Yesterday the crawl on Fox News said that new intelligence indicates that if military action occurs against Iraq, Saddam Hussein would ignite Iraqi oil fields. Some take this as evidence of Saddam’s irrationality or spitefulness.
Perhaps it is. But it could also be another example of the tradeoffs among bad alternatives that we have seen throughout 20th century history. Anyone who knows any war history knows that oil wells are typically blocked or ignited when an area is under threat. When the British left Southeast Asia in 1941, for example, they made the painful decision to ignite the wells that they had spent so much time and money constructing. Why? Because the alternative was having them fall into the hands of the Japanese, who were waging war precisely because they felt threatened by their lack of access to oil. The British chose to destroy their fields because having them fall into Japanese hands would prolong the war and reduce the probability of Allied victory.
As another example of this behavior, consider another World War II example. In the runup to World War II the British put cement plugs into their oil wells in many Middle East locations, in case the Germans took control of the region. The economic calculation is this: you incur a cost of foregone production, as well as a cost of re-opening the well at the end of the war if you have retained control of the area. In return for that, you forestall the potential of your enemy extending the war, or even winning, because of access to your oil wells.
All sounds pretty logical to me, if you consider the risks, timeframes, and costs involved. Not spiteful and not irrational.
By the way, if examples like this interest you, check out Daniel Yergin’s superb book The Prize: The Epic Quest for Oil, Money and Power. I’ll have more to say about lessons from oil history when I have more time to put fingertips to keys.