Oil: A Defining Moment for Our Political Class and the Press

Not generally understood and barely reported upon outside the pages of the, the issue of challenging OPEC is a core test of our political class.
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Aspen -- Coincidence perhaps, but continuing here at the Aspen Ideas Festival, on Friday I attended a seminar entitled "Where Have All the Leaders Gone," with panelists William George, Sidney Harman and moderator David Gergen.

The subject: leadership and the qualities that make a leader, discussed by a dauntingly brilliant group of panelists. The interchange focused on the shortcomings of our political class and came to an ominously pointed conclusion that "leadership has got to become more than the ability to raise money to become reelected."

That very morning an article in the Wall Street Journal headlined "Why Bid to Allow Lawsuits Against OPEC May Fly," thereby presenting an issue of policy and a test of leadership that could not be more clearly drawn.

Not generally understood and barely reported upon outside the pages of the WSJ, the issue of challenging OPEC is a core test of our political class. Please know, the ability of the Organization of Petroleum Exporting Countries (OPEC) to operate freely outside the law, hiding behind our sovereign immunity shield, has made it possible for the cartel to fix pricing in the oil market in a way that the oil companies and oil interests have benefited in the billions if not the trillions at our expense over the past years. This gusher of money has given them enormous wherewithal to influence policy. The oil patch wants no interference with the status quo and will marshal all its ammunition to defeat this bill.

But perhaps a new day is dawning. In defiance of the oil lobby the Congress and the House of Representatives have overwhelmingly voted for the "NOPEC" bill (70-23 in the Senate and 345-72 in the House) so dubbed because it would allow the international oil cartel, OPEC, to be sued under U.S. anti-trust law as are other cartel/anti-trust violators (see "Average Gas Prices Hit All Time High: How Congress Must Now Act to Reduce Runaway Oil/Gasoline Prices" 05/07/07). Hereby an act of refreshing and courageous leadership by our Congress.

But wait. The oil industry will not be counted out. They and their allies in the OPEC cartel have a powerful friend in our (one begins to wonder if it still is "our") administration. That of course is the president. The White House Office of Management and Budget has let it be known that it would advise the president to veto the bill because litigating against OPEC could trigger a variety of legal, political and economic headaches. You can bet the farm that the White House will come up with a full agenda of arcanely documented reasons (enthusiastically supplied by the "K" Street oil lobby crowd) to veto the bill. One might call it the "Iraq decision syndrome."

If you can judge the merits of the NOPEC bill by its detractors you need look no further
than the vocal opposition of the American Petroleum Institute, the trade association of the industry that has overseen a near 400 percent rise in the price of crude oil in the last seven years, happily cheering exploding prices all the way. And then the likes of the oil industry's Energy Policy Research Foundation who caution, "Our friends in the Middle East don't understand we are just venting steam." Their director, Mr. Larry Goldstein's language, not mine.

There are of course the warnings by those parties interested in NOPEC's defeat cautioning us that if sued, OPEC might reduce or cut supplies to the United States. Let them! They need us as badly as customers as we have counted on them as suppliers. And for too long it has been a one-way street. We do their bidding while they play us for fools. When the UAE's oil minister Muhamed al Hamli not so subtly threatens, "if a state wanted to sue a (OPEC) member state, that would be a very dangerous step," they should be promptly reminded that the American taxpayer is paying near $100 million a day to keep a naval fleet in the Persian Gulf (I know, some would prefer it be called the Arabian Gulf) to protect his coastline and the coastline of other OPEC producers.

An important point in response to implied threats: oil is a fungible commodity, meaning that supplies not delivered here will be delivered elsewhere, thereby freeing up other sources for shipment here. It will also unmask the manipulative ambitions and fundamental unreliability of the OPEC suppliers, giving us further impetus to lead our economy toward a non-fossil-fuel future.

One need keep in mind that this is an important issue. Bringing OPEC to reasonableness is a beginning step toward energy self-reliance. To show that we are no longer afraid of their threats and that we will work assiduously toward minimizing our dependence on carbon based fuels. That the time is not far away that they will need us more as customer than we need them as supplier.

It is highly important that the press focus on this story, telling us about those in Congress who supported the NOPEC bill, and shining a bright light on those against it. Here we have Congress courageously working against vested interests. They should be heralded for their initiative in the nation's interest and their willingness to stand up against the oil lobby. Many would begin to have a renewed appreciation and respect of their work. It is the press' responsibility to make us aware that here, on this issue, we have an example of a Congress that has at last gone beyond the dead-end of leadership limited to "raising money to become reelected."

As for the president's threatened veto? Let it be. It will sadly further delineate his judgment and who he is and what he stands for. And of course, there will be Prince Bandar cheering in the wings.

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