The Oil Weapon in America's Hands

Townhall.com ^ | November 14, 2014 | Pat Buchanan

[MeganC]

FDR's cutoff of oil to Japan was thus a primary cause of WWII in the Pacific

FDR's action only affected the timing of the Japanese attack on Pearl Harbor. The Japanese had started contemplating an attack on Pearl as early as 1923 and by 1940 it was considered an inevitability at Etajima.

[Paladin2]

We should back ISIS in any attacks on Wahabbist Exporting SA.

[nathanbedford]

Pat has been a long and earnest advocate of American mercantilism and events in the recent years may well have proved him prescient. Certainly, oil it is a potent geopolitical weapon by which we can actually revolutionize the world economy including political and military power.

A real mercantilist policy would open oil taps everywhere in America, permit the building of refineries, build all pipelines required and flood the world with oil and the results would be tumultuous. My exposure to Russians here in Germany tells me that they are panicking with oil just below $80 a barrel. The Russian economy fails with oil at $80 a barrel. Likewise, Venezuela, as mentioned by Buchanan, might actually go bankrupt to the point where it cannot survive.

The next step, legalize drugs in America and further strengthen our geopolitical situation.

[Theoria]

'permit the building of refineries, build all pipelines required and flood the world with oil and the results would be tumultuous.'

That should have been part of the GWOT. The shallow thinking of our dear leaders never put into place such actions to benefit our long view. Opening up refineries and such would have been a basic tenet for a 'authorization of force' vote.

[DJ Taylor]

I wonder, could Saudi contributions to Democrat politicians be causing the lack of development of oil and gas resources in this country?

[lacrew]

If Russia is on the verge of going bankrupt...

The Chicoms will buy more oil for their reserves (its probably a safer investment that loaning $$ to Uncle Sam anyway).

And as Pat mentions, nations around the globe, from Venzuela to Iran depend on oil sales....not to mention all the Arab nations that have absolutely no other export other than oil, and happen to be in the midst of popular uprisings/civil war/ISIS threat. They can’t hold out for long with the lower prices. I don’t think the Saudis are going to be able to pull it off this time.

[Darteaus94025]

And which President moved the Pacific Fleet to Hawaii?

Why, FDR of course!

[Vince Ferrer]

We cannot be destroyed by cheap oil. Some small oil companies may go under and be bought by larger companies with deeper pockets, but the rest of our more diversified economy will benefit from low oil prices. In contrast, OPEC and Russia will be hurt more, because they have undiversified economies.

[mrsmith]

But Pat is wrong here: “Are the Saudis thinking of doing to the new oil-producing champion, USA, what we are doing to Venezuela, Russia and Iran? “

It’s the Saudis who are ‘doing it’ to Venezuela, Russia and Iran (and Nigeria, Ecuador, Libya and US)!
It’s mercantilism at it’s finest: drive down the value of oil production assets and purchase them. They’ve wisely saved the money to do this- we certainly haven’t.

[Theoria]

I doubt it. It took several years[2008] for Pres Bush to just lift the ban on offshore drilling in .gov waters!

It was a symbolic gesture. But the tone should have been set on 9/12 for oil exploration and deregulation.

Wars tend to get rid of regs and permits. Not this time.

[xzins]

Purchasing anything in Venezuela, Russia, or Iran is a bad choice. It will be nationalized at the convenience of the current dictator.

[ZOOKER]

The Saudis are attacking their competition, on many fronts in many countries.

$80 oil is bad news for Russian AND American producers. The Saudis are rich and can afford to give away free or nearly free oil for years in order to break the Russians, the US frackers, XL pipeline builders, etc.

Let's not forget the new oil exporters in the ME, ISIS. They took over Syria's wells and are plowing the revenues into building their Caliphate. Their long-range goal is to control ALL the ME (and all the oil in it, too). This can't make the Saudis real comfortable.

[Zhang Fei]

all the Arab nations that have absolutely no other export other than oil, and happen to be in the midst of popular uprisings/civil war/ISIS threat. They can’t hold out for long with the lower prices. I don’t think the Saudis are going to be able to pull it off this time.

They have sovereign wealth funds worth at least 1 year's GDP. They can ride out $50 oil by producing more barrels of something that costs them $10-$25 per barrel to extract. Oil service companies involved in fracking and deep water projects that were going full throttle with large debt issues and dividend payouts will go bust.

Now, you might say that new oil service companies will sprout like mushrooms when oil prices start rising again, so the Arabs will have wasted their ammo. The reality, however, is that the rebirth of these companies - via the veterans of the ones that went bust - will take time. Financiers will be leery of jumping in until they're confident the Arabs are done punishing them. In that interval, Arab producers will recover much of what they lost during the price war.

[uglybiker]

The next step, legalize drugs in America and further strengthen our geopolitical situation. when Venezuela goes under, we go in, take over and cover it in coffee plantations.

Then we will rule the world!

[mrsmith]

You’re right about that!

Most countries would pay “protection money” to the Saudis in the form of partnership deals.
The Saudis could buy a portion of an overleveraged fracking firm or of ‘sovereign’ producers in centralized nations for dimes on the dollar.
The Saudis would still have the threat of low prices to hold over them in the future.

Mercantilism IS pretty cool.

[Zhang Fei]

And which President moved the Pacific Fleet to Hawaii? Why, FDR of course!

It made no sense to house it in the PI. Too far from resupply, which was mainly why MacArthur had to say "I shall return". And if it had been based in CA, Hawaii would have spent the war in Japanese hands.

[BCW]

Not that I care for Islam at all - but having ISIS go in and burn Riyadh to the ground and strip the king of his robes while executing his family would be a “how does it feel you bastards” after seeing the violence enacted towards us while in Iraq....I saw it first hand from 2003-08...Saudi, Kuwait, Bahrain, UAE, and the others all donating towards Wahhabi insurgent groups streaming in through Syria...let the animals have their spoiled meat - let them devour Saudi!

[zeestephen]

Slightly off topic...

Re: “Keystone Pipeline”

I read an interesting article yesterday at CNBC.

The Keystone Pipeline will pump mostly oil from the Canadian Tar Sands.

The break even point for Tar Sands oil is $95-$100 per barrel.

Today, the price of oil closed around $75 per barrel.

Also, the break even point for new fracking wells in the North Dakota Bakken Shale fields is $78 per barrel.

If the price of oil stays at $75 for an extended period, we can wave goodbye to the Pipeline and to the Bakken Shale.

[Balding_Eagle]

Exactly. Bring on cheap oil you Saudi bastards!