THE STRATEGIC POWER OF OIL AND SHOOTING OURSELVES IN THE HEAD
INTELLIGENCE REPORT #101
FROM RICHARD P. ROBISON’S LATEST BOOK, JUST RELEASED:
THE MIDDLE EAST EXPLAINED: Answering the Critical Questions on America’s Middle East Challenge (November 2005, 336 pgs., AuthorHouse Publishers, www.authorhouse.com)
I am continually amazed at the utter foolishness and hopeless naïveté of the American people, and the cowardice of our national leaders unwilling to make the simple, yet right choices. Nothing demonstrates this better than America’s insane, suicidal approach to national energy policy. We in America, through our own very poor choices, we are letting our future prosperity, even our security, be determined by a relative handful of mostly foreigners who are skillfully plotting to control an increasingly larger percentage of global energy. Even though we see it coming plain as day, we are unwilling to do what is necessary to prevent this modern-day piracy.
How could this happening to us? Well, during my recent trip to the Middle East region I met with a senior officer in a mammoth Turkish company that builds oil refineries, tanker port facilities, in fact almost any major construction project required by the rapidly expanding Persian Gulf oil and gas industry. This Turkish company is currently in the thick of an incredible array of oil refinery, port, and petro-chemical projects, from the Persian Gulf region to the Pacific Rim. Truly an “insider,” my well-placed source outlined a dizzying list of building projects commissioned by mostly Arab and Iranian oil producers, and their Asian (Chinese and Japanese) partners, to ensure the inevitable dominance of not only crude oil markets, but also natural gas sales. They have gone one step further, rapidly expanding the development of gas-to-liquid (GTL) technology, these hyper-modern refineries springing up throughout the Gulf region, particularly in Qatar and in Iran, both possessing the world’s largest supplies of natural gas. Look at what this means, as vast new types of energies are integrated into the market in coming years! (Read between the lines here, PLEASE.)
So, while American environmentalists have worked night and day to lock up some of our most productive oil and gas fields, or let many deteriorate with disuse, Persian Gulf oil producers, along with their Asian partners, are racing to expand production up and down stream (from drilling new wells and upgrading old, to expanding high-quality distribution outlets, as well as develop incredible new-generation hydrocarbons). The Asians, and the Gulf producers, understand what is at stake here. And this is exactly what we should be doing. Yet, America insanely locks away potentially phenomenal fields such as Anwar in Alaska, or prevents drilling off the coast of California, the East Coast, or in the Gulf of Mexico, or refuses to develop oil shale and tar sands, while at the same time allowing environmentalist wacko groups over the past 30 years to prevent the building of any new oil and gas refineries in the U.S. Ask any expert. Our existing refineries are running flat out, pushing 98% capacity, which is essentially more than maximum capacity. We as a nation have never been more vulnerable to energy industry shocks than we are right now. We are on thin, no very thin, ice.
I would not be surprised at all if the Arab mega-oil producers have been secretly supporting the many environmental activists in this country over the past couple of decades, secretly funneling them money through shell companies and bogus front groups. For America’s environmentalist movement has done more to undermine America’s security and prosperity than any foreign enemy we’ve ever faced. What’s especially amazing (and dangerous) about these groups is that they have been so effectively sold to the America people as something they are not. Who can criticize “clean air and clean water?” “Everybody wants that, right?”
Add to this challenge the ongoing selfishness on the part of most Americans in insisting on driving gas-guzzling monster cars, in driving many more miles than is necessary, in building houses far larger than needed, and in generally rushing about hopelessly “consuming mass quantities.” Yes, we are our own worst enemies.
As to my oil industry friend. He explained it all so well: Because Americans are unwilling to get in and tackle their energy problems seriously, others will do it for them, and these “others” will not be looking out for the best interests of the United States. Enter the Persian Gulf oil producers (and set aside for the moment the links between petro-dollars and terrorism). Take Saudi Arabia, for example: 75 to 100 years of proven reserves of crude oil, and almost unlimited supplies of natural gas! Ditto (generally) the other “Gulfies.” Are we running out of oil? Not in the Gulf region, no way. Insult to injury, Saudi and Kuwait crude oil costs these modern-day buccaneers about $2.25 per barrel to lift and ship via supertanker anywhere in the world. $2.25 per barrel! What is the price of crude oil selling for on international markets? Yes, dang-it, over $50 a barrel! Indeed, these are modern-day pirates, gouging the world’s eyes out at the pump. American oil producers pay many times more than that to lift and produce their oil, and their profit margins are nothing to whine about.
Most Americans, however, just sit back on their asses and watch the world go by, unwilling to roll up their sleeves, get environmentally realistic, and protect themselves. So, these modern-day Arab and Iranian corsairs pour billions of dollars into expanding not only existing and new oil wells in the Gulf region, in Iran and in Iraq, but also into building new and expanding GTL refineries and petrochemical plants with the ultimate goal of capturing greater market share and dominating overwhelmingly the world’s energy supplies. Get the picture?
As world demand skyrockets—it is going absolutely wild in China with the Chinese gobbling up energy, industrializing, militarizing—Middle East oil producers will expand production as fast as necessary to keep the price of oil relatively low (thus discouraging the development of competing energies). (Yes, over the next few years, short of absolute conflagration in the Middle East, as we’ve proven above, oil prices will decline.)
In the process, America and the world will become increasingly dependent upon Middle East oil—and far more vulnerable—and OPEC producers will not only reap the windfall, but also become increasingly rich and powerful players in world finance, in shaping how the war on terror will be waged, and become king-makers in the competition between Superpower States, such as China, Europe, and the United States.
Yet, all of this is so unnecessary, for America’s energy industry unleashed would further magnify America’s power in the world, reshape the nature of the war on terror, and provide an even greater, more effective American vehicle for spreading freedom and representative government the world over. This would benefit us all. Coupled with a genuine American belt-tightening, and the United States could accomplish miracles. This is precisely why the Middle East has become the most critical global region and key to either prosperity and freedom, or…Armageddon. But don’t expect the “Friends of the Earth,” or the Sierra Club to ever admit (or comprehend) the damage they’ve done. Indeed, that would be a miracle.