The Saudis' Lord Haw Haw: An Energy Article G98 Can Enjoy

[roo_ster]

Zubrin is a conservative proponent of ethanol, if you are willing to concede that massive subsidy is conservative or at least not disqualifyingly statist.

Bryce is the author of the book Gusher of Lies, Saudi butt-boy, and Israel-despiser.  He also has something to say about energy policy.

We see a lot of articles as to the folly of our current ethanol pooch-humping, but here is something a bit different.

The Saudis' Lord Haw Haw
Robert Bryces Gusher of Lies is aptly named.

By Robert Zubrin

If despair is the worst of sins, then Robert Bryces appropriately named Gusher of Lies: The Dangerous Delusions of Energy Independence must rank as the worst book on energy policy ever written. Given the vast number of low-quality titles in the field, this is a remarkable accomplishment.

The U.S. cannot control its destiny when it comes to energy, Bryce asserts, and theres nothing the U.S. can do to change that fact. There is no reason to be unhappy about this, because theres little or no justification for the push to make America energy independent. Never mind that the U.S. could pay $600 billion for imported oil this year, up from $40 billion in 1999. Prices fluctuate. They go up and they down. Get over it. . . . No matter how you slice it, gasoline is cheap, cheap, cheap.

Bryce sees Americas continued obsession about the price of oil as being really quite rude to our suppliers. You know, the Chinese never ask us about price, observes Prince Saud, chairman of Saudi Basic Industries Corporation, who provides Bryce with a helpful quote. Do we really want to look like a bunch of cheapskates by comparison?

We should get over our obsession with Saudi support for terrorism, too: Terrorism actually causes rather little damage. And anyway, the conflation of oil and terrorism implies a link between terrorism and Islam. That is simply not true. And who are we to judge, anyway? America itself was founded by terrorists. One mans terrorist is another mans freedom fighter. Paul Revere, John Adams, and Samuel Adams  three icons of Americas push to gain independence from Britain  were all members of the Sons of Liberty, a group that frequently used violence to intimidate British loyalists. So how is al-Qaeda any different?

When you get past all the phony concerns about terrorism and price gouging, it becomes clear that all this anti-OPEC talk is simply racist, in Bryces telling. In fact, he says, America should welcome high oil prices because A dramatic drop in the price of crude would reduce Chinas oil import bills and thereby allow greater consumption with little cost. That would allow Chinas economy to grow even faster  growth that will further fuel Chinas rise as a global power. So, even though we pay three times as much as China for oil imports in absolute terms, and 12 times as much per capita, we should be grateful to OPEC for imposing this tax upon our economy because by doing so they are saving us from the Yellow Peril. Bryce points out that high oil prices save us from the threat of rising living standards in India, as well. Obviously, anyone who fails to appreciate these benefits must be a racist.

Bryces insights are thus truly unique. But there is a reason why his understanding of these issues exceeds that of most people. Invited to Saudi Arabia, he was shown the wonders of the Kingdom, which cured him of his previous misconceptions. He has seen the future, and it is Islamic.

A Pusher of Lies
In assuming the mantle of the Saudis Lord Haw Haw urging Americas energy surrender, Bryce makes his case with verve, utilizing an unprecedented combination of incorrectly performed calculations, illogic, rhetorical dishonesty, silly demagoguery, willful stupidity, outright falsehoods, critical omissions, crank citations, and pseudoscientific theories. Indeed, one must be grateful to his publisher for titling the book Gusher of Lies, as otherwise many people might be deluded into believing that some of it is true.

Correcting all the errors in Gusher of Lies would take a work three times its length, and at 372 pages, it is 372 pages too long already. Nearly all the relevant calculations in Bryces doorstop are off by at least a factor of two, and some  like his estimate of the amount of water used to produce corn ethanol  are off by a factor of over 400. (He says 885 gallons of water per gallon of ethanol; the actual industry figure is 2, since corn used for ethanol is not irrigated.). Bryce seems to suffer from an incapacity to consider quantity as relevant to any issue. To his mind, those concerned about terrorism cant object to increased Saudi revenues, since the Kingdom can fund just as much terrorism whether their income is under $3 billion per year (as in 1972), $30 billion per year (as in 1999), or over $300 billion per year (as it will be this year.)



Bryces discussion of the alleged benefit of higher oil prices for Americas 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 Iraqs favor. Those higher prices have allowed the country to amass sizable funds for its rebuilding effort, and they have helped offset the effects of Iraqs faltering oil production, which has fallen dramatically since the March 2003 invasion. Given that Iraq will  for good or ill  be Americas colonial possession in the Persian Gulf for the foreseeable future, higher oil prices are far better than lower prices.

In other words, whats good for OPEC is good for Iraq, and whats good for Iraq is good for America. But Iraqs 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 havent imported crude oil from Iran since 1991. However, elsewhere in his book, he admits that oil is fungible  i.e., all the worlds 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 dont worry about it. After all, we are the Arabs best customers, so a fuel embargo is inconceivable. One might answer: Wasnt 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, thats 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 didnt 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 dont 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 Wests oil supply. Al-Qaeda almost did it on February 24, 2006, when two of their fanatics drove a truck bomb into Saudi Arabias 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 wont do anything to stop them. True, but energy independence would stop those attacks from wreaking havoc on America.

[roo_ster]

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 thats 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 dont 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, Pimentels solution for remedying Americas 60-percent dependence upon foreign oil is to cut the nations 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.



Beyond such crank citations, Bryce indulges in wild demagoguery of his own, chanting scam and Big Corn at every turn. His bete noire is Archer Daniels Midland (ADM), which he portrays as a huge conspiratorial monopoly that completely dominates the ethanol industry. Actually, ADM is not even the largest American producer of ethanol. That honor goes to POET, a farmer-financed corporation with an output of 1.2 billion gallons per year, which is now building the first commercial cellulosic-ethanol plants. The fact that Bryces book fails to mention POET speaks volumes about his credentials  like a defense-policy expert who is unacquainted with the existence of the U.S. Army.

Having drawn a picture of the menacing ADM-driven Big Corn ethanol scam, Bryce proceeds to expose how this octopus is corrupting the American political system. He cites data proving that, between 1989 and 2006, ADM was the 85th-largest political donor in the U.S. (I am not making this up.) If that doesnt scare you, consider this: over the 16-year period in question, ADM contributions to its top recipient, Illinois Democratic senator Dick Durbin totaled $57,350, while GOP Illinois congressman Dennis Hastert raked in some $38,500  with average ADM yearly contributions to the two of them coming to $3,584 and $2,406, respectively! (Again, I am not making this up.)

OPECs Vertical Monopoly
As a loyal devotee of the oil cartel, the last thing Bryce wants is to do is describe how biofuels have weakened OPECs vertical monopoly on transportation fuel  and how we might weaken it further. This could be done forcefully, by having the U.S. Congress pass a law requiring that any new car sold in the U.S. be flex-fueled, i.e., able to run on any combination of gasoline, ethanol, or methanol. NRO contributor Cliff May has previously described how this flex-fuel mandate would work, as have I. Within three years of making flex fuel vehicles (FFVs) the industry standard, there would be 50 million cars on U.S. roads capable of running on methanol, ethanol, and gasoline  and hundreds of millions more worldwide. By forcing gasoline to compete everywhere against alcohol fuels made all over the world, from a number of diverse sources, FFVs would destroy the vertical monopoly of the oil cartel, forcing prices down to around $50 per barrel  and eventually down further, as alcohol-fuel production technology advances.

The FFV strategy for achieving an open-source fuel market is exactly the policy we need to beat the oil cartel, and it has been well-known as a policy alternative since it was first published in an article I wrote for The American Enterprise in 2006. Since Bryce is unable to refute it, he chooses not to mention it. This is certainly a disservice to his readers, but Bryce seems most interested in service to OPEC.

I was scheduled to debate Bryce in Washington, D.C., last month, but he backed out. I did manage to corner him, though, on Michael Medveds nationally syndicated radio show. His responses there were of considerable clinical interest: hard pressed, he fell back on the argument that biofuels should be shunned because they threaten to lower the price of oil, and thus contribute to economic growth, particularly in the third world, and so lead to global warming. He went on to cite Tim Searchinger, an Environmental Defense Fund (EDF) attorney who opposes biofuels for this reason. The EDF, it should be noted, is the organization whose proudest achievement has been the global ban on the pesticide DDT, an action which has caused the deaths of tens of millions of Africans through otherwise preventable malaria.

Bryce, a long time stringer for the oil industry funded Institute for Energy Research, has more recently become a regular contributor to Alexander Cockburns anti-American left fascist magazine Counterpunch. There, Bryce has written a series of diatribes attacking ethanol and denouncing Israel. Heres a sample of Bryce on the latter subject: Israel is not content with its occupation and total military domination of Palestine. No, Israel has proven that it wants to assure the Palestinians continue to live in the most dire poverty. . . .  etc., etc. Bryces views on the Mideast are instructive in clarifying the source of his opposition to ethanol.

Nevertheless, some conservatives hail Bryce because of his opposition to U.S. corn-ethanol subsidies. Such people need to take a hard look at the broader picture and reconsider their views. The core issue is not a 51 cents per gallon fuel production subsidy  although as Adam Smith himself showed by his support for British sail cloth subsidies in The Wealth of Nations, maintaining industries necessary for national defense should be supported by all who would maintain the free-enterprise system. After all, if you cant defend your freedom, you wont have free enterprise for long.

Nor is about abstract free-market principles. The oil business is not a free market. It is an oligopoly controlled by a cartel which is engaged in an active conspiracy against the free market. The flex-fuel standard Bryce opposes would help defeat that conspiracy. As Adam Smith and the great free-market economist F. A. Hayek both argued, government action to break such anti-market conspiracies is entirely appropriate.

That said, the central issue goes well beyond that: it is about who is going to control the world, on what principles, and to what ends.

As the case of Bryce demonstrates, Islamists and Malthusians share a common interest in keeping oil prices high. They have more in common than that. They are alternate sides of the same coin  the cult of human sacrifice. One is theistic, the other atheistic, but their fundamental program is the same: crush individual liberty, thwart human initiative, and constrain human aspirations to maintain a narrowly conceived fixed order, whether economic or religious. In both systems, tyranny is the natural political expression.

For the defeatist Bryce, the world of Islamist supremacy, enriched by OPECs control of humanitys fuel supply, and justified by Malthusian ideology demanding the sacrifice of many in order to fulfill the designs of a few, is acceptable. For the defeatist Bryce, the looting of the American economy of hundreds of billions of dollars per year to finance Islamist takeovers of corporations, media organizations, and ultimately, political systems, throughout the Western world is acceptable. It is not acceptable to me, nor do I believe that it is in any way acceptable to the American people.

Bryce has chosen to face Saudi Arabia and grovel. That is his right. But if the rest of us want to preserve the last best hope of mankind, we need to try something else.

 Nuclear engineer Robert Zubrin is president of Pioneer Astronautics, a senior fellow at the Foundation for Defense of Democracies, and author of Energy Victory: Winning the War on Terror by Breaking Free of Oil.

"...corn used for ethanol is not irrigated." 
True?

"And if you dont 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 the only reason to be upset about the ethanol BOHICA.

"The real issue respecting energy independence is not how much energy it takes to make a fuel, but how much petroleum is required..." 
I strenuously disagree.  It is the "real issue" only if you look at it from one perspective: keeping money out of the hands of the Saudis.

"As a loyal devotee of the oil cartel, the last thing Bryce wants is to do is describe how biofuels have weakened OPECs vertical monopoly on transportation fuel..." 
I think this more than a little optimistic.

"This could be done forcefully, by having the U.S. Congress pass a law requiring that any new car sold in the U.S. be flex-fueled, i.e., able to run on any combination of gasoline, ethanol, or methanol."
Flex-fuel may be a good idea.  Making a federal case of it is not.

"The core issue is not a 51 cents per gallon fuel production subsidy"
Jeebus.  What a screw-job for everybody not growing corn but still paying taxes.  That is a pretty serious core issue, IMO.

"...Adam Smith himself showed by his support for British sail cloth subsidies in The Wealth of Nations, maintaining industries necessary for national defense should be supported by all who would maintain the free-enterprise system."
Just as every child in a classroom is special, every industry is "vital" for our national defense.

[Gewehr98]

The Saudis are sweating anything that would reduce our dependency on their source of income, as well they should.

As for corn ethanol, if you're not in the cornbelt, it isn't a factor, and the incessant whining about the man keeping fuel and food prices high falls on (my) deaf ears.

If you are, and like my family, both grow extra corn for ETOH and use it in our flex fuel vehicles, then you'd know it's been around for a long time and will continue to do so until cellulosic ETOH comes on line.  Our black angus herd loves the free silage and the distiller's dry grains.  That's something the anti-ETOH crowd doesn't want anybody to know.

It's why my '53 Chevy pickup is running a 383 stroker w/E-85 Edelbrock carb, and why I'm looking into converting my '78 Shovelhead.  I filled up for $2.83/gallon the other day, and that's with a 40-cent/gallon tax in the price.  Subsidized?  Yeah, sure.  So are the folks in Louisiana who decided to live in a floodplain, and my tax dollars are buying cereal and milk for pregnant women, too.  The rebate checks going out to everybody this month?  They're coming from somewhere, and I'd wager it has something to do with my taxes, too.  For once, our farms aren't going to get foreclosed on. Cry me a river, anti-ETOH pundits! 

[Sergeant Bob]

"...corn used for ethanol is not irrigated."
True?

Sounds like BS to me. Corn needs water to grow.

The Saudis are sweating anything that would reduce our dependency on their source of income, as well they should.

As for corn ethanol, if you're not in the cornbelt, it isn't a factor, and the incessant whining about the man keeping fuel and food prices high falls on (my) deaf ears.

If you are, and like my family, both grow extra corn for ETOH and use it in our flex fuel vehicles, then you'd know it's been around for a long time and will continue to do so until cellulosic ETOH comes on line.  Our black angus herd loves the free silage and the distiller's dry grains.  That's something the anti-ETOH crowd doesn't want anybody to know.

It's why my '53 Chevy pickup is running a 383 stroker w/E-85 Edelbrock carb, and why I'm looking into converting my '78 Shovelhead.  I filled up for $2.83/gallon the other day, and that's with a 40-cent/gallon tax in the price.  Subsidized?  Yeah, sure.  So are the folks in Louisiana who decided to live in a floodplain, and my tax dollars are buying cereal and milk for pregnant women, too.  The rebate checks going out to everybody this month?  They're coming from somewhere, and I'd wager it has something to do with my taxes, too.  For once, our farms aren't going to get foreclosed on. Cry me a river, anti-ETOH pundits! 

Whoa! Didn't see that coming!
I guess you won't be crying about your taxes paying my retirement, SSDI, Medicare and Tricare for Life, as a supplement to Medicare.