Read the following article from the New York Times .... then ask yourself: "Doesn't it make clear sense for the West to aggressively pursue alternative energy strategies ... even on a Manhattan project scale?" Duh!!!!!
CARACAS,
Venezuela — As the price of oil roared to ever higher levels in recent years, the leaders of Venezuela,
Iran and
Russia muscled their way onto the world stage, using checkbook diplomacy and, on occasion, intimidation.
Now, plummeting oil prices are raising questions about whether the
countries can sustain their spending — and their bids to challenge
United States hegemony.
For all three nations, oil money was a means to an ideological end.
President Hugo Chávez
of Venezuela used it to jump-start a socialist-inspired revolution in
his country and to back a cadre of like-minded leaders in Latin America
who were intent on eroding once-dominant American influence.
Iran
extended its influence across the Middle East, promoted itself as the
leader of the Islamic world and used its petrodollars to help defy the
West’s efforts to block its nuclear program.
Russia, which
suffered a humiliating economic collapse in the 1990s after the fall of
communism, recaptured some of its former standing in the world. It
began rebuilding its military, wrested control of oil and gas pipelines
and pushed back against Western encroachment in the former Soviet
empire.
But such ambitions are harder to finance when oil is
at $74.25 a barrel, its closing price Monday in New York, than when it
is at $147, its price as recently as three months ago.
That is
not to say that any of the countries is facing immediate economic
disaster or will abandon long-held political goals. And the price of
oil, still double what was considered high just a few years ago, could
always shoot back up.
Still, Russia, Iran and Venezuela have
all based their spending on oil prices they thought were conservative
but are now close to the market level. Significant further drops could
tip the three countries into deficit spending or at least force them to
choose among priorities. A worldwide recession, which many economists
say is likely, would worsen matters, dampening energy demand and
holding down prices.
It is not clear whether the new pressures
could create opportunities for the United States to ease tensions, or
whether the three countries’ leaders will rely more on angry words even
if they cannot afford provocative actions. Mr. Chávez has continued his
overtures to Russia. He, Prime Minister Vladimir V. Putin of Russia and President Mahmoud Ahmadinejad of Iran may now see the United States, hobbled by financial crisis, as even more vulnerable.
Daniel Yergin, chairman of Cambridge Energy Research Associates, a
consulting firm in Cambridge, Mass., said oil states were facing
something of a reckoning. Originally, he said, they saw the economic
crisis as a problem mainly for the United States — but then oil prices
went into free fall.
“Now, the producers are experiencing a
reverse oil shock,” Mr. Yergin said. “As revenue went up, government
spending went up and expectations of a continuing windfall led to
greater and greater ambitions. Now they are finding how integrated they
are into this globalized world.”
Venezuela
Mr. Chávez was emphatic last month when he announced that Venezuela
would engage in naval exercises with the Russian Navy in the Caribbean.
“Go ahead and squeal, Yanquis,” he said. “Russia’s naval fleet is
welcome here.”
The moment, made possible in part by a flood of
petrodollars used to buy Russian weaponry, must have been sweet for a
man who has spent his presidency wagging his finger at the United
States and railing against its capitalist model. Cozying up to Russia,
whose leaders have been increasingly at odds with the United States,
evoked cold war rivalries in the hemisphere.
Mr. Chávez has also
used his oil money — in direct payments and through subsidized oil
shipments — to win friends in the hemisphere and elsewhere, including
President Evo Morales of Bolivia, who expelled the United States ambassador in La Paz last month, saying the envoy was involved in plotting a coup.
Domestic spending in Venezuela has also surged, through the creation of
a wide array of social welfare programs that furthered Mr. Chávez’s
goal of building a socialist-inspired state — and suppressed
opposition. The 2009 budget, based on $60-a-barrel oil, includes a 23
percent increase in government spending, to $78.9 billion.
At
$140 a barrel for oil, that was conservative. With prices now
uncomfortably close to $60 a barrel, economists in Venezuela are
expressing alarm over the government’s ability to pay its bills,
including those for arms purchases.
Venezuelans are already struggling with an inflation rate of 36 percent, one of the highest in the world.
Read the full article:
http://www.nytimes.com/2008/10/21/world/21petro.html?pagewanted=1&_r=1&hp