The “other” side of deals is often overlooked by both sides of deals.
For example, President Donald Trump wrote the popular book “The Art of the Deal,” but no one has written one entitled “The other side of the deals.” Is there something to be learned from the “other side of deals?
My assignment in Appellate Argument in law school answered this question for me. Appellate Argument is when two law students are given a trial court decision, and each one is assigned to argue in support of a different side. I laughed when I read the case given to me because, I thought, I can win this case with “my suit on backwards.”
This learning began when I realized I had the “other” side of the case. My preparation required that I learn how to use the few strengths in my case to offset the few weaknesses in the other side’s case in order to minimize their overall strengths. A recent deal illustrates this approach.
President Joe Biden expressed his side of the deal with Oil Producing Exporting Countries was that OPEC caused the high price of energy. In a version of Appellate Argument, if you were assigned the “other” side, the OPEC side: What would be your version?
The background is that after U.S. companies found oil in the Mideast, they agreed to pay the rulers of those countries enough royalties that they were able to expand their economic influences and parlay them into political ones.
That is, until the U.S. elected President Donald Trump, who used the power of making the U.S., for the first time, energy independent by encouraging the oil companies to produce the 13 million barrels a day the U.S. uses. The president then canceled the Iranian deal and scared Russia into taking no actions against Ukraine. The U.S. not only became economically and politically independent of OPEC but was also helping its allies reduce their dependencies.
That is, until the U.S. elected President Joseph Biden, Jr., who walked from his inauguration to sign executive orders that restored the power of OPEC, by reducing the production of the US energy industry, before he even crawled into the presidential bed.
With the swishes of a pen, the president eliminated the Keystone Pipeline, which would have delivered an estimated 800,000 barrels a day from Canada and 100,000 from North Dakota, and reduced the land and permits for drilling. To meet its needs, the U.S. began importing oil from Russia and other OPEC nations, and when that was not enough, the president began to systematically take a million barrels a day from our Strategic Oil Reserve.
If you represented OPEC members Russia, Iran or Venezuela, what would you have done?
These countries reacted with Russia invading the Ukraine. The U.S. response? To ask Russia to represent the U.S. in negotiations with Iran, who was still vowing “death to America” while refusing to even talk to the Biden team while that team tries to buy their oil. After Venezuela expropriated Chevron’s oil-producing operations — and rumors are they are sending their prisoners to the U.S. — the Biden team is trying to buy their oil.
President Biden, after accusing their rulers of crimes, flew to Saudi Arabia to ask OPEC for more oil.
In our Appellate Argument simulation, how would you expect Saudi Arabia and OPEC to respond to a request for them to replace the million barrels a day, which would have been delivered by the Keystone Pipeline, if asked by either President Trump or President Biden?
A theoretical question since President Trump disempowered OPEC, but a hint is that Saudi Arabia threw a huge reception for him, and Russia did not invade the Ukraine. President Biden was met at the airport by a couple of second-tier diplomats and, as described by a pundit, had his signature fist bump figuratively returned with a one finger salute as Saudi and OPE, not only refused to increase their oil production, but is decreasing it. Did President Biden exercise any economic actions towards OPEC?
Not really, although he did propose economic actions against U.S. producers and consumers by proposing to eliminate off off-shore drilling for U.S. companies while also considering these steps:
— Urging gas stations to cut prices.
— Adding a windfall profits tax on oil companies that will incentivize them to cut production.
— Imposing a ban on oil exports even though the U.S. shale oil is too light to be refined in the U.S. That means it is being traded for heavier crude while the president’s threats to shut down oil exports are preventing the companies from investing billions to refit their refineries for the lighter crude.
— Allowing other countries to buy Russian oil with a price cap. That’s a classic as it permits Russia to sell more oil with no concern about a price cap by the “toothless tiger” the U.S.has become.
It appears from their policies that President Trump did, indeed, understand the “other” side of deals, an understanding not evident in the actions of the Biden team.
For example, returning to our Appellate Argument simulation, it appears that OPEC must have been surprised, and thankful, when the Biden team transferred the economic and political power of oil to them.
If you were OPEC, would you now be wondering how you could help the U.S. keep the status quo through the November elections?
Brent E. Zepke is an attorney, arbitrator and author who lives in Santa Barbara. His website is OneheartTwoLivescom.wordpress.com. Formerly, he taught law and business at six universities and numerous professional conferences. He is the author of six books: “One Heart-Two Lives,” “Legal Guide to Human Resources,” “Business Statistics,” “Labor Law,” “Products and the Consumer” and “Law for Non-Lawyers.”
