An Exodus of One?

At this writing, Egypt remains in turmoil. The land of the Pharaohs, the Nile River that Moses floated down as a baby, and the country Jesus spent his early childhood in is again facing historic if not so world-changing events. In recent and ancient history, Egypt has been a moderate country that people would flee to for safety or help in time of crisis. It was once a world superpower, only to slip so far as to not even be able to read their own country’s writings. (It took the discovery of the Rosetta Stone to enable reading of hieroglyphics). After Antony and Cleopatra VII were defeated in 31 BC by the Romans, Egypt was not even ruled by an Egyptian for another two millennia. “Let my people go” was what Moses told Pharaoh 3500 years ago.[i] Now the people of Egypt are seeking freedom, but today are telling the current Egyptian ruler to go.

Egypt itself is no longer a world powerhouse or major player in any arena. What could happen should the demonstrations take root and spread to major oil producing regions such as the Kingdom of Saudi Arabia? While unlikely, this scenario underscores the fragility of our oil supplies and the need to increase US domestic drilling for oil and gas and development of US coal reserves NOW. To penalize one of the most helpful industries in the world—the hydrocarbon energy industry—in order to subsidize one that has never been net positive on energy production—the green energy movement—is foolish. Since it takes years to bring new deepwater discoveries online, now more than ever, the sensible energy policy for the United States is to “Drill, Drill, Drill.”

Similarly and closely related to the mindless O’admin emphasis on green energy, we should immediately stop the massive ethanol subsidies—which are not much more than political payoffs. One of the underlying causes of unrest in developing world countries is food inflation. As governments print more paper money, the past year has seen high inflation on such items as corn, wheat, rice, and vegetables--prices increasing by 20%-88%. India is said to be fighting an escalation of onion prices, a staple there. While we can’t do much about Indian onions, we can help with grains and stop “burning our food supply”, which is essentially what corn-to-ethanol does. (Corn was reported this morning to be up 88%.)

Due to better exploration and extraction technologies, oil is more abundant now in history. To turn our back on this lifeblood of modern economic engines is extraordinarily ill-advised. Worse, to tell developing countries that they must use green energy instead of hydrocarbon based sources is, in essence, to sentence them with insufficient energy and keep them in third world status for a very long time. They simply cannot afford the less efficient and more costly green energy.

With Egypt, it is still anyone’s guess as to what will happen then. As unsettled as things are, a few relevant tidbits of information may be worth coalescing.

  • Mubarak’s family, including the heir apparent(s), have gone to London 
  • Wealthy families (likely to include President Hosni Mubarak’s closest supporters) are fleeing. 
  • Over 100 souls are reported killed, with thousands injured. That said, it does NOT appear to be another “Tiananmen Square” in the making. 
  • The King of Saudi Arabia has strongly condemned the protesters. 
  • American flags have NOT been burning. 
  • The US State Department urges Americans to consider leaving. 
  • Demonstrations (of support of the demonstrators in Egypt) have broken out all over the world, including Jordan, Yemen, and even here in Houston Sunday afternoon. 
  • The “Muslim Brotherhood” (MB) has begun getting involved, claiming to be forming a “Unity government”. Their leaders are reported to NOT be well known with the Egyptian people, however. (The MB claimed responsibility when Mubarak’s predecessor, Anwar Sadat, was assassinated). 
  • The Cairo headquarters of Mubarak’s ruling “National Democratic Party” were torched by the demonstrators. 
  • A significant number of the Cairo population is NOT Muslim…10-20% are Coptic Christian, and even some Jews live there (along with 52,000 Americans registered with the State Department). 
  • A week into the protests, it is still NOT clear what sparked the demonstrations. There was likely long term displeasure with the Mubarak regime, and worldwide wholesale food prices are up much, but the trigger for these demonstrations seems unknown. 
  • Their military is exercising restraint against the unarmed demonstrators. 
  • Our military is on the way (at least a carrier group that was already headed for the middle east).  
  • Unconfirmed reports have Mubarak dealing with various countries for exile permission.  
  • The Suez Canal remains open, though some shipments are reported delayed. 
  • The internet remains blocked, along with some cell phones. Info getting out is largely via phone to other countries where it is being relayed. CNBC has a live feed this morning (Monday). 
  • The former head of the Egyptian intelligence has now been appointed Vice President, a position that did not exist in the past. 
  • The US and even the United Nations seem strangely silent. 
  • The best news source seems to be Al Jazeera!

A few conclusions seem obvious:

  • If the Canal (or the 2 million barrel per day pipeline) is shut down (temporarily), oil prices, especially in Europe, will spike upward (temporarily). 
  • Natural gas prices in Europe might skyrocket, as natural gas transport around Africa becomes much less economic. (Russia gains much leverage here, especially in the wintertime when Europe depends on much natural gas for heating). 
  • The demonstrators have support of the US government and the United Nations, at least tepidly.  
  • Hosni Mubarak is (or will soon be) out, with or without additional military action.  
  • World leaders will be quick to condemn Mubarak once he is out, much as they did with the fall of the Shah of Iran. 
  • Whoever controls the Egyptian military will likely control or choose the new government. Only if they choose wisely will it last. 
  • Whoever replaces Mubarak will likely not be as friendly to US, European or importantly Israeli interests (before Egypt was friendly to the US, it was a puppet of the USSR.) 
  • As Egypt and Jordan are the strongest supporters of Israel’s right to even exist in the Middle East, and both are adjacent to Israel, the risk to Israel seems to be permanently higher at this point. 
  • Other US and Israel friendly governments could also be in peril, notably Jordan and Yemen.

[i] Exodus 5:1 (NKJV)


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