The cost of liberty and the price of oil

23 Feb

 

Those were the days: Libya's Muammar Qaddafi, now under siege, (left) and former Egyptian President Hosni Mubarak in happier times.

What’s the price of liberty?

 

It spiked to about $100 per barrel on Wednesday. (The cost of crude oil in the U.S. settled down by the end of the day, closing at $98.) The average price for a gallon of gasoline in the U.S. has climbed to $3.19 in the last few weeks, and it’s likely to go still higher.

The revolutions in the Middle East make oil production and delivery uncertain, which makes commodity markets nervous. Libya, the most recent and so far most dangerous scene of popular uprising, produces only about 2 percent of the world’s oil supply, but its high quality makes it particularly valuable, according to analysts quoted in the New York Times and Wall Street Journal. Several large oil companies, such as France’s Total, have already started reducing their output from Libya.

Some analysts predict the price of oil could climb to $150 per barrel if Libyan production is entirely shut down, and maybe $220 if another major oil-producing nation in the region shuts down too.

Developed nations and particularly democracies like the U.S. may soon face a crisis — or actually two crises. There’s the potential economic crisis as the price of oil pushes up the cost of virtually everything: manufacturing, agriculture (compounding a growing food-cost problem that already haunts most of the world), distribution and so on. Virtually every segment of the economy may be touched. A more expensive tank of gas for the car is only the beginning and might be the least of our worries in the U.S. All of this, of course, would be just piling on, severely slowing down if not stalling the world’s recovery from the so-called Great Recession that’s dogged us since 2008.

But there’s another kind of crisis — more philosophical or ideological — if we take the word literally, back to its Greek root of krinein: “to separate, decide, judge.” We face some serious decisions, we who (a) live in democracies and think other people should live in democracies too, and (b) depend on oil for our way of life. We could start by asking this question: How much are we willing to alter our “way of life” and even sacrifice for the sake of others’ political freedom?

Or to put it roughly: When will the drive for liberty and justice for all in oil-producing nations get too rich for our blood? Is there a point — a price point, that is — when we might decide that we can live with repressive regimes like Qaddafi’s in Libya after all, and choose to not support democratic movements? We haven’t reached that point this time around — and I hope we don’t — but the temptation certainly exists and is no doubt being argued in offices around Washington, Geneva and New York.

American foreign policy is built first and foremost on keeping the U.S. “secure” economically, politically and militarily. The Middle East regimes teetering and falling like dominoes almost weekly are creating complicated and unpredictable scenarios. None of this is easy or simple.

But taking the long view, the U.S. may gain greater security if we help people in other nations gain the liberty we say we value so much, and choose to not literally sell them out over the cost of oil. (It wouldn’t hurt our national security to push harder to develop alternative forms of energy either, but that’s another post.)

Resisting the temptation to sell out will be hard to resist, even at the most basic level. So far most Americans haven’t felt the impact of the events in the Middle East and North Africa, but who knows? Some people on Main Street, not to mention Wall Street, are already getting nervous and maybe even a little impatient.

I was chatting on Tuesday with a self-employed guy whose job puts him on the road literally hundreds of miles each week. We talked a little while about the day’s headlines, including the news coming out of Libya, Bahrain and Saudi Arabia.

“It’s amazing what’s happening over there,” he said. Then he shook his head and added, “But, man, these gas prices are starting to kill me. I hope we can do something about that pretty soon.”

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