NLP WESSEX
'Coming Clean' On Why Iraq Really Matters
Tue Sep 28, 2004 00:37
64.140.158.122

'Coming Clean' On Why Iraq Really Matters
To Downing St And The White House

"The old Arab hands in the Foreign Office are not always right, but they warned against the US invasion in terms which have proved prophetic. It is arguable that the policy of containing rather than removing the Saddam Hussein regime would have been more realistic. At the time, I took the Government’s view, and supported the Prime Minister’s decision to back President Bush. From the British Government’s point of view, refusal to support the United States [on Iraq] would have been a breach of the Anglo-American alliance. The Americans would anyway have gone ahead without us..... In my judgment, Tony Blair did not lie, but neither did he tell the whole truth. Beside these arguments there is the question of oil. This appears on placards as though the world’s governments ought not to concern themselves about the world’s supply of energy. That is impossible. All the major global economic equations include oil, whether one is talking about the development of China, the US deficit, the level of interest rates, the prospect for inflation, the level of unemployment or the survival of the European Union itself, with its expensive welfare systems. In the 1970s, almost every democratic government in the world was turned out of office by a global inflation based on the oil market. Unfortunately, a high proportion of the world’s oil supply and even higher proportion of reserves exists in countries which run along a single political faultline. This faultline stretches from the Islamic oil states of Central Asia through Iran, through the Middle Eastern oil states, including Iraq and Saudi Arabia, to Nigeria. Any major political disruption along that line is a threat to the whole global economy, equally a threat to the new industries of Shanghai or to the income of an old-age pensioner in Edinburgh.... I hope that the Americans will vote to continue to carry the burden in Iraq, which would mean voting to re-elect President Bush. It is the only hope for Iraq, not a good hope, but the only one.... Very possibly the future of Iraq will decide the future of the world economy. If the Islamic world is torn along the dotted line, the consequences in the oil market could cost a decade of world economic growth."
Why we must not quit now
Lord William Rees-Mogg
London Times, 27 September 2004
http://www.timesonline.co.uk/article/0,,482-1280987,00.html

"On Friday The Times published a lead letter from Dr David Fleming, the director of the Lean Economy Initiative. He argues that the turning point is with us already. 'Next year,' he writes, 'world oil production, with the exception of the five Middle East Opec members, will reach its halfway mark; in 2001 it will start its steady decline towards depletion.' This may be too precise, but in terms of the radical shift between the old and new centuries, it is probably justified; the 20th century was based on oil; the 21st will have to adjust to the decline of the oil economy...... In the 1970s, oil proved to be the fundamental commodity. The world seemed to move on to an oil standard, as currencies responded to the inflation of the oil price by inflation of their own. There was a global financial battle in the 1970s between the oil cartel, organised by Opec, and the currency cartel, organised by the world's central bankers. In the 1970s, Opec won that battle, only to lose in the 1980s and 1990s. Battle may again be joined in the first decade of the next century. If Dr Fleming is correct, the trump cards may be back in Opec's hand, although painful experience may make Opec play them less aggressively than in the 1970s. In that decade, inflation rose in almost all countries, interest rates rose, real values fell, share prices fell, unemployment rose, governments were turned out. It was a miserable decade. The gold price followed the oil price; as currencies weakened, the historic commodity standard of gold benefited from the victory of the new commodity standard of oil. Whether this year's central bank attack on the gold price has been a pre-emptive strike by the central bankers, fearful of a return to 1970s conditions is an interesting question; probably it is nothing as well considered as that. A return to the oil market conditions of the 1970s would be very damaging for the global economy, for the developing countries of Asia, for Europe, for Japan and for America. Britain would have some protection from North Sea oil; Russia would benefit hugely; sheikhs would again become hyper-rich; oil would be an investment of choice. The United States already has a dangerously large balance of payments deficit; more expensive oil imports would make that worse, although the US dominance in defence would encourage Opec states to recycle their wealth back into dollars. If the price of crude oil rose by a factor of 20, as it did in the 1970s, one would have to expect spectacular consequences. Crude oil would go to $200 a barrel, there might be 20 per cent inflation, or higher, gold at $2,000 or $3,000 an ounce, US reconciliation with Iraq, the break-up of the euro and a Conservative majority of over 100. I do not believe that anyone can predict the timing of oil depletion, or its effect on oil prices. There are too many variables, in the development of technology, in changing patterns of use, in the effectiveness of Opec, in the response of the consumer governments, in reserves. I suspect that Dr Fleming's forecast will prove to have been premature. Yet the difficulty of forecasting means that he may prove right even in the short term. He will certainly be right in the longer term."
Troubled waters for oil
Lord William Rees-Mogg
London Times, 30 August 1999
http://www.casi.org.uk/discuss/1999/msg00591.html

"Optimists about world oil reserves, such as the Department of Energy, are getting increasingly lonely. The International Energy Agency now says that world production outside the Middle Eastern Organization of Petroleum Exporting Countries (opec) will peak in 1999 and world production overall will peak between 2010 and 2020. This projection is supported by influential recent articles in Science and Scientific American. Some knowledgeable academic and industry voices put the date that world production will peak even sooner—within the next five or six years. The optimists who project large reserve quantities of over one trillion barrels tend to base their numbers on one of three things: inclusion of heavy oil and tar sands, the exploitation of which will entail huge economic and environmental costs; puffery by opec nations lobbying for higher production quotas within the cartel; or assumptions about new drilling technologies that may accelerate production but are unlikely to expand reserves. Once production peaks, even though exhaustion of world reserves will still be many years away, prices will begin to rise sharply. This trend will be exacerbated by increased demand in the developing world..... The recent report by the President's Committee of Advisers on Science and Technology... concluded 'A plausible argument can be made that the security of the United States is at least as likely to be imperiled in the first half of the next century by the consequences of inadequacies in the energy options available to the world as by inadequacies in the capabilities of U.S. weapons systems. It is striking that the Federal government spends about 20 times more R&D money on the latter problem than on the former.'... The nearly $70 billion spent annually for imported oil represents about 40 percent of the current U.S. trade deficit.... Research is essential to produce the innovations and technical improvements that will lower the production costs of ethanol and other renewable fuels and let them compete directly with gasoline. At present, the United States is not funding a vigorous program in renewable technologies.... The United States cannot afford to wait for the next energy crisis to marshal its intellectual and industrial resources....Our growing dependence on increasingly scarce Middle Eastern oil is a fool's game—there is no way for the rest of the world to win. Our losses may come suddenly through war, steadily through price increases, agonizingly through developing-nation poverty, relentlessly through climate change—or through all of the above."
Senator Richard G. Lugar and R. James Woolsey (Former Director of the CIA)
The New Petroleum - Foreign Affairs January/February 1999
http://www.btinternet.com/~nlpwessex/Documents/WATwoolseypeakoil.htm

"For the world as a whole, oil companies are expected to keep finding and developing enough oil to offset our seventy one million plus barrel a day of oil depletion, but also to meet new demand. By some estimates there will be an average of two per cent annual growth in global oil demand over the years ahead along with conservatively a three per cent natural decline in production from existing reserves. That means by 2010 we will need on the order of an additional fifty million barrels a day. So where is the oil going to come from? Governments and the national oil companies are obviously in control of about ninety per cent of the assets. Oil remains fundamentally a government business. While many regions of the world offer great oil opportunities, the Middle East with two thirds of the world's oil and the lowest cost, is still where the prize ultimately lies, even though companies are anxious for greater access there, progress continues to be slow."
Dick Cheney, Chief Executive of Halliburton, now Vice President of the United States
Speech at London Institute of Petroleum, Autumn Lunch 1999
http://www.peakoil.net//Publications/Cheney_PeakOil_FCD.pdf

"In his second week in office, President George W. Bush established the National Energy Policy Development Group [lead by Vice President Dick Cheney] ......America in the year 2001 faces the most serious energy shortage since the oil embargoes of the 1970s. The effects are already being felt nationwide. Many families face energy bills two to three times higher than they were a year ago. Millions of Americans find themselves dealing with rolling blackouts or brownouts; some employers must lay off workers or curtail production to absorb the rising cost of energy. Drivers across America are paying higher and higher gasoline prices.... A fundamental imbalance between supply and demand defines our nation’s energy crisis. As the chart illustrates, if energy production increases at the same rate as during the last decade our projected energy needs will far outstrip expected levels of production. This imbalance, if allowed to continue, will inevitably undermine our economy, our standard of living, and our national security. But it is not beyond our power to correct..... Renewable and alternative fuels offer hope for America’s energy future. But they supply only a small fraction of present energy needs. The day they fulfill the bulk of our needs is still years away. Until that day comes, we must continue meeting the nation’s energy requirements by the means available to us. Estimates indicate that over the next 20 years, U.S. oil consumption will increase by 33 percent, natural gas consumption by well over 50 percent, and demand for electricity will rise by 45 percent. If America’s energy production grows at the same rate as it did in the 1990s we will face an ever-increasing gap.... Increases on this scale will require preparation and action today. Yet America has not been bringing on line the necessary supplies and infrastructure. Extraordinary advances in technology have transformed energy exploration and production. Yet we produce 39 percent less oil today than we did in 1970, leaving us ever more reliant on foreign suppliers. On our present course, America 20 years from now will import nearly two of every three barrels of oil – a condition of increased dependency on foreign powers that do not always have America’s interests at heart..... The National Energy Policy seeks to lessen the impact on Americans of energy price volatility and supply uncertainty. Such uncertainty increases as we reduce America’s dependence on foreign sources of energy. At the same time, however, we recognize that a significant percentage of our resources will come from overseas. Energy security must be a priority of U.S. trade and foreign policy. We must look beyond our borders and restore America’s credibility with overseas suppliers. In addition, we must build strong relationships with energy-producing nations.... By 2020, Gulf oil producers are projected to supply between 54 and 67 percent of the world’s oil. Thus, the global economy will almost certainly continue to depend on the supply of oil from Organization of Petroleum Exporting Countries (OPEC) members, particularly in the Gulf. This region will remain vital to U.S. interests..... By any estimation, Middle East oil producers will remain central to world oil security. The Gulf will be a primary focus of U.S. international energy policy, but our engagement will be global, spotlighting existing and emerging regions that will have a major impact on the global energy balance..... The NEPD Group recommends that the President make energy security a priority of our trade and foreign policy."
National Energy Policy
Report of the [US] National Energy Policy Development Group [Cheney Task Force] - May 2001
http://www.whitehouse.gov/energy/

"Chaos and lawlessness have gripped large parts of Iraq following the US-British invasion. The country's civilian population finds itself bereft of jobs and even basic services. Museums, hospitals, universities, power stations, water plants and telecommunication facilities have been stripped bare by looters, leaving the country in dire straits...... Less visible than the pedestrian plundering afflicting Iraq's cities and archeological treasures, another looting operation from on high is in the works: the Bush administration has been moving with great alacrity to take control of the major prize to be won in Iraq - strategic control over the country's considerable oil wealth. While the invaders tolerated the widespread ransacking, they moved swiftly to secure the country's oil facilities. In Baghdad, the oil ministry was heavily guarded and was thus spared the fate of other Iraqi ministries, which went up in flames."
Iraq's other looting
Asia Times, 11 July 2003
http://www.atimes.com/atimes/Middle_East/EG11Ak01.html

NATURAL LAW PARTY WESSEX
nlpwessex@btinternet.com
http://www.btinternet.com/~nlpwessex