Yes, pump prices are high, but what gets to the pumps comes from the refineries, and they price, and the retail outlets price based on that and on all the profit above it they think and hope they can make.
So, the Drill Here trash is only to deregulate things so the oligopolists can tie up the remaining domestic sources of energy along with the existing ones they have tied up and are not showing any intent or activity aimed at exploiting in any way that might put cheaper gas into the the retail pumps they dominate and manage.
Pay attention, I will republish [they can sue me if they like] two entire recent articles from Asia Times Online, and keep in mind - the truth is a buck a barrel to pump oil from the ground in Iraq. Then figure who's being untruthful about things.
Plese, please, please read the entirety of the articles. And please understand that beyond what they say, the globe is finite, the atmosphere is what we breathe, and changing habits toward, say tele-commuting is a liberating thing and no burden.
The articles came from here and here.
They show we are being lied to, big time, and incessantly propagandized with that lie.
Jul 9, 2008
DISPATCHES FROM AMERICA
All the oil news that's fit to print
By Nick Turse
On June 19, the New York Times broke the story in an article under the headlines "Deals with Iraq Are Set to Bring Oil Giants Back: Rare No-Bid Contracts, A Foothold for Western Companies Seeking Future Rewards". Finally, after a long five years-plus, there was proof that the occupation of Iraq really did have something or other to do with oil. Quoting unnamed Iraqi Oil Ministry bureaucrats, oil company officials and an anonymous American diplomat, Andrew Kramer of the Times wrote: "Exxon Mobil, Shell, Total and BP ... along with Chevron and a number of smaller oil companies, are in talks with Iraq's Oil Ministry for no-bid contracts to service Iraq's largest fields."
The news caused a minor stir, as other newspapers picked up and advanced the story and the mainstream media, only a few years late, began to seriously consider the significance of oil to the occupation of Iraq.
As always happens when, for whatever reason, you come late to a major story and find yourself playing catch-up on the run, there are a few corrections and blind spots in the current coverage that might be worth addressing before another five years pass. In the spirit of collegiality, I offer the following leads for the mainstream media to consider as they change gears from no comment to hot pursuit when it comes to the story of Iraq's most sought after commodity. I'm talking, of course, about that "sea of oil" on which, as deputy secretary of defense Paul Wolfowitz pointed out in May 2003, the month after Baghdad fell, Iraq "floats".
All the news that's fit to print department
In a June 30 follow-up piece, the Times' Kramer cited US officials (again unnamed) as acknowledging the following, "A group of American advisers led by a small State Department team played an integral part in drawing up contracts between the Iraqi government and five major Western oil companies ..."
In addition, he asserted, this "disclosure ... is the first confirmation of direct involvement by the [George W] Bush administration in deals to open Iraq's oil to commercial development and is likely to stoke criticism". This scoop, however, reflected none of the evidence - long available - of the direct involvement of Bush administration and US occupation officials in Iraq's oil industry. In fact, since the taking of Baghdad in April 2003, the name of the game has been facilitating relationships between Iraq and US-based and allied Western energy firms when it came to what Bush used to delicately call Iraq's "patrimony" of "natural resources".
For instance, almost a year ago, the Washington Post's Walter Pincus drew attention to a call by Bush's Commerce Department for "an international legal adviser who is fluent in Arabic 'to provide expert input, when requested' to 'US government agencies or to Iraqi authorities as they draft the laws and regulations that will govern Iraq's oil and gas sector'." The document went on to state, "As part of a US government inter-agency process, the US Department of Commerce" would be "providing technical assistance to Iraq to create a legal and tax environment conducive to domestic and foreign investment in Iraq's key economic sectors, starting with the mineral resources sector."
This was no aberration. In March 2006, for instance, the US Army issued a solicitation for a two-year contract "to allow any organization or entity to support IRMO [Iraq Reconstruction Management Office] (US Embassy Baghdad) to deliver an effective capacity development program utilizing predominantly US and European firms, universities, institutes and professional organizations for personnel within the Iraqi Ministry of Oil ..." This was to include participation in "development programs" offered by "private companies", long-term development through "commercial training entities in the United States and Europe for oil and gas specialists from the Ministry of Oil", and the implementation of "joint government-industry activities". Translated out of bureaucratic contract-ese, this meant that the US would pay for programs to, among other things, enhance relationships between the Iraq Oil Ministry and ... you guessed it ... foreign firms.
In October 2006, the Department of Commerce (DOC) put out a call for experts that was nearly identical to the later solicitation discovered by Pincus. They were to aid a program facilitating "the creation of a legal and tax environment conducive to domestic and foreign investment in Iraqs [sic] key economic sectors, starting with the mineral resources sector" and provide "expertise to DOC, to other [US government] agencies, or to Iraqi authorities on creating a legal and tax environment conducive to domestic and foreign investment in Iraqs [sic] oil and gas sector". Such an individual would, in fact, act "as a liaison between [the DOC's technical assistance arm] and key stakeholders in Iraq (such as Iraq's Ministry of Oil, or the oil authorities in Kurdistan)".
In fact, the US Trade and Development Agency notes that, in 2006 and 2007, it funded a "$2.5 million multifaceted training program for the Iraqi Ministry of Oil" to "provide critical knowledge transfer and establish long-term relationships between the US and Iraqi oil and gas industry public and private sector representatives".
It's worth recalling that Iraq's oil bureaucrats, about to receive such "critical knowledge" and "expertise", were not exactly neophytes in the world of oil management. They had effectively managed the Iraqi oil industry from the time the five oil majors now slated to receive those "service contracts" were tossed out of Iraq, when its industry was nationalized in 1972, until the invasion of 2003. They had kept the country's oil infrastructure going even after the disaster of the First Gulf War of 1990-1991, even through all the desperate final years of sanctions against Saddam Hussein's regime.
The Pentagon-petroleum partnership
Another connection, long ignored in the mainstream, that reporters like Kramer might consider pursuing when it comes to the complex ties among Iraqi officials, the Bush administration, the Department of Defense (DoD), and Big Oil is the overt Pentagon connection. The DoD is, as national security expert Noah Shachtman notes, "the world's largest energy consumer". And, when it comes to Pentagon gas-guzzling, its post-9/11 wars and occupations, especially in Iraq, have been a boon. While the Bush administration has been working overtime to clear the path for Big Oil's return to Iraq, the Pentagon has been paying out staggering amounts of US taxpayer dollars to the very oil majors now negotiating with Iraq's Ministry of Oil.
According to recent reports, the proposed Iraqi service contracts, which may be paid off in cash or crude oil, will be worth $500 million each. That is roughly what the Pentagon paid out on June 18 alone - the day before the Times broke its story about Big Oil's return to Iraq - for natural gas and aviation fuel. Over half the total amount, in excess of $268 million, was handed over to one of the oil giants set to benefit from the Iraq deal: BP (formerly British Petroleum). Only days earlier, two of the other majors from the coterie of potential no-bid contractors, Exxon Mobil and Chevron, nabbed contracts from the DoD - in Exxon Mobil's case, a $73 million deal for gasoline and fuel oil; in Chevron's, a $16 million contract for aviation fuel.
Keep in mind, however, that - although you won't learn this in your daily paper - this has long been standard operating procedure. Each of the oil giants named in the original New York Times piece - Exxon Mobil, Shell, Total, BP, and Chevron - regularly show up on the Pentagon's payroll. In fact, last year, Iraq's new fave five took home more than $4.1 billion from the DoD - with Shell leading the way with $2.1 billion.
It's no secret that the Pentagon relies on vast quantities of oil to power the ships, planes, helicopters, heavy armor, and other ground vehicles essential to its occupation of Iraq, nor that it regularly pays out vast sums of taxpayer dollars to the very companies that US advisors have aided in working out oil deals with the Iraq Oil Ministry. Despite ample evidence of the Pentagon connection, this circular and mutually-reinforcing relationship has been almost totally ignored in the mainstream media. But think of it this way: Your tax dollars have given the Pentagon the opportunity to use up oil - bought from the oil majors, in prodigious quantities - in order to create a situation in Iraq in which those same majors will soon receive no-bid contracts to make money off the Iraqi oil industry and, if all goes well, get far better, longer term deals in the near future.
One big, happy, oily family
It turns out that, despite that story the Times broke as if something totally new were on the horizon, the Bush administration has been facilitating ties between the Iraqi government and foreign oil companies for years, and the same companies now likely to nab a no-bid toehold in Iraq's oilfields are intimately tied in to the Pentagon to the tune of billions of dollars annually. It's worth noting that most of these firms have also been closely connected to Vice President Dick Cheney from the early days of the Bush administration. In fact, executives from Exxon Mobil, Shell, and BP met behind closed doors with Cheney's energy task force in 2001, when the administration was pounding out its energy policies, according to a White House document obtained by the Washington Post. The Government Accountability Office also found that Chevron was just one of several companies that "gave detailed energy policy recommendations" to the task force.
It's almost impossible to tease out all the interconnections between Big Oil, the White House, the Pentagon, and the Iraqi Ministry of Oil, since they are tied together in a web of contracts and mutually supporting relationships built up over many years. However, just in case the Times wants to set its staff loose on the recent past, there is no mistaking the many ties that exist. (A small tip for Times researchers: skip the Times archives, they will be of little help.)
Should further evidence be necessary, when it comes to those US advisors at work in Iraq, mainstream reporters need look no further than the solicitations sent out by the Iraqi Ministry of Oil itself. Consider, for instance, a recent "tender" for a contractor to drill "two deep exploration wells" in the South Rumaila and Luhais oil fields in the Basra District of southern Iraq. Not only does the solicitation (the deadline for which is July 27, 2008) contain special instructions for "companies outside Iraq", but it asks potential contractors to send their bids to the Ministry of Oil not in Arabic, but "in the English language".
Now, again that does not mean having the 8-mile-per-gallon Dodge Ram with the compound four-tire rear axle and whining about price per gallon is justified. It is not, and those people deserve to have a profligacy tax imposed, as should be the case with recreational snowmobiles and ATV's, with the latter in particular hammered hard with special taxes to discourage idiotic tearing up of sensitive wilderness or woodland areas by those turkeys who deserve turnovers more frequently than they achieve.
What the Peak Oil people are saying ultimately is correct. Timing of the point where the reserves start to look too depleted might be now, it might be ten or more years from now. But in terms of geological time and resources, the oil is finite and took millions and millions of years to be formed. Ultimately, if you think about it, animal and mainly plant matter covered, compressed, etc., it is all "solar energy." Plants run on solar input, that is what photosynthesis is, and the entire food chain runs on plants. And the oil is a product of food chain events a long time ago. So why not use solar as much as we directly can, now, and that includes wind, because we all know what makes the winds blow. Bypass the millions of years of change to preserve the petroleum for petrochemical and resins and such. Trucking, trains and ships to move cargo, that's needed, and they and aircraft use metals and composites and we do not get those, or recycle them, without consuming energy. Some things we cannot eliminate or even scale back on drastically. But a lot of slack is in the lifestyles that we are used to, and we can improve, we can change.
We need sensible public transit, and it will be used if it is as in Europe, more convenient than driving. But that means having the foresight and will to pay the price for it, and to free up the roads for movement of essentials, movement of goods and services, not rush hour tie-ups nor mid-day Mall of America diddling by people who live north of Fridley and Coon Rapids but drive there because "the shops are niceer." Live with what's to be bought near home, or move to where the "nicer shops" are nearby.
Some habits can and should change. But the pump price, that is an artificial and minipulated thing. There is long-term elasticity in petroleum product demand, other energy resources can be substituted, which is why the price gouging is alternated with periods of cheap oil and gas energy to prevent widespread long-term hard thinking and planning on alternative energy sources and ways and means.
Short-term the elasticity is rigid, there is no substitute for the stuff the big Dodge Ram sucks up rapaciously, in order to move. That's the nature of cycling in a concerntrated seller market situation where, at retail, the long and short term elasticities are as they are. Gouge for a period, slack back to prevent long term alternatives taking hold, then gouge again, etc.
And we all join hands and sing Kumbiya when the pump price gauge atop the gasoline pump display again turns more slowly relative to the gallons pumped display. For now it hops by tens of dollars while the gallons ring up far, far too slowly, right?
Next article, about current truths that debunk current lies:
Jul 4, 2008
THE ROVING EYE
Big Oil's 'secret' out of Iraq's closet
By Pepe Escobar
NEW YORK - It is not about the "war on terror". It is not about weapons of mass destruction. It is not about "freedom and democracy to the Iraqi people", or to the "Afghan people". It is not about "Islamofascism". It is not about a Pentagon-coined "arc of instability" from the Middle East to Central Asia. New evidence shows once again both George W Bush administration wars - in Afghanistan and Iraq - above all are about oil and gas.
Those were the days - up to a few days ago, actually - when the fateful words "war" and "oil" would never have been aligned in the same sentence anywhere in US corporate media; the days when former defense secretary and Pentagon supremo Donald Rumsfeld insisted Iraq had "literally nothing to do with oil".
But now the US and European Big Oil majors that controlled the Iraqi oil industry up to the 1972 nationalization - today represented by Exxon Mobil, Shell, BP, Total and Chevron - seem to be back with a vengeance. Thus the New York Times, for instance, can redeem itself from printing Ahmad Chalabi-fed weapons-of-mass-destruction nonsense on its front page for months and actually engage in news that's fit to print.
This past Monday, the paper reported that "a group of American advisers led by a small State Department team played an integral part in drawing up contracts between the Iraqi government and five major Western oil companies to develop some of the largest fields in Iraq".
The bland language may be misleading. This is no less than the first step in the de facto de-nationalization of the Iraqi oil industry - Vice President Dick Cheney's wet dream.
As James Paul, director of the Global Policy Forum, has summarized it, this is all about:... a new round of immensely profitable oil deals ... announced by Iraqi Oil Minister Sharistani, in which giants like Exxon Mobil can nail down long-term contracts and take away a large share of the oil from several key operating fields, like the massive Rumaila and West Qurna, some of the world's largest.
Oil can be produced in these fields for about one dollar a barrel, while its value on world markets is now around US$140. With hundreds of millions of dollars of profits at stake - and while the US occupation remains in full force - the oil giants are making their move, seeking to bypass opposition in the Iraqi parliament and ignoring suspicion and anger among the Iraqi public. With world oil supplies visibly running short and oil prices skyrocketing, this is a desperate gamble to control some of the world's largest and most lucrative fields, at huge human and environmental cost.
Meanwhile in Washington, no collective breath is being held, as it's extremely unlikely the supine US Congress will be looking closer at whether the Bush administration is bypassing the Biden amendment, which prohibits the use of US funds to "exercise United States control over the oil infrastructure or oil resources of Iraq". There's too much money to be made.
Big Oil hardball
Hussein al-Shahristani, the Iraqi oil minister, has always been a huge cheerleader of Big Oil taking over the Iraq oil industry. He dreams of Iraq as the world's second - or at least third-biggest - oil producer, competing with Saudi Arabia and Russia. To get there he is frantically selling out, trying to get voracious, predatory production sharing agreements (PSAs) over the heads of the Iraqi parliament and even harassing Iraqi oil unions.
At this early stage it's still about TSAs (technical support agreements); these are simple consultancy contracts to help Iraq raise its oil production by 500,000 barrels a day, not long-term contracts to develop juicy oil and gas fields.
But oops! Iraqis have not been fooled by the smoke and mirrors - nor by Big Oil hardball. At a press conference in Baghdad on Monday, Shahristani had to admit, "We did not finalize any agreement ... because they refused to offer consultancy based on fees, as they wanted a share of the oil." Big Oil, of course, wants the "Big Prize" (copyright Cheney).
What Cheney and Big Oil really want is to wallow in the extra-profitable 30-year PSAs once the new, International Monetary Fund-redacted Iraqi oil law is forced through the gorges of the Iraqi parliament, sealing a major US-European takeover - the whole thing, of course, protected by a Status of Forces Agreement with its 58 US military bases, total control of Iraqi airspace, total legal immunity for US soldiers and the right for the Pentagon to turn Iraq upside down without even asking the hosts.
And make no mistake, that's what the US power elite always wanted.
Greg Muttit, co-director of the London-based oil industry research group Platform, explains that what's at stake at the current stage are "nine-year risk service contracts for six oilfields"; these are "halfway between TSAs and PSAs". Bids are due by March 2009, with signing in June 2009. As for the technical service contracts for five of the same oilfields, these are "no-bid contracts whose terms were dictated by the oil companies themselves". In other words: Big Oil is telling the Iraqi government what it wants.
And here's the catch. Muttit says, "The tendering of these fields is a big policy change, as producing fields were supposed to be developed by the Iraq National Oil Company [INOC], with only new fields allocated to foreign oil companies." Big Oil, though, wants the whole cake. INOC gets only a shabby 25% stake. Muttit makes an enlightening comparison with Libya, "where the national oil company gets around 80%, which is much more normal for fields of this size".
Meanwhile, in Central Asia ...
Bush/Cheney, unfazed by their own regime's death throes - and following what was already official policy under former present Bill Clinton - now are also poised to have one more crack at the New Great Game in Central Asia, trying to thwart regional energy supremacy by both Russia and Iran.
Last April, Afghanistan, Turkmenistan, Pakistan and India signed a Gas Pipeline Framework Agreement, deciding - not for the first time - to build the $7.6 billion TAP (now TAPI) pipeline that would deliver natural gas from Turkmenistan to Pakistan and probably India, cutting right through the heart of Afghanistan's Kandahar province, where the neo-Taliban are merrily running rings around the forces of the North Atlantic Treaty Organization.
Construction should start in 2010, with gas being supplied by 2015. The project is backed by the Manila-based Asian Development Bank. The government of Afghan President Hamid Karzai, which cannot even provide security for a few streets in central Kabul, has engaged in Hollywood-style suspension of disbelief by assuring unsuspecting customers it will not only get rid of millions of land mines blocking TAPI's route, it will get rid of the Taliban themselves.
Inevitably, US Assistant Secretary of State Richard Boucher weighed in, saying the US has a "fundamental strategic interest" in Afghanistan, without making a single reference to the words "oil" or "gas". In real life, with this move Bush/Cheney believe they can block the $7.5 billion Iran-Pakistan-India (IPI) pipeline, also known as the "peace" pipeline. Fat chance. The three countries are all on board and the pipeline, delivering Iranian gas to South Asia, is a go.
This new US adventure has also sent a frantic red alert right to the core of the Canadian government, which is now contemplating the geopolitical nightmare of having its troops, alongside NATO's, protecting a fragile pipeline in a war zone. The conservatives in power in Canada have committed to keep troops in Afghanistan at least until 2011.
The Canadian Center for Policy Alternatives released a report, A Pipeline Through a Troubled Land: Afghanistan, Canada and the New Great Energy Game, written by John Foster, energy economist and former lead economist of PetroCanada, depicting TAPI as turning Afghanistan into "an energy bridge" between Central and South Asia. But Foster is very worried "the quest for 'energy security' risks drawing Canada unwittingly into a new Great Energy Game".
Were investors, perhaps nursed by Afghan opium, to be delirious enough to build such a pipeline - and that's a monumental if - Afghanistan would collect a mere $160 million a year in transit fees. Well, that's maybe not so grim considering it's the equivalent of 50% of Karzai's current annual revenue. The Taliban would love to get a piece of the action.
Forget about all that old 2001 "bringing freedom to Afghan women" rhetoric. TAP's roller-coaster history goes back to the mid-1990s Clinton era, when the Taliban were wined and dined by California-based Unocal - and the Clinton machine. Unocal beat the competition, led by Argentina's Bridas. The negotiations broke down because of money - those pesky transit fees. At the Group of Eight summit in Naples in July 2001 it was decided the US would take out the Taliban by October; September 11, 2001, accelerated the schedule by a fraction.
One of the first actual fruits of the US bombing of Afghanistan in 2001 was that in December, Karzai, Pakistan's President Pervez Musharraf and Turkmenistan's wacky Nyazov (now dead) signed an agreement committing themselves to build TAP (by then known as the Trans-Afghan Pipeline). The Russians decided to wait for their counterpunch, and delivered it in style in September 2006.
Gazprom accepted a 40% price increase demanded by Nyazov for his gas. In return, the Russians got priceless gifts: control of all of Turkmenistan's gas surplus up to 2009; a preference for Russia to tap the new Yolotan gas fields; and Turkmenistan bowing out of any Trans-Caspian pipeline project. Nyazov pledged to supply all his country's gas to Russia.
Thus, dead on arrival, lay TAP, the (invisible) star of the "good" Afghan war, as Democratic senator and presidential hopeful Barack Obama now sees it. Washington's plan has always been to seduce Nyazov to provide Turkmenistan gas to the Baku-Tblisi-Ceyhan (BTC) pipeline, and then to TAP. This was part of a US grand strategy of a "Greater Central Asia" centered on Afghanistan and India.
Bush/Cheney will never give up. But India will go ahead with the Iranian pipeline. And Turkmenistan is selling all its surplus gas to Russia. Who needs a $7.6 billion, 1,600-kilometer steel serpent in a war zone?
It ain't over till the fat (oil) lady sings. But if the Bush administration "vision" of a perpetual Iraqi puppet regime, with its oil wealth confiscated and under the imperial boot, takes hold, alongside the Taliban having a long pipeline to play with in Afghanistan, the least one can expect is a lot more blood on the tracks.
I do not suggest any reader should agree 100% with every word of every sentence of both articles. I do strongly suggest having differing versions of how to read things beyond what US mainstream media provide, beyond Fox News and CNN, is worthwhile.
It at least elevates discourse above simplistic propagandistic sloganeering, such as "Drill Here. Drill Now. Pay Less," when in all honesty that "Pay Less" part of the Newt Gingrich new times mantra for the stupid, is change I cannot believe in.
Bottom line: A buck a barrel to pump it, at the wellhead, in Iraq. That is truth. Not Newt, Michele, Norm telling you something different.
A buck a barrel.
Why the occupation is not having that translate into something besides the current and expected near-term pump prices we see and anticipate is, well, the puppets we have installed there in Iraq are not pulling their own strings. So go figure.
Who is managing what, and telling us things having little to do with the truth of what they are doing to keep the oligopoly fat and sassy? Follow the money.
Think about it and see what answer you get.