A British Columbia aboriginal leader told the parliamentary committee studying Bill C-51 that the legislation was designed mainly to disrupt opposition to expansion of Alberta’s oilsands industry.
The Swedish government this week decided to scrap an arms deal with Saudi Arabia, effectively bringing to an end a decade-old defense agreement with the kingdom. The move followed complaints made by the Swedish Foreign Minister Margot Wallstrom that she was blocked by the Saudis from speaking about democracy and women’s rights at a gathering of the Arab League in Cairo.
Clobbered by falling oil prices, Iraq is headed over a fiscal cliff, unable to make critical investments needed to keep its oil flowing and still pay the skyrocketing costs of fighting Islamic State extremists, according to government officials. Without a recovery in oil revenues, some fear the country is again sliding toward a breakup.
A Syrian businessman facing European Union sanctions denied on Tuesday allegations that he bought oil from the Islamic State group for President Bashar Assad’s government.
The National Oil Corporation blamed authorities in the Libyan-capital of Tripoli, set up by Islamist-backed militias, for failing to protect the oil fields.
“What can you expect from a movie that’s produced by a group whose advisers include a former CIA director, a onetime Shell Oil Co. president and a man who once headed the Rockefeller Foundation? If you answered, ‘a spirited defense of America’s oil industry,’ guess again.”
The Washington Post has an interesting story about the impact of lower gas prices — meaning the overall price drop since June, taking into account the recent uptick — on consumers in Saudi Arabia. While the government might one day have to make a decision about lowering oil output, thus letting prices climb again, regular citizens aren’t noticing much difference. That’s because Saudis pay about 45 cents a gallon to fill up their vehicles, thanks to government subsidies.
In Saudi Arabia, the general response to the drop in global oil prices by half — from more than $100 a barrel six months ago to around $50 now — is a shrug. Remember all those $60 fill-ups at U.S. pumps when gas was running close to $4 a gallon over the past few years? While your wallet was getting hammered, Saudi Arabia’s was getting stuffed thick. The kingdom has more than $750 billion in cash reserves, which is more than enough to keep the lights on and stave off panic over oil markets.
Not only is the government not sweating the reduced price of oil, it’s continuing with an ambitious program of public works to benefit citizens.
the government could go seven or eight years without trimming back its plans, simply by using its massive reserves, which are equal to 100 percent of annual gross domestic product, to cover budget deficits. More likely … the government would monitor oil prices closely for about 18 months and rethink strategy if they did not rebound.
Saudi Arabia has prospered over the decades thanks, in part, to protection from the U.S., the world’s most prolific consumer of oil. According to this timeline on PBS’s “Frontline” program:
1940-45: Although Saudi Arabia officially maintained neutrality through most of the war, the U.S. began to court the kingdom as it realized the strategic importance of Saudi oil reserves. In 1943, President Franklin Roosevelt made Saudi Arabia eligible for Lend-Lease assistance by declaring the defense of Saudi Arabia of vital interest to the U.S. In 1945, King Abdel Aziz and President Roosevelt cemented the tacit oil-for-security relationship when they met aboard the USS Quincy in the Suez Canal.
The Atlantic’s Matt Schiavenza has some pointed commentary on the longtime U.S.-Saudi alliance, arguing that the United States needs the Middle East kingdom “more than ever.”
Following the death of King Abdullah last week at age 90, following a lung infection, President Obama cited his “enduring contribution to the search for peace” in the region. Secretary of State John Kerry said he was a “man of wisdom and vision.”
Schiavenza then lists the ways in which Saudi policy undermines the American praise, including the lack of rights of women, and the case of blogger Raif Badawi, who was sentenced to 1,000 lashes and 10 years in prison for defending atheism.
Schiavenza writes:
Contrary to President Obama’s statement, Saudi Arabia’s role in brokering Middle Eastern peace has, at best, been unhelpful. King Abdullah bitterly opposed Washington’s support of pro-democracy protesters in Egypt and urged President Obama to use force to preserve Hosni Mubarak’s dictatorship. Since Abdel Fattah al-Sisi assumed the country’s leadership in 2013, Riyadh has helped finance his brutal suppression of the country’s Muslim Brotherhood. Saudi Arabia has also resisted the rise of Shia movements in the region out of fear that Iran, their main rival, will gain influence. When Shia protesters threatened the Sunni dictatorship in neighboring Bahrain, Saudi Arabia dispatched its military to suppress the uprising. Riyadh’s support of Syrian rebels, too, has backfired: Islamic State fighters have benefited from Saudi money and weapons.
The reason the United States continues to “put up with” Saudi Arabia, the writer contends, is oil. And despite ramped-up production in the U.S. shale-oil fields, the U.S. will continue to need Saudi oil. Currently there’s a glut that might worsen, since Abdullah’s successor, his half-brother Salman bin Abdul Aziz, appears unlikely to reduce oil production to stem the drop in price. Right now the U.S. produces about 9 million barrels of oil a day, comparable with Saudi output.
But the kingdom, which is the leading oil-producer in OPEC (which controls 40 percent of the world’s oil supply), is “well-positioned to survive a sustained drop in the price of oil,” Schiavenza writes, adding:
Riyadh generally needs oil to trade at $80 a barrel in order to balance its budget. But with $750 billion stashed away in reserve, the kingdom faces little pressure to reduce supply and raise the price. In addition, Saudi Arabia and fellow OPEC members Kuwait and the United Arab Emirates have proved reserves of 460 billion barrels. The United States, by contrast, has proved reserves of just 10 billion—and the U.S. Energy Information Agency forecasts that American shale oil production will plateau in 2020.
Fuel Freedom Foundation co-founder and chairman Yossie Hollander was interviewed on Sean Hannity’s radio show on Jan. 13 about oil money and how it funds extremist groups and terrorism. Read more →
R. James Woolsey, the former director of Central Intelligence and a current member of the Fuel Freedom board of advisors, went on the Jacki Daily show recently and had some interesting observations about the global sell-off in the oil market.
He said the price drop has been particularly hard on oil-exporting nations that need a high price to balance their budgets and meet generous public benefits. “Russia really needs oil up around $120 a barrel in order for its society to function,” he said.
He said nations like Russia should diversify their economies so they aren’t as reliant on oil prices for a thriving economy. “Russians don’t make anything. When was the last time you were in a store and you bought something that says ‘Made in Russia’? I guarantee you it doesn’t exist.”
Despite low prices, many experts predict that the global demand for oil will resume its upward trajectory, making fuel diversification essential, Woolsey said.
“Let the alcohol, the methanol producers particularly, and the gasoline producers and the natural gas producers, biodiesel producers … let everybody play.”
Woolsey, who served as CIA director under President Clinton, also is a member of the U.S. Energy Security Council. You can read this story quoting him about the vulnerability of the U.S. power grid in Forbes.
