US to help Saudis with nuclear reactor

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May 16, 2008 19:29 | Updated May 17, 2008 10:26

US to help Saudis with nuclear reactor

By ASSOCIATED PRESS

President George W. Bush and King Abdullah formalized new cooperation on Friday between the kingdom and the United States on a range of topics, including the development of civilian nuclear energy in Saudi Arabia and US protection of Saudi oil fields.


The agreements came as Saudi Arabian leaders made clear that they saw no reason to increase oil production until their customers demanded it, apparently rebuffing a request made by the president directly to the king in an effort to stay the soaring US gasoline prices.

During Bush's second personal appeal this year to King Abdullah, Saudi officials stuck to their position that they are already meeting demand, the president's national security adviser told reporters.

"What they're saying to us is ... Saudi Arabia does not have customers that are making requests for oil that they are not able to satisfy," Stephen Hadley said on a day when oil prices topped $127 a barrel, a record high.


The Saudi government indicated that it is willing to put on the market whatever oil is necessary to meet the demand of its customers, Hadley said.

But even then, he said, Saudi leaders say increased production would not dramatically reduce pump prices in the United States.

The Saudis are investing in ways to increase oil production over time. Officials told Bush they are doing "everything they can do" for now to address a complicated market.
Hadley said the Bush administration will take the explanation back to its own experts and "see it if conforms."

When Bush and Abdullah met in the kingdom in mid-January, the president also sought more Saudi output but got a chilly response to that plea. Saudi Arabia said it would increase production only when the market justified it and that production levels appeared normal.

Bush acknowledges that raising output is difficult because the demand for oil - particularly from China and India - is stretching supplies. Also, economists say prices are being driven up by increased demand, not slowed production.
High energy costs are a major drain on the US economy, which is experiencing a slowdown that some think is already a recession. At the pump, gas prices rose to a national average of $3.78 per gallon on Friday, according to a survey of stations by AAA and the Oil Price Information Service.

Beyond oil, Iran also dominated the meeting between the president and the king. The two shared a concern over the recent in violence in Lebanon, where Hizbullah overran Beirut neighborhoods last week. The display of military power by the Iranian- and Syrian-backed Hizbullah, which the US considers a terrorist organization, resulted in the worst internal fighting since the end of Lebanon's 1975-90 civil war.

Hadley said the leaders shared concerns the recent events would "embolden Iran." The US and Saudi Arabia, he said, "are of one mind in condemning what Hizbullah did in bringing pressure on the duly elected government of Lebanon."

"Iran, working directly and through Syria, was very much behind what happened in Lebanon over the weekend and it is another example of Iran taking actions that are contrary to the interests of those in the Middle East who want peace, security and freedom," Hadley said.

Bush was spending the day with Abdullah at his horse farm outside Riyadh, talking mostly out of public view over three tea services and two meals.

The White House says the president's visit is intended, in part, to celebrate 75 years of formal US-Saudi relations. But the rising price of oil commanded attention.
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"May God have mercy upon my enemies, because I won't." -General George S. Patton

Psalm 82-8: Arise, O God, judge the earth, for You inherit all the nations.