weekend commentary - GWB and Saudi Oil production
(snip)"US President George W. Bush said on Saturday that a hike in oil output by Saudi Arabia would not solve American energy problems.
"It's not enough, it's something but it doesn't solve our problem," Bush told reporters in Egypt's Red Sea resort of Sharm el-Sheikh.
Bush said he was "pleased" with a Saudi decision taken on May 10 to increase its oil production by 300,000 barrels per day in response to customers, but said that he was "also realistic" about what the Americans should do.
"Our problem in America gets solved when we aggressively go for domestic exploration. Our problem in America gets solved if we expand our refining capacity, promote nuclear energy and continue our strategy for the advancing of alternative energies as well as conservation," he said.
"One interesting thing about American politics these days is those who are screaming the loudest for increased production from Saudi Arabia are the very same people who are fighting the fiercest against domestic exploration, against the development of nuclear power and against expanding refining capacity." "(snip)
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Re: weekend commentary - GWB and Saudi Oil production
300k barrels is about 1.4% of US daily consumption- whoopdedoo::) - about how thrilled most people would be about a 1.4% pay raise.
The comment about need for more refinery capacity is right on.
Re: weekend commentary - GWB and Saudi Oil production
^^^ I think that you're missing the point about marginal pricing. 300,000 barrels per day also constitutes 1/2% of total world oil demand. Thus if production versus consumption volumes are exactly equal today, if an extra 300,000 barrels per day are added to the world market supply it will slowly accumulate a surplus ... refilling storage tanks, refilling the US strategic petroleum reserve etc. Eventually this will result in reduced bids for additional oil, which will cause the world market price to decline.
A 300,000 barrel per day production increase by the Saudis might help a little. However it might also be bought up immediately by China / India / Asia and do nothing to relieve supply concerns or high prices for US import. In contrast, ANY increase in US domestic oil production i.e. ANWR, offshore drilling off any of the three coasts etc. would bypass the world market and directly reduce the level of US imports of foreign oil.
I do agree that where the US is concerned, limited / antiquated refinery capacity is a much bigger cost issue at the gas pump than news media typically attributes.
Re: weekend commentary - GWB and Saudi Oil production
Eck. Congress will sue those OPEC meanies! That'll teach em! We'll sue em and take their bank accounts and their refineries!
Re: weekend commentary - GWB and Saudi Oil production
^^^ well in theory that would accomplish a very important objective. OPEC would respond by cutting off oil exports to the USA. At that point, Americans would be subjected to gas / fuel oil rationing based on American oil production plus whatever could be scared up from Mexico and Canada despite the price rising to $10 per gallon on the black market. Price increases for every energy intensive product from foods to fertilizer would go orbital as well. American politicians and voters would then understand clearly that the American suburban lifestyle / paradigm cannot function without massive daily foreign oil imports, that America has no leverage with OPEC while China / Japan / Korea / India are eager to buy as much oil as OPEC wishes to export, and that the true 'cost' of keeping new oil drilling in the ANWR / offshore on all three coasts off the table is far higher than the vast majority of registered voters are willing to 'pay'.
Of course that doesn't stop certain politicians from trying to pander to uneducated voters ...
(snip)"The House of Representatives Tuesday passed a bill authorizing the federal government to sue OPEC in US courts over alleged price fixing, in the latest swipe at the cartel over skyrocketing oil prices.
The bill passed the Democratic-led House by 324 to 84 votes, on a day when the price of oil soared to a record above 129 dollars a barrel.
"The House today with a strong bipartisan and veto-proof margin voted to hold foreign oil cartels and Big Oil accountable," Democratic House speaker Nancy Pelosi said.
President George W. Bush has however threatened to veto the legislation, although its margin of passage in the House suggested Democrats may get a two-thirds majority needed to sustain the largely symbolic measure.
"Instead of using a veto threat to shield cartels and Big Oil companies from accountability, the Bush Administration should work with the Congress to protect American consumers," Pelosi said.
The White House warned that the bill could discourage foreign investment in the US economy, subject US firms abroad to reprisals, and could end up limiting oil supplies, raising prices and threatening US jobs. "(snip)
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