Our Dependence on OPEC
OUR DEPENDENCE ON OPEC -- (House of Representatives - April 02, 2004)
The SPEAKER pro tempore. Under a previous order of the House, the gentlewoman from Ohio (Ms. Kaptur) is recognized for 5 minutes.
Ms. KAPTUR. Mr. Speaker, it is very interesting to listen to some of the remarks on the floor this evening. We had a gentleman, one of our Members from California, say how good the economy looks to him. And yet if you read the newspaper today, U.S.A. Today indicates Gateway is going to be closing all of its stores around our country, the struggling PC computer maker, and laying off 2,500 more workers.
In the same newspaper we see a headline, "No Shortage of Oil, Saudi Arabia Says." Saudi Arabia sought to quiet critics of OPEC's decision this week to cut oil production, arguing there are ample supplies, despite decade-high gasoline prices. Their foreign affairs advisor to the Crown Prince said there is no shortage of crude oil.
I would like to draw my colleagues' attention to this chart, which shows that the United States since the mid-1980s and every succeeding year has amassed more job loss and greater trade deficit than ever before in the history of our Nation. This year, the trade deficit is going to go over $580 billion. This is an unbelievable number. That means more imports coming into our country than our exports going out. We are exporting jobs and we are importing products from every other place in the world.
Someone ought to really pay attention in the executive branch, and the Members of Congress who brag how great this is better pay attention to the fundamentals that are driving us in the wrong direction. One of those fundamentals involves rising gasoline prices and rising petroleum prices because we are not energy independent here at home. We need a President and we need a Congress that will make America energy independent again.
Here is another chart. This chart shows over a period of 25 years every single year the amount of petroleum that we consume and how much every year comes from abroad. The Middle East, OPEC, controls half of what flows into this economy. Every time a U.S. consumer goes to the gas pump, at least 7 or 8 cents of what you spend per dollar for every gallon you buy goes to Saudi Arabia, a very undemocratic place, one of the worst dictatorships in the world, no matter how much sweetener they try to put on it; 2 or 3 cents goes to Kuwait and Iraq, all places without democratic governments in place.
It has been happening for a long time. It just did not start. But it has been getting worse, and the job loss in our country has really been getting worse. Good jobs with benefits that people can depend upon, retirement programs that cannot be taken away, and a chance for children to go on to college without becoming debtors, the hole we have been digging has been getting deeper every year.
A gentleman writes a letter to the editor today to U.S.A. Today. He is from out in Michigan. He says that everybody wants free trade, but it seems strange to me that the most powerful Nation on this earth can do nothing to stop the collusion, he says, among the organization of petroleum-exporting countries and our own oil companies to drive up the price of oil.
Here in Washington last night I was watching the television, and Chevron-Texaco had this big ad about how great they were except for one thing, all that oil comes from someplace else and contributes to this rising share of imported petroleum and to the amassing trade deficit that is a damper, a huge damper on creating wealth inside this economy because we are siphoning it out of our own pockets and giving it to someone else.
Imagine if we put those dollars to work to create a new industry across rural America, the biofuels industry, where we ripen ethanol production, soy diesel production, at a level where our farmers could be earning money from the marketplace, not from the Federal Government subsidy that goes to them. Imagine if we really were serious about fuel cell production, imagine if we really tried to bring modern hydrogen production to this country and push our photovoltaic production from the sun, energy from the sun to the limit, to the limit.
NASA has done a great job of helping us move the technology to where it is today, but that is where America needs to move. We do not have to have more job loss. We do not have to have rising trade deficits. We need a government in this country that is going to make us energy independent again and begin creating jobs here at home for the future.
Mr. Speaker, I include for the RECORD additional extraneous material.
Pressure OPEC to Lower Gas Prices
Everybody wants free trade. But it seems strange to me that the most powerful nation on this earth can do nothing to stop the collusion I see among the Organization of Petroleum Exporting Countries and our own oil companies to drive up the price of oil ("OPEC votes to cut oil output, starting today," News, Thursday).
Why can't the U.S. work with our non-OPEC industrialized allies and other nations that also need a steady supply of cheap petroleum and take retaliatory economic action by withholding essential goods and services, or even military action? We need to give the OPEC cartel a taste of its own medicine.
Donald Seagle,
Ishpeming, Mich.
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Gateway to Close All Stores, Fire 2,500
(By Michelle Kessler)
Struggling PC maker Gateway said Thursday that it plans to close all 188 of its retail stores and lay off 2,500 workers.
The stores will close April 9, Gateway says. Its computers will still be sold on Gateway's Web site and via phone.
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No Shortage of Oil, Saudi Arabia Says
Saudi Arabia sought Thursday to quiet critics of OPEC's decision to cut oil production, arguing there are ample supplies despite decade-high prices. "There is no shortage of crude oil," said Adel Al-Jubeir, foreign affairs adviser to the Crown Prince of
Saudi Arabia. "High oil prices are not good for consumers, and low oil prices are not good for producers." The country also said it remains in contact with President Bush. The 11-member Organization of Petroleum Exporting Countries voted Wednesday to cut production 1 million barrels a day, angering U.S. lawmakers who partly blame OPEC for record gasoline prices in the USA.
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[From the Times of Oman, Apr. 3, 2004]
Higher Oil Price to Take Economy to New Highs
(By K. Mohammed)
The Sultanate's economy is poised for better performance this year if the spiralling oil prices are any indication. Omani crude price, the single most important factor which drives the Omani economy, is currently staying at $31.44 per barrel and the market expects crude prices to stay at the current level in the rest of the year. According to statistics, the Omani crude prices realised $29.91 per barrel in January 2004, which is significantly higher compared to prices realised last year. Last year, the government had budgeted oil price at a conservative $20 per barrel but the actual realisation was much higher at $27.84. This had resulted in a substantial rise in government revenue with all sectors of the economy witnessing significant growth in 2003.
The government has budgeted Omani crude price at $21 for the current fiscal (2004) but the actual realisation may be much higher than the prices realised last year, considering the present buoyancy in the international oil market. The most heartening fact about AGCC economies, and Oman in particular, is that international oil prices have been staying above the Opec basket price band of $22-$28 per barrel in the new year, significantly higher than the prices achieved last year, and Opec is expecting a steady market this year. International oil prices are currently staying at around $34 a barrel.
Considering that the oil production will be maintained at the present level the prospects at the oil price front remains brighter for the country.
Government's revenue receipts and public spending are other indicators of the economic growth. Last year, the corporate sector fared well on account of increased public spending. The government's actual public spending has increased from RO2,367.9 million in 2002 to 2,638.5 million as at the end of November 2003, an increase of 11.4 per cent. The budget for the year 2004 has estimated total spending at RO3,425 million. The actual public finance deficit for the year 2002 had come down drastically to RO124 million from the budgeted RO380 million. When government spending goes up the gross domestic product (GDP) will expand, triggering increased economic activity and generating more job opportunities and more revenue for the government. The increased spending coupled with the prevailing low interest rate scenario is expected to give the much-needed impetus to economic growth this year.
Figures on the revenue receipt side looks rosier. As of November-end 2003, the government's total revenue stood 8.7 per cent higher at RO2,942.5 million compared with RO2,705.9 million mainly on account of increased oil price realisation. As the average price for Oman crude stood $29.16 a barrel in December 2003, the government is expected to report a lower actual deficit for the year 2003 as against the projected RO470 million.
The country saw inflation remaining below 1 per cent last year. This year too, the inflation is expected to remain below
1 per cent level. However, the weakening of the dollar is a cause for concern as it may put downward pressure on the local currency triggering a mild flare up in the prices of euro-denominated goods and services. Like other AGCC countries, Oman too imports from European countries and euro-denominated goods are bound to become costlier with the weakening of the dollar.
The increased activities in the non-oil sector, especially a significant rise in LNG production will also contribute much to the strengthening of the economy.
Reflecting the pulse of the economy the local stock market has scaled new highs. The Muscat Securities Market General Price Index rose from 272.67 points as at the end of December 31, 2003 to 296.10 points on April 1, 2004, scoring 23.43 points. This shows a handsome gain of 8.59 per cent. The buoyancy is also reflected in the various sector indices.
On the economic reform front, a lot of action will be seen in the rest of the year. As part of its commitments to the WTO, the government is expected to divest a significant stake in Omantel. Last month, the much-publicized initial public offering of Al Maha Petroleum opened. The opening up of the telecom sector will see a second GSM licensee entering the market soon, paving the way for competition in the telecom market with consumers ultimately emerging as the winner with better and cheaper services.
[From Reuters News Service, Apr. 2, 2004]
Bush in Touch With Saudis, Non-OPEC on Oil-W. House
HUNTINGTON, WV. (Reuters).-President Bush and the Saudi crown prince have been discussing oil prices for some time, and the administration is also talking with other OPEC and non-OPEC oil producers, a White House spokesman said Friday.
"We remain actively engaged with our friends in OPEC and other producers around the world to address these issues,"
White House spokesman Scott McClellan told reporters. "Bush and the (Saudi) crown prince have been in touch on this subject for a while now."
Earlier this week, OPEC agreed to a production cut of 1 million barrels per day despite Bush administration requests to delay it.