of recycling mechanisms and
recognition that the real problem will be whether increased world
savings can be invested. (see his section IV) p. 137
S. Okita, "Natural Resource Dependency and Japanese Foreign
Policy," Foreign Affairs, July 1974.
- The first Trilateral Commission report on energy
prepared December 1973 to June 1974. The report calls for
acceptance of reduction in standards of living,
conservation, Trilateral regional cooperation, emergency sharing
scheme, financial cooperation, sharing of technology and peaceful
coexistence with the producing countries. Aimed in part
against consumption, ("extravagance in personal
consumption is no essential attribute of a free society; indeed to
trim unnecessary fat may have social as well as economic benefits"
p. 111 "The real challenge of the energy problem is not a struggle
with outside adversaries, as in most great crises of the past, but
within and among our respective societies. Our peoples need a
wartime psychology to fight this war against
ourselves. [With Trilat President Jimmy Carter this would become
an effort to make the energy crisis "the moral equivalent of war".]
They should be prepared to tighten their belts and to share
sacrifices among themselves --because it will be a long, uphill
struggle." p. 121) in part against the dangers of international
competition between nation states ("Solidarity of the
consuming countries remains essential, as the alternative to a
ruinous scramble for competitive advantage," p. 117 "The energy
crisis has propelled the industrial nations into a situation to which
other factors were also bringing them though more slowly: a
situation in which they have to set th elines of basic policy
together or succumb to chaotic national competition and a
destruction of the fundaments of a rational world order." p.
Walter J. Levy,
"World Oil Cooperation," Foreign
Affairs, July 1974.
- Overview of Japan's dependence on oil and other
resources, the impossibility of changing this and the consequent
Japanese diplomatic posture of not making enemies who might
threaten supply lines. For more on Japan see Trilateral
Commission reports which evaluate position of each area. Also
compare with Japan's later role in the Gulf War.
"Energy and the Future of Europe," Foreign
Affairs, April 1975.
- Calls for 1) cooperation among importers, 2)
understanding exporters, 3) program of energy austerity, 4)
eventual price reduction. Reflects both fear of competitive actions
and trade restrictions and desire for long term planning. Similar to
Trilat's report during the preparation of which Levy was
- Outline of the problem of united European
strategy and relations with the US in the energy field. Also brief
rundown on degree of European dependence on OPEC oil and
differences with the U.S. Naive or diplomatic on his interpretation
of US policy.
2. Motivations Within OPEC
"The Oil Story: Facts, Fiction and Fair Play,"
Foreign Affairs, July 1973.
Stephen Krasner, "The Great Oil Sheikdown," Foreign
Policy, No. 13, Winter 1973-74, pp. 123-138.
- Major Iranian spokesman argues justice of OPEC
moves and wisdom of cooperation between OPEC and the West. p.
*T. H. Moran, "Why Oil Prices Go Up: The Future: OPEC Wants
Them" Foreign Policy, No. 25, Winter 1976-77.
- Krasner agrees with Adelman on the importance
of the role of international oil companies, but he argues US politics
are such that the companies can not be undermined. He also
argues US policy is against price decreases because of
likely political instability that would result in OPEC
countries -- a rare recognition of underlying popular pressure on
OPEC governments. "It is not likely that the monarchies of Iran,
Kuwait, Abu Dhabi, and Saudi Arabia would survive if petroleum
prices fell; nor is it clear that instability in areas now controlled by
more radical regimes -such as Libya- would necessarily favor
the interests of the United States." p. 131. "Mohammed is better
than Marx. The former suggests suspicion of all infidels; the latter
condemns only some. The possibility of political turmoil leading
to the establishment of Communist regime cannot be ignored." p.
B. Varon and K. Takeachi, "Developing Countries and Non-Fuel
Minerals," Foreign Affairs, April 1974. and Zuhyr
"Collusion Could Work," and S. D. Krasner,
"Oil Is the
Exception," and C. Fred Bergsten,
"The Threat is Real". Both in
Foreign Policy, No. 14, Spring 1974 section on "One,
Two, Many OPECs ..."
- Another important article. This time for the way
in which it shows that central to the motivations of oil price
increases was the need of the ruling elites in the OPEC countries
for resources to deal with domestic social unrest. OPEC needed
higher prices in the future, Moran shows, because so much of its
existing surpluses were being drained off to finance social peace
rather than industrial development, which were what the Shah and
his neighoring rulers wanted to use them for. OPEC, eg., the
Shah's, desire for money for economic development,
industrialization and military modernization have been widely
recognized. Less so was the need for money for "domestic
stability". Moran traces the situation in Iran, Saudi Arabia and
Iraq and shows how the costs of programs needed to limit internal
dissent, such as food subsidies, housing and urban services (as well
as industrial investment and military costs) have grown much
faster than forseen, and where the market had been looked to for
help and failed (e.g., middle and low cost housing in Iran) the
needs will be much greater in the future. All of this is a glimpse
-through the numbers of fiscal crisis- of the social tensions
seething in the background of the policy decisions made by OPEC
countries. These OPEC governmets "want" higher prices, not just
because they are greedy but because they are under pressure to
meet popular demands -either through concessions (e.g., food
subsidies) or repression (e.g., SAVAK, the Iranian secret police).
Both cost more money than expected. So the internal, domestic
pressures for oil price increases continued in the mid and late
1970s. All this, of course, amounted to a warning, for those acute
enough to notice (and they were damned few), the social pressures
which would explode in the Iranian revolution in 1978!
- These articles constitute part of a debate that
emerged as to whether Third World countries could duplicate the
OPEC cartel for other, non-oil minerals. Some say yes, some say
no. In fact there was no wave of such cartel formation as was
D. Multisided Debate
A. B. Lovins,
"Energy Strategy: The Road Not Taken?"
Foreign Affairs, October 1976. Available through
Dan Luria and Lee Price, "Solar Energy, Jobs and Labor: Some
- Outline of the "soft technology' alternatives to
the usual energy programatic of increased oil, coal and nuclear
power. Shows huge gains in conservation via partial technological
changes and the virtues of solar, wind, etc. These virtues also
show the dangers to business of loss of control even though Lovins
is trying to sell his ideas to the elite. p. 168
D. A. Rustow,
"US Saudi Relations and the Oil Crisis of the
1980s," Foreign Affairs, April 1977.
- A critique of the equation: soft energy means
more jobs equals better path. Luria and Price, two economists
working for the UAW, argue that in the long run we should be
looking for less labor, for more energy. p. 200
Frank Church, "The Impotence of Oil Companies," and Geoffery
"The Innocence of Oil Companies," Foreign
Policy, No. 27, Summer 1977.
- Analysis of Mideast alignments and conflicts and
US role. Emphasizes possible shortages of oil and calls for
conservation, coal and nuclear development.
John C. Campbell,
"Oil Power in the Middle East," Foreign
Affairs, October, 1977.
- A debate on the degree of responsibility of the oil
companies in the crisis.
R. S. Pindyck,
"OPEC's Threat to the West," Foreign
Policy, No. 30, Spring 1978.
S. Fred Singer,
Limits to Arab Oil Power," Foreign
Policy, No. 30, Spring 1978.
E. The Second Oil Shock
Walter J. Levy, "The Years the Locuts Hath Eaten: Oil Policy and
OPEC Development Prospects," Foreign Affairs,
Winter 1978/79. Available through
James A. Bill,
"Iran and the Crisis of '78" Foreign
Affairs, Winter 1978/79.
- Argues that growing difficulties in realizing
development plans, social pressures, and slow development of new
energy sources will lead OPEC to push prices up. Allocation will
become more critical, need for revenue greater. Calls for high
prices, more Western energy conservation and cooperation with
OPEC ... and acceptance of slow growth, i.e., crisis. p.
L. Turner and J. Bedore, "The Trade Politics of Middle Eastern
Industrialization," Foreign Affairs, 57(2) Winter
- An analysis of the growing middle class
opposition to the Shah that would help overthrow him and a
critique of US policy as uninformed and in conflict with long term
interests. Bill was a professor at UT.
Robert Stobaugh and Daniel Yergin,
"After the Second Shock:
Pragmatic Energy Strategies," Foreign Affairs, Spring
- Analysis of the difficulties to be faced by Saudi
and Iranian petrochemical industrialization in breaking into
Western European markets already plagued by overcapacity and
protectionist demands. Calls for further European restructuring to
make penetration possible.
"OPEC: The Cartel's Deadly New Sting,"
BusinessWeek, April 9, 1979.
- Important article giving results of Harvard
Business School 6-year study. Concludes that natural and political
limits on oil, coal and nuclear power make conservation and solar
energy the most important ways to improve the US energy
situation and avoid growing dependence on OPEC oil. (Compare
to Lovins) Virtually admits defeat in control of coal miners,
environmentalists and anti-nuclear activists. It would seem those
struggles are pushing the elite in the direction we, not they, want to
go. p. 263
"Oil, Money and Recession," Foreign
Affairs, 58(2) Winter 1979/80.
- Analysis of the immediate and likely results of
the 9% price hike plus free surcharges that came in the wake of the
Iranian oil production/shipment cut-off. Also look at increased
chances for global recession and US policy.
R. Stobaugh and D. Yergin,
"Energy: An Emergency Telescoped,"
Foreign Affairs, 58(3) 1980.
Walter J. Levy,
"Oil and the Decline of the West," Foreign
Affairs, 58(5) 1980.
S. Fred Singer and Stephen Stanas,
"An End to OPEC,"
Foreign Policy, No. 45, Winter 1981/82.
Harry Cleaver, "Remarks: Energy in the 1980s," Address to a
Conference at the Graduate School of Business, University of
Texas, Austin, Spring 1983?
- Text of a debate with business representatives
over the nature of the energy crisis.
F. The Third Energy Shock: The Price Fall
"Oil Prices Hit the Skids," BusinessWeek, August 13,
1984. p. 311
"What's Causing Anarchy in the Oil Market,"
BusinessWeek, September 10, 1984. p. 315
"OPEC, Meet Adam Smith," BusinessWeek, October
29, 1984. p. 316
"OPEC's Loss is The Economy's Gain,"
BusinessWeek, November 5, 1984. p. 319
"OPEC's Leaky Spigot is Flooding the Oil Market,"
BusinessWeek, December 10, 1984. p. 323
"OPEC Drills a Dry Hole," BusinessWeek, January
28, 1985. p. 325
Christopher Flavin, World Oil: Coping with The Dangers of
Success, World Watch Paper 66, July 1985.
Edward L. Morse, "After the Fall: The Politics of Oil,"
Foreign Affairs, Vol. 64, No. 4, Spring 1986.
"Rambo on the Barbary Shore,"
Midnight Notes #9, May 1988.Summary Reprinted in Midnight
Notes Collective, Midnight Oil: Work, Energy, War, 1973-
1992, Boston: Autonomedia, 1992, pp. 283-301.
- Interesting article which seeks to explain
American-Libyan relations in terms of oil politics and other
aspects of the global crisis rather than the usually pictured conflict
over "terrorism." The article was written in response to the U.S.
bombing of Libya. Caffentzis traces the military hostility of the
U.S. to a shift from agreement to conflict between Libya over oil
price policy as the U.S. changed from supporting high price oil to
insisting on low price oil.
F. Chernobyl and the Crisis of Soviet Energy
"Soviet Power: Nuclear Energy in the USSR,"
Capital and Class, No. 21, 1983.
Edward Hewett, Energy, Economics and Foreign Policy in
the Soviet Union. Brookings.
"Soviets Scrap A New Atomic Plant In Face of Protest
Over Chernobyl," The New York Times, January 28,
Hossein G. Askari,
"Saudis and Soviets: Oil's Odd Couple,"
New York Times March 18, 1990.
G. The Gulf War: The Fourth Energy
1. U.S. Domestic Economic Background
"Zero-Inflation: Prescription for Recession,"
Challenge, Vol. 33, No. 1, January-February 1990, pp.
"Zero Inflation May Not be All its Cracked Up to Be,"
Business Week, June 25, 1990, pp. 48, 51.
Energy Information Administration, Annual Energy
Outlook: Long Term Projections, January 1990.
- Long before Saddam Hussain sent his armies into
Kuwait, the Federal Reserve Board was tightening money supplies,
raising interest rates and guiding the American economy into
depression. These two articles explain how its five-year 'anti-
inflationary' campaign (zero inflation by 1995) -continuations
from the anti-inflationary, anti-wage policies of the Reagan
period- were and would work to generate depression.
- See especially sections on world oil prices
(expected to rise) and US production prospects (expected to
decline) and future imports (expected to rise).
2. Persian Gulf Background
"Chronology of Conflict in and Around the Persian Gulf Oil
Fields," -available from Cleaver, hardcopy (9pp) or Macintosh
MSWord file (28k).
*Joe Stork and Ann M. Lesch, "Why War? Background to Crisis,"
Middle East Report, November-December 1990, pp.
11-18. Included in 3rd packet on the Crisis of Diplomacy.
*Joe Stork and Martha Wenger, "The U.S. in the Persian Gulf:
>From Rapid Deployment to Massive Deployment," Middle
East Report, January-February 1991, pp. 22-26. Please
Note the box on "further resources on the Persian Gulf Crisis" at
the end of this article. Included in 2nd packet on the Crisis of
- Sketch of regional historical background to the
Persian Gulf War: the colonial heritage, imperialism and oil, the
social character of Kuwait, the political dynamics of Iraq and the
events and conflicts that led to war.
"Revolution, Reform or Regression? Arab
Political Options in the 1990 Gulf Crisis," The Brookings
Review, Vol. 9, No. 1, Winter 1990-1991, pp. 17-21.
- Outline of the build up in U.S. military
intervention in the Gulf area before the Iraqi invasion of Kuwait.
Sketch of history of efforts to directly or indirectly manage the
region and protect American and Western control over oil.
Information provided makes clear how rapid build-up after August
2, 1990 was made possible by previous construction and
positioning of military capability with just such intervention in
- Overview of breakdown of Middle Eastern Arab
order leading into the Persian Gulf War, a discussion of the pre-
invasion projects of Kuwait, of the socio-economic crisis in
Jordan, and of Iraq's economic problems, all of which point to
continuing future instability in the area regardless of the outcome
of the war.
3. Political Economic Analysis of the Persian Gulf War
and Oil Policy
"Iraqi Strategy Turns OPEC Toward Higher Prices",
Petroleum Intelligence Weekly, July 30, 1990, p. 1,
"Exposed: Washington's Role in Saddam's Oil
Plot," London Observer, October 21, 1990.
- This issue of an industry "insider" publication,
which came out before the Iraqi invasion of Kuwait, reports on
Iraq's success in forcing Kuwait and the UAE to cut back
production and raise prices. It's account suggests industry
satisfaction with Iraq's new role as policeman of OPEC and with
the prospect of higher oil prices. "The latest OPEC meeting marks
a clear turning point in how the producer group manages itself and
the oil market. Iraq's shift to a 'big stick' strategy, besides inducing
output discipline, seems to have stopped in its tracks any quota
jockeying that might have emerged . . . Baghdad's willingness to
use force to advance its oil policy goals stands in sharp contrast to
Saudi Arabia's past leadership, which was ultimately based on
decreasingly effective threats to flood oil markets. Iraq's strategy
is likely to result in higher and less volatile oil prices than Riyadh's
past approach . . . Iraq's more aggressive tack worked because it
was credible, because virtually all producers wanted higher prices
and because the Saudis had been negotiating quietly to forge a
workable compromise . . . Despite qualms over Saddam's 'might
makes right' approach, most members grudgingly or not support
higher prices now, since their revenue needs are outstripping
income . . . the deal being worked out appears bullish for oil
Fouad Ajami, "The Summer of Arab Discontent," Foreign
Affairs, Winter 1990-1991, pp. 1-20.
- In this poorly written but fascinating story,
Graham provides evidence of US complicity with Iraq's desires to
raise oil prices prior to the invasion of Kuwait. "one of America's
top Middle East experts -a former ambassador still used by the
Bush Administration for foreign policy missions- held a discreet
meeting with an Iraqi Minister in New York in January. The
Minister, one of Saddam's closest associates, was told that Iraq
should engineer higher oil prices to get it out of its economic fix . .
. As a result of this meeting, a Washington think tank [Washington
Center for Strategic and International Studies] then proposed that
Iraq push for an oil price of $25 a barrel and that it should take the
initiative in forcing the increase on its fellow OPEC members . . .
Details of the [WCSIS] report have been kept secret, but a
reflection of it appears in an interview with Henry Schuler, the
centre's energy security director on 1 March to the Arab Oil
and Gas Journal . . . Schuler advocates an aggressive oil
price policy for Arab oil producers . . . Arab oil producers could
get $24 or $25 a barrel without consumers searching for alternative
sources." etc. She goes on to quote from Iraqi recordings of
discussions with American diplomats, including April Glaspie
which suggest American agreement on $25 a barrel.
*H. Cleaver, The Political Economics of the Gulf War
, (pamphlet)January 1991. (A version of this piece was published
in the Polemist, December 1990 and in Austin
Peace and Justice Coallition Newsletter, January 1991.)
Included in 3rd packet on the Crisis of Diplomacy.
- Johns Hopkins professor and CBS commentator,
Ajami sketches, for the influential readers of Foreign Affairs, the
background to the conflicts within which Iraq’s takeover of
Kuwait occurred. He points out the widespread and deep Arab
resentments of the oil states’ wealth (backed by Western
supporters) but argues that after Iraq is contained "a buffer must be
established between the dynastic states of the gulf and the Iraqi
predators . . . that buffer will have to be provided by American
power, or by a multinational force centered around an essentially
Phyllis Bennis and Michel Moushabeck (eds.) Beyond the
Storm: A Gulf Crisis Reader, New York: Olive Branch
- Article sketching the political and political
economic issues at stake in Bush’s drive to intervention and war in
*Midnight Notes, articles 1-7 in Midnight Notes, Midnight Oil: Work, Energy, War,
1973-1992, Boston: Autonomedia, 1992.
"Oil Guns and Money"
Some Photographs I was not Able to Take" (Available through
Silvia Federici, "Development and Underdevelopment in Nigeria"
"Recolonizing the Oil Fields",
Ihonvbere, "Resistance and Hidden Forms of Protest Amongst the Petroleum Proletariat in Nigeria,"
Summary of "To Saudi with Love".
- This is an extremely useful collection of
materials that includes a detailed chronology and several key
documents, including the Glaspie-Hussein Transcript where
Hussein speaks of a $25/barrel oil price and Glaspie responds "We
have many Americans who would like to see the price go above
$25 because they come from oil-producing states." [Such as
George Bush.] It also contains the infamous Glaspie to Hussein
"But we have no opinion on the Arab-Arab conflicts like your
border disagreement with Kuwait" (p. 395).
On the U.S. diplomatic management of the war through the
United Nations see chapter 9: Phyllis Bennis, "False Consensus:
George Bush's United Nations", pp. 112-125.
- This is the biggest chunk of reading in this
section. A useful exercise is to compare and contrast the analysis
in Midnight Oil with that in the other articles, especially the
pamphlet I wrote against the Gulf War.
4. The Persian Gulf and North Atlantic Energy
Christopher Flavin, "Beyond the Gulf Crisis: An Energy Strategy
for the 90s" Challenge, Vol. 33, No. 6, November-
December 1990, pp. 4-10. Or, Christopher Flavin, "Conquering
US Oil Dependence," World Watch, Vol. 4, No. 1,
January-February 1991, pp. 28-35, for a variation on the same
Harvey Wasserman, "Nuclear Power's Desperate Comeback,"
Nuclear Times, Winter 1990-1991, pp. 3-4.
- V.P. of Worldwatch Institute sketches recent
history of Reagan-Bush destruction of alternative energy
programs, points out conservation makes far more sense than
trying to produce more oil [the essence of Bush's National Energy
Strategy statement -released after this article was written] and
calls for re-investment in alternative energy sources and in
"Paying for Oil Security,"
Challenge, Vol. 33, No. 6, November-December 1990,
- Wasserman traces how the nuclear power
industry, largely defeated by the environmental movement in the
1970s, is trying to use the Persian Gulf crisis to win concessions
and opportunities that would make it profitable again -mostly by
concelling the constraints imposed on the industry in the 1970s.
He also points out how renewable energy sources are already
cheaper (as well as safer) than nukes.
"Analysis of the Potential Economic Consequences for the
EC of the Iraq/Kuwait Crisis," European Economy,
No. 46, December 1990.
- Renshaw calls for increased taxes on gasoline to
pay for the Gulf War and induce cut-backs in US oil consumption,
via fewer miles driven and shifts toward more fuel efficient
transportation. Although he calls for taxes which "shift most of
the cost to motorists so as not to weaken the international
competitiveness of the US petrochemical industry (p. 15), he
recognizes the regressive nature of such taxes and that they "will
be harder on the poor than on the rich" and so also calls for such
off-setting measures as an increase in the earned income tax credits
currently available to low-income families.
Daphne Wysham, "Power Ploy: How the Oil, Nuclear and Coal
Industries Hijacked the National Energy Strategy and Led Us to
War," Greenpeace Magazine, March/April 1991, pp.
- European Economic Community analysis of
likely impact of increased oil prices on European economy. Takes
into account the past experience of oil price increases after 1973
and 1978 as well as subsequent improvements in efficiency,
reductions in import dependency and recent appreciation of the
ECU against the US dollar [the depreciation of which has been
accelerated by the FED's monetary easing, as interest rates came
down in the Fall of 1990 and Spring of 1991 interest seeking
investment money has tended to pull out of the US and increase
the supply of dollars - see previous discussion in packet on
international monetary crisis]. The main policy recommendations
call for macro policy coordination, continued anti-inflationary
policies and especially avoidance of nominal wage increases to
offset price rises. Such avoidance would "preserve profitability
and would minimize the negative impact on the level of
investment." p. 120
Edward L. Morse, "The Coming Oil Revolution," Foreign
Affairs, Vol. 69, No. 5, Winter 1990-1991, pp. 36-56.
- Brief overview of the genesis, gutting and final
results of the National Energy Strategy recommendations issued in
the Spring of 1991 by the White House.
Joseph J. Romm and Amory B. Lovins,
"Fueling a Competitive
Economy," Foreign Affairs, Winter 1992/1993.
- Morse, publisher of the Petroleum
Intelligence Weekly, argues that supply will be squeezed
and oil prices will rise in the 1990s (independently of the Persian
Gulf War) and new institutional arrangements are necessary to
prevent bad management. In particular he sees increasingly tight
relations between the private and governmental sectors and calls
for greater international cooperation to regulate conflicts and
markets. He critiques Bush's handling of oil policy in the Fall of
1990 and continuation of Reagan's dismantling of energy policies
in the 1980s. Calls for more government spending on R&D
(especially natural gas for autos) and increased gasoline taxes and
efficiency standards to reduce consumption.
- A comprehensive plan to produce an "industrial
ecosystem" and revive America's competitiveness from the Rocky
Mountain Institute. Romm and Lovins attack Reagan-Bush
supply-side policies (more energy now) and argue for using energy
efficiency to prime the economic pump, an different (non-military)
industrial policy to guide investments and environmental
technology to "create a cottage industry for the 21st Century." For
example: "Even before Iraq invaded Kuwait, U.S. forces
earmarked for gulf deployment were costing taxpayers around $50
billion a year -nearly $100 per barrel of oil imported from the
Persian Gulf . . . In the wake of the Gulf War the Bush
administration proposed a National Energy Strategy that, by its
own projection, would further increase dependence on Middle
Eastern oil . . . That strategy also substituted the Bush
administrations favorite technologies for market choices,
expanding already lavish subsidies to uneconomic options such as
nuclear power and 'clean coal' that would squander capital and
perpetuate laggard U.S. competitiveness." They argue, like
Commoner and others, for more fuel efficiency, e.g., new 'ultralite'
autos, feebates, technical changes to reduce electricity, increased
alternative energy source use, e.g., passive solar heating, solar heat
for industry, biofuels, windpower. "By contrast nuclear power
remains uncompetitive when compared to both efficiency and
renewables." Current costs of nuke power ignore both
decommissioning costs, environmental costs and federal subsidies
(1984 = $15 billion, "nearly twice the value of the nuclear power
generated"). What to do "The United States needs to adopt the
same kind of comprehensive long-term strategy for creating high
paying jobs as its major trading partners. . . The first step . . a new
energy policy to promote greater efficiency among U.S. businesses
. . The second step is thus to expand the list of civilian
technologies funded by NIST to include the kinds of 'flexible'
manufacturing technologies currently employed by the Japanese,
which aloow for rapid production and product innovation . . The
third step is to assist the diffusion of these new technologies to
small businesses. . . The fourth step is to invest in worker training.
. . A fifth step is increased funding for civilian infrastructure. . .
An ultimae goal for the nation should be an 'industrial ecosystem.'
This means an industrial process that minimizes both inputs of
energy and materials and outputs of waste products and pollutants:
manufacturing byproducts are designed to be sold or reused. A
proper economic strategy would ensure that new manaufacturing
would only increase America's environmental quality."
H. WAR IN SOUTHWEST ASIA: THE FIFTH ENERGY CRISIS?
Michael T. Klare, "The New Geography of Conflict," Foreign Affairs, May - June 2001.
Amory B. Lovins and L. Hunter Lovins, "Fool's Gold in Alaska," Foreign
Affairs, July - August 2001.
Ken Silverstein, "No War for Oil! Is teh United States really after Afghanistan's resources? Not a chance," The American Prospect, August 12, 2002.
I. GULF WAR II: OIL, TERRORISM OR EMPIRE?
1. Sources of Information
Crisis in Iraq Webpage.
A webpage created by the Carnegie Endowment for International Peace to "help media, policy makers, scholars and the public better follow the complicated issues surrounding the situation in Iraq." The website is updated daily. It also contains a link to the Endowment's report
Iraq: A New Approach that contains the proposal for "coercive
inspections" that was being applied by the UN in Iraq before Bush decided to blow off the UN and attack.
Mainstream US News Sources: New York Times,
Wall Street Journal,
Major Alternative News Sources: Russian Site #1,
Russian Site #2,
you can also access a large number of particular Indymedia sites such as the one at
Al Jazeerah - a major source of news from Arab media,
Arab News - from Saudia Arabia.
2. Media and the War: Critical Views
Both the content and the structuring of reporting on the conflicts before and during
the second Gulf War have been hotly contested - as they were in the case of the first Gulf
War. The American mass media has been criticized both at home and abroad for uncritically
repeating Bush Administration and Pentagon propaganda filled with euphemisms and doublespeak.
Other sources, such as those Arab media covering the war have also been attacked for either
failing to report significant events or being biased in their reporting. There is no way to
evaluate such claims other than by examining journalist reporting critically in the light
of all available information. Compare what you find in your examination with Kellner's account
in his Persian Gulf TV War
FAIR (Fairness & Accuracy in Reporting)
Commentaries on news reporting on the war in Iraq.
Al Jazeerah on
the difference between itself and CNN.
J.Donnelly & A.Barnard,
"Differing TV Images Feed Arab, US Views", Boston Globe, March 3, 2003.
LaborStart, "International Federation of Journalists Say Attacks on Journalists are Crimes of War and Must be Punished," April 8, 2003. Available through
4. The Bush Jr. Administration, Background and Claims: Saddam, WMD & Terrorism
Because of the interrelationships between those corporations and Bush Administration figures who were involved in past traffic in both WMD technology and oil industry contracting, this section really overlaps with the next one: Oil War?
The National Security Strategy of the United States of America, September 2002. A National Strategy to Combat Weapons of Mass Destruction, December 2002.
These two documents make up the basic administration foreign policy orientation and claims concerning Iraq and more generally the new doctrine of preemptive war and overthrowing foreign governments. You should read them both for understanding the general policies of this administration and for its claims vis a vis Iraq. A great many more official statements can be accessed through the Carnegie Endowment page linked below that covers the WMD inspections.
Excerpts from 2003 State of the Union Speech, January 28, 2003.
Lawrence Kaplan & William Kristol, The War Over Iraq: Saddam's Tyranny and America's Mission, San Francisco: Encounter Books, 2003. Chapters Seven to Nine. Available through
M.Dobbs, "US Had Key Role in Iraq Buildup: Trade in Chemical Arms Allowed Despite Their Use on Iranians, Kurds", Washington Post, December 30, 2002.
Institute for Policy Studies Report, Crude Vision: How Oil Interests Obscured Government Focus on Chemical Weapons Use by Saddam Hussein, March 2003. Available through
Press Release: Rumsfeld Ignored Weapons of Mass Destruction in Pursuit of Oil Pipeline, March 24, 2003. Another report outlining essentials of IPS Report: Dave Lindorff,
"Crude History Lesson: Is the War about oil after all?", In These Times, March 27, 2003.
This report provides detailed and documented information on the history of US corporate and US government cooperation to provide Saddam Hussein with capacity to produce chemical weapons, as well as detailing the history of current policy makers roles in efforts to win lucrative oil contracts for various corporations with which they were (and often continue to be) associated. The report is not long, the press release web page contains pdf files-for-download of many pertinent documents and the Lindorff article provides a sketch of the whole sordid history.
Richard Oppel, "Bechtel Has Ties in Washington, and to Iraq," New York Times, April 17, 2003. Available through
Doug Ireland, a review of: Peter Mantius, Shell Game: A True Story of Banking, Spies, Lies, Politics - and the Arming of Saddam Hussein, The Nation, June 10, 1996.
Please note how long the essentials of this story have been known.
Joost Hilterman, "America Didn't mind Poison Gas," International Herald Tribune, January 17, 2003.
Steven Pelletiere, "A War Crime or an Act of War?", New York Times, January 31, 2003.
An interesting assessment of what is, and is not, known about Hussein's use of chemical weapons against his own people by ex-CIA Senior Analyst who was in charge of Iraq desk during Iraq - Iran War. Basically Pelletiere says there is no evidence that the gas (that was used) was aimed at Iraqi's rather than at Iranians who were attacking the town in question.
Carnegie Endowment Collection of Materials on UN Inspections
John B. Kiesling, A US Diplomat's Letter of Resignation, New York Times, February 27, 2003.
5. Oil War?
Nelson Mandela, All Bush Wants is Iraqi Oil, IOL.com, South Africa, January 30, 2003.
Global Policy Forum Web Site on Iraqi Oil.
The Global Policy Forum is an NGO that monitors the United Nations and issues associated with it, thus its concern with Gulf War II. The webpage on Iraqi Oil is one part of a larger series of pages on the Crisis in Iraq. On the site on Iraqi oil you will find numerous papers that you should read including
the articles by James Paul
Iraq: the Struggle for Oil, December 2002 and
Oil in Iraq, the heart of the Crisis, December 2002 that are not long but informative. You should also read the article by Susan Warren and Chip Cummins that appeared in the Wall Street Journal called
"For Iraqi Oil, a US Corporate Mold", April 25, 2003.
Baker Institute, "Strategic Energy Policy: Challenges for the 21st Century," 2001.
Executive Summary follow the links to Publications/Studies.
"Official: US Oil at the Heart of Iraq Crisis," Sunday Herald (Scotland), October 6, 2002.
Critical view of Baker Institute study.
"Bood & Oil: Alternatives to War with Iraq", World Watch Institute, November 22, 2002.
6. War for Empire?
The Editors, "US Imperial Ambitions and Iraq" Monthly Review, Vol. 54, No. 7, 2002.
Antonio Negri, "The Order of War", Global Magazine(Italy), November 2002.
7. The Costs of War
William Nordhaus, "The Economic Consequences of a War with Iraq," Yale University, November 2002.
"The Cost of Militry Intervention in Iraq," International Institute for Strategic Studies, no date given.
Letter from 1,000 War Veterans to George Bush, March 10, 2003.
Liam McDougall, "The Looting of Babylon: Western Inaction has led to the pillaging of priceless cultural treasures," The Sunday Herald, April 20, 2003.
"Aid Groups Warn of Disaster in Iraq", The Observer(UK), December 22, 2002.
J. GULF WAR III?: Invasion of Iran and/or Permanent War
"Oil Wars," Tom Dispatch.com,
October 7, 2004.
Michael T. Klare is a professor of peace and world security studies
at Hampshire College. This article is based on his new book, Blood and Oil:
The Dangers and Consequences of America's Growing Petroleum Dependency
(Metropolitan / Henry Holt). Klare's research has long been focused on the
relationship between U.S. foreign policy and natural resources and he has
been a sometime contributor to journals such as Foreign Policy.
Seymour M. Hersh,
"The Coming Wars: What the Pentagon
Can Now Do in Secret," The New Yorker, January 24-31, 2005.
"The Permanent Energy Crisis," TomDispatch.com, February 9, 2005.
"Mapping the Oil Motive,"
TomPaine.com, March 18, 2005.
"Oil, Geopolitics, and the Coming War
with Iran," TomDispatch.com, April 11, 2005.
"The Intensifying Global Struggle for
Energy," TomDispatch.com, May 9, 2005.
"The Iran War Buildup,"
The Nation, July 21, 2005.
Seymour M. Hersh,
"The Iran Plans," The
New Yorker, April 17, 2006.
M. A. Adelman, "Is the Oil Shortage Real?" Foreign Policy, No. 9, Winter 1972/73.
J. C. Campbell, et.al, Energy: A Strategy for International
Action, Trilangle Papers No. 6, Trilateral Commission,
- An attack on the myth of an energy shortage,
Adelman shows that there is only overpricing managed by the oil
companies and argues for reversing US policy in order to
undermine the companies, thus the cartel and thus prices.
A. B. Lovins, Soft Energy Paths: Toward A Durable
Peace, Harper Colophon Books, New York, 1977.
- Second Trilat energy report. Mainly reiteration
and elaboration of the first with an attack on the lack of progress
(only IEA and emergency sharing system had been accomplished).
Demand for global planning instead of ruinous international
Ray Reece, The Sun Betrayed: A Report on the Corporate
Seizure of US Solar Energy Developments, South End
Press, Boston, 1977.
A. B. Lovins and L. H. Lovins, Energy/War: Breaking The
Nuclear Link, Friends of the Earth, San Francisco,
Petter Nore and Terisa Turner (eds), Oil and Class
Struggle, Zed Press, London, 1980.
- A collection of radical analyses of the energy
crisis which includes discussions of Libya, Iran, Iraq, Nigeria,
Venezuela and Canada as well as more general treatments of the
role of oil in capitalism and in imperialism.