Saudi's look to increase oil production

Looking at the effects upon global economic conditions and under pressure by the U.S., Saudi Arabia is looking at increasing production of oil.

With oil reaching a record of $140 a barrell and an increased push in the search for alternative energy sources and methods, King Abdullah of Saudi Arabia is rethinking his position taken in May after meeting with President Bush concerning oil production increases.

Set to meet with oil producers and consumers in Jidda later this month, King Abdullah is expected to recommend an increase in production, hoping to stave off potential losses in the face of alternative fuel sources becoming more available.The U.S. has not been alone in pressuring for an increase in oil production, the other seven members of the G-8, France, England, Germany, Japan, Canada, Italy, and Russia, have been suggesting an increase in production as well, hoping to boost their economies.

Rising prices have shaken the world: Gas in the U.S. has reached as high as $4.43 a gallon and India, Indonesia and other Asian nations have cut fuel subsidies, creating anger and panic among drivers.

The kingdom produces about 9.45 million barrels of oil a day. The New York Times reported that the nation was considering raising that by about 500,000 barrels. Some economists believe that such a jump would cater to the West at the expense of Saudi Arabia, which has the world’s largest oil reserves.

Critics, however, object, saying that this jeopardizes Saudi oil reserves for the sake of western consumption. Others object to this line of thinking, saying that an $11 jump every day in oil prices is not in the best interest of oil producers, claiming that if it continues, interest in oil could very quickly be replaced by interest in alternative fuels. Such a situation would, in effect, cause oil producers to price themselves out of business. Some economists have speculated that an increased push for alternative fuels could hurt the economies of oil producing nations, particularly Saudi Arabia, in as soon as 10 to 15 years.

Once and Always, an American Fighting Man

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Bush on Domestic Oil Exploration

With oil continuing to break records for high prices on a daily basis, and the refusal of Saudi King Abdullah to do anything to reduce the price of oil, President George Bush is finally looking homeward for alternatives.

President Bush met with the Saudi king last week, as well as other members of OPEC, in an effort to see what could be done to lower the price of fuel and oil for the United States. When discussing raising production of oil with King Abdullah, he was told, in short, "you want more oil? BUY more oil." The oil producers did finally agree to pump an additional 300,000 barrels a day, but that will barely make a difference in a situation that is reaching crisis proportions economically.

The Saudis’ long standing position is that they are willing to pump more oil — but only if their customers, the refineries, demand it. The oil minister, Mr. Naimi, told reporters in Riyadh on Friday that the government had decided on May 10 to boost production by 300,000 barrels a day in response to requests from customers, mostly in the United States.

“Our response is positive,” Mr. Naimi said, adding, “What we have said is, ‘Let the buyer come and we will satisfy his request. Very simple business: If you want more oil, who’s going to buy the oil?”

In making his case with the oil producers, President Bush pointed out that by continuing to raise the prices of fuel to their "biggest customers," the oil producers themselves were increasing the push by the United States and other countries to develop alternative energy sources, in effect potentially pricing themselves out of business in the future.

It is speculated that the Saudi decision to increase production, though by a small margin, may also be influenced by pressures from Congress, who have threatened to cut arms sales to them if something isn't done on their part.

Having made no real headway with Middle Eastern oil producers, the President is now turning the focus of America's fuel remedy where others have been calling for the country to put the focus for some time now: back to the United States itself.

And Mr. Bush took aim at Democrats in Congress, who have repeatedly blocked his proposals to allow oil exploration in the Arctic National Wildlife Refuge.

“One of the interesting things about American politics these days,” Mr. Bush said, “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.”

With the oil sitting in ANWAR, in the Gulf Coast that is being drilled by China and Cuba in international waters off our shores that we could just as easily be drilling for and pumping as well, and the discovery of oil along the Canadian border, it's little wonder that there are so many calling for the U.S. to begin more drilling domestically and to build new refineries at home, eventually removing ourselves from dependence on foreign oil.

In the meantime, to go along with domestic production of oil, real and viable alternative energy methods could and should be developed, methods that don't interfere with nor cut into food crop production, applying some common sense and sound thinking rather than off the cuff, knee jerk reactions that send the markets into turmoil in other directions than just from the fuel industry.

Once and Always, an American Fighting Man

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