term energy security will require the U.S. and Saudi Arabia to confront four key challenges: 1.) improving data; 2.) removing impediments to deliverability; 3.) protecting the physical security of the supply system, and 4.) maintaining the flexibility necessary for overcoming unanticipated disruptions. Challenge Number 1: While much needs to be done to improve oil market data, there is a particularly pressing need for predictable energy demand data. The lack of reliable information on demand makes it very difficult to assess the risks and rewards of investing billions of dollars to increase capacity. When faced with these decisions, producers must evaluate both market-driven forces as well as unpredictable government policies which can either inflate or reduce future demand for energy. Unfortunately, we fear that some producers, when faced with such uncertainty, will choose a risk-averse approach which means they will not make timely investment in new capacity. Much work needs to be done in the area of improving oil market data. We have made a significant start with the inauguration of the Joint Oil Market Data Initiative which is known by the acronym JODI. The JODI will shortly release its second report, and with the participation of over 90 countries and six international organizations, I believe we will see notable progress toward the goal of improving oil market data. Challenge Number 2: The need to remove constraints on deliverability. Resource availability is not a threat to sustainable global energy security. There is plenty of oil left to be produced and technology will help us recover an ever greater percentage of the oil in place. While availability is not a concern, it is clear that the industry must confront serious bottlenecks and constraints on our ability to deliver products to end consumers. This is what I have termed our "deliverability" problem. The challenges will increase with the growth in energy demand that is expected over the next 20 years. We in Saudi Arabia are committed to resolving this "deliverability" challenge. We are undertaking a massive investment program to increase our production capacity to 12.5 million b/d by 2009, with the potential for more later if market conditions warrant. This expansion will make a significant contribution to meeting the world's increasing needs for energy. In addition to our program to increase oil production capacity, the Kingdom is undertaking large projects in a number of areas, including: oil and natural gas exploration, petroleum refining, petrochemicals, power generation, water desalination, mining and manufacturing. --more 2136 Local Time 1836 GMT
