As Oil Approaches $100, is Saudi Arabia Waging Resource Aggression Against the American People and the World Economy?!
Imagine waking up to the following nightmare headline "Canada Interdicts the Head Waters of the Missouri and Mississippi Rivers and All Water Flows From Its Territory Into the Great Lakes." One's reaction would not be passive nor that of our government to such a blatant act of resource aggression. And if you permit a glib interjection, any argumentation that , "well its water on their side of the border" would hold no water whatsoever. The deterioration of relations between the United States and Canada would be immediate, grave, and threatening.
Yet in degree, this is the current status of our resource relationship with the Saudis. Consider the following. On March 5, 2007 in a first page article "Oil Innovations Pump New Life Into Old Wells", the New York Times reported that Nansen G. Saleri, the head of reservoir management at the state owned Saudi Aramco reported that Saudi Arabia's total reserves were almost three times higher than the kingdom's officially published figure of 260 billion barrels. He estimated the kingdom's resources at 716 billion barrels. Mr. Saleri continued that he wouldn't be surprised if ultimate reserves of Saudi Arabia reached a trillion, (1,000,000,000,000) barrels!
This amazing revelation coming from the reservoir manager of Aramco underlines the degree to which the Saudis have perverted the current world oil market. The Saudis are the putative leaders of OPEC and their capabilities and objectives determine OPEC's policy goals. It is clear as the International Energy Agency phrased it in their recent report, "The greater the increase in the call of oil and gas...the more likely it will be that they will seek a higher rent from their exports and to impose higher prices ... by deferring investment and constraining production."
Saudi Arabia, given its enormous reserves, could readily produce significant additional quantities of oil in order to abate the steep run up of oil prices. At these price levels the fact they and OPEC are maintaining the major portion of their production cuts made at the beginning of this year (OPEC's production cut of 1.7 million barrels/day altered by a production increase of only 500,000 barrels/day starting this month) is smoking gun evidence of their extortionist intent. By holding oil off the market, oil which they clearly have in ample supply, they are gouging the world's economies, pricing their product at levels that have no market rationale whatsoever. They are preying on the world's need for oil. It is an act of resource aggression against the world's consumers much as Canada's hypothetical interference with the headwaters of our major river ways would be an act of aggression against the United States.
Please note in my title I referred to waging resource aggression against the American people. The government was not mentioned because in this imbroglio our administration is in effect Saudi Arabia's, as well as OPEC's and the oil patch's greatest ally. In the near seven years of its Presidency, virtually nothing has been done to constrain Saudi Arabia's policies. On the contrary our President and Vice President are so wedded to the oil industry's interests that the enormous increase in oil prices during their tenure can well be ascribed to willful lack of any forceful policies to counter the Saudi extortion. This has manifested itself in many ways.
Let me just cite a few:
- In the near seven years of the Bush presidency, virtually no serious steps have been taken to significantly abate demand for fossil fuels;
- The nations Strategic Petroleum Reserve has been used to underpin escalating prices by continuing purchases even as prices exploded, thereby signaling the governments acceptance and approval of these price levels, and worse by declaring the doubling of the Reserve just as crude oil prices were retreating to $50/bbl earlier this year.
- Neither through "friendly persuasion" nor as a Dutch Uncle, making Saudi Arabia understand its price and production policies are intolerable. This even though we are in essence the guarantors of last resort of Saudi Arabia's independence as evidenced by the some $100 million dollars a day being expended from this nation's treasury on our naval flotilla stationed off the Saudi Coast in the Arabian Gulf- thereby serving as a bulwark against Shia Iran that without our presence would have designs and capabilities against Sunni Saudi Arabia;
- By the fawning obsequiousness our high government officials have shown toward Saudi officialdom, (see "The Price of Oil, OPEC and Our Laws and Now Welcome to Vichy" 5.4.06) or be it Price Bandar's open access to the Oval Office while he was Ambassador in Washington and thereafter.
- Or as exemplified by the symbolic holding of then Price Abdullah's hand at the Crawford Ranch meeting (see "Cheney in Saudi Land, Don't Hold Abdullah's Hand" 01.16.06; and "President Bush's Most Respectful Letter to King Abdullah on Energy Cooperation" 06.22.06 ) whose coziness resulted in an almost immediate upward ratcheting of oil prices.
The administration's oil industry buddies are ecstatic at the windfall the entire oil sector has reaped by the quadrupling of oil prices to levels undreamed of before the advent of this Presidency, while many of the nations citizens are having their household budgets ripped to shreds in order to meet their home heating bills this coming winter. Rarely if ever in the history of the Republic has there been such a divergence between the nation's interests and those of the vested interests that formed this administration.
Raymond J. Learsy is the author of the newly updated Over a Barrel: Breaking Oil's Grip on Our Future
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We get more oil from canada, why don't we bomb canada - makes sense to me and they are alot closer - should be over in a week - break out the mission accomplished banner - bush could fly it over Niagra Falls
Note to Learsy, the name of the gulf is “PERSIAN GULF” not the Arabian. This here demonstrates how little we know about Iran. Here is some information to digest:
The Iranian people have suffered in the name of islam more than anyone else. The first was in the seventh century and then in 1978. They are to this day being oppressed by fundamentalist rulers that want to erase their Persian culture and replace with islam. The arab world would love that, as Persian culture has greatly influenced the region. This is something Persians are very proud of but arabs would love to see destroyed.
Ya think that having a bunch of oil people running things in the White House could have anything to do with this? Nahhhhh... (sarcasm)
Not to mention the FUN of having a bunch of people maimed and killed in Iraq and Afghanistan!
Sociopathic sadists, that's what they all are!
Of course! But for the last 40 years we have voted at the polls for a series of bozos (for President and Congress) who have done nothing about energy (recall the Nixon and Carter oil embargos/shortages), and voted with our dollars for gas guzzlers and energy squandering systems, and even now are considering corn-based ethanol(????) as a solution. We didn't know about energy self-sufficiency?
Over those years, my wife and I generally have been consumers of the most resource/dollar efficient autos, a bunch of VWs (when they were still small), Honda Civics, a Festiva, a Focus but they were still (relatively) gas guzzlers and we were without much choice. Now it's been backed up on us.
I can't help analogizing to the problem of illegal immigration. They're here because we let them come, hired them, depended on their services, legislated against them, failed to enforce the laws, and NOW BLAME THEM!?!?
We drilled for Saudi oil when ours was limited and too expensive to obtain. We knew that it was a slim reed on which to rely but, regardless, we built an infrastructure of highways and bridges, parking lots and garages, and developed and reconfigured machines which depend on their oil
and refused to develop alternatives which would be in our sole control ('cause they're expensive, too much trouble, or?) and overuse and abuse the petroleum drug, and go to war with our miniscule mercenary military over it AND THEN WE BLAME THE SAUDIs!?!?!?
Some rationalization there!
War talk from the the War Party: If they won't give us our oil we need to take it.
The world is now at peak oil. Depletion will outrun new supply, and this in the face of ever increasing demand.
The powers that be have known about peak oil for over a decade. What they didn't count on was the absolute economic explosion of China and India.
Should we use the military to confiscate oil we will be headed for bankruptcy and a totalitarian government.
I'm surprised that so many people on a "liberal" blog would believe that they are entitled to other people's resources, and entitled to invade and steal those resources. I guess the conservatives are right. America is indeed an "entitlement society".
Americans have had to bear the consequences of the right's incestuous relationship with the House of Saud for entirely too long. While we're thoroughly stuck in the festering swamp that is Iraq, let us not forget that 15 of the 19 9/11 hijackers were of Saudi origin. Let us not forget that, in the two days immediately following the diaster, the only planes flying were those ferrying Saudi nationals back to their home country; many of these were members of the Bin Laden family. Let us not forget the the brand of Wahabbi Islam taught in Saudi schools has been used by the royal family to control their masses of disaffected young men. Let us not forget that, going all the way back to the first Arab oil embargo of 1973, the Saudis were largely responsible for untold hardship for the people of the western world.
Rather than invading a largely dysfunctional and decrepit Iraq, the American military should have invaded Saudi Arabia, taken control of the Saudi oil fields, and deposed the rulers of the House of Saud.
On the morning of 9/11, watching the towers fall into piles of toxic dust and burning cremains, I had the distinct notion that, somehow, our leaders would use the disaster to blame Saddam's Iraq. We need leaders who will go to war only in the most dire of circumstances; surely, Saudi Arabia qualified as a genuine enemy of the American people.
Saudi Arabia are the bankers for the Bush Crime Family.
I must have been really dumb to think Bush was telling the truth when he said the oil in Iraq would pay for the war. I never dreamed the Republicans would stick us with the bill and then charge us an arm and a leg to fill up our tanks. Talk about double taxation. When when all those Christians realize that terrorism has nothing to do with God and everything to with OIL? When will they vote to go green by voting for the Democrats?
Wow, oil is now like water! Where have I heard the quote, "Millions have lived without oil, without water not one"? When has man every said "NO thank you" to a new technology? Heck, we are back at the nuclear power trough again, does anybody remember how we had supposedly "kicked the habit"? If Saudi was being run by Shia clerics, GWB would have instituted a draft to occupy the place. Time and again he and Cheney have shown their willingness, indeed desire, to put the interests of friends and business associates above the interests of the American people. But, that is a bit off the point. I offer you this question. Where are you proposing to aquire the Oxygen which will be required to combust 1 TRILLION bbls of hydrocarbon fuels? I am going to go out on a limb here, and am predicting that within the next two years, an announcement will be made that scientists have detected a measurable decrease in the Earth's percentage of Oxygen. The rate of fossil fuel burning and the rate of deforestation, our Oxygen generator, are on a collision course. The natural progression on our current course is thus. We now have to choose between driving an SUV or a Prius. In the not so distant future we will have to decide on whether to drive a Prius, or continue to breath.
Have you reviewed the number of times that Republicans in Congress and the White House have fought against windfall profits taxes and for juicy new tax breaks for ExxonMobil. Answer ZERO
PROFITS=
1stQuarter 2006 -- $ 8.40 Billion
2Q 2006 -- $ 10.36 Billion
3Q 2006 -- $ 10.49 Billion
4Q 2006 -- $ 10.25 Billion
1Q 2007 -- $ 9.28 Billion
2Q 2007 -- $ 10.26 Billion
Source: Exxon Mobil
Unfortunately the American energy picture by what can only be described as a lack of courage by politicians to support opening the vast available and unused and untapped energy resources for development. We sit on an enormous amount of undeveloped coal, uranium, tar sands, oil shales, and even petroleum but all unused. While Cuba grants the Cinese the right to drill for oil off the coast of Florida, American companies are denied that same right by the Federal and State governments. Companies cannot explore in the Arctic, coal power plants cannot be developed atop coal resources of New Mexico, North Dakota or Utah, and nuclear power plants are simply not built alhough sufficient uranium resources are well documented. Instead, a silly and largely ignorant assemblage of politicians and a cery narrow and intelelctually stagnant group of supposed "conservationaist" who claim to be more comfortable with hirse dung than automobile exhaust, stall all developemnt of our sufficient resources.
Once the world learns how to kick the oil habit, all of those trillions of barrels will be worth nothing and the Middle East will have no power at all.
The air will be cleaner for it and the ice just might stop melting.
We must also understand that speculations is also driving up the price.
People are making a killing on the market it is the poor that suffers.
Be honest, if it was an oil company, say, one of the ones that owns the US Congress, instead of Saudi Arabia, you'd be calling it a sound business decision. It is not like the Great Lakes watershed (there's only one of those), you can buy oil elsewhere. The price of oil is a function of many things, such as the greed of the oil companies, the reckless 'diplomacy' of the US government in the Middle East, and the fact that George Bush has borrowed so much money that the dollar is devalued.
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Posted November 8, 2007 | 08:22 AM (EST)