How America Is Funding Terrorism

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In the recent, Academy Award-winning film There Will Be Blood, one man's lust for oil - and the power and wealth that comes with it - eventually drives him mad.

The timing of the film is ironic, as the United States' increasing reliance on foreign oil has some Americans questioning their government's sanity. President Bush says America is "addicted to oil"--and that it's time for a change.

"America has got to change its habits," he told an audience at the International Renewable Energy Conference in March. "We've got to get off oil...that dependency presents a challenge to our national security. In 1985, 20 percent of America's oil came from abroad. Today that number is nearly 60 percent."

Big Oil, Big Terror

Much of that imported oil comes from OPEC, a group made up of 13 of the world's most petroleum-rich nations: Saudi Arabia, Libya, Kuwait, Iraq, Iran, the United Arab Emirates, Algeria, Angola, Indonesia, Nigeria, Qatar Venezuela and Ecuador.

While these nations may have an abundance of oil, most of them lack democracy and human rights. Worse yet, some of them are state sponsors of terrorism -- and sworn enemies of the United States.

"With only one or two exceptions, OPEC is effectively dictatorships and autocratic kingdoms," former C.I.A. director James Woolsey tells CBN News.

Woolsey is a member of the Set America Free Coalition. The group highlights the national security and economic implications of America's dependence on foreign oil.

"Ninety seven percent of our transportation is fueled by oil products of one sort or another," says Woolsey. "And two thirds of the world's proven reserves of conventional oil are in the Middle East, and about that share is also in the hands of OPEC."

Gas and oil prices are currently at an all-time high - OPEC sets the market price. Woolsey says Saudi Arabia is using a chunk of its oil wealth to spread its brand of radical Wahhabi Islam worldwide.

"The Saudis control about 90 percent of the world's Islamic institutions," he says. "And oil is the reason for that."

Iran's big oil profits mean big money for that country's nuclear program and its terrorist proxies, Hezbollah and Hamas.

Lately, Iranian Pesident Mahmoud Ahmadenijad has been joined by Venezuela's Hugo Chavez in threatening to help drive oil prices up even further.

Are Flex Fuels the Key?

"The price of oil was $11 a barrel in 1999. It went to $22 a barrel in 2001 $50 a barrel in 2004. Now it's a $100 a barrel," author Robert Zubrin points out. "And Hugo Chavez and Ahmadenijad are already talking about raising it to 200 dollars a barrel. And they will do that if we don't have a competitive situation."

Zubrin is the author of Energy Victory: Winning the War on Terror by Breaking Free of Oil. He says flex fuel vehicles are the way to break what he calls OPEC's energy monopoly.

"Only fuel choice can defeat OPEC," he tells CBN News. "And it's flex fuel vehicles that will create fuel choice in the market."

Flex fuel vehicles run on a mixture of gasoline and either ethanol or methanol. If you put 85 percent ethanol and, say, 15 percent gasoline into your car, your gas bills are obviously going to be much lower. The less gas your car requires, the less money goes to OPEC.

One of the attractive aspects of ethanol and methanol is that they're alcohol fuels that are easily produced. Ethanol can be made from corn, grains, barley, wheat, rice and sugar cane. Corn is the main ingredient for ethanol in the United States.

Ethanol and Food Prices

But corn-based ethanol has plenty of critics. Critics have blamed the trend toward corn-based ethanol fuel for recent food shortages in Third World countries like Haiti. They say the increased demand for biofuels like ethanol that can be made from food has driven up food prices.

Bush said last month that the increased production of corn-based ethanol is a good thing. He pointed out that the in 2005, the U.S. became the world's leading ethanol producer. He, too, is concerned that corn ethanol is driving up food prices.

Zubrin disagrees.

"The retail price of corn, as well as all other food commodities, is being driven up an average of 4 percent by increased fuel prices, which are up 40 percent this year, as well as increased demand from China and India," says Zubrin.

"The increased fuel prices affect retail food prices by increasing the price of production , transport, wages, and packaging, which are the majority of cost of retail food," he says.

There are other flex-fuel options as well, like methanol. It can be made from any kind of biomass--like plants, crops, wood and agricultural waste, as well as coal, natural gas and even urban trash.

According to Zubrin, these types of flex fuels could help America become energy independent.

"The U.S. Congress could destroy the oil cartel with the stroke of a pen simply by passing a law mandating that all new cars sold in the U.S.-- not made, sold - be flex fueled," he says. "That it's able to run either on alcohol or gasoline."

He says such legislation would force gasoline to compete against flex fuels at the pump.

"What this would do is put 50 million cars on the road in the United States within three years capable of running on alcohol," he states.

"If we made it the American standard that to sell a car here it has to be flex-fueled, that means all the foreign carmakers would switch their cars over to flex fuel.and gasoline would be forced to compete at the pump against alcohol not only in Iowa, but in Argentina and Kenya and Poland: everywhere."

New Flex Automobiles

Here in the U.S., Detroit's Big Three automakers are producing 24 different models of flex fuel cars this year. Still, flex fuel cars make up only about 3 percent of the new car market.

"The reason why you can't find an ethanol pump is that there aren't any cars," says Zubrin. "At the gas station, if you have three pumps, you're not going to dedicate them to a type of fuel that only 3 percent of the cars use.

That would change if Congress passed a flex fuel mandate. But some libertarian and conservative groups strongly oppose any government involvement in the energy sector.

"The reason we subsidize not because of some economic calculation. It's because politicians are in the business of buying votes. And a set of votes they would dearly love to buy are votes from farm states like Iowa and Ohio and Pennsylvania and Michigan and Minnesota," Policy Analyst Jerry Taylor of the free-market Cato Institute told CBN News last year.

There's also been concern from environmental groups that as more land is cleared to make room for crops needed to make flex fuels, deforestation will occur in places like Brazil,

Zubrin argues that the increased demand for biofuels will actually be a boost to the economies of Third World countries that can easily produce them.

Some experts say there could eventually be other options as well, like hydrogen-based cars.

But the debate continues over how best to handle America's energy needs in a hostile world.

"If we should be wondering who should be paying for, let's say, little Pakistani boys to go to madrassahs to be taught to be suicide bombers," suggests Woolsey. "If you really wonder about that, move your rearview mirror a few inches before you get out to charge your gasoline and look into your own eyes. And now you know. You and I are paying for it.

*Originally aired on April 15, 2008.

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CBN News
Erick Stakelbeck

Erick Stakelbeck

CBN News Terror Analyst

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