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Mid-East situation critical
By E. Ralph Hostetter
The Mid-East Crisis, involving the Palestinians and Israelis, has reached fever pitch with the suicide bomb set off in Tel Aviv recently that killed 21 young Israelis and injured many more
As Israel and the Palestinians posture for a solution to resolve the violence, America is caught in the breach of a no-win situation.
On the one hand, the United States has a commitment to guarantee the security of Israel from external attack, while on the other hand, the United States is dependent, for the most part, on the OPEC nations of the world for the better part of 60 percent of its foreign imports of oil.
President George W. Bush and Secretary of State Colin Powell will need the Wisdom of Solomon with a little help from Midas to find their way though a minefield that was sown millennia ago.
Those of us old enough to remember the Arab-Israeli war of 1973 will recall the recession that followed. It was brought about in good measure by the escalation in Middle East crude oil prices from $4.50 per barrel to $40 per barrel eventually.
In November 1973, this writer of a newspaper column, "Publisher's Prerogative," pointed out, and we quote: "Our economy is being crippled because the Arabs have already cut off all oil shipments to the United States. We were relying on them for nearly one-fifth (20 percent) of oil needs. American business and industry are staggered and we will surely suffer an economic recession, if not a depression."
America got a deep recession.
For the last few years or more, OPEC, the Arab and Venezuelan oil cartel has increased crude oil prices from a low of $10 per barrel to $30 per barrel by reducing production. We have said for some time now, the additional $20 per barrel is for the purpose of building a war chest.
America must come to the realization that the OPEC countries, having once completely cut off oil supplies to the United States, are very capable of doing it again.
The money accumulated in their war chest for several years now amounts to more than double what their normal income was. The Arab countries could not sustain a complete crude oil cut off for long in 1973 with prices only of $4.50 per barrel.
OPEC can now, with $30 per barrel oil, cut off U.S. supplies for six months or more - living off their war chest.
Losing half of our crude oil supplies would cripple the U.S. economy. We would not have the energy resources to wage war if attacked. It is problematic whether the U.S. has enough energy to produce, process and deliver food to its population. The California problem would shrink to nothing as compared to such a new national problem.
President George W. Bush must act immediately to put the United States on the fast track to energy self-reliance. President Bush was not elected to place the mating habits of some northern caribou above the economic survival of the United States.
Ralph Hostetter serves on the Board of Directors of the Free Congress Foundation.
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