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:
 More
efficiency
– Additional cost
– Good long term
trucking, airlines…
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,
Processing
 Saudis
Transportation,
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