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G. Palast: Iraq as planned

by das monde Fri Jun 16th, 2006 at 03:08:19 AM EST

This point of view may look shocking and uber-cynical even for ready conspiracy believers. But the logic is hardly surprising or new. Yet the scale is chilling, and there is little discussion of this. There is a dissonance of this perspective with Peak Oil worries. But if you know the game theory anecdote about killing the last whale for maximal profit, there is no paradox.

I had to check it today: my last DailyKos diary so far is of 3 months ago. It was on the article of investigative journalist Greg Palast, where he was making a case that Iraq operation is indeed being accomplished as planned by the Bush administration. Yeah, right: all those bombings, absence of government control, civil victims and US military casualities - in a wicked way, all of this is a part of the plan.

So what is the plan? It is simple: keeping Iraqi oil production very low. (As DeAnander pointed out, we should speak of oil extraction, not production. But I keep the economic jargon this time.)

Wow, you would say... Does Bush administration  care about oil for our descendants after all?.. Nope. This is all for the profit of the few.

Iraq's output in 2003, 2004 and 2005 was less than produced under the restrictive Oil-for-Food Program. Whether by design or happenstance, this decline in output has resulted in tripling the profits of the five U.S. oil majors to $89 billion for a single year, 2005, compared to pre-invasion 2002. That suggests an interesting arithmetic equation. Big Oil's profits are up $89 billion a year in the same period the oil industry boosted contributions to Mr. Bush's reelection campaign to roughly $40 million.

That would make our president "Mr. 0.05%."

This is an excerpt from a new article of Greg Palast, on the same.

This time Greg Palast offers historical highlights of Iraqi oil extraction. As it appears, it was supressed from a get go.

On paper, Iraq, at 112 billion proven barrels, has the second largest reserves in OPEC after Saudi Arabia. [But] Iraq has fewer than three thousand operating wells... compared to one million in Texas. [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.  [Chalabi]'s plan for Iraq to pump 12 million barrels a day, a million more than Saudi Arabia, [is] ridiculous politically. It would never be permitted. An international industry policy of suppressing Iraqi oil production has been in place since 1927.

[In 1925] King Faisal, neophyte ruler of the country recently created by Churchill, [gave] 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%" [Calouste Gulbenkian].

The oil majors had a better use for Iraq's oil than drilling it -- not drilling it. The oil bigs had bought Iraq's concession to seal it up and keep it off the market. To please his buyers' wishes, Mr. 5% spread out a big map of the Middle East on the floor of a hotel room in Belgium and drew a thick red line around the gulf oil fields, centered on Iraq. All the oil company executives, gathered in the hotel room, signed their name on the red line -- vowing not to drill, except as a group, within the red-lined zone. No one, therefore, had an incentive to cheat and take red-lined oil. All of Iraq's oil, sequestered by all, was locked in, and all signers would enjoy a lift in worldwide prices.

The factology of Greg Palast is pretty provoking, isn't it?

When the British Foreign Office fretted that locking up oil would stoke local nationalist anger, BP-IPC agreed privately to pretend to drill lots of wells, but make them absurdly shallow and place them where, wrote a company manager, "there was no danger of striking oil." This systematic suppression of Iraq's production, begun in 1927, has never ceased. [...]

The OPEC cartel, controlled by Saudi Arabia, capped Iraq's production at a sum equal to Iran's, though the Iranian reserves are far smaller than Iraq's. The excuse for this quota equality between Iraq and Iran was to prevent war between them. It didn't. To keep Iraq's Ba'athists from complaining about the limits, Saudi Arabia simply bought off the leaders by funding Saddam's war against Iran and giving the dictator $7 billion for his "Islamic bomb" program.

In 1974 [during the Arab oil embargo] Senator Edmund Muskie revealed a secret intelligence report of "fantastic" reserves of oil in Iraq undeveloped because U.S. oil companies refused to add pipeline capacity. Muskie, who'd just lost a bid for the Presidency, was dubbed a "loser" and ignored. The Iranian bombing of the Basra fields (1980-88) put a new kink in Iraq's oil production. Iraq's frustration under production limits explodes periodically.

In August 1990, Kuwait's craven siphoning of borderland oil fields jointly owned with Iraq gave Saddam the excuse to take Kuwait's share. Here was Saddam's opportunity to increase Iraq's OPEC quota by taking Kuwait's (most assuredly not approved by the U.S.). Saddam's plan backfired. The Basra oil fields not crippled by Iran were demolished in 1991 by American B-52s. Saddam's petro-military overreach into Kuwait gave the West the authority for a more direct oil suppression method called the "Sanctions" program, later changed to "Oil for Food."

Is this the world we are living in?

Bush and the Bush family is one of the most cynical and greedy to happen along in American history...and that's saying something. Its all about the money...

"Once in awhile we get shown the light, in the strangest of places, if we look at it right" - Hunter/Garcia
by whataboutbob on Fri Jun 16th, 2006 at 07:58:49 AM EST
So, is Jeb running in 2008?

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman
by Carrie (migeru at eurotrib dot com) on Fri Jun 16th, 2006 at 08:16:51 AM EST
[ Parent ]
I got the impression that the world "runs" today on the greed of oil executives. They drawed the maps even in 1920's, when no one knew of Bushes.  George W. Bush is just a role player, an instrumnet to ensure oil profits. Surely, the Bush family greed is special indeed. But they just suck up a bigger tit, and they are told what to do.

It is pretty sure that the oily rullers "know" the next President of the US - another bloke who would lick any ass just to get into the White House. Maybe I bet on McCain.

by das monde on Fri Jun 16th, 2006 at 08:49:30 AM EST
[ Parent ]
10,000, 50,000, 1 million - these are also just numbers.

You can't be me, I'm taken
by Sven Triloqvist on Fri Jun 16th, 2006 at 09:05:59 AM EST
Conspiracy theories:
When I was growing up there was a story floating around that RCA had invented something to replace the vacuum tube (valve in the UK) and was keeping it off the market to allow them to keep selling their existing product.

Some years later the transistor was invented (by Bell Labs) and the story went away.

Once in awhile a conspiracy may actually be true, but keeping oil of the market doesn't need to be for nefarious reasons, it could just be husbanding resources so they are available in the future. Furthermore, does it make sense that the same oil companies who are supposedly part of the cabal would currently be extracting oil from much less profitable sources (like tar sands) when they could be pumping money out of the ground?

There may be a grain of truth in all this, but I'm not sure what it really is.

Policies not Politics
---- Daily Landscape

by rdf (robert.feinman@gmail.com) on Fri Jun 16th, 2006 at 05:23:55 PM EST
I preferv the incompetence theory in this case: they tried to grab all the oil, and the harder they squeeze the less oil comes out.

I expect similar outcomes if the US (or anyone else) intervenes militarily (or covertly) in other oil producing countries.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Carrie (migeru at eurotrib dot com) on Fri Jun 16th, 2006 at 05:31:13 PM EST
[ Parent ]
There is a factor of incompetence, but superficial I would say. You have to notice the skill with which so many people were fouled, the smooth running of "liberal" media, remarkable cluelessness of US Democrats, cool control of GOP political machine, their readiness for each "smackdown". It is as if some interested party has the knowledge of what would work politically and economically, what is needed for the things to work, what can be staged, how opposition forces can be diminished, and in particular, how appearance of incompetence can be used. It is a crazy way of thinking, very crazy. But what if some people know valuably more of history and the world than meets the public knowledge?.. Ha ha, can we recognize Intelligent Design?!
by das monde on Sun Jun 18th, 2006 at 10:28:28 PM EST
[ Parent ]
does it make sense that the same oil companies who are supposedly part of the cabal would currently be extracting oil from much less profitable sources (like tar sands) when they could be pumping money out of the ground?

It does make sense. If that meeting in Brussels hotel is indeed true, the oil companies were planning smart long term: they were saving (and then keeping an eye on) a large portion of oil resourses. When oil everywhere else is gone, these oil companies could rule the world... Unless, as you say, a new technology would arrive. But on other hand, oil is such a 'wonder' resourse (and not only for fuel) - you can hardly imagine anything more effective. With high probability, humans will never beat this product that the nature was making in millions of years.

If these companies are smart, they will be pumping money and royal life for their CEO's out of the ground for many years, while a few others will be making some living of tar sands ;-]

by das monde on Sun Jun 18th, 2006 at 10:07:57 PM EST
[ Parent ]

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