Oil's Price Surge Began Way Back in 2001

It was a foreseeable happening and the Bush administration continues to give it a very big push.

Middle East Oil Field >>>

Yes, the beginning of the current high oil prices began on March 14, 2001, when George W. Bush declared that; "We need more sources of energy." Unfortunately, upon making this profound statement, he and his Administration and the Republican Congress chose to sit on their butts and do absolutely nothing for dealing with the obvious.

And what do I mean by the "obvious"? Well, lets look at the world-wide situation that was emerging at that time.

What we actually knew and what we now know.

>>> Energy demand at that time was known to be increasing in all of the world's industrialized nations. China's growth impact was seriuosly showing and the US Energy Department was predicting that China would soon surpass Japan as the second largest energy consumer. The other developing nations in Asia were also growing at a rate that would make Asia the world's forth largest consumer of global energy.

>>> The petroleum industry experts from 1999 through 2001 had written multiple reports and many industry articles were being published showing how the production of oil world-wide was "peaking" in global output.

>>> Once this peaking issue had been brought to the Bush Administration's attention, the President appointed Vice President, Dick Cheney, to review the situation and come up with a "comprehensive US energy plan". The Vice President then proceeded to assemble all of the nation's oil and energy company executives (and their experts) and to meet in secret in Washington DC for developing this plan. (And as of today, the details of that meeting are still secret and are currently being protected by "executive privilege".)

Three months later, on May 17th, 2001, the results of that meeting were released and all that had been decided was to keep the existing US energy system (i.e: no change in status quo) and the US could be expected to continue its heavy reliance on oil and coal. There were also no suggestions or demands from the meeting for starting or increasing government sponsored alternate energy programs.

>>> Even though most of the country's energy experts were recommending that the White House should support a nation-wide program for energy conservation, the Administration totally disagreed. In April 2001, Vice President Cheney went as far to say; "Conservation may be a sign of personal virtue, but it is not a sufficient basis for a sound, comprehensive energy policy." In other words, they had spent thousands of hours and taxpayer dollars to finally say, "let's do nothing and oh, forget about conserving".

>>> Due to this continued commitment to a reliance on oil, Bush sought to increase production by calling on more drilling in the country's protected areas such as the Artic National Wildlife Refuge (ANWR). Even if this had been approved, the most optimistic projections are that in ten years, it would only reduce the US need for oil by ~4%.

>>> Due to this dilemma, Bush decided that the US would need to depend on more oil from the Middle East. Understanding that this could mean potential oil delivery disruptions due to possible Middle Eastern conflicts or political upheavals, the Administration began planning for stepped up military involvement in the overseas oil zones. The focus of these efforts was of course on the Persian Gulf. This idea was also supported by the then Secretary of Defense, Donald Rumsfeld, when he announced his "priority enhancement of American power production" in the unstable areas of specific developing oil nations. (i.e: Iraq / Iran)

>>> Then came 9/11 and the "War on Terror".
This catastrophic event gave the Administration an excellent opportunity to accelerate Rumsfeld's military build-up efforts as well as other objectives such as the elimination of Saddam Hussein. Hussein was then considered by the Bush Administration to be the strongest challenger to the possible US domination of the Gulf's energy supplies.

>>> After it was determined that there were no WMD's in Iraq, the Administration began claiming that the the invasion of Iraq was mostly intended for establishing a democratic state in the Middle East. Actually, the Administration's unspoken first priority was to stabilize the production and export of Iraq's oil output. Unfortunately, the results of the invasion were the exact opposite. Despite the billions of invested tax-payer dollars, oil production today is at about the same level as it was before the invasion. In addition, Iraq has now become a training ground for militant extremists that are migrating to other oil kingdoms and attacking those oil facilities. This also has caused some spikes in the rise of global oil prices.

>>> Now we have the situation with Iran.
With Saddam gone, Bush and Cheney now consider Tehran as the greatest threat to the US control of the Gulf. Even though Iran is making billions in oil revenue today, the Administration continues to promote that there is a strong possibility that Iran will eventually attack the oil shipping in the Persian Gulf. And that this attack will also ignite unrest among militant Shiites in the region. (Most Middle Eastern experts, outside of the vocal Republican Party members and the Bush Administration, feel that the administration has inflated the perceived menace of Iran's potential actions against the US well beyond reasonable consideration.)

Therefore, to restrain Tehran's nuclear programs, Washington has imposed economic sanctions on Iran and has forced America's European and Japanese allies to abandon plans for developing new Iranian oil fields. The result of these sanctions has been that Iran, with the world's 2nd largest oil reserves, is only producing 1/2 of the oil that it could be producing. Ergo, another major oil supply restriction that has been caused by the Bush Administration's actions.

>>> Unfortunately, the real major reason for the current increase in oil prices is due to the the Administration's constant threats to attack Iran if it doesn't stop its nuclear development programs. The Iranians have been clear that an attack on Iran would cause them to retaliate by blocking all Gulf oil shipments. This would drastically reduce the world's oil supply and the barrel price would zoom immediately to over $200 per barrel.

>>> It has been demonstrated that every previous threat of an attack on Iran from the Bush Administration has triggered a sharp rise in the speculation barrel price of crude oil. These threats and subsequent crude oil price increases have caused US pump prices to soar well above $4.00 per gallon.

>>> There is still no major effort to take the approach as was done in WW II to mobilize the country for developing alternate energy sources or for any mandatory energy conservation programs. Virtually all of today's conservation efforts are still mostly individual or voluntary. The Bush and Senator McCain proposals for off-shore drilling are pathetic and will do little to reduce the US demand for foreign oil.

If the Bush Administration and Senator McCain seriously wanted to help the average American's pocketbook at the gas pump today, they might just try announcing that military force is not an option in dealing with Iran. Most of the experts on Wall Street agree that taking the threat off of Iran would deflate many of the oil speculators reasons for the current high barrel prices. It could then possibly start to be a real situation of dealing with the true issues of supply and demand, instead of a market reaction to the threat of a war with Iran.

No, the price would not be down by 50%, but it could at least cause a major beginning of a downward slide in the global price of oil.

I believe it's at least worth a try.