OPEC Members Demand Output Cut

[DuctapeFatwa]

Those observors looking for a signal, just got one. Nigeria and Algeria have ordered international energy companies to reduce their oil production by as much as 10 per cent, a sign that OPEC will stick to its plan to reduce world oil production despite record prices.

The orders will affect the production of international companies including Royal Dutch/Shell, ChevronTexaco and Eni in Nigeria, and Anadarko and Cepsa in Algeria, which enjoyed high profits last year in part because of their unrestricted output.

Algeria, which ordered the cut from mid-February, and Nigeria, which asked companies to reduce their output from April 1, have in the past been the OPEC members most reluctant to forgo revenue by reducing their oil output.

http://www.neftegaz.ru/english/lenta/show.php?id=46219

[David Dunham]

1. Higher Oil and Gas Prices Will Hurt Bush!!

[salin]

10. Yes and no

The higher prices also allow bush to push the Energy Bill - which is VERY significant to his administration... under the guise of "Crisis."

Look at the first tasks assigned to Cheney when they took office: Take over efforts (ala a task force) on terrorism AND on energy. Because the energy taskforce (and givebacks to industry - the largest donor segment, I believe, to their campaign) was priority... Cheney set forth with his secretive energy meetings... and then crafted the Energy Policy from that (and the law suits around his process... remain). In that time, despite warnings in the transition team briefings from Sandy Berger (with Condi Rice), the decision to lower track these concerns and focus on energy first resulted in exactly ZERO meetings by Cheney (the nominal head of the issues) on Terrorism.

They tried to get the Energy Bill pushed through in 2002 - and failed due to a series of controversies - the biggest one in that go round being ANWR. The ANWR issue was perceived to be the Trojan Horse - not really wanted/needed by the GOP - but enough concern to the powerful Environmental lobby that it would take all of the attention off of the multiple other (awful) provisions. The point... keep the focus on Anwr and bargain it out. In the lead up to the midterm elections... with a big push on other suddenly imp items to the president (most signficantly: wanting congress to have to vote on the War (IWR) and home land security... before the elections)... the energy bill withered.

When it came back this past year... under a new push/energy after the big east coast Blackouts... the bill in very different forms was passed through each house of congress. Then the GOP applied their new tactic (now done on at least three bills - and still very unusual tactics that belie any biparisanship)... go to conference - where traditionally you have members from each house from the committee that had held hearings on the legislation, members from each party and craft a compromise that is most likely to pass. Instead - the GOP locked out the democrats from ALL negotiations and completely rewrote the bill. There are all sorts of reports of instances where while the democrats were blocked out, paid industry lobbyists were spotted bringing prewritten parts of the bill that got scripted into the new "conference" bill. In addition the attempt was to put in enough goodies (pork) to key waivering senators to win the final votes needed. Between industry wants and quasi bribes to districts the legislation's costs balooned from about 19 billion to more than 30 billion. Then the democrats on the conference committee were given just little more than 48 hours to "review" the 1,000+ page brand new legislation before the vote. Of course the vote in the conference committee was already assured as more than half of the members had been in on crafting the bill.

But some funny things happened on the way to bringing the bill to the senate. First, the public had been upset with the 87B bill for Iraq (second installment), and the over all increasingly bulging deficits... and some congressfolks were starting to balk at the costs. Then - without ANWR in the bill as the bargaining chip - even with the short review time, some very unpopular and ugly parts of the legislation starting getting press - which split people away from the bill. Finally it was blocked by filibuster in the senate.

Stand off.

But... in the SOTU address bush started the push for the Energy Bill (have to show return to campaign funders ... if to be expected to keep raising funds at that level). Work began to "slim the bill down" - which is now back to 16B (which sounds like a lot of cutting, when compared to the post-conference committee bill, but isn't a great deal of cutting from the original 19B form). Just yesterday Sen. Minority Leader Daschle promised that he had the votes to deliver to get the bill out of standoff (60 needed for cloture to end the filibuster stand off; and more than enough needed to get the bill passed.)

Rising gas prices create an impetus in the form of a "crisis" to give cover to congress for pushing this bill through. Big event for bush. Losing event for us - who will have fewer protections, will see a policy dominated by short-term fixes (more drilling, digging, and using up existing resources) with very little investment into long-term energy self-sufficiency efforts, and other fun goodies (one provision that is likely still there in essence gives the right of eminent domain (ostensibly through the Fed. En. Reg. Comm.) to energy companies for electricity transmission (wires and pipelines)... )

[Sagan]

2. Anyone else remember Chimpy saying he'd make OPEC increase output.?

During the 2000 election campaign?

Now, an idealist would say "Gosh, President Bush was sure wrong about being able to deal with OPEC. They're walking all over him."

A cynic would say "So there are a bunch of oil executives in the Administration and gas prices are through the roof. Fucking DUH!"

[bluestateguy]

3. Do the OPEC ministers want to damage Bush?

I don't know, do they want to drive up US gas prices to damage Bush?

The thing about gas prices is that everybody needs gas, regularly. They are reminded of high prices several times a week. People get really cranky when they can't get their gas now and get it cheap.

[kysrsoze]

14. Absolutely. They're not stupid. They know Bushco is a danger

to the Middle East. The people who determine output have brains and education. You can bet this has something to do with it.

Of course it also has to do with making the the supply last as long as possible. Oil use is at its highest ever and will go higher as India and China become more industrialized and richer. There's not going to be enough oil to go around. See the posts below on Peak Oil.

[whistle]

4. See the discussion earlier here on Peak Oil...

whether there is a tax on gas or OPEC controls supply and gets it's prices up, we consumers are screwed. The world is running out of oil and we have to conserve and find alternative energy sources. Mars and the moon don't have large crude oil supplies that any of we earthlings are aware of. I am doing my part by driving half as much I was last year and I fill up every other week now. But today it cost me $30.00 for 17.6 gallons of regular gas. In two weeks I expect it will cost $1.50 to $2.00 more for the same fill up. When OPEC cuts production officially, that will be another $2.00 to $3.00 per fill up bump. This is going to be a big issue for the election IMHO.

[Zhade]

12. I experienced that $2-in-a-week jump you describe.

You're quite right to underline Peak Oil's place in all this. In my estimation, OPEC's gambit is win-win for them: cut production to stretch the remaining supply longer, and also hurt the b*sh administration domestically - a tactic I wholeheartedly endorse.

Welcome to DU, by the way! :hi:

[whistle]

5. The news just keeps coming...

Venezuela oil cut threat
By Nigel Wilson
March 2, 2004

BELEAGUERED Venezuelan President Hugo Chavez has sent a tremor across the international oil market with threats of cutting oil exports to the US.

Predictions the oil price could soar above $US40 a barrel if Venezuelan oil stopped being shipped to the US come as the rapid resurgence in the US economy is forcing a realisation high crude oil prices are here to stay in the medium term, at least.

The left-wing Venezuelan leader made the warning in a fiery speech to supporters in which he accused US President George W. Bush's administration of backing opposition attempts to oust him from the presidency of the world's No.5 oil exporter.

"Mr Bush must know that if he gets the mad idea of trying to blockade Venezuela, or, even worse, of invading Venezuela, if that happened, the people of the United States should know that not a drop of oil would reach them from Venezuela, not a drop more," Mr Chavez told tens of thousands of cheering supporters.

http://finance.news.com.au/common/story_page/0,4057,8844185%255E14324,00.html

[ClintonTyree]

7. The invasion of Venezuela..............

is on the drawing board as we speak.........bet on it. This administration isn't going to be pushed around by sovereign countries, that's OUR oil dammit!

[loudsue]

6. I think this is OPEC's (including Venezuela's) way of

getting rid of bush. Nobody in THE WHOLE WIDE WORLD wants this administation in charge of the (so far) biggest world power.

I say....fine! If the neocons keep pressing their agenda in every area of our lives, and the world's lives, the increased oil prices will be the least of the world's worries.


:kick:

[tedzbear]

8. If higher gas prices unseat * in November...

...then I will pay the price gladly.

[pinniped]

9. Me too, "bring it on"!

n/t

[NYC]

15. I read that the OPEC production cut scheduled for April

will cause higher prices for gasoline in the summer.

That still leaves time for the prices to drop before the election.

http://news.bbc.co.uk/2/hi/business/3476909.stm

From Feb. 11, 2004.

[zelda7743]

17. I feel the same, however.....

Living in Hawaii dampens my enthusiasm for expensive gas. The cost to ship stuff out will be astronomical. We're already paying $6.00 for a gallon of milk. I can't imagine what it will be when they start adding on fuel surcharges.
Hawaii will be the first casualty in this peak oil business. :(

[Zhade]

13. This is the same reason I don't mind Iraqis blowing up the oil pipelines.

With the caveat that no one is hurt during such acts, of course.

The simple fact is, that oil is not ours, and we have no right to be stealing it from under the Iraqis' collective noses. As far as I'm concerned, blow the pipelines up from now until the "coalition of the shilling" gets the hell out of the country.

I do worry about the environmental damage done by such a tactic, but let's face it, there's more environmental and physical long-term harm done by the insane amount of depleted uranium used by our troops than from pipelines being destroyed. And I for one cannot blame the Iraqis who target the pipelines. It's what I'd do if someone invaded the United States to steal our oil.

[Changenow]

11. Look to the Strategic Petroleum Reserve to be opened in September

or October if prices get too high. Chimp won't let a little thing like the National Security interest of having the reserve get in his way of his chance for election.

[osaMABUSh]

16. Higher prices will affect the recovery and job creation

less disposable income means there is less for the consumers to drive (no pun intended) the economy.

We've never seen $2.00 / gal. in most places in the US. That is the cost prediction for May / June.

The Oil president may get hosed by oil itself.

Another irony (unrelated to oil): the capture of Saddam secured Bush's defeat by taking the wind out of Dean's sail (who * would have beat) and allowing Kerry to be the nominee who will beat Shrub.