It's doubtful that presidential spokesman Scott McClellan failed to choose his words carefully when he announced this week that Saudi Arabia was producing "near capacity." It was the same day that President Bush called for passage of his energy plan which includes continuing heavy subsidies for fossil fuels and new subsidies for nuclear power.
But an admission that the world's largest oil exporter and only remaining swing producer is out of capacity means either 1) the White House knows that oil supplies are stretched as far as they can go or 2) it will say whatever it needs to in order to get a bad energy bill passed.
Energy investment banker Matt Simmons has been insisting that if Saudi Arabia has peaked, then the world has peaked. This is within a context in which all major government energy planning agencies acknowledge that the bulk of future growth in oil supplies is going to have to come from Saudi Arabia and a few other Persian Gulf states. Do Scott McClellan and, by extension, the president understand what they are saying?
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