The War for Saudi Arabia

by Stan Goff   

(The following was written last August for Sanders Research Associates, a subscription web site that posts detailed studies of war, oil, and finance. This is an excellent resource. The article is re-posted under Fair Use.) 

 

Oil is not a normal commodity. No other commodity have five US navy battle groups patrolling the sea lanes to secure it.

-Mark Jones

It was in early August, in the wake of the most strictly scripted Democratic Party convention in US history, that presidential candidate and Senator John Kerry began broadcasting his claim to the US electorate that he would “cut troop numbers in Iraq.” This claim, of course, is as preposterous as the same claim made by the Republicans before they oversaw the invasion of Mesopotamia.

Kerry is not saying he will take unilateral action to disengage the American occupation of Iraq. He is saying he will “work with our allies” to “put a deal together over the course of time” to cut numbers before the end of his first term – January, 2009.

This is the kind of hollow oath that is taken with the frequency of a wind change every general election cycle. Such a “plan” is so contaminated with shifting variables outside the rule of a US administration as to be utterly meaningless, and Kerry very well knows it. He is pandering to the growing popular discontent with the occupation among US voters, at the same time attempting to induce mass amnesia about his own original support for the war – which was also pandering. He will dance around the ring until November with one central campaign tactic – to prove that he is not George W. Bush.

This is a tough period for politicians in both the United States and Great Britain, because the wheels have fallen off Operation Iraqi Freedom, and the underlying crisis – which none of them can publicly name – is growing more urgent with each passing day.

The Bush administration itself has been forced by electoral pressure into ever more reckless economic policies to ameliorate what might become a chronic recession. The current uptick in the so-called economic indicators, based on consumer spending, are a combination of historically low interest rates that have fueled equity-loans against refinanced home mortgages and a flash flood of fictitious value rushing into a housing market bubble the explosion of which could rival the dot-com crash of 2000. A one-time tax refund boosted the mad dash to buy new SUVs and home entertainment systems, and the average personal debt load of Americans – already astronomical – went up correspondingly. The administration is hoping they can duplicate the Reagan administration’s military “Keynesianism” of substituting the state – via Defense spending – for a manufacturing export market, at the same time that the United States falls more deeply into its unpayable international debt to finance the counter-insurgency in Iraq.

While the election itself does not constitute a primary contradiction on the world stage right now, it has further delayed decisive action to reverse the reverses of the Bush administration, and left whoever wins the 2004 US electoral ritual holding a bag of rattlesnakes.

The real war being fought, and the staffs of both Bush and Kerry know it, is related to a terrifying crisis about which they can say not one word to the American people. Just as the Democrats themselves circled their wagons to protect the fraudulent 2000 electoral-judicial fiat – in order to avoid a constitutional crisis that could undermine the legitimacy of the whole system – they are now being forced to collaborate with their elite rivals in sending the American public on a snipe hunt to avoid that public seeing an ugly imperial reality.

The war is about terrorism alright, but not the way most people imagine. And the issue is not how that war is managed or who is responsible for the “intelligence failures.” What is at stake is the entire unipolar world system, and our beleaguered imperial rulers now have their attention riveted upon Saudi Arabia.

The recent Michael Moore documentary, Fahrenheit 911, that grossed more than any documentary in history, laid heavy emphasis on Saudi Arabia and its connections with the Bush family. This was valuable in shifting the usual premises of public discourse in the heavily-indoctrinated United States, but it was also illusory. The Bush-Saudi connections are reflective of a deeper structural connection that both the left and the right, for different reasons, seem unwilling to discuss.

The right doesn’t want to tell the people that it must have Persian Gulf oil for continued capital accumulation, regardless of the consequences, or that the decline of living standards all over the world has already begun to encroach even upon the working class of the United States in order to finance that accumulation.

The left doesn’t want to tell the same people that their living standards are destined to fall based on the energetic limits to growth, regardless of who is in power, or that this decline will happen sooner rather than later if our imperial government fails to secure military control over Southwest Asia. They are interested in stopping the war (and I share this goal, even though it will ultimately mean economic hardship for the West), painting the right as the source of all our problems, and procrastinating about revealing the tougher truth that no simple political brake in the US will be sufficient to stop us running over the fossil energy bluff.

The complexity of the question of Saudi Arabia makes it impossible to say exactly how and when the decisive historical shift that is now in progress will finally play out. Still, it is helpful to lay out some of the constituent parts of the current conjuncture as a way of developing some credible hypotheses, in particular my own that we may be seeing the initial stage of the historical obsolescence of conventional imperial military power. The United States is particularly vulnerable to any disruption in the constant flow of inexpensive oil – more vulnerable than any society in history. We have developed a social infrastructure not just around ground transportation that requires petroleum-based fuel, but around the private automobile.

This does not mean that we simply use a lot of cars. Cars are no longer a luxury in the United States, but an absolute necessity because of the spatial separation inhering in our economic specialization. We are absolutely dependent on the oceanic web of asphalt that connects every economic activity to every other with roads for private automobiles. The nearest grocery store to my home is two and a half miles away, and my spouse commutes 35 minutes each way to her job each day. Public transportation systems, with a few exceptions in places like New York, are ludicrously inadequate. Any disruption in oil flow would have immediate and near catastrophic consequences for the US.

Economic dislocations in the United States, it must be said, will pole-axe the rest of the world, for two reasons.

First, the current stability of currency markets is underwritten by the inherently unstable system of “dollar hegemony.” Central banks around the world have cached US Treasury bills as currency reserves in a dollar-dominated world system. When the un-payable international dollar overhang finally breaks off and these nations are obliged to sell off their dollars during the free-falling dollar devaluation, the shock to their domestic economies will hit like the Bam earthquake.

Secondly, the most significant consumer of export goods in the world is the United States. In fact, with the deindustrialization of the US economy and the rise of debt-leverage imperialism, the US has taken on the distinctive role of world consumer of last instance. Abrupt decline in consumer demand in the US could easily lead to an equally abrupt overproduction crisis among export economies and precipitate a synchronized global recessionary nosedive.

The pricing of petroleum is not solely an issue of market value in the usual sense. While supply and demand certainly are associated with each other, as we are about to see in the post-peak-oil era, determination of prices has typically been a closely monitored monetary and political question. Petroleum rents in the Gulf States have been assessed more to ensure the longer-term stability of rentier-regimes than to allow market equilibrium; this is a political calculation, not a merely economic one. The price of oil in the west has been used carefully to balance the profits of oil entrepreneurs against the larger financial equation of inflation. When inflation is seen as a threat – which is almost always in the arithmetical cosmos of economists – holding oil prices down, along with wages (by increasing unemployment with Fed interest rate hikes), becomes a prime directive.

The paradox of pricing, as Andrew McKillop of the International Association of Energy Economists points out, is that higher prices would actually benefit the aggregate world economy, if we are using aggregate “growth” as the benchmark for improvement. The rub is that the economies that will most benefit from oil price increases, and whose economic advances would constitute the bulk of this improvement, are not the Euro-American metropoles. McKillop:

“Higher oil prices operate to stimulate first the world economy, outside the OECD countries, and then lead to increased growth inside the OECD. This is through the income or revenue effect on oil exporter countries, and then on metals, minerals and agrocommodity exporter countries, most of them Low Income (GNP per capita below $400/year). Almost all such countries have very high marginal propensity to consume. That is any increase in revenues, due to prices of their export products increasing in line with the oil price, is very rapidly spent, on purchasing manufactured goods and services of all kinds. In the 1973-81 period, in which oil price rises before inflation were of 405%, the New Industrial Countries of that period - notably Taiwan, South Korea and Singapore - experienced very large and rapid increases in demand for their exports. These three countries increased their oil imports in under 8 years through the 1973-81 period, and despite the 405% price rise, by 60% to 80% in volume terms. This macroeconomic mechanism of higher revenues for fast spending poorer countries quickly levering up world economic growth (the very simplest type of Keynesianism, but at the global level) is easily triggered by rising oil and real resource prices, and flatly contradicts the arguments by authorized ‘experts’ who opine that higher oil prices ‘hurt poorer countries the most’. Higher revenue earnings for many low income oil exporter countries, and also for the special case of Saudi Arabia may be the only short-term way to stop these countries falling into civil strife, insurrection or ethnic war.”

McKillop supports his thesis with a consistent empirical correspondence between higher oil prices and increased demand, counter-intuitive as this may seem. The facts that make this a zero sum game between the metropolitan “North” and the under-developed “South” – and therefore a structural antagonism between these two aspects of the world system – are both geological and political.

All perfidious claims to the contrary, OECD economies are not now less reliant on oil imports than they were during the oil shock of the 1970s. Import-dependence in these countries has risen from 25% in 1990 to over 50% today, and the chief pig at the trough is the United States, with a per capita consumption rate of 25.6 barrels a year within a world average of around 4.51 barrels a year. Per capita consumption in China is one-third of the world average, and in India only one-quarter.

To see the deeper trend, however, it must be noted that world per capita consumption in 1980 was 5.28 barrels a year (higher than today), when oil prices were (in adjusted PPP dollars) $100 a barrel.

The fundamental problem is that (1) the world cannot produce oil fast enough to maintain current average world consumption, and (2) demand is increasing. The current United States government understands this perfectly, and so does John Kerry.

Global demand this year is approximately 79.5 million barrels a day (mbd), if you believe the US Department of Energy which has a tendency to rationalize its figures in order to make production and demand match. DOE and the OECD IEA claim that output will increase to 115 mbd by 2020 to meet demand, but they calculate global demand rising at 1-1.25% each year.

In fact, current demand is tracking up each year by 2.25%, even as many experts who are not on someone’s payroll as professional Pollyannas say that if we achieve world stability and commit to massive infrastructure improvements, global output can be pushed no further than 84-87 mbd. Even this is optimistic.

Energy investment banker Matthew Simmons has studied the Saudi oil fields in detail and for some time now. When the Energy Information Agency (EIA) stated in 2004 that Saudi Arabia will need to boost its production from its current 8 million barrels a day to 20 million, he was aghast. The EIA was basing its projections on the claim that Saudi Arabia contains adequate known reserves (260 billion barrels) for production at these rates for 90 years.

Saudi Arabia has six significantly productive oil fields, Simmons points out, Ghawar being the leviathan that regurgitates 5 million of the 8 each day. The others are Abqiaq, Safaniyah, Zuluf, Berri, and Shaybah. Of all of them, only Shaybah has produced for under 30-50 years. The flow rate in these fields has been maintained through water injection at the margins of the fields that maintains flow pressure in the area around the center, called the “oil column.”

In every one of these fields, this oil column is shrinking, and every one of them is experiencing progressively greater problems with water migrating into the crude. Interruptions in the flow are called “water cuts.” Water is settling under the oil, and the water-oil line is rising. So ARAMCO (the state oil corporation) began using horizontal drilling to harvest the crude above the water-oil line, but water cuts were still occurring. New technology has now been employed to network the horizontal wells, monitor for water cuts, and automatically close the water cuts then transfer extraction to another point in the network. There have also been more frequent flow interruptions due to gas.

Claims of both the EIA and the Saudi government, if checked against historical data, are not very reliable, but the Saudis make even more wildly optimistic projections than the EIA. Simmons suspects that all the Saudi fields have already peaked eight years before even the pessimists predicted it would happen, and that they are now entering a period of permanent decline.

One of those pessimists, petroleum geologist Dr. Colin Campbell, has been warning the public for years now that stockbrokers, oil executives, and government agencies lie about oil reserves, or twist the numbers to conceal the most fundamental fact that the world is at or extremely near global peak production.

“All of this is so incredibly obvious,” Campbell said, “being clearly revealed by even the simplest analysis of discovery and production trends. The inexplicable part is our great reluctance to look reality in the face and at least make some plans for what promises to be one of the greatest economic and political discontinuities of all time. Time is of the essence. It is later than you think.”

Saudi claims that they could up production to 15 mbd for the next 50 years were put to the test by recent oil price hikes that have begun to threaten the Untied States with an inflationary spike. The US pleaded with OPEC and with Saudi Arabia to increase output. When terror threats against the US sent prices soaring above the $40 a barrel mark in August, the plea to OPEC became more urgent.

“There is no more supply,” OPEC president Purnomo Yusgiantoro told them on August 2nd. Oil hit a new record that day on the New York Mercantile Exchange. The Saudis waffled, saying they would need more time to achieve the production hikes. The cat, it seemed, was out of the bag. When two consecutive and highly successful attacks were executed within three days against Iraq’s northern oil pipeline, the price of crude jumped to $44.

Noting that the PPP adjusted price of oil during the Carter era was once $100, that shouldn’t seem an issue, but the Bush administration is now struggling to keep its economic numbers inflated during their feeble “jobless recovery” until November. Interest rates are still rock bottom, and if inflation accelerates, there is no interest rate weapon to use against it that doesn’t threaten the US with a second consecutive recessionary dip. Employment figures released in August – already grossly distorted because they are measured by the number of unemployment insurance filings and not actual un/underemployment –were a crushing disappointment to economists and the Bush administration that had both predicted the addition of 200,000 jobs to the US economy. This is likely to dampen any enthusiasm the Fed might have for the interest rate hikes they recently hinted were inbound.

Chinese demand for imported crude by 2020 is projected to rise to 7 mbd. This year, it will pass Japan as the second largest national importer of oil, after the US. There is a collision about to occur. The chief colliders over oil are the United States on one side, consuming almost 20 mbd now, and rapidly industrializing China on the other. Neither of these countries is self-sufficient in oil production, and both are on steep demand-increase trendlines. So the question becomes twofold: Where is the oil? Who can elevate production? Dick Cheney’s so-called Energy Plan for the US called for an additional 7.5 mbd by 2020.

The cost of the counter-insurgency in Iraq alone right now in Department of Defense oil consumption is around 350,000 barrels a day. Most people do not have a real appreciation of the immense oil dependency of the US military. This means the Iraq war alone is approaching 2% of total US consumption.

The US strategic petroleum reserve (SPR) is sufficient to provide around 50 days of US supply at current demand levels.

Iraq’s pre-invasion production was 2.5 mbd, and it is now stuck at 1.8 mbd in the face of persistent guerrilla attacks against contractors and sabotage of the pipelines… a net loss of 700,000 barrels a day on the world market from fallen production and combined with the energy expenditure of the occupation, less the cost of a peacetime military, around a million barrels a day now being lost to the Bush-Cheney war.

The dual role of the Persian Gulf countries becomes progressively clearer in light of the numbers. Not only does this region supply 18 percent of US oil imports, but is the only region that has any putative capacity to boost production for the purpose of shifting prices (though as we’ve seen, this is in doubt). Moreover, it is the only region that (ostensibly) has not reached its Hubbert peak of production, and therefore the sole oil patch that is not objectively in decline in a world where demand has the American and Asian locomotives howling straight at each other on the same track.

In terms of its international demand-competition, the imperative for the US – having chosen uninterrupted capital accumulation above all other priorities – has become what McKillop calls “demand destruction,” which includes ripping up the existing development of peripheral countries and curtailing the development of semi-peripheries like the Asian giants.

This leaves ‘demand destruction’ as the sole option and real response to any large rise in oil or gas prices, through economy destruction by the interest rate weapon. The last time this was done, in 1980-83, oil prices were surely reduced through cutting economic activity in general. Oil prices in today’s dollars fell from $100/barrel in late 1979 [PPP adjusted] to around $60/barrel in 1984, but the collateral economic and social damage was awesome. Unlike today, however, the OECD economy started from a position of growth, with balanced budgets in many countries including the USA, in 1979-80. The world economy could and did take the horse medicine of sky-high interest rates without imploding into a sequence like that of 1929-31, but there is no certainty or guarantee this would be the case today - no ’soft landing’ is currently on offer.

The United States is now caught between the Scylla of economic stagnation – temporarily perched atop a potential avalanche of personal debt – and the Charybdis of inflation if fuel prices continue to rise… the specter of the temporal coincidence of stagnation and inflation – stagflation.

The actions of the Bush administration are not, as presumed by the vast and spectacularly stupid population that has been convinced of American invincibility, acting out of a position of strength, but of overpowering crisis and radical instability.

The US is aggressively attempting to diversify its oil sources, not just in the Gulf where it has ensnared itself in the tar-baby of Iraq, but in Latin America, Africa, and the Caspian Basin. In all these regions, the populations have been bled white by the debt-peonage of US-directed structural adjustment programs, and anti-American sentiment is at an all time high. This animosity is further inflamed in the Caspian Basin and the Gulf by the unrepentant support for Zionism by the US and the current administration’s invocation of the Crusades in its wars against Afghanistan and Iraq.

None of these countries, however, compares to Saudi Arabia in its strategic centrality to the world system right now, or its centrality to US hegemony within that system. And it appears that one Saudi revolutionary has apprehended both this centrality and the increasing frangibility of that system – Osama bin Laden.

There really is a war between OBL and the United States, and the war is for Saudi Arabia. This war has monumental geopolitical consequences waiting in the wings, and we have already seen the first of them if we are paying attention – the military balance of power has irrevocably changed in the world.

The attack of September 11, 2001, has been extensively judged through the lenses of morality. It’s time we judge it from a military perspective, because this was a brilliantly conceived and almost flawlessly executed martial strike at the military, political, and financial centers of the United States by a non-state actor.

There was good reason for the administration to have been stunned and confounded by these strikes. They graphically demonstrated the vulnerability of the United States and all the metropolitan countries. As Mark Jones wrote on September 18, 2001:

“The truth is that the civilian populations of all the advanced industrial states are hostages penned inside extremely dangerous concentrations of chemical, nuclear, biochemical and other volatile industrial complexes. And all of us living in the west are vulnerable to attacks by toxic or biological warfare agents as well as by suitcase nukes, planes launched at reactor buildings etc. Clearly, arguments from historical precedent no longer apply… For the first time in 250 years, since the industrial revolution gave the west unlimited military superiority over all its enemies and victims, the West has decisively lost that military advantage, and we are therefore entering new and uncharted waters. A new era in world history has been opened, and it is clearly a transitional era, an epoch of contestation in which the traditional advantage enjoyed by the capitalist states is no longer so certain as it was.”

Lashing out at Afghanistan was a purgative exercise in revenge, and likely the execution of a plan that was already on the books – considering the invasion was prepared in only a month. As many have pointed out, the Pakistani government had been put on notice by the Americans as early as July 2001 of an impending October invasion, and a trans-Afghan pipeline was already under consideration by Hamid Karzai’s ex-employer, Unocal.

What the Afghanistan invasion proved was that the US military had become an unstoppable force in the world – of course, we pretty much knew that – when it comes to militarily wrecking any state that doesn’t have a nuclear deterrent. The Taliban government was scattered in short order. But the other thing that became apparent, if it wasn’t already from the September 11 attacks, was that the US military is singularly incapable of stopping many determined non-state actors. Both Taliban fighters and bin Laden’s “Arabs,” no longer obliged to protect and preserve a state apparatus, were free to scatter into the mountain wilderness along the Afghan-Pakistani border, from where they may again show that they can strike at a time and place of their choosing. They already roam and strike in southern Afghanistan with almost monotonous regularity.

This lesson did not register in Washington, DC. Guided by the fevered martial imaginations of career non-combatants like Paul Wolfowitz and Donald Rumsfeld, they decided to destroy the Iraqi state once and for all… which they did, creating yet another stateless milieu of 26 million mostly hostile inhabitants with access to an inconceivable supply of weapons and explosives.

The deep underlying crisis has been complicated by a fairly straightforward military crisis. The US has tied up the bulk of its ground combat forces in an un-winnable guerrilla conflict. That conflict “just happens” to be adjacent to Saudi Arabia, and the hostility of the Iraqis toward the Americans is now a regional contagion.

Osama bin Laden, once you overlook his obscurantist chatter, has always been relatively direct. He has stated two objectives. One, he wanted the non-Muslim military forces out of Saudi Arabia. Two, he wants to overthrow the House of Saud.

Over the last year, the United States has quietly begun acquiescing to the first demand. While Americans have not paid this much attention, the furious masses in the Muslim Crescent have, and bin Laden’s stature has never been greater.

Let’s examine for a moment how much closer he may be coming to his second goal. There are two implicit steps bin Laden has to take: (1) topple the existing regime, and (2) seize power for his own faction.

Paul Michael Wihbey of the Institute for Advanced Strategic and Political Studies, writing just after the September 11 attacks, said that “contrary to much of the conventional wisdom about Osama bin Laden, the Saudi fugitive is hardly a madman. In fact, he has developed a stunningly deceptive regional war calculus that stands a reasonable chance of success.

“Despite the massive build-up of allied forces, bin Laden’s strategy depends on a set of well-conceived geopolitical assumptions that he fervently believes can turn Western military capability to his strategic advantage.”

What, then, are the factors and assumptions in this war calculus?

Many observers err in focusing exclusively on the internecine low-intensity war that characterizes the Royal family. This is certainly part of that calculus, but it ignores approximately 19 million other Saudis, and around 9 million foreign professionals/workers who constitute a significant portion of these two essential economic strata.

Those foreigners have come under ever more frequent attack, and the Saudi government and economy is extremely dependent on foreign professionals. Any precipitous out-migration of this stratum will be a body blow to the Saudi system.

Alarmed by the frequency and success of the attacks, the Saudi government offered an amnesty in July to militants, after discovering the head of American Paul Johnson in the freezer of Saleh al Awfi after a police raid. Radio Free Europe correspondent Jeffery Donovan wrote that:

The government had predicted that the amnesty would greatly aid a campaign to rein in militants. Shortly after the amnesty was announced, Adel al-Jubeir, an adviser to Saudi Crown Prince Abdullah, vowed that Riyadh would win its war on terrorism.

“We are not fighting this war for public-relations purposes,” al-Jubeir said. “We are fighting this war to ensure the safety and security of our citizens and our residents. People in Saudi Arabia are being murdered. We have every intention of stopping those murders. We do it for our sake.”

Al-Qaeda has appeared determined to bring down the Saudi ruling family through a wave of suicide bombings and kidnappings, mainly aimed at terrorizing the 9 million foreigners who play a vital role in the world’s dominant oil industry. Some 90 people have been killed in the attacks since May 2003.

This pressure against foreigners is coming as the situation for average Saudis themselves steadily deteriorates.

Since 1975, the rate of urbanization in Saudi Arabia has gone from around 59% to nearly 90%, and in many urban neighborhoods, population density is as high as a thousand per square kilometer. In 1973, when Saudi Arabia led OPEC in its historic “embargo,” the population of Saudi Arabia was 6.76 million. This tripling of population in three decades, in conjunction with the massive urbanization of the Saudi population, is further complicated by an age shift. Over 40% of Saudis are now under 15 years old.

This demographic left-shift is combined with historically high unemployment and the steady erosion of Saudi Arabian per capita income, $28,000 in actual dollars in 1982, now fallen in actual dollars to less than $7,000. This is in part due to the venality of the political leadership, whose profligacy is legendary. But it is also due to low oil prices, an imperial tribute to the United States above all, and partly to balance the influence of Israel in the region. Peter, the people, is being robbed to pay Paul, the regime’s mighty security guarantor and investment banker.

Sixty percent of Saudi foreign investment is in the United States, and the Saudi Royals are heavily invested in the US financial sector. This investment is growing, rising from a Saudi-to-US FDI in 1998 of $2.7 billion to $4.4 billion by 2001 when the World Trade Center fell. Any blow to the US financial establishment reverberates through Saudi Arabia, and this heavy Saudi investment significantly disinclines either country to disentangle with the other. It also reinforces dollar hegemony with the petrodollar.

Saudi Arabia loses approximately $2.5 billion every time the price of oil drops by one dollar a barrel. Its public debt is over 120% of its GDP. So the Saudi’s pay a high price for providing their US benefactor cheap oil. The US manages to sweeten this bitter medicine with the largest single outlay of US foreign military subsidies in the world - $33.5 billion in military hardware alone.

Another festering issue in Saudi Arabia is water.

In June, 2003, Arab News reported:

“Frequent interruptions of the water supply have led to acute water shortages in different parts of the city during the seasonable hot weather. In some areas residents have left their homes because of undependable supplies of water. “The Ministry of Water and Electricity has assured us time and again that the problem of water scarcity is at the top of its agenda, but it has failed to address the grievance so far, despite its claim to be working hard to find a lasting solution,” said Ibrahim Al-Owain, an apartment owner.

“A number of Saudis have expressed their anger at the continuing interruptions in the water supply just as the heat of summer arrived. On the other hand, the ministry claims that some 40 percent of the city’s daily water consumption can be saved if waste is eliminated. The problem is compounded by an increase of some 50,000 cubic meters in daily consumption during the summer.”

Daily consumption in Saudi Arabia is high at 400 liters a day, compared to the average individual consumption in other countries where it ranges from 180 to 220 liters, according to a recent report.

Riyadh residents say that the problem has made their lives miserable. They called on the ministry to review the situation carefully and find solutions on a priority basis.

In 1999, Population Reports issued a study called Solutions for a Water-Short World, in which it stated, “Saudi Arabia presents one of the worst cases of unsustainable water use in the world. This extremely arid country now must mine fossil groundwater for three-quarters of its water needs. Fossil groundwater depletion in Saudi Arabia has been averaging around 5.2 billion cubic meters a year.”

Only half of Saudi Arabia’s water is supplied by its massive desalinization capacity (37 facilities). The other half comes from its aquifers.

The depletion rate of Saudi aquifers is directly tied to the water injection technology required to maintain Saudi oil flow rates. So the biologically essential mineral, water, is being exhausted in order to continue exploiting the economically necessary mineral, oil. One could hardly imagine a more painful dilemma for an unstable regime sitting atop an increasingly restive population.

The water issue is experienced as a water shortage in the cities now, but over 85% of Saudi Arabia’s aquifer water is used for agriculture, and depletion has had a deleterious effect on this sector of the Saudi economy. Lester Brown of the Earth Watch Institute, writing this year, explained, “During the late 1980s, Saudi Arabia launched an ambitious plan to become self-sufficient in wheat. By tapping a deep underground aquifer, the Saudi’s raised grain output from 300,000 tons in 1980 to 5 million tons in 1994. Unfortunately the aquifer could not sustain large-scale pumping and by 2003 the wheat harvest had fallen to 2.2 million tons.”

These three cascading trends of oil depletion, aquifer depletion, agricultural shortage are trends against which Saudi Arabia’s demographic shifts and social dislocations are creating a treacherous social fault line.

It is against this backdrop that we must understand the political standoff in the House of Saud.

The internet is littered with stories detailing the struggles within the Saudi Royal family. A Google search using the four words “Saudi,” “royal,” “family,” and “intrigue” yields over 3,000 links. This article will not attempt to explore the fracture lines in the House of Saud in exquisite detail, then. Instead, I will only construct a cursory outline of the latent instability in the Saudi government.

At the center of the instability is the power struggle over succession.

King Fahd has been incapacitated by a stroke since 1995, and a death watch has ensured ever since. Fahd has been in Europe being treated for his illness since 9/11. These “diplomatic illnesses” in the past have tended to coincide with intensified struggle within the Royal family factions.

In the wake of King Fahd’s stroke in 1995, the Crown Prince, Abdullah, now the de facto ruler, left the country for a meeting in Oman. His rival, Prince Sultan who was the defense minister, used this opportunity to approach the Ulema (the Saudi religious authority) for support of his own bid for succession. The Ulema refused, and when Abdullah returned he mobilized the largely Bedouin National Guard for a very aggressive and very public military exercise. While few in the west understood the significance of this move-countermove, Saudi Arabia had teetered dangerously close to a civil war.

Sultan’s faction has its popular base in the business stratum primarily preoccupied with international commerce, and in fact his son Prince Bandar – a long standing friend to the Bush family – is the Saudi Ambassador to the United States. Abdullah, on the other hand, has his base among the Bedouins (and therefore the National Guard) and the Ulema, the latter of which is highly suspicious of the westernized ways of Saudi compradors. What is notable here is that the vast majority of Saudis are left out of this social base calculation. They are up for grabs, as it were, and Osama bin Laden is in a grabbing frame of mind.

Another dimension to this struggle is within the family itself, with the faction relating to Saudi’s international business sector infamously corrupt – which they see not as corruption, but a royal entitlement – and Abdullah’s Bedouin military-clerical faction embracing political “modernization” which includes rooting out corruption to re-legitimize the Saudi state with its own population.

It is important to note that Abdullah himself is in his late 70s, so the various leaderships in Saudi Arabia literally have a limited life expectancy, which could lead to successive intra-factional struggles for leadership.

Prince Turki, the former Saudi chief of intelligence who had close ties to both the CIA and Pakistani intelligence, and therefore by extension to the Taliban (a creation of Pakistani intelligence), was fired just prior to the September 11 attacks. This was a high-stakes firing that radically ratcheted up the factional tension. Though the Byzantine details are, as always, unclear, it appears that interior minister Prince Nayef disagreed violently with Turki’s suggestions that the kingdom cooperate more fully with the American FBI, saying it would violate Saudi sovereignty. Nayef went to Abdullah demanding Turki’s resignation.

Turki is now ambassador to Great Britain.

Prince Turki alleges that in 1998 he had arranged the extradition of Osama bin Laden to Saudi Arabia with the Taliban government in Afghanistan. This plan, according to Turki, was disrupted by the African embassy bombings which precipitated a US Cruise missile strike against Afghanistan and queered the extradition deal when Mullah Omar angrily reneged. Turki had long been warning his Taliban associates that bin Laden would bring evil down on the heads of the Taliban government.

If this story contains any truth, then apparently bin Laden was already outmaneuvering the Saudi government in 1998, and effectively manipulating US policy vis-à-vis Afghanistan.

The sudden departure of Turki just days before the September 11 strikes, given that the Pakistanis and probably the Saudis were already aware of US intentions to invade Afghanistan in October, may well have been an attempt in advance of Abdullah’s government to distance itself from the Taliban, with which Turki was closely identified.

At this point, the planners of September 11 had already pushed the start button on the operation. Bin Laden surely saw the simultaneous flare-up of Saudi court intrigue as anything but fortuitous for the Royal family. And the sudden diplomatic illness of King Fahd less than two weeks after September 11 – always an indication of political crisis in the House of Saud – was almost certainly counted a tactical victory by bin Laden.

Wihbey, writing in 2002, explains the role of religion in swinging the population for political purposes:

“In its cynical pursuit of power at all costs, the House of Saud has often traded in religious fanaticism. In 1919, Ibn Saud employed Al-Ikhwan (the Brotherhood) - the precursor of bin Laden’s al-Qa’eda - to confront and defeat his rival, the Hashemite Abdullah, at the Battle of Turabah.

“As Abdullah’s camp was sleeping, the brethren fell upon it, slashing about with their daggers and screaming their war-cry: “The winds of paradise are blowing!” The military prowess and religious piety of the feared Ikhwan helped to mould the growing militancy of today’s Wahhabite dissident clerics.”

No longer content to provide constitutional legitimacy to the House of Saud, they have, in recent years, issued fatwas condemning members of the royal family and demanding the overthrow of the Saudi regime.

The longer bin Laden is able to evade American bombs, the more likely it is that he will conjure up the spirit of the Ikhwan among his Saudi followers.

Against this backdrop, and with the memory of the bloody attempt by Iranian-inspired militants to seize the Grand Mosque in 1979, Crown Prince Abdullah may well seek Fahd’s abdication.

Bin Laden himself is no political outsider, as he has been portrayed by mainstream media and the US government. His father, Mohammed, one of the richest men in the world, was instrumental in the seizure of power from King Saud by King Faisal. Osama bin Laden has been a player on the Saudi political scene for many years, and in that role became a CIA asset for the US-sponsored proxy-war with the Soviet Union in Afghanistan. His decisive break with the Saudi Royal family came when Iraq invaded Kuwait in 1990.

Bin Laden, blooded as a military leader in Afghanistan, offered to organize a popular army to repel any invasion by the Iraqis. When the Saudi Royals turned him down – in no small part because they has intense reservations about arming large sectors of the Saudi population – and invited the American armed forces to use Saudi Arabia as a military launch platform, bin Laden was furious.

It is important to note that while this was probably the genesis of bin Laden’s planning for an overthrow of the Saudi government, he did not issue his fatwa against the United States until 1998, whereupon he is believed to have been involved in the planning of the attacks on the US embassies in Tanzania and Kenya. It is reasonable to infer, within the hypothesis presented here, that bin Laden saw the need to await the development of internal and external forces in Saudi Arabia and in the international situation for a decisive strike. While there was an attempt in 1993 to bomb the World Trade Center and a successful attack against the USS Cole, these were not in any way decisive.

They had more the character of a reconnaissance in force, a probing tactic to observe reactions and to refine one’s own methods.

The embassy bombings, as we shall see however, may very well have been part of the larger strategic calculus leading to 9/11.

It was with the election of a fanatical clique to the US executive branch that had repeatedly declared its intention to go forward with an ill-considered invasion of Iraq, an imminent invasion of his own bases in Afghanistan, with regional rage peaking against the Israeli response to the Palestinian Intifada, that bin Laden could have seen a unique confluence of forces in which a devastating strike against the United States could initiate a cascade of political consequences that would come crashing into Riyadh.

The key to setting up the unstable House of Saud for a post-crisis takeover, from the perspective of a bin Laden, is the preparation of the already restless population. To quickly consolidate a political revolution, there must be an energized and militant mass movement that throws itself behind the new regime, as the Iranian masses did behind Khomeini in 1979. He has to mobilize the resentment of the Saudi masses against the House of Saud as a US puppet, and by extension associating them with Zionist Israel. He has to provide the emotional and ideological fuel for this struggle, and political Islam does that with the additional benefit of its emphasis on iron discipline. This kind of discipline is often craved by the masses once any political struggle is decisively engaged. How better than to “invite” the Americans into the region as an invading force, where they can become bogged down in the same way the Soviets did in Afghanistan where bin Laden cut his teeth as an asymmetric warrior?

All that is required in this scenario is the catalyst.

When one considers the plethora of targets available to the September 11 hijackers, targets that could have been far more devastating in loss of life and property damage, even near the actual targets – think here of the Indian Point nuclear power facility, where the ignition of spent fuel and/or a core melt, in the right wind conditions, could indefinitely turn metropolitan New York and large swaths of the Eastern seaboard into a radiological wasteland – then it is conspicuously apparent that the target selection was political. To call this a pure act of terror is a demagogic claim that requires intentional ignorance of the facts. The planners had no irrational desire to incinerate the West.

Certainly they knew that, while these attacks would deliver a terrible blow, they would not precipitate a social or political collapse; and just as certainly they knew this attack would galvanize a vengeful anger among the general population.

Hitting financial, political, and military headquarters makes perfect military sense in two respects – first tactical, since these are high value social infrastructure, and second psychological, because it was a near 100% certainty that the US political establishment would feel compelled to react swiftly and decisively even if there weren’t – in Rumsfeld’s own words – any good targets.

Moreover, does anyone believe that this billionaire CIA-trained guerrilla was unfamiliar with the ravings that were openly available from neocon think tanks that explicitly stated they would attempt this regional takeover if presented “a new Pearl Harbor” as a pretext?

Bin Laden and his staff had close ties to Pakistani intelligence, which was well aware that the US was planning to militarily topple Afghanistan in October 2001. What better time for a pre-emptive attack – already planned to the last detail – against the United States than when they were already leaning forward for a military action in the region, when there was a near certainty they would promptly follow through with the very plans for regional occupations that they had articulated on the public record? It is politico-military judo, using the momentum of the larger adversary to throw him.

The calculation of bin Laden, in this scenario, is based on his experience in Afghanistan courtesy of the United States.

Mamood Mamdani, a political scientist and cultural anthropologist at Columbia University, makes the case that what we now call “terrorism” is a direct outgrowth of the Cold War and the logical correlative of the post-Cold War political environment. In a 2003 New York Times article about Mamdani, by Hugh Eakin writes:

“In the varied explanations for the 9/11 attacks and the rise in terrorism, two themes keep recurring. One is that Islamic culture itself is to blame, leading to a clash of civilizations, or, as more nuanced versions have it, a struggle between secular-minded and fundamentalist Muslims that has resulted in extremist violence against the West. The second is that terrorism is a feature of the post-cold-war landscape, belonging to an era in which international relations are no longer defined by the titanic confrontation between two superpowers, the United States and the Soviet Union.”

But in the eyes of Mahmood Mamdani… both those assumptions are wrong. Not only does he argue that terrorism does not necessarily have anything to do with Islamic culture; he also insists that the spread of terror as a tactic is largely an outgrowth of American cold war foreign policy. After Vietnam, he argues, the American government shifted from a strategy of direct intervention in the fight against global Communism to one of supporting new forms of low-level insurgency by private armed groups.

“In practice,” Mr. Mamdani has written, “it translated into a United States decision to harness, or even to cultivate, terrorism in the struggle against regimes it considered pro-Soviet.” The real culprit of 9/11, in other words, is not Islam but rather non-state violence in general, during the final stages of the stand-off with the Soviet Union. Using third and fourth parties, the C.I.A. supported terrorist and proto-terrorist movements in Indochina, Latin America, Africa and, of course, Afghanistan, he argues in his new book, “Good Muslim, Bad Muslim: America, the Cold War and the Roots of Terror” (Pantheon).

“The real damage the C.I.A. did was not the providing of arms and money,” he writes, ” but the privatization of information about how to produce and spread violence - the formation of private militias - capable of creating terror.” The best-known C.I.A.-trained terrorist, he notes dryly, is Osama bin Laden.

Robert Meister, commenting on the Mamdani thesis, said, “Mahmood’s argument is that terrorism is a defining characteristic of the last phase of the cold war. It was a characteristic that took on, especially in Africa [he speaks here of ‘proxy-war’ – Mamdani is originally from Uganda], a logic of its own, a logic that eventually broke free of the geopolitics that started it.”

The logic from which it broke free was the logic of the state as the principle actor in war.

And Mamdani challenges the Orientalist rhetoric about this being some “pre-modern” phenomenon. Timothy Mitchell of New York University says, in the same NYT article, “Scholar-pundits like Bernard Lewis and Fouad Ajami tell us that the culture of Muslims or Arabs cannot cope with modernity. Mamdani shows us that the origins of political Islam are themselves modern, and, in fact, largely secular.”

Bin Laden’s experience in Afghanistan was the experience of a tectonic shift in the dynamic of war with the emergence of non-state actors presenting new and still insoluble problems to the armed forces that are embedded in the larger political apparatus of the state, a state inherently constrained by its own domestic and international relations.

Bin Laden is applying that lesson to the United States right now, and the supreme historical irony is that he is doing so by having baited the US into a fight with his other arch-rival Iraq, just as the US encouraged the gory trench war between Iraq and Iran when bin Laden was still on the CIA asset list.

The ultimate irony (or ultimate brilliance of bin Laden as a strategist) is that bin Laden now shares a strategic goal with the neocons – who dare not say it right now – of overthrowing the House of Saud. Certainly the neocon think tanks are issuing a steady stream of vitriol now at the Saudis, just as they had been for decade prior to their invasion of Iraq.

With the upcoming elections, spring-boarding off of Michael Moore’s Fahrenheit 911, the Democrats are now inveighing against Saudi Arabia as a bludgeon against the Republicans. And while elections years always shake out the differences between US elites about future political directions in the oblique double-speak of the campaigns, the more direct indication of a political crisis within the seated administration is when internal conflict in the government breaks out into public view.

The Bush administration’s ritual sacrifice of its own intelligence establishment for its miscalculations in foreign policy were almost certainly going to evoke retaliation from those within that establishment, especially those who warned the administration that they were heading down the path of self-destruction.

In the August 9 edition of the Washington Times, Shaun Waterman reported that the anonymous CIA author of the new book entitled bluntly Imperial Hubris – Why the West is Losing the War on Terror is actually analyst Mike Scheuer who has specialized in “Osama bin Laden” for several years. Scheuer was officially “gagged” by the administration. In his account, he called the Iraq invasion a “tremendous gift to Osama bin Laden.”

It validated so many of the arguments he’s made over the past decade…We have the first one, the most important in the Arabian peninsula, we occupy that in their eyes [Saudi Arabia]…We now occupy Iraq, the second holiest place, and the Israelis have Jerusalem, the third… The idea that we would smash any government that posed a threat to Israel - that’s validated by our actions…And his claim that we lust after control of Arab oil; Iraq has the second greatest reserves in the Arab world… So it’s been an astounding victory for Osama bin Laden in terms of perceptions and perceptions are reality so often.

Indeed, that Orientalist canard that bin Laden is a pre-modern warrior is belied in this statement. Perceptions are reality, and bin Laden is not the pre-modern embodiment of war, but the post-modern one that augurs ill for the US state and its military.

We are seeing not an older face of war, but the newest one.