Perspectives to current issues. The center itself is strictly nonpartisan. The purpose of the program is not to advocate for any particular policy, but provide Historical Context to help inform policymakers and the public as they deal with difficult issues. Thank or acknowledge the Financial Support of the Mellon Foundation which makes this series possible. I also want to thank Rachel Wheatley in the back of the room who is our assistant director and helped organize this. I want think the i want to think the office of gerry connolly, and i want to alert you to the fact that you will have index cards on your chairs. This is for questions. As the presenters are speaking, feel free to jot down questions, they will get formal remarks in the first hour, and the second half hour will be devoted to q and a. We will go from there. Thank you offer coming. This the rest of it is in the flyer. I worked briefly with the Congressional Research service. A little longer with the department of energy. Seven years at at the department. As the flyer notes, my research and publications focus on the political economy and geopolitics of oil. Before introduced todays speakers, a few words about studying history. There are many ways of understanding the world, why study history . I would say first, in addition to being intrinsically interesting, studying history expands our range of experience. Learning from other people in other times and places forces us to think outside our own experience in time and place. Studying history helps us understand who we are. As individuals, as nations, and human beings. Second, in contrast to popular usage, history is not just about the past, but rather it is also key to understanding the present and preparing to face the future. Studying history helps to understand how the world got to be the way it is today and then helps us understand the forces that govern its ongoing evolution. As my late teacher michael hunt his coauthor wrote in the 2012 book, arc of empire, without perspectives, we flounder in midoceans, the shore with which we came already out of sight, the land we seek will be on the horizon. As a historian pointed out many years ago, history is also a way of learning. The methods historians use to understand the past are the same methods we can and should use to understand the present and to think about the future. And ill give you some examples. Historians stressed the importance of context, as dr. Kennedy pointed out. Both temp oral and spatial. It matters a lot when and where events and decisions are made. Although historians study change over time, they are also sensitive to continuities of change and continuity are very important. Historians emphasize the interconnectedness of the various aspects of the human experience. Historians historians try to see the world rather than focus only on some factors. Historians place great emphasis on close engagement with facts and primary sources. You have to read a lot. Studying history helps us develop the ability to identify relevant sources and it helps us distinguish between types of sources and how to support our conclusions with evidence. Studying history helps us learn how to evaluate different interpretations and how to distinguish between evidencebased conclusions and unfounded statements. Our speakers today will draw on Knowledge Based on years of research of primary and secondary sources. They will emphasize context. They will examine continuity as well as change. And they will analyze the interconnection between the many factors that influence the geopolitics of middle east oil, and they will strive to provide you with a Historical Perspective on the current crisis. Our speakers today are dr. Toprani, an associate professor of strategy at the u. S. Naval war college and dr. Nathan citino of rice university. Dr. Citino has written many, many articles and two very fine books on the middle east. Book won the book prize from the society of historians. It is a great honor. I will turn this never now to first this over now to first dr. Toprani. Dr. Toprani so, there is no need to go over my background. I am an associate professor at the u. S. Naval war college. Obviously i do need to add a little disclaimer to my remarks. While i am here on an official capacity, none of the opinions i express should be construed as representing the official opinion of the United States government or any of its agencies. Leaving that aside, this is a short talk i give to my students at the war college regarding the oil industry. I will try to keep it to 10 minutes. Hopefully david will keep me honest. So the aim of this talk is to give you one, an overview of how the oil industry operates as informed by the study of history the second study of history and the second point, to explain how oil influenced u. S. Policy and strategy since 1945. The first point, oil is different from other commodities. For most commodities i will give you a brief discussion of macro economics. Dont worry, im am not an economist, thank god not even an economic historian but you need to know, for most commodities lets imagine shoes. Thats always the example i give. The supply of shoes is shaped by the demand for shoes. If there is a high demand for shoes, you will produce more shoes until the supply exceeds the demand, at which point you cut back on supply. That is pretty straightforward. The thing is, oil does not operate under those conditions. Demand for oil is inelastic. It is a fancy way of saying if oil is two dollars a gallon for or three dollars a gallon, you are still driving to work. It does not do a whole lot to affect demand over the short term. The most important factor, because it is inelastic, the most important factor shaping supply is not the demand, but rather the price of oil. The price of oil determines whether or not certain supplies are economical to produce or uneconomical to produce. For example, if you have a high price for oil, it makes sense to produce oil from tar sands in canada. At a low price, that makes no sense. So i want to stress that the most important factor behind shaping the overall supply of oil is not a man, but rather the price for oil. Demand, but not rather the price for oil. The second point, lots of economists, including nobel prize winners, to tell you that oil is fungible. It is whether or not something can be substituted for another. So theoretically, coke is with pepsi, although i do not know why anyone would drink coke. So a lot of economists like to talk about oil as being fungible. They use the analogy of a bathtub. Oil taken from one part of the bathtub is replaceable by oil from the rest of the bathtub. The problem is, this is wrong. As anyone who works in the oil industry can tell you pretty quickly, oil is not fungible because all types of crude oil are not the same. Specifically, oil is usually dominated in two ways. Oil tends to be sweet or sour that has to do with sulfur content. Or it tends to be heavy or light, depending on its specific gravity. So u. S. Shale oil tends to be light, sweet crude. As a sweet as a mountain spring, light of the cloud, as people used to say whereas oil from the , middle east tends to be light, tends to be light, but also sour. Meaning it has a high sulfur content. Why does this matter . It means oil of different compositions cannot be refined in the same facility. If you have a refinery there to produce light, sweet crude, it cannot handle heavy, sour crude. And the process of converting refineries i talked to people in the industry can take several months to several years. Right . T you go all so for that reason, never think of crude oil as being fungible. If refineries are designed to process oil from the middle east, that is all they can handle. They cannot substitute it for oil from the United States or west africa, which has different chemical compositions. Different chemical properties. An important fact to bear in mind. Oil is expensive to produce, but it is not scarce. I want to stress this. Oil is not scarce. How much do you pay for a gallon of gasoline . Back home, 2. 50. It is around the same here, right . Think a little bit higher. Lets say it is three dollars a gallon. How many liquids in the world can you buy for three dollars a gallon . Go to the supermarket. Tell me how much does a gallon of milk cost . How much would a gallon of pepsi cost . I mean, petroleum is very, expensive, in considering how much we use. The important thing to bear in mind, there are high barriers to entry in terms of finding oil and producing it and the economy the economy is scale. The marginal cost of oil goes down the more you produce. But it is tricky to find and produce oil in the first place. And the other point, how much oil is there . If i knew the answer, i would not be at the National History center, i can assure you, but generally, there are two answers. If you ask a geologist how much oil there is, they will tell you, based on the existing state of technology and how much they know about the world at this very given point in time, they will give you an answer. The problem is, that answer is only good for that window of time. It is based on their knowledge at that particular point in time. That is why geologists every 20 or 30 years will tell you, we only have 30 or 40 years of oil given these rates of consumption. And every 30 or 40 years, it turns out we have more oil. That is not because geologists are idiots. By any stretch of the imagination. It is just that geology is not a predictive science. It is there to study the earths past, not its future. I like to dump on economists, but unfortunately they are probably the people you need to ask when it comes to how much oil is there. They will ask, if you want to know how much oil there is, tell me what the price of oil is. If the price is high, odds are there will be large quantities of oil. If the price is low, ironically, that will actually shrink the amount of Oil Available because it is not economical to produce. The question arises, what is the position of the United States Government Regarding oil prices . Do we want high or low prices . High prices carry severe economic costs for consuming nations. Generally they inhibit Economic Growth and promote inflation. But as we have seen since 2013, low prices in and of themselves can cause problems. They discourage efficiency or conservation and will tend to undermine the political stability of oilproducing nations that depend on export revenues. Sorry, i have to barrel through all this. In the remaining time, i want to schedule out, why is oil and middle east oil significant . Why is it significant u. S. And to u. S. Policy and strategy since 1945 . Control of middle east or gulf oil is at the center of u. S. Strategy since 1945, but not for the reasons you might expect. Most people would think it is significant because we need to for ourselves. Strangely, it is not because we needed it for ourselves. We really only started to import significant quantities of middle east oil in the 1970s, and even then, starting in the 1980s, once western hemispheric production came online, the importance of the middle east to u. S. Supplies specifically tended to decline. What is more significant, this oil was vital for european and asian consumption. Specifically, i want to make this clear, the oil is not important for the United States, it was important for u. S. Allies. And that is a factor probably still continuing, because we can see in the asiapacific, basically all you as partners allies relyners and on middle east oil for 50 to 80 of their consumption of middle of imports to this day. Secure supplies in europe and japan after the Second World War, and discouraged them from relapsing to economic nationalism by developing synthetic fuel sources domestically or grab resources from neighboring countries. We did not want to have to have a replay of operation barbaro so or pearl harbor because japan or germany ran short on gasoline. Development of the gulf center of World Oil Production after the Second World War for the most part tended to promote price and supply stability. For the most part, which in turn promoted american prosperity even after the United States became a net importer of oil after 1948. Why is the middle east so significant . Two reasons it is not the amount of oil it produces. Lots of places of the world produce significant quantities of oil. ,articularly the United States russia or the soviet union beforehand. What is significant about the middle east, in global export markets, there is relatively small consumption within the region relative to how much it can export. The slight capacity within the middle east. How much they can wrap up production or turn it down depending on under supply or oversupply in the rest of the world. Overall, this prosperity, which is fueled by middle east oil, facilitated the containment of the soviet union and its communist allies, and helped win the cold war. Anyways, i think in the remaining time i have, i think i have one more minute, what are u. S. Aims, broadly speaking, regarding the oil industry past and future . I would argue there is not a whole lot of difference from what they were in 1945 and what they are today. The most important factor is control over the global oil trade. Not control over foreign oil fields. Remember, the oil is only useful if you have a market for it. As long as we control access to those markets the developed world who tend to be more oil intensive as long as you control access to those markets, you dont actually need to control the oil fields themselves in the producing world, which obviously makes relations with Oil Producers more amicable than they would be if you owned their resources. We want to secure oil for the United States and u. S. Allies and partners at a reasonable cost, which we do by commanding we tend to be rather ambivalent towards preferntal powers, which pipelines relative to oil tankers. A recent set of controversy over ream, theeam nord st Second Russian pipeline from russia to germany, it is not new. The United States traditionally viewed russian oil and gas exports to europe in the 1970s and 1980s as a threat to u. S. National security because that is a supply that could not be controlled or intermediated by u. S. Companies and the u. S. Navy. We want to make sure oil revenues go to our partners and not to hostile Oil Producers. I think that should be pretty selfexplanatory. We want to enhance the economic position of the u. S. In the gulf, if Oil Producers are selling to u. S. Partners and allies in the United States and doing so through u. S. Companies, even if we are sending dollars to that part of the world, they will need to recycle those dollars using companies that tend to be american or allies. It is a way of recycling those dollars and ameliorating the current account strain placed on u. S. Balance payments. Most importantly, we want to prevent the domination of the gulf by any external powers. Traditionally, this means we doctrine have a monroe for the gulf, that no power would dominate the region. And im talking about in its incarnation the Carter Doctrine, which was designed to stop a potential soviet bids to dominate the region and was expanded by president reagan the following year to include domination by any internal regime specifically iran. It had just gone through a revolution. So with those comments in mind, i will be one question in your mind bearing all i have said, does it make sense for the United States to wind up its commitments in the gulf when the overall context that surrounds u. S. Engagement of the gulf and the u. S. Mission globally is not so different as it was at the end of the Second World War . U. S. Allies and partners continue to rely on the gulf and we still control access to that by mediating supplies that travel overseas and controlling access to markets. Thank you. Dr. Citino thank you. Im Nathan Citino from rice university. I would like to thank the National History center for organizing this event and for inviting me, and i would like to thank all of you for coming to hear this discussion early on a monday morning. A few weeks ago, on october 11, the defense secretary, mark esper, announced a deployment of u. S. Military forces to saudi arabia. And at the time of that deployment, he said saudi arabia is a Security Partner in the middle east and asked for Additional Support to supplement their own defenses and defend the international rulesbased order. This statement and the deployment itself gives us an entry point in our discussion this morning for talking about the history of the u. S. Saudi relationship and American Foreign policy in the gulf more generally. Those phrases, like Security Partnership, or maybe you have heard the phrase a bargain of security for oil, are frequently used to describe the u. S. Saudi relationship. These descriptions serve to portray that relationship as natural, inevitable, and apolitical. Historical research by me and by many other people in the field some great work being done right now shows there was nothing inevitable about the u. S. Saudi relationship, which developed over time and in a contingent manner. On the basis of conflict, as well as cooperation, and in a way that generated political controversy in both countries. In my remarks, i will give you a sense of the scholarly literature by talking about three major themes or topics in talking about the u. S. Saudi relationship. The first has to do with the postwar petroleum order. And the basic idea here is that the u. S. Saudi relationship emerged simply not on a bilateral basis, but is part of the system that developed middle eastern oil for fueling western europe and japan after world war ii. So we talk about u. S. Saudi u. S. Saudi relations, we are not just talking a bilateral relationship, but to the place of the relationship within the larger system, that included Major Oil Companies as well as states, that included oil transit states those countries whose territory was crossed by oil on its way to market as well as Oil Producing states, and that included governments in the region and great powers, like the United States and great britain. So major u. S. Corporations formed the Arabian American Oil company, or aramco, to develop saudi oil and the transarabian pipeline across four countries to transport oil from the gulf to the mediterranean. Aramcosaudi relations were 1950 on a deal struck in for a 50 50 sharing arrangement. Those relations were also based on conflict, characterized by conflicts over payment and ownership of the company, over the housing promotion and of and treatment of saudi workers, and aramcos commitment overall to Economic Development in the kingdom. U. S. Recognition and support for israel also complicated this relationship and isolated saudi arabia within the arab world. So a second set of topics has to do with the politics of reform, domestic politics within the saudi kingdom. Within saudi arabia. And the basic sort of recognition or argument that historians make is, from the beginning of this relationship in the 1930s, u. S. Government and american Oil Companies were involved in domestic saudi politics. Strikes among aramco workers in 1945, 1953, and 1956 latitude led to demands for reform and the nationalization of aramco by the saudi government. The government suppressed these strikes and arrested or exiled leaders. The groups, such as the National Reform front, formed out of these uprisings. Labor leaders and other dissidents regarded the u. S. Airbase and aramco itself as constituting a colonial presence in saudi arabia. This was the era of anticolonial nationalism, of decolonization in the arab world of the authority, influence, and popularity of the egyptian president. A movement for a constitutional monarchy, supported by workers, by some government employees, and even some members of the ruling family, was defeated in the 1960s. The u. S. Government closed ranks behind the king, who opposed the constitution and who in 1964 deposed his halfbrother. So a third and sort of this is the most recent bite of of or body of scholarship on the u. S. Saudi relationship has to do with the 1970s and the period subsequent to the 1970s. So the scholarship that examines the 19731974 oil embargo, its consequences, and the way the relationship was reconstituted following that embargo. So prior to 9 11, the most serious crisis in the relationship came when saudi arabia joined other Oil Producers in an oil embargo against the United States, imposed for american support of israel in the october 1973 arabisraeli war. The oil embargo came at a time when tight Global Oil Supplies gave producing governments leverage over major companies. The result was a major shift in what historians have called the postwar petroleum order. Producing states pursued what is sometimes called resource nationalism in the forms of higher prices, demanding a greater share of the wealth produced by the production of oil, and also corporate nationalizations. In other words, demanding ownership rights within the companies that were producing oil within their territories. As a consequence, saudi arabia nationalized aramco in a planned takeover that culminated in the 1980s with the creation of the state oil company, saudi aramco. Which has a rather large presence in houston. That phrase i mentioned earlier, security for oil, a bargain between the United States where the u. S. Offers security in exchange to secure access to saudi oil, that security for oil bargain pertains to the post embargo area, the period after 19731974 oil embargo. The u. S. Saudi relationship was reestablished on the basis of recycling petrodollars, especially through weapons sales produced by u. S. Companies to saudi arabia, and saudi arabias purchase of treasury bonds, so helping to fund the debt of the United States, as well as saudi support for anticommunist causes in the cold war, especially the support for the Islamist Insurgency against the soviet union in afghanistan after 1979. Also in 1979, as you heard, the u. S. Lost its principal ally in the gulf, the shah of iran, to a revolution. The iranian revolution placed added emphasis on saudi arabia as a regional u. S. Ally, but proposals to arm the saudis elicited strong opposition from proisrael groups and politicians in the United States. Following the announcement of the Carter Doctrine in 1980, the u. S. Dramatically increased its military presence in the gulf. This encompassed in the creation of the Rapid Deployment joint task force and later the u. S. Central command, as well as the basing of u. S. Forces in the saudi arabia area. Hundreds of thousands of u. S. Troops were deployed to the region, including saudi arabia, during the gulf war of 1990, 1991. As you might expect from what i was talking about earlier, the u. S. Troop presence provoked opposition and resistance and opened a new chapter in the opposition against the ruling family and close u. S. Saudi relations. Al qaeda included saudi dissidents such as Osama Bin Laden and veterans of the antisoviet campaign in afghanistan. Most recently, saudi leaders saw the u. S. As a principal ally against iran and its regional proxies. Saudiiranian rivalry has entered a new phase as these countries compete for dominance and civil conflicts across the region, a region destabilized by the 2003 u. S. Invasion of iraq and its cascading effect in yemen, iraq, syria, lebanon. Saudiiranian rivalry has escalated and intensified violence in conflict that are framed in sectarian and religious terms, but are really about regional power. Prioritizing the conflict with iran has led saudi arabia to criticism ofute u. S. Policies towards the iranianpalestinian conflict, even as the Current Administration has adopted israels position on issues such as the status of jerusalem. It has also split the gulf cooperation council. The alliance of arab gulf states, with saudi arabia and other states seeking to isolate qatar. By threatening the stability of the gulf, the recent attacks on oil tankers and Saudi Oil Installations raise questions about whether the saudiiranian governments will seek to deescalate their rivalry and implications of this development for the u. S. Campaign of maximum pressure on the iranian economy through sanctions. So as in the past if we are using the past as a guide rather than an apolitical partnership, conflicts over regional power, the place of oil in the Global Economy, and domestic politics in both countries will shape or determine contours of the u. S. Saudi relationship and u. S. U. S. Saudi relationship and u. S. Policy going forward. So i will conclude my remarks there and look forward to your questions. Thanks very much. [applause] so you have your cards, if you have questions, we will take questions through the cards rather than the hand raising. Question about a opec. Opec seems to dominate a lot of peoples minds. They talk about the opec embargo in 1973, there was no opec embargo. Apec, the arab producing countries. I find in statistics that people still list opec countries and nonopec producers. I wonder, i will start with dr. Toprani here, how important is opec anymore . Teach a course, georgetown oil and world power, at the graduate and undergraduate level, and we talk about was there an opec era . Is it still on . Does it only last a short time . How could you engage opecs power . Dr. Toprani opecs power please forgive me for not mentioning this in the talk it is greatest when oil prices, ironically, are low, not high. If you can sustain oil prices at a low level for a long period of time, guess what . Who controls the largest share of the worlds cheap oil prices . Who has the lowest cost of production . Those tend to be producers in the middle east who dominate opec. So the reason why opec there may not have been an opec oil embargo, but there were opec price increases to compensate for the decline of the u. S. Dollar following the shock in 1971, the delinking of dollar to dollar to gold. Our senses were that oil prices were too low. It was unfair to producing nations. They were giving a nonrenewable resource at such a low price. This means if you have sustained low oil prices, obviously the middle east will become more important in terms of Oil Production, because it makes no sense to produce anywhere else. You cant make money off of it. Ironically, low oil prices tend to increase opecs power. High Oil Prices May benefit opec in the short term. I mean, opec enjoys an increase in oil revenue over the 1970s. But that actually created a longterm problem for them, because you might want to bear in mind every boom lays the seeds for the next bust, and vice versa. An oil boom, having High Oil Prices leads to finding new sources of oil, which leads to low oil prices, and the cycle repeats itself. So basically that is how it affects opecs role. Right now, because of the sustained high prices, not just in the early 2000s, but in the 1970s and 1980s, a new source of oil markets did not exist beforehand, and thats u. S. Shale oil, which does not provide a mortal threat to opec, but does undermine the price of oil through production increases and cuts. Prof. Painter i apologize to whoever wrote this question, they asked the same question i did. Whatever happened to opec as an independent actor and shaping the geopolitics of oil . Does it remain a force independent of the u. S. In the west . Dr. Citino as a historian, i can give a little bit of historical background or context for opec. Opec was established in 1960. And at the time it was established, the Eisenhower Administration viewed opec as a kind of less dangerous outcome, or less threatening outcome, arab placing oil in an nationalist context. The egyptian leader, this great figure of panarab nationalism, the fear was that oil produced in the gulf would be used for political purposes, to pressure the United States, especially in its policy toward israel in another context. But opec emerged as an Oil Producers club, both arab and nonarab oil states. That included states like iran, venezuela in the western hemisphere. So opec, to the great relief of american leaders in 1960, took oil out of the context of Arab Nationalist politics and needed made it this Producers Club where the focus was on bargaining over prices and other kinds of technical issues. The second kind of contextual point to make is because of the embargo of 1973, 1974, many developing countries whose economies were based on the production of primary materials, raw materials, viewed that embargo as a kind of model for trying to force a reform or restructuring of the Global Economy in a way that in their view would be more just and more equitable to those kinds of developing countries that produce primary materials. This was known some of you may know, in the history of the united nations, as the new International Economic order. This was an agenda of developing states. There are many reasons that didnt come to pass, why countries that produced products other than oil couldnt follow in the footsteps of opec and the arab oilproducing states. It had to do with u. S. Foreign policy and opposition to that kind of agenda. But it also had a lot to do with with the fact that the structure of the Global Oil Industry, the nature of oil as a global commodity is different from other kinds of primary commodities Like Minerals and others. Prof. Painter a question here. I will start out with dr. Toprani. Someone asked about explain a little more the term slack capacity, or excess capacity, and how it applies most to middle east oil in general, and maybe dr. Citino can talk about how it refers to saudi arabia in particular. And maybe work in swing producer. Dr. Toprani power in the oil industry comes from not just the ability to produce oil, but the ability to produce oil on demand, that you can increase or decrease production as circumstances may require. In the u. S. , the longest time, that role was played by texas. The great state of texas. It could increase or decrease production depending on u. S. Or global commissions. And that role has shifted largely to the middle east. When i say the middle east, i mean one country the kingdom of saudi arabia. As far as we can tell, it has pretty much all of the worlds slack capacity. Its the difference between what you produce and what you could produce. If theoretically tomorrow, if there was a problem elsewhere in the world, say venezuela descending into anarchy, there was problems in iraq, nigeria was having a systemic issue, countries in the gulf, specifically saudi arabia, can increase production to compensate for the shortfalls elsewhere in the world. That gave through the swing that gave them the role of the socalled swing producer. That power of increasing Oil Production to compensate for shortfalls anywhere else in the world lies not just within opec, but largely within the gulf. As far as statistics for how much slack capacity in the world this point. Paque at its no more than 5 Million Barrels a day. It used to be about 10 Million Barrels. Now it is 4 million to 5 Million Barrels. Its a closely guarded secret. Million from 3 to 4 Million Barrels of that is located in the kingdom of saudi arabia. Dr. Citino i dont have much to add, other than to say that the importance of saudi arabia as a swing producer is undeniable. Foreign also benefits from the perception that that is the case. We relate the more small and mediumsized producers that are also coming online and going to mayto world supply and drive down price at least to an extent. The other factor is the tremendous production in the 10 years or so in north america in developing new technologies, socalled tight oil that is available now in north america that to some extent has undermined that role as swing producer. Prof. Painter that was another question, and the role of u. S. Shale Oil Production. Some people have argued the shale industry is now the new swing producer, not so much because it has a lot of excess capacity, but it is easy to bring on and offline. It is on land, you have small producers, slack demand he lay people off. There is a lot of equipment, but they can go on and off. What would you say to that argument . The impact of shale Oil Production in the United States on the global balance of power within the oil industry . Dr. Toprani the issue is, there is a time lag. But there is an immediate like 2 million, three million, x Million Barrels go offline tomorrow, who is going to replace that . It is not going to be a shale producer, because it will take several months to years to produce that. I have been following this in the wall street journal and other places. Transformed the Global Energy outlook, but Shale Companies are in incredibly poor investment. They basically all have negative cash flows, it is not a profitable business to be in. Basically cheap money and low Interest Rates allowed companies to produce oil at will, and make money through volume rather than the price of oil, because it was low, but this meant profitability was very low. What we have seen in the shale patch over time is the Small Companies are increasingly going out of business for having access to capital restricted. Larger companies have taken their place. These Larger Companies do not have the same interests in maximum production and choose to make their money not through volume, but through the higher price of oil. These Larger Companies, mind you, have interests elsewhere in the world and want to see higher priced oil if at all possible. I would argue that once again yes, shale has transformed the Global Oil Industry by creating large new sources and other countries may play a major role. Thats not the same as saying they have global slack capacity. The production you have at any given point in time, it is on all out production or nothing. The question is how much do you hold back production in order to compensate for any shortfalls anywhere else . Again, i stress that the only country in the world that has the ability through simple simple turning of balance to increase production is saudi arabia. Even if the russians had played, it is really not opec, it is just saudi arabia. Supposedly russia has been trading production cuts in order to stabilize oil prices, but as a russia oil analyst told me, it is not clear the russians are trading Oil Production so much as having a natural decline in the productivity of their oilfield. Were really the only country that is decreasing production increasing production and raising it as circumstances may require, the kingdom of saudi arabia. U. S. Shale does not comparing quite that same regard. Dr. Citino i would throw one issue other that is hanging over the Global Oil Industry, im a that is climate change. The description i gave of the history of aramco and the way a plant naturalization in saudi arabia of what became saudi aramco in the 1980s, many have been reading. Saudi aramco is going to be offered as a publicly traded company, a couple percent of the company will be offered for public shares. In part, we are reading this is part of a strategy by the saudi kingdom to hedge against the possibility of, and perhaps the reality of increased demand for hydrocarbons as people become more concerned about carbon induced climate change. Prof. Painter a couple of people asked questions about the saudiiranian conflict. Pretty safe a few things could you say a few things not only about the saudiarabian conflict, but the relationship of the u. S. And saudi arabia, as well as iran, and how it has developed and changed over time. Dr. Citino i would expand a bit on the comments i made. In the late 1960s, the sort of principal imperial power in the gulf for many years for more than a century had been great britain. Britain withdrew from the gulf, the u. S. , this cold war context of a power vacuum that increasingly relied on saudi arabia and iran, at that time ruled by the shah of iran, as sort of the pillars of American Foreign policy in the gulf. Shah was a much more powerful Regional State at the time. When the iranian revolution occurred in 1979, this posed a tremendous difficulty and talents to the United States and its Foreign Policy in the gulf, to a certain extent saudi arabia took up that role or took on a greater responsibility as an american ally in the gulf. The saudis at that moment were experiencing their own difficulties and challenges. As some of you may know, there was a seizure of a grand mosque in mecca by islamist militants. Also in 1979, an uprising in the Eastern Province in the eastern part of saudi arabia. Mobilized by the iranian revolution as well. Some background to that relationship among the u. S. And saudi arabia. Another question came up somebody get another card. I can get it. You seemed to imply earlier the saudiiranian conflict is less over religion and more over power . Dr. Citino that is my stance. And i think that historians and other analysts look at that relationship much more as one over regional power, over two kinds of broad of states and regimes in the middle east, one that is aligned with the u. S. , israel, other sort of prou. S. Regimes, and those that are aligned with iran, including syria, other states that are opposed to the first coalition. The emphasis on secretary and sectarianry politics, sunni versus shia for example, is a kind of political strategy that i think was seen as beneficial by parties on both sides of that conflict in mobilizing political support, and establishing transnational coalitions of supporters. So for iran, for example, seeing lebanon as a valuable ally in the confrontation against israel and the United States would be an example. But also a kind of political strategy for undercutting the sort of democracy movements that we saw during the arab spring in 2011, and which have a history in the region, as i suggested in my remarks about the Constitutional Movement in saudi arabia in the late 1950s and early 1960s. Prof. Painter anybody would like to speak about the u. S. Role in overthrowing the iranian government in 1953 and the longterm implications of that action . You want toe of touch that one . Dr. Citino that is an important topic that we can approach from a number of different ways. I will say two things first, the real importance of historians work uncovering what happened and getting on the Public Record of what happened. Recently, the office of the historian at the u. S. State department produced a new volume of the foreign nations of the United States series, the documentation of u. S. Foreign policy. That offered a much more transparent and complete accounting of the u. S. Role in organizing the coup against him that overthrew him in august of 1953. Professional historians are doing that important work of insisting that documents be released and be made as transparent as possible for historical researchers and for students. Another interesting point about that era is that even before the overthrow, iran was under economic sanctions. Its a kind of precedent for the moment of maximum pressure on iran through sanctions on its economy. And the reason iran was, to a certain extent, embargoed so successfully, was this was a moment in the 1950s were a where a handful of Major Oil Companies controlled the oil industry. And thats really no longer the case. So its march more difficult to impose that kind of successful sanctions regime than it was more than half a century ago. There are also buyers like china and other countries who arent part of that, arent part of the maximum pressure campaign. Dr. Toprani i feel the need to make a point about iran and the coup. And im not an iran expert, so im shamelessly pilfering iranian colleagues work on this. There are a couple of things you need to bear in mind about the crew, which i think are of real relevance to the subject today, important to history and understanding the challenges. The first point to make, as my colleague once told me, is that the coup in 1953 is trumpeted not by the shahs regime, but the iranian revolution regime after 1979. It was more important to them, as evidence of u. S. Perfidy, that obviously anyone beforehand. So as far as they are concerned, they are the ones who create the the coup in most of the former u. S. Embassy. May champion the role of the United States as a maligned actor in iranian domestic politics, not beforehand. The memory of muster that was utterly marginal in iranian domestic politics before the revolution. So understand that it is a revolutionary regime that is appropriating most of that and his legacy for political reasons, even though they have absolutely no time for Secular Democratic politicians in any other circumstances other than a u. S. Coup. The second point to make is, there is a tremendous decline in iranian perception of the u. S. , it is not due to , it is due the socalled status of forces agreement in 1956. What really turned iranians against the United States is the notion that americans in iran there were tens of thousands of american advisers and military personnel in iran before the revolution, that these personnel would be subject to extra territoriality. That is a fancy way of saying they would be subject to american laws, not iranian laws, that iran was being colonized by the brass, as evidenced by this agreement. It is the status of forces agreement more than the coup against iran that really undermines the perception of the United States and americans within iran before the revolution, not the coup. And it is an important point to bear in mind, considering under what conditions we want u. S. Troops to offer in other nations in the world insisting being subject to american laws, not to domestic laws. Talks i have given about president obamas decision to withdraw troops from iraq after 2009, the Sticking Point was not just would american troops remain in iraq, they were indifferent to that, it was a question of would they be subject to iraqi law or not . And it was a condition of the u. S. Government that they would have extraterritorial rights. This was unacceptable to the iraqis, hence the decision to withdraw those troops. You can argue amongst yourselves as to whether or not it was a good trade to make, whether the mayhem and pandemonium could have been avoided if we were willing to choose a different path. But bear in mind, that was the Sticking Point, just as it was in iran in the 1960s. Prof. Painter we have a question here that goes to another question of the supply demand balance. Thats what drives oil prices, thats what drives oil politics. What is the supply demand valance today, and what are the factors that affect it . We have a question here that mentions, would it increase capacity for Renewable Power in the United States . How would that change if the u. S. Was less dependent on fossil fuels . How would that change u. S. Relations with the middle east, especially with the persian gulf . Dr. Toprani ok, so the supply and demand balance is basically as far as we can tell, there is only one place in the world that is seeing an increase in Oil Consumption over time, and thats east asia. The developed parts of the world are seeing basically flat line demand for oil. They still consume a lot of oil in all products, but that is not what demand growth is coming from. If you want growth in the industry, you are looking to sell to east asia and maybe to considering we are still sitting on oil whenever africa can modernize. The question is who is looking for access to those markets . That is where the money is to be made in terms of future market growth. In terms of supply balance, its the only part seeing any supply growth over the last few years, the United States. Because of shale, and 90 of the new oil supplies that have come online over the last 10 years is u. S. Production. So basically thats it. Course, in mind, of where are the reserves of the world located . What is the cost of production of those reserves . The bulk of the world reserves still tend to be within the gulf, which has the lowest cost of production. Yes, supposedly venezuela has larger reserves, but they are of heavy crude. Obviously nobody really wants to invest a lot in venezuela today for reasons that are related to that are only ancillary related to oil. The middle east means that even if you have a lot of supply growth in the United States, they are largely being consumed within the u. S. Or the western hemisphere. The middle east remains important because of its low cost of production, it is the global export market, and the only part of the world that can conceivably in the short to midterm satisfy expanding growth within east asia and south asia. Prof. Painter i want to thank again the National History center for setting this up. Thank you for coming today. [applause] [captioning performed by the national captioning institute, which is responsible for its caption content and accuracy. Visit ncicap. Org] [captions Copyright National cable satellite corp. 2020] this is American History tv on cspan3, where each weekend we feature 48 hours of programs exploring our nations past. Tonight on q a, well discuss notable speakers of the house with Capital University of America Political science professor matthew green. We have come a long way from the days of sam rayburn and dwight eisenhower, this idea that you work together, even if you are in separate elected institutions. This idea that the speaker in particular should be deferential to the president. That is not what we are seeing now. There is a way in which that is a sign of a healthy, vigorous partisan differences, if you disagree with the president or think the speaker should keep their face out. This is what troubles me i have written about this there are certain ways in which our elected officials, we expect them to kind of share some common agreement on issues or at least a sense that they have these important roles to play, institutional roles that should rise above their policy differences. At 8 00 p. M. Ght eastern on cspans q a. Next, Smithsonian Institution secretary lonnie bunch and Philanthropist David Rubenstein discuss the central role of slavery in antebellum washington, d. C. At historic st. Johns church across Lafayette Square from the white house. The White House Historical association in hosted this event in recognition of their new initiative, slavery in the president s neighborhood. Quite please welcome the ,irector of st. Johns Church Reverend fisher. [applause] welcome. Good evening. Im the director st. Johns church
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