February 14, 2008


Breaking OPEC’s Grip: A flex-fuel mandate would stop the U.S from funding its enemies. (Robert Zubrin, 2/14/08, National Review)

Consider the following: In 1972, the U.S. paid out $4 billion for oil imports, an amount equal to 1.2 percent of our defense budget at that time. In 2006, we paid $260 billion — about half of what we paid for national defense. Over the same period, Saudi oil revenues have grown in direct parallel: from $2.7 billion in 1972 to $200 billion in 2006 — which will likely exceed $300 billion this year. Much of that money is being used to fund an international network of front organizations and Wahhabist madrassas devoted to spreading terrorist ideology. Meanwhile, Iran is using its share of the take to fund its nuclear bomb program, as well as terrorist groups like Hezbollah.

If something isn’t done to break the Organization of Petroleum Exporting Countries (OPEC) — the cartel that dominates and manipulates the global oil market — the situation is likely to get much worse: With China and India industrializing rapidly, world demand for fuel is going up. OPEC is positioned to exploit this new demand with radical price hikes that go well beyond the 50-percent increase it effected during 2007 alone. Venezuela’s Hugo Chávez and Iran’s Mahmoud Ahmadinejad are already calling for prices of $200 per barrel. In short, we Americans are financing a war against ourselves — and the way things are going, we may soon be paying the enemy more than we are paying our own military.

The enemy’s unconstrained ability to loot us is also threatening our economy. Consider this: Congress is raiding the public purse to put $140 billion back in the pockets of American consumers, in the hope that this will provide an economic stimulus to prevent recession. Yet by paying $100 per barrel of oil, we are allowing OPEC to set oil prices high enough to take more than triple that amount out of Americans’ pockets. If Chávez and Amadinejad have their way, our economy will soon be drained at a rate of nearly $900 billion per year, an economic de-stimulus tax package six times as large as anything Congress has put on the table to push the other way. [...]

[T]here is now a way to break OPEC, a surprisingly simple one. What is needed is for Congress to pass a law requiring that all new cars sold (not just made, but sold) in the U.S. be flex-fueled — that is, be able to run on any combination of gasoline or alcohol fuels. Such cars already exist — two dozen different models of flex-fuel vehicles (FFVs) are being produced by Detroit’s Big Three this year — and they only cost about $100 more than identical models that can run on gasoline only.

...just tax gasoline to the point where it's nonviable.

Posted by Orrin Judd at February 14, 2008 8:40 PM

Or, conversely, eliminate all taxes on oil, and let it all run out. Other energy sources will eventually become viable.

Posted by: sam at February 14, 2008 9:35 PM

Force it faster.

Posted by: oj at February 14, 2008 10:33 PM

There isn't enough arable land on the planet to make corn & byproducts viable for anything other than a supplement.

Corn is worse for the air too, according to the most recent thing I read.

But hey, ADM gets rich.

Posted by: Bruno at February 15, 2008 6:47 AM

Better still, give tax credits for oil consumption. It will run out faster.

Posted by: sam at February 15, 2008 8:23 AM

Other than nuclear power, there is no current energy source alternative that can scale with the demand necessary to replace oil. The chap at uss enterprise.something ran numbers on what it would take.

The 'tax oil' crowd knows this but considering they are nothing but big gov statists in disguise, don't really care.

This canard offers them the benefit of growing government while at the same time hamstringing the individual with a burden sure to remove opportunity and foster dependency. Its a win-win for them.

Posted by: Perry at February 15, 2008 10:59 AM

I'm normally at the front of the line to complain about mandates, but that one is actually worth considering. Methanol, in particular, can be produced from coal or cellulose much more easily than ethanol, or even from atmospheric CO2 if you've got cheap (nuclear?) heat.

Creating an opening for gasoline alternatives and letting the market hunt for them might make sense at that cost.

Posted by: Mike Earl at February 15, 2008 11:04 AM

OJ didn't write tax oil. He wrote gasoline. That's the source of the problem. Let the users bear some of the cost of our high subsidization of oil imports by those with the discretion to abuse its use. Let the market provide the impetus to solve the problem. Markets work!

Posted by: Genecis at February 15, 2008 2:10 PM

Nuclear power is no replacement for oil. Nuclear power is great for generating electricity, and could be a source of heat (if needed). But oil isn't used much anymore for electricity generation (it's too expensive).

Oil is transportation-exclusive (aside from the plastics used in manufacturing, which might be 2% of the total). Now, if I could drive a nuclear-powered car, I probably would. But State Farm might not want to offer me liability.

Raising the gas tax prohibitively is a bad idea. It means trusting the government to do the right thing with the money. I can't go there. Maybe OJ can - he has a squishy statist/bureaucratic side to him. But how will he guarantee the 'lockbox' on the gas fund?

Posted by: jim hamlen at February 15, 2008 3:03 PM

Oil is transportation-exclusive (aside from the plastics used in manufacturing, which might be 2% of the total). Now, if I could drive a nuclear-powered car, I probably would. But State Farm might not want to offer me liability.

Dude, electric cars, heard of them?

And OJ wants us to ride in giant phalluses(Phallusi?)anyway.

Mighty nuclear powered phallusi!

Posted by: Benny at February 15, 2008 7:46 PM

The generation of electricity runs air conditioning, refrigeration, lighting, appliances, electronic entertainment, computers, smelters, and other industrial and commercial processes.

As of now, it does not flow to electric cars. It may, but probably not in measurable amounts for the next 20 years or so. And by then, 100-inch television/computer/video/Internet integrated units will probably be using as much juice as a 3-ton A/C unit.

Now if OJ wanted to be truly radical, he would propose an electricty tax. People don't need A/C to live, but computers do. You can stop driving, but absent a roof solar unit, getting off the grid is difficult.

Posted by: jim hamlen at February 15, 2008 8:54 PM

There our no competing technologies to pick, excepting nuclear generated electricty to power car batteries or to break water for its hydrogen.

But liberals won't let that happen. Taxing energy in any form is just punitive.

Posted by: Perry at February 15, 2008 9:24 PM

'our' should be 'are'

Posted by: Perry at February 15, 2008 9:28 PM