Why the Open Fuel Standard is Urgent

Beyond the pinch on our wallets, the Open Fuel Standard holds a much bigger issue at stake. In Robert Zubrin's book, Energy Victory, the preface to the paperback edition makes our precarious situation perfectly clear. The hardcover came out in 2007 and the preface to his paperback was written in 2009. In that short time, a lot had happened.

In 2007, the price of petroleum was $70 a barrel. OPEC restricted its oil production, so the price of oil climbed to $140 per barrel and then the economy tanked. Many people said the economic collapse was because of "speculative mortgage-backed securities" which lost their value when the housing market collapsed.

But, asks Zubrin, "Why did the global housing market collapse?" Because people ran low on money all over the world. But why? Where was everyone's money? It went to pay for oil.

In Fiscal Year 2008, "Americans paid $900 billion for their oil supply," writes Zubrin, "and the world as a whole paid $3.6 trillion. These petroleum costs were up by a factor of ten from what they were in FY 1999, and they represent a huge, highly regressive tax on the world economy."

And it continues to increase. Americans paid $80 billion for oil in 1999 and they paid $900 billion ten years later. This is equivalent to a "33 percent increase in income taxes across the board." And 60 percent of that money was handed over to foreign governments.

Let that sink in. We're paying a lot more now than we were paying then — for the same product. It doesn't seem like we've been spending that much on gas, but the money we pay for oil doesn't only go into our own car's gas tank. The "income tax" is across the board. Rising oil prices increase the cost of everything shipped somewhere, which means just about everything.

The global housing market collapsed because people didn't have as much money — it had been given to oil suppliers. Auto sales collapsed too, for the same reason. "So, as a result of this massive new tax on our economy — by far the largest in American history — the United States" was driven into a recession.

It was bad enough for Americans. It was far worse for people in poorer countries who didn't have "disposable income" to dispose of.

The destruction of the world's economy is deliberate. During November and December of 2008, "even as the leaders of the industrial nations scrambled desperately to implement stimulus programs to save their economies, OPEC's conspirators held meetings in which they agreed to take 4.5 million barrels of oil per day off the world market for the explicit purpose of forcing prices back to economic strangulation levels of over $70 per barrel as quickly as possible," says Zubrin (prices had come down temporarily because the economy had fallen apart).

OPEC controls the global price of oil. It doesn't matter how many other sources of oil there are. The world has many new producers of oil who are not a part of the cartel, and because of these new sources, the global production of oil has risen immensely over the last ten years, but OPEC's production is a large enough percentage to control the world price. When they lower their production, oil prices go up.

There is no way to deny it: The American economy is dangerously vulnerable to OPEC's price manipulation. Why? Because the only choice we have at the pump is oil.

OPEC's plans are clear — they will raise the price of oil, gouging and looting the world's economy, and that will be followed by a recession or depression, and when the economy recovers, they will continue their gouging and looting. They started with the oil crisis in the early 1970's and they've been at it ever since.

With each raid, says Zubrin, they are "transferring further large increments of wealth and power to the cartel, and the reactionary Islamists and other totalitarians that stand behind it."

Zubrin points out that in Fiscal Year 2008, "OPEC's net export profits reached $1.5 trillion, an amount equal to roughly 10 percent of the October 2008 valuation of the entire US Fortune 500."

A great deal of the cartel's profit goes to Sovereign Wealth Funds "whose explicit purpose is to enable the cartel's members to take over corporations in the United States and Europe." And because of the recession, they've been able to pick up corporations at "bargain prices."

This is why the Open Fuel Standard is not merely a good idea — it is a burning imperative. The critical urgency of our circumstances is one of the only legitimate justifications for overriding the perfectly sound policy to keep government away from free markets. For this specific purpose, for the sake of our economic survival, it is a sensible thing to do to speed up a process that is already occurring.

Every year, more cars on the road are flex fuel vehicles. And it is certainly possible that eventually 95% of new cars would be FFVs without any government interference, but we are like a patient in "critical condition." We are hemorrhaging our wealth, and hostile regimes are using that wealth to undermine us further — as fast as they can. We don't have the time for market forces to meander.

OPEC money is not only buying up U.S. corporations. "They are also buying up US government debt," writes Zubrin, "which recession-driven deficit spending has sent completely out of control. And with each takeover, bailout, or investment operation — or generous donation to a university or political think tank — the power and influence of the cartel's money within the American and European political systems is growing, a trend that will make effective government action to counter OPEC increasingly difficult to achieve."

OPEC has been at it for three decades. "Each looting cycle makes the enemy stronger and ever better positioned to confound our efforts to escape."

We cannot afford to wait much longer. We can free ourselves from OPEC's destructive hold on the U.S. economy, but we had better act quickly. And the fastest, most inexpensive first step we can take is to pass an Open Fuel Standard bill.