Wednesday, June 12, 2024
Hawai'i Free Press

Current Articles | Archives

Friday, December 30, 2011
War Games, An Energy Crisis, and the Iranian Threat
By Heritage Foundation @ 11:02 AM :: 7761 Views :: National News, Ethics, World News, Family

The Strait of Hormuz lies between Iran and the United Arab Emirates, providing passage for some 15.5 million barrels of crude oil per day, amounting to one third of the world's seaborne oil shipments. In a word, it is a 34-mile-wide chokepoint, making Iran's threat this week to shut down the strait all the more serious for the global community.

The Iranian regime's provocative warnings came on Tuesday from Iranian First Vice President Mohammad Reza Rahimi who threatened to close the strait if Iran faces sanctions for its nuclear ambitions. And Wednesday, Iran's top naval commander Habibollah Sayyari said, "Closing the Strait of Hormuz for Iran's armed forces is really easy ... or, as Iranians say, it will be easier than drinking a glass of water."

Iran's closing of the strait -- and its economic ramifications -- is a scenario that has been contemplated before. From December 2006 to March 2007, Heritage Foundation scholars conducted a computer simula­tion and gaming exercise that examined the likely economic and policy consequences of a major oil disruption in the Persian Gulf. Specifically, the war game was based on a scenario in which Iran began blockading the Strait of Hormuz in January 2007.

What did they find? Based on their modeling, if Iran succeeded in fully blockading the strait for up to one week, Americans would see a massive spike in oil prices, a one-quarter drop in GDP of $161 billion, the loss of one million jobs, and a drop of real disposable personal income costing more than $260 billion.

With those threats at hand, the scholars recommended a series of steps to manage the theoretical blockade and its worldwide economic consequences:

A focused but restrained use of military power oriented toward objectives that address vital national interests would demonstrate U.S. determination to uphold freedom of navigation in the Strait of Hormuz, help to calm global markets, and reassure American consumers, and measures liberalizing energy policies and rolling back regulatory restrictions would allow the marketplace to work to meet global energy needs.

At the time this war game analysis was conducted, the scholars described why a potential blockage of the Strait of Hormuz would be such a significant threat. Their words ring true today. They looked back to the energy crises during the Arab oil embargo in 1973-1974 and the Iranian revolution in 1978-1979 -- both of which led to fuel shortages, long gas lines, gasoline rationing, high inflation, and energy-related dam­age to the overall economy.

In those instances, they wrote, America suffered not only as a result of the changes in global oil supply, but also because of policies emanating from Washington:

At almost every turn, Washington policymakers exacerbated the already challenging energy situation with their own policy blunders. The federal government's newly created maze of economic and environmental regulations and implementing agencies greatly hampered domestic energy supplies and limited the private sector's ability to respond to events.

In retrospect, the U.S. government probably caused at least as much harm as any foreign entity did. Much of the energy crisis was self-inflicted by bad decisions made in Washington. The errors of the 1970s should serve as a cautionary tale as Amer­ica again faces similar energy challenges.

Today, Washington is throwing up similar roadblocks to energy independence. President Barack Obama has postponed a decision on the Keystone XL pipeline, which would transport 700,000 barrels of oil per day from Canada to refineries in Texas, and give a major boost to the U.S. economy. Meanwhile, his Administration has blocked access to shale resources and slowed down and even halted offshore drilling in the Gulf of Mexico, which supplies 30 percent of domestic oil production. And the Environmental Protection Agency is imposing new, costly regulations on energy production. And all of this comes as Iran is threatening to cut off a quarter of the world's energy supply.

As Heritage's war game analysis showed, there are things America can do to respond to such provocations from Tehran, but no actions can totally eliminate the economic consequences. However, there are things Washington can and should do today to help America become less dependent on the Middle East for its energy and soften the blow should Iran choose to lash out at the West. America's security depends on it.





TEXT "follow HawaiiFreePress" to 40404

Register to Vote


Aloha Pregnancy Care Center


Antonio Gramsci Reading List

A Place for Women in Waipio

Ballotpedia Hawaii

Broken Trust

Build More Hawaiian Homes Working Group

Christian Homeschoolers of Hawaii

Cliff Slater's Second Opinion

DVids Hawaii


Fix Oahu!

Frontline: The Fixers

Genetic Literacy Project

Grassroot Institute

Hawaii Aquarium Fish Report

Hawaii Aviation Preservation Society

Hawaii Catholic TV

Hawaii Christian Coalition

Hawaii Cigar Association

Hawaii ConCon Info

Hawaii Debt Clock

Hawaii Defense Foundation

Hawaii Family Forum

Hawaii Farmers and Ranchers United

Hawaii Farmer's Daughter

Hawaii Federation of Republican Women

Hawaii History Blog

Hawaii Jihadi Trial

Hawaii Legal News

Hawaii Legal Short-Term Rental Alliance

Hawaii Matters

Hawaii Military History

Hawaii's Partnership for Appropriate & Compassionate Care

Hawaii Public Charter School Network

Hawaii Rifle Association

Hawaii Shippers Council

Hawaii Together


Hiram Fong Papers

Homeschool Legal Defense Hawaii

Honolulu Navy League

Honolulu Traffic

House Minority Blog

Imua TMT

Inouye-Kwock, NYT 1992

Inside the Nature Conservancy

Inverse Condemnation

July 4 in Hawaii

Land and Power in Hawaii

Lessons in Firearm Education

Lingle Years

Managed Care Matters -- Hawaii

Missile Defense Advocacy

MIS Veterans Hawaii

NAMI Hawaii

National Parents Org Hawaii

NFIB Hawaii News

NRA-ILA Hawaii


OHA Lies

Opt Out Today

Patients Rights Council Hawaii

Practical Policy Institute of Hawaii

Pritchett Cartoons

Pro-GMO Hawaii

Rental by Owner Awareness Assn

Research Institute for Hawaii USA

Rick Hamada Show

RJ Rummel

School Choice in Hawaii

Talking Tax

Tax Foundation of Hawaii

The Real Hanabusa

Time Out Honolulu

Trustee Akina KWO Columns

West Maui Taxpayers Association

What Natalie Thinks

Whole Life Hawaii