That makes the price of oil and the West’s dependence on it national security problems of the first order. What can be done? Robert C. McFarlane, who served as President Reagan’s national security advisor, wrote last week, that we can and should be producing more of our own oil, but “that is not enough. To outmaneuver OPEC we need to eliminate oil's monopoly as the only transportation fuel.”
The most promising possibility: Natural gas is a resource America has in abundance. Cutting-edge American technology – e.g. horizontal drilling and fracking -- has made natural gas easier and cheaper to extract. As McFarlane points out, natural gas “can be used in various forms to fuel vehicles. Compressed natural gas (CNG) is well-suited to drive long-haul and other fleet vehicles” but for “light trucks or automobiles, a better approach lies in using natural gas to make the liquid-fuel methanol, a high-octane, clean and safe fuel…”
He notes that the Methanol Institute, a private industry group, estimates that producers can, right now, deliver an amount of fuel equivalent to the energy in a gallon of gasoline for approximately $3. The cars we drive would require only minimal and inexpensive modifications in order to run on methanol – as race cars already do.
Let me emphasize: McFarlane is not proposing that we stop using gasoline and other petroleum products. He is not proposing government subsidies for natural gas, methanol or other fuels. On the contrary, he is making the case for eliminating subsidies and government favoritism of one fuel over another. He and others are arguing for breaking the monopoly that oil currently enjoys and encouraging the creation of a competitive fuel market.
If, for any reason, that does not happen, only those who invested their own money would suffer. If it does happen, however, having a larger fuel supply from more than one source would provide multiple benefits: It would reduce the funds available to Islamists (strengthening national security), bring down the cost at the pump and reduce price volatility (easing the burden on families, commuters, truckers, etc.), and keep more money and jobs in the United States thereby reinvigorating the domestic economy (good for those who live, work and invest in America). The downside? There is no downside.
“Friedrich Hayek and Milton Friedman stressed that the foremost economic duty of government is to eliminate cartel pricing,” McFarlane notes. At the moment, however, government is not doing its economic duty. Nor is it not doing its national security duty: It should not require a Clausewitz to grasp that transferring unprecedented amounts of wealth to your enemy in a time of war is counterproductive. Yet, at the moment we are knowingly funding the “violent extremists” who want to kill us, as well as the more moderate Islamists who merely want to dominate us.
From time to time, Islamists of both stripes must gaze at Westerners and wonder: “How can people so technologically smart be so strategically stupid? Like the oil under the desert sands, this must be a gift from Heaven.”