How Did Our Oil Get Under Their Sand?

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Dylan Ratigan

Dylan Ratigan hosts Morning Meeting with Dylan Ratigan on MSNBC and the Dylan Ratigan Show Sundays on WABC Radio

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October 24th, 2011 7:04 PM

How Did Our Oil Get Under Their Sand?

It's somewhat rare to hear a Senator tell the truth about American foreign policy, but we did get a glimpse of reality last week when Senator Lindsey Graham lustily talked about the death of Gadhafi. He said, "There's a lot of money to be made in the future in Libya. There's a lot of oil to be produced. Let's get on the ground and help the Libya people establish a democracy and a functioning economy based on free market principles."

Though rare, this is not the first time a high profile American politician has accidentally told the truth about our foreign policy. In March, 2003, Secretary of Defense Donald Rumsfeld told a Senate appropriations committee that the war with Iraq would be paid for by Iraqi "frozen assets" and "oil revenues." This was not completely crazy - the first Gulf War had largely been financed by foreign countries who saw value in the oil supply lines we were protecting.

At the same time last week, the American solar industry filed a trade complaint against Chinese solar makers, who produce 55% of the world's solar panels. They allege that China is selling its solar panels below cost, which would be consistent with the Chinese industrial policy of preparing for a post-oil world. According to Stephen Leeb's new book Red Alert, China spends over $350 billion a year on renewable energy infrastructure, locking up critical supplies of zinc, silver, gold, copper, and rare earth minerals. Meanwhile, America spends its money keeping sea lanes open for dwindling oil supplies.

The Chinese are improving their skill at making solar panels, whereas American policymakers are explicitly avoiding building a post-oil energy infrastructure. Chinese elites want to secure oil and coal, of course, but they are also rapidly preparing for the day when these resources cannot be profitably extracted and used. American elites are engaged in a more short-sighted strategy of destroying any possible bridge to a post-oil energy future to protect their status quo profits. Leeb believes that this is a choice that could mark the end, not just of American dominance, but of American civilization.

It isn't that this possible doomsday scenario is hard to grasp; promises of alternative energy and threats of higher oil prices have been around for decades. So why is it still going on? My suspicion is a mixture of greed and inertia.

We have an industrial policy driven by oil, which has been the case for nearly a century. Initially, when oil was cheap and we produced most of it, this made sense Our advantage in oil helped us win World War II. Our national highway system, our network of airports and gas stations, suburban sprawl and the associated property tax base was all funded by fossil fuels. These huge oil fortunes played a major role in organizing our political system. When America could produce more oil than anyone else, or had the military alliances to do so, this worked in our favor.

Starting in the 1970s, oil became a strategic drawback, which is why President Carter tried a logical plan - an infrastructure bank - to get us off oil. Yet, our politics is so entwined with oil that Carter was crushed, and no one has since been able to break our oil obsession.

Oil still drives our industrial policy, and now petro-politics is so routinely dominant that it's almost pointless to even think about politicians not funded by oil. Lindsay Graham, for instance, has received a little less than a million dollars from the energy sector over the course of his career, so his lust over Libya's energy profits isn't surprising. Republicans are the party of oil - both Bush and Cheney were knee deep in the oil industry before entering the White House. On the other side of the aisle, TransCanada, which is seeking to build an enormous oil pipeline to bring in shale oil from Canada that will pump as much carbon into the atmosphere as all the oil in Saudi Arabia, just bragged about 22 Democrats who signed a letter asking for approval of the pipeline. Both Secretary of State Hillary Clinton and President Barack Obama will likely boost the project. These are just the most recent examples of petro-politics; next month there will be different, equally odious examples.

Many Americans believe that oil is bad for us, and do want to invest in a non-oil infrastructure. Though our industrial policy remains consistent regardless of which party is in power. This doesn't make sense to most voters, because it cuts against the way we think about ourselves as a relatively just democratic society. Our politicians should work for us, but they don't. The traditional model for understanding power in American politics is polling and elections - will Democrats or Republicans win the ability to organize our cultural resources? But this has obvious problems, since we've seen through multiple administrations congruity in policy-making.

A better way to think about power is to follow the money, because money is how our society allocates resources. The money is in fossil fuels and finance, which opens the door to Congressional offices and sells political power to the highest bidders. The Koch Brothers recently held a retreat in Vail, where they thanked those who had given more than a million dollars to their political causes - the so-called "million dollar" club. Mother Jones magazine was able to get a list of those people. Eight finance tycoons and seven fossil fuel (coal, oil, natural gas) magnates were the majority of the twenty eight families listed (the others were in retail and housing). The Koch Brothers themselves make enormous sums from oil, chemical products, and finance.

While we have the illusion of choice in our politics, the only real consistency in policy-making is Washington's commitment to war and oil, and increasingly often, war for oil. Libya was the oil dealer to Western Europe, but the market for oil is global. And oil is the prize, not democracy. This is why John McCain praised Gaddafi in 2009 for his peacemaking efforts, and applauded his death last week. It's also why our military is increasingly extended across the world in oil-rich regions.

Our oil-drenched, defense-heavy industrial policy is increasingly creaky, but it is protected by the money that flows into the political system to wall off politicians from voters. We know that we must restructure our energy system, but it's not as simple as plugging in a new green battery to replace coal plants and gas stations. Just as we must restructure a financial system to ensure investment and value-creation, we must also restructure our industrial policy to get off oil, and our politics to get off oil money. This will require a new way that citizens relate to each other, more local production of goods and services, stronger community ties, and a politics that isn't dominated by big money, but instead by public spaces and deliberation. If you look at the Occupy Wall Street protesters in Zuccatti Square and the others across the world, they may not articulate this, but this is what they are asking for.

Without a reformation for new politics, and a different way of relating to one another, we will continue with the status quo. And we will have to keep finding countries and asking the question of how our oil got under their sand.