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Black Gold - Getting the Gold vs the Shaft

Reported by Eleanor - September 6, 2004 -

Newshound Editorial
We received the following links to articles concerning oil interests in Iraq from an oil industry insider that I feel are worthy of examining here. Hopefully, communication about such critical issues as Iraqi oil will stimulate some discussion here among some highly intelligent people concerning our role in the world, and the reasons we went to Iraq in the first place.

Question: Who's getting the gold? Who's getting the shaft? These articles can help answer those questions.

1. Who is paying the human toll for this Iraqi oil?
About 1,100 U.S. soldiers and Marines were wounded in Iraq during August, by far the highest combat injury toll for any month since the war began and an indication of the intensity of battles flaring in urban areas. See U.S. Troops in Iraq See Highest Injury Toll Yet for the Washington Post article about the human toll that is absent from TV news.

2. Who is cashing in on the loss of life, loss of limb?
Exxon Mobil Corp., the world's largest publicly traded oil company, posted record profits of $5.79 billion yesterday, and the Royal Dutch/Shell Group of Cos. saw its earnings rise 54 percent as a result of higher prices for oil and natural gas. See the Washington Times article Oil Companies Awash In Profits for more.

3. What is happening to Iraqi Oil?
Saboteurs kept up relentless attacks on Iraq's oil production system on Saturday, hitting pipelines in the north and south that disrupted internal supply, oil officials said. Sabotage has risen over the past month, although the government worked on co-opting tribes along export routes and reinstated hundreds of former ruling Baath Party members, who were fired from the oil ministry after the war. Read more at Iraq Pipelines Hit, Export Flows Hold

4. What does next year hold for oil demand?
"We expect oil demand will be around 2 million barrels per day more in 2005 versus the average in 2004, so we need something like 3 million barrels per day of additional capacity globally to avoid another year of high prices," Mandil told Reuters on the eve of the 19th World Energy Congress in Sydney. Read the entire Reuter's article at World Needs More Oil Capacity.

5. Where does this lead?
Our oil industry insider makes the following observations:
The USA cannot solve its problem with oil by producing more. Even if Bush were granted the authority to drill in environmentally sensitive areas, it would not satisfy 5% of the US energy needs. The world is operating at 99% production capacity, and demand is not abating in spite of the tepid US economy. Demand from China is strong, and the instability created in the Mideast by the invasion into Iraq is generally considered the cause of at least ten percent of the current high levels of oil prices. As long as the US has troops in Iraq, there will be sabotage, and such sabotage may endure for months or years after the US departs Iraq as an occupying army.

If Bush gains a second term, further instability in the Mideast is a given. The drumbeats of war against Iran have already begun. Iran has significant oil reserves. Oil will be at $50 per barrel before the end of the year, and it will probably hit $60 next year if Bush gains a second term.

Only conservation will solve the US energy problems. We must respond to 9/11 by making Mideast oil irrelevant. Automobiles must be more fuel efficient, weigh less, and utilize hybrid technologies. The vast breadbasket of America must be turned into our renewable oil reserves by growing the corn and other produce which can create cleaner burning fuels. Ethanol can be made cost effective if it is given proper government and industry backing and receives the same kind of dollar commitment made to securing Mideast oil. Wind, water, and sun are the energy sources we must exploit similarly.

A great president would call on Americans to make this sacrifice. We cannot continue mainlining motor oil like the energy junkies we have become. What kind of nation sends its sons and daughters to die instead of requiring more fuel efficient cars? When our government policy pursues conservation and renewables instead of conquest, our energy future will be secured. Until then, more blood for oil.