Wednesday, June 11, 2008
Saber rattling the Saudis Won’t Bring Gas Prices Down
Earl Ofari Hutchinson
Predictably, Senate Democrats saber rattle threat to block an arms deal to the Saudis unless it pumps out another million barrels of oil went nowhere. The Saudi rattle is fueled by a mix of anger, frustration, desperation, and most importantly politics. It’s an election year and strapped motorists are screaming at politicians to do something, anything, to give them some gas price relief. But Senate Democrats showpiece gesture was doomed from the start. Even if they meant what they said the Royal Kingdom would simply buy the arms somewhere else. But that’s not necessary anyway. The Kingdom literally has the U. S. over two barrels. The first is the most obvious. About ten percent of the petroleum guzzled daily in the US comes from Saudi Arabia. That’s about fifteen percent of U.S. imports.
It was almost laughable to watch the Saudis throw up their hands in mock resignation when Bush on his two recent visits to the Kingdom asked them to increase production. Short of a U.S. takeover of the Saudi oil fields Bush’s request was simply a political feel good gesture. Bush officials desperately need Saudi oil. In fact, U.S. dependency on Saudi oil is greater now than it was before the 9/11 attacks, and this mocks Bush's claim that the U.S. can and will at least any time soon wean itself off Saudi oil, or dictate to the Saudi's how they should run their government or diplomatic policy.
It’s not just the U.S. that’s in oil hock to the Saudis. Western Europe, China, Japan and India's glutinous appetite for oil continues to grow. The Energy Department estimates that it will take up to 120 million barrels per day by 2025 to satisfy that appetite. Over one-fourth of this added oil will come from the Saudis.
Meanwhile, the U.S. occasionally will talk tough to the Saudis about speeding up democratic reforms, and cracking down on Muslim fundamentalist groups. That's more bluster mostly for media and public consumption.
If anything, Bush’s visits to the Kingdom sent a huge signal that the U.S. will do everything it can to placate the Saudi regime. The reason is simple. The much hoped for new oil sources that could break the U.S. dependency on Saudi oil have not panned out. The rivers of oil the U.S. boasted would flow into the tanks of America's gas-guzzlers after Saddam Hussein was dumped are a pipedream. Post-Saddam Iraq has shown no sign that it can produce the six million barrels projected by 2010. Currently it barely squeezes out two million barrels a day. Nigeria and Russia are mired in corruption and mismanagement, and Venezuela is government non grata to Bush. Libya, even with the softening of relations with the U.S., doesn't have the oil reserves to meet the U.S.'s bloated needs. Its reserves are about one sixth of Saudi Arabia's.
American oil executives have hammered the Bush administration and Congress to scrap environmental and land protections to tap the millions of barrels in oil reserves believed nestled in shale deposits off the coast and in the frozen ground on Alaska's North Slope. Those millions may or may not be there. It will take big improvements in exploration and drilling technology, as well as beating back environmentalists' challenges to determine the real oil potential of the North Slope and the sea.
While the U.S. is the still the world's most rapacious oil user, China and India have come on strong, and are willing to court the Saudi's and pay top dollar for the oil they need to fuel their industrial boom. The Saudi's can and will play both nations off against the U.S. With oil prices smashing new records every day that means billions more in the Saudi coffers.
The second barrel the Saudis have the U.S. over is the always durable and convenient threat of Iran and more Middle East turmoil. The Saudis are still the most dependable and consistent watchdog and Arab counter balance to Iran, and the U.S.’s perennial helpmate to safeguard regional stability. But there’s a Catch 22 in that for the Saudis and the U.S. The Saudi royal family runs the Kingdom as a tight knit, autocracy. It's fair game for both homegrown and foreign Muslim extremists and fundamentalists. A renewed internal insurgency could shake the regime. That could deepen anti-American sentiment in the country, and open the door wide to more terrorist attacks. Even without a Saudi regime shift or change, the anger and hostility toward U.S. policy in Iraq and the U.S.’s rock solid support of Israel, prevent the Saudi government from totally publicly realigning its policies with the U.S. Oil is and always will be the Saudi’s main weapon to keep the U.S. at arms length publicly while embracing it politically to maintain its power, security—and obscene wealth.
The talk by Congress of lawsuits, killing arms deals, and presidential visits and pleadings to the Saudis for oil relief will be just that empty talk; talk that will continue to fall on deaf Saudi ears. The U.S. dependency on Saudi oil will grow even greater, and unfortunately so will gas prices.
Earl Ofari Hutchinson is an author and political analyst. His new book is The Ethnic Presidency: How Race Decides the Race to the White House (Middle Passage Press, February 2008).