- The Washington Times - Tuesday, May 27, 2008


Robert Zubrin’s suggestion that Congress take action to break the Organization of the Petroleum Exporting Countries (OPEC) cartel certainly would be beneficial (“OPEC strangling American economy,” Op-Ed, Friday). However, mandating flex-fuel vehicles as Mr. Zubrin proposes would do little good. OPEC simply would pump more oil to drive the price of gasoline below the cost of any alternative fuel, and, consequently, drive its producers into bankruptcy. This would be easy because oil priced on actual production costs - not to be confused with the present market price - can produce gasoline far cheaper than any known alternative.

Today’s problems are caused by Congress trying to fix something that wasn’t broken. Its members decided that because oil eventually will run out, we must quit looking for any more now. However, contrary to popular belief, we will never run out of oil. Instead, its production costs will increase gradually as it is depleted until alternative fuels become cheaper than gasoline. Alternative fuels and flex-fuel vehicles will then be marketed without any government mandates or incentives needed.

As for dealing with OPEC, a large portion of Earth has yet to be explored for oil, and it is likely that large additional reserves exist. The surest way to break the back of OPEC is to find enough additional oil that not a drop of OPEC oil is needed to meet demand. Rather than aiding and abetting OPEC by preventing our oil companies from competing, we need to form an organization of ethical consuming and producing nations that will cooperate with each other to find more oil.

Additionally, members must agree not to use oil from outsiders, even if their price is lower, when oil is available from members. No present OPEC member will ever be permitted to join unless it stops withholding production today or until those now in power are overthrown and adequately punished for their misdeeds.

As for those in Congress who think drilling now won’t help because we still will run out eventually, let us apply this faulty logic to these lawmakers’ political careers. We should replace them now because eventually they will either lose an election or retire.




History repeats itself. Indeed, it seems the history of the Barbary pirates exacting tribute in the 18th century is repeating itself in the form of the extortion of huge sums of money by the Organization of the Petroleum Exporting Countries (OPEC) cartel that Robert Zubrin discusses in his generally excellent Op-Ed column. Events that make up a repetition of history, however, are not normally identical.

The infamous Barbary pirates seized ships, including American ones, and held them and their crews for fat ransoms or tributes. These tribute-exacting entities eventually were put down by force.

The current piracy is different: It cannot be suppressed by force because the OPEC energy piracy of the early 21st century already has yielded a victor and a vanquished party. The oil exporters are the victors, and America and other Western nations are the vanquished.

There were several chances, dating back to late 1973, to start taking action against the cartel - concerted actions that, after considerable hardship, would have borne some fruit by now. However, America and other Western countries dropped the ball. The diversification of fuels would have been a valid solution, but it likely is too late.

Congress, Mr. Zubrin says, must “take definitive action to break the OPEC cartel.” Unfortunately, the OPEC cartel has potent weapons to make America and the West taste the economic whip should any such action be seriously attempted. For instance, Congress is making noises about suing OPEC under various U.S. antitrust laws. Should such a suit appear to be more than an exercise in bluff and bluster, OPEC might well drop the dollar as the oil-trading currency, which Iran already has done. This would constitute a telling, perhaps fatal, blow to the dollar.

Should consuming powers take further action toward breaking away from OPEC’s thrall, who is to say OPEC and its allies might not levy an oil-and-gas embargo that essentially would break Western economies? There is no credible substitute for oil and gas to run economies such as ours. Any meaningful fuel diversification exists mainly as blue-sky visions for the future.

One might ask, “Well, what about coal and nuclear?” Technically, these alternatives are valid and viable, but coal increasingly is being deemed environmentally unacceptable, and nuclear seems mostly politically unpalatable.

I agree with Mr. Zubrin’s recommendations in principle, but I think we are many days or years late and many dollars short. Barring some unforeseen, miraculous technological breakthrough very soon, the near-term and even long-term future appears bleak indeed.



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