The questions are these:
Can we stop or at least enormously reduce the amount of oil we import from countries that are unfriendly or even hostile to the United States?
And if we can, will it matter much to their funding of terrorism?
The short answers: yes to the first question, no to the second.
About three-quarters of the world’s proven oil reserves are in the hands of adherents to an ideology best described as Islamofascism. We are and our allies are, as a result, transferring enormous wealth in the form payments for imported petroleum to people who are trying to kill us.America imports 63 percent of its oil. Canada accounts for 18 percent of total imports, meeting 10.5 percent of US demand. Nineteen percent of all the oil we use import from the Persian Gulf. Since we import 13,173,000 barrels per day, that means we import 2,503,000 (rounded) bpd from the PG. (The API summary is here.) We would not wish to cease imports from every PG nation - we should buy from Iraq as much as we can, for example. Saudi Arabia provides 7.4 percent of total domestic requirements. (Venezuela, no friend of ours, provides 6.5 percent.) We buy no oil from Iran. Other PG nations individually provide so little of our oil that they are collectively clumped as "other" in the API's country breakdown.Not least, our putative friend, the “moderate” regime of Saudi Arabia is using such funds to promote a pincer movement against the West, involving Wahhabi recruitment and indoctrination via Saudi-funded mosques, madrassas, political influence operations, prison and military chaplain programs and campus organizations on the one hand and Muslim Brotherhood fronts on the other. As Under Secretary of the Treasury Stuart Levey told Congress in July 2005, “Wealthy Saudi financiers and charities have funded terrorist organizations and causes that support terrorism and the ideology that fuels the terrorists' agenda. Even today, we believe that Saudi donors may still be a significant source of terrorist financing, including for the insurgency in Iraq.”
Our enabling of such behavior is the height of folly, an irresponsible and certainly unsustainable practice from a national security perspective.
So, for the security issue that Gaffney explained, there are two questions:
1. Can we either replace Saudi oil - 1,531,000 barrels per day - with another source, or can we implement efficiencies here that would reduce domestic requirements by at least that much?
2. As far as the Saudi's funding of terrorism goes, will it matter to their revenues if we do?
From the security perspective, only reasonably near-term solutions will matter. We could drill in ANWR and replace Saudi oil altogether for the next 30 years - once we started large-scale pumping and refining. But politically, that's a dead issue, as is, for that matter, opening any other domestic oil fields.
Therefore, we're only going to stop buying Saudi oil because of gained efficiencies, not increasing domestic production. (We have been trying to increase non-PG imports for at least 30 years, so substituting other imported oil for Saudi oil is not realistically on the horizon.)
I think we can reduce, perhaps eliminate, our need for 1.5M bpd with improved efficiencies in motor-vehicle propulsion. But before I blog about that, let's take a look at whether buying zero Saudi oil will matter to their funding of terrorism.
According to the US Energy Information Administration, Saudi Arabia can produce 12.1 M bpd and is producing 10.7M bpd. The country uses 2.1M bpd and therefore exports 8.7M bpd.
At $90 per barrel, the Saudis make $783,000,000 per day in export revenues. If we stopped buying their oil, they'd make $648,000,000, a 17.6 percent reduction. But it's still a heckuva lot of money. I'm not sure that such a reduction would crimp the resources of the Saudi princes who backchannel money to Islamist causes and groups. Nor would it necessarily reduce the Saudi government's funding of Wahhabist madrassas and the like in the West or elsewhere.
Such a revenue reduction assumes, of course, that the Saudis couldn't find other buyers. Reducing our demand will take time, during which demand will increase in other parts of the world, mainly China and India and southwest Pacific countries, whose rising demand is already pushing oil prices up anyway.
Since worldwide oil demand is expected to rise 60 percent by 2020, the Saudis will have no difficulty selling as much oil as they can pump. So the idea that we can shut down their funding of Islamist groups or causes by eliminating our need for their oil just doesn't hold up.
At least, that's the way I see it.
Coming - can we gain enough energy efficiency to eliminate our need for Saudi oil? I think so. Update: it's here.
Cross-posted at Sense of Events.
I think when dealing with energy policy its almost as important to start with the question, "why do we want to do this"? I think a few reasons that get thrown around:
(I would be curious if anyone thinks I left anything out)
I believe this post deals with the first issue, oil as a national security concern. I think its in our national interest to reduce the disposable income the Saudis have to fund terrorists. One way to do this would be to find ways to reduce the price of oil, but I think we have to keep in perspective that terrorism doesn't cost much and oil is fungible -- price will be set by world demand and supply, not by U.S. policy.
Solely from a security p.o.v., I wonder if drilling in ANWR or otherwise squeezing out every conceivable ounce of domestic oil makes sense. I'm not sure it ain't a bad idea to leave a chunk of oil in the ground in case Saudi Arabia gets nuked or access to the PG is lost.
(I also wonder if there other ways to reduce Saudi disposable income. They have a pretty inefficient economy . . .)
I'm curious how the price of oil relates to the demand. It's conceivable, though I can't show it, that the price of oil would drop precipitously if our demand fell by the 1.5m bpd mentioned in the article. I suppose it depends on the discipline of OPEC. Also, if the US somehow reduced its consumption through improved automobile efficiency, surely every other nation would make similar improvements. The worldwide effect would be much more than 1.5m bpd. My only point is that reducing worldwide oil consumption may lead to a greater than 1:1 loss for the Saudis.
Suppose we had a reactor like this:
Easy Low Cost No Radiation Fusion
and used it to develop Canadian Tar Sands and American Oil Shale? i.e about 1.5 to 2.5 Saudi Arabias worth of oil.
Suppose we also used them as the power source to develop ethanol/methanol production?
Is it going to happen? The US Navy is funding the project:
Bussard Fusion Update.
We should have an answer in 6 to 9 months.
Buck up. Let's not count out ANWR yet. After all, China is drilling for oil off the coast of Cuba. Once Floridians wake up to the fact that there is oil being pumped by China within a few miles of Miami and they are getting zero/zip/bupkiss/nada benefit from it they may allow drilling in Florida's Gulf, and that would have a good chance to break the logjam on ANWR.
If it doesn't, then the national security argument is a potent one.
Scott, one point i was trying to make is that even our best efforts to reduce domestic gasoline demand will not be quick. Worldwide demand for pertroleum is rising fast enough to shake off a paltry reduction of demand in the US of a mere 1.5M bpd.
You are right, though, in asking why other nations couldn't use the same technology we (hopefully) will use to reduce gas use. And that means, really, America, Europe, the southwest Asia and probably India.
Believe me, converting all those countries to new efficiencies will be a massive undertaking. (By "new efficiencies" I mean autos that could consume only one gallon of gasoline to travel 500 miles. Yes, 500 miles. That's the topic of my next post.)
But the fall of oil prices as demand for gas falls is as certain as night follows day. I explained how that works in my post about the price dynamics of replacing gasoline with E85.
Basically, though, the amount of oil produced is driven by the demand for gasoline. While we refine 46% of our oil into gasoline, the second-place product, oil distillates (fuel oils) account for only 25%. that is, we produce almost twice as much gasoline as the next-most produced refined oil product.
If demand for gas declines in the US, it does not mean that the demand for fuel oils would also decline. In fact, fuel-oil demand may even rise (I'll explain why in my next post about this topic.) Ultimately, the driving demand for oil production could become fuel oils. We'd use - and therefore import - less oil, but not as much less as you might think, perhaps only 5M bpd. Now, that's a lot of oil to cut, but it means we'd still be refining 16M bpd just to meet the distillates demand.
That also means that we'd still be producing a lot of gasoline. Refinery designs can be changed to refine less than 46% per barrel into gas, but there are two factors that weigh directly on doing so:
A. Producing less gasoline means producing more of something else. Except for a few percentage points of refining losses (raw oil that is simply wasted or consumed in refining) 42 gallons of raw oil going into a refinery results in 42 gallons of refined products coming out.
B. No matter what, gasoline will be refined. We can refine less of it than we do now, but some oil will always be made into gas. In fact, the reason that autos started using gasoline, more than a century ago, was that kerosene production was barely meeting demand so auto makers used what was available - gasoline, which was then considered a waste byproduct.
If the demand for gasoline falls below the irreducible minimum that is refined, then the price of gas will drop like an anvil off a cliff. Except that oil execs aren't stupid: when they see it coming, they'll drop the price of gas well in advance to make it cheaper for us to stick with full-gas engines and make up the profit difference by raising the price of other refined products.
And this will mitigate against adoption of greater efficiencies using no-gas-powered engines.
Eventually, though, these technologies will be adopted because they offer the potential of m oving a car at 1/10th the present price of gas (maybe less), and even if gas drops from today's $3/gal. to $1.50, it still won't compete on price.
As I said, more later.
why don't we just take the saudi oil ? seriously, what would it change, who would say boo ? go ahead and get indignant on behalf of the saudi royal family.
Is it possible to money-starve the terrorists? Yes. Will it get done? Probably not. And the reason is that nobody in America, the only country with the resources to do something about it, has the will to do what's necessary - probably because of short-termism.
What needs to be done? Rapidly increase tax on oil products, particularly gasoline, for two reasons - to discourage consumption (and encourage buying of smaller vehicles, better home insulation and so on) and to provide money for the other and longer-term part of the solution - which is a crash programme into any and all methods of energy production and transport not involving fossil fuels and particularly oil.
Once the alternatives are in place and America doesn't need imported oil any more - bomb the pipelines, mine the Persian Gulf, simply confiscate any and all assets held by terrorist sympathisers - and let them rot.
I never have figured out why some people think that the solution to every problem is to raise taxes and give the government more authority over the way we live.
The US government will not be part of the solution. It is part of the problem and has been for decades.
"I never have figured out why some people think that the solution to every problem is to raise taxes and give the government more authority over the way we live."
The reason is simple sheeplike fear of wolves.
One citzen's wolf is a lack of healthcare, another's is terrorism.......
I am not suggesting any regulation of oil product usage, but merely harnessing market forces to get a desired outcome.
There was a vaguely similar situation in Czechoslovakia many years ago. The problem was that the Danube was getting close to being sterile, due to pollution emitted by various factories. The solution was very simple. The government decreed that if any industrial complex took water from the river and returned used water, the outlet pipe must be upstream from the inlet. Pollution dropped by 80-90% within 2 years, and stayed that way.
The fact remains that global Islamic terrorism is fuelled by oil money. Time, and way past time, to cut down the money tree. No compulsion in the matter of what vehicle to buy, or how low to set the AC, is required.
It doesn't matter whether America buys Saudi oil or not. Only global demand matters. Why?
HOW IT WORKS
Let's say oil is pumped out of ANWR in Alaska. Let's assume that draconian laws are even enacted, ensuring that it can only be sold to the American market. Those barrels displace oil that would otherwise be sold to the American market - but they do so at the global price, because that's the price of oil.
The displaced oil (for fun, let's say Saudi oil) is then available on the global market... and all ANWR production has done is make a very tiny dent in that global market. Which means prices will only go down very marginally over a scenario in which ANWR isn't producing any oil. Unless the global demand is now lower than global production, therefore, the Saudi oil gets bought. The Saudis still get the money - ALL of the money - from their oil export revenues, because ALL of their oil is still sold, and sold at the global price.
Nothing changes that unless you can find a way to reduce global demand for oil below the limit of global production. In which case, you drop the price of oil. Which raises global demand, and equalizes the price again at a lower level.
HOW IT'S WORKING NOW
That global demand looks to be keeping up with or outstripping exploitable supply in the near to medium term.
Saudi Arabia is in the process of buying arms from Russia, and Europe and China are also eager suitors for influence. Which means America would be difficult - but not impossible - for them to replace.
That means less American leverage. Which, in turn, means the Saudis will continue to finance terrorist movements to the tune of large sums of money, because the basic dynamics of the Saudi Wahabbi state itself have changed little.
COULD THIS MAKE SENSE?
Now, a big caveat. There is a strategic and economic reason that makes sense, and makes the argument that Canada, the US, and Mexico should be able to rely on their combined reserves of fossil fuels (or the USA rely on its own) for an extended period of time.
The reason is freedom of action. America in that position can credibly threaten to destroy oil distribution chokepoints elsewhere - and even production - and not bear the same consequences as other actors like Europe, or China (Russia is already in this position, by the way). This would drastically change the diplomatic calculus in those countries, since shutting down Persian Gulf oil production and introducing a variant of Canada's 1970s National Energy Program for oil/natural gas would let the US economy falter only slightly, while Europe's economy would nosedive and China's would crash.
Mu'ad Dib: "He who can destroy a thing, controls it."
That still not a panacea, note, because the other big global winner in that scenario is Russia. Distribution is their big chokepoint, but the first time the US even threatened the above course of action Europe and China would finance Russian distribution infrastructure, even given its likely confiscation by Russia's government.
So the Paul Atreides threat works once, and strengthens Russia once used. Break the glass on it only in a truly dire emergency, even if the capability is there.
Which, at the moment, it isn't... but take a look at the likely oil/gas reserves in America's offshore continental shelf some time, and contemplate the ease of converting existing vehicles to natural gas power.
That's indeed the bottom line, Joe, that we can make enormous and expensive efforts to reduce our oil consumption, and the resulting drop in demand - or more likely, lower rate of increase in demand - will do little to reduce the price of oil. By little, I mean that it is impossible to change the amount of revenue that the Saudi's get to an order of magnitude. Especially as the Saudi's have some ability to influence reductions in supply as well. Nothing except the extreme of deposing the Wahhabi regime or threatening to do so will remove them from financing extremism. And we do not have a practical alternative to that regime today.
Market forces cannot create a wholesale destruction of petroleum based economies and the substitution of some other energy currency in any reasonable timeframe.
What is a reasonable time frame? Low radiation, low cost fusion plants could start impacting the oil market in as little as 5 years if current experiments green light a crash program to develop Bussard Reactors.
BTW has any one even looked at the links I provided?
Or am I going to get the same treatment on that that I got with my drug articles (the NIDA has confirmed that addiction is 50% genetic and 50% environmental)?
I'd be glad to debate the science (drugs or fusion). Any takers? Joe?
My take re the Bussard team's work:
I'm very hopeful about eventual zero-sum-neutron "P-B11" fusion using polywells but I'd say the way to bet is 50 years before that technology makes any significant dent in our energy use patterns. I'd hedge that down to perhaps 25 years.
If the Bussard team's last test gets confirmed with the next results, of course, and if they don't get ratholed. They need some fresh eyes/skeptics on the team at some point to help keep that latter likelihood down. Bussard himself wanted that, as I'd expect they all did.
I'm hopeful, and I'd like to be proven overly pessimistic in my estimate.
That 25-to-50-years is unless some other singularity-style miracle happens (which basically means "unless weakly-superhuman-or-stronger AI {Artificial Intelligence} / IA {Intellect Augmentation} happens soon, in a big way").
If only human-par AIs come into being, all we'll get is stuff that affects "service economy" and industrial design, I fear.
If a sufficient special adverse circumstance, some "black swan", swims into view, that could also make things progress more quickly (think "war effort").
Correction to the above: 50 years to takeover. 25 years to "significant dent". This is by analogy to coal and oil. The "right" {sic} sort of conflict or adversity could shorten the timeline somewhat.
M.Simon, five years to an economic impact when you proposing a "crash program" of development of an unproven technology? That seems to be pretty much impossible. Construction time of any large generation plant is going to be greater than that if you already had a proven design. You've taken some really optimistic time-frames for constructing a test facility and pretended that is the time-frame to deploy a mature successful technology.
But the point remains that by developing oil-sands you are not going to be producing enough petroleum substitutes to change the Saudis revenue by an order of magnitude, so you are not going to be changing their capacity for financing troublesome ideology.
#16 Robin Roberts:
One of the attractions of polywell fusion is that the individual generating units would almost certainly end up quite small - just how small is uncertain, but it sounds as if it is in the range of power plants for large buildings, ships, possibly locomotives and maybe very large aircraft. Unfortunately, fusion-powered trucks are very unlikely and cars next to impossible. But since the work hasn't been done, it might conceivably turn out that Back To The Future's "Mr. Fusion" is possible. In which case, sell your oil company stocks.
If this turns out to be the case, then polywell fusion plants could be turned out in numbers with a short lead time - small units are always faster to build.
In the case that Polywell fusion turns out to work, then with a little more work we get fusion rockets - and then, for the $200 million or so that the research will cost, humanity gets the Solar System.
There is another question here: is it possible for America to get its oil consumption down low enough that the world could be supplied with oil without Saudi? Russia is hardly a nice place, but it's a heck of a lot better than the Dark Ages hellhole that is the Moslem Middle East. If it is possible, and once it's done, then the right thing to do is to shut down Saudi oil production - permanently - and confiscate all their assets. Oil isn't edible - it's way past time they were reminded of that.
The Dems have one thing correct -- the USA should be taking a more "law-based" approach to terrorism.
Meaning, in accordance with civil law, the funders of terrorist actions should be responsible for paying the costs of the terrorist actions, including any enforcement costs required to collect.
The US should put a $10 000 000 price on the life of all Americans killed by terrorists, or terrorist action, or attempts to stop terrorism (i.e. military in Afghanistan and Iraq). The terror funders, Saudia Arabians and Iranians, should be held financially liable.
They should be given a bill, and a collection schedule. And if they refuse to pay the bill ...
send in the collection agents, i.e. the Marines.
The legal point is to make the terrorist funders pay the costs.
This is, I think, a little more sophisticated than cjm's "just go in and take it".
The USA should also support the right of other countries to damages. Thus, Sunnis in Iraq might well be asking for terrorist damages from Iran. And Shia in Iraq might be asking for terrorist damages from Saudi Arabia.
And the Shia and Sunni members of the Iraq Army, supported by US Air power, might well be able to enforce collection of the damages -- with any UN SC resolution against such action being vetoed by the US,(much like China is vetoing any real action to stop genocide in Darfur.)
In the meantime, short term, where is the Solar powered Air Conditioning?
M. Simon,
The economic explanation works regardless of technologies, that's just how things work. IF the fusion experiments go well, and IF commercialization happens (I recall your own article explaining time frames), and IF the energy is used to get at shale oil and tar sands, and IF the limiting issue of water is solved... then the scenario I describe at the end of my posy becomes thinkable.
Depending on rate of production not just totals, it may also be possible to move the needle on the global price. Until China's and India's demand continues to ramp to a level that puts us right back here eventually.
Meanwhile, Saudi Arabia will still get market rate for however much oil it can produce, and unless they've hit a peak oil scenario of their own (possible, Winds covered that debate), they'll have ample funds to continue supporting terrorism. They'll also have ample patrons to make it difficult to pressure them to stop. As a rentier state, buying the loyalty of its citizens is the only game it knows or can know - and many of them will turn around and channel those funds to evil people because that's what they've been taught since childhood.
Truly stopping the Saudis from being among terrorism's biggest sponsors will take one of 2 things: the Wahabbis have their access to the resources and funds cut off within the kingdom, or the cut off takes place upstream. Inside, or outside. As long as they have access to the spinoffs from oil funds, and the current setup of the Saudi states ensures this, terrorism and Saudi promotion thereof will be an ongoing and escalating problem.
Without those funds, the Wahabbis become Islam's version of the Amish.
Some scenarios:
Every one of these scenarios is possible. None of them is easy, or likely. Until one of them becomes likely, or another option emerges that separates the Wahabbis from the oil revenues (which will continue), what we'll see are the Saudi oil ticks buying insulation from pressure here in the US (by buying the State Department) and abroad (Russia, China, Europe, et. al.), while supporting Islamic terrorism around the world.
"Can we stop or at least enormously reduce the amount of oil we import from countries that are unfriendly or even hostile to the United States?"
Robert Zubrin does a presentation on CSpan that outlines his book, "Energy Victory: Winning the War on Terror by Breaking Free of Oil." I found him quite convincing. It's long (about an hour) but worth the watch. The guy is a real nurd but he is well respected, interesting and I have to give head to anything that gets rave reviews from a National Review AND a Daily Kos reviewer.
His premise is that all we must do is mandate flex-fuel ability in all vehicles and a myriad of problems will be solved. I had dismissed the idea of ethanol as a major part of energy policy myself but he does make a compelling argument.
One point he makes addresses what he refers to as the canard that ethanol production uses almost as much energy as it consumes. He shows numerous studies that show at most a 10% - 20% loss to production energy use.
Sorry about the C Span link not posting:
link
[Bare URL corrected. NM]
#16 Robin,
I guess I should be more specific. With a crash program we can start rolling out these devices in series production in 5 years (two or three if the money is unlimited and things go well).
In 10 years we can be producing 100 GW a year or more. I am assuming 100 MW electrical plants. If we built 1,000 MW plants we could completely change over to fusion in the first world (where that size makes sense) in 10 years (i.e. 15 years after the start of a crash program). Where we really make out with low cost energy is revitalizing old oil fields, oil shale, and tar sands. That could start about 7 years from the beginning of major research.
What helps the most is this: no turbine requirements. The reactor direct converts high energy alphas to electricity. That means low inventory in the production process. i.e. about 6 months from plant start to delivery. That means not a lot of tied up capital.
BTW there is a fairly large gang of physicists and engineers already working on solving the technical problems so when major research starts we will be able to hit the ground running.
Now the real kicker is this: the oil tics may start pumping like crazy if they see real competition on the horizon. So the effects of an announcement might be felt much sooner than actual production.
Joe,
Cheap energy for desalinization solves the water problem.
I'm 90% certain that the current experiments will greenlight further efforts because the experiment has already been done once with positive results. At first I was hopeful but sceptical. However, every place I could check out the science independently, the science checked out. Dr. Bussard was a very straight shooter. So I'm convinced that the odds are very good.
I can say that the engineering is going to be a bitch. There are a lot of problems that will have to be solved. However, I (and others) have assembled a very good team of freelancers working on solving (at least for a first cut) those problems. As Bucky Fuller said - when you get good at solving problems the work doesn't get easier. You get harder problems. Fine by me. I love a challenge.
I am in contact with some Air Force people and they are VERY interested in making this work.
I have also heard from people with contacts in Congress that they are chomping at the bit to Manhattanize this effort. All that is needed is promising results from experiments that are already in train.
Fletcher,
Bravo. I can tell you have been doing your homework.
===
Let me also say that the effort crosses political lines. Along with the usual bunch of right wing engineers and physicists there is a KOS diarist on the team. It is doubtful that politics is going to add much friction.
Just one more thing to add: If polywell fusion research looks like coming up with the goods, then the gas, coal, oil and utility companies WILL do anything and everything to stop the work and to stop the plants being built if the work gets done. They should not, and must not, be allowed to succeed.
Fletcher,
Actually if Polywell works it will extend the life of American oil producers. It means delaying the day when we switch from oil to some other fuel by lowering the price.
The coal guys would be important if they currently held a significant part of the energy market. The natural gas guys will be supplying heat for homes for a long time to come.
In addition the US Navy wants this very badly.
WB-7 First Plasma
The world has just changed. Cheap fusion is on the way. About 5 years.
I think your conclusion is the same as mine after reading this:
www.nationalreview.com
Weening ourselves of our reliance on oil does benefit us by decreasing the leverage the Saudis have over our economy. But even if we stopped importing their oil altogether, they would just sell it to the Chinese and pump the proceeds into Al Qaeda regardless.
At the end of the day, the only real solution to the Saudi threat, as I see it:
www.asecondlookatthesaudis.com
Is the military solution.
That's dangerously close to drive-by territory, Bill. We'll give you a pass just this once.
We welcome substantive contribution here. Stick around and post here -- great. Do another drive-by -- we'll probably ban you. This constitutes your only warning.