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Over a Barrel

Earlier this week, Ariel Cohen of Heritage had a controversial opinion article run in the New York Post, which despite its aggressive house rhetoric, makes a pretty strong point:

Russian leaders, more anti-American today than ever, have written the book on using money and energy muscle to buy friends and influence neighbors. They made an example out of Ukraine, by cutting gas supply to it on New Year’s Day for four days. They also intimidated France and Germany into bucking the US at the Bucharest NATO summit and objecting to Georgia and Ukraine being issued a North Atlantic Treaty Association membership plan. Russia’s Gazprom has hired former German Chancellor Gerhardt Schroeder as the Chairman of a pipeline consortium, and made a similar offer to former Italian Prime Minister and the top Eurocrat Romano Prodi. Vladimir Putin does brisk energy business with Silvio Berlusconi, and with the French President Nicolas Sarcozy, though both are considered pro-American. German businessmen enthusiastically lobby Chancellor Angela Merkel on the Kremlin’s behalf. Russia, some argue, has more clout today in Europe than Washington.

Finally, Iran, Russia, Venezuela, and even US friend Kuwait are dumping the greenback in favor of the Euro in energy transactions. This is likely to decrease demand and increase the supply of dollars, sending the US currency into a tailspin. Weaker dollars and higher inflation may add insult to injury in the prolonged process of America’s economic deterioration.To stave it off and to combat its oil-rich adversaries, the US needs, in the short term, to expand its domestic energy sector. Increasing oil and gas production in the West, along the Pacific and Atlantic continental shelf, and in Alaska will help, and so will a coal and nuclear power build-up.The US Congress should also abolish corn ethanol subsidy and lift tariffs on the really competitive ethanol made from sugar cane. Brazil and Africa can produce more ethanol than Iowa and Nebraska. However, in the long term, more advanced technological solutions are vital to stem the global wealth redistribution to OPEC potentates and other America-haters.World powers have risen and fallen over major economic factors. This should never be the case of our nation. The oil potentates should know that the US will not be intimidated – or bankrupted out of existence.