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Book Review: 'The Oil Card: Global Economic Warfare' Causes of high gas prices not the usual suspects, says author By Gary Feuerberg Epoch Times StaffOct 6, 2009 Facebook Digg del.icio.us StumbleUpon | | Related articles: Arts & Entertainment > Literary & Visual Arts ECONOMIC WAR: Writer James R. Norman contends that constantly rising gas prices hurt China more than the U.S. (http://www.theoilcard.com/ ) James R. Norman says in The Oil Card that the price you pay at the pump is not determined by the free market. That news is not terribly shocking or new. Supply increased as demand remained largely unchanged. The price of oil soared more than 12-fold in less than 10 yearsunder $12/barrel in 1998 to nearly $140 by mid-2008. Oil had been trading steadily at $20 /barrel for the previous 15 years. According to Norman, the price of a barrel of crude oil futures reached $100 in December 2007 which, according to respected analysts, was as much as $50 above what it should be based on demand. Another sign of market rigging is the huge volume of futures trading, ³far beyond the normal needs of industry hedging activity,² says Norman. So, who is behind the price manipulation and why? Speculators? That¹s what the conventional wisdom says, but Norman argues that the explanation has nothing to do with people wanting to make a killing on the market. Norman¹s explanation is also not that the oil cartels are greedy for profits. Nor is Saudi Arabia holding back production. All of the above factors, in fact, were driving the price of a barrel of oil down, says Norman, and brought on a price collapse in the 1980s with a glut of oil. Norman¹s thesis is that some unnamed entity in the U.S government tied to our national security manipulates the price upward. While Norman doesn¹t identify who is responsible, he does have an explanation for why oil prices are manipulated much higher than would be the case under true free market conditions. It¹s to play keep-away with our number one strategic competitor, the People¹s Republic of China (PRC), and make them pay much more to sustain their economic juggernaut. While high prices hurt us, it hurts them a lot more. Norman¹s thesis is that some unnamed entity in the U.S government tied to our national security manipulates the price upward. Norman concedes there is no hard evidence for his thesis of a covert economic war between the U.S. and the PRC, but oil price manipulation can explain a lot of phenomena that are perplexing. Why did the empire of the Soviet Union suddenly collapse in 1991? The Soviet Union relied on oil sales (as well as precious metals) for meeting their hard currency needs. When oil prices plummeted during the Reagan years, the Soviet Union ran out of money which in turn forced it to surrender its grip on Eastern Europe. This happened without firing a bullet, chiefly through the Saudis being persuaded to increase production and lower prices, and limiting natural gas imports to the West from Russia. For this part of the story of the use oil price manipulation to bankrupt the Soviet Union, Norman draws upon Peter Schweizer¹s account of the Reagan Administration¹s strategy to hasten the collapse of the Soviet Union. Norman then takes this lesson in history of the collapse of one communist country and, drawing upon his own extensive knowledge of the oil industry, applies it to another communist foe: The People¹s Republic of China. The PRC is vulnerable in the reverse of the former Soviet Union, which needed to sell its abundant natural resources. The PRC¹s annual growth rate in oil consumption has been nearly 10% since 2003. Oil supply is a major weakness of China, with more than half of its 8.1 million barrels per day (2008) oil demand coming from foreign sources. Increasingly, China needs to buy its oil, with an undervalued currency, to keep its economy going, hold down unemployment, and dampen social unrest. ³Oil prices are a pain in the neck for Americans, but they could strangle the Chinese economy,² says Norman, and he quotes from Chinese officials that they see it the same way. But why and how did China become our adversary? The news media often mentions China¹s appalling human rights record and authoritarian rule, and the Tiananmen Square massacre in 1989, but very little about China¹s military threat to the U.S. Norman¹s tells the story of how China moved from being our ally against the Soviet Union to becoming our adversary. For Norman, the rivalry is about a struggle between the U.S. wanting to remain the undisputed world superpower (and its global reserve currency) versus ³the survival of one-party Communist rule and the small elite behind it.² The security establishment in this country, says Norman, expects that as China¹s power increases, a showdown is inevitable as to who will dominate Asia and the Pacific. And there is plenty of data that the Chinese Communists too view war with the U.S. as inevitable. One can¹t feel much sympathy for the PRC and its mercantile policies, as described by Norman. The PRC relies on heavy subsidies for its oil refiners to alleviate the high prices China pays for its oil. He cites critics who point out the PRC¹s rampant subsidies, non-tariff import barriers, dumping, and, in general, a command economy that keeps afloat enterprises that wouldn¹t last long in a true market economy. It¹s really a slave economy existing for the purpose of keeping the communist elite in power. The turning point seems to have been 1998, during Clinton¹s second term when Beijing¹s aggressive agenda was becoming more evident. In that year, the PRC¹s Belgrade embassy was bombed ³accidentally,² according to the Administration, but Norman suggests otherwise. Our covert war has even more serious implications, namely, the reason for the U.S. 2003 invasion of Iraq and the regime change forced there. The reason most often givenweapons of mass destructionwas never very convincing and later found to be without merit. Nor was it believable that Saddam had partnered with Al Qaeda. According to Norman, the reason the U.S. invaded Iraq was for oilnot for the purpose of consuming the oil for ourselves, but to deny the PRC a primary source. The PRC¹s China National Petroleum Corp was working on obtaining the development rights to two major oil fields; it had one agreement in 1997 and another that it was in line to secure. This all was to occur later in the year when U.N. sanctions were to be lifted. According to Norman, the U.S. could not tolerate the PRC to set up in Iraqwhich after Saudi Arabia has the largest oil reservesa client state as they had done in the Sudan. So, the U.S. had little choice but to invade the country and occupy it, ³with or without allies or UN support.² Plausible. ³But no one wants to talk about it,² says Norman. Thus, rather than wait for a military settlementwhere both sides losethe U.S. security establishment decided to preempt matters by wagging economic warfare, and leading the effort by pushing oil prices up and sustaining them. Norman admits that this economic war with China is not going quite as well as the one a generation ago against the Soviet Union. And we had to experience the deaths and losses in Iraq as a cost to oust Saddam. But the costs and casualties are quite manageable, he argues, compared to a military confrontation with China. Norman glosses over a lot of troubling aspects of this remarkable story. For one, the journalists even in a free society like our own are powerless to obtain much more than a glimpse into the maneuvers, posturing and chicanery devised in the deep recesses of the U.S. security apparatus. Given the realities of modern military and economic warfare, Norman is quite willing to accept the lack of candor on the part of the U.S. Government and leaders. But can we sleep in comfort knowing that our government surreptitiously wages economic warfare? And might this not constitute a threat to our freedom sometime in the future? The Oil Card: Global Economic Warfare in the 21st Century by James R. Norman (2008) is published by Trine Daily and available in paperback at amazon.com.
