LA NOTEBOOK - We have learned all our life that death and taxes are certainties. Another soon to become part of these certainties is gasoline at $10.00 a gallon. Los Angeles is most vulnerable to these rising prices because we are most dependent on gasoline.
In January President Obama abruptly vetoed a permit for the Keystone XL pipeline, Canada’s $7 billion project to deliver oil across the U.S. Midwest to the Texas Gulf Coast which environmentalist have long opposed. This represented a capitulation to the ideals of environmentalists at the expense of 7,000 direct and 118,000 spin-off U.S. jobs. Also overlooked are the 300,000 miles of existing pipeline while denying 2,500 additional miles.
Canada has come to grips with this obstinacy and is moving along swiftly towards building a pipeline from Bruderheim in the Edmonton, British Columbia region of Canada to Kitmat in Vancouver on the Pacific Coast. The destination of this oil then is Asia to satisfy their growing hunger. Both China and India are developing a growing appetite with their rising middle class of auto owners.
Environmentalists have also continued to block the tapping of the 2 trillion barrels of oil reserves beneath the surface of the Rocky Mountains, the reserves of Alaska’s Prudhoe Bay, the unmeasured trillions of barrels of oil reserves off the shores of the U.S., and the proven oil reserves in the Gulf.
The reasons we will soon be facing $10.00 a gallon gasoline therefore are:
- Failure to tap proven oil reserves in the U.S.
- Failure to tap accessible oil reserves adjacent to the U.S.
- Failure to maintain our oil refineries in tip top shape
- The growing demands for oil throughout Asia
- Dependency on OPEC to satisfy our oil requirements
- The weakened dollar that causes us to have to pay more
The dependency on OPEC to satisfy our oil requirements is fast becoming a crisis. Iran said Sunday that it is cutting off oil exports to France and Britain in a preemptive strike against European economic sanctions, while top U.S. and British officials warned against a military attack on Iran’s disputed nuclear program.
This creates an explosive situation. This puts us that much closer to the fit hitting the sand. The last time I was in Iran was in 1980 on a Pan Am clipper flight from Frankfurt to New Delhi. It was midnight as we flew over the city on an unscheduled stop. Raging fires were visible for miles in every sector of the city. Mohammad Shah Pahlavi was the second and last ruler of the House of Pahlavi of the Iranian monarchy. He had grown fat over the decades thanks to the largess of the U.S. taxpayer and had invested heavily in Pan Am. This stop, therefore, was probably his family cashing in some of their Pan Am chips before the Shah fled into exile in Egypt and died.
The captain advised we were making an unscheduled stop to pick up desperate evacuees. We were advised that anyone departing the clipper as it sat in an isolated warehouse area would be left. We were on the ground for one hour as boxes and distraught passengers were loaded. One young lady from Ohio had seven cardboard boxes stacked into the rear galley. I wise-cracked and asked if she always traveled this light. I felt like a rat when she said it now represents all her worldly possessions.
When the fit hits the sand next time the results will be much more tragic:
- The Strait of Hormuz will be blocked and our supply of OPEC oil will be cut
- Iran’s nuclear program will be attacked and the conflagration will spread throughout the Middle East
- The weak dollar will face collapse and the world will face calamity
Nobody wants Iran to have nuclear weapons but an attack will have consequences. Everyone is placing great hopes on the approach to the very serious economic sanctions and diplomatic pressure and the readiness to negotiate with Iran. What a perplexing dilemma!
We are dealing with Iran. One way or another, the cost of gasoline will increase. You can bet on it. You can bet $10.00.
We will have three Life Certainties:
- Death
- Taxes
- $10.00 a gallon gasoline
(Kay Martin is a writer and a new contributor to CityWatch. His years of travel and work included tours in Russia, Europe, the Middle East, Africa, Asia, Australia, Hawaii, Latin America, and the Pacific. He can be contacted at [email protected].) –cw
