Atlantic Unbound |
May 29, 2003
Interviews
Addicted to Oil
Robert Baer, a former CIA agent and the author of "The Fall of the House of Saud" (May Atlantic), discusses the perils of our dependence on Saudi Arabia and its precious supply of fuel .....
A dependence that's so strong it's almost like a narcotic. You don't question
the pusher." It may sound like the language of drug addiction, but in
fact Robert Baer, a former CIA agent in the Middle East, is describing American
dependence on Saudi Arabia and its oil. In "The Fall of the House of
Saud" (May Atlantic), Baer details the United States's absolute reliance
on oil from a country that is deeply, dangerously unstable.
The history of U.S. involvement in Saudi Arabia goes back
nearly to that nation's birth. In 1933, a year after the kingdom was declared,
the first American oil concession was granted. Over time, U.S. interest in
Saudi oil evolved into a company called Aramco, which controlled all of the
oil in Saudi Arabia25 percent of the world's total. Aramco was a private
company held by four large U.S. oil companies, with immense influence on the
U.S. government. (It is now wholly owned by the Saudi government.) Moreover,
the relationship between the U.S. and Saudi Arabia extends beyond this private
interestas early as 1943, President Franklin Roosevelt asserted that protecting
the kingdom, and its oil, was of vital economic importance to the United States
as a whole. The precedent of maintaining a friendly relationship with Saudi
Arabia, for both public and private reasons, has remained unchanged in the
intervening years.
The United States' policies on Saudi Arabia, Baer argues,
are built upon the delusion that Saudi Arabia is stablethat both the country
and the flow of its most precious commodity can continue on indefinitely.
Sustaining that delusion is the immense amount of money (estimated at $19.3
billion in 2000) exchanged between the two partners: the U.S. buys oil and
sells weapons, Saudi Arabia buys weapons and sells oil. Oil and the defense
contracts underpinning its protection bind these two countries together in
such a way that when Saudi Arabia fallsa fate Baer feels is absolutely certainthe
U.S. falls too. Perhaps not all the way down, but, if we don't curtail our
dependence, he argues, a failure in Saudi Arabia could have catastrophic consequences
for the United States.
Our relationship, however, continues unabatedeven as the
corrupt royal family bleeds the Saudi treasury, Wahhabist extremism heats
up, and Saudi Arabian citizens kill American citizens in acts of terror. Baer
maintains that we must look at Saudi Arabia with a more objective lens and
examine the foundations of that country, since they are, in some sense, the
foundations of our own.
Robert Baer was part of the Central Intelligence Agency for
twenty-one years; for most of that time, he worked for the Directorate of
Operations in the Middle East as a field officer. He is the author of See
No Evil: The True Story of a Ground Soldier in the CIA's War on Terrorism.
His article for The Atlantic is adapted from his new book, Sleeping With the
Devil: How Washington Sold Its Soul for Saudi Crude, to be released in July.
We spoke by telephone on May 20.
Elizabeth Shelburne
How did you come to be involved in the CIA?
It's a bit of a mundane process applying and getting hired.
I actually just called the federal center in San Francisco. I was curious,
and it was a bit of a prank in a way. I was living there, I'd finished college,
and I was working part-time. They set up an interview for me, gave me a couple
tests, and about six months later I was in, to my surprise.
So you just called as a prank and this ended up being
something that you did for twenty-one years?
Well, you know, it was in the news a lot back in '75 and
'76. I definitely never considered it seriously. I didn't even know what a
spy was; I didn't like spy movies. But it was curiosity more than anything,
I suppose. And I never thought I'd get in, and I never thought I'd stay in.
Twenty-one years later, I was still in.
How did you decide to write a book about Saudi Arabia?
How much time did you spend there? You mention that you know the Saud familydo
you know any of them personally? Where does your knowledge about them come
from?
I've visited Saudi Arabia, but I've never served there on
a tour. I've always looked at Saudi Arabia and the phenomenon of Sunni fundamentalism
from the periphery, where it is easier to see these people, to meet them.
Because in Saudi Arabia, and this is one of the problems, you just can't walk
into a mosque and sit down and start talking to the clerics. And you can't
just drive around the country, going to Medina and Meccathey're off-limits
to Americans, unless you're Muslim. I'm like someone who followed the Soviet
Union from the outside. But I've spent twenty-five years in the Middle EastI've
met members of the royal family, I've talked to Saudis.
That's one of the reasons I started thinking about the book.
In the summer of 2001, I'd picked up some information that there was going
to be a big attack. The person I was dealing with was in touch with the terrorists
and wanted to go to Riyadh to pass on the information. He wanted me and another
former CIA officer to go with him to Riyadh as intermediaries. But when we
met with the Saudi Ministry of Defense in Geneva to see if we could go, they
said, "Absolutely not. We don't want you there. What do you know about
Saudi Arabia? What do you know about terrorism? We don't want to listen."
It's that combination of arrogance, xenophobia, and denial that I was struck
by. Then I started investigating it more and started talking to people. I
went around the United States and asked people exactly what we knew about
Saudi Arabia. It was amazing that for a country like Saudi Arabia, that is
so important to us, we know so little about it. Why is this? Why haven't we
looked into the kingdom that owns 25 percent of the world's oil resources?
Why don't we look inside and examine the threat?
And what is the answer to "Why don't we look inside?"
Dependence. Dependence on cheap oil. It's a dependence that's
so strong that it's almost like a narcotic. You don't question the pusher.
So many of my colleagues who worked in Saudi Arabia left the CIA and went
to work for the Saudis. How can they spend thirty years in the CIA, walk out
the door, and have the same remarks I do if they are working for the place?
This is an uneasy relationship, because even the Saudi ambassador to the U.S.,
Prince Bandar bin Sultan, has admitted that he holds out jobs in front of
bureaucrats, knowing that one day they can work for the Saudis or work for
defense companies that work inside Saudi Arabia. These companies don't want
to question Saudi Arabia. You're not going to get Boeing or any of these other
companies, like the Carlyle Group, to do independent studies saying, "Oh,
by the way, our source of cheap oil is wobbly."
In your article you describe how vulnerable the Saudi
oil infrastructure is to attack. How worried should we be about the kind of
attack that you mention? And can you describe what kind of shape an attack
might take?
Well, here's my theory. Of course, I'm not an expert, I'm
not an engineer. I've read stuff on the vulnerabilities of Saudi oil, tightly
held studies. And what the engineers worry about is, What could be done if
there was a strong support system behind the planners, or if people inside
the oil industry were co-opted; what sort of damage could they do? Externally,
a truck bomb at the gate would do minimal damage. But, if an employee who
knew the system could place explosives, could hit a couple key places, including
the redundant systems, then you could take 25 percent of Saudi oil off the
market for a long period of time. That's the worst-case scenario.
With respect to the attacks last Monday on the compounds
in Riyadh, there is more and more evidence that I am hearing (and it's not
confirmed yet) that this was done with internal support from the National
Guard. So, if they can do this to the compoundsa military operation with
all these suicide bombers and multiple car bombswhy couldn't these same groups
hit the oil industry and really do serious damage? I'm quite sure at this
point that the Saudis have got security all over that system at the sensitive
points. If it were just bin Laden on the outside, the risk isn't that much.
But when you have internal support and operatives, then it worries me.
You mention the possibility that a terrorist could procure
a submarine from the global arms bazaar and use it in an attack on Saudi oil.
Could you talk a bit about the global arms bazaar?
A lot of countries that make these advanced arms are impoverished
and they're willing to sell the arms. They are more and more available. My
understanding is that the two most recent suicide bombings in Israel used
explosives that weren't locally made. Plastique has almost become a commodity
like heroin or cocaine. You can pick it up anywhere on the black market for
a certain price. Guns are easily available and heavier weapons are easily
available. And that's not to speak of a person like bin Laden, who bought
a lot of weapons in the mid-nineties that came from this market. In Yemen
you can buy weaponssurface-to-surface rockets, surface-to-air missiles, the
shoulder-fired ones, which closed down British Airways going into Kenya. In
fact, availability of arms, the spreading of hate and demographic problems,
all mean it's going to be a long time before we can get over this. It's going
to take a lot of hard work. A country that it could really affect is Saudi
Arabia. If you fired at one civilian airliner leaving Riyadh and shot it down,
there would just be an exodus of foreigners. The people who run Saudi Arabia's
oil industry are just going to get up and leave. So it's all interconnected.
What disturbs me is how little we know about all this. Ten
days ago, before the Riyadh bombing, the head of counterterrorism at the State
Department, someone I know, said, "We've beaten bin Laden, he's on the
run." He's not trying to mislead us, it's just that we don't know how
deep this goes. If bin Laden's alive, he's holed up in some cave in Pakistan
or Afghanistan. He's not running this. It's much too complicated. It's done
locally. And with local access to arms, we can expect a lot more attacks.
What is the Saudi royal family's attitude toward the threat
to their oil?
Well, even the King, back in the early seventies, when there
was the Kissinger plan of seizing the oil fields, the King said "Fine,
seize our oil fields and we'll go to war with you and we'll go back to the
desert and live off camel's milk and eat dates." There's this mentality
in Saudi Arabia that oil has been a curse. And maybe Saudi Arabia would be
an ideal utopia if you got rid of the oil and all this money that it's generated
that has caused more problems than it's solved for the majority of the Saudi
people. So it's this convergence of terrorism and this attitude that we really
need to watch in the future; not even in the future, right now.
One of the things you mention in your article is that
in the past you accepted on faith the U.S.'s assumption that the Saud family
could keep their position and their oil safe. What caused you to change your
mind?
September 11. I figured that we'd be attacked eventually
in the United States, but I never suspected that they would be able to put
nineteen suicide bombers on those airplanes and hit us as hard as they did.
It was an extraordinary attack, and the amount of damage it did to the United
States is incalculable.
But you have to think like the opposition. Why wouldn't they
attack the oil, or the Saudi monarchy? No one knows what the repercussions
of that would be. Since the article came out, I've talked to a lot of oil
analysts and they've said, "You know, you cite the figure of $150 per
barrel if the Saudis' contribution to the world oil supply were cut off, but
there are no econometrics for this." It's the unthinkable if you took
this oil out.
You have to remember that Saudi Arabia plays a dominant role
in the rest of the Gulf/Arab sheikdomsKuwait, Oman, United Arab Emirates.
A cataclysmic failure of some sort in Saudi Arabia is bound to spread to these
other countries. So we could, without having any econometrics on this, go
way beyond $150. What's going to happen then? We truly are in uncharted waters
if Saudi Arabia falls.
Has CIA activity or U.S. policy as a whole helped to shape
or create the present situation in Saudi Arabia?
We, as a country, not just the CIA, didn't think that Sunni
fundamentalism was all that bad. It helped us defeat Egypt in a large sense,
and it helped us in the Yemen civil war in the sixties, and then in Afghanistan.
So we were supportive of Sunni fundamentalism, never thinking that once the
Russians were run out of Afghanistan the Sunnis would turn on us. It was a
failure to see forward to this possibility. It wasn't just the CIA. It was
the CIA, the State Department, the White House, and the American press as
well. They all said, "Saudi Arabia is a medieval country, we don't really
need to worry about it, it's very conservative, it doesn't change very fast,
it's a mutually beneficial relationship. They pump the oil, they bank our
oil, they buy our weapons, it's all to our advantage."
Can the American and global dependency on Saudi oil be
changed? If so, how do we do it?
It's got to be changed. Just look at the environmental motivations
to change it. And the increase in our dependence on oil can only make matters
worse, because oil unfortunately sits in the most unstable parts of the world:
Venezuela, Nigeria, Chad, the Middle East, the Caucasus, and Central Asia.
Even Russia's not particularly stable. When our future is in the hands of
parts of the world that are spinning out of control, it worries me.
What would be your first thoughts in terms of how we go
about making the change?
I would start with, for one, taxing carbon-based energy sources.
We have a huge gas problem in the United States; I'd start taxing those sources
in order to force down consumption. Then I'd use incentives and start investigating
practical alternativesfuel cells, wind energy. Pumping more oil is just not
going to do it. Alaska's going to last us for, what, sixty days of oil consumption?
I think that's wishful thinking. Once we back away from this dependence on
foreign oil or oil at all, we can have a more independent foreign policy.
One of the things that you mention in your article is
the surplus oil that the Saudis sent to the U.S. after September 11. Was that
part of an agreement with the U.S.? Did the Saudis do this of their own volition?
How did that decision come about?
There's an extremely close relationship between the White
House and the king of Saudi Arabia, along with the oil minister and the ambassador.
You can call the ambassador up and say, "Look, we're forecasting a shortage
in the world oil market because of speculation. Can you pump more?" In
every crisis, the Saudis have come through. Let's be frank about itthey were
our best allies in the Middle East. They banked this oil2-3 million barrelsat
a very high cost, they never got reimbursed for it, and they were always there.
The Iran-Iraq war, they were there. When the Iraqis overran Kuwait, they were
there. Strikes in Venezuela, they came through and pumped more oil. They had
their own interests, but they also protected our markets as well.
Were they being financially compensated for pumping more
oil?
We pay market prices. But the point is that it's all based
on supply and demand, and by increasing the supply, they keep down the price.
It's something the Saudis have paid out of their pockets. We've never reimbursed
them for this surplus capacity. We built it in the sixties and seventies;
but when they nationalized Aramco they paid for it, they bought it back. We
can't simply just sit down and say, "These guys have always been against
us and the Wahhabi fundamentalists have been sent by the royal family to destroy
the West"that's when it veers off into right-wing theory.
I'm intrigued by what the Saudi reasoning behind surplus
oil is. Is it just to keep in the good graces of the U.S.? What do they get
from it?
Well, we provide their defense. We've got troops based in
the area; we protected them from the Iranian terrorist threat in the eighties.
They also maintain market dominance and they are looked at as a reliable partner,
which helps them strategically. And that's worked fine until we've had this
series of terrorist attacks, the intifada in Palestine, and this movement
in the streets of Saudi Arabia. No one foresaw this, but now it's time to
catch up.
You said before that many Saudis feel that oil has been
a curse for them. With that in mind, could you talk about the amount of money
used to sustain the lifestyles of the Saudi family? Where does it come from
and how is it being used?
It's all hidden in defense and construction contracts. What
has happened is that the price of Saudi oil is really transparent when it's
sold. Aramco has contracts, they sell oil at world prices, and they get reimbursed.
It's part of their budget. Some of their oil is called "political oil"
which they give to their allies for free, whether it's Yemen or Jordan, or
at times, Bahrain and even Afghanistan and the Taliban. Where the money is
stolenand I call it stolen; the Saudis might notis in construction and defense
contracts. You pay commissions of 20-40 percent for arms deals. That's divided
among senior princes in the royal family and commission agents. The same thing
happens in construction. When they rebuilt Mecca and Medina, they were overpaying
for projects and the money went into the royal family, into the bin Laden
family, into the bin Mahfouz family. I mean, what's a commission? If you get
40 percent on a deal, it seems like bribery to me. And the royal family divides
these commissions up, which supplements money they get in their allowances.
You mention in the article that these allowances range
anywhere from $19,000-270,000 per month.
Those are the stipends, which are perfectly open and legaland
expected. But it's over and above that that they are getting the commissions
from construction and arms.
For people who are living on that amount of money, is
oil really a curse? Could they really go back to the desert?
I don't think they could. I'd hate to live in Saudi Arabia
without air conditioning if I'd grown up with it. No, they couldn't. I don't
think most Saudis would survive without oil money, but the problem is now
they believe that they can. The question is, What percentage of Saudis believe
it? Once you start hitting the high numbers like sixty or seventy percent,
you're ripe for a revolution.
Could you talk a little bit about the current relationship
between the House of Saud and Wahhabismthe fundamentalist Islamic movement
gaining strength in Saudi Arabia? In the article you mention that the connection
dates back to the eighteenth century, when Muhammad ibn Abdul Wahhab, the
founder of the movement, and Muhammad ibn Saud, of the House of Saud, cemented
their relationship with a deal that "the Saud family would provide the
generals, and the Wahhabis would provide the foot soldiers."
Saudi Arabia is a very conservative society and it has always
been conservative. And the royal family depends upon the Wahhabis and these
conservative religious groups. What the royal family did over the years was
give them a lot of money, encourage them, give them mosques, give them an
educational system, with the primary schools and the mosque schools, in return
for not criticizing the royal family. Eventually, in the sixties and seventies,
they gave them money to expand Wahhabi Islam, which spread into Central Asia,
North Africa, and beyond. It was a payoff for turning the other way when it
came to the Saudi royal family.
Is that starting to change now?
No. I don't think they can change it. These people are powerful.
Somebody recruited those fifteen Saudis. Not all of them were recruited in
Afghanistan and they weren't recruited in Europe. They were recruited in Saudi
Arabia. They joined this bin Laden movement there.
Aren't there some aspects of that movement that do call
for the overthrow of the royal family?
Sure, sure they do. Because they think it's corrupt. It's
corrupt because it's made an alliance with the United States, because of money,
things like that.
We've seen a lot in the news during the past few months
about the idea that toppling Saddam Hussein might lead to a domino effect
in the Middle East. Could that happen in Saudi Arabia? Would it ever be allowed
to happen?
A domino effect? Sure. We crossed a threshold when we invaded
Iraq. All bets are off. The obvious is no longer obvious. But again, it's
all in the timing. Everybody thought that the terrorism would start when the
first bombs fell on Iraq; it took two months. When are we going to see the
unintended consequences of this war? I don't know. The Saudi royal family
is trying to make reforms very quickly, but it's going to be too little, too
late.
What kind of reforms are they trying to push through right
now?
They've created a pseudo-parliament, to give people some
measure of representation. But what are they going to do with the radicals,
who say "Let's break relations with the United States, let's stop pumping
so much oil, let's raise the price of oil, and let's support a jihad in Iraq
against American troops"? The Saudi royal family is never going to let
that happen.
Basically, they are governing a country that is at a complete
disconnect with the life they are leading and the foreign policy they are
pursuing.
Yes. These huge contradictionswe're starting to see the
fissures resulting from them now. Again, I emphasize, we don't know how bad
it is, but based on the closing of the embassies today and based on the attack
in Riyadh, I think the scenario is speeding up.
In the article you say that Crown Prince Abdullah has
called for "democratic reforms, the reining in of the conservative clergy,
and military disengagement from the United States." Where does he stand
in the eyes of others in Saudi Arabia as a result of those views?
He's popular, I believe. He's taken a strong position on
reforms, on cutting back the princes' stipend, on the corruption. He's aware
of the problems. He just hasn't been able to get a consensus inside the royal
family.
Some of the behaviors of the Saudi princes just seem purely
criminal in nature. Would there ever be any sort of popular uprising against
the princes' corruption?
That's what I'm afraid of. I'm hearing that the National
Guard, which is a tribal group, is fighting against Saudi Arabia's connection
to the West. Is that going to spread to the rest of the military? Are they
going to turn against the royal family? I don't know. But it's something we
shouldn't rule out.
About a third of the Saudi Arabian population is composed
of foreign nationals, and they seem to be the ones who keep that economy functioning.
What kind of effect does that have on the society? If Saudi Arabia were ever
to find itself in a situation where these workers didn't have jobs or decided
to leave en masse, what effect would that have in Saudi Arabia and the rest
of the Middle East?
If they got up and left, the whole economy would collapse.
They're the engineers, they run things. A lot of Saudis are not equipped to
run their water-purification plants and things like that. But I think that
what we are talking about is the Americans leaving or the British leaving,
rather than the Pakistanis, who are Muslims, of course, or the Bangladeshis.
If the Americans all left, it would be a catastrophe, but not like if all
6 million foreign nationals left.
You talk about the Washington establishment's proposed
solutions: for the royal family to cede part of its authority, support reform-minded
princes, set up a model parliament, and co-opt firebrands by giving them political
office, etc. Do you think any of these suggestions are enough?
Instant democratic reforms? No. Because the problem is that
the country would be like Algeria and would vote in an Islamic government.
Everything I've seen suggests that. And it's something we couldn't live with
right now, because that would be entirely unpredictable.
According to the Washington establishment, are there any
real plans to implement these kind of suggestions, or is it enough to have
the suggestions at all?
No, it's not enough to just have suggestions. And it's not
enough to pull our troops out. I don't know what you do to fix it now. I would
say you're going to have to start by doing something serious about Israel
and the Palestinians. The problem is that going into Iraq, the way the Saudi
in the street looks at it, was an invasion of an Islamic country. We decided,
for whatever reason, to ignore that. Can we turn back this wave by military
force? It depends on how bad things are in the Islamic world. But it's a risky
strategy.
How long do you think we have before we start to see Saudi
Arabia fall apart from all of these tensions?
The smart people tell me that in three or four years we're
going to see some big change in Saudi Arabia. Now, it may be a change in succession,
an Islamic government, or a complete distancing of the country from the United
States.
Any of those changes could radically alter the world.
Yes. We should have contingency plans, if that occurs. If
we see an Iranian-style revolution occur there, what do we do about the oil?
Can we afford to lose Saudi Arabia's oil production? We can't rule it out
that they might just close it down. Or that a completely nutty group might
get a hold of the oil facilities and destroy them.
Do you think the most recent eventsthe withdrawal of
troops and the bombingsare going to serve as a wake-up call to either the
Saudi family or the Bush Administration?
I think they have. The fact that we've closed the embassy
down, it's clear to me that they're saying, "Hey, things are bad there
and we have to do something about it."
Elizabeth Shelburne is a staff editor at The Atlantic.
Copyright 2003 by The Atlantic Monthly Group. All rights reserved.
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