"Will we ever be over a Saudi pump?"
Not as long as we are in Iraq! :-]
Will We Forever Be Over a (Saudi) Barrel at the Pump?"
Yes, until they run out of oil. No President can resist capitulation to the oil interests.
The Saudis have very, very, very little to do with the rise in oil prices: if anything, they're helping to keep prices lower than they otherwise might be.
Here's what's driving oil up, and it has pretty much nothing to do with the Middle East:
1) Venezuala: If Chavez is recalled this weekend, prices may fall- if the recall fails (or if it leads to further instability) they may go up.
2) Russia: Nobody is quite sure what's up with the Russian Government and the Russian oil industry.
3) China: In the last year, Chinese oil imports have increased from 2.02 Million Barrels Per day to 3.02 Million BPD- a 50% increase in a single year! This has sucked up pretty much all of the world's excess production.
In fast, I've seen at least one commentator raise the possibility that China may be deliberately buying oil and stockpiling it both to secure its own supplies in the case of a future war over Taiwan, but also to drive up the world price of oil in order to weaken the American economy and ensure the defeat of President Bush.
At today's prices, oil in 1974 would cost $57 a barrel.
During the 1920s, at today's prices, gas cost $10 a gallon.
Bush needs to start drilling by executive order and make the Democrats squeal.
Even when I was paying $1.96 in July it was equal to $.34 a gallon in 1964 dollars, which was the 1964 price in many areas. Maybe we aren't being ripped off as badly as everyone thinks.
We have a grocery chain here called Giant Eagle.
The Giant for every 50 dollars I spend gives me a coupon for 10 cents off on a gallon for all the gallons I can pump into my car.
Right now the pump price is 1.79.
I fill up the car with gas about every three weeks.
I usually pay somewhere between 1.29 and 1.49.
Being retired, I find this helpfull.
But it is no solution.
ANWR has long made sense to me. Domestic oil production must be put on a war-time footing.
We should be drilling like crazy, and like right now.
Well, as an option, biodiesel looks pretty good now and will probably be looking better and better. If I had a diesel, I'd seriesly consider the conversion.
And nobody is talking about ANWR, which would substitute for all the oil we import from Saudi for quite a few years.
http://www.anwr.org/
http://www.anwr.org/backgrnd/backgrnd.htm
1. Drill ANWAR now!2. Start a crash building program for 20-30 refineries. Give the oil cos big breaks on all the PC environmental crap.
3. Slap the EPA up side the head to knock off all the "designer blends" of gasoline.
Look at it this way... if Xlinton could do damn near anything he wanted by EO, President Bush could do the same.
And this, unlike the peanut crop(!), IS a national security priority.
Sometimes ya just gotta do what's right for the country.
Scientists have discovered that certain types of algae could create complex hydrocarbon molecules that could be refined to either kerosene or diesel fuel in a form that is actually far cleaner burning than petroleum-derived fuel (mostly because you have no impurities that can generate sulfur dioxide or particulate emissions!). Imagine a 20 mile square pond about six feet deep growing this type of algae--they've estimated it is enough to make diesel fuel for every car, truck and diesel-electric locomotive in the USA and then some! 
In short, science could make having to pump out petroleum from the ground obselete before you know it.
The gas tanks aren't gonna run dry in our lifetimes.
Reagan didn't stand for this crap. He drove the price of oil down to record lows, helping bankrupt the USSR.
I miss him.
I laugh at the idea we're over a Saudi barrel. Any idea where we would be without that Saudi barrel, in light of the fact that the Saudis actually bump up production at our request quite often?
Sugguest you give it some thought and explain to folks what would happen to the price of our oil per barrel, if the Saudis stoped production.
As you well know, I blew it. You just posted the article. I appologize. The comments should go to the person who created that title.
The oil companies began exploring in earnest during the boom of the 1970's to early 1980s. They found significant reserves in the following locations: California coastline particularly areas near Malibu, the Gulf of Mexico, the Four Corners, the Grand Banks, and the continental shelf off Masssachusetts, NY-Long Island, and NJ coastlines, particularly running near old fault lines.
They capped the areas on the continental shelf off the MA, NY, and NJ coastline because the technology then could not access the oil cheaply (1970's tech) and environmentalist/fishermen/real estate owners on the shore worried about spills and storms.
My opinion is that the US and Canada are actually sitting atop untapped the largest oil reserves that would put the MEast to shame. But the MEasterners have to dig in sand for relative short distances with cheap overhead and labor while ignoring environmentalists which makes their product more desirable to cost-conscious oil companies and weak politicians.
The reason for prices at record highs:
o China and USA stockpiling stategic reserves past 30 day limit.
o It's pure futures speculation not based on fact but emotion.
o Possible market manipulation with stockpiles.
Check out the following two articles on the subject. The first is from 1984 and the second is from today.
Washington Report On Middle East Affairs (http://www.wrmea.com/backissues/121784/841217005.html)
Trade and Finance
OPEC: The Next Crisis by John Haldane
December 17, 1984, Page 5
OPEC's handling of the oil price cuts announced in October by Britain, Nigeria and Norway turned out to be a small, but manageable, crisis for the Organization of Petroleum Exporting Countries. Similar "mini crises" may develop again next year, particularly in the spring, when demand for oil may slacken. But oil analysts taking a longer look into the future say that a far less manageable problem will almost certainly arise when Iran and Iraq resume exports at, or near, pre war levels. While no one expects this to happen overnight, analysts say it could occur as early as one year from now.
Following the October price cuts by the non-OPEC producers, OPEC met in Geneva and decided to cut its production ceiling from 17.5 million to 16 million barrels per day (b/d). This total daily cut of 1.5 million barrels was distributed among 11 of OPEC's 13 members, with Iraqi and Nigerian quotas left unchanged. The smallest decrease in allocation, 13,000 b/d, went to IC7abom, while Saudi Arabia accepted the largest cut of 647,000 b/d. Informal arrangements also were worked out so that wealthier nations like Saudi Arabia and Libya would absorb the cutbacks of less wealthy states.
Saudi Arabia again played a leading role in persuading OPEC colleagues to reduce output, rather than to lower the benchmark price of $29 per barrel for high quality Arabian Light oil. This price probably will hold through the winter, with usual sales on the spot market selling for a dollar or so less. But how low the benchmark price may drop when winter is over is open to debate. OPEC officials plan to meet again in Geneva later this month to examine overall pricing strategy.
Near normal oil exports by both Iran and Iraq could seriously test OPEC's ability to remain an effective cartel. Iraq, by building new pipelines, may reach pre war export levels by late 1985 or early 1986, regardless of whether its war with Iran continues. The second factor is the potential resumption of high Iranian output soon after Iran ends hostilities with Iraq. Given increasing domestic tensions over economic conditions in Iran, the Ayatollah Khomeini may be forced to end the war to safeguard his regime.
The war between Iran and Iraq, now in its fifth year, has cost the two countries billions of dollars in lost oil revenues. Economic development programs in both nations have been slowed and, in some instances, cancelled. Vitally needed agricultural and industrial imports have been cut back, and foreign businessmen complain of long delays in receiving payment. Since neither country exports anything else nearly as valuable as oil, both need to resume oil production at pre war levels and to sell this output at going market rates, regardless of OPEC production quotas or the going benchmark price. While Iraq may be willing to listen to Saudi advice about working through OPEC, Iran may feel no such compulsion, and only seek to regain its old market share. Before the revolution, Iran produced roughly 25 percent of total Gulf production, while Saudi Arabia's share was 35 percent. Now the Saudis supply almost 50 percent, while the Iranian share has fallen to 10 percent.
Oil Exports Getting Top Priority
According to industry estimates, Iran currently is producing below its new OPEC quota of' 2.3 million b/d. In the past, Iran has pumped as much as 6.2 million b/d. While the condition of Iranian oil facilities at present probably prohibits a quick rise in production, an all out repair effort could bring production capacity back up to 4 million b/d in a year or so, with a longer range goal of 5 to 6 million b/d. Iranian economic planners are giving top priority to the maintenance and repair of oil fields, despite a shortage of hard currency.
Iraq also is producing less than its OPEC quota ; 1.2 million b/d. Exports have been badly hurt by the closure of Iraq's oil export facilities on the Gulf and by its inability to send oil via its pipeline through Syria, which was closed by the Syrian government in April, 1982. Present Iraqi production is less than 50 percent of its 3.5 million b/d pre war production, which then was ranked second highest in OPEC. However, the pipeline being constructed to link up Iraq's southern oil fields with the existing east-west Saudi line to Yanbu, on the Red Sea, should permit Iraq to increase production by about 500,000 b/d early in 1986. Combined with anticipated expansion of Iraq's existing pipeline through Turkey (the only line presently in operation), Iraq's oil exports by early 1986 could exceed its 1.983 level by 1.8 million b/d. As in the case of Iran, Iraq is giving top priority to resuming oil exports and plans to raise export levels rapidly once a ceasefire is negotiated.
Some experts predict that post war Iran/Iraq production increases could total 3 million b/d, a 19 percent rise over OPEC's current overall ceiling. This added production possibly could be absorbed by a new upswing in the world's economy, assuming, unrealistically, that such debt ridden oil producers as Mexico, Nigeria, and Venezuela would not increase their production. The more likely scenario is that the new output will create strong pressures to cut oil prices. It may be impossible for OPEC to maintain the $29 benchmark price in the face of such downward pressures.
The problem OPEC will face when Iraq and Iran boost production is how to set new OPEC quotas agreeable to all participants. If some members opt to sell all the oil they can produce at open market prices, this loss of control by OPEC over its members' production could result in world prices as low as $20 a barrel. Most oil analysts do not predict such a sharp drop, but rather forecast an OPEC benchmark price of $25 for next year.
For several years OPEC has not been the only oil game in town. Its power over the world oil market has been eroded by the steady increase in production by non OPEC nations. OPEC's estimated share of world consumption has dropped from 60 percent in 1979 to 40 percent today. During this same period, OPEC production dropped from 32 million to 17 million b/d, while non OPEC production rose from roughly 20 million to 25 million b/d. This creates a downward pressure on oil prices that will continue as long as increases in non OPEC production exceed the growth in world consumption.
John Haldane is a specialist in Middle East affairs who has served as a foreign service officer in Baghdad, Beirut and Cairo, and as an international economist in the Departments of Commerce and Treasury.