COMMENT A HISTORY LESSON: OIL AND MUNITIONS ARE AN EXPLOSIVE MIX

G. Henry, M. Schuler
Director, Energy Security Program Center for Strategic and International Studies
Washington, D.C.

This is a slightly different version of an article that first appeared in the Nov. 1, 1991, issue of Geopolitics of Energy published by Conant & Associates Ltd., Washington.

The Senate's crushing rejection of its energy committee's legislation and the administration's National Energy Strategy reflects a willingness to tie America's energy future to a special relationship with Saudi Arabia's al-Saud dynasty.

The Senate nay-sayers are effectively endorsing the views of aspiring matchmakers who acknowledge there can never be a formal marriage but urge a much more public cohabitation than has existed in the past.

After all, the argument runs, the mutuality of interests is obvious: Saudi Arabia has unrivaled oil resources but no prospect for defending itself, while the U.S. has unrivaled military resources but no prospect for fueling itself. So why shouldn't both parties proclaim their commitment?

Unfortunately, experience has shown that Middle East liaisons based on oil and defense ties eventually break up in bitter acrimony.

THREE EXAMPLES

Painful reminders of that axiom came almost like clockwork until the most recent decade.

The Baghdad Pact could guard the Iraqi throne and western oil interests against Soviet aggression but not against a popular left-leaning revolution that executed King Feisal in 1958.

America's Wheelus Air Base and Britain's El Adem armor depot could deter Egypt's President Nasser from attempting to seize Libyan oil fields but could not stop Lt. Muammar Qadhafi and a handful of Arab nationalists from overthrowing King Idris in 1969.

Massive sales of sophisticated arms and large training missions could establish Iran as Washington's surrogate "policeman of the gulf," but they could not protect the shah from Islamic militants in 1979.

That alarming recitation makes it clear that U.S. assistance in deflecting external threats-whether through express defense commitments, air bases, prepositioned equipment, joint exercises, state of the art arms sales, training support, or "trip wire" force presence-could not block internal upheaval.

In fact, those external defense arrangements provided explosive fuel to be exploited by internal forces intent upon socioeconomic revolution, pan-Arab coup, and/or Islamic upheaval.

As for their efficacy in assuring U.S. access to Middle East oil, one need only observe that the successor governments have been so hostile to the U.S. that Washington currently bars unrestricted imports from each of the three countries: Iraq, Libya, and Iran.

The U.S. was mercifully spared the demise of a Middle East oil friend during the 1980s unless Egypt's relatively minor exports are enough to qualify the 1981 assassination of Anwar Sadat. But it would be foolhardy to conclude that special relationships linking oil and defense no longer provide tinder for domestic upheaval.

LIBYAN CONNECTION

While recognizing that precise parallels never exist, especially when separated by several decades, it is useful to examine the dynamics of the situation surrounding the special relationship entered into by Libya with the U.S. and Great Britain.

The Libyan monarchy had its origins in the Sanusi Emirate of Cyrenaica, the eastern part of the country. It drew its support from the Sanusiyah Brotherhood of religious revivalists and the noble (Saadi) bedouin tribes who represented the ethnically purest Arabs outside the Arabian Peninsula.

Helped by Great Power maneuvering, this narrowly based, inward looking dynasty was imposed on the more settled, worldly, politicized people of Tripolitania, the western part of the country.

Given that somewhat shaky claim to national legitimacy, every economic and political grievance represented a potential threat to the Sanusi monarchy.

Although those grievances arose in Libya, Washington and London could not counsel internal reforms involving political representation, wealth distribution, societal change, dynastic feuding, and government corruption without raising palace hackles.

Therefore, the monarchy's would-be protectors found it much less discomfiting to attribute economic and political threats to external forces, specifically to Egyptian aggression and Nasserite subversion, which they could combat financially and militarily.

BEN HALIM'S ROLE

As if to proclaim the linkage between oil and defense, both Libyan-U.S. relationships had their roots in a July 1954 trip by Prime Minister Mustafa Ben Halim to the U.S. Ben Halim spent part of his time in Washington, negotiating a 20 year lease for Wheelus Field and part of his time in the "oil patch," listening to appeals for legislation that would favor U.S. independent oil companies over the "Seven Sisters."

Upon his return to Libya he introduced a Mutual Defense Assistance Agreement and a Petroleum Law that ended Britain's postwar domination of Libya and tied its fortunes more closely to U.S. interests.

A less savory side of the defense-oil linkage was provided when President Eisenhower's Secretary of the Air Force Harold Talbott did a little "moonlighting" to assist promoter Wendell Phillips in obtaining concessions.

During its relatively brief appearance on the world stage, the Libyan monarchy evidenced its general support for U.S. oil interests-corporate and governmental-in many ways.

The most prospective concessions went to U.S. companies to the dismay of BP, CFP, and Royal Dutch/Shell. Libya's willingness to calculate taxable income on the basis of realized price rather than posted price permitted Conoco and Marathon to penetrate the European refining/marketing sector and held down world oil prices.

Although Libya joined the Organization of Petroleum Exporting Countries, the monarchy's refusal to slow an unprecedented rapid growth in production fatally undermined OPEC's first effort to establish quotas in 1965 and met the exploding U.S. demand for low sulfur fuel oil required to meet new environmental legislation.

LIBYA'S OIL FLOOD

Libya's oil support for the U.S. and Britain was political and strategic as well as economic and commercial.

When Arab exporters imposed an embargo on the U.S. and other countries during the Six Day War of 1967, Libya nominally complied but rendered the destination restrictions moot by increasing overall production. Then, when Libyan oil workers struck in protest against that subversion of the Arabs' only political weapon, the government imprisoned more than 100 young technocrats.

Increased Libyan exports in the Mediterranean also weakened Egypt's attempt to gain leverage by refusing to open the Suez Canal for transit of tankers from the Persian Gulf.

By 1969, Libya had become Britain's largest supplier and America's largest supplier outside the Western Hemisphere. Libya exported three times as much oil as Saudi Arabia to the U.S., but Washington and London had few concerns in light of the monarchy's extremely cooperative oil policies.

In fact, Britain saw the Libyan oil fields as a "strategic reserve west of Suez" because it was confident that King Idris' avoidance of involvement in Middle East politics would leave him on the throne long after the oil monarchs of the Persian Gulf had departed the scene.

DEFENSE LINKS

On the other side of the equation, Libya's defense links were no less special than its oil links.

Under the Anglo-Libyan Treaty of Friendship and Alliance signed in 1953, Britain pledged to defend Libya's borders, provide internal security assistance, and, in a secret protocol, protect the king's safety and (at least by implication) his throne.

Whitehall backed its pledges with hardware, moving half of the powerful 10th Armored Division to Cyrenaica when Nasser forced evacuation of Britain's Suez Canal base in 1954.

Although the British Army ultimately reduced its troop levels to a mere company that would serve as a sort of trip wire while protecting King Idris, most of the armor remained at El Adem close to the Egyptian border.

Lest Nasser fail to get that pointed message, British tank crews were deployed to man the prepositioned equipment for several months following the overthrow of Iraq's King Feisal in 1958 and regularly flew into El Adem for joint exercises with the Libyan Army throughout the 1960s.

STRATEGIC AIR BASE

The U.S.-Libyan Mutual Defense Agreement provided for U.S. use of Wheelus Air Base and associated desert bombing ranges until at least the end of 1971.

It was not only the sole U.S. air base in the Arab world following forced evacuation of Dhahran in Saudi Arabia and Nouasseur in Morocco, but also the largest base anywhere outside U.S. territory.

Beyond its overt mission as a training facility for NATO's tactical fighter bombers and its secret role in SAC's strategic deployment plans, Wheelus offered the only air base for staging troops and equipment to the Middle East.

It was not just on paper, for Libya accepted the Eisenhower Doctrine and permitted the use of Wheelus for deploying U.S. forces to Lebanon in 1958. For all intents and purposes, the monarchy thereby fully aligned itself with U.S. strategic and regional containment policies.

Although air bases and prepositioned armor would permit relatively rapid deployment of U.S. and British forces, Egypt's Soviet-equipped forces were near enough to require a more immediate Libyan defense capability, especially in the aftermath of Nasser's attempted takeover of Yemen.

Besides, the sale of military equipment would offset growing outlays for Libyan oil and spread rising R&D costs. Accordingly, Washington and London encouraged Libyan aspirations to create an air-sea-land defense capability and agreed to divide the training responsibilities-and sales proceeds. So Britain got the navy, and the U.S. got the air force while they competed for the contracts associated with a doubling of the ground forces.

Libya's military leaders had relatively modest air and naval ambitions, but their appetite for heavy tanks and sophisticated air defense systems was easily whetted.

BRITISH ARMS SALES

Anxious to resurrect a rapidly eroding defense industrial base, Britain was determined to win contracts.

With highest level support from the U.K. government, British Aircraft Corp. won a 1968 contract to sell state of the art air defense systems, including Rapier and Thunderbird missiles as well as associated radar and communications equipment.

Priced at $365 million, it was not only the biggest international arms sale concluded to that time, but it also offered high paying jobs in Libya for almost 1,000 British "technicians" and tied Libya to an air defense strategy that would require future purchases of almost $1 billion worth of British fighter interceptors.

In April 1969, Libya also agreed to purchase 188 Chieftain tanks for $60 million. Because this was Britain's main battle tank with a stabilized 120 mm gun not previously available in any offensive Middle East arsenal, Libya was required to pledge that the Chieftains would not be used in any war with Israel.

PRECAUTIONS

Recognizing that an expanded Libyan Army also held the seeds of a coup d'etat, the monarchy and its foreign supporters implemented classic precautions.

Responsibility for internal security was assigned to the Cyrenaican Defense Force (Cydef), a paramilitary force composed of loyal tribal levies, that would be armed with antitank guns when the Libyan Army got tanks.

Key army and Cydef commands were held by officers with the most to lose from a coup, those who were linked to King Idris through blood, adoption, or marriage and who shared in large commissions from arms contracts. The loyalty of junior officers was to be assured by careful vetting and selection from traditionally supportive tribes or families.

In sum, everything appeared to be under control as the end of the 1960s was approaching: rising oil revenues would keep the Libyan people happy, and a growing defense capability would keep Nasser at bay.

COOPERATION FALLOUT

Unfortunately, oil and defense cooperation provided grist for the mills of Libyans who were already aggrieved by the monarchy.

In fact, the 1968 arms purchases became a sort of paradigm for all of Libya's ills. Large commissions to the king's senior loyalists in the army epitomized prevalent corruption and favoritism.

Provision for a sizable contingent of technical and English language instructors symbolized a dependence-even subservience-that was cultural as well as professional.

Acquisition of an air defense capability at a time when Libya was well outside Israeli aircraft range demonstrated that the system was focused on some nearby "Arab brother" such as Egypt or Algeria and involved the monarchy in imperialist efforts to divide and conquer.

Worse, the humiliating restrictions on the Chieftain tanks proved that the monarchy had disassociated itself from the struggle to liberate Palestine.

QADHAFI APPEARS

Although many Libyans shared those perceptions, junior officers in the Libyan Army were affected most strongly.

All they needed was a leader who would bring together the threads of Arab nationalism, Muslim revivalism, Palestinian sympathy, bedouin egalitarianism, and foreign resentment. Libya's military buildup provided him.

Faced with a growing need for junior officers at a time when the best qualified young men gravitated to the petroleum industry, Libyan recruiters lowered their educational standards and adopted a more tolerant view of political correctness.

The most significant beneficiary of that leniency was Muammar Qadhafi. He was admitted to the Royal Military Academy despite having been thrown out of secondary school for political agitation. He was commissioned in 1964 even though he was a known troublemaker while at the academy. Just 5 years later, he and a handful of fellow officers overthrew the monarchy Sept. 1, 1969. Thereafter, the special oil and defense relationships came to a precipitous end.

CHANGE OF NAMES

While reiterating that parallels are never exact, a few changes of name and reference point give cause for pause in the rush toward a special relationship with Saudi Arabia:

The al-Saud for the al-Sanussi, Nejd for Cyrenaica, Hijaz for Tripolitania, the Wahhabi Ikhwan for the Sanusiyah Ikhwan, Saudi National Guard for Cyrenaican Defense Force, Saddam Hussein for Gamal Abdul Nasser, Kuwait invasion for Yemen invasion, Dhahran Air Base for Wheelus, King Khalid Military City for El Adem, Abrams tank for Chieftain, and Patriot missile for Rapier.

Do all those clever substitutions mean there will someday be a Saudi Lieutenant X as a counterpart for Libya's Lt. Qadhafi?

No one can know the answer to that, but it certainly cannot be ruled out. It is at least a risk to be considered by those responsible for plotting U.S. energy strategy.

Congress must, therefore, reconsider its ill-advised decision to reject comprehensive energy legislation.