OIL

WORLD IMPACT  Every $10-a barrel rise in oil price subtracts $300 billion from the world economy, even after the transfer of payments. –USNWR 1/10/2005 pg. 47

INCREASED COSTS  Rising cost in manufacturing –Plastics, Heating….  Transportation: trucking, airlines…  More efficiency –Additional cost –Good long term

THE ECONOMY  Consumer Spending accounts for 70% of U.S. economy BW 11/25/02 pg. 34  U.S. needs over $2 billion of foreign investment per day  1 of 10 barrels of oil produced in the world are for U.S. cars NPR News 4/5/05  Americans own 1.2 vehicles, EU=.6 FT 8/17/02  In ’98, 17 Bil. catalogs were distributed – 64 per every man, woman & child. DP 2/7/01  Computer generates 140 lbs. of solid & hazardous waste and 7,000 gallons of wastewater in its manufacture. USNWR 6/25/01

THE U.S. DOLLAR  Oil is priced in $U.S.  With weak $, oil producers are tempted to raise prices to offset weak $.  U.S. imports nearly 60% of oil it consumes, rise in oil price widens the trade gap.  Trade deficit tends to push down $.

OIL CURSE  Venezuela, Nigeria, Azerbaijan, Equatorial Guinea, Colombia…  Poor sharing of resources –Lack of infrastructure –No diversification –Corruption –Coup attempts

CRESCENT OF INSTABILITY  By 2030 OPEC is projected to supply more than half the world’s oil (up from 35% now) USNWR 1/10/2005 pg. 51  Saudi Arabia, Iran, Iraq, Russia, Libya, Nigeria, Venezuela, Algeria  Terrorists have I.D.’d oil as Achilles heel of U.S. and Western economies

COST OF INSTABILITY  Extraction, Transportation, Processing  Saudis have 30,000 guards  Kidnapping, Government Blackmail  Environmental Damage

THE MIDDLE EAST  Political Stability - Tribal allegiance  United Arab Emirates imports 100%, Kuwait & Qatar 98% of its food.  Saudi: King, Crown Prince, Defense, Foreign and Interior Ministers are all brothers.

THE NEW AGE  THE WORLD HAS ACHIEVED BRILLIANCE WITHOUT CONSCIENCE. OURS IS A WORLD OF NUCLEAR GIANTS AND ETHICAL INFANTS. –General Omar Bradley