Iraq, Oil, War, and Presidents and Vice-Presidents... err... Lying Liars... err... War Criminals

A small aside today via a walk down memory lane. Some things simply should not be forgotten, for they show you where you have been and are likely to go. Energy needs to be out of the hands of big corporations and in the hands of indivicuals, towns, cities and regions.

It wasn't about the oil, except that it was.

A little history lesson first. It saddens me to say Jimmy Carter got the ball rolling with a goodly toss, but he did. Unintended consequences, I suppose, as he was responding directly to a perceived USSR threat. Still... All those years later, this doctrine was considered support for the invasion of Iraq. Being about outsiders and not locals, it's bogus, but slippery slopes are called slippery for a reason. But, really, that's a minor point in all this.

Comes 9/11 and the excuse is laid at the feet of an administration bent on securing oil supplies. Here we need a little history else all looks like mere greed. And G_d knows no American President would ever engage in THAT! It's un-American! Except one did. In 1953.

But there were other issues at work, which I've blogged about before. Namely, Peak Oil. (It's a shame we had to name a simple geological reality. It makes it easier for people to pretend it's something other than simple geology and math, but what'r ya gonna do?) Cheney set it out rather accurately in 1999. (I'm not thrilled about the source, but it's the most complete transcript I've seen of the quote.)

Producing oil is obviously a self-depleting activity. Every year, you've got to find and develop reserves equal to your output - just to stand still, just to stay even. This is true for companies as well in the broader economic sense for the world.

A new merged company like Exxon-Mobil will have to secure over a billion and a half barrels of new oil equivalent reserves every year just to replace existing production.

It's like making a return of 100% interest on investment. It’s like discovering another major field of some 500 million barrels every four months, or finding two Hibernia’s [a major find off Canada] a year.

For the world as a whole, oil companies are expected to keep finding and developing enough oil to offset our 71 million barrels a day of oil depletion, and also to meet new demand.

By some estimates, there will be an average of 2% annual growth in global oil demand over the years ahead along with, conservatively, a 3% natural decline in production from existing reserves. That means by 2010, we will need in the order of an additional 50 million barrels a day.

So, where is the oil going to come from?

Governments and the national oil companies obviously control about 90% of the assets. Oil remains fundamentally a government business. While many regions of the world offer great oil opportunities, the Middle East with two thirds of the world's oil and the lowest cost, is still where the prize ultimately lies.

Many of us knew the invasion was about oil, but many us were not aware of the underlying realities that were driving BuCheney to their ruinous, illegal and immoral war. What I want you to take away from this is the following:

They had the choice to move strongly to alternative energy and chose to butcher, kill, maim, steal and sacrifice American and Iraqi lives instead.

People inside and outside the US government have known about Peak Oil for decades. I have previously written of Admiral Rickover, Jimmy Carter's Sweater Speech and, of course, King Hubbert. This was not a surprise or shock to BuCheney, to anyone who would have reason to know.

The Hirsch Report (2005) is linked in sidebar. It clearly states that waiting until peak production occurs means a huge crisis. Starting mitigation 10 years before means crisis. Starting 20 years before means a possible smooth transition. Well, as I posted not long ago from Tony Erikson, peak is almost certainly past. Any rise back to past levels of production will be short-lived, if they happen at all. Even the IEA admits decline rates are such that we need a new Saudi Arabia every two years or so. And the decline rate will accelerate. Remember: it's simple geology and mathematics.

So, given this, had BuCheney chosen to act on alternative energy instead of wasting time, money and talent on their war of oil theft, we would be in much better shape with regard to our economics, our energy supplies and with GHG emissions.

But don't believe me. Let BuCheney do the talking.

Eager to Tap Iraq's Vast Oil Reserves, Industry Execs Suggested Invasion

Friday 03 July 2009

by: Jason Leopold, t r u t h o u t | Report

Two years before the invasion of Iraq, oil executives and foreign policy advisers told the Bush administration that the United States would remain "a prisoner of its energy dilemma" as long as Saddam Hussein was in power.

That April 2001 report, "Strategic Policy Challenges for the 21st Century," was prepared by the James A. Baker Institute for Public Policy and the US Council on Foreign Relations at the request of then-Vice President Dick Cheney.

In retrospect, it appears that the report helped focus administration thinking on why it made geopolitical sense to oust Hussein, whose country sat on the world's second largest oil reserves.

"Iraq remains a destabilizing influence to the flow of oil to international markets from the Middle East," the report said.

"Saddam Hussein has also demonstrated a willingness to threaten to use the oil weapon and to use his own export program to manipulate oil markets. Therefore the US should conduct an immediate policy review toward Iraq including military, energy, economic and political/diplomatic assessments."

The advisory committee that helped prepare the report included Luis Giusti, a Shell Corp. non-executive director; John Manzoni, regional president of British Petroleum; and David O'Reilly, chief executive of ChevronTexaco.

James Baker... Ken Lay... At the time of the report, Cheney was leading an energy task force made up of powerful industry executives who assisted him in drafting a comprehensive "National Energy Policy" for President George W. Bush.

A Focus on Oil

...But Bush's first treasury secretary, Paul O'Neill, later described a White House interest in invading Iraq and controlling its vast oil reserves, dating back to the first days of the Bush presidency.

In Ron Suskind's 2004 book, "The Price of Loyalty," O'Neill said an invasion of Iraq was on the agenda at the first National Security Council. There was even a map for a post-war occupation, marking out how Iraq's oil fields would be carved up.

Even at that early date, the message from Bush was "find a way to do this," according to O'Neill, a critic of the Iraq invasion who was forced out of his job in December 2002.

The New Yorker's Jane Mayer later made another discovery: a secret NSC document dated February 3, 2001 - only two weeks after Bush took office - instructing NSC officials to cooperate with Cheney's task force, which was "melding" two previously unrelated areas of policy: "the review of operational policies towards rogue states" and "actions regarding the capture of new and existing oil and gas fields." [The New Yorker, February 16, 2004]

By March 2001, Cheney's task force had prepared a set of documents with a map of Iraqi oilfields, pipelines, refineries and terminals, as well as two charts detailing Iraqi oil and gas projects, and a list titled "Foreign Suitors for Iraqi Oilfield Contracts," according to information released in July 2003 under a Freedom of Information Act lawsuit filed by the conservative watchdog group Judicial Watch.

...At about the same time as Rodon's trip to Iraq - October 2002 - Oil and Gas International, an industry publication, reported that the State Department and the Pentagon had put together pre-war planning groups that focused heavily on protecting Iraq's oil infrastructure.

Guarding the Oil Ministry

...After US troops captured Baghdad in April 2003, they were ordered to protect the Oil Ministry even as looters ransacked priceless antiquities from Iraq's national museums and stole explosives from unguarded military arsenals.

Unacceptable Options

...helping Iraq under Saddam Hussein extract more oil by easing embargoes...

...The report recommended Cheney move swiftly to integrate energy and national security policy as a means to stop "manipulations of markets by any state" and suggested that his task force include "representation from the Department of Defense."

...the price that has been paid by American troops, Iraqi civilians and the US taxpayers has been enormous.

Cheers

Bush: Can Saudi Arabia Increase Output?

As noted by The Oil Drum . Com, during his trip to Saudi Arabia Bush openly questioned whether SA had the capacity to increase production. One would be quite surprised were one to learn Bush needed to go to Saudi Arabia to obtain this information. One is further surprised Bush had decided to openly, though indirectly, acknowledge Peak Oil. While it is a certainty that BushCheney knows about Peak oil due to their extensive background in the oil industry and Cheney's statements in 1999 regarding oil, depletion and future supply, their prior association with Matt Simmons of Twilight in the Desert fame, etc., it is still startling to hear the president day it.

I know, you're thinking, "He said no such thing! Conspiracy theorist!" In fact, he did. This is a simple conclusion based on the following facts:

• The EIA, the USGS and the IEA all state that the bulk of future oil production must come from the Middle East, i.e. OPEC.
• Most of the other OPEC nations are producing at or near their limits.

Logically, it follows that if the KSA (Saudi Arabia) cannot ramp up production, nobody can make up the difference. In actuality, the KSA can ramp up, but probably not as quickly as many would like to believe. They have been adding wells at a huge rate over the last few years in preparation for ramping up production to 12.5 mb/d. One assumes, given that all fields deplete and the KSA's largest fields have been producing for decades, that they are also drilling to maintain production in older fields. But it takes time to bring new oil to market, whether from new wells at existing fields or new wells at new fields, and especially the latter. We recently had an announcement from Aramco that production at the new **** field will be delayed.

According to former Aramco production and exploration chief, Sadad al Huseini, 12.5 is all the KSA is likely to ever produce. BushCheney certainly know this if you and I do. One can only speculate that the public admission that the KSA may not have the capacity to ramp up is meant for the masses. It's a warning shot fired as if it wasn't meant to be serious. "We were only kidding" as it were. Plausible deniability so that BushCheney can later claim Peak Oil took them by surprise, too.

So, there you have it from the horse's ass's mouths: de facto statements of Peak Oil.

Here's some more on the topic:

Bush Acknowledges Peak Oil

This is a pretty stunning admission, during his press conference in Saudi Arabia:

I hope that OPEC, if possible, understands that if they could put more supply on the market it would be helpful. But a lot of these economies are going -- a lot of these oil-producing countries are full out.

---

...There is no longer any argument in the industry that non-OPEC oil is peaking (that includes the International Energy Agency and even ExxonMobil)

...the topic was disucssed 3 separate times in the interview:

I also understand the dynamics behind the issue, and that is growing demand from U.S., but more particularly, China and India, relative to supply.

Oil is a commodity; it isn't something you just turn a tap. I mean, it requires investment, exploration, a lot of capital. I talked to His Majesty early on in my presidency in the hopes that they would explore for new fields; they have. They've increased their capacity. But in the meantime, demand has gone up quite substantially.

Note that Bush states that Saudi Arabia has increased its production capacity since "early on in his presidency"...

...BP statistics show that Saudi internal consumption jumped from 1.5mb/d in 2000 to 2.0mb/d, which means that fully one third of Saudi Arabia's production increase went to domestic demand).

I would like for them to realize that high energy prices affect the economies of consuming nations. And that if these economies weaken, those economies will eventually be buying fewer barrels of oil. And having said that, there is not a lot of excess capacity in the marketplace. What's happened is, is that demand for energy has outstripped new supply. And that's why there's high price.

That's the third time he said it.

Now ask yourself, "Why is George Dumbya Bush off-grid?" (Thanks to LATOC for the link.) Here we have the most anti-environment, ecologically devastating president in the history of this nation, but he's off the grid? Is he telling YOU to get off the grid? Is he telling YOU to conserve? Is he telling YOU to build yourself a passive solar home complete with gray water re-use? No? Why not? This is the man who invaded a nation for its oil. Why in the world would he be against Kyoto, deny global warming for years, eviscerate the science of his own Executive Branch and muzzle James Hansen, perhaps the world's leading climate scientist, but live in an OFF THE GRID home?

As my economics prof in university used to say, "Rhetorical question."