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I know that many of you here on the site see mostly the oil industry through the lense of the obscene profits they are making, and their much too close relationship with the Bush administration and the consequences this has on how they are regulated domestically, but you have to believe me when I tell you that internationally, it's not the same thing at all, and the oil industry is not really happy with the trigger-happy Bush administration. Here's an article in the Financial Times about what the industry, and other players think about the Iran policy of the Bush administration, summarised by this quote:
"*The general perception in the oil industry is that the biggest risk to the oil industry is the US administration*," commented Fareed Mohamedi, chief economist with PFC Energy consultants. *This was China's perception too*, he said, following the destruction of Iraq's oil industry after the US invasion and the long-standing US embargo that has hobbled Iran's energy sector.

Support Asian powers' thirst for oil threatens to scupper American efforts to isolate Iran US efforts to isolate Iran over its nuclear ambitions are colliding with the energy concerns of Asia's economic powers, testing Washington's ability to form a diplomatic coalition and its influence on oil and gas markets. Officials tell the Financial Times that the US is looking at "creative" ways of addressing the energy worries of China, Japan and India - major buyers of Iranian oil. The US is searching for a viable energy framework that would persuade such thirsty customers to halt planned investments in Iran's energy sector or even contemplate the shock of a sudden break in oil exports. Officials and analysts are sceptical it can be done and, so far, *US moves seem to be having the opposite effect*.
So, this is in the context of the ongoing escalation of tensions with Iran by the Bush regime, and they are bumping against the (obvious to any rational observer) obstacle of oil.
Iran, second largest producer in the Organisation of the Petroleum Exporting Countries, is racing to conclude big energy deals with all three countries before possible discussion of sanctions reaches the United Nations Security Council. China, meanwhile, brought its concerns to Washington last month, laying out three principles that underpinned its energy policy: no interference in the internal affairs of others, no nuclear proliferation and secure energy supplies from the Middle East. The US urged China to avoid investing in Iran; China said it would support diplomatic efforts to resolve the Iranian nuclear crisis as long as oil supplies were not affected.
That's the core issue, really. However important nuclear issues may be, they are simply not as vital, in the short and medium term, to any oil-importing country as a secure supply of the 'black gold'. And Asian countries, which import most of their oil from the Middle East, are particularly worried.
The US message to China and Japan - as well as India and Pakistan, which want to share a gas pipeline from Iran - is that Iran cannot be trusted as a reliable energy provider. But the Bush administration's image is also taking a hit. "The general perception in the oil industry is that the biggest risk to the oil industry is the US administration," commented Fareed Mohamedi, chief economist with PFC Energy consultants. This was China's perception too, he said, following the destruction of Iraq's oil industry after the US invasion and the long-standing US embargo that has hobbled Iran's energy sector.
When you are seen as the cause of the problem, it's hard to sell yourself as the provider of the solution. Say that again: *in the international oil arena, the Bush administration is seen as the biggest problem around.* How can that be good for US overall security?
To enhance its independence of energy supplies, China is investing where the US is absent: Iran, Sudan, Burma, Uzbekistan and possibly Venezuela. "They fear that in the case of conflict or a cold war, the US will interfere in China's oil supplies," Mr Mohamedi said. "By saying 'we can help', the US is making the situation even worse. There is very little the US can offer China."
And thus China looks for solutions elsewhere, in moves that only annoy - or worry - the Bushistas more. It would be ironic that the Bush policies are the main reason the Bush enemies (like Venezuela or Iran) are being helped or protected to some extent by all sorts of significant players, starting with China and Japan, but it simply reflects the fact that these players are rational and doing what they can to secure supplies. They don't want to piss off America, but some things are simply more important. And thus the Bushistas are unleashing a real domino-effect as both energy importers and oil exporters build links and try to get out, together, of the sphere of influence of the US. And the USA are becoming increasingly isolated on the world scene. Still the biggest boy around, but the crowd around is thiniing and that of the concerned or hostile onlookers is growing.
One option would be to tap the oil stockpiles of the 26 industrialised nations co-ordinated by the International Energy Agency. Claude Mandil, IEA executive director, recently said emergency stocks were enough to fill an 18-month hole if Iranian oil exports stopped. Countries negotiating with Iran "did not have to worry about an eventual loss of Iranian oil because you have the means to deal with it," he said. Despite these assurances, analysts say crude oil could easily hit $100 (€84, £58) a barrel if Iran was taken off the market.
That's probably an optimistic scenario. If 3mb/d of Iranian exports are taken out of the market at a time when spare capacity is, at best, 1-1.5mb/d, that means that balancing the market will require demand destruction - or dipping in stocks - to the tune of 2 mb/d, a pretty huge flow of oil. Expect shortages, rationing, and increase vulnerability to any other shock (bad weather, strike, an accident anywhere) - and that's if oil keeps on flowing unimpeded by Iran through the Hormuz Straits from other Gulf producers.
A US official said Washington felt it had a "bit more leverage" over its ally, but that Japan had complained China would fill any investment gap left by Tokyo. "They tell us to solve the China problem first," he said.
And that's the story with oil: you cannot solve the problem partially: you have to solve it in full. If there is a shortage for anybody, then the whole market will suffer. The heart of this story is that our civilisation's dependence on oil is making a mockery of any attempts at trying to influence the regional powers in the Middle East. So long as we guzzle oil, they hold us by the balls. And the oil industry, and the main other oil consumers, are basically saying to Bush: stop pissing these guys off, they are beginning to squeeze, and it hurts. And that's not even taking into account the fact that peak oil may be around the corner, and that supply is not increasing fast enough to cover the current increasing demand... So Bush's links to oil inside the US, and thus his lack of willingness to do anything about the country's dependence on the stuff, kills off any capacity for action in oil production regions (apart from that of breaking things up, which only worsens the problem), unites other countries in their opposition to US policies, and ends up terrifying the oil industry. Yep, it would be funny if it weren't so scary.

Originally posted to Jerome a Paris on Mon Mar 13, 2006 at 05:28 AM PST.

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Comment Preferences

  •  Tip Jar - Mar. 13 (129+ / 0-)

    Do we still do these now?

    In the long run, we're all dead (Keynes)
    Read more on the European Tribune - bringing dKos to Europe

    by Jerome a Paris on Mon Mar 13, 2006 at 05:25:45 AM PST

  •  hmm (2+ / 0-)
    Recommended by:
    irate, GreyHawk

    not sure, esp as we're all getting used to the new system here.

    Night and day you can find me Flogging the Simian

    by Soj on Mon Mar 13, 2006 at 05:27:03 AM PST

  •  Jerome . . . (1+ / 0-)
    Recommended by:
    irate

    From earlier diaries, you seemed to think a long-term conflict between Iran and the U.S. was not likely.  Do you still think that?  Just curious, thanks.

    "In the beginning the universe was created. This has been widely criticized and generally regarded as a bad move." -- Douglas Adams

    by LithiumCola on Mon Mar 13, 2006 at 05:37:25 AM PST

    •  I am not sure (28+ / 0-)

      how I said that, but let me maybe rephrase it.

      I think Iran has no particular desire to be in conflict with the US. They want to be respected as a proud, sovereign country, and thay don't want to feel threatened. Today, they have a lot of reasons to feel threatened by the US (the rhetoric, the fact that the US Army has invaded 2 neighbors in the past 5 years and has a presence in two more, and the diplomatic pressure) and thus every reason to defend themselves as much as they can, including by trying to procure nuclear weapons or playing the oil card.

      But a number of commentators in Tehran keep on saying that the ocuntry would be amenable to a genuine peace offer from the US - full diplomatic relations, a peace treaty of some kind, recognition of the country and its current regime as legitimate, and an end to the "axis of evil" stuff.

      In return, things like an end to support to any terrorist group, no nuclear weapons, and (but that probably requires an Isralei-Palestinian peace agreement) recognition of Israel should be on the table.

      One can dream.

      In the long run, we're all dead (Keynes)
      Read more on the European Tribune - bringing dKos to Europe

      by Jerome a Paris on Mon Mar 13, 2006 at 05:46:30 AM PST

      [ Parent ]

      •  Bush is evil AND Stupid (14+ / 0-)

        That is one dangerous combination, KEvin Phillips covers the Bush's dangerous religious mania in his new book, "American Theocracy: The Peril and Politics of RAdical Religion, OIL, and Borrowed money in the 21st Century"

        Quite the title, Mr. Phillips sums up the the right-wing religious mania of Bush's most loyal supporters and their "reason-impervious believers who make war on biology and geology".

        From the Will Englund review:  

        Now the oil is running out.  A botched war in the Middle East, rather than securing supplies, has instead put them at greater risk.  Heedless, the U.S. continues to finance its consumption-obsessed way of life with money borrowed from thrifty foreigners.

        The Bush/Rove sycophants are clearly lacking a connection with reality, so it is not beyond them to bomb Iran without considering the full consequences.  Bush is a disaster, how can we get rid of him?

        •  I'm not sure they're lacking a connection (14+ / 0-)

          With reality.

          I think they're very well aware that oil supplies are growing scarce, and that whatever supplies a country can secure now will be an important source of power over the next 3 decades, and that the easiest way to ensure that China's economy  never rivals the US (as it is forecast to do by 2025) is to make sure it doesn't get the oil it needs.

          It's just that they're gambling all to make sure China doesn't get those supplies, they're gambling all to make sure the US remains the hegemonic power in the world.

          The (smart) alternative would be to put all the money we're now spending on wars into finding alternatives to oil. But they're not smart.

          Realistic, yes. Smart, no.

          This is the way democracy ends Not with a bomb But with a gavel -Max Baucus

          by emptywheel on Mon Mar 13, 2006 at 06:02:34 AM PST

          [ Parent ]

          •  I agree (5+ / 0-)

            That's the thing that a lot people don't get: Bushco would want to control the Middle East even if the US went completely to solar power, or something.  Control of oil is control of world affairs.

            (BTW, the new comments isn't letting me "recommend" comments.  I hope that is temporary.  Here's a fake "4".  lol

            "In the beginning the universe was created. This has been widely criticized and generally regarded as a bad move." -- Douglas Adams

            by LithiumCola on Mon Mar 13, 2006 at 06:07:58 AM PST

            [ Parent ]

        •  I would also recommend (3+ / 0-)

          Mr. Phillips' books Wealth and Democracy, and also American Dynasty.

          I think that we in the US are used to viewing a portion of the Oil industry, particularly the financial and final product part of it as being the whole industry.  I think that the general industry, that is concerned with natural gas, India, China, Russian pipelines, etc is not something that US citizens are much in the know about and don't know that the whole world is not sweating the exploration of the North Slope.

          It is not surprising that we are so uninformed, since there is almost no coverage of the international scene in any depth in this country.  I've learned more from Jerome's diaries, here and at ET than I have anywhere else, and I at least subscribe to the Economist.

          Keep up the good work, Jerome, and good luck with the midlife crisis.

          "I said, 'wait a minute, Chester, you know I'm a peaceful man.'" Robbie Robertson -8.13, -4.56

          by NearlyNormal on Mon Mar 13, 2006 at 12:22:49 PM PST

          [ Parent ]

      •  Meanwhile (2+ / 0-)

        The US (or at least the Neocons in the US) want to make sure the US gets to preside over impending peak oil, and that Iran doesn't get the benefits and power that ought to come to a large oil producer as oil becomes increasingly scarce.

        This is the way democracy ends Not with a bomb But with a gavel -Max Baucus

        by emptywheel on Mon Mar 13, 2006 at 05:57:31 AM PST

        [ Parent ]

        •  The good news, it's not going to happen (9+ / 0-)

          The Bushista's are a throwback to McKinley, Teddy Roosevelt and Woodrow Wilson, all of whom used American military force to dictate access to Latin America.  This is the same play, but the game no longer favours the United States.  I'm sure the Pentagon (not the military) entertains fantasies of seizing the Iranian oil deposits on the Gulf.  The impossibility of making that hold secure has been discussed many times.  Having been burned once in Iraq, however, our Wehrmacht is unlkely to go along with it.

          The strategic incompetence of this administration is beyond belief.  I remember thinking in November-December 2000, that there was enough inertia at State, Defence, and possibly even at Treasury, to prevent worst-case scenarios.  Well, like a lot of people, I learned different.  As I believe Richard Clarke put it, the installation of the new administration was effectively a coup d'état by a handful of crazies.  It's happened before, though not in the United States.  We are now witnessing the inexorable implications of their madness.  It could turn out truly awful, but with Bush so low in the polls, I don't think the military, much less the public will go along, no matter how hard Rove and Cheney pound the war drums.

          •  doesn't a military revolt seem palpable (4+ / 0-)

            as much as a few zealous marines may pose for and support republicans in their local races.  

            My sense is that the Pentagon is watching our Army getting lit up in an unwinnable situation and rather than see it totally decimated will find a way to turn against the administration.  Meaning find a back door way to get democrats elected to congress to at least act as a roadblock to Bush insane policies.

            •  voting machines (2+ / 0-)
              Recommended by:
              tobendaro, imabluemerkin

              the gop is trying to reposition from BushCo for 2006.

              I'm sure NSA, ONI, and other intelligence organizations (outside the CIA) work on the vote-rigging system that keeps getting better and better every election.

              There are no democrats in the lineup, with the possible exception of Joe Lieberman, Ben Nelson and Hillary.

              the gop will hang on to their seats and claim the party is shifting away from BushCo and the public reponds.

              In the end it aint the parties that will save us and/or the military from our self-destructive path.

              It's we the people.

              We've spent all our "forefathers'" political capital.  We can have democracy if we really want it, but the price is we must invest our own blood now.

              The so-called, "Global War On Terror" IS Terrorism!

              by november3rd on Mon Mar 13, 2006 at 09:57:31 AM PST

              [ Parent ]

          •  The polls trend strongly in favor of action... (0+ / 0-)

            Financial Times/LA times did a survey about the US support for military intervention.  It was at 57%.  This before the true propoganda blitz, and this also before a trigger event that will coagulate American aggression.  We're only one staged terrorist attack away from most Americans signing away our constitution, and Europe is only one terrorist attack away from unleashing NATO.  Russia also seems to be jumping on the bandwagon.  Moderation will not reign.  This administration is playing for keeps with peak oil bearing down on the markets.  They want full spectrum dominance in the middle east and in the energy markets as peak hits.  This is beyond nukes.  It is about future US global strategic and economic hegemony (at least as the neo-cons imagine it).  The ex CIA analyst McGovern says it is about OIL (Oil, Israel, and Logistical bases).  See article here:

            McGovern article here

            57% Poll article here

            We're going into Iran in 2006.  Its just a matter of when and with who.  The crappy evidence and trigger events will begin to unfold.  They already started the media blitz last week.

      •  Those commentators in Tehran (8+ / 0-)
        are out of luck. Don't they KNOW that they are evil?

        At the risk of incurring the wrath of DHinMI, I again suggest  a (limited!) historical parallel between an out-of-control German leader and the Bush Regime.

        That is....... Wilhelmine Germany, exactly 100 years ago.

        Bush (like Wilhelm) is rapidly becoming an embarrassment to the rest of the worlds leaders, but he represents an insecure, fearful country that is too big to be marginalized. His bullying, stupidity and ignorance is terrifying everyone else, and is thus making an unstable international situation even more unstable, and everyone else less "reasonable" than they might otherwise be.

        I have no idea whether Iran is trying to acquire nuclear technology to make weapons and attack somebody, but it is clear that Bush, by dint of his saber-rattling and his willingness to trash international agreements, is making Iran more dangerous, not less.

        And, no, I am not predicting that Iran will be the focus of a catastrophic collapse into world war driven by mistrust, fear and a lack of international legal structure, but I believe that Bush is making this kind of thing more likely.

        History is rhyming again................

        The Perfect is the Enemy of the Better

        by dabize on Mon Mar 13, 2006 at 06:42:01 AM PST

        [ Parent ]

  •  Bush is a moron (11+ / 0-)

    He has this arrogant inability to see that the rest of the world doesn't have to play by his rules. In fact, he's made it easier for the Iranians to find allies by threatening the oil supply with his bombings. The Iranian government is maneuvering to make the probability of UN sanctions much less likely especially where China is involved.

    I have never seen such stupid policies as those promulgated by this out-of-touch administration. The rest of the world must think we're insane!

    Too often we enjoy the comfort of opinion without the discomfort of thought- John F. Kennedy

    by vcmvo2 on Mon Mar 13, 2006 at 05:50:00 AM PST

    •  Bush's Most Telltale Word: 'Irrelevant' (5+ / 0-)

      In the runup to the invasion I wrote a couple of lte's that were never printed. I said that the way Bush was slinging around the word 'irrelevant' toward insititutions and military & economic powers would surely come back to bite us.

      I wish it'd been printed because we're now seeing the beginnings of the rest of the world treating us as irrelevant.

      We are called to speak for the weak, for the voiceless, for victims of our nation and for those it calls enemy....--ML King, "Beyond Vietnam"

      by Gooserock on Mon Mar 13, 2006 at 08:07:25 AM PST

      [ Parent ]

      •  Good catch (3+ / 0-)

        It's as troubling as it is frustrating. It didn't have to be this way. For a long time now I had expected that we wouldn't be the only superpower for long- in fact I knew it would be best that there was a balance to our power. But this has happened despite Bush's willful ignorance of the world and how he sees our place in it. This was exemplified by picking Bolton to destroy what little credibility we had left at the UN. Bush decided to be irrelevant when he decided to describe our allies as "Old Europe"! What the hell did he expect!

        Too often we enjoy the comfort of opinion without the discomfort of thought- John F. Kennedy

        by vcmvo2 on Mon Mar 13, 2006 at 08:18:06 AM PST

        [ Parent ]

    •  After 2004, yeah we're officially nuts. (1+ / 0-)
      Recommended by:
      vcmvo2

      "Help us to save free conscience from the paw -- Of hireling wolves whose gospel is their maw." --John Milton

      by ohiolibrarian on Mon Mar 13, 2006 at 12:46:53 PM PST

      [ Parent ]

  •  Shorter the Financial Times (8+ / 0-)

    THe US is such a problem right now precisely because its warmongering over Iran is about oil supplies, and not nukes.

    This is the way democracy ends Not with a bomb But with a gavel -Max Baucus

    by emptywheel on Mon Mar 13, 2006 at 05:55:11 AM PST

  •  A who's who would be very instructive (2+ / 0-)

    Jerome, you may want to consider creating a table or spreadsheet listing all the major players, such as BP, Shell, Mobil-Exxon, Gazprom, National Iranian Oil Company, Elf Aquitaine, Saudi Aramco, etc etc; the degree of theiir ties to BushCo; their position vis a vis U.S. policies; amount of reserves they control; their position on Peak Oil and alternative energy sources; and what ever other intelligence indices you might think important. I would bet that most Americans, and even most dKos readers, are not familiar with players such as Elf Aquitaine or Saudi Aramco. Hell, after all the mergers of the past few years, I'm not even sure of the names of the American majors at this point.

    An interesting question then becomes: how do the service firms such as Halliburton or Schlumberger fit in?. And also: where is the nexus of Bush influence, and the comparative size or weight of firms such as Harken?

    Is private credit the friend and patron of industry? -- The Federalist Papers, No. 15, Alexander Hamilton

    by NBBooks on Mon Mar 13, 2006 at 06:10:45 AM PST

  •  There's a split in opinion on that subject (3+ / 0-)

    On the one hand, speculators and stockholders benefit from the revenue spikes that go along with perceived crises and supply interruptions.  Tighter supplies drive up prices.  Company revenues and profits HAVE risen dramatically since 2000 along with the level of U.S. military action and aggressive threats against several major producing countries.

    During the Bush years, war and the threat of wider regional war in the Persian Gulf/Middle East has been a major factor driving up international oil prices.  Continuously rising market prices reflect the possibility that the US may eventually move to seize Iranian oil fields, and perhaps offshore facilities near Venezuela and Saudi Arabia, as well.  Aggressive Bush-Cheney policies have been very good for multinational energy company stock prices and dividends compared to the Clinton era, which was a period of expanding supplies and low prices and industry profits.

    On the other hand, many oil industry executives prefer stable supplies and predictable market demand.  That is also the preference of most energy consuming countries, such as China, Japan and some countries in Europe, which do not have control over adequate supply to financially benefit from the Great Game of oil supply warfare.

    This article reflects the sentiment of the latter group.  It does not express the dominant preference for crisis economics held by the Bush Administration and their major clients, the Board members of multinational oil companies, and oil market speculators.

    •  One point to add to the above (3+ / 0-)

      The struggle isn't so much between countries, as it is between the haves and have-nots among the oil producers.  The US-based multinationals -- Exxon/Mobil, Chevron, etc -- are among the have-nots, while the big nationalized oil producers hold the vast majority of the world's reserves.

      The Bush-Cheney cabal is seeking to upend that order.  The regime serves its clients interests, which is to try to seize reserves by military means where they perceived market mechanisms have failed.

      Yes, this dynamic makes for some interesting cross-cutting interests, and a great deal of political instability and bloodshed.

      •  Something to Keep in Mind (2+ / 0-)

        With regard to many (if not most) of the national oil companies, the major multinationals -- not all of which are US-based companies, by any means -- generally operate with those national companies through various joint venture enterprises in which the multinationals hold a minority ownership interest.  More often than not, the large multinationals will provide the initial investment capital for new projects and for ongoing operations, as well as the vast majority of the personnel used in running the joint venture.  The national oil companies usually sit back in these ventures and just watch the cash flow in (so to speak).

  •  I love this quote (4+ / 0-)

    China said it would support diplomatic efforts to resolve the Iranian nuclear crisis as long as oil supplies were not affected.

    Sounds like what most Democratic pols in DC are saying these days:

    "We will support efforts to resolve the Unitary Executive Constitutional crisis as long our chances of reelection are not affected."

    A pessimist sees a glass half empty. I see a paper cup with holes punched in it.

    by Paper Cup on Mon Mar 13, 2006 at 06:23:08 AM PST

  •  Great quote from the article (1+ / 0-)
    Recommended by:
    SleeplessinSeattle

    China said it would support diplomatic efforts to resolve the Iranian nuclear crisis as long as oil supplies were not affected.

    Sounds like what most Democratic pols in DC are saying these days:

    "We will support efforts to resolve the Unitary Executive Constitutional crisis as long our chances of reelection are not affected."

    (man this new comment system bites hard)

    A pessimist sees a glass half empty. I see a paper cup with holes punched in it.

    by Paper Cup on Mon Mar 13, 2006 at 06:24:49 AM PST

  •  Thank you Jerome....... (3+ / 0-)

    great diary.  This administration is so inept.  We've got to push for more alternative energy in the US so we're not held hostage by OPEC or by anyone else.

    If the people lead, the leaders will follow.

    by Mz Kleen on Mon Mar 13, 2006 at 06:34:24 AM PST

  •  Related note (3+ / 0-)

       Reported comments from the UAE Central Bank Governor suggest that he is looking at converting up to 10% of their reserves from dollars to euros.  They must be pissed about something.

    It's getting harder to be an optimist

    by coolbreeze on Mon Mar 13, 2006 at 06:38:52 AM PST

  •  doubt Bush Inc fully thinks through consequences (5+ / 0-)

    or maybe they do but make such ridiculous mis-calculations or plan insane counter measures that it makes your jaw drop.

    For instance, bomb key Iranian facilities so that

    1. Iran stops making nuclear stuff
    1. Iranian government collapses.

    IF these are the goals of Bush Inc, fine, I suppose, but in reality what would happen.

    1. If the government doesn't collapse they would likely retaliate by restricting exports to the EU and US and increase exports to China and other "friendly" governments. This would send our energy prices through the roof and being that they are sitting on hundreds of billions in profits from high prices over the past few months they could easily do this for awhile, at our economy's expense.
    1. the Iranian government does collapse, drying up oil production and sending enery prices through the roof for A LONG TIME, MANY MONTHS IF NOT YEARS.

    and what is Bush Incs plan to re-stabilize Iran, probably nothing other than "support moderates"

    America used to have this aura of invincibility that we could use to intimidate the world.  That's been shattered.  All we are now is a spoiled wealthy nation with thousands of nuclear weapons that can destroy the world.  
    My question is simply, how do we use our terrifying nuclear arsenal to make the world a better place to live?

  •  balls? (3+ / 0-)

    So...the 'heart of the story' is that we need to 'influence the regional powers in the middle east.'  ?????  Not global warming?

    Like John McCain, would you add Venezuala to your list?  McCain talks about 'oil dependence' because he worries about our ability to dictate to Hugo Chavez what's best for his country.  

    To me Jerome, this all sounds a lot like the Bush Doctrine. The Bush doctrine made rational, perhaps, but it's still a version of the Bush doctrine.

    I would think the goal of energy 'independence' would be to have less to do with the midde east--fewer wars like Iraq I and II.  It sounds like you have something else in mind?  Greater US 'influence' over the region?

    Meanwhile, the real problem, the international environmental crisis--global warming, and the methods of diplomacy and international agreements needed to solve it--are all given a backseat?

    The heart of this story is that our civilisation's dependence on oil is making a mockery of any attempts at trying to influence the regional powers in the Middle East. So long as we guzzle oil, they hold us by the balls.

    Military intelligence is a contradiction in terms. Groucho Marx

    by markymarx on Mon Mar 13, 2006 at 08:02:04 AM PST

  •  Jerome, (2+ / 0-)

    Aren't the actions of the Bush Administration, while possibly detremental to the upcoming Asian powers, extremely helpful and in the interests of the Saudi royal family and to American oil firms?

    I've recently come to the conclusion that chaos in Iraq is exactly what the Bush administration wants in order to keep the price of a barrel of crude sky high.

    Then when the Wahabis bombed the al-Askari mosque in Samarra causing, intentionally, this rampant sectarian violence it dawned on me that Iraqi civil war is in the Saudi royal family's interest as well. t will ensure that Iraq's oil field will not be developed in the near future keeping the world supply of oil tight.

    Doesn't this violence, and saber rattling in other oil producing countries keep profits up for the Saudi's and American companies like Exxon-Mobile?

    What I'm saying is, does an economic incentive exist for chaos and tension in oil producing countries for a certain group of American and Saudi petro-elite?

    Not only are we going to New Hampshire, Tom Harkin, we're going to South Carolina, and Arizona, and Oklahoma....

    by Cathan on Mon Mar 13, 2006 at 08:28:35 AM PST

    •  asdf (6+ / 0-)

      Whilst high oil prices are helpful to the Saudi regime, they're also helpful to Iran, Russia, Venezuela and others that the Bush administration is opposed to. And sustained high oil prices give countries like Venezuela and Iran a degree of political leverage that makes Washington nervous ( because it drives up the costs of "action" ).

      There are also domestic political ramifications to high oil prices that are problematic - I'm pretty sure that Karl has done his polling on this score and he knows that pump prices of $3 per gallon are politically toxic. The administration will do EVERYTHING in its power to keep the spot price below $70 per barrel this year.

      Whilst high oil prices are good for a small number of energy companies, they are bad for a broader section of the economy - and these sectors are ALSO big contributors to Republican coffers. Worse still, the oil import bill for the US has doubled since the Iraq war - and this is going to exert pressure on the currency, which puts pressure on interest rates, which is, in turn, politically toxic if it goes too far.

      The oil majors were all making profits at $30 per barrel - they may be making more profits now, but this comes at the expense of the profitability of other sectors of the economy and to the detriment of the consumer.

      •  Here's what I'm afraid of. (2+ / 0-)

        The administration is practically over.  Bush is a lame duck, the 2006 midterms haven't even happened yet and Rove is already posturing for a 2008 campaign.  I'm worried that they no longer give a shit about the political consequences of interest rates, inflation, energy prices etc.

        There is one thing they have been very good at.  Looting the treasury, giving it to their extremely wealthy friends and contributors, and passing the financial consequences off to my generation and the next group of leaders.

        As far as Iran and Venezuela....

        I'm afraid that after the US overthrows Evo Morales in a tidy coup that we'll force Chavez to spend all his money in defense which in turn will take away from his social spending, which in turn will drive a wedge between him and the indigenous poor, which will in turn empower the Florida based Venezuelan elite to take the country back putting their oil supply under US control once again.  

        With Iran, I'm afraid we will stand behind Israel as they start a major conflict in that country over the nuclear issue, in the process disturbing their oil production.

        All of this works out in the favor of those who I mentioned above.

        Who knows if any of this will happen, I sure hope it doesn't, but it's what I'm afraid of.  If there is one thing that my generation should learn since the start of this millennium it should be to expect the worst from our government and huge corporate interests.

        Not only are we going to New Hampshire, Tom Harkin, we're going to South Carolina, and Arizona, and Oklahoma....

        by Cathan on Mon Mar 13, 2006 at 09:04:15 AM PST

        [ Parent ]

        •  asdf (2+ / 0-)

          Well, if they don't give a shit about these things - especially as large numbers of voters and businesses that give money to Republicans do - then Republicans will lose a lot of support and suffer serious consequences. In the end that's the problem that the Bush administration has - it has to convince people who do "give a shit" about these things to go along with their "not giving a shit". You can do this when oil is $25 per barrel, but you're fucked if try this when oil is at $60 per barrel.

          In reality, you get the kind of political fractures that you are currently witnessing, with "serious" Conservatives breaking ranks, Republican senators/congressmen worrying about losing office and so on; all this tends to stymie the kind of "action" that you mention.

          FWIW, there is no chance of Morales being deposed in a coup - the rest of the South American countries will simply pull the same trick that they used when Chavez was briefly unseated in 2002. This time, however, any such action will result in the suspension of Venezuelan oil exports to the US; if it happens, says, after the Mexican elections, then you can add their exports too - that's 3 million bpd that's at risk, and the price at the pump will be $10 per gallon; this is not going to happen.

          The Bush administration did not dematerialise from the Q continuum, and even this distant observer can see that it's political capital is spent, it is firefighting on multiple fronts and its freedom of action has narrowed to a very uncomfortable extent.

  •  Meh... PFC Energy (3+ / 0-)

    PFC Energy has been unrelentingly negative on just about everything Bush has done regarding energy supply.  Really, not just Bush, they're pretty unrelentingly negative on the energy situation as a whole.


    Whenever, the newspapers want a negative quote about the oil situation as a whole, their go-to man has generally been Fareed Mohamedi.


    His track record, in my opinion, has generally not been all that good:


    A brutal price war in the oil market will likely be avoided in the next year and oil prices will average $20 a barrel, Mohamedi said. "OPEC has not done a good job in the past 20 years when it comes to managing prices," he said in response to a question after his presentation. "I have never seen the cohesion in OPEC that I have seen since 1998."


    Or from here:


    That picture could change dramatically if the U.S. military staves off Iraqi sabotage and puts in place a new regime committed to hurry-up modernization. If Iraq opens its oil taps, that would be a powerful psychological force for lower oil prices worldwide. "The whole market will flip from bullish to bearish," says Fareed Mohamedi, chief economist at PFC Energy in Washington.


    I know "attacking the source" is generally frowned on, and I'm not really trying to say Jerome is wrong, in any real sense.  I just suggest you take this all with a large grain of salt.  I caution against ever taking PFC's views as those of the whole industry.

  •  China, India, Japan best reasons for energy ind. (1+ / 0-)
    Recommended by:
    besieged by bush

    Energy independence is often sold around the idea of getting us out of the troublesome Middle East. What is often lacking is a realization that the absolute best reason for energy independence is the increasing competiation from the growing economies of China and India (big) and Brazil and South East Asia (smaller but growing).

    Yeah, it would be great to be able to tell the Middle East dictatorships to go suck an egg, no not have to cozy up to oppression, to be able to deal with these countries in a more rational way. But it will be the increasing competition for limited energy sources that will exert the greatest political pressure around the world in 10 years.

    Doomsayers used to point to limitations in food supplies or clean water as the limiting factors in our ability to grow as a world. Many a scenario was painted of food wars or water wars. To me, and many others, oil wars are much more likely.

    Strategically, we can do a couple of things.

    We can try and form closer diplomatic ties to the oil-producing countries. A good idea, but limited because diplimatic ties, in the end, are just pieces of paper and fancy speaches. This also requires us to have good relations with countries whose basic foundations we find abhorant. (Iran, Saudi Arabia, Libya, Uzbekastan...)  

    We can militarily occupy (or try, anyway) major oil-producing areas. Not feasible, nor desirable. If we tried to make any such move we'd have the entire world turned against us.

    We can rape our own environment to squeeze every single drop of oil out of every single source. Forget National Parks, forget Scenic Shoreline, forget beaches and a clean environment, it would be all about oil. Also not feasible, nor desirable. It also wouldn't give us enough to make up for the entire imports of Middle Eastern oil.

    We can push and develop sources of energy that will replace all of the imports from unsavory sources of oil, including the Middle East. Reduce our energy needs to the point where we can provide all the oil we need purely within domestic, environmentally sound sources. Then we can not only tell the Middle East to stop being a one-industry town, but instead focus on developing your people. (and if they don't then the impact won't be nearly so horrible) But we can also tell our main competitors that they can now worry about all of the problems of the oil areas, or they can buy our technology.

    I know which one of the solutions sounds best to me.

    Plane

    "It is hard to fight anger, for a man will buy revenge with his soul." Heracleitus, 500 BCE

    by PlaneCrazy on Mon Mar 13, 2006 at 09:14:36 AM PST

  •  China, India, Japan best reasons for energy ind. (2+ / 0-)

    Energy independence is often sold around the idea of getting us out of the troublesome Middle East. What is often lacking is a realization that the absolute best reason for energy independence is the increasing competiation from the growing economies of China and India (big) and Brazil and South East Asia (smaller but growing).

    Yeah, it would be great to be able to tell the Middle East dictatorships to go suck an egg, no not have to cozy up to oppression, to be able to deal with these countries in a more rational way. But it will be the increasing competition for limited energy sources that will exert the greatest political pressure around the world in 10 years.

    Doomsayers used to point to limitations in food supplies or clean water as the limiting factors in our ability to grow as a world. Many a scenario was painted of food wars or water wars. To me, and many others, oil wars are much more likely.

    Strategically, we can do a couple of things.

    We can try and form closer diplomatic ties to the oil-producing countries. A good idea, but limited because diplimatic ties, in the end, are just pieces of paper and fancy speaches. This also requires us to have good relations with countries whose basic foundations we find abhorant. (Iran, Saudi Arabia, Libya, Uzbekastan...)  

    We can militarily occupy (or try, anyway) major oil-producing areas. Not feasible, nor desirable. If we tried to make any such move we'd have the entire world turned against us.

    We can rape our own environment to squeeze every single drop of oil out of every single source. Forget National Parks, forget Scenic Shoreline, forget beaches and a clean environment, it would be all about oil. Also not feasible, nor desirable. It also wouldn't give us enough to make up for the entire imports of Middle Eastern oil.

    We can push and develop sources of energy that will replace all of the imports from unsavory sources of oil, including the Middle East. Reduce our energy needs to the point where we can provide all the oil we need purely within domestic, environmentally sound sources. Then we can not only tell the Middle East to stop being a one-industry town, but instead focus on developing your people. (and if they don't then the impact won't be nearly so horrible) But we can also tell our main competitors that they can now worry about all of the problems of the oil areas, or they can buy our technology.

    I know which one of the solutions sounds best to me.

    Plane

    "It is hard to fight anger, for a man will buy revenge with his soul." Heracleitus, 500 BCE

    by PlaneCrazy on Mon Mar 13, 2006 at 09:18:48 AM PST

  •  why no alternatives (1+ / 0-)
    Recommended by:
    besieged by bush

    As long as the world economy is petroleum energy based, the US dominates.

    By upping the ante on oil, BushCo is beginning to compel everyone else to swim with us or sink.

    Really, what are they going to do about us?  We already possess Iraq--for better or worse--and we are essentially the military protectors of Saudi Arabia.

    No matter what our debt, or how weak our currency gets, nor how low our standard of living plummets, as long as our armed forces control the world oil supply, we call the shots.

    The heart of this story is that our civilisation's dependence on oil is making a mockery of any attempts at trying to influence the regional powers in the Middle East. So long as we guzzle oil, they hold us by the balls.

    Mock away.  In the Middle East, we are the regional power.  As long as our war machine has oil, we dominate.  I guess the combination of greed and real politik propelled this strategy for "world domination," but it's too late to ask anyone to forgive us now.

    We have a lead to protect, and that's how BushCo holds us all hostage here, too.

    We have no alternatives.

    The so-called, "Global War On Terror" IS Terrorism!

    by november3rd on Mon Mar 13, 2006 at 09:41:11 AM PST

  •  back in February I heard an intervew on DWR (0+ / 0-)

    Deutsche Welle Radio, that is, which I've never been able to track down the exact recording or transcript of.

    But it was about the recently-built GE research facility in Bavaria, and one of the GE bigwigs giving a speech about international cooperation and mutually beneficial scientific development, and afterwards the interviewer asked him something about well, wasn't it a little strange that here the US govt was trashing Germany for not getting behind the Iraq War, and here they, a major US firm and defense contractor, were expanding their presence and hiring more people in Germany?

    And the GE bigwig said No, not at all, they didn't see it like that, essentially that GE was above these petty temporary political concerns, because they had been around for 125 years and intended to be around for 125 more.

    I thought, listening to that, that any Republican strategists relying on big business to have their specific candidates' success at the top of their list of goals, rather than their own long-term success, was foolish. If I were Karl Rove, hearing a GE senior executive say that, I would be trembling in my boots and calling "Team B" to see if we had any pictures in the file of GE execs with live boys, dead girls, or goats...

    "Don't be a janitor on the Death Star!" - Grey Lady Bast (change @ for AT to email)

    by bellatrys on Mon Mar 13, 2006 at 10:27:56 AM PST

  •  Enemy of my enemy is not necessarily my friend (0+ / 0-)

    And this just proves that.

    Just because Big Oil thinks W is a reckless faux cowboy who endangers the flow of their megaprofits, that does not mean that Big Oil has our best interests at heart.

    Francine Busby for Congress -- CA-50 -- Special Election, April 11

    by socal on Mon Mar 13, 2006 at 10:38:52 AM PST

  •  Might I (timidly) suggest that... (1+ / 0-)
    Recommended by:
    Jerome a Paris

    if nuclear weapons are loosed, whether by nations or terrorist organizations, we can forget about oil.  We can, in fact, forget just about everything that we think we now "know."  I fear we and everyone else have already forgotten exactly what these weapons do to the environment and all living things.  Whole sections of the planet would become uninhabitable.  And this scenario is quickly becoming less than far-fetched.  

  •  end of civilization (0+ / 0-)

    I recommend this story http://bellaciao.org/...

  •  War is not good for business ... (0+ / 0-)

    at least for some in the oil industry ...

    Like (most) good businessmen, they would prefer stability that enables calmer strategic planning to enable greater profits.

    Now, it is somewhat odd, because the 'war tax' / 'risk tax' on oil certainly has been making many -- especially in this industry -- extremely wealthy in recent years.

    9/11/05, Day 1469, A count worth keeping? Or, Osama Bin Forgotten?

    by besieged by bush on Mon Mar 13, 2006 at 12:44:09 PM PST

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