Article is 6 pages long. I only posted the first page. Click on the link if you want to read the rest. Look at the 3rd paragraph. Eerie, huh? http://query.nytimes.com/gst/fullpage.html?res=9401E2DC123FF937A25753C1A9679C8B63 Fears, Again, of Oil Supplies at Risk By NEELA BANERJEE Published: October 14, 2001 THEY are the nightmares, the worst confluence of misguided decisions and startling violence, that politicians and oil executives ponder briefly and then shoo away: That sympathizers of Osama bin Laden sink three oil tankers in the Strait of Hormuz and choke off the narrow, bow-shaped channel that funnels 14 million barrels a day from the Persian Gulf to the rest of the world. That the United States attacks Iraq, and Israel launches a huge strike against the Palestinians, driving them from their camps and staking out more land -- all of which spurs the Persian Gulf states to cut off oil for the West. Or perhaps that a popular uprising, led by sympathizers of Mr. bin Laden, topples the ruling Saud family in Saudi Arabia, by far the world's largest oil producer. ''If bin Laden takes over and becomes king of Saudi Arabia, he'd turn off the tap,'' said Roger Diwan, a managing director of the Petroleum Finance Company, a consulting firm in Washington. ''He said at one point that he wants oil to be $144 a barrel'' -- about six times what it sells for now. The attacks on the World Trade Center and the Pentagon and the subsequent battering of the global economy have stretched the edges of imagination. Most Western politicians and oil industry experts say they believe assurances from the Middle East that oil supplies will stay stable as the American-led attacks on terrorist groups continue. But in such a profoundly changed world, they concede, anything is possible. If there is a serious disruption of oil supplies, it will probably not be in Venezuela or in the North Sea, but in the countries of the Persian Gulf. Those countries have taken the politically risky position of siding with the West, however quietly, in the campaign against Mr. bin Laden, thereby alienating many of their own citizens. And the proof of their support for the West is in the oil that OPEC nations continue to ship, recently forgoing a production cut even as they faced falling prices that rob them of revenue. By attacking oil supplies or the Middle East regimes themselves, Mr. bin Laden's supporters would strike a powerful blow against the West. The United States' own oil production and that of its allies in the Western Hemisphere could not take up the slack. The Strategic Petroleum Reserve, a stockpile created in 1975 to deal with such emergencies in the United States, could cover the lost oil for a time, but its efficacy would depend on the length and size of the disruption. Congress is looking for ways to add to the reserve, but it remains unclear whether the money could be found to acquire the oil quickly. New oil fields could not begin pumping fast enough to make up for the shortfall, and they would not produce enough anyway. The United States has only 3 percent of the world's known oil reserves. The country's ability to navigate such a rocky period, industry experts said, ultimately depends on how much American society scales back its prodigious consumption of oil. High prices and lower supplies pushed the United States to trim its use of oil in the 1980's, but the country now relies more than ever on imports. Imports account for 60 percent of daily American oil consumption, up from 47 percent a decade ago. ''We can't just blame Detroit for higher oil consumption,'' said Jay Hakes, the former director of the Energy Information Administration, the analytical arm of the Energy Department. ''We're all in this. We have met the enemy, and the enemy is us.'' As far back as the Truman administration, when automobile use started to soar, the United States has grappled with where to get oil and how much to pay for it, Mr. Hakes pointed out. The nation has always faced a choice. It could rely on its own small output but pay much higher prices for it and for alternative energy sources. Or it could open itself up to imports from places like the Persian Gulf, increasing its economic and political vulnerability. It chose the latter. The United States gets only about 13 percent of its daily dose of oil from the Persian Gulf states, and that is down from 23 percent a decade ago. But those countries produce 18 percent of the world's oil, and a significant disruption in their output would set off price spikes, if not outright shortages. The turmoil in the region during the last three decades frequently aroused fears, sometimes well-founded, of oil supply disruptions....
Bush has done the opposite. He has made the flow of oil guaranteed unlike any time ever in history. Unlike the 70's oil embargo that tied us up politically (support for Israel), we now have free rein with 150,000 seasoned American troops. Our troops have freedom to move around the Persian gulf at will. This has unleashed a worldwide economic boom of historic proportions lifting 500 million people out of relative poverty. By the way no Government, Govt. agency or UN poverty panel has come close to helping so many people out of poverty like the Global market has. So it is ironic the Osama has seen his dream come true of $144 oil. But its cause is the STRENGTH and SOUNDNESS of the free market, not the ruin of the free markets.
That is a very factually inaccurate statement. The rise of emerging markets has NOTHING to do with our damaged foreign policy in Iraq. In fact, Iraqi oil production has stalled completely since the invasion...dropped off a cliff. Do you not see that those oil companies doing business in Iraq prior to our intervention have been precluded from aiding the Iraq Ministry in rebuilding its supply line now, and that this is a major source of friction between the U.S. and China, Russia and France? What about the riots in the developing world as a result of inflation regarding everything from fuel to food? If anything, this has constrained world supply, and retarded growth in China, Russia, India and other emerging markets, by boosting inflationary input costs dramatically. Your attempt to apply the Iraq War as causality to the rise of emerging markets is not only erroneous, but bizarre. Those markets have done well despite our Iraq policy, not because of it. And we are now bearing some major additional costs.
World oil production is at an all time high, even with Iraq offline. In the big picture of geopoliticals the Iraq war is insignificent. The US has overwhelming force and is in control of all borders aside from pesky IED's and small time terrorists attacks. There is no chance that a soverign nation would be be able to take control of the Straight of Hormuz. In this situation, the oil will flow. Higher Food costs are partly due to some of bad crop years and greater demand for better diets.
I said to someone in 2003 that BL had won. They stared at me. I stated that this one man had changed America in a way that we will never return to. They stared at me. The war on terror has no nation, so this enemy is eternal. We are Rome right now. We need to call our troops back, enforce our borders, and provide for the common defense.