Oil Boom Creates Millionaires and Animosity in North Dakota

STANLEY, N.D. — Geologists first discovered oil here in 1951, but it took the recent spike in gas prices and new technology to make drilling economical. Now, after decades of watching their children flee the prairie for brighter futures elsewhere, North Dakotans in the state's sparsely settled west find themselves sitting atop the largest contiguous oil deposit in the lower 48 states. There are an estimated 4.3 billion barrels of recoverable oil in a deposit under parts of the Dakotas, Montana and Canada — about half what the USA uses in a year. Some who own only the surface of their land because forbearers sold off the mineral rights beneath complain about traffic and trucks chewing up their roads. Restaurants, motels and hospitals helplessly watch employees leave for higher-paying oil jobs. A nursing home recently offered $1,000 signing bonuses for housekeepers. Schools started the fall short of teachers priced out by a housing shortage that has seen rents double as oil companies snap up whole apartment buildings for their workers, says Tom Rolfstad, economic development director in Williston.

Saudi Arabia's Token Increase in Oil Production

RIYADH, Saudi Arabia - Regular gasoline goes for about 50 cents a gallon here in the capital of the world's largest producer of oil, which pumps out 9 million barrels a day. But, after a visit with the Saudi monarch here, President Bush has found little hope of bringing any significant relief back home, where Americans are paying close to $4 a gallon. The Saudis have agreed to a relatively modest boost in oil production, announced in the midst of meetings Friday with King Abdullah over tea, lunch and dinner and an overnight stay for Bush at the palatial horse farm where the Saudi ruler keeps 150 Arabian stallions in air-conditioned stalls. But, for the second time in five months, the Saudis have rebuffed the Bush administration's request for significantly stepped-up oil production to ease rising oil prices.

Gas/Oil Prices Continue To Climb

WASHINGTON — Airlines have reduced the amount of spare fuel on airplanes in a money-saving effort that is raising concerns among some pilots and a government watchdog. Less fuel on planes increases the likelihood of diverted flights because planes can't circle for as long over airports when a landing is delayed, according to more than 20 pilots who filed complaints in the past year with NASA's Aviation Safety Reporting System. The reporting system collects complaints from pilots and others and keeps their identities secret.

WASHINGTON — Oil prices have risen above $127 a barrel for the first time Thursday, while gasoline also recorded a new high at a national average of $3.79 per gallon.

Gassed

The average price of gasoline set a record Monday, joining the prices of oil and diesel fuel in high-price territory that threatens an already shaky U.S. economy. Americans were paying a nationwide average of $3.225 for regular, the U.S. Energy Information Administration said in its weekly price survey — 0.7 cents more than the previous record last May 21, though still short of inflation-adjusted federal peak of $3.405 in March 1981. Oil blew by its record of $105.47 a barrel to close Monday at $107.90.Gasoline prices are rising sharply as refiners, who have kept prices down in order to compete for sales, become more willing to pass on their higher costs of crude oil, according to an industry analyst Sunday. The Lundberg Survey of 7,000 stations nationwide released Sunday said things will likely get worse, with prices at the pump rising 20 to 30 cents a gallon in the next month as refiners begin passing on to customers more of their higher costs for crude oil.

• JJ Commentary: Oil will prove to be the lynch pin that undermines the U.S. economy given the falling dollar and our humongous debt.

Slippery Slope

LONDON (Reuters) — World oil demand will rise faster than expected to 2012 while production lags, leading to a supply crunch, the International Energy Agency said Monday. The outlook, which updates an IEA forecast from February, coincides with a jump in oil prices to more than $75 a barrel, closing in on a record high near $79, on concerns of a tightening market. The Paris-based IEA also said additional global refining capacity over the next five years will lag earlier expectations as rising costs and a shortage of engineers delay construction.

The report points to a greater reliance on the Organization of the Petroleum Exporting Countries, the source of more than a third of the world's oil. While foreseeing higher demand, the IEA expects less supply to come from producers outside OPEC and the agency also trimmed a forecast for the 12-member group's unused production capacity. Lower supply from non-OPEC countries and rising demand will boost the requirement for OPEC oil.

• JJ Commentary: Oil will be one of the primary Islamic weapons in the months and years to come.