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OPEC and the Economic Conquest of Iraq
(Greg Palast, Harpers Magazine, October 24, 2005)
Two and a half years and $202 billion into the war in Iraq, the United States has at least one significant new asset to show for it: effective membership, through our control of Iraq's energy policy, in the Organization of the Petroleum Exporting Countries (OPEC), the Arab-dominated oil cartel. . . . Just what to do with this proxy power has been, almost since President Bush's first inaugural, the cause of a pitched battle between neoconservatives at the Pentagon, on the one hand, and the State Department and the oil industry, on the other. At issue is whether Iraq will remain a member in good standing of OPEC, upholding production limits and thereby high prices, or a mutinous spoiler that could topple the Arab oligopoly. . . . According to insiders and to documents obtained from the State Department, the neocons, once in command, are now in full retreat. Iraq's system of oil production, after a year of failed free-market experimentation, is being re-created almost entirely on the lines originally laid out by Saddam Hussein. . . . Under the quiet direction of U.S. oil company executives working with the State Department, the Iraqis have discarded the neocon vision of a laissez faire, privatized oil operation in favor of one shackled to quotas set by OPEC, which have been key to the 148% rise in oil prices since the beginning of 2002. This rise is estimated to have cost the U.S. economy 1.5% of its GDP, or a third of its total growth during the period. . . . the original scheme for reconstruction, at least the one favored by neoconservatives, was to privatize Iraq's oil entirely and thereby undermine the oil cartel. One intellectual godfather of this strategy was Ariel Cohen of the Heritage Foundation, who in September 2002 published (with Gerald P. O'Driscoll, Jr.) a post-invasion plan, The Road to Economic Prosperity for a Post-Saddam Iraq, that put forward the idea of using Iraq to smash OPEC. . . . Under Saddam Hussein, Iraq adhered to the OPEC quota limit (historically set to equal Iran's, now 3.96 million barrels a day) via state ownership of all fields. Cohen reasoned that if Iraq's fields were broken up and sold off, a dozen competing operators would quickly crank up production from their individual patches to the maximum possible, swiftly raising Iraq's total output to 6 million barrels a day. This extra crude would flood world petroleum markets, OPEC would devolve into mass cheating and overproduction, oil prices would fall over a cliff, and Saudi Arabia-both economically and politically - would fall to its knees. . . . Following the U.S. military's swift advance to Baghdad, those skeptical of the neocon plan were summarily brushed aside. . . . In plotting the destruction of OPEC, the neocons failed to predict the virulent resistance of insurgent forces: the U.S. oil industry itself. . . . With pipelines exploding daily, the fantasy of remaking Iraq's oil industry also went up in flames. Carroll was replaced by another Houston oil chieftain, Rob McKee, a former executive vice-president of ConocoPhillips and currently the chairman-even during his tenure in Baghdad-of Enventure, an oil-drilling supply subsidiary of the Halliburton Corporation. McKee had little tolerance for the neocons' threat to privatize the oil fields. . . . In November 2003, McKee quietly ordered up a new plan for Iraq's oil. The drafting would be overseen by a "senior adviser," Amy Jaffe, who had worked for Morse when he held the formidable title of Chairman of the Council on Foreign Relations-James Baker III Institute Joint Committee on Petroleum Security. Jaffe now works for Baker, the former Secretary of State, whose law firm serves as counsel to both ExxonMobil and the defense minister of Saudi Arabia. The plan, nominally written by State Department contractor BearingPoint, was guided, says Jaffe, by a handful of oil industry consultants and executives. . . . For months, the State Department officially denied the existence of this 323-page plan for Iraq's oil, but when I identified the document's title from my sources and threatened legal action, I was able to obtain the complete report, dated December 2003 and entitled "Options for Developing a Long Term Sustainable Iraqi Oil Industry." The multi-volume document describes seven possible models of oil production for Iraq, each one merely a different flavor of a single option: the creation of a state-owned oil company. . . . Given how easily the interests of OPEC and those of the IOCs can be aligned, it is certainly understandable why smashing the oil cartel would not strike oilmen as a good idea. In 2004, with oil approaching the $50-a-barrel mark all year, the major U.S. oil companies posted record or near record profits. ConocoPhillips, Rob McKee's company, this February reported a doubling of its quarterly profits from the previous year, which itself had been a company record; Carroll's former employer, Shell, posted a record-breaking $4.48 billion in fourth-quarter earnings. ExxonMobil last year reported the largest one-year operating profit of any corporation in U.S. history. . . . According to Morse, the switch to an OPEC-friendly policy for Iraq was driven by Dick Cheney himself. "The person who is most influential in running American energy policy is the Vice President," who, says Morse, "thinks that security begins by . . . letting prices follow wherever they may." . . . And Dick Cheney, far from "putting the squeeze on OPEC," has taken his de facto seat there, assenting by silence to the oil monopoly's piratical price gouging. But hasn't OPEC's stratospheric crude prices choked the life out of America's auto industry and bankrupted half a dozen airlines? In the Vice-President's bunker the elimination of jobs of Democratic-leaning union members is likely seen as a bonus for the good deed of boosting oil industry profits far above the ozone layer.

. . . Read more!


posted by LoZo 4:44 PM

 

New Memo: Bush tells Blair "First Iraq, then Saudi Arabia"
(Marie Woolf, The Independent, 16 October 2005)
George Bush told the Prime Minister two months before the invasion of Iraq that Saudi Arabia, Pakistan, Iran and North Korea may also be dealt with over weapons of mass destruction, a top secret Downing Street memo shows. . . . The US President told Tony Blair, in a secret telephone conversation in January 2003 that he "wanted to go beyond Iraq". . . . He implied that the military action against Saddam Hussein was only a first step in the battle against WMD proliferation in a series of countries. . . . Mr Bush said he "wanted to go beyond Iraq in dealing with WMD proliferation", says the letter on Downing Street paper, marked secret and personal. . . . The confidential memo recording the President's explosive remarks was written by Michael Rycroft, then the Prime Minister's private secretary and foreign policy adviser. He sent the two-page letter recording the conversation between the two leaders on 30 January 2003 to Simon McDonald, who was then private secretary to Jack Straw, the Foreign Secretary. . . . . . . Mr Rycroft said it "must only be shown to those with a real need to know ". . . . "The conversation seems to indicate that Iraq was not seen as an isolated issue but as a first step in relation to a broader project," he said. "What is interesting is the mention of Saudi Arabia, which to the best of my knowledge had not at that time been identified particularly as a country with WMD. An alternative view is that the mention of Saudi Arabia indicates that the true objectives [like stealing oil] were not related exclusively to WMD." . . . Sir Menzies Campbell, the Liberal Democrats' foreign affairs spokesman, said the timing of the conversation was significant ­ since it took place when Britain and the US were still trying to get a second UN resolution to make the legal case for the Iraq war watertight. . . . "If this letter accurately reflects the conversation between the President and the Prime Minister it will cause consternation, particularly in Saudi Arabia. American policy in the Middle East for decades has been based on support for Israel and an alliance with Saudi Arabia," he said. "If this was more than loose talk and represented a genuine policy intention it constitutes a radical change in American foreign policy."

. . . Read more!


posted by LoZo 12:47 PM

 

UN aid chief warns time is short for earthquake victims
(BBC NEWS, 13 October 2005)
IMAGINE 50 KATRINAS! . . . that is what these earthquake victims are experiencing.

Top UN aid official Jan Egeland warned that "we are losing a race against the clock in the small villages", urging the tripling of aid helicopters. . . . He was speaking after touring the badly damaged town of Muzaffarabad and nearby villages in Pakistani-run Kashmir. . . . Survivors are still pouring out of mountain regions, searching for help. . . . Tens of thousands are thought to have arrived in the wrecked city of Balakot, leaving their dead and some of the injured behind in the mountains where conditions are deteriorating. . . . The UN says an estimated two million people need rehousing and a million are in urgent need of help. . . . Pakistan now says Saturday's earthquake killed at least 25,000 people on its territory while India recorded at least 1,200 deaths. . . . "I've never seen such devastation before. We are in the sixth day of operation, and every day the scale of devastation is getting wider," Mr Egeland said. . . . "We have seen a much graver picture and I believe we need to triple the number of helicopters in the operation. My appeal to the world is to come up with more aid, more relief, and more resources," he said. . . . Some 20 helicopters have been lent to the aid effort by the international community, but the vast area of destruction is still stretching resources to the limit. . . . Pakistani troops queued in a field in Muzaffarabad to board a helicopter on Thursday bound for isolated villages in the Neelum valley. . . . "We are worried for them. We're taking food and supplies with us. We can't reach them by road so we have to use helicopters," an army colonel told AFP. . . . "The soldiers will be clearing the way for relief workers and channelling through supplies. They will also be clearing the dead bodies," he said, pointing out the face masks many of his men were wearing. . . . Mr Egeland called for India and Pakistan to put their differences over disputed Kashmir behind them and handle the disaster together. . . . "We should really forget about old divides in Kashmir and there should be a very open invitation to all assistance from everywhere," he said. . . . India was among the first countries to offer aid to Pakistan and was sending a second consignment of relief goods on Thursday.

. . . Read more!


posted by LoZo 7:45 AM

 

Two Mayan villages declared 'mass graves'
(BBC NEWS, October 10, 2005)
Officials in Guatemala are calling for a number of remote communities to be declared mass graves, after they were engulfed by landslides. . . . Rescue efforts were suspended in some areas on Sunday after it was deemed too dangerous to dig for survivors. . . . More than 650 people in Guatemala have been confirmed dead in the aftermath of Tropical Storm Stan. Hundreds more are thought to be missing. . . . At least 100 people have died elsewhere in Central America and in Mexico. . . . Stan slammed ashore as a category one hurricane in southern Mexico on Tuesday. It quickly lost force, but most of the damage has been done by torrential rains lasting days on end. . . . Guatemalan Vice-President Eduardo Stein said rescuers had still not been able to reach at least 90 villages cut off by mudslides. . . . Some estimates said as many as 1,400 people were feared buried. . . . Two Mayan villages in the worst affected area have been completely submerged by a slick of mud. . . . Diego Esquina, the mayor of Panabaj, said his village "will no longer exist". . . . "We are asking that it be declared a cemetery. We are tired, we no longer know where to dig," he said. . . . "The bodies are so rotten that they can no longer be identified. They will only bring disease." . . . Some 77 bodies have been recovered from Panabaj, but about 250 are still missing, the mayor said. . . . Nearby Tzanchaj was similarly devastated. . . . Firefighters said they had had to order villagers to give up their desperate digging on unstable ground. . . . Correspondents say the Mayan villagers are struggling with a dilemma, as local cultural traditions dictate that bodies must be recovered and given a decent burial. . . . "Entire families have disappeared," local official Diego Sojuel told the Associated Press news agency. . . . Taxi driver Gaspar Taxachoy returned from working in Guatemala City to discover his home buried in mud. . . . The bodies of his wife, two daughters and a son have been found. "I'm only missing one more son," he told AP. . . . The BBC's Claire Marshall, in Mexico, says it is the region's poorest people who have been worst hit, with precariously-built hillside communities drowned by the mudslides.

. . . Read more!


posted by LoZo 2:47 PM

 

Breaking America's grip on the net
(Kieren McCarthy, Guardian Unlimited, October 6, 2005)
Old allies in world politics, representatives from the UK and US sat just feet away from each other, but all looked straight ahead as Hendon explained the EU had decided to end the US government's unilateral control of the internet and put in place a new body that would now run this revolutionary communications medium. . . . The issue of who should control the net had proved an extremely divisive issue, and for 11 days the world's governments traded blows. For the vast majority of people who use the internet, the only real concern is getting on it. But with the internet now essential to countries' basic infrastructure - Brazil relies on it for 90% of its tax collection - the question of who has control has become critical. . . . And the unwelcome answer for many is that it is the US government. . . . when it became global, it created a private company, the Internet Corporation for Assigned Names and Numbers (Icann) to run it. . . . But the US Department of Commerce retained overall control, and in June stated what many had always feared: that it would retain indefinite control of the internet's foundation - its "root servers", which act as the basic directory for the whole internet. . . . A number of countries represented in Geneva, including Brazil, China, Cuba, Iran and several African states, insisted the US give up control, but it refused. The meeting "was going nowhere", Hendon says, and so the EU took a bold step and proposed two stark changes: a new forum that would decide public policy, and a "cooperation model" comprising governments that would be in overall charge. . . . . . . Much to the distress of the US, the idea proved popular. Its representative hit back, stating that it "can't in any way allow any changes" that went against the "historic role" of the US in controlling the top level of the internet. . . . But the refusal to budge only strengthened opposition, and now the world's governments are expected to agree a deal to award themselves ultimate control. It will be officially raised at a UN summit of world leaders next month and, faced with international consensus, there is little the US government can do but acquiesce. . . . according to Nitin Desai, the UN's special adviser on internet governance. "There is clearly an acceptance here that governments are not concerned with the technical and operational management of the internet. Standards are set by the users." [COMMENT by Lorenzo: I sure hope it works out that way.] . . . Hendon is also adamant: "The really important point is that the EU doesn't want to see this change as bringing new government control over the internet. Governments will only be involved where they need to be and only on issues setting the top-level framework." . . . There are still dozens of unanswered questions but all the answers are pointing the same way: international governments deciding the internet's future. The internet will never be the same again. . . . [COMMENT by Lorenzo: To be honest, who would you rather had control over the Internet's root name servers, the UN or the Bush Crime Family? I'll take my chances with the UN.]

. . . Read more!


posted by LoZo 5:46 PM