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 Page 8 Page 9 WEEKEND Febi