We've Been Warned

Cliff May
10/14/2011

Ayatollah Khomeini, leader of Iran’s 1979 Islamic Revolution, had a saying: “The Americans cannot do a damned thing.” Tehran has tested that proposition time and again – conspiring, over three decades, to kill Americans in Lebanon, Saudi Arabia, Iran and Afghanistan.

Now we have learned of an audacious plot to launch terrorist attacks on American soil. One hesitates to imagine the consequences if, after this, we allow Khomeini’s heirs to acquire nuclear weapons. No one will be able to say we were not warned. Lessons? Short term, Iran must be made to pay a price. The sanctions implemented so far have been only a shot across the bow. There is much more that can be done to isolate Iran economically and diplomatically. In addition, the millions of Iranians who oppose the theocratic regime should be supported and empowered. And there are other measures, more painful, that can be taken. We need to make clear that they are very much on the table.

Longer term, we need to finally recognize that Iran and other self-proclaimed jihadi regimes and groups are waging a war – a real war, not a metaphoric war. In response, America’s economic policies must become national security policies. As Bernie Marcus, the entrepreneur who founded the Home Depot recently said: “If the country is not strong economically, we can’t be strong period.”

Energy policy also must become national security policy. Right now, 97 percent of all transportation systems in the United States can run only on petroleum-based products. That makes oil a strategic community, one whose price is manipulated by OPEC, a conspiracy in restraint of trade dominated by Iran and other regimes hostile to America.

If transportation fuel were more abundant and cheaper, that would weaken OPEC – while strengthening both our economy and national security. How do we get there from here?

Most immediately: Re-open the Gulf of Mexico to oil production. In 2010, following an offshore drilling rig explosion, the federal government instituted a moratorium on deepwater drilling in the Gulf and halted much of the shallow-water drilling as well. It was essential to find out whether other rigs were at risk. Once that question was answered, the moratorium was lifted – in theory. In fact, the Interior Department has been refusing to issue permits for offshore operations.

David Holt, president of the Consumer Energy Alliance, a pro-energy advocacy group, calculates that 200,000 jobs have been killed as a result, and that another 380,000 are threatened.

But re-opening the Gulf for energy production, he said, would “create thousands of new jobs in nearly every state across the country, spur economic growth and enhance our national security.” More precisely, he cited a recent study concluding that increasing permit approvals for oil and gas exploration in the Gulf would “create 230,000 new jobs …bolster U.S. gross domestic product by $44 billion and generate nearly $12 billion in revenue to state and federal treasuries. In addition, opening the Gulf would increase domestic oil production by more than 400,000 barrels per day, reducing U.S. spending on imported oil by $15 billion.”

The Gulf is not the only area where vast amounts of energy are waiting to be tapped. The development of new technologies and techniques, such as “horizontal drilling" and hydraulic fracturing, have made it possible to recover vast amounts of oil and natural gas from the Bakken oil fields of Montana and North Dakota, and the Marcellus Shale in the Appalachian Basin.

But when Harold Hamm, the discoverer of the Bakken oil fields, recently told President Obama about “the revolution in the oil and gas industry and how we have the capacity to produce enough oil to enable America to replace OPEC,” Obama was dismissive, as the Wall Street Journal’s Steve Moore reported:

"[Obama] turned to me and said, 'Oil and gas will be important for the next few years. But we need to go on to green and alternative energy. [Energy] Secretary [Steven] Chu has assured me that within five years, we can have a battery developed that will make a car with the equivalent of 130 miles per gallon.'" Mr. Hamm holds his head in his hands and says, "Even if you believed that, why would you want to stop oil and gas development? It was pretty disappointing."

Disastrous might be the more precise term if America’s energy, economic and national security policies boil down to this: waiting for the development of new, improved batteries that can be used in electric vehicles which we hope will replace the existing fleet of gasoline-powered internal combustion engines, thereby reducing the funding we are providing to our sworn enemies at some point in the future. That’s like dealing with a house on fire by waiting for a blizzard.

As part of this hope-for-change policy, the Obama administration also has been stalling on approvals for the Keystone pipeline, a privately funded project that will bring oil to the US from the tar sands of Western Canada, creating 20,000 jobs with no taxpayer money.

And the White House has spent no political capital pushing for a minor and inexpensive modification of new automobiles that would allow motorists to fill their tanks not only with gasoline but with a variety of liquid fuels, including methanol, which can be made from natural gas, coal, urban garbage, and agricultural and forestry waste, and ethanol which can be made from sugarcane and many other crops that can be grown not just in American but in parts of the developing world (where little development is currently taking place).

Which of these energy sources can best reinvigorate the economy and enhance America’s security? All of the above: Let a thousand offshore oil rigs bloom, let a thousand distilleries turn waste into fuels, let horizontal drillers drill and frackers frac, let entrepreneurs gamble and consumers choose, let a freer market pick winners and losers – without subsidies or tariffs.

The alternative is to continue waiting and watching as rising oil and gas prices hobble job creation and economic growth. The alternative is to continue sending trillions of dollars to mullahs, sheikhs and caudillos who decide how much to spend on terrorist groups and, in the case of Iran, nuclear weapons development.

Making policy is challenging when progress on one front means losing ground on another. But right now a single set of policies could strengthen us economically and make us more secure. What we need are leaders willing to demonstrate that Khomeini was wrong: Americans can do a damned thing.