63. THE IRAQ WAR IS NOT A WAR FOR OIL
Personally, I'm sick of all this "oil war" and "resource war" hype. A bona fide oil war is one where you go in, wage war on the people who currently possess the oil and take physical possession of the oil. The U.S. is not currently involved in any oil wars. In fact, I'm laughing my butt off about Uzbekistan asking the U.S. to leave. I guess the shock and awe U.S. "oil offensive" in Central Asia got turned back by a brutal Uzbek counteroffensive, in the form of a letter to the U.S. embassy. Quite a genteel war we've got going on here people.
Of course, as a dutiful member of the hype patrol, Savinar responds to the above comments with a typical non sequitor:
Matt Savinar wrote:
I guess you haven't seee these:
This too is just another diaper load of hype. Here's a simple question: How many Iraqi oil fields, and how many barrels of Iraqi reserves, does the U.S. now own as a result of the Iraq war? I'll tell you: zero and zero. "Iraqi oil belongs to the people of Iraq."
It's not a real pirate raid if you don't come back with the BOOTY.
In response to the above, Savinar writes:
Matt Savinar wrote:
What was Iraqi oil being sold in prior to the US invasion? What is it sold in now?
Are you too unsophisticated to understand modern economics?
To which, I reply: Who cares? The Americans are still purchasing it like a bunch of wimps, not taking it like warriors. At worst, the Iraq War was a war for financial arrangements, not a war for oil. In a real war for oil, they wouldn't devote a second of thought to financial arrangements. They would just kill everybody and take the oil. When that happens, I'll call it a war for oil. Iraq is no war for oil.
EIA stats (pdf) show: in the 4 years prior to the start of the Iraq War, the US imported roughly 600,000 barrels/day from Iraq. In the last 12 months, the US has imported roughly 600,000 barrels/day from Iraq, and they paid for it. Oil-wise, they are in exactly the same position after the war as they were before the war. They didn't get any oil out of it, so how could it be a war for oil?
One more point: The U.S. is desperate to get out of Iraq. It is hemorhaging money, and the war is becoming increasingly unpopular. U.S. forces will be leaving shortly, so what are Savinar, Ruppert and the rest of the hype patrol going to say then? If the intent of the operation was to seize oil, why didn't they seize any oil, and why are they desperate to pull out? What are they going to do? Retire all their forces and then go back in again, spend another $200 billion and do it right the second time around?
No troops died for oil in Iraq, due to the simple plain fact that the U.S. obtained no oil as a result of the Iraq war. The U.S. has spent about $200 billion dollars on the Iraq War since it began in March 2003. Since then, it has purchased about 470 million barrels of oil from Iraq. The value of that oil (estimating with a price per barrel of $50) is about $24 billion.
EROEI of the Iraq War = ($24 billion)/($200 billion) = 0.12
EROEI for Halliburton? Priceless.
Yeah JD, I guess we must be there for the 115 billion barrels of broccoli that Saddam was sitting on.
The intent was not to "seize" oil and bring it here - it was to control it and keep it priced in dollars. Oil is a globally traded commodity. You don't need to be shipping it back to the US to be profiting from it.
Yeah, those 14 permanent military bases we're building must be for shits and giggles.
We ain't leaving till that oil is pumped dry.
How can anyone trust the word of Peak oilers when they believe in conspiracy in general and believe they know more than economists who have been studying scarcity of resources for 100s of years?
Sorry JD, but I disagree with you here. When the only office that the U.S. military defended in Baghdad in the post-war chaos was the Oil Ministry, and the first objective of the Special Forces was to secure the Western Iraq oilfields, the circumstanial evidence strongly points to a war for oil.
They tried to "grab the oil", and failed miserably in doing so, as terrorists regularly sabotage the oil pipelines leading out of the country.
As you say, even if the war was for oil, the entire notion is plain silly. Terrorists and the indigenous population wouldn't (and haven't) just stood by, nor in the event of shortages would other nations.
The war would cost so much money and energy, along with the political disruption, there is little or no point in doing it. And at some stage the population would turn on it’s rulers in any case, as can be seen by the anti-war movement.
The UK and US haven't got a stomach for another war, simply for oil, nor the finances. It doesn't secure supplies and just makes the situation worse IMHO. Alternatives and efficiency will come because they have to.
Who's paying for the war? You and me.
Who's profiting from the war? Halliburton and friends.
That's why we're there even though it may not make sense financially.
This country is being run as the private feifdom of Bush and company.
Although the Iraq war is not just about oil, oil is the the lynch pin because it is the LARGEST tradable commodity.
U.S. hegemony, if it is to continue to exist, must control the trade of oil. The only option available to this sinking empire is war because no other military exists on Earth that could possible counter U.S. aggression. This is the Global War On Terrorism.
For further reading try William Engdahl and William R. Clark.
Iraqwar was about looting iraq, including its oil. The fact is, that you cannot start a war today and outright kill people and take their oil or whatever resources. And why should you? You can do the looting the financial way. Follow this crude example:
-US invades Iraq
-Iraq exports oil for dollars to the US
-Iraq can only spend the dollars on US companies (Halliburton, Bechtel etc)
-Dollars get recycled back to the US through US companies
So what happened here? Oil flowed netto from Iraq to US, providing jobs for US companies. This is a modern way of looting a country.
I came across your blog just recently and am always facinated by individuals on both sides of the Peak Oil camp as this topic has become more "mainstream" and not simply relegated to the confines of the oil industry and universities. It is also interesting for me to read commentary on this subject matter by people who have little or no industry experience in the oil and gas sector as there are many assumptions and misconceptions passed around as fact on both sides of the debate unfortunately. However I am happy that it has now become a topic of major discussion regardless of the contraversies that it has sparked. I also understand that your contrarian viewpoint has a sole purpose of invoking "shock value" as it is always easy to strike "low blows" at controversial topics such as peak oil however I wish your opinions also included a degree of scientific basis in them as this would truly extend the discussion in a more valuable dialogue. As a trained geologist and management professional working for the past 35 years for several of the oil majors, I find your debunking capabilities to be quite unsound and lacking any real scientific data to boot. As I have many disagreements with your superficial coverage of issues related to geology, depletion and the general topic often labled as Peak Oil, I will concentrate my disdain with one paricular post as of recent. With regards to "oil wars" and in particular as it relates to the most recent invasion of Iraq, you are correct in assuming that the US is not there to as you put it "take the oil." To the contrary, the US is most interested in ensuring the control over the distribution and logistics of supplying the world markets, most importantly the US, as this is a much more important factor. In fact the US would like nothing more than to distance itself from the day-to-day production and procurement of oil from the Middle East as long as it has willing suppliers that allow them the rights to control the overall shipment of the finalized product and maybe even more importantly, the actual sale in US Dollars. This does not mean to suggest that the US and its prolonged engagement in Iraq has nothing to do with the establishment of a "friendly regime" in order to stablize the government and its associated oil production capabilities. To think anything different here is pure ignorance. During the first 10 years of my career I was stationed in Iran and worked along-side NGOs and US military during the early days of our joint exploratory projects in both Iran and the surrounding caspian sea. Prior to the revolution in that country we were very much aware of the vital importance the distribution channels played as it was 90% of our total revenue. Secondly, as a military issue, it was vital for national security as made clear by the Carter doctrine during the same time which several high ranking US military officials that I worked closely with were very much involved with. In fact there was not a new exploratory project in the area where we were not involved with US military. This cooperation with US military officials was especially intense during the setup of new distribution channels both through the Straits of Hormuz and other vital pipeline routes which we were involved with on the mainland of Iran at the time. Many of my former collegues (some of which are now retired) worked also in Saudi Arabia in the 50s and 60s and a hard and valuable lesson which we learned back then was that we were not going to maintain total hegemony over the oil and gas reserves in the Middle East. Thus we had to make a tremendous shift in our overall business focus as a supplier of services to the industry in this region of the world and place an increasing focus our efforts to maximize profits from areas where to a larger extent we could maintain greater control over. Over the years this translated into everything from exploratory services, rig construction, setup and maintenance, and supply-chain/logistic services. It is the later where we have been most successful in the Middle Eastern markets but this has also been heavily funded by the US government in the form of subsidies. Going back to the topic of Iraq, there is really nothing different here as the long-term goal is to stablize the country, facilitate in getting their oil industry back on its feet and ensuring the long-term distribution of oil from this region to the US instead of markets such as France, China, India, etc. I think you should quit with creating straw-man arguements such as the "US is trying to steal the oil wealth from Iraq" and focus your efforts on analyzing the real situation here from more accurate sources. As I read through your blog it seems to be repleate with assumptions and half-baked arguments, but a tad bit too short on facts.
thanks for your comments. This is a complex topic which I'm only beginning to investigate. What I need is considered, thoughtful responses to the debate by people with relevant experience.
Everyone is entitled to their opinion, but there's opinions and there's the truth. Here's how I see it. The truth is that fossil fuels are finite. Oil would appear to be, all things considered, the most important of fossil fuels. Western Economies are based on the idea of constant growth. An increase in economic growth = an increase in consumption. To grow the economy oil supply (as the primary energy resource and economy driver) must increase. But at some point oil must run out because it is finite. So I ask myself, in terms of movitating factors why would America go to war in Iraq? 9/11? It just doesn't make sense, it wasn't Saddam, we all know that. And we know there was no WMD. So was it concern for Iraqi's i.e. human rights issues? I don't know anyone outside the US who believes that argument, same for the "spreading democracy" argument. It seems to require a tremendous amount of naievty to believe America invaded Iraq for noble or altruistic purposes. So it's all about what argument makes the most sense on faced with evidence like past behaviour and the current world climate.
It just seems to me quite simple. Our entire western civilisation is based on one thing, oil. All our eggs are in one basket. And the basket is beginning to fall apart at the seams i.e. oil is running out. Put in this context America's invasion of Iraq looks like a desperate act by desperate people trying to keep the economy/western socitey afloat in the hope that we find a way out of the mess before the oil runs out completely. So if America is that worried about oil (with all it's tech know how and superiority at everything) then it makes me worried too.
I really think the issue is that simple despite people deliberately/inadvertently making it more complex than it really is.
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