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In the first installment of "Busting Conspiracy Theories", I reviewed the actual oil production of the US compared to the oil production of Iraq and the amount of oil actually being purchased by the US from Iraq. Let's recap some of the facts:
The other 1.9 mil barrels are purchased by France, Germany, China, Korea, etc. See Blood for Oil: Part1
Other Countries include: Europe (France, Germany, Britain, Spain, etc), Korea, China, Australia, Japan, etc. Table 2.1 World Oil Balance, 1999-2003
What assumptions can we make from these numbers?
1) Total Iraqi oil production does not match US oil needs
2) Amount of oil currently purchased by US from Iraq does not make a significant impact on US daily needs.
3) Loss of Iraqi oil for US could be absorbed from increasing internal production which was as high as 9.52 mil barrels a day in 2002(capable of offsetting loss of Iraqi oil)
4) There is no significant oil production to be gained from invading Iraq
Cracking Open the Nut of Conspiracy: Who Is Getting the Money
Now that we've cracked the nut shell, so to speak, we need to deal with the second part of the conspiracy theory: It's not the amount of oil, it's the value (money) and who gets it!
Not so fast! Let's answer the first question: who is controlling the ministry of oil?
Minister of Oil Ibrahim Mohamed Bahr al-Uloum Appointed Sept 2003
A Shia Muslim, al-Ulloum is the son of Shia cleric Mohammad Bahr al-Ulloum. al-Ulloum was educated in the United States, earning a Ph.D. in petroleum engineering from the University of New Mexico; he later worked for the Kuwaiti oil ministry, for the Petroleum Recovery Research Center in New Mexico, and as an independent consultant in London (from 1992 to 2003). He avoided an assassination attempt in Iraq on 12 October 2003
Well...That doesn't prove anything. He's an Iraqi ex-patriate. He's either a CIA or MI6 dupe. Of course, his degree in Petroleum engineering and the years working in the oil industry does seem to make him imminently qualified. Technically, the oil ministry is already under the auspices of the interim government. This will be confirmed on June 30. Problems arising from terrorist activities, continue to make the reconstruction and turnover difficult. However, Mr. al Ulloum is managing the ministry quite well and complete turnover is expected to be smooth.
Who is getting the money you might ask? According to multiple sources, the money, 6.9 billion in 2004 with a total of 10.79 billion, including 2003 oil proceeds are in the Central Bank of Iraq. Much of these proceeds are earmarked by the Iraqi Interim Government for reconstruction efforts along with 8.1 billion remaining from the recently released Food for Oil funds administered by the UN and transferred to the coalition on Nov. 21, 2003.
Of course, the CTs got heated up over the transfer and began calling it the black hole, insisting that 4 billion in oil for food money was missing based on their estimations. Little did they know that they were probably right on target with missing money, but it wasn't the coalition that took it.
The Value of Iraq's Oil vs. Cost of War and Reconstruction
In this section, we will now explore the approximate value of Iraq's oil based on current and projected output in 5 years based on current projections of US forces remaining as "guardians" until Iraq has a fully trained military, air force, police, etc and all ministries are firing on all cylinders. This is the optimistic projection. I will try to explore the same value in 10 years (pessimistic projections) and compare them side by side.
- Current oil production 2004: 2.5 mil barrels/day or 75 mil barrels/mo
- Projected oil production by 2010: 4.0 mil barrels/day or 120 mil barrels/mo
- Month over month oil production increase: .69 mil bbls/mo
Projection is an average linear increase over 74 mos
Projections indicate price could drop down to appx $28-$32/barrel but oil futures are indicating a high as much as $48/barrel (that's right. If the current gas prices don't make you shudder, wait until 2010; better buy hybrid). For the sake of this analysis I use a linear average increase from current pricing by .32/barrel for the next 74 mos.
This will be what is left for disbursements and rebuilding costs.
Linear decrease to 1 mil/mo per DOD estimates for maintenance of bases, equip, personnel, etc)
Ok...do I have to paint the picture again? The value of oil in Iraq for 6 years, starting from the war in March 2003 thru stability mission in 2009, cannot cover the cost of the actual war. Now, if you are a conspiracy theorist, you probably wouldn't stop there. The point would be made that Iraq has more than 6 years worth of oil. The issue here is that, Iraq has control of their money, completely and without reservations, on June 30, 2004. A separate auditing firm will be responsible for insuring that all monies are spent correctly and in Iraq. Further, as revealed by production and demand models, the US buys little of it's oil from Iraq.
Dammit! There he goes again! The President not only invades a country who's oil production couldn't support our daily oil demands circa 1925, but we can't even break even on the project! I'm calling my congressman!
Stay tuned for Part 3 of Blood for Oil: Haliburton's Deal with the Devil, where we will explore the potential profit and loss of this operation, cash flow and contract bidding/award process. (I decided I had to make a separate one to cover Haliburton, just to cover the gamut of issues brought up by the CT's about the "military/oil industrial complex")
Disclaimer: All figures were calculated by me. Oil production and value figures came directly form the Energy International Agency and the CPA. Prosecution of war, occupation and pacification mission costs are based on the Congressional Budget Office (CBO) estimates (with slight adjusted inflation of cost in last 6 mos considering on going violence and increase in troops on the ground) and known appropriation bills previously passed. A spread sheet with a 74 mo analysis of oil and military costs is available for review upon request. Any inferences that this is actual costs configured by the Department of Defense is completely accidental. No such actual costs have been released for public consumption.
Sources
Report from the CBO to the Congressional Chairman of the Committee on the Budget
House Budget Committee, Democratic Caucus
US Cost of an Iraq War
OPEC Brief
EIA Oil Production Projections
EIA Statistics on Iraq Oil
Coalition Provisional Authority
4 comments:
Lu and Mark..."enemy" is all that is required. No ambiguity. No questions. They are the enemy.
Lu...I am happy to see your response. I was wondering about Faiza's intent. I had written an email to her in response to the email from "Joan" who said that America was full of evil, gun toting, drug ridden youths who didn't have any decent schooling (paraphrasing a little) and that people were starving to such an extent, they had to "revert" to raising their own food.
I responded by sending her pictures of where I live and explained that Joan must live in a bad neighborhood and she should consider moving to my neck of he woods. Very low crime and AAA schools. I asked Faiza if it was not the same in Iraq: good places and bad places.
I then explained I lived in the "bread basket" and many of my family were generations of farm owners. While we often had private vegatable gardens and slaughtered some stock for our freezers, most of our farming products went to market for sale. So, while we WERE, in essence, feeding ourselves, we were feeding many other people as well.
I asked if it was the same for Iraq?
She never responded except that I saw her comments later about how people are sending her emails to try to convince her of a different opinion (paraphrasing) and it just wasn't happening.
I wonder if she sponcers classes for horticulture and IED builidng?Kat-Missouri/USA | Email | Homepage | 06.22.04 - 2:12 pm | #
I did question Faiza's past connections as it seems only feasible that anyone living such a comfortable life, prior to the demise of the Saddam regime, must have, at least, known how to play the Ba'athi game. I feel this colors her diatrabs consistantly. No less than my own stance colors mine. I am capable of admitting such leanings. No such luck from you or her.
I don't recall charging her with building IEDs. You must have me confused with another poster…..Kat-Missouri/USA | Email | Homepage | 06.24.04 - 4:31 am | #
While you have no desire to apologize to me at the very least you should apologise to Faiza for posting comments that could, in all truth, get her killed. My great anger that you should place on public display an allegation that could lead to a decent, peace-loving woman being arrested, tortured or killed is something that you may not be able to comprehend. Certainly you were not honest enough to admit the awfulness of what you had done. Perhaps you will never again post such evil, illegal, unfounded slanders against people and guard your mouth before threatening their lives. You want to see yourself as a decent, caring individual? Then take responsibility for your failings and never make such dangerous comments about innocent people again. You were incapable of recalling what you posted two days ago on Jeffrey’s blog. Well here it is, in all its awful, shameful fact. Being too much of a coward to admit what you have done is one thing – develop real courage and do not do such a despicable thing again.Now, delete this comment as nobody else needs to see it, and act with honor in the future. You wronged Faiza, you wronged me, and you wrong yourself by posting lies that can get someone killed. Think hard before you throw out awful accusations. I have retained a copy of this post to ensure that you do not make any further dishonest claims about it and lodged it with appropriate internet authorities. Your words are illegal, but if you refrain from ever again using such ill-considered comments the matter can drop.ma3assalaama
Ibn Battutah
An erstwhile opponent from Iraqi Bloggers Central has joined me here on the blog to take me to task for something, quite late in the game I might add, because I had the gall to refute some statistics he was fronting as proof that America was somehow amoral or, so incapable of taking care of it's own people, that it had no right to interfere with the rest of the world (I am paraphrasing, but that is my take on his purpose for presenting such information).
Ibn rightly points out that I did make a comment on another blogger concerning her apparent leanings towards the old regime, where I did state "I wonder if she sponsors classes on horticulture and IEDs" on
June 22 at Iraqi Bloggers Central
Of course, Ibn proceeds to take me to task 4 days later and out of context of the entire conversation in which we were discussing the tendancies of the blogger to print nothing but negative emails from her "friends" and would not respond to any emails from anyone making a positive comment. She had also cut and pasted some parts of a "friends" email out of context just to support her point.
I did later deny it (4 days later) as I did not remember adding that to the end of my post. Although, going back and reading the thread of the conversation, I thought it a humorous take on the strange juxtopositioning of her "garden pictures" and her constant complaining about the situation, lamenting about "the good ol' days" before the evil Americans came and took out Saddam..
I find it interesting that it took Ibn this long to take me to task and that he demands an apology from me not only for Faiza (who may or may not deserve it), but for himself, for whom there will definitely be no apology. After I refuted his statistics and asked for comparative information, Ibn, instead of returning and indicating I should look at a particular link that would support his proof, proceeds to show his true face and turns to attack me personally.
Kat- Missouri, the idiot who appeared when I can gone to refute 'my statistics' (they are your government's statistics you illiterate imbecile - can't you even read,/b> links? Tear yourself a new one, and try not to keep your dumb head shoved up it this time. Harsh? Yes, because this cowardly bitch sits in her safe house in America and types speculation that Faiza might sponsor (note the correct spelling, dummy) the making of IEDs - improvised explosive devices. That's right, this thick, ugly-minded American bitch accuses, from the cowardly anonymity of the internet, a decent Iraqi woman of perhaps being tied to murder and destruction. You insane, immoral, life-endangering, low-life fucking cow. And Jeffrey said nothing.This is the two faces of Ibn. I think it is quite clear that his rather lucid commentary on the possible repercussions to Faiza on this blog and the mindless insults he perpetrated on the other site, shows the truth of Ibn Battutah.
Generally, I would not post such language on my blog as it does nothing but detract from the purpose, but Ibn was not kind enough to email me personally on the subject nor leave an email which I could return a message to him in kind. Further, he has decided to leave his comment here as an attempt, I believe, to discredit me as he feels discredited.
I think that these two comments from Ibn, side by side, shows the strange two faces of his personality. As I do not know which face Ibn is speaking with, I will make no apology to either.
Ibn... Thank you for adding nothing particular to the discussion on this blog. I'm sure your ego will require that you return to see if you had a response. You have and, should you post again, you will find yourself "relegated to the ash heap" once more.
Forgot to add...Ibn..please feel free to inform the "proper internet authorities". Somehow, I feel that they will be more interested in you than they would be in me. LOL
Who are you trying to threaten? LOL
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