Terror Free Oil

I find this such a ridiculous idea. Two words as to why: Global Market.

Since oil is traded on a global market the idea that you can “show those Arabs something” by not buying their oil simply isn’t going to work unless the boycott is world wide and everybody abides by it. We saw the same thing back when gasoline prices got high here in California. Every now and then I’d get an e-mail about how we were to boycott a given oil/gasoline company. One week nobody is supposed to buy from Shell stations. The next week the station to be avoided would be Exxon, the Chevron, and so forth. Why, soon these greedy companies would realize the error of their ways and bow down to the might of the California consumer. What happened? Nothing.

If you really want to “show those Arabs something” (or the oil companies) then stop using oil. Completely. If you buy oil from a different supplier, then somebody else is going to buy from the Arab. This is why the oil embargoes didn’t really work in preventing oil from reaching the United States and other Western countries. To be sure the price of oil went up, but that was due to cuts in production and it impacted everyone, the United States, Western and Non-Western countries alike.

Do oil revenues go to fund terrorism? I’d be surprised if this were not the case. The problem is that there isn’t an alternative to oil that is anywhere near as efficient. Not using oil is not too different from cutting off one’s nose to spite one’s face. And the idea that you can buy terror free oil is just a feel good marketing scheme that ultimately will do nothing against terrorism funding.

FILED UNDER: Economics and Business, Middle East, World Politics, , ,
Steve Verdon
About Steve Verdon
Steve has a B.A. in Economics from the University of California, Los Angeles and attended graduate school at The George Washington University, leaving school shortly before staring work on his dissertation when his first child was born. He works in the energy industry and prior to that worked at the Bureau of Labor Statistics in the Division of Price Index and Number Research. He joined the staff at OTB in November 2004.

Comments

  1. Triumph says:

    The problem is that there isn’t an alternative to oil that is anywhere near as efficient.

    Dude, what are you talking about? Bush says we can just use ethanol instead!

    Sure, there won’t be any more cropland for FOOD–but we’ll have all the “renewable” fuels we can use!

  2. Oh, I don’t know, maybe next they can shill for carbon emission free oil. It makes about as much sense.

  3. Steven Plunk says:

    Blaming Bush for ethanol programs? Seems like those have been pet projects for greenies for years. Now that Bush lends a little support some people blame him for famine?

    Steve V. recognizes the world market for oil and how things like “terror free oil” or Chavez sending oil to New England really don’t do much. Freeing the US from middle eastern oil doesn’t matter either. It’s a world market and everybody is in it.

    If we want less oil from the middle east then we should develop and pump more ourselves along with encouraging other countries to develop and pump more. Flooding the market would reduce prices and perhaps bring about an end to OPEC’s market manipulation.

    As a marketing gimmick it’s pretty good, as economics it’s nothing. By the way, How do we know it’s “terror free” and would that include Venezuelan oil?

  4. legion says:

    Triumph,
    I smoked all my switch grass. Got any more?

  5. Dave Schuler says:

    Not only is there a global market but it’s very nearly a perfect market: prices are communicated virtually instantaneously. If the mouth-breathers at TFO were completely effective in their campaign, what would the result be? Middlemen of various stripes would make a killing.

    And guess who the middlemen would be? Yup. Other supporters of terrorism.

    Cellulosic ethanol i.e. ethanol made from switchgrass or something other than corn, sugar, etc. is actually a pretty fair idea. Switchgrass grows practically everywhere in the Western Hemisphere and doesn’t require fertilizer, at least not much. It will grow where other crops won’t so it doesn’t need to displace farmland. But we’re a long way from where it’s a real, economically and ecologically sound alternative.

  6. M1EK says:

    “Blaming Bush for ethanol programs? Seems like those have been pet projects for greenies for years.”

    No, they haven’t. Even the dumber greenies still knew that ethanol was just a farm subsidy.

    As for the main post – what about making sure you use AS LITTLE OIL AS POSSIBLE? The theory that driving the typical US 15,000 miles per year in an Expedition doesn’t do more to make the Saudis rich than driving 3,000 in a Prius seems, somehow, flawed.

    Do what you can. Everybody can do something. And something’s better than nothing.

  7. Rick DeMent says:

    If we want less oil from the middle east then we should develop and pump more ourselves along with encouraging other countries to develop and pump more.

    If this were possible we would be doing it, sadly there are no reserves big enough to make even a little tiny dent on world prices that we could get our hands on.

    Sure we could exploit our last undeveloped domestic sources (ANWAR, the gulf and a few others) but all that would do is make that much worse for us sooner rather then later. In this case, Mr.Verdon is spot on the money, the only way we can really do is use less. One thing we could do right away is stop all subsidies and tax brakes for oil companies, recreational use of energy, and exploration and recovery. Then a per barrel tax on oil to fund an Apollo like program to develope sustainable energy sources. In the case of the former, let the market do it’s work, in the latter let’s be the ant not the grasshopper.

    Bio-fuels are great as a temporary adjunct to aid in the transition but not a final solution. At this point there are no good solutions other then to simply use less.

  8. Steve Verdon says:

    As for the main post – what about making sure you use AS LITTLE OIL AS POSSIBLE? The theory that driving the typical US 15,000 miles per year in an Expedition doesn’t do more to make the Saudis rich than driving 3,000 in a Prius seems, somehow, flawed.

    Okay, but only if it doesn’t cost me money…and in fact, toss in a subsidy to boot.

  9. M1EK says:

    I’d argue that we currently excessively subsidize gas-guzzlers; from paying for a lot of direct and indirect road costs by means other than tolls or gas taxes, to paying hundreds of millions on military adventurism to prop up odious regimes that happen to keep prices agreeably stable.

    You remove those subsidies and I’ll be happy to eliminate the hybrid tax credits and whatnot. I’ll be way ahead when that happens, though.

  10. Steve Verdon says:

    I don’t think you understand my point M1EK. Positive externalities isn’t some sort of quid-pro-quo thing. If driving a hybrid means less pollution and less funding for terrorism and I’m not getting the full benefit of buying a hybrid, then it should be subsidized irrespective of those other things you mention. Of course, I’m presuming you aren’t in third grade.

  11. equaltruth says:

    Unsolicited Suggestion.

    The black monster that engulfed from the bowels of the earth, excruciating and knocking-down people on the streets, with the Deadly Tetra Ethyl Lead (TEL) that contain in fossil fuel, and now, replacing it with Methylcyclopentadienyl Manganese Tricarbonyl (MMT) if not with Methyl Tertiary Butyl Ester (MTBE) that contaminates ground water.

    Why not Enkonize your engines?

    Enkoco is not a bio-fuel and as a fuel additives — as described by legislators.
    http://www.gov.ph/forum/thread.asp?rootID=136581&catID=5

    Enkoco invites expats would-be business partners and international product distributors.
    http://www.exportlinker.com/businessdirectory/0000001954.htm

    Please visit us at:
    http://www.enkocogreengold.zoomshare.com

  12. The so-called “Terror Free Oil Initiative” is in reality an initiative by its owners to steal more money from Americans, to profit from the fear-mongering that they are promoting in other media, and to make a huge amount of money. See the expose at Hatewatch Hall of Shame or click the link in this comment (link may be in my name)