Saturday, January 2, 2010

Iraq: A Good Heist?

A couple of weeks ago I read a bit of the December edition of the Oilwatch Monthly, an oil production newsletter published by Rembrandt Koppelaar, President of ASPO Netherlands. (You can get a PDF download here: “Oilwatch Monthly December 2009”; click on the link I have provided, then click on the link that says, “November 2009 – 1.24 MB – 33 pagina's” in the target page.) I came across a very curious statement under the discussion titled, “The Importance of Iraqi Oil Production,” which I quote as follows:

European, Russian and Chinese oil companies including Shell, Lukoil, CNPC and BP are having a field day winning auctions to develop big Iraqi oil fields. Shell and Petronas have obtained the right to develop Majnoon with 7 billion barrels of reserves, Lukoil and Statoil the West Qurna 2 field which in total holds 9.75 billion barrels, and Total and Petronas the Halfaya field with 0.5 billion barrels. The only US company that secured a deal is ExxonMobil over the development of West Qurna 1, quite a disappointment given the amount of money the US has invested in Iraq through the Iraqi war...

As demand is the driver of oil markets, and a continued shrinkage of the economy under a W or L shaped recession is more likely, the development of Iraqi oil is even more important due to its low cost structure. The costs to develop these fields are in the order of 10 to 20 dollars per barrel excluding war subsidies already incurred. Low cost Iraqi oil that ‘floods’ the market bringing oil prices down as supply vastly outmatches demand can give a huge boom to the economy. Albeit temporarily for only about five year as continued declines will eventually outweigh increases, it can create the breathing space to make some swift decisions to add resilience to national economies. In that sense the Iraqi war may not have been fruitless but create a boon for the global economy...”

Note the last sentence: “...the Iraqi war may not have been fruitless but create a boon for the global economy...” Frankly, I choked on this statement. I'd like to present a rather different view of things in today's post.

First, a minor unrelated criticism. For over a year I have been less enthusiastic about accepting the production figures in the Oilwatch Monthly, not because I think Mr. Koppelaar is not competent, but because those figures are based on figures published by the International Energy Agency. Since the middle of 2008, I have suspected the IEA of cooking the books a little to hide the reality of global oil production declines. I still think that 2005 was the year of maximum global oil production.

Secondly, a technical criticism of stated Iraqi reserves. It is common knowledge that many OPEC nations grossly inflated their proven and probable reserve numbers in the 1980's in order to boost their production quotas. Thus Iraq went from declared reserves of 30 billion barrels in 1980 to 100 billion barrels in 1987. (Source: “Oil reserves,” Wikipedia). Lately a figure of 115 billion barrels has been tossed around. It is very possible that such high numbers are a mere fiction.

In making these minor criticisms, I freely admit that I'm not a petroleum geologist or oil industry expert, but an average ordinary guy trying to make sense of things. I'm sure the experts know much more that I do. But on to my third criticism, which has to do with morality. Here I think I can speak with more confidence. The Iraq invasion was not “worth it” from a moral standpoint. Here are my reasons for saying so.

  1. All of the “terrorism” and “weapons of mass destruction” excuses for the war have turned out to be false. It has been conclusively proven again and again that both the American and British governments fabricated evidence of Iraqi involvement in terrorism and continued Iraqi attempts to build WMD's, in order to build a case for invading Iraq. (Anyone want a little “yellowcake” to go with your coffee while you're reading this?) Further, no weapons of mass destruction were found after the invasion. None.

  2. There are no moral justifications for attacking a country that was not planning or preparing to attack us. Some have attempted to justify the invasion on grounds other than American access to Mideast oil, but these justifications hold no water and are often mere attempts to deflect attention from the real reason for the invasion. I think in particular of how one prominent writer has stated that America invaded Iraq in order to “modify and influence the behavior” of other Arab powers in the region, in addition to sending a message to the Arab world in response to 9/11.

To me, this justification is unrighteous. So, Iraq and Saddam Hussein had nothing to do with terrorism, Al-Qaida or the events of September 11th, yet we destroyed that country in order to send a message to the rest of the Arab world? How would you like to be punished for a crime committed by someone else? Does that seem fair? Two wrongs do not make a right.

  1. I agree with Rembrandt that it is obvious that the Iraq war was all about oil – specifically American access to Iraqi oil (and anything else of value that belonged to the Iraqis). Abundant proof of that is seen in the actions of Lewis Paul Bremer, the governor of Iraq appointed by President Bush in the aftermath of the American invasion. We went to Iraq in order to jack that country – all so that well-fed Americans could continue to drive outlandish, super-sized vehicles wherever they want, as fast as they want.

  2. In the process of jacking Iraqi oil, we killed a lot of people. In considering this, some will think only of the American soldiers who died. That's typical of American self-centeredness. But how about all the Iraqis who died? (By some counts, this figure is over one million.) It just hit the news that a Federal judge recently dismissed all charges against five Blackwater operatives who massacred seventeen unarmed Iraqi civilians in 2007.

  3. Having stolen our way to Iraqi oil, we have not used our access to that resource in order to buy time for an orderly transition to more sustainable societal arrangements. Instead, we have done our best to keep industrial expansion and the concentration of wealth in rich hands going as smoothly as possible. We are indeed like a heroin junkie who, having just murdered and robbed a victim, is using the money not for rehab, nor even for methadone, but for another fix.

These are difficult times, and we will have to work together to insure that resources are allocated fairly to all the world's people. In times like these, it is dangerous to lose one's moral compass, and even more dangerous to decide that one does not need a moral compass.

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