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February 01, 1991 - Image 8

Resource type:
Text
Publication:
The Michigan Daily, 1991-02-01
Note:
This is a tabloid page

Disclaimer: Computer generated plain text may have errors. Read more about this.

was forced to compensate for the
loss of Iraqi and Kuwaiti oil from
the world market. The American
Petroleum Institute reports that
Saudi Arabia increased its
production last August by
915,000 barrels a day in order to
help OPEC restore its production.
to the pre-crisis level of 23 million
barrels per day (bpd).
Since OPEC has restored its
production level to the pre-crisis
quota, thus eliminating the
shortfall caused by the embargo,
it is now producing near full
capacity. "OPEC was going to
increase its production level in
October in order to account for
higher cold weather demand -
something that happens every
year," Trench said. "They were
not able to increase production
this year because all of the excess
productive capacity was used in
order to make up for the 4.3
million bpd lost from Iraq and
Kuwait."
Domestic oil companies
cannot increase production to
compensate for the OPEC loss
because they are currently
operating at full capacity. Lance
Lamberton, a senior media
analyst for Exxon, said that oil
companies are interested in long-
term results, and the uncertainty
of a war which could be over soon

0

or not for many months makes
the companies hesitant to re-open
plants that were shut down
during the hard times the oil
industry went through in 1986.
"We all work at maximum
capacity anyway so we don't
have the excess to suddenly...
turn a valve and get more supply
when something happens. It was
always anticipated that the

oil is ever found," said Jim West,
news editor of the Oil & Gas
Journal.
"But that's not going to
happen," West asserted. "They're
going to keep looking because you
can still drill extensively in the
Gulf of Mexico."
There were 1,459 new field
discoveries, 1,323 new reservoir

'We knew that Saudi Arabia was for relatively low
prices and we knew that Kuwait was for relatively low
prices as a matter of long-term oil policy. We didn't
know that about Hussein, and that may have been an
unknown that the (Bush) administration was
unwilling to accept'
-Scott Rogers
Economic analyst

b

by David Rheingold

The rallying cry "No Blood for
Oil!" has been shouted at anti-
war demonstrations across the
country since the first rallies
several months ago protesting the
war in the Persian Gulf.
Despite President George
Bush's statements that the intent
of the war is "to prevent further
aggression," promote "stability"
in the Middle East, and to
"liberate" the people of Kuwait,
many people see the conflict as a
war caused by the existence of
extensive oil reserves in the
Middle East. Many students are
asking what role oil actually
plays in the Gulf conflict.
Even days before the war
broke out, protestors here on

campus already displayed "End
the War in the Gulf" banners.
The initial rally, staged in the
Diag in November, drew a crowd
of more than 200 concerned
students. Others walking to class
casually passed by.
Last weekend, however, an
estimated 500 university students
boarded nine buses bound for
Washington, D.C., to join a
national protest against the war
in the gulf.
"I think that argument has
gotten a little bit confused into
saying that we're fighting
because we need Middle East oil to
survive, we the United States
need it. And that's not true.
Eleven percent of our oil comes

and Gas In And Around Kuwait
Crude oil, gas or Oil and/or gas'field ; D Oil refinery
petroleum-product pipeline name in italics

Basrah Khorramshahr
North Rumaia
zubairAbadan
South Rumaita
Raudhatain
IRAQ
Sabnryah
BhaiBubtyan slani
KUWAIT.
....... .............
Minagish::: : : ::
Umm Gud
SAUDI ARABIA Burgan A;
( :* Zaw
Rimthan Wafra
Kha__i ::F;wr
South Fuwarns

----- _

from the Middle East, and we can
survive very well without that
oil," said Jennifer Van Valey,
President of the Michigan
Student Assembly (MSA) and
member of Student Against
United States Intervention in the
Middle East (SAUSI), who
travelled to the capital last
weekend.
According to the American
Petroleum Institute, imports
from Kuwait and Iraq constituted
1.4% and 7.4%, respectively, of the
United States' total oil imports
prior to Aug. 2. On that date, Iraqi
forces captured neighboring
Kuwait, leading to a United
Nations embargo on all oil from
the region.
The importance of the Middle
East to the world oil economy is
that it holds two-thirds of the
world's proven oil reserves.
Countries unable to produce
enough oil to meet their needs
must import oil from countries in
the area. The United States, for
example, imports almost 30% of
its oil from the gulf. (See pie
chart).
"I see it as a war in the
interests of oil in the long term -
that is, oil as an international
needed resource, and we have to
look into the year of 2000... s it
isn't just a matter of the next year
or the next six months," said
Emanuel Winston, a Chicago-
based analyst of Middle East
affairs.
Others believe Saddam
Hussein isn't intent upon
destabilizing the U.S. economy. "I
don't think Hussein is out to
control the world. Why would
Hussein try to destabilize the
economy of the U.S. if he's trying
to make money? Not to justify
the usurping of Kuwait and
certainly the violence that it took
to do that, but... the issues were
more economic than anything
else, and the fact was that
Hussein was trying to gain
control of the Kuwaiti oil fields to

Oil Reserves

of Top Twenty Countries as of 1/1/91
(in billions of barrels)
200 300 400 500
1 1 1

Oil Production of Top Fifteen Cour
(In millions of barrels p
2 4 6

0

100

600

0

-

__I_

MICHELLE GUY/Daily
At the rally in Washington last weekend, this was among the many symbolic
protests against U.S. policy.
increase his bankroll," said Corey clearly the king of the mountain,
Dolgon, chair of MSA's Students' so to speak. So there's nothing
Rights Commission. really to stop him from taking the
But some believe Saddam 10% in Abu-Dhabi [in the United
would have invaded Saudi Arabia Arab Emirates]
without the U.S. soldiers "Now even if he doesn't
stationed near the border. "He actually physically take it, it
(Saddam) certainly gathered his means that since he's the biggest
troops on the Kuwaiti border, and guy on the block, he can certainly
in a very short time, jumped in influence decisions over countries
and absorbed the fields. And there - both political ones as well as
was no reason at all. And there the commercial ones that have to
was certainly no line inthe sand do with oil markets."
that would have kept him from
absorbing the Saudi fields, which As the crisis unfolded last fall,
were really quite close," Winston motorists spent more and more
said. money at the gas pumps to
To defend against such an accomodate the steadily
invasion of Saudi Arabia, as increasing oil prices. The cost of
country with 25.7% of the oil, which was around $20 per
world's reserves, President Bush barrel before the crisis, reached a
dispatched U.S. troops to Saudi high of $40.40 Oct. 9 but
Arabia just days after Kuwait plummeted to $19.25 Jan. 18,
was taken. when news of the United States's
"Think of Saddam Hussein as aerial attack brought relief to the
having twenty percent (of world panic-ridden oil markets.
reserves) - that is, ten of his After the United Nations
own, Kuwait for ten," said placed the embargo on Iraq, the
Cheryl Trench, Executive Vice- Organization of Petroleum
President of the Petroleum Exporting Countries (OPEC), a
Industry Research Foundation, cartel which includes Iraq,
Inc. "Now he's going after 25%. Kuwait, Saudi Arabia and most
And once he's got that 25%, he's other oil-producers in the region,

Arabian Peninsula
Saudi Arabia
Iraq
United Arab Emirates
Kuwait
Iran
Venezuela
Soviet Union
Mexico
United States
China
Ubya
Nigeria
Indonesia
Algeria
Norway
Canada
Egypt
Qatar
Oman
United Kingdom

100
98.1
94.5
92.9
59
57
52
26.2
22.8
17.1
11
9.2
7.6
5.8
4.5
4.5
4.3
3.8

There are 999.1 billion barrels of proven oil
reserves. All the time, new fields are being
discovered and explored, while old fields begin
to dry up. The Middle East is far and away the
world's most bountiful region for oil, with Saudi
Arabia alone making up 25.7% of the world's
reserves. The top bar represents the reserves
that would have been under Iraqi control had
Bush administration fears of an invasion of the
entire Arabian Peninsula occurred.
Source: Oil and Gas Journal

257.5

USSR
USA
Saudi Arabia
Iran
Iraq
China
Mexico
United Arab Emirates
Venezuela
United Kingdom
Nigeria
Kuwait
Norway
Canada
Libya

3.1
.2.9
2.8
2.6
2.3
2.1
1.9
1.8
1.6
1.6
1.5
~~1A

Everyday,the oil-p
extract60.3 million
USSR and the Un
producers, are gi
most of the oil that
as the OPEC natic
little and produce
needs of the rest(a
figures for Iraq an
beginning of the c

17.2

6.2

majority of the make-up volume
- the replacement volume -
would come from OPEC
nations," Trench said.
Although Middle East oil
constitutes only 30% percent of
the United States' consumption,
its role may increase in the future.
The U.S. has a reserve-to-
production ratio of ten years -
that is, all the oil in the U.S.
would last ten years "if no other

discoveries in old fields, and 5,829
extensions in the United States
during the 1980s, according to
U.S. Crude Oil, Natural Gas, and
NaturalGas Liquids Reserves annual
reports.
Although analysts say the U.S.
has been extensively explored,
they expect new discoveries to
Please turn page

A mittened protestor in Washington DC las
gas pump with a flower perched inside.

United States' Net Oil Imports by Source
(in percentages of total)

European Community's Net Oil Imports by Source
(in percentages of total)

United Arab Emirates 4.3%

Saudi Arabia 18.9%
Kuwait 1.0%
Iraq 8.0%
Other Persian ----_
Gulf 0.2% °

Japan's Net Oil Im
(in percentag
Iraq 4.7%
Kuwait 9.1%
ui 11.5%

Other Net Imports 48.1%

Iraq 11.0%

Other Persian Gl

Saudi Arabia 15.0%

Saudi Arabia 18.5%

Other Net Imports 73.3%

50 milesAbut
50 km. Jwayiat ' (r~p1 N,4

Other Persian Gulf 15.6%

-____-.

:ania
rHadrya

Each day, the United States requires approximately 17 million barrels of oil. However, this country produces only 7.2 million barrels per day,
dependent on imports for roughly half of our oil. The leftmost pie chart illustrates the sources of U.S. oil imports. Information for Japan and th
Community are included for comparison. (Source: U.S. Department of Energy; figures as of June, 1990)
111

APWeekend

February 1, 1991

WEEKEND

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Page 9

WEEKEND

Febi

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