OIL DEPENDENCE
America's Achilles' heel
BY CARLOS ALBERTO MONTANER
www.firmaspress.com
President Hugo Chávez of Venezuela again has threatened the United States with canceling the sale of crude oil. He did so from the ''anti-imperialist tribunal'' with which Chavistas have been amusing themselves this summer, an anti-American circus where participants call Bush ''Mr. Danger'' and insult his Cabinet with terrible epithets.
According to Chávez, if Venezuela stops U.S. oil sales, it already has a substitute client. Chávez doesn't name it, but obviously he alludes to China.
Two large tankers loaded with Venezuelan crude sail to the United States every day. In one year, they deliver approximately 16 percent of all U.S. imported oil. It is not impossible to find other partial sources of supply, but at this moment any confrontation between Washington and Caracas will raise oil prices even higher.
Specialists estimate that when the price of a barrel climbs to $94 (today it's about $64) the increase is likely to create a recession in the still-booming U.S. economy, as happened in 1973, 1981 and 1990. Chávez, therefore, has chosen the right moment to huff and puff.
Whenever the United States enters into a recession, U.S. imports are reduced, stock prices drop, investors become queasy, the dollar hides behind gold bullion or other secure financial instruments, and the rest of the planet suffers the consequences.
It is hard to believe that the feverish leaders of the Banana Left have not discovered that whenever the First World is doing well, all other countries go forward -- to the degree of their economic efficiency -- and when the First World is doing badly, all other countries go under. A U.S. recession would, for example, reduce its imports from China, thus cooling China's impetuous growth and leading to a lesser need in Beijing for oil.
Just as astounding as the suicidal ignorance of the Banana Left -- which is willing to go blind so long as it can poke the United States in one eye -- is America's persistent and unpardonable lack of foresight. Since 1973, more than 30 years ago, the Americans have known that they cannot depend on oil imports, especially because a great portion of the reserves of that fuel lies in territories that are politically unstable and potentially hostile to the United States.
Ever since, all U.S. presidents, from Richard Nixon to George W. Bush, have insisted that they'll put an end to that fatal servitude, yet have never done so. Irresponsibly, all of them have gone for the short-term fix, in deference to private economic interests, merely stimulating partial measures that have not pried the problem from its site.
True, there is no cheaper source of energy than a barrel of oil priced at under $30, but that formulation is too simple to be true. How much does U.S. political and military support for Saudi Arabia and the Arab Emirates cost?
If the United States in 1990 had kept its promise to be self-sufficient in terms of energy, and oil had become a less-desirable product, would Saddam Hussein have sent his troops into Kuwait? What was the cost of the recessions caused by rising oil prices in the 1970s, '80s and '90s? What will be the cost of the next recession if the price per barrel reaches $94?
Billions, maybe trillions of dollars evaporate ceaselessly as administrations simplistically weigh the average industrial value of a barrel of oil against solar, wind or atomic energy and the rest of the available options without introducing into the equation the huge hidden cost of oil dependence and the periodic crises that dependence provokes.
Will the crisis with Venezuela be the starting point for a more serious and mature attitude on the part of the United States? If that happens, the miracle that Hugo Chávez has actually done something constructive will come to pass. An amazing consequence, indeed.
©2005 Firmas Press
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