For the last several months, the Obama administration has gone out of its way to facilitate a deal with Iran over its nuclear program.
The push for a deal has been unpopular with a wide swath of people, including the Israeli government, Congress and a majority of Americans according to a recent Pew poll. Despite all the elements working against the Obama administration, President Barack Obama and his top diplomat, Secretary of State John Kerry, have remained steadfast in achieving some sort of deal.
So why the big push?
Let’s pretend Obama is ultimately successful in this quest to make nice with the Iranian regime. Sanctions would be lifted against Iran, which would open up Iranian oil to international markets. The international oil market is already in a curious situation. Saudi Arabia has increased production of crude oil in what analysts say is an effort to make new U.S. oil procurement’s efforts like fracking and shale oil extraction not viable economically.
While that’s led to lower gas prices, down $1.30 a gallon nationally from a year ago, it has put some Americans out of work where oil extraction led to booms in local economies, including North Dakota, Texas and Colorado.
Such means are said to only be profitable when the price of a barrel of oil is approaching $100 a barrel. Currently the price of oil is hovering around $50. Although it would take a few months, the introduction of Iranian oil to the world market could lower the price of oil even more and would seemingly end, or at least temporarily halt, the procurement of oil through these alternative methods.
It would also likely diminish the enthusiasm of the push for the Keystone XL pipeline, which has become a favorite hobby horse of the Republican congressional majority. But isn’t that what Obama and the environmental lobby want?
At face value a deal with the Iranian regime on its nuclear program doesn’t make a lot of sense, particularly if it involves Iran still being able to keep some sort of nuclear program for what it alleges to be for peaceful purposes. However, a deal that includes the not-so-obvious consequence of furthering the Obama administration’s domestic environmental agenda offers all more the motivation to get any deal done.
On the campaign trail in 2008 Obama infamously said, “Under my plan … electricity rates would necessarily skyrocket.” That was in reference to Obama’s pledge to curb the production of electricity by coal power plants in the name of preventing so-called anthropogenic global warming.
Couple that with Obama’s former Secretary of Energy Steven Chu having stated a need to “figure out how to boost the price of gasoline to the levels in Europe” and it is clear this White House once favored a progressive environmental agenda over an economy boosted by lower energy prices.
Six-and-a-half years into his presidency, electricity rates as a whole are only slightly higher than they were when he was sworn in. Gas prices aren’t as low as they were when he was sworn in, but at the time there was a lack of demand for gasoline due to an economy struggling on the heels of the financial collapse.
Perhaps President Obama has given up on his vision for his solar powered-utopia that includes the public’s dependency on mass transit and electric cars.
If he’s able to force a deal with Iran that would be resistant to a congressional veto, then he would get some of his environmental goal met, at least in the interim. Inevitability technology will allow for the extraction of oil through shale and fracking at an even lower cost and therefore viable when oil is even at $50 a barrel.
All of this jockeying will lower gas prices and that’s good news for the American people who struggled with gas prices in excess of $3 a gallon through most of the first four years of the Obama presidency. Combine that with the automobile fuel efficiency standards imposed by this administration and it is less likely Americans will find themselves in the predicament they were in during the summer of 2008 at the record highs in excess of $4 a gallon.
The deal may also destabilize the Middle East, which based on past history could impact oil prices as well. It may force Saudi Arabia to build its own nuclear program and force an arms race between Iran and Saudi Arabia.
It may also force Israel into a corner where its only way out is to act unilaterally and launch a strike against Iran, much like it did with its 1981 Operation Opera air strike mission on nuclear power plant in an Iraq that was then-governed by a hostile regime led by Saddam Hussein.
That could spark a major Middle Eastern war, which would force the United States’ involvement on Israel’s behalf. Next thing you know, we’ll be back where we started with oil prices.
It’s certainly a risky gamble for Obama to throw caution to the wind and strike this deal, but don’t discount other motivations behind the alleged push for peace with Iran.