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The Saudi Fifth Column On Our Nation's Campuses
Front Page Magazine ^ | April 5, 2K4 | Lee Kaplan

Posted on 04/05/2004 1:24:43 AM PDT by rdb3

The Saudi Fifth Column On Our Nation's Campuses
By Lee Kaplan | April 5, 2004

From Riyadh to Ramallah to the Ivy League, the Saudi Wahhabi lobby and money machine is funding the goals of radical Islam and undermining America’s efforts to prosecute the War On Terror.

The press recently reported new closures by the Department of Justice of Saudi “charitable” fronts like the Muslim World League, the Al-Haramain Foundation, the International Islamic Relief Organization (IIRO), and others which raised money for Al Qaeda, Hamas and Islamic Jihad.[1] But the government has so far ignored an even larger network of Saudi front groups working toward parallel ends.

This network is embedded deep within our system of higher education, including many of our most prestigious universities. The Saudis have steadily infiltrated American educational institutions, using vast infusions of money to turn the American educational system against US support for Israel and in favor of the Saudi vision of a global Muslim state in which not only Jews but Christians and all infidels will have subordinate status to the followers of the “true faith.” At the same time they look to affect American policy in the Middle East and public opinion in the US in a way to aid their Wahhabist goals.[3]

Saudi Wahhabism fuels a particular hatred for the West and its liberalism regarding religious tolerance and human rights. It views attempts by the West to promote democratic reforms in the medieval Arab monarchy of the Saudi royal family as an affront to Islam. In other words, it shares its religious and political views of its wayward-but not forgotten- son, Osama Bin Laden.

Accordingly, the Saudi royal family has been waging its own quiet jihad of ideas and disinformation to advance its goals. It has also financed terrorist activities of Al Qaeda and Palestinian radicals. The US Senate Judiciary Committee recently heard testimony from fellow senators and terrorism experts that the Bush administration has failed to recognize the threat of Saudi influence, having left the Kingdom in control of most of the Muslim organizations in the United States. For instance, 80% of the mortgages on mosques in the US are paid for by the Wahhabist Saudis.

Over the last 30 years the Saudi Royal Family has contributed upwards of 70 billion US dollars to infiltrate worldwide institutions with propaganda against the West and Israel. This sum was said to make the one billion dollars per annum spent by the Soviet Union during the Cold War for communist propaganda pale by comparison. [4] The Saudis see donations to our universities as a way of promoting their political and religious propaganda. To quote their English language daily, Ain Al Yaqueen: “The kingdom of Saudi Arabia, under the custodian of the Two Holy Mosques, King Fahd Ibn Abdul Aziz has positively shouldered responsibility and played a promising role in order to raise the banner of Islam all over the globe and raise the Islamic call either inside or outside the kingdom.”[5]

The new head of Middle East Studies at UC Santa Barbara, Stephen Humphreys, holds a chair named after Aziz himself. The head of the Muslim American Society , W. Deen Muhammed, has stated that Saudi gifts require the receiver prefer the Saudi “school of thought.” While Humphreys denies there are strings attached, one wonders how likely a thesis on Saudi misogyny or their educational system teaching hatred of Americans, Jews and Christians would go over in the department if someone hoped to advance or be tenured.[6]

According to the International Institute of education, out of 15 million students in the United States there are approximately 76,000 students from Muslim countries. Students from Saudi Arabia account for less than 7% of that amount. [7] One wonders why a theocratic totalitarian regime where 30% of the population is illiterate and where PhDs teach that Jews use the blood of gentile children to make matzoh[8] would take such interest in the American educational system instead of their own.[9]

Yet the money the Saudis are pouring into our universities and colleges as gifts and endowments is alarming: King Fahd donated $20 million dollars to set up a Middle East Studies Center at the University of Arkansas; $5 million was donated to UC Berkeley’s Center For Mideast Studies from two Saudi sheiks linked to funding Al Qaeda; [10] $2.5 million dollars to Harvard; $8.1 million dollars to Georgetown including a $500,000 scholarship in the name of President Bush; $11 million dollars to Cornell; $1.5 million dollars to Texas A&M; $5 million dollars to MIT; $1 million dollars to Princeton; Rutgers received $5 million dollars to endow a chair as did Columbia which tried to hide where the money came from.[11] Saudi largesse included UC Santa Barbara; Johns Hopkins; Rice University; American University in Washington, D.C.; University of Chicago; Syracuse University; USC; UCLA; Duke University; and Howard University among many others.[12]

Saudi infiltration works on several levels. By creating new Middle East Studies Centers and such endowed chairs on campuses across the US, the Saudis are able to influence the curriculum taught to the next generation of American students about the Middle East situation as taught at Saudi-funded madrassas both here and abroad. That curriculum is decidedly anti-Western and full of incitement against Christians and Jews.[13] Based not on truth as much as the agenda of the totalitarian regime in power, it “molds” the next generation to hate Israel and to hate America as an “imperialist” or “racist” nation.[14]

For example, Columbia, according to Middle East historian Martin Kramer, has become the “Bir Zeit (University) on -the- Hudson”[15]. Bir Zeit is a university built for the Palestinians by Israel in the West Bank. Instead of its being a source for educational prosperity and peace, it is a breeding ground for totalitarian terrorist ideologues and their ilk. Faculty write scholarly works about Middle East history against the US and Israel as a matter of course. At Columbia, Palestinians dominate teaching the modern Middle East and do not conform to a diversity of approaches in doing so. [16] When a chair is endowed by Saudi money the goal becomes to find a person known for Palestinian or Saudi activism less than for scholarship.

Thus Columbia’s new chair was offered to Rashid Khalidi, a University of Chicago historian and Palestinian activist. Khalidi took over the “Edward Said Chair Of Arab Studies.” Said, who dies recently, and who some say was really born in Egypt, was the Palestinian academic who wrote less historical than political books damning Israel and the West for the current situation in the Arab world and was a former member of the Palestine National Conference. He often said Arafat was too moderate. [17] His expertise was as an English literature professor, an expert on Jane Austen, yet his writings dominate the field of history in Middle East Studies departments across the nation.

Khalidi has made statements saying it is all right to kill Israeli soldiers. His quote: “Killing civilians is a war crime, whoever does it, but resistance to occupation is legitimate in international law”. [18] Khalidi is certainly not an international attorney, and given Palestinian speak-ese, and that repeatedly even Arafat has said in Arabic that all of Israel is occupied, such doublespeak in a university setting is frightening. Khalidi is an obsessive Israel basher and has stated Americans are “brainwashed” by the Middle East’s only democracy. He also considered US popular support for overthrowing Saddam Hussein an “idiot’s consensus”. [19]

Another Palestinian professor in Columbia’s Middle East Studies program is Joseph Massad, who also rails against the US and Israel. Massad likes to denigrate American democracy by alluding to early 19th century history when slavery was a worldwide institution, and accuses America of nuclear genocide for using the atomic bomb to end World WarII. He has also characterized Israel, which has a majority population of Jewish refugees from Arab countries, as being an “imperialist” and “colonial” concoction of the Europeans. [20]

With  Khalidi’s appointment as chair and Massad as the main teacher of politics and history of the Middle East at Columbia, what students will be exposed to with no alternative views isn’t hard to imagine. Even Lisa Anderson, head of International Studies at Columbia has conceded publicly that Middle East Studies at Columbia are not balanced, nor are they at other Middle East Studies centers nationwide.[21] What is more telling is Columbia tried to conceal where the money came from to fund Khalidi’s chair until pressure from outside academics and even the state of New York required it.[22] Khalidi, prior to getting tenure at the University of Chicago, taught at the Lebanese University and the American University in Beirut. Perhaps not Bir Zeit University, but not far off. Daniel Pipes, another Middle East Studies professor, has remarked that choosing Khalidi for the Columbia chair is “particularly egregious because he is one of a team of Palestinian falsifiers who are all giving us this propagandist, non-scholarly interpretation of the Middle East” and that Columbia’s cover-up of the donors “doesn’t smell right”.  Steve Emerson, who reports to Congress frequently on terrorism issues, has stated publicly that “Khalidi’s statements raise serious questions about his attitudes on violence” [23]

But Columbia is not alone. Such departments and professors are now found in Middle East Studies programs nationwide.

UC Berkeley’s Center For Middle East Studies website boasts of receiving a $5 million dollar grant courtesy of Sultan bin Abdulaziz Al-Saud and Sheikh Salahudin Yusef Hamza Abdeljawad, another major donor. Both are linked to Islamic charities which the US government says are front groups for funding Al Qaeda and both are now part of a $1 trillion dollar lawsuit by the families of the victims of 9/11.

Their contributions link through a labyrinth of front banks and charitable institutions which ultimately finance terrorism against the West. Al-Saud gives generously to the International Islamic Relief Organization (IIRO), the Al-Haramain Islamic Foundation, the Muslim League and World Assembly of Muslim Youth—all established fronts for terrorist funding named by the US State Department. And Abdeljawad is linked to the Saudi Dar-Al_Maal-Islami Bank founded by Osama Bin Laden and managed by Osama Bin Laden’s brother that is known by the State Department to also fund terrorism as well. Did the Sultan Al-Saud give money knowingly to charity that made its way to Bin Laden? [24]

A visit  to the Sultan’s foundation website in Saudi Arabia tells much more. It lists a “Higher Council” or board of directors which includes one Abdulrahman bin Ali Jeraisy who has been openly funding Al Qaeda according to a report to Congress.[25] Is Jeraisy perhaps the Sultan’s executive in charge of terrorism? In any case, UC Berkeley’s academics have more than conformed to Saudi goals of indoctrinating students there and using a US campus to teach hate for America and Israel. The Israel divestment petition was begun at UC Berkeley and has been promoted by faculty there. [26] A Jewish student who complained her Arabic instructor told students the anti-semitic Protocols Of Zion was indeed written by Jews was attacked by the instructor’s supervisor, who openly called her a liar and tried to use the university’s name to threaten her with punishment for slander. He even lied to the press claiming an investigation had been done when the student was never interviewed. The instructor held fast to his comment about Jews being authors of the documents and the campus newspaper and at least one of his students felt afterward the articles were written by Jews. [27]

Amazingly enough, such endowed chairs and departments have produced faculty who teach on the college level here in the US the made-up drivel taught to 8th graders in Saudi Arabian schools.

In Saudi Arabian textbooks children are taught Jews “are people of treachery and betrayal.” Norton Mezvinsky, a professor at Conneticut State University declares Judaism a religion of “racism” whose followers believe that “the blood of non-Jews has no intrinsic value” (shades of the blood libel matzoh stories) and that Jews consider the killing of non-Jews does “not constitute murder according to the Jewish religion” and that Judaism teaches “the killing of innocent Arabs for revenge is a Jewish virtue.” While textbooks in Saudi Arabia claim “the Zionist Jews are the enemies of Islam and supporters of the modern Crusaders” and “in our time, the Jews have occupied Palestine with the help of Crusadism,” Joel Beinin, Middle East Studies professor at Stanford and former head of the Middle East Studies Association (MESA), rails against America’s “Zionist lobby” that controls the US government by blocking democracy and economic development in the Arab world” and uses power “to make and unmake regimes”. [29]

The University of Arkansas Middle East Studies department, set up under King Fahd, offers an Arabic language program. That is not alarming. But when touring the center’s newsletter to see the curriculum, a subtle pattern emerges. In extolling the virtues of courses in Arabic Studies at the center one comes to a full-page poem entitled “A Letter To A Faraway Friend (from inside the occupied territory)”. After noting that it was translated by some of the student body’s Arabic language students, it subtly demeans Israel and praises martyrdom and death. [30] Most telling, the sole guest lecturer flown in from California for a lecture on the Israel/Palestinian dispute is none other than Joel Beinin again, who rails against the “Zionist lobby” and frequently blames the 9/11 attacks on US foreign policy. It isn’t hard to imagine how objective that lecture could be.[31]

Examples abound all over the country at almost every major campus. Harvard received a $2 million dollar grant from Sheik Khalid Al Turki. For its graduation ceremony it chose a student, Zayed Yasin, for commencement speaker. His speech? “My American Jihad.” Yasin has voiced his support for Hamas and says suicide bombers should be paid. He also has raised money for the Holy Land Foundation, one of the Islamic charities shut down by the Bush administration as a front for Al-Qaeda.[32] Prince Alaweed Bin Talal recently donated $500,000 to Georgetown University for a scholarship program in President Bush’s name. Alaweed also recently donated $27 million dollars to Hamas. Martin Kramer’s book “Ivory Towers On Sand: The Failure Of Middle East Studies” illustrates many other similar situations on US campuses to show how pervasive this has become. [33]

Few Americans know about Title VI funding mandated by Congress. Originated in the late 1950’s during the Cold War, it received a sharp increase after 9/11 of $86 million dollars as part of the Education Act. This allowed the creation of 118 Middle East Resource Centers at US colleges and universities where Arabic would be taught and security analysis developed in the War On Terror. Yet the program has been seriously abused. The idea was that with the War On Terror the universities would provide scholars with an understanding of the Middle East and most particularly expertise in Arabic language to serve for security and military purposes. But where does that money really go? Most Middle East Studies departments let their students slide with minimal Arabic instruction and it goes into research articles to advance the Arab worldwide cause of jihad more than to protect American society or to produce esoteric reports of little value other than to keep the wheels of academia grinding.[34] It goes also for  “outreach” programs which are anti-US as much as anti-Israel and where grade school teachers are indoctrinated to teach our children down to the youngest child.

At Georgetown University such an outreach program was held for teachers from kindergarten level through the 12th grade. Seminars were packed with Arab anti-war activists who were opposed to the removal of Saddam Hussein by the US military. One of these “academics” was in fact once a public relations consultant for Saddam Hussein and blamed the oppression of Iraq’s people by Saddam Hussein on the United States. And of course 9/11 being America’s fault was standard fare. No opposing views were presented.[35] This is indoctrination, not education, and the attendees go off and teach our children so they are prepped for the biggest indoctrination of all when they reach college.

So those Saudi donations go a long way. But once those endowments are complete, matching funds are then provided by the US taxpayer, who refreshes the Saudi investment with matching funds through Title VI. Recent investigations by Congress into such abuses of Title VI were recently addressed by the Middle East Studies Association, the professional society of Middle East scholars in the US. And who pitched a continuation of such funding to Foggy Bottom? None other than Hussein Ibish, a non-academic and leader of a Saudi front group, the American-Arab Anti-Discrimination Committee, one of the Saudis main lobbying groups in the US. [36] As Daniel Pipes has said, “Something doesn’t smell right”. The Saudis prime the pump with donations to create chairs, then the US taxpayer pays for a Saudi education right here at home.

Middle East Studies professors who advance Saudi ideas and goals do reach students outside the field of Middle East Studies who may take courses as part of their breadth requirements in the humanities as well so indoctrination becomes more pervasive. But that still doesn’t reach everybody. Besides paying the salary of academics who advance the Saudi “point of view”, Title VI money goes to what could be considered the “foot soldiers” on campus who will carry the message to the rest of campus and the outside world.

Co-mingled funding for Middle East centers goes into stipends, scholarships and fellowships for Arab students to support them as workers within the several Muslim and Palestinian groups on our campuses. While handpicked Arab professors and sympathizers “reeducate” the student body to the proper “point of view,” certain student groups carry it forward by creating the atmosphere that permeates the campus with anti-Americanism and anti-democratic ideas. A tour of any major campus finds unending professionally produced flyers posted against Israel and “Zionists” (the new euphemism for Jews) or against American policy in Iraq. Students now walk across campus wearing keffiyahs (Arab headdresses), mimicking Yasser Arafat’s dress, although most college students today are too young to know the bloody history of the man who invented aircraft hijackings and left a trail of dead people worldwide.

Title VI funding provides stipends to Middle East Studies students, who then become a professional force of demonstrators on campus. Arab students may train overseas during the summer in “activism” then return to campus to ply their skills. Anti-Semitic attacks are on the increase on our college campuses, and not long ago Jewish students at San Francisco State needed to be escorted to safety by off-campus city police during a pro-Israel rally, causing one professor to remark it was like Germany in the 1930’s.  At Concordia University, 1,500 “students” showed up to create a riot and prevent former Israeli Prime Minister Binyamin Netanyahu from speaking about terrorism on that campus and ticket holders needed a police escort off campus as well.













[12] Source: US Dept. of Education (figures may be higher due to more current donations).












[24]  also:








[32]   also:




[36] also: (note discussion of American-Arab Anti-discrimination Committee touring Saudi information minister) also:  also:





TOPICS: Culture/Society; Foreign Affairs; War on Terror
KEYWORDS: academia; colleges; education; jihadinamerica; madpoet; muslims; saudiarabia; wahhabilobby
The Saudis. Again.

We need to start drilling again in the U.S. so we can finally flush these turds.

Show 'em my motto!

1 posted on 04/05/2004 1:24:43 AM PDT by rdb3
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2 posted on 04/05/2004 1:25:09 AM PDT by Support Free Republic (If Woody had gone straight to the police, this would never have happened!)
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To: rdb3
"the Saudi vision of a global Muslim state in which not only Jews but Christians and all infidels will have subordinate status to the followers of the 'true faith'"

...i.e. dhimmitude...and the Koran will be the only constitution and the shariah will be international law, in other words: The Muslim Dream

--as opposed to The American Dream...

3 posted on 04/05/2004 2:23:04 AM PDT by Savage Beast (Was it "Love Story" that was written about John Kerry? Or was it "Washington Square"?)
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To: rdb3
Interestingly Sulatn is the Kings brother and in charge of the air force (and therefore a huge customer for F15s). His son was the joint commander alongside Shwartzkopf of the first Gulf war.

Jeraisy is the biggest reseller of IT equipment in the kingdom and does millions of dollars a year worth of business with Sun and Hewlett Packard amongst others. If you are a stockholder of these companies then maybe you should be questioning why your investment is being used in this way
4 posted on 04/05/2004 2:23:32 AM PDT by weegie
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To: rdb3
Also did (and probably still do) the Saudis pay for religious schools in Pakistan for refugees from Afganistan. And from these schools are the talibans.

But as to start drilling in the US for oil, where are you going to get the oil? And do not mention Alaska´s oil wich is insignificant in comparison. Here is an article (is that ok posting a whole article in the comment section? I am new here), from the conservative british newspaper the Economist, wich underlines how much the worlds economy and thus our whole civilization in fact depends on the Saudis and stability there:


Still holding customers over a barrel
Oct 23rd 2003
From The Economist print edition


This week marks the 30th anniversary of the Arab oil embargo. Western countries are no less in thrall to Middle Eastern oil than they were then

ON OCTOBER 17th 1973, Saudi Arabia and several of its oil-rich neighbours voted to cut off oil supplies to America. Two days later, Libya said it would also cut supplies to America and raise the price of oil to other countries from $4.90 a barrel to $8.25 a barrel. Arab frustration at Israel's military victory that month came to a peak on October 21st when Dubai, Qatar, Bahrain and Kuwait cut off supplies too. The Organisation of Petroleum Exporting Countries (OPEC), founded in Iraq in 1960 to promote the interests of producer nations, had finally found its muscle.

The Arab embargo has become a symbol of the political chaos and economic troubles endured by the West during the oil shocks of the 1970s. After decades of gradual decline in real terms, oil prices rocketed upwards (see chart 1). Most mainstream forecasters-including those at America's Department of Energy-predicted that oil would cost over $100 a barrel by 2000.
A casual observer of the energy business today might find little changed from that tumultuous autumn of 30 years ago. Once again there is talk of scarcity and crisis. The Middle East is again on the brink of chaos, not only because of Arab countries' resentment over America's support for Israel, but also because of its military occupation of Iraq. And, after years of weakness in the 1990s, OPEC has sprung back to life. Although oil prices have remained around $30 a barrel for some time, and western economies are anaemic at best, the cartel shocked the market last month by voting to cut its output even further.
Moreover, America's Congress is in the final stages of intense negotiation over a huge energy bill that is based on the administration's notion that there is a serious energy-supply crisis. The bill is expected to be passed by Congress any day now. "It's becoming very clear to the country", George Bush has said, "that demand is outstripping supply." The Texas oilman's words echo those of Jimmy Carter in 1977. "The diagnosis of the US energy crisis is quite simple," he said. "Demand for energy is increasing while supplies of oil and natural gas are diminishing."

It's the market, stupid
If so many things remain unchanged, is the power of OPEC to bring western economies to their knees one of them? The answer to that is complicated: OPEC's power was enhanced by stupid policies pursued by western governments, then reduced by wiser policies of energy conservation, and now is making an alarming comeback.
First, consider what the Arab embargo actually accomplished. In technical terms it was a complete failure: OPEC oil shipped to Europe was simply resold to America or, in effect, it displaced non-OPEC oil that was redirected from Europe across the Atlantic. Prices did rise, but that affected all oil consumers not just Americans. Oil, it became clear at the time, is a "fungible" global commodity. In 1973, Morris Adelman, a professor at the Massachusetts Institute of Technology (MIT), predicted that "if the Arabs don't sell us oil, somebody else will." He was right.
The petrol queues and shortages in America that are now linked in the popular imagination with that period had little to do with the Arab embargo. Jerry Taylor of the Cato Institute argues, correctly, that the shortages were due chiefly to the misguided, anti-market energy policies that had been adopted by America in the years before the embargo.
In 1971, for example, the Nixon administration imposed price controls on the energy industry that prevented oil companies from passing on the full cost of imported oil to consumers. That led directly, and predictably, to the companies making decisions to reduce their imports and to stop supplying independent petrol stations that they did not own.
Congress made the situation worse in September 1973 by trying to allocate oil to various sectors of industry and different parts of the country through bureaucratic fiat. It also tried to force different pricing for "old" oil and "new" oil-a meaningless distinction for a fungible commodity. These measures led (again predictably) to the panic and hoarding that were to blame for those petrol queues. Both Arab producers and American politicians failed in the 1970s to understand the market forces that lie behind the oil business-that is, the power of supply and demand. Happily, there are signs that both are now a bit wiser to the ways of the market.

Siberia to the rescue?
In one sense, the cries of oil scarcity heard three decades ago were certainly wrong: the world is not about to run out of hydrocarbons. Thanks to advances in exploration technology, there are more proven reserves of conventional oil today than there were three decades ago. What is more, even if the stuff starts to grow scarce some decades hence, there are great quantities of unconventional oil (such as Canada's tar sands) still to be extracted.
The astonishing burst of innovation in oil technology was the result of investment by big western oil companies in non-OPEC areas such as Alaska and the North Sea. The development of fields in these regions undoubtedly helped to check the market power of OPEC. Unfortunately for consumers, however, these mature oil sources are about to enter a period of dramatic and irreversible decline. This poses an enormous challenge for the big oil companies, which must somehow replace their lost reserves or see their share prices punished by Wall Street.
In a forthcoming study, the International Energy Agency (IEA), a quasi-governmental group of oil-consuming nations, estimates that the oil industry needs to invest as much as $2.2 trillion over the next 30 years in exploration and production. Much has been made about the soon-to-soar energy needs of fast-developing giants like China and India, but only a quarter of that $2.2 trillion is required to meet growth in oil demand; the rest is needed, the boffins say, merely to replace production that is already in decline or soon to decline. Daniel Yergin of Cambridge Energy Research Associates, an industry consultancy, says: "Every day the head of every major oil company wakes up focusing on how he is going to replace his reserves. The pressure is relentless." If western oil companies do not manage to find new sources of supply, OPEC's market share can only increase-and with increasing market share comes more power.
Where can the companies hope to find new reserves? A glance at the headlines in recent weeks suggests that Siberia is to be the industry's salvation. After a long history of hostility to foreign involvement in energy, it now appears that Russia is putting out the welcome mat. And big oil firms are racing breathlessly across it, given that Russia has the largest reserves of any country outside the Middle East.
BP, which lost $200m in an ill-fated venture with a local company in 1997, appears to have won the first big prize with its new joint-venture with TNK, a big Russian oil firm. Recent rumours suggest that Exxon Mobil and Chevron Texaco may be about to gobble up minority stakes in local firms too. Such acquisitions could be welcomed by YukosSibneft and Lukoil, two of Russia's biggest oil firms. Their owners might be happy to sell now that foreign companies seem eager to pay high prices for businesses such as theirs.

No one swings like the Saudis
If Russia's fickle politics continues to allow foreign investors in, then the big oil companies should be able to replenish their reserves. That does not mean, however, that the West has found an OPEC slayer. One problem is that it costs far more to lift oil out of the tundra than it does from the sands of the Middle East; indeed, it costs barely a dollar a barrel to extract it from the Saudi or Iraqi deserts compared with an average of about $2.5 a barrel in Russia.
Another reason why Russia will not prove the end of OPEC is that it cannot play the role of swing producer. Saudi Arabia maintains a large amount of excess capacity in order to manage prices and cope with disruptions in supply. Because Russia's oil is in private hands, the country will never be able to maintain such a buffer-no company boss could justify such a waste of shareholders' money. Iraq, whose reserves are cheap but not as plentiful as Saudi Arabia's, is unlikely to become a swing producer because its capacity too is limited. Given the dilapidated state of Iraq's infrastructure and the problem of continuing sabotage, few analysts think that its output will rise even to 6m barrels a day (bpd) in less than a decade-let alone to Saudi levels of over 8m bpd.
There is another reason why Russia will never be a proper counterweight to Saudi Arabia. Vahan Zanoyan of PFC Energy, a consultancy, points out that many of the country's ports are frozen for part of the year. Even if the Russians develop idle capacity, it will be of little use if they cannot get the extra output to market quickly. When political turmoil in Nigeria and Venezuela reduced oil exports on the eve of America's invasion of Iraq this year (which in turn led to a halt in Iraq's limited exports) it was the swift release of oil by the Saudis that kept prices from soaring.
Such moves by Saudi Arabia may seem reassuring, but in fact they point to a cause for great concern: the real problem with the supply of oil is its concentration, not its scarcity. Fully 25% of the world's proven reserves of oil sit under the parched deserts of Saudi Arabia. Add in four of the kingdom's neighbours, and the share of the world's oil reserves held by Middle Eastern OPEC countries soars to about two-thirds. It is this immutable fact that gives the cartel, and especially the Saudis, all the aces in the energy game. Russia, by contrast, sits atop barely 5% of the world's reserves. (Iraq controls about 10%.) The Arctic reserves in Alaska, which are at the centre of so much controversy in America, are insignificant in comparison.
What is more, because the Middle Eastern suppliers are restraining their production in order to prop up prices, they are sure to have plenty of oil left when the non-OPEC countries start to run out of it. That is why official forecasts, such as those of the IEA, suggest that the market share held by countries in the Middle East-especially Saudi Arabia-can only increase over the next two decades.

CAFE society
All this shows that an approach that focuses on the supply of oil, such as that taken by President Bush, can do little to free the world economy from OPEC's grip. An approach that focuses on demand, however, might be a different story. Amory Lovins, the head of Rocky Mountain Institute, a natural-resources think-tank, is among those who argue that demand-oriented policies designed to encourage energy efficiency and conservation can help.

During the dark days following the Arab embargo, when most oil economists were convinced that energy use and economic growth had to grow in harness, Mr Lovins insisted that demand-side measures could save the day. In a famous article published in Foreign Affairs in 1976, he argued that America could pursue a "soft path" that would remove the link between energy guzzling and GDP growth. He was widely mocked by the energy industry and mainstream economists at the time, but history has shown him to have been right (see chart 2).
Several forces explain the decoupling of energy use and economic output in the rich world. One is the broad transition from manufacturing to service and information industries, which typically require less energy input. Another is the embrace of policies specifically designed to encourage energy efficiency. In Europe and Japan, governments adopted higher energy taxes on the grounds that the environmental and security "externalities" involved in using oil were not reflected in the market price. In America, politicians decided to use regulation rather than price to encourage efficiency.
The most important, and most controversial, of America's demand-side measures is the Corporate Average Fuel Economy (CAFE) law. As a result of this measure, the average fuel efficiency of new American-made cars rose by over two-fifths from 1978 to 1987. From 1977 to 1985, America's GDP rose by 27%, but its oil use dropped 17% by volume. The volume of America's net oil imports fell by nearly 50% during that time. Mr Lovins argues that the dramatic drop in oil intensity of the American economy "broke OPEC's pricing power for a decade". The cartel fell into disarray in the late 1980s, and the world enjoyed relatively low and stable oil prices for much of the 1990s.
Demand-side measures like CAFE did help check the cartel's power for some time. However, the automobile industry hates the law and for the past few years has managed to thwart efforts by some in Congress to raise the standards and to close a loophole that exempts trucks and sport-utility vehicles (SUVs). As a result, America has started to return to its gas-guzzling ways of the past. The average fuel efficiency of American vehicles has been near a 20-year low for the past two years.

Praying for Riyadh
Beyond these measures, what can the West do to reduce the chances of another oil shock? Stock up on oil, for a start. At the time of the Arab embargo there were no meaningful buffer stocks of petroleum. The wealthy members of the OECD have since agreed to maintain at least 90 days' worth of stocks, and they created the IEA specifically to monitor them.
Critics argue that politicians meddle in the management of these stocks too much; some even suggest that the stocks do not do much good at all. But Claude Mandil, the IEA's boss, insists that they play an important role as an "insurance policy", which gives Saudi Arabia an incentive to play its role as swing producer and to prevent future oil shocks. If the Saudis do not release their oil, Mr Mandil argues, they know that the IEA will release its own.
This delicate game of cat and mouse points to the harsh reality of today's oil market: it is Saudi Arabia's willingness to be the swing producer that now insures the world's economy against oil shocks. As long as there is a stable government in Riyadh, the West can probably be confident that the enlightened self-interest of the Saudis will coincide with the interests of western gas guzzlers.
Alas, the stability of the Saudi regime is far from guaranteed. The pro-American, ruling family is deeply unpopular with fundamentalists in the country, and there is no clear successor to the current de facto ruler, Crown Prince Abdullah. As even the Saudis now grudgingly concede, home-grown terrorists regularly carry out attacks in the country. And if a radical like the Saudi-born Osama bin Laden were ever to topple the royal family, the world could well be hit by another energy shock.
The conventional view has held that economic reason and American military might would quickly put an end to any such trouble. It is true that any rational rebel, however anti-American, would still sell oil to the world market in order to feed his people. A wilfully irrational zealot, however, might very well shut down the Saudi spigots in an effort to hurt the West.
As for the notion that American troops could quickly restore oil exports, the current morass in Iraq suggests otherwise. If zealots ever got hold of nuclear or chemical weapons and turned them on essential bits of Saudi infrastructure, then all of America's might could not prevent a prolonged and extremely painful oil shock. At a recent conference held on Capitol Hill to reflect on the anniversary of the Arab oil embargo, James Woolsey, a former director of America's Central Intelligence Agency, said: "There are malicious, 9/11 equivalents in the energy system because of our risky reliance on the Saudis as swing producers."

There's safety in cells
As the centre of gravity of the world's oil production shifts inexorably closer to Riyadh over the next two decades, this risk can only grow. One statistic makes the point particularly well: even assuming that oil-production technology advances by leaps and bounds, and assuming that four-fifths of all upstream investment in oil takes place outside the Middle East, the IEA still predicts that Saudi Arabia and its immediate neighbours will meet nearly two-thirds of the anticipated increase in oil demand in the years to 2030.
If that is accurate, government stocks, while sensible, will never be able to compensate for the loss of Saudi output for more than a few months. Seeking out new sources of non-OPEC oil abroad, and squeezing out more energy efficiency at home, are surely good things to do as well. But in the end neither will make the world much safer from another oil shock.
Only by finding a radical alternative to oil-another way to power the world's cars and buses-will consuming countries be able to escape a dangerous reliance on Saudi Arabia and its neighbours. Hydrogen-powered fuel cells, and other alternatives such as bioethanol, might provide a means of escape in a decade or two, if pursued vigorously enough in the meantime. Until then, however, the world's addiction to oil remains an increasingly risky gamble on Saudi Arabia.
5 posted on 04/05/2004 2:28:55 AM PDT by Leifur
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To: tubavil
6 posted on 04/05/2004 10:24:25 AM PDT by yonif ("If I Forget Thee, O Jerusalem, Let My Right Hand Wither" - Psalms 137:5)
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