Editore"s Note
Tilting at Windmills

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May 16, 2008
By: Kevin Drum

NO OIL FOR YOU....President Bush has gone to Riyadh once again to beg the Saudis to increase oil production, and once again he's been rebuffed. Here's the explanation:

Stephen J. Hadley, the national security adviser, told reporters, "What they're saying to us is" that "Saudi Arabia does not have customers that are making requests for oil that they are not able to satisfy," The Associated Press reported.

That's a lovely tautology, isn't it? Needless to say, there's always a price at which the demand for Saudi oil is no greater than what they happen to be putting on the market. Today it's $127 per barrel. If they cut production in half and the price went up to $500 per barrel, they still wouldn't be getting any requests they couldn't satisfy.

In other words, the Saudi response was not materially different from "Piss off." At this point, the only really interesting question is whether they're throttling their supply because they want to or because they have to. As time goes on and prices keep going up, I'm inclining more and more toward the latter.

UPDATE: It turns out that the Saudis are increasing their production after all. The increase is only a token 300,000 barrels per day, so it's not clear what's really going on here. A face-saving measure for Bush? Or something else?

Kevin Drum 1:15 PM Permalink | Trackbacks | Comments (103)

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Comments

ITS PELOSI'S FAULT !!!


Posted by: bottom 28% nut bags on May 16, 2008 at 1:27 PM | PERMALINK

Walras' law maybe?

Posted by: CSTAR on May 16, 2008 at 1:28 PM | PERMALINK

You know, someday that place will become nothing but a big desert.

Posted by: Anon on May 16, 2008 at 1:29 PM | PERMALINK

Of course, the fact that the Dollar has collapsed against practically every other world currency might have a little something to do with the current price of oil.

In Feb, 2002, the exchange rate was about $0.86/euro. Now it's about $1.55/euro.

My friends, we're in deep doo-doo.

Posted by: Quaker in a Basement on May 16, 2008 at 1:32 PM | PERMALINK

But but... If the Saudi's would have given in... would they have been APPEASERS?!!!

Posted by: RobertSeattle on May 16, 2008 at 1:33 PM | PERMALINK

That's sounds like an admission that SA is at or beyond peak production on its existing fields.

Posted by: PeakVT on May 16, 2008 at 1:33 PM | PERMALINK

Every private industry and government intelligence report I've read on various nation's claimed oil reserves says they're lying through their teeth and overstating what they have. Peak oil arrived months or years ago. All the players know it and it makes perfect sense to hoard it somewhat for future earnings and political/economic leverage. Sure, it's a bit of a fine line, not wanting to crash your customers economy or have the 101st Airborne just drop in and take it. For now it's "Piss off" and no one should be surprised. Plus, who in their right mind feels the least bit disposed to mollify Bush? Right now he's the loser at the party that NO ONE wants to dance with. No. One. He can't even get pity laid.

Posted by: steve duncan on May 16, 2008 at 1:38 PM | PERMALINK

100% American-made Biodiesel - $5.60/gallon

Old Mercedes wagon - $2,200

Viton fuel lines $200, installed.

Giving the House of Saud the finger - absolutely fucking priceless.

Posted by: cazart on May 16, 2008 at 1:39 PM | PERMALINK

Dubya has now officially morphed into Willy Loman.

Posted by: BombIranForChrist on May 16, 2008 at 1:42 PM | PERMALINK

The case for going to war with Saudi Arabia after 9/11 was and is considerably stronger than the case for going to war with Iraq.

Posted by: Virginia on May 16, 2008 at 1:43 PM | PERMALINK

How about this?
Bush knew what the answer would be, Riyadh knew what the answer would be. But they had to put on a show for the rubes.

Posted by: thersites on May 16, 2008 at 1:46 PM | PERMALINK

It's been the latter for years now. Remember the story about the Saudis steam-injecting Ghawar? Whenever you hear "steam-injection" or the like, it means the field is in permanent decline. Saudi Arabia is in permanent decline.

Posted by: orion on May 16, 2008 at 1:48 PM | PERMALINK

Actually bottom 28% nut bags, it can all be traced back to Bill Clinton.

Posted by: ET on May 16, 2008 at 1:49 PM | PERMALINK

You know we get more of our oil from Canada and Mexico than from SA. So how come we ain't suckin' up to our neighbors? Oooops sorry about that anti-Nafta stuff, wink, wink.

Posted by: optical weenie on May 16, 2008 at 1:53 PM | PERMALINK

All those romantic hand-holding walks and now, bupkis?

Nicely done, dubya. His sole area of presumed competence--oil--and he proves himself feckless there too.

Hooray for us.

Posted by: trollhattan on May 16, 2008 at 1:54 PM | PERMALINK

So much for "jawbonin'"

Posted by: RollaMO on May 16, 2008 at 2:01 PM | PERMALINK

So much for "jawbonin'"

Posted by: RollaMO

It would have been more expedient to have gone straight for the blow job.

Posted by: optical weenie on May 16, 2008 at 2:04 PM | PERMALINK

Supply and demand, right?

What possible motive would the Saudis have to increase production if they can get $150+ per barrel of oil doing what they are doing, versus, say, $100 per barrel if they increase production? (Assuming they could increase production, of course.) It is a straightforward business decision; Your product is in demand; you sell your product for the highest price the market can bear. Do they really care whether Americans pay $75 each time they fill the SUV's gas tank?

The failure to wean America of cheap foreign oil is just another way in which GWB has been a disaster as POTUS. Sure, we could have been conserving oil for seven years now, we could have been developing alternate fuels and sustainable energy supplies, but then the terrorists would have won.

Posted by: PTate in MN on May 16, 2008 at 2:05 PM | PERMALINK

Dubya has now officially morphed into Willy Loman.

If I were any kind of patriot, I suppose I'd be embarrassed, even angry, to see my President going hat in hand, only to see the door slammed in his -- and, by extension, my -- face. Thing is, I can't stop laughing.

Posted by: junebug on May 16, 2008 at 2:07 PM | PERMALINK

Gee, I wonder if Bush cares more about Saudi profits than the American economy?

This is a totally shocking result.

Posted by: Boronx on May 16, 2008 at 2:11 PM | PERMALINK

"Saudi Arabia does not have customers that are making requests for oil that they are not able to satisfy,"

I don't understand what this means, except maybe that Stephen Hadley is taking night courses in how to freeze my brain.

Posted by: inkadu on May 16, 2008 at 2:11 PM | PERMALINK

PTate in MN: Sure, we could have been conserving oil for seven years now, we could have been developing alternate fuels and sustainable energy supplies, but then the terrorists would have won.

Make that 28 years, if that great hero Ronald Reagan hadn't killed off Carter's conservation programs.

Posted by: thersites on May 16, 2008 at 2:11 PM | PERMALINK

BombIranForChrist: Dubya has now officially morphed into Willy Loman.

Not at all - I had a lot of sympathy for Willy.

Posted by: alex on May 16, 2008 at 2:11 PM | PERMALINK

What do you expect, it's not like the Bush clan has a long standing friendship with the royals, with lots of connections and obligations between them...

Hey, wait a minute....

Posted by: Boronx on May 16, 2008 at 2:12 PM | PERMALINK

Mexican oil production is in decline as well. In Canada, we're squeezing oil out of tar sands. That shows you how desperate we all are. It's like the junkie trying to scrape up a few specs of coke that fell on the floor and are down in the shag carpet somewhere.

Posted by: Speed on May 16, 2008 at 2:14 PM | PERMALINK

alex: Not at all - I had a lot of sympathy for Willy.

Excellent point.

Posted by: thersites on May 16, 2008 at 2:14 PM | PERMALINK

optical weenie: You know we get more of our oil from Canada and Mexico than from SA. So how come we ain't suckin' up to our neighbors? Oooops sorry about that anti-Nafta stuff, wink, wink.

What's there to suck up to - they won't sell it to us any cheaper than the world price, any more than our domestic producers will.

As for NAFTA, there is a provision whereby Canada is obligated to sell us X% of their oil and gas production, where X is the max percentage that they've ever sold to us. Our northern neighbors are quick to remind us of that any time we complain about NAFTA. Of course, it's still world price.

Posted by: alex on May 16, 2008 at 2:17 PM | PERMALINK

Tell me again why Toyota stopped producing its electric car? Maybe its time to bring it back, along with a plug-in hybrid Prius.

Is it possible the Saudi's don't have as much oil as they have led the world to believe?

Posted by: leslie on May 16, 2008 at 2:17 PM | PERMALINK

We get more from Venezuela than KSA, and, I think, than Mexico, for that matter.

And .. no shit, horsing around… the first of my Friday scatbloggings has a real life animal. including

Posted by: SocraticGadfly on May 16, 2008 at 2:19 PM | PERMALINK

Alex: We get more from Venezuela than KSA and, I believe, than Mexico.

Leslie: Plug-in Prius may be here in 2010. But, Toyota says ppl may not want to pay the higher sticker price.

And, Gen 3 of the “regular” Prius will be here in January.

Posted by: SocraticGadfly on May 16, 2008 at 2:22 PM | PERMALINK

cazart: 100% American-made Biodiesel - $5.60/gallon

Problem: there isn't enough crop land in the US to feed our fuel habit, whether ethanol or biodiesel.

Short term the only biofuel crop that makes sense is sugar cane, so why does this "free trading" country maintain a $0.51/gal tariff on it?

Longer term the only biofuel that makes sense is algae. Still needs work to scale it up, but you could feed our fuel habit with about 15,000 sq. mi. of land (about 0.5% of our country's size) and none of it needs to be farmland.

Posted by: alex on May 16, 2008 at 2:26 PM | PERMALINK

Remember Bush's policy from the 2000 campaign ?
(When oil was $40 a barrel)

''I would work with our friends in OPEC to convince them to open up the spigot, to increase the supply,'' Mr. Bush, the presumptive Republican candidate for president, told reporters here today. ''Use the capital that my administration will earn, with the Kuwaitis or the Saudis, and convince them to open up the spigot.''

http://query.nytimes.com/gst/fullpage.html?res=9A03E4D71030F93BA15755C0A9669C8B63

How's that working out for you Dubya ?

I guess things work a little different in the real world...

Posted by: Stephen on May 16, 2008 at 2:27 PM | PERMALINK

"Bush knew what the answer would be, Riyadh knew what the answer would be. But they had to put on a show for the rubes."

Thersites, as usual, says it all.

P.S. Is it possible people STILL do not understand the concept of peak oil? HuminahuminaHummer
http://www.theoildrum.com/

Posted by: Everyman on May 16, 2008 at 2:27 PM | PERMALINK

Stephen: How's that working out for you Dubya?

Money talks; bullshit walks. You can quote me on that if you like :).

Posted by: alex on May 16, 2008 at 2:30 PM | PERMALINK

The Saudis mocked the President of the US today. Then they buggered him.

Posted by: Brojo on May 16, 2008 at 2:36 PM | PERMALINK

See?, look, talking is not appeasement.

Posted by: Jet on May 16, 2008 at 2:43 PM | PERMALINK

A serious question: What is the upside for Bush to go to the Saudis, hat in hand, and get turned down? I mean, the normal diplomatic process would be not to ask unless they already knew the answer was 'yes'. Or, if he really was going to make a personal appeal, to not publicize it unless it was successful. So why are they handling it like this?

Posted by: MarkedMan on May 16, 2008 at 2:45 PM | PERMALINK

The do it because it's good for them - as the price goes up and gets more volatile, the optionality of leaving oil in the ground gains value. I hope they also want to do it to screw the helpless floundering shit-for-brains lame duck, and ruin his party.

Posted by: what a mighty joy on May 16, 2008 at 2:47 PM | PERMALINK

They do it because, it's good for them - as oil's price rises and gets more volatile, the optionality of leaving it in the ground gains value. I hope they also want to do it to screw the helpless shit-for-brains lame duck and annihilate his party.

Posted by: mighty joy on May 16, 2008 at 2:51 PM | PERMALINK

News flash: KSA will raise oil output — 300,000 bbl/day — a relative drop in the bucket. That’s less than one-half of 1 pct of world daily production.

Posted by: on May 16, 2008 at 2:52 PM | PERMALINK

Per my "anon" post just above and Thersites, Bush groveled enough to have his show for the rubes pay off at pennies on the dollar.

Posted by: SocraticGadfly on May 16, 2008 at 2:54 PM | PERMALINK

Kevin said:
At this point, the only really interesting question is whether they're throttling their supply because they want to or because they have to.

I'd say its still probably because they want, otherwise it would be easy enough for Bush to just say "our Saudi allies are producing at current capacity" and avoid the appearance of being told to piss off. I think the difference now, as opposed to the days when the saudis were willing to up production under US pressure, is that the global demand is so great and demand growth sustained by developing nations that they don't need to worry about pissing the US off anymore. Someone's going to buy their oil at these much higher prices, so why should they increase production and deplete their reserve more quickly to give us a discount.

Posted by: kahner on May 16, 2008 at 2:57 PM | PERMALINK

Dunno MarkedMan, I'm going to speculate that they made a deal and will increase production right before the elections.

Yet Saudi is only what 17% of our oil? So why isnt he asking Mexico, or Canada even, to increase production?

And even if they did increase production the US doesnt have the refineries to handle the extra production.

Posted by: Jet on May 16, 2008 at 2:58 PM | PERMALINK

Alex: Sorghum is now being touted as the latest “miracle grain” for fuel and food both.

Posted by: SocraticGadfly on May 16, 2008 at 3:25 PM | PERMALINK

Jet: Mexico's going to be a net importer by 2015. Ain't no more oil coming from them.

Posted by: SocraticGadfly on May 16, 2008 at 3:27 PM | PERMALINK

Aren't the Saudis aware of the Peak Oil problem? Maybe they don't want it all burned up in the near future - some of them might be more responsible (to their own people) than our politicians have been to our posterity.

Posted by: Neil B. on May 16, 2008 at 3:28 PM | PERMALINK

"Longer term the only biofuel that makes sense is algae. Still needs work to scale it up, but you could feed our fuel habit with about 15,000 sq. mi. of land (about 0.5% of our country's size) and none of it needs to be farmland."

Hells-to-the-yes, Alex. Great post.

I am, unfortunately, running Cargill B100 right now, but a company here in SF is making big progress with the algae method. Apparently the Secretary of the Navy drove up to the Pentagon in a algaediesel powered Hummer a couple weeks ago?

Posted by: cazart on May 16, 2008 at 3:34 PM | PERMALINK

algae. ... about 15,000 sq. mi. of land

I'm not trying to be deliberately obtuse here, but wouldn't that need a lot of water, too? Or am I showing my ignorance? (Wouldn't be the first time.)

Posted by: thersites on May 16, 2008 at 3:39 PM | PERMALINK

optical weenie: It would have been more expedient to have gone straight for the blow job.


fyi..

jawboning is gop talk for a b-j....

Posted by: mr. irony on May 16, 2008 at 3:41 PM | PERMALINK

Thersites might have something there - I think you do need some water to grow algae.

Posted by: optical weenie on May 16, 2008 at 3:46 PM | PERMALINK

Doesn't have to be *good* water, though -- there are plenty of salt water algae, thought I don't know if any of the current crop of biofuel algae research uses them.

Posted by: tavella on May 16, 2008 at 3:59 PM | PERMALINK

And a quick google says that yes, there are saltwater biodiesel farm projects.

Posted by: tavella on May 16, 2008 at 4:02 PM | PERMALINK

thersites: wouldn't that [algae] need a lot of water

Several possibilities:

1. Salt water.

2. Gray water, meaning waste water from ag runoff, household washing, output of sewage treatment plants, etc.

3. Closed PBR's. Oh boy, yet another TLA! (it means photo-bio reactor). Basically closed tanks or bags or something instead of open ponds. They also yield higher growth rates due to more controlled conditions, but there's a lot of debate over whether you can recover the capital costs (I'd like 10,000 acres of fish tanks please).

Algae is far from a slam dunk, as nobody has yet scaled it to large scale economical production. Nevertheless there are at least a dozen companies working on it, and it was demonstrated on a small scale by the NREL's Aquatic Species Program (shut down in 1996, in order to save a nickel, but going to restart).

Posted by: alex on May 16, 2008 at 4:05 PM | PERMALINK

Call me dense, but I really don't understand why Bush did this.

He must get something out of this exercise, but what?

Posted by: Tilli (Mojave Desert) on May 16, 2008 at 4:05 PM | PERMALINK

MMM, bj....

Posted by: PreznitBush on May 16, 2008 at 4:08 PM | PERMALINK
Yet Saudi is only what 17% of our oil? So why isnt he asking Mexico, or Canada even, to increase production?

Because the perentage of our oil doesn't matter at all. What matters is influence on global prices, and amenability to requests from the current US President. Saudi Arabia certainl has more of the former than Canada or Mexico (or Venezuela). And, given the close relations between the Bush family and the Saudi royals, one might reasonably expect far more of the latter, as well, though that hasn't been demonstrated here, perhaps because, despite their claims, they don't actually have the excess capacity.

Posted by: cmdicely on May 16, 2008 at 4:16 PM | PERMALINK

jawboning is gop talk for a b-j....

One more reason to be a Democrat.

Posted by: thersites on May 16, 2008 at 4:33 PM | PERMALINK

A couple of zillionaires whose personal family fortunes depend on oil revenues were REALLY sittin' around talking about CUTTING oil prices?

Why the hell should either one of them even think about doing that?

Posted by: wobbly on May 16, 2008 at 4:34 PM | PERMALINK

CM, exactly. I think the modest 300K bbl increase just announced may be worse than none at all. A lot of people may be like me and wondering, “Is that it?”

Posted by: SocraticGadfly on May 16, 2008 at 4:35 PM | PERMALINK

Dubya has now officially morphed into Willy Loman.

I was thinking more along the lines of Alfred E. Neuman.

Posted by: Pug on May 16, 2008 at 4:42 PM | PERMALINK

There's a lot of people that believe we are in a speculative bubble with regard to oil and general commodity prices. Commodities are being traded as an inflation hedge.

There are plenty of oil-extraction ventures that make sense at $120 a barrel that don't make sense at $50. None of those are starting up yet. Because that investment is very vulnerable to the Saudis just turning up the spigot, assuming that they can do that.

I expect the Saudis don't want to say that they are at full capacity, even if they are. Because they lose this threat, and eventually their position of leverage.

If they are at full capacity, they are staring at the abyss. That's assuming they have the guts to not look away.

Posted by: Doctor Jay on May 16, 2008 at 4:45 PM | PERMALINK

Somewhat near topic, is it just me that finds Americans complaining vehemently about high gas prices while driving around in giant (and unnecessary -- see Europe) gas guzzling behemoths to be rather, well, ridiculous? Long before these prices shot up, I had been thinking that the only way Americans will start demanding gas efficient cars was for something like this to happen -- since apparently mandating this via legislation was not happening.

45% of oil is used for gasoline in this country, but does anyone know how much of that is used by consumers as opposed to the military or for the trucking industry?

Posted by: e henry thripshaw on May 16, 2008 at 4:54 PM | PERMALINK

"If I were any kind of patriot, I suppose I'd be embarrassed, even angry... Thing is, I can't stop laughing."

Considering what Bush & Co. have done with the Constitution and everything else they've gotten their shit-smeared paws on, laughing at him is deeply patriotic.

Posted by: on May 16, 2008 at 5:29 PM | PERMALINK

I thought this interesting from the NYT article:

Among the steps: Saudi Arabia will join 70 partner nations of a global initiative to fight nuclear terrorism, and will join more than 85 countries participating in an initiative intended to reduce the proliferation of weapons of mass destruction.

In exchange, the White House said, the United States will help the Saudis develop civilian nuclear power, as well as new infrastructure to safeguard its energy supplies.

Interesting that we gave Iran so much shit about not needing nuclear power plants because they've got so much oil (what do they need those for?)

Posted by: Doc at the Radar Station on May 16, 2008 at 5:39 PM | PERMALINK

Yes, I also thought that nuclear cooperation part was a bit... odd. According to the State Department release:

The United States will assist the Kingdom of Saudi Arabia to develop civilian nuclear energy for use in medicine, industry, and power generation and will help in development of both the human and infrastructure resources in accordance with evolving International Atomic Energy Agency guidance and standards. Saudi Arabia has stated its intent to rely on international markets for nuclear fuel and to not pursue sensitive nuclear technologies, which stands in direct contrast to the actions of Iran.

Posted by: has407 on May 16, 2008 at 5:53 PM | PERMALINK

Doctor Jay: There's a lot of people that believe we are in a speculative bubble with regard to oil and general commodity prices.

Yes, increasing oil prices are right in line with other commodity price increases, and there is a correlation with interest rates; see here.

Oil stocks are not suffering, production is consistent with demand, and OPEC is predicting a slight decline in demand in 2008. Given those factors, the Saudis would likely gain little from increasing output, and potentially cause a crash in oil prices.

Posted by: has407 on May 16, 2008 at 5:59 PM | PERMALINK

I have to admit, after 7 and a half years I'm STILL impressed with Bush's negotiating skills, the man has truly made it an art form.

Posted by: tom.a on May 16, 2008 at 6:26 PM | PERMALINK

For many years, Saudi Arabia kept production high at the request of the U.S. and helping to sustain the U.S. economy. Who actually believes that the U.S. will show any gratitude to Saudi Arabia rather than telling Saudi Arabia to "piss off" when they cease to have any oil ?

The Saudis also have increased production in the past when poorer countries were having shortages (wars, collapse of Soviet Union, etc.), which is something for which they have received little acknowledgment.

Posted by: H-Bob on May 16, 2008 at 6:42 PM | PERMALINK

When the Saudi oil is gone, even Cheney will not piss on the Saudis.

Posted by: Brojo on May 16, 2008 at 7:25 PM | PERMALINK

The Saudis are in an interesting situation at the moment. The Saudis are in a situation very different than many of the other OPEC countries, e.g. Kuwait or Libya or even Venezuela. That is, SA has reserves that will last longer than just about anyone else's. In addition, they have a relatively small population, unlike Venezuela for example. So there's not a pressing need to pump just to meet current government expenditures.

With that background, OPEC has had serious issues off-and-on over the years when the Saudis' best interest and those of other members have diverged. Venezuela or Kuwait may be best off with the very highest price the market will bear. For the Saudis, the case is much less clear. What alternative energy technologies are available or will become cost effective or may emerge in the future as/if oil stays at $100 or $125 or $150 or ...? For Venezuela or Kuwait, it's not a tremendously big deal. For the Saudis, it's critical. Take an extreme case. If solar were cost effective at $100, in the near future we could all be driving electric vehicles and the demand for oil could shrink dramatically. Maybe $100 isn't the value; maybe it's $150 or $200 or ... However, the Saudis very carefully evaluate this type of question. Thus, the Saudis now may actually prefer a slightly lower price, looking at maximizing the present value of their future income stream. The small increase may well signal that they "feel our pain." At the same time, the Saudis also are well aware of the current U.S. political solution, know Bush is extremely unpopular, and are unlikely to accommodate in any major way unless there's something major in it for them.

Posted by: Rich on May 16, 2008 at 8:46 PM | PERMALINK

The following is a letter to the editor that I sent my local newspaper recently:


In 1999, when Bill Clinton was president, conservatives warned us that Bill Clinton's sex life was a danger to our children's morals and the UN was coming to take our guns in black helicopters. The stock market was booming, gas was $1.10 per gallon and we removed a dictator from power without losing a single soldier. Then, two oilmen from Texas lose an election but move into the White House under shady circumstances, the economy goes into a tailspin, we are stuck in two bloody wars with no end in sight and gasoline is nearly $4.00 a gallon.

Do you think people might get suspicious if Colonel Sanders was appointed President by the Supreme Court and a bucket of chicken suddenly cost $100?

Posted by: The Conservative Deflator on May 16, 2008 at 8:59 PM | PERMALINK

The increase is only a token 300,000 barrels per day, so it's not clear what's really going on here.

I think I know what's going on here. They want us to smash the shit out of Iran to nip the Shia menace in the bud and we really DON'T want to-despite all of our promises and saber rattling to the contrary over the last several years. We went for the "Sunni Awakening", but stopped short. It is bait and blackmail for us to finish up what we promised. We are the Saudi's proxy army and we're balking on the follow through and they are pissed off.

Maybe David Ignatius was right last week:
http://www.washingtonpost.com/wp-dyn/content/article/2008/05/07/AR2008050703189.html
The risk of a U.S.-Iranian confrontation is growing in part because Saudi Arabia and other U.S. allies in the Middle East are so eager for it. "Behind closed doors, we are praying that the Iranians will make a mistake so that you will have a reason to attack," one Saudi told me this week.

Posted by: Doc at the Radar Station on May 17, 2008 at 1:35 AM | PERMALINK
We get more from Venezuela than KSA, and, I think, than Mexico, for that matter.
No. No. No. From the DOE: Crude Oil and Total Petroleum Imports, Top 15 Countries. The top table is crude, and the bottom table includes crude, natural gas and refined petroleum. This is the first year in a long time that Mexico ships us less oil than KSA. The decline in production at Cantarell has finally taken MX out of the #2 spot.

Even with all the looting, kidnapping and oil field burning in Nigeria, they still ship us more oil than Venezuela.

Posted by: Tangurena on May 17, 2008 at 1:35 AM | PERMALINK

I for one think our interstate system would make for lovely bicycle boulevards.

Posted by: Christopher on May 17, 2008 at 1:38 AM | PERMALINK

I can't believe that trip was for anything but show. High gas prices just mean big bucks for Bush's oil buddies, foreign and domestic.

Posted by: secularhuman on May 17, 2008 at 2:04 AM | PERMALINK

I think the comment by "SPEED" is the best description yet!!! GOOD ONE!!!

Posted by: David on May 17, 2008 at 8:43 AM | PERMALINK

Has George McGovern lost his mind? The Junior Senator Obama from Illinois is an Elitist Marxist and pure 100% Racist, all you have to do is read the first book he ever wrote “Dreams from my Father” 1995–2004 Three Rivers’ Press, New York, New York.

His continued references to the “White man,” in the book listed as “Haole,” defined in the Hawaiian Dictionary under: White man: Haole, ʻilipuakea; hauhole (slang). To act like a White man, to ape White people or assume superior airs, hoʻohaole. Sayings about White men: haole kī kōlea ʻelelū kea, White cockroach (insulting); (He) references the “White man,” over and over in his personal pride in paperback – “We get it already,” your Black!!!

The idiot wrote that book while its common knowledge among Pacific islanders that Hawaii’s not on any list of favorite destinations, especially from his pompous, stuffy wife who someone should “Please ask to shut-up or go to the back of the “Obama08 Bus,” and read her husbands Racist book while on the campaign trail, –give her something more to embarrass Americans with. Hearing her husband rant on about debating President Bush and Senator McCain is so absurd it’s almost amusing standing on his soap box acting tough, … he’s a slimy weasel, liar, and if the Anti-Christ is among us, all eyes are on the tall lanky guy with a hidden secret; “a paperback book,” written years ago that seems to share the very words and impressions of America his (So-called), prior Reverend (The good ole’ Mr. Wright speaks of.) “There Two of a kind,” fooling only the fool’s who believe his lapel pin resurfacing is Patriotic, sorry Uncle Sam will tell you outright it’s a ploy; he’s still just a Junior Senator whose wife is sinking the MS Obama08 with her ignorant remarks and tasteless personal outbursts, “please SOMEONE please, tell her sit-down, be seen - just not heard,” or as Michele would simply blurt-out “for Heavens sake - shut-up woman!!!” Mrs. Obama is an embarrassment to all those who sat in the front row of those very ‘elite schools she attended with her finger up your nose, apparently.

Hillary save us from this cartoon-of-a-couple, please bounce him out of the race and move this election forward. At this point with headlines such as “Obama Has the Upper Hand. But McCain Can Still Take Him,” well that’s almost correct, off his soap box Tweedy bird would score a KO !!!

Get the fool out of the race so America can and will get on with the seriousness of this new presidential election, without the absurdity of the Obama’s, “June and Ward Cleaver they are not,” … by far.

Posted by: Pineapple1 on May 17, 2008 at 9:40 AM | PERMALINK

"Has George McGovern lost his mind?"

No, but it's pretty clear that you have.

"The Junior Senator Obama from Illinois is an Elitist Marxist and pure 100% Racist"

Q.E.D. Oh, well, it was a hilarious rant, so not a total loss.

Posted by: PaulB on May 17, 2008 at 11:34 AM | PERMALINK

"Because the perentage of our oil doesn't matter at all."

Not to mention that it is widely believed that Saudi Arabia is the only country with sufficient excess capacity to make a difference. Canada and Mexico aren't increasing flow because they likely cannot, not because they are waiting for us to ask them.

Posted by: PaulB on May 17, 2008 at 11:38 AM | PERMALINK

At this point, the only really interesting question is whether they're throttling their supply because they want to or because they have to. As time goes on and prices keep going up, I'm inclining more and more toward the latter.

Why should the Saudis increase oil production for the U.S. when the U.S. prohibits development of some of its own oil reserves? I am not saying that it is wrong to prohibit development of our oil reserves, but high fuel prices in the U.S. are basically a self-inflicted result.

Posted by: on May 17, 2008 at 11:57 AM | PERMALINK

optical weenie: You know we get more of our oil from Canada and Mexico than from SA. So how come we ain't suckin' up to our neighbors? Oooops sorry about that anti-Nafta stuff, wink, wink.

It's even worse. A provision in the energy security act of 2007 inhibits expanded imports from the Alberta tar sands; new Canadian taxes also inhibit expanded production from the tar sands. There are government-inspired restrictions on output in almost every country that has oil (in Nigeria, Russia and Venezuela the reduced output is largely an unanticipated consequence of government policy, but a consequence nevertheless.)

Posted by: spider on May 17, 2008 at 12:03 PM | PERMALINK

*

Posted by: mhr on May 17, 2008 at 12:37 PM | PERMALINK

spider: "A provision in the energy security act of 2007 inhibits expanded imports from the Alberta tar sands; new Canadian taxes also inhibit expanded production from the tar sands."

That's good on both counts, because extracting oil from so-called "tar sands" is a hideous environmental disaster, causing massive local and global pollution and wasting vast quantities of natural gas and water.

We need to phase out ALL fossil fuel use, not only "Middle Eastern Oil". And the costly and destructive extraction of low-grade oil from tar sands is right up there with "mountaintop removal" extraction of coal as among the worst practices that need to be phased out first.

If we are going down the tar sands road, pursing ever more costly and toxic sources of fossil fuels while the cheap, easily extractable reserves of high-quality oil, coal and gas are depleted, until the last drop of oil, the last crumb of coal and the last whiff of gas have been burned, then (1) civilization will be destroyed by the consequent global warming and global ecological meltdown, and (2) civilization will collapse when fossil fuels become too scarce to support it and we have failed to build a post-fossil fuel renewable energy infrastructure to take their place, and (3) civilization will probably incinerate itself with nuclear war as nations fight each other over dwindling supplies of fossil fuels, fresh water and arable land.


Posted by: SecularAnimist on May 17, 2008 at 12:45 PM | PERMALINK

The $150/bbl. oil price is only the chest pains. No one died from the chest pains. Climate is the infarction.

And mhr is offering a broad range of pain-killers, when it's malpractice to not be threading a stent.

Posted by: Davis X. Machina on May 17, 2008 at 1:33 PM | PERMALINK

The point is, why are they refusing to indulge Georgie? Is this about the Palestinians?

Posted by: Lee on May 17, 2008 at 2:12 PM | PERMALINK

Lee

Because they cannot. The fields are mature, and increasing production would simply damage their long term recovery of oil, by weakening pressure.

Posted by: Valuethinker on May 17, 2008 at 5:11 PM | PERMALINK

Secular Animist: We need to phase out ALL fossil fuel use, not only "Middle Eastern Oil". And the costly and destructive extraction of low-grade oil from tar sands is right up there with "mountaintop removal" extraction of coal as among the worst practices that need to be phased out first.

when I wrote "even worse" in the prior post, I meant "more extreme", since I don't believe that the policies are necessarily bad. I am in favor of phasing out fossil fuel use, and current high prices of oil will at least help phase out oil use. I believe that CO2 sequestration technology will eventually (under 5 years' time) be mature enough and deployable enough to support coal use during the transition to an economy free of fossil fuel.

High fuel prices result in part from popular government policies now in place, and our government and our governed (who elect the government) act as though it isn't so.

Posted by: spider on May 17, 2008 at 5:59 PM | PERMALINK

I for one think our interstate system would make for lovely bicycle boulevards.
Posted by: Christopher

And those concrete dividers and grassy dividers would make great right of ways for monorails and light rail commuter lines. No one will be inconvenienced by the construction when gas hits $5 a gallon. They'll be somewhere other than in their cars anyway.

Posted by: slanted tom on May 17, 2008 at 6:12 PM | PERMALINK

with all of these 'educational' comments one would think we are all a bunch of fat moronic assholes who
do not even realize that age old newtonian addage :
'you can't get something from nothing' .
idiots.

Posted by: george on May 17, 2008 at 7:40 PM | PERMALINK

'you can't get something from nothing' -George


Considering the universe is mostly nothing, I'd say your wrong. Without nothing you cant have something.

Posted by: Jet on May 17, 2008 at 7:56 PM | PERMALINK

It's either all a ruse, to try to force Americans to allow drilling in ANWR (remember how close the Bush clan actually is to the Saudis) or it's pay back for Iraq.

Posted by: Hmmm on May 18, 2008 at 1:36 AM | PERMALINK

Why don't we talk about the "Bush Premium" on oil?

I'd say it's about 100 dollars/barrel, since oil was $28/barrel in 2001 when he took office, and it will be close to $150 (?) by 2009 when we have another president.

Great legacy, George.

Posted by: Tom Nicholson on May 18, 2008 at 9:19 AM | PERMALINK

slanted Tom

In the UK, gasoline is now over $10 per imperial gallon. So in Yank terms, £1.20/litre X 3.8l/ US gal = c. $9.00

And yet traffic, caused by private passenger vehicles, and traffic congestion, is our worst problem. We have some of the worst traffic congestion in western Europe (and yes, we have big box stores, car suburbs, and outside of London, commuting by public transport is well less than 1/5th of the population: 90% of all journeys are by private car).

High gasoline prices have hardly strangled the British driver.

As Matt Simmons points out, at a US gas station, petrol is the cheapest fluid you can buy: bottled water and soda pop both cost more per gallon.

Rumours of the death of the private passenger car due to high oil prices are much exaggerated.

Posted by: Valuethinker on May 18, 2008 at 9:45 AM | PERMALINK

Why did our President embarrass our country by begging Saudi Arabia for more oil and not oil-rich Mexico, our next-door neighbor? There is only one logical explanation. Mexico demands unlimited migration to our country for oil. The severe financial crisis of the wave of cheap labor from Mexico, displacing our hard-working workers, is due to oil. What we must do is to get as much oil and other energy from America, and fight all opposition and criticism. We must drill in Alaska and offshore. We must build refineries, over local opposition. We must build wind power everywhere there is wind, and fight all locals who oppose.

Posted by: Sanford Aranoff on May 18, 2008 at 10:21 AM | PERMALINK

Why did our President embarrass our country by begging Saudi Arabia for more oil and not oil-rich Mexico, our next-door neighbor? There is only one logical explanation. Mexico demands unlimited migration to our country for oil. The severe financial crisis of the wave of cheap labor from Mexico, displacing our hard-working workers, is due to oil. What we must do is to get as much oil and other energy from America, and fight all opposition and criticism. We must drill in Alaska and offshore. We must build refineries, over local opposition. We must build wind power everywhere there is wind, and fight all locals who oppose.

Posted by: Sanford Aranoff on May 18, 2008 at 10:21 AM | PERMALINK

Why did our President embarrass our country by begging Saudi Arabia for more oil and not oil-rich Mexico, our next-door neighbor? There is only one logical explanation. Mexico demands unlimited migration to our country for oil. The severe financial crisis of the wave of cheap labor from Mexico, displacing our hard-working workers, is due to oil. What we must do is to get as much oil and other energy from America, and fight all opposition and criticism. We must drill in Alaska and offshore. We must build refineries, over local opposition. We must build wind power everywhere there is wind, and fight all locals who oppose.

Posted by: Sanford Aranoff on May 18, 2008 at 10:21 AM | PERMALINK

Gasoline is not the only product of oil.

The price of gas is one thing, but the tremendously carbon rich molecules of petroleum are the reason we
love it so.

I think our oil crisis would disappear if all creationists (who don't believe in fossils anyway) stopped using any oil-based products.

Think about it. If you don't know how old oil is, why should you be allowed to use it.

6,000 years or millions. Which is it?

Posted by: Tom Nicholson on May 18, 2008 at 11:24 AM | PERMALINK
"The U.S. imported $36 billion worth of crude oil last month. If oil exporters then used this money to buy our wheat, they would have enough money to buy the entire U.S. crop," said Peter Kordell, president at Slipka Financial Partners, a commodity futures brokerage in Minneapolis.' http://www.reuters.com/article/newsOne/ idUSN2539504620080402?sp=true

Got bread?

Posted by: MsNThrope on May 18, 2008 at 12:32 PM | PERMALINK

The Saudis previously said that the Khursaniyah field would be coming on line starting in April, with phase 1 production slated to reach 300,000 barrels per day shortly after. I would not be surprised to find that the new production from Khursaniyah is the source of the amount the Saudis mentioned to Bush.

Posted by: Paul E. Tickle on May 18, 2008 at 3:46 PM | PERMALINK

Yeh, we're entitled to Saudi overproduction to feed the SUV pigs.

Posted by: Luther on May 19, 2008 at 2:08 AM | PERMALINK

I know why they have done the small increase in production. Someone out there has been reading all the blogs and the comments about telling OPEC to kiss our @$$es.
lol

Posted by: jc on May 19, 2008 at 3:06 PM | PERMALINK

Somethinge else. It's funny to think Bush would go anywhere, do anything to lower the price of oil and thus, the profits of his backers.

He's there to talk war plans.

Posted by: Zane Safrit on May 19, 2008 at 4:28 PM | PERMALINK

Very nice site! cheap viagra

Posted by: John1286 on March 28, 2009 at 7:43 PM | PERMALINK




 

 

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