Friday, January 31, 2014

What Competition Can Do

The Superbowl is a demonstration of what competition can produce. Each player competes with others to get on the team. The teams compete with each other to get into the Superbowl. Even advertising companies compete with each other to make the best ads.

Each competitor's innovation or extra effort forces the other competitors to bring their level of excellence up another notch.

While you're watching the Superbowl, amazed by feats of athletic execution, think about this: Shouldn't we see what transportation fuel — the most important strategic commodity on earth — could do with the same kind of vigorous competition?

The Open Fuel Standard would make that happen.

Thursday, January 16, 2014

What Will it Take to Break Oil's Monopoly?

Many people want to introduce competition into the fuel market and break the oil monopoly. But we are completely outgunned. The oil industry is vastly outspending the fuel freedom fighters. The oil industry has so much more money in their war chest that this is like an elephant being challenged to a duel by an ant.

The only way we'll win is by talking to our fellow citizens and increasing our numbers. The more people involved in this cause, the more clout we'll have in the marketplace and with Congress. Swarming ants can, in fact, defeat entire herds of elephants.

That means the most important thing that needs to be done is recruiting. Increasing our numbers. In other words, those of us who already understand what's at stake need to take it upon ourselves to talk to people and get them motivated to talk to others about it.

We are not outnumbered. Far more people would benefit from an open fuel market than are now profiting from oil's monopoly. It wouldn't take a majority of us to make this happen, but it will take more than we have now. So let's get on it. What can you do today that will recruit more people to this cause?

Sunday, January 12, 2014

Alnuaim Threatens to Burst America's Shale Oil Bubble

In an article in the Saudi Gazette, Dr. Sami Alnuaim discusses OPEC. Alnuaim is a Saudi expert on the Saudi oil business. On its surface, it is merely an article about OPEC's oil strategy. Barely veiled by its superficial appearance is a threat. On behalf of Saudi Arabia, Alnuaim is threatening the United States with the collapse of its oil boom. He says the Saudis could drop the world price of oil to $70 a barrel. Many experts in America have pointed out that a significant percentage of American shale oil production begins to be unsustainable below $90 a barrel.

In other words, whenever they think the time is right, Saudi Arabia could drop the world price of oil and burst the shale oil bubble in America, just as they did to the ethanol industry in the 1980s.

Are they waiting for a better time to bring down the shale oil industry? Are they waiting until much more money is invested before they pull the rug out from under it? Are they waiting until Americans feel overconfident and begin gloating over our new "energy independence?"

Saudi Arabia has the cheapest-to-produce oil in the world. That's the leverage they have over the other members of OPEC and why Saudi Arabia can dictate to them what the world oil price will be. Member nations of OPEC must agree to do what Saudi Arabia says or the Saudis can retaliate by lowering the price so much (by increasing their oil production) that the rest of the OPEC nations go into debt or even collapse.

They have the same power over America's oil industry, and for the same reason. But their power over our energy security and economic vitality only exists because we haven't yet bothered to create true fuel competition in America, even though it would be easy and inexpensive to do. Part of the reason is that some of the immense profit from the oil industry has been used for over a hundred years to prevent competition.

This is ridiculous. If we were already using methanol made from natural gas, Saudi Arabia couldn't touch us. Their ability to influence our economy or our national security would drop to almost nothing. They would have nothing to threaten us with. And as a side-effect of our new fuel competition, our economy would be thriving.

We must — urgently — diversify our fuel portfolio. We must introduce competition.

If our cars were able to burn methanol, the price per barrel of oil would drop below $70 a barrel, completely changing the balance of power in transportation fuel. But it would also hurt the shale oil boom in America because that price is too low for much of that oil to be worth recovering. However, there would be a simultaneous profusion and expansion of other American fuel-producing businesses, and American drivers would save big money at the pump, which means we would have more money to spend on other things, which leads to job creation.

Saudi Arabia would no longer have the ability to threaten the United States. In fact, their repressive regime may well collapse without their massive oil revenue to pay off their subjects. And when fuel prices drop in America, the economy soars. It would greatly increase our national security, it would reduce the amount of money the oil industry has to influence our government, it would help solve our garbage and landfill problem, help people in developing nations rise out of poverty, help prevent mental illness, put fewer military personnel in harm's way, and reduce the amount of pollution and greenhouse gases that are sent into the atmosphere, into the ocean, and into the ground.

It would be such a technically simple thing to do, but the consequences would be world changing. Get involved and let's make this happen. Use whatever resources you can muster to support this goal. Support and promote Fuel Freedom's plan and support and promote the Open Fuel Standard. Overkill would not be out of line for a goal this significant.

Author: Adam Khan, the co-founder of and co-author of the book, Fill Your Tank With Freedom. 

Monday, January 6, 2014

How Important Are Fuel Prices?

Material used in manufacturing is often created using fuel: Mining, logging, farming, etc. The material is then SHIPPED (using transportation fuel) to a manufacturing plant. The finished product is then SHIPPED (using transportation fuel) to a distribution center, where it is then SHIPPED (using transportation fuel) to a store, where you DRIVE (using transportation fuel) to the store to get it, or you order it online, in which case it is SHIPPED (using transportation fuel) to you.

Someone has to pay for all this fuel. Guess who?

Without transportation fuel, the world as we know it stops functioning. With expensive fuel, more of the economy's resources have to be spent on shipping rather than the material or products themselves.

With inexpensive fuel, more economic activity can happen, more goods are created, more goods are delivered, and it is all less expensive. The result: Everyone has a higher standard of living all over the world.

What will make fuel less expensive? Competition.

Sunday, January 5, 2014

Does America's Shale Oil Boom Require High Fuel Prices to Sustain It?

Arjun Sreekumar says, "If the oil price falls below its marginal cost of production, drilling activity in costlier locations, such as Canada's oil sands and deepwater prospects offshore Brazil and Africa, could quickly become uneconomical. Mining projects in Alberta's oil sands, for instance, have breakeven costs in the $90-$100 per barrel range, according to consultancy Wood Mackenzie, leaving them especially vulnerable to lower prices."

Keith Schaefer writes, "The report says that massive infrastructure spending (pipelines, refineries, etc.) is a key to energy independence — and notes that oil companies have already proven unwilling to invest in new infrastructure at prices as high as $90 per barrel, despite most wells remaining profitable."

Marshall Kaplan says, "Many experts have indicated that the marginal cost of oil shale development is about $90 [per barrel]."

Dr. Sami Alnuaim writes, "The stability of the prices of OPEC basket during the last three years (2011, 2012, and 2013) to reach an average price of $106 a barrel despite of all the challenges and the many factors that could have negatively impacted the oil prices confirms this successful strategy...This high average oil price has also encouraged a lot of countries and oil companies to invest in exploration, development and production of what is so-called shale-oil..."

Saturday, January 4, 2014

What Kind of Government Controls the World's Economy?

In an article in US News and World Report entitled, Activists Say 2013 Dark Year for Saudi Rights, activists warn the world about Saudi Arabia's egregious human rights violations. I will excerpt part of the article below, but first think about this:

1. Because of our lack of fuel competition, petroleum is the foundation of the world's economy. Without transportation fuel, the world's economy as we know it would collapse.

2. OPEC determines the world's price of oil (find out how here).

3. Saudi Arabia has the most influence over OPEC.

4. When the price of fuel is low, the entire world's economy booms. When the price of fuel is high, the entire world's economy struggles (except Brazil).

5. OPEC is deliberately keeping oil's price high.

In other words, the country with the terrible human rights record you will read about below, has a controlling influence on the world's economy. This intolerable reality can be changed quickly and inexpensively with the introduction of fuel competition in America. The fastest way to achieve it is to pass The Open Fuel Standard. Here are the excerpts:

With global attention focused on upheaval elsewhere in the Middle East, Saudi Arabia quietly intensified its clampdown on dissent in 2013, silencing democracy advocates and human rights defenders with arrests, trials and intimidation in what reformists say was one of the darkest years ever for their efforts in the powerful U.S.-allied Gulf state.

This year, at least nine prominent reformers were given lengthy jail sentences for offenses including "breaking allegiance with the king." A leading rights lawyer was forced to flee the kingdom for fear of arrest. One of the kingdom's most prominent rights organizations — the Saudi Association for Civil and Political Rights, was shut down. A tough anti-terror law was approved by the government, defining acts as vague as "defaming the state's reputation" as terrorism.

More than 200 protesters, including women and children, were detained in Buraydah, north of the capital Riyadh, for demanding the release of imprisoned relatives. A Saudi man was sentenced this week to 30 years in prison for his role in leading protests by the country's Shiite minority, who complain of discrimination. At least five women were detained for several hours for flouting a driving ban, and a Saudi male writer supportive of their push was detained for almost two weeks.

Saudi Arabia is one of the world's last absolute monarchies. All decisions are centered in the hands of 89-year-old King Abdullah, who has the sole power to ratify new laws. There is no parliament. There is little written law, and judges — implementing the country's strict Wahhabi interpretation of Islam — have broad leeway to impose verdicts and sentences. A Specialized Criminal Court created in 2008 for terrorism cases has tried reformers and activists. Offences such as "disobeying the ruler" can result in years in prison.

When Saudis speak out, they say their phone calls and emails are monitored and that they are tailed by security officers. The kingdom has aggressively monitored social media websites like Facebook and Twitter, where jokes about the aging monarchy are rife and anger over corruption, poverty and unemployment is palpable.

One female activist, who was recently put under house arrest and banned from Twitter for her criticism of the government, said people are terrified of the "security state."

"Everyone expects a revolution in the kingdom. We don't want one because the people are divided. The only thing uniting us is repression," she said. She spoke on condition of anonymity for fear of retribution against her family, saying security officials warned that her parents could face arrest for her activism.

The United Nations High Commissioner for Human Rights over the weekend voiced its "deep concern" about what it said was the "intimidation and prosecution of individuals in Saudi Arabia for exercising certain fundamental freedoms."

Human Rights Watch released a report last week saying Saudi authorities have redoubled their harassment of activists since early 2011.

The Saudi Association for Civil and Political Rights was formed in 2009 to challenge detentions of people held for years without trial or kept imprisoned far beyond their sentences. Since then, it became one of the most vocal organizations in the kingdom, though it was never given a license to operate. There are two licensed human rights bodies in the kingdom but unions and most independent civil society groups are not allowed to operate.

Two years ago, the Saudi Association for Civil and Political Rights and other rights advocates were strong enough to pressure the government to shelve a version of the anti-terror law that was recently approved by Cabinet. Last year, the group challenged a law that says citizens must pledge allegiance to the king in accordance with Islam and the Quran.

Now around a dozen members of the group are in detention, on trial or under investigation.

One of them, 23-year-old Umar al-Saeed, was sentenced in December to four years in prison and 300 lashes. The verdict came in a secret, surprise session of his trial without his defense lawyers or family present, and the court has not announced what charges he was convicted on, al-Saeed's lawyer Abdullah al-Shubaily said. Another activist got seven years and 600 lashes for "insulting Islam."

Separately, two founding members of the Saudi Association for Civil and Political Rights and icons of the reform movement, Mohammed al-Qahtani and Abdullah al-Hamid, were sentenced to between 10-11 years in prison, with a five- to 10-year ban on travel after that on charges of breaking allegiance with the ruler, inciting disorder, disseminating false information to foreign groups and founding an unlicensed organization.

Rights lawer Alhussan, who represented the two, was later interrogated by authorities and accused of trying to damage the reputation of the prison system because of tweets critical of his clients' treatment. Shortly after, he left to the United States as a visiting scholar at Indiana University.

Read the whole article here: Activists Say 2013 Dark Year for Saudi Rights.

Amnesty International has censured Saudi Arabia for not addressing the “dire human rights situation” in the kingdom. Amnesty published a report saying a paper was submitted to the United Nations detailing “an ongoing crackdown including arbitrary arrests and detention, unfair trials, torture, and other ill-treatment over the past four years.” 

And we haven't even mentioned the lack of women's rights in Saudi Arabia and the systematic use of Saudi oil money to spread misogyny around the world. Saudi women can't even drive cars!

And last but certainly not least, the Saudi government beheads and literally crucifies criminals.

If you would like to see this brutal and backward monarchy collapse due to lack of funding, and if you'd like to see America's economy thrive, support the Open Fuel Standard with all your might. Start here.