“… the greatest purveyor of violence in the world today–my own government.”
–Dr. Martin Luther King, “Beyond Vietnam: A Time to Break Silence,” April 4, 1967 at New York City’s Riverside Church
“If we don’t have boots in the Iraqi desert by spring, we have to wait till winter because of the heat,” says conventional wisdom. Don’t believe the hype: our soldiers can handle the heat, but gas and oil prices can’t stand the cold. Heavy demand makes winter fuel prices the highest of the year, and prices spike when an oil producer like Iraq is attacked. Best to fight in the spring and summer when prices are low. That’s just the first lesson in the nexus between oil, money, time and the taking of other people’s property by force. As the U.S. government rushes to invade and occupy Iraq, people around the globe ask Why, Why now, and Why so alone?
Look all around you. Plastics, carpets, asphalt, paint, fertilized soil. Look how electrified our lifestyles. All of it based in oil and gas. Transportation systems, the glue of our economy, needed for centralized workplaces and the economic cohesion of our nation, dependent on oil. Agriculture, pharmaceuticals, a host of other industries all critically dependent on oil. Globally, one’s personal income is more closely related to the amount of energy one consumes than to any other factor. Oil is the most liquid energy, the form most easily transformed to others. The more oil you use, directly or indirectly, the richer you are. As the richest country on the planet, U.S. oil consumption is more than 20 million barrels a day and rising. We produce less than half those barrels, importing the rest largely from Saudi Arabia, Mexico, Canada, Venezuela, Nigeria, and Iraq. Within 20 years, we will import 6.5 barrels out of every 10 we consume.
U.S. oil production peaked in 1971, enabling OPEC’s 1973 oil embargo and the deep economic recession that resulted. Jimmy Carter changed our country’s policy toward Arab nations in 1980 by designating the supply of cheap oil from southwest Asia (the “Middle East”) vital to national security. Our policy in the region quickly evolved to prevent the rise of a hegemonic power, like Iraq was becoming in 1990, able to influence use of the region’s oil. The world’s oil production will peak this decade, bringing with it a permanent change in oil market control from those who consume to those who produce. This change will occur at a time when our economy is far more dependent on imported oil than it was in the 1970s. With deep roots in the oil industry, the Bush administration rightly seeks to diversify our sources of imported oil. Large oil and gas deposits in the Caspian Sea (circumscribed by Iran, Russia, and the -stans in central Asia), South America (including Mexico, Venezuela and Brazil), the South China Sea (circumscribed by Korea, the Philippines, and Indonesia), and West Africa (primarily Nigeria, Angola and Gabon) are consequently drawing sober U.S. interest.
Black Americans have historic and cultural ties to Africa, as illustrated by our concern with the continent’s poverty and HIV/AIDS rates, its terms of international trade, and its continuing struggles against colonialism. Many of us cheered last year when all 53 African states vowed to increase trade and to cross national boundaries as necessary to implement the mandates of a new African Union. Few of us know that Africa produces one-seventh of the oil consumed in the U.S., a figure that will rise to one-quarter over the next decade. Even fewer know that oil discoveries in Africa have outpaced those of every other region for several years. “West Africa’s oil has become of national strategic interest to us,” Assistant Secretary of State for African Affairs Walter Kansteiner declared early last year. “African oil should be treated as a priority for U.S. post-September 11th security,” added Congressman Edward Royce, chair of the Africa subcommittee in the House of Representatives. Discussions are ongoing at the highest levels of our government to formally designate west Africa a region vital to national security. Those of us with interests in Africa–African Americans, in particular–must understand the implications of this. With the size of Africa’s oil exports growing to rival Saudi Arabia’s, we must assess our government’s war plans against the U.S. need for oil.
Our country is the largest consumer of the world’s oil, but our economy is tied to oil in more ways than one. Since the 1940s, oil has been denominated in U.S. dollars only, making our dollar the world’s preeminent reserve currency. Nations buy and hold dollars like they buy and hold gold because they can’t purchase oil without dollars. With this support for our currency, U.S. foreign debt has grown to $2.8 trillion, or $10,000 owed to foreigners by every man, woman and child in our country. Last year’s trade deficit alone was more than $500 billion and shows no sign of slowing. Any other country with our lack of fiscal discipline would see its currency and stock market crash hard. But the dollar’s value is essentially backed by oil, which allows our Treasury to simply print money as needed to finance our debt. Since accounting makes no allowance for fiat money, the General Accounting Office has been unwilling to certify our nation’s financial statements for several years. We can operate this way only while our dollar is the world’s preeminent reserve currency; without dollar preeminence, there is hell to pay.
Enter the real “weapon of mass destruction,” the euro. Eleven European countries formed a monetary union around this currency on January 1, 1999; Britain and Norway, the major European oil producers, were conspicuously absent. Due to the strength of European economies, the euro now presents a serious challenge to the dollar in its role as key reserve currency. The rise of the euro also threatens to hobble the British pound’s eventual entry into Europe’s monetary union. Britain and the U.S. have mutual interests in oil to match their interests in the euro. Of the five largest oil companies in the world, two (ExxonMobil and ChevronTexaco) are , two (Royal Dutch/Shell and BP) are based in Britain, and one (TotalFinaElf) is French. U.S. and British oil companies are all but banned from exploration in Iraq, while French, Russian and Chinese companies have contracts waiting for the lifting of sanctions. France and Germany, the largest economies in the Euro-zone, can diminish U.S. credibility and keep the euro on track to become the key reserve currency by preventing war with Iraq.
Under U.S. and British military attack for the last decade, Iraq has had its exports restricted to oil through a United Nations oil-for-food program that deducts war reparations from the receipts. Iraq has used smugglers to trade its oil for goods and services, minimizing official oil sales as a way to influence prices and punish its attackers. Labeling the dollar “the currency of an enemy state,” Iraq switched its oil denomination to the euro in late 2000, risking the loss of $270 million to the dollar’s strength at that time vis-a-vis the euro. But the dollar lost 15% of its value against the euro last year. Iraq’s move to the euro–and Iran’s expected move–are placing tremendous pressure on OPEC countries and other oil producers to drop our dollar as the main transaction currency for oil. With a looming global peak in production, consuming nations must switch currencies when oil-producing states do so. For instance, Jordan began using euros to buy oil as soon as its major supplier, Iraq, began using them to sell, and North Korea switched to the euro late last year to protest the U.S.’ halt in fuel aid. Given the highly leveraged and fragile state of our economy, an OPEC switch from the dollar to the euro would bring a quick and devastating dollar and Wall Street crash that would make 1929 look like a $50 casino bet. Iraq’s currency action adds urgency to the coming oil price and supply crisis, so our leaders have moved to control both the flow and the currency denomination of oil.
The U.S. strategy to destroy OPEC is twofold: pressure non-OPEC producers to flood the oil market and retain denomination in dollars in an effort to weaken OPEC’s market control, and change the leadership of any country switching oil denomination from the dollar to the euro (hence, the “axis of evil”). The strategy requires that the U.S. military assert our interests in oil and gas deposits worldwide. U.S. interests in the Caspian Sea have been secured through regime change in Afghanistan and a deal for a new pipeline through that country. U.S. interests in South America, despite the failure of the coup in Venezuela (an OPEC member), are being secured via military aid to neighboring Columbia. U.S. interests in southwest Asia are being secured through the planned invasion of Iraq, then Iran (both OPEC members) if it switches oil denomination. U.S. interests in the South China Sea are being secured through military deployments in the Philippines and off the Korean coast (near OPEC member Indonesia). But what of West Africa?
While most African countries import oil from outside the continent, Africa is a net oil exporter. That’s because nearly all African oil is produced for export to Europe and North America. The vast majority of foreign direct investment in Africa is in the energy sector. In the largest project to date, ExxonMobil and ChevronTexaco have invested $3 billion in a pipeline project to bring Chad’s oil through Cameroon to the west African coast for export; the oil could flow by the end of this year. Yet the primary goal of the African Union is economic, political and military integration. In a nod to the continent’s internal needs, ChevronTexaco is building a gas pipeline from Nigeria to ports in Ghana, Benin and Togo. Until OPEC lowered production quotas last year, Nigeria was selling large blocks of oil to South Africa and Kenya. As the African Union succeeds in integrating the continent’s economies, Africa’s oil exports will be turned increasingly to internal use. Does U.S. policy in Africa mirror our policy in the Persian Gulf, a policy designed to prevent the rise of a hegemonic power with influence on the use and denomination of the region’s oil?
Sao Tome and Principe, an island nation 150 miles off the West African coast (triangulating Nigeria and Angola), agreed last year to host a U.S. naval base in exchange for protection of oil in its territorial waters. Nigeria has claimed exclusive licensing rights to an oil block in these waters for many years. The U.S. base could also be used to protect Cameroon’s claims to Bakassi, the oil-rich island off its coast long claimed by Nigeria. A new deployment of U.S. Special Forces to Djibouti, a tiny country bordering Ethiopia, Eritrea and Somalia, could likewise check national autonomy in the Horn of Africa. This troop deployment, designed to catch terrorists in east Africa, adds to the 3,000 French and German troops already present in the area. Our State Department has openly threatened Zimbabwe as that country puts its land back into Black hands. Like accusations levied against Somali “warlords” a decade ago, President Mugabe is charged with exacerbating Zimbabwe’s famine by distributing food aid only to government supporters. Our country has numerous opportunities–and perhaps an incentive–to violate African sovereignty. The upshot is that African Americans could soon experience repression of the sort felt lately by our Arab and Muslim brothers and sisters.
What are we to do? Recognize that Black well being in the U.S. and around the world will be adversely impacted by our government’s war for oil. Recognize that an oil war, by increasing the costs of energy, threatens oil-importing developing economies everywhere, especially those in Africa and South America, as well as Black America’s. Recognize that the war to control the world’s oil is in the late planning stages but is early in its implementation and can be stopped. Recognize that Martin was killed because of the moral authority he brought to the Vietnam anti-war movement, drawn from his use of the “race card,” and that the African American community retains that authority. Recognize that our ability to drive domestic response to an immoral foreign policy is what keeps the warmongers up at night. Recognize that thoughtful Black people, from Nelson Mandela to your next-door neighbor, are against this war for two reasons: because it is against Black interests–in the U.S., in central and South America, in Africa–and because it is so very terribly wrong. Talk to your friends and family about your opposition to the war. Stick an anti-war poster in your yard and a bumper sticker on your car. Join or help organize a local or national protest. Call, write, email and visit your congressional representatives. Take a few “sick days” from work, and don’t buy anything you don’t absolutely need. Get behind the anti-war movement now, before it’s too late.
We must also work on root causes with those in other communities. It may already be too late for a smooth transition from oil dependence to sustainable energy use, but we must begin now. If we are sensible, we’ll invest in solar and wind technologies, human-powered and public transportation (bikes and buses), public agriculture, and other requirements of sustainable communities. We must get our economic house in order and rebuild our manufacturing base. “Made in the USA” means we’ll have more jobs, even though they may be difficult and may not pay very well. Our lifestyles will change dramatically. Our standards of living will decrease, but the quality of our lives will improve. We’ll be forced to depend more on each other, to communicate more with each other, to build stronger families and communities. And just maybe we won’t have to kill people to maintain our economy. We can only suspect that, had the people’s will prevailed in 2000, our president-in-exile would have begun this transition.
On September 20, 2001, President Bush declared, “The war will be fought not just by soldiers, but by police and intelligence forces, as well as in financial institutions.” Hmmm. War is not the answer. It’s a shortsighted desperation play that is doomed to failure. Our military forces may take but cannot hold Iraq’s oil, as they have failed to tame Afghanistan’s land. Far from staving off disaster, our arrogance may instead compel OPEC to “go euro” en masse, taking many oil-consuming nations with them by force of economics. And a trade war with Europe will lend the coup de grace to our economy. In the meantime, many people will be hurt and killed, research and development on fuel efficiency and renewable energy will be slowed, the necessary policy and tax initiatives on energy consumption will be delayed, and our country will be far worse off when intelligent leadership finally prevails.
Sonja Ebron is the chief executive of blackEnergy, the place to practice Black cooperative economics. blackEnergy brings the benefits of deregulated energy to Black communities everywhere. This article originally appeared on one of our favorite websites, The Black Commentator–bookmark it today.