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Unrest in Nigeria?
It's 11 days before Christmas 2005, and the turmoil is preventing about 600,000 barrels of oil per day from reaching the world oil market, which was already drum-tight. . . .
Should U.S. troops be sent to restore order? Should America draw down its strategic oil reserves to stabilize soaring gasoline prices? . . .
The economic effects of unrest in faraway Nigeria are immediate. Crude oil prices soar above $80 a barrel. June's then-record $60 a barrel is a distant memory. A gallon of unleaded gas now costs $3.31. Americans shell out $75 to fill a midsize SUV.
Terror attacks in Saudi Arabia and/or Alaska?
. . . The Cabinet can't agree on even the simplest short-term solutions. There aren't many options . . . There's no infrastructure in place to deliver alternative fuels such as ethanol or diesel made from soybeans or waste products.
Fast-forward again, to June 23, 2006. Emboldened Saudi insurgents attack foreign oil workers, killing hundreds. A mass evacuation follows from the world's pivotal oil producer, the one country that could be counted on to boost production during shortages in global supplies. . . . Without foreign oil workers, how will Saudi Arabia meet its production targets and quench the oil thirst of America, China and India?
Oil prices have reached an unthinkable $150 a barrel. In Philadelphia, Miami and Kansas City, gas prices reach $5.74 a gallon. Now it takes $121 to fill that midsized SUV.
Are such scenarios realistic?
Former CIA chief [James] Woolsey described the scenarios that the National Commission on Energy Policy and the advocacy group Securing America's Future Energy simulated as "relatively mild." . . .
"It was striking that by taking such small amounts off the market, you could have such dramatic impact" on world oil prices, said Robbie Diamond, the president of Securing America's Future Energy.
What can be done?
"I think where most of the work has to happen now, both intellectually and politically, is on (the reduction of) demand," Haass said.