A Petroleum-Only Society Leaves Our Economy Vulnerable

Saturday, July 28, 2012

Saudi forces are constantly detaining terror suspects
plotting attacks on energy installations.
Even though Saudi Arabia deliberately restrains their oil output to keep world oil prices high, they still export more oil than any other country in the world. And the U.S. imports more oil than any other country.

The global price of oil is determined by production levels. If something happened to seriously slow down Saudi Arabia's production, oil prices would go through the roof, which would seriously damage the economic stability of every country except Brazil. I don't think it would be an overstatement to say it would be an economic catastrophe for the United States.

We are extremely vulnerable to oil shock. It doesn't matter how much oil America gets from Saudi Arabia. A disruption in Saudi oil production would immediately and critically raise the global price of oil.

Security on one of Saudi Arabia's biggest facility is weak, and it is considered an important target by terrorists:

Wikileaks Cables Show Worry About Saudi Oil Security

In all likelihood, it is only a matter of time before terrorists successfully cripple Saudi Arabia's facilities. And that is not the only possible way Saudi oil production could be disrupted.

But the Open Fuel Standard would greatly reduce America's vulnerability. Once the bill passes, within three years most gas stations will provide fuel pumps for alcohol fuels because there will be enough flex-fuel cars on the road to justify it. Then fuels can begin to compete. And our vulnerability will begin to wane. If something happens to Saudi Arabia, American drivers would simply put alcohol fuel in their tanks on their very next fill up.

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