Sunday, June 21, 2009

America's Dollars and Middle Eastern Terrorism

In his book Hot, Flat, and Crowded, New York Times columnist Thomas Friedman brings up a point which has stuck in my mind during the events of the past several days:

Finally, through out energy purchases we are funding both sides of the war on terror. That is not an exaggeration. To the extent that our energy purchases enrich conservative, Islamic governments in the Persian Gulf and to the extent that these governments share their windfalls with charities, mosques, religious schools, and individuals in Saudi Arabia, the United Arab Emirates, Qatar, Dubai, Kuwait, and around the Muslim world, and to the extent that these charities, mosques, and individuals donate some of this wealth to anti-American terrorist groups, suicide bombers, and preachers, we are financing our enemies' armyies as well as our own. We are financing the U.S. Army, Navy, Air Force, and Marine Corps with our tax dollars, and we are indirectly financing, with our energy purchases, al-Qaeda, Hamas, Hezbollah, and Islamic Jihad. (p. 80)

During the extensive commentary and analysis about the situation in Iran which I've watched over the past several days, one point that I've heard made numerous times is that a change in the political situation in that country could potentially destabilize such organizations as Hamas and Hezbollah. Additionally, there has been conjecture over a number of years that the Iranian government has been helping to fund and provide manpower for the ongoing insurgency in Iraq, so there is the potential that a shift in the political winds could potentially (but not necessarily) calm the situation in Baghdad and allow the new government there to get its feet underneath.

Assuming Friedman's assessment is correct - and there is no reason to believe it isn't, because his comments aren't the first time I've heard someone assert that it's our money that keeps things going (in a certain manner of speaking) in the Middle East - how much hope should we have that a regime change in Iran will really alter things in a significant way? Any move towards lessening the grip of these terrorist organizations would be an improvement, but it would be overly optimistic to think that it will change things in dramatic fashion. No, it seems to me that if the financial support network is really to take a hit, the United States really needs to rethink its relationship with other oil producing nations.

I have always been a supporter of the notion that we as a nation should look inward when it comes to potential sources of energy (excluding for purposes of this discussion renewable sources). It is a well-known fact that there are tremendous untapped areas of oil and natural gas in both continental and coastal regions of the United States, but numerous groups over many years have blocked repeated efforts to reduce our dependency on foreign resources and become more self-sufficient. However, we haven't done anything to reduce our reliance on other nations, despite repeated admonitions of American presidents, Republican and Democrat alike.

Where do we stand now? According to the website of T. Boone Pickens and his Pickens Plan, we as a country currently import 65% of all the oil we consume to the tune of $475 billion in 2008. Friedman cites a report from the Centre for Global Energy Studies predicting that in 2008, OPEC nations could expect to receive $600 billion (as it turned out, they earned $645 billion in the first half of 2008 alone). Of the 11 OPEC nations, two - Iraq and Libya - were at one time on the official list of state sponsors of terrorism - from them, in 2008 we imported roughly 266 million barrels of oil; two others that are rumored to provide terrorist assistance - Saudi Arabia and Syria - were the source of an additional 562 million barrels that same year.

Using the 562 million number for Syria and Saudi Arabia, at the current price of $70/barrel, you're looking at roughly $39 billion handed over to nations with alleged links to terrorism. Operating off of Friedman's statement I cited at the beginning of this post, how much of a dent do you think we would make in the operations of terrorist organizations if we quit buying oil overseas and started buying American instead? How quickly would these nations rethink their support if one of their biggest customers started shopping elsewhere? If it was a choice between keeping the Western-type lifestyle they have adapted with the flood of oil revenue or keeping ties to terrorist organizations, which do you think these governments would choose?

Optimistically, I would like to say they would choose the former rather than the latter. Realistically, it's difficult to say...

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