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Post Info TOPIC: Oil - Americans Should Rely on Their Own


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Oil - Americans Should Rely on Their Own
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In an article entitled Defend America, Buy More Iranian Oil, author Shikha Dalmia proposes that the United States can improve national security buy continuing to buy Iranian oil. Published at Reason.org (5/6/2006), Dalmia proposes that trade fosters partnerships between countries and those partnerships provide economic incentives to refrain from any act that could jeopardize the agreement. As such, becoming a energy independent nation could actually reduce our degree of national security.

Shikha Dalmia makes several arguments to support his position. The first being that oil prices are established on a global scale. There is also no guarantee that domestic oil will be sold to the domestic market. This means that oil produced and refined here in the US will be sold at going world market rates. If American suppliers can sell their product to Middle East consumers at a higher price, they will take advantage of that incentive.

Secondly, the author debunks the fears of a global oil cartel (such as OPEC) manipulating the price of oil and even the amount of supply. However, Dalmia states that the history of the 1973 oil embargo will not repeat itself. He bases this on the role that Saudi Arabia played role as "swing producer" in the 80's. As Saudi Arabia cut its' production of oil, (in an agreement with other OPEC nations to increase prices), other nations just increased their output. This failed political maneuver has taught a very important lesson to oil producing countries, and even Saudi Arabia has vowed to never "unilaterally" cut output.

Lastly, Dalmia addresses the issue of Iran directly. He acknowledges that many in the world see Iran as a direct threat to national security. As such, many government officials feel that placing an embargo on Iran's oil is a good maneuver to economically force it to comply with the will of the international community. But, oil exports make up 50% of Iranian revenues and Iran's Oil Minister has reassured the oil community that Iran has no intention for causing "hardship to consumers around the world."

In conclusion, Dalmia declares that national security is not the sole reason to boost domestic oil production. He believes that maintaining a peaceful trade partnership with otherwise hostile countries can keep the political relationship just as peaceful.

Shikah Dalmia makes valid points in his article. He correctly asserts that capital will find its' way to the place of greatest return, and that often times economic considerations will override political concerns. However, he discounts the fact that religious idealism would never trump economic logic. For example, even though we haven't yet made a dent into demand for Iranian oil, the current Iranian President still seeks to obtain nuclear technology. He also continues to make threatening statements to the media concerning Israel and the West. The author bases his assumptions on that of a rational, economic minded leader. The same dependence argument could be an Iranian national security strategy. They can propose to keep the United States so dependent on their oil that we do not seek out ways to reduce our consumption or find alternative fuels. We become so dependent on their oil that we give into them politically - because we cannot possibly attack them and risk being cut off. They can continue to develop nuclear energy facilities that could be converted into nuclear weapons at their leisure.

Furthermore, does the author assume that using alternative energies such as ethanol or hydrogen is bad for national security? Eventually fossil fuels could run out, and not having a national alternative to one essential element such as petroleum is poor long term planning. It can also be feared that if the US Government is counting on the consumption of Iranian fuel as a national security policy, it will need that consumption to continue. Thus, the government will strive to place limits on domestic companies that explorer for oil and develop oil alternative technologies.

The United States should not have to "bribe" other countries into not attacking us or our interests by buying their products. It is very ethnocentric to allow Iran to destroy their natural environment through oil exploration, while the United States preserves the Alaska oil fields. Government restrictions should be lifted on domestic exploration, as well as air quality standards that regulate additional refining capacity. As long as there are enough free market opportunities, the demand for oil will be met whether or not Iran stops producing. We should also continue to find alternative fuels, reduce consumption, explore homeland sources, and greatly expand the Strategic Oil Reserve.

For more info on the global war on terrorism, please visit: Operation Iraqi Freedom Geo-Forum / News & Views

About the Author

Ken Thompkins is a writer and web programmer from Detroit, MI. Operation Iraqi Freedom Geo-Forum



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