Greg Palast: Keeping Iraq's Oil In The Ground

[Wetzelbill]

Keeping Iraq's Oil in the Ground
By Greg Palast
AlterNet

Wednesday 14 June 2006

World oil production today stands at more than twice the 15-billion a-year maximum projected by Shell Oil in 1956 - and reserves are climbing at a faster clip yet. That leaves the question, Why this war?

Did Dick Cheney send us in to seize the last dwindling supplies? Unlikely. Our world's petroleum reserves have doubled in just twenty-five years - and it is in Shell's and the rest of the industry's interest that this doubling doesn't happen again. The neo-cons were hell-bent on raising Iraq's oil production. Big Oil's interest was in suppressing production, that is, keeping Iraq to its OPEC quota or less. This raises the question, did the petroleum industry, which had a direct, if hidden, hand, in promoting invasion, cheerlead for a takeover of Iraq to prevent overproduction?

It wouldn't be the first time. If oil is what we're looking for, there are, indeed, extra helpings in Iraq. On paper, Iraq, at 112 billion proven barrels, has the second largest reserves in OPEC after Saudi Arabia. That does not make Saudi Arabia happy. Even more important is that Iraq has fewer than three thousand operating wells... compared to one million in Texas.

That makes the Saudis even unhappier. It would take a decade or more, but start drilling in Iraq and its reserves will about double, bringing it within gallons of Saudi Arabia's own gargantuan pool. Should Iraq drill on that scale, the total, when combined with the Saudis', will drown the oil market. That wouldn't make the Texans too happy either. So Fadhil Chalabi's plan for Iraq to pump 12 million barrels a day, a million more than Saudi Arabia, is not, to use Bob Ebel's (Center fro Strategic and International Studies) terminology, "ridiculous" from a raw resource view, it is ridiculous politically. It would never be permitted. An international industry policy of suppressing Iraqi oil production has been in place since 1927. We need again to visit that imp called "history."

It began with a character known as "Mr. 5%"- Calouste Gulbenkian - who, in 1925, slicked King Faisal, neophyte ruler of the country recently created by Churchill, into giving Gulbenkian's "Iraq Petroleum Company" (IPC) exclusive rights to all of Iraq's oil. Gulbenkian flipped 95% of his concession to a combine of western oil giants: Anglo-Persian, Royal Dutch Shell, CFP of France, and the Standard Oil trust companies (now ExxonMobil and its "sisters.") The remaining slice Calouste kept for himself - hence, "Mr. 5%."


http://www.truthout.org/docs_2006/061406J.shtml

[Vinnie From Indy]

1. It all makes so much sense!

Saudi Arabia and the House Of Smirk are joined at the hip. The only thing that makes them crazy is guys like Chavez in Venezuela cashing in on their fake "energy crisis". The goal is to get to a price that slows alternative energy research but still allows them to maximize profits using their near monopoly on energy and their vertically integrated supply chain.

[Minnesota Libra]

2. Anyone who doesn't think this administration is going to wring............

.....every last dollar of profit they possibly can out of the Iraqi oil has just not been paying attention. If it takes more production for a while and then later much less production then that is exactly what the world will get. The only way we get out from underneath the oil profit train is to develop renewable fuel resources and like nothing but super quick.

[Wetzelbill]

3. sick, but true

the price per barrel is so damn high, I cringe just thinking about windfall profits. It's an ugly situation being so dependent on that stuff.

[Bushwick Bill]

4. I love Palast, BUT

his recent hit piece on peak oil was very disappointing.
http://www.gnn.tv/articles/2295/No_Peaking_The_Hubbert_Humbug

It is entirely possible that the energy wars are about jacking up oil prices and screwing the American consumer, but I don't think that is the reason. I think the oil oligarchs are fully aware of impending peak and what that means when thirsty 2.3 billion thirsty Chindians are pining for oil at the same time we keep expanding suburbia, so the plot was hatched to control flow and chokepoints for when the blank hits the fan. Throw in the fact that western oil oligarchs would make a ton of cash if they get their mitts on beefing up Iraqi oil infrastructure, plus the was profiteers would make a lot of dough, and the war made complete sense to them.

Palast's contention that the Iraq War is meant to keep Iraqi oil in the ground may dovetail with all of this because that oil will be worth a ton and whoever controls it has a ton of power if world production goes into decline. So, keeping a lid on it may have been the goal all along. Others completely disagree and say the neocons wanted to get western investment in the middle east fields to modernize the poor infrasturcture and pump up production to keep powering the global economy and possibly even flood the market with cheap oil. I don't know which is the answer here.

[Xipe Totec]

5. A blast from the past:

The Coming Energy Crisis? (Oil Industry warned of Iraq war consequences)

As submitted to Oil & Gas Journal for publication February 3, 2003

All warning signs that existed prior to the energy crises of 1973 and 1979 exist today. Various energy security measures indicate that the potential for an energy shortage is high.


Various measures of US energy security indicate that the US might be heading for an energy crisis. Many of the warning signs that existed before the energy crises of 1973 and 1979 exist today and they indicate that the current situation could be even worse. US dependence on petroleum imports has grown steadily for over a decade and has been at record levels for several years. Petroleum inventories are low and the ability of Strategic Petroleum Reserves (SPR) and commercial petroleum stocks to cope with an interruption in imports matches the historic lows preceding the 1973 and 1979 energy crises.

The potential for an energy crisis has never been higher. Oil prices have recently exceeded $30 per barrel and they may continue to increase. The disruption of Venezuelan oil supplies has increased the US dependence on Middle Eastern oil and made the US more susceptible to supply interruption. With the crisis in Venezuela, the capacity of OPEC to meet any additional supply interruption is limited and a war with Iraq would put OPEC at its limit. Any energy crisis in the near future will hinder President Bush’s efforts to stimulate the economy through tax cuts and other fiscal measures. An energy crisis could cause a recession, inflation, and higher unemployment.


http://www.democraticunderground.com/discuss/duboard.php?az=view_all&address=103x77290

[dipsydoodle]

6. I came across this concept last year,

which was well before I joined DU , while rooting around for information concerning the Iranian Oil Bourse and backgrounds to the war in Iraq. It's certainly not new information. I don't recall which site it was on but if you repeat using a similar you're bound to come across it. If I found it I wouldn't post it - last time I did so on another subect I got my wrist slapped for posting a conspiracy theory from <unknown to me> a "dubious" site.

Each time a thread has mentioned keeping Iraq's oil under wraps I've simply pointed out this theory of increasing production to break OPEC's grip on price . To date no one has shown any interest in the subject which I personally consider to be very plausible arguement.x(