At last, some honesty from the Government on oil! Deputy Prime Minister John Anderson confirmed the guts of my column today, Oils ain’t just oils, they’re to die for. He said on the ABC’sInsider�s program this morning (with no follow up from Barrie Cassidy!):

 

I do share the community’s quite deep concern about the outlook (for oil prices) because it really is related to very heavy demand for fuel around the place, limitations of global refining capacity and, I have to say it, the very real prospect that at some stage in the next few short years global production may very well peak and it may be hard to increase it further at a time when countries like China, of course, are looking for a lot more fuel and even in places like Australia our dependence on oil, on petrol and transportation continues to increase.

This is one of the reasons why I believe, in common with legislators in most other Western countries, that we need to be determinedly looking at alternative fuels, both extenders and new fuels and that includes biofuels. But I don’t want to fudge and say that there is an easy answer to this. The realities of global fuel refining are quite stark.

I got some fantastic feedback to the column, with lots more links and information. Here we go, after general recommendations.

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Recommendations

Tim Gillin: The new bombshell from Seymour Hersh, that Rumsfeld authorised torture in Iraq, is atThe New Yorker. Hersh has been wrong before. I am thinking of his “The Dark Side of Camelot” and the claim that JFK had been secretly married before his marriage to Jackie: see smokinggun.

Scott Burchill: See Pioneers Fill Campaign War Chest, Then Capitalize, on how Bush buys his donations.

Allen Jay: See Brian Cloughley on the Patriot Act in the US at Where are you heading, America?. If he can write for Janes, then I doubt that even your most conservative readers would find reason to object, although they may choke on the opinions expressed. Given a background in the British and Australian Army and a specialist in the region, his views are always worthy of consideration – even if he has taken up exile in NZ. His home page is briancloughley.

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Kerryn Higgs

Your piece on the oil question is very timely. I was taken aback this morning when John Anderson appeared on the ABC�s Insiders and warned of:

…the very real prospect that at some stage in the next few short years global production may very well peak and it may be hard to increase it further at a time when countries like China, of course, are looking for a lot more fuel and even in places like Australia our dependence on oil, on petrol and transportation continues to increase.

As Webdiarist David Mieluk pointed out last week in George Bush: the crouching man is naked, this concern has been raised for many years, by oilmen and geologists in particular, and decades ago by the Club of Rome researchers. Your Cheney quote indicates that the US administration is as well aware of it as the craziest of doomsayers.

If the Iraq strategy has been directed at cornering what�s left � or the greater part of it � it�s still very odd when you realise that, even if the USA did succeed in controlling the declining resource, there�s a big crisis coming in a matter of years, or decades at best, not centuries. Common sense might suggest that now is the time to prepare for a more orderly transition, rather than profiteer from the guzzling of the last of it.

The world�s oil, by the way, is the distilled product of tens of millions of years of plant growth in geological history. That�s way beyond ordinary human comprehension, but what we�re doing is burning millions of years of plant growth every decade � and it�s accelerating.

David�s paragraph which you quoted in your article reminded me of what I felt in 1967 or so when I first came across critics of the Vietnam War. These loonies told me that there was no actual threat to anyone from Vietnam, there were no dominoes and we were being led along by the nose. Our leaders (and US leaders for that matter), I thought, would surely not deceive us and launch a war for spurious reasons. It was shocking, a stretch of the imagination. For quite some time I simply could not credit the allegations.

So, if the world is about to face a crisis of its energy supply (and it�s more than the transport and trade that Anderson mentioned � the entire mass-production sector in agriculture is based on oil-derived fertilisers, pesticides and mechanised farming); why wouldn�t our leaders look for solutions? And how do we force them to do this?

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Anthony Rizk: Just shut up will you………for God sake.

Peter Brown: I thought you might like to read Kurt Vonnegut’s view on this in Cold Turkey: “Here�s what I think the truth is: We are all addicts of fossil fuels in a state of denial, about to face cold turkey. And like so many addicts about to face cold turkey, our leaders are now committing violent crimes to get what little is left of what we�re hooked on.”

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Andrew Mamo

Finally somebody in the Australian media has had the guts to discuss Peak Oil!! Like your reader from Terrigal (my suburb coincidentally), I am constantly confounded by the willful ignorance of our politicians and journalists to deal with the devastating potential of this threat. Well done for breaking the silence, and I hope to see this become the real focus of government and public concern over the next 10 years, rather than any phony wars on terror. (Margo: Andrew is an artist who organised Garage doors against the war before the invasion of Iraq.)

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Michael Ekin Smyth

Yeah, Margo, you�ve finally nailed it. It�s just a giant American conspiracy � powered by those evil Jewish neo-cons.

Congratulations. You just leapt over neo on the path to fully blown Nazi ideologist. I�ll bet there is a good Chinese tailor in Sydney who can run you up a nice black uniform in no time.

The armband? Well, that is a little more difficult. Some find even them morally repugnant. But there are plenty like you lurking in the depths of liberal central Europe. They�ll be able to get you fully kitted out in uniforms, military equipment and anti-American, and free market bigotry in no time. Whoops! No need for the anti-American bigotry is there? You�re fully armed with that already � and a hatred of the Jews, and of capital markets.

Hell, we�ll get a Krystallnacht organised in no time! Sieg Heil!

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Dave Worth, convenor of the Sustainable Transport Coalition, WA

I agree with your comments on what is happening re global oil demand. We organised a conference last year called WA: beyond oil, and we�ll have another one in August called “Oil: Living with Less”. Webdiarist Carmen Lawrence launched our new policy of the same name two weeks ago here in Perth.

I have personally lobbied a number of federal MPs as well as appeared at a House of Reps enquiry in Adelaide 2 weeks ago, and no one wants to know about this topic and its implications for car-using Australians. We have issued a number of media releases which The West Australian has never run. So yes, people just don�t want to know, and when oil goes to the level of what they are paying NOW in Europe- AUS$1.60 to $1.85- they will scream for governments to subsidise the petrol price, especially those with large engined cars and 4WDs.

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Geoff Davies of Canberra (on leave in California)

Thanks for stating the rarely-stated though blindingly obvious about oil and Iraq, and for moving on to the topic of how we can begin to wean ourselves off oil.

In case you missed the brief review of my recent book Economia: New economic systems to empower people and support the living world by Bruce Elder (SMH 24-25 April), check it out atgeoffdavies. It’s a complete reconception of how economies really work, how we can redirect and restructure our societies to have much less impact on the world, how many innovations already move us in that direction, and how ultimately we can aspire to promote the regeneration of cultural diversity and biodiversity.

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John Omaha, an American in Sydney

I appreciated your article in today’s Sun-Herald regarding the place of oil in the causes for my country’s unprovoked, illegal, and immoral attack on Iraq.

There is another cause for the attack however. By attacking defenseless countries the American military-industrial complex successfully hijacks the U.S. budget, diverting billions of dollars into the treasuries of Martin-Marietta, General Dynamics, Boeing, Halliburton’s Brown-Kellog-Root, North American-Grumann, and several hundred other corporations.

This process was begun in Vietnam. Before the Gulf of Tonkin (non) incident, the U.S. defense budget stood at $80 billion (US) per year. At the termination of the invasion, the budget was $400 billion, and it has remained in that range ever since. Regularly, the U.S. military-industrial complex succeeds in duping the easily-flummoxed citizens and the duplicitous Congress into attacking yet another defenseless nation. You may recall that our ambassador suckered Hussein into invading Kuwait by telling him the U.S. would not respond if he did invade, and the instant he took the bait, Desert Story was on.

I think that many citizens around the world do not realize the true horror of the actions of the military-industrial complex. You touch on the issue in your column today. No American commentators ever mention the fight for survival of U.S. corporations.

I believe we no longer live in a democracy in America. We live in a corporatocracy which serves solely the interests of corporations, bureaucracies, congress, both political parties, and the media.

Citizens do not count. Our needs are never considered. We exist solely to fund the corporatocracy. When we get too old to work, we are cast aside without medical care, our pension funds looted, our benefits attenuated.

This is the view of one disgusted American citizen. The majority of my countrymen are too dumbed down to appreciate this argument.

Cordially from Sydney, where I am delivering a couple of workshops in my field of psychology.

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Ian McPherson

Congratulations! Your oil article goes right to the heart of the matter. Australia is as reliant as the US on foreign oil, and we import most of our needs. That will only increase until world oil supplies are seriously depleted, around about 2050.

NOW is the time for alternative energy solutions.

If you are interested in the link between the placement of US troops (usually couched as military assistance [sic]) and the US’s oil requirements, the expert is Michael T. Klare.

I have assembled as many reliable links as I can on this subject, as I believe it is the most important problem facing mankind (water depletion is possibly the second). From oil dependence stems global warming, global dimming and massive pollution.

For me, one of the most convincing and intelligent articles is by George Monbiot in The Guardian.

It is past time to deal honestly with the issue of oil depletion, whether it occurs within 20 or 50 years. NOW is the time to invest in alternatives, and legislate against oil wastage. The federal government must lead and not just follow the lead of the US – which will lead to endless war.

We must look for energy alternatives now, solutions that do not suffer from the side-effects of war, human rights violations, pre-emptive invasions and the support of dictatorships. Some of these alternatives are now available and there is reason for hope, as shown in How many windmills would $87 billion buy?

The next step, necessarily, will be to research, develop and present real-life solutions. This is the challenge that is facing mankind. If we solve the issue of oil depletion, it is more than possible that we will solve the issue of endless war.

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Tim Gillin in Sydney

Geologist Colin Campbell, quoted in your article on oil, may or may not be proven right, but one thing is for sure, he is certainly adding another repeat to the chorus of the “we’re going to run out of oil and have a disaster” refrain that has been recycled every decade or so since oil was first discovered. And to date the track record of that refrain has been pretty poor ( see http://www.cato.org/pubs/regulation/regv27n1/v27n1-1.pdf):

In 1875, John Strong Newberry, the chief geologist of the state of Ohio, predicted that the supply of oil would soon run out. The alarm has been sounded repeatedly in the many decades since. In 1973, State Department analyst James Akins, then the chief U.S. policymaker on oil, published “The Oil Crisis: This time the wolf is here,” in which he called for more domestic production and for improved relations with oil-producing nations in the Middle East. In 1979, President Jimmy Carter, echoing a CIA assessment, said that oil wells “were drying up all over the world.

In 2003, world oil production was 4,400 times greater than it was in Newberry’s day, but the price per unit was probably lower. Oil reserves and production even outside the Middle East are greater today than they were when Akins claimed the wolf was here. World output of oil is up a quarter since Carter’s “drying up” pronouncement.

For an alternate take on oil, it is worth examining the myth repeated endlessly by the media that the Middle East is home to two thirds of the world’s oil reserves. A good place to start myth busting is Radford: “The oil reserve estimates …all refer to a narrow category of “proven” oil reserves, not to “every … barrel of oil in the world”

Left, right and center, the messengers who have analysed global energy supply have all focused on the problem through one optic.

According to a US Geological Survey report quietly published in 2000, there is more oil outside the Middle East than inside the region. Certainly two thirds is not at all accurate – it’s 54 percent of identified reserves, possibly 40 percent of ultimately recoverable reserves, and possibly 30 percent or less if you include unconventional heavy oil fields.

As Standard Oil executive Wallace Pratt said in 1944, it is a “fallacy [to] cite proved reserves as a measure of available future supplies.” Yet this is exactly what has animated US policy in the Middle East.

The news media nearly always use the proven reserve figures and omit other categories because the Department of Energy and the oil industry publish reports that include only “proven” oil reserves – as if that is all there is. Most people do not realize that other petroleum geologists – most notably those at the USGS – take a different view.

The war in Iraq may or may not be “for” oil, but there is no question that at some level, it is “about” oil. What if Saudi Arabia, Iraq and the Middle East are NOT the home of the world’s largest oil reserves? What if decades of American foreign policy are based on a faulty premise?

Your column reminded me of a quote from Admiral Gene La Roque of the Center for Defense Information, commenting on the first Gulf War (the one endorsed by the UN and the ALP):

This is a war over the price of oil and I don’t think we want to sacrifice the life of one American boy to keep the price of oil down or the king of Saudi Arabia on the throne.

Is the current “bad” war in Iraq about “oil”? I think the real way to answer that question is to look at other wars in history, like the Great War, WW2 or the American Civil War, and determine if they were about one thing. The answer is “no”.

Oil is a factor in the current war, along with terrorism, islamism, Israel and even the need for the US military industrial complex to maintain its relevance in a post-Cold War world (see Dick Cheney�s Song of America ).

And what do we mean by a war for oil? For control over future supply or for control over current oil profits and revenues? Those two issues are quite different.

The following quote from Gulf War 1 critic, economist Murray Rothbard, emphasises the revenue angle:

… Since the oil shocks of the 1970s, more oil has been discovered, and produced, in non-OPEC countries (such as Mexico, the North Sea), and U.S. and other consumers are using less petroleum per product. The OPEC proportion of world oil output fell from 56 percent in 1973 to only 32 percent today. And since 1973, the amount of oil and gas needed to produce a dollar of GNP in the United States has been cut by 43 percent. All this can be predicted from economic theory: that higher prices call forth a greater supply, and that consumers and other buyers restrict their demands for oil and move to other sources or to more oil-efficient energy uses.

…if oil price increases are the problem, why didn’t the U.S. move in force in 1973 against the OPEC countries, sending troops into Saudi Arabia and Kuwait to take them over and force them to lower the price of crude oil? Why should the U.S. balk at a few dollars a barrel now when it stood still for a quadrupling of the price of oil two decades ago?

The war against Iraq, …has nothing to do with any “national interest” that Americans may have in abundance of oil and in keeping its price low. Does that mean that this war is in no sense an “oil war?

No – it means that it’s a very different – and far more sinister – kind of oil war: a war not for the American consumer but for the control of a supply and of the vast profits from oil. A war, in short, for narrow economic interests against the interests of the American consumer, the taxpayers, and of Americans who will die in the effort.

Specifically, why the U.S. hatred of the cartelist Saddam and its great tenderness and concern for the cartelist Saudis?

First, the long-term “friendship” with the “pro-West” despots of the Saud family. This “friendship” has been concretized into Aramco (the Arabian-American Oil Co.), the Rockefeller company that has total control of Saudi Arabian oil – and long-time heavy influence, if not control, over U.S. foreign policy. After World War II, Aramco (owned 70 percent by Rockefeller companies – Exxon, Mobil, and Socal, and 30 percent by Texaco) produced all of Saudi oil.

Originally, Aramco owed King Ibn Saud of Saudi Arabia $30 million in royalty payments for the monopoly concession. And so, James A. Moffet, former vice president of Standard Oil of New Jersey (now Exxon), who had been appointed as Federal Housing Administrator in World War II, used his influence to get the U.S. Treasury to pay Ibn Saud the $30 million. In addition the King got an obliging “loan” of another $25 million from the Rockefeller-dominated U.S. Export-Import Bank, at taxpayer expense, to construct a pleasure railroad from his capital to his summer palace. In addition, President Roosevelt made a secret appropriation out of his boodle of war funds, of $165 million to Aramco to do preparatory work for its pipeline across Saudi Arabia. Furthermore, the U.S. Army was assigned to build an airfield and military base at Dhahran; the base, after costing U.S. taxpayers over $6 million, was turned over gratis to King Ibn Saud in 1949. Dhahran, not coincidentally, was close to the Aramco oilfields.

During the 1970s, Aramco was “nationalised” by Saudi Arabia, a process completed in 1980. But the nationalization was phony, because the same Aramco consortium immediately obtained a contract as a management corporation to run the old, nationalized Aramco. More than half of Saudi oil production goes to the old Aramco-Rockefeller consortium, which sells the oil at a profit to whomever they wish, in obedience to Saudi cartel regulations. The remaining part of Saudi oil is run and distributed by the Saudi government directly, through Petromin (the General Petroleum and Marketing Organization), the marketing arm of the Saudi Petroleum Ministry.

It all boils down to a happy case of the “partnership of industry and government” – happy, that is, for the Saud family and for the Rockefeller oil interests.

Iraq, on the other hand, has very little dealings with the Rockefeller Empire. In contrast to heavy dealings with Iran (in the Shah’s day), Kuwait, Saudi Arabia, and the rest of the Gulf states, the big Wall Street banks reported that they had virtually no loans outstanding or deposits owed, to Iraq. Thus, Citibank (Rockefeller) reported that its risk of loss to Iraq was “zero,” and similar reports came from Chase Manhattan (Rockefeller) and the rest of Wall Street.

And so: the war against Iraq is a war over oil, all right, but not on behalf of cheap oil or abundant oil to the U.S. consumer. It is a war of the Rockefeller Empire against a brash interloper. Bush’s Pentagon speech takes on heightened meaning when he talks about everyone suffering “if control of the world’s great oil reserves fell into the hands of that one man, Saddam Hussein”.

Whether Rothbard, who was talking about the first Gulf War, is right or not, is not my main point. I’m not sure. When blaming war on oil we need to remember that that small word is not so much a definitive answer, as merely a prompt for a lot more questions.