It's the Oil, Stupid

On Friday I passed my two bellwether stations and gasoline was up $.08 over Monday. I suspect that when I pass them on Monday, at least another $.02 will have been added. No surprise there, eh?

We tend to think of the price of gasoline in terms of what we pay at the pump, and we tend to rail at the obscene profits the oil corporations post each quarter, and well we should. However, there is more to all of this than just what it costs to fuel our transportation. I was reminded of that in an interesting article in today's LA Times.

Iran maintains a costly nuclear program while spending billions to subsidize everything from apartments to gasoline. Russia defies international demands to give up a monopoly on oil pipelines to Europe. Venezuela sends aid to countries around the globe in an effort to expand its influence.

What all three have in common are treasuries swollen by the high price of oil.

The increase in oil prices is the common denominator in some of Washington's most implacable foreign policy challenges. From the U.S. government's perspective, oil money empowers regimes to defy American policy on a host of key issues, including nuclear nonproliferation and human rights.

Viewed another way, oil allows developing nations to challenge what their leaders see as years of lopsided U.S. dominance over international markets and the politics of the Middle East, Latin America and Central Asia.

Oil prices hit $78 a barrel in July. Although they have slid to about $60 since then, they remain more than twice as high as they were five years ago. With American demand for oil high and China and India rapidly increasing consumption, most analysts predict that petroleum will remain expensive for the foreseeable future.

For producing nations, the result has been a flood of revenue that "gives them leeway to pursue their own strategic and political objectives to a degree that they had not before," said James R. Schlesinger, a former U.S. secretary of Energy as well as Defense.

"I can mention Iran, I can mention Venezuela as glaring cases. Russia is also a prominent case in that regard. It is also true that the revenues that have been generated by these high oil prices have spilled over into the availability of funds for terrorist groups," he said.

Schlesinger and many other energy-policy experts fault U.S. officials for failing to do enough to counter rising oil prices. Schlesinger co-chaired a task force of the Council on Foreign Relations that said last month that high U.S. oil consumption was "undercutting U.S. foreign policy and national security" and criticized the Bush administration for failing to take effective steps to reduce American consumption of gasoline and other oil products.

The administration has pushed for new drilling to boost domestic production but has resisted efforts to raise gasoline taxes or boost vehicle mileage standards, saying those measures would hurt the economy.

The task force suggested, however, that failing to reduce demand for oil could have a greater cost in undermining U.S. policy abroad. [Emphasis added]

Now, ain't that a kick in the pants. Not only is our economy (and the personal economies of Americans) being affected by our dependency on oil, so is our foreign policy, and ultimately our security. And the administration's response? Let's do more drilling, in Alaska, the Gulf of Mexico, and off the coast of California. Yeah, that'll get it. In the mean time, there has been no move towards increasing CAFE standards, no real push for alternative sources of energy.

Senator Barbara Boxer will chair Senate Environmental Public Works Committee come January, and she has already promised a a shift in that committee's approach. She intends to emphasize Global Warming issues.

Sen. Barbara Boxer on Thursday promised major policy shifts on global warming, air quality and toxic-waste cleanup as she prepares to head the U.S. Senate's environmental committee.

''Time is running out, and we need to move forward on this,'' Boxer said of global warming during a conference call with reporters. ''The states are beginning to take steps, and we need to take steps as well.''

Hopefully, she will see that one of the elements of global warming is the emissions caused by petroleum based engines. She's certainly smart enough to connect the dots. Alternative energy sources should be on her agenda, as should the interim step of increasing the CAFE standards, and that's just for starters. The results of such an approach will affect all sorts of issues facing this nation.