2AC: Oil Dependence/Oil Prices Block

1. Higher Pump Prices Will Linger Into 2011

Sand Shore, December 20, 2010 (Sandy, AP Business Writer; http://abcnews.go.com/Business/wireStory?
id=12440778)

Those stubbornly high gas pump prices might seem like an unwelcome house guest who overstays his welcome, come January.
Drivers in many states already pay at least $3 a gallon for regular and analysts don't expect any relief soon. That's because crude
oil has hovered between $83 and $89 a barrel since Thanksgiving .The national average for regular gasoline was $2.981 a gallon
Monday, according to a survey by AAA, Wright Express and the Oil Price Information Service. That's about the same as a week
ago and more than a dime higher than a month ago. A year ago the average was $2.59 a gallon. Motorists in Washington,
California, Hawaii, Illinois and Maine are among those paying the highest prices — from $3.092 a gallon to $3.618 a gallon. The
Rockies, Texas and parts of the Midwest have the cheapest gas, ranging from $2.738 a gallon to $2.827 a gallon. A new study
from business management firm PortiaGroup with data supplied by OPIS finds the average U.S. household will spend about $305
on gasoline this December, up almost 14 percent from last December and 76 percent more than December 2008. Gasoline is
taking a bigger bite of median household income this year: 7.4 percent, compared with 6.5 percent last year and 4.2 percent two
years ago, the study says. Energy analyst Jim Ritterbusch believes the national average for a gallon of regular will range between
$2.90 a gallon and $3.07 a gallon through February."We're going to see comparatively high prices here for a while," he said.
"We've seen a stronger-than-expected economy and that tends to augur toward stronger gasoline prices, unfortunately, despite the
fact that unemployment is still high."Tom Kloza, publisher and chief oil analyst at OPIS, expects prices to fall during the winter
and then begin to climb again. He has forecast prices between $3.25 and $3.75 a gallon from March to May, barring an
unforeseen global economic issue. Pump prices could rise above $4 a gallon again in some states for the peak driving season, if
oil prices continue to climb. And oil prices climbed again on Monday, as China's thirst for energy showed little sign of being
quenched. Platts, the energy information arm of McGraw-Gill, said China's oil demand in November hit an all-time high of 9.3
million barrels per day. Traders also are monitoring the stock markets for clues about where the global economy may be headed
in the New Year. Stocks wavered between small gains and losses on Monday. The Dow Jones Industrial Average closed down
about 14 points. The NASDAQ and the S&P 500 were a little higher. Benchmark oil for February delivery rose 77 cents to settle
at $89.37 a barrel on the New York Mercantile Exchange. In other Nymex trading in January contracts, heating oil added 1.58
cents to settle at $2.4895 a gallon, gasoline futures gained 6 cents to settle at $2.3778 a gallon and natural gas gained 17.1 cents
to settle at $4.129 per 1,000 cubic feet .In London, Brent crude rose $1.07 to settle at $92.74 a barrel on the ICE Futures
exchange

2. Inevitable carbon-tax on electricity causes higher oil prices

Watson, frequent contributor to Global Research, 6-21-2010 (Paul, “Carbon Tax On Electricity To Send Prices
Skyrocketing”, http://www.prisonplanet.com/carbon-tax-on-electricity-to-send-prices-skyrocketing.html)

The elite are still desperate to impose a consumption tax on Americans as part of the move towards a “post-industrial
revolution” and the kind of nightmare “green economy” that has left Spain with a 20 per cent unemployment rate. In a so-
called green economy, over 2.2 jobs are lost for every “green job” created. Electricity prices in Spain have “skyrocketed”
since the implemented of these policies, according to a leaked government report. The EPA has been busy floating
propaganda about how Obama’s cap and trade legislation would cost Americans an average of $79 to $146 per year. In
reality, as we have documented, the stronger provisions of the bill would see around $2.9 trillion shaved off the economy
by the year 2050 if enacted. The legislation would also reduce GDP by 6.9 percent – a figure comparable with the
economic meltdown of 1929 and 1930. (ARTICLE CONTINUES BELOW) Carbon Tax On Electricity To Send Prices
Skyrocketing 150410banner1 A carbon tax would impact almost every aspect of Americans’ lives, from higher gas prices,
to soaring utility bills, to exorbitant excesses related to the “energy efficiency” of their homes. It would be enforced by an
army of environmental regulators and green police poking their noses into the private affairs of citizens. The “green
economy” is nothing more than a euphemism for an organized effort on behalf of big business and the government to
completely eviscerate the middle class and introduce levies and regulation into every area of their lives. Massive oil
companies like British Petroleum, who Obama pretends to be fighting when he reads off his teleprompter, were amongst
the founding members of the carbon trade lobby. BP has supported the Kerry-Lieberman climate bill and other so-called
“green” initiatives every step of the way because, far from acting as a punishment for big polluters, they represent a
financial windfall. “As Democrats fight to advance climate change policies, they are resorting to the misleading tactics
they used in their health care and finance efforts: posing as the scourges of the special interests and tarring “reform”
opponents as the stooges of big business,” writes the Washington Examiner’s Timothy P. Carney. “There’s a problem: BP
was a founding member of the U.S. Climate Action Partnership (USCAP), a lobby dedicated to passing a cap-and-trade bill.
As the nation’s largest producer of natural gas, BP saw many ways to profit from climate legislation, notably by persuading
 Congress to provide subsidies to coal-fired power plants that switched to gas.” Indeed, BP has “explicitly backed” a
“higher gas tax,” because the money will end up back in their coffers. If Obama limits the carbon tax to electricity
companies, BP won’t be affected. However, even if the tax is expanded to include oil companies, the costs will merely be
passed on to the consumer in the form of gas rate hikes. Obama’s constant call to reduce dependence on oil also helps
companies like BP sell the myth of artificial scarcity, which in turn boosts the price of oil to their benefit. Transnational oil
companies like British Petroleum and Exxon Mobil have been amongst the biggest promoters of man-made global warming
because they are headed up by globalists who understand that the carbon tax will do nothing to help the environment but
will be used to bankroll the implementation of global government while swallowing up whatever deposable income
impoverished Americans have left.

3. No Impact - OPEC can control prices despite the emergence of other producers
Bharati, Crain, and Kaminski 08,(Rakesh, Susan and Vincent, Professors at Southern Illinois, Missouri State,
and Jesse H. Jones School of Graduate Management, respectively, OPEC Credibility and Clustering in
Crude Oil Prices, Dec. 30th, http://69.175.2.130/~finman/Reno/Papers/OPEC_Credibility_CLustering.pdf,
Retrieved:7-15-1
Thus far strong evidence has been presented of OPEC’s ability to influence open market oil
prices. Nevertheless, the hypothesis must be examined more closely to rule out the possibility of
clustering due to other factors. Therefore other implications of OPEC market power are studied as well.
If OPEC wields credible pricing power in some periods but not in others, the market would correctly
infer the degree of pricing power under the semi-strong form of market efficiency. Imbalances in
supply and demand in such periods would have a less pronounced impact on the price since OPEC
should respond swiftly to restore the equilibrium. Therefore a stronger tendency to cluster-in-the-large
is expected in low volatility periods (i.e., when the market infers OPEC to be credible). Interestingly,
this is opposite to the case of clustering-in-the-small where existing literature has noted a positive
relation between volatility and clustering-in-the-small due to price resolution. Further, as speculative
periods are accompanied with higher volumes, they should also be accompanied with a lower degree
of clustering. As noted earlier, the crude oil market has undergone different regimes based on the
behavior of OPEC and the emerging importance of non-OPEC production – Russia, West Africa etc.
Further collaboration among OPEC nations has varied based on the economic and security needs of the
countries. Tang and Hammoudeh (2002) use monthly prices to propose the target price zone of $15-
$25 (1988- 1999). Chapman and Khanna (2006) proposed two target pricing zones: $15-$20 (1986-
1997) and $23- $30 (2000-2003)25 as a result of a Nash equilibrium. Slaibi, Chapman, and Daouk
(2009) found support for this hypothesis using time series analysis and monthly price data. If prices
are targeted by OPEC through supply management as proposed, there should be a preponderance of
clustering in the TPZ subperiods. Further insights can also be gained about subperiods where OPEC
behavior is not clearly modeled. Table III presents the analysis of clustering across subperiods based
on the motivation of Chapman and Khanna (2006) and the results appear in line with the proposed TPZ
hypothesis. As reported in the last column of Table III, the two combined TPZ periods of 1986-1997
($15-$20) and 2000-2003 ($23-$30) show extremely strong evidence of clustering with the familiar
pattern. Once again, the value 9 is most likely with the familiar pattern of rise from value 3 to 9 and
the subsequent decline. The 9 centered half (digit values 7,8,9,0,1) occur 69 percent of the time. What
is interesting is that, despite the fact that there are two different prices ranges both terminating in
tens ($20 and $30), the closing spot price has managed to cluster at the value 9, at the top end of the
scale. This suggests that OPEC possessed a strong ability to influence prices despite demand
and supply shocks, other disruptions, and the fact that non-OPEC production had already
surpassed OPEC production in 1982. In the first subperiod, where the $15-$20 range was
applicable, the futures price closed below $15 only 248 times out of 3,015 trading days. Also, the
1983-1985 period is where OPEC established a price of $29 per barrel and Saudi Arabia took on the
role as the swing producer. Consistently, the same clustering pattern is observed as in the TPZ
subperiods. This time, the futures price closed at the 9- centered values on 83 percent of the trading
days. Thus, in the subperiods of 1983-1985, 1986-1997, and 2000-2003, the tendency to cluster near
the top end of the scale is quite strong. Further this ability to influence the price is impressive
given that OPEC controls less than 50 percent of the market and appears driven by internal
hostilities among member Gulf countries.
4. Turn – Withdrawal increases investment in Iraqi oil
Hossein-zadeh (Prof. Economics @ Drake University) 2009Ismael, Perspectives on Global
Development and Policy, 295-314, Vol. 8
It is true that for a long time, from the beginning of Middle Eastern oil exploration and discovery in the
early twentieth century until the mid-1970s, colonial and/or imperial powers controlled oil either
directly or through control of oil producing countries—at times, even by military force. But that pattern
of colonial or imperialist exploitation of global markets and resources has changed now. Most of the
current theories of imperialism and hegemony that continue invoking that old pattern of Big Oil
behavior tend to suffer from an ahistorical perspective. Today, as discussed earlier, even physically
occupying and controlling another country’s oil fields will not necessarily be beneficial to oil interests.
Not only will military adventures place the operations of current energy projects at jeopardy, but they
will also make the future plans precarious and unpredictable. Big Oil interests, of course, know this;
and that’s why they did not countenance the war on Iraq : “The big oil companies were not
enthusiastic about the Iraqi war,” says Fareed Mohamedi of PFC Energy, an energy consultancy firm
based in Washington D.C. that advises petroleum firms. “Corporations like Exxon-Mobil and Chevron
-Texaco want stability, and this is not what Bush is providing in Iraq and the Gulf region,”adds
Mohamedi.

Dependence is exaggerated - We could go along while without Middle East

oil
Raphaeli 2/4/09 - Dr. Raphaeli, Senior Analyst (emeritus) at MEMRI.
http://www.lebanonwire.com/0902MLN/09020405MEMRI.asp
This brief analysis sought to underscore two critical issues of major significance for U.S. strategic and economic policies:
First, the alleged dependency on Middle East oil is greatly exaggerated. With the help of its oil strategic reserves, its
national production of oil and the availability of oil from two friendly neighbors, Canada and Mexico, coupled with the
drive for developing alternative energy sources, the U.S. could muddle through with reduced Middle East oil for a long
while. Second, the sharp decline in oil revenues will lessen the threats of applying pressures on U.S. foreign policy by
wealthy

Economic decline does not cause war

Daniel Deudney, Hewlett Fellow in Science, Technology, and Society at the Center for Energy and Environmental
Studies @ Princeton University, Bulletin of Atomic Scientists, Environment and Security: Muddled and Thinking April
1991, proquest

In addition, economic decline does not necessarily produce conflict. How societies respond to
economic decline may largely depend upon the rate at which such declines occur. And as people get
poorer, they may become less willing to spend scarce resources for military forces. As Bernard Brodie
observed about the modern era, “The predisposing factors to military aggression are full bellies, not
empty ones.” The experience of economic depressions over the last two centuries may be irrelevant,
because such depressions were characterized by under-utilized production capacity and falling
resource prices. In the 1930s, increased military spending stimulated economies, but if economic
growth is retarded by environmental constraints, military spending will exacerbate the problem.