David J. Jonsson
The world stands today at the precipice dividing the eras of the post-Cold War which we have know since 1989one of expanding democracy and free marketsand a new world order which is unknown and certainly a much less prosperous and friendly place. The geopolitical uncertainties of the future could have far reaching consequences. The control of the world's energy infrastructure may well determine the future of the Western world. No war has been won without the availability of energy and food. Both are now being threatened. The control does not concern only how Russia and China deal with Iran's nuclear ambitions, but extends to events in Africa and Latin America as well. We ignore crude politics at our peril. The Russians, on the other hand, may resort to an en passant on its chessboard of energy geopolitics and catch many by surprise. If the conditions are right, there is a possibility here of losing Japan and South Korea - due to its proximity to the Siberian and Sakhalin oil and gas fields - to Moscow's orbit. Japan could also find itself in a dilemma over how to reconcile its stance against nonproliferation with its desire to develop Iran's Azadegan oil field a key element of its future energy strategy. Adding to Japan's dilemma is the fact that China may invest in Azadegan, which is believed to contain 26 billion barrels of crude oil, should Japan pull out from there.
The Currency Card and Iran Oil Bourse
A Tehran-Caracas Axis clearly extends also to Havana and Damascus. Whether we realize it or not, we are already involved in an economic war that could easily turn into a shooting war, starting with Iran.
Energy Security Through Energy Interdependence
Peter Robertson, Vice Chairman of Chevron Corporation of the U.S. in a presentation to Jeddah Economic Forum on February 11, 2006 said the United States would be better off working for ``interdependence'' with oil producing countries rather than seeking to cut dependence. He went on to add: _ U.S. President George W. Bush's desire to cut U.S. dependence on Mideast oil shows a ``misunderstanding'' of global energy supply and the critical role of Saudi Arabia.
Cuba and Weapons of Mass Destruction
In a letter to then Russian Premier Nikita Khrushchev regarding his role in the 1962 Cuban Missile Crisis, Cuban dictator Fidel Castro reflected upon the possible use of nuclear weapons during the U.S.-Soviet confrontation, It was my opinion that, in case of an American invasion [Cuba], a massive and total nuclear strike would have to be launched. Given Castro's affection for nuclear weapons, it should come as no surprise to observers that the aging terrorist has befriended Iranian President Mahmoud Ahmadinejad.
But Castro's initial interest in Islam actually surfaced many years ago. Shortly after Ayatollah Khomeini's followers drove the Shah into exile in 1979, Castro dispatched Cuban envoys to Tehran to rekindle bilateral relations, professing his admiration for the revolutionary role of Islam.
If life were a football game, we'd be commending Muslims for an artful fake. While half the Muslim world was rioting in reaction to a few unremarkable cartoonsthanks to the fancy footwork of the anti-West Muslim Brotherhoodnuclear-minded Iran was making new kissy sounds with head cheerleader Fidel Castro.
Among Castro's proudest achievements is his Center for Genetic Engineering and Biotechnology, a huge research and development enterprise in which he has invested much of his cash-strapped nation's resources and intellectual capital. While some of his shipments to Iran are surely to provide medical drugs for Iranians, skeptical observers suspect there's more than altruism at work.
Dr. Jose de la Fuente, who headed the biotechnology research and development at the center through most of the 1990s, wrote in 2001: "There is no one who truly believes that Iran is interested in these technologies [solely] for the purpose of protecting all the children in the Middle East from hepatitis, or treating their people with cheap streptokinase when they suffer sudden cardiac arrest."
What else might biological agents be used for? Biological weapons of mass destruction spring to mind. Speaking to students at the University of Tehran in 2001, Castro praised the Islamic revolution for ousting the shah, then mentioned the "shah of imperialism which is entrenched near my homeland." He promised that . . as the shah of Iran was overthrown, this shah too will fall."
Ovations, riots - Islamist passions provide ample fuel for the kind of dreams Castro nurses. Dreams that, unfortunately, are shared by much of the Muslim world.
The thoughts of an Islamic terrorist state located 90 miles off of the Florida coast should enough to keep the people of America and even President Bush up for weeks.
According to AKI Adnkronos International Gholam Ali Haddad Adel, the president of the Majlis, the Iranian parliament, who is related by marriage to Ayatollah Seyyed Ali Khamenei, the spiritual leader of the Islamic republic, met on February 13 with the president of Venezuela, Hugo Chavez. Haddad Adel arrived in Caracas on Sunday night with a delegation including agriculture minister Mohammad Reza Eskandari and industry minister Ali Reza Tahmasebi. After the visit to Venezuela, Iran's main ally in Latin America and within OPEC, the Iranian delegation is set off to travel to Cuba, Brazil and Uruguay.
In his first foreign visit as Iran's newly elected president, Mahmoud Ahmadinejad visited Cuba and Venezuela before heading to the United States for a UN summit in September last year. Ahmadinejad met with Venezuelan president Chavez and the Cuban leader Fidel Castro.
While the Cuba visit itself may be of little consequence, the invitation offers a reminder that our Cuban neighbor is ceaselessly working to pursue anti-American foreign policy. It also offers a heads-up that Iran's nuclear aspirations may as well be Cuba's.
Security for U.S. Ports
But, it is not only Cuba that is necessary to consider. The UAE owned Dubai Ports World (DP World) finalized a $6.8 billion deal on February 13, 2005 to buy the English firm P&O Ports, which now runs Manhattan's cruise-ship terminal on the West Side and the Port Authority's Newark Container Port, as well as ports in New Orleans, Philadelphia, Baltimore and Miami. Do the feds really want to place the ports of New York and New Jersey in the hands of a Middle East country with ties to the Sept. 11 hijackers?
Hamas Interest in Spain
There is much more at stake for Europe than its own energy supplies.
Iran has reached the shores of the Mediterranean with the recent elections bringing Hamas into Palestine and the Hezbollah in Lebanon. The Muslim Brotherhood succeeded in the elections in Egypt.
The children's web site al-Fateh, property of the Palestinian terrorist group Hamas, demands in its most recent issue the return of the Spanish city of Seville to the "lost paradise" of Al Andalus, as the Muslim part of Spain was called during its existence between 711 and 1492. The web magazine, whose name means "conqueror," says it is for "the young builders of the future."
Italy has evolved from a logistics base for Islamic militants to a de facto base of operations for Algeria's Salafist Group for Preaching and Combat (GSPC) targeting Italy, other European countries and the United States. While the GSPC continues to engage in and support terrorist operations in Algeria, the group's emphasis on "out-of-Algeria" terrorist operations has made it the largest, most cohesive and dangerous terrorist organization in the al-Qaeda orbit.
GSPC cells in Italy employ a dual-track approach to planning terrorist attacks and provide support infrastructuresafe houses, communications, weapons procurement and documentationto GSPC networks in other European countries.
Moscow's increasing control of the energy infrastructure and markets in central Europe has long-term implications for the security and not just energy security, for all of Europe. The trafficking in weapons by China and Russia to obtain political control and control of energy resources impacts global relations. Putin before he was elected said his strategy is to utilize control of energy for geopolitical power. He fired the first salvo with his curtailment of natural gas to the Ukraine and in turn to Europe.
The issue of control of the energy infrastructure not only affects the price of oil, but also could impact the total availability of oil at any price. The availability of oil is not the only issue at stake; the countries supplying much of the world oil also supply needed products for an industrial country to continue to prosper but also to eat.
Natural Gas and America's Food Supply
Let me explain: natural gas is the starting source for the production of ammonia and ureathe fertilizers that drive the agriculture sector of the United States and the rest of the Western countries. Because of increased price of natural gas in the United States, large portions of U.S. ammonia production has shut down and moved to countries with lower cost gas, such as to the Middle East. In the Gulf of Arabia (Persian Gulf) the price of gas is less than $1.00/MMBU compared to $6.00-14.00/MMBU in the U.S. Over 50% the urea used for agricultural production in the U.S. is now imported. The price of imported fertilizers could significantly increase or reduced in availability at any price if the Strait of Hormus were blocked. Remember it also takes urea to grow corn for production of ethanol. The production of ethanol as a means to replace oil is not secure and in the end may not reduce import dependence on foreign supply.
Russia and Saudi Connection
However, it should be noted that Saudi, in its battle against Russia prior to the fall of the Soviet Union, used the reverse tacticincreasing oil production to bring down the price of oil, thus reducing the major export of Russia, and ultimately, resulting in the economic collapse of the Soviet Union. It is because of this history that Russian President Vladimir Putin met on September 1 and 2, 2003, with then Crown Prince Abdullah of Saudi Arabia to coordinate oil production and for Russia to become an observer in the Organization of Islamic Conference (OIC) on July 1, 2005. Saudi Arabia succeeded in getting Russia to reduce oil production expansion.
The China-Iran Connection
In fact, the China-Iran connection transcends energy and covers a whole spectrum of economic activities - dam-building, steel mills, ship-building, transport and dozens of other projects. At present, more than 100 Chinese firms are involved in Iran, also cooperating to develop ports, jetties, airports in six cities, mine-development projects and, of course, oil and gas. Trade between the two countries in 2005 hit a new record of US$9.5 billion, compared with $7.5 billion in 2004.
The Iran Oil Bourse Begins
In a threat certain to unsettle the NYMEX and IPE oil markets, a senior Iranian official said in February 2006 that if Iranian oil exports are sanctioned it will ban transit of oil tankers in the Gulf.
Iran's Mehr news agency reported that Shura Council national committee for security and foreign policy member Sulaiman Jaafar Zadeh said, "If a ban is imposed on our oil exports, we will not allow oil tankers to sail in the Gulf waters."
The New York Mercantile Exchange NYMEX and the London's International Petroleum Exchange (IPE), are the world's leading commodity markets for energy. Iran has announced its intention to set up a rival oil bourse in Teheran in March 2006 that will trade in euros and possibly other currencies rather than dollars. Why not, in short, end the monopoly rule of the almighty dollar?
The prospect of a mushroom cloud rising from the Dasht-e-Lut, Iran's Desert of Stones, may not be Tehran's greatest threat to international stability. A successful test of an Iranian nuclear weapon at some point in the next few years may prove less destabilizing than a simple free market economic measure that Iran is said to be planning for March 20 of this yearthe opening of the Iran Oil Bourse. The currency bomb took a longer time to arm and required the building the Leftist/Marxist Islamist Alliance. And, it is equally difficult to disarm.
The Leftist/Marxist Islamist Alliance is in fact an alliance of odd-fellows brought together because of the their common goals of world domination. For the alliance to hold, China and Russia must remain as partners. They were not partners over much of recent history and only recently have become so. A key factor in this Russia-China alliance or potentially a war between Russia and China is the control of the world's energy infrastructure of Central Asia and Siberia. However, the alliance is also based on accepting the the reported oil reserves of the member countries and reported world oil consumption. The assumption utilized for consumption and reserves lack transparency and may be subject to gross error as will be explained below.
The Europeans will not have to buy and hold dollars in order to secure their payment for oil, but would instead use their own currency.
The Chinese and the Japanese will be especially eager to adopt the new exchange. It will allow them to drastically lower their enormous dollar reserves and diversify them with euros. One portion of their dollars they will still want to hold onto; another portion of their dollar holdings they may decide to dump outright; a third portion of their hoards they will decide to use up for future payments without replenishing their dollar holdings, but building up instead their euro reserves.
The Chinese central bank holds foreign currency reserves that have reached $819 billion, a foreign currency reserve second only to Japan and expected to exceed that nation's reserves this year. China has invested about three-quarters of this reserve in U.S. Treasury bills and other dollar-dominated assets. China's purchase of Treasury bills, in additions to similar purchasing by Japan and other nations (predominantly OPEC members) is responsible for much of the value of the U.S. dollar, and China uses the purchases to keep its own currencythe yuanundervalued, thus maintaining a balance of trade that vastly favors cheap Chinese manufacturing goods. This also has the effect of holding U.S. interest rates at low levels, besides keeping the dollar at a high value worldwide. Chinese currency reserves are growing at an average rate of $15 billion each month.
The Russians have economic interest in adopting the Euro the bulk of their trade is with European countries, with oil-exporting countries, with China, and with Japan. Adoption of the Euro will immediately take care of the first two blocs, and will over time facilitate trade with China and Japan. Also, Russians seemingly detest holding depreciating dollars, for they have recently found a new religion with gold: their central bank is diversifying out of dollars and accumulating gold. The Islamic Development Bank (IDB) desires to see all trade with OIC countries in Islamic Gold Dinars. Russians have also revived their nationalism; if embracing the euro will stab the Americans, they will gladly do it and smugly watch the Americans bleed.
The Arab oil-exporting countries will eagerly adopt the Euro and/or Islamic Gold Dinars as a means of diversification against rising mountains of depreciating dollars. Just like the Russians, their trade is mostly with European countries, and therefore will prefer the European currency both for its stability and for avoiding currency risk.
As mentioned above Venezuela and the other Latin American countries are already seeking an alternative to the dollar.
The differences in trading oil in euro are first, that this one would price its energy in euros, not dollars, and second, that it would not use West Texas Intermediate or Brent Crude (from the North Sea) as its standard oil for pricing. It would use a Persian Gulf-produced oil instead.
So what? This sounds like a minor change, and possibly even a useful one, broadening the choice among traders and consumers in the kind of way that Adam Smith, the 18th century father of modern capitalism, would have recommended.
Not so. This could be a far more profoundly punishing blow to American interests than Iran's ability to manufacture a crude atom bomb that would have little credibility until it became small and stable and reliable enough to be delivered on some putative target.
The relationship between the oil price and dollar is intimate and important, and very useful to the dollar's highly profitable status as the world's reserve currency. The prospect of a rival bourse and futures market opens the intriguing possibility, beyond hedging the future oil price, of profitable arbitrage between the euro and the dollar. There are of course potential issues resulting from Shariah Law which may ultimately restrict the hedging.
There are, naturally, limits to the degree to which the United States can debase its currency, as the world found with the first great OPEC price rise of 1973, when the price per barrel tripled. This is usually attributed to the political decision by Saudi Arabia and other Arab oil producers to punish the United States for its decisive support of Israel in the Yom Kippur War (October 1973). That is partly true, but the crucial OPEC decision was as a direct result of President Richard Nixon's Aug. 15 decision to end the dollar's link to the gold standard.
The dollar declined in value, which meant the OPEC producers received less value for their oil. So at their Beirut meeting on Sept. 22, OPEC adopted resolution XXV:140, which resolved to take "any necessary action ... to offset any adverse effects on the per barrel real income of member countries resulting from the international monetary developments as of Aug. 15."
The then Minister of Oil (Petroleum), Sheikh Zaki Yamani first mentioned the oil embargo. He is best known for his role during the 1973 oil embargo, when he spurred OPEC to quadruple the price of crude oil. During that time, Yamani gained a colourful international reputation, known in the West for both diplomatic skills and characteristic goatee. In reality; the American control of the oil fields was entering its final decade; the Saudi government nationalized Aramco in the 1970s after extensive negotiations in which the the Saudis were as relentless as the Americans were reluctant. By the 1970s, the era of the Middle East oil concessions was over: Iraq, Algeria, and Libya had followed Iran's lead and ended foreign control. In 1974 the Saudi government had taken 60% participation in Aramco, Yamani reached final agreement in 1976 to acquire all of Aramco's assets and facilities in Saudi Arabia based on book value. Since that time information is not available concerning the true status of the fields and reserves. Many projections of oil reserves have been made based on hypothetical assumptions and limited information provided by Saudi Aramco. Saudi Arabia will need foreign investment and technology to expand production. A decline in production will not only limit availabilty of oil for the world, but may cause the fall of the House of Saud.
Most of the financial world is currently awaiting another, similar devaluation of the dollar, in response to the monstrous scale of current deficit on the U.S. current account. Harvard Professor Marty Feldstein writing in the Financial Times (Uncle Sam's bonanza might not be all that it seems January 9, 2006) suggested that on the basis of the 1985-87 Louvre and Plaza devaluations, the dollar could fall as much as 40 percent or even more.
As reported in the Financial Times on February 16, 2006 (Magellan looks overseas to boost returns) Fidelity's flagship Magellan fund has redrawn its strategy, dumping big-name US consumer stocks such as Procter & Gamble and Pfizer and moving a fifth of its $51bn under management into overseas markets. Magellan raised its non-US holdings to 25 per cent from only 4 per cent during the December quarter, according to regulatory filings
There is an ominous precedent for the Iranian threat. During the 1980-1988 "tanker war," between Iran and Iraq, there were 543 attacks on ships, with approximately 200 merchant sailors killed. More than 80 vessels were sunk or written off, causing more than $2 billion in losses and a 200 percent increase in global hull insurance rates. The U.S. State Department urged the government to re-flag 11 Kuwaiti oil tankers, which it did as well as providing naval escort through the Strait of Hormuz.
Any Iranian action to carry out its threat would undoubtedly involve the U.S. Navy's Fifth Fleet, home-ported in Bahrain.
U.S. and Western countries "don't have the ability to take decisions in the Middle East. Iranian supremacy in the region cannot be denied, and any threat or pressure on Iran will make the West receive a severe hit in Afghanistan and Iraq."
Since China has scanty strategic oil reserves of about 30 days, the "nightmare scenario" itself is a powerful motivating force for China to play crisis-prevention, and yet, since it has limited influence on Iran and the other players in this dangerous crisis, it must also consider the option of sacrificing some of its shared interests with the US for the sake of safeguarding its cherished energy stakes in the Middle East. The energy card may be played by China to the detriment of the West. It must be realized the China and Russia and Iran as an observer are part of the Shanghai Cooperation Organization (SCO).
According to the Energy outlook for China report prepared by KMPG, in a bid to check its growing reliance on imported oil and energy security, China is turning to its greatest energy resourcecoal. Coal liquefaction (also known as coal-to liquids, or CTL) involves transforming coal into refined oil through a series of processes in an environment of extreme pressure and high temperature.
China has been quick off the mark. The world's largest coal liquefaction project is already under construction in China's Inner Mongolia Autonomous Region, and is due for completion in 2007.
In the long term, Beijing hopes to replace up to 10 per cent of oil imports through coal liquefaction. According to the China Coal Research Institute, it costs around US$25 per barrel to produce a ton of coal-liquefied oil, with 3-5 tons of coal used in the production.
However, despite this conventional wisdom about China's obvious economic expansion and the inherent need for increased energy sources, China stunned the energy markets on Friday, January 13, 2006, by claiming their crude oil imports rose only 1.2-percent while their oil products imports actually fell 34-percent, and that total oil demand dropped by 0.3-percent. With an economy growing at double-digit rates, China is behind only the U.S. in terms of its energy consumption, consumption which rose by 15-percent in 2004. Deutsche Bank and International Energy Agency (IAE) figures on Chinese oil consumption suggest an eleven month rise in demand that is at or greater than 3-percent.
The Chinese may be is using short-term tactics to disguise their true oil consumption and keep prices from rising too quickly; to build a bundle of reserve currency in U.S. dollars to keep their exports cheap and their currency undervalued; to develop multiple oil deals with nations outside of the Middle East; to secure an infrastructure deal in Siberia; and to swell their global trade surplus to amass as much hard currency as possible to finance their oil deals, manufacturing industry, and military.
The fallout from China's announcement was mostly skepticism. Energy analysts pointed to the Deutsche Bank and IEA statistics to suggest China is for some reason providing misleading data about their energy consumption and oil import needs. A planned OPEC increase in production capacity, in response to sharply rising global oil demands (and China's own 15-percent rise in consumption), could be postponed if China's data are accepted as accurate. The data might also help stem the rise of crude oil futures, which stand at over $60 per barrel, and which are rising in response to increased global tensions over Iran's nuclear program and due to recent attacks on oil infrastructure in Nigeria. Another announcement by China of a significant rise in oil consumption, similar to that in 2004, might have sparked or will in the future cause a more rapid rise in crude oil futures. For these reasons or perhaps others, China could be attempting to disguise its actual oil demand and consumption, according to some energy analysts.
It is important for countries to report accurately both their consumption and reserve data. Discrepancies also exist in reserve estimates among the oil producing countries, this has not been the case.
OPEC set up their original quota system in 1982, OPEC oil ministers set quotas on each member nation, based upon the size of that nation's oil reserves, to help regulate oil production to maintain a healthy global price for oil. The response might have been expected many nations simply recalculated the amount of their oil reserves to show a huge increase and thus avoid decreasing their production. Global reserve estimates shot up by several hundred billion barrels between 1985 and 1990. In 1985, Kuwait was the first nation to adjust their reserve estimates to avoid decreasing their production, so that Kuwaitis went to bed with stated reserves of 65 billion barrels of oil and awoke the next morning with 90 billion barrels. In 1988, Abu Dhabi followed suit and adjusted their reserves from 31 billion to 92 billion barrels. Iran and Iraq raised theirs as well, and Saudi Arabia adjusted their estimates in 1990 from 170 billion barrels to 258 billion barrels. In total, the Middle East raised their proven reserve figures from oil fields already identified by 300 billion barrels between 1985 and 1990. That these new estimates are for fields already identified is significant, because it means that the countries were not claiming to have discovered new oil fields, they were claiming 300 billion new barrels of oil in pre-existing fields. In addition, most major oil producing statesespecially in the Middle East and South America are now adding water injection into their reserves, as already mentioned with regard to Saudi Arabia.
In 1993, following the Iraq/Kuwait war, they readdressed the problem, adjusting the the quota distributions to the then upgraded production of the member countries.
On January 20, 2005, Reuters reported Kuwait oil reserves only half official estimate according to the Petroleum Industry Weekley (PIW). "PIW learns from sources that Kuwait's actual oil reserves, which are officially stated at around 99 billion barrels, or close to 10 percent of the global total, are a good deal lower, according to internal Kuwaiti records." PIW said the official public Kuwaiti figures do not distinguish between proven, probable and possible reserves.
But it said the data it had seen show that of the current remaining 48 billion barrels of proven and non-proven reserves, only about 24 billion barrels are so far fully proven 15 billion in its biggest oil field Burgan. Similar reduction have been reported by other state owned and international oil companies
The petro-commons issue deals with indigenous peoples such as the tribes in Latin America preventing the drilling for oil on their lands. Similar issues arise in the oil producing regions of Nigeria. The United Nations Global Compact also has a potential negative influence on oil availability. Similarly, Islamic countries applying the Shariah law exclude private ownership and thus restrict foreign ownership of oil resources. Such restriction on ownership by the International Oil Companies (IOCs) reduces investment and hence exploration and production. A good saying concerning this issue is: Have you ever washed a rented car? Private ownership of oil reserves is critical to maximize economic value and environmental control. These actions limit supply.
The second factor is the government-to-government deals for oil supply usually supported by supply of weaponsweapons trafficking. Examples of such transactions include those of China with Venezuela, Syria and Sudan. India and China both recognize that energy security depends on government-to-government deals to assure control of the critical energy sources. These actions increase competition and price for the limited available oil traded on the open market.
It is my hypothesis that developing alternative sources of natural gas and oil and petroleum products (increasing the pool of available resources in an environmentally sustainable manner) would alleviate the issues raised and reduces the cost of oil while increasing security of supply and delivery while reducing foreign debt exposure and the need to support military action to maintain energy interdependence.
On February 10, 2006, Interior Secretary Gale Norton cited the potential of gas hydrates but warned that a lack of technology still made it economically viable.
"The estimate is that we have based on our current usage of natural gas about 100,000 years worth of our current usage," said Norton. "...We don't yet have the technology to develop that resource and don't know if that would be economic at all."
The utilization of America's abundant energy natural resources combined with conservation and renewable sources can provide both energy security and a sustainable environment.
Economics, the environment and ultimately security will determine the ultimate sources to meet our future energy needs. Unfortunately the federal budget for fiscal 2007 cuts overall funding for natural gas research in an effort to get the oil and gas industry, which displayed record profits in 2006, to fund research and development. It should be noted that U.S. government actions against the IOC's and proposed windfall profits taxes led to increased taxes on these companies by foreign governments. Such actions reduce world oil availabilty and increase cost to U.S. consumers. The increase in taxes by the British government on off-shore development led to some oil companies dropping development programs in the North Sea, thus reducing potential gas availabity for homes and industry and increasing future import requirements. The plan to slim down natural gas research has lawmakers who supported the energy act talking. I cannot understand why President Bush is proposing to zero out the entire natural gas technology program, which includes gas hydrates. The national economy of America and that of the Western World as we know it depends on the availibility of transportation fuels to support our military and natural gas to provide the fertilizers to grow our crops. The West and particularly the United States cannot rely on the dogma of energy interdependence to provide the energy security.
The U.S. Department of Energy, in a 2005 analysis, stated that peak oil (the point at which global oil production will reach its zenith and then begin to plummet) could be reached as early as 2016. This analysis also stated that the U.S. will face a "severe liquid fuels problem" if the nation does not begin planning a post-petroleum economy prior to peak oil. Further, the D.O.E. said that if such planning starts ten years prior to the peak, the U.S. will still face a decade of "hardship". If peak oil is reached in 2016, then the time to prepare a post-petroleum economy without "hardship" has already passed.
Both issueslocation and availibility must be addressed in an energy security strategy.
The energy strategy enunciated by President Bush in his State of Union message of building nuclear power plants to provide the energy for the developing countries of the world by 2025, although admirable, will not provide the energy security for the West nor necessarily make the world a safer and environmentally sustainable place of our children to grow up. The West can not be subservient to the Leftist/Marxist Islamist Alliance.
If regimes like those in Iran, Venezuela, Syria, Burma, Sudan and Nigeria have the benefit of $60 oil for 10 years, the democratic process, which occurred in post-Cold War years, will end. The totalitarian regimes with the most repressive governments will control the energy infrastructure and the access to freedom and liberty.
David J. Jonsson is the author of Clash of Ideologies —The Making of the Christian and Islamic Worlds, Xulon Press 2005. His next book: Islamic Economics and the Final Jihad: The Muslim Brotherhood to the Leftist/Marxist - Islamist Alliance will be released in spring 2006. He received his undergraduate and graduate degrees in physics. He worked for major corporations in the United States and Japan and with multilateral agencies that brought him to more that fifteen countries with significant or majority populations who are Muslim. These exposures provided insight into the basic tenants of Islam as a political, economic and religious system. He became proficient in Islamic law (Shariah) through contract negotiation and personal encounter. David can be reached at: firstname.lastname@example.org. uk
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