A slightly out of the box solution to our gasoline/energy problem

Imagine a policy where the US drastically cut defense expenditures, increased our dependence on foreign oil, withdrew and stopped entering wars to protect or prop up the petrodollar and pay higher consuming costs not only at the pump and grocery store but everywhere else and in between. Would you believe it? Would you even accept this as remotely possible without destroying our economy? I know it sounds crazy and no, this isn’t a page out of the Obama playbook. This would be the policy going forward if I was sitting at the top of the elitist pyramid. It's not ideal but you have to play the hand that is dealt.

I know there are “greenies” or “tree-huggers” that are reading this and smiling. I hate to disappoint but it’s not a green agenda. No, this is a strategy that would keep America not only at the top of the neocolonial power structure; it would vastly strengthen its grip. How do you suppose this is possible? First and foremost it’s a strategy centered on oil.

We have all experienced the rising gas prices. We have seen the rising prices in commodities. We have felt the gouge in the pocketbook, as trips to the grocery store have become ever increasingly more expensive. The volatile relationship of humans and fuel has taken center stage as the issue of 2012. Emerging economies cannot grow without fuel and established markets crumble if they lose the access.

If it affects everyone, then everyone has an opinion on what to do about our dependency on fossil fuels. Some say, drive the prices sky high so we can jump-start innovation for green tech. While others say “drill baby drill” using our own resources to offset rising costs. Then there are those of us in the middle. While I can see the logic behind the green push and the tapping of our resources, the reality of the situation, unfortunately, is not so pragmatic.

Oil as we know is a global commodity traded around the world. What is traded and receives the most attention is crude oil. Crude oil is by far the most lucrative oil for its producers and the most inexpensive for the consumer. Its diverse applications make in the most valued of all fuels. As far as we go here in the states, it is true; we do have vast reserves of oil, but how much of it is crude oil is a big question mark.

 

The amount of crude oil we have here in the in proven reserves (as you can see above) is nothing like they have in the Middle East. This is why the Middle East remains so vital to the entire world. Just ask Dick, before he became "Vice Dick" back in 1999 while he was CEO at Haliburton.

 “The Middle East with two thirds of the world’s oil and the lowest cost, is still where the prize ultimately lies, even though companies are anxious for greater access there, progress continues to be slow” - Dick Cheney

 
 However, there are people like Harold Hamm, CEO of Continental Resources, who say the US has billions of untapped crude reserves, just waiting to be put into production. According to Hamm and his exploration and production company, the Bakken region alone has 20 billion barrels of crude. That would equal the entire US total in proven crude reserves according to the EPA numbers. And that is just in North Dakota and Montana. 

Texas, Pennsylvania, Oklahoma, California, Alaska and off shore are all seeing a new oil boom. The amount of oil we have in reserves is rivaled by no other nation in the world. Again, how much of it is crude, is open for debate, there is no denying the vast supply of fuels however.

With crude being the most lucrative and easiest to refine, it will remain the preferred fuel until the time comes when supply of it is vastly outstripped by demand creating equilibrium amongst other types of oil. If you look at the crude oil rich Middle East (who supplies over sixty percent of the world’s oil demands), its crystal clear what kind of clout you receive having the breadbasket of energy in your backyard. 

That region is home to some of the most backwards societies on the planet; yet our President will bow to their king, because he knows how vital they are. Now superimpose that type of power to the US, who already runs the petrodollar scam. So it doesn’t matter really what our reserves are made from. When the supply of crude becomes so depleted you will have all types of oil becoming economically viable. At that point, all oil will be worth not only pursuing but manufacturing and refining as well. 

So, it stands to reason, in a Machiavellian-esque outlook, the US should do all it can to pump the world of its crude, as quickly as possible. This of course will be painful in the short terms but the reality is that the price of oil isn’t going down anymore. The days of cheap gas are gone. 

The US dollar is nothing more then a mirage, its no more valuable then the paper it’s printed on. We are trading paper backed in confidence for tangible assets from other nations that have to invest in our nation just to get oil 66% of the time. Then those nations who take the dollars reinvest them back into this country, yes, that as you know is the short version of the petrodollar recycling process but I think its important to understand the significance of this and the opportunity that lies within it. That’s about as good as a scam as one can devise. If you did it, it would be called counterfeit.

When the Middle East and OPEC lose their stranglehold, the dollar dies. We have accumulated too much debt since OPEC agreed to trade oil for dollars in the early 1970's. The recoil from that action will have a dramatic impact on not only our market but the entire world market.

 

So, I say NO to: “drill baby drill”. 

I say YES, take a hatchet to defense spending and reinvest that money towards balancing the budget or subsidize gas prices for the American consumer (further pushing up consumption).

I say YES to further litigation and regulation, stifling American companies from extracting oil in the US. Bring on Green Peace and bring on the environmentalists.

I say NO to consuming 1.oz of the 695.9 million barrels we have as a nation in the Strategic Petroleum Reserve

Do whatever it takes to use up the rest of the world’s fuels, trading worthless paper for them in the process. The ends justify the means.   

Iran, a nuclear threat? Or... Dollar threat?

(Graphic courtesy of Soahead.com)

Is Iran a threat? Are they a threat to the US? Are they are threat to her allies? Is Iran a threat to the region? The answer to these questions are all, yes, they are. However, they are a threat for different reasons to each entity. Israel has long had problems with Iran. It’s well documented and that will never cease; at least not in our lifetimes.

The Middle East region is very complicated and convoluted. With the Arab Spring now working its way into other totalitarian regimes, established dictators and theocracy’s, the region remains sensitive to any waves. Iran is the most powerful state left in the Middle East. They are predominately Shi’a Muslim’s (85%) while the rest of the region is overwhelmingly Sunni Muslim (90%). If we remember the problems with the US invasion and subsequent occupation of Iraq, it was complications of various religious sects and the sectarian violence that ensued because of those divisions, was what caused the greatest problems.

Religion was also in part the basis for Iraq’s invasion of Iran in 1980 that lasted eight bloody years resulting in over 1 Million deaths. This was the same war that the US backed Saddam’s Sunni invasion supplying both weapons and intelligence to Iraq in proxy war against the Shi’a Iranians. It was during and after the Iraq invasion that Iran became more isolated the ever before and when you include they speak a different language (Persian) and have another belief system from their neighbors; it only compounded the isolation.

Recently, there was the wikileaks cable that quoted Saudi Ambassador to the US, Adel al-Jubeir recalling King Abdullah of Saudi Arabia urging the US to attack Iran’s nuclear program. To quote “cut the head off the snake (Iran)”. Last month, Saudi Oil Minister, Ali al-Naimi, said that the Kingdom will be able to make -up for any shortfall if Iran remains in a defensive posture; further indicating their approval for regime change. 

"It is because of our ongoing investment that Saudi Arabia is able to respond to shortages around the world - take issues with Libyan production last year for example. 'And it's because of our investment that any future shortages will be handled."

In fact, most Arab nations do not receive the Iranians well and do not want them to go nuclear. The Arab League has isolated Syria (Iran’s only ally) as it has halted both diplomatic and economic ties with the nation. If that wasnt enough of a statement they will lend political and material support to the Syrian opposition. It appears Syria will come to some type of regime change similar to what happened in Egypt and Libya. The Arab spring is said to be based on freedom of individuals and elections are a part of that; if and when the revolution takes power, it will not replace the leadership of Assad with a pro Iranian government.

What is happening is Iran is walking the proverbial plank. They have no allies. Everyone around them either wants their leadership removed or they simply don’t care either way. Both bordering nations of Iran have been vaporized by the United States. Its only logical that another member of the “Axis of evil” stuck smack dab in the middle of US occupations is next.

They know it and they also know they only have a few cards to play. First, they must go nuclear BEFORE an attack, being that a nuclear nation has yet to be attacked by the United States. Will this deter them from being attacked by the West? Nobody can say for sure, but it will at least give them pause and possibly buy the Iranians more time. Secondly, and the Ace of Spades, is that they will divorce themselves from the dollar.

With the drumbeat of war ratcheting up from the US to heights not seen since 2002, Iran, like its neighbor Iraq once did, is poised to play chicken with the US and its European allies engaging the US in economic war. The first strike was launched by the US in new sanctions signed by President Obama back in December and there was a response by Tehran with a threat to close the Strait of Hormuz. 

Now, we have Belgium-based SWIFT - who is a lifeline to international trade, as they oversee an average of 18 million payment messages per day between banks in 210 countries prepared to cut off Iran, virtually forcing international trade with Iran to a standstill. This is a remarkable revelation and a clear indication of the clout the US still carries as the reserve currency of international trade. Never, has SWIFT removed a nation since its inception in 1973.

"Kicking Iran out of SWIFT is both unprecedented and another dangerous step toward turning a financial war into a military conflict," said Reza Marashi, National Iranian American Council's research director.

Not only does this hurt all Iranians, but more importantly it hurts Iran’s military as well. Without fuel you cannot mobilize your military and logistics become impossible. Logistical failure has been the downfall of some of them most important conflicts of the last 300 years and with Iran being economically cut off it would inevitable. While Iran maybe the 3^rd largest supplier of crude in the world, it’s also relying on 40% of its petroleum and diesel consumption to come way of imports due to both refinery dysfunction /inefficiencies and just flat out a shortage of new refineries. That however is being addressed and eventually Iran will not be so dependable on importing gasoline but yet still vulnerable if those refineries were knocked offline.  

At one point, Iran was planning on getting out of the dollar as early as 2002 (if not long before) and then Iraq (who tried getting out of the dollar in 2000 after a decade of sanctions) got blitzed and Tehran went eerily silent. Then a few years later and coincidentally enough with the US bogged down in two stagnate/unpopular wars... Tehran began chatting aloud about dumping the dollar again. It was The Iranian Oil Bourse, created in 2008, that set the stage for this showdown that will officially end the petrol-dollar relationship with Iranian crude oil beginning on March 20, 2012. That is just a little over a month to go.

Now that we are facing our own debt problems, drawing down from Iraq and Afghanistan and have a President who may be perceived as weak, the Iranians threw down the gauntlet. What are we to do? All this adds up to one thing and that is why we are seeing a strong military presence in the Middle East, coupled with tough talk from talking heads here in the states. I see a major push to invoke war with the Iranians.

I've always felt and said that nuclear weapons and terrorism have always been more of a perceived threat then an actual threat concerning the Middle East. 9-11 was the exception and it wasn't state sponsored either. Are nuclear weapons that much of a threat to warrant all this attention? I have my reservations. Iran has plenty of nations around them that don't particularly care for them and are nuked up as well, and those that don’t posses nuclear capability's, I assume would be more then happy to have nukes from the US/West planted on their soil as a deterrent.

Iran maybe a nutty regime but mutual destruction is a deterrent to even the crazies, no matter how much “cooze” Allah can (sic) promise. It’s simply a self contained regional situation in spite of what the saber wavers might otherwise say, even if they did get nukes. The idea of supporting terrorist and getting nukes however is easier for people to grasp then how the Petrodollar recycling machine works and its more inline with the average person’s moral views: good vs evil is easier to understand vs then say what it really is and that is the Machiavellian battle of high vs low mach, or some might say survival of the fittest.

Hell, the majority of the country does not even believe in natural selection!? Can you really blame our government for running with the: 'scary dudes in turbans, armed with rocket launchers and hiding in caves reading Korans under camp fires - alongside a gaggle of virgins, who also want to nuke you…because they hate you, because you are free' story?  

That's where this web gets tangled. See, as Americans we like our standard of living. Is it inflated? Is it driven purely by consumption and debt? Is it made possible by a rigged game that allows us to trade pieces of paper for all types of goods and commodities that the rest of the world has to break their backs for? The answer to those questions is also - yes.  

If it was just about nuclear weapons we would have eliminated North Korea's capability's long ago. If it was about terrorism, we would have went after our own allies like Saudi Arabia or never would have clandestinely funded so many right-wing gorilla operations in Latin and South America the last 50 years. 

Anyone that threatened to flip the monopoly board over and not participate (and publicly denounce the petrodollar) in the petrodollar scheme and trade with other currencies, has already been or will be (Hugo Chavez) neutralized. From Libya - Iraq - former IMF chair Dominique Strauss-Kahn and now Iran. 

“The dispute over Iran’s nuclear programme is nothing more than a convenient excuse for the US to use threats to protect the 'reserve currency’ status of the dollar” from the Tehran Times - which calls itself the voice of the Islamic Revolution

With the Petrodollar recycling process being the single - most vital element to the United States hegemony, it is imperative and absolutely essential that nations (see OPEC) continue to exchange their oil for US dollars. Or, the world as we know it here in the States will be much different... and not for the better. You can rest assured, that we will be putting a boot up the Ayatollahs ass and carpet bombing the Caucasus before our leaders (see corporations) allow us to fall into that state.