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CENTRAL VIEW for Monday, July 28, 2008

by William Hamilton, Ph.D.

Oil, opium, and domestic energy independence

Question: If the supply of crude oil has not increased and the demand for oil remains the same or is even higher, why did the price of crude oil drop $20 dollars-per-barrel last week? Answer: When President Bush lifted his father’s ban on off-shore drilling and when Congress merely “talked” of doing something to increase domestic energy production, some of the oil speculators left the market.

Meanwhile, the Sinistra Media try to foist two canards on the public: (1) America can’t drill its way out of high gas prices. Wrong. (2) The oil companies are not drilling on government lands already leased to them. Wrong. But for a complex set of reasons.

Given access to sufficient land and to the off-shore shelf where petroleum geologists predict oil is likely to be found, oil drillers can, within three-to-five years, match the amount of crude oil currently put into the world market by the oil producers of the Middle East.

But having land under lease and having permission to drill on it are two entirely different matters. The organizations opposing further development of our domestic fossil-fuel resources make it extremely difficult for oil companies to gain permission to drill on the government lands they have leased. So, having a lot of acreage under lease does not necessarily translate to actual oil production.

Another factor likely to increase the supply of Middle Eastern oil is a London Sunday Times report that the U.S.-led coalition has won the war in Iraq. The Times cites the fact that 15 of the 18 benchmarks set by Congress have been met. The Times also reports: “A terrorist force that once numbered more than 12,000, with strongholds in the west and central region of Iraq, has over two years been reduced to a mere 1,200 fighters, backed against the wall in the northern city of Mosul.” Only the Investor’s Business Daily and the Fox News Channel are reporting this story. Not the Sinistra Media.

Iraqi Prime Minister Nouri al-Maliki is so confident of victory that he is saying it won’t be long until his security forces can take over from the U.S.-led coalition. That is one of the outcomes intended by the U.S. back in March of 2003. That Baghdad is becoming safer than Washington D.C. is a tribute to our fighting forces and to the “surge.”

Those who voted against the surge will either ignore its success or say the victory in Iraq was entirely the work of Maliki and his government. But, politically, it is probably not a good idea to try to snatch defeat from the jaws of victory.

Question: Assuming one cannot do both, is it better to finish out the victory in Iraq or abandon Iraq and try for a victory in Afghanistan? Consider this: Iraq’s best cash crop is oil. Afghanistan’s best and only cash crop is opium. Afghanistan’s former “crop” was al-Qaeda and its Taliban protectors.

In fact, we may have already won in Afghanistan. Osama bin Laden and the remnants of al-Qaeda have been driven into northwestern Pakistan. The ultra-religious Taliban is so unpopular with everyday Afghans that its goat may be cooked as well.

So now, the looming danger comes from Iran’s lunatic Mahmoud Ahmadinejad who could throw the world economy into chaos by closing the very narrow Strait of Hormuz. A handful of Iranian torpedo boats could easily sink enough oil tankers to close it. Lloyd’s and other maritime insurers would flee the Gulf market.

Once the Strait of Hormuz is closed, gas at U.S. pumps could top $10 dollars-per-gallon. Having seen our frantic reaction to $4.00 gas, Ahmadinejad has reason to feel that Iran’s burgeoning nuclear-weapons program is immune from attack.

Yet, if we produced the domestic energy of which we are capable, we would be the ones immune from Ahmadinejad and all the rest of them.

William Hamilton, a syndicated columnist and a featured commentator for USA Today, studied at Harvard’s JFK School of Government. Dr. Hamilton is also a graduate of the U.S Naval War College in Newport, RI.

©2008. William Hamilton.

©1999-2017. American Press Syndicate.

Dr. Hamilton can be contacted at:
P.O. Box 2001
Granby, CO 80446

Email: william@central-view.com

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