Sunday, June 26, 2005

OIL CRISIS LOOMS...

What if...?
It's 11 days before Christmas 2005, and the turmoil is preventing about 600,000 barrels of oil per day from reaching the world oil market, which already was drum-tight. Gates, functioning as the top national security adviser to the president, convenes the Cabinet to discuss the implications of Nigeria's spreading religious and ethnic unrest for America's economy.

Should U.S. troops be sent to restore order? Should America draw down its strategic oil reserves to stabilize soaring gasoline prices? Cabinet officials agree that drawing down the reserves might signal weakness. They recommend that the president simply announce his willingness to do so if necessary.

The economic effects of unrest in Nigeria are immediate. Crude oil prices are more than $80 a barrel. June's then-record $60 a barrel is a memory. A gallon of unleaded gas now costs $3.31. Americans shell out $75 to fill a midsize sport utility vehicle.

[...]

Fast-forward to Jan. 19, 2006. A blast rips through Saudi Arabia's Haradh natural-gas plant. Simultaneously, al-Qaida terrorists seize a tanker at Alaska's Port of Valdez and crash it, igniting a fire that sweeps across oil terminals. Crude oil spikes to $120 a barrel, and the U.S. economy reels. Gasoline prices hit $4.74 a gallon.