Our best weapon against Iran? Oil prices

Even ahead of China, Iran is the most difficult problem we have in foreign policy right now. As John McCain said in his speech last night, the ayatollahs are the biggest state sponsor of terrorism in the world (starting with their wholly-owned subsidiary, Hamas), and they’re very hard to get at; for reasons of terrain alone, a traditional military response such as an invasion would be extremely unwise. Add in other considerations, and the advisability of such an approach only decreases. And yet, contra Joe Biden, we can’t just let them do whatever they feel like doing. So what do we do?One option might be what the old KGB called mokrie dela—”wet work,” such as assassinations and clandestine subversion—but that’s probably not the best way to go; not only is it morally problematic, but historically, we aren’t very good at it. This does, however, raise the thought that a more subversive approach to the Iranian government, especially in light of rising domestic disaffection in that country, is probably the one to take; what brute force can’t accomplish, geopolitical judo might. And as Emanuele Ottolenghi points out, a recent IMF report on the Iranian economy shows us how to do that, or at least how to begin: do everything possible, from increasing domestic production to pressure on OPEC, to bring the price of crude oil back down below $85 a barrel. Not only would that be good for the American economy, it would throw the Iranian economy into crisis. The current high price of oil has propped up the current regime there and funded its quest for WMDs and its adventures in international terrorism; knocking the ayatollahs’ feet out from under them, economically speaking, would at the very least cripple their international ambitions, and quite possibly start an earthquake that would bring them down altogether.

Posted in Economics, Energy, International relations, Uncategorized.

6 Comments

  1. Surprisingly, I don’t disagree with this assessment completely.

    However, I am not a big fan of reducing oil prices, and I realize that comment isn’t particularly popular. But as a person who remembers the 70’s, I do not want prices to drop and thereby stopping the real progress that is being made in finally moving us completely off the oil standard. A high price for oil makes solutions like termites, algae, solar and others economically sound. With a reduced cost for oil, those efforts would stop, like they did in the 80’s.

    I’m sorry Rob, but I really think the best thing for America is to turn off the spigot completely. Once we have done this, we can share our knowledge and expertise (read jobs in that) with the rest of the world. And hopefully, through that effort remove the threat of “oil” sponsored terrorism from our collective psyche forever. This would impact not only Iran, but all the other terrorism hot spots out there. It will not stop terrorism, but sure as heck will make them a lot poorer.

    It may indeed be a pipe dream (no pun intended), but that should be our goal imho.

    Take care!

  2. In the first place, energy is only one way in which hydrocarbon production is essential; even when the time comes that we no longer generate any significant energy by hydrocarbon combustion (above burning logs in the fireplace, anyway), we’ll still need oil for other things.

    In the second place, at this point, the changeover is irreversibly begun, for a great many reasons; lower oil prices aren’t even likely to slow it. A McCain/Palin administration would push alternative energy for foreign-policy reasons even if gas dropped back to $1 a gallon the day after the inauguration. (After all, cheap gas still left the Sa’udis with plenty of money to give al’Qaeda to bring down the Twin Towers.) I would assume that any other administration would take much the same tack.

    In the third, the collateral damage of high oil prices, which give aid and comfort to regimes like Iran, Venezuela, and Sa’udi Arabia, enabling corruption and dysfunction and empowering malignant agendas, is simply too great to tolerate if they can be brought down.

  3. If I am reading your first comment correctly, then yes, I understand that oil is used for other things beyond gasoline, and yes, I believe there are solutions in the pipe (loving these puns) to resolve these aspects of our dependency as well. As an example, corn being used to make plastics, and fabrics that had been previously created from foreign oil.

    On your second point, there were a great many who thought that oil was going to be a thing of the past as we entered the 80’s. The price of oil dropped and all of that research skidded to a halt. There is an interesting article and discovery show (more than one actually) on algae oil production that discussed this in detail as an example.
    Oil is still entrenched. If we found a huge pocket of it, thereby reducing the cost of oil to something even close to reasonable, it is my belief that we would give in to the “ease” of oil. We would push off any real solutions as “cost prohibitive”.

    As to your third bullet point, this is nothing new. These enemies have been using their oil profits for years to support terror and other malicious activity (and they are not alone). The only real solution is to render these “wackos” obsolete. It will be hard, but we can do it. We just need our government to be as receptive to this as possible (and I am not talking about handouts).

    Reduce incentives for oil and increase incentives for other solutions are good starting points in my opinion. Much of this is being done at the local level, but a national based strategy would be helpful for an undertaking this large.

    I would like to make a fourth point, if we provide Americans with the scantest of hope that oil can continue to be their long term solution, it is my opinion that they will drag their heals adopting alternatives. There are a number of addiction related articles that seem appropriate, but I will spare you the details.

    Anyhow, nicely done on the post. We both agree that they need to be stopped, and we seem to agree that through the pocketbook is the best solution.

    Take care!

  4. We can’t “render these ‘wackos’ obsolete”; it’s not within our power to cause cultural shifts on such a scale. And you miss three key shifts between the ’80s and now:

    –9/11. America takes the threat from Islamic terrorists far more seriously than it used to. As long as everything they did was far away, the stomach for actual sacrifice to deal with them was nil. Now, even though the reaction to 9/11 has faded, there remains a much greater understanding of what exactly we’re up against.

    –The auto industry is no longer allied with our oil companies–instead, they’re among the biggest funders of fuel-cell research, and are already at work designing fuel-cell cars (I’ve seen some of the concepts, which are remarkable). For one thing, they’ve figured out that the fluctuation of gas prices hurts them; for the other, they’ve figured out that they’ll be able to do much cooler things with cars once the engine is out of the way.

    –We’re much farther along technologically, which means that cars that no longer burn hydrocarbons (the greatest challenge) are visible on the horizon. Getting Americans to give up their cars–on that, I agree with you. It won’t be that much longer before that won’t be necessary–and, as noted, the automotive industry is pushing as hard in that direction as it can.

  5. After reading your note a couple of times, it finally dawned on me that you are referring to the religious extremist in your comments. If we ignore the religious extremists for a moment (sorry for my denigration of them, but…), the political culture of these countries will most assuredly change. In part because the financial ability to perpetrate their illicit activities simply won’t exist. I do not argue that their desires will change, but rather the means to achieve those desire will diminish.

    In my perfect world, they will be too busy trying to get off a one item economy to care about us any longer. Hopefully that would provide us with some respite, and with good, sound foreign policies perhaps this can be permanent (okay, I’m not that much of an optimist, but it sure sounds nice).

    I base the economic comments off of material read during the Kyoto meetings. Forgive my memory on the specifics, but the oil states were requesting financial aid as a stipulation to signing the treaty. They were very concerned about the impact to their economy if oil use was reduced worldwide.

    – The auto giants have indeed seen the light, but as you and many others have stated, our method of propulsion for cars is only a piece of the pie. I should point out that many thought the same thing about the auto giants at the end of the seventies. They go where the customers are, and right now, with high gas prices, alternatives will sell. By the way, the Volt is looking to be a spectacular hit if they can get it to work. What a beautiful concept car.

  6. I think I’m tracking with you now–maybe not, though, it’s late and I need to head off to bed; I still don’t think we can make those countries obsolete, but we can certainly drastically reduce their importance. We need to. And if we do, if we can (as Sen. McCain keeps saying) stop sending $700,000,000 a year to countries that don’t like us, then it’s going to be a crash for them; but while that will reduce the wackos’ resources, it’s not going to make them go away. But it will, overall, make them less dangerous, and more easily dealt with.

    And as I say, I think we’ve hit the tipping point on new energy sources; people are committed now which they never really were before, is my read.

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