While Egypt is not a major oil producer, it does control the Suez canal as well as a major pipeline. As such, what is happening in Egypt could have a profound effect on the world economy. While it is possible to transport oil without using Egypt, this would add thousands of miles of travel distance-thus making the oil more costly and also slowing things down. There is also the obvious concern that the ships will be at greater risk making the longer journey.
As with almost every other incident in the Middle East, this latest episode exposes how unwise it is for the United States to rely so heavily on foreign oil for our energy needs. There is also the more general concern about the entire world economy-how it is effectively held hostage by a few countries in an incredibly unstable part of the world. This has always struck me as bordering on madness.
The obvious way to mitigate the impact of the Middle East is to develop alternative energy sources such as solar and biofuels as well as exploiting other sources of fossil fuels in the short term. Doing this on a sufficient scale would help stabilize the world economy by making energy costs more consistent and would also help reduce the relative value of the Middle East. This would also help cut the financial support for some terrorist organizations. On the minus side, this could mean serious economic woes for the countries in the Middle East which could in turn lead to instability, revolution, war and a spike in terrorism. As such, effort would need to be made to transition the Middle East as the world economy shifted away from their oil. Of course, given the success rate of almost anything attempted in the region, failure is the most likely outcome.
Naturally, there will be considerable opposition to such a transition from Middle Eastern oil and oil in general. There are major political players who have a vested interest in oil in general and the region’s oil in particular. They will. of course, fight any attempts to change things by casting these attempts as being left wing, unrealistic, unpatriotic and so on. However, freeing the world economy from such a deranging factor would seem to realistic, patriotic and not left leaning at all.