on ways to improve international counter terrorism efforts in February. The report of that conference is the only meaningful survey to date of operations for improving cooperation, it addresses new ways to fight terrorist financing in more depth that any other unclassified document available. Saudi Arabia emphasized the need to join in a global effort to create international terrorism centers as well as the need for reform to fight the causes of terrorism without equivocation. Interestingly enough, the supposed rivals within the Saudi royal family all cooperated in creating that conference. Crown Prince Abdullah and Prince Nayef were the keynote speakers and Prince Saudi al Faisal, the Foreign Minister, chaired it.
SAUDI LEADERSHIP DOES NOT SYMPATHIZE WITH TERRORISTS
Dr. Anthony Cordesman, Dr. Anthony H. Cordesman holds the Arleigh Burke Chair in Strategy at the Center for Strategic and International Studies and is Co-Director of the Center's Middle East Program. He is also a military analyst for ABC and a Professor of National Security Studies at Georgetown 2005
http://www.saudi-us-relations.org/articles/2005/ioi/050411b-terrorism-saudi-cordesman.html “Saudi Arabia and the Struggle Against Terrorism”
Three other elements of the Saudi counter terrorism effort also deserve attention. The first is that the government has handled its efforts in ways that have made it clear it will not use brute force or repression, and that counter terrorism means attacking terrorists. Anyone who visits Saudi Arabia sees many signs of improved security, but also of a gradual, though sometimes faltering, willingness to open up the news media and allow popular debate over public policy. Elections move slowly, and educational reform moves too slowly, but progress is still there. In contrast, the Al Qa’ida extremists have used violence and extremist rhetoric in ways that have largely alienated) the Saudi population as a whole. They find little support among Saudi Arabia's business community and educators. The bulk of the Saudi clergy, including its conservatives, see them as serious religious "deviants." There is no sign of popular protests or serious student support, or of more than the most marginal support within the security forces and military..
HIGH PRICES KILL ECON
OIL SHOCKS CAUSE SHIFT TOWARDS ALTERNATIVE ENERGY Gregg Johnson, Greg Lehman and Matthias Matthijs
“Power and Preservation in the House of Saud”
The Bologna Center Journal of International Affairs Spring, 2002 http://66.102.1.104/scholar?hl=en&lr=&q=cache:k566t6zx91oJ:www.jhubc.it/bcjournal/archive/print/2002/houseofsaud.pdf+%22alternative+energy%22+%22oil+prices%22+decrease+%22saudi+economy%22
Unlike many other oil producers, Saudi Arabia has huge untapped oil reserves. (Some estimates predict that Saudi reserves could supply oil for at least another century.) This has led officials in Riyadh to recognize the importance of moderate prices. Sharp increases, such as those experienced in the 1970s, would lead the West to reduce consumption and intensify the search for alternative energy sources, neither of which would be in the Saudis’ best interests.
SAUDI OFFICIALS CONCERNED ABOUT HIGH PRICES- SHOCKS DRIVE SHIFTS TOWARDS ALTERNATIVE ENERGY
Keith Johnson, Environmental capital reporter for the Wall Street Journal, 6/23/08 “Saudis or Speculators? Oil-Price Finger-Pointing Heats Up Where to find the answer for expensive oil—Saudi Arabia or Capitol Hill?”
http://blogs.wsj.com/environmentalcapital/2008/06/23/saudis-or-speculators-oil-price-finger-pointing-heats-up/
When Saudi Arabia rebuffed President Bush’s request for more oil production last month, the reasoning was simple: No customers were asking for more oil, so it clearly wasn’t a supply issue. So how to read the Kingdom’s decision Sunday not just to juice the wells with a short-term fix of an extra 200,000 barrels a day, but also a multi-billion dollar, long-term plan to produce more oil than Saudi Arabia’s ever produced before? For many observers, it’s just OPEC’s way of keeping the oil monkey on the world’s back, even if the promises seem flimsy. If high prices eventually succeed in driving the global economy away from oil and toward some alternative energy, Saudi Arabia and other Middle Eastern countries will be orphaned; discounting oil exports, the entire Middle East has a lower GDP than just Spain. From SMU’s EnergyIQ blog before this weekend’s Jeddah summit: It is in their best interest to feed the world’s addiction to oil with a reliable reasonably priced “fix.” At the very least, Saudi Arabia and OPEC will attempt to “talk the price down” by providing assurances to producers and consumers regarding its ability to continue to supply the world. But OPEC is implicitly arguing that there’s not a serious supply and demand imbalance. Thus there must be some other reason oil prices have drifted outside OPEC’s comfort zone. The WSJ notes that “Saudi officials worked the halls” in Jeddah blaming “despicable” commodities speculators for the run-up. Congress bit—today, armed with the knowledge that speculation in crude oil has nearly doubled since 2000, the House subcommittee on Oversights and Investigations is parading through a host of experts to debate the role of market speculators in the oil price rise. What will the House hear? To judge from the witness list, just what it wants. Among the experts: Oppenheimer and Co. oil analyst Fadel Gheit, who famously and furiously blames speculation for the bulk of the price increase, as well as Michael Masters, a Virgin Islands-based fund manager who doesn’t hesitate to point the finger at colleagues. He noted in previous congressional testimony that in the last five years, speculation in crude futures has increased almost as much as physical demand for oil in China, another favorite bete noir. Other energy experts set to testify include speculation alongside a weak dollar, “peak oil” and relentless demand growth as a part of a “perfect storm” that explains today’s high oil prices. Clearly, oil demand is soaring, thanks to China and other fast-growing economies, even as global production struggles to keep pace. But huge investment funds also discovered commodities like oil as a convenient way to hedge against inflation. What’s the real explanation for high oil prices—and more importantly, what’s the solution?
HIGH PRICES KILL ECON/ SAUDI ECON ALT CAUSE
HIGH PRICES KILL SAUDI SOFT POWER- SAUDI OFFICIALS TRYING TO LOWER PRICE NOW
6/22/08 “Saudi summit aims at oil prices The world's largest oil producer, worried the escalating cost of crude will dampen demand, is convening a special meeting on Sunday to seek solutions.”
NEW YORK (CNNMoney.com) -- Saudi Arabia this weekend will convene a special summit on oil prices that could lead to cheaper crude on the world market. But a Saudi decision to produce more crude likely won't come without a demand: The Kingdom is expected to press the U.S. government to impose greater controls on oil trading and take steps to strengthen the dollar. The world's largest oil producer, stepping out of its usual role as de facto leader of OPEC, will host representatives of big oil producing nations, consumer countries and companies. The Saudis are widely believed to be concerned that escalating oil prices - crude hovered around $134 a barrel Thursday, nearly double what it cost a year ago - will cause a permanent drop in demand as consumers get more efficient or, worse, the global economy slows. One sign of the Saudi anxiety: The country's oil production decisions, usually left to its oil minister, appear to have been put back in the hands the Royal Family, according to Antoine Halff, deputy head of research at brokerage firm Newedge. Fuzzy numbers As a group, OPEC has been reluctant to raise production. Several states, enjoying the record prices, maintain there is no shortage of crude. It's a line the Saudis also touted - until recently. Saudi Arabia now says it will pump more. The Kingdom, during a recent visit by President Bush, pledged to increase production by 300,000. Last week, they said they would boost it by another 200,000 barrels. Those numbers are not set in stone, and Sunday's meeting may produce more details on the planned increases. The Saudis will also seek to convince refineries and others to keep buying. Recently, refiners worldwide have cut back in light of record prices. But that has only led to a drop in crude inventories - further pushing up the price of oil. To inject more oil into the market, Halff said the Saudis may use the meeting to arrange for special deals with refiners and others that could bring crude to market at below-market prices. The exact nature of the deals, he noted, will probably never be disclosed. At the very least, traders will be watching the Sunday meeting to see if those announced production increases fall closer to the 500,000 or 800,000 barrel a day mark. Sunday showdown The meeting holds high stakes for both Saudi Arabia and the United States. If prices don't respond, the country's credibility will suffer, and with it any notion that someone has control over these record oil prices. "Riyadh is seen as running out of options to regain control of the market," said Halff. "Failure to do so, it is assumed, could cause prices to leap even higher." The Saudis will also expect something from consumer nations in return. The Kingdom has long held that oil markets are well supplied, and that speculative investing is the real culprit behind high prices. To that end, the Saudis will likely seek more oversight of oil markets, and perhaps even limits on the amount of contracts speculators can hold. That's something consuming counties may give them. Several proposals along those lines have bipartisan support in Congress. More difficult to deliver, and probably more important to the Saudis, is a stronger dollar. Like the currencies of many countries in the Middle East, the Saudi riyal is pegged to the U.S. dollar - it rises and falls with the greenback. But while lower interest rates - and hence a lower dollar - may be what the U.S. economy needs to snap out of its slump, they have been disastrous for the red-hot Saudi economy. Inflation in Saudi Arabia has doubled in the last year and is projected to surge even higher. "I think [Saudi Arabia] wants something from the West, particularly the U.S. ... a stronger monetary policy," Nauman Barakat, an energy trader at Macquarie Futures, wrote in a research note. That will be hard to get. The Federal Reserve is unlikely to raise interest rates anytime soon. And any other move by the U.S. government is likely to have little effect on the free-trading dollar.