Even though Saudi Arabia deliberately restrains their oil output to keep world oil prices high, they still export more oil than any other country in the world. And the U.S. imports more oil than any other country.
The global price of oil is determined by production levels. If something happened to seriously slow down Saudi Arabia's production, oil prices would go through the roof, which would seriously damage the economic stability of every country except Brazil. I don't think it would be an overstatement to say it would be an economic catastrophe for the United States.We are extremely vulnerable to oil shock. It doesn't matter how much oil America gets from Saudi Arabia. A disruption in Saudi oil production would immediately and critically raise the global price of oil.
Security on one of Saudi Arabia's biggest facility is weak, and it is considered an important target by terrorists.
In all likelihood, it is only a matter of time before terrorists successfully cripple Saudi Arabia's facilities. And that is not the only possible way Saudi oil production could be disrupted.
But the Open Fuel Standard would greatly reduce America's vulnerability. Once the bill passes, within three years most gas stations will provide fuel pumps for alcohol fuels because there will be enough flex-fuel cars on the road to justify it. Then fuels can begin to compete. And our vulnerability will begin to wane. If something happens to Saudi Arabia's output, American drivers would simply put alcohol fuel in their tanks on the very next fill up.
Read more: Robust Versus Feeble Fuel Competition.
Adam Khan is the co-author with Klassy Evans of Fill Your Tank With Freedom and the author of Slotralogy and Self-Reliance, Translated. Follow his podcast, The Adam Bomb. You can email him here.
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