Bryce’s discussion of the alleged benefit of higher oil prices for America’s bottom line provides another example of his innumeracy — and a valuable insight into his views on U.S. Mideast policy. He says:
Iraq has become a colonial possession of the U.S. And higher oil prices have been among the few things working in Iraq’s favor. Those higher prices have allowed the country to amass sizable funds for its rebuilding effort, and they have helped offset the effects of Iraq’s faltering oil production, which has fallen dramatically since the March 2003 invasion. Given that Iraq will — for good or ill — be America’s colonial possession in the Persian Gulf for the foreseeable future, higher oil prices are far better than lower prices.
In other words, what’s good for OPEC is good for Iraq, and what’s good for Iraq is good for America. But Iraq’s oil production, under two million barrels per day, is less than one-tenth of U.S. consumption: Iraq brings in $20 billion exporting its oil, while America in 2008 could spend $600 billion for oil imports. According to Bryce, if the price of oil were cut by two thirds, the drop in Iraq petroleum revenues from $20 billion to $7 billion per year would be a disaster for the U.S. — despite the fact that America would keep $400 billion of the $600 billion per year we now spend on foreign oil.
His book is rife with such specious reasoning. In several places, he asserts that U.S. oil purchases do not fund Iranian terrorism, since we haven’t imported crude oil from Iran since 1991. However, elsewhere in his book, he admits that oil is fungible — i.e., all the world’s oil goes into, and is sold from, a common pot, with shares of the proceeds going to each supplier: the U.S. puts in 25 percent of the payments and takes out 8 percent of revenues, while OPEC takes 40 percent– so in fact part of every U.S. oil dollar does go to Iran, as well as every other terror-funding petrotyranny.
Will our excessive dependence on foreign oil leave us vulnerable to a supply cutoff and economic shutdown? Bryce says don’t worry about it. After all, we are the Arabs’ best customers, so a fuel embargo is inconceivable. One might answer: Wasn’t there one in 1973? Bryce says no. The gas lines, mass layoffs, and general economic chaos during the winter of 1973-74 in the U.S. were all the fault of the Nixon administration. (How Nixon also engineered a simultaneous seven-fold hike in the price of oil globally goes unexplained.)
Of course, that’s the version of history given in just one part of the book. Elsewhere, he quotes leading Saudi figures admitting to their efforts at an embargo in 1973, but that it “didn’t work.” They should be able to do better next time they try, because the OPEC powers now have massive financial reserves as a result of elevated oil prices over the past several years, reserves they did not have in 1973. Today, they can afford to keep an embargo in place for much longer. The fact that the U.S. is now 60-percent dependent on foreign oil (up from 30 percent in 1973) would make a repeat embargo far more devastating. But don’t worry, says Bryce. The Arabs are sensible people. Just trust them.
Bryce does admit, however, that there are a few bad apples in the Arab world who might try to cut off the West’s oil supply. Al-Qaeda almost did it on February 24, 2006, when two of their fanatics drove a truck bomb into Saudi Arabia’s main oil terminal at Abqaiq, nearly destroying it. Had a single guard missed his shot, or had his gun jam, or been disloyal, or been asleep, or was first killed by terrorists, the effects on the world economy would have been catastrophic. Yes, says Bryce, more such attacks can be expected in future, but “energy independence won’t do anything to stop” them. True, but energy independence would stop those attacks from wreaking havoc on America.
Having thus argued that no one should want to be free of oil-cartel domination, Bryce launches an extended attack on corn ethanol. This is understandable. The 8 billion gallons of ethanol the U.S. produced in 2007 (at a cost to taxpayers of $4 billion in blender subsidies) cost OPEC $20 billion in revenues from reduced American oil-sales volume. Worse yet, in combination with Brazilian and other foreign biofuel efforts, the ethanol program has been responsible for cutting global oil prices by $13 per barrel compared to what they would otherwise be, according to Merrill Lynch analysis published in the Wall Street Journal in March. Now that’s a serious matter. As a result of this $13 per barrel price erosion, ethanol cost the cartel $170 billion in global revenues this year, with $65 billion in potential collections lost in the U.S. alone. No wonder that Bryce (along with other OPEC spokesmen such as Hugo Chavez and the Saudi oil minister) is upset. And if you don’t like the fact that $85 billion of your money is not going to OPEC, then you should be upset about the ethanol program, too.
Not surprisingly, Bryce fails to bring up the issue of OPEC financial losses in decrying ethanol. Instead, he quotes David Pimentel, an insect ecologist from Cornell, who has published analyses claiming that it takes more energy to make ethanol than the final fuel product delivers.
Pimentel is a Mathusian zealot who opposes all forms of modern agriculture, including fertilizer use, irrigation, and pesticides — and his anti-ethanol analyses have been refuted repeatedly in the refereed scientific literature. The real issue respecting energy independence is not how much energy it takes to make a fuel, but how much petroleum is required, and (as A. Farrell et al. showed in Science in 2006) it takes more than ten times as much petroleum to refine a given quantity of oil into gasoline as is needed to produce the equivalent BTU value in corn ethanol. Moreover, Pimentel’s solution for remedying America’s 60-percent dependence upon foreign oil is to cut the nation’s population by 200 million people, a goal he proposes to accomplish by ending all immigration and imposing state-run population control programs. Indeed, Pimentel is a member of the Board of the Carrying Capacity Network, an ultra-Malthusian group whose chairman is the self-professed “white separatist” Virginia Abernethy. Yet the supposedly anti-racist Bryce freely quotes Pimentel as a bona fide authority.