Monday, September 25, 2006

Winds of War: Who’s Got Who Over the Oil Barrel?

From The Gathering Storm

The big fear of the US when, not if, we confront the plans of Islamic domination from Iran and other Islamist states in the Middle east, is the threat of cutting off or severely restricting our oil supply. The thinking goes that Iran and its cronies, including the tin pot Marxist in Venezuela, have the power to make Americans freeze in the dark.

It goes without saying that if OPEC or any member of OPEC restricts its oil supply to us, we can be placed into a severe economic hurt. But the question is this. Will the Mideast oil countries cut off their nose to spite their face? Will they kill the goose that lays the golden eggs? And can we use some leverage of our own to counter balance their threats.

If Iran goes through with its threats if we either bomb its nuclear facilities or commit some other act that they deem aggressive, will Saudi Arabia and the other Gulf States support Iran’s oil restrictions to the US for political reasons like the Israeli/Arab war in the 70s when OPEC restricted the oil supply to the US. The Saudis and other kingdoms may go along with Iran or Venezuela for a time to show support for whatever political gains they are seeking, but a crippled American economy will do the Sheiks little good if they can’t sell their oil at any price. In addition, once oil rises to a certain price, alternative energy sources would not only become cost effective but necessary too. Maybe this is just what the US needs to get off its butt and start a Manhattan Project type R&D program for alternative energy or building nuclear plants that we so badly need today but the politicians can’t seem to muster.

That result can not go unnoticed by OPEC.

Yes, the economic pain will be hard in the short run. But in the long run, I believe it’s us that have them over the oil barrel in the long term. But it will take some political foresight and leadership with guts to do it. Let’s see what a nationally televised speech by such a leader would look like.

  • My Fellow Americans. As you all know, America is being held hostage by foreign oil producers. Our laissez-faire attitude towards this ongoing threat can no longer be accepted. I am declaring, by executive order, a national emergency to deal with this threat that has been hanging over our nation’s head for decades. This is why in my speech tonight and in the UN General Assembly tomorrow, our country will make it clear that any attempt at restricting the oil supplies to this country will be considered an act of war. Does that mean we will attack the oil producing country or countries that make this decision? No. We will not. We will respond in other ways.
  • First, I am signing the order tomorrow for all possible oil producing areas in US territory be opened to oil exploration and drilling. In return, the oil from these US properties will be sold to US companies for no more than $40 a barrel.
  • Second, I am approving immediately, current applications for the construction of nuclear plants and the acceptance of proposals for others.
  • Third, if any country, countries or oil producing organizations or associations participate in the restricting of oil to this country, we will immediately cut off all aid to all of those countries including military, educational and humanitarian.
  • Fourth, all commerce of any type with such countries who use oil as a political weapon will cease.
  • Fifth, all financial transactions will be frozen and funds and assets in the US will be confiscated.
  • Sixth, I am funding $100 billion for the implementation of a Manhattan Project type energy program that will over the long term remove our dependence of foreign oil.
  • I know these are drastic measures and will take some time for the effects of my executive order to pay dividends. But our foreign imports amount to only a third of oil that we consume. If the crisis comes, I believe with proper rationing of our current inventories and the release of our nation’s strategic reserve, we can make it through the shortfall as we did during World War II. If our nation’s access to its oil in restricted, this is war - and we must act accordingly with sacrifice and courage. God bless America.

Such a policy should give the oil producing states some cause for a second look at oil as a political weapon. How much, I don’t know. Any nation bent on national suicide either economically or militarily like Iran, would not be moved by such a US policy. But the more ‘sane’ oil producers would think twice about using oil as a political weapon in the future.

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