What do you all think of Tom Friedman's Geo-Green Plan for the Middle East? I can't find any articles on it-- unless I pay the NY Times! Basically, he calls for a Manhattan Project-type initiative to develop alternative energy sources for the US, thus damaging the middle east economies which are largely dependent on western oil consumptions. They don't really have to deal with us when they have us by the balls--- err barrels.
America makes tons of money off of the rest of the world using American dollars to buy oil. If we tried to stop or even reduce our oil expenditures, then OPEC would sell oil for Euros instead and America would take a big hit to our economy. That would be my guess as to what he is talking about anyway.
What Stupidmoniker said. If OPEC converts to Euros, we'd have to run an account surplus to buy Euros into oil. Demand for the dollar would fall, the dollar would devalue even more. We'd have to pay the world average price for oil, ~$5/gallon. Because industrial economies run on oil, most countries would buy more Euros for their currency reserves, demand for the dollar would fall even more. It's because we're the unofficial currency for foreign investors that we're able to run budget and trade deficits. Those investors gave America an almost interest free loan. We would be forced to live at our means than beyond it. We have the technology right now. Wind power's cost to power ratio is near coal generated power. The wind in America can theoretically generate 3 times our nation's current energy consumption if we were able to use all of it. Solar technology will continue to become cheaper and it could be the next Silicon Valley if private industry pushes it. Flywheels, which are kinetic batteries, has an 80% storage efficiency. They can be used to store solar energy during the day for night use, or store power plant energy at night in order to reduce daytime loads. The flywheels proposed are expensive because of the composite technologies involved, but would be very cheap, durable, nonhazardous, and easily replacable if mass produced to scale. These advancements should induce public excitement and government involvement, but there isn't a lot of awareness. Instead, we have hot button issues like the Kyoto Protocol and drilling into ANWR when they shouldn't have to be issues. Cheap and safe hydrogen power is a longshot in the next 30 years. Most of this is political. How can we assume oil states are our enemies when we provide security to their leaders? The public assumes that government involvement will solve our energy needs. Our best bet is the private industry.
^The first paragraph isn't meant to be too dramatic. Investors would still invest in the dollar, but the dollar wouldn't be dominant as it is now. The American economy and public would still have to adjust. It's just that current conditions, with debt and budget crisises, would increase the shock in our economy. By decreasing world dependence on oil, we also decrease world dependence on the dollar.
Well now that's a pickle isn't it... If the Arab world hates us so much, isn't it just a matter of time before they shift to the Euro? Our neck is out there doubly. This did not come up in the Russert-Friedman conversation. I wonder if it's in the full article?
The people in the Arab world who hate us don't control the Arab oil - the oil reserves are controlled by small minority who aren't about to piss off their best customer (we're the #1 consumer of oil by a wide margin). The point is that if we lessen our dependence on oil, that would provide the motivation for OPEC to switch to the Euro.
On a side note. Say if someone invent a water based energy source, how long do you think he would live?
by the time we were able to make a dent in our consumption, India and China will have plenty of demand for the Middle East we can't hurt them without crippling ourselves
If you take away the politics, OPEC nations could already be greedy by switching to the Euro. The price of the Euro would rise due to increased demand and conversion to oil. Goods from import nations (which OPEC also purchases with their new official currency) would be traded for the Euro. OPEC profits doubly. Then after all has been neatly converted after some 5-10 years, OPEC switches back to the dollar and profits doubly again. But what we're seeing now with Bush's soft dollar policy is that the trade deficit hasn't shrunk as much as anticipated (it's getting there). One reason is that oil prices has risen. OPEC nations aren't getting their bang for the buck because the value of oil has dropped along with the devalued currency. In order to compensate, they've increased the price per gallon, which resulted in stifling growth in industrialized countries. The cheaper dollar negates OPEC's profits from such an increase while the soft dollar policy isn't working to full effectiveness. If it was up to simple economics, OPEC's switch to the Euro would be immediate. So while the Arab world might hate us, Arab governments definitely don't. Actions speak louder than words.
