Bush fails to win Saudi help for oil increase big enough to cut high gasoline prices

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  • 0

    adaydream

    Arab perceptions that Washington favors Israel too much in the dispute with the Palestinians, the Iraq war and the Sept 11, 2001, attacks.

    I agree with Saudia Arabia.

    Where's the oil that he was going to get so he could still fill up the Strategic Petroleum Reserve? Why doesn't he threaten to veto the bill to stop filling the Strategic Petroleum Reserve?

  • 0

    skipthesong

    frayed by Arab perceptions that Washington favors Israel too much in the dispute with the Palestinians, the Iraq war and the Sept 11, 2001, attacks." Any support for Israel is going to be too much for Arabs. Iraq war? which one? they sure as hell didn't mind using the US in the first one. 9/11? how many hijackers were from that country?

    Once people find a better source of energy, the Kingdom would become obsolete. Perhaps its time to talk to OBL - that would make the Kingdom very happy.

  • 0

    skipthesong

    Where's the oil that he was going to get so he could still fill up the Strategic Petroleum Reserve?" I understand that the US can't drill in Alaska due to environmental concerns

    " Why doesn't he threaten to veto the bill to stop filling the Strategic Petroleum Reserve?" Do you think that is a good idea, what happens if there is a catastrophe? That is what it is there for isn't it? And, I think I recall 20/20 saying something that there really isn't that much in there anyway which wouldn't make a difference.

  • 0

    nucular

    Bush's opponents in Congress won't even let American companies explore the possibilities in extracting petroleum from oil shale:

    "...The moratorium prevents the Department of Interior from issuing regulations so that oil companies can move forward on oil-shale projects in Colorado and Utah. Allard said the moratorium has left uncertainties at a time when companies need to move forward and in the long term make the United States more energy independent.

    "If we are really serious about reducing pain at the pump, this is a vote that would make a difference in people's lives," Allard argued.

    But in a 14-15 vote, the committee spilt strictly on party lines and rejected the amendment."

    Insane.

    http://www.rockymountainnews.com/news/2008/may/15/panel-defeats-attempt-end-oil-shale-moratorium/

  • 0

    adaydream

    I understand there are wells drilled in Alaska right now that could be producing oil for us. But they are being pumped.

    I sure I can be corrected.

    They are 97% full. Not down a significant amount that in the event of a catastrophe.

  • 0

    SezWho2

    I think the Democrats are right to try to block a $1.4B arms sale to Saudi Arabia--but not because the Saudis won't pump more oil. Better reasons are that the Saudi government is repressive and that we must eventually wean ourselves from living on arms sales. Even if pumping more oil would lower the price--and that is by no means certain--the Saudis are under no obligation to create an oil glut in order to satisfy our oil gluttony.

  • 0

    adaydream

    Here are wells in Akaska that have never been pumped and won't be. We'll keep buying Arabian oil, when we have this available here, domestically.

    http://www.americanfreepress.net/html/gullislandoil.html

  • 0

    adaydream

    Why is the oil that is currently being pumped out of the Alaskian oil wells being sent to Japan? We could keep it here at home and not bring in all this Arabian oil.

  • 0

    skipthesong

    Better reasons are that the Saudi government is repressive and that we must eventually wean ourselves from living on arms sales. Even if pumping more oil would lower the price--and that is by no means certain--the Saudis are under no obligation to create an oil glut in order to satisfy our oil gluttony." Sez, I agree 100% with that statement.

    adaydream: Why is the oil that is currently being pumped out of the Alaskian oil wells being sent to Japan?" Never heard about that, and I somewhat in the energy business, though not oil.

  • 0

    SuperLib

    I love high oil prices.

  • 0

    Betzee

    the Saudis are under no obligation to create an oil glut in order to satisfy our oil gluttony.

    True, however in theory they have an interest in not letting oil prices rise too high. This is because high prices spur the search for alternative technologies that would make what they have in the ground, which is a lot by any reckoning, worthless.

    But the reality is the search for alternative technologies, despite all the talk, has not proceeded far and there's a whole lot of customers clamoring for their (as well as everybody else's) oil.

  • 0

    Betzee

    Why is the oil that is currently being pumped out of the Alaskian oil wells being sent to Japan?

    Look at the map. Oil extracted in Alaska has to be transported to Houston, where most American refineries are located, a journey which passes through the Panama Canal, making Asia closer.

  • 0

    SezWho2

    Betzee,

    I understand the part about high prices spurring alternative energy research, but I don't understand the "worthless" part.

    It seems to me that as long as their technology for extracting oil is cheaper than other oil technologies they will always have a competitive advantage. In regard to non-oil technologies, I admit that there may be a threat but until we can find a cheap, plentiful and renewable source of energy, oil will be sought after.

  • 0

    skipthesong

    "Q: I have read that most of Alaska's oil is exported to Japan. Is this true?"

    "A: No. Since 1996, from 5% to 7% of Alaska North Slope (map, left, from USGS) oil was exported, about half of it to South Korea and the rest to China and Japan. Those exports ceased in 2000, and since then all Alaskan crude has gone to the US, mostly through Washington and California refineries. See the following sites for more information: ANWR.org • NCSE • State of Alaska "

  • 0

    Sarge

    "oil ( output ) increase"

    The problem is we can't refine it any faster into gasoline.

  • 0

    smithinjapan

    Damn... that whole war for nothing! not to mention helping the terrorists and Bin Laden's family after 9/11! Ungrateful Saudis!!

  • 0

    adaydream

    Thanx Skipthesong.

    They haven't build a refinery in 22 years.

  • 0

    Madverts

    If this isn't enough to prove to every single person who buys gasoline that we need an alternative energy sourec, like yesterday, then I don't know what is.

    I'd like to know why gas is still going up in the EU - surely if we're buying with the currently strong euros and the price is based in dollars it should be getting cheaper??

  • 0

    Sarge

    "They haven't built a refinery in 22 years"

    I'll bet the Democrats have something to do with that.

  • 0

    Madverts

    "I'll bet the Democrats have something to do with that."

    Why?

  • 0

    Sarge

    Why? Because the Democrats, in cahoots with the environmentalist wackos, have been standing in the way of energy development for years.

  • 0

    Betzee

    SezWho, This is the logic of natural-resource reliant economies. Saudi Arabia's entire economy is dependent on oil sales. Theoretically speaking, they thus have an interest in not letting the price get too high which would spur the search for alternative technologies on the part of end-users. If such a technology were found, what they have remaining in the ground becomes worthless.

    By contrast, states with more modest reserves want the price to go as high as it can so they can sell out their existing stock for top dollar. There are countries, like Gabon, which have already tapped out their oil reserves.

    In the here and now, of course, there is no alternative technology in sight, just a lot of oil-dependent customers so the Saudis can disregard this logic.

  • 0

    Madverts

    Which alternative energies developments would those be, uh, sarge?

  • 0

    Sarge

    Not alternative energy so much as oil drilling and refining, uh, adverts.

  • 0

    proxy

    Don't worry. Technology advances exponentially. In 15 years there will be a surplus of dirt cheap, clean solar energy and the technology will be owned by companies operating in Silicon Valley; then the Saudis can either pay for the technology through the nose or get on their bikes.

  • 0

    Madverts

    Ah, so more oil and subsequent dependence on it. A good job the dems are siding with change from another no-brainer then young man!

  • 0

    Sarge

    ( sigh ) Go ahead and stick your head in the sand, Madverts. The fact is, oil is going to be the, ahem, driving force behind the world economy for our lifetime.

  • 0

    thepossum

    Whats with the misleading headline ? The Saudis are upping their production by "300,000 barrels a day to help meet the US needs."

    And Bush left, as they say, "satified" !

    Seems to me it's the poli's back home who are not satisfied. Once again Bush is right. The American public needs to address it's addiction to foreign oil, move on with alternative fuels (too bad for the rest of the planet that is about to face starvation as corn crops become bio fuels, maybe the French can help), and basically let the Arab nations hash out billions of barrels of "unwanted" petro products in the future. I have no problems with that scenario ! Non what so ever !

  • 0

    Sarge

    "Bush got a red-carpet welcome"

    Heh.

  • 0

    smithinjapan

    Sarge: Eat your own words, my friend. The president just got utterly DISSED on people he literally bailed out on 9/11 while claiming to be fighting terrorism, rushed into an illegal invasion to free up some oil and has it flying back in his face, and what was it he said today? ahem 'We need to start working aggressively at home (on alternative energies).'

    And it only took 7 + years of everyone telling him so, and thousands upon thousands of lives. Sadly, it's just him getting his ar$e handed to him by the people he expected to dish out oil that has caused him to suddenly change his tune. What an utter loser...... and for you to still support him? well... we'll just say anyone who follows a fool is even more foolish.

  • 0

    smithinjapan

    Owe, and sarge, I meant to add... he only said 'we need to work more aggressively at home' after begging for more oil from the Saudis..... pathetic!

  • 0

    super delegate

    And when Barack Obama is elected, Saudi Arabia will ramp up production at least ten fold.

    Hope!

    Change!

    Audacity of hopeful change!

  • 0

    Betzee

    The Indian and Chinese ones won't, and those two countries are now, and will continue to be, the main reason for increased demand and higher oil prices.

    This is the reason we can expect a long-term rise in price. But it doesn't explain what Americans have experienced since 2003, which is a doubling of oil prices (by pump price). That owes more to the uncertainties generated by political instability in oil-producing nations. Every time someone blows up the pipeline in the Niger Delta, where Nigeria's light sweet crude is located, the price goes up.

    The invasion of Iraq had a discernible impact on the price of oil. I took a car trip in early March 2003 and the price at the pump was inching up on a daily until it hit $2.00 a gallon. This owed to the uncertainty of what would happen in Iraq after Saddam was toppled. Well, we know what happened and we're going to have to pay the price (at the pump and elsewhere).

    Not that any Republicans will admit it, but GWB does look pretty silly having criticized the Clinton administration for not doing more ("jawbone") to get OPEC to lower its price back when gas was like $1.70 a pop. His administration's plan, to break the back of OPEC by getting a post-Saddam Iraq out of it, failed miserably.

  • 0

    SezWho2

    Betzee,

    I understand the words. In fact, I understood them the first time. And I understand that rising prices are a spur to alternative technologies. It's just that I don't see any viable non-oil technologies on the horizon that approach competitiveness with oil.

    At $120 a barrel, there are oil technologies which promise to be competitive. However, given the start-up costs, the need to test and fine-tune the technologies and so on, it seems to me that the Saudis can be comfortable with this price at least until the political situation stabilizes--if it ever does.

    Furthermore, the Saudis only need a competitive price to be higher than that for extraction of their product, plus any refinement costs and a margin for profit, in order to keep their in-ground reserves useful. Presumably these criteria were met when oil was at $40 a barrel, so it seems to me that they have a lot of latitude.

  • 0

    sharky1

    Time for the US to globalize the food for oil program. I think a loaf of bread for a barrel of oil sounds about right.

  • 0

    adaydream

    The petroleum industry has gone and reduced the volume of oil that we pump out of Prudhoe Bay. It has been a steady reduction the past few years. We don't have a shortage, we have a market manipulation and we're paying for it.

    http://cryptogon.com/20060806_blogarchive.html#115500836133128568

    We don't need more Saudi oil, we need more U. S. oil.

  • 0

    DXXJP

    At a 120 a barrel, AND WHY IS IT THAT HIGH. Supply and demand, Yet nobody tells the record profit oil Co's to lower their price because they have us by the balls. They know it will be paid no mater the cost.

    Iraq was carefully planned it wasnt to get cheaper oil like every one thought, it was to stop or slow the supply thus raising demand which did what?

    Exactly Exactly

    You dont go beat up your neighbor because your friend punched you in the face do you.

    Congrats to the saudis for snubbing dubya. I LMAO when I saw the news. Yet I pay 10 bucks to fill the car. As for worrying about saudi when the oil runs out well it will run out in the states before the well goes dry here

  • 0

    SuperLib

    Actually, oil has been going up for a lot of reasons. Mostly people are guessing that's it's a mix of a weak dollar plus the increase in funds flowing into oil speculation since the other markets are doing badly. Supply and demand play their part, but the price has gone up 85% in the last year. The world's oil demand doesn't change that quickly.

    But it is interesting to watch people choose whichever reason helps their agenda most.

  • 0

    apecNetworks

    I am surprised no one spells out what is actually happening at the macro level. This is not complicated, but oil usage is not clear.

    All great powers in the past has gone thru this to varying degrees, and it seems the US is no exception.

  • 0

    apecNetworks

    Correction "All great powers in the past haVE...."

    I do need a proofreader!!!!!

  • 0

    romulus3

    bush is well and truly in bed with the Saudis. He is making them rich, as promised at the expense of rich Americans. His whole presidency has been about looking after his friends interests. Its just another Mafia but on a huge huge scale.

  • 0

    super delegate

    "bush is well and truly in bed with the Saudis."

    Russia is doing quite well with oil at its current prices, as are Canada and Norway

    So is Bush well and truly in bed with them as well?

    The Saudis built Clinton a huge library and have basically bought the Middle Eastern Studies chairs at most of our major universities.If you knew anything about America you'd know that academia is not pro-Republican and certainly not pro-Bush.

    It's the Democrat party that will not allow drilling in Alaska or on the coasts or off of Florida, and it's the Democrats that just last week shot down proposals to even allow US companies to try and develop oil shale resources in places like Wyoming and Colorado.

  • 0

    nonacnon

    I think it is in the interest of oil companies to have high oil prizes and micro chipping the ordinary sheep. ID card, biometrix database, surveillence society.

    The damnd for oil is there. That is also what inflates the oil prizes as well as the deflatiion of the dollar. It is problematic for countries who export to as US have less purchase power now than before.

    Bush is making profit from selling arms, contractors and oil companies. Because the country is in war he will use that as a pretext to take personal liberties from citizens and call people who oppose un patriotic. The steps have come gradually. US already have Patriotic Act and some millitary act where ordinary citizens can be sentenced outside the court of law by the government which is unheard of in democracy as the founding principles of democracy is that the cabinet, parlament, court are to be seperate.Also how someone can be withheld for years without a sentence and a charge goes against the popular opinion on what democracy is.

  • 0

    Betzee

    This was written in late 2004 and the trend has only become more pronounced since then:

    Oil prices and the dollar have made the news lately. Oil prices have risen, while the dollar has simultaneously plummeted against the euro....Because oil prices and the dollar have moved in opposite directions, the increase of oil expressed in euros instead of dollars has been less pronounced than the oil price increase in dollars. This may not be coincidental. Oil producers sell their products in dollars. These dollars are used to purchase other goods in international markets. As the dollar lost its value starting in 2002, oil producers could afford to buy less in international markets with their dollars....

    Dollars being the currency in which oil is priced allowed the U.S. to go off the gold standard under Nixon (complicated story). Now some oil-exporting countries, principally Iran and Venezuela, are pushing OPEC to abandon the dollar and switch to Euros (or Yen) pricing. If they succeed it would be disastrous for the United States. But it's our government's responsibility to maintain the dollar as an attractive currency for international pricing. This means cutting the deficit....

  • 0

    romulus3

    super,

    the others are just a by product of Bushes centric economics. lucky them

  • 0

    Betzee

    Furthermore, the Saudis only need a competitive price to be higher than that for extraction of their product, plus any refinement costs and a margin for profit, in order to keep their in-ground reserves useful. Presumably these criteria were met when oil was at $40 a barrel, so it seems to me that they have a lot of latitude.

    They do have a lot of latitude. Things looked very different for them a decade ago when there were predictions the price of a barrel of oil might drop to USD 5 (I'm serious).

    Now we're in a downward spiral in which oil prices have to go up to compensate for the declining value of the dollar which in turn drives it lower. This is not good for the United States, to say the least.

    As for alternative technologies, the market has to send a very strong signal to entrepreneurs and venture capitalists: we want to wean ourselves from dependency on oil period rather than simply drill in new locations (Alaska, the American Southwest). Otherwise nobody is going to invest.

  • 0

    nonacnon

    The reason for the high oil prizes is as other posters have mentioned is due to a deflating Dollar and increase in oil demand. The oil production will peak in a few years and from then the production will decrease while demand will stay the same or rise. Oil countries are ditching the deflating petro Dollar and using solid currencies such as Euro and Yen thus weakening the Dollar even more while US has to borrow money from China to be able to maintain their war in Iraq while the country is heading towards bankrupcy.

  • 0

    Betzee

    The decline of the dollar has been evident for a while, it's not an overnight phenomenon. For a long time the Bush administration was indifferent or claimed it was a good thing because it made American exports cheaper. The thing is, the United States doesn't really export anything except in categories such as aircraft, where price is not the determining factor in Boeing securing deals over Airbus.

  • 0

    nonacnon

    A crack in the petro Dollar will have concequences for the US enterprise especially the millitary and the war in Iraq. As US does not export much consumer products compared with Japan or Europe and has a huge trade defecit they could get away with it as the Dollar was kept artificially high due to the petro currency. With Iran and other countries now trading oil in Euros and Yens the Dollar is expected to sink even more. The Feds then print out more Dollars and thus the Dollar sinks even more. The cost of war in Iraq is too much for the US economy. To finance the war US needs to borrow money from China and their debt becomes even bigger. US is in a recession. The question people ask is how big of a recession are they in. If the country is in recession what you need to do is spend less than you earn and not the other way around. US will need to cut down on what isn't sustainable for the economy.

    Saddam changed the oil currency the year before the US lead invasion and now that Iran has changed from the Dollar to the Yen and Euro US is acting extremely aggressive towards Iran.

  • 0

    presto345

    For decades I have been reading about the difficulties in developing alternative energy sources, like solar, geothermal and wind energy, because of the cost perspective. These sources can now be developed as crude oil prices have soared out of proportion, but things are still moving slowly because it is 'feared' prices will drop again. Wishful thinking, as long as speculators are allowed to have their way and disrupt markets and economies. Bush did not foresee what the Iraq invasion legacy would be and how much it would cost the taxpayer, but had he known, he could have opted to spend the billions of dollars to develop the alternative energy sources and give the U.S. a tremendous edge in the field, but perhaps alienating the weapons industry?

  • 0

    Betzee

    Tom Friedman had some interesting observations on this in his column today:

    It baffles me that President Bush would rather go to Saudi Arabia twice in four months and beg the Saudi king for an oil price break than ask the American people to drive 55 miles an hour, buy more fuel-efficient cars or accept a carbon tax or gasoline tax that might actually help free us from what he called our “addiction to oil.”

    The failure of Mr. Bush to fully mobilize the most powerful innovation engine in the world — the U.S. economy — to produce a scalable alternative to oil has helped to fuel the rise of a collection of petro-authoritarian states — from Russia to Venezuela to Iran — that are reshaping global politics in their own image. If this huge transfer of wealth to the petro-authoritarians continues, power will follow....

    http://www.nytimes.com/2008/05/21/opinion/21friedman.html?hp

  • 0

    Zaphod

    It is just so pathetic to see another Western politician crawl on his knees in front of the Saudi Wahabis, begging for more oil.

    We know that the Western world is addicted to oil. We know that Saudi has most of it. We also know that Petrodollars from Saudi are financing the world-wide islamic jihad against us.

    And we also know that only Western intelligence and technology, based on the free thought of enlightenment, freed from the suffacting shackles of islamic doctrine, would allow us to find alternative energy sources.

    And instead of calling for a Manhattan-project style emergence program to get AWAY from the dependence of the medieval Arab Jihadists, Bush is kissing their behinds, asking to please increas oil output.

    This is so sick, I want to throw up.

    Alas, from next year we can see Obama or Hillary do the same act.

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