TO: President George W. Bush
FROM: Vice-President Richard Cheney
RE: Keeping our oil industry competitive
Our efforts to expand petroleum reserves without decreasing consumption are working. People are buying SUVs and using electricity like crazy - it seems last year's energy crunch is nothing but a distant memory. However there are problems on the horizon. We are still too dependent on Saudi oil, Americans are showing increasing desire for efficient cars, and people are beginning to believe that there is not really an energy crisis after all.
We need to keep American oil, energy, and car companies competitive. This requires a three-step process: expand domestic production, lower international oil prices, and fight environmental objections.
First, we need to expand American oil reserves.
The first step is to drill in Alaska. In order to maintain support for our drilling initiative, we need to prevent people from buying more efficient cars. A slight increase in average fuel efficiency would get us more oil than we could ever hope to get from Alaska. Besides, most of the oil we currently extract from that state is exported to Japan. The American public does not know this, and we must keep it that way.
Additionally, we must explore for oil in the Rockies, offshore in California and Florida, and anywhere else we can. The Department of Energy predicts global oil demand will grow from the current 77 million barrels per day to 120 million barrels per day in 2020. Global demand for petroleum is going to skyrocket, George, and this is how our oil companies can ride that wave.
Most importantly, we need to make the American people believe oil is a matter of national security. Between you and me, George, there really is not any petroleum shortage: when you account for inflation, the price of a gallon of gas has fallen by around 40 percent since 1980. Because technology is improving, there are now more known oil reserves than ever before. But if we make people think we are at the mercy of the Middle East oil companies, they will be more willing to accept drilling at home. That will benefit American petroleum companies, some of our biggest campaign contributors.
Second, we need to get cheaper gas from abroad.
We still have to contend with the sticky fact that the Middle East has 63 percent of the world's known oil reserves, 25 percent in Saudi Arabia alone. Every day, Saudi Arabia has three million barrels in extra capacity - oil they are not even using! That means that they can drive down prices to cripple any competitor they want. We saved their rear ends in the Gulf War, and they still insist on gouging us for everything we have. Sorry, George, this part always gets my heart pounding!
Saudi Arabia provides us with about 17 percent of our oil. In order to maintain this market share, they have to sell us oil for a dollar less per barrel than to other countries, equivalent to a $620 billion subsidy per year to American consumers. What I am trying to say, George, is that Saudi Arabia is serious about being our biggest supplier. We need to make some changes.
Over the last two years, Russia increased its annual petroleum output by half a million barrels per day. This is the single greatest increase any country has ever seen. This puts the pressure on Saudi Arabia, Kuwait, and all the other Organization of Petroleum Exporting Countries (OPEC) countries to lower their prices. What does this mean for us? More gas at lower cost! That means our car and energy companies can benefit from decreasing prices. We need to seize this opportunity and play Russia off the Middle East.
Third, we need to fight environmental objections.
We are still facing resentment over not signing the Kyoto Global Warming Protocol. The US is the biggest carbon dioxide producer, and we need to do a better propaganda job convincing people we are concerned about global warming. One way to do this is to emphasize the increasing efficiency our economy is running at. Although carbon dioxide emissions continue to increase, we must focus the argument on efficiency.
So far, this is working. Although Asia will soon be gulping oil down like the rest of us, no other country can compete with the US for growth of oil imports. We have managed to keep our car companies strong by preventing any serious restrictions on SUV emissions.
Although the American people say they support conservation, nobody really practices it. We need Americans buying big, inefficient, gas-guzzling cars, and we need to fight laws that would increase minimum gas mileage. By emphasizing voluntary emissions reductions, we can make people think we are reducing greenhouse gasses while not actually forcing anyone to change their behavior. That is how we can get the economy back on its feet, car manufactures making profits, oil companies raking it in, and us back into office in 2004.
On a personal note, most of your administration has close ties to the oil, energy, and automobile industries. The Bush fortune was built with oil, I was CEO of Halliburton - one of the world's leading petroleum companies, Chief-of-Staff Andrew Card was head lobbyist for General Motors, and National Security Advisor Condoleezza Rice has an oil tanker named after her. Oil policy does not just affect American companies, George, it affects our families.
By increasing domestic reserves, playing Russia off the Middle East, and making people think there is a dangerous oil shortage, we can be the best administration for American big business since Reagan. Look forward to talking with you next time you stop by my secure, undisclosed location.
