PrintFebruary 6, 2009
The realities of our oil dependency
For the past 35 years, since the Arab oil embargo of 1973, there has been a lot of talk about reducing America's dependency on foreign oil, especially from the Mideast. President Barack Obama (D) has placed particular importance on this while emphasizing the need to develop "green" alternatives. While agreeing with the need to reduce our oil dependency, analyst Nimrod Raphaeli, of the Middle East Media Research Institute (MEMRI) discusses the realities of the situation which are quite different from common perceptions.
Backed by facts and figures he concludes that for the US
the alleged dependency on Middle East oil is greatly exaggerated. With the help of its oil strategic reserves, its national production of oil and the availability of oil from two friendly neighbors, Canada and Mexico, coupled with the drive for developing alternative energy sources, the U.S. could muddle through with reduced Middle East oil for a long while.
And, as Governor Sarah Palin (R-Alaska) has noted, if we expand oil production in Alaska our muddling through would be quite graceful and even beneficial as it would increase employment while US costs for imported oil, especially to countries hostile to our interests.
Unnoticed by many is that the global financial crisis has affected oil producers also, including those in the Middle East and Hugo Chavez's Venezuela. As a result
The decline of oil revenues has meant budget deficits in oil exporting countries. Available figures suggest that Saudi Arabia, the largest oil exporter in the world, will post a deficit in 2009 of $17 billion, the first since 2002; Oman, $2.1 billion; and Dubai, the second largest emirate of the United Arab Emirates, $1.1 billion.
What? Those oil rich countries have budget deficits too? Who knew? For the US this could mean
the sharp decline in oil revenues will lessen the threats of applying pressures on U.S. foreign policy by wealthy country or even the threat of acquiring vital U.S. assets by sovereign wealth funds.
Amidst all the bad news, some signs of hope.
