Aletho News

ΑΛΗΘΩΣ

China snubs US call for harsher Iran sanctions

Press TV – February 25, 2010

Beijing once again has shrugged off Washington’s call for harsher sanctions against Iran over its nuclear activities.

US Secretary of State Hillary Clinton recently said she expects the UN Security Council to impose new sanctions against Iran within the “next 30 to 60 days.”

Clinton claimed that the US administration’s overtures to Tehran have helped Washington gain greater international support for tougher sanctions against Iran over its nuclear program.

Clinton said, “Iran has left the international community little choice but to impose greater costs for its provocative steps.”

However, China’s Foreign Ministry spokesman Qin Gang said that his country believes diplomatic efforts have not yet been exhausted.

“We believe there is still diplomatic room for the Iranian nuclear issue,” Qin said.

“We hope all parties concerned can put the overall interest in their mind and enhance consultation and dialogue so as to come to a peaceful solution,” he added.

Qin said China would “continue to play a constructive role” in resolving the issue.

Aside from China, Russia — another veto-wielding member of the UN Security Council — has voiced opposition to new Iran sanctions proposed by Clinton.

Tehran has repeatedly declared that the Western-backed sanctions will not force it to give up the Iranian nation’s legitimate nuclear rights.

February 25, 2010 Posted by | Economics, Wars for Israel | Leave a comment

Barak gives his marching orders

Press TV – February 23, 2010

After failing to win support in Russia for tough sanctions against Iran, Israel turns to its closest ally, the United States, for a backup plan to curb Tehran’s enrichment program.

On Tuesday, the Israeli military radio reported that Defense Minister Ehud Barak will be travelling to Washington to share his concerns over Iran’s refusal to stop its nuclear activities.

Barak will meet several US officials during his five-day tour, including US Defense Secretary Robert Gates, Secretary of State Hillary Clinton and Middle East ‘peace’ envoy George Mitchell. He is also scheduled to meet the UN Secretary General Ban Ki-moon in New York.

As part of a last-ditch effort to obstruct Iran’s nuclear program, Israel has sought to send high-ranking delegations to a number of countries, particularly Russia and China, to rally support for punitive measures against the Tehran government.

In Russia, Israeli efforts have achieved little with Kremlin officials declaring that it is much too soon to consider stringent measures against Iran. This has not stopped Tel Aviv’s effort to call for international sanctions against Iran. On the contrary, it has prompted Israeli Prime Minister Benjamin Netanyahu to go as far as demanding that the UN Security Council should be sidestepped if it cannot agree to more sanctions against Tehran.

“We must prohibit Iranian oil exports and imports to Iran of refined oil products. No other sanctions will be effective,” Netanyahu said in Jerusalem (Al-Quds) at a meeting of delegates from the Jewish Agency, an organization that encourages Jewish immigration to Israel.

Such daring rhetoric by the Tel Aviv regime comes in light of the wide belief that Israel is in possession of over 200 nuclear warheads. Additionally, Israel has refused to sign the Nuclear Non-Proliferation Treaty (NPT) and is not a member of the UN’s International Atomic Energy Agency (IAEA).

Despite its refusal to join any international atomic regulatory agency, Israel has been the most vocal in calling for international sanctions against the Islamic Republic of Iran for its IAEA-monitored nuclear program.

“We have arrived at a point where the international community has to decide if it seriously plans to stop Iran’s nuclear program,” the Israeli premier added.

This comes as the UN nuclear watchdog released a new report on Tehran’s enrichment program, criticizing Iran for a range of issues, but verifying the non-diversion of declared nuclear material in the country at the same time.

Iran says that is a signatory of the NPT and, unlike Israel, neither believes in atomic weapons nor, as a matter of religious principle, does it intend to access such weapons of mass-destruction. Tehran has also repeatedly called for the elimination of all nuclear arms throughout the globe.

Source

February 23, 2010 Posted by | Wars for Israel | Leave a comment

Israel: Sanctions must target Iran energy sector

Press TV – February 22, 2010

Israeli Prime Minister Benjamin Netanyahu continues on his campaign for international sanctions to be imposed against Iran’s energy sector.

“We must prohibit Iranian oil exports and imports to Iran of refined oil products. No other sanctions will be effective,” Netanyahu said in Jerusalem (Al-Quds) at a meeting of delegates from the Jewish Agency, an organization that encourages Jewish immigration to Israel.

Netanyahu went so far as to say the UN Security Council should be sidestepped if it cannot agree on the move.

“We have arrived at a point where the international community has to decide if it seriously plans to stop Iran’s nuclear program,” he added.

Netanyahu’s effort to stop Iran’s nuclear program — which Tehran says is peaceful — comes while Israel is reportedly the sole possessor of nuclear arsenals in the Middle East with 200 nuclear warheads.

On a visit to Russia last week, Netanyahu insisted on the need for “biting sanctions that have the power to influence the regime, bitter sanctions that have to hit, in a convincing way, the oil industry, imports, exports and refining.”

Russia’s Foreign Ministry, however, rebuffed the call and announced that Moscow is against imposing sanctions on Iran, noting that Russia has always favored a diplomatic solution with regards to Iran’s nuclear program.

Russia’s Deputy Foreign Minister Sergei Ryabkov said Moscow was against imposing “crippling sanctions” on Iran.

The US, Israel and some Western countries accuse Iran of seeking atomic weapons under the guise of its nuclear energy program.

Iran denies that it seeks to build an atomic bomb and says it only wants to enrich uranium for civilian purposes such as generating electricity and producing medical isotopes.

Source

February 22, 2010 Posted by | Mainstream Media, Warmongering, Wars for Israel | Leave a comment

Clinton avoided nuke question – student

AFP | February 22, 2010

A SAUDI student blasted US Secretary of State Hillary Clinton for skirting her question on Israel’s nuclear arsenal during a “town hall” meeting at a Jeddah college.

“I did not get a straight answer,” Mariyam Alavi said in a letter published in Arab News on her question to the top US diplomat last Tuesday. “My question was simple and direct enough,” she wrote, but Ms Clinton’s response “was very unsatisfying.”

Alavi, a 12th grader at the International Indian School in Jeddah, attended the meeting at the elite Dar al-Hekma College with six classmates. She had asked Ms Clinton about Washington’s stance on the existence of nuclear weapons in the Middle East.

If the Americans “so vehemently oppose Iran’s nuclear programme,” she had asked, “then why isn’t the US asking Israel to give up their nuclear weapons?”

Ms Clinton gave a lengthy answer detailing the US case against Iran, but did not mention Israel. She did, however, say that “we want not only a world free of nuclear weapons, we want a Middle East free of nuclear weapons, including everyone.”

Alavi’s Arab News letter assailed US “hypocrisy” over the issue, reflecting a widely held sentiment in in the region.

“Clinton said that the United States, under the able leadership of President Barack Obama, was trying to repair and strengthen its ties with the Muslim world.

“It is high time she realised it couldn’t be done without answering the questions uppermost in the minds of the Middle East people.”

Alavi said she had been nervous about asking such a “politically provocative question” but was then encouraged by strong applause from the audience when she addressed Ms Clinton.

Ms Clinton had been on a three-day trip to Qatar and Saudi Arabia to discuss, among other things, how to confront Iran’s alleged programme to develop nuclear weapons.

Source

February 22, 2010 Posted by | Deception, Progressive Hypocrite, Wars for Israel | Leave a comment

‘Ecuador being punished for befriending Iran’

Press TV –  February 22, 2010

Ecuadorian President Rafael Correa says his country was added to a list of states accused of lagging in the campaign against money laundering to punish it for its ties with Iran.

“This decision has nothing to do with the fight against money laundering, or the fight against the funding of terrorism… It has to do with that we have an embassy in Iran,” Correa said in the highland town of Sangolqui outside Quito on Saturday.

“So because we have misbehaved. They are giving us a smack so we don’t misbehave,” he added, describing the move as a “hypocritical punishment.”

“Instead of revising themselves, they condemn us. There is no money laundering here my friends. There is no terrorism, and no funding of terrorism. Imagine if he had money to fund terrorism, I wish I had money to build all the schools that I want to build,” he said.

The Paris-based Financial Action Task Force, or FATF, named Ecuador and Iran on a list of states that it says are failing to comply with international regulations against money laundering and financing terrorism.

However, Correa said that Ecuador’s two dozen banks had perfectly adequate legislation to protect against laundering and terrorism financing and dismissed the report as “a huge lie.”

Under Correa’s administration, Ecuador has strengthened diplomatic and commercial ties with Iran, which has opened an embassy in Quito.

In recent years, Iran has looked to increase its cooperation with Latin American states such as Ecuador, to the chagrin of Washington.

Citing a 2009 agreement between Ecuador’s Central Bank and some Iranian financial institutions, Ecuador’s private bank association said on Friday that it believed the Iran factor was behind the country’s inclusion on the FATF list.

Source

February 22, 2010 Posted by | Deception, Mainstream Media, Warmongering, Wars for Israel | Leave a comment

Some Straight Thinking About Iran

By Philip Giraldi | February 18, 2010

The Annual Threat Assessment overview was released by the office of the Director of National Intelligence on February 2nd.  A forty-seven page unclassified version includes a page and a half on Iran’s proliferation threat.  It raises legitimate concerns about Iran’s doubling of its number of operating centrifuges (while conceding that as many as half might not be working) and regarding what it describes as the secret nuclear facility near Qom.  Apart from that, it supports the conclusions of the December 2007 National Intelligence Estimate (NIE) which concluded that Iran had abandoned its nuclear weapons program and had not made the political decision to start it up again.

One would think it would be good news that the Iranian nuclear program has not really advanced since 2007, but something strange is happening.  The Obama Administration has intensified pressure on Iran with Secretary of State Hillary Clinton denouncing what she sees as the Iranian government’s increased militarization.  The mainstream media, meanwhile, has not reported the conclusions of the Annual Threat Assessment while there has been instead considerable commentary about how Iran is moving closer to having a nuclear weapon together with calls for harsh sanctions.  The Washington Times and Newsweek are also reporting that the US intelligence community will soon finish a second NIE on Iran that will revise the conclusions of the December 2007 document.  If their information is correct, the forthcoming NIE will emphasize that Iran is moving towards the point where it will have all the technical requirements in place to put together a nuclear weapon if the country’s political leadership decides to proceed.  This is a spin that is somewhat different than the Annual Threat Assessment, which is presumably written by the same analysts using the same information.  Admittedly, as the political go-ahead might never be given, all the intelligence really suggests is that Iran could soon join a large number of other countries that have the technical capability to make a nuclear weapon.  Of those countries there are some – mostly in Europe — that clearly have no interest in nuclear weapons development while others could move rapidly into a weapon program if their circumstances seem to demand it.  Iran is far from unique.  Turkey, Egypt, and Saudi Arabia all have the technological resources to develop nuclear weapons on an expedited basis if they found themselves threatened.

So the Annual Threat Assessment and the possibly forthcoming NIE would really only confirm the 2007 NIE’s judgment that Iran does not have a nuclear weapon, does not appear to have an in-place weapons program, and is still several years away from having a nuclear device even if the political decision is made to proceed.  If there is a new NIE it will not really change anything, but there is clearly a political agenda playing out that is driving the process.  One might even suggest that the timing is somewhat reminiscent of the infamous 2002 “slam dunk” Iraq NIE that falsely made the case for war by hyping phony evidence of weapons of mass destruction.  In this case, the conclusions are not as important as the report’s appearance at a crucial time when negotiations between Tehran and the West have broken down and Washington is pushing hard to pressure Iran.  The surfacing of a new assessment that is already being spun to heighten the threat will inevitably increase concerns about a possible Iranian weapons program and provide ammunition to those who are seeking a more assertive US policy.  By its very existence, the new NIE will also provide a measure of credibility for the Obama administration, which has relentlessly been making the case that Iran is intent on acquiring a nuclear weapon, a conclusion that is not supported by the available intelligence.

That the drive to punish Iran has been supported in Congress and the media is perhaps no coincidence, suggesting that the effort is being coordinated by those who want war.  At the end of January, by an overwhelming voice vote, the US Senate joined the House of Representatives in passing a resolution demanding sanctions on Iran’s energy imports.  A joint resolution that will go to President Obama is currently being crafted and is expected soon.  The resolution could well give Obama the political cover he needs to advocate even more draconian measures against Iran and its rulers.  From the Iranian viewpoint, it is pretty much a declaration of war.

Why is Iran the target of so much rage even though it has not threatened the United States or any vital American interest?  Influence over Congress and the media from Israel and its friends is surely a large part of the answer.  How else can one explain the different treatment afforded Iran and North Korea given Pyongyang’s open development of nuclear weapons and ballistic missiles?  Unlike North Korea, Iran continues to be a signatory of the Nuclear Non-Proliferation Treaty and its nuclear sites are inspected by the UN’s International Atomic Energy Agency.  Iran is a developing country with a small economy and tiny defense budget and it has not invaded a neighbor since the eighteenth century.  It does not even have the resources to refine its own oil for home consumption and must import the gasoline it uses.  If the proposed Congressional sanctions are fully implemented the country’s economy will grind to a halt, but the damage does not stop there.  Iran deals with many European and Asian companies in its energy industry, all of which would be sanctioned by the US if they do not break off relations.  They might not like that and might well take commensurate steps against the United States.  Ultimately, the United States Navy might have to enforce the sanctions.  What would happen when a Chinese or Russian ship is stopped on the high seas?  Did the US Congress really think about what it was doing and what the consequences of sanctions might be?

And the irony is that the United States has a problem with Iran that has largely been manufactured in Washington and in Tel Aviv.  Even though Tehran does not actually threaten the US, Washington has been supporting terrorists and separatists who have killed hundreds of people inside Iran.  Israel, which has its own secret nuclear arsenal, claims to be threatened if Iran develops even the ability to concentrate its uranium referred to as “mastering the enrichment cycle,” a point of view that has also been adopted by Washington.  The White House has made repeated threats that the military option for dealing with Tehran is “on the table” while Israel has been even more explicit in its threats to attack.  Meanwhile, the US mainstream media is united in its desire to come to grips with the Mullahs.

It is no wonder that Iran feels threatened, because it is.  To be sure, Iran is no role model for good governance but a desire to deal with the country fairly and realistically is not an endorsement of the regime in power.  Iran is engaged diplomatically and through surrogates in the entire Persian Gulf region and central Asia, supporting its friends and seeking to undermine its enemies.  But that does not make it different than any of its neighbors and the United States, all of which play the same game.  The bottom line is that the US has been interfering in Iran since 1978 and even before if one goes back to the overthrow of Mohammed Mossadeq by the CIA in 1953.  The interference has accomplished nothing and has only created a poisonous relationship that Barack Obama has done little to improve.  Indeed, Obama and Secretary of State Hillary Clinton’s harsh rhetoric suggests that when it comes to Iran the Democrats are more hardline than George W. Bush.

Imagine for a moment what might happen if Washington were to adopt a serious foreign policy based on the US national interest.  That would mean strict non-interventionism in troubled regions like the Middle East where the US has everything to lose and little to gain.  It would be the real change promised by Obama if Washington were to admit that it is not threatened by Tehran and were to declare that it will not interfere in Iran’s politics. It could further announce that it no longer has a military option on the table, and that it will not permit Israeli overflight of Iraq to attack Iran.  Iran’s leaders just might decide that they don’t really need their own “option on the table” which has been the threat that they might seek to develop a nuclear weapon.  And an Iran that feels more secure might well be willing to take some risks itself to defuse tension with its neighbors and Washington.  In 2003 Iran offered to negotiate all outstanding differences with the United States, an offer that was turned down by the Bush White House.

So the big question about Iran is not whether or not it has the knowledge and resources to build an atom bomb.  It does or will soon.  The real issue is whether the United States is actually threatened by that knowledge and what should be done in terms of positive policies to discourage an expanded nuclear program.  The United States should first of all recognize that, as the world’s only superpower, it controls the playing field.  It is up to Washington to take the first steps to defuse the crisis that is building by offering Tehran the security guarantees that might undercut the influence of those in its government who seek a nuclear weapon deterrent.  Punishing Iran is no solution.  It will not work, closes the door to diplomacy, and will only make the worst case scenario that much more likely.  Opening the door to a rapprochement by eliminating the threatening language coming out of Washington and creating incentives for cooperation is a far better course of action.

Source

February 18, 2010 Posted by | Mainstream Media, Warmongering, Wars for Israel | Leave a comment

NYT Sees UN-Syria Conspiracy Theory

By Robert Parry | Consortium News | February 15, 2010

The New York Times simply refuses to deal with “enemy” Muslim states with any sense of objectivity or fairness, reaffirming its deep-seated bias again on Sunday with the publication of a one-sided article about the assassination of former Lebanese Prime Minister Rafik Hariri on its fifth anniversary.

The article entitled “A U.N. Betrayal in Beirut” by op-ed contributor Michael Young argues that the original United Nations-authorized Hariri investigation, which pointed the finger of guilt at the Syrian government and its Lebanese allies, was correct but was then undercut by U.N. officials for political reasons.

The hero of the Times op-ed is German prosecutor Detlev Mehlis, who headed the initial U.N. inquiry and was subsequently replaced by Belgian investigator Serge Brammertz, who is portrayed as an incompetent who squandered Mehlis’s supposedly courageous work. Young wrote:

“Mr. Mehlis had few doubts about Syria’s involvement, and said so in his first report. He asked for President Assad’s testimony (over Syrian protests), interviewed Syrian intelligence officers in Vienna and arrested suspects. When Mr. Mehlis stepped down from his position in December, 2005, he felt he had enough to arrest at least one of the intelligence officers.

“However, the investigation wilted under his successor. … Mr. Brammertz issued uninformative reports and displayed a lack of transparency that discouraged potential witnesses, unsure of whether he had solid evidence in hand, from coming forward; … he failed to follow through on the interviews with the Syrian officers; and though he met with President Assad, he apparently did not formally take down his testimony.”

Young’s narrative fits with the Times’ previous hostility toward the Syrians regarding the Hariri case and other issues, much as the Times regularly tilted its coverage against Iraq prior to the U.S.-led invasion in 2003 and currently slants its reporting against the government of Iran.

On the Hariri case, the Times would have its readers believe that U.N. leaders lost their nerve and dumped a brilliant prosecutor in favor of an incompetent to sabotage the case.

But what Young and the Times failed to disclose on Sunday was that Mehlis’s initial investigation amounted to a rush to judgment that relied heavily on two witnesses whose testimony was later discredited or retracted. His successor, Brammertz, had no choice but to retrace Mehlis’s steps because there had been so many slip-ups.

The murder mystery began on Feb. 14, 2005, when an explosion destroyed a car carrying Hariri through the streets of Beirut.

Because Syria was then on President George W. Bush’s hit list for “regime change” – and Syria was considered a front-line enemy of Israel – speculative evidence of Syrian guilt was an easy sell to the U.S. news media. When Mehlis’s preliminary report was issued, there was little U.S. media skepticism about its assertions of guilt regarding Syrian leaders and their Lebanese allies.

“There is probable cause to believe that the decision to assassinate former Prime Minister Rafik Hariri could not have been taken without the approval of top-ranked Syrian security officials and could not have been further organized without the collusion of their counterparts in the Lebanese security services,” declared Mehlis’s report on Oct. 20, 2005.

Despite the curiously vague wording – “probable cause to believe” the killing “could not have been taken without the approval” and “without the collusion” – Bush immediately termed the findings “very disturbing” and called for the U.N. Security Council to take action against Syria.

The U.S. press joined the stampede in assuming Syrian guilt. On Oct. 25, 2005, a New York Times editorial said the U.N. investigation had been “tough and meticulous” in establishing “some deeply troubling facts” about Hariri’s murderers. The Times demanded punishment of top Syrian officials and their Lebanese allies.

But Mehlis’s investigative report was anything but “meticulous.” Indeed, it read more like a compilation of circumstantial evidence and conspiracy theories than a dispassionate pursuit of the truth.

As a wealthy businessman with close ties to the Saudi monarchy, Hariri had many enemies who might have wanted him dead for his business or political dealings. The Syrians were not alone in having a motive to eliminate Hariri.

Indeed, after the assassination, a videotape was delivered to al-Jazeera television on which a Lebanese youth, Ahmad Abu Adass, claimed to have carried out the suicide bombing on behalf of Islamic militants angered by Hariri’s work for “the agent of the infidels” in Saudi Arabia.

However, Mehlis relied on two witnesses – Zuhair Ibn Muhammad Said Saddik and Hussam Taher Hussam – to dismiss the videotape as part of a disinformation campaign designed to deflect suspicion from Syria.

Mehlis then spun a narrative of a Syrian conspiracy to kill Hariri. Four pro-Syrian Lebanese security officials were jailed on suspicion of involvement in Hariri’s murder. Everything was falling neatly into place.

As a new U.S. press hysteria built over another case of pure evil traced to the doorstep of an American adversary in the Muslim world, holes in the U.N. report were mostly ignored. At Consortiumnews.com, we produced one of the few critical examinations of what had the looks of a rush to judgment. [See Consortiumnews.com’s “The Dangerously Incomplete Hariri Report.”]

A Case Crumbles

Much like the Bush administration’s Iraqi WMD claims – which the Times also touted uncritically – Mehlis’s Hariri case against the Syrians soon began to crumble.

One witness, Saddik, was identified by the German newsmagazine Der Spiegel as a swindler who boasted about becoming “a millionaire” from his Hariri testimony. The other one, Hussam, recanted his testimony about Syrian involvement, saying he lied to the Mehlis investigation after being kidnapped, tortured and offered $1.3 million by Lebanese officials.

Mehlis soon stepped down, as even the New York Times acknowledged that the conflicting accusations had given the investigation the feel of “a fictional spy thriller.” [NYT, Dec. 7, 2005]

Mehlis’s subsequent replacements backed away from his Syrian accusations. Brammertz began entertaining other investigative leads, examining a variety of possible motives and a number of potential perpetrators.

“Given the many different positions occupied by Mr. Hariri, and his wide range of public and private-sector activities, the [U.N.] commission was investigating a number of different motives, including political motivations, personal vendettas, financial circumstances and extremist ideologies, or any combination of those motivations,” Brammertz’s own interim report said, according to a U.N. statement on June 14, 2006.

In other words, Brammertz had dumped Mehlis’s single-minded theory that had pinned the blame on senior Syrian security officials. Though Syria’s freewheeling intelligence services and their Lebanese cohorts remained on everyone’s suspect list, Brammertz adopted a far less confrontational and accusatory tone toward Syria.

Still, the U.S. news media, which had played the initial Mehlis accusations against Syria as front-page news, barely mentioned the shift in the U.N. probe.
Virtually nothing appeared in the U.S. news media that would alert the American people to the fact that the distinct impression they got in 2005 – that the Syrian government had engineered a terrorist bombing in Beirut – was now a whole lot fuzzier.

Instead, it remained common practice for the New York Times and the rest of the mainstream U.S. news media to continue citing the Mehlis report and referring to “Syrian officials implicated in Mr. Hariri’s killing” without providing more context.

That pattern continued Sunday in Young’s article, with the online version linking to a 2005 story that trumpeted Mehlis’s initial report. Young and the Times cite no articles describing the subsequent collapse of Mehlis’s case.

Last year, the U.N. tribunal examining Hariri’s murder and other terrorist acts in Lebanon acknowledged that it lacked the evidence to indict the four Lebanese security officials who had been held without formal charges since 2005. Finally, Judge Daniel Fransen of a special international tribunal ordered the four imprisoned security officials released.

In a similar situation – say, one that involved a U.S. ally – the release would have been viewed as proof of innocence or at least the absence of significant evidence of guilt.

In this case, however, the New York Times refused to acknowledge the obvious fact that the case against Syrian complicity was weak. Instead, the Times framed the development as underscoring “the legal pitfalls of a divisive international trial.” [NYT, April 30, 2009]

That stubbornly one-sided approach has now extended to the fifth anniversary of the Hariri slaying. Instead of acknowledging the flaws in Mehlis’s initial findings – or recognizing how recklessly premature those accusations were – the Times is now promoting a conspiracy theory that U.N. officials willfully tanked the investigation.

Yet the only conspiracy that Young’s article seems to corroborate is the one in which the Times and its editors relentlessly portray Muslim governments that are out of Washington’s favor as the “bad guys.”

Source

February 16, 2010 Posted by | Mainstream Media, Warmongering, Wars for Israel | Leave a comment

Don’t Worry About Dependence on Foreign Oil

By Ivan Eland | September 1, 2008

Politicians regularly turn public fear into votes. President Bush proved a master at this in his 2004 reelection success. Most presidents who don’t win the popular vote the first time don’t get a second term, but fear pushed Bush over the top in 2004.

In the 2008 election, oil prices are high, and the presidential candidates from both parties are trying to get into the White House by fear mongering about U.S. dependence on foreign oil. Barack Obama and John McCain both seem to think such dependence is a bad thing, and the American public wholeheartedly agrees. Because almost everyone concurs (except many economists) on this questionable proposition, the debate on high oil prices and what to do about them degenerates from there.

The facts are that oil prices are high by historical standards (although at this writing, they have declined somewhat from their peak, and the media has provided less coverage of this downward slide than it did of their upward movement) and the United States imports about two-thirds of the crude oil that it consumes.

In the globalized world, however, the United States is heavily dependent on imports for many important necessities and products – for example, semiconductors. International trade allows U.S. companies and the American public to take advantage of the world market to get better goods at cheaper prices. Thus, when politicians generate fear of U.S. dependence on foreign oil, they are implicitly alleging that oil is somehow special. Oil is heavily used in transportation and the manufacture of such industrial items as petrochemicals and plastics. Yet to use the example of semiconductors mentioned above, imported semiconductors also are key component parts of important items throughout the economy – for example, computers, television sets, other electronic devices, cars, etc. Therefore, the politicians are not only implying that oil is special, but that it is also “strategic.”

Oil is strategic, however, only in the narrow sense that its derivatives help run tanks, aircraft, ships, helicopters, and other vehicles that the U.S. military would use in a war. (Of course, so do semiconductors.) But the United States produces about 1.8 billion barrels of oil annually, almost 13 times what the U.S. military used at the height of its consumption during the latest simultaneous wars in Iraq and Afghanistan (144 million barrels per year). Thus, there is plenty of domestically produced oil to run the U.S. military in times of war.

With the probability of any worldwide conventional war among great powers escalating into a global thermonuclear holocaust being quite high – in which case nobody would be caring about the vaporized imported oil – such a widespread conventional conflict is very unlikely. Thus, in any regional war, the U.S. economy would be able to get oil from the regions of the world not involved in the conflict. The price might go up because of the war, but industrial economies are actually quite resilient to oil price increases. For example, the U.S. economy has not collapsed in the wake of recent record oil prices, and from late 1998 to late 2000, Germany maintained respectable economic growth rates in the face of a 211 percent price increase in oil.

But what if the war occurred in the volatile Persian Gulf region? The United States only gets 21 percent of its oil from the Persian Gulf. Most of it comes from Canada, Mexico, Nigeria, and Venezuela. Of course, a war anywhere in the world will cause the price of oil to go up. But about 80 percent of U.S. semiconductor imports come from East Asia, yet the media doesn’t constantly run hysterical stories on price spikes in semiconductors or on the horrible U.S. dependence on East Asian semiconductors. And the politicians don’t talk about using the U.S. military to safeguard such supplies from East Asia.

But can’t the world run out of oil, especially with developing nations, such as China and India, using more? Theoretically, the answer is yes because there are only finite deposits in the earth. Yet because exploration and recovery technology is constantly improving, proven oil reserves have tended to increase over time. Also, as oil prices go up, conservation increases and alternative energy sources – natural gas, solar, geothermal, etc. – become more attractive economically. For example, the conventional wisdom was that U.S. natural gas fields were in irreversible decline, but the high price of oil has led to a drilling boom to find more of this substitute. New technology to extract natural gas from shale beds has increased production in the U.S. dramatically and will probably also do so around the world. So who knows, similar technological leaps might also increase the amount of recoverable oil around the world.

But one thing is sure: it’s a myth that being dependent on imported oil is bad. As a way to stump politicians who perpetuate this nonsense, perhaps we should ask them this question: If oil is so critical and will become even more valuable when world supplies allegedly dwindle in the future, shouldn’t we use other countries’ oil now and have the U.S. government require that our limited production be saved to use or sell as the shortages worsen and future prices go even higher? Diametrically opposed to the present time, with the prevalent fears of dependency on foreign oil, this “conservation theory” was all the rage in the late 1930s and 1940s when a slowdown in finding new oil deposits seemed to threaten chronic future shortages (similar to the dire predictions after World War I and in the early 1920s before big oil discoveries were made late in the 1920s).

Of course, this is not the right policy prescription either. We should instead treat oil as any other product and let the market provide ample supplies at the lowest cost to the consumer.

Source

February 16, 2010 Posted by | Malthusian Ideology, Phony Scarcity, Timeless or most popular, Wars for Israel | Leave a comment