Syriana and “Oil Change”

By Matthew Bandyk

Between Munich and Brokeback Mountain, theatres this holiday season had their fair share of films that inspired much debate. Another courting controversy is Syriana, directed by Stephen Gaghan, best known as the screenwriter of 2000’s Traffic, a stark and cynical portrayal of the war on drugs. Gaghan’s latest film is a investigation into the corrupt world surrounding oil and the Middle East, and it is just as penetrating and insightful as Traffic. But it seems that the film’s biggest fans, and even its own screenwriter, have missed perhaps its most important point: that the problems that result from America’s addiction to oil are largely the result of government.

That’s definitely not the message Gaghan hopes his audience takes home. The film’s closing credits touts a website called “Oil Change,” which claims to be the home of a grassroots “campaign to reduce our dependence on oil” inspired by the movie. As the group writes in its mission statement, “with ingenuity, we can turn [hybrid cars and renewable energy] into thriving new businesses that will make America safer, cleaner and more prosperous.”

But if one looks at the recommendations actually proposed, it becomes clear that by “ingenuity,” Oil Change and its allies mean the heavy hand of government. For example, on its page about renewable energy, the group links to recommendations from one of its campaign partners, the National Resources Defense Council, that the federal government spend $1.1 billion on the development of biofuels such as ethanol to replace oil. Oil Change also approvingly links to an interview with former CIA Director James Woolsey, founder of a new environmental think tank, who says that “the best option is for the government to provide tax credits and loan guarantees that foster [green] technologies.”

But does the storyline of Syriana actually give us a reason to support massive handouts? One can easily draw from the film a cautionary tale of why we should not look to government to find the alternative to oil, unless we want to repeat past mistakes,

Be warned that the following reveals crucial elements of the film’s storyline. At the center of the film’s incredibly complicated plot is an unnamed Arab country in a state of political transition: the emir has two sons both vying to replace him: the younger is a lazy playboy who wants to continue his father’s repressive ways and has deep ties to American oil companies. The older son is a Western-educated reformer who wants to introduce to his country democracy, women’s rights and an independent judiciary.

The problem is, he also willing to sell his country’s massive oil supplies to the Chinese. A large American oil corporation fears the prospect of competition from the Far East. So the oil tycoons use their deep-reaching ties with the US government to pressure the Emir to name the playboy as a successor. But it soon becomes obvious that the more progressive prince plans to stage a coup. Washington, now doing the oil companies’ dirty laundry in the name of national security, assassinates the prince with a cruise missile.

It shouldn’t seem odd that this kind of argument could be an indictment of government intervention, rather than a justification. For decades, economists working in public choice theory have argued that in democracies, certain powerful private actors tend to capture the support of political institutions, and then use the power of the state to defend their narrow interests, often at the expense of the polity as a whole. A large and active government, even if it is intended to work for the good of society, can easily and quickly become a boon for a few special interests because they have the inclination and influence to lobby politicians to a far greater degree than the ignorant masses. Therefore, we should try to avoid the expansion of government power, in order to deprive the rent-seekers of this tool.

The storyline of Syriana is a perfect example of how political rent-seeking by powerful interests creates public problems. The oil industry used the influence it gained from providing the major source of energy for the US to twist the political process to its own advantage. But satiating this private interest requires the sacrifice of the public interest of promoting democracy in the Middle East in order to quell the roots of terrorism.

While the US probably isn’t secretly assassinating democratic reformers, the movie’s portrayal of petro-politics as an obstacle to democratic reform and a boon to terrorism is fairly accurate. For decades the US government has outright supported the autocratic and Al Qaeda-funding Saudi Arabian regime—with massive economic ties between Saudi oil and American corporations playing

Syriana reveals the corrosive results when government entangles itself with energy. So why are its creators calling for even more state involvement? Part of the reason is that oil, with its polluting nature and association with terrorism, just seems icky and dangerous. Subsidies to oil are bad, but subsidies to clean and friendly resources are easier to defend.

This is a flawed mindset. Rent-seeking can create unintended and negative consequences for policies even when we least expect it. Let’s look at how state subsidies for one seemingly innocuous alternative fuel, ethanol, can create problems. I choose ethanol simply because it’s the most feasible alternative to oil at this point. Congress has already bestowed billions of dollars for ethanol development. There’s an easy explanation for Congress’s generosity: Fuel ethanol is produced from corn, one of US agriculture’s biggest cash crops. As anyone who has looked at the federal budget knows, the farm lobby is one of the most powerful in Washington, receiving $16 billion a year in subsidies from 1996 to 2002 alone.

So just as oil has its own powerful corporate constituency that had such a pernicious influence in Syriana, political support for ethanol is largely based on rent-seeking from corporations determined to keep US agriculture on top. Contrary to those who see ethanol as a cuddlier alternative to oil, US agricultural policy is on the whole much more destructive than its oil policy. US farm subsidies are indirectly responsible for the starvation and poverty of millions in the Third World. And if Woolsey, the Sierra Club, and all the others calling for an “oil change” had it their way, the farm lobby that maintains these subsidies would be even stronger. The same companies that benefit from the policies that hurt Third World farmers are also the biggest supporters of ethanol. For example, Archer-Daniels-Midland is one of the biggest agricultural corporations in the US, and at least 43% of its profits come from heavily subsidized products. It also is the most important producer of ethanol in the US, and one of the primary lobbyists for the lavish benefits to ethanol contained in recent energy bills.

So it seems that the quest for alternative energy sources is just as full of pitfalls as our current dependence on oil. But that’s not a reason for inaction. Here’s an idea: why not remove the billions of direct and indirect subsidies that the oil industry receives every year? Gas prices would further rise, giving consumers more of an incentive to seek out alternative fuels. That way, consumers can make their own “oil change” instead of relying on government to make decisions that are rarely in their best interests

See Syriana and decide for yourself what kind of political action the film best justifies. Stephen Gaghan and environmentalists should pay attention to the sinister intersection between government, special interest, and energy politics as displayed in Syriana, and be more skeptical before deciding that Uncle Sam’s dirty and sticky fingers should get caught up in another resource.

Matt Bandyk is a freelance writer and college student in Charlotte, NC. Besides analyzing pop culture from a classical liberal perspective, Matt is also interested in transportation and land use issues.