Posted on 04/24/2005 6:54:25 PM PDT by Flavius
US President George W. Bush will press Saudi Arabia to control rocketing oil prices when he meets the country's de facto leader, Crown Prince Abdullah, today at his ranch in Crawford, Texas.
The meeting is meant to be a relaxed occasion at which both leaders renew their long-held ties of friendship, but the US public has viewed the House of Saud with growing scepticism since the September 11 attacks, in which 15 of the 19 hijackers were Saudis.
With continuing fighting in Iraq, unrest over the US push for democracy in the Middle East and Israeli-Palestinian relations in a new phase, the agenda for the two-way talks would have been crowded even without the crisis over sky-high oil prices, which is putting domestic pressure on Mr Bush and slowing global economic growth.
Consumers, industry and stock markets around the world are feeling the squeeze as oil prices topped $US55 ($70) a barrel last week – double the price when Mr Bush was first elected in 2000.
The Saudis have enjoyed a bonanza of wealth from oil, but Americans are increasingly resentful as they are forced to pay inflated petrol prices.
Republican pollster Frank Luntz said: "If oil prices continue to climb, so does the hatred towards Saudi Arabia. To put it bluntly, the American public feels, 'If they are allies, why are they charging so much for oil? If they are allies, why are their people trying to kill us?"'
Mr Bush stepped up the rhetoric by accusing the Saudis of doing too little to increase oil production. "I don't think they're pumping flat out," he said. "We've just got to get a straight answer from the Saudi Government as to what they think their excess capacity is."
But Robert Jordan, US ambassador to Saudi Arabia from 2001-03, said he did not expect a change in the bargain between the two nations, whereby Washington provides security for the Saudi regime in exchange for enough oil to meet its needs.
However, he said the Saudis could do more to reassure the US they were keeping their side of the deal.
"We need to understand we're still on the same page and they're not just running after new business," Mr Jordan said, referring to the growing demand for oil by emerging economic giants such as China and India.
The global oil industry urgently needs to update refineries and develop new fields to meet demand. A report by Goldman Sachs sent energy prices soaring last month when it warned that oil markets could be entering a "super spike", with the price of crude reaching $US105 a barrel.
Saudi Oil Minister Ali Naimi said the country was willing to boost its pumping capacity to 11 million barrels a day – its maximum – and announced that Saudi Arabia would double its investment in energy to $US50 billion over the next five years, raising pumping capacity to 12.5 million barrels a day by 2009.
There are several pressure points on the Saudis, who are hoping this week's visit to Crawford will seal a deal that will help Riyadh join the World Trade Organisation by the end of the year. Trade relations have suffered since September 11, and it has become harder for Saudi businessmen to get US visas.
Mr Bush intends to remind the crown prince that the Saudis' recent success in killing terrorist leaders solves only part of the problem of militant Islamic fundamentalism.
"He will want to talk to him about the ideological support for terrorism and make sure they are also dealing with extremist clerics in schools and mosques," Mr Jordan said.
The Sunday Times
$10 of the current %40 price is speculation. break the speculation, and it goes down to $40.
open the SPR and sell teh oil for $42 to US refiners. then sign a contract with the new iraqi government to replace that oil at $40/bbl, the $2 spread being "war reparations". it would be a great move politically,and would bust the hedged positions adding $10 to every bbl of oil.
bashing the saudis will accomplish nothing.
should say "current $50 price"
Side note, im jelous im not a wealthy oil owner/producer or have family that is.
Published on 23 Nov 2004 by MSNBC. Archived on 23 Nov 2004. Oil prices prompt another look at shale
by Judith Crosson RELATED NEWS:
US: Caution warranted on oil shale...
The U.S. government said Tuesday it was ready to resurrect oil shale drilling in the Rocky Mountains, a technology heralded 30 years ago to boost America's energy output until it failed financially.
About half of the world's oil shale reserves are estimated to be located in the United States, with other big reserves in Russia, China and Australia, according to the Department of Interior and its agency, the Bureau of Land Management, that oversees public lands.
With oil above $40 a barrel, even an expensive technology can add to the bottom line.
"The BLM welcomes public input as to how we can best develop this energy source, which will enable us to expand and diversify domestic energy production in accordance with the president's National Energy Plan," BLM assistant director for minerals Tom Lonnie said in a statement.
Interior and BLM are specifically looking at the Piceance Creek Basin in Colorado, the Uinta Basin in Utah and the Green River and Washakie Basins in Wyoming, areas considered to have the most easily recoverable deposits in the United States.
The BLM said energy companies were keen to develop the area and it comes at time when traditional drilling is hitting record levels in the Rocky Mountain region.
The BLM plans to issue 10-year research and development leases, although the area could go into commercial production before the end of the term, BLM spokesman Jim Edwards said. The public will have 30 days to comment.
Shale is a sedimentary rock containing kerogen, which is then converted into synthetic oil by processing, according to the World Energy Council. Environmentalists argue that the process produces high greenhouse emissions.
"U.S. companies have developed and patented new technologies to develop oil shale that are both economical and environmentally friendly," Lonnie said.
The oil shale boom took Colorado by storm in the 1970s. "One of the things we learned from the oil shale prototype leasing in the 70s was that there were some technologies that could recover oil shale, but they just weren't economical," BLM's Edwards said.
Unocal Corp. was one of the major energy companies that tried to drill oil shale, but pulled out and sold all its properties, spokesman Barry Lane said.
The Rocky Mountain region has been high on the Bush administration's list of areas to increase oil and natural gas production, much to the dismay of environmentalists.
"It's going to be a record year for oil and gas well permits," Brian Macke, director of the Colorado Oil and Gas Conservation Commission, said.
Timeline: A historical look at oil In real terms, stripping out the impact of inflation, oil prices are much lower today than the highs of some past spikes. The following details average annual dollar-denominated oil prices in the money of the day and the equivalent price in 2003.
Year ------- Event ----- / Money of the day / 2003 dollars
1861 - Pennsylvania oil boom / 0.49 / 10.08 1876 - Russian oil exports start / 2.56 / 43.38 1945 - Post-war reconstruction / 1.05 / 10.79 1974 - Arab oil embargo / 11.58 / 43.38 1979 - Iranian revolution / 30.03 / 76.40 1980 - Iranian revolution / 35.69 / 79.99 1981 - Post-Iranian revolution / 34.28 / 69.59 1990 - Iraqi invasion of Kuwait / 23.84 / 33.54 1998 - Asian economic crisis / 13.11 / 14.80 2004 - Year-to-date / 35.62* / 35.62* 1861-1944: U.S. average, 1945-1985: Arabian Light posted at Ras Tanura, 1986-present day: Brent spot
"Its the largest number of wells that we've permitted since 1981, the last large oil and gas drilling boom in Colorado," Macke said in an interview. The commission estimates it will issue 2,700 permits in 2004, compared with the record of 2,378. About 80 percent of the permits in Colorado are for natural gas.
Things are also busy in neighboring Wyoming, which ranks third in U.S. natural gas production behind Texas and Oklahoma. "We're the highest we've been in 18 years," Don Likwartz, supervisor of the Wyoming Oil and Gas Conservation Commission. "I'm sure price has some effect on it," he said.
Drilling applications are also up in Utah.
There is just so much oil and now and now China entering the arena for oil raises demand greatly. That is mostly the problem.
That aside, maybe watch the oil company profits and see if they hit the roof. If they do, they were ripping everyone off.
They are ripping everyone off... but its our own fault we let them
The Saudi's are jerks.
That said, I question how much the House of Saud can do about Chinese comsumption.
Maybe you are right, but I sure think there needs to be an investigation into it.
I read some where that their oil wells were 80% water and 20% oil and they are keeping it to their selves. If thats true, the world better get a source of energy quick.
Thats hard to believe.
A little late little man. Keep your head in the sand where its been.
Nah... who cares.
If the oil drys up, that just forces MASSIVE investment in alternative fuel.
'The sky is falling' people need not apply, if people want it, it will come... consequently if people see no need for it, it will not happen (of course you can pollute the free market with incentives intended to act as a catalyst, but the utility in such actions exponentionally decreases with cost)
Hey....I thought Bush had a "secret deal" to lower oil prices below $35/barrel for the election. Bob Woodward said it, so it MUST have been true!
W should meet with the Chinese instead of the Saudis, and ask them to please freeze in the dark so we can drive our SUVs.
He might as well bash Goldman Sachs.
The Saudi's can squeese quite a big percentage more with new technology and methods.
The thing is... if they increase production it will NOT be for the purpose of lowing prices, but rather to meet the increasing demand.
The Time --> Infinity result is oil gets too rare, and gradually grows in price until it is economically profitable to invest/use alternative fuels.
I see short term problems, but no real long term issue (that is if you 'trust' the free markets)
...open the SPR and sell teh oil for $42 to US refiners. then sign a contract with the new iraqi government to replace that oil at $40/bbl, the $2 spread being "war reparations". it would be a great move politically,and would bust the hedged positions adding $10 to every bbl of oil...
=====
There are a number of ways to BUST the current price per bbl. War reparations are in order, and I don't think the Iraqis would mind a special "value" with the U.S. SPR's name on it for a few years!!!
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