The opinion piece below pushes the proposition that President Bush recently went to Saudi Arabia, hat in hand, to beg the Saudis to increase oil production. The result was a paltry, virtually useless drop in the bucket increase. Over the past five months that trip was the third Presidential or Vice Presidential trip to Saudi Arabia for what appears on the surface to be the same reason.
It could very well be that our leaders as well as the Saudis themselves are involved in a slight of hand operation to take the attention of the public and the media off of the fact that Saudi oil production capacity is past it's peak. In other words, the Saudis are tapped out and cannot increase production by any meaningful measure even if they wanted to in the worst way.
Were that to become general public knowledge there could easily be a worldwide oil panic. It appears leaders are doing all they can to keep our attention off of that slowly emerging truth in order to avoid what would most certainly be an economic calamity.
It is unlikely that the President and Vice President were unable to cut back scratching deals behind the scenes had that been their purpose. It makes more sense to look beyond the obvious to the prospect of mutually beneficial planning in the midst of an increasingly chaotic oil marketplace. It is also worth noting that following his meeting with the Saudis, Bush immediately called for the resumption of a robust domestic drilling program.
Why? Because we are going to need it, and very soon.
Beseeching the Saudis
We don't know who advised President Bush to go on bended knee to Saudi Arabia yesterday, to plead with King Abdullah to ramp up oil supply and ease prices at the American gas pump. But about that adviser, our suggestion to the President is: Fire him – or her.
A cardinal rule of presidential diplomacy is never to ask publicly for favors unless you know in advance they will be granted. The same request by Mr. Bush had already been rebuffed by the Saudis during his visit to Riyadh in January. This time around, the Saudi response was particularly blunt and condescending: "If you want more oil, you need to buy it," said Ali al-Naimi, the Saudi oil minister.
This second presidential humiliation comes even as the Administration is defending its decision to sell the House of Saud billions of dollars in advanced weapons, over the increasingly hectic objections of New York Senator Chuck Schumer. The Administration is also proposing to help the Saudis develop civilian nuclear reactors to provide for their energy needs. That may help the Kingdom export more oil by easing its domestic requirements. But we await the explanation for why the world needs another politically unstable Islamic theocracy in possession of radioactive fuel rods.
It isn't clear how much reserve oil-pumping capacity the Saudis have at their disposal. According to Mr. Naimi, they have already increased supply in recent months by 300,000 barrels a day, to 1.7 million, and much of the remaining crude may be difficult to refine. As it is, rising prices are less a reflection of inadequate supply than they are of the dollar's collapse. For proof, look no further than Europe, where gas prices haven't risen nearly as sharply as they have in the U.S.
We never like to see an American President of either party go begging. But if Mr. Bush really needs to beseech a political authority, he'd be better served turning to Federal Reserve Chairman Ben Bernanke, creator of our current commodity-price spike.
URL for this article:http://online.wsj.com/article/SB121098095970700095.html
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