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
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.
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!
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!
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.
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.
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
The air will be cleaner for it and the ice just might stop melting.
People are making a killing on the market it is the poor that suffers.