The Politics of the Petroleum Economy

As a matter of principle and practice, I believe inrepresents slightly more friendly and reliable
Win-Win solutions whenever possible, and that lifesources of imported oil for the United States, we
presents us with a virtually unlimited number ofshould not allow this to give us a false sense of
opportunities to break out of "zero-sum"security.
assumptions to create abundance. In fact, this isA protracted war in the Middle East, for example,
the magic of American-style capitalism. Thecould create scarcity and have a significant and
economic decisions of millions of individualsdirect impact on oil supplies and oil prices in the
throughout our society have for generationsUnited States, and ultimately on the American
created sufficient wealth to ensure an Americaneconomy. Adding to the direct impact, countries
standard of living that has been the envy of thesuch as Japan, Germany, South Korea, France,
world. To be sure, oil is not yet a scarceItaly, Spain, and the Netherlands import more than
resource, but is becoming more costly to90 percent of their oil. And nations like China and
produce, and the politics of petroleum in the worldIndia, as well as much of the developing world,
today threatens the very foundation of ourare consuming more oil every year. Interruptions
national wealth.in supply from Middle East oil producers could send
Petroleum is a commodity, in fact, a marketthe global economy into economic free fall. Our
basket of commodities that has over the yearsStrategic Petroleum Reserve provides little more
been priced roughly in relation to the cost ofthan short-term protection from interruptions in
production. The reality of petroleum supply is thatpetroleum supplies, as it amounts to only about
it is becoming increasingly costly to produce.37 days of United States oil consumption, and
Although oil is not yet in scarce supply, low cost,only 75 -85 days worth of imports.
domestic sources have in recent decades beenThere is also the unstated cost that the United
replaced by increasingly costly "tertiary recoveryStates has been incurring to secure Middle East oil,
methods", and risky domestic off-shore drilling.namely, the cost of the umbrella of military
Now let's look at how much oil we are importing,protection we have been providing to the ruling
and from where. The top ten oil producers inelites in the Middle East. Our military supports
2008 were, in order: Saudi Arabia, Russia, Unitedunstable governments such as Saudi Arabia,
States, Iran, China, Canada, Mexico, United ArabUnited Arab Emirates, and Kuwait - all of which
Emirates, Kuwait, and Venezuela. Several of thesewould likely fall into the hands of extremists in the
source countries are less than reliable, subject toabsence of support from the United States.
political instability, and/or capable of using oil as aOur economic security and political independence
political weapon. Two-thirds of oil imported intoare increasingly at risk. Who will lead us to the
the United States comes from five countries (inenergy solutions we need to secure our freedom
order of most oil imported): Canada, Mexico, Saudihere in the United States for generations to
Arabia, Venezuela, and Nigeria. Although fromcome?
among the world's top producers this list