We Must Battle Al Gore And His Cabal Of Scientists To The Bitter End!!! First It Was Teaching Evolution, Now Global Warming!

[Right Wing Climate Realist]

Pray To Allah, Death To The AntiOil Environazis.

he World Oil Crisis: Implications for Global Security and the Middle East
Gal Luft

*

The global oil market environment of very strong demand and very little
spare capacity offers a huge opportunity to the radical jihadists. The
terrorists believe that the best way to hurt the global Western economy is to go
after oil.
*

Since the end of the major hostilities in Iraq, there have been close to
300 attacks on pipelines, refineries, and other facilities, and there have been
attacks on oil installations in many other parts of the world, including
Chechnya, Pakistan, India, Russia, Azerbaijan, and Nigeria.
*

The cumulative impact of those attacks amounts to about 1 million barrels
a day that has been taken off the market as a result of sabotage. If this
million barrels a day had reached the market, oil prices would have been at
least $20 a barrel lower.
*

We are seeing today in essence a transfer of wealth of historic
proportions from the economies of the United States, Japan, China, and Europe to
the economies of the oil-producing countries. Of course, this is not a way to
win a war on radical Islamic terrorism when the side that needs to defeat
terrorism and radical Islam is constantly enriching the enemy.
*

We are seeing the beginning of a new era in the Middle East where other
players, particularly China, will move in and want to cut deals and alliances.
The U.S. and Europe are trying to curb Iran's nuclear program, to stop it from
developing the bomb, but the Chinese have signed a $70 billion energy deal with
Iran, and it will be very difficult to get them on board at the UN Security
Council.
*

One of the main causes of friction between China and Japan involves access
to oil and gas deposits in the East China Sea. The Chinese are also developing a
strong foothold in Pakistan, where thousands of Chinese workers are building a
new port in Baluchistan at Gwadar, which sits right at the entrance to the
Persian Gulf.

Spare Oil Production Capacity Falls Drastically

In the United States, gas prices have reached $3.30 a gallon. In a country where
one cannot even get a loaf of bread without getting into a car and driving
somewhere, this is a major issue.

The oil crisis we face today is not the supply-driven crisis we had in 1973.
This is a demand-driven crisis, due in large measure to increased demand for oil
in China and India, whose economies are growing by leaps and bounds. Their need
for energy has caused a chain reaction, since this has almost totally eliminated
the oil market's spare production capacity of about five million barrels a day
that Saudi Arabia and other countries could produce in times of emergency to
stabilize the market.

Today there is a very thin layer of insulation in the oil market amounting to
approximately one million barrels a day, meaning that every small disruption, be
it a hurricane in the Gulf of Mexico or riots in Nigeria or instability in the
Middle East, immediately creates a rise in prices. This situation will be with
us for a long time because there is no new spare capacity. Building spare
capacity requires an investment of billions of dollars to create infrastructure
that may sit idle most of the time. Nobody will invest on those terms.

Jihadi Terrorists Target Oil Production

This environment of very strong demand and very little spare capacity offers a
huge opportunity to the radical jihadists. The terrorists believe that the best
way to hurt the global Western economy is to go after its oil, to blow up
pipelines, refineries, pumping stations, tankers, and take them off the market.
They realize that when they blow up a pipeline in Iraq or in Sudan or anywhere
in the world, this translates immediately into a price rise in all the markets.
It is much easier for terrorists to blow up an oil facility or take out a tanker
somewhere in the world than to infiltrate into the United States and blow up the
World Trade Center.

Osama bin Ladin and the jihadists have said many times that their war against
the West is not only a religious war or a political war but an economic war.
This is an economic war against the infidel similar to the war they fought
against the Russians. "We bled them to the point of bankruptcy. So if we were
able to do it to the Russians, we can now do it to the Americans, and the best
way to do it is to go after their Achilles heel and attack oil." This is what
they have been doing primarily in Iraq. Since the end of the major hostilities
in Iraq, there have been close to 300 attacks on pipelines, refineries, and
other facilities, and there have been attacks on oil installations in many other
parts of the world, including Chechnya, Pakistan, India, Russia, Azerbaijan, and
Nigeria.

The cumulative impact of those attacks amounts to about 1 million barrels a day
that has been taken off the market as a result of sabotage. If this million
barrels a day had reached the market, oil prices would be at least $20 a barrel
lower. This shows that the jihadists, using very simple tactics, have been very
successful in driving up oil prices significantly, taking advantage of a very
tight market.

Transferring the World's Wealth

In 2001, oil was selling for $20 a barrel; today it sells for more than triple.
This means that the Saudis, the Iranians, and all the other producers are making
an extra $40 a barrel. We are seeing today in essence a transfer of wealth of
historic proportions from the economies of the United States, Japan, China, and
Europe to the economies of the oil-producing countries. Of course, this is not a
way to win a war on radical Islamic terrorism when the side of the world that
needs to defeat terrorism and radical Islam is constantly enriching the enemy.
American taxpayers send their dollars and soldiers all over the world to fight
for freedom and democracy. At the same time, every time they go to a gas
station, they finance the enemy that is out there to kill us.

Some 77 percent of the world's oil reserves are in the hands of governments.
These governments have little interest in bringing down oil prices.
Unfortunately, most of the oil-producing countries are corrupt dictatorships.

How Oil Shapes Foreign Policy

What happens when you have the United States, China, India, Europe, and Japan
all competing over the same oil? We are seeing today the beginning of a new era
in which the Middle East will no longer be a unipolar arena. There will be other
players, particularly China, that will move in and want to cut deals and
alliances.

The United States and Europe are trying to curb Iran's nuclear program, to stop
it from developing the bomb, but the Chinese have signed a $70 billion energy
deal with Iran, and said they will veto any attempt to impose sanctions on Iran
at the UN Security Council.

When the Security Council tried to impose sanctions on Sudan - one of China's
main oil suppliers - over the issue of Darfur, the Chinese again said no. These
are two cases in which China's energy interest trumped their interest to be part
of the international community.

A third incident happened this year in Central Asia, which is a very important
new energy domain. In May a massacre occurred in Uzbekistan, with hundreds of
people killed by President Islam Karimov. The United States and Europe asked for
an international investigation, but China, which had signed a $600 million gas
deal with Uzbekistan, said no. A few weeks later, the United States was told by
Uzbekistan that it had 180 days to evacuate the air force base it was using to
fly over Afghanistan in the context of the war on terrorism. China has been a
leading force in calling for the United States to remove all its military forces
from Central Asia, including Kurdistan. So we see how oil shapes foreign policy.

We are seeing a situation in which America's policy of bringing democracy to the
Middle East is being constantly compromised by the fact that the United States
and China are essentially competing over energy resources. This is happening all
over the world, not only in the Middle East and Central Asia. It is happening in
Africa and even in the Western Hemisphere, where China is moving into Venezuela
and Canada.

Access to energy resources will shape the world in the years to come. It will
dictate the international behavior of countries as it plays an increasing role
in relations between the major powers. We will see new alliances forged, such as
between China and Saudi Arabia.

One of the main causes of friction between China and Japan involves access to
oil and gas deposits in the East China Sea. Similar occurrences are happening
all over the world. The Chinese are also developing a strong foothold in
Pakistan, where thousands of Chinese workers are building a new port in
Baluchistan at Gwadar, that sits right at the entrance to the Persian Gulf.

Israel should be very sensitive to developments between the United States and
China, and should be very careful in pursuing military relations with China
because there will be a cost. There are a lot of things that can be done with
China on many issues, but for Israel to pursue military relations with China at
a time when very important parts of the U.S. defense establishment and Congress
are extremely hawkish on China is a very dangerous game to play.

American Dependence on Foreign Oil Has Doubled

Americans are beginning to understand that their dependence on foreign oil has
doubled in the past thirty years. In 1973 America imported 30 percent of its
oil. Today it imports more than 60 percent and that will increase. Americans are
beginning to understand that dependence on oil imports is America's Achilles
heel and that this needs to be addressed. Oil is no longer an environmental
issue. It is increasingly becoming a national security issue.

In 1973, Brazil imported 80 percent of its fuel. Today the Brazilians are on the
road to energy independence because they have developed an agricultural sector
that allows them to produce transportation fuel from sugar cane. Brazil today
does not feel the impact of an oil crisis as other countries do.

A lot of investment is going toward producing transportation fuel from coal. In
South Africa, planes that fly out of Johannesburg run on synthetic jet fuel made
from coal, not oil. So a country does not have to subjugate its entire foreign
policy just to satisfy its need for petroleum products. Two-thirds of U.S. oil
consumption is in the transportation sector. With a quarter of the world's coal
reserves, America can do the same and embark on a path toward weaning itself
from its oil dependence. This has already been done in the U.S. power sector -
today only about 2 percent of U.S. electricity is generated from oil.