• IRAN: Déjà Vu, all over again

    In the mid-to-late 1970s the OPEC nations, including a Iran, attacked the United States by reducing the flow of crude oil through an oil embargo. In the period of time from late 1973 to early 1974 the price of a barrel of crude oil went from $3 to $12 a barrel. The shock to the US economy was dramatic. At that time America was importing close to 60% of its energy needs so the crimping off of supply had a was clearly in control of the American economy and the American people.

    If you were old enough to remember, gas was rationed, there were limits on how much gas you could buy, and when you could buy it. Some people from the “Greatest Generation” talked about how much this resembled rationing in the Second World War. The scheme to ration was not consistent across the country. One system used alternating house numbers, if you’re house number was an even number you could buy gas on Monday. Wednesday, Friday. If your house had house numbers were odd then you could buy on Tuesdays Thursdays and Saturdays, if you could find gas. Another odd and even system used your license plate numbers.

    The longer we sat in the lines, the angrier we were at our government, and Iran. As a people we were dealing with the energy crisis, and low morale, the country was further demoralized by the capture of American citizens as hostages by Iran. President Carter tried to do his best to deal with the long gas lines, but when America attempted to rescue the hostages, it was an incredible disaster, and made us look to the world and ourselves as a nation that was impotent, along with its people.

    I still remember today the President indicating that in order to save energy we are not going to lite the national Christmas tree, and he told us that we shouldn’t light ours either. No outdoor decorations because they wasted energy. He told us, turn down your thermostat, put on long sweaters it’s about the best we can do. He didn’t offer any real ideas on how America could become energy independent, and shift the power the energy from OPEC to the United States or get our hostages back. It is now 40 years later and have things really changed.

    We have been sitting at the negotiating table with Iran discussing how to prevent nuclear proliferation in the Middle East for years. Strangely enough that same nation that had American hostages has them again. Not as many this time but still American hostages and all the time the negotiations were taking place we have been assured by Secretary of State Kerry that their release was brought up everyday. There is no indication as to when or if the hostages are going to be released, perhaps much like last time, with philosophical change in leadership in the White House, Iran will once again release the Americans.

    America’s never been in a position to use energy as a geopolitical weapon, but with the expansion and the development of the energy reserves in the United States the fear that we would not only be energy independent, but that we would lift the ban on the exportation of energy has caused OPEC to once again try and influence economic policy in the United States. OPEC is much more astute at using energy as a weapon then the United States.

    Many of the OPEC nations economies, including Iran, are driven by the revenue generated through exporting crude oil. The recent decline to retest the low under $50 a barrel for West Texas intermediate crude, has put American oil interests under financial pressure. America is not the only country whose energy sector is experiencing financial difficulty. In many cases OPEC nations are also under a great deal of financial pressure, if we go back and test the $42 level, I have no doubt that a number of energy companies in the United States, will go into bankruptcy, which is exactly what OPEC is trying to do. Destroy our economy. They want to destroy the American energy industry so us to keep America dependent on foreign oil imports. What grate irony, 40 years ago they try to destroy us by raising prices and now they’re trying to destroy this by lowering prices.

    The profits from OPEC oil have been used too fund terrorist organizations and as revenue has declined from the sale of oil, less revenue is coming into the coffers of the OPEC nations. The President of Shell Oil recently told his shareholders, that he believed the price of energy may stay low for extended period of time, and he is adjusting the size of his company, to reflect the reduced demand, and over supply on a global basis.

    If he is correct, that prices will stay range bound for an extended period of time, then the revenue available to fund terrorist groups will diminish. OPEC governments are going to have to make some serious decisions, especially if revenue continues to diminish, about what they should provide to their people and what they can afford to give the terrorists. My guess is, because they like being in charge, they will take care of their people first, so that the funding to terrorists we’ll have to decline.

    Some people have talked about the growing influence of Russia and China on the world economic stage. Lower oil prices will have a significant impact on the Russian economy. If the United States were to lift the ban on the exportation of crude oil the American oil companies we’ll be free to go to Western Europe and negotiate with them to replace Russia as a primary source of oil and natural gas. As America continues to convert more and more to its abundance of natural gas to an alternative to crude oil, then America we have, an every decreasing demand for imported crude oil. America will begin to build significant surpluses of crude oil, which will allow us to actively compete against OPEC.

    If Royal Dutch Shell has the process that converts natural gas to engine oil, and other companies are testing the conversion of natural gas into diesel fuel and gasoline, then our need for crude oil will diminish rapidly, as these new technologies come onboard. Crude oil will in fact be a throwaway item that will allow us to attack all of the customers of OPEC based on price. We have a chance to break the back of OPEC and Iran by becoming the biggest exporter of oil. We can deal with the 93 million Americans who are out of work. We don’t have to worry about a minimum wage of $15 per hour people will have an opportunity to make more money then they ever dreamed.

    We need to say no to Iran’s nuclear program, we don’t send them $150 million in cash. According to Business Insider on line, Iran has the third largest reserves in the ground at just over 88 years of proven reserves. Why doesn’t the President go back to the table and ask them to stop wasting their money on trying to build an outdated technology like a nuclear bomb, and let him show Iran Americas green energy success. By the way we also in order to show you our success we will need our people back now. But, don’t forget the sweater, because deserts can be cool at night.

    Dan Perkins

    Dan Perkins is a novelist who has written a trilogy on a terrorist attack against the United States. The Brotherhood of the Red Nile series is available at Amazon.com. Mr. Perkins book web site is www.danperkins.guru.

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