So How About All That Mideast Oil?

There is a widespread belief that the US imports beaucoup oil from the Mideast with the result that we must make nice to the various feudal despotates of wonderful, zany world of oil, sand and Islamism. So, as they say in the sports world, let's go to the videotape.

Well, to err on the side of accuracy, let's go to the figures for last October (the most recent that the Geek has found) and examine just where our foreign origin oil originated. The numbers come from the Energy Information Office of the Department of Energy.

The number one source of imported oil was that dangerously unstable and often hostile country Canada which provided 2.066 million barrels per day. Canada far outstripped the number two offshore source, Saudi Arabia. The Saudis provided 1.435 million barrels per day. At this figure the Kingdom barely edged out Mexico which held the number three position with 1.256 million barrels per day.

Next in line was Venezuela. The neo-Castroite regime of Hugo Chavez provided 1.027 million barrels per day. Fifth place was held by strife torn Nigeria with 0.935 million barrels per day.

If the top fifteen exporters of crude oil to the US that month are considered, the total amount provided was 9.098 million barrels per day. Of this the four largest Arab sources (Saudi Arabia, Kuwait, Algeria and Iraq) furnished 2.693 million barrels per day or roughly 22.2 per cent of all American imports.

(To put these numbers in perspective it should be recalled that the US is the third largest producer of oil in the world after Saudi Arabia and Russia. The most recent figure on US production the Geek's less than nimble computer fingers could find showed a domestic production of some 8.3 million barrels per day.)

The clear implication is simple. Should oil from the Arab states suddenly end such as it did during the prototypical oil embargo of 1973, the impact on the US would be significant but not crippling. A second implication is equally clear. The US can and should move to take mitigating actions, particularly as regards Mexico.

Mexico could furnish a greater amount of oil to the US in the near-term if its present producing fields and associated infrastructure could be improved. The mid-term prospects for Mexican oil would be greatly enhanced if the new off-shore fields could be brought online expeditiously.

The problem for both the near- and mid-term development of present and projected fields is money. More specifically, the lack of money by the Mexican national oil company and the government that owns it.

The source of this dilemma is historical. After Mexico nationalised its oil fields in a frenzy of justifiable nationalism three-quarters of a century ago, the laws of the country prohibit foreign ownership which is to say foreign investment in the Mexican oil patch. There is no doubt that the Mexicans were right in their desire to kick the foreigners (primarily Americans) out of their natural resource base given the record of crass exploitation and concomitant corruption.

But, that was then and this is now. The need and rationale for nationalistic zeal are gone. Gone but far from forgotten.

Enter diplomacy.

While the US casts about for viable, repeat, viable ways to reduce its overall use of fossil fuels, particularly oil without crashing either our styles of living or economy to pre-Twentieth Century levels, we have a genuine national and strategic interest in reducing, preferably ending, our importation of oil from the Mideast. The reasons for this conclusion are (or should be) self-evident.

Mexico has a need. From the perspective of the government and ruling elites the need is compelling and will grow more so in coming months and years. The Mexican need is simple. To paraphrase a recent statement by a committee from the Mexican Senate: Mexico must insist that the Obama administration and the American Congress reform laws so as to permit "fair and open migration."

Translation: Mexico wants the US to be the land of opportunity and remittance so that the surplus Mexican working age population can move North of the Border and send money home. This means some species of "immigration reform" which will provide real, substantial and material benefits directly to unemployed, ambitious Mexicans and indirectly to the stability of the ruling elite.

Given that immigration reform of this nature is at least as unpopular with a large number of Americans as opening the oil patch of Mexico is to the nationalist minded folks to the south, the outlines of a deal are apparent.

Mexico changes its laws so as to allow foreign investment (at least from its NAFTA partners) in the upgrading and development of its oil resources. The US engages in an exercise in immigration reform which meets at least the minimum Mexican concerns and apparent needs. The degree of openness in investment would be mirrored by the degree of openness in the US-Mexican border.

It's an old diplomatic practice. Goes by the technical term "you-scratch-my-back-I'll-scratch-yours."

The Mexican government and elite might also be gently reminded of two important realities. The first is that Mexican nationalism can be protected by limiting the percentage of foreign ownership. The second reality concerns the internal Mexican economy. Improving and expanding the petroleum industry will mean more, higher paying technical jobs in Mexico and for Mexicans.

For the Mexicans it is a win-win proposition. All the government and elite have to do is put a bridle on nationalistic fervor.

For the US it is a win-sort of win deal. Cutting loose from Arab oil liberates foreign policy, puts more options in play, reduces the incentive for the continued deployment of American military forces in the Mideast and Persian Gulf. It also provides the potential for a "profit deal" (as Steve Martin once put it) investing in the new and improved Mexican oil patches. At the same time it introduces more foreign (both with and without documents) workers into the US at a time of economic distress with the potential for social and political turmoil that implies.

It is however, a time of (to quote President Obama) of "shared sacrifice." And, as history shows time after time, sacrifices are never equally shared as between a society's elite and its hoi polloi.

Sacrifice is necessary if the US is to achieve even the necessary minimal level of energy independence--that of eliminating Arab and, if necessary, other Muslim dominated states from our roster of oil suppliers. Energy autarchy, if that is what is actually meant by the buzz phase of "energy independence" will be a long time coming. Energy autarchy will require not only time, it will demand much money and some basic technological breakthroughs.

Lost in the Gore-ite and similar deep green rhetoric over the need to end human caused climate change (if such actually is at work) with its focus on still semi-exotic technologies of renewable energy and conservation is the need for measures which will meet US national and strategic interests in the foreseeable future. The US must vigorously pursue actions from those such as the diplomatic quid pro quo with Mexico to purely domestic matters such as mandating the use of irradiated foods (to reduce refrigeration requirements) and on-demand hot water heaters in lieu of the current practice of keeping jilly-poo gallons of water hot 24/7.

Finally, We the People and those who purportedly represent us at the Federal level must decide just what the hell we mean when we bandy "energy independence" around. The term has been with us for the best part of forty years now and we still don't have a consensus on what it means. Without that, any measure which we take is more likely than not to run afoul the Law of Unintended Consequences.

While we scratch our collective heads over that basic matter of definition, let's at least get a grip on the need to remove the assorted sand-and-oil despotates from our list of suppliers and look to our neighbors both north and south for agreements which meet best our collective interests. Anything less will simply be a matter of self-destructive political and ideological posturing.