Former Secretary of State Condoleezza Rice speaks at Rackham Auditorium Wednesday. Rice discussed the role oil plays in global foreign policy.

Ryan Stanton | AnnArbor.com

Rice spoke to several hundred people at the 2011 Goff Smith Lecture, which the University of Michigan College of Engineering uses to honor important individuals for their contribution to society.

Rice used her speech to discuss how countries with oil-based economies reacted to the period in 2008 when oil prices soared to about $140 per barrel. Rice said it was during that time she realized exactly how much oil can mean to the global economy.

“I said to my colleagues at the time, I have never seen anything warp diplomacy like high oil prices,” Rice said.

Using the examples of Russia, Venezuela, the Middle East as a region and China, Rice said each area's foreign policy was affected by oil.

She said Russia is currently debating whether or not to have an economy based on knowledge or based on commodities — mainly oil and gas.

She said there are many inside Russia hoping for lower oil prices, otherwise the country will continue to “avoid the diversification Russia should be involved in."

Rice pointed to Venezuela as one country that uses oil as a weapon in its foreign policy.

When oil prices reached $140 per barrel in 2008, the country’s leader Hugo Chavez used his country’s oil reserves to buy support from Latin American countries, Rice said. She added Chavez threatened to cut off oil supplies to the United States because he was unhappy with American policies toward Venezuela.

“Using oil as a weapon to a foreign policy component was very prevalent in that time,” she said.

As important as oil is to the American economy, it is even more important to China’s economy and that importance is reflected in the Chinese foreign policy, Rice said.

She pointed to China’s unwillingness to be involved in the humanitarian crisis in Sudan or impose sanctions on Iran — two major suppliers of oil to the Chinese — as examples of how oil shapes Chinese foreign policy. Rice said the Chinese need fuel to help grow an economy that needs to grow 10 to 12 percent and create 25 million jobs every year in order to avoid social unrest.

“You can be absolutely certain the Chinese will never do anything in their foreign policy that will affect oil and petroleum supply to their economy,” she said.

About 10 people protested outside of Rackham Auditorium before Rice’s speech, holding signs decrying her role in the war in Iraq.

Rice was not asked about Iraq specifically during the question and answer session following her speech, but did touch on the upheaval in the Arab world, which has become known as the Arab Spring.

Rice said she could see upheaval coming in the Middle East for a long time, but never knew what spark would set if off. She said she expected countries like Tunisia and Egypt to come out of the upheaval in a positive fashion, but said countries like Libya and Yemen were “disaster situations.”

Rice recognized the United States’ role in supporting many of the regimes now coming under fire.

“The United States unfortunately tried to buy stability at the expense of democracy and we got neither,” she said, adding that she expected the Middle East to be an unstable region for many years to come.

In a lighter moment near the end of the Q&A, Rice weighed in on a topic near and dear to many Ann Arbor residents’ hearts — the search for a new head coach of the U-M football team that occurred earlier this year.

Rice remained diplomatic when she was asked if she thought former Stanford coach Jim Harbaugh should have stayed at the school, become a Wolverine again or gone to the National Football League, which he eventually decided to do by becoming head coach of the San Francisco 49ers. Rice served as Stanford’s provost in the 1990s and has been a member of Stanford’s faculty since 1981.

“I always thought he would go pro,” she said, before wishing him the best.

Kyle Feldscher covers K-12 education for AnnArbor.com. He can be reached at kylefeldscher@annarbor.com or you can follow him on Twitter.