A few days ago Saudi Ambassador Turki al-Faisal advised that President Bush had sent a letter to Saudi Arabia's King Abdullah reaffirming his commitment to the agreements reached at the ranch at Crawford Texas in April 2005. Sort of belated penance for the State of the Union "addicted to oil" comments and his concurrent call to cut oil imports from the Middle East. Hereby some ruminations on what President Bush might have said in his letter.
"Your Royal Highness,
I have such fond memories of your visit to the ranch at Crawford last year. Strolling along hand in hand was truly a highlight of my days at the ranch. A few questions have come to mind which permit me, Your Highness, to set forth below.
- When you visited in April 2005 the price of oil was in the upper 40's a barrel. A few months later it jumped to some $70 a barrel, where it remains today. Laura asks me nearly every day what was it that I said to you that encouraged you to persuade your brethren in OPEC to allow prices to jump that high. And so quickly after our visit. I know there was "Katrina" (which I hear a great deal about from my friends in the oil business) but to stay there yet, after all this time. A near fifty percent jump in price almost immediately after our meeting really isn't good for my image, though I must tell you my friends in the industry are delighted.
- That you agreed to increase your production capacity to 12.5 million barrels from some 10 million barrels a day by 2009 really impressed me. And that you were going to commit $50 billion to expanding your production was a gesture I found especially moving as I told you at the time. But since then I've been doing some arithmetic and I've begun to realize it's a little thin. Fifty billions by 2009 to help bring the world economies and oil production into closer balance ( I know you don't like to hear this- and possibly bring the price of crude oil down). At today's prices and your current announced production levels ($70/bbl x 10 million barrels shipped daily) that's barely two weeks of oil revenues a year, each year through 2009. Not very much given the dimensions of all that is at stake. I won't go into comparisons with our commitments elsewhere.
- It is only natural that we agreed to cooperate, we have so many interests in common. You are a major source of energy for us and the world. We are, in large measure, the de facto guarantor of your independence (remember Gulf War1 and Saddam Hussein, and now think of Iran on your left flank and Al Qaeda on your right). And yet we know so little about your true production capabilities. We are happy to provide you with whatever information you may wish to have about us through our Deparment of Energy on crude production, known reserve's, refinery capacity, transportation infrastructure and energy generation in all its manifestations (coal, nuclear, wind, hydroelectric and on) or through the Department of Commerce should you wish to have additional data on consumption and distribution. Yet we, in turn, know so little about your reserves, your production capacity. We all know your resources are the world's largest currently known (I'm sure you are aware that only 10 percent of Iraq's land mass has been prospected for oil, no telling what one may find there if the Sunni insurgency would abate). But basically we are flying blind on specifics. If we are to cooperate as partners you have to be more open with us and the rest of the world. We have major responsibilities in planning future steps for our economies for which we need facts and not hearsay on energy capabilities. Transparency on your part would be helpful as well. It would make our cooperation more fruitful and convey a greater sense of shared mission in the economic realm.
- Oh, Your Highness, one last question. Back in the 70's Saudi Aramco brought out a study calling for Saudi Arabia to increase its oil production capacity to 20 million barrels a day. Do you happen to have a copy of that study?
Your Highness, With My Highest Esteem,