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Right Blames Obama for Bush's Failure to "Jawbone" OPEC

With U.S. gas prices above the $3 level, the conservative echo chamber is in overdrive. While the Heritage Foundation warns "Obama will make you pay more at the pump" and Americans for Limited Government decries "Obama's war on energy," Brent Bozell's Media Research Center simply asks, "How does Obama plan to raise prices?" Of course, as Paul Krugman pointed out this week, stagnant production and accelerating global demand for oil as the world recovers from the 2008 economic meltdown have much more to do with price increases at the pump. That, and oilman turned President George W. Bush's utter failure to "jawbone" his friends in Kuwait and Saudi Arabia into opening the spigots.

On May 7, 2001, Bush press secretary Ari Fleischer was asked "does the President believe we need to correct our lifestyles to address the energy problem?" Fleischer's infamous response made clear energy conservation was off the table for President Bush:

"That's a big no. The President believes that it's an American way of life, and that it should be the goal of policy makers to protect the American way of life."

Instead, George W. Bush promised to get biblical on OPEC.

His pledge to persuade, cajole and other twist arms dated back to his first run for the White House in 1999. As oil prices rose to the then-alarming level of $30 that December, then Governor Bush said President Clinton "must jawbone OPEC members to lower prices." At a New Hampshire Republican debate the next month, Bush claimed the mantle of the Great Persuader. Contending that his days in the West Texas oil fields made him uniquely qualified for the task, Bush proclaimed:

"What I think the president ought to do is he ought to get on the phone with the OPEC cartel and say we expect you to open your spigots...And the president of the United States must jawbone OPEC members to lower the price...

...I used to be in the oil business. I was little oil -- really little oil. And so I understand the -- I understand what can happen in the marketplace."

By June 2000, the Bush jawbone pledge became a standard on the stump. As the New York Times reported, Bush foreshadowed future expenditures of political capital he would fail to accumulate:

"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."

That November, of course, the American people were persuaded. Despite Bush's own personal record of busts and bailouts in the business, his family's close ties to Prince Bandar and the Saudi royal family, Americans must have reasoned, should count for something.

As it turned out, not so much.

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Fearing Peak Oil, Saudi Arabia Seeks To Diversify Their Economy

saudi oil fields_9c00a_0.jpg

Well, sort of:

Concerns over peak oil — that moment when oil demand exceeds global oil supply — has produced little more than a disdainful eye roll from Saudi Arabia. After all, the largest oil producer in the world has far more pressing problems — like peak demand, for example.

In fact, Saudi leaders are so worried that demand for oil could peak in the next decade they’ve done the unexpected — and slightly ironic — by calling for an economy that includes renewable energy. It’s an interesting reversal coming from a country that has poo-pooed investments in renewable energy in the past.

Let’s not forget Saudi Arabia — along with OPEC, the oil cartel it’s a member of — was a major opponent of greenhouse-gas reduction proposals during the climate summit in Copenhagen last year. At the time, OPEC’s chief said oil-producing countries should be compensated for lost revenues if any agreement coming out of Copenhagen leads to cuts in the use of oil. No, really.

Earlier this month, OPEC producers had the gall to ask the world to give them more clarity and certainty about long-term oil demand in order to justify additional investment in new production capacity, according to the Petroleum Economist. As Robert Rapier over at R-Squared notes, that’s simply not the way the world works. The best any business can do is try and estimate where demand will end up and then make decisions from there.

Now, the renewable energy that so worried Saudi Arabia before has suddenly become a worthy investment. The country is starting its first carbon-capture project and is investing in other industries including aluminum and steel in an effort to diversify its heavily crude-focused economy, according to a Bloomberg report. Mohammad al-Sabban, oil minister adviser and the lead negotiator at the climate talks, said the country is working to become the top exporter of energy, including alternative forms such as solar power.

Saudi Arabia is growing annually at about 4.2%, and needs jobs for the influx of foreign workers (estimated at about 7.5 million currently). They are reaching out to the private sector to provide those jobs, both through alternative energy and tourism.

Oh, the irony that Saudi Arabia is recognizing the need for alternative forms of energy more readily than our Republican Party.



Oil Companies Sharing the Pain

While I'm sure this little honeymoon will be short-lived, it certainly is interesting to see the shoe on the other foot:

LONDON -- The International Energy Agency said Thursday world crude-oil demand this year is now expected to officially enter its own recession of sorts, with oil consumption contracting for the first time in 25 years because of the deterioration in global economic activity.

I don't know about you, but it's sure been nice to get in the car and make a non-essential trip without hyperventilating. (Aside from the contribution to global warming, I mean.)