Friday, May 16, 2008

Saudis Increase Production, Pelosi Faults Bush

OK, House Speaker Nancy Pelosi didn't fault President Bush for getting Saudi Arabia to increase production.

She actually attacked him for NOT getting his "buddies" to increase production:

“As record oil prices continue to burden American families and businesses, reports indicate that the President’s visit to Saudi Arabia today to push for increased production has failed. Despite considerable influence, the Bush Administration has been ineffective in pressuring Saudi Arabia and, yet again, has failed to effectively use diplomacy to exact short-term relief for American consumers.

Ignore for a moment the absurdity of the 2nd-most-powerful elected official in our country treating a sovereign friendly nation like some frat-house sidekick to be pushed around. And ignore for the moment the longstanding (before Democrats lost all civility) policy of elected officials NOT attacking the President while he is on foreign soil.

There's this little problem -- Saudi Arabia actually DID boost oil output, and is ready to do more if necessary:

RIYADH (Reuters) - The world's top oil exporter Saudi Arabia said on Friday it was ready to pump more oil if needed and has already made a modest output boost.

And rather than rebuffing the President, the Saudi government is sending this additional oil to our country:

Naimi said most of the extra supplies would go to buyers in the United States, the world's largest energy consumer.

And, since Naimi is a bit smarter than Nancy Pelosi when it comes to understanding the world oil markets, he notes the move is mostly symbolic:

But Naimi told Bush and other U.S. officials in a presentation on Friday that an increase in oil output would not lead to a dramatic reduction in U.S. pump prices, a U.S. official said.
OPEC officials blame the high price on factors beyond their control, such as speculation and the weak dollar. Naimi reiterated those views on Friday, blaming oil's rise on international political tension, dollar weakness and the role of investors in the commodities market.

But there's more. She also touted legislation that will do nothing to help us out:

“Next week, the New Direction Congress will send legislation to the President to suspend deliveries to the Strategic Petroleum Reserve, a tool that has in the past reduced prices for consumers.

Suspending deliveries to the SPR has NEVER reduced prices for consumers. What Pelosi is referring to is periods when oil has been SOLD from the SPR, usually in an emergency when supplies were scarce. And don't forget in 2000 when Clinton used the SPR to push energy prices down, in order to try to get Al Gore elected. Simply stopping the purchase of 70,000 barrels of oil in a market that moves over 70 MILLION barrels a day will do nothing to lower costs.

But there's more. On the same day, when the President is out of the country, and Nancy Pelosi is using that opportunity to attack him by urging him to stop the purchase of oil for the SPR, the DOE was announcing that it had already stopped the purchases:

The US Department of Energy will not divert any more crude oil to thenation's Strategic Petroleum Reserve as soon as the current six-month contractis completed in late June, the agency said Friday. DOE "will not sign contracts this year for the receipt and transportation" of 13 million barrels of crude oil to the SPR sites, theagency said in a statement.

BTW, this wasn't some brilliant new idea from the Democrats. Bush halted the SPR purchases in May of 2006 as well, as we find in this May 2006 article, Bush halts SPR Deliveries; Analysts see little Effect:

President Bush's decision to temporarily halt oil deliveries to the nation's Strategic Petroleum Reserve will not dramatically affect motor fuel prices this summer, an oil analyst with the Department of Energy told TRANSPORT TOPICS.

So let's summarize. Pelosi attacks Bush while he's on foreign soil for not getting Saudis to increase production; But they already increased production and offered to do more if needed.

Pelosi then urges Bush to stop filling the SPR, when the DOE has announced they are stopping.

And she claims this will save people money, when economists, the people who know oil like the Saudis, and even analysts and democrats in 2006, all know that small changes like this can't really move the market.

Oh, she also announced something called "NOPEC", where we apparently will call OPEC names and try to punish oil companies for trying to supply us with the gasoline we need, after blaming Bush for not convincing OPEC to be nicer to us.

And they are still looking for that elusive "price gouging". They've looked for years and found nothing, but still they look on.

When Pelosi took the gavel, Gasoline cost about $2.23 a gallon. She promised to lower that price. 16 months later, Gas gosts $3.75. Oil has more than doubled under the Democratic congress.

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