Tuesday, July 10, 2007

Breaking the Oil Habit

Breaking the Oil Habit by Richard Miniter

Every time you squeeze the trigger on the gas pump, you are putting money into the pockets of terrorists.

Trace back the snaking hose, past the pump and the oil refinery, and you will find nearly two dozen oil kingdoms—all of which, to some degree or another, fund al Qaeda, Hezbollah, Hamas and other jihadi groups.

With the exception of a few mature Western democracies like Canada, Norway and the United States, writes New York Times columnist Tom Friedman, “the price of oil and the path of freedom run in opposite directions.”

If the world did not buy their oil, the sheikhs couldn’t give terrorists enough money for a car to put a car bomb in.

So the key strategic question is: Can we sever the link between oil and al Qaeda?

Wrestling with the issue in a private room at the Four Seasons Restaurant recently was former CIA director James Woolsey, former Reagan Administration Education Secretary Bill Bennett, CNN anchor Lou Dobbs, and Wall Street Journal editorial writer Stephen Moore. The forum was the Hudson Institute’s Briefing Series, the best ticket for high-end discussion in New York. The audience is as interesting as the guests: hedge-fund managers, executives, journalists, scholars and socialites.

The Saudis account for 1% of planet’s Muslims, but provide 90% of the funding for Islamic institutions and charities world-wide. In keeping with Saudi Arabia’s official version of Islam, the kingdom’s billions flow to mosques and charities that espouse a Wahabi doctrine.

“When the Wahabis teach their doctrine, they are teaching al Qaeda’s doctrine,” Woolsey said. “There is no substantial difference between al Qaeda’s doctrine and the Wahabi doctrine.”

Since the collapse of the Soviet Union, Saudi-funded missionaries have trekked deep into Central Asia, sub-Saharan Africa, Southeast Asia, the Balkans and into the neighborhood mosques of Western Europe. Every place the new missionaries of Islam brought their strict creed—with an unique emphasis on jihad—terror attacks have followed.

Other oil baron nations have followed the Saudi pattern.

Of the ten nations with the largest proven oil reserves, the U.S. is number ten. The other nine are among the 40 worst nations in terms of human rights, according to Freedom House. Torture, beheadings, denial of the rights of women and ethnic minorities and so on. And, of course, support for terrorists.

For too long, we have been paralyzed with fear that the Arabs would turn off the oil spigot.

We feel that the oil barons have an Achilles’ heel: terrorists rely on rulers who only have one source of wealth and power—oil. Minus oil, the total value of the non-petroleum exports of the 22 members of the Arab League plus Iran is less than the exports of Finland. Without oil, the main exports of the Near East would be carpets, dates and honey.

How can we get there? Let’s start with transportation. The U.S. Air Force gulps down 70% of all oil consumed by America, mostly jet fuel. (Those who argue that Iraq is a war for oil have it backwards: we use more oil fighting in Iraq than we could ever hope to import from it.)

The U.S. uses oil and its byproducts for 97% of its transportation needs. So any solution starts with cars.

One answer, suggested by Woolsey, is ethanol from farm products. He cited estimates by the National Energy Policy Commission that just 7% of U.S. farmland could produce enough biomass to provide the fuel needed for all U.S. passenger vehicles. The production costs for cellulosic ethanol are headed downward toward around 70 cents per gallon, he said.

Another realistic option: hybrid vehicles. They usebattery power for short trips (20 miles or less) and gasoline for long hauls. Users would charge their cars overnight by plugging in an extension cord an ordinary 110-volt socked in their garage

Utilities are warming to the idea because plug-in hybrids would open a new market for them: selling off-peak power at night.

Wouldn’t that drive up electricity prices or force us to build more power plants? Not for a very long time. Hybrid plug-ins use off-peak nighttime power—the electricity now consumed by bars, hospitals and insomniacs. The Department of Energy’s Pacific Northwest National Laboratory estimates that adopting plug-ins will not create a need for new base-load electricity generation plants until plug-ins make up more than 84% of the nation’s 220 million cars and trucks.

Further, Woolsey contends, those plug-in cars that are left connected to an electrical socket after they are fully charged (most U.S. cars are parked over 20 hours a day) can provide electricity from their batteries back to the grid.

Woolsey envisions a world in super fuel-efficient vehicles. “A 50 mpg hybrid, once it becomes a plug-in, will likely get over 100 mpg.”

If we didn’t buy that oil, wouldn’t the Chinese just buy that much more oil? asks former Education Secretary and radio-talk show host Bill Bennett. China’s appetite for oil is growing with its economy. And therefore, wouldn’t the money still flow into purses of the oil barons?

Both Woolsey and Dobbs offer fascinating answers.

Any energy-saving technology developed by the West would be quickly adopted by China and other developing nations, Woolsey contends. As a result, world demand for oil would slow as more nations switch to new vehicles.

China also has a strategic reason to wean itself from Arab oil, the former CIA director said. The Chinese are fully aware that they are no match for the U.S. Navy in Indian Ocean or the South China Sea. If crisis over Taiwan exploded, the U.S. Navy could block oil tankers bound for mainland China—choking both its economy and its war machine.

And China has an economic incentive to usher in the post-gasoline age. Batteries for electric cars are already made in China.

High oil prices also drive up America’s trade deficit, Dobbs points out.

The easiest way to shrink the American trade deficit—which amounts to $1 billion per day in payments for imported oil—is to stop importing oil.

No comments: