Two stories on CNN.com today show how the deepening oil crisis is sending the addicted US government searching in desperation for more petroleum to come to market, as prices have broken records every day for the last week.
While Congress votes to cut off sending more oil to the Strategic Petroleum Reserve, Bush is in Riyadh pleading with the Saudis to increase production, and being outright denied (see below). Though CNN doesn’t say it, the reason the Saudis won’t do it is most likely that they simply can’t. If Matthew Simmons’ book Twilight in the Desert is correct, Saudi Arabia has no more spare capacity, and therefore can no longer be called on to increase supply when the market gets tight. The US is up the creek without a paddle.
No small fix here or there is going to be anything but a drop in the bucket as this crisis develops. $4-per-gallon gasoline will be remembered as amazingly cheap in a few years, and $100-per-barrel crude oil might never be seen again.
The only solution to this crisis is to create an economy that does not rely on oil, or fossil fuels of any kind for that matter. We can accomplish it by focusing on meeting human needs above the interests of corporations and governments, who are the real petroleum consumers. One positive first step would be to abandon the $3 trillion War against Iraq and use those resources to provide universal health care and universal higher education in the US, the most backwards industrialized nation. Likewise, the smart money is on dropping ethanol and other so-called biofuels like the dead weights they are, and once again making all those millions of tons of corn and other grains available for hungry people to eat.
Common sense forever evades a junkie government.
Saudis rebuff Bush’s request to pump more oil
RIYADH, Saudi Arabia (CNN) — Saudi Arabia Friday rebuffed President Bush’s request to immediately pump more oil to lower record prices, saying it does not see enough demand to increase production.
President Bush walks with Saudi King Abdullah in Riyadh Friday.
The Saudis said they would increase production if customers demanded it, Steven Hadley, Bush’s national security adviser, said.
Bush is spending much of the day in closed-door meetings with King Abdullah, the Saudi ruler.
Friday’s visit was Bush’s second trip to the kingdom this year, coming as oil prices reached a new record high Friday of more than $127 a barrel. When he traveled to Riyadh in January, his request for the Saudis to pump more oil was also rejected.
Oil prices were just below $100 a barrel in January, and Americans were paying an average of $3.06 for a gallon of gasoline. They were paying $3.78 on Friday, following more than week of record highs every day.
“Clearly, the price of gas is too high for Americans, and it’s causing a hardship for many families of low income. But it also is not allowing our economy to grow as strong as it could,” spokeswoman Dana Perino said en route to Saudi Arabia.
“One of the best ways to have lower prices is if there was a better calibration between the laws of supply and demand. We have little — not enough supply, and too high demand. Trying to get more supply out there is good for everyone,” she said.
But Saudi Arabia — and many economists — say the high prices are a result of market speculation, the weak dollar, and demand from the developing world rather than a shortage of supply.
“We will raise production when the market justifies it. This is our policy,” Ali al-Naimi, Saudi Arabia’s minister of petroleum and mineral resources, said during Bush’s first visit in January. “Our interest is to hopefully keep supply matching demand with minimum volatility in the international oil market,” he added.
Saudi Arabia maintains spare production capacity of about 2 million barrels per day use when there is “an unexpected need,” al-Naimi said in January.
Bush will also discuss oil industry security and peaceful nuclear cooperation with the Saudis. The trip, part of a Middle East tour that began in Israel and will continue to Egypt, marks the 75th anniversary of diplomatic relations between Washington and Riyadh.