Guess what happened? Hamas, a group of criminals funded by Iran, declared an end to the truce with Israel and stepped up rocket attacks. To defend itself from the rocket attacks, Israel attacked Hamas, and oil prices increased to over $45.00/barrel. Can there be any doubt why we pay so much for oil?

The purpose of our government is to protect us from the initiation of force both foreign and domestic. Our government has not protected us from those who use force to steal our wealth by manipulation of oil prices. How can our government protect us from the aggression of these “totalitarian” governments?

First, look at the facts.
1. The natural order of consumption of natural resources is to consume those with the lowest recovery cost first. To do otherwise would be to artificially increase the cost of the resource.
2. The “Strategic Petroleum Reserve” has been ineffective in protecting us from artificial surges in oil prices.
3. The baseless restrictions on development of domestic natural resources are aid and comfort to our enemy, enhancing their ability to manipulate prices.
4. The ability of OPEC to manipulate oil prices makes it very unlikely that private companies will convert oil resources to reserves in a quantity to destroy the “totalitarian” government’s monopoly power. Even if they tried, the low cost of Mid-East oil available to the “totalitarian” governments would make the effort futile.
5. The use of force by these totalitarian governments to manipulate the price of oil can only be defeated by the use of force.
6. In our society, the government has a monopoly on force.
7. Over the last ten or so years the use of military force has been ineffective in maintaining a stable source of energy.
8. As long as the “totalitarian” governments have access to vast unearned wealth of manipulated oil prices, there will be no peace in the Mid-East.
9. Conventional military force does not offer a long term satisfactory solution.

The solution to the problem is to create a “Strategic Petroleum Production Reserve” instead of the “Strategic Petroleum Reserve”. The United States has enough fossil fuel resources to last well over a hundred years. The problem is that these resources will cost much more to convert to reserves and harvest than Mid-East oil. Mid-East oil is not now and will never be available at stable and reasonable prices as long as it is a monopoly controlled by “totalitarian” governments.

The fossil fuel resources of the United States are oil, coal and shale oil and are adequate for well over 100 years usage. Following the doctrine of consumption of the natural resources in the order of lowest recovery cost, these resources would be developed when the “cheap Mid-East” was depleted. If the monopoly exercised by the “totalitarian” governments could be broken, the natural order of the consumption of natural resources could be restored.

How do we solve the problem? The government should create the “Strategic Petroleum Production Reserve” by contracting with oil companies to convert our fossil fuel resources to reserves and maintain these facilities so that production could be started when oil prices reached a predetermined level. Part of the contract would allow for continuing research to reduce the cost of conversion of shale oil and coal to petroleum products. The cost of the project could be paid for by using the “stimulus package” (makes a lot more sense than the “bridge to nowhere” or congressional earmarks), release of the “Strategic Petroleum Reserve”. Limited production and a small tax on imported oil (even with the tax, the oil would cost less than we pay now) would be used to pay the maintenance and research cost. As the cheap Mid-East oil is depleted, the oil price level that triggered “Strategic Petroleum Production Reserve” activity would increase. The value of the “Strategic Petroleum Production Reserve” would increase with the increased trigger price.

Eventually, cheap Mid-East oil would be depleted and “Strategic Petroleum Production Reserve” would come “on line” and produce much of the world’s energy requirements. When “Strategic Petroleum Production Reserve” comes on line; companies managing the facilities will repay the initial cost of the project. Remember, any money repaid to the government would come from the users of the energy. In the meantime we would all enjoy a price of energy based upon cost and reasonable profit, not monopoly force.

Today, a reasonable price to trigger the “Strategic Petroleum Production Reserve” production would be around $22.50 a barrel with a $2.50/barrel tax on imported oil. I may have guessed a trifle high on the trigger price.

To this discussion I’ll reemphasize what Weber (a sociologist) said long ago: bureaucratic inertia is a fact of life. He said it more eloquently. Clearly, precedent is flexible and ironically stable and even more ironically, predictable. Laws do have their place in society. Unfortunately, we have many law makers who are self-righteous legalists; this attitude forgets the rationale behind the law. It’s very frustrating to see some of these policies have such negative effects. What can a student from humble beginnings do anyway?

Yet Clare\’s sharp questions must I shun,
Must separate Constance from the nun
Oh! what a tangled web we weave
When first we practice to deceive!
A Palmer too! No wonder why
I felt rebuked beneath his eye;