Air Force General Advocates Bombing Iran's Oil Refineries

In a new article for Defense News, Air Force Major General Charles Dunlap writes that the next phase of the counterinsurgency in Iraq should be bombing Iran's oil refineries, in retaliation for Iran's support of Iraqi guerrillas.

(pictured left: Iran's oil refinery at the Gulf Port of Bandar-Abbas.)

According to excerpt of the article published on the Danger Room:

"What does every war-fighting effort require? Fuel. In this instance, Iran has real vulnerabilities that the 'overwhelming application of the air instrument' can exploit.

Specifically, despite huge reserves of crude oil, Iran nevertheless must import about half of its gasoline, largely because of a shortage of domestic refinery capacity. Targeting what refinery capacity Iran possesses could directly and concretely erode its ability to support Iraqi insurgents.

Oil refineries are ideal targets for air and missile attack. They are large, relatively 'soft' facilities that are difficult for even the most modern air defense to protect. At the same time, they represent wholly lawful targets generally subject to attack with a minimal risk of collateral damage.

Besides reducing the fuel available to support insurgent activities in Iraq, the further cutback in refinery capacity could influence Iranian leadership, as the nation has already seen civil disturbances as a result of gasoline rationing.

Another indirect benefit of destroying refining capacity: Billions of dollars otherwise available to support Iraqi insurgents would have to be diverted by the Iranians to import additional gasoline supplies."

The Onion on US-Iran Relations

I couldn't help but share this piece from The Onion on this very hot August afternoon when a good laugh is needed. It would be funnier if the conclusion of the article weren't so true.

Another Sanctions Bill Anyone?

Apparently there are not enough sanctions bills already being considered by Congress. On Friday, August 3, Rep. Darrell E. Issa (R-CA) introduced H.R. 3390, to impose sanctions on Iran and on other countries for assisting Iran in developing a nuclear program, and for other purposes. The bill was referred to the Committee on Foreign Affairs in addition to the Committees on Financial Services, Ways and Means, Oversight and Government Reform and Intelligence.

I will post the bill when it is available. In the meantime, here is an interesting post from Jim Lobe regarding pressure on the American Enterprise Institute by members of its Board for supporting sanctions and divestment.

Gulf Arms Deal Poorly Veiled Attempt to Mask American Policy Disaster

The proposed US arms deal to the Gulf Cooperation Council countries – Saudi Arabia, the United Arab Emirates, Kuwait, Qatar, Bahrain and Oman – is a poorly veiled attempt to mask the disaster of American policy in the region that has boosted Iran and weakened popular support for Arab regimes. At the announcement of the deals, US officials acknowledged that the common goal of the military aid packages and arms sales is to strengthen pro-Western countries against Iran as it seeks to extend its power in the region. Citing the Iranian threat as the main rationale for this deal is a convenient approach for the Administration to receive Israeli and Congressional acquiescence for selling the significant new military technology, meanwhile bolstering profits for US defense contractors.

The proposed US arms deal with the Gulf Cooperation Council Countries, as well as the new military aid packages to Egypt and Israel would have disastrous consequences in Iran. After the fall of Sadam Hussein, Iran became the most conventionally superior force in the Gulf region. Iran currently spends around $4 billion on its military forces each year. The proposed arms deal would provide such a huge inflow of arms into the region that it could tip the balance in Tehran in favor of those who want to pursue nuclear weapons. They will argue that the only way for Iran to survive is to have a nuclear deterrent.

The reality is that the proposed arms deal to the Gulf Cooperation Council Countries may not produce much real military capability for many years, if at all. Iran’s military capability improvements thus far have focused on unguided rocketry, guided anti-ship missiles, coastal warfare and perhaps mines. It is essentially a capability to deter a US attack on Iran. If the US were to attack Iran, it could respond by using its force to significantly raise the costs of shipping in the Gulf and cut off oil exports from countries in the region. If the US does want to attack Iran in the future, it would need to significantly ramp up the forces of allies in the Gulf to quickly neutralize any Iranian response. Thus, the proposed arms deal is not so much “defensive” as it is strategically offensive, but it will take many more deals to ramp up the capabilities required.

The arms sales will only undermine true dialogue and diplomacy. Rather than ratcheting up tensions through arms sales in the region as has been US policy for the last two decades, the US should devote its resources to sustained dialogue with Iran on the range of issues at the core of tensions between the two countries. And instead of rewarding Saudi Arabia with a massive arms contract, the US should negotiate with the country to stop its sponsorship of terrorism in Iraq.

There is still time to prevent the arms deal as it must still go through Congress. Several House members, including Nadler (D-NY), Weiner (D-NY), Engel (D-NY) Woolsey (D-CA), Lee (D-CA) and Ferguson (R-NY) have announced their intention to try to block the sale. Congress can block major arms sales by passing a joint resolution of disapproval that the President has to sign.

Statement of Bush Administration Policy on H.R. 2347

After the House passed H.R. 2347, it was sent to the Senate, where it is currently sitting on hold in the Banking Committee.

Here is the Bush administration's Statement of Policy on H.R. 2347. It argues that the bill would undermine US efforts to maintain international unity on intensifying pressure on the Iranian regime.

According to the Statement, "Increasing American unilateral sanctions targeted at United States allies and diplomatic partners would shift focus away from Iran's unacceptable behavior and onto differences between the US and its partners, and would impair the Adminsitration's ability to employ effective multilateral approaches, including multilateral sanctions. This is essential because we believe US unilateral sanctions alone will not suffice and will harm the coalition."

House Passes HR 957

On July 31, 2007, the House passed HR 957 by a vote of 415-11. The bill adds to the list of those that can be sanctioned for making investments that increase Iran's ability to develop it petroleum resources. The Ways and Means and Financial Services Committees spent a lot of time on this bill and below is a useful summary of changes prepared by Financial Services.

SUMMARY OF CHANGES TO HR 957

(1) Section 2 would only apply prospectively (so that contracts that were entered into legally would not be made illegal) but would also apply to companies that have already acquired companies that do business with Iran if that company expands its contracts, a new contract is entered into, or a contract is automatically rolled over which otherwise could have been cancelled. (See “Exception,” beginning on page 3, Line 15).

(2) Under section 2, which keys off of two executive orders and the International Emergency Economic Powers Act, W&M wanted to make sure that the waiver authority in the two executive orders and the IEEPA were preserved with regard to this section. What we learned is that there are no waivers under the E.O’s in question. Rather, the President reserves the right to issue licenses through the Treasury Department to allow the transaction in question. That is the form the waiver takes; so if an entity acquires a company and wishes to continue doing business with Iran, it would apply for a licenses, Treasury would issue it, and then the business could continue without any penalties against the company. That is, in effect, a waiver of penalties against the company.

So the construction clause on Page 4, Line 5 preserves this right of the President to issues licenses with regard to a particular companies activities, which is tantamount to a waiver because in such cases, no civil penalties would apply.,

(3) Under definitions on page 4, the definition of “parent company” was (1) an entity is a “parent company” of another entity if it owns, directly or indirectly, more than 50 percent of the equity interest in that other entity and is a United States person.”

We pointed out that depending on the type of shares held, an entity could hold less than 50% of the shares of a particular entity and still be “controlling” the entity, depending on how the other shares are listed and what voting rights are attached. The inverse is also true (i.e., one could hold more than 50% of the equity shares and not be “controlling.” So a change was made: see page 4, lines 15-17.

(4) Under section 1 of the bill as reported, the definition of “petroleum resources” was expanded to “petroleum by-products” and “liquefied natural gas.”
Petroleum by-products seemed unnecessarily broad, so we asked for it to be changed to “petroleum refining capacity.” See page 2, line 18.

(5) Under section 1 of the bill, “export credit agencies” is specifically added under the list of entities under which sanctions may be imposed under Iran Sanction Act. Chairman Frank’s concern was that a sanction against a foreign credit agency could be construed to attach to the entire government of a specific credit export agency and not just to the export credit agency itself. Ms. Ros-Lehtinen strongly opposed making this clarification/ distinction in the text of the bill (and the bill’s report was already written), but she, at the last minute, did finally agree to the construction language in page 2, Line 20, which provides some clarification.

House Passes HR 2347

On July 31, 2007, the House of Representatives passed H.R. 2347, The Iran Sanctions Enabling Act, by a vote of 408-6, despite opposition from the Secretaries of State and Treasury.

The bill will establish a federal list of companies that have direct investments in Iran’s energy sector and remove specific legal barriers to enable mutual fund and corporate pension fund managers to cut ties with these listed companies if they choose to do so. The bill also provides federal authority for state and local governments that choose to divest their public pension funds and calls on the U.S. government to list companies with more than $20 million invested in Iran's energy sector.

Linking the Sudan and Iran divestment bills, Rep. Barney Frank (D-MA), H.R. 2347’s sponsor, said, “I am disappointed by the Bush administration's opposition to both of these bills, and I am pleased that the House has passed them with well above the number of votes that would be necessary to override any vetoes.”

Under the bill, private sector and state and local government money managers who decide to divest from companies on the list would be protected from lawsuits. The bill could affect large public pension funds and several states, including California, Florida and Ohio have already introduced divestment legislation.

The Congressional Research Service recently found more than $100 billion in energy investments in Iran since 1999 by foreign firms like France's Total, Royal Dutch Shell Plc, Italy's ENI and Japan's Inpex Holdings Inc.