Politics, Foreign Policy, Current Events and Occasional Outbursts Lacking Couth

Been away for a while. Just some brainstorming regarding 5GW.

Via Wiggins (Iran needs oil at $60 a barrel:)

The International Monetary Fund said in a report in August that if the price of Iranian crude fell to $75 a barrel, Iran would face a current account deficit in the medium term that would be tough to sustain due to Tehran’s financial isolation.

Not the work of some dark, 5GW cabal, but that of a crumbling global economy. But the design is there. I'll speak hypothetically here.

President elect Barack Obama has promised an energy policy geared toward weaning the US off from foreign hydrocarbon's and adapting to renewable sources. Assuming his immense popularity continues (and it likely will) until 1/20/09, he could embark upon an intensive effort to combine his executive position, a friendly legislative branch, and his immense popularity with the already sensational pop culture of "going green" and the neodogma of climate change. The result has the potential to shift American demand for oil even further than the "natural" effects of the current tumbling global economy. The consequences (as noted above) for those economies foolish and reckless enough to float all their eggs in a single hydrocarbon basket would be potentially devastating.

Should American consumption fall significantly enough and assuming China and India could not step in to fill the demand vacuum (eventually perhaps, but a steep enough drop; not immediately I suspect) America stands to gain a rather hefty bit of leverage as it could essentially shop where it wanted. The effect is a complete 180 from the current situation in which the US is forced by want to rely on and at times support regimes that are otherwise unsavory.

A good portion of the Gap could be at least contained or controlled (if not shrunk) by shifting their base from resource providence to avenue hawker.


Wiggins said...

As Amory Lovins put it, the United States is the Saudi Arabia of oil demand.

Anonymous said...

We followed an explicit policy of robbing the Soviet Union of hard currency by conspiring to keep oil(and gas) cheap (in the 1980s) and by sabotage of their gas exportation ability. Iran already has to import refined petrol because their refinery capacity is inadequate and rickety. They are a brittle empire. HOWEVER, this is a lever not to crush them or cause them to break up, but to make nice. They work much more as a natural ally (considering their neighbors - especially to the north). An implicit understanding is something that we should pursue in the medium future.