Saudi Arabia To Increase Number Of Drilling Rigs Substantially; Yemen Is A Success Story -- President Obama, September, 2014 -- March 21, 2015

Saudi perspective: Saudi says they will increase sharply the number of drilling rigs. This is a huge story; long-time readers of the blog know my thoughts on this (Saudi Perspective, Peak Oil?)

Reuters/Rigzone is reporting:

As the global energy industry stares transfixed at a spectacular drop in U.S. rigs, Saudi Arabia is ramping up the number of machines drilling for oil and gas despite a sharp fall in the price of crude.

Industry sources and analysts say the OPEC kingpin is looking beyond the halving of global oil prices since June 2014 to a time when crude could again be in short supply. Riyadh is therefore keen to preserve what is known as its spare capacity - the kingdom's unique ability to raise oil output quickly at any given moment.

But to achieve that, Saudi Arabia has to drill much more than in the past, after boosting output to record levels to compensate for global supply outages in the past four years. "The Saudis are probably worried about everyone else reducing capex as a result of low oil prices and about non-OPEC output falling off a cliff at some point.

We all know that supply disruptions are unpredictable but they are certain," said Gary Ross, executive chairman of New York oil consultancy PIRA. "The increase in Saudi rig numbers is like a signal to the industry - let's be rational. We will need supply growth in the future."

Flashback: Shale Boom Makes United States World’s Top Petroleum Producer, US Chamber of Commerce, September 30, 2014:

 46% of America's crude oil production comes from Texas and North Dakota; the rest from the other 48 states.

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Not Much Value Except Perhaps For Archival Purposes

Perhaps Something Is Lost In Translation

I'm not sure whether these stories have any relevancy. First, the source (a Saudi spokesman) is self-serving; second, I've never found the Saudis to be particularly trustworthy; and, then third, some of the statements are completely absurd, such as this one:

“Shale oil companies are one of the high-cost producers that benefited from high oil prices,” al-Madi said. “We’re not against shale oil. We welcomed shale oil but it’s not fair for high-cost producers to push low-cost producers out of the market.” 

"It's not fair for high-cost producers to push low-cost producers out of the market." And then he talks about supply and demand. Give me a break. The whole interview is preposterous. Perhaps something was lost in translation. 

Bloomberg Business is reporting.

For me, this is the important takeaway: if the Saudis are correct, that we won't see $100- or $120-oil any time soon, it really puts a crimp on OPEC countries that base their budgets on $100 - $200 oil. I believe one of the most conservative countries (with regard to pricing) is Saudi Arabia and even they set their budget at $100-oil. Many of the other OPEC countries have a budget based on a much higher number.

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That Was Easy

For those with short memories (most of the media and much of Congress, I assume), this was the headline story back in September, 2014, less than a year ago:

Touting Yemen, Somalia as success stories, Obama sets low bar for Iraq

Regardless of the bar set for Iraq, President Obama touted Yemen as a success story.

I guess it was. We just didn't know that President Obama was rooting for the terrorists.

Being tweeted now:

US is evacuating roughly 100 special forces from Yemen as security situation deteriorates - @cnni 

Once the US special forces leave, this will be another stronghold for the JV team -- ISIS.

Memo to self: scratch Yemen off my bucket list of countries to visit this year.

In an unrelated story, President Obama will soon sign an agreement with Iran, following closely on his successes in Yemen.

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Yemen

JVs - 1, US Special Forces - 0

CNN is reporting: 

The U.S. military is in the process of evacuating about 100 Special Operations forces members from the Al Anad airbase in Yemen due to that country's deteriorating security situation.

Those being evacuated are the last American troops stationed in the Arab nation, which is home to al Qaeda in the Arabian Peninsula, the terrorist group also known as AQAP. The United States closed its embassy in Sanaa last month, after Houthi rebels took over the Yemeni capital. And hundreds of al Qaeda members escaped two Yemeni prisons Thursday and Friday, raising further security questions.

For years, the U.S. military has worked closely with Yemen's government to go after AQAP, together carrying out numerous attacks like the 2011 drone strike that killed prominent al Qaeda figure Anwar al-Awlaki. U.S. President Barack Obama has hailed this cooperation as a pillar in his anti-terrorism campaign.

"Yemen has never been a perfect democracy or a island of stability," Obama said in January, promoting the policy of "partnering and intelligence-sharing with that local government" as the best approach in a bad situation.

Of course, last September, Yemen was one of President Obama's success stories. 

Understatement of the century: "Yemen has never been a perfect democracy or a island of stability." -- President Obama.

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65% Is A Failing Grade -- Except For The Government

The Weekly Standard is reporting:

Given that Obamacare’s supporters like to take the Congressional Budget Office’s overly optimistic scoring of the president’s signature legislation as gospel, it’s fun to look at how poorly Obamacare is actually doing in relation to earlier CBO projections. 

When the Democrats rammed Obamacare through Congress in 2010 without a single Republican vote, the CBO said that the unpopular overhaul would lead to a net increase of 26 million people with health insurance by 2015 (15 million through Medicaid plus 13 million through the Obamacare exchanges minus 2 million who would otherwise have had private insurance but wouldn’t because of Obamacare).

Fast-forwarding five years, the CBO now says that Obamacare’s tally for 2015 will actually be a net increase of just 17 million people (10 million through Medicaid plus 11 million through the Obamacare exchanges minus 4 million who would otherwise have had private insurance but won’t, or don’t, because of Obamacare). 

In other words, Obamacare is now slated to hit only 65 percent of the CBO’s original coverage projection for 2015.

The numbers have always been an issue, but the real travesty is that ObamaCare is nothing more than high-priced catastrophic health insurance.