Boycott Watch
Sunday, February 24, 2008
Blame US weakness for $100 per Barrel oil
Editorial by Fred Taub,
President, Boycott Watch

    While most Americans are blaming OPEC and the oil companies for the rising cost of fuel, we should really be looking no further than U.S. policy for the price increases that are affecting the entire world.

    No, this is not about environmentalism or bashing President Bush for what he is doing in Iraq as liberals would claim, nor is it about OPEC, the Organization of the Petroleum Exporting Countries, gouging consumers because of greed as many conservatives would believe. It is about the United States not being aggressive enough in policy, the same namby-pamby attitude that has lead to the declining dollar.

    When the United States rescued Kuwait and its oil from Saddam Hussein, the first President Bush stated that it was to preserve U.S. interests in the free oil market. After that, however, U.S. policy changed to removal of Saddam Hussein as a dictator. In the meantime, all we did was free Kuwaiti oil interests from one OPEC dictatorship to return it to another OPEC dictatorship while propping up a third OPEC dictatorship, namely Saudi Arabia.

    After 9/11, the American focus in the Middle East completely shifted from energy to making sure that Arabs don’t feel the United States is prejudiced against Arabs in general. In placating the Arab world, the United States has completely lost sight of its own core needs.

    Saddam Hussein, and the rest of the world for that matter, completely expected the United States to take control of the Iraqi oil fields, which is why Saddam Hussein ordered them set ablaze. The United States had the opportunity to break OPEC at the time by demanding free and open market sale of both Kuwaiti and Iraqi oil, but instead chose to let OPEC, the arch enemy of the U.S. economic engine, to re-take control of a vital U.S. interest.

    This all happened as Congress refused to open ANWR, the Arctic National Wildlife Refuge, drilling for oil, ensuring that the U.S. economy would be held hostage by foreign oil dictatorships for years to come.

    Topping things off, when Hugo Chavez’s Venezuela, another OPEC dictatorship, seized control of U.S. oil assets in Venezuela, the United States just stood by and watched, thus putting even greater control of U.S. energy reliance in the hands of yet another tyrant who wants to see the United States destroyed. Although the United States invaded Grenada in 1983 to rescue American student there, Chavez knew that America would do nothing to protect American business interests in his country, just as the United States abandoned businesses which had assets in Cuba before Castro nationalized all U.S. assets there.

    In the world oil market, most Persian Gulf oil goes to Europe. The North Eastern section of the United States gets most of its oil from the North Sea, and the Midwest gets most of its oil from the United States, Venezuela, and Mexico. Rounding off the supply map, the West Coast shares the oil from Alaska with Japan. Much of this is because of the convenience of delivery, as it takes 21 days for a tanker ship to make a round trip from the Persian Gulf to the United States, and only seven days from Venezuela to the United States. Oil sourcing in the United States remains relatively stable and refineries redirect their products by regional demand.

    Because of these shipping realities, boycotts of any gasoline brands are pointless because refineries and distributors simply sell each other their products on demand to equalize their supply based on customer demand by brand. When refineries pump gasoline across the country in pipelines, they ship generic gasoline by octane grade and final formulation is performed at the local distribution point to the local franchised gas stations. Brand boycotts therefore only affect the locally owned and operated gas station franchise owner.

    Over the past twenty years, the United States has passed on every opportunity it had to obtain oil self-sufficiency as well as every opportunity it had to break OPEC. The U.S. economy is suffering from those mistakes today. The reason is ''Political Correctness.'' For the past twenty years, the United States has been more worried about what the world thinks of us rather than being a leader and doing the right thing.

    The policy of Political Correctness in the United States meant avoiding short term public relations hits and traditionally being thanked in the long run. Instead, Political Correctness resulted in the United States receiving short term accolades while suffering the long term public relations hits.

    The United States can’t have its cake and eat it too, which is essentially the utopian vision of Political Correctness. Americans need to understand that what’s good for this country is good for the world economy. Had the United States been concentrating on building its own economy rather than offering an international placebo, the world would have prospered more as a result.

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