It's the Oil, Stupid - AAWFrance .org

Peak Oil FAQ

2006-10-19T01:05:00.000+02:00

ARE WE RUNNING OUT OF OIL?

Oil is a substance, which is formed over million of years at a rate much smaller than the current rate of consumption. For all practical purposes it can therefore be considered to be a finite resource. One day we will run out of it, but not today.

Peak oil theory acknowledges the fact that there is a very large amount of oil left. However from a production point of view the amount of oil left is not the only thing that matters. The facility by which it can be produced is equally important.

As we begun to develop the oil recourses of this world, we started with the oil, which was easy to find and to develop. At this moment many of these early wells are reaching the end of their lifetime, and we are facing the increasing challenge of replacing these wells by more expensive and less productive sources. This is a challenge, which should not be taken lightly.

This brings us to the core of the peak oil problem. We're not running out of oil, but we are running out of the cheap, easy-to-get oil.

· What is peak oil?

Peak oil is a concept, which was developed and published in 1949 by Hubbert King, a petroleum engineer at Shell. Hubbert looked at the behavior of individual oil wells. What he noticed was that an oil well essentially has three stages of production.

1. At the first stage of a well's life, the oil is easy to produce. The pressure in the reservoir simply pushes the oil out. At this stage production growth is easily achieved.
2. As more oil is produced the pressure in the reservoir starts fading. As most of the easy oil has been extracted, the oil becomes more difficult to extract. At this stage great amounts of technology have to be introduced to maintain reservoir pressure and flow. The production curve levels off.
3. At a certain point, no amount of technology can stop the production from declining and the production starts to decrease until extraction is not economically feasible anymore. When that happens the well is closed.

Plotted against time this yields a bell shaped curve, the so-called Hubbert curve. Hubbert's main discovery was that the curve was symmetrical and that the peak in production usually fell at the halfway point. That means that the production peaks at the point where it has produced half the oil that it is ever going to produce.

He then went further by assuming that the production of a country should display a similar behavior, since the production of a country basically is the summation of a number of wells. In he applied this concept to the production of the USA and derived a peak in 1970. Although his theory was met with a lot of skepticism it has proven to be extremely accurate. US production peaked in 1970 and has been in decline ever since.

This theory can also be applied to the world as a whole. According to the peak oil theory, the peak will occur when roughly half the world's recoverable reserves have been recovered.

· When will it hit?

This has been the subject of a fierce debate. The consensus is that peak oil will hit somewhere between now and 2030, but the different models and the different reserve estimates, point to different dates within this timeframe. The US experience has shown that the peak occurs with little or no advance warning. The models are 'blind', in a sense that they greatly rely on the accuracy of the input. The problem is that such data is hard to come by, as the oil industry is a very competitive (and thus secretive) industry. The current debate revolves around 3 central issues.

* The amount of recoverable reserves that already has been found. - Recent experiences have shown that various companies and governments have overstated their reserves for political reasons. The suspicion exists that this is a widespread practice in the oil industry and that actually less oil has been found than is currently reported.
* The amount of recoverable reserves that still has to be found. - As we can assume that we haven't found all the oil in the world yet an estimate has to be made of the oil that is still out there.
* The technological advances that will be made in the near future. - Enhanced methods of recovery mean that more oil can be extracted from existing wells, thereby shifting the peak to a later date.

In this debate two groups can be distinguished:

* The International Energy Agency (IEA), which is a Paris-based intergovernmental body. Their estimates lead to a peak for conventional oil in 2030. (World energy outlook 2004).

* The Association for the Study of Peak Oil and Gas (ASPO). Their estimates lead to a peak for conventional oil in 2005. (ASPO Newsletter November 2004)

One of the main differences between these organizations is that the IEA uses unaudited (as they are reported by the various countries) reserve numbers. In their 2004 report they do warn that these numbers are suspicious, as various countries have revised their reserve numbers upwards without presenting any new finds to justify these revisions.

Saudi Arabia and Kuwait revised their reserves upward by 50%, while Venezuelan reserves were boosted 57% by the inclusion of heavy oil in 1988. The United Arab Emirates and Iraq also recorded large upward revisions in that period. Total OPEC reserves jumped from 536 billion barrels in 1985 to 766 billion barrels in 1990. As a result, world oil reserves increased by more than 30%. This hike in OPEC countries' estimates of their reserves was driven by negotiations at that time over production quotas, and had little to do with the actual discovery of new reserves. In fact, very little exploration activity was carried out in those countries at that time. Total reserves have hardly changed since the end of the 1980s. IEA world energy outlook 2004

The main point of criticism towards the IEA is that they are much too positive when it comes to estimating the known and unknown reserves. The current stream of reserve scandals does seem to suggest that their reserve numbers are too high. Their estimate of the yet-to-find oil would mean that we should be finding much more oil than we're currently doing, which can be a sign that these estimates are also too high.

ASPO uses more conservative (audited) reserve estimates, but critics claim that ASPO is too negative when it comes to estimating the world's reserves and the impact of future technology. Indeed they have been forced to revise their date several times. On the other hand ASPO has correctly predicted the peak for a number of individual countries, showing the validity of their methods.

One can wonder whether this debate is really so important. Peak oil is something, which is going to happen in our lifetimes. This clearly is something we have to deal with, not the future generations.

· Are the current high oil prices related to peak oil?

Oil prices have risen dramatically in the past few years. This is certainly a worrying sign. Although much of the price fluctuations can be related to the global geopolitical situation, there are signs that the production has problems in keeping up with the demand growth. This could be a temporary lapse or a structural problem.

Most countries are producing at full capacity. Since the oil shocks OPEC has always maintained spare production capacity. They are "swing producers" which means that they have the ability to temporarily increase production to absorb supply shocks. This has been a great stabilizing factor in the oil market. Unexpected demand growth is currently usurping OPEC's spare capacity, so that any supply disruptions lead to violent price swings. Whether the prices will come down depends on whether OPEC will be able to reclaim that swing role by indigenous production growth.

As most of the non-OPEC producers are already post peak or close to peaking the role of OPEC is extremely important for the future of oil production. If for any reason OPEC would be unable (or unwilling) to increase the production significantly, the world would be very close to peaking.

· How will peak oil affect me?

Peak oil will be a turning point in the history of mankind as oil is one of our most valuable and versatile commodities. The problem goes much further than the petrol you put in your car. There is hardly anything we use which isn't dependent on oil.

Imagine the current world without oil. There would be no transport, no heating fuel, no synthetic fibers, no plastics, no computers etc. Without oil-based fertilizers and oil powered farming machines our food production would be severely compromised. Without oil the transport of the food to the markets would be a daunting task.

Luckily we're not going to lose our entire oil production overnight. After the peak the oil production will gently slope downwards by 2-3% a year, buying us more time. However this little thought experiment illustrates the complexity of the problem we're facing. Peak oil is going to affect all aspects of our life: the food we eat, the clothes we wear, the houses we live in, and the work we do. We have to find solutions to each and every one of those aspects, and implement them at the rate of the decline, if we want to maintain our current standard of living.

Some people say that the task ahead is simply too big. They foresee a collapse of the society as an inevitable outcome of peak oil. Others say that it is possible, that we can make the transition. No one is saying it is going to be easy.

Without a crystal ball it is impossible to predict what exactly is going to happen. Any guess is as good as another. What is certain is that we have to start thinking about a future without oil and that the longer we wait with facing this reality, the harder the transition is going to be.

· Many people have cried wolf before, why is this different?

In the past century more people have proclaimed that our oil production would peak. The most notable person to do so was president Carter in a dramatic speech in 1977.

"The oil and natural gas we rely on for 75 percent of our energy are running out. In spite of increased effort, domestic production has been dropping steadily at about six percent a year. Imports have doubled in the last five years. Our nation's independence of economic and political action is becoming increasingly constrained. Unless profound changes are made to lower oil consumption, we now believe that early in the 1980s the world will be demanding more oil that it can produce."

"Each new inventory of world oil reserves has been more disturbing than the last. World oil production can probably keep going up for another six or eight years. But some time in the 1980s it can't go up much more. Demand will overtake production. We have no choice about that".

As we all know this hasn't happened. Peakoil critics frequently use this speech, to dismiss any fears about the future of the oil production. That's not entirely fair because we have to account for the fact that shortly after this speech the oil shock occurred which cut the consumption by over 20%. Were it not for this event the world would have consumed a lot more oil and would be a lot closer to peaking. Perhaps we would even be post peak right now.

If anything, it shows the difficulty of predicting the oil supply, as production is also heavily influenced by economic and political factors.

Indeed many people have cried wolf before, and many were wrong. But we should not forget that some where right. An odd 30 years ago the Club of Rome warned us for global warming. Critics we're quick to dismiss this as another "Wolf" story. It appears now that we have to suffer the consequences of that naivety.

Secret US Plans for Iraq's Oil

2006-10-19T01:04:00.001+02:00

Secret US Plans for Iraq's Oil

by Greg Palast
Reporting for BBC Newsnight
17 March 2005

Greg Palast is the author of The Best Democarcy Money Can Buy. His website is http://www.gregpalast.com/

The Bush administration made plans for war and for Iraq's oil before the 9/11 attacks sparking a policy battle between neo-cons and Big Oil, BBC's Newsnight has revealed.

Two years ago today - when President George Bush announced US, British and Allied forces would begin to bomb Baghdad - protestors claimed the US had a secret plan for Iraq's oil once Saddam had been conquered.

In fact there were two conflicting plans, setting off a hidden policy war between neo-conservatives at the Pentagon, on one side, versus a combination of "Big Oil" executives and US State Department "pragmatists."

"Big Oil" appears to have won. The latest plan, obtained by Newsnight from the US State Department was, we learned, drafted with the help of American oil industry consultants.

Insiders told Newsnight that planning began "within weeks" of Bush's first taking office in 2001, long before the September 11th attack on the US.

An Iraqi-born oil industry consultant Falah Aljibury says he took part in the secret meetings in California, Washington and the Middle East. He described a State Department plan for a forced coup d'etat.

Mr Aljibury himself told Newsnight that he interviewed potential successors to Saddam Hussein on behalf of the Bush administration.

Secret sell-off plan

The industry-favored plan was pushed aside by yet another secret plan, drafted just before the invasion in 2003, which called for the sell-off of all of Iraq's oil fields. The new plan, crafted by neo-conservatives intent on using Iraq's oil to destroy the Opec cartel through massive increases in production above Opec quotas.

The sell-off was given the green light in a secret meeting in London headed by Ahmed Chalabi shortly after the US entered Baghdad, according to Robert Ebel. Mr. Ebel, a former Energy and CIA oil analyst, now a fellow at the Center for Strategic and International Studies in Washington, flew to the London meeting, he told Newsnight, at the request of the State Department.

Mr Aljibury, once Ronald Reagan's "back-channel" to Saddam, claims that plans to sell off Iraq's oil, pushed by the US-installed Governing Council in 2003, helped instigate the insurgency and attacks on US and British occupying forces.

"Insurgents used this, saying, 'Look, you're losing your country, your losing your resources to a bunch of wealthy billionaires who want to take you over and make your life miserable," said Mr Aljibury from his home near San Francisco.

"We saw an increase in the bombing of oil facilities, pipelines, built on the premise that privatization is coming."

Privatization blocked by industry

Philip Carroll, the former CEO of Shell Oil USA who took control of Iraq's oil production for the US Government a month after the invasion, stalled the sell-off scheme.

Mr Carroll told us he made it clear to Paul Bremer, the US occupation chief who arrived in Iraq in May 2003, that: "There was to be no privatization of Iraqi oil resources or facilities while I was involved."

The chosen successor to Mr Carroll, a Conoco Oil executive, ordered up a new plan for a state oil company preferred by the industry.

Ari Cohen, of the neo-conservative Heritage Foundation, told Newsnight that an opportunity had been missed to privatize Iraq's oil fields. He advocated the plan as a means to help the US defeat Opec, and said America should have gone ahead with what he called a "no-brainer" decision.

Mr Carroll hit back, telling Newsnight, "I would agree with that statement. To privatize would be a no-brainer. It would only be thought about by someone with no brain."

New plans, obtained from the State Department by Newsnight and Harper's Magazine under the US Freedom of Information Act, called for creation of a state-owned oil company favored by the US oil industry. It was completed in January 2004, Harper's discovered, under the guidance of Amy Jaffe of the James Baker Institute in Texas. Former US Secretary of State Baker is now an attorney. His law firm, Baker Botts, is representing ExxonMobil and the Saudi Arabian government.

View segments of Iraq oil plans at
www.GregPalast.com/opeconthemarch.html

Questioned by Newsnight, Ms Jaffe said the oil industry prefers state control of Iraq's oil over a sell-off because it fears a repeat of Russia's energy privatization. In the wake of the collapse of the Soviet Union, US oil companies were barred from bidding for the reserves.

Jaffe said "There is no question that an American oil company ... would not be enthusiastic about a plan that would privatize all the assets with Iraq companies and they (US companies) might be left out of the transaction."

In addition, Ms. Jaffe says US oil companies are not warm to any plan that would undermine Opec, "They [oil companies] have to worry about the price of oil."

"I'm not sure that if I'm the chair of an American company, and you put me on a lie detector test, I would say high oil prices are bad for me or my company."

The former Shell oil boss agrees. In Houston, he told Newsnight, "Many neo-conservatives are people who have certain ideological beliefs about markets, about democracy, about this that and the other. International oil companies without exception are very pragmatic commercial organizations. They don't have a theology."

Greg Palast's film - the result of a joint investigation by BBC Newsnight and Harper's Magazine - will broadcast on Thursday, 17 March, 2005.

You can watch the program online - available Thursday, March 17 after 7pm EST for 24hrs - from the Newsnight website.

You can also read the story in greater detail in the latest issue of Harper's magazine - now available at your local newsstand.

GlobalCorp - An Important Announcement

2006-10-19T01:03:00.000+02:00

GlobalCorp - An Important Announcement

by Michael C. Ruppert
From The Wilderness
March 10, 2005

Michael C. Ruppert is the author of Crossing the Rubicon, the Decline of the American Empire at the End of the Age of Oil.

(Extracts)

Peak Oil is no longer on the way. It is here. Forget for a moment whether or not global oil production has actually begun (see below) its hopelessly irreversible decline. We will not know that for certain until sometime after it happens. The political fact, however, is that global inertia in response to Peak has driven our species, all of it, past the point of no return. There is no changing course for us. We have committed to a path of bloody destruction that can no longer be postponed or evaded. Energy investment banker Matthew Simmons - long a smoke alarm for Peak Oil - has said repeatedly, "The problem is that the world has no Plan B." Simmons is right.

Seeing clearly that there is no Plan B, it is now also too late to come up with a Plan C or Plan D. What I had hoped to accomplish with Crossing the Rubicon is now a missed opportunity. Yet the map so many of us drew in Rubicon remains astonishingly accurate and unaltered. It may prove to be an indispensable survival tool in and of itself very shortly.
…

As the evidence grows stronger that we are at Peak now (or very close to it), there is a distinct correlation between oil price hikes and military budget increases, weapons deployment, warfare and covert operations around the world. Economists don't consider such things so they don't report on them. Their orthodoxy scorns any integrated view of world developments outside their own discipline.
…
Nature does not grant time outs.

THE CIA

I recently had a conversation with someone who spent 17 years in the CIA's Directorate of Operations. Thinking of the purge and power shift that has - over the course of the last nine months - decimated the Central Intelligence Agency (long my Bête Noir) and shifted much of its power to the Pentagon, I asked the following question.

"Look, the agency does many things in many roles from raw intelligence gathering, to economic warfare, to satellite recon, to paramilitary operations requiring cover and deniability, to drug smuggling. But since its inception it was always focused in large part on medium and long-term intelligence gathering and covert operations through the costly, patient, expensive means of placing NOCs (non-official covers) or assets in missions where it might take five, ten or fifteen years to bear fruit. These programs were always centered on "what if" contingencies which inherently implied that multiple outcomes were possible; that there were alternative futures to be influenced and shaped.

"Battlefield intelligence is a different critter. It presupposes that there is nothing more important than the battle that has been joined at this moment. If the battle is not won, there are no future choices. Hence nothing matters other than the war that is being fought today. No Yaltas or Potsdams; no future deep cover moles will be needed.

"Every country in the world is betting everything it has on this one hand knowing that after 2007 or 2008 the game ends. The map of the future after that is unknowable and, to large extent, irrelevant. That's why Rumsfeld has won the battle to control American intelligence operations and why the new National Intelligence Director John Negroponte is getting the job.

"Is that right?"

Without the slightest hesitation the former CIA employee answered, "Yes."

It is the ultimate testimony to the madness of Donald Rumsfeld, Paul Wolfowitz and Dick Cheney that there are no more tomorrows left to fix anything. Since 9/11, and especially since a second presidential election was stolen four months ago, the setting for a real Armageddon has been locked in place. It may well have been for years before that.

GASOLINE PRICES

A recent USA TODAY story, giving us the new word "Petronoia," warned that gasoline prices could jump by 25 cents per gallon within the next few days. That increase, it said, would take $90 million per day out of a consumer economy that relies on profligate spending to sustain already bursting bubbles. How are we getting the money to sustain these bubbles? We are, according to Bill Fleckenstein of MSN, using our houses as ATMs just to keep up, even as the housing bubble has already begun to burst.1 Our paychecks certainly aren't increasing.

OIL PRICES

Oil has topped $54 a barrel. It's gone up more than 25% in less than three months and fifty per cent over the last year; 400% since 1999. This amid strong signs that global oil production may have already peaked, as declines around the world are not being offset by new production. New fields may come online but the respite will be very short-lived. There may be a few "mega" projects (about a six-day supply for the planet in each) which may produce momentary price declines but the trend is irreversible. Official bodies like the International Energy Administration (IEA) are openly wishing that demand growth might slow in 2005, when actual figures already prove this wish utterly fanciful. China's oil demand is expected to grow by 33% this year. Industrialized and developing nations are expanding their economies as fast as possible to generate cash and liquidity as a means of securing more oil.

The vicious cycle is in full swing. And yet, according to economist Andrew McKillop…

We then move on to actual declines in production. For the majority of non-OPEC producers - (in fact nearly all except Russia and some Central Asian producers) rates of decline are stubbornly high, despite vaunted technology improvements…

One of the biggest problems facing the IEA [a UN sponsored agency], the EIA [a US government agency] and a host of analysts and 'experts' who claim that 'high prices cut demand', either directly or through damping oil economic growth, is that this does not happen in the real world. Since early 1999 oil prices have risen about 400%. Oil demand growth in 2004 at nearly 4% was the highest in 25 years. In each year since 1999 world oil demand growth has been higher than the previous year - as prices rise.2

McKillop's analysis, which essentially says that rising oil prices are either good or of no consequence, falls way short for two reasons. Energy investment banker Matt Simmons a year ago in Berlin stated that he saw the actual point at which price would curb demand at around $180 per barrel. The consumers are bearing most of the costs of these increases. Is this the consumers' choice, or is it simply the point beyond which "the American way of life" will become impossible, regardless of how many incremental cuts people accept?

Go ahead; try to choose to use less oil of your own volition. What reductions are available to you are minimal because the world in which you must make your house payments, feed your family, drive to work and pay your bills is leaving you little choice but to consume more and get less for your money. Only at around $180 a barrel will the consumer no longer be able to subsidize the corporate and economic superstructure on his/her shoulders. This is essentially what Simmons was saying.

The poor will be the first to suffer and they will suffer the most. They will be the first to die.

Secondly, McKillop assumes a "trickle down" benefit to consumers from high prices. International capital flows and your own checkbook should be enough to dispel this belief. Need I say more? Didn't we hear enough about trickle-down from Ronald Reagan?

PRODUCTION

Oil industry guru Jan Lundberg - who seems to be getting a lot less air time than he used to - recently wrote the following brilliant assessment for (ironically of all places) Electric Vehicle (EV) Magazine. Lundberg got it right.

The end of abundant, affordable oil is in sight, and the implications are colossal. About now in our hydrocarbon phase of human history, we have pulled out of the Earth approximately half of the available petroleum (crude oil and natural gas). The other half still in the ground is harder to extract and may not - as assumed - fuel the global economy or even provide a transition to another phase…

This means that the next tough oil shortage, even if it is not acknowledged as a post-peak oil extraction phenomenon of diminishing supply, will cripple the globalized economy. Understanding of both the economics and social dynamics of collapse is rare, and even when it is present there is an absence of taking into account the "market factor" in ushering in collapse…

Despite the need to be prepared for imminent, final energy shortage - which could happen now or in several years at the latest - people persist in focusing too much on the likely date of the passing of the peak. It is already clear that the oil industry and OPEC numbers on oil reserves are suspect.

The scenario I foresee is that market-based panic will, within a few days, drive prices up skyward. And as supplies can no longer slake daily world demand of over 80 million barrels a day, the market will become paralyzed at prices too high for the wheels of commerce and even daily living in "advanced" societies. There may be an event that appears to trigger this final energy crash, but the overall cause will be the huge consumption on a finite planet.

The trucks will no longer pull into Wal-Mart. Or Safeway or other food stores. The freighters bringing packaged techno-toys and whatnot from China will have no fuel. There will be fuel in many places, but hoarding and uncertainty will trigger outages, violence and chaos. For only a short time will the police and military be able to maintain order, if at all. The damage that several days' oil shortage and outage will do will soon wreak permanent damage that starts with companies and consumers not paying their bills and not going to work.

After an almost instant depression seizes the modern industrialized world, and nation-states break down, the frantic attempts of people to feed themselves, stay warm and obtain fresh water (pumped presently via petroleum to a great extent), there will be no rescue. Die-off begins. The least petroleum-dependent communities will survive best. These "backward" nations will be emulated by the scrounging survivors of the U.S. and the rest of the "developed" world, as far as local food production will be tried - in a paved-over, toxic landscape by people who have lost touch with the land...

The prospects of mitigating peak oil or avoiding collapse are almost nil. U.S. petroleum demand in 2004 grew at its strongest rate in five years. In December the daily consumption of refined oil was 21 million barrels in the U.S, a quarter of world use. The U.S. leads the industrialized world in population growth, part of a domestic policy to assure more car and oil sales…

… The Earth cannot, as of the world oil peak in extraction, give up ever greater quantities of black gold. Most of the world exporting companies are now reducing extraction rates due to fewer discoveries and depleted fields. Oil production in 18 producer countries has passed its peak and is declining faster than previously thought: at about 1.14 million barrels a day.

"International Energy Agency figures put the total spare capacity of all 11 countries in OPEC at just 330,000 bpd (down from 6 million bpd in 2002). Conventional Saudi spare capacity is zero... An IEA report from August 2004 indicates Saudi Arabia needs up to 800,000 bpd of newly discovered oil each year just to offset declining fields and maintain its current production level." [Al-jazeera] - This can't happen, so watch for the ensuing energy crisis.

The world needs to produce another 2,723,530.2 barrels per day by the end of 2005 just in order to stand still…

Petroleum is the Great Leveler, in the sense of "leveling" or flattening oil civilization. But petroleum will also be the Great Leveler in terms of equalizing everyone: People will go through a final, grasping petroleum grab with whatever funds and connections they have, before the attempt fails for good. Then all people will have no choice but to work together or perish. Until then, we have skewed values: for example, when a kindly old lady drives to a shop and has her charitable concerns, the use of oil makes her a killer of the planet and she is not pursuing a sustainable form of transportation. Meanwhile, a mean old man who scowls at little children who walks to the shop might be a much more valuable citizen in a practical fashion that matters to the world.3

THE MOST EVIL STATEMENT I HAVE EVER HEARD

Detroit News columnist Thomas Bray recently described an interview with two "experts"; authors who come from the corporate/industrial/Neocon camp. The aberration of his thinking is symptomatic of the guilt we all share and the consequences we all seem to be begging for.

"We will never stop craving more," say Huber and Mills, "nor should we ever wish to. Energy is what brings light out of dark, civilization out of disorder, prosperity out of poverty."4

What was the title of the book that Bray was so jazzed about? The Bottomless Well: The Twilight of Fuel, the Virtue of Waste, and Why We Will Never Run Out of Energy.

Contrast all of the above with the following February 28 quotation from China's Xinhuanet news agency:

Global demand may average 84 million barrels a day in 2005, while daily production in January was only 83.6 million barrels, according to the International Energy Agency. Oil prices have risen 11 per cent in the past three weeks in New York on growing concern that OPEC and other exporters will fail to keep up with demand this year.5

That all of these factors are forming a perfect storm is now clear.
…

ENERGY

* The world's network of crude oil pipelines also is now operating at virtually 100% capacity. For almost all of 2004, the world's tanker system operated at full capacity too. This sparked an unprecedented rise in tanker rates, which added up to $5 to $6 per barrel to the wellhead price of oil in some key long-haul export routes. - Matthew Simmons. Why are no more tankers being built? Because soon there won't be enough oil to ship to cover what it would cost to build them.
…

MILITARY AND POLITICAL

* China is already buying and hoarding 60% of the world's commodities: (Oil, Cement, Aluminum, Copper, Zinc, Manganese, Steel, Coal, Gold, Silver, etc.). It has bought so much cement that it has caused a slowdown in US construction. Last year it bought 90% of the world's steel output and shipped it to China - Multiple sources. Why? Because soon there won't be enough fuel for the globalized transport of such heavy things, nor, presumably, for their industrial exploitation. The world may also be at war shortly, further endangering international trade and transport.

* China has begun placing nuclear-capable ballistic missiles on some of its submarines for the first time. - The Washington Times, December 3, 2004.

* Last November a Chinese nuclear submarine intruded deep into Japanese territorial waters and was escorted (chased) by Japanese Navy ships back into international waters. - The Asia Times, Jan. 16, 2005

* A number of stories have reported that Japan is secretly considering the abandonment of its pacifist constitution and - if it so chose - could have nuclear weapons in months, if not weeks. - Multiple sources.

* Venezuelan President Hugo Chavez has traveled to New Delhi, India where he chose to make a public statement that he would cut off Venezuelan oil supplies to the US in the event of any intervention or a US-directed attempt on his life. The Indian government has thus tacitly endorsed the threat. Meanwhile, the US ambassador to Venezuela has imponderably replied that if that happened the US would just go somewhere else to get its oil. [Where? Iran? Canada (which is signing contracts with China)? West Africa? There is no elasticity anywhere.] - Multiple sources.

* Venezuela has sold its (already in decline) San Cristobal oil field to India. - Times of India, March 6, 2005

ECONOMICS

* Federal Reserve Chairman Alan Greenspan told Congress the record U.S. budget deficit is "unsustainable'' and that spending cuts are needed before costs balloon for Social Security and other benefit programs. - Bloomberg, March 2, 2005.

* German Chancellor Gerhard Schroeder has stated that high oil prices are threatening the global economy and that those prices will be one of the most important items on the agenda of the coming G-8 summit. - The Daily Star, March 1, 2005.

* The Bank of International Settlements has made it official: the dollar dump is underway. Since 2001 the number of dollars held by Asian central banks has fallen by 13% and the rate of sell-off is increasing. - Reuters, March 6, 2005.

* OPEC has announced that oil prices could reach $80 per barrel within two years. - Agence France Presse, March 3, 2005.

THE NEW WORLD ORDER

The New World Order is not a monolith; no single group of rich folks sits together in one room debating our planetary future. It is, quite literally, a new order in which world power aggregates along geographic/geologic lines, forcing regions to become players against each other and running roughshod over the nationalist sentiments of their subject populations. …

Take a look at Orwell's 1984 again. It is a wonder how he saw so much. Yet behind all of this realignment, enormous streams of wealth or capital are being expended and - most importantly - transferred behind the scenes. The people controlling that money are not seeing their control dissipate as the nation-states vanish. Money makes its own rules.

Profits were made during the cold war by continuing the controlled escalation of tensions between the superpowers while secretly preventing those tensions from reaching critically dangerous levels. The major players included Armand Hammer, the Rothschilds, the Bushes, Averill Harriman, inter alia.

These people always find ways to eke profits from a system that is in meltdown. They make money on the way up. They make money on the way down. Their appalling justification, their pact with the devil that makes this all possible, is that "As long as we're making money then everything must be OK." This is what the real PTB (Powers That Be) believe. This is the final distilled definition of "the bottom line".

The problem lies in the definition of "The Powers That Be." Most people still think in terms of nation states. I always think in terms of money, even to the point of looking at money (the way it functions now) as the PTB without attachment to a human or national identity.
…

In spite of all the warning signs that demand and energy use must be curbed immediately, the only commercial effect of Peak Oil has been to increase consumption as much as possible - so as to get as much "money" as possible, as quickly as possible. This before the instant, possibly only months away, when money - because of a lack of energy - becomes valueless. Solutions that should enable a reduction in oil consumption are only functioning as an insane rationale for using more. The pity of this utterly unnecessary disaster is matched only by the arrogance that created it.

With unmistakable desperation, China, the US, Russia, Europe and the Middle East are fiercely jockeying for a measly 40 billion barrels of Caspian heavy-sour oil instead of the 350 billion we were promised by the major oil companies a decade ago. …

The only way to curb demand is to pull the plug on global economies, starting first with the already partially cannibalized US economy. Our manufacturing has been stolen or given away for "spare parts." So have our savings, our Constitution, our resources, our credit, our credibility, our confidence, our manufacturing base, our jobs; and soon our houses, our personal bank accounts and ultimately our hope. The United States is being liquidated after a fait accompli merger and acquisition.

The bottom line turns out to be the suicide of the human race as mergers and acquisitions lead to the final moment of malignant capitalism: "the last corporation standing."

GlobalCorp becomes Global corpse.

http://www.fromthewilderness.com/

A Game As Old As Empire

2006-10-19T01:02:00.000+02:00

A Game As Old As Empire

by Amy Goodman
Democracy Now!
December 31st, 2004

John Perkins, author of Confessions of an Economic Hit Man (http://www.amazon.com/exec/obidos/ASIN/1576753018/), reveals how the U.S. became the world's largest superpower: by forcing developing countries into debt.

John Perkins worked for years as chief economist at an international consulting firm in Boston called Chas. T. Main. His job was to persuade countries that are strategically important to the U.S. - such as Indonesia, Panama, Ecuador, Iran and Saudi Arabia - to accept enormous loans for infrastructure development and then to make sure the lucrative projects were contracted out to U.S. corporations. Saddled with huge debts they couldn't possibly repay, these countries came under the control of the U.S. government, the World Bank and other U.S.-dominated aid agencies that acted like loan sharks, dictating repayment terms and bullying foreign governments into submission.

AMY GOODMAN: Now, already people are going to be wondering, what is he talking about, "economic hit man"?

JOHN PERKINS: Well, really, over the past 30 to 40 years, we economic hit men have created the largest global empire in the history of the world. And we do this, typically - well, there are many ways to do it, but a typical one is that we identify a third-world country that has resources that we covet. And often these days that's oil, or might be the canal in the case of Panama.

In any case, we go to that third-world country and we arrange a huge loan from the international lending community; usually the World Bank leads that process. So, let's say we give this third-world country a loan of $1 billion. One of the conditions of that loan is that the majority of it, roughly 90 percent, comes back to the United States to one of our big corporations, the Bechtels, the Halliburtons. And those corporations build in this third-world country large power plants, highways, ports, or industrial parks - big infrastructure projects that basically serve the very rich. The poor people in those countries and the middle class suffer; they don't benefit from these loans, they don't benefit from the projects. In fact, often their social services have to be severely curtailed in the process of paying off the debt.

Now what also happens is that this third-world country then is saddled with a huge debt that it can't possibly repay. For example, today, Ecuador. Ecuador's foreign debt, as a result of the economic hit men, is equal to roughly 50 percent of its national budget. It cannot possibly repay this debt, as is the case with so many third-world countries.

So, now we go back to those countries and say, look, you borrowed all this money from us, and you owe us this money, you can't repay your debts, so give our oil companies your oil at very cheap costs. And in the case of many of these countries, Ecuador is a good example here, that means destroying their rain forests and destroying their indigenous cultures. That's what we're doing today around the world, and we've been doing it since the end of World War II. It has been building up over time until today where it's really reached mammoth proportions where we control most of the resources of the world.

Robert MacNamara, you write about him. Talk about his roles from Ford to secretary of defense to World Bank.

I think that what we have here is a world empire that's controlled by a very few men I call the "corporatocracy," and these are the heads of the big corporations, big banks and government, and they tend to be the same person. They jump across these lines and MacNamara is a great example of that. He was president of Ford and then he became secretary of defense under Kennedy and Johnson and then he became president of the World Bank. And in all three roles, his main job was to promote American business, to promote the corporatocracy, to bring the goodies home, to exploit the world. And he was in democratic regimes, Kennedy and Johnson.

Today we've got Dick Cheney who's basically in the same picture. We had George Schultz under the former President Bush. So, the two Bushes both have these types of people, too. Condoleezza Rice. Government is filled with these people.

But it is not just a Republican issue. It's a bipartisan issue. It goes across all the lines, and MacNamara is a very good example of that. I think, at the same time, MacNamara was one of the most important people in terms of framing the new economics, what he called aggressive management. It was aggressive about going out and basically taking the world and bringing it into us so that today, out of the 100 largest economies in the world, 52 are corporations; 47 of them are U.S. corporations - they're not countries, they're corporations.

What about Iran?

Iran is where economic hit men really get started because in the early 1950s, Iran democratically elected a man named Mossadeq as premier. But as soon as he got into power, he went up against the oil companies. And he really stood up for his people. And he said, particularly British Petroleum, if you are going to be here, you are going to give your fair share to our people.

The oil companies were very upset, so the United States made the decision to go in and do something about this. Now, at the time, we were terrified of thermonuclear war. Russia was the enemy after World War II, and Iran is on the Russian border. So we didn't dare send in troops to get rid of Mossadeq, but we've decided we have got to get rid of him because he is opposing the oil companies.

Instead of sending in the troops, we sent in Kermit Roosevelt, a CIA agent who happened to be Teddy's grandson, and we sent him in with a few million dollars, and he managed to create riots, protest, havoc, and to make a long story short, he overthrew Mossadeq, the premier, and brought the Shah back into power. We all know about the Shah.

When you say everyone knows what happened there, I don't take that for granted. What happened in Iran under the Shah?

We wanted desperately to control all the Middle Eastern oil. We saw the Shah as being the person who could make this happen for us. The plan was that the Shah would help take over the rest of the Middle East, including Syria and Iraq, and we all know there was a war between Iraq and Iran much later. But from the very beginning, the idea was to become allies with the Shah. We did everything we could to shore him up.

At the same time, we realized that he had a lot of oil money and so our companies were benefiting tremendously. Once again, all those engineering firms that we've talked about, my own, Charles T. Main, and Bechtel and Halliburton, and everybody else who was in there building cities, building power plants, building highways, getting very, very, very rich. And we were making tremendous numbers of people angry. Even to this day, Osama bin Laden cites what happened with the Shah, how we overthrew Mossadeq and brought the Shah in, as one of the reasons for his anger.

Oil is the source of so much pain.

Every country in the world that has major supplies of oil has suffered. Oil is not a benefit for these countries. It's a benefit for a few of the very wealthy people at the top of the economic totem pole in these countries. But for everybody else, it's a curse. Oil is a curse to the world. It's destroying our environment, it's destroyed a lot of world economies, it's destroyed tremendous numbers of indigenous people who are suffocating from the results of the carbon dioxide that oil has produced.

You also were tied up in Saudi Arabia.

Saudi Arabia was our greatest success as economic hit men. I mean, that's how we judge ourselves. In the early 1970s, OPEC really flexed its muscle. It didn't like U.S. policies in Israel supporting Israel, and decided to do something about it. So it shut down oil production significantly. And as a result, the U.S. economy went into a tailspin. There were long lines of cars at gas stations, many of us still remember that. And we were afraid that it was going to be another crash like 1929 as a result of OPEC.

And so the treasury department came to me and some other economic hit men, and said 'this must never happen again. You have got to devise a plan. What are you going to do about this? How can you make sure this never happens?' And we knew the key was Saudi Arabia.

For one thing, it had more oil than anybody else. Even at that point in time, the Shah was getting a little bit shaky, and we'd seen that he wasn't probably going to take over the rest of the Middle East. We knew that the House of Saud, the royal Saudi family, was corruptible. They were corrupt, they are corrupt, and they were corruptible.

So, to make a long story short, we put together this deal whereby the House of Saud agreed to send most of their petro dollars, the money we paid for petroleum, back to the United States and invest it in U.S. securities. The interest from those securities would be dealt out by the treasury department to U.S. engineering construction firms to build Saudi Arabia in the Western image, to build huge cities out of the desert, which we've done - power plants, highways, McDonald's, the whole works - to make Saudi Arabia a very westernized country.

And the House of Saud would guarantee to keep oil prices within limits acceptable to us, and we would guarantee to keep the House of Saud in power. And we have. All those things have followed since the early 1970s. The policy still holds. Even to the point where we know that the House of Saud supports Osama bin Laden, supported him at our encouragement, of course, in Afghanistan, continues to support him and a lot of terrorist movements.

What was your personal involvement there?

I was one of the people that structured this plan. There were a number of other people involved. And then we sent an envoy to Saudi Arabia - I was never officially told who it was, but I'm almost positive it was Henry Kissinger - to convince the House of Saud to accept our plan. And the message came back to us that the House of Saud had accepted the plan, but now a number of princes had to be convinced because even though Saudi Arabia is not a democracy, apparently there was a certain amount of democratic consensus building within the family, anyway.

So, I was assigned to one of the princes and told that I needed to bring him around. He was a very, very strict conservative, Wahabi, and he didn't really want to see his country become westernized. He saw this coming. And so I knew my job was a challenge. He made it a little easier for me, in some respects, because at the beginning, he let me know that every time he came to Boston or I visited him in New York or Washington, he would expect to have a companion, a beautiful blue-eyed, blonde woman. And if I couldn't provide him with this, I could forget about meeting with him.

It was one of the few illegal things that I did. Most of my job as an economic hit man was, strictly speaking, legal. What we did to the other countries should not be legal, but it is. Pimping is not legal. So I was pimping in Massachusetts at the time, and the only way I could pay for these services was by basically padding my expense accounts, and that also is illegal.

And so what happened with this?

Well, eventually we worked it out whereby we provided him with a blonde, blue-eyed woman from one of the Scandinavian countries. At that time, there was a large trade in white traffic of women to the Middle East, and we arranged for that for him. He became quite happy with all this and eventually he agreed to the plan that we wanted. He supported it. And the House of Saud completely supported it, and it went into place.

You tried to write this book over several decades. What happened?

It always bothered my conscience, what I was doing, and I really wanted to expose it because I didn't like what was going on in the world, what I saw my country doing. I'm a very loyal American and I believe very deeply in the principles of this country, the founding fathers. And as time went on, I began to see how we were cheating those principles, how we were distorting them, how we're losing our sense of democracy almost completely and becoming such a capitalistic corporatocracy-oriented country, a great empire, an imperialistic country.

Other empires have been created militarily and everybody in the country knows the armies are going out there and creating empire. But this one has been done so subtly that most Americans have no idea that it is going on.

I knew deep in my heart I needed to write this book. I needed to expose the truth behind what's going on in the world. I had a young daughter. She was born in 1982. So during the 1990s, she was very young. I was concerned about her safety and comfort, but I was also concerned about her future. But I could justify constantly not writing this book on many, many levels. And I was sworn to secrecy on it.

But when 9/11 struck, I was in the Amazon at the time. I went up to New York a few weeks later and sat there and I could still smell the burning flesh and see the smoke coming out of that hole, and I sat there and I knew that I had to take responsibility for what had happened there. I knew that I had to expose the truth because what happened at Ground Zero is a direct result of the empire building, of what we economic hit men did, and I knew as I sat there that if we don't do something to change the course we're on in the world, my daughter basically has no future and certainly her children don't.

This empire that we've created that's made so many people around the planet angry, that's resulted in destitution for billions of people on this planet: 24,000 people starve to death every day; 30,000 children die every single day from lack of medicines for diseases that could be cured and we have to take responsibility for that. We can change that and we will change it. But we'll only change it when we really come to understand what's going on.

Iraq: How does that fit in?

Well, Iraq followed Saudi Arabia. After our tremendous success in Saudi Arabia, we decided we should do the same thing in Iraq. And we figured that Saddam Hussein was corruptible. And, of course, we had been involved with Saddam Hussein anyway for some time. And so the economic hit men went in and tried to bring Saddam Hussein around, tried to get him to agree to a deal like the royal House of Saud had agreed to. And he didn't. So, we sent in the jackals to try to overthrow him or to assassinate him. They couldn't. His Republican Guard was too loyal and he had all these doubles.

So, when the economic hit men and the jackals both failed, then the last line of defense that the United States, the empire, uses these days, is the military. We send in our young men and women to die and to kill, and we did that in Iraq in 1990. We thought Saddam Hussein at that point was sufficiently chastised that now he would come around, so the economic hit men went back in the 1990s, failed once again. The jackals went back in, failed once again, and so once again the military went in - the story we all know - because we couldn't bring him around any other way.

Iraq had become very, very important to us for many reasons. Its strategic location, the fact that it controls a great deal of the water of the Middle East, the Tigris and Euphrates both flow through and out of Iraq and, of course, its oil.

And now we're not so sure we can keep the House of Saud in control. It's become extremely unpopular amongst its own people. Over 100 assassinations this year. We've been recently reading about the U.S. Consulate being attacked in Saudi Arabia. The House of Saud is losing control. It's very unpopular, partly because it accepted this deal with the West. It did a lot like what the Shah of Iran has done. And Osama bin Laden, of course, is very against it. But so are a tremendous number of Muslims around the world. So we've been afraid that we're going to lose the grip on the House of Saud. One way to protect against that is by taking over Iraqi oil fields, which may be larger than those in Saudi Arabia.

You work with a lot of people in other countries and right here in the international financial institutions, for example, like the World Bank. What understanding do they have? Do a lot of people feel the same way you do?

Well, that's a good question. It's hard to answer for a lot of other people. Within those organizations, most of the people don't realize what's going on. The engineers at Bechtel and Halliburton and the financial specialists at the World Bank and so on and so forth don't really realize what's going on. They should. They ought to look into it and find out. But there is every excuse not to on their part. They do their jobs.

I'm struck by the fact that as I travel around the world how many people in these countries, even people we consider illiterate, question their government. They assume their government is corrupt, they assume ours is corrupt, but we don't. It is amazing to me how many of us don't, at least not openly. The fact is that Americans, for the most part, don't really want to know what's going on. But we need to. We really need to question that.

So within these organizations, you've got tremendous numbers of people that are just going along with the system, getting paid really well to do it, and getting jobs that they were trained to do. But then you always have a number of people like me at the top of the organizations who know what's going on. They are part of this and they use every means they can to keep the system moving.

http://www.democracynow.org/article.pl?sid=04/12/31/1546207&mode=thread&tid= 25

Adventure Capitalism - The Hidden 2001 Plan to Carve-up Iraq

2006-10-19T01:01:00.000+02:00

Adventure Capitalism - The Hidden 2001 Plan to Carve-up Iraq

by Greg Palast
TomPaine.com
October 27, 2004

Greg Palast is the author of "The Best Democracy Money Can Buy"

In February 2003, a month before the U.S. invasion of Iraq, a 101-page document came my way from somewhere within the U.S. State Department. Titled pleasantly, "Moving the Iraqi Economy from Recovery to Growth," it was part of a larger under-wraps program called "The Iraq Strategy."

The Economy Plan goes boldly where no invasion plan has gone before: the complete rewrite, it says, of a conquered state's "policies, laws and regulations." Here's what you'll find in the Plan: A highly detailed program, begun years before the tanks rolled, for imposing a new regime of low taxes on big business, and quick sales of Iraq's banks and bridges-in fact, "ALL state enterprises"-to foreign operators. There's more in the Plan, part of which became public when the State Department hired consulting firm to track the progress of the Iraq makeover. Example: This is likely history's first military assault plan appended to a program for toughening the target nation's copyright laws.

And when it comes to oil, the Plan leaves nothing to chance-or to the Iraqis. Beginning on page 73, the secret drafters emphasized that Iraq would have to "privatize" (i.e., sell off) its "oil and supporting industries." The Plan makes it clear that-even if we didn't go in for the oil-we certainly won't leave without it.

If the Economy Plan reads like a Christmas wishlist drafted by U.S. corporate lobbyists, that's because it was.

From slashing taxes to wiping away Iraq's tariffs (taxes on imports of U.S. and other foreign goods), the package carries the unmistakable fingerprints of the small, soft hands of Grover Norquist.

Norquist is the capo di capi of the lobbyist army of the right. In Washington every Wednesday, he hosts a pow-wow of big business political operatives and right-wing muscle groups-including the Christian Coalition and National Rifle Association-where Norquist quarterbacks their media and legislative offensive for the week.

Once registered as a lobbyist for Microsoft and American Express, Norquist today directs Americans for Tax Reform, a kind of trade union for billionaires unnamed, pushing a regressive "flat tax" scheme.

Acting on a tip, I dropped by the super-lobbyist's L-Street office. Below a huge framed poster of his idol ("NIXON- NOW MORE THAN EVER"), Norquist could not wait to boast of moving freely at the Treasury, Defense and State Departments, and, in the White House, shaping the post-conquest economic plans-from taxes to tariffs to the "intellectual property rights" that I pointed to in the Plan.

Norquist wasn't the only corporate front man getting a piece of the Iraq cash cow. Norquist suggested the change in copyright laws after seeking the guidance of the Recording Industry Association of America.

And then there's the oil. Iraq-born Falah Aljibury was in on the drafting of administration blueprints for the post-Saddam Iraq. According to Aljibury, the administration began coveting its Mideast neighbor's oil within weeks of the Bush-Cheney inauguration, when the White House convened a closed committee under the direction of the State Department's Pam Wainwright. The group included banking and chemical industry men, and the range of topics over what to do with a post-conquest Iraq was wide. In short order, said Aljibury, "It became an oil group."

This was not surprising as the membership list had a strong smell of petroleum. Besides Aljibury, an oil industry consultant, the secret team included executives from Royal-Dutch Shell and ChevronTexaco. These and other oil industry bigs would, in 2003, direct the drafting of a 300-page addendum to the Economy Plan solely about Iraq's oil assets. The oil section of the Plan, obtained after a year of wrestling with the administration over the Freedom of Information Act, calls for Iraqis to sell off to "IOCs" (international oil companies) the nation's "downstream" assets-that is, the refineries, pipelines and ports that, unless under armed occupation, a Mideast nation would be loathe to give up.

---The General Versus Annex D---

One thing stood in the way of rewriting Iraq's laws and selling off Iraq's assets: the Iraqis. An insider working on the plans put it coldly: "They have [Deputy Defense Secretary Paul] Wolfowitz coming out saying it's going to be a democratic country . but we're going to do something that 99 percent of the people of Iraq wouldn't vote for."

In this looming battle between what Iraqis wanted and what the Bush administration planned for them, the Iraqis had an unexpected ally, Gen. Jay Garner, the man appointed by our president just before the invasion as a kind of temporary Pasha to run the soon-to-be conquered nation.

Garner's an old Iraq hand who performed the benevolent autocratic function in the Kurdish zone after the first Gulf War. But in March 2003, the general made his big career mistake. In Kuwait City, fresh off the plane from the United States, he promised Iraqis they would have free and fair elections as soon as Saddam was toppled, preferably within 90 days.

Garner's 90-days-to-democracy pledge ran into a hard object: The Economy Plan's 'Annex D.' Disposing of a nation's oil industry-let alone redrafting trade and tax laws-can't be done in a weekend, nor in 90 days. Annex D lays out a strict 360-day schedule for the free-market makeover of Iraq. And there's the rub: It was simply inconceivable that any popularly elected government would let America write its laws and auction off the nation's crown jewel, its petroleum industry.

Elections would have to wait. As lobbyist Norquist explained when I asked him about the Annex D timetable, "The right to trade, property rights, these things are not to be determined by some democratic election." Our troops would simply have to stay in Mesopotamia a bit longer.

---New World Orders 12, 37, 81 and 83---

Gen. Garner resisted-which was one of the reasons for his swift sacking by Secretary of State Donald Rumsfeld on the very night he arrived in Baghdad last April. Rummy had a perfect replacement ready to wing it in Iraq to replace the recalcitrant general. Paul Bremer may not have had Garner's experience on the ground in Iraq, but no one would question the qualifications of a man who served as managing director of Kissinger Associates.

Pausing only to install himself in Saddam's old palace-and adding an extra ring of barbed wire-"Jerry" Bremer cancelled Garner's scheduled meeting of Iraq's tribal leaders called to plan national elections. Instead, Bremer appointed the entire government himself. National elections, Bremer pronounced, would have to wait until 2005. The extended occupation would require our forces to linger.

The delay would, incidentally, provide time needed to lock in the laws, regulations and irreversible sales of assets in accordance with the Economy Plan.

On that, Bremer wasted no time. Altogether, the leader of the Coalition Provisional Authority issued exactly 100 orders that remade Iraq in the image of the Economy Plan. In May, for example, Bremer-only a month from escaping out Baghdad's back door-took time from fighting the burgeoning insurrection to sign orders 81-"Patents,"and 83, "Copyrights." Here, Grover Norquist's hard work paid off. Fifty years of royalties would now be conferred on music recording. And 20 years on Windows code.

Order number 37, "Tax Strategy for 2003," was Norquist's dream come true: taxes capped at 15 percent on corporate and individual income (as suggested in the Economy Plan, page 8). The U.S. Congress had rejected a similar flat-tax plan for America, but in Iraq, with an electorate of one-Jerry Bremer-the public's will was not an issue.

Not everyone felt the pain of this reckless rush to a free market. Order 12, "Trade Liberalization," permitted the tax- and tariff-free import of foreign products. One big winner was Cargill, the world's largest grain merchant, which flooded Iraq with hundreds of thousands of tons of wheat. For Iraqi farmers, already wounded by sanctions and war, this was devastating. They could not compete with the U.S. and Australian surplusses dumped on them. But the import plan carried out the letter of the Economy Plan.

This trade windfall for the West was enforced by the occupation's agriculture chief, Dan Amstutz, himself an import from the United States. Prior to George Bush taking office, Amstutz chaired a company funded by Cargill.

There's no sense cutting taxes on big business, ordering 20 years of copyright payments for Bill Gates' operating system or killing off protections for Iraqi farmers if some out-of-control Iraqi government is going to take it away after an election. The shadow governors of Iraq back in Washington thought of that, too. Bremer fled, but he's left behind him nearly 200 American "experts," assigned to baby-sit each new Iraqi minister-functionaries also approved by the U.S. State Department.

---The Price---

The free market paradise in Iraq is not free.

After General Garner was deposed, I met with him in Washington. He had little regard for the Economy Plan handed to him three months before the tanks rolled. He especially feared its designs on Iraq's oil assets and the delay in handing Iraq back to Iraqis. "That's one fight you don't want to take on," he told me.

But we have. After a month in Saddam's palace, Bremer cancelled municipal elections, including the crucial vote about to take place in Najaf. Denied the ballot, Najaf's Shi'ites voted with bullets. This April, insurgent leader Moqtada Al Sadr's militia killed 21 U.S. soldiers and, for a month, seized the holy city.

"They shouldn't have to follow our plan," the general said. "It's their country, their oil." Maybe, but not according to the Plan. And until it does become their country, the 82nd Airborne will have to remain to keep it from them.

Bush and Sharon - The Oil Connection

2006-10-19T01:00:00.000+02:00

Bush and Sharon - The Oil Connection

by Conn Hallinan
source
May 26, 2004

Conn Hallinan is a provost at the University of California at Santa Cruz.

On its face, President George Bush's recent endorsement of Israeli Prime Minister Ariel Sharon's land grab in the occupied territories makes little sense. The plan, under which Israel would abandon Gaza while permanently annexing most of the West Bank, has met with almost universal condemnation.

* It has stirred rage in the Arab world, where, according to U.S. ally Egyptian President Honsi Mubarak, "there exists a hatred of Americans never equaled in the region."

* European Union (EU) foreign policy spokesperson, Brian Cowen, said that the "EU will not recognize any change to the pre-1967 borders other than those arrived at by agreement of the parties."

* A letter by 52 former senior British diplomats called Prime Minister Tony Blair's support for Washington on this issue, "one-sided and illegal," and predicted it "will cost yet more Israeli and Palestinian blood." A Financial Times editorial called the letter "the most stinging rebuke ever to a British government by its foreign policy establishment."

At a time when the U.S. is desperate for an international bailout in Iraq, why would the White House go out of its way to alienate allies?

The most popular explanations are:

* The influence of pro-Israeli lobbies, and a Republican strategy to woo Jewish voters and money away from the Democrats;

* A bow to the Bush Administration's Christian Evangelical wing, which is rabidly pro-Israel because it is convinced the Second Coming is upon us.

There is no question that pleasing evangelicals is an Administration priority, and certainly Republicans would like to cut into traditional Jewish support for the Democrats. But this explanation assumes foreign policy is all about partisan politics and God.

Bush certainly has the inside track with evangelicals. However, there is virtually no difference between Republican and Democrats on Israel. If anything, the latter are slightly more hawkish.

There is a simpler explanation for the White House's posture, one the Administration laid out four months after taking office. In May, 2001, Vice-President Dick Cheney's National Energy Policy Development Group recommended that the President "make energy security a priority of our trade and foreign policy."

The recommendation was hardly a bolt from the blue, and the Republicans didn't invent the idea. The recent move of oil companies and the U.S. military into Central Asia is a case in point. It was President Bill Clinton, not George W. Bush, who crafted that strategy. It was not the Republicans who brought Halliburton and Cheney into the Caspian region, but Clinton advisor Richard Morningstar, now a John Kerry point man.

A flood of future Bush Administration heavies followed in Cheney's wake. Condolezza Rice helped ChevronTexaco nail down drilling rights for Kazakhstan's Tenez oil fields. James Baker, who pulled off Bush's Great Florida Election steal, helped British Petroleum get into the area.

When it comes to oil, partisan politics stop at the U.S. coastline. And if it is about oil, it's about the Middle East.

Oil production in the US, Mexico and the North Sea is declining, and a recent study by the University of Uppsala in Sweden suggests reserves may be far smaller than the 18 trillion barrels the industry presently projects. If the new figure of 3.5 trillion barrels is correct, sometime between 2010 and 2020, worldwide production will begin to decline.

Given that most oil geologists think there are few, if any, undiscovered resources left, that decline is likely to be permanent.

So the price of oil---now $41.65 a barrel, a jump of $32 since 1997---may not be a temporary spike. World pumping capacity is going full throttle, but a combination of economic growth, coupled with cash shortages for investment, have kept supplies tight. Only during the Iranian revolution and the Iran-Iraq War did oil cost more.

With U.S. consumption projected to increase 1/3 over the next 20 years--- two thirds of which will be imported by 2020---the name of the game is reserves. The bulk of those lie in the Middle East. Between Saudi Arabia, Iraq, the United Arab Emirates and Kuwait, the Gulf states control 65 percent of the world's reserves, or close to 600 billion barrels. In comparison, the U.S. reserves are a little under 23 billion.

Whoever controls these reserves essentially controls the world's economy. Consider for a moment if the U.S. were to use its power in the Middle East and its growing influence in Central Asia to tighten oil supplies to the exploding Chinese economy.

China presently uses only 8 percent of the world's oil, accounts for 37 percent of consumption growth.

Lest anyone think this scenario is paranoid, try re- reading President Bush's June, 2002 West Point speech that clearly states the U.S. will not allow the development of any "peer competitors" in the world.

That is what Cheney's Energy Policy Group meant by making "energy security" a corner stone of US "trade and foreign policy."

So, what does this have to do with Israel and the occupied territories?

Israel may not have any oil, but it is the most powerful player in the Middle East. In the great chess game that constitutes oil politics, there are only two pieces left on the board that might check U.S. plans to control the Middle East's oil reserves: Syria and Iran.

And that is where Ariel Sharon comes in.

Sharon's ruling coalition has been spoiling for a fight with Syria and Iran. The Israelis bombed Syria late last year and leading members of the Sharon government have routinely taken to threatening Iran.

Cabinet Minister Gideon Ezra threatened to assassinate Damascus -based Hamas leader Khaled Meshaal, and Sharon did the same to Hezbollah leader, Hassan Nasrallah. On May 11, the Bush Administration levied economic sanctions on Syria.

The Sharon government is just as belligerent about Iran. Israeli Chief of Staff, Lt. Gen. Moshe Ya'alon says that he hopes international pressure on Iran will halt its development of nuclear weapons, but adds ominously, "if that is not the case we would consider our options."

Neoconservatives in the Bush Administration have long targeted Iran. Richard Perle, former Defense Policy Board member, and David Frum, of the neo-com Weekly Standard, co-authored "An End to Evil," which calls for the overthrow of the "terrorist mullahs of Iran." Michael Ladeen of the influential American Enterprise Institute argues that "Tehran is a city just waiting for us."

According to Irish journalist, Gordon Thomas, the U.S. has already targeted missiles on Iranian power plants at Natanz and Arak, and one Israeli intelligence officer told the Financial Times, "It could be a race who pushes the button first---us or the Americans."

If Syria and/or Iran are removed from the board, the game is checkmate.

The Americans can ill afford another war in the Middle East, but the Israelis might be persuaded to take the field. Is giving Sharon a free hand in the West Bank a quid pro quo for an eventual American-supported Israeli attack on the last two countries in the region with any semblance of independence?

The world, of course, is not a chess game, and the pieces don't always do what they are told.

Sharon might indeed start a war with Syria or Iran, but not because the Israelis are spear-carriers for the Bush Administration. The "Greater Israel" bloc has its own strategic interests, which for the time being, happen to coincide with American interests.

Sharon, however, is hardly a trusty ally. During the first Gulf War, he did his best to sabotage the coalition against Iraq, because he felt such a victory would eventually be used to pressure Israel for concessions in the Occupied Territories.

Nor are all Israelis on board. The recent round of assassinations has helped revitalize the peace movement, which put 120,000 people into the streets of Tel Aviv May 17.

Some Israelis are unhappy about what they see the West Bank becoming. "Sharon has pushed Washington into embracing an accelerated process of forming the state of Israel as a bilateral state based on apartheid," Meron Benvenisti, former deputy mayor of Jerusalem told the British Guardian.

Others are uncomfortable with the support of Christian evangelicals. According to Rabbi David Rosen, international director of the Inter-Religious Affairs of the American Jewish Committee's Jerusalem office, the evangelicals support "some of the most extreme political positions in Israeli society."

One of those "extreme positions" is a plan to raze the Dome of the Rock Mosque in Jerusalem and rebuild the Jewish temple destroyed by the Romans-a precondition, Evangelicals believe, to the Second Coming.

For the time being, the American drive to control the bulk of the world's oil reserves, and the Sharon government's push for a greater Israel and the elimination of regional rivals, finds common ground. On the other hand, if Israel crosses U.S. interests, watch how fast the lobbies and the born-agains find themselves out in the cold.

The crisis in the Middle East is not a clash of civilizations, less so a hijacking of American foreign policy by the so-called "Jewish lobby" and Christian fundamentalists: It's business as usual.

Plan now for a world without oil

2006-10-19T00:59:00.000+02:00

Plan now for a world without oil

Michael Meacher, MP
January 5, 2004

Four months ago Britain's oil imports exceeded exports, heralding the decline in North Sea oil already well under way. North Sea oil output peaked at about 2.9 million bpd (barrels per day) in 1999, and has been predicted to nearly halve to only 1.6 million bpd by 2007. Even the latest discovery of the new Buzzard field, the biggest British oil find in a decade with a total of 0.4 million barrels recoverable, won't alter much the overall picture.

This prospect might not be so bleak were it not that similar trends are now becoming manifest across the world. The three main oil-producing regions are OPEC, the former Soviet Union, and the rest of the world. Modelling OPEC's future production is open to some question, but it is expected to peak in 2020 at about 40-45 million bpd. The under-production in the former Soviet Union in the 1990s following the Soviet collapse is now leading to a new surge in East Siberia and Sakhalin and new discoveries in the Caspian, which will yield a peak of about 10 million bpd in 2010. For the remaining 40 or more major oil-producing countries around the world as a whole, the broad overall pattern is similar, with some local variations.

Combining the three crude oil models for OPEC, the former Soviet Union and the rest of the world puts ultimate world oil recovery at some 2,200 billion barrels, with a peak at about 80 million bpd between 2010 and 2020. To this may be added non-conventional oil and other liquids brought into commercial production by the rising oil price as oil scarcity tightens. This includes oil from coal and shale, bitumen and derived synthetics, heavy and extra heavy oil, deep-water oil, polar oil and liquids from gas fields and gas plants. These sources, though at very much greater cost, could provide an ultimate recovery of about 800 billion barrels, and might peak in 2050 at around 20 million bpd. The combined model for all sources suggests a peak of about 90 million bpd around 2015.

This global capacity is the likely maximum on the supply side. Today we have a daily production of 75 million bpd. But to meet projected demand in 2015, we would need to open new oilfields that can give an additional 60 million bpd. This is frankly impossible. When the top production in the North Sea was 6 million bpd, it would require the equivalent of opening ten new regions the size of the North Sea. Maybe Iraq with enormous new investments might increase production by 6 million bpd, and at an extreme the rest of the Middle East might be able to do the same. But to suggest that the rest of the world can produce an extra 40 million bpd is just moonshine.

This is the oil crunch at 2010-15, perhaps earlier. The world's super-giant and giant oilfields are declining at an average rate of 4-6% a year. No more major frontier regions await to be explored apart from the north and south poles. The production of non-conventional crude oil has already been initiated at enormous cost in Venezuela's Orinoco belt and Canada's Athabasca tar sands and ultra-deep waters. And yet no major primary energy rival can replace oil and gas in the short-to-medium term. Mankind is headed for a dislocation of historic proportions.

The implications of this are mind-blowing since oil provides 40% of all traded energy and no less than 90% of transport fuel. But not only are the motor vehicle and farming industries dependent on it, so is national defence. Oil powers the vast network of planes, tanks, helicopters and ships that provide the basis of each country's armaments. It is hard to envisage the massive effects of a very much reduced oil supply on a modern economy or society. Yet it is staring us in the face.

The world faces two stark choices. One is to continue down the existing path of rising oil consumption, trying to pre-empt available remaining oil supplies if necessary by military force, but ultimately inviting an even sharper dislocation as global capacity is steadily exhausted. The other is a decisive switch to renewable sources of energy, much more stringent standards of energy efficiency, and a steady reduction in oil use. The latter would involve huge new investment in energy generation and transportation technologies.

The US response to this dilemma is very striking. Cheney's National Energy Policy report of May 2001 proposed the exploitation of untapped reserves in protected wilderness areas within the US, notably the Arctic National Wildlife Refuge in north-eastern Alaska. The rejection of this extremely contentious proposal then forced President Bush, unwilling to curb America's ever-growing thirst for oil, to decide, contrary to White House rhetoric, to increase the flow of oil from foreign suppliers.

It was a fateful decision. It means that for the US alone oil imports, or other sources of oil such as natural gas liquids, will have to rise from 11 million bpd to 18.5 million bpd by 2020. And securing that increment of imported oil - around 7.5 million bpd or the equivalent of total current oil consumption by China and India combined - has driven an integrated US oil-military strategy ever since.

There are however two fundamental weaknesses in this policy. One is that the most countries targeted to increase oil supplies to the US are riven by deep internal conflicts or a strong anti-Americanism, or both. Facing down the likely violent resistance that will develop in many key oil-producing regions would require a level of expenditure of both revenues and soldiers' lives, of which Iraq is only the first example, which even the US may find unsustainable. Secondly, it is a very short-sighted policy doomed to failure within the medium term. If global oil production peaks at 2010-15, the only way the US can continue to extract a growing increment from a reducing global availability is through resource wars on a scale that would rapidly prove insupportable, even despite the top priority the Bush Administration has given to enhancing US power projection forces.

There is therefore no avoiding the utterly stark dilemma of shrinking world oil supplies, probably within a decade. If we do not immediately plan to make the switch to renewable energy within a shorter timescale and with far greater investment than anything yet envisaged, then civilisation faces the sharpest and perhaps most violent dislocation in recent history.

http://www.epolitix.com/EN/MPWebsites/Michael+Meacher/

Operation Oil Immunity

2006-10-19T00:58:00.000+02:00

Operation Oily Immunity

Steve Kretzmann and Jim Vallette are analysts with the Sustainable
Energy & Economy Network of the Institute for Policy Studies.
During the initial assault on Baghdad, soldiers set up forward bases
named Camp Shell and Camp Exxon. Those soldiers knew the score, even if
the Pentagon's talking points dismissed any ties between Iraqi oil and
their blood.

The Bush/Cheney administration has moved quickly to ensure U.S.
corporate control over Iraqi resources, at least through the year 2007.
The first part of the plan, created by the United Nations under U.S.
pressure, is the Development Fund for Iraq, which is being controlled by
the United States and advised by the World Bank and the International
Monetary Fund (IMF). The second is a recent Bush executive order that
provides absolute legal protection for U.S. interests in Iraqi oil.

In May, the U.N. Security Council unanimously adopted Resolution 1483,
which ended sanctions and endorsed the creation of Development Fund for
Iraq, to be controlled by Paul Bremer and overseen by a board of
accountants, including U.N., World Bank and IMF representatives. It
endorsed the transfer of over $1 billion (of Iraqi oil money) from the
Oil-for-Food program into the Development Fund. All proceeds from the
sale of Iraqi oil and natural gas are also to be placed into the fund.
In the creation and expected implementation of this Development Fund for
Iraq, one finds the fingerprints of the global economic structural
adjustment that has attracted so much protest in recent years. World
Bank and IMF programs, backed by the rigged rules of the World Trade
Organization, have imposed dramatic financial restructuring upon much of
the world. Developing countries have amassed huge debts in exchange for
selling out their natural resources to powerful Northern corporations.
This paradigm cloaks corporate welfare and neocolonialism in terms of
"poverty alleviation," and now in Iraq as "humanitarian assistance."
New debt for Iraq will accrue through the very program that President
Bush pledged would "benefit the people of Iraq." The Development Fund,
derived from actual and expected Iraqi oil and gas sales, will
apparently be used to leverage U.S. government-backed loans, credit and
direct financing for U.S. corporate forays into Iraq. Besides financing
reconstruction projects, some of the funds will also be used as
collateral for projects approved by the U.S. Export-Import Bank (ExIm),
whose mission is not development or poverty alleviation, but rather the
creation of U.S. jobs and the promotion of American business abroad.
ExIm recently announced that it was open for business in Iraq and would
begin considering applications by subcontractors (that is, companies
hired by Bechtel and Halliburton) in Iraq. Corporations have found it
next to impossible to obtain private bank credit for work in Iraq, due
to the ongoing insecure environment. But ExIm has stepped in to take a
lead role in facilitating U.S. business in Iraq.

"The primary source of repayment," explained an ExIm release, "is the
Development Fund for Iraq, or another entity established under the
auspices of the Coalition Provisional Authority with access to foreign
exchange and protection from claims of creditors of the former regime."
In other words, the U.S. government is happy to provide credit to any
U.S. business wishing to do business in Iraq -- especially because the
money comes from Iraq.

But for the Bush/Cheney administration and their allies in the oil
industry, this was not enough. Hours after the United Nations endorsed
U.S. control of the "Development Fund" for Iraq, Bush signed an
executive order that was spun as implementing Resolution 1483, but in
reality went much further towards attracting investment and minimizing
risk for U.S. corporations in Iraq.

Executive Order 13303 decrees that "any attachment, judgment, decree,
lien, execution, garnishment, or other judicial process is prohibited,
and shall be deemed null and void," with respect to the Development Fund
for Iraq and "all Iraqi petroleum and petroleum products, and interests
therein."

In other words, if ExxonMobil or ChevronTexaco touch Iraqi oil, it will
be immune from legal proceedings in the United States. Anything that
could go, and elsewhere has gone, awry with U.S. corporate oil
operations will be immune to judgment: a massive tanker accident; an
explosion at an oil refinery; the employment of slave labor to build a
pipeline; murder of locals by corporate security; the release of
billions of tons of carbon dioxide into the atmosphere. The president,
with a stroke of the pen, signed away the rights of Saddam's victims,
creditors and of the next true Iraqi government to be compensated
through legal action. Bush's order unilaterally declares Iraqi oil to be
the unassailable province of U.S. corporations.

In the short term, through the Development Fund and the Export-Import
Bank programs, the Iraqi people's oil will finance U.S. corporate
entrees into Iraq. In the long term, Executive Order 13303 protects
anything those corporations do to seize control of Iraq's oil, from the
point of production to the gas pump -- and places oil companies above
the rule of law.

Bottom of the barrel

2006-10-19T00:57:00.000+02:00

The Bottom of the Barrel The world is running out of oil - so why do politicians refuse to talk about it?

George Monbiot
December 2, 2003
The Guardian
http://www.guardian.co.uk/oil/story/0,11319,1097672,00.html

The oil industry is buzzing. On Thursday, the government approved the development of the biggest deposit discovered in British territory for at least 10 years. Everywhere we are told that this is a "huge" find, which dispels the idea that North Sea oil is in terminal decline. You begin to recognise how serious the human predicament has become when you discover that this "huge" new field will supply the world with oil for five and a quarter days.

Every generation has its taboo, and ours is this: that the resource upon which our lives have been built is running out. We don't talk about it because we cannot imagine it. This is a civilisation in denial.

Oil itself won't disappear, but extracting what remains is becoming ever more difficult and expensive. The discovery of new reserves peaked in the 1960s. Every year we use four times as much oil as we find. All the big strikes appear to have been made long ago: the 400m barrels in the new North Sea field would have been considered piffling in the 1970s. Our future supplies depend on the discovery of small new deposits and the better exploitation of big old ones. No one with expertise in the field is in any doubt that the global production of oil will peak before long.

The only question is how long. The most optimistic projections are the ones produced by the US department of energy, which claims that this will not take place until 2037. But the US energy information agency has admitted that the government's figures have been fudged: it has based its projections for oil supply on the projections for oil demand, perhaps in order not to sow panic in the financial markets.

Other analysts are less sanguine. The petroleum geologist Colin Campbell calculates that global extraction will peak before 2010. In August, the geophysicist Kenneth Deffeyes told New Scientist that he was "99% confident" that the date of maximum global production will be 2004. Even if the optimists are correct, we will be scraping the oil barrel within the lifetimes of most of those who are middle-aged today.

The supply of oil will decline, but global demand will not. Today we will burn 76m barrels; by 2020 we will be using 112m barrels a day, after which projected demand accelerates. If supply declines and demand grows, we soon encounter something with which the people of the advanced industrial economies are unfamiliar: shortage. The price of oil will go through the roof.

As the price rises, the sectors which are now almost wholly dependent on crude oil - principally transport and farming - will be forced to contract. Given that climate change caused by burning oil is cooking the planet, this might appear to be a good thing. The problem is that our lives have become hard-wired to the oil economy. Our sprawling suburbs are impossible to service without cars. High oil prices mean high food prices: much of the world's growing population will go hungry. These problems will be exacerbated by the direct connection between the price of oil and the rate of unemployment. The last five recessions in the US were all preceded by a rise in the oil price.

Oil, of course, is not the only fuel on which vehicles can run. There are plenty of possible substitutes, but none of them is likely to be anywhere near as cheap as crude is today. Petroleum can be extracted from tar sands and oil shale, but in most cases the process uses almost as much energy as it liberates, while creating great mountains and lakes of toxic waste. Natural gas is a better option, but switching from oil to gas propulsion would require a vast and staggeringly expensive new fuel infrastructure. Gas, of course, is subject to the same constraints as oil: at current rates of use, the world has about 50 years' supply, but if gas were to take the place of oil its life would be much shorter.

Vehicles could be run from fuel cells powered by hydrogen, which is produced by the electrolysis of water. But the electricity which produces the hydrogen has to come from somewhere. To fill all the cars in the US would require four times the current capacity of the national grid. Coal burning is filthy, nuclear energy is expensive and lethal. Running the world's cars from wind or solar power would require a greater investment than any civilisation has ever made before. New studies suggest that leaking hydrogen could damage the ozone layer and exacerbate global warming.

Turning crops into diesel or methanol is just about viable in terms of recoverable energy, but it means using the land on which food is now grown for fuel. My rough calculations suggest that running the United Kingdom's cars on rapeseed oil would require an area of arable fields the size of England.

There is one possible solution which no one writing about the impending oil crisis seems to have noticed: a technique with which the British and Australian governments are currently experimenting, called underground coal gasification. This is a fancy term for setting light to coal seams which are too deep or too expensive to mine, and catching the gas which emerges. It's a hideous prospect, as it means that several trillion tonnes of carbon which was otherwise impossible to exploit becomes available, with the likely result that global warming will eliminate life on Earth.

We seem, in other words, to be in trouble. Either we lay hands on every available source of fossil fuel, in which case we fry the planet and civilisation collapses, or we run out, and civilisation collapses.

The only rational response to both the impending end of the oil age and the menace of global warming is to redesign our cities, our farming and our lives. But this cannot happen without massive political pressure, and our problem is that no one ever rioted for austerity. People tend to take to the streets because they want to consume more, not less. Given a choice between a new set of matching tableware and the survival of humanity, I suspect that most people would choose the tableware.

In view of all this, the notion that the war with Iraq had nothing to do with oil is simply preposterous. The US attacked Iraq (which appears to have had no weapons of mass destruction and was not threatening other nations), rather than North Korea (which is actively developing a nuclear weapons programme and boasting of its intentions to blow everyone else to kingdom come) because Iraq had something it wanted. In one respect alone, Bush and Blair have been making plans for the day when oil production peaks, by seeking to secure the reserves of other nations.

I refuse to believe that there is not a better means of averting disaster than this. I refuse to believe that human beings are collectively incapable of making rational decisions. But I am beginning to wonder what the basis of my belief might be.

· The sources for this and all George Monbiot's recent articles can be found at www.monbiot.com.