Spare capacity (Iraq is trying to develop same); 4. Who has strategic influence over

Spare capacity (Iraq is trying to develop same); 4. Who has strategic influence over ME oil will matter; 5. Oil and global GDP are connected. In some ways, our energy policy may become more difficult. One big question is whether China will continue their policy of non-intervention in internal affairs of other countries (e.g. KSA goes Islamic). KSA’s response to Arab Spring was to double the pay of everyone in the military. Gfoeller. KSA social welfare was $20/bbl per year, now $85/bbl, projected at $300/bbl in 2030. This means they will have to go to taxes and that will trigger social reaction. Arabs have already translated “‘no taxation without representation”’. Major political shifts are occurring and major financial stresses are predictable. Free health care and education are untouchable. Arab Spring will come to KSA. AQ was easy to fight because you could identify bad guys and kill them. Could fight their ideology. Arab Spring has no leaders, no ideology. They want everything: money, power and vote. When will KSA get nukes? Realignment of national security team (Bander plus 2 other major changes suggest a major focus and potential big deals in the offing. Is this about Iran or Russia and china or Arab Spring or something else. Mehgan: Power of being energy indep has consequences. Being a major consumer has leverage. KSA taking oil off market will still be meaningful. Will China retain its policy of non-interference in internal afairs when faced with Islamist take over of KSA? US Policy Going Forward TJP Summary: see write up Bob Blackwill: Pivot to Asia does not relieve us of serious interests we have in ME. We announce a pivot to Asia when: Iran — moving to nukes Egypt — Mubarak is in a cage and new govt could be seriously anti-US Syria — disintegrating Iraq — could fragment KSA — ripe for revolution ME peace process 1s dead Israel — at more serious risk than in living memory 13 HOUSE_OVERSIGHT_025809