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>US report acknowledges peak-oil threat

2005/03/31 2 comments

>Some say global oil production has passed its peak point

by Adam Porter in Perpignan, France

Aljazeera (March 09 2005)

It has long been denied that the US government bases any policy around the idea that global oil production may be in terminal decline.

But a new US government-sponsored report, obtained by Aljazeera.net, does exactly that.

Authored by Robert L Hirsch, Roger Bezdek and Robert Wendling and entitled the Peaking of World Oil production: Impacts, Mitigation, & Risk Management, the report is an assessment requested by the US Department of Energy (DoE), National Energy Technology Laboratory.

It was prepared by Hirsch, who is a senior energy programme adviser at the private scientific and military company, Science Applications International Corporation (SAIC).

They work extensively on defence and geopolitical issues for clients, including many for the US government.

Advisory roles

Among current job openings at SAIC are positions at Fort Benning (formerly School of the Americas) and a private military contract to help retrain the Albanian air force in Tirana.

Hirsch has held a wide variety of positions in the US energy hierarchy including senior energy analyst at the Rand Corporation, through to a presidentially appointed assistant administrator for solar, geothermal and advanced energy systems.

He has also previously worked for the US Department of Energy on numerous advisory committees, including the DoE Energy Research Advisory Board.

This new report follows on from two presentations by Hirsch last year. One on 1 March to the same National Energy Technology Laboratory and another on 14 June last year at the Annapolis Centre for Science Based Public Policy. Here Hirsch laid down his ideas on the peak of oil production.

The Annapolis Centre for Science-based Public Policy is a group which has received $658,000 in funding from Exxon Mobil since 1998. It openly disputes the idea that global warming is the result of burning fossil fuels.

But this brand new senior-level report on “peak oil” is unprecedented in US government circles. It is not just the existence of the report itself that is such a landmark in the current oil debate. Its conclusions also pull no punches.

Uncertain timing

“World oil peaking is going to happen”, the report says. Only the “timing is uncertain”.

The effects of any oil peak are similarly not ignored. Specifically, the impact on the economy of the United States. “The development of the US economy and lifestyle has been fundamentally shaped by the availability of abundant, low-cost oil. Oil scarcity and several-fold oil price increases due to world oil production peaking could have dramatic impacts … the economic loss to the United States could be measured on a trillion-dollar
scale”, the report says.

The authors of the report also dismiss the power of the markets to solve any oil peak. They call for the intervention of governments. But also they rather worryingly point to a need to exclude public debate and environmental concerns from the process. They say this is needed to speed up decision-making.

“Intervention by governments will be required, because the economic and social implications of oil peaking would otherwise be chaotic. But the process will not be easy. Expediency may require major changes to … lengthy environmental reviews and lengthy public involvement.”

Hirsch notes, despite arguments from the major oil companies and producer nations, that new finds of oil are not replacing oil consumed each year. Despite the advances in technology reserves are becoming increasingly difficult to replace.

Three scenarios

The report sees “a world moving from a long period in which reserves additions were much greater than consumption, to an era in which annual additions are falling increasingly short of annual consumption. This is but one of a number of trends that suggest the world is fast approaching the inevitable peaking of conventional world oil production.”

The report then takes three possible scenarios and outcomes. Firstly that energy replacement solutions, or “mitigation” as the report states, are started twenty years before any “peak”. Secondly that solutions are only enacted ten years before any peak and, thirdly, that solutions are only put into practice as the peak becomes apparent.

In what some may see as an optimistic assessment, the authors believe twenty years is enough time to limit damage from any peak. However, they point out that “if mitigation were to be too little, too late, world supply/demand balance will be achieved through massive demand destruction”.

Demand destruction is a modern way of saying catastrophic recessions and shortages. But as well as these predictions, the report lays out “signals” it believes will be apparent in the run-up to any peak. This is perhaps the most worrying aspect of the report, as it seems to describe the very events that are taking place at the moment.

Supply insecurity

“As world oil peaking is approached, excess production capacity … will disappear, so that even minor supply disruptions will cause increased price volatility as traders, speculators, and other market participants react to supply/demand events”, the report says.

“Simultaneously, oil storage inventories are likely to decrease, further eroding security of supply, aggravating price volatility, and further stimulating speculation … oil could become the price setter in the broader energy market, in which case other energy prices could well become increasingly volatile and unpredictable”.

The report highlights a series of ways to minimise any impacts. From increased fuel efficiency to technological help in stopping the practice of “oil-left-behind” or non-extractable oil and various forms of new liquid fuels, liquefied coal and gas-to-liquids.

But in its conclusion the report makes troubling reading, noting that “the world has never faced a problem like this. Without massive mitigation more than a decade before the fact, the problem will be pervasive and will not be temporary. Previous energy transitions were gradual and evolutionary. Oil peaking will be abrupt and revolutionary.”

This report is the clearest signal yet that the US government is taking the subject of “peak oil” seriously. Yet it remains to be seen what actions can be taken to stop this potentially “revolutionary” change.

http://english.aljazeera.net/NR/exeres/5EF86883-8CDB-49B5-9A07-5759205A9DBE.htm

Bill Totten http://www.ashisuto.co.jp/english/

Categories: Uncategorized

>The Business of Killing

2005/03/30 3 comments

>The corporate manslaughter bill
has been neutered to please employers

by George Monbiot

Published in the Guardian (March 29 2005)

It is better than a poke in the eye with a sharp stick, or a tap on the head with a steam hammer. But only just. The new draft bill on corporate manslaughter is a ghost of what was once proposed. But, for the first time in the United Kingdom, there might now be a chance of prosecuting large companies for killing their workers.

No one could accuse the government of rushing. It first promised to introduce an offence of corporate killing at the 1997 Labour Party conference. It promised again in a Home Office consultation paper in 2000, and again in the Queen’s speech at the end of that year. Nothing happened, but the promise was repeated in Labour’s 2001 manifesto. In May 2003 the Home Office promised it would publish a draft bill in the autumn. In autumn 2003, it promised the bill would materialise in the spring. In February 2004 it promised it would be produced in April. In April, it promised the bill would be published during the current parliamentary session. In September, Tony Blair promised that the April promise would be kept. Two weeks later, the Home Secretary said it would come out in the autumn. Autumn, and the parliamentary session, came and went. In the Queen’s speech at the end of November, the government promised to publish the bill before Christmas. Soon afterwards, it promised the Home Affairs select committee that the bill would appear on December 21st. On December 17th, it confessed that this wasn’t going to happen, but promised the bill would be published during the current parliamentary session. Astonishingly, this promise has been kept. But as the draft bill has to go out to consultation, it cannot be passed during the life of this government, which means that the manifesto promise has been broken. Altogether that makes twelve broken promises. I think this might be a record.

Between the 1997 Labour party conference and today, almost 5000 people have been killed in “workplace incidents”. By the time the law is implemented (assuming both that Labour is re-elected and that the latest promise isn’t broken) another few hundred are likely to die.

The excuse the Home Secretary makes for these delays is that the bill deals with a “very complex area of law”. Strangely the same consideration did not stop him from rushing the Prevention of Terrorism Act through parliament, which deals with such straightforward areas of law as convicting people before they’ve been tried. When a government wants something to happen, it makes it happen, whatever the complexities might be.

The real problem was that from the day the then Home Secretary opened his mouth at the 1997 conference, big business started mobilising. The government’s proposal was popular, as company directors had been able to walk away without penalties from a series of spectacular disasters, like the Piper Alpha explosion, the Southall rail crash, and the sinking of the ferry whose name extolled the culture which caused the disaster: the Herald of Free Enterprise. So bodies such as the Confederation of British Industry [“CBI”] and the Institute of Directors [“IoB”] had to proceed carefully. They followed what could be described as the Svejk Strategy. At the beginning of Jaroslav Harsek’s novel The Good Soldier Svejk, its hero, knowing that he is about to be conscripted into the Austro-Hungarian army, persuades a friend to push him into the recruiting office in a wheelchair, where he noisily volunteers for service, while making it clear that, to his enormous regret, such service is in fact impossible.

The CBI and the IoD have both been clamouring to be sent to the front line, while waving their broken legs about. Last week the Institute of Directors issued what is surely the world’s most back-handed press release. “With the publication today of the draft Corporate Manslaughter Bill, the Institute of Directors’ long-running campaign for action finally seems to have paid-off. The IoD has been calling for action … since early 2000.” The press release goes on to welcome the two provisions which gut the bill: the guarantee that directors themselves will not be prosecuted, and the promise that “no new burdens [will] be placed on companies which already comply with health and safety legislation”. In its response to the government’s consultation paper in 2000, the Confederation of British Industry loudly agreed that “the general law of manslaughter is in need of reform” and that “the public deserve reassurance that business is accountable and takes its responsibilities to society seriously”. It went on to argue that “the best results will be achieved by ensuring compliance with the current law”. Pressing as the need for change is, in other words, it would be better if it doesn’t happen.

Every time the bill was about to be published, someone in the Cabinet flinched. The chief flincher has been Jack Straw, who also happens to be the man who first proposed it in 1997. In October last year, he sent a letter to the deputy prime minister insisting, just like the CBI, that though the case for action “appears unanswerable”, “there is a strong case for maintaining the current position”.

And he more or less got what he asked for. In his foreword to the bill, the current Home Secretary, Charles Clarke, uses a phrase coined and endlessly repeated by the CBI. “It is not my intention to propose legislation that would … create a risk averse culture”. I don’t know where I got the impression that the purpose of this bill was to prevent directors from taking risks with other people’s lives.

So what the bill gives us is a law that will allow companies, but not the people who run them, to be prosecuted for killing their workers. At the moment, a firm can’t be convicted of manslaughter unless prosecutors can prove that one of the directors was personally responsible for the death. This makes it impossible to pursue any but the smallest companies. The new law will allow firms to be convicted as long as “senior managers” were responsible for a gross breach of their duty of care towards their workers. The company can be fined. But the human beings who make the decisions are immune. As directors can still be disqualified and imprisoned for a gross breach of their duty of care towards their shareholders’ investments, money in the United Kingdom will remain more valuable than human life.

Just in case the law threatens to encourage a risk averse culture, the prosecution will have to prove that senior managers “sought to cause the organisation to profit” from their breach of duty. This, in the age of the cross-cut shredder, will in most cases be impossible. It is not clear whether the parent company can be prosecuted, or only its subsidiaries. Neither is it clear how the law can prevent senior managers from blaming junior ones for an accident, thus absolving the company of legal responsibility.

But at least something is happening, or might possibly be happening. And that, after eight years of broken promises, looks like a minor miracle.

http://www.monbiot.com

References:

1. Jack Straw, quoted in The Guardian, 3rd October 1997.

2. The Home Office, 23rd May 2000. Reforming the Law on Involuntary Manslaughter: The Government’s Proposals.

3. Home Office, 21st May 2003. Government to Tighten Laws on Corporate Killing. Press release.

4. http://www.corporateaccountability.org/Updates/manslaughter.htm

5. ibid.

6. Baroness Scotland, 29th April 2004. Speech to Centre for Corporate Accountability’s conference on corporate killing.

7. Tony Blair, 13th September 2004. Speech to the TUC conference.

8. David Blunkett, 29th September 2004. Speech to the Labour Party Conference.

9. http://www.corporateaccountability.org/Updates/manslaughter.htm

10. “The TUC estimates that 249 workers and 385 members of the public are killed in workplace incidents every year.” Alan Travis, 24th March 2005. Draft law welcomed on corporate killing. The Guardian.

11. Quoted by Jean Eaglesham, 17th December 2004. Death at Work Law Suffers Further Setback. Financial Times.

12. Institute of Directors, 23rd March 2005. Corporate Manslaughter Bill ? ‘Action At Last’ Says IoD. Press release.

13. Confederation of British Industry, 8th September 2000. CBI Response to Home Office Consultation Document, ‘Reforming The Law On Involuntary Manslaughter: The Government’s Proposals’.

14. Quoted by Patrick Wintour, 22nd October 2004. Straw Tries to Block Law on Death at Work: Corporate Killing Bill ‘Poses Serious Problems’. The Guardian.

15. Charles Clarke, March 2005. Foreword to: Corporate Manslaughter: The Government’s Draft Bill for Reform. The Home Office.

16. Section 1 (1) (b) of the draft Corporate Manslaughter Bill.

17. Section 3 (2) (iii).

http://www.monbiot.com/archives/2005/03/29/the-business-of-killing/

Bill Totten http://www.ashisuto.co.jp/english/

Categories: Uncategorized

>Oil and the War in Iraq

2005/03/29 1 comment

>Speech made at the Commonwealth Club of San Francisco

by Tefel Hall

tefelhall@msn.com (June 02 2003)

In 1999, OPEC demonstrated unprecedented solidarity, forcing the price of oil to triple in less than a year. Could this resurgence in OPEC’s power be related to the current conflict in Iraq? Author and speaker Tefel Hall explains the relationship between OPEC and American militancy.

Did everyone get a handout?

Hi everybody, my name is Tefel Hall, and today, I’m going to be talking to you about oil. My own interest in this subject began just last year, when I went to my first antiwar rally, and there I saw people carrying signs which said, “No blood for oil”. And I thought to myself, that’s a very clever slogan, but I wonder if it’s true?

Not long after that, I had a chance to pick my own topic for a college research paper, so I decided to investigate the link between oil and war that was brewing in Iraq. And today very I’m glad to have this opportunity to share with you a bit of what I learned.

Let me start by giving you some background.

Seventy-five years ago, oil was discovered in Iraq. Back then, Iraq was still a colony of the British empire, and soon, Western oil companies were making astronomical profits, while paying the puppet king of Iraq only pennies per barrel of oil. Then, in the 1950s and 1960s, we have a series of coups, and Iraq starts drawing closer to the Soviet Union. And finally, in 1972, Iraq nationalized its oil industry, seizing concessions valued at over one billion dollars.

At that time, Saddam Hussein was the vice-president of the Revolutionary Command Council, and he held a big news conference. The room was packed with reporters, photographers were flashing away, and Saddam announced:

“We are confiscating the assets of the Americans, the British, and the Dutch – but not the French. The French will be allowed to stay in the country, because the French have always shown a just policy toward the Palestinians.”

I think this event is important for three reasons:

First, this was an affront to many Americans. Even today, there are powerful people in the oil industry who feel like, “Hey, Saddam stole a billion dollars of our money”. And for that, they have never forgiven him.

Second, US oil companies never succeeded in getting back into Iraq. For the last thirty years, the US has been shut out, while France and Russia have invested heavily in Iraq’s oil industry.

And third, Saddam always portrayed himself as a champion of the Palestinian cause. And for this reason, we shouldn’t be too surprised that there are many people in the Arab world who feel that Saddam is a lesser evil than the United States.

Anyway, today President Bush is saying that the war and the US occupation of Iraq have nothing to do with oil. But it’s hard not to notice that Iraq possesses the second largest oil reserves in the world, and the US is probably the most oil-dependent country in the world.

Analyst David Fleming has pointed out that the US economy is built around the assumption of cheap, long distance transport, and therefore any disruption in our oil supply could shut our economy down “within days”.

Yet most of us don’t appreciate how dependent we are on oil. This might help. This comes from an article by Richard Heinberg, who writes:

“The industrial revolution, still continuing, is all about replacing human and animal labor with the work of machines running directly or indirectly on fossil energy. Each day, the energy from oil used by people around the world equals the work of some 180 billion humans. It’s as if the average global man, woman, or child had thirty slaves toiling around the clock. But those petroleum ‘ghost slaves’ are not evenly distributed. Each of us in the US has, on average, more than 120 of them. This is the energetic basis of our American Way of Life.”

Wow! Think about that. Each and every one of you has 120 slaves, thanks to oil. These are the slaves that push your car, heat your home, plough your fields, harvest your crops, and bring your food to market. And God help all of us if we were ever forced to do all that work ourselves.

So where do all these oil-slaves come from? Globally, about forty percent of them come from OPEC, the Organization of Petroleum Exporting Countries. So let me introduce you to some of the major players.

1) Saudi Arabia
2) Kuwait
3) Iraq
4) Iran
5) Venezuela

These are the five original members of OPEC. Today, the cartel has grown to include eleven different countries, but these five are still the five most powerful. So, for the sake of simplicity, today I’m just going to let these five countries represent the entire organization.

Can anyone tell me which of these countries is the most powerful member of the OPEC?

That’s right, Saudi Arabia. Because generally speaking, the power of any OPEC country is roughly proportional to the amount of oil that it produces, and Saudi Arabia produces about twice as much as oil as any other these other countries. So Saudi Arabia is the undisputed kingpin.

The purpose of OPEC, as I’m sure you know, is to keep oil prices high by limiting the supply. So when we when we talk about OPEC, we often talk about Price Doves and Price Hawks. And the doves, obviously, are those countries that want to keep the price of oil affordable, while hawks are those that believe that the world can afford to pay a lot more.

But these terms also have another layer of meaning, because when we say that OPEC is dovish, sometimes what we really mean is that OPEC is weak, because these countries are quarreling and competing amongst themselves. And when we say that OPEC is hawkish, sometimes what we really mean is that OPEC is strong, because these countries are united and cooperating closely.

Back in 1960, when OPEC was first formed, OPEC was extremely weak, and that’s why I’ve lined these countries up on the left side of the room, under doves. And really, for most of the last thirty years, OPEC has been a notoriously weak and ineffectual organization.

The problem is that, at heart, these countries are all competitors, so they’re very wary of entering any agreement that might give someone else an advantage. Even when they do agree, they’re all notorious cheaters. For example, they’ll all get together in Geneva or some place, and they’ll agree to raise the price of oil, and they’ll make an agreement which stipulates exactly how much oil each of these countries is going to produce, and they all make a solemn pledge not to pump any more oil than the agreement allows … but then they get back home, and the cheat. They overproduce their quotas. It’s like, each of these countries wants everyone else to limit the amount of oil that they sell, but none are willing to curb their own production. So what happens? Well, when all these countries are trying to sell as much oil as possible, pretty soon they flood the market, and the price of oil falls back down.

And that, historically, has been OPEC’s greatest weakness. These countries are simply too divided, divided by competition. But every once in a while, these countries cooperate, and when they do, OPEC is extremely powerful. And whenever OPEC does turn hawkish, the US gets extremely worried, as we’re going to see.

I know this is all very simple stuff, if you follow the oil news regularly, but not all of us own oil stocks, so let me give you one more analogy:

Imagine that you are America, and you’re driving down the road in your car, and you need to fill up the gas tank, so you stop at the corner, and there you have King Fahd’s gas station, and Saddam Hussein’s Iraqi gas station, and Kuwait, Iran and Venezuela.

As the consumer, you are happiest when there is vigorous competition between these stations. You love it when they’re trying to undercut each other’s prices. You absolutely love OPEC price wars.

But if these stations were to ever get together and fix the price of gas – you’d be screwed. Because it’s not like you can just drive across town and buy your gas someplace else. Uh-uh. All over town gas stations are going out of business. So you have to buy gas from these five stations, and if they’re not competing against each other, you’re in deep trouble.

Okay, now that we all know how OPEC works, it’s time for a statement of US policy. And this statement comes straight from a secret pentagon report that was leaked to the New York Times. And according to this report:

“Our objective in the Gulf … is to prevent an alignment of powers from dominating the region”.

Now, I think we can be even more specific. I mean, let’s just tell it like is. Our objective is to prevent these countries from banding together and fixing the price of oil. That’s it; that’s our policy. Or, in the words of the eminent economist M A Adelman, “Our minimum objective should always be: Do nothing to help the cartel”.

Okay, now I think we’re ready to play the OPEC game. That’s right – today we’re going to play a game, sort of. Actually, I’m going to have to limit your participation, so if I ask you a question, it’s just rhetorical, please don’t raise your hand. But I just want you to play along with me, and I want you to pretend that you are the president of the United States, and the object of the game is to prevent these five countries from aligning themselves on the opposite side of the room.

Because if these countries ever form a truly effective monopoly – America would be finished. Well, maybe not finished, but we certainly wouldn’t be a superpower anymore. Instead, we’ll be OPEC’s puppet, OPEC’s cash machine – and it’s all going to be your fault, because you are the president of the United States.

Okay, let’s play.

I want you to imagine that the year is 1973, and you are president Nixon. And you get a news flash: “Mr President, Egypt and Syria have just attacked Israel, and OPEC says that if you help Israel, it’s going to cut off America’s supply of oil. What are you going to do?”

Actually, we know that President Nixon ignored the threat, and he sent the Israelis some $2 billion in military aid anyway. And then OPEC retaliated by slowly closing its taps, and over the next few months the price of oil quadrupled.

[move Saudi Arabia and Kuwait]

For the audio tape let me just say that we have now moved Saudi Arabia and Kuwait to the hawkish side of the room.

This is not good. Fortunately, OPEC did not show complete solidarity, and Iraq, Iran, and Venezuela continued to export as much oil as they could, because they wanted to take advantage of the higher prices. Nonetheless, there was a lot of panic buying, and this caused the price of oil to stay high, so now we have a lot of angry Americans who are demanding to know why gas is so expensive – not to mention all those questions about Watergate.

Clearly we have to do something – but what? I have an idea. How about if we threaten to go to war? And, in fact, that’s exactly what we did. The US threatened to go to war if the embargo were not lifted, and we were quite prepared to follow through. Defense Secretary James Schlesinger has said, and I quote:

“I was prepared to seize Abu Dhabi. Something small, but nothing big. Militarily we could have seized one of the Arab states. I think the Arabs were quite worried about it after 1973.”

My point is this: America has always demanded that these countries compete against each other. And when they don’t, America tends to get militant.

Anyway, the threat of war may or may not have helped, but what ultimately ended the embargo is that these countries – Saudi Arabia and Kuwait – they realized that the embargo was not in their own best interest. The world had plunged into a deep recession; industries were using less oil; politicians were starting to worry about conservation; and people were looking for other sources of energy. And these trends are not good for the oil business.

Meanwhile, these other countries – Iraq, Iran, and Venezuela – they’re making a killing. They’re selling a lot more oil, at much higher prices, so they’re getting rich at the expense of these price hawks. So how long do you think these hawks are going to let their ideology get in the way of their pocketbooks?

[move Saudi Arabia and Kuwait back to Doves]

The answer was about five months, and then these countries stopped cooperating, and once again there was vigorous competition.

Okay, now I want you to imagine that it’s 1979, and you are President Carter. And you get a news flash: Mr President, the Shah of Iran has just been deposed, and now the country is being led by the Ayatollah Khomeini. What are you going to do?

[move Iran over to hawks]

The problem is that Khomeini is an outspoken price hawk. Before taking power, he said:

“… It is necessary for all oil-rich Islamic nations to use their oil … as weapons against Israel and the imperialists, and cut off the sale of oil to these countries …”

Gosh, this could be a problem, don’t you think? What’s even worse is that the Ayatollah is trying to unite the Islamic world against the West. He’s actually getting on the radio and broadcasting his message across the border, inciting the Shiites in these other Muslim countries to rise up and overthrow their leaders.

What if these regimes were to fall as quickly and as suddenly as the Shah? What a disaster! We might then be facing a block of Islamic nations, all loyal to the Ayatollah, and the Ayatollah would then have the power to bring America to its knees!

Clearly, we have to do something. But what? We can’t attack Iran directly, without risking an all-out confrontation with the Soviet Union. So what are we going to do?

Saddam has an idea. He says, “I’ll attack Iran. I don’t like the Ayatollah either.” And there is some evidence that the Carter administration encouraged Saddam to attack Iran. In any case, Saddam did attack, and what was our response? Did we say, “Oh, no! Saddam has violated international borders!” No, of course not. We were mad as hell at Iranians; they were still holding our hostages. So when Saddam attacked Iran, we were like, “Yeah! Go Saddam! Teach those Iranians a lesson!”

And over the course of the next eight years, we helped Saddam build up his army, and we provided him with: anthrax, botulism, E. Coli, chemical warfare agents, the plans for a chemical warfare facility, equipment used to fill chemical warheads, special helicopters equipped for “crop dusting” – the same helicopters, in all likelihood, as the ones which later dumped chemical weapons on Halabja. And according to Bob Woodward of the Washington Post, the CIA even taught the Iraqis the most effective way to use mustard gas!

Gosh, do you think we might have been a little complicit in the use of chemical weapons?

My point here is this: Saddam’s army was, in many ways, a proxy army for the United States. We were scared of the Ayatollah, and he was scared of the Ayatollah, so he fought the battles, and we rewarded him with billions of dollars in military and economic aid.

Can you see a pattern developing? In 1973, we threatened to go to war. And in 1980, we actually did go to war, albeit through Saddam Hussein. And in both cases, the reason for the war was “to prevent an alignment of powers from dominating the region”.

Anyway, after eight years of war and 1.5 million dead, Saddam finally wins the war. And the borders haven’t changed much, but Saddam has won some major battles, and the Ayatollah is forced to eat humble pie.

Let’s give Saddam some credit. He has saved our gas-guzzling way of life, by preventing the Ayatollah Khomeini from dominating OPEC. Come on, everyone, let’s give Saddam a great big round of applause …

Well, that was less than enthusiastic. But you know, perhaps you’re right. Because no sooner had the war ended, than Saddam began to do some very unsettling things. For example, he sent his oil minister over to Iran to discuss the price of oil.

[Move Iraq to hawks]

You see, Saddam is flat broke. In his own words, he can’t even pay the war widows. So now he’s pushing OPEC to raise the price of oil, and Iran has decided to cooperate. Saddam has just become a leading price hawk.

This is astounding. These two countries – Iraq and Iran – they hate each other. They’re blood enemies. They’ve just fought a horrible eight-year war. Technically, they’re still at war; they’re still holding each other’s POWs! Yet now, for the first time in ever, they’re cooperating on oil prices, and both agree that it’s time for OPEC to band together and demand a better price for oil.

Uh-oh, what’s this? Now Saudi Arabia and Venezuela have decided to join them. [Move Saudi Arabia and Venezuela over to hawks]. Saudi Arabia, OPEC’s biggest dove, has suddenly turned hawkish. This is momentous. America is quavering!

Thank God Kuwait is still pumping oil like crazy. Thanks to Kuwait, these countries don’t yet have a complete monopoly. As long as Kuwait keeps ignoring its quotas, it’s going to be very hard for these hawks to maintain their solidarity.

But then … on July 25 1990, Saddam does something which is strategically brilliant. On the eve of a big OPEC meeting in Geneva, he moves 30,000 troops to the border of Kuwait. And at the meeting, his oil minister pounds on the table and says to Kuwait, “If you don’t limit your oil production, we’re going to limit it for you!”

And what’s more, Saudi Arabia backs up Iraq! Saudi Arabia tells the Kuwaitis, “Look, if you don’t stop cheating on your quotas, we’re not going to protect you from Saddam”.

[Move Kuwait to hawks]

Faced with this kind of pressure, Kuwait caved. And the emir, in a gesture of conciliation, fired his oil minister, and the new minister promised to cooperate with OPEC. And now, OPEC finally has the alliance it has always dreamed of – the kind of alliance that’s been out of its grasp for the last thirty years.

Believe me, this event did not go unnoticed in the Western press. Here, for example, is an article from the following day. This is from the New York Times, and the reporter is reporting from the OPEC meeting in Geneva.

“Iraq appeared today to have won a political victory, forcing Kuwait … to reduce oil production and pushing OPEC to raise oil prices … Mehdi Varzi, an oil analyst … said the talks … may turn out to be ‘a historic turning point’ … That is so, Mr Varzi said, because Iraq has used military might to show that it ‘is now the OPEC policeman’ … Several Arab OPEC officials here also conceded that, among other things, Iraq’s status in the Arab world has reached new heights as Baghdad has cast itself as the main arbiter of oil prices within OPEC. ‘Iraq has picked the right fight at the right time’, [said] Nordine Laoussine, a former senior Algerian OPEC official. ‘This meeting may turn out to be a landmark in the history of OPEC in as far as observing production discipline and setting oil prices on an upward curve in the long run is concerned’.”

You know, I could go on and on, reading you quotes like that one.. In another article, an oil minister is quoted as saying, it’s “a whole new ballgame”. And in the Wall Street Journal, another oil minister is quoted as saying, “This is a turning point for OPEC. The credibility of OPEC is on the threshold of being restored.” And in another article, an oil expert is quoted as saying, this is “the most important development for the oil industry since the 1979 Iranian revolution”. And another oil analyst says “It’s a sea change. Higher prices were always within OPEC’s grasp if they adhered to discipline. This time discipline is guaranteed by a principal player which carries a loaded gun.”

Clearly, this is a major victory for OPEC, and everyone is giving the credit to Saddam Hussein. And even in the West, Saddam is getting some sympathy. For example, this is from an interview on the MacNeil Lehrer NewsHour. And the host, Jim Lehrer, is interviewing Charles Maxwell, an energy strategist for Morgan Grenfell.

And Lehrer says: “So no matter what anybody thinks of Hussein, the fact is that he is right on this issue. Is he right?”

And Maxwell responds: “Well, he is right on his merits. If you were paying for oil at the pump, you might have a different view. But I think that on his own system and OPEC’s system, he is correc … You know, in cartels there is always a need to allocate the market … We need somebody to come along and knock heads”.

So overnight, Saddam Hussein has become an OPEC hero. With only 30,000 troops, camped along the border of Kuwait, he has succeeded in uniting OPEC for the first time in history. And everyone is predicting that the price of oil is going to go up and up.

Now I want you to imagine that you are President George Bush Senior. And for one whole week, you’ve been staring at these cards, aligned as they are on the wrong side of the room, and you’ve been racking your brain wondering what you can do to save America from OPEC.

Then you get a knock on the door, the door of your oval office. And I come in, and I’m one of your foreign policy advisors. And I say to you, “Mr President, I have some good news and some bad news”.

So of course you’re going to say, “Give me the bad news first”.

“The bad news, Mr President, is that Saddam Hussein has just invaded Kuwait. That means that he now controls just as much oil as Saudi Arabia. And given the fact that his army is much larger, it is now almost certain that Saddam will become the dominant force within OPEC”.

So you say, “Gosh, that’s terrible! Quick, tell me the good news!”

“The good news, Mr President, is that now we have the perfect excuse to intervene militarily”.

Of course, there’s way no to know if that conversation ever really happened. But there is overwhelming evidence that the purpose of the first Gulf War was to weaken OPEC and prevent Saddam from becoming the head of the cartel. And later, if we have the time, I’d be glad to elaborate on some of this evidence. But for right now, I’d just like to read you one quote, which I think kind of sums it up. This is from an interview on Frontline, after the war, with National Security Advisor Brent Scowcroft. And the interviewer asks:

“Did you think the invasion of Kuwait mattered? If so, why?”

And Scowcroft replies: “Yes, I thought it mattered, a lot. Principally because there was a struggle and had been a struggle going on within OPEC over, if you will, control of OPEC and it was a struggle basically between Saudi Arabia and the radicals, over keeping production flowing and keeping prices reasonable or trying to squeeze, if you will, the industrialized world. And the notion of Iraq, which was an oil powerhouse in itself, acquiring the Kuwaiti resources and thus perhaps of being able to dominate OPEC was a tremendous danger to the United States and to the industrialized world. I thought it made a lot of difference, aside from the issue of flat naked aggression in and of itself.”

Then the interviewer asks: “So … at the heart of this … was oil?”

And Scowcroft replies: “No, at the heart was naked aggression against an unoffending country, that was our firm and legal position, but what gave enormous urgency to it was the issue of oil. Yes that transformed it.”

So there you have it, straight from the mouth of the National Security Advisor. The legal justification for the first Gulf War was the invasion of Kuwait. But the underlying reason was to stop OPEC from squeezing the industrialized world.

In other words:

We killed 200,000 people, in order to keep the price of oil low. And that’s not to mention the half-million children who died because of the sanctions.

You know, I think this is terribly important, because sometimes we tend to believe our own propaganda. For example, just before this latest war, I was watching Charlie Rose on TV, and he was interviewing the UN ambassador from Iran. And Charlie Rose asks – perfectly serious? – Mr Ambassador, why is it that the Arab nations are so ungrateful to the United States? After all, in 1991, we sacrificed American lives in order to defend them from Saddam, yet now they won’t even support us.”

And the UN ambassador was very diplomatic, but I think an honest answer would have been:

“Charlie, I’m sure the Kuwaiti Royal family is very grateful for what you did. But the rest of the Arab world knows that you fought the Gulf war for your own self purposes – and to prevent the region from becoming as powerful as the United States. So stop expecting the Arab world to be grateful.”

Are you starting to see the pattern?

In 1973, we threatened to go to war, unless the embargo were lifted.

And during the Iran-Iraq war, we helped Saddam use chemical weapons, in order to prevent the Ayatollah Khomeini from fomenting revolutions and taking control of OPEC.

And then in 1991, we went to war with Saddam, in order to prevent him from taking control of OPEC.

Can you see how this policy works? We have always done our best “to prevent an alignment of powers from dominating the region”.

And that brings us to the current conflict.

But first let me backtrack. By winning the first Gulf War, the US effectively took Saddam out of the picture.

[remove Iraq]

And these countries were happy to have Saddam’s market share, so they went back to being doves and pumping oil just as fast as they possibly could.

[move all to doves]

And by the way, who else benefits from sanctions? US oil companies, that’s who. Because US companies are invested in Saudi Arabia, whereas French, Russian, and Chinese companies are invested in Iraq. So the sanctions helped US companies by hurting their foreign competitors.

But then, as the decade progresses, a new problem arises. Oil Scarcity. All over the world, old oil fields are drying up faster than new ones are being discovered, and this gives OPEC tremendous leverage, because OPEC has some of the youngest fields in the world.

Then, in 1998, Hugo Chavez gets elected president of Venezuela, and Chavez is a super-hawk whose mission in life is to raise the price of oil.

[Move Venezuela to hawks]

And then in March of 1999, OPEC holds a historic meeting in Vienna …

[move all back to hawks]

… and at this meeting, all these countries agree to raise the price of oil.

Now, there’s nothing historic about OPEC agreeing to raise the price of oil. That’s what they do. But what’s different is that this time, they all stick to their agreement. No one cheats. Simultaneously, they all tighten their taps, and within a year, the price of oil has tripled!

By this time, of course, the price of oil has become a major campaign issue, and conservatives are blaming Clinton and Gore, saying it’s their fault that oil prices are so high, because they are the ones who failed to check OPEC’s growing power.

But what could Clinton do? He tried begging. Clinton practically fell on his knees, begging OPEC to lower the price of oil. At that time, Hugo Chavez was the president of OPEC, and do you know how he responded? He said:

“Aw … Wouldn’t it be nice if the West also lowered the price of the things that it sells us – like cars, computers, medicine and the interest on foreign debt”.

Obviously, OPEC is in no mood to do America any favors. So what can we do?

Presidential candidate Steve Forbes had an idea. He said we should indict OPEC on price fixing charges and freeze their assets. I don’t know how far that idea went, but I suspect it didn’t go too far.

Congressman Gilman of New York had an idea. He said we should retaliate against OPEC by stopping all foreign aid to these countries. There’s only one problem. We don’t give these countries a lot of money to begin with. So that idea fell by the wayside too.

Hey, I have an idea! How about if we instigate a coup in Venezuela? Oh, I forgot, we tried that in April 2002 and it backfired. But I’m getting ahead of myself. We’re still back in the year 2000, and oil prices are killing us. What are we going to do?

Saddam has an idea. He says, “Why don’t you lift the sanctions? I’ll pump oil like crazy, and that will increase the supply, and the price will come back down.”

Is that a good idea? Some people thought it was a very good idea, so let’s study it a bit more closely.

So if you’ll take out the handout I gave you, on the side which says “Two Solutions to Rising Oil Prices”, on the left, you’ll see that if we lift the sanctions, this might prove beneficial, because,

Allowing Iraq to develop its resources would tend to make the market more competitive.

However, there are some disadvantages too. Namely,

Saddam would still be in charge of his own production. And can we really trust Saddam to pump as much oil as he can? Given his history, it’s far more likely that he’ll join the hawks, and limit the supply of oil.

Furthermore, French, Russian, and Chinese companies are going to have an advantage, because Saddam will invite them into Iraq, to develop his oil resources. It’s very hard to imagine that he’s going to invite US companies in, considering that we’re the ones who crushed him militarily then strangled him with ten years of sanctions.

In short, if we lift sanction, we’ll still be at the mercy of OPEC, and foreign oil companies will have a long-term advantage.

Well, about this time, some influential neo-conservatives proposed an alternate solution. [Move Iraq back to doves]. They said that we should oust Saddam militarily, and install a pro-American regime in Bagdad. And the advantages of this plan are obvious:

Oil supplies would increase.

And a pro-American regime could be trusted to pump as much oil as it could, thereby undermining the power of OPEC,

and reducing our dependence on Saudi Arabia.

And a pro-American regime would be sure to invite US companies in, while foreign companies would probably be excluded.

And this would be a great chance to expand our military presence in the region – a region which is destined to become even more important, in the coming decades.

Of course, this plan has some drawbacks too:

The Iraqi people may not want a pro-American regime.

And OPEC leaders are sure to object, because they’re going to see right through this. They’re going to know that this is a plan to undermine their power.

And France, Russia, and China are sure to object, because they’re going to know that we’re trying to take away those lucrative oil contracts that they’ve been so busy lining up.

And the American people may not support an oil war.

Nonetheless, in 2000 and 2001, a growing chorus of voices is pushing for this solution.

And these voices come from congress, the pentagon, and White House advisors.

And they’re coming from influential magazines like Insight, Commentary, Forbes, National Review, and the Weekly Standard.

They’re also coming from think tanks such as the Heritage Foundation, the Center for Defense Information, US-Defense-American Victory, Project for a New American Century; the James Baker Institute; the Council on Foreign Relations, the Washington Institute for Near East Policy, and the US Army War College.

As well as countless newspapers and oil journals.

And many of these voices are unapologetic. They are brazenly saying that the best way to undermine OPEC is to oust Saddam Hussein.

While others are a bit more circumspect, and all they’re saying is, “Gee, if Saddam were to be replaced with a pro-American regime, wouldn’t this be fantastic for America, because:

Oil supplies would increase,
the power of OPEC would be diminished,
we’d be less dependent on Saudi Arabia,
US oil companies could get into Iraq,
and we could boost our military presence in the region.

And then September 11 happened, and suddenly it became even more urgent to reduce our dependence on Saudi Arabia, because Osama Bin Laden has called for the overthrow of the Saudi monarchy, and Osama has said that he wants oil to be $144 dollars a barrel – and I’m not sure how he came up with that figure, but that’s about six times what it’s selling for now!

And September 11 did something else: It gave the current administration a plausible excuse for a full-scale invasion of Iraq.

The aftermath of the war has been entirely predictable. Iraq’s oil industry is now being supervised by Philip Carroll, a former executive at Shell. Carroll has said that he is reviewing all the contracts that the former regime made with foreign oil companies, and that most of these contracts will probably be cancelled.

He has also said that he thinks Iraq will privatize much – if not all – of its oil industry. What does this mean? James Paul, who writes extensively about oil, has made an interesting rough calculation. He starts with the amount of oil that is estimated to lie beneath Iraq, and he assumes that only half this oil is actually recoverable. Then he values this recoverable oil at twenty-five dollars a barrel, subtracts the likely production costs, and in this way he estimates that there are some $3 trillion in profits to be made from Iraqi oil. If we assume that these profits are going to be split 50-50 between the oil companies and the new government of Iraq, and we further assume a production period of fifty years, then the oil companies that are lucky enough to get into Iraq will share some $30 billion in annual profits.

This is a huge sum of money, even by industry standards, so it’s little wonder that oil companies are lining up at Philip Carroll’s door – and Carroll has already said that countries that did not support the war will not be allowed to participate in Iraq’s reconstruction. In other words, the lion’s share of these new contracts is going to go to US and British companies.

And Haliburton, the company formerly run by Vice-president Cheney, has already been awarded some $70 million in oil-related contracts – and it didn’t even have to bid for them!

As for OPEC, Carroll has said that he thinks Iraq will withdraw from OPEC. About ten days later, another US-appointed oil official contradicted him, and said, “No, no, that’s not right”. But most analysts agree that the point is moot, because even if Iraq stays within OPEC, it isn’t likely to agree to any limits on its own production. Therefore, OPEC has been effectively crippled, although it may continue to play a minor role in stabilizing oil prices.

It is highly doubtful that we have reduced the risk from terrorism. But we have certainly succeeded in reducing the threat from high oil prices – at least as long as we can keep a firm grip on 24 million Arabs and Kurds.

And the only surprise is that the Iraqis are so “ungrateful” that we have finally lifted the sanctions and we’re finally going to allow them to develop their own resources – as long as they do it in a way that benefits us.

Anyway, I’d like to go ahead and sum things up, so if you’ll turn your sheet of paper over, you’ll see that I’ve boiled this all down to one key point:

The US has always tried to keep oil prices low, by encouraging vigorous competition between oil producing states.

And now I want to leave you with five questions.

1) To what extent is this a legitimate goal? President Bush has argued quite credibly that low oil prices are good for the whole world, and the countries that benefit the most are the poor and underdeveloped countries. So on the face of it, this would seem to be a very noble goal.

2) Does the US cross a line when it uses its military to enforce competition?

3) By enforcing competition, isn’t the US, in effect, asking oil-producing states to subsidize our gas-guzzling way of life? After all, we’re asking them to limit the growth of their own economies, so that we can continue to benefit from relatively low oil prices.

4) If the US uses its military to enforce competition, isn’t this the same as placing a hidden surcharge on the price of gas? We all pay for the US military. But do we all benefit equally from our aggressive foreign policy? Who benefits most from this surcharge? Is it you and me? Or is it the industries that depend most heavily on cheap oil – like the airline industry, and the SUV industry, and the big oil companies that have always profited from keeping us dependent on oil.

And the last question is perhaps the most important.

5) Is America trading blood for oil?

I think it’s time that we all recognize that the answer is a definite, “Yes”.

Thank you very much.

[Sources available upon request]

tefelhall@msn.com

http://tefelhall.com/oldwebsite/Articles/Oil%20and%20the%20War%20in%20Iraq.htm

Bill Totten http://www.ashisuto.co.jp/english/

Categories: Uncategorized

>The Big Rollover

2005/03/28 2 comments

>Are We Facing Another Oil Crisis?

by Tefel Hall

tefelhall@msn.com (December 19 2002)

The Big Rollover is another term for Peak Oil, the point at which global oil production peaks and demand starts exceeding supply.

For the last hundred years, scientists have been trying to estimate how much oil is in the earth and how much longer it will last. For example, Albert Bartlett, a doctor of physics at the University of Colorado, has shown that even if the entire volume of the earth were filled with oil, the supply would not last humanity more than 342 years (“The Oil Coup”). Such calculations are great for keeping first-year calculus students busy; however, most serious analysts agree that they are completely irrelevant.

The important question for humanity, they say, is this: How long will cheap oil last? In other words, at what point will oil become so exorbitantly expensive that civilization as we know it cannot continue to exist? The answer is disconcerting. Experts from many different fields agree that the days of cheap oil are already over, and the ramifications are enormous.

Understanding the basics of oil depletion/production

It is widely accepted that the depletion of a finite resource such as oil follows a bell curve (“The Hubbert Peak for World Oil”). See first graph at

http://tefelhall.com/oldwebsite/Articles/The%20Big%20Rollover.htm

To understand this curve, start on the left side of the graph. It is plain that when oil was first discovered, only a dribble was produced. The reasons are fairly obvious. First, there was hardly any demand for oil, and second, engineers did not have the technological know-how to extract large quantities from the ground. Then, following the development of the oil combustion engine, the demand for oil picked up, and therefore so did production. More holes were drilled in the ground, and the industry’s growing expertise led to a faster rate of discovery. These things account for the steep rise in the curve.

However, there comes a point when drilling more holes does not lead to an increase in production. All the really good oil fields have already been discovered, and the ones which remain are smaller and less accessible (like at the bottom of the sea). At this point, the curve starts to peak (or flatten out). And that is pretty much where we are today.

In the future, new oil fields will certainly be discovered, and some of them may be quite large. But petroleum geologists predict that each new hole which is drilled in the ground will have less of a chance of striking oil, and each strike, on average, will be smaller and of poorer quality. Meanwhile, old wells are drying up (“Investing on”).

These things account for the downward slope of the curve. Eventually, the remaining oil becomes so hard to extract that the curve once again flattens out, as only a dribble can be pulled from the ground, no matter how hard anybody tries.

In short, the curve represents the rate at which oil is pumped, or depleted, and the space beneath the curve represents the total amount of oil that remains. Since we are now at the peak of the curve, we have, theoretically, consumed about half of the recoverable oil in the world. That means the glass is both half full and half empty. While it is true that there is still a lot of oil left, from now on, the rate of recovery will decrease.

Here is another way of looking at it: Picture a giant tap from which the world’s oil flows. About a hundred years ago, someone opened the tap, but only slightly. Then slowly, over the last hundred years, the tap has been opening wider and wider. At the moment, the tap is open full blast, and oil is gushing out at an unprecedented (and unsustainable) rate. Soon, the tap will slowly start to constrict, until, about a hundred years from now, it will, for all practical purposes, close shut.

This theory of oil depletion has already proven accurate on smaller scales. The bell curve is used to predict the longevity of individual oil fields, as well as the life span of oil-producing regions. In Texas, for example, oil production peaked in the 1970s. In the Middle East, oil production may not peak for another ten years (“Oil Supply Prospects”). But globally, the peak is now, or next year, or certainly, within the next few decades (Magoon).

Understanding the basics of oil consumption/demand

The demand for a finite resource such as oil follows a very different kind of curve. It is widely accepted that demand for oil will continue to grow exponentially. This is due to population growth, and the fact that much of the underdeveloped world is just now starting to drive cars and convert to petroleum economies. See second graph at

http://tefelhall.com/oldwebsite/Articles/The%20Big%20Rollover.htm

The problem

By now, the problem should be fairly obvious. If both curves were superimposed, it would be easy to see that at some point in time, demand outstrips supply. Since for all practical purposes this point coincides with the peak of the oil-hump, it is often called the Big Rollover. See third graph at

http://tefelhall.com/oldwebsite/Articles/The%20Big%20Rollover.htm

The Big Rollover (often called peak oil), is the subject of a complicated scientific debate, and the actual (or predicted) shape of the rollover depends on which expert is crunching the numbers. The numbers, too, are contested, since no one can be certain how much oil is in the earth, or how future technologies may impact both supply and demand.

Yet despite the intricacies and uncertainties which surround this debate, the consensus of expert opinion is that the Big Rollover is happening now, or next year, or in the very near future: certainly, within the next few decades (Magoon). In short, the world oil market is currently in the midst of a grand transition, from a buyer’s to a seller’s market. And that means that oil is about to get a lot more expensive.

Then what?

In an ideal world, rising oil prices would spur investment in conservation and alternative energy technologies. A “price signal” would cause people to switch to more economical sources of energy (Fleming). It might be a bit uncomfortable, at first, but surely within the next few decades, some breakthrough technology will once again make energy cheap and abundant. Industrialized nations will easily be able to wean themselves off oil.

That is called the so-called “economic” model, and it’s the scenario which many government and industry officials are pitching (Leach). Certainly, the oil industry doesn’t want to alarm people into thinking that oil will soon become scarce. Their biggest fear is that people might switch to other sources of energy, before they have finished pumping all the oil out of the ground (Fleming).

Meanwhile, a significant number of futurists are screaming from the sidelines, trying to get the world’s attention (Stanley). They claim that the economic model is patently unrealistic, when applied to a finite resource such as oil. David Fleming, author of The Lean Economy, is one such vociferous critic, and he points out at least four reasons why the principles of market economics do not apply.

First, he notes that the price of oil today has virtually no influence on the rate at which it is discovered. In fact, most of the oil consumed today was discovered over forty years ago. Back then, the world was in the midst of a discovery boom. But, according to Fleming, “There is no conceivable increase in prices” which could bring those boom days back (Fleming). In the words of another scientific doomsayer, “This is a matter of oil reservoir physics rather than production technology or economics” (Leach).

Second, Fleming claims that many economists have failed to grasp the importance of the Big Rollover. The problem is that they look at the total quantity of oil that is left in the earth, and therefore they see no reason for immediate worry. What they have failed to grasp, according to Fleming, is that the total quantity is largely irrelevant, since it is the rate at which oil is pumped from the ground which determines the world’s supply. And, as the oil-tap starts to inexorably close, there is simply no way that producers will be able to supply an oil-thirsty world with all the fuel that it demands.

Third, Fleming decries the use of abstract figures which do not take into account the realities of specific oil-dependent industries. For example, he states:

“Arcane calculations about the impact of oil prices on growth rates are irrelevant. While it is true that oil has declined as a percentage of all energy use in the UK since 1973 (from 45 per cent to 33 per cent), the volume of transport, which depends entirely on oil, has doubled. We are twice as dependent on transport as we were in 1973 [the year of the Arab oil embargo]. Arguments about ‘reduced dependency’ would be correct were it not for one problem: we do not fill up our cars with percentages.

Fourth, Fleming claims that economists tend to presume, erroneously, that as soon as the price of oil becomes prohibitive, alternative sources of energy will suddenly flood the market, ready to heat the world’s homes and power its cars. But Fleming points to studies which show that even a determined push toward renewable energy sources would not have any significant impact for at least another 25 years. That leaves a 25-year “energy gap” in which all sorts of global upheavals are likely to occur.

Fleming concludes that many economists are simply out of touch with the real world:

“So it does seem that one reason we find ourselves in this surreal situation, with devastating change unrecognized by the experts and dismissed by government, is that the problem falls outside the mind-set of market economics. Expertise, it seems, trumps common sense. Maybe, for a moment, we should stop thinking, and just feel the reality of energy famine. In the last few months, there are already people in the poorer countries who have found that the cost of paraffin for cooking is beyond their reach” (Fleming).

That passage was written in November 2000, when the price of oil was rising steeply after a decade of relative stability. Since then, prices have not come back down. In 2001, volatile oil markets convinced some analysts that the Big Rollover had finally arrived, as originally predicted more than thirty years ago (Hubbert, Fleming). Then the terrorist attacks of 9-11 caused a reduction in air travel, and global recession also slowed the demand for oil, perhaps postponing the inevitable slide down the depletion curve a little longer.

In 2002, oil markets remain volatile, and no one seems sure whether this is due to a flattening supply, OPEC militancy, or simply the political uncertainties caused by the war in Afghanistan, renewed tensions between Israel and the Arab world, and the current US saber rattling against Iraq. Perhaps the answer will be clear by next year. In any case, there’s at least a good possibility that the amount of oil which is pumped from the ground today may be the largest daily total ever pumped – in the entire history of the world.

Doomsday scenarios

If, as Fleming and others contend, alternative technologies are in no way ready to make up for the world’s dwindling oil supplies, then a lot of grim scenarios become plausible. One highly respected (albeit controversial) futurist predicts a total collapse of civilization within the next thirty years (Duncan). Others are less pessimistic, but their forecasts still abound with gloom and doom. They note, for example, that many solutions to the world’s problems depend on a cheap source of energy. Drinking water can easily be made from sea water, for instance, but only if a cheap source of energy (such as oil) is available. They also note that technological cures have never fully materialized.

At present, the industries most heavily dependent on oil are agriculture and transport. When prices jump, these industries will be the first and most severely affected. Poorer countries (already ridden by debt because they must borrow money in order to import oil) will suffer famines due to food distribution problems and the prohibitive cost of irrigating and fertilizing crops. As people starve and industries grind to a halt, economies will collapse and political upheavals will likely become commonplace.

Nor will richer nations be spared the agonies of rising oil prices. In fact, some people point out that highly developed nations may suffer the most, because they have the farthest to fall. The US, for example, currently consumes about a quarter of the world’s oil supply. This is an exorbitant amount, considering that Americans comprise only five percent of the world’s population (Huffington). In this regard, an interesting analogy has been made by author and college professor Richard Heinberg:

“The significance of [The Big Rollover] is difficult to overstate. The industrial revolution, still continuing, is all about replacing human and animal labor with the work of machines running directly or indirectly on fossil energy. Each day, the energy from oil used by people around the world equals the work of some 180 billion humans. It is as if the average global man, woman, or child had 30 slaves toiling around the clock. But those petroleum “ghost slaves” are not evenly distributed. Each of us in the US has, on average, more than 120 of them. This is the energetic basis of our American Way of Life.”

Can Americans cope without all their oily ghost slaves? Barring some new miracle technology, it appears the answer is no. If and when oil prices skyrocket, long gas lines and empty shelves may the least of America’s worries. The US economy is built around the assumption of cheap, long-distance transport, and a sudden disruption of oil supplies could shut the US economy down “within days” (Fleming).

Even more ominously, futurists predict a semi-permanent state of war between oil-gluttonous nations, such as the United States , and the oil-rich Arab countries in the Middle East (Ehrenfeld).

America’s dependence on foreign oil

Nixon once boasted that he was the first president to address the energy problem (LeRoy Miller 15). Certainly, every successive administration has also spoken of the need to lessen America’s dependence on foreign oil. But rhetoric is one thing, and action is another.

As the oil industry rode the production curve skyward, reaping enormous profits, it undermined efforts to change US energy policy. Meanwhile, oil-producing nations have kept prices low, in order to encourage profligate consumption. The end result is that very little has been done to prepare America for the inevitable rollover. Richard Holbrooke, currently the head of the anti-terrorism task force at the Council on Foreign Relations, spoke publicly about this failure when interviewed for the program Frontline:

“If you believe, as I do, that our problems should be less dependence on oil, foreign oil, then the one president in our lifetime who really attacked this problem head on was Jimmy Carter with his Project Independence. And that project, which was designed to reduce our dependence on foreign oil over a ten-year or twenty-year period, was abandoned the minute his successors took power in 1981. I think that was a great tragedy (quoted in PBS: Frontline).

Given this lack of concerted action, it appears that America will probably face the full brunt of rollover, and the only real question is: How bad will it be? L B Magoon of the respected US Geological Survey says, “If we don’t recognize the problem soon and deal with it, it’s going to be quite a ride!”

Donald Hodel, former Secretary of Energy under Ronald Reagan, has put it more bluntly: “[The US] is sleepwalking into a disaster” (quoted in Kelly).

To say, however, that the US is wholly unprepared is somewhat misleading. Some years ago, someone asked Irwin Stelzer of The Weekly Standard what America’s energy policy was. He replied: “Aircraft carriers” (quoted in Stelzer).

Those aircraft carriers are now arrayed against a single man, Saddam Hussein. Could there be a link between the Big Rollover and the current conflict with Iraq? Many analysts think so (Chin, Kolskegg). In fact, it’s something of an open secret, as many very influential conservatives have publicly called on the Bush administration to “secure” a supply of Mideast oil before it’s too late (Moorer, Lowry), and the oil-soaked objectives of some powerful US policymakers have been widely reported in the media (Klebnikov, Tolan). In any case, the fate of Iraq’s oil wealth is certain to be a major issue following any war (Beaumont).

Conclusion

Modern politicians can’t really say, “We’re going to war because we covet more oil than we can cheaply get our hands on”. Historians, however, invariably conclude, “The war was fought over oil”. Given that historians always have the last word, it would be reasonable to place the burden of proof on anyone who claims that the current war with Iraq is not about oil.

Yet this particular war may not be the issue. The uncomfortable truth is that geologists have long predicted that the turn of the millennium would mark the beginning of the end for the world’s petroleum economies (Fleming). Yet American policymakers have largely ignored their warnings. So now, or soon, Americans will face a stark choice: either send their sons and daughters off to die in foreign wars, or learn to live without so many oil-slaves. Either way, it is plain to see that the ramifications of the Big Rollover are enormous.

Works Cited

Beaumont, Peter, and Faisal Islam. A Focus: Attack on Iraq : Carve-up of oil riches begins: US plans to ditch industry rivals and force ed of Opec, write Peter Beaumont and Faisal Islam. @ The Observer 3 Nov. 2002: 16.

Chin, Larry. A The Deep Politics of Regime Removal in Iraq : Overt Conquest, Covert Operations. @ Online Journal . 24 Oct. 2002. 15 Dec. 2002. .

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Ehrenfeld, Temma, and Jane Byrant Quinn. A Iraq : It = s the Oil, Stupid. @ Newsweek 30 September, 2002. Vol. 140 Issue 14, p43 1p, 1bw; Database: MasterFILE Premier; also posted on MSNBC 2 Nov. 2002. .

Fleming, David. A After Oil. @ Prospect Magazine November 2000. 28 Oct. 2002. .

Heinberg, Richard. A Oil, War, and Terror. @ Museletter # 116 . Oct. 2001. 16 Dec. 2002. .

Hubbert, M. King. A Energy and Power. @ A Scientific American Book 1971: 29. Graph pictured in M. King Hubbert. The Coming Global Oil Crisis . 15 Dec. 2002. .

Huffington, Arianna. A Support Our Troops, Dump That SUV. @ Arianna Online . 14 Nov. 2001. 15 Dec. 2002. .

A Investing on the Hubbert = s Curve. @ Editor = s Comments. Oil and Gas Investor . Jan. 2002. 15 Dec. 2002. .

Kelly, Martin. A American Spies and Blood for Oil. @ Nonviolence.org . 15 Jan. 1999. 31 Oct. 2002. .

Klebnikov, Paul. A Hitting OPEC By Way of Baghdad . @ Forbes . 28 Oct. 2002: Vol. 170, Issue 9. Database: MasterFile Premier.

Kolskegg, Max. A 9/11: A Desperate Provocation by US Capitalism. @ Boston Indymedia . 24 Jan. 2002. 16 Dec. 2002. .

Leach, Gerald. A The Coming Decline of Oil. @ Tiempo [Date unclear, late 2001] 15 Nov. 2002. .

LeRoy Miller, Roger. The Economics of Energy: What Went Wrong and How We Can Fix It . New York : William Morrow. 1974.

Lowry, Richard. A End Iraq B To conclude the Gulf War, ten years later. @ National Review 15 Oct. 2001.

Magoon, L. B. A Running Out Of Oil? @ USGS 11 June 2001. 15 Dec. 2002. .

Moorer, Adm. Thomas H. A Oil is not well in the Gulf. @ WorldNetDaily . 23 Dec. 2000. 25 November, 2002. .

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PBS: Frontline. A interview richard holbrooke. @ Oct. 2001. 29 Oct. 2002. .

Stanley, Bruce. A Oil Supply Seen Set to Decline. @ The Washington Times 28 May 2002. 15 Dec. 2002. .

Stelzer, Irwin M. A What to Do About the Energy Crunch. @ Commentary March 2001.

A The Hubbert Peak for World Oil. @ Hubbert Peak of Oil Production . 12 Feb. 2001. 28 October, 2002. .

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Tolan, Sandy . A Beyond Regime Change; The administration doesn = t simply want to oust Saddam Hussein. It wants to redraw the Mideast map. @ Los Angeles Times 1 Dec. 2002: M.1.

http://tefelhall.com/oldwebsite/Articles/The%20Big%20Rollover.htm

Bill Totten http://www.ashisuto.co.jp/english/

Categories: Uncategorized

>Water Scarcity and the Future of "Greater" Israel

2005/03/27 2 comments

>by Tefel Hall

tefelhall@msn.com (April 21 2003)

For thirty-five years, Israel has thwarted the establishment of an independent Palestinian state. Ostensibly, Israel claims that such a state would be a threat to its own security: it insists that it needs a buffer zone between itself and its hostile neighbors, and it claims that the Palestinians cannot be trusted with independence. These claims are of doubtful validity. A more plausible explanation for Israel’s intransigence is that a Palestinian state would expose the hypocrisy of Israel’s unfair water policies.

In the early 1950s, Israel began siphoning off water from the Jordan River and the Lake of Galilee. The amount of water it takes from these sources is considerable. Driven by the Zionist of ideal of “making the desert bloom”, the Israelis aggressively built a National Water Carrier – a network of pipes and canals – that brought water from the highlands of Galilee to the Negev desert and the coastal plain (Deconinck).

Largely as a result of this construction, the water level of the lower Jordan dwindled to a trickle. Today, the amount of water that empties into the Dead Sea is only one-eighth the amount that emptied into the sea fifty years ago (Barlow). Furthermore, the water of the lower Jordan has become excessively saline, threatening the environment (“The Jordan River Basin”).

Needless to say, the drying up of the lower Jordan also affects the economic development of the people who live on its banks: Palestinian Arabs who once depended on the river for water. Their complaints, however, have fallen on deaf ears. The Israeli government claims that water should be harnessed at its source (Darwish, “Water Wars”). In effect, the government is basing its water rights on the Harmon Doctrine, an outdated legal principle which asserts that upstream countries can use their water resources any way they like, without concern for riparian communities downstream (Topkaya).

After the 1967 war, Israel took control of the West Bank. Among the many restrictions it placed on the West Bank Palestinians, the military administration strictly limited the ability of the Palestinians to drill new wells (“Control over Water”). As the Palestinian population rose, per capita water consumption in the Occupied Territories decreased. Meanwhile, Jewish settlers were permitted to drill extremely deep wells, and the amount of water that settlers draw from the West Bank aquifer has caused many of the shallower Palestinian wells to run dry (Darwish, “Water Wars”). Naturally, Palestinians feel that this is grossly unfair. The mountain aquifer is right beneath their feet: why shouldn’t they be allowed equal access to it?

The reason, say the Israelis, is matter of geography: much of the rainwater that falls on the West Bank soaks into the mountain aquifer, then trickles gradually down the slopes into Israel proper, emerging in the foothills from springs (Deconinck). In other words, Israel is downstream of the aquifer, and if the Palestinians extract more water in the hills, then less will flow to the plains.

The only legal justification for depriving Palestinians of rainwater which falls on their own land is another out-dated legal theory, the theory of “absolute territorial integrity”. According to this principle, a riparian State may not develop its water resources if it will cause harm to a downstream state (Topkaya). Obviously, this theory is in direct contradiction to the Harmon Doctrine.

In short, the Palestinians are being squeezed by two contradictory legal theories: they are being denied access to the waters of the Jordan because they are downstream of Israel, yet at the same time, they are being denied access to their own aquifer because it is upstream of Israel. The inconsistency of the Israeli position is blatant, and it is doubtful that any Israeli lawyer would care to defend the Israeli position in an international court. Conveniently, they don’t have to: the West Bank is not a sovereign state, and therefore international laws cannot be applied (Darwish, “Water Wars”).

However, if the Palestinians were to gain their independence, their legal position would be greatly strengthened. According to Franklin Spinney, a writer who works in the US Department of Defense:

“Establishing a viable Palestinian state on the West Bank could internationalize as much as two thirds of Israel’s water budget. Such a development would place Israel on the horns of a dilemma: if Israel insisted on its downstream rights to the mountain aquifer, it would validate the same Palestinian claim on water flowing out of the Upper Jordan basin. But if Israel denied the Palestinian downstream riparian claim on the Upper Jordan basin, it would invite a reciprocal preemption by the Palestinians with regard to water flowing out of the mountain aquifer.”

Clearly, Israel has an interest in maintaining the status quo, based on its military superiority. It is therefore not surprising that when President Bush recently offered a “roadmap” for a political settlement (March 2003), Ariel Sharon’s government responded by asking that all references to an “independent” Palestinian state be eliminated. Instead, the Israelis claim that they are prepared, in theory, to accept a Palestinian state with “certain attributes of sovereignty”, as long as Israel maintains control of Palestine’s underground water resources (McGreal).

This is but the latest incident of many which demonstrate how jealously Israel guards its water supply. In 1965, Israel attacked Syria to stop it from completing a damn project that would have diverted water from the Jordan river (Grunfel). And in 1967, water tensions flared into all-out war. Ariel Sharon (then a general) has said, “People generally regard 5 June 1967 as the day the Six-day war began. That is the official date. But, in reality, it started two-and-a-half years earlier, on the day Israel decided to act against the diversion of the Jordan” (quoted in Darwish, “Water Wars”).

Prime Minister Sharon no doubt takes pride in Israel’s legendary “victory”, but one must not forget that victory is incomplete without peace, and a final peace deal between Israel and Syria has yet to be reached. Nor is such a peace deal likely in the foreseeable future, considering the fact that Israel cannot return the Golan Heights to Syria without risking its claim to about one-third of its fresh water (Zaslavsky). Indeed, according to an Israeli military report, water security is one of the primary reasons that Israel’s military opposes the return of the Golan Heights, despite the fact that their occupation is the main obstacle to peace (Darwish, “Water Wars”).

Given these historical trends, it is unlikely that in the future Israel will accept international arbitration on water issues, either with Syria or with a potentially independent Palestinian state. In 1997, Israel abstained from voting for the UN Convention on the Law of Non-navigational Uses of International Watercourses, the most recent attempt to codify international water laws. Among Israel’s objections to the Convention was Article 33, which gives the United Nations a voice in settling disputes (“United Nations”). Israel, it seems, prefers to settle disputes by relying on its military superiority, without outside interference.

But Israel’s water disputes with the Palestinians aren’t likely to go away, nor can Israel continue indefinitely to suppress the Palestinians militarily. When people are dying of thirst, they have not choice but to rebel. And Palestinians are already suffering from a severe water crisis. Water rationing in the Occupied Territories is commonplace, and Palestinians in Gaza are exposed to severe health risks because the water in the Gaza aquifer has become salinated and polluted, due to over-pumping (Gould).

Israel tries to deflect responsibility for this crisis by blaming the Palestinians; it claims that Palestinians mismanage their water resources. But the fault lies in the lengthy occupation. For 35 years, Israel has made only minimal investments in the water infrastructure of the the Occupied Territories, while the depressed economic condition of the Palestinians has prevented them from switching to more water-efficient methods of agriculture (Grunfel, Deconinck). Even following the Oslo accords, Israel has continued to maintain almost total control of the water sector in the Occupied Territories (“Water Issues”). For these reasons, a 1998 report by the Israeli human rights organization B’Tselem places the blame squarely on Israel’s shoulders, and it lambasts Mekorot (Israel’s water authority) for the blatant way it discriminates against Palestinian Arabs:

“The discrimination between Palestinians and Israeli settlers regarding the supply of water is especially conspicuous in the many cases where [Israeli] settlements are located near a Palestinian town or village and are connected to the same Mekorot well. While the settlers benefit from an unlimited quantity of running water – including filling swimming pools and watering lawns, the Palestinian towns and villages suffer a severe shortage of running water, even for drinking and bathing” (“Disputed Waters”).

Only by addressing these inequalities can Israel hope to end the civil war raging within its de facto borders. And Israel must also be prepared to invest heavily in the Palestinian water sector, in order to alleviate the shortages. It is estimated that sixty percent of the water supplied to Jenin is lost through leaks from improper maintenance (“Control”). And many Palestinian farms still use primitive methods of irrigation, wasting untold quantities of water to evaporation. Israel is a world leader in the area of drip irrigation (“Water Consumption”). By extending a helping hand to the Palestinians, it could forestall the depletion of the aquifers on which Israel itself depends .

Israel could also do more to combat wasteful consumption by its own population (Deconinck, Zaslavsky). To do this, Israel must confront some entrenched, but foolhardy, ideologies. For example, Israel has always placed a lot of emphasis on food self-sufficiency, despite the fact that agriculture is a heavy user of water. Shifting its economy away from agriculture would help alleviate Israel’s chronic water shortages (Al-Khayari). At the very least, Israel should stop exporting water-rich fruits and vegetables, as this is tantamount to exporting “virtual water” (Swain). Another example of reckless water management has been pointed out by author Adel Darwish: “For some bizarre ideological motives a number of Israeli farms insist on growing every fruit, vegetable or a crop of which they read in the bible, even if that was not always economically feasible” (“Water Wars”).

Unfortunately, efficient water management is not an adequate long-term solution to Israel’s water problems. The real issue that must be addressed is population growth. In the words of Robert May, a research professor at the University of Oxford:

“Patterns of accelerating resource use, and their variation among regions, are important but secondary: problems of wasteful consumption can be solved if population growth is halted, but such solutions are essentially irrelevant if populations continue to proliferate” (quoted in Bartlett).

Biologist E O Wilson is even blunter:

“The raging monster upon the land is population growth. In its presence, sustainability is but a fragile theoretical construct. To say, as many do, that the difficulties of nations are not due to people but to poor ideology or land-use management is sophistic” (quoted in Bartlett).

At current birth rates, the population of Israel (including Palestine) is expected to double within the next twenty years (Darwish, “Water Wars”). The consequences of leaving this growth unchecked are enormous. According to a 1997 United Nations study, consumption of fresh water tends to increase at twice the rate of population growth (Melanne). There is simply no way that the Jordan River basin can provide that much fresh water. In the words of ecologists, the basin will have exceeded its “carrying capacity”, the number of humans a region can support without damage to the environment. Already, both Israelis and Palestinians complain about the lack of fresh water, and already the depletion of the areas resources is causing permanent environmental damage (Welsh).

Therefore, solving the population problem is key. But slowing population growth is politically difficult, and halting it altogether is probably not feasible. Even in highly developed countries where education and birth control are widely available, populations continue to rise, straining resources (Bartlett). In Israel, the problem is exacerbated by the Zionist tenet of encouraging Jewish immigration, and the high birth rate of the Palestinian population (Al-Khayari).

Immigration could probably be curbed, given the political will. But only draconian laws are likely to bring the area’s birth-rate down to zero. It is highly doubtful that the Israeli government would ever impose such laws on its Jewish population, as the Jewish culture places importance on the duty of procreation (“Judaism”). And while the Israeli government might conceivably try to impose birth control on the Palestinians, it is hard to imagine that such an effort would prove successful.

In fact, there is only one well-known tendency which gives any reason for hope: as societies develop economically, birth rates usually fall (Fargues). Yet this, sadly, is probably a false hope, because developed societies make greater demands on the environment (Deconink, Gould). Thus, Israel now faces a stark and somewhat paradoxical dilemma: It can reduce the environmental impact of the Palestinian population by encouraging economic development in the Occupied Territories, yet economic development would probably only exacerbate its chronic water shortages.

The problem of development is easy to grasp if one thinks of the two hundred thousand Palestinians who are currently not connected to any water network (“Not Even”). Every day, these people must fetch water from a well or a water truck. Some of them have to walk long distances, carrying water in bottles and jerricans. It is hardly surprising that these people consume only a fraction of the water consumed by the average Israeli.

Connecting these people to a water network is a requisite step on their path to the modern world. Yet by doing so, Israel would hasten the depletion of the area’s aquifers. This is the essence of Israel’s conundrum: if it helps to lift the Palestinians out of poverty, it will also be hastening the day when all the area’s wells run dry.

Statistics seem to back up this pessimistic view. The population growth rate in Israel is about one-third of that in the Palestinian territories, yet each Israeli uses, on average, six times as much water as the average Palestinian (Fargues; “Not Even”). If Israel encourages Palestinian development, the environmental savings made by slowing their birthrate will probably be trumped by a net increase in overall water consumption.

Dying democracy

Isaac Asimov, the renowned futurist, had a deep insight into the relationship between overpopulation and democracy. In an interview with Bill Moyers, he was asked: “What happens to the idea of the dignity of the human species if this population growth continues at its present rate?” Asimov responded:

“It will be completely destroyed. I like to use what I call my bathroom metaphor: if two people live in an apartment and there are two bathrooms, then both have freedom of the bathroom. You can go to the bathroom anytime you want to, stay as long as you want for whatever you need. And everyone believes in freedom of the bathroom; it should be right there in the Constitution. But if you have twenty people in the apartment and two bathrooms, no matter how much every person believes in freedom of the bathroom, there is no such thing. You have to set up times for each person, you have to bang on the door, ‘Aren’t you through yet?’ and so on. In the same way, democracy cannot survive [overpopulation]. Human dignity cannot survive [overpopulation]. As you put more and more people onto the world, the value of life not only declines, it disappears. It doesn’t matter if someone dies, the more people there are, the less one person matters” (quoted in Bartlett).

Using Asimov’s analogy, it is clear that Israel has a bathroom shortage – and the people who share the apartment are getting snippety. Palestinians are blowing themselves up on crowded buses, and IDF snipers are shooting little children in the head. Yet few people seem to understand the true nature of the problem. Human rights activists lament the lack of democracy, and they try to address this problem by advocating for Palestinian rights. They believe that if everyone were treated with dignity, then cooperation between Jews and Arabs would eventually solve the water problem.

This is naive. It is the shortage of water which is creating the lack of democracy, not the other way around. The Jewish people are not inherently racist. On the contrary, Jews have a reputation for humanism and tolerance. Yet faced with water scarcity, the Jewish nation has turned its back on its lofty ideals, becoming one of the most racist and undemocratic countries in the developed world.

Even more disturbing, Israel has, for the last several years, targeted Palestinian water sources, as a way of punishing its restive Palestinian population. For example, according to a 1998 news report:

“Units from the Israeli forces have been shooting on water tanks on the roofs to worsen the acute water shortage they have helped to create. Furthermore, they have prevented vehicles with water tanks from reaching a number of sections of the city. There have also been incidents reported of Israeli soldiers shooting at residents who have tried to get water across the checkpoints or the roofs of houses” (“The Israeli Blockade”).

Israel’s descent into barbarism seems to confirm Asimov’s predictions. Yet some people still find reasons for hope. They claim that desalination plants could eventually alleviate the water shortage, or that water could be imported into Israel from water-rich countries such as Turkey. Indeed, plans to import water from Turkey are already in the works. But these solutions would be easier to believe in, were it not for these disquieting facts: desalination requires a cheap source of energy, and the price of oil is expected to rise sharply in the coming decade (Campbell). Moreover, the rest of the world is facing water crises of its own. Turkey, for instance, is currently fending off threats from Syria and Iraq, both of which accuse Turkey of diverting too much water from the Tigris and Euphrates (Darwish “Troubled”).

Only a miracle of technology can avert widespread droughts, famine, and misery in the not-too-distant future. And the kind of warfare we see in Israel today is likely to spread to the rest of the world tomorrow. Israel’s hypocrisy with regard to the water that flows into and out of the West Bank is a telltale sign that the world is thirstier than we have thus far acknowledged, and humanity is far more selfish.

Works Cited

Al-Khayari, Ahmed, et al. “Water Scarcity in the Middle East: A Potential Public Health Crisis”. Boston University School of Public Health. 1999. 20 March 2003. http://dcc2bumc.bu.edu/SCP/99/Controversies99/water_scarcity_in_the_middle_eas.htm

Barlow, Maude, and Tony Clarke. Blue Gold: The Fight to Stop the Corporate Theft of the World’s Water. New York: The New Press. 2002.

Bartlett, Albert A. “Reflections On Sustainability, Population Growth, And The Environment – Revisited”. Renewable Resources Journal, Vol 15, No 4, Winter 1997-98, Pages. 6-23. 20 March 2003. http://dieoff.org/page146.htm

Campbell, C J. “Oil Price and Depletion”. The Coming Global Oil Crisis. 6 June 2000. 21 March 2003. http://www.oilcrisis.com/news/article.asp?id=1083

“Control over Water under Occupation”. B’Tselem. 19 March 2003. http://www.worldrover.com/history/jordan_history.html

Darwish, Adel. “Troubled Water in Rivers of Blood”. World Media. 3 December 1992. 21 March 2003. http://www.mideastnews.com/water004.html

Darwish, Adel. “Water Wars”. Geneva Conference on Environment and Quality of Life. June 1994. http://www.hewett.norfolk.sch.uk/curric/NEWGEOG/Africa/waterwa4.htm

Deconinck, Stefan. “Israeli water policy in a regional context of conflict: prospects for sustainable development for Israelis and Palestinians?” Centre for Sustainable Development. Ghent University (Belgium). 2002. http://waternet.rug.ac.be/waterpolicy.htm

“Disputed Waters: Israel’s Responsibility for the Water Shortage in the Occupied Territories”. B’Tselem. Sept. 1998. 19 March 2003. http://www.btselem.org/English/Publications/Summaries/Disputed_Waters.asp

Fargues, Philippe. “Fertility as a Political Weapon in the Palestinian-Israeli Conflict”. Population Council. 26 October 2000. 23 March 2003. http://www.popcouncil.org/mediacenter/newsreleases/pdr900.html

Gould, Beth. “Nowhere a drop to drink: The Politics of Water in the Middle East”. Satya. July 1998. 19 March 2003. http://www.montelis.com/satya/backissues/jul98/water.html

Grunfel, Lilach. “Jordan River Dispute”. ICE Case Studies. Spring 1997. 19 March 2003. http://www.american.edu/projects/mandala/TED/ice/JORDAN.HTM

“Judaism and the Population Crisis”. The Schwartz Collection of Judaism, Vegetarianism, and Animal Rights. 20 March 2003. http://schwartz.enviroweb.org/popcrsis.html

McGreal, Chris. “No independent Palestine, Sharon insists”. Middle East Information Center. 17 March 2003. 21 March 2003. http://middleeastinfo.org/article2241.html

Melanne Andromecca Civic. “Water Scarcity in the Jordan River Basin”. USIS Global Issues. March 1999. 20 March 2003. http://greennature.com/article84.html

“Not Even A Drop”. B’Tselem. 8 May 2001. 19 April 2003.http://www.btselem.org?English/Press_Releases/2001/010805.asp

Swain, Ashok. “A New Challenge: Water Scarcity in the Arab World”. Arab Studies Quarterly. Winter98, Vol. 20 issue 1, p1. 19 April 2003. http://web.macam.ac.il/~arnon/Int-ME/water/Water%20scarcity%20in%20the%20Arab%20world.htm

“The Jordan River Basin”. Green Cross International. 22 March 2003.
http:www.gci.ch/GreenCrossPrograms/waterres/pdf/WFP_Jordan.pdf

“The Israeli Blockade of Hebron”. LAW – The Palestinian Society for the Protection of Human Rights and the Environment. 27 Aug. 1998. 19 April 2003. http://leb.net/~bcome/palestine/israeli-blockade.html

Topkaya, Bulent. “Water Resources in the Middle East: Forthcoming Problems and Solutions for Sustainable Development of the Region”. Akdeniz University Faculty of Engineering, Dept of Environmental Engineering. Antalya Turkey. July 1998. http://www.akdeniz.edu.tr/muhfak/publications/gap.html

“United Nations General Assembly Press Release GA/9248”. The Water Page. 21 March 2003. http://www.thewaterpage.com/UNPressWater.htm

“Water Consumption”. M.F.A. 19 April 2003.
http://www.israel-mfa.gov.il/mfa/go.asp?MFAH0as70

“Water Issues under the Oslo Accords”. B’Tselem. 19 March 2003. http://www.btselem.org/English/Water/Water_under_Oslo_eng.asp

Welsh, Paul. “Water conflict in the Middle East”. BBC News. 2 June 2000. http://news.bbc.co.uk/1/hi/world/middle_east/764142.stm

Zaslavsky, Dan. “Definition of Israel’s Water Problems”. Technion-Israel Institue of Technology. 14 June 2000. http://216.239.53.100/search?q=cache:hE2A5xXoL70C:www.biu.ac.il/SOC/besa/water/zaslavsky.pdf+%22definition+of+Israel%27s+water+Problems%22+Zaslavsky&hl=en&ie=UTF-8>.

http://tefelhall.com/oldwebsite/Articles/Water%20Scarcity.htm

Bill Totten http://www.ashisuto.co.jp/english/

Categories: Uncategorized

>Adam Smith Would Decry President Bush’s Hubris …

>… and Business Education

by Yoshi Tsurumi (March 22 2005)

President George W Bush is the first president of the US with a Master’s of Business Administration (MBA). Yet, he epitomizes the worst aspects of America’s business education. To privatize Social Security, he is peddling a colossal lie about its solvency. It is the propaganda of lying, not personal integrity, that counts in his presidency. Business education has also produced Enron’s Jeff Skilling and other MBAs behind the malfeasances of Tyco, HealthSouth, Haliburton, AIG, and WorldCom. Many executives of Corporate America who hold MBAs have also been engaged in the unethical acts of raiding their corporate treasuries at the expense of employees and stockholders. President Bush and the business aristocrats show no compassion for working Americans, robbing them to benefit big business and the very rich. Last year, due to Bush tax cuts, over 80 of America’s most profitable 200 corporations did not pay even a penny of their federal and state income taxes. Meanwhile, to pay for his additional tax cuts for the very rich, President Bush is drastically cutting the federal lunch programs for poor children.

Emulating President Bush’s hubris, one CEO after another of Corporate America give themselves obscenely large bonuses that have little to do with their performance. To pay for such self-dealt compensations, corporate aristocrats lay off their workers, cut ordinary employees’ health benefits, and outsource jobs abroad. Under the Bush Administration, over 5 million Americans have lost their health benefits and America has lost over 2.7 million quality manufacturing jobs. In 1980, the CEOs of Fortune 500 large corporations received, on average, 70 times larger annual compensations than their average employees. Under the Bush Administration, comparable CEOs have come to give themselves 600 to 1,000 times larger annual compensations than their rank-and-file employees whose pay has stagnated. President Bush and his rapacious “captains of piracy” of Corporate America are destroying America’s democracy built up since Franklin D. Roosevelt’s “New Deal” era. No wonder that other nations do not trust President Bush’s promised democracy for Iraq.

Thirty years ago, President Bush was my student at Harvard Business School. In my class, he called Roosevelt a “socialist” and was against Social Security, unemployment insurance, Securities and Exchange Commission and other New Deal innovations. He refused to understand that capitalism becomes corrupt without democratic civic values and ethical restraints.

In those days, George W. Bush belonged to a minority of MBA students who were seriously disconnected from taking the moral and social responsibility for their actions. Today, he would fit in comfortably with an overwhelming majority of business students and teachers whose role models are celebrated captains of piracy. Since the 1980’s, as neo-conservatives captured the Republican Party, America’s business education has also increasingly become contaminated by the robber baron culture of the pre-Great Depression era.

Meanwhile, American economics study has increasingly become a pseudoscience of mathematical formula manipulation that is devoid of humanity. This economics has conquered America’s business education and become fused with the robber baron culture of greed supremacy. American MBA’s are taught to treat ordinary employees as disposable costs and to swallow uncritically the gospel that corporations exist only to reward abstract stockholders. MBA’s are taught the pretend-science of manipulating accounting, finance, employees, customers, and stock prices. Financial games and hostile takeovers of competitors are taught to accomplish corporations’ sole objective to make money and manipulate stock prices. Such a mistaken view of corporations has caused the dismal decline of American auto manufacturers while Toyota and Honda widen their market shares and profits in America, pursuing their goals of expanding employment and technological innovations.

To justify the robber baron culture, America’s business educators and economists falsely cite their demigod of laissez-faire market economics, Adam Smith. Little do they know that Adam Smith in fact scathingly castigated the Bush type of government-business collusion and unfair taxes, Wal-Mart’s exploitations of labor and communities, and robber barons’ hubris. No where in his 900-page book, The Wealth of Nations, does Adam Smith even imply that those who knowingly harm others and society in their pursuit of personal greed also benefit their society. He rejects the notion that a corporation exists to make money without ethical constraints.

Yoshi Tsurumi is Professor of International Business at Baruch College, the City University of New York, 17 Lexington Avenue, New York, New York 10010.
Tel: 646-312-3286 E-Mail: yoshi_tsurumi@baruch.cuny.edu

Bill Totten http://www.ashisuto.co.jp/english/

Categories: Uncategorized

>Mapping The Oil Motive

>by Michael T Klare

ZNet (March 19 2005)

What role did oil play in the US decision to invade Iraq? If oil did play a significant role, what, exactly, did President Bush and his associates hope to accomplish in this regard? To what degree did they succeed? These are questions that will no doubt occupy analysts for many years to come, but that can and should be answered now – as the American people debate the validity of the invasion and Bush administration gears up for a possible war against Iran under circumstances very similar to those prevailing in Iraq in early 2003.

In addressing these questions, it should be noted that the US invasion of Iraq was a matter of choice, not of necessity. The United States did not act in response to an aggressive move by a hostile power directed against this country or one of its allies, but rather employed force on its own volition to advance (what the administration viewed as) US national interests. This means that we cannot identify a precipitating action for war, but instead must examine the calculus of costs and benefits that persuaded President Bush to invade Iraq at that particular moment. On one side of this ledger were the disincentives to war: the loss of American lives, the expenditure of vast sums of money and the alienation of America’s allies. To outweigh these negatives, and opt for war, would require powerful incentives. But what were they? This is the question that has so bedeviled pundits and analysts since the onset of combat.

It is highly doubtful that any one factor tipped the balance toward invasion. A war of choice is rarely precipitated by a single objective, but rather stems from a combination of contributing factors. In this case, many come to mind: legitimate concern over Saddam Hussein’s weapons of mass destruction; an inclination to demonstrate the effectiveness of the administration’s “pre-emptive” war doctrine; increased security for Israel; the promotion of democracy in the Middle East; US domination of the Persian Gulf region; and a thirst for Iraqi oil. All of these, and possibly others, are likely to have figured to some degree in the president’s decision to invade. What is difficult is to ascertain is how these factors were ranked in the administration’s calculus; what we can do, however, is to put them into some sort of context, to show how they formed an overpowering nexus of motives that outweighed the disincentives to war. And here, oil proves essential.

The starting point for such an assessment is the locale for this war: the Persian Gulf region, home to two-thirds of the world’s known oil reserves. For more than forty years, US foreign policy has been guided by America’s growing dependence on oil supplies from the Middle East. Embraced by both Republicans and Democrats, this policy is known as the Carter doctrine because it was articulated most clearly by President Jimmy Carter in 1980.

Presidents Reagan, Bush Senior and Clinton have all acted under the banner of the Carter Doctrine: supporting Iraq during the Iran-Iraq war (1980-88), opposing Iraq by liberating Kuwait in 1991, imposing sanctions and no-fly zones between 1991 and 2003. As I described in the December issue of The Progressive, Bush and the neocons used the banner of the war on terror after 9/11 to massively expand American capacity to employ force in the pursuit of global oil reserves.

Setting The Stage For War

When George W Bush entered the White House in February 2001, Iraq was still under sanctions, and Saddam Hussein remained in power. At this point, Bush ordered two major reviews of American policy: an assessment of the effectiveness of sanctions by then Secretary of State Colin Powell, and a review if US energy policy by Vice President Dick Cheney. Although prompted by separate concerns – the survival of Saddam Hussein in one case, persistent energy shortages in the other – these two reviews both focused attention on developments in the Persian Gulf and together set the stage for the 2003 invasion of Iraq.

The first review, completed at some point in the late spring, concluded that sanctions had not only failed in their intended purpose of unseating Hussein, but had also strengthened his position by making it appear that the United States was victimizing the poor and downtrodden population of Iraq. To make matters worse, Hussein appeared to be using the United Nation’s “oil for food” program to accumulate funds for the acquisition of arms and illicit weapons technology.

The second review, released as the National Energy Policy on May 17 2001, also described a worrisome situation: domestic oil production in the United States was in irreversible decline at a time of soaring energy demand, and so the nation was becoming increasingly dependent on imported energy. But while expressing concern over the dangers inherent in this situation, the authors of the report concluded that the United States had no choice but to increase its reliance on imports in order to fuel the nation’s cars and factories. And because so much of the world’s remaining untapped petroleum lay in the Persian Gulf area, US energy policy would have to concentrate on gaining greater access to these supplies. “By any estimation, Middle East oil producers will remain central to world oil security”, the NEP affirmed. Hence, “The Gulf will be a primary focus of US international energy policy”.

The NEP also made it clear that the existing oil infrastructure in the Persian Gulf was inadequate to produce the much higher levels of oil that would be needed to satisfy projected US and international requirements in the years ahead. According to the 2001 edition of the Department of Energy’s International Energy Outlook, the Gulf countries would have to nearly double their combined output, from approximately 24 million barrels per day million barrels per day to 45 million barrels, in order to meet anticipated world demand in 2020 – a Herculean task that exceeded the capacities of many of the region’s prevailing regimes, including those in Iran and Iraq. Only if US firms were allowed to come in and take over production in these Gulf countries, the NEP hinted, would it be possible to quench the world’s insatiable thirst for oil.

The two reviews thus reached several complementary conclusions: the sanctions regime was in disarray; Hussein continued to pose a threat to Persian Gulf security; the United States needed more Persian Gulf oil; and ways had to be found to insert US oil firms into the region. How, then, to reconcile all of these concerns? In the end, only one option promised to secure all of these objectives: the forcible removal of Saddam Hussein and his replacement by a regime disposed to satisfy US energy objectives. And so, in late 2001 or early 2002, the administration decided to invade Iraq.

That these various factors were intertwined in the administration’s thinking is clearly evident from the most important speech given by Vice President Dick Cheney on the reasons for war, in an address before the Veterans of Foreign Wars on August 25 2002. “Should all [of Hussein’s WMD] ambitions be realized, the implications would be enormous”, he declared. “Armed with an arsenal of these weapons of terror and a set atop ten percent of the world’s oil reserves, Saddam Hussein could then be expected to seek domination of the entire Middle East, take control of a great portion of the world’s energy supplies, directly threaten America’s friends throughout the region, and subject the United States or any other nation to nuclear blackmail”. From this perspective, inaction was unthinkable.

Hands In the Honeypot

Having decided to eliminate Hussein, the Bush administration set out to ensure that any successor regime would be predisposed to satisfy US energy objectives. Ahmad Chalabi, a former Iraqi banker who was being groomed by the Department of Defense to serve as Iraq’s future ruler, was encouraged to meet with representatives US energy firms and arrange for their participation in the postwar rehabilitation of Iraq’s oil infrastructure. “American companies will have a big shot at Iraqi oil”, he promised after one such meeting. Meanwhile, the Working Group on Oil and Energy – a collection of expatriate Iraqi oil experts assembled by the Department of State – developed plans for the privatization of Iraq’s state-owned oil company and its acquisition by foreign firms. And, to ensure that none of Iraq’s oil assets would be damaged by Saddam Hussein loyalists, the Pentagon assembled a special force to seize Iraqi oilfields at the very onset of hostilities.

And so the Bush administration went to war confidently, believing that it would both eliminate a major threat to Persian Gulf stability and ensure a substantial American role in the exploitation of Iraq’s prolific oil fields. All was set for this favorable outcome in April 2003, when triumphant American forces occupied the Oil Ministry headquarters in downtown Baghdad, blithely ignoring the rampant looting taking place in surrounding areas. But now, two years later, the situation appears far less promising. We return, then, to our final question: To what extent did the administration achieve its intended objectives in Iraq?

Mission Accomplished?

Certainly, Saddam Hussein has been removed from office, and his ability to wreak havoc in the Gulf has been eliminated. The Iraqi National Oil Company (INOC) is now in the hands of American-installed technocrats, and some progress has been made toward restoring production to prewar levels. But it is scarcely apparent that the Persian Gulf is more secure than it was two years ago, or that America’s ambitious oil objectives will ever be realized. By failing to deploy sufficient numbers of ground troops in Iraq and imposing a modicum of civic order, the United States squandered its initial advantage and opened the space for a virulent insurgency and the emergence of ethnic and religious factionalism. This, in turn, has curtailed Iraq’s oil output and threatened to tear the INOC apart.

Looking at Iraq today, one can see several powerful impediments to the accomplishment of US objectives:

* The insurgency has crippled Iraq’s capacity to export more oil. When US forces first entered Baghdad in April 2003, US officials confidently spoke of boosting Iraq’s prewar production of 2.5 million barrels per day to 3 million barrels per day in 2004 and 5 to 6 million barrels per day by the end of this decade. Today, because of persistent sabotage of pipelines and refineries, Iraq is producing less oil than it did before the war – about 2 million barrels per day. In northern Iraq, insurgents have repeatedly bombed the main export pipeline to Turkey, taking it out of operation for months at a time; in the south, saboteurs have periodically crippled key pipelines and loading platforms, curtailing exports by sea. The United States has spent billions of dollars to repair these facilities and to enhance security along the pipeline routes, all to no avail. According to a recent report in Oil and Gas Journal , Iraqi output is expected to remain below prewar levels in 2005 and to begin a slow recovery in 2006 – but only if the security situation has improved by then. And no one is willing to predict when, if ever, the country will reach the fabled level of 6 million barrels per day.

* Ethnic and religious antagonism between Kurds, Sunnis, and Shiites threatens to dismember the INOC . When invading Iraq, the Bush administration assumed that a US-installed government under Ahmad Chalabi would unify the country and quickly restore central government authority. Now, the country is split into three more or less autonomous regions: a self-governing Kurdish enclave in the north; the beleaguered “Sunni Triangle” in the center; and the clerical-dominated Shiite zone in the south. Rather than bridge these divisions, the recent elections – widely touted as a victory for democracy – have tended to strengthen the forces of dissolution. Each community is jockeying for political and economic advantage, with Iraq’s oil reserves as the major prize. The Kurds, with one-fourth of the seats in the new national assembly, are demanding control over the Northern Oil Company (the INOC’s northern affiliate in Kirkuk) as the price for their participation in any future federal system; the Shiites, for their part, seek control over the Southern Oil Company in Basra; and many Sunnis, seeing themselves excluded from the possible division of Iraq’s oil wealth, appear inclined to support the continuing insurgency. Under these circumstances, foreign oil companies are reluctant to invest in any major projects in Iraq, preferring to wait until the insurgency has been brought under control and the future status of the INOC has been decided – steps that may take years to accomplish.

* Insurgency and ethnic factionalism in Iraq threaten to destabilize the entire Persian Gulf region . By invading Iraq and removing Saddam Hussein, the Bush administration sought to bring greater security to the Gulf area and thereby ensure the safe production of oil. But while the removal of Hussein has eliminated one serious threat to Gulf security, the ensuing insurgency and ethnic disorder have introduced a whole new array of dangers. By demonstrating a capacity to stand up to American military might and inflict significant US casualties, the insurgents have emboldened Islamic jihadists in neighboring countries. The resurgence of violent extremism in Saudi Arabia has been particularly striking, with a series of major terrorist strikes in Riyadh and in the oil centers of Khobar and Yanbu. Meanwhile, the various armed bands in Iraq appear to be receiving financial aid from other countries, Iran in the case of the Shiite militias and Saudi Arabia in the case of the Sunnis. And Turkey, with a large and restive Kurdish population of its own, has hinted at full-scale military intervention in northern Iraq if the Kurds establish an autonomous nation in that area. Given these developments, it is very hard to argue that the Gulf is more secure today than it was in March 2003, before the war began.

When all is said and done, therefore, it appears that the US incursion into Iraq – begun with such high expectations two years ago – has largely failed to achieve its intended purposes. No weapons of mass destruction were ever found in Iraq, so the invasion cannot be said to have eliminated a potential WMD threat. The danger posed by terrorism is no less severe now than it was in 2003, and in some cases has grown stronger. It is true that democracy has made some inroads in Iraq, but it is not al all evident that elections will produce a stable, unified state. And it is clear that Iraq is in no position to quench America’s voracious thirst for petroleum.

This assessment has obvious implications for many key aspects of US foreign policy. For one thing, it casts considerable doubt on the utility of pre-emptive military action as a tool for promoting stability in unsettled regions like the Middle East – a conclusion that deserves close attention as we move closer to a possible war with Iran. Many aspects of US policy for postwar “nation building” also need to be re-examined. But what is most evident is that the administration’s strategy of using military force to achieve its energy objectives in the Middle East is hopelessly flawed. Despite all the loss of human life, it appears highly unlikely that the major Gulf producers will achieve the 85 percent increase in daily petroleum output deemed essential to meet US and international oil requirements in 2020, and so we should expect recurring oil shortages and price increases. Only by diminishing our day-to-day consumption of petroleum and demilitarizing our foreign energy policy can we hope to reduce our exposure to costly oil-supply disruptions in the Middle East and lower the risk of further bloodshed.

Michael T Klare is a professor of peace and world security studies at Hampshire College and the author, most recently, of Blood and Oil: The Dangers and Consequences of America’s Growing Petroleum Dependency (Metropolitan Books).

http://www.zmag.org/content/showarticle.cfm?SectionID=15&ItemID=7479

Bill Totten http://www.ashisuto.co.jp/english/

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