California’s oil crisis wafts away – maybe we can thank the Saudis
By Franz Schurmann
Pacific News Service
For several months now Californians have been worried about rolling electrical blackouts and soaring energy bills. Then, suddenly natural gas prices tumbled and it turns out the “crisis” was only a very short nightmare.
One clue is the news from the markets on June 5– “crude and heating oil futures rise on jitters about Iraq's suspension of petroleum exports while gasoline futures retreat to three month lows and natural gas falls.”
But the key answer is found in the financial section of the Saudi newspaper As-Sharq al-Ausat (ASAA) of June 3, in a story headlined “Saudis are prepared to cover all shortages in world markets after Iraq halted oil exports.”
This was apparently the first report of a Saudi commitment to assure adequate supplies to all oil markets, a capability they alone have among oil producing nations.
Saudi oil minister Ali ibn-Ibrahim al-Na'eemi made the announcement June 4, on the eve of the formal OPEC meeting in Vienna. So the ASAA must be credited with a scoop.
A fair part of the ASAA piece dealt with the timing of Iraq's action – how Iraq announced on June 2 it would halt all exports the following day, June 3. ASAA cited a Reuters report that all Iraqi oil had stopped flowing through the major Turkish oil port Ceyhan on the Mediterranean coast which usually handles 2.5 million barrels of oil a day, some 85 percent of which is from Iraq.
Did Saddam really cut the oil flow or only said he would? ASAA reported the Saudi oil minister al-Na'eemi as stating that “all members of OPEC” were in full agreement with the Saudis– though the Iraqi announcement was made before the Vienna conference opened.
The piece quoted al-Na'eemi as saying that even Egypt supported the move – on June 3 he was in the Saudi capital Riyadh meeting with Egyptian prime minister Atef Obeid– but Egypt is not a member of OPEC. And when the ASAA reporter asked how many barrels a day the Saudi oil commitment could amount to, al-Na'eemi just kept saying “yes.”
The apparent scenario, then, looks like this: Saddam the rogue threatens to strangle the West by cutting its oil flow. The Saudis, like Bedouin Sir Galahads, swoop in and promise to save Western motorists from an oil shortage like the one that shook them so badly in October 1973.
ASAA explained Saddam's gambit as a way to show he was peeved at the Security Council for renewing the “food for oil” agreement for only 30 days rather than six months.
But that explanation holds no water. Saddam knows the sanctions have been wafting away – not least because Secretary Powell, even before Bush's inauguration, said he wanted to do away with all U.S. or UN sanctions except for those involving weapons of mass destruction.
In fact, halting oil exports would be a silly move and Saddam is not a silly man. He has nothing to gain from such an action. As for the Saudis, they loathe Saddam but are not letting him terrorize them.
What really concerns King Fahd and Prince Abdullah is the U.S. posture in the Middle East. Washington holds the key– either to peace and profits in the world economy or a worsening war and plummeting profits.
The Saudis have always opted for the former. And so the royal family has been close friends of U.S. oil companies for over half a century.
Washington had seen Egypt's president Hosni Mubarak as an uncertain friend despite huge U.S. military aid. However, in recent weeks he has both consolidated his domestic power and moved to the forefront of the Israeli-Palestinian peace process. He is now a major peace process ally for the Bush administration.
Maybe his prime minister Atef Obeid brought some news to Riyadh that convinced the overly cautious Saudi rulers that this time Washington is determined to end the Israeli-Palestinian bloodshed by forcing a decision on both antagonists.
No matter how much we Americans may disapprove of about just everything Saudi, we can't do so for their oil as well. If we did we would have no more SUV's to drive– especially zooming ahead on freeways with only the driver at the wheel and the radio booming. If that's the American paradise then we'll have to thank the Saudis for it.
Franz Schurmann, emeritus professor at UC Berkeley, has written on the politics of oil for over two decades, especially in his book “The Foreign Politics of Richard Nixon.” (Berkeley, 1987)
Playing hardball at East Campus not good
RE: A proposed hardball field at the East Campus site (Derby/MLK/Carlton/Milvia)
I am opposed to this project. The quality of life in this dense area has already been severely compromised.
Again, it is necessary to resume public meetings before unpopular and divisive decisions are made. Positive community development demands quieter, greener areas with gardens to encourage ecological studies, neighborhood participatory activities and perhaps, at the most, soccer or softball spaces. The street must not be closed. The old “temporary buildings” should be razed ASAP as they pose a danger to the health and safety in the area and are a visual blight.
I am a longtime resident of Berkeley and my children did go through the Berkeley schools. With many of my neighbors I will continue to oppose this project.
Jean Rowe Leiber R.N., N.P.
Take a hint from the wheelchairs
Something good may come out of the spiraling cost of energy, regarding personal vehicles [am I seeing things or are there fewer SUV’s recently in Berkeley?]: smaller cars, more efficient cars, lighter cars, more thoughtful cars, reduced use of cars.
In the 60’s, I advocated legislating smaller cars; my professor in urban planning irritable dismissed my idea as unworkable. [Grandmother gave me a VW so I could work while in college; “... all my friends had Porches ...”]
By the eighties, a compact parking space was mandated for every few normal sized spaces for planning new projects, by counties and towns everywhere.
But car-makers now make more on show-off, muscle, look-at-me, get-out-of-my-way vehicles; and now Detroit and fuel producers with handsome profits first in mind tell the public guzzling is good, if not god.
Sixty percent of auto trips, according to a 70’s statistic that sticks in my mind, may be recreational, or at any rate, nonessential; folks do love to watch the landscape streaming past, etc.
After seeing my friends who use motorized wheelchairs zip all around the area, it occurs to me most local trips could easily be made with personal vehicles little, if any, larger than those ingenious devices. Increasing their reliability, weather-protection, affordability and range would make them more attractive to the non-disabled; expanding the BART network would make mini-personal electric vehicles able to reach a huge proportion of the Bay Area.
Terry Cochrell, Architect