Fracking lets us ditch Saudi oil to use our own

Money Jihad, Sep. 26, 2014:

As part of the run-up to Money Jihad’s five-year anniversary, we’re looking back at five important videos from over the past several years about the financing of terrorism.

Last week we looked at money that has been pumped into the Gulf monarchies in oil royalties that they have turned around to use for terror for decades to placate their own Wahhabi domestic religious/political partners.  But what are we going to do about it? Drill our way out. U.S. energy independence from Arab oil, largely driven by technological innovation through hydraulic fracturing, may be the biggest strategic game-changer in the global balance of power since World War II.

From a Fox News interview last year with the Wall Street Journal’s Steve Moore and national security analyst KT McFarland:

Iran Moves to Dominate OPEC, Scuttle U.S. Oil Boom

oil drill in Texas

The Iranian regime is hoping to cloud the West’s judgment with economic incentives. The hope is that pressure from influential businesses and the desire for lower energy prices will build a shield from sanctions in the future.

By Ryan Mauro:

The Iranian regime is proceeding with a second leg of its energy strategy to immunize itself from international sanctions. It is conspiring with Iraq to undercut Saudi Arabia’s influence over the Organization of Petroleum Exporting Countries (OPEC).

The Iraqis are aiming to triple their oil production capacity by 2020, from 3 million barrels per day (BPD) to 9 million bpd. This is a major threat to Saudi Arabia, a rival of Iran. Saudi Arabia paved the way for sanctions against Iran by boosting its own output to keep down the price of oil. The Saudis produced 9.8 million BPD in December and have a capacity of 12.5 million.

The Iranians are hoping that a strengthened Iraq will allow its bloc to overtake Saudi Arabia as the main decider of OPEC policy. In addition, the two Shiite-led countries are trying to attract Western investments that will lure foreign countries towards Iran and away from the Saudis.

Russian company LukOil says the Iraqis will cause a “revolution” in the oil market. Billionaire and LukOil shareholder Leonid Fedunagrees, recalling that a “a top manager at a leading Western firm said the modern history of the oil business will be split into the pre-Iraq and post-Iraq periods.”

The good news for the West is that Iran and Iraq could potentially cause the cost of oil to fall, but that comes with a price. Iran’s grip on the world economy, in addition to the lucrative deals with Western businesses, will make future sanctions implementation dramatically more difficult. The world may not want Iran to have a nuclear bomb, but will it decide that confronting Iran is worth a sharp spike in oil prices?

Another objective of Iran’s oil strategy may be to slow down America’s own energy production. Christopher Helman of Forbes observes that Iran’s moves could “lead to the scuttling of the great U.S. oil boom” by reducing the incentive for domestic drilling.

“The concern for U.S. drillers is that successful Middle Eastern diplomacy could end up being the worst thing for their business. If crude oil benchmarks were to fall to $75 a barrel and stay there for a couple months, you’d see drilling rigs across Texas and North Dakota fall silent,” he writes.

The other leg of Iran’s energy strategy is to ally with Turkey in seducing Europe with natural gas.

Read more at Clarion Project

It’s time to shock O.P.E.C.

2739712755CSP, By Frank Gaffney:

Forty years ago this week, America received a harsh lesson about the dangers of relying on others for energy.  President Nixon’s decision in the midst of the Yom Kippur War to resupply Israel with U.S. weaponry gave members of the OPEC cartel an excuse to embargo oil supplies to this country and drive up prices worldwide.  It became known as the “oil shock” of 1973.

Ever since, politicians of both parties have promised to reduce our dependency on unreliable foreign sources.  To that end over the past four decades, they have invested untold sums on various schemes – from imposing price controls, producing synthetic fuels and subsidizing ethanol production, curbing demand and diversifying overseas sources of supply for oil and natural gas.

Thanks largely to private sector initiatives and funds, however, real progress has lately been made on this longstanding national objective. Finally, the widespread application of technology like horizontal drilling and hydraulic fracturing (better known as fracking) and a series of discoveries of vast quantities of natural gas around the United States and off its coasts have transformed our situation from one of energy dependency to potentially that of the largest energy exporter in the world.

The geopolitical and economic significance of this transformation will be the focus of conferences sponsored by two influential, bipartisan groups in Washington this week.  Former Cabinet and sub-Cabinet officers, senior military personnel and other experts will convene on Tuesday under the auspices of the U.S. Energy Security Council and on Wednesday under that of Securing America’s Future Energy (SAFE) to discuss the oil embargo, the intervening years and where we are today vis a vis those who used energy as an economic weapon against us in the past.

It is very much to be hoped that these conversations will not simply repeat nostrums about the inadvisability of being dependent upon unreliable – to say nothing of  actually hostile – energy sources.  Or, worse yet, simply revel in the change of fortunes that will, in the absence of further Obama administration obstructionism, enable us to become again a huge net producer of energy.  (Regrettably, between its pursuit of cap-and-trade restrictions on carbon emissions, overreaching EPA regulations, the campaign to destroy the coal industry and further shenanigans with respect to the Keystone XL pipeline, there is ample reason to expect more official impediments to our energy security, not fewer.)

What is needed now is a strategic approach to using our newfound energy leverage to cause some oil “shocks” of our own.

For starters, the windfall of natural gas deposits being found in this country opens up an opportunity to transform the sector in which we are still almost entirely dependent on oil and its byproducts: the transportation of people and goods via automobiles, busses and trucks.  If natural gas can become widely used in eighteen-wheelers and turned into methanol for use in most modern cars, we could dramatically reduce the amount of gasoline we are obliged to import from the Islamists of OPEC.

What is more, as Nobel laureate George Olah observed in an op.ed. article he co-authored in the Wall Street Journal last week, recent breakthroughs in chemistry are allowing another vast U.S. resource – carbon dioxide – to be cost-effectively converted into methanol.  Far better to burn it in our automobiles and in modified surface transportation and maritime diesel engines than to pay exorbitant sums, as Team Obama has in mind, to try to store it underground.

Best of all, by enabling these alternatives to oil and gasoline to become available across America, we can create fuel choice for consumers – and competition for the cartelists.  The predictable effect would be to drive oil prices down, especially as the scores of other developing nations capable of manufacturing their own alternatives to gasoline begin to do so, as Brazil has already done with ethanol.

The result could be to break the back of OPEC, once and for all.  That, in turn, would help dry up the funding that has done so much for decades to power jihadism and undermine our economy.

This is no longer simply a desirable thing to do.  It is absolutely imperative.  As Center for Security Policy Senior Fellow Kevin Freeman has observed, Mideast oil producers seem determined to join the Chinese and Russians, among others, in terminating the U.S. dollar’s status as the world’s international reserve currency.  Should they succeed in this gambit, the profound and debilitating economic and strategic ramifications will make the oil shock of forty years ago look like the good old days.

Adopting bipartisan Open Fuel Standard legislation and taking such other steps as are necessary to enable fuel choice can help us withstand as well disruptions in oil supply and/or skyrocketing price increases in the event of a new regional war in the Middle East.  We can and must be in a position to deliver the next oil shock, not be its recipient.

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US approaching energy independence? – H/T Money Jihad who had this to say,

Readers should take a look at this video from Fox News which addresses the strategic implications of this development for U.S. national security.  The shift means a reduced likelihood of U.S. entanglement in Middle Eastern affairs, less risk of disruption due to volatility in and hostility from that part of the world, and a reduced flow of petrodollars to regimes that fund terrorism.

Video: oil dependence

opec2Money Jihad:

Do you want OPEC to keep calling the shots in the 21st Century?  Do you enjoy seeing American presidents literally holding hands with or bowing down to the Saudi king?

Regular readers know that this blog supports expanded domestic oil drilling to help North America decrease its dependence on Middle East oil.  Although Eyal Aronoff of the Fuel Freedom Foundation (@fuelfreedomnow on Twitter) offers a different course of action to deal with the problem of oil financing terrorism, this video as a must-watch:

Aronoff lays out compelling ideas for reduced oil dependence, and Money Jihad has as well.  Wouldn’t it be nice if national political leaders embraced just some of these ideas as part of a genuine “all of the above” approach to energy to reduce our reliance on Saudi sharia oil?

View The Counter Jihad Report’s video playlist on oil independence

This one is particularly good:

Turning Oil into Salt, a 28-minute high-production value documentary that explains why the Open Fuel Standard is so important. It includes clips of interviews and powerful comments by Robert McFarlane, James Woolsey, Frank Gaffney, Anne Korin, Gal Luft, Paul Werbos, Edwin Black, Mark Dubowitz, Megan Ortagas, Bill Holmberg, Donald, Yale, Steve Marshall, Chelsea Sexton, Greg Breukelman, Johanna Mendelson Forman, and Jack Hidary. They point towards a solution of stripping Oil off its strategic status by making cars that can run with all different kind of fuels. Brazil has proven its feasibility with its ethanol from sugarcane concept. Important note: Biofuels can be made from all kind of Biomass and are not responsible for the rise of food prices. A film by Frederick von Sulle and Helmut Strasser about Energy Security.