Jim Woolsey and Anne Korin have an article in the fall 2008 issue of MIT Innovations titled How to Break Both Oil’s Monopoly and OPEC’s Cartel. An excerpt:
The reality is that neither efforts to expand petroleum supply nor those to crimp petroleum demand will be enough to materially address America’s strategic vulnerability, although they can help on an interim basis with such issues as the effects of our huge balance of trade deficit. But such solutions do not address the roots of our energy vulnerability: oil’s monopoly in the transportation sector as the reason oil is a strategic commodity. This monopoly gives intolerable power to OPEC and the nations that dominate oil ownership and production over the consuming nations’ economies. Policies that only perpetuate the petroleum standard, doing nothing to address the lack of transportation fuel choice, would therefore guarantee a worse future dependence on the oil cartel as the non-OPEC nations’
share of the world’s oil reserves and production further shrinks.
Not long ago, technology broke the power of another strategic commodity. Until around the end of the nineteenth century salt had such a position because it was the only means of preserving meat. Odd as it seems today, salt mines conferred national power and wars were even fought over control of them. Today, no nation sways history because it has salt mines. Salt is still a useful commodity for a range of purposes.We import some salt, so if one defines independence as autarky we are not “salt independentâ€. But to most of us there is no “salt dependence†problem at all — because canning, electricity and refrigeration decisively ended salt’s monopoly of meat preservation, and thus its strategic importance.
We can and must do the same thing to oil. When the British Navy made the shift from coal to oil, then First Lord of the Admiralty Winston Churchill famously remarked, “safety and certainty in oil lies in variety and variety alone.â€To diminish the strategic importance of oil to the international system it is critical to expand the Churchillian doctrine beyond geographical variety to a variety of fuels and feedstocks.Ensuring that new cars sold in the U.S. and, by extension, the rest of the world, are platforms on which fuels can compete will spark a competitive market in fuels made from a wide array of energy sources, thus breaking oil’s transportation fuel monopoly and eventually stripping oil of its strategic status.