Lawrence J.

Haas

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November 11, 2008

The Unfortunate Allure of Cheaper Gas

The plunging price of oil on world markets, which has sent prices at the pump plummeting from Maine to California, appears a lone bright spot in an otherwise gloomy economic forecast.

But if we treat these lower prices merely as a gift to relieve the pain of recent higher prices, we will blow a historic opportunity to move toward energy independence and leave ourselves still beholden to foreign powers that work against our interests each and every day.

By implementing the right policies – now – we can create and maintain markets for alternative fuels, diversify our energy sources, dramatically reduce oil’s role in our economy, eliminate the leverage that oil-producing nations enjoy over us and regain our independence.

Today, the United States is at the mercy of others – economically, diplomatically, even to some extent militarily. In the early 1970s, we imported less than 30 percent of our oil. Today, that figure is over 60 percent.

Who controls the world’s oil market? A “who’s who” of America-haters, including: Saudi Arabia, which funds mosques and schools the world over, including here in the United States, that teach an extreme anti-Western form of Islam known as Whabbism; Iran, the world’s most active state sponsor of terrorism, which is ignoring global calls to halt its nuclear program; Russia, whose leaders seem intent on igniting a new Cold War; and Venezuela, where Hugo Chavez is trying to build an anti-American bloc of nations south of our border.

Saudi Arabia dominates the Organization of Petroleum Exporting Countries (OPEC), which sets the pace for world oil prices. When it chooses, as it did after the 1973 Arab-Israeli war, OPEC can squeeze supplies, which both sends prices soaring and forces importers to conserve.

Question: Why doesn’t the United States confront the Saudis over Whabbism, which advocates the murder of Jews and Christians, the subjugation of women, the conquest of non-Muslim lands and the overthrow of Western governments, including the United States? Answer: Oil.

Why don’t the United States and its Western allies more forcefully confront Iran over its nuclear program, such as by preventing the Islamic Republic from importing the refined petroleum products that it desperately needs? Lots of reasons, but oil is surely one of the big ones.

Radical Islam, whether the Shia strain of Iran, the Sunni variety that dominates the Persian Gulf or the Sunni offshoot of Whabbism that rules Saudi Arabia, provides the ideological ammunition for the terrorism that threatens the United States, Europe and Israel.

In essence, the United States is funding both sides in the war on terror – its own side, when it deploys its military to destroy Al-Qaeda in Afghanistan and Iraq and Iranian-backed militias in the latter, and the other side, when Americans fill the tanks of their gas-guzzling SUVs.

Here’s the good news: The oil producers are even more dependent on oil than the United States. Iran, Russia and Venezuela, all of whom had been flexing their muscles on the world stage when prices were much higher, are showing signs of economic distress now that prices have plunged.

Thus, a long-term solution to our oil dependency and the problems it causes is well within our grasp. The skyrocketing oil prices of just a few months back created financial incentives for alternative fuels – biofuels, batteries, wind and so on. Investors, expecting oil prices to stay high as global demand grew, banked on the promise that alternatives would provide lower prices for consumers.

Now, we must maintain the market for alternatives. If oil prices return to and maintain their previous highs, that will do the trick. If they stay at current levels or fall further, the new president and Congress should respond by dramatically increasing the price that consumers pay, such as by boosting gas taxes, ensuring that alternatives remain financially attractive.

In an ideal world, two things would occur. First, world oil prices would fall, bankrupting the autocrats in Riyadh, Tehran and Caracas. Second, Americans would continue to pay high prices, forcing conservation that would further drop world oil prices while maintaining the market for alternative fuels that, over time, will wean America from its oil dependency.

Will we do the right thing? The early signs are not encouraging. Across the country, Americans have begun to drive more in response to falling gas prices. In Washington, no one of note proposes to force Americans to pay more than the market now demands.

And on Wall Street, analysts fear that falling prices are threatening the market for alternatives.

© 2008 North Star Writers Group. May not be republished without permission.

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