UPDATE: American TurmOIL

Here are a couple of interesting examples that go along the lines of what I was talking about in "American TurmOIL." As the world is getting stared in the face by a possible double-dip recession, state-capitalistic Brazil just posted a 9% economic gain in the past 3 months! Also, remember Dubai's Burj Khalifa tower? It used to be more appropriately named the Burj Dubai tower, but in light of Dubai's economic crash, they renamed it after a neighboring prince of Abu Dhabi and president of the UAE, Sheik Khalifa bin Zayed al-Nahyan.

This may not sound like a big deal, but to give the battle some background, the Al Nahyan family and Dubai's ruling family, the Al Maktoum family, have fundamentally differing economic philosophies. Both families are aware that they will not be able to surf the wealth of oil forever, and have made efforts to diversify their economies. Dubai has done this by inviting free-market principles into their country and developing real estate. Abu Dhabi has diversified by setting up a sovereign wealth fund (SWF). SWFs are basically huge pools of government surplus that is set aside for the purpose of investment and may be drawn from for stimulus. Since SWFs are controlled by the state, they are a common tool of the state-capitalists. Again, we see state-capitalism vs free market, and who needed the giant bailout and had their tower renamed? The free market guys.

The reputation of the free market is taking a hit big time, all over the world, yet somehow here in the US, where we should be laying low a bit until things blow over, we have this ridiculous resurgence of free-market purists, even though it was our unregulated private sector that initiated this global bust! And getting back to oil, even the guys who HAVE it and are soon to be rich off of its high demand, are moving away from their economic dependence on it, because they know they're going to run out of the stuff in the relatively near future! Yet HERE we're protesting regulations designed to ween us from our oil habit, and our SOLUTION is to drill more oil... the oil we don't have. That they have and they're running from because it is a dwindling commodity... Unbefreakinlievable. My brain is seriously going to fall out of my face just thinking about the stupidity.

We're idiots. That's got to be it. My next post will expand on this a bit, but hopefully more from a human standpoint than an American standpoint.

American TurmOIL

Here's a long one, primarily influenced by "The End of the Free Market" by Ian Bremmer. Don't worry, it's not what the title sounds like, and is actually very pro-America. GO BUY IT NOW, IT'S BRILLIANT!

Why Real Patriots Hate the Environment: It's time to wake up people (hahaha, what a hilariously overused, quaint phrase. Thanks Palin)! Global warming is a myth, it's largely disputed in the scientific community, it's a conspiracy run by the Emerald Cities, CCX, Al Gore, AND OBAMA! It's actually caused by a shift in the gravitational poles of the earth as prophesied by the late great EDGAR CAYCE! (Nobody's saying that, I'm just fascinated by Cayce) Oil drilling is perfectly safe, we're not actually causing ocean temperatures to rise, we're not in the middle of a mass-extinction event, and don't need to start doing everything in a more sustainable manner...

WHEN in the history of EVER was there an ANTI-environment campaign on the scale that conservatives are running today!?! This is ludicrous! Who's spreading this garbage? (that'll likely be my next post :P) Oh well, that's never going to convince anybody, so how about this: Reducing oil consumption is a matter of economic and national security! Two terms that speak clearly to all conservatives :D

Junk Stolen From Ch3 of "Free Market": The emergence of state-capitalism (read the book!) has brought about the rise of National Oil Companies (NOC)! How big are they? NOC's control 52% of the present market and 88% of all known reserves. They ARE the future! Aside from NOC's being vastly larger than private sector oil companies, they also have different motivations. Private industries are concerned with profit, whereas the NOC's use their natural resources as bargaining chips to achieve the political goals of the nation.

What does this mean for the future? As the present wells run dry and our dependence on oil grows with our population, we become vulnerable to the political whims of those controlling the NOC's. For example, Venezuela has repeatedly threatened to cut off our oil supply, and they're our third largest supplier! Oil prices are going to go up as the supply goes down, and then who gets rich, and what do you suppose they'll do with their new found wealth? Well when oil prices peaked back in 2008 Russia started a conflict with Georgia, and Iran started firing off test missiles. Also, as I mentioned in yesterday's post, China gets oil for weapons in Iran, and traded oil for nuclear programs in N. Korea! THAT is the trading power of oil. Forget dollars!

So which NOC's are the most powerful, and who owns them? Saudi Aramco, Russia's Gazprom, China's CNPC, Iran's NOC, Brasil's Petrobras, Malaysia's Petronas, and Venezuela's PDVSA make up the "new seven sisters" of oil. We have good relations with Saudi Arabia, bad relations with Iran and Venezuela, we have very shaky relations with Russia and China, and Malaysia and Brasil largely keep politics out of their oil (not to be feared or relied too heavily upon).

Our massive reliance on oil will necessarily fund nations who would love to see us fall! Despite claims to the contrary, we're NOT a socialist state, and because we love our free market so much, we will NOT be able to get in on this NOC game. Our only chip on the table is that we are and must continue to be vital to the survival of all other economies through our top notch educational institutions, innovative products, and massive consumption (...of things that don't rhyme with soil). The ONLY way to take control of our destiny is to reduce the bargaining power of oil by massively reducing our dependence on oil for energy, production, and gasoline.

One glimmer of hope resides in the fact that these NOC's are not operated as well as private multi-nationals and largely use the profits for political gain rather than for investing in new rigs and fixes. This hurts their productivity, but also limits the supply further by blocking access to other companies who could more efficiently extract the oil. This could help or hurt, depending on who is failing and who picks up the slack.

Short Term Junk: Cap and Trade will necessarily cause electric bills to "skyrocket," but if oil goes over $100/barrel again or even $200/barrel, what do you think is going to happen to our bills? Byproducts of cap and trade include cleaning our environment, developing green technologies, and Al Gore gets rich. Byproducts of continuing our reliance are we destroy the environment, lose our position as a global super power, and start speaking Chinese.

Case rested. Conservatives, please, stop with the kill the planet campaign. Archaic Libertarian greed at the moment will cause our downfall in the future, a flaw I'll likely write about soon.

~Yasu

...btw, I gave oil drilling a hard time earlier, and would like to clarify. Just because there's a disaster now doesn't mean drilling won't be a good idea once we resolve safety issues. If the anti-oil stigma is similar to the anti-nuclear stigma following Chernobyl and Three Mile Island, it will only exacerbate the problems I just outlined. It's not a popular opinion right now, but I hope and believe oil drilling should make a comeback much faster than nuclear did :\