Friday, June 27, 2008

Their Oil Under Their Sand

Some news items from this week: First, “Iraqi Oil Workers' Union Threatens Strike to Block New Oil Law,” Bloomberg, 26 June 2008, This story describes another round in the continuing saga of how the West, specifically the United States, is seeking to achieve the goal for which it fought the Iraqi war: to gain control of Iraq's oil reserves so that they could be owned and exploited by Western international oil companies. The first installment of that story involved the appointment of Lewis Paul Bremer III by President Bush to oversee the management of the Iraqi economy and national resources after the removal of Saddam Hussein. As the “governor” of Iraq, Mr. Bremer issued 100 orders to the Iraqi people. These orders commanded the nearly complete privatization of of Iraq's state-owned enterprises, the allowing of up to 100 percent foreign ownership of Iraqi businesses, and the granting of full immunity from prosecution to all foreign contractors, including private security firms. (Sources: Wikipedia, and

Mr. Bremer served as “governor from May 2003 to June 2004, when he was replaced by the first of several governing bodies largely picked by overseers from the United States government. From February 2007 onward, President Bush has been pressing the Iraqi government to pass a national “oil law” which would formalize many of the policies begun by Paul Bremer. This oil law would give overwhelming control of Iraqi oil reserves and production to foreign international oil companies like Royal Dutch Shell and Exxon Mobil, on terms far more generous than those granted by any other Mideast oil-producing nation. (Source: Oil Change International website, While this law was stalled in negotiations for over a year, it now seems very close to ratification.

Why is the Iraqi Oil Workers' Union threatening to strike if this law is implemented? Because they resent seeing their nation become yet another victim of globalism – a nation whose natural resources are extracted by foreigners who reap fantastic profits while paying slave wages to the citizens of the nation for the “privilege” of working for these foreigners. It must be especially galling to the Iraqis, whose country was invaded on a pretext, solely for the purpose of allowing the West to rape their resources.

But the funny thing is that the Iraq war and the oil law may be a mistake for another reason. One of the things that's always mentioned in mainstream media coverage of Iraq is that the country is supposed to hold “vast, untapped” oil reserves. Impressive numbers are tossed out by people who salivate whenever these numbers are mentioned – 100 billion barrels! 115 billion barrels! Who knows, maybe even 350 billion barrels!!! (Sources: “Iraq Upgrades Reserves to 350 bil. Barrels, Invites New IOC's for Pre-Qualification,” 20 May 2008,; “The Challenge of Exploiting Iraq's Oil,” BBC News,

These are curious numbers, but there is historical evidence that the oil “books” may have been cooked. For many years before OPEC, the oil wealth of the Mideast was exploited by Western international companies such as Exxon Mobil, Total, and others. Geologists for these companies established field size and reserve estimates based on sound science and engineering judgment. But when OPEC was formed after many of the assets of these companies were nationalized by Mideastern governments, the OPEC ministers set a policy of allowing each OPEC member country to produce a certain monthly oil quota, with that quota being set by the reserves each member country claimed to have. This was done to prevent the price of oil from being driven down to unacceptable levels, since the sale of oil made up so much of the gross domestic product of the OPEC member countries.

The problem with this arrangement was that since the prosperity of member countries depended so heavily on the selling of their oil, they were under great pressure to inflate their reserve numbers so that they would be allowed to sell more oil (remember, this was over two decades before the present oil shortage we are now seeing). Therefore, just before the quota system was enacted, Kuwait published reserve figures of 63.9 billion barrels; Saudi Arabia published figures of 166 billion barrels, Venezuela reported 24.9 billion barrels, and Iraq claimed 43 billion barrels. But in 1985, when the quota system was in effect, Kuwait magically and mysteriously raised its stated reserves to 90 billion barrels. In 1988, Iraq raised its reserve figures to 100 billion barrels. And in 1990, Saudi Arabia raised its reserve figure to 257.5 billion barrels. No one knows whether these reserves are based on valid geological surveys or whether they are simply hot air. But the Saudis have claimed from 1990 onward that their reserves have remained at 260 billion barrels – even though they have been pumping over 9 million barrels a day ever since. Truly Saudi Arabia must be a magic land – a land not only of flying carpets, but of cars whose gas tanks never run dry, no matter how much they are driven! (Source: “Peak Oil: The Challenge, the Possible Responses,” Richard Heinberg, 24 August 2006,

Now, if we assume that the Iraqi reserves have been overstated since 1988, and that the actual figure is somewhat less than 43 billion barrels, we can calculate how long Iraqi oil will last at present and/or desired rates of extraction. Even if we don't know the true extent of Iraqi reserves, we can formulate a pretty accurate guess, using a mathematical technique known as Hubbert linearization, which requires simply that we know the rate of extraction and the total amount of oil extracted to date. Thus it is possible to guess how much Iraqi oil will help America continue its extravagant and unsustainable lifestyle, and for how long that oil will sustain our way of life. We can then formulate a comparison: on the one hand, the total amount of recoverable Iraqi oil available to the U.S., along with the total economic value of that oil; and on the other, the total number of Iraqis killed in this present Gulf War, the total number of American soldiers killed or traumatized, the total amount of damage to Iraqi society, and the total amount spent by the U.S. on the war effort. But if even after that comparison, someone still thinks our seizure of that oil was worth the price, let that person compare the temporary benefit of enjoying stolen goods against the pain of everlasting judgment. Since I am an evangelical Christian, I believe in everlasting judgment. I do not sympathize with radical Islam; yet I believe that what was done in Iraq by the United States is wrong, and that it will have eternal consequences.

Which brings me to the second bit of news: there are two bills pending in Congress right now. One, HR 362, would authorize the President to conduct a naval blockade of Iran in order to prevent the import of refined petroleum products by Iran and to inspect all ships and cargo entering or departing Iran (Source: Senate Resolution 580 is similar, but milder in that it states that “nothing in this resolution shall be construed to authorize the use of force against Iran.” (Source: These two bills are supposed to counter the threat posed by an Iranian nuclear weapons program, even though United States intelligence agencies issued a National Intelligence Estimate in December 2007 which stated that Iran halted its nuclear weapons program in 2003 in response to international pressure. Reasonable people would conclude that war with Iran is unnecessary and that therefore, the best policy in dealing with Iran is to maintain enough international pressure to persuade the Iranian government to exercise good global citizenship. But most of the decision-makers in Washington do not seem to be reasonable. Rather, they are intoxicated by the smell of oil – perhaps bazillions of barrels of vast, untapped reserves!

As far as daily life goes, it is supposed to get very hot in the Pacific Northwest this weekend (but we don't believe in global warming, now, do we? After all, James Dobson is working overtime to make sure that We Get It!) One advantage of the hot weather is that it enables environmentally friendly ways to dry clothes.

If you've never seen one of these, they are easy to construct: a few lengths of galvanized threaded pipe from Home Depot, some cement, some post-hole diggers, and a bit of cord, and you're in business. And clothespins are still widely available...

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