Is oil just another commodity? Donald Trump thinks so, as he will no doubt make clear in his energy speech on Thursday from North Dakota.
The Republican nominee is scheduled to keynote an oil conference and follow remarks from North Dakota Rep. Kevin Cramer. As a congressman from one of the major fracking states, Cramer has pushed for less regulation, the relaxation of export bans and full-throated coal and oil production. He also is calling on the Republican candidate to take a strong stand with OPEC for driving down world oil prices.
Trump supports this agenda of increasing domestic production of energy and getting tough with OPEC as part of his plan to put America first.
Judging from his campaign pronouncements, for Trump, fossil fuels are a means to an end, whether to fuel his resorts and casinos or to pressure foreign powers to bend to American will. He can adopt that approach now only because the United States is awash in oil and natural gas.
But, unlike his steak knives, oil is not just another commodity. This is a dangerous view that requires the support of American military might and relies on a rejection of the reality of climate change.
Even if we have dramatically reduced the amount of oil we import and we have pulled back our military presence in the Middle East under President Obama, history shows that oil markets are volatile and unpredictable. Moreover, even with recent increases in the use of renewable energy, we are still very dependent on fossil fuels, which harms the climate.
Finally, Trump has a history of bellicose statements about the Saudis and ISIS that suggest that war could be on the horizon again, if the global oil market shifts, even though he has also flirted with isolationist policies.
Trump has a long record on energy. He has never been interested in those who warn that our history of energy consumption has been costly. He thinks climate change is a “hoax” and a “con job.”
In 2012, for example, he tweeted out, “Global warming is based on faulty science and manipulated data.” In a recent Washington Post interview, he said, “I think there is change in the weather. I’m not a believer in man-made climate change. I am not a great believer.” And he described President Obama’s efforts to regulate emissions as “overreach.” In case his views were not clear, he told his Twitter followers, “I will not support or endorse a carbon tax.”
Earlier this decade, he made his opposition to wind power clear in a major battle to defeat a Scottish wind farm, which would obstruct the view from his golf course.
“With the reckless installation of these monsters,” he said in an effort to derail a plan for offshore wind turbines, “you will single-handedly have done more damage to Scotland than virtually any event in Scottish history.”
Trump is an entrepreneur whose whole business model is predicated on growth, luxury spending and tourism. His personal success, including his own private jet, reflects and depends on an energy-intensive lifestyle.
Instead of seeing oil as an energy source with serious geopolitical and environmental implications, Trump sees oil as just a good in the marketplace, one backed by the strength of the U.S. military.
Though he has called for the U.S. to pull back its commitments overseas, when it comes to oil Trump has often been remarkably assertive and confrontational. Back in 2011, when gas was $4 a gallon, Trump said the United States should just tell the Saudis that we would pay only half of what they wanted.
In an ABC interview, he said, “We don’t have anybody in Washington that calls OPEC and says, “Fellas, it’s time. It’s over. You’re not going to do it anymore.” He also said that if prices did not come down, the United States should seize the oilfields in Iraq and Libya. In the same interview he said, “You go in. You win the war and you take it.”
Trump’s view of the need to manhandle the Saudis dates all the way back to the 1980s, when he said in an 1988 interview, “I want to tax Saudi Arabia for the job we do keeping them alive.” He added, “They wouldn’t be here for 20 minutes if we ever said, ‘You’re on your own baby.'” Last fall he kicked off his campaign with an ad warning ISIS that he would take their oil to punish them.
One of Trump’s early endorsements came from Sarah Palin, who suggested that she would be happy to serve as his energy secretary. Trump made clear that he was against the Paris climate treaty. In an interview with Reuters, he said, “I will be looking at that very, very seriously, and at a minimum I will be renegotiating those agreements, at a minimum. And at a maximum I may do something else . . .Those agreements are one-sided agreements and they are very bad for the United States.”
The last time that oil prices were in a free fall, the head of the Republican Party, Ronald Reagan, espoused a similar view that oil was just a commodity, better left to the whims of the marketplace — and the protection of the U.S. military. Both George H.W. Bush and his son would adhere to the same view during their tenures in the White House. Trump’s energy policy threatens the same kind of environmental costs and military obligations of that era.
Reagan came into office, much like Trump, promising to unleash American domestic production, scale back environmental regulations, reject any support of conservation and secure supplies abroad through military force if necessary.
Reagan wanted to abolish the Department of Energy, created by his predecessor Jimmy Carter, and appointed James Edwards, the governor of South Carolina, to head DOE who spent much of his professional life as a dentist. The head of Reagan’s energy task force, Texas oilman Michel Halbouty, said their agenda was simple. “We want more production. More, more, more.”
Reagan saw environmentalism as illegitimate and was known for saying things like, “Trees cause more pollution than automobiles do.”
Reagan tapped James Watt as secretary of the Interior, who denounced “environmental extremists [who] . . . would deny economic development” and would fight to “lock up from utilization our resources.” Watt promised to gut regulations so completely that no one “would ever change them back because he won’t have the determination I do.”
Under Reagan’s historic 1981 budget, EPA lost a substantial amount of its funding and staff.
Danny Boggs, the White House point man on energy, summed up their philosophy. “The government will no longer try to manage every aspect of energy supply and consumption.”
This faith in the free market went hand-in-hand with a stepped-up commitment to militarize the Persian Gulf. According to this view, the Saudis should serve American interests, rather than vice versa.
“From the point of view of U.S. foreign policy,” said Douglas Feith, who worked for Reagan, “it is critical to recognize that oil is a commodity essentially similar to cocoa, tin and pigs’ bellies. It is subject to the laws of supply and demand, as are all commodities in trade, and one need not ingratiate oneself to any oil regime in order to buy oil.”
During Reagan’s time in office, the global price of oil collapsed, which emboldened U.S. policy in the Persian Gulf. With prices so low, Reagan cheered that the age of limits was over. In his 1988 GOP acceptance speech, Vice President George H.W. Bush said, “There are millions of young Americans in their twenties who barely remember the gas lines.”
Two events of the Bush years made clear the costs of this energy dependence. On March 24, 1989, an oil tanker, the Exxon Valdez struck an Alaskan reef, resulting in the largest American oil spill to date. Approximately, 11 million gallons of oil spewed into the waters.
On August 8, 1991, President Bush initiated Operation Desert Shield to take up defensive positions in Saudi Arabia in response to Saddam Hussein’s invasion of Kuwait, a country with significant oil resources. “The sovereign dependence of Saudi Arabia is of vital interest to the United States,” explained Bush. On January 16, the United States, with its 500,000 troops, led an international coalition of airstrikes against Iraq in Operation Desert Storm.
These events, along with the ongoing increase in energy production and consumption, make it clear that we should not view oil as just another commodity, but rather as a fossil fuel that runs the risk of entangling America in foreign wars if and when today’s glut turns into tomorrow’s shortage, and in the meantime doing irreparable harm to the world we live in.