The Trillion Dollar Idea from " Finishing Brushstrokes"

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Finishing Brushstrokes

Chapter 7

The Palace, Mahé, Seychelles

I lived on a remote island in the Indian Ocean. I lived at the center of the world. I lived where history was being made every day, including much of the history going on in other places. That was another “little thing” I soon discovered, that the four hundred or so inside The Palace directed the activities of ten of thousands outside The Palace. Through those tens of thousands, millions more were directly influenced. Ultimately, most of the world’s six billion had their daily lives affected by The Palace.

That was the case with Oscareyo and also the case of OPEC respecting the surprise announcement of 31 March 2003. To a certain clique within The Palace, it was called “April Fool, USA”. One thirty-minute address delivered by a heretofore-unknown employee of the oil cartel, a recent US emigré to Qatar named John R. Newman. Mr. Newman was a broad-shouldered, silver-haired, bespectacled oil veteran with degrees in petroleum engineering and computer science from the Colorado School of Mines in the US. He left the US only sixteen days before that, turning from a mid-level operations manager from Texaco into a multi-millionaire citizen of an Arab emirate and a non-US-citizen in just that amount of time.

There had been some rumors that OPEC would make an important announcement during its annual meeting in Vienna, but as usual, the mainly-Islamic group of ministers was quiet, dignified and reserved as they made their entrances behind the closed doors of their planning conferences. There was a certain sparkle in the eye of the Senior Oil Minister of Qatar, but John Newman’s disappearance was news only to a few Texans used to seeing him complain inside Houston conference rooms. He always started off with “The US has it all wrong.” No, John Newman was going nowhere in his career, insisting that the US needed a drastic change to its energy policy, and that Texaco should take the lead in a global energy conservation/energy utilization program.

“First, I’d like to briefly introduce myself. My name is John Newman, and I have been appointed as a Special Envoy to the Oil Producing and Exporting Cartel, known by its acronym OPEC to most of the world. While I have spent thirty years in the energy production arena of Texaco, Inc., most of the world has no idea of who I am or what I stand for. Three weeks ago, I was another nameless suit at Texaco’s Operating Division headquarters in Houston, Texas. To a few industry insiders, I was the insistent complainer as to international petroleum production and conservation policies. That is, I didn’t like what my country, the US, and Texaco were doing. I was tolerated, just barely, but I had no voice in the process.

“Things change. First, I’m now a citizen of Qatar and I have renounced my US citizenship. Therefore, what I am about to announce, which most Americans will consider highly harmful to the US, is not a crime. My ideas are going to become an action plan for the world, thanks to OPEC. You see, I wrote journal articles for over two decades, trying to be heard; OPEC heard, and OPEC approves. Therefore, what I’m announcing at this time is not something vague; it is instead an official act of OPEC, business conducted at its annual meeting held here this week. Those of two heads of state, both OPEC members, will follow my words. They mark the most important change in OPEC since its formation and underscore the sincerity and indelible determination of OPEC to implement the policies that I will announce.

“On a personal level, it is indeed gratifying that my lone voice in the wilderness has caught the attention of world powers, that my ideas have been adopted as a way for the world to live better. To distinguish my achievement, I have taken a six-month assignment as Special Envoy and Policy Minister for OPEC. As such, I am to be paid a weekly salary by Qatar equal to the revenue generated by its average producing well in one day. So that you understand what that means, I will cite two statistics: (1) There are over 10,000 such wells in Saudi Arabia alone; and (2) the average well in Qatar produces 10,000 barrels per day, with a wellhead price of about $US27.50 per barrel. My weekly salary is therefore $275,000, or more than the annual pay check of the President of the United States.

“Before I announce the new OPEC policy, I am going to cite facts about energy and the United States, the sort of data conveniently “forgotten”, because no one likes to take issue with the world’s supposed only superpower. First, as almost everyone knows, the US is the largest energy consumer, with annual use of about thirty five hundred quads. So that you know the true meaning of that figure, I am going to ask you to write down the digits “3” and “5”, and then follow that by seventeen zeroes. It’s equal to more than 37,000 horsepower hours for each man, woman and child in the US. Or, to put the number in an old-fashioned pose, it’s the energy of four straining horses for each breath of life of every American. It’s twenty times the energy consumption per person of China, which is the nation with the world’s third largest energy consumption. It’s wasting energy at a level unbelievable to most of the world.

“Second, the scientific community generally accepts that nuclear energy is the most desirable way to produce electric power, after hydroelectric complexes. Unfortunately, there aren’t many viable sources of hydroelectric power that haven’t been tapped, mostly for decades. There are, however, uranium reserves equivalent to that needed for at least five hundred years of nuclear power, twenty times that of petroleum reserves, and uranium deposits have not been sought with the zeal of those after petroleum deposits. Despite the anomalous occurrence at Chernobyl, nuclear power is safe, whereas thousands of lives are lost each year in the production of coal, oil and gas, which are alternative fuels used to run the dynamos that produce electricity.

"While it is true that spent uranium fuel presents a problem in that there is no absolutely safe way known to store it indefinitely, the same is true with a host of chemicals routinely used by industry worldwide. And uranium used for nuclear power is concentrated energy. The amount of matter equivalent to half of the smallest US coin, the ten-cent piece commonly referred to as a dime, was the amount that devastated Hiroshima. There’s not that much matter to store, so the utilities just leave it “on site”, behind locked gates in concrete drums, a couple of hundred meters from the reactors. That process has worked well for over fifty years, so there’s no real concern that it shouldn’t continue.

“As I see it, that means the US uses too much energy, so much that it is the world’s largest importer of petroleum, even though it is an extremely large producer of petroleum and has vast resources of coal and natural gas. Due to silly politics and anti-nuclear media hype, its politicians have caused the US to produce less nuclear power than it should, aggravating the energy problems of that nation. This is further aggravated by the US failure to utilize vast resources of untapped oil and natural gas in the North Slope of Alaska, due to the politics of appeasement to so-called environmentalists and so-called conservationists.

“OPEC is poorly understood by many from even developed nations like the US. OPEC’s member states produce about 40% of the world’s oil, no more. Most is produced and used by other nations. But OPEC is composed of those whose production-to-use ratio is low, so it does control the exported oil. And while natural gas fuels some cars, the vast majority of motor vehicles, virtually all the ships and airplanes are fueled by petroleum. While coal and natural gas power most of the US dynamos, the world in general uses oil for the production of electricity, along with nuclear power in the developed countries.

“There will be a good and stable market for OPEC petroleum in the foreseeable future. At the present rate, OPEC supplies will last about another 30 years, no more. So OPEC members want a way to extend their supplies for a longer period and I long ago developed a plan for that to occur. It involves changes in the US: (1) The use of nuclear fuel as the foremost electrical power source; (2) The conversion and building of more natural-gas-powered vehicles to gradually be the standard for the country, using domestically-produced fuel; (3) Further electrical power conservation by homes and businesses; (4) The cessation of importation of petroleum and the exporting of surplus to other countries; and (5) The production of all reasonably discoverable as well as already-discovered sources of petroleum, regardless of ecological and environmental complaints.

“In short, the world’s energy problems would be substantially solved by US action in the above five areas. With OPEC behind me, tonight I announcing a program intended to bring the US into compliance. I call it The Trillion Dollar Idea, because it transfers a trillion dollars from the US and Israel to poorer nations. The OPEC announcement is simple: ‘Starting tomorrow, 12:01a.m. New York City time, all OPEC imports of petroleum by two nations, the US and Israel, will incur a surcharge based on 50% of the value of all their imported petroleum, from non-OPEC as well as OPEC producers. Prices to other nations will remain the same. Transshipments from non-OPEC nations in an attempt to save the US and Israel from the effects of the surcharge will be passed on to the offending nations; continued deliberate efforts to disguise the true destination of petroleum will lead to further sanctions against offenders, including an indefinite embargo of oil to such offenders.’

"'Further, all OPEC members have today terminated their membership in the World Trade Organization and formally notified the World Court, as a judicial body within the WTO, that they will not recognize their jurisdiction respecting trade matters. All treaties that would restrain or prevent OPEC and its members from assessing and collecting the surcharge are hereby nullified. Therefore, no court can change the disposition of this transferred trillion dollars, my idea.'

“That’s the entire announcement, from OPEC’s standpoint, save for two new matters involving the makeup of OPEC itself. Today, OPEC added a new and important member state, so the Executive Director of OPEC and the President of that country will now make those announcements.”

As John Newman left the podium and a host of unanswered questions from reporters and journalists around the world, his new face was replaced by the somewhat-familiar face, beard and caftan of Emir Al-Aziz Fattah, a member of the Saudi royal family and nominal head of OPEC. He spoke a few minutes in Arabic, which was translated immediately into English and heard throughout the world “In the name of the magnificent Allah, I bring greetings from the Oil Producing and Exporting Cartel. We have unanimously voted today to add a new member-state, whose oil exports will now be governed by OPEC decisions. Additionally, that new member-state has offered to provide OPEC members a certain form of military protection, for which OPEC has agreed to pay a sum equal to 75% of the aggregate US petroleum surcharge less the Palestinian commitment as I shall explain it. The remainder of the surcharge monies will go to Venezuela and Nigeria, two hitherto non-Arab members most in need of economic revitalization.

"We Arabs are well aware that the US has subsidized the State of Israel heavily. The US has more than the sum of the assets of the OPEC nations. Nevertheless, we, as a predominately Arab and Muslim organization, are extremely sympathetic to our Palestinian brethren and have pledged to annually subsidize the Palestinian people in an amount equal to that provided Israel by the US. Accordingly, the entire aggregate Israel petroleum surcharge shall be paid daily to The Palestinian Authority on behalf of the Palestinian people.

"OPEC will have strict accounting controls in place and shall assert itself as an active participant in Palestinian affairs. This will insure the monies paid by OPEC from the surcharges are solely for the benefit of the Palestinian people. They shall not to be used for military purposes or for the personal benefit of the Palestinian President or any governmental personnel or agencies. If OPEC cannot be assured that monies paid are doing exactly that, then OPEC will establish new agencies entirely controlled by it for distribution of monies for the building of Palestinian infrastructure, such as roads, hospitals, schools and communication systems, and for direct aid to the impoverished Palestinian people.

"There is a condition to this aid, one that the US, Israel and the world shall appreciate. No aid shall be paid for a period of thirty days after each and every act of terrorism against Israel, the US or any non-Palestinian country, where such terrorist act is done by a Palestinian or one or more persons acting with the consent, prior knowledge, assistance or personnel of Palestinian or supposedly-pro-Palestinian organization.

"We have assurances from Yasser Arafat and the PLO. He and they have agreed that acts of terrorism and conspiracies to conduct such acts shall, as of now, constitute capital offenses and, if done in the name of an organization, make all members of such organizations capital offenders. He has assured me that he welcomes a new era of peace and prosperity and that the OPEC aid justifies this extreme stance against zealots whose unreasoned hatreds would upset this special OPEC-Palestine donation.

"In turn, OPEC nations have agreed to extradite all known terrorists within their borders to the PLO and to do all acts necessary to prevent terrorism, anywhere, anytime, for whatever purpose. Israel may now turn its attention to its own internal affairs and should now seek aggressively to see that the historic 1994 Oslo accords are forthwith ratified. This means that the 1967 Israeli boundaries as referenced in the oft-cited UN resolutions are re-established and that Israeli settlements on the West Bank of the Jordan are abandoned in favor of the Palestinians as their rightful owners. I say to Israel: You agreed then and you should not attempt to backtrack or renegotiate now. Obey the will of the world as contained in the UN resolutions and pray to your God for the blessing of peace that OPEC has provided you. With Arab and OPEC and Palestinian governmental blessing and governance aggressively requiring anti-terrorist behavior, you are safe.

"So that you understand the care and concern with which this anti-terrorism message is made, let me clarify a point you might now raise in justification of continued militarism against the Palestinian people. We of OPEC, along with Yasser Arafat, have consulted with representatives of Islamic Jihad, Hamas and many other so-called terrorist organizations. As we speak, most of them are formally and informally disbanding, considering that they have outlived their usefulness to the Palestinian people, now that OPEC has made its pledge of aid and non-Israeli interference, and further taxed the Israeli people to aid the Palestinian people.

"But I also say to Israel: Make no mistake. You may not unilaterally send troops and tanks into the Palestinian areas, regardless of supposed provocation. Palestine does not send troops against Israel. From today, neither shall Israel send troops against Palestine, or it shall pay the ultimate price, its nuclear annihilation.

"The President of that new member state will now give his formal assent and detail the military defense arrangement. He will clarify how adamant OPEC is as to the implementation of Mr. Newman's Trillion Dollar Idea.”

There was a pause as the Emir left and a slight delay before the emergence of the President of that new OPEC nation. One look caused the world to breathe an involuntary gasp as the insidious craftiness of OPEC was manifested as an operational strategy in order to pursue Mr. Newman’s ideas.

Vladimir Putin, President of Russia, was beaming as never before. The Russian bear was back, not as a superpower, but as an OPEC member charged with a role in OPEC defense and compensated at the rate of $US110 billion per year. The extra hard currency would be enough to turn Russia from third-world and poverty to developed and prosperous in eight to ten years. Other former SSRs with significant oil production would follow Russia’s lead into OPEC and immediately enjoy the same advantages.

His Russian was delivered with precision, as the former KGB official used words like hammers to impact the full force of his message at a stunned world and a particularly incensed US military-political-industrial triumvirate. “With OPEC’s acceptance of our nation’s bid for entry, we have uniquely agreed to act as the nuclear deterrent to efforts to overthrow OPEC sovereignty. Whether by the US, Israel or others, including the United Nations, OPEC will not tolerate attack or invasion. There will be no non-nuclear alternative, no discussions, no negotiations, and no mitigation. Offenders will be the objects of an immediate and unceasing nuclear defense by OPEC in the form of ICBMs launched from Russia at the offenders. We have kept a sufficient number within our military forces’ control for this purpose. It is about five thousand warheads, just 10% of the total number the USSR once deployed, but enough to effectively eradicate the US, even with its limited SDI, and all of any other offending country.”

“Russia and OPEC don’t want war. But OPEC won’t be bullied and now Russia has sufficient hard currency resources to allow it to be in the economic position that it needn’t kowtow to the US, US bankers, world Jewry or other American-Israeli interests.”

A blow by a professional boxer to the midsection of the US President would have hurt less. The US lost face, the Russians and OPEC gained, and Israel was even more an isolated outpost in world political machinations. But good sense prevailed and the US response, after much heated debate, included no nuclear first strike. Instead, there were diplomatic overtures, talk and threats of economic sanctions. In the end, the US capitulated, changing its policies to conform to Mr. Newman’s five requirements. The result was observable by the decline of its imported petroleum, a figure that went from 30,000,000 barrels of oil a day to one-third that figure within eight years and zero imports within fifteen. Behind closed doors in both developed and third world nations, people and politicians around the globe were pleased to see America get its comeuppance.

The US economy was then humming away at a level of nearly $11 trillion ($11,000 billion) per year. The extra cost of importing oil was large but only two per cent of the entire US economy. So the effect caused merely a stall to the burgeoning US economy, a hiccup to an economic elephant. Money went elsewhere, to feed and clothe Russians and Palestinians, together with citizens of South American and African OPEC member states. Two per cent of the US economy equaled much more to those others than two per cent to their own economies. It equaled dignity, hope and prosperity, and yes, it was a trillion dollar idea over the course of US oil importation, but it was worth it, to the US, to a begrudging Israel and to the world.

Mr. Newman didn’t fade away. OPEC “discovered” some Texaco-created software, and with his help, he directed the OPEC group that used it to effectively monitor world petroleum use, by-product creation and consumption and simultaneously monitor energy production and consumption of sources other than petroleum. OPEC had a real-time bird’s eye view of energy and it was a hawk when it came to would-be cheaters of its US/Israel-pay-more policy. Billion dollar “wrist slaps” kept the supposedly crafty at bay.

But Mr. Newman’s broad grin became the well-recognized face for honest reporting of world energy policy in a very positive way. Like Ronald Reagan as spokesman for General Electric decades earlier, he seemed to exude optimism while espousing conservation, along with the use of more nuclear and less fossil fuels where practical. Existing power plants usable only with petroleum, motor vehicles, most shipping and all aircraft, together with heating oil needs - OPEC’s product would forever be in demand, at a good price, but OPEC reserves would last longer. North Slope exploitation would help the US but it was no miracle cure. And John Newman’s smiling face delivered a twice-monthly account of US energy progress and the money it was saving in imported petroleum. The bitter, some said indigestible, pill had been swallowed and the US was moving in line with the rest of the globe.

That was perhaps the most exciting aspect of my job, the witnessing and recording of decisions made from the long view, as no politician had ever been able. It was a crafty sort of global tinkering, an adjustment from an Olympian perspective.

[The remainder of chapter 7 is not printed here]

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