An Energy Pearl Harbor? - Washington Post 3/6/06

[Coastie for Truth]

An Energy Pearl Harbor? - A Near Miss in Saudi Arabia Hints at Future Shocks

By Gal Luft Sunday, March 5, 2006; B02

"We call our brothers in the battlefields to direct some of their great efforts towards the oil wells and pipelines. . . . The killing of 10 American soldiers is nothing compared to the impact of the rise in oil prices on America and the disruption that it causes in the international economy." -- A jihadist Web site

The two cars that exploded a week ago outside the inner perimeter of Abqaiq, an oil processing facility in Saudi Arabia that is the world's largest, could have caused more loss of life and economic devastation than the two planes that crashed into the World Trade Center on Sept. 11, 2001.

Had the terrorists succeeded in penetrating the guarded facility and detonating their bombs inside, they might have turned the complex into an inferno, releasing toxic chemicals that could have killed and sickened thousands of locals and expatriates, including many Americans, who work and live nearby.

The damage to the world economy also would have been severe because the oil market today resembles a car without shock absorbers: The tiniest bump on the road could send consumers and prices bouncing off the ceiling.

That wasn't always the case. Once there was enough wiggle room in the oil market to deal with occasional supply disruptions. As recently as 2002, some oil producers, chiefly Saudi Arabia, had the spare production capacity to provide liquidity to oil markets. But due to the sudden growth in demand in developing countries in Asia and continuing profligacy in industrialized nations such as the United States, oil output is largely spoken for. In 2002, there were about 7 million barrels a day of spare production capacity, or about 10 percent of world consumption. Today, spare capacity amounts to about 1 million barrels a day, less than 2 percent of world consumption.

<<<SNIP>>>

[msongs]

1. america's oil corporations pray for such an event to happen....

as does the cheney/bush gang. just like 9/11 was a prayer answered for bush, so will the huge profits
from an oil industry disaster be a gift to the BFEE.

so when bush says he prays, I believe him

Msongs
www.msongs.com/democratsmugs.htm

[Strelnikov_]

2. And The Maximum Leader / (G)reed (O)nly (P)arty Are Facilitating

at a minimum, if not outright colluding, with 'Al Quedas' plans, in order to retain/expand domestic political power.

Osama bin Laden's strategy is based on the conviction that the way to bring down a superpower is to weaken its economy. We "bled Russia for 10 years until it went bankrupt and was forced to withdraw in defeat," bin Laden boasted in his October 2004 videotape. "We are continuing in the same policy to make America bleed profusely to the point of bankruptcy." His logic, feasibility aside, is simple: Bring the United States to a point where it can no longer afford to preserve both its military and economic dominance. Then, as the United States loses standing in the Middle East, the jihadists can gain ground and topple regimes they view as corrupt and illegitimate, while defeating other infidels who inhabit the land of Islam.

. . .

The attack would have removed 4 million to 6 million barrels a day of supply from an already tight oil market.

Removing 4-6 M bbl/dy would have resulted in a price shock far exceeding the Iranian Revolution price run-up. If the capital flowing out of the US was suddenly diverted (by China, Japan, etc.) to chasing high priced oil, instead of being recycled by the purchase of US assets, we would find ourselves in both an energy and liquidity shock.