Saturday, June 28, 2008

Saudi Arabia is not holding oil

By Sabria S. Jawhar

Jeddah energy summit on Sunday was a big eye-opener. I always thought the US government under President Bush bordered on delusional but know I am convinced.
King Abudullah scheduled just two weeks ago the summit to discuss the skyrocketing oil prices, which are now hovering around $135 per barrel. British Prime Minister Gordon Brown thought the summit was so important that he showed up himself.
Bush, on the other hand, thought it was important enough to, well, send Energy Secretary Samuel W.Bodman, who did a lot of sulking but little to further dialogue about how to curb high prices.And this is what I find so troubling and perplexing.
There is this sense of self-entitlement and finger-pointing among Americans, but little in the way of self-examination when it comes to America's role in oil consumption.Certainly it's debatable whether demand is exceeding supply.
Yes, oil consumption in India and China has risen dramatically. But is this the cause of high oil prices? It's possible, but not likely the sole reason. The US government seems to believe it's the only reason for high prices at the exclusion of evidence that oil speculation and lack of oil refineries are helping the drive in high prices.
We've come to learn that Westerners look for easy answers to complex issues and are quick to demonize foreign leaders based on little more than old prejudices, stereotypes. I'm half expecting some Western leader to demand the technology for magic flying carpets as transportation alternative because we are, after all, Arabs.
We have in US Congress Democrats considering withholding selling the Kingdom military hardware to Saudi Arabia until we supply more oil.They want to appear tough on oil suppliers, but they can't be tough with their own president or at least make an effort to protect the integrity of their own constitution.
We have New York Times columnist Thomas Friedman comparing us to drug pushers. It's everybody's fault but the Americans. Whatever happened to that old-fashioned Yankee ingenuity? What happened to sacrifice?Didn't the US learn anything from the long gas lines of the 1970s?
From where I sit, they had more than 35 years to explore alternative energy sources. Did they honestly think that once oil production and delivery resumed at normal levels after the 1970s, a gas crunch would never happen again?Americans in the 1970s used the odd-even system to ease gas consumption and long lines at gas stations.
The system allowed motorists with license plates ending with an even number to purchase gas on one day while those with odd numbers bought fuel on the alternate day. The Americans used to have meatless Tuesdays and implemented strict gas rationing during World War II. Americans then knew about sacrifice.But what did the Bush administration offer following the dark days of9/11. Spend, spend, spend. Visit the malls. Shop at Wal-Mart. Gas up and take a drive.
Now gas is $4 a gallon and there are some pretty angry American motorists. Now they think that maybe engaging in a seven-year spending spree was not such a good idea. But their leaders are saying, "Hey,it's not us. The Arabs won't give us more oil."If only the answer was that simple.
You've got to give Republican presidential candidate Senator John McCain a little more credit than George Bush. He wants to start drilling for more oil off the coast of the United States. But he's not exactly on the environmental-friendly bandwagon. Democratic presidential contender Barack Obama is a little more realistic. He wants an investigation into oil market speculators.He blames them for the high prices.
At the summit in Jeddah, US energy secretary Bodman grumpily said there "is no evidence we can find that speculators are driving futures prices."Yet Senator Joseph Lieberman, the former Democrat now serving as McCain's handmaiden, is leading a Senate committee to conduct hearing son whether speculators are driving the huge price increases.
So apparently the US government can't make up its mind whether Saudi Arabia is holding oil as hostage or if something else is at work here.And we must consider what Akira Amari, Japan's minister of economy,trade and industry, cryptically said at the summit.
He warned that the price increases is leading some nations to consider the introduction of alternative fuels. He called it a "natural self-defense measure" that would "inevitably reduce the revenues of oil producing countries in the medium- to long-term."Oh, really.
A natural self-defense? If they thought of a natural self-defense and created alternative fuel sources back in the 1970s,oil-consuming nations today wouldn't be in the fix they find themselves. Perhaps it's time the West bucked up and took responsibility for its reckless actions over the past 35 years and stop looking for demons to blame.

5 comments:

Anonymous said...

What a delight to find you!

I'm an American who works in agriculture, an energy intensive industry, so of course I've followed this closely.

One thing that has struck me is that the Saudis have finally decided to go after the Khurais field. It's a huge technical/engineering risk, and if it goes badly, that field will be lost. It does not make sense to me that they would take that risk were they not fairly certain that Ghawar is in moderate to serious decline. Here is a link:

http://www.energyinvestmentstrategies.com/2008/04/22/new-saudi-capacity-the-worlds-most-difficult-plumbing-problem/

Best,

Pamela

Kashmiri Nomad said...

I think that the fundamental problem is a little more complex than western politicians would have us all believe.

In essence petroleum and petroleum by-products have become such an integral part of western societies in all honesty there is no realistic alternative in the near or distance future.

Western politicians whether they be George Bush or Gordon Brown have to be honest with their electorates and tell them that the age of $18 barrels of oil are long gone. But I doubt that this is likely as any politician who says such things will find themselves out of power very quickly.

The real story is that petroleum will become exponentially more expensive as time goes on. How will this affect global politics and project of the new American century only time will tell.

Bassem said...

I agree with you. It's rather funny sometimes how simple-minded Americans can be when it comes to facing facts that they don't want to admitt to themselves. It's much easier to blame us rather than focus on the real issues. Not to mention, the American citizens are paying tax money for their gas and the US government is making a lot of money from that. The US government can sell the gas cheaper for its citizens if it wanted. And then again, it's a supply and demand market and if we want to play the role of "drug pushers" then it's our well earned right and well taught lesson from the American Capitalism.

Anonymous said...

bassem:

"And then again, it's a supply and demand market and if we want to play the role of 'drug pushers" then it's our well earned right and well taught lesson from the American Capitalism."

heh.

I wish every American on the planet could hear you say that. It just might anger them/us enough to get off our collective butts and do something.

Pamela

Cherie said...

Good words.