Sunday, October 27, 2013

We Can Bankrupt the Global Jihad

After the "Arab Spring," Saudi Arabia gave its citizens a raise. Saudis citizens don't pay income taxes. Most of them don't even work. The Saudi government pays them, and to avoid the fate of the leaders in Egypt, Libya and elsewhere, the Saudis increased their citizens' pay and pensions. They committed future funds to these payoffs.

This has presented the counterjihad movement an opportunity to strike a decisive blow into the heart of the global jihad.

Jihadist projects are funded largely through Saudi Arabia and Iran, two OPEC nations. The Taliban is a Saudi oil-money project, for example. So is the Muslim Brotherhood and the OIC. Hezbollah is an Iranian oil-money project.

OPEC is a cartel formed of primarily Islamic countries. OPEC was founded for the purpose of raising world oil prices. Jihadist activities around the world have been on the rise because jihadist funding has been on the rise. The source of that funding is oil profits, which have been on the rise.

What keeps the whole thing functioning is oil's monopoly over the most important commodity on earth — transportation fuel.

In the 1980's, because the rising cost of oil, many new programs were started to create a freer fuel market. Brazil launched its ambitious ethanol program, many new ethanol distilleries were built in America, Roberta Nichols created a massive methanol experiment in California, etc. But in the mid-80's, OPEC flooded the world market with oil in order to drop world oil prices, which made all of these potentially-competitive fuels no longer competitive on price, which crashed Brazil's program, put half the U.S. ethanol facilities into bankruptcy, and prompted California to abandon its methanol experiment.

It was a classic monopolist move. It's the oldest trick in the monopolist's book: Drop your price to send the competition into bankruptcy.

Once their competitors were sufficiently crippled, OPEC started raising the world oil price again.

But competing fuels have recently begun to reappear. Brazil permanently changed to flex fuel vehicles (rather than ethanol-only vehicles) for example, which has protected them from OPEC's manipulations (when oil prices drop, drivers buy gasoline; when oil prices rise, drivers buy ethanol). Brazil's economy is booming.

In the United States there is a growing clamor to use methanol as a fuel, ideally in flex fuel vehicles. Methanol can be made inexpensively from America's abundant natural gas, and can be sold for half the cost of gasoline without any subsidies. If it was available as a fuel, people would buy methanol because it would save them a lot of money. But right now, it is not available as a fuel in the U.S. One bill now in Congress is trying to change that.

So let's say the bill passes into law and methanol becomes available, and people start using methanol for fuel. Gasoline would have to drop in price to compete, or it wouldn't sell. Everything would be wonderful. But...

Wouldn't OPEC just drop the world price of oil to crush this new competitor?

This is where things have changed in an important way. This is our new opportunity. Saudi Arabia controls what OPEC does. The Saudis are sitting on the easiest oil to produce in the world, and therefore theirs is the cheapest oil to produce. Because of this, they dictate what the rest of the OPEC nations will do. But if methanol becomes a fuel in America, Saudi Arabia (and the global jihad movement) will be between a rock and a hard place — and it could be the end of both OPEC and the third jihad.

If the Saudis decide to lower the world price of oil to make the U.S. lose interest in methanol, they would not make enough money to fulfill their commitments to pay off their subjects, who would probably rise up and throw the monarchy out. But if the Saudis keep the price of oil high, they would lose their income, because who would buy gasoline at $4.00 a gallon when methanol is available for half the price of an equivalent gallon? Not many.

Gal Luft, the co-director of the Institute for the Analysis of Global Security, wrote:

Since the beginning of the Arab Spring, Saudi King Abdullah almost doubled his Kingdom's budget, committing billions in subsidies, pensions and pay raises in an effort to keep his subjects from storming the palaces.

This expensive response effectively raised the price of oil needed for the Saudis to balance their budget from under $70 a barrel before 2011 to at least $110 a barrel by 2015.

When oil is $100 a barrel, gasoline is about $3.50 to $4.00 a gallon. Methanol can sell at about $2.00 an equivalent gallon. Oil would have to be $50 a barrel to compete.

In other words, what happened in the 1980's can no longer happen. Saudi Arabia can no longer afford to drop the price of oil low enough to eliminate the competition. If we introduce vigorous fuel competition now in America, it will be the end of oil's monopoly for good, and funding for the global jihad would evaporate as Saudi Arabia and Iran would be forced to struggle to simply stay afloat.

This is an unprecedented opportunity. And you can help make it happen: If you are an American, join the fuel competition revolution. Go to and sign up for their updates and urge your Representative to co-sponsor the bill. If you are in any other country, let your fellow counterjihadists know about this bill and what it could mean for the world, and let everyone around the world urge Americans to pass this bill. The U.S. is the largest consumer of transportation fuel in the world. If fuel competition happens here, it will spread to other countries. And it will be the death knell of the third jihad.


Citizen Warrior said...

If you have any questions about this, I would be glad to answer them.

Anonymous said...

Uh...what happened in the 1980s already can't happen because of fracking...kind of an old news now hence the recent news about Saudi princes sh*tting in their "kanduras".

Besides, the US can do all they want, it won't change what China's doing which is, becoming a huge market for Saudi oil.

The naivete of some proposals seriously...


Pastorius said...

I hope so, C-Dub. I've asked questions every time you've written on this subject, and you haven't replied yet, that I recall.

Here's some information from Huffington Post (it is consistent with other info I have read on Methanol, but this article is more comprehensive than most:

Ethanol and biodiesel are dead, long live methanol! Methanol is the simplest alcohol, with one carbon atom; ethanol has two. Thus, given biomass, it should be cheaper to produce methanol than ethanol. Surely enough, in a comprehensive assessment Stone & Webster performed for the U.S. Department of Energy two decades ago, with the Hawaii Natural Energy Institute as an associate, this fact was confirmed.

However, methanol has a few flaws. First, if drunk, you can go blind. But, who drinks gasoline? Second, there was a time when methanol was used as the feedstock to produce MTBE as a gasoline additive. MTBE is carcinogenic. Methanol is not, just don't drink it. Third, methanol can dissolve certain plastics and embrittle a some metals. So change the plastic and metals to avoid this problem.

Methanol has only half the energy content per gallon of gasoline. Ethanol is two-thirds the intensity of gasoline. However, a fuel cell powered vehicle is at least twice the efficiency of an internal combustion engine, so the tank storage problem would be solved with a direct methanol fuel cell. The DMFC for portable electronics is said to soon replace batteries, so the technology is real. Methanol is the only biofuel capable of being directly fed to a fuel cell. Ethanol and gasoline need to first be passed through an expensive reformer.

Plus, and this is difficult to accept, but true: one gallon of methanol has more hydrogen than one gallon of liquid hydrogen. Thus, the infrastructure is already largely in place for a methanol economy. George Olah in his book, Beyond Oil and Gas: The Methanol Economy, provides all the science and speculation you need.

So why is our country and rest of world enamored over ethanol and biodiesel? In two words, the Farm Lobby. They came up with a politically brilliant scheme to use corn as an answer to imported oil. By so doing, the price of farm commodities recently doubled and more. Farmers are ecstatic! The poor around the world are suffering.

Pastorius said...

So, question #1:


Note the article also says, Methanol basically works best (because of it's low energy content) with cars that are already Hybrid. But Hybrid's are not at all popular in the U.S.

Pastorius said...

Also, C-Dub, did you know that the top three trucking companies (Wal-Mart, UPS, and Fed-Ex) have all switched over to Natural Gas ALREADY, and that major investors such as T. Boone Pickens are investing heavily in building out the Natural Gas Infrastructure to ship all goods via a trucking system based on Natural Gas?

And, did you know that we are replete with Natural Gas? We don't have to create it.

And, did you know that Natural Gas really does cost about 2/3rds the price of Gasoline?

And, did you know that almost half the fuel used in the U.S. for autos is used by trucks in transportation of goods? Therefore, if the trucks are switched over the Natural Gas, we will have saved a huge amount of oil anyway, without building out and creating Methanol, or Ethanol, which are weaker in the first place.

And, did you know that the United States, Canada, and Australia have MANY TIMES MORE OIL THAN SAUDI ARABIA?

If you want the numbers, I will provide you with a lengthy series of links.

Epaminondas said...

By 2017 at the LATEST even with not a single other change in US law, the USA will become energy independent. After that we will be exporting. AGAIN.
Frackign is not cheap but increased supplies worldwide and the lack of american demand on foreign duel supplies HAS to have an effect sooner or later.
If methanol can be produced, shipped, and used within that economic framework, and be competitive it's a win.

If not there is NO WAY this works. Walmart has demonstrated worldwide that preservation of any national economy is not as important as cheap flip flops, or BRAND NAME canned corn at $0.69/can.

That's now an historical and economic fact. No long haul eco effort can succeed against the gravity of prices.

Not the WESTERN WAY OF WAR. Just ask VDH.

We can't do it that way. Not us.


Pastorius said...

And, my larger point is that between Australia, the United States and Canada, the Anglosphere will be the Saudi Arabia of the 21st century. WE WILL BE OPEC.

Stop worrying and learn to love the oil economy.

Anonymous said...

And Argentina will be the new Venezuela with 3rd largest no change there. :/


Citizen Warrior said...

One of the most important ideas to get about all this is that oil interests have worked hard to prevent other fuels from competing.

Although we have lots of oil, and will have more soon, we are still importing the PRICE of oil, which is set on the world market. American oil companies do not sell American oil to Americans for any cheaper than they would sell it to anyone else in the world. And the price for oil is set by OPEC. So even if we drill all "our own" oil, the price will still be high for drivers, and Islamic nations in OPEC will still be raking in tremendous sums of money, which they will use to undermine the free world.

The solution to a monopoly is competition.

Citizen Warrior said...

I remembered to make a comment and click the "email me when there's a comment" button, so I can be part of this conversation. I didn't know Pastorius, that you had left comments before.

About the methanol price. It is half the price for a "gasoline-gallon equivalent." Yes, it is roughly half the energy, but it's only 91 cents a gallon unsubsidized. And while the energy is half of the BTUs, that is a measure of heat, and methanol burns cooler, so more of its energy goes toward moving the car forward and less is wasted in radiated heat.

Check out this study on the topic:

And everyone, please read Energy Victory by Robert Zubrin. And read Petropoly by Anne Korin and Gal Luft.

I don't write about things I don't know very well. I've been learning about this topic for many years. This is the real deal. I'm totally in favor of American's drilling American oil. It helps our trade deficit and produces American jobs. But it doesn't solve the jihad funding problem and doesn't lower the price, so it's not good enough.

Which would you rather have? A monopoly or competition?

Citizen Warrior said...

Have ya'll read about Zubrin's methanol experiment?

With the addition of one part that cost 41 cents, his non-flex fuel car ran on methanol without a problem, and for a lot less.

Yes, Pastorius, I know all about CNG and America's glut of cheap natural gas. It's great. But having different VEHICLES that can burn different fuels is far different than having a single vehicle that can burn multiple fuels, and the technology has already been developed to do this. So every time each INDIVIDUAL goes to the pump, those fuels are forced to compete with each other. That's how the consumer can really win. And that would drive a stake through the heart of jihad funding.

China is already using methanol for fuel. Over a million cars in China burn methanol.

Sign up for the updates on These guys are both Israeli-Americans and are millionaires in the software industry who have taken on this purpose (in my opinion, in order to save Israel).

Citizen Warrior said...

By the way, that's the main reason why methanol is so cheap -- it is being made from abundant natural gas.

Natural gas is so cheap and abundant, they are just burning it off to get rid of it in the Bakken fields. They are flaring the equivalent of a fourth of all America's consumption of natural gas! And that's only one of our many oil fields where this is happening. It is a ridiculous waste when that fuel could be used to put downward pressure on gasoline prices and bring the global jihad to its knees. Check it out:

Citizen Warrior said...

Nicoenarg, you jumped the gun on this one a little bit. Because the U.S. is the largest consumer of oil in the world, if we had fuel competition and prices came down here, it would have an impact on prices throughout the world -- not just on prices, but on cars. We're the second biggest car market in the world (with China barely beating us out), so if we had cars that could burn methanol as well as gasoline, the rest of the world would get them too, causing worldwide fuel competition and a permanent pressure on oil prices.

Pastorius said...

Thanks for replying. You taught me something. I did not know that the price of Methanol was adjusted for potency. I have not read that elsewhere. If that is true, then it is indeed a good deal. As long as it does not require wheat crops of other food crops for production.

Anonymous said...

There was no jumping of guns. Reread my comment. China has become the biggest importer of oil in the world (since Sep 2013). Last time I checked your article was regarding Saudi oil. And like I mention, China's importing of oil is on the rise and Saudi Arabia exports its oil to China...

Other than jumping around topics a lot I don't see you actually addressing the fact that China is not going to give two sh*ts about whether the US switches to methanol or water. Especially since this change can't happen overnight.

Your article (I think we're sticking to it, lemme know if you've changed your mind) is talking about creating a complete alternative but the US, last time I checked, has not dictated the affairs of the world since, I don't know, its inception?

Again, your article was about bankrupting Saudi Arabia. Your assumption, which is naive, is that if the US switches to methanol Saudi Arabia's Kingdom will fall...

No it won't. First you won't be able to replace oil in a day. Two, you have big powers like China and Russia that are connected to oil in one way or another, you can't force them to change no matter what you may tell yourself and Europe also is a big oil consumer, you can't force them either.

I'd support any effort that bankrupts Saudi Arabia but this, just like every other liberal effort, SOUNDS good but seems as unrealistic as every other utopia that has ever been painted.

Fracking, for now, is a good alternative. Something that already has the Saudis throwing tantrums. I'll see what happens with methanol but so far its just a smoke screen to me that bears nothing when it comes to reality.

As for whether one wants a monopoly or competition...uh monopoly means ONE PARTY controlling everything, AKA OPEC. As Pasto already pointed out though, the US, Canada and Australia (and Argentina, which he didn't mention) can easily compete against OPEC. But again, this wasn't, as far as I was aware, an emotionally charged discussion about monopolies vs free markets so I'm gonna leave that at that.

As for what you were saying about the Saudi subjects overthrowing the monarchy if they didn't get paid enough, I'd really suggest you talk to someone from Saudi Arabia or who is aware of Saudi culture. Or Islamic culture for that matter. Blame the Jews for all your problems and Saudis will be fine living in tents, eating dates and drinking camel milk. They've done so before, and they'll do it again.

Anyway, we've got local elections going on here so I'm not going to be commenting on here until much later.


Anonymous said...

Also, you might want to update your knowledge about what's happening in the world of oil and energy consumption:


Citizen Warrior said...


We don't need to REPLACE oil. We need to add competition. Real competition. And methanol can provide that. It's a great fuel (the Indy 500 used it for 41 years), it is far less expensive than gasoline, it is made from something America has in abundance (natural gas), and it burns well in ordinary gasoline cars with very minor modifications. It is good enough, plentiful enough, to give gasoline serious competition.

Oil is the monopoly. Not OPEC. OPEC is simply exploiting oil's monopoly of transportation fuel. Because 95 percent of our transportation vehicles (including planes, trains, ships, cars, and trucks) are warranted to only burn petroleum fuels, call it what you will, but petroleum has a monopoly on transportation fuel. OPEC exploits that monopoly. If the monopoly is broken, petroleum revenue plunges, America's economy gets a huge boost (because almost everybody will now have more spending money because they'll be spending less for transportation), and oil loses its vital strategic status, which means the Middle East loses its strategic status.

This is not a pipe dream. It is not wishful thinking. Brazil has done something similar and in a very short time has climbed to be an economic power. They just passed Britain to become the sixth largest economy in the world.

Almost all cars sold in Brazil now are flex fuel cars, burning both gasoline and ethanol, which they have in abundance because of sugarcane. They have not replaced oil. They have given oil competition. When oil prices are high, they buy ethanol. When ethanol prices are high, they buy gasoline. The consumer wins.

We can do even better in America using three resources we have in abundance: natural gas, coal, and garbage -- all three of which can be made inexpensively into methanol.

Citizen Warrior said...

I think some of you might be interested in seeing this. It's a presentation by the U.S. Energy Security Council (broadcast live by C-SPAN) which occurred earlier this month:



Also an article by Anne Korin and Gal Luft that ran in Foreign Affairs:

Pastorius said...

C-Dub, what does one need OTHER THAN NATURAL GAS to produce Ehtnaol?

Citizen Warrior said...

While ethanol can be made with natural gas, I was talking about methanol, which can be made from natural gas too. Methanol is already one of the most common chemical products because it's useful for lots of industries. And the most common feedstock used to make it is natural gas.

To make methanol, to answer your question, you don't need ANYTHING else but natural gas. One common method is using "gasification." This explains it a little:

Pastorius said...

I'm sorry. I didn't mean to write "Ethanol". I meant to write "Methanol." So you answered the right question.

Well, here's my answer then: If Methanol requires only Natural Gas, then great. What is the advantage of selling it as Methanol vs. Natural Gas, when we are already building out the infrastructure to fill America's trucks with Natural Gas?

Citizen Warrior said...

Using CNG (compressed natural gas) is great. The only disadvantage for the average driver and for fuel competition in general is that it requires a different tank and it is somewhat expensive to convert a gasoline-only engine into one that can burn natural gas. And usually once it can burn natural gas, it cannot also burn gasoline, so there still would not be direct competition in fuels. That is, competition in the moment, on the fly, where the two fuels are pitted against each other constantly, whereby when the price of one fuel goes up in an oil embargo for example, drivers would not be able to simply and easily switch to using a different fuel. It is entirely possible that some day natural gas prices would go up, in which case gasoline might well be the inexpensive fuel, and then what? We would have all these trucks and cars converted to natural gas and paying more than they need to for their fuel.

Ford came out with something I like. It is a F-150 that can burn CNG AND gasoline. Now we've got real competition between fuels in the same vehicle, and that matters. Check it out:

Citizen Warrior said...


Read more carefully and quit jumping the gun. I said the U.S. is the largest consumer of oil in the world. Not the largest importer. And the WSJ article you sent says, "The U.S. also remains the biggest oil consumer by a wide margin..."

You and I are on the same side of the counterjihad, I am assuming. I urge you to reconsider your position on fuel competition. It could be pivotal.