And you don't think those Saudis are silently thanking Bush all the way to the bank?
Good God, when you think about it, the combination of Bush's domestic policies (utter lack of energy conservation or mass transit planning) and foreign policies (invade Iraq and wreak chaos across the globe) you gotta estimate that Bush alone is personally responsible for putting a trillion or more dollars in the pockets of the Saudis. Staggering to contemplate.
"Bush alone is personally responsible for putting a trillion or more dollars in the pockets of the Saudis"
And hundreds of billions in Iran's treasury.
If they ever go to war with Tehran, they could probably be accused of treason and working for the enemy...
guys, imagine if you had the last cow, or 4 out of ten of the last cows. milk wouldn't cost a whole lot to produce, but when you brought out a pail of milk to sell, would you be surprised at how much people would pay?
this is just a stupid analogy, for instance we have alternatives to cows' milk. unfortunately no one bothered to find any substitutes for the stuff that makes the world go around. oops, our bad.
The price of fundamentally limited commodities isn't set by the lowest cost producer. It's set by the relationship of available production capacity to the demand for the commodity. And I don't believe that $2 number is currently accurate, either, btw. People were kicking that same value around a decade ago; in the meantime, the cost of above-ground inputs (oil, steel, skilled labor, etc) have shot up dramatically.
Zzzzzzzzzz
Come on Hubris, you're presenting numbers from the Saudi Oil Ministry like their public pronouncements are remotely credible. Their transparently fraudulent reserve claims (they do not, for instance, deduct production from their published numbers) should disabuse anyone of the notion that they might be telling the truth.
$2/bbl production cost at ~$130/bbl oil implies an EROI of (significantly) better than 65, which simply isn't credible -- the real EROI wasn't that good when Saudi Aramco was subject to US auditing rules, and EROI of oil extraction tends to drop over time.
Now, Saudi Arabia has numerous reasons to both overstate the amount of oil they have in the ground and understate the cost of extraction. Since relative OPEC quotas are based on published reserve numbers, every OPEC country has had a massive incentive to inflate their reserve numbers. And they have. See http://www.theoildrum.com/node/3665.
The thing that the House of Saud fears, quite possibly more than anything else in the world, is a large-scale migration away from the use of oil as a transport fuel. When that happens, they're dead men, quite literally. The internal discontent that they've been alternately buying off and brutally suppressing will boil over, and the princes are likely to suffer rather grisly fates when it does. And if prices remain in the range they are, that day is going to come sooner rather than later.
So, they do their best to reassure the world that there's plenty of oil under the Arabian penninsula and forestall the day when we dump petroleum as a transport fuel. They most likely cannot increase production without abusing their fields; there is substantial and growing evidence indicating that their production has peaked or will in the near future. See Simmons' Twilight in the Desert and spend some time reading http://theoildrum.com/ for a more complete story.
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