Saturday, June 26, 2004

Conspiracy Theory Intermission

I have been busily looking for information about Haliburton, KRB, Cheney, Energy Task Force, etc as well as doing my real job (torturing the San Diego branch with my presence again this week) and haven't had time to put together my next episode of "Blood for Oil". However, during a recent jog through the blogosphere, I ran into "Lu", who appears to have some background on this subject. I decided to copy our conversation here as it seemed rather pertinent to this section of the blog.

These comments are largely un-edited. I say "largely" not because I cut and pasted only parts of "Lu's" posts, but because I cut out our side conversations about other subjects. For instance, an impassioned plea from our oppressed friend in Canada who begged us to invade them and liberate the cows. We declined as we have plenty of cows here. I didn't post it here because I didn't want some crazy conspiracy theory to start up (ie, John Candy?) abut invading Canada. LOL

So, without further adieu, Kat and Lu discuss oil and energy policy:

Kat,
I went to your blog to see what was going on there and can give you some information that might interest you because I have worked as an energy economist. Europe and Japan are much more dependent on Middle Eastern oil than we are--but the Saudis often produce the incremental barrel so can set the world price. Third, the tar sands in Alberta Canada contain more crude reserves than all the estimated reserves in Iraq. (Watch out,Louise, we could invade you) Economic ways of extracting the crude from the tar sands are being used and that is what masks, in my opinion, the peaking of world production from conventional wells.
Lu | Email | Homepage | 06.24.04 - 10:07 pm | #

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Lu...you are the best! I've been searching and reading so much data on the oil thing that it was making me go cross eyed.

I was reading some information about the "peaking" of conventional oil wells, when and where it will happen first. Also, saw a graph on the untapped oil reserves around the world.

Apparently, Korea has some possible off shore abilities that need to be explored, but are difficult due to political issues(?)

I hope we don't have to invade Canada! I have so many friends their! LOL

I actually have part 3 and 4 of my "conspiracy busting" going at the same time. In 4, I am planning to discuss oil and the over all stability of the middle east, effect on economy, history of changing basis of economy, need for other technologies, why peaking reserves demand this (how long we have, per se), and what might be the future of the ME if said technologies become advanced enough to leave their economies behind.

Wow...is that a lot to cover? Hey...When you said the US was buying Iraq's oil at fair market value...Did you mean we were buying it ALL? No one else got any?

I just want to know if I have to change my outcomes. Where would I find that info, do you know?
Kat-Missouri/USA | Email | Homepage | 06.24.04 - 10:25 pm | #

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Kat,
A lot questions so I'll do my best.

Peaking of conventional wells---
I believe it has happened. Some believe that it will happen in 10 years and some think 20. The top energy economist in the world--I do not exaggerate!--the state of Alaska and the Saudis have hired him in the past and hang on his every word--agrees with me on that --we are good friends.
We used to laugh and say that when the US peaked, we would import from Canada--but they've probably peaked too--definitely have with natural gas! This is not an exact science. Most reserves in OPEC countries have been overestimated--if you look at the numbers available they are not accurate--the reason is that their allowable production within OPEC is based on their reserves so all the oil companies who need to work with them overestimated reserves as a courtsey so each country could produce more and get more oil revenues!
We will have to be nice to Canada about their lumber experts since that is a real sore spot.
I hate to say this among republicans, but Kerry's plan to wean us from ME oil is excellent and the current Bush plan is full of give-aways to the companies and tries to preserve an unrealistic status quo. We need to start now!
Solar, wind--the technologies here are dominated by the oil companies and are not yet economically competitive. We should be mass producing cheap photovoltaic panels right now! We did import just about all of Iraq's production--there was some going to Jordan and there was domestic use but almost all of their official production came here if you match our imports with their official production and export statistics. I wish I could give you sources but I put these things together from so many different sources that I just can't think of them all and it would take me hours to dig them all out again so I will just try to guide you in the right direction. The economic repercussions will as usual be full of the unexpected. The peaking means that oil prices and other fuels like NG and coal will rise steadily--with ups and downs of course, but the direction is up for sure. The growing demand from China and India will aggravate this--maybe the economic slowdown expected in China will slow demand. Demand is a function of overall economic activity and the price is a world price--no one country can grab an unfair share--they all just pay the price and if they can't afford it they buy less. For many years the primary risk to supply has been the instability of the Saud government--the terrorist attacks are not the real revolution going on there, the people want more freedom so it is ripe for trouble at some point. They need trained foreigners there to produce the oil. The effects on world economies of rising oil prices are very serious--if you think of it there is no economic activity that does not have the cost of oil built into it! Just try to name one and you will understand. Inflation big time. Recessions and limited growth. If we started co
Lu | Email | Homepage | 06.25.04 - 12:09 am | #

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ooops! I typed right over the limit--the economic effects are not happy. If you need more let me know.
Lu | Email | Homepage | 06.25.04 - 12:18 am | #

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got it..The economy based on oil was pretty evident to me as well as the "unrest in middle east" possibly pushing us to 1978 gas lines and depression. That's why I can't figure the whole "no blood for oil" thing from some people. That always seems so hypocritical to even start chanting that when they should stop driving their SUVs and start walking if they want to change it. But, truth be told, we are some selfish folks sometimes and we don't like to change our ways any more than Faiza does although we sure like to talk about it. I am of the opinion that we probably won't have much choice sometime soon.

If I understand both parties energy policies, it would seem to me that we actually need a little of both. Viable technologies that will help push diesels and trains around are a necessity for delivering goods. If we can't at least figure out how to do this en masse, we are going to be screwed one way or the other.

Therefore, I think we need to insure that the oil resources stay available while we figure out how to move the new technologies forward. We need both policies. Any other candidate on the horizon running with this?

Not that I want to add to the conspiracy theories, but, ever since I read the info on "peak production" I have been wondering if that is what is in the secret "Cheney Energy Committee" minutes. Maybe a realistic outlook on our energy needs and future? And, nobody wants it to be wide spread in case it causes panic. You know..Your average American doesn't pay much attention except for the price of gas.
Kat-Missouri/USA | Email | Homepage | 06.25.04 - 12:39 am | #

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PS...thanks again Lu, I'll start looking for some different resources.
Kat-Missouri/USA | Email | Homepage | 06.25.04 - 12:40 am | #

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Kat,
You might try one of the international oil companies--but the numbers just are not accurate! The real ones are not public.
The problem is we have done nothing about this problem!
One of the documents that came out about Cheney's meetings was a map of Iraq marking possible new reserves for development--and we all know there was no plan to develop that oil while Saddam was still there.
I think one of the reasons we attacked them was to make the country a stable democracy and transform the ME thus insuring the uninterrupted flow of oil to the world. Again, my feeling is that was the wrong approach because it has intensified the hatred for the US through out the ME and governments willing to work with us will not always be in power--the people in power will be the ones who hate us. About half a million people were killed or wounded this morning in Iraq and it's just starting to heat up. With Iraqis not understanding the nature of al Qaida and actually working with them and allowing them to coordinate their attacks because they believe that they are fighting for Iraq's freedom is heartbreaking. Our intensions at this point are not believable. I've traveled quite a bit in the ME and these are proud people who will only accept one of their own as a leader-now anyone associated with us or the UN is suspect. This could spread into a real revolution through out the country. We may have a legitimate case that the war could benefit Iraq in the long run but it doesn't seem to be in our national interest. I'm falling asleep!
Lu | Email | Homepage | 06.25.04 - 1:01 am | #

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Sorryl..Only 10 pm here. You must be on the east coast. I'm in CA today.

Lu..I kind of have the impression we were damned if we do and damned if we don't. The AQs were going to keep after us. KSA is going to go revolutionary one day sooner or later and Iran was going to go nuclear.

Seems to me that we were already the "bastards" of the world and we could either wait for the changes to happen and re-act or take some action now. After 30 years of reaction, I was ready for some action.

My grandfather always said if you were going to be hung for stealing a lamb, you might as well steal the whole herd!
Kat-Missouri/USA | Email | Homepage | 06.25.04 - 1:26 am | #

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Lu...I was just on another site that was talking about only buying gas from certain companies because they only buy from Texas or North Sea. You think this is feasible, truth or helpful in the whole situation?
Kat-Missouri/USA | Email | Homepage | 06.25.04 - 1:33 am | #

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Kat,
That's down to earth but in this situation I don't understand why we couldn't at least have done it the way we always have. Saddam was loosing his grasp spending his time writing romantic novels--the sons did not have the command that Saddam had so surly there would have been upheaval at his death or even sooner. We could have gotten surrogates within Iraq to start a revolution and then supported them. There was no immediacy. There is a very plausible theory that Saddam himself believed that he had WMD and funds were going to his scientists, etc. For that purpose but they were pocketing it. That indicates his control had slipped The weapons inspector who came back and said we were all wrong about WMD--Kay wasn't it?--also said that the problem was worse than we imagined because of the disarray of the government. With that type of weakness we could have done something more indirect--not launch an all our military attack when we don't have enough troops to stabilize the country if this violence doesn't subside very soon. I just read the new polls and now a clear majority of the American public believes that this war was a big mistake and in the end the American public is very wise.
Lu | Email | Homepage | 06.25.04 - 1:46 am | #

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Kat,
To answer your question above, I think maybe that filling station might have some small advantage for awhile--the real problem would be the price, not shortages as we had during the embargo--assuming the oil is still flowing--with adjustments according to the qualities of the crude, world prices will rise. As long as you can pay more than someone else, you would be able to buy it. When prices rise, people want to buy less and conserve and look for substitutes. It's not a shortage. People in cold climates will have a problem with heating for example and may move south. The buying habits will change with higher prices as different goods reflect the price of oil--could you think on any product or service that would not be affected?.
Lu | Email | Homepage | 06.25.04 - 2:01 am | #

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Basically, people will just be poorer until the substitutes come on line and are cheaper.
Lu | Email | Homepage | 06.25.04 - 2:07 am | #

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Very interesting (and a little scary) information you provided Lu.

could you think on any product or service that would not be affected?.

I worked in the high tech industry and we 'shipped' some software products online. Of course, the price was not any cheaper than the version on the store shelves, but there was no transit cost in the calculation. The music industry is moving in that direction also.

Your information makes a good argument for telecommuniting also.
Kris, Seattle | Email | Homepage | 06.25.04 - 2:48 am | #

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hmmm...I think the war was much more than oil from Iraq. I'm not sure we could have waited (like Castro) for him to fall. Last time we did the insurgency thing it turned into the Iraqi "Bay of pigs".

I think that we must revert to the "war on terror" here. From my way of thinking, looks like KSA is going to be flash point soon. Whether it is Al-Qaida or other Revolution because of lack of significant reforms, it will happen and it won't be good. IMO, Islamist control of KSA oil doesn't sound like a good thing to me considering their stated agenda for the new Muslim world order.

Seems Iraq as a friendly nation next door might give us the ability to help stabilize KSA or fight the Islamists as necessary.

Again, IMO, we didn't have time to wait. I think we are running against the clock now and we have just sped it up so it didn't give the Islamists time to coordinate anymore than they already have. Sometimes, that's the purpose of doing something now rather than waiting. You pick the time and place, not the enemy.

Wellington marched his troops all day and all night to get to Waterloo ahead of the French. He had been there as a child and new the lay of the land. He new he could hide his troops amongst the rolling hills and provoke Napoleon into attacking what he thought was a smaller, exhausted troop. He did not allow for proper preparation of the battlefield, but threw his best troops onto the field, thinking he could win a quick victory. Please note what happened to Boney at waterloo.
Kat-Missouri/USA | Email | Homepage | 06.25.04 - 4:45 am | #


I want to add a small disclaimer here. I have not had time to look up the information that Lu suggested to me. All of Lu's information does seem to make sense, but this is only conversation between she and I, that I have not supported with research materials. Not because they don't exist, but because I haven't had the time. So...If you think anything debunks my debunking, think again. Lu makes a very valid point, early on in the posting: The US purchased almost all of Iraq's oil production at fair market values and this continued right up to the outbreak of the war. So, I would conclude that we did not attack Iraq to get their oil. Second, most of our petroleum imports come from Canada and next from Venezuela--.

In this case, I will let you draw your own conclusions.

Source:
Iraqi Bloggers Central

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