Easy oil, hard choices: Krane’s new book explores Persian Gulf countries’ conundrum

A new book by Baker Institute for Public Policy expert Jim Krane highlights the challenges and complexities faced by leaders of the petroleum-fueled Persian Gulf kingdoms as well as the implications for the United States and the rest of the world.

Photo by Jeff Fitlow

“Energy Kingdoms: Oil and Political Survival in the Persian Gulf,” published this month by Columbia University Press, details how after the discovery of oil in the 1930s, the Gulf monarchies — Saudi Arabia, Kuwait, Qatar, the United Arab Emirates, Oman and Bahrain — went from being among the world’s poorest and most isolated places to some of its most ostentatiously wealthy.

Petroleum from the Gulf monarchies powered the free world during the postwar boom period, says Krane, the Wallace S. Wilson Fellow for Energy Studies at the Baker Institute and a former journalist who spent six years in the region.

“Gulf oil fueled the West German ‘Wirtschaftswunder,’ Japan’s economic miracle, and the suburban commuter belts of the American colossus,” Krane writes. “It was easy oil, pooled in boundless reservoirs that practically geysered into action with the prick of a drill bit.”

To maintain public support, the Gulf’s ruling sheikhs provided their subjects with cheap energy, unwittingly leading to some of the highest consumption rates on Earth, Krane says. Today, as summertime temperatures set new records, the Gulf’s rulers find themselves caught in a dilemma: Can they curb their energy profligacy without jeopardizing the survival of some of the world’s last absolute monarchies?

In his 224-page book, Krane takes readers inside these monarchies to consider their conundrum. He traces the history of the Gulf states’ energy use and policies, looking in particular at how energy subsidies have distorted demand. Oil exports are the lifeblood of their economies and political systems — and the basis of their global strategic importance — but domestic consumption has begun eating into exports while climate change threatens to render their desert region uninhabitable, Krane says.

“The Gulf countries are caught in the pincers of a climate dilemma,” Krane writes. “On the one hand, the region is one of the most climate-stressed and dependent on greenhouse gas mitigation. Higher temperatures could render it uninhabitable within the current century. On the other hand, oil exports remain the region’s economic livelihood and the source of its longstanding protection by the United States.”

At risk now are the sheikhdoms’ way of life, their relations with their Western protectors and their political stability in a chaotic region, Krane says. Backed by extensive fieldwork and deep knowledge of the region, Krane lays out the hard choices that Gulf leaders face to keep their states viable.

Reviews for Krane’s book are notable. “Bravo to Jim Krane for his thoughtful and well-researched book that explains the important roles oil has played in the domestic economies and internal politics of the Persian Gulf states, and the hard choices they will have to make as they try to wean their citizens from a troubling reliance on it,” wrote former Secretary of State James A. Baker III, the Baker Institute’s honorary chair.

Bobby Tudor, chairman of Tudor, Pickering, Holt & Co. and chair of the Rice Board of Trustees, wrote, “Perhaps never before has the energy industry played such a pivotal role in the world’s economic, geopolitical and environmental future. At the heart of it all is the Persian Gulf region. ‘Energy Kingdoms’ is a timely take on the challenges and complexities faced by the leaders of the Persian Gulf kingdoms, as well as the knock-on effects for the rest of the world. It is a meaningful contribution to our understanding of and response to those challenges.”

Columbia University’s Center on Global Energy Policy will host a launch event for “Energy Kingdoms” in New York Jan. 29, which will include a presentation by Krane and discussion. A live webcast will be available starting at 5 p.m. Central at https://energypolicy.columbia.edu/livestream.

On Jan. 30, Krane will discuss his book at the National Press Club in Washington. A book presentation and discussion is also planned for Feb. 6 at the Baker Institute.

Krane, who joined the Baker Institute in 2013, researches the geopolitical aspects of energy with a focus on the Middle East and the OPEC states and their political and economic strategies. His scholarly articles focus on energy subsidies and demand, as well as internal politics in exporting states. He teaches classes on energy policy and geopolitics at Rice.