Worldwide Change and the End of OPEC

Homegrown Defense is a great little book about the impact of the oil monopoly on national security in America. It's a collection of essays by different authors — Wesley Clark, Frank Gaffney, Gal Luft, Burl Haigwood, and Robert Zubrin. The following is an excerpt from Frank Gaffney's chapter:

Over time, the Open Fuel Standard would transform America's transportation sector from what I call "gasoholic" vehicles to "omnivores." As new FFVs become ever more widely available and older, gas-only cars are phased out, the United States would create a vast new market for fuels that can be produced domestically, in the case of methanol derived from anything made up of carbon. Among such plentiful sources are switchgrass and other plants, wood pulp, used tires and trash.

In this fashion, at the cost of just $100 or less per newly manufactured vehicle, the United States can, over time, wean itself from what amounts to its present, utter dependency on a single source of transportation fuel — oil — most of which is supplied by members of the OPEC cartel. This will have a truly revolutionary strategic effect, especially if, as a practical matter, the US Open Fuel Standard winds up becoming an international standard. That would seem to be a predictable result since car companies, having retooled their production lines to make Flexible Fuel Vehicles, will find it more economical to manufacture basically the same vehicles for sale elsewhere.

As a result, within relatively short order, something like 120 countries around the world, many of them currently desperately poor and unable to afford high gas prices, will be able to produce their own transportation fuels from native vegetation or other sources. Some may even be able to become net energy exporters, offering them a way out of their state of impoverishment.

The result will be the end of OPEC's monopoly and, perhaps, of the cartel itself.

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Fuel Competition and Mental Health

I was talking with the director of a large mental health hospital a few months ago. They had just finished building a new wing of the hospital, and he said they've been extremely busy since the Great Recession began. He told me something I've never heard before — recessions always initiate a steep rise in mental health problems.

I must have looked surprised. He explained, "Well, people lose their jobs, which causes stress, and sometimes they lose their houses too. Under the strain, couples get divorced. Depression and anxiety increase. Anger and frustration rear their ugly heads. Sometimes people deal with it by drinking too much or taking drugs, and that causes even more problems. Sometimes the stress can trigger the onset of latent problems like psychosis and schizophrenia."

All of this got me to thinking. Since every time oil prices have spiked since WWII, we've had a recession in the United States, and since recessions cause more peoples' lives to fall apart, and since we could prevent rising oil prices from causing recessions if we had sufficient fuel competition, then it is not unreasonable to assert the following:

Oil's monopoly on transportation fuel
causes mental illness.

Or at least the oil monopoly plays a causative role in triggering a greater number of mental health problems than would otherwise have occurred.

So we can chalk this up as yet another good reason to stop the insanity of perpetuating a one-fuel economy. In addition to increasing our national security and boosting our economy, fuel competition can help keep our citizens mentally healthy. In addition to curtailing the money going to prop up dangerous women-oppressing regimes, lowering the amount of lobbying and influence the oil industry enjoys, helping to solve our garbage and landfill problem, helping people in developing nations rise out of poverty, and reducing the amount of pollution and greenhouse gases sent into the atmosphere, into the ocean, and into the ground, fuel competition can also literally make the world a saner place.

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How Oil Prices Influence Employment

There is an insidious side effect of rising gasoline prices. As people spend more money on gas, they spend less money on other things, and that causes the loss of jobs.

“Since consumer spending is the main driver of the U.S. economy,” says Mark Cooper, Research Director of the Consumer Federation of America, “when speculators, oil companies and OPEC rob consumers of that much spending power, the inevitable result is a dramatic reduction of economic activity and employment.”

In Cooper’s study of the effect of oil prices on jobs, he discovered that every time oil prices have spiked since World War II, we’ve had a recession in America. In his study, he showed that because oil was about $30 a barrel higher than “costs or historic trends justify,” gas prices rose by a dollar a gallon in one year (from the summer of 2010 to the summer of 2011), which drained about 200 billion dollars from the economy. This is about two percent of consumer spending. That doesn’t seem like much, but two percent less spending (200 billion dollars) created the loss of hundreds of thousands of jobs.

Another way to look at it is that because most of our cars are not warranted to burn anything but gasoline, we imported about $500 billion dollars per year of oil, sending that money out of the country. That would have paid five million workers $100,000 a year! But the money leaving our country just leaves — doing nothing for us. If the same money was paid to workers here, it would have a huge ripple effect in our economy because that money would then be used to buy other goods and services in America.

- Excerpted from the book, Fill Your Tank With Freedom.

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