America must break OPEC’s chokehold

By Richard Olivastro
Posted 4/7/08

Five weeks ago we called for the United States to “start drilling now” to extract oil domestically. We also outlined an approach that politicians, both incumbents and candidates, can use to implement immediate action through bipartisan …

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America must break OPEC’s chokehold

Posted

Five weeks ago we called for the United States to “start drilling now” to extract oil domestically. We also outlined an approach that politicians, both incumbents and candidates, can use to implement immediate action through bipartisan legislation.

Since that column, the economic, geopolitical and security situation of our country has continued to deteriorate. That must stop.

America needs strong decisive leadership — now. We cannot wait for November, or next Jan. 20. There can be no further delay, nor further excuses. This is about the will to lead and to act now in the interests of the U.S., as well as the immediate and strategic interest of every American citizen.

This is not about government intervening in the free markets. It is not about government or bureaucrats tinkering with free markets in general, or with the oil industry. This is about oil.

We need bold leaders to step forward now and deliver a clear consistent message. As we see it, the message is: All public land and owner-authorized private property within each of the 50 states plus our shorelines is open now to domestic drilling for oil, natural gas, etc. Additionally, every state will be expected to cooperate expeditiously, and welcome the construction of energy processing facilities within each state.

Here is some background. Last month, we discussed how crude oil worldwide hit well over $100 a barrel, which was up over 19 percent from February to March, and how the average U.S. price-per-gallon for regular gas is 69 cents higher today than last year at this time. Sixty-nine cents, of course, was the price increase through last month.

Now, we are paying even more. In fact, the AAA survey this month reports that Americans nationally are paying 14 cents more on top of the 69 cents.

Last month, we noted that OPEC cartel President Chakib Khelil rebuffed calls for increased oil production saying, “there is sufficient supply” and “there’s plenty of oil there, definitely not due to a lack of crude.” He also said, “The mismanagement of the U.S. economy is to blame.”

This past weekend, while visiting Iran, OPEC Secretary-General Abdullah al-Badri was quoted, by Iran’s official IRNA news agency, as saying that “OPEC is not under any pressure … to raise crude output. … Because the increase in oil prices is not related to a shortage of supply and because crude markets are stable … OPEC members did not see a reason to hold an emergency meeting.” Badri also made clear there were no plans to hold an OPEC emergency meeting before its next scheduled meeting in September. OPEC met early last month.

What was the OPEC Secretary-General doing in Iran?

For a number of years, Iran has lobbied within OPEC for the group to switch to a basket of currencies for its pricing instead of using the U.S. dollar. More recently, Venezuela has joined with Iran in this monetary move.

During the visit, Iranian President Mahmoud Ahmadinejad reiterated to Badri to “stop pricing oil trades in U.S. dollars;” and is “urging OPEC members to form a joint bank.”

Asked by Iranian reporters whether OPEC members may abandon the dollar for pricing oil, Badri said, “each individual country can decide to get its oil income in currencies other than the dollar based on its interests.” But he suggested any such move for OPEC as a whole would take time, IRNA reported.

In other words, OPEC is using oil to choke the U.S. economy and its citizens. Iran’s Ahmadinejad, along with Venezuela’s Chavez, are at work to further undermine the U.S. dollar, and then start an OPEC “Oil Bank.” Folks, huge amounts of oil money buy huge amounts of weapons. You get the picture.

And, our elected officials have not done anything effectively, and are not doing anything publicly, to stop the choking by OPEC, as a group, and each of the member countries. It’s time for strong leadership, across the board and around the world, with jaw-boning included.

The rationale for action and the multi-prong strategy to be implemented includes:

Domestically: The bottom line is gasoline literally fuels the American economy for individual mobility and to move food and goods for commerce. Therefore, the need for increased domestic oil drilling is absolutely necessary. Start drilling now. Every state must be opened to exploration and active drilling and to new construction of additional processing facilities.

Internationally: Oil cannot be used as an economic weapon. Oil distribution must flow via pipeline, shipping lanes, canals, etc. without interruption or delay. Select oil-producing countries will be offered a direct U.S. partnership treaty, independent of any industry group, i.e., OPEC, etc. The treaty would encompass oil-related energy products and binds each signatory nation to mutual national security.

Richard Olivastro is president of People Dynamics, an executive leadership development company, is a professional member of the National Speakers Association and founder of Citizens For Change. He can be reached at Rich@Olivastro.net.