Bush Battles Democrats over Oil Production
From Constance Ikokwu in Washington, D.C., 06.24.2008
As the oil summit holding in Saudi Arabia ends with no tangible agreement on the best way to force down high commodity price, President George W. Bush has taken his crusade to members of the Democratic Party in the United States Congress accusing them of “obstructing” new domestic oil exploration in the country.
This comes as the media in America are pointing to militant attacks in the Niger Delta region, a development they argue will diminish Saudi Arabia’s plan to increase oil output by 200,000 barrels per day beginning from next month.
Bush blamed Democrats for blocking plans to start domestic oil exploration that could ease the suffering of consumers in the country. His government has proposed opening up protected offshore drilling sites, expanding domestic refineries, exploring oil shale reserves in the Rocky Mountains and the green River Basin and drilling in Alaska.
The US is hard hit by rising oil prices forcing families to quit driving and choose between grocery shopping and filling their tanks. The pump price of fuel is over $4.
In an address to the nation, Bush stated: “my administration has repeatedly called on Congress to open access to new oil exploration here in the United States.
Unfortunately, Democrats on Capitol Hill have rejected virtually every proposal. Now Americans are paying the price at the pump for this obstruction.”
On thier part, Democrats argue oil companies can increase supply without new explorations. They also favour renewable fuel and reduction in oil consumption as a way of ridding the country of dependence on foreign oil.
Eighteen million barrels of oil could be added if offshore drilling is opened to oil companies. But critics counter that would not have immediate impact on prices as it could take several years for the product to reach the market.
Four bills are expected to reach the floor this week. It includes a measure that reduces public transit fares and encourages oil companies to use the drilling and exploration leases they hold, in addition to tackling commodity speculation, which they argue, causes a spike in oil price.
Saudi Arabia recently called a meeting of oil producing countries, seeking to reduce increasing commodity price. The meeting reportedly ended in a disappointment as no solid agreement was reached on immediate steps to end high prices.
Saudi Arabia has promised to increase supply by 200,000 barrels per day, its highest level in 30 years, while insisting that speculation rather than low supply is the main cause. Some US analysts say they are disappointed having expected an increase of at least 500,000 barrels per day.
This is coupled with the fact that shut-ins of 270,000 bpd in Nigeria following militant attacks on 150,000-bpd Bonga oilfield and 120,000-bpd Escravos oilfield, operated by Royal Dutch Shell and Chevron wipes out gains from any increase from the Kingdom.
Nigeria, long Africa’s biggest oil producer has fallen to second place behind Angola as a result of the attacks. The country now pumps less than 1.5m barrels while it has the ability to produce 2.5 million barrels per day.
