Distrust Rising

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Over the last few days I have been surprised by a number of local people who are saying that the BP oil rig explosion and spill was not an accident but deliberate.Their ideas are it was an inside job of some sort to keep the price of oil up and going higher.

These are not folks inclined towards conspiratorial theories, at least not in the 9/11 and wars for lies vein. But when it comes to oil and gas prices and the possibility of the oil industry killing their own and creating an environment disaster for a long term agenda, they are open to the prospect.

Whether the ‘event’ was actually an accident where all the ‘fail safe’ measures failed or something more, the suspicions of some seem to me to be an example of the growing distrust of government and corporations among the population.

Even if the rig disaster was an accident, the Hegelian Dialectic of problem … reaction … solution is coming into play. As Rahm Emanuel would say “You never let a serious crisis go to waste.”

Did Someone Blow Up That BP Oil Rig

Bad Boys, Bad Boys: Obama Sending SWAT Teams To Inspect Gulf Oil Rigs

10 suspects, and motives as to why the Gulf oil spill was an inside job

Yes I know… Not everything is a conspiracy, but I don’t let that stop me from theorizing, especially when a certain incident has so many beneficiaries. Sure, as Rhambo Emanuel is famous for saying… “Never waste a good crisis” – good enough, except this crisis in many ways places some oily egg right on his face.

While is possible that this TOO was just another example of “incompetence” or Mother nature fighting back… We owe it to ourselves to fully analyze the situation, its players, and beneficiaries.

Consider this a starting place for reasons that the Gulf of Mexico oil spill was an inside job, and go from there. My point is not to convince you, but to make sure we aren’t missing anything by simply buying in to the Media version of events. In fleshing this all out I will be counting in two columns. Who stands to gain, and who had a motive and opportunity.

Whats fishy here is that all the witnesses have vanished! 11 people BTW (there’s that pesky 11 again). There is no surveillance video evidence, even though we are talking about billions of dollars sitting offshore. Surveillance cameras at the BP gas stations, but not on their oil rig? Yeah… there were no cameras at the Pentagon, or at Oklahoma City either… wink wink.

Here is the list of suspects, not particularly in any order.

1) ENVIRONMENTALISTS. “Eco Terror” is a fact of life, For decades some of the most radical and dangerous groups have been environmentalists. In a way its hard to blame them. Most of the planet has been polluted by the Kleptocracy for decades. Through mind numbing propaganda, the environmental movement have been conditioned to believe that if drastic measures are not taken ASAP… Were all gonna Diiiiiiiiiiiiiie! (This “Movement” was started interestingly enough by the same people who own BP, see below)

So its no wonder they capable of doing anything to save the planet.This includes targeting “capitalist” oil rigs.

(If I believed as they do, I might be just as capable of same.)

They have a motive. The question is, do they have the means. It would have been an incredible feat, but with enough planning, people and bravado… It could be done. I tend to lean very low on this one though. The collateral damage to the environment should rule them out altogether, and it would take a commando style raid on the armed rig. While its possible, it’s not likely. Count on them to exploit the problem just the same.

2) OPEC: The global economic war is a serious one with players from every ideology. OPEC stands to gain as this incident will effect the price of oil, supply and demand. When you loose millions of gallons of domestic oil, who do you go to to make up the difference? Yep.

We should also consider that an increase in off shore drilling, if it catches on, could cost OPEC 100’s of Billions annually. (We all heard Obama a few weeks back promising to do more drilling. Was that just pandering? See below) Therefore if OPEC could throw a monkey wrench into the works by causing a conveniently timed disaster, would they? Sure. Could they?

They have a motive. As for the means, they have that too.

The problem with pinning it one them is its too obvious, and it would be too much of a risk for them to attempt. Also the US (as Iraq) is a member, so…. would the US purposely attack themselves? Ok, dumb question. Still – I rule out OPEC, but will explore some of the members below.

3) Shrimp and Fish (IE: Food) cartels. (Today, the US harvests over 650 million pounds of shrimp a year, more than any other country. And still this is not enough to fill the need, in spite of shrimp-farming. The US imports yet another 200 million pounds a year. )

Yeah, yeah Its a stretch. Obviously the price of a shrimp cocktail will be out of site for the next few years. While the cartels do stand to gain, have access to this part of the world, and the money to make it all so… Its just too out of the realm of reality. (We can keep in mind that many on this list cross pollinate, and have some of the same owners!)

Our hearts go out the the families who will lose their livelihoods while the cleanup continues. 

4) THE SECURITY INDUSTRIAL COMPLEX: Always looking for new people to protect, and tied in to some of the most nafarious groups the world over, the SIC could definately befefit from the Oil Rig Distater. I would guess that someone already had the contract to train the men and protect the rig. Well they failed, and a new player can now move in on the territory.

many companies under this banner can easily make something like this happen, but I am betting that the group holding the current contract stood down to make this happen. (unless a drug cartel was responsible) Whatever happens you can bet that all rigs will up their security after this. Cha CHING for the SID!

5) RUSSIA / VENEZUELA AXIS: The economic enegry war has been waged from the west on players like this. Like OPEC, they always stand to gain when oil becomes scarce. No doubt they cheered when they heard the news! Oil futures have been artificially high as of late and I attribute that to some back door negotiations with the US.

Russia obviously has the know how (tetonic and exotic waeponry) and would do the deed if they were sure they wouldnt get caught. It lays them out for FULL ON retailiation though. This is why I would have to rule them out for now. Poke the Tiger and get your head bitten off.

6) BP: Would BP attack itself? Uh … the 7/7 underground bombing is London says YES. What would be their motive?

Higher oil prices which might be canceled out by the bill for all the damages? No… the only reason for their involvement is… ha ha EVERY CUI BONO IN THIS ARTICLE. They ARE the environmental movement, They Are western / global intelligence. They ARE the drug smugglers. They are the economic hit men!!!! This makes BP a prime suspect, at least for a stand down and a cover up.

7) GULF DRUG CARTELS: One of the things that Mike Ruppert did best was to blow the whistle on how offshore oil rigs were being used as a drop, and ship for Cocaine and other elicit drugs. He implicated Halliburton (KBR) in doing so (see below)

The theory here is that the Gulf Cartel(s) wanting to wipe out the CIA / MI6, et al competition and strike a blow to the oligarchs in the process. The cartels are militarized, well trained, and extreme. They have the funds to buy whatever was needed to blow the rig and get rid of the witnesses. They have to be in consideration for prime suspect at this point, but it would have been a HUGE risk for them.

8) GLOBAL INTELLIGENCE / CIA:This would run as a opposite to the benefits gained by Russia and Venezuela, OPEC etc… The prime target would be China in this regard. The shadowy world of economic hit men has been detailed extensively by Jim Norman (the Oil Card) and John Perkins (Confession of an economic hit man) Unlike the environmentalist movement, GI doesn’t care one whit about collateral damage. People get hurt by them all the time. They might even want this kind of Chaos and distraction. If you analyze it, this theory probably makes the most sense. So they have the motive, the track record, and the resources to pull it off. Top suspect IMO.

9) HALLIBURTON: These guys, like Bechtel.. are very powerful. So powerful in fact, that they can escape blame for the spill, and turn it into huge profits. While they should be considered a perfect accomplice to Global Intel groups, they would not likely be the masterminds. This is because they are doing everything they can to keep a low profile, after years of bad publicity. They would play a part, but not chance much more.

10) DNC / SOROS / AL GORE / FOB’s (OBAMA’S BACKERS) “Spill baby Spill” will now replace “Drill Baby Drill” which should cripple and pro drilling America first style energy policy previously sloganized by Aw Shucks Sarah Palin and crew. This would mean that Obama’s announcement to increase off shore drilling was a well timed ruse they had no intention of following through on. That’s done now, and so is anyone who wants to use it as a political weapon against cousin Barry and Crew.

Obama backers can see this and the Mine tragedy last month as a win for their “Green” energy cabal. Of course they have all the tools necessary to not only pull this off, but to cover it up. They have to be considered prime suspects. Their actions going forward will either give them away or vindicate them. We are watching!!!

The coming months will bring events that make it much clearer as to whom was responsible, and why. In the mean time we should be questioning why British (beyond – LOL) Petroleum is drilling off the coast of the USA! Also… Why is Louisiana one of the most poverty stricken states in the US, while they have all those resources? {source – Jack Blood}

Road to Oil?

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An entrepreneur here in middle Tennessee thinks he has oil on his land. This area is deep in the hills and we’re getting the road ready for the drill rig.

An old neighbor and friend, who long ago passed away, worked for the government as a guide in the 1930’s when they were looking for oil in this area. He always said that they found a lot of places where oil should be but the cost of drilling compared to potential return was always prohibitive. Until now.

We’ll see how this works out.

The Great ‘Oil Shortage’ Scam

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The Great 'Oil Shortage' Scam(July 26 2008) Lindsey Williams, who has been an ordained Baptist minister for 28 years, went to Alaska in 1971 as a missionary. The Transalaska oil pipeline began its construction phase in 1974, and because of his concern for the spiritual welfare of the “pipeliners,” Mr. Williams volunteered to serve as Chaplain on the pipeline, with the subsequent full support of the Alyeska Pipeline Company.

Because of the executive status accorded to him as Chaplain, he was given access to the information that is documented in his book, “The Energy Non-Crisis,” which shows that peak oil is a scam because our domestic reserves in the North Slope of Alaska alone are at least as large as those in Saudi Arabia and are potentially large enough to power the US with domestic oil for two centuries.

Recently this year, due to the sensitive nature of his book, Mr. Willians’ life was threatened and he was forced to shut down his web-site and stop selling his books and CDs. At the urging of Dr.

Stanley Monteith of Radio Liberty, he called back the same oil executive who had warned him about the danger he would be in if he continued to disseminate certain information to ask if in fact there was any information that he could in fact convey to the public without upsetting the powers that be.

The oil executive, who Mr. Williams had known for years, gave Mr. Williams some startling revelations which he could safely reveal to the general public.

As you know, the Illuminati are arrogant enough to reveal some of their plans because they believe there is nothing we can do about it.

Basically, Mr. Williams was told that over the next twelve months, from mid-2008 to mid-2009, (1) news of super giant oil fields, ready to produce, would be announced for two locations, in the Northern Slopes of Russia and in Indonesia, which oil fields would together contain more oil reserves than the entire Middle East; (2) that this news would drive oil prices down to $50/barrel; (3) that OPEC countries, especially in the Middle East, would be bankrupted by this price decrease; (4) that this would cause the financing of our foreign trade and current account deficits through purchases of treasury paper by foreign nations with their surplus oil profits to collapse, leading to the collapse of the dollar; (5) that the collapse of the dollar would cause unprecedented financial strife and turmoil in the US, and that it would take many years for the US to recover from this financial debacle; (6) that they (big oil) support John McCain for President; and (7) that US domestic oil reserves would never be tapped, and that any legislation which might allow domestic reserves to be tapped would not be allowed to pass, leaving the US dependent on foreign oil forever.

News of the Russian oil field has been announced just as predicted, but whether the rest happens as stated above remains to be seen. Nevertheless, many of these revelations seem quite feasible, so we thought we would comment on how these revelations might play out under the current financial scenario.

Certainly, if the world’s oil reserves, ready to produce, are increased by an amount equal to the total oil reserves of the Middle East, oil could easily be brought down to $50 per barrel. It would almost be like starting all over again from an oil reserve perspective.

This would destroy the economies of countries that are currently giving us trouble, such as Iran and Venezuela, allowing us to defeat them without ever firing another shot. Russia would get less per barrel, but would be selling an awful lot of oil out of their vastly increased reserves, so they would be weakened, but not bankrupted. Nations in the Middle East, whose reserves are rapidly dwindling, would all be destroyed from an economic perspective at first, but the ensuing civil unrest would also eventually topple all Middle East OPEC regimes, allowing the US to move in and take over control of their governments and their remaining oil reserves.

Countries such as China, Japan and India, who import large portions of their oil, would get a huge shot in the arm from reduced oil prices, and this would also be a great help to the free trade-globalization agenda, which is being strained by high oil prices because transportation costs are offsetting the advantages of cheap labor.

What we envision happening under the scenario revealed to Mr. Williams would certainly start with the stated reduction in oil prices well ahead of elections.

This would produce great joy and relief for the sheople and ignite a huge, worldwide stock market rally just prior to elections, making George Bush and congressional incumbents look a lot better and lending support to John McCain, the stated preferred presidential candidate of big oil.

Much lower oil prices would support the dollar and suppress precious metals by reducing inflation by the amount attributable to recent oil price increases, but only at first. The huge rally would give the elitists the chance they were looking for to bail out of paper assets such as stocks, bonds (which would include treasuries) and derivatives at the top of the markets using the dark pools of liquidity known as Project Turquoise and Baikal.

The proceeds from the sale of paper assets would then be plowed into real, tangible assets such as commodities, precious metals, real estate, infrastructure, machines and equipment and corporations whose values are heavily weighted in tangible assets, such as resource stocks. The prices of such real, tangible assets would be bought on the cheap due to their ongoing suppression, or at least that would be the Illuminati’s hope, but we see most of these items skyrocketing long before the elitists get their fill of these goodies.

Many nations with large FOREX reserves, like China, Japan and Germany, and especially nations “friendly” to the US, such as Saudi Arabia, who would be hurt by lower oil prices, would be given free reign to invest in tangible, real assets of the US, and this ties in with the cessation of the FTC’s publication of statistics regarding foreign investment in the US as a cover-up for this huge flood of foreign money.

These foreign investment reports allegedly were discontinued because such reports cost too much to produce, but essentially this is the same bologna we got from the Fed when they discontinued the publication of M3 to cover up their profligate issuance of money and credit.

All this money pouring into tangible, real assets from the sale of paper assets through dark pools of liquidity outside the view of the public and outside the view of non-insider institutional investors would then ignite a fresh round of wildly spiraling inflation. Such hyperinflation, compounded by direct monetization of treasuries by the Fed to bail out big commercial banks and other financial institutions, including Fannie and Freddie, and to finance burgeoning foreign trade and current account deficits caused by the cessation of foreign investment in treasury paper, would take us to a historical reenactment of Germany’s former Weimar Republic and today’s Zimbabwe. The dollar would collapse, along with our economy, and stock, bond and derivative markets would be devastated.

The public, as usual, would be left holding the bag, precisely as happened in the days leading up to the Stock Market Crash of 1929 and the ensuing Great Depression.

As an aside, all insiders were warned early in 1929 when to get out (i.e. when the Fed was going to turn off the money and credit spigot) while all non-insiders were left like lambs for the ensuing slaughter. Rest assured that the elitists are planning a repeat of that rip-off, but on a much grander scale.

During the Great Depression, FDR outlawed ownership of gold in the US, but elitist insiders were warned of this in advance and moved their gold holdings overseas. FDR then raised the redemption rate for an ounce of gold from $20 to $35, giving the elitist insiders an instant 75% profit, showing that crime does pay, and pay well, when you are a part of the group of reprobates and sociopaths who comprise or support the Illuminati.

This type of treatment of public gold holdings will most likely not happen under the current scenario, because US citizens hold very little gold, the gold standard has been eliminated, and most of elitist gold holdings are now held overseas in any case, especially in Switzerland. Also, gold bullion holdings of the US treasury have all been stolen, leased, swapped out or otherwise compromised. That is why our so-called gold “reserves” have not been properly audited since 1954, and why they are referred to as “deep storage gold” in the US Mint’s and Treasury Department’s statements of account.

Elitists may use their thousands of tons of failsafe gold, which, incidentally, they have acquired over the ensuing decades either by stealing them from national treasuries or by buying them at fire-sale prices such as the bargains made available through Gordon Brown’s sale of the UK’s national gold at the bottom of the market, to back a new regional currency for North America such as the proposed Amero once the dollar has been destroyed.

Getting back once again to Mr. Williams’ scenario, in order to protect scum-bag incumbents who always do whatever the Illuminati tell them to do because they are bought-and-paid-for or compromised, the elitists would attempt to support the dollar and prevent it from collapsing prior to elections. They would do this by temporarily stemming the flood of foreign investment in tangible, real assets located within the US and by getting certain nations like China and Japan to keep buying up treasuries by giving them sweetheart deals on such future investments in tangible, real assets located in the US, especially on real estate, infrastructure and investment in surviving elitist financial institutions and transnational conglomerates.

Many Arab nations would break their dollar pegs, but would delay doing so until after elections based on promises of security for what will be their outgoing regimes once their economies collapse from cheap oil prices. This could be why Paulson and Bernanke are flying around the globe meeting with various heads of state, namely, to arrange all of the above.

Once the new round of hyperinflation got started, the dollar would be destroyed and replaced with a new currency such as the Amero which would be the de facto start up of the North American Union which the elitists continue to vehemently deny is a work-in-progress for the US, Canadian and Mexican governments.

During the ensuing financial conflagration, the elitists would attempt to nationalize many industries, and take control over the regulation of the entire financial sector through the Fed or its super-nasty successor which may well be planned by the Illuminati.

Civil unrest may ensue in the US, and this would be used to increase police state powers, perhaps through the implementation of martial law, which has all been set up in the Patriot Acts and the Military Commissions Act. Off to the concentration camps will go all the truth-seeking and truth-disseminating troublemakers while the rest of the sheople are led blindly around with a ring in their nose to wherever the elitists decide to take them.

The troublemakers have already been identified by the CIA, NSA, Pentagon and FBI using Project Echelon and scads of illegal wire-taps and other nefarious spying techniques which the Bush Administration has rampantly implemented in pursuance of a surveillance society and Nazi-like police state.

The end result that is planned is a corporatist, fascist state that would make Mussolini and Hitler green with envy. Next comes the elimination of the “useless eaters” and the creation of Plato’s vision, which is George Orwell’s “1984” on steroids, the ultimate worldwide feudal system.

The above scenario is not without its problems, however. Lower oil prices reduce elitist profits, and could put a big hit on struggling elitist financial institutions that are exploiting the Enron loophole and cheap credit from the Fed to save their balance sheets.

However, once the Illuminati control the world’s oil, they can price oil as high as they like using whatever excuse suits them at the time, just as they have done for decades. But control over oil in Russia and Indonesia may be problematic, since these regimes are not typically friendly to US interests.

Further, confrontations may occur with China, India and other big oil importers who may feel that their continuous supply of oil would be under constant threat if the Illuminists controlled most of the world’s reserves, and some of those big oil consumers may try to cut deals with the bankrupted nations in OPEC as a failsafe against Illuminist control assuming that such bankrupted nations are able to shirk off Illuminist attempts to take them over.

This may entail much war and conflict, which the financially strapped US is unable to handle with its stretched-to-the-limit military.

Also, civil unrest and protests may get out of control in the US and abroad and the Illuminati may get a much bigger backlash than they are planning. People are going to get wise to what has been done to them, and a good number of them are going to do something about it. Many Illuminists may start to disappear without a trace if people start to get their dander up, and the civil unrest may spiral beyond elitist control.

Further, the Illuminati are very vulnerable due to the credit-crunch, asset-backed derivative and real estate debacles plus the inevitable addition of a quadrillion dollar, smoldering caldera of interest rate and credit default swaps.

Also, what would happen if certain nations did not cooperate, and started to by precious metals and commodities with their sovereign wealth funds or broke their dollar pegs too soon. It’s not as easy as it might first appear, and we can always count on the forces of “Chaos” to show the same acumen as those in the old “Get Smart” series, so the Illuminati really have their work cut out for them. We believe they will ultimately fail, and that world government will once again become a far-in-the-future objective for the would-be lords of the universe.

If you don’t own gold, silver and their related shares under the Williams scenario, you will quite simply be vaporized.

The rollover process for COMEX gold futures got underway this week, which is why gold is showing some weakness, in addition to lower manipulated oil prices and dead-cat PPT dollar rallies that will soon peter out. This process will be complete by the end of July, and then its Katie-bar-the-door against the explosion in precious metals prices.

Earnings will continue to disappoint, the credit-crunch will worsen, bank failures will continue to occur, the dollar and assets denominated in dollars will continue to be shunned, ardent de-leveraging will continue unabated keeping pressure on the stock markets, the real estate market will continue to worsen and derivatives will soon implode as inflation spirals out of control, consumer spending drops into nothingness and real interest rates continue to rise, giving rise to a potential bear market in bonds that could bring the whole Illuminist financial house of cards tumbling down as their main source of power explodes and goes down in flames like the Hindenberg.

The Fed continues to be irrelevant because their power over real interest rates is greatly diminished. The Fed’s governors are boxed in and cannot get out, as their European counterparts take rates in the opposite direction the Fed governors would really like to go if it would not stoke inflation in the process.

The fraudsters will continue to fail, and the sheople will continue to bail, unless we rise up and do something about it. Throwing out all incumbents would be a good start.


Are They Really Oil Wars?

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Ismael Hossein-Zadeh

A most widely-cited factor behind the recent U.S. wars of choice is said to be oil. “No Blood for Oil” has been a rallying cry for most of the opponents of the war. While some of these opponents argue that the war is driven by the U.S. desire for cheap oil, others claim that it is prompted by big oil’s wish for high oil prices and profits. Interestingly, most antiwar forces use both claims interchangeably without paying attention to the fact that they are diametrically-opposed assertions.

Not only do the two arguments contradict each other, but each argument is also wanting and unconvincing on its own grounds; not because the U.S. does not wish for cheap oil, or because Big Oil does not desire higher oil prices, but because war is no longer the way to control or gain access to energy resources. Colonial-type occupation or direct control of energy resources is no longer efficient or economical and has, therefore, been abandoned for more than four decades.

The view that recent U.S. military adventures in the Middle East and the broader Central Asia are driven by energy considerations is further reinforced by the dubious theory of Peak Oil, which maintains that, having peaked, world oil resources are now dwindling and that, therefore, war power and military strength are key to access or control of the shrinking energy resources.

In this study I will first argue that the Peak Oil theory is unscientific, unrealistic, and perhaps even fraudulent. I will then show that war and military force are no longer the necessary or appropriate means to gain access to sources of energy, and that resorting to military measures can, indeed, lead to costly, not cheap, oil. Next, I will demonstrate that, despite the lucrative spoils of war resulting from high oil prices and profits, Big Oil prefers peace and stability, not war and geopolitical turbulence, in global energy markets. Finally, I will argue a case that behind the drive to war and military adventures in the Middle East lie some powerful special interests (vested in war, militarism, and geopolitical concerns of Israel) that use oil as an issue of “national interest”—as a façade or pretext—in order to justify military adventures to derive high dividends, both economic and geopolitical, from war.

Has Oil Really Peaked—and Is It Running Out?

Peak oil thesis, as noted above, maintains that world oil reserves, having reached their maximum capacity, are now dwindling—with grave consequences of oil shortage and high energy prices. While this has led many to call for more vigorous conservation, it has led others to argue in favor of unrestrained exploration and extraction of oil reserves, especially those located in the Alaskan Wildlife regions.

Significant policy and/or political implications follow from the view that oil is running out. For one thing, this view provides fodder for the cannons of war profiteering militarists who are constantly on the look out to invent new enemies and find new pretexts for continued war and escalation of military spending. For another, it tends to disarm many antiwar forces that accept this thesis and, therefore, “internalize responsibility for U.S. foreign policy every time they fill their gas tank. Thus they own the wars.”[1]

The Peak Oil thesis serves as a powerful trap and a clever manipulation in that it lets the real forces of war and militarism (the military-industrial complex and the pro-Israel lobby) “off the hook; it is a fabulous redirection. All evils are blamed on a commodity upon which we are all utterly dependent.”[2]

The fact, however, is that there is no hard evidence that oil has peaked, or that global oil reserves are shrinking, or that the current skyrocketing price of oil is due to a supply shortage. (As shown below, there is actually an oil surplus, no shortage.)

Peak oil theory is not altogether new. It was originally floated around in the 1940s, arguing that world oil reserves would be exhausted within the next two decades or so. It then resurfaced in the 1970s and early 1980s in reaction to the oil price hikes of those years—which were, incidentally, precipitated not by oil shortages but by international political convulsions, revolutions and wars. But it died down once the price of oil fell back to pre-crises levels.

As recent geopolitical convulsions in the Middle East (especially the U.S. war on Iraq, and the resultant booming speculation in oil markets) have triggered a new round of oil price hikes, Peak Oil theory has once again become fashionable. The theory is being promoted not only by war profiteers and proponents of an unbridled domestic oil exploration and extraction, especially in Alaska, but also by some apparently antiwar liberals such as Michael T. Klare and James H. Kunstler.[3]

Peak oil theory is based on a number of assumptions and omissions that make it less than reliable. To begin with, it discounts or disregards the fact that energy-saving technologies have drastically improved (and will continue to further improve) the efficiency of oil consumption. Evidence shows that, for example, “over a period of five years (1994-99), U.S. GDP expanded over 20 percent while oil usage rose by only nine percent. Before the 1973 oil shock, the ratio was about one to one.”[4]

Second, Peak Oil theory pays scant attention to the drastically enabling new technologies that have made (and will continue to make) possible discovery and extraction of oil reserves that were inaccessible only a short time ago. One of the results of the more efficient means of research and development has been a far higher success rate in finding new oil fields. The success rate has risen in twenty years from less than 70 percent to over 80 percent. Computers have helped to reduce the number of dry holes. Horizontal drilling has boosted extraction. Another important development has been deep-water offshore drilling, which the new technologies now permit. Good examples are the North Sea, the Gulf of Mexico, and more recently, the promising offshore oil fields of West Africa.[5]

Third, Peak Oil theory also pays short shrift to what is sometimes called non-conventional oil. These include Canada’s giant reserves of extra-heavy bitumen that can be processed to produce conventional oil. Although this was originally considered cost inefficient, experts working in this area now claim that they have brought down the cost from over $20 a barrel to $8 per barrel. Similar developments are taking place in Venezuela. It is thanks to developments like these that since 1970, world oil reserves have more than doubled, despite the extraction of hundreds of millions of barrels.[6]

Fourth, Peak Oil thesis pays insufficient attention to energy sources other than oil. These include solar, wind, non-food bio-fuel, and nuclear energies. They also include natural gas. Gas is now about 25 percent of energy demand worldwide. It is estimated that by 2050 it will be the main source of energy in the world. A number of American, European, and Japanese firms have and are investing heavily in developing fuel cells for cars and other vehicles that would significantly reduce gasoline consumption.[7]

Fifth, proponents of Peak Oil tend to exaggerate the impact of the increased oil demand coming from China and India on both the amount and the price of oil in global markets. The alleged disparity between supply and demand is said to be due to the rapidly growing demand coming from China and India. But that rapid growth in demand is largely offset by a number of counterbalancing factors. These include slower growth in U.S. demand due to its slower economic growth, efficient energy utilization in industrially advanced countries, and increases in oil production by OPEC, Russia, and other oil producing countries.

Finally, and perhaps more importantly, claims of “peaked and dwindling” oil are refuted by the available facts and figures on global oil supply. Statistical evidence shows that there is absolutely no supply-demand imbalance in global oil markets. Contrary to the claims of the proponents of Peak Oil and champions of war and militarism, the current oil price shocks are a direct consequence of the destabilizing wars and geopolitical insecurity in the Middle East, not oil shortages. These include not only the raging wars in Iraq and Afghanistan, but also the threat of a looming war against Iran. The record of soaring oil prices shows that anytime there is a renewed U.S. military threat against Iran, fuel prices move up several notches.

The war also contributes to the escalation of fuel prices in indirect ways—for example, by plunging the U.S. ever deeper into debt and depreciating the dollar, or by creating favorable grounds for speculation. As oil is priced largely in U.S. dollars, oil exporting countries ask for more dollars per barrel of oil as the dollar loses value. Perhaps more importantly, an atmosphere of war and geopolitical instability in global oil markets serves as an auspicious ground for hoarding and speculation in commodity markets, especially oil, which is heavily contributing to the recently soaring oil prices.

As much as 60% of today’s crude oil price is pure speculation driven by large trader banks and hedge funds. It has nothing to do with the convenient myths of Peak Oil. It has to do with control of oil and its price. . . . Since the advent of oil futures trading and the two major London and New York oil futures contracts, control of oil prices has left OPEC and gone to Wall Street. It is a classic case of the ‘tail that wags the dog.’[8]

Wall Street financial giants that created the Third World debt crisis in the late 1970s and early 1980s, the tech bubble in the 1990s, and the housing bubble in the 2000s are now hard at work creating the oil bubble. By purchasing large numbers of futures contracts, and thereby pushing up futures prices to even higher levels than current prices, speculators have provided a financial incentive for oil companies to buy even more oil and place it in storage. A refiner will purchase extra oil today, even if it costs $115 per barrel, if the futures price is even higher.[9]

This has led to a steady rise in crude oil inventories over the last two years, “resulting in US crude oil inventories that are now higher than at any time in the previous eight years. The large influx of speculative investment into oil futures has led to a situation where we have both high supplies of crude oil and high crude oil prices. . . . In fact, during this period global supplies have exceeded demand, according to the US Department of Energy.”[10]

The fact that the skyrocketing oil prices of late have been accompanied by a surplus in global oil markets was also brought to the attention of President George W. Bush by Saudi officials when he asked them during a recent trip to the kingdom to increase production in order to stem the rising prices. Saudi officials reminded the President that “there is plenty of oil on the market. Iran has put some 30 million barrels of oil that it can’t sell into floating storage. ‘If we produced more oil, it wouldn’t find buyers,’ says the Saudi source. It wouldn’t affect the price at all.”[11]

And why producing more oil “wouldn’t affect the price at all”? Well, because what is driving the soaring oil prices is not shortage but speculation: “with so much investment money sloshing around in the commodities markets, the Saudis calculate they have no hope of controlling short-term price fluctuations. They blame the recent price run-ups on speculation and fear of shortages [not real shortages], factors they say are beyond their control.”[12]

War for Cheap Oil?

The widely-shared view that the U.S. desire for access to abundant and cheap oil lurks behind the Bush administration’s drive to war in the Middle East rests on the implicit but dubious assumption that access to energy resources requires direct control of oil fields and/or oil producing countries. There are at least three problems with this postulation.

First, if control of or influence over oil producing countries in the Middle East is a requirement for access to cheap oil, the United States already enjoys significant influence over some of the major oil producers in the region—Saudi Arabia, Kuwait, and a number of other smaller producers. Why, then, would the U.S. want to bring about war and political turmoil in the region that might undermine that long and firmly-established influence?

Let us assume for a moment that the neoconservative militarists are sincere in their alleged desire to bring about democratic rule and representational government in the Middle East. Let us further assume that they succeed in realizing this purported objective. Would, then, the thus-emerging democratic governments, representing the wishes of the majority of their citizens, be as accommodating to U.S. economic and geopolitical objectives, including its oil needs, as are its currently friendly rulers in the region? Most probably not.

Secondly, and more importantly, access to oil no longer requires control of oil fields or oil producers—as was the case in times past. For more than a century, that is, from the early days of oil extraction in the United States in the 1870s until the mid-1970s, the price of oil was determined administratively, that is, by independent producers operating in different parts of the world without having to compete with each other. Under those circumstances, colonial or imperial wars of conquest and occupation were crucial to the control of oil (and other) resources.

Beginning with the 1950s, however, that pattern of local, non-competitive price determination began to gradually change in favor of regional and/or international markets. By the mid 1970s, an internationally competitive oil market emerged that effectively ended the century-old pattern of local, administrative pricing. Today, oil prices (like most other commodity prices) are determined largely by the forces of supply and demand in competitive global energy markets; and any country or company can have as much oil as they wish if they pay the going market (or spot) price.[13]

To the extent that competitive oil markets and/or prices are occasionally manipulated, such subversions of competitive market forces are often brought about not so much by OPEC or other oil producing countries as by manipulative speculations of financial giants in New York and London. As was discussed earlier, gigantic Wall Street financial institutions have accomplished this feat through “innovative” financial instruments such as establishment of energy hedge funds and speculative oil futures markets in New York and London.[14]

It is true that collective supply decisions of oil producing countries can, and sometimes does, affect the competitively determined market price. But a number of important issues need to be considered here.

To begin with, although such supply manipulations obviously affect or influence market-determined prices, they do not determine those prices. In other words, competitive international oil markets determine its price with or without oil producers’ supply manipulations. Such supply managements are, however, designed not to create volatility in energy markets, or chronic oil price hikes. Instead, they are designed to stabilize global oil prices because oil exporting countries prefer stability, predictability and long-term planning for their economic development and industrialization projects. Here is how Cyrus Bina and Minh Vo describe this relationship:

As a result, we conclude that the global oil market is the prime mover [i.e., prime determinant of oil price] and OPEC indeed follows its trajectory accordingly and consistently. . . . When market price (both spot and futures) is falling, OPEC decreases its output; when market price is rising, OPEC attempts to increase its output; and when market price is steady, OPEC keeps its output unchanged. . . . And, this is a kind of oil market we have experienced after the dust settled following the crisis of de-cartelization and globalization of oil industry in the 1970s.[15]

Producers’ policy to sometimes curtail or limit the supply of oil, the so-called “limited flow” policy, is designed to raise the actual trading price above the market-determined price in order to keep high-cost U.S. producers in business while leaving low-cost Middle East producers with an above average, or “super,” profit. While for low-cost producers this limited flow policy is largely a matter of making more or less profits, for high-cost U.S. producers it is a matter of survival, of being able to stay in or go out of business—an important but rarely mentioned or acknowledged fact.

A hypothetical numerical example might be helpful here. Suppose that the market-determined, or free-flow, price of oil is $30 per barrel. Further, suppose this price entails an average rate of profit of 10 percent, or $3 per barrel. The word “average” in this context refers to average conditions of production, that is, producers who produce under average conditions of production in terms of productivity and cost of production. This means that producers who produce under better-than-average conditions, that is, low-cost, high productivity producers, will make a profit higher than $3 per barrel while high-cost, low efficiency producers will end up making less than $3 per barrel. This also means that some of the high-cost producers may end up going out of business altogether. Now, if the limited flow policy raises the actual trading price to $35 per barrel, it will raise the profits of all producers accordingly, thereby also keeping in business some high-cost producers that might otherwise have gone out of business.

Furthermore, supply manipulation (in pursuit of price manipulation) is not limited to the oil industry. In today’s economic environment of giant corporations and big businesses, many of the major industries try, and often succeed in controlling supply in order to control price. Take, for example, the automobile industry. Theoretically, automobile producers could flood the market with a huge supply of cars. But that would not be good business as it would lower prices and profits. So, they control supply, just as do oil producers, in order to manipulate price. During the past several decades, the price of automobiles, in real terms, has been going up every year, at least to the tune of inflation. During this period, the industry (and the economy in general) has enjoyed a many-fold increase in labor productivity. Increased labor productivity is supposed to translate into lower costs and, therefore, lower prices. Yet, that has not materialized in the case of this industry—as it has in the case of, for example, pocket calculators or computers.

Another example of price control through supply manipulation is the case of U.S. grain producers. The so-called “set aside” policy that pays farmers not to cultivate part of their land in order to curtail supply and prop up price is not different—nay, it is worse— than OPEC’s policy of supply and/or price manipulation.

It is also necessary to keep in mind that OPEC’s desire to sometimes limit the supply of oil in order to shore up its price is limited by a number of factors. For one thing, the share, and hence the influence, of Middle Eastern oil producers as a percentage of world oil production has steadily declined over time, from almost 40 percent when OPEC was established to about 30 percent today.[16] For another, OPEC members are not unmindful of the fact that inordinately high oil prices can hurt their own long-term interests as this might prompt oil importers to economize on oil consumption and search for alternative sources of energy, thereby limiting producers’ export markets.

OPEC members also know that inordinately high oil prices could precipitate economic recessions in oil importing countries that would, once again, lower demand for their oil. In addition, high oil prices tend to raise the cost of oil producers’ imports of manufactured products as high energy costs are bound to affect production costs of those manufactured products.

War for Expensive Oil?

Now let us consider the widely-shared view that attributes the Bush administration’s drive to war to the influence of big oil companies in pursuit of higher oil prices and profits. As noted, this is obviously the opposite of the “war for cheap oil” argument, as it claims that Big Oil tends to instigate war and political tension in the Middle East in order to cause an oil price hike and increase its profits. Like the “war for cheap oil” theory, this claim is not supported by facts. Although the claim has an element of a prima facie reasonableness, that apparently facile credibility rests more on precedent and perception than reality. Part of the perception is due to the exaggerated notion that both President Bush and Vice President Cheney were “oil men” before coming to the White House. But the fact is that George W. Bush was never more than an unsuccessful petty oil prospector and Dick Cheney headed a company, the notorious Halliburton, that sold (and still sells) services to oil companies and the Pentagon.

The larger part of the perception, however, stems from the fact that oil companies do benefit from oil price hikes that result from war and political turbulence in the Middle East. Such benefits are, however, largely incidental. Surely, American oil companies would welcome the spoils of the war (that result from oil price hikes) in Iraq or anywhere else in the world. From the largely incidental oil price hikes that follow war and political convulsion, some observers automatically conclude that, therefore, Big Oil must have been behind the war.[17] But there is no evidence that, at least in the case of the current invasion of Iraq, oil companies pushed for or supported the war.

On the contrary, there is strong evidence that, in fact, oil companies did not welcome the war because they prefer stability and predictability to periodic oil spikes that follow war and political convulsion: “Looking back over the last 20 years, there is plenty of evidence showing the industry’s push for stability and cooperation with Middle Eastern countries and leaders, and the U.S. government’s drive for hegemony works against the oil industry.”[18] As Thierry Desmarest, Chairman and Chief Executive Officer of France’s giant oil company, TotalFinaElf, put it, “A few months of cash generation is not a big deal. Stable, not volatile, prices and a $25 price (per barrel) would be convenient for everyone.”[19]

It is true that for a long time, from the beginning of Middle Eastern oil exploration and discovery in the early twentieth century until the mid-1970s, colonial and/or imperial powers controlled oil either directly or through control of oil producing countries—at times, even by military force. But that pattern of colonial or imperialist exploitation of global markets and resources has changed now. Most of the current theories of imperialism and hegemony that continue invoking that old pattern of Big Oil behavior tend to suffer from an ahistorical perspective. Today, as discussed earlier, even physically occupying and controlling another country’s oil fields will not necessarily be beneficial to oil interests. Not only will military adventures place the operations of current energy projects at jeopardy, but they will also make the future plans precarious and unpredictable. Big Oil interests, of course, know this; and that’s why they did not countenance the war on Iraq: “The big oil companies were not enthusiastic about the Iraqi war,” says Fareed Mohamedi of PFC Energy, an energy consultancy firm based in Washington D.C. that advises petroleum firms. “Corporations like Exxon-Mobil and Chevron-Texaco want stability, and this is not what Bush is providing in Iraq and the Gulf region,” adds Mohamedi.[20]

Big Oil interests also know that not only is war no longer the way to gain access to oil, it is in fact an obstacle to gaining that access. Exclusion of U.S. oil companies from vast oil resources in countries such as Russia, Iran, Venezuela, and a number of central Asian countries due to militaristic U.S. foreign policy is a clear testament to this fact. Many of these countries (including, yes, Iran) would be glad to have major U.S. oil companies invest, explore and extract oil from their rich reserves. Needless to say that U.S. oil companies would be delighted to have access to those oil resources. But U.S. champions of war and militarism have successfully torpedoed such opportunities through their unilateral wars of aggression and their penchant for a Cold War-like international atmosphere.

When Vladimir Putin first became president of Russia he was willing to allow American energy companies to continue with the one-sided contracts they had drawn up during Boris Yeltsin’s presidency. Putin built a seemingly trusting relationship with George Bush who looked into Putin’s soul and liked what he saw. The two leaders grew even closer in the aftermath of the 9/11 attacks on World Trade Centre and the Pentagon—when Russia provided “help for America’s invasion of Afghanistan.” Soon after this generous cooperation, however, “Bush repudiated the anti-ballistic missile treaty in the belief that America could develop the technology for winning a nuclear war. This posed a huge strategic threat to Russia.”[21]

Describing the heavy-handed, imperial U.S. policy toward Russia, Stephen F. Cohen writes: “The real US policy has been very different—a relentless, winner-take-all exploitation of Russia’s post-1991 weakness. Accompanied by broken American promises, condescending lectures and demands for unilateral concessions, it has been even more aggressive and uncompromising than was Washington’s approach to Soviet Communist Russia.”[22]

Bush’s withdrawal from the ABM treaty not merely posed an existential threat to Russia but was almost a betrayal of the trust that Putin had put in him. This led to Putin’s disenchantment with America. “Eventually he seems to have decided that every time America transgressed against Russian interests he would retaliate by stopping another American company from exploiting Russian resources.”[23]

During the past few decades, major oil companies have consistently opposed U.S. policies and military threats against countries like Iran, Iraq, and Libya. They have, indeed, time and again, lobbied U.S. foreign policy makers for the establishment of peaceful relations and diplomatic rapprochement with those countries. The Iran-Libya Sanction Act of 1996 (ILSA) is a strong testament to the fact that oil companies nowadays view wars, economic sanctions, and international political tensions as harmful to their long-term business interests and, accordingly, strive for peace, not war, in international relations.

On March 15, 1995 President Clinton issued Executive Order 12957 which banned all U.S. contributions to the development of Iran’s petroleum resources, a crushing blow to the oil industry, especially to the Conoco oil company that had just signed a $1 billion contract to develop fields in Iran. The deal marked a strong indication that Iran was willing to improve its relationship with the United States, only to have President Clinton effectively nullify it. Two months later, sighting “an extraordinary threat to the national security, foreign policy and economy of the U.S.,” President Clinton issued another order, 1259, that expanded the sanctions to become a total trade and investment embargo against Iran. Then a year later came ILSA which extended the sanctions imposed on Iran to Libya as well.

It is no secret that the major force behind the Iran-Libya Sanction Act was the America Israel Public Affairs Committee (AIPAC), the main Zionist lobby in Washington. The success of AIPAC in passing ILSA through both the Congress and the White House over the opposition of the major U.S. oil companies is testament to the fact that, in the context of U.S. policy in the Middle East, even the influence of the oil industry pales vis-à-vis the influence of the Zionist lobby.[24]

ILSA was originally to be imposed on both U.S. and foreign companies. However, in the end it was the U.S. companies that suffered the most due to waivers that were given to European companies after pressure from the European Union. In 1996 the EU pursued its distaste of ILSA by lodging complaints with the World Trade Organization (WTO) against the U.S. and through adopting “blocking legislation” that would prevent EU companies from complying with ILSA. Meanwhile, the contract that Iran had originally signed with Conoco was awarded to TotalFinaElf of France for $760 million; the deal also left the door open for Total to sign an additional contract with Iran for $2 billion in 1997 with their partners Gazprom and Petronas.

In May of 1997 major U.S. oil companies such as Conoco, Exxon, Atlantic Richfield, and Occidental Petroleum joined other (non-military) U.S. companies to create an anti-sanction coalition. Earlier that same year Conoco’s Chief Executive Archie Dunham publicly took a stance against unilateral U.S. sanctions by stating that “U.S. companies, not rogue regimes, are the ones that suffer when the United States imposes economic sanctions.” Texaco officials have also argued that the U.S. can be more effective in bringing about change in other countries by allowing U.S. companies to do business with those countries instead of imposing economic sanctions that tend to be counterproductive.

Alas, Washington’s perverse, misguided and ineffectual policy of economic sanctions for political purposes—often in compliance with the wishes of some powerful special interests—continues unabated. “Even with the increased pro-trade lobbying efforts of the oil industry and groups like USAEngage, whose membership ranges from farmers and small business owners to Wall Street executives and oilmen, the lack of support from Washington and the Bush administration could not allow them [major oil companies and other non-military transnational companies] to overtake or counteract the already rolling momentum of AIPAC’s influence on Middle East policy or the renewal of ISLA.”[25]

Despite the fact that oil companies nowadays view war and political turmoil in the Middle East as detrimental to their long-term interests and, therefore, do not support policies that are conducive to war and militarism, and despite the fact that war is no longer the way to gain access to oil, the widespread perception that every U.S. military engagement in the region, including the current invasion of Iraq, is prompted by oil considerations continues. The question is why?

Behind the Myth of War for Oil

The widely-shared but erroneous view that recent U.S. wars of choice are driven by oil concerns is partly due to precedence: the fact that for a long time military force was key to colonial or imperialist control and exploitation of foreign markets and resources, including oil. It is also partly due to perception: the exaggerated notion that both President Bush and Vice President Cheney were “oil men” before coming to the White House. But, as noted earlier, George W. Bush was never more than an ineffective minor oil prospector and Dick Cheney was never really an oil man; he headed the notorious Halliburton company that sold (and still sells) services to oil companies and the Pentagon.

But the major reason for the persistence of this pervasive myth seems to stem from certain deliberate efforts that are designed to perpetuate the legend in order to camouflage some real economic and geopolitical special interests that drive U.S. military adventures in the Middle East. There is evidence that both the military-industrial complex and hard-line Zionist proponents of “greater Israel” disingenuously use oil (as an issue of national interest) in order to disguise their own nefarious special interests and objectives: justification of continued expansion of military spending, extension of sales markets for military hardware, and recasting the geopolitical map of the Middle East in favor of Israel.

There is also evidence that for every dollar’s worth of oil imported from the Persian Gulf region the Pentagon takes five dollars out of the Federal budget to “secure” the flow of that oil! This is a clear indication that the claim that the U.S. military presence in the Middle East is due to oil consideration is a fraud .[26]

While anecdotal, an example of how partisans of war and militarism use oil as a pretext to cover up the real forces behind war and militarism can be instructive. In the early stages of the invasion of Iraq, when the anti-occupation resistance in Iraq had not yet taken shape and the invasion seemed to be proceeding smoothly, two of the leading champions of the invasion, Secretary of Defense Donald Rumsfeld and his deputy Paul Wolfowitz, often boasting of the apparent or pre-mature success of the invasion at those early stages, gave frequent news conferences and press reports. During one of those press reports (at the end of an address to delegates at an Asian security summit in Singapore in early June 2003), Wolfowitz was asked why North Korea was being treated differently from Iraq, where hardly any weapons of mass destruction had been found. Wolfowitz’s response was: “Let’s look at it simply. The most important difference between North Korea and Iraq is that economically, we just had no choice in Iraq. The country swims on a sea of oil.”[27]

Many opponents of the war jumped on this statement, so to speak, as corroboration of what they had been saying or suspecting all along: that the war on Iraq was prompted by oil interests. Yet, there is strong evidence—some of which presented in the preceding pages—that for the last several decades oil interests have not favored war and turbulence in the Middle East, including the current invasion of Iraq. Nor is war any longer the way to gain access to oil. Major oil companies, along with many other non-military transnational corporations, have lobbied both the Clinton and Bush administrations in support of changing the aggressive, militaristic U.S. policy toward countries like Iran, Iraq and Libya in favor of establishing normal, non-confrontational trade and diplomatic relations. Such efforts at normalization of trade and diplomatic relations, however, have failed time and again precisely because Wolfowitz and his cohorts, working through AIPAC and other war-mongering think tanks such as the American Enterprise Institute (AEI), Project for the New American Century (PNAC), and Jewish Institute for National Security Affairs (JINSA) oppose them.

These think tanks, in collaboration with a whole host of similar militaristic lobbying entities like Center for Security Affairs (CSA) and National Institute for Public Policy (NIPP), working largely as institutional façades to serve the defacto alliance of the military-industrial complex and the pro-Israel lobby, have repeatedly thwarted efforts at peace and reconciliation in the Middle East—often over the objections and frustrations of major U.S. oil companies. It is a well established fact that Wolfowitz has been a devoted champion of these jingoistic think tanks and their aggressive unilateral policies in the Middle East. In light of his professional record and political loyalties, his claim that he championed the war on Iraq because of oil considerations can be characterized only as demagogic: it contradicts his political record and defies the policies he has been advocating for the last several decades; it is designed to divert attention from the main forces behind the war, the armaments lobby and the pro-Israel lobby.

These powerful interests are careful not to draw attention to the fact that they are the prime instigators of war and militarism in the Middle East. Therefore, they tend to deliberately perpetuate the popular perception that oil is the driving force behind the war in the region. They even do not mind having their aggressive foreign policies labeled as imperialistic as long as imperialism implies some vague or general connotations of hegemony and domination, that is, as long as it thus camouflages the real, special interests behind the war and political turbulence in the Middle East.

The oil and other non-military transnational corporations’ aversion to war and military adventures in the Middle East stem, of course, from the logical behavior of global or transnational capital in the era of integrated world markets, which tends to be loath to war and international political convulsions. Considering the fact that both importers and exporters of oil prefer peace and stability to war and militarism, why would, then, the flow of oil be in jeopardy if the powerful beneficiaries of war and political tension in the Middle East stopped their aggressive policies in the region?

Partisans of war in the Middle East tend to portray U.S. military operations in the region as reactions to terrorism and political turbulence in order to “safeguard the interests of the United States and its allies.” Yet, a close scrutiny of action-reaction or cause-effect relationship between U.S. military adventures and socio-political turbulence in the region reveals that perhaps the causality is the other way around. That is, social upheavals and political convulsions in the Middle East are more likely to be the result, not the cause, of U.S. foreign policy in the region, especially its one-sided, prejudicial Israeli-Palestinian policy. The U.S. policy of war and militarism in the region seems to resemble the behavior of a corrupt cop, or a mafia godfather, who would instigate fights and frictions in the neighborhood or community in order to, then, portray his parasitic role as necessary for the safety and security of the community and, in the process, fill out his deep pockets.

No matter how crucial oil is to the world economy, the fact remains that it is, after all, a commodity. As such, international trade in oil is as important to its importers as it is to its exporters. There is absolutely no reason that, in a world free of the influence of the beneficiaries of war and militarism and their powerful lobbies (the armaments and the pro-Israel lobbies), the flow of oil could not be guaranteed by international trade conventions and commercial treaties.


[1] Ron Andreas, reporter/researcher, e-mail correspondence with the author.
[2] Ibid.
[3] Michael T. Klare, Resource Wars: The New Landscape of Global Conflict (New York: Holt paperbacks 2002); James Howard Kunstler, The Long Emergency: Surviving the Converging Catastrophes of the Twenty-first Century (Grove/Atlantic, 2005).
[4] Eliyahu Kanovsky, “Oil: Who’s Really Over a Barrel?” Middle East Quarterly (Spring 2003).
[5] Ibid.
[6] The Wall Street Journal (17 May 2001); cited in Eliyahu Kantovsky, Ibid.
[7] The Wall Street Journal (10 March 1998); cited in Eliyahu Kantovsky, Ibid.
[8] F. William Engdahl, “Perhaps 60% of Today’s Oil Price Is Pure Speculation,” financialsense.com (2 May 2008)
[9] Ibid.
[10] Ibid.
[11] Stanley Reed, “Help from the House of Saud: Why the leading oil producer wants to cool off the market,” Business Week (29 May 2008)
[12] Ibid.
[13] Cyrus Bina and Minh Vo, “OPEC in the Epoch of Globalization: An Event Study of Global Oil Prices,” Global Economy Journal, Vol. 7, Issue 1 (2007); for a discussion of the theory and history of oil price determination see also, Cyrus Bina, “The Rhetoric of Oil and the Dilemma of War and American Hegemony,” Arab Studies Quarterly 15, no. 3 (Summer 1993); also Cyrus Bina, “Limits of OPEC Pricing: OPEC Profits and the Nature of Global Oil Accumulation,” OPEC Review 14, no. 1 (Spring 1990).
[14] F. William Engdahl, “Perhaps 60% of Today’s Oil Price Is Pure Speculation,” financialsense.com (2 May 2008),
[15] Cyrus Bina and Minh Vo, “OPEC in the Epoch of Globalization: An Event Study of Global Oil Prices,” Global Economy Journal, Vol. 7, Issue 1 (2007).
[16] Gary S. Becker, “Why War with Iraq Is Not about Oil,” Business Week (17 March 2003): 30.
[17] Johnathan Nitzan and Shimshon Bichler. The Global Political Economy of Israel (London and Sterling, Virginia: Pluto Press, 2002).
[18] Melinda K. Ruby, “Is Oil the Driving Force to War?” unpublished Senior thesis, Dept. of Economics and Finance, Drake University, Des Moines, Iowa (spring 2004), 10.
[19] As quoted in Ruby, Ibid., P. 13.
[20] As cited by Roger Burbach, “Bush Ideologues vs. Big Oil: The Iraq Game Gets Even Stranger,” CounterPunch.
[21] Israel Shamir, The Writings of Israel Shamir, Contributor 45
[22] Stephen F. Cohen “The New American Cold War,” The Nation (10 July 2006); as quoted in Shamir, Ibid.
[23] Shamir, Ibid.
[24] Ruby, “Is Oil the Driving Force to War?” pp. 14-15; see also Herman Franssen and Elaine Morton, “A Review of U.S. Unilateral Sanctions Against Iran,” Middle East Economic Survey 45, no. 34 (26 August 2002), pp. D1-D5 (D section contains op eds. as opposed to staff-written articles).
[25] Ruby, “Is Oil the Driving Force to War?” pp. 16-17; see also David Ivanovich, “Conoco’s Chief Blasts Sanctions,” Houston Chronicle (12 February 1997).
[27] The statement was widely reported by many news papers and other media outlets. See, for example, The Guardian (4 June 2003)

¤ ¤ ¤ ¤ ¤

Ismael Hossein-Zadeh, author of the recently published The Political Economy of U.S. Militarism (Palgrave-Macmillan 2007), teaches economics at Drake University, Des Moines, Iowa.

© 2008 Ismael Hossein-Zadeh

SOURCE: http://www.counterpunch.org./zadeh07092008.html

URL: The Peoples Voice


America’s Gas Guzzling Hypocrisy

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Thomas Paine’s Corner


By Will Patching


Many pundits in the US believe developing nations are the culprits responsible for oil prices doubling from around $68 per barrel a year ago to their current dizzy heights.

Rising demand from China and India has undoubtedly had an effect although other offenders have been identified too: the greedy oil companies for profiteering, those nasty A-rabs running an ‘illegal’ cartel called OPEC, and mysterious evil speculators with their esoteric hedge funds that somehow create billionaires by manipulating gas prices in ways normal people cannot fathom…

Now the champions of free market forces have found a new scapegoat to attack: the emerging economies’ disgraceful habit of subsidizing fuel.

Subsidizing poor people distorts the market…

“We know demand is increasing because a lot of nations are still subsidizing oil, which ought to stop,” said US Energy Secretary Sam Bodman last month as he lectured developing countries for artificially stoking oil demand.

If only their governments would let the price of gasoline reflect its true cost at the pumps, so the theory goes, demand would reduce, thereby creating equilibrium in the market and a reduction in price back to ‘normal’ levels.

Bill Veno, an oil analyst with Cambridge Energy Research Associates sums up the problem: “These subsidies artificially protect consumers from the high price of oil.” Eliminating them “would have almost an immediate effect to curtail demand.”

Well, these experts, good old Sam and Bill, are pretty clear where the blame lies, eh? And they seem quite adamant that all such anti-market practices should end. Shouldn’t they?

So let’s start with the great capitalist exemplar: America.

But subsidizing US corporations is okay…

The US government has subsidized big oil for years, diverting billions from hard pressed taxpayers into the coffers of overpaid oil executives and the bloated bank accounts of their shareholders – while artificially keeping gas prices at an acceptable level for voters.

There is no explicit per gallon subsidy at the point of sale like there is in, say, Indonesia, but there is plenty of money thrown at the US supply side. However, it is almost impossible to calculate the total of these direct subsidies, exploration incentives, royalty waivers and tax breaks bestowed on the great American oil industry, although estimates suggesting $20 billion a year are possibly conservative.

Hardly surprising then that this powerful lobby successfully stymied the Senate’s recent attempt to reduce taxpayers’ unwitting largesse, but regardless of spurious justifications for these oilcorp subsidies, the fact remains that the US is guilty of the charge it is now leveling at developing countries.

The Strategic Energy Security Premium

Dwarfing these overt payments is a much larger invisible subsidy: the price of gas in the States has consistently failed to reflect the energy security premium. What exactly is that? Quite simply it is the huge cost of maintaining an effective worldwide US military presence, largely deployed to protect the free flow of oil.

Regardless of whether you subscribe to Alan Greenspan’s view that the Iraq invasion was “largely about oil,” no one can deny the first Gulf conflict was about protecting oil supplies from Kuwait and Saudi Arabia. In truth, much of American foreign policy has been geared toward securing oil supplies since WWII, and some analysts suggest the bulk of America’s massive military expenditure is currently incurred protecting strategic oil supplies. If market forces were rigorously applied and these costs passed on to the US consumer at the pump rather than collected through a myriad of other taxes, the price of gas would double or even treble.

Such a hike would be impossible of course; no US government would dare levy an energy security premium since any additional tax on gas is always hugely unpopular – and would be seen as an attack on American citizens’ non-negotiable ‘way of life.’

Hence America’s failure to raise prices to a level comparable to its developed neighbors, thereby ensuring the population’s blasé approach to oil consumption continues unabated.

By contrast, much of the industrialized world has applied oil conservation measures triggered by the original energy crisis. Since the 1970’s the Europeans have imposed increasingly penal taxes on gasoline to reduce consumption, encourage fuel efficient vehicles and, more recently, lower carbon emissions. Meanwhile the American government has consistently pandered to the public’s gas guzzling habit with an attitude that apparently elevates cheap gas to the level of a constitutional right.

The resultant difference in cost at the pump is stark.

Gasoline taxes have inflated European prices to levels that would create riots in America: the average is double that of the US. Even the Brits’ stiff upper lips are twitching at having to pay around $9 per US gallon, while militant French haulers have gone on strike at having to fork out more than $10.

These figures make a suggested Energy Security Tax seem reasonable, even if it had the effect of doubling retail prices in the US.

Gas prices distorted by anti-subsidies

Meanwhile, no US economists are demanding these massive European taxes – anti-subsidies – should be dropped as they ‘distort’ the international market price of oil by artificially dampening demand. Instead they happily accept this advantageous disparity, marveling at the naivety of their conservation minded economic peers, whilst pointing their chubby fingers at poor countries like Indonesia, heaping shame on emerging nations for daring to help their citizens compete with the world’s richest economies for the lifeblood of their rural communities.

It is a sad fact that, in developing countries, food and energy costs make up the most significant proportion of household cost. John Kilduff, an energy analyst at MF Global in New York has a typical view regarding these poorer nations whose “customers just don’t have the durability U.S. customers do.” He acknowledges that oil price rises resulting from removing subsidies will have “a real impact on them.”

It may seem naive and old fashioned to us in the enlightened capitalist West, but these subsidies are the response of governments who are trying to help their people. Rather than their corporations…

Of course, some subsidized oil inevitably ends up in the petrol tanks of the rising ranks of the middle classes, but in this age of globalization, everyone wants to live like an American – and surely that’s laudable, isn’t it?

Development is A Good Thing…

But perhaps we should take a moment to reflect on how long current reserves of oil would last if everyone did live like a US citizen: just eight years. Really. (Click on the link below and scroll down.)


That is a truly frightening statistic and one that suggests higher gas prices are inevitable. Rather than blaming the world’s poorest countries for their hardship perhaps this latest crisis will help Americans understand the impact of their gluttonous oil habit on the finite resources we have on our shared planet.

And maybe, just maybe, the most technologically advanced nation in the world will decide to inspire its brilliant scientists to innovate and create an economically viable alternative to the Bush/McCain solution of drilling for more oil.

Let’s hope so.


Reuters quoting Bodman as he casts the blame elsewhere.

CNN quoting experts Veno and Kliduf on foreign gas subsidies.

For more on the true cost of oil check out this link and also the excellent 2004 book by Michael Klare: Blood and Oil.

More from Will can be found at www.willpatching.com


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When oil reaches $150 per barrel, Americans will be spending around 12 percent of their incomes on energy. Some believe this value represents a tipping point. It may be. But whether it is $150 or not, we can begin right now to anticipate the changes that are about to happen.

Globalization in Reverse

The world prides itself on its efficiencies. We are able to produce vast amounts of food, and effortlessly move goods and people around the world. It has been a world of choice up to now, with barriers flattened to allow the exchange of trade and world commerce. People and produce have been able to move virtually effortlessly all over the world.

All these selfsame efficiencies also work just as efficiently in reverse — that is to say, they unravel quickly. An example of an “efficient mechanism” in our lives, particularly in suburbia, is electricity. While electricity can allow us to quickly cook our meals, dry our hair and warm our baths, when it is no longer there, the breakdown is very rapid.

The same is true for the efficiency we get from driving to the mall to stock up on everything we need. When we can no longer do that, suburbia becomes dysfunctional, and a Dysfunctional Suburbia is implicit in the New Oil Order — and for air travel, and so on.

The World Is Unflattening

Not long ago star New York Times columnist Thomas L. Friedman wrote The World Is Flat. Friedman’s book now represents a manual for what is going to disappear quickest. If you read the book critically, you will understand that the unstated premise for virtually all the flattening forces is cheap energy.

Now, many of the companies that Friedman cites as successes are likely to crash and burn. Some of the world’s wealthiest companies will disappear off the Fortune 500 in months, if not weeks, never to be seen again. McDonald’s and Coca-Cola are just two examples.

And as this process gathers momentum, the world effectively becomes a much larger place, and it becomes difficult to operate with the ease and convenience we have been used to…

Say Goodbye

The first casualty of high oil prices are vast swathes of the poor, especially the rural poor. They may disappear for a while from the aisles of commerce (informal industry mostly) but they will reappear in cities as massive disordered and desperate militias.

Meanwhile, industry can begin by bidding the airline industry a fond farewell. The biggest may survive longer, and Singapore Airlines with its supersized Airbus A380 might be the last to go. Airlines in the Middle East like Qatar Airways may also stay in business for an extra season or two. The future of air travel will belong to an elite few, and airlines as we know them simply will no longer operate. To date over a dozen international airlines have declared bankruptcy in the first 6 months of 2008 alone, including:

Airblue (Pakistan), City Star Airways (UK), Frontier Airlines (US), Nationwide Airlines (South Africa), Palestinian Airlines (Egypt), Tavrey Airlines (Ukraine), Jet4you (Morocco), Euromanx (Isle of Man), Aeropostal (Venezuela) and Silverjet (UK), among others.*

The vast silos that are today’s airport buildings may in five years be converted into art of technology museums.

Say goodbye also to the services that rely on airlines, such as courier companies. This means FedEx and UPS, Say goodbye, too, to the likes of Amazon.com.

Giant scale operations — from air travel, to farming, to industry (think General Motors) — will scale down drastically.

This represents an implosion in world tourism, which means world spectacles like the FIFA World Cup and the 2012 Olympics are going to be beyond reach for 90 percent of consumers. This also has an impact on all those services that survive on international tourism — entire hotel chains, car hire companies, restaurants and the like.

Supermarkets like Wal-Mart (US), Carrefour (France), Pick ‘n Pay (South Africa), Tesco (UK) and countless others will first face stock shortages for fairly unconventional goods, and then more and more basic goods, including fruit and vegetables. These markets knocked out local markets once upon a time, ruining many local grocers and farming industries. These local operations are about to be reborn, and as they redevelop, these smaller local markets will subsume the supermarkets.

The End of Offshore Operations and Supply Chaining

Multinational corporations will quickly lose both their ability to make use of foreign labor sources, and to do so cheaply. Once again, trade is about to become more local. This means that if your country does not build computers, for example, these devices are about to be priced virtually out of the market.

Electronics are going to go the way of airlines. Generics may survive, and some of the cheapest and most useful will survive better than more complex and far-to-source models. In countries where Internet costs are not minimal, Internet usage will drop drastically.

Media will shrink, from the number of TV channels, to the number of newspapers serving an area, to the number of magazines on the racks. Blogs, however, will continue their surge, but become more functional and community oriented. In some countries — depending on how long Internet infrastructure has been in place — newspapers will disappear entirely in favor of Internet-based data. In other countries, particularly where the Internet is still a young industry, newspapers will reclaim all lost ground and the Internet may disappear altogether.

More and more people will be renting, will be without cars and even without mobile phones. The number of the urban poor will swell to alarming levels. All of this represents the end of endless choice.

The Resurgence of Repair Shops

We will no longer be able to afford our throwaway culture. If something breaks, we will have to find people — technicians — to fix it. Warrantees and guarantees will become meaningless.

People will have to learn skills again — not only how to fix things, but also how to make things. When toilet seats no longer arrive in containers at coastal cities, or fishing rods, or piles of clothing, local industries will have to fill this vacuum. It will take time, and it will not be easy. Old people (with skills) will become the new celebrities.

The End of Capitalism

We will see a stock market crash based around the realization (in markets) that not only is economic growth no longer logical, but depleting energy means breakdowns in all the financial architecture that was designed on top of it — from property markets, to banks, to entire industries, including (of course) the auto and food industries. Obviously, when entire banks fail, so will capitalism and what remains of the financial apparatus.

Money will have little or no value in the future, and commerce will be done via barter, and probably in a disorderly manner. Agriculture will become a big industry, along with other forms of resource management (mining, forestry, etc.).


It goes without saying really that all these transitions are likely to be associated with unpleasant levels of public disorder. It is likely that around the world authorities will struggle to maintain law and order. Governments will have a hard time staying relevant and of use to suddenly impoverished mobs. These struggles will place additional strain on those Cheap Oil Relics that survive, for example municipal services and roads. Who will maintain these in a world that can no longer afford very much?

One of the new projects (mentioned above) will be farming, but not so much with machines and the accoutrements of first-world technology. Probably we will have to pay a lot of attention to the soil in order to produce anything of value and in significant quantities. In the new world we will be particularly vulnerable to diseases and pandemics, and also to climate change. With so much to face, individuals will struggle. Communities with talented and skilled craftspersons who work together will do better to adapt. Sharing a common purpose or faith during this period will also benefit these groups over those that have become dispirited and lost their way.

Benign dominoes

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Saturday, June 28, 2008



Within the context of a spat between Joe Klein and Max Boot over whether the neocons suffer from what is known as ‘dual loyalties’ – an outrageous slur, as there has never been the slightest evidence that the neocons had any loyalty to any country other than Israel – Klein writes:

“You want evidence of divided loyalties? How about the ‘benign domino theory’ that so many Jewish neoconservatives talked to me about – off the record, of course – in the runup to the Iraq war, the idea that Israel’s security could be won by taking out Saddam, which would set off a cascade of disaster for Israel’s enemies in the region? As my grandmother would say, feh! Do you actually deny that the casus belli that dare not speak its name wasn’t, as I wrote in February 2003, a desire to make the world safe for Israel? Why the rush now to bomb Iran, a country that poses some threat to Israel but none – for the moment–to the United States…unless we go ahead, attack it, and the mullahs unleash Hezbollah terrorists against us? Do you really believe the mullahs would stage a nuclear attack on Israel, destroying the third most holy site in Islam and killing untold numbers of Muslims? I am not ruling out the use of force against Iran – it may come to that – but you folks seem to embrace it gleefully.”

It is a shame, but not a great surprise, that Klein decided not to share the ‘benign domino theory’ with his readers at a time when Americans could have used the information. It smacks of the conspiracy of a secretive cabal. Of course, the benign domino theory is what I like to call the Zionist plan for the Middle East, and was in full force and effect amongst the neocon conspiracy which tricked Americans into the disastrous attack on Iraq. Iraq was just step one, and had the Old American Establishment not come to its senses and kicked most of the neocons out of the American government, we would now be witnessing their attempts at carrying out the greater plans of the cabal, all intended to lead to the building of Greater Israel. As Josh Marshall notes discussing the same spat, he described Boot’s views as far back as 2003 (my emphasis in red):

“The hawks’ other response is that if the effort to push these countries toward democracy goes south, we can always use our military might to secure our interests. ‘We need to be more assertive,’ argues Max Boot, a senior fellow at the Council on Foreign Relations, ‘and stop letting all these two-bit dictators and rogue regimes push us around and stop being a patsy for our so-called allies, especially in Saudi Arabia.’ Hopefully, in Boot’s view, laying down the law will be enough. But he envisions a worst-case scenario that would involve the United States ‘occupying the Saudi’s oil fields and administering them as a trust for the people of the region.’

What Boot is calling for, in other words, is the creation of a de facto American empire in the Middle East. In fact, there’s a subset of neocons who believe that given our unparalleled power, empire is our destiny and we might as well embrace it. The problem with this line of thinking is, of course, that it ignores the lengthy and troubling history of imperial ambitions, particularly in the Middle East. The French and the English didn’t leave voluntarily; they were driven out. And they left behind a legacy of ignorance, exploitation, and corruption that’s largely responsible for the region’s current dysfunctional politics.”

Far from being a worst-case scenario, occupying the Saudi oil fields is the culmination of the Zionist plan for the Middle East (step 10 in my list), finally depriving the Arabs of the ‘oil weapon’ which constituted the main barrier to the creation of Greater Israel.

The funniest thing about all this is that the plans of the neocon cabal were never a secret, and it should have been common knowledge that the neocons never had American interests at heart. Imperial confusion – for which I blame people like Chomsky – allowed the neocons to clothe their completely Zionist goals in words which looked like plans of the American Empire. It is too bad it took an attack which will end up destroying that empire to teach Americans a lesson.