THE THREE WORD SOLUTION

Solution to what?  Defeating Russian imperialism, defeating Saudi Wahhabism and Moslem terrorism, defeating Moslem crazies in Iran making nukes, defeating Luddite environmentalists, defeating Democrats determined to hamstring our economy and national security.

How's that for starters?  What would do all of this?  Three words:  crash oil prices.

What enables Putin's Russia to re-ignite the Cold War is the many billions of dollars it makes on sky-high oil prices.  Attacking Georgia in order to seize or threaten the BTC (Baku-Tblisi-Ceyhan) pipeline is Putin's way of propping up the price.

The most effective way to defeat Russian imperialism is economically, for the Russian economy is a one-trick pony.  Crash oil prices and the Russian economy crashes.  That's the necessary condition for putting an end to Russian barbaric belligerence.

What enables the Saudis to fund Moslem Jihadi terrorists in Iraq and Afghanistan, and Wahhabi missionaries subverting Europe into Eurabia with demands for Sharia Moslem law, is the many billions of dollars it makes on sky-high oil prices.  The only way to deny them those billions is to crash oil prices.

What enables Ahmadinejad and the mullahs in Tehran to sponsor terrorists in Iraq, Hamas terrorists in Israel, and Hezbollah terrorists in Lebanon, and to build nuclear bomb-making facilities at enormous cost, is the many billions of dollars it makes on sky-high oil prices.  Crash oil prices and both the Iranian economy and the Iranian government's control over the country implodes.

Oh, yes, crash oil prices and it's curtains for Hugo Chavez in Venezuela and the South American dictators his oil money props up, Evo Morales in Bolivia and Rafael Correra in Ecuador.

Crashing oil prices to, say, below $40 a barrel, should therefore be the number one priority of American national security. 

Yet any attempt to lower oil prices is blocked by Democrats in Congress and lawsuits by their environmentalist allies.  Exhibit A as evidence is their hysterical refusal to allow oil and gas drilling in Alaska and offshore.  Exhibit B is their hysterical refusal to allow the construction of new oil refineries – there hasn't been a new one built since 1976.

So – is there something the President could do, is there an Executive Order he could issue, that could circumvent Congress and the enviro-lawyers to crash oil prices? 

Let's start answering with another question:  Who is the single biggest purchaser of oil in the world?  The answer is the US Military.  No single consumer on the planet buys more oil then our military, over 150 million barrels a year.

And another question:  Is DOD (Dept. of Defense) property in the US subject to the same environmental regulations, e.g. regarding impact statements or the Endangered Species Act, as private property?  The answer is no.  On the grounds of national security, DOD is exempt from many or most provisions of enviro-regs.

Given this, President Bush could, and President McCain would (because he has bigger cojones) issue an EO declaring, as a matter of critical national security, that any and all federal land – including the entire US continental shelf beyond the 12-mile state limit and ANWR – can now be designated a Military Petroleum Reserve (MPR).

Exempted would be any federal land or offshore waters proven to contain no oil or gas.

The EO would authorize DOD to hire contractors (private US oil companies) to competitively bid for oil and gas production in the new MPR's.  It would further authorize competitive bidding for the construction of oil refineries in the new MPR's.

No appropriation from Congress would be needed.  Instead, the EO would specify that part of the competitive bidding process would be a production split between DOD and the producer, whereby DOD gets X% of production for free, while the producer gets the remaining with no royalties, no property taxes, and no or greatly reduced environmental regulatory delays.

The US military would get all the oil and refined petroleum products it needs at no cost – and there would be an explosion of oil and gas production, millions of barrels a day brought on line quickly and cheaply (for it's government delays and fees that slow development down and jack up the cost).

Just think of how many of the world's problems would be solved or substantially lessened with a crash in oil prices.  Not all problems, there will still be plenty left.  But just think of how many of the world's bad guys would be screwed with such a crash.

Then think of how many of the world's good guys – billions of folks around the world – would be better off with cheaper oil, with cheaper energy for food production, transportation, keeping their homes warm in winter, on and on.

As Richard Rahn explains this week in TTP, the current price of oil is many times the cost of producing it, because its supply is artificially constrained by governments.

Obviously, then, the solution is to start blowing up the constraints.  A Presidential Directive making the entire offshore US continental shelf (beyond 12 miles) and millions of acres of federal lands a Military Petroleum Reserve as sketched above would be that start.

A start that would catalyze a collapse of oil prices.  It's not a silver bullet, not a sufficient condition (which means all that's needed) for solving the problems listed at the start of this essay.

Yet crashing oil prices is the single most necessary condition (which means it's required for what's needed) to solve them all – for sky-high oil prices is what connects them all.

The single most important thing in the world to do right now, the single most important thing a US President must do, is to take action in the most effective ways possible to crash oil prices.  Outlined here is one of those ways.

[Note:  Many thanks to TTP'er "Skye" for his technical expertise and assistance.]