“We must strip oil of its strategic significance.” These words were spoken by Anne Korin, co-director of the Institute for the Analysis of Global Security (IAGS) in her presentation before the House Committee of Foreign Affairs on May 22nd.. If oil stays at or above $125 per gallon, we will export 500 billion of revenue in 2008 – equal to our national defense budget – to many nations that are not friendly to the U.S. Saudi oil reserves at $100 a barrel are worth 60 trillion… more than the market cap of all the world’s largest companies combined.
If I were the King of OPEC so to speak, I would immediately increase oil supply to the world. Why? Because OPEC has not increased oil supply for thirty years which has resulted in an out of whack supply/demand curve. The bad news for us – oil prices in the past few years have skyrocketed because of world wide growth and a falling dollar. The good news, OPEC is about to see how creative the U.S. will become in responding to a crisis. Yes – a crisis. The average American is now saying for the first time, they are sick and tired of paying for high fuel costs, especially when they know much of it is financing Islamic radicalism. Ten years ago, Osama Bin Laden said he wanted oil to reach 140 dollars a barrel. He knew this would stunt economic growth and supposedly help repay the Muslim world what he claims we “owe” them for past abuses. His wish is coming true.
If OPEC does not increase supply, which will not be easy because they now have their own limitations, the world will finally start to move away from oil as the sole source of transportation fuel. Hurray! It’s about time. We have needed a shock to wake us up and OPEC provided it. Now it is up to us as the American people to take the needle out of our arm and break the habit.
Korin says we must act quickly. She reminds us of the rule of 17. Seventeen million cars are sold every year in the U.S. and the average lifespan of every car is seventeen years. Ninety seven percent of U.S. transportation runs on oil. Only 3% of our electric power runs on oil. We consume one of every four gallons of oil in the world but have barely 3% of the world’s proven reserves. We are vulnerable to the need for oil and we cannot replace it just by drilling more on our own soil. We must develop alternatives and do so quickly. Oil’s strategic value derives from it’s virtual monopoly on transportation fuel. As Korin said, “This monopoly, which gives intolerable power to OPEC and the nations that dominate oil ownership and production, must be broken.”
Doug Wilson is the the co-author, with Edwin Feulner, of Getting America Right: The True Conservative Values Our Nation Needs Today.
Be the first to read Doug Wilson's column. Sign up today and receive Townhall.com delivered each morning to your inbox.