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Guest Editorial: How to Destroy OPEC
by Dr. Robert Zubrin

The U.S. Congress recently raided the treasury of 0 billion to give to consumers to try to stimulate our lagging economy. Yet it is sobering to note that this year the United States will import 5 billion barrels of oil. At 0 per barrel, that will allow the international oil cartel to take 0 billion out of the pockets of American consumers, or more than four times as much as Congress is trying to put in.

Moreover, recently, Venezuelan dictator Hugo Chavez and Iranian president Mohmoud Amadinejad jointly threatened to raise oil prices to 0 per barrel. The threat should be taken quite seriously. With no practical transportation fuel alternative to petroleum available to the world market, the OPEC oil cartel has already been successful in raising prices twelvefold over the past 9 years, with a 90 percent increase effected over the past year alone. Once implemented, this would raise OPEC’s tax on America to trillion per year, and its tax on the world economy to over trillion per year.

In 2001, when George W. Bush took office, the United States paid around billion for oil imports. Thus, during the current President’s watch, out nation’s tribute to foreign petrotyrannies has already increased by 0 billion, an amount triple that forgone by the U.S. treasury by the Bush tax cuts, with yet another 0 billion now in the works.

This tax increase is not just drugging our economy. It is also providing foreign powers with means to wage war against the United States. Consider the following – in 1972, the U.S. paid out billion for oil imports, an amount equal to 4.5 percent of our defense budget at that time. The amount we will pay this year will be around 130 percent of our defense budget. Much of this will be used by Saudi Arabia to fund an international network of front organizations and maddrasses devoted to spreading terrorist ideology. Other portions will be used by Iran to fund the development of nuclear weapons.

We are financing a war against ourselves, and the way things are going, we will soon be paying the enemy more than we are paying our own military.

Finally, the threat associated with legal uses of a trillion per year transfer of wealth to the OPEC powers need to be understood. This tenfold increase in petrodollar revenues since 2001 could allow Islamist and other foreign totalitarians to gain controlling interests in most major media organizations and corporations in the United States, Europe, and Japan in less than a decade. Such a process is already underway, with Saudi purchases of significant positions in AOL-Time Warner (which owns CNN) and Newscorp (which owns Fox, the Wall Street Journal, and the London Times), and much European media.

Arab bids are also now in for control of Citibank, which if achieved, will also give them influence over scores of major corporations whose debt Citibank holds. These purchases only cost a few billion each. With trillions available, much more can be done.

In light of this, the top priority of U.S. national security policy must be to break the oil cartel. This imperative has been apparent since the 1973 oil embargo, but nothing effective has been done. However, there is now a way to break OPEC.

What is needed is for the U.S. congress to pass a law requiring that all new cars sold (not made, but sold ) in the United States be flex fueled. About 24 different models of flex fuel cars are being produced by the Detroit big three this year, and they only cost about 0 more than the same car in a gasoline-only version. But they only command about 3 percent of the new car market, because there is little upside to a consumer in owning one, since alcohol fuel pumps are nearly are rare as unicorns. And the reason, of course, why E85 pumps are not to be found is that gas station owners don't want to dedicate one of their pumps to a kind of fuel that only a few percent of the cars can use.

But if we had a flex fuel vehicle standard, then within three years of enactment there would be 50 million cars on the road in the U.S. capable of running on high-alcohol fuels, and under those conditions, E85 and M50 (a 50 percent methanol, 50 percent gasoline fuel mix) pumps would start appearing everywhere.

But most importantly, this would not just be happening here in the U.S., but worldwide, since by requiring that all new cars sold here had to be flex fueled, we would be forcing all the foreign car manufacturers to switch their lines to flex fuel as well, effectively making flex fuel the international standard.

So not only would there be 50 million cars in the U.S. within three years capable of running on alcohol, there would be hundreds of millions worldwide, forcing gasoline to compete everywhere against alcohol fuels that can be produced from numerous sources. This would effectively break the vertical monopoly that the oil cartel currently holds on the world's fuel supply, constraining prices to the ~ per barrel range, because that is where alcohol fuels become competitive. It would also create a market that would mobilize tens of billions of dollars of private investment into areas such as cellulosic ethanol and other advanced alcohol production techniques that will cheapen alcohols further and radically expand their potential resource base.

Then, with such a production and distribution infrastructure in place, we could proceed to not merely contain the petrotyrranies, but wipe them out by implementing tax and tariff policies that favor alcohols over petroleum. Effectively we could take over a trillion dollars a year that is now going to the oil cartel, and direct it towards the world agricultural sector instead. This would not only be of great benefit to farmers here, but an enormous boon to the third world, which otherwise faces brutal looting through the extremely regressive tax imposed on them by continued unconstrained OPEC price hikes. Thus there is not just a strategic and economic case for breaking OPEC, but a very strong humanitarian case as well.

Instead of financing terrorism, we could be funding world development. Instead of selling blocks of Citibank or CNN to Saudi princes, we could be selling tractors to Africa. That is the way to win the war on terror.

About the Author

Dr. Robert Zubrin is president of Pioneer Astronautics, an aerospace engineering research and development firm, a Senior Fellow at the Foundation of Democracies, and author of Energy Victory: Winning the War on Terror by Breaking Free of Oil, published by Prometheus Books

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The American Coalition for Ethanol publishes Ethanol Today magazine each month to cover the biofuels industryís hot topics, including cellulosic ethanol, E85, corn ethanol, food versus fuel, ethanolís carbon footprint, E10, E15, and mid-range ethanol blends.
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