Oh! The mob is hip to CHENEY! Comments on the WaPo

Bush Officials Condoned Regional Iraqi Oil Deal

Contract Contradicted State Dept.'s Public Stance

Ray Hunt of Hunt Oil was a member of Bush's Foreign Intelligence Advisory Board. (Natalie Caudill - Dallas Morning News) Enlarge Photo COMMENT washingtonpost.com readers have posted 415 comments about this item. View All Comments »

By Steven Mufson

Washington Post Staff Writer
Thursday, July 3, 2008; Page D01

Bush administration officials told Hunt Oil last summer that they did not object to its efforts to reach an oil deal with the Kurdish regional government in northern Iraq, even while the State Department was publicly expressing concern that such contracts could undermine a national Iraqi petroleum law, according to documents obtained by a House committee.

This Story

• Bush Officials Condoned Regional Iraqi Oil Deal
• More to the Story: Hunt Oil Deal Documents Raise More Questions

Last fall, after the deal was announced, the State Department said that it had tried to dissuade Hunt Oil from signing the contract with Kurdish regional authorities but that the company had proceeded "regardless of our advice." Although Hunt Oil's chief executive has been a major fundraiser for President Bush, the president said he knew nothing about the deal.

Yesterday, however, Henry A. Waxman (D-Calif.), chairman of the House Committee on Oversight and Government Reform, released documents and e-mails showing that for nearly four months, State and Commerce department officials knew about Hunt Oil's negotiations and had told company officials that there were no objections. In one note, a Commerce Department official even wished them "a fruitful visit to Kurdistan" and invited them to contact him "in case you need any support."

That guidance contradicted the administration's public posture. The Bush administration made an Iraqi national petroleum law, which has still not been adopted, a top priority last year in the hope it would more tightly bind the country's regions together and open the way for international oil companies to invest in much larger oil fields south of Iraq's Kurdish region. The State Department said, and continues to assert, that it opposes any contract with a regional Iraqi authority in the absence of a national petroleum law.

The Hunt Oil deal was seen by Kurdish officials as a key victory because the company's chief executive, Ray L. Hunt, was not only a major backer of Bush but also a member of the President's Foreign Intelligence Advisory Board. After the deal was completed, a dozen other foreign firms signed oil contracts with Kurdish authorities.

State Department spokesman Tom Casey said yesterday that "we continue to stand by our previous statements that the U.S. government made its objections to this arrangement known both to the company as well as to the KRG [Kurdistan Regional Government]."

But in a letter to Secretary of State Condoleezza Rice, Waxman said documents his committee had obtained "tell a different story about the role of Administration officials."

The documents show that as early as June 12, 2007, Hunt Oil officials met with members of the State Department's Regional Reconstruction Team for the Kurdistan region in Erbil and on June 15 specifically asked whether there was a policy about companies entering contracts with Kurdish authorities. According to notes taken by Hunt Oil officials, they were told that the "U.S. has no policy, for nor against."

The documents also include an e-mail from Hunt Oil's general manager for the region stating, "There was no communication to me or in my presence made by any of the 9 state department officials with whom I met . . . that Hunt should not pursue our course of action leading to a contract. In fact, there was ample opportunity to do so, but it did not happen."

The State Department officials in Erbil sent summaries of Hunt Oil activities to the embassy in Baghdad and to Laird Treiber, the economic coordinator in the State Department's office of Iraq affairs in Washington.

Separately, Ray Hunt on July 12 and again on Aug. 30 wrote letters to Stefanie R. Osburn, the executive director of the President's Foreign Intelligence Advisory Board, describing his contacts with Kurdish officials.

On Sept. 5, three days before the Hunt Oil contract was signed, the State Department's regional coordinator and deputy team leader in Erbil informed Treiber in Washington that the deal was imminent. The note recounts a conversation with Hunt Oil's regional manager, David McDonald. "Asked about concerns over potential conflicts between the recently passed KRG hydrocarbon law and an [sic] national law, he said the 'significant opportunity' outweighs the legal ambiguity," the note said.

Treiber replied, "Thanks for the heads up; getting an American company to sign a deal with the KRG will make big news back here. Please keep us posted."

It did make big news, and Bush himself was asked about it. On Sept. 20, he said, "Our embassy also expressed concern about it. I knew nothing about the deal." He continued, "I need to know exactly how it happened. To the extent that it does undermine the ability for the government to come up with a oil revenue-sharing plan that unifies the country, obviously I'm -- if it undermines that, I'm concerned."

Later, at a State Department briefing, Casey said, "We certainly are discouraging individuals and companies, as well as the government of Kurdistan, the regional government of the Kurdish region, to engage in these kinds of contracts." Referring specifically to Hunt Oil, he added that the "company decided to sign a contract regardless of our advice, but that is their decision."

Some of my favorite comments !!

1. Maybe he's just implimenting the Benjamin Franklin doctrine: Oily to bed, and oily ro rise..,

2. W=Wide Cut Gas
M=Motor Fuels
D=Diesel

B=BP-AMOCO
U=United Refining Company
S=Saudi Arabian Oil Company
H=Hunt Oil

C=ConocoPhillips
H=Halliburton
E=ExxonMobil
N=Nigerian National Petroleum Corporation
E=ENSCO International
Y=Yukos Oil Company

It is that simple.

3. speedyo wrote: "Is Ray Hunt the same Hunt who tried to corner the Silver market in the 1970's during Carter's administration?"
-----------------------------------------------------
Same crooked family, but I think Ray is the son of porky Bunker and/or his brother, Not-Bunkie. But it was in the Reagan Administration that they got their True Justice as Republicans - A government-guaranteed bailout!

Yes,folks, when one of Reagan's buddies got caught trying to screw the entire world by cornering silver, then lost his a$ doing it, YOU paid to bail him out, Mister Sucker Taxpayer. Just like YOU paid the $850,000,000,000 that was stolen by Neil Bush, Jebby Bush, Charles Keating, and their cronies in the Savings and Loan swindles.

But don't worry, it'll be a new Morning in America any time now.

4. What is so disgustng is that these guys are so rich they could solve world hunger and poverty in 10 minutes. But they had to go and start a war and let thousands of people die so they can get bigger yachts.

Congress - do your job and IMPEACH this administration NOW.

5. To be a true patriot today you have to follow. You have to believe every word your leaders say. You have to set aside the evidence before your eyes and deny the facts you hear and believe with all your heart that your leaders know better than you do what is good for you, what is right, what is just, and what is real. If your leaders tell you that the law is wrong, you have to get rid of the law. If your leaders tell you to live with fear, then you have to surrender to fear. Being an American now means being a follower. It means being obedient.

This is liberty: the liberty to have no liberty.

This is freedom: the freedom to give up freedom.

This is patriotism: the strength to be weak and compliant.

Thinking for yourself is subversive. Questioning your leaders is unpatriotic. The truest patriots today are the ones with their hands over their eyes and their ears stopped up. It is better to be fooled for the good of the nation than to question and dissent.

You angry leftist socialists aren’t Americans anymore. We are building a new reality while your old angry one gets left behind. In the new America, people will understand their place. The press will support the leaders and the people will be happy.

Gott mit uns.

6. OOOOH, . . a real Patriot! Are you writing form Iraq, where you are "defending our freedom'?

Well, starsandstripes, the decent Americans are tired of you scaredy-cats giving away MY Constitutional rights just because your fools in office couldn't protect us on 9/11 despite repeated warnings. This is the land for which I enlisted and fought, Mr. Patriot, and I'm not going to be bullied around by anyone.

Do you like what you have done to America? How do you like our economy? How about the nice little job the Republicans have done on our Armed Forces? Yessirree, that's the way to "support" our troops, . . just send them to kill sons and daughters of folk in other countries.

Like the Justice Department? I was on a federal criminal grand jury when Gonzales perverted that department, watching as the slow rot corrupted its mission and its abilities to perform.

How about our international reputation? How do you like being voted "The Biggest Threat to Woprld Peace" repeatedly in international polls? Do you think everyone on Earth is wrong but you and Dubya and Cheney?

No, you are not going to question my patriotism, and you are not going to intimidate me. We've had enough of the phony macho put out by Republican wannabe soldiers/militia/gun nuts. It's time for the grownups to take over.

7. Now Im really getting scared.....
WaPo hasn't put Obama in today....
WHY?......
It' all about OIL...

McCain is trying to move away from Bush...
Obama is moving closer to Bush......
WHY?.......

Since we all count on the media (all the media), to get our information, it's hard to tell what the truth really is......

But it IS easy to tell which candidate the media prefers......
What will they do when they HAVE to tell us what the heck Obama is up to??????

From where I sit, his magnificant* team keeps him away from orating about the issues he's been running on, sort of.....

Looks like HE chooses subjects that gets free airtime, and he doesn't talk about the REAL issues like he used to do.....

Since he keeps changing and his followers don't seem to mind, it appears that they would follow him to hell and back.....

So it MUST be the MAN rather than the issues that seem to matter......
If he keeps up the 'change', sooner or later, the people will realize that he's just another politition , but one who gets to choose what issues he will talk about......

Count on HIM for late breaking news very soon....

He would never let a long week-end pass by without something controvercial that will keep him the TOP news story for days.....
And don't think he'll be the one to do it, it will likely be a 'source' from his campaign.....as, that way, his hands will stay clean and allow him to make another sermon.....

I've always been a democrat since the 1960 election and we really do need a democrat in the WH, but it's getting harder every day to keep him an ORIGINAL...

He's lost the 'freshness' that we hungered for....

Delegates are allowed to change their minds......
If he keeps moving too close to the middle.....it just may hurt him in the general election......
Right now, I feel he is a 'shoe in'....without even talking about foreign OIL.......
OIL is like a 4 letter word.....and we NEED it, we WANT it, we HAVE it, but won't help ourselves drill for it....

Have a very nice July 4th week-end and keep safe.....
God bless our troops and God bless America........

8. Finally, Mission Accomplished!!!!

9. WHAT?! The Bush administration lied about Iraq and Oil, killing thousands and bankrupting the economy?

WAIT!...look over here--Obama got a sub-prime loan for his house! OMG!!! What a sleazeball!

10. Douglas J. Feith has a piece in the Wall Street Journal op-ed today called:

Why We Went to War in Iraq

God! What does that say when six years into a war they are STILL trying to explain why?

11. And the beat goes on.
I'm not even going to bother reading the comments here because I just don't want to be even further disgusted by the twenty-five percenter's talk of "Nothing to see hear, liberal media, but Clinton got a ...."
It boggles the mind that there are still Americans who presumably can read, who think the invasion of Iraq was about "our freedoms". (This had the highest rankings of all )

12. Exactly why did Ms. Pelosi take impeachment off the table so qjuickly? If you can do it for a president's personal life, surely it can be done for violation of national interest, massive fraud, corruption of the Justice Department and so forth.

Obama can't do it alone -- the Democratic Party must rebuild itself and reconsider its leadership.

13. as an ex-president I wonder what kind of "speaking fees" he will get from the oil industry... Bet it will start at $1 million for him to show up and speak for 5 minutes with that dumb smirk of his.

14. Unfortunately, they will probably get away with everything because while many of the American people know they were duped, but they also know they were willing accomplices.

They were frightened after 9/11, their government exploited that fear to frighten them more, and lie to them so they could push forward their pre-9/11 agenda.

Hitting SOMEONE with American military might made people feel powerful again, and if it was the wrong country, they didn’t really want to know about it!

The Media loved it because it brought in viewers. Remember, the mood was almost festive, lacking only the foam finger, and chants of "USA! USA!"

Now the people know the truth, and they are ashamed, and just want to look away.

To indict the Whitehouse would mean indicting the congress, the media, AND ourselves:
Better to just see what Brittany’s doing, instead.

15. Texas+Oil+Admin=Record Gas Prices+Unbriddled profiteering by the chosen few + Gullible, suffering, foolish populace = 2+2 = 4.

Mathematical Expectancy.

16. I can't even find words anymore to describe how I feel about this morally bankrupt administration so I won't even try.

What I will say is that all of us should be watching to see if the media, print & TV, actually followup on this story. Will we see the president asked repeatedly about this until we get a truthful answer or will the media ignore this and let this adminstration lie about the original lie they told the public? Will we have media covering up for them yet again?

Every time this administration has been caught lying, whether about torture, illegal wiretapping, starting a war, etc., etc., etc., they spin another lie about why they are not guilty and the media let them get away with it every single time.

Everyone in the media has known for a long time that it wasn't just a few bad apples that tortured our prisoners yet when Maj. Gen. Taguba came out and accused the administration of war crimes, something that should have been on the front page of every newspaper and on every TV channel, there was a collective yawn in the media. We must demand that the media coverup stops right here, right now.

NO MORE LIES! NO MORE COVERING UP LIES! NO MORE PASSING RETROACTIVE LAWS THAT LEGALIZE ILLEGAL BEHAVIOR COMMITTED BY THIS ADMINSTRATION AND THEIR PARTNERS IN CRIME. NO MORE APATHY! NO MORE STUPID STORIES ABOUT WHAT GENERAL CLARK SAID WHEN THE MEDIA SHOULD BE TALKING ABOUT WHAT GENERAL TAGUBA SAID!

17. Unreal.

The Bush Jr Administration took us into a totally unnecessary "war" and disastrous, self-defeating occupation all for the sake of rewarding powerful campaign contributors, of which this one was a member of the President's Foreign Intelligence Advisory Board.

Geez, what are the odds Ray Hunt also sat in on those still-classified energy task force meetings with Cheney before the Iraq invasion?

Just when you think our vile, warmongering chickenhawk of a President & Vice President can't possibly sink any lower than they already are.....

18.
IMPEACH THE SON OF A B*TCH BUSH.

HOW MANY THOUSAND VIOLATIONS OF ABUSE OF POWER DOES HE NEED TO COMMIT???

MAYBE NANCY FANCY PANTIES PELOSI WHO HAS FOR />> 2 YEARS << style="font-weight: bold;">19. What is amazing is that this comes as a shock to the usually uninformed americans.
Here in Europe everyone following the situation in Kurdistan have known about this link.

As usual no american media has bothered to get the Kurdish point of view,either official or unofficional.
Imperial hubris.

Facts:
Kurdistan is more secure than any big city in the US.
30 000 Kurdish Peshmerga is controling the borders.
Unlike the US,Kurdistan is booming.
Hospitals,schools and other infrastructure is constructed and tempo is increasing.
Several international airports are running and the kurdish diaspora are vacationing at home and investing in their areas.
All income from oil exports from kurdistan goes to Baghdad for redistribution,and all new exports must be approved from Baghdad.
Kurdistan will get about 18 % of the oil export income as negotiated,whether it is exported from Kirkuk to Ceyhan or from Basra to tankers.
Iraq will export oil for 100 Billion USD this year,too much for Iraq to spend safely because of lacking security in areas outside of Kurdistan.

Meanwhile in the US:
1) The country is going broke.
2) The military is out of control.
3) Standards of living are falling.
4) Criminal facists are ruling the land.

Buy gold.

WAR CRIMES DOSSIER: Oil: Hardly Suprising Iraki newz

Giant Oil Companies to Return to Iraq Under No Bid Contracts

Published on Thursday, June 19, 2008.

Source: International Herald Tribune

BAGHDAD: Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power.

Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq's Oil Ministry for no-bid contracts to service Iraq's largest fields, according to ministry officials, oil company officials and an American diplomat.

The deals, expected to be announced on June 30, will lay the foundation for the first commercial work for the major companies in Iraq since the American invasion, and open a new and potentially lucrative country for their operations.

The no-bid contracts are unusual for the industry, and the offers prevailed over others by more than 40 companies, including companies in Russia, China and India. The contracts, which would run for one to two years and are relatively small by industry standards, would nonetheless give the companies an advantage in bidding on future contracts in a country that many experts consider to be the best hope for a large-scale increase in oil production.

There was suspicion among many in the Arab world and among parts of the American public that the United States had gone to war in Iraq precisely to secure the oil wealth these contracts seek to extract. The Bush administration has said that the war was necessary to combat terrorism. It is not clear what role the United States played in awarding the contracts; there are still American advisers to Iraq's Oil Ministry.

Sensitive to the appearance that they were profiting from the war and already under pressure because of record high oil prices, senior officials of two of the companies, speaking only on the condition that they not be identified, said they were helping Iraq rebuild its decrepit oil industry.

For an industry being frozen out of new ventures in the world's dominant oil-producing countries, from Russia to Venezuela, Iraq offers a rare and prized opportunity.

While enriched by $140 per barrel oil, the oil majors are also struggling to replace their reserves as ever more of the world's oil patch becomes off limits. Governments in countries like Bolivia and Venezuela are nationalizing their oil industries or seeking a larger share of the record profits for their national budgets. Russia and Kazakhstan have forced the major companies to renegotiate contracts.

The Iraqi government's stated goal in inviting back the major companies is to increase oil production by half a million barrels per day by attracting modern technology and expertise to oil fields now desperately short of both. The revenue would be used for reconstruction, although the Iraqi government has had trouble spending the oil revenues it now has, in part because of bureaucratic inefficiency.

For the American government, increasing output in Iraq, as elsewhere, serves the foreign policy goal of increasing oil production globally to alleviate the exceptionally tight supply that is a cause of soaring prices.

The Iraqi Oil Ministry, through a spokesman, said the no-bid contracts were a stop-gap measure to bring modern skills into the fields while the oil law was pending in Parliament.

It said the companies had been chosen because they had been advising the ministry without charge for two years before being awarded the contracts, and because these companies had the needed technology.

A Shell spokeswoman hinted at the kind of work the companies might be engaged in. "We can confirm that we have submitted a conceptual proposal to the Iraqi authorities to minimize current and future gas flaring in the south through gas gathering and utilization," said the spokeswoman, Marnie Funk. "The contents of the proposal are confidential."

While small, the deals hold great promise for the companies.

"The bigger prize everybody is waiting for is development of the giant new fields," Leila Benali, an authority on Middle East oil at Cambridge Energy Research Associates, said in a telephone interview from the firm's Paris office. The current contracts, she said, are a "foothold" in Iraq for companies striving for these longer-term deals.

Any Western oil official who comes to Iraq would require heavy security, exposing the companies to all the same logistical nightmares that have hampered previous attempts, often undertaken at huge cost, to rebuild Iraq's oil infrastructure.

And work in the deserts and swamps that contain much of Iraq's oil reserves would be virtually impossible unless carried out solely by Iraqi subcontractors, who would likely be threatened by insurgents for cooperating with Western companies.

Yet at today's oil prices, there is no shortage of companies coveting a contract in Iraq. It is not only one of the few countries where oil reserves are up for grabs, but also one of the few that is viewed within the industry as having considerable potential to rapidly increase production.

David Fyfe, a Middle East analyst at the International Energy Agency, a Paris-based group that monitors oil production for the developed countries, said he believed that Iraq's output could increase to about 3 million barrels a day from its current 2.5 million, though it would probably take longer than the six months the Oil Ministry estimated.

Fyfe's organization estimated that repair work on existing fields could bring Iraq's output up to roughly four million barrels per day within several years. After new fields are tapped, Iraq is expected to reach a plateau of about six million barrels per day, Fyfe said, which could suppress current world oil prices.

The contracts, the two oil company officials said, are a continuation of work the companies had been conducting here to assist the Oil Ministry under two-year-old memorandums of understanding. The companies provided free advice and training to the Iraqis. This relationship with the ministry, said company officials and an American diplomat, was a reason the contracts were not opened to competitive bidding.

A total of 46 companies, including the leading oil companies of China, India and Russia, had memorandums of understanding with the Oil Ministry, yet were not awarded contracts.

The no-bid deals are structured as service contracts. The companies will be paid for their work, rather than offered a license to the oil deposits. As such, they do not require the passage of an oil law setting out terms for competitive bidding. The legislation has been stalled by disputes among Shiite, Sunni and Kurdish parties over revenue sharing and other conditions.

The first oil contracts for the majors in Iraq are exceptional for the oil industry.

They include a provision that could allow the companies to reap large profits at today's prices: the ministry and companies are negotiating payment in oil rather than cash.

"These are not actually service contracts," Benali said. "They were designed to circumvent the legislative stalemate" and bring Western companies with experience managing large projects into Iraq before the passage of the oil law.

A clause in the draft contracts would allow the companies to match bids from competing companies to retain the work once it is opened to bidding, according to the Iraq country manager for a major oil company who did not consent to be cited publicly discussing the terms.

Assem Jihad, the Oil Ministry spokesman, said the ministry chose companies it was comfortable working with under the charitable memorandum of understanding agreements, and for their technical prowess. "Because of that, they got the priority," he said.

In all cases but one, the same company that had provided free advice to the ministry for work on a specific field was offered the technical support contract for that field, one of the companies' officials said.

The exception is the West Qurna field in southern Iraq, outside Basra. There, the Russian company Lukoil, which claims a Saddam-era contract for the field, had been providing free training to Iraqi engineers, but a consortium of Chevron and Total, a French company, was offered the contract. A spokesman for Lukoil declined to comment.

Charles Ries, the chief economic official in the American Embassy in Baghdad, described the no-bid contracts as a bridging mechanism to bring modern technology into the fields before the oil law was passed, and as an extension of the earlier work without charge.

To be sure, these are not the first foreign oil contracts in Iraq, and all have proved contentious.

The Kurdistan regional government, which in many respects functions as an independent entity in northern Iraq, has concluded a number of deals. Hunt Oil Company of Dallas, for example, signed a production-sharing agreement with the regional government last fall, though its legality is questioned by the central Iraqi government. The technical support agreements, however, are the first commercial work by the major oil companies in Iraq.

The impact, experts say, could be remarkable increases in Iraqi oil output.

While the current contracts are unrelated to the companies' previous work in Iraq, in a twist of corporate history for some of the world's largest companies, all four oil majors that had lost their concessions in Iraq are now back.

But a spokesman for Exxon said the company's approach to Iraq was no different from its work elsewhere.

"Consistent with our longstanding, global business strategy, ExxonMobil would pursue business opportunities as they arise in Iraq, just as we would in other countries in which we are permitted to operate," the spokesman, Len D'Eramo, said in an e-mailed statement.

But the company is clearly aware of the history. In an interview with Newsweek last fall, the former chief executive of Exxon, Lee Raymond, praised Iraq's potential as an oil-producing country and added that Exxon was in a position to know. "There is an enormous amount of oil in Iraq," Raymond said. "We were part of the consortium, the four companies that were there when Saddam Hussein threw us out, and we basically had the whole country."

free link to book on abiotic oil ..

I Was Wrong (from corz.org's blog, link above)

From

Okay, I was wrong. About lots of things, probably, but particularly about Peak Oil. I hadn't considered it until I heard about it, even after that, and I guess it slotted beautifully into my Man-Kill-Earth (MKE) mindset. It made sense, and I was shocked, which tends to sink things in that bit further, all by itself.

But like I said, I hadn't considered it. Why should I? The facts are surely undeniable; crude oil is a fossil fuel, it was created way back in Neolithic Earth (or thereabouts, Neolithic just sounded poetic) and exists as a limited and finite resource scattered in tiny pockets around the globe, and we are using it all up, and we'll run out, right? Wrong. Totally wrong.

Put it like this; Something transformed Russia from an economically backward nation massively dependent on foreign oil reserves, into the world's largest exporter of oil (that is, on top of their own energy needs, of course). That something was the simple discovery that oil is not a "fossil" fuel, but is created, continually, deep within the Earth's mantle. And the development of the technology to get at it, of course.

They didn't keep it a secret, either. From the Forties on, a huge body of scientific data has amassed on the science, mechanics and practical extraction of "Abiotic" oil. They built hundreds of deep drilling wells, and, went on to to create enough wealth to become a world superpower.

Here's an image, with a link to a site with links to sites all about this..



It's interesting that Western petroleum scientists, to this day, refuse to accept the (unrefuted) evidence, and there is a lot of it, that their whole idea about what oil is, is completely false. This isn't an entirely new phenomenon in the world of science, but with such vast sums of money involved, and private industry involved, you would think we'd get past the dogma, and quickly.

But, and this is a long and woeful "but" that spindles off into directions I wouldn't attempt to track here; illuminati, power, corruption, lies, many things; BUT all the evidence I've read suggests that for some reason, the powers that be would prefer not to drill even a fraction of the known conventional reservoirs, let alone explore the Russian's incredible new technology.

This rather fascinating free book may shed some light on things.

Written by a Chaplain who missionaried on the Alaskan pipeline construction, it details the astonishing lengths the US government went to, to delay, obstruct, and otherwise sabotage the construction of the pipeline to this vast oil field (of which they had granted permission to produce only a tiny fraction of, by the way) whilst simultaneously forcing the US into an energy crisis, national press stuff, farm machinery stopping, cars abandoned, pumps empty, the works.

The "why would a government do that?", I will leave to more inclined minds. Here I'm simply setting the record straight about Peak Oil, a rather ingenious and captivating lie. A hoax. Sorry. I hope you didn't get all anxious about it, as I did.

There is plenty of oil, and will be for a very very long time, probably for ever. Certainly long enough for us to develop cleaner, sustainable energy technologies, like hemp1 biomass. .

No. I'm not gonna get started on how a plant once so common and much-used that Culpeper2, in his famous Complete Herbal, stated..

This is so well known to every good housewife in the country, that I shall not need to write any description of it.

..could become outlawed, and in all the areas it provided for Mankind; paper, textiles, raw cellulose, food, medicine, etc., etc.; less efficient, more toxic and expensive alternatives were sold in its stead. Orchestrated insanity on a global scale.

See, from there we could jump to Du Pont, and then we're back into illuminati territory, fuck that. It's just too mind-boggling. Maybe another day.

for now..

;o)
(or

references:

1:
http://www.jackherer.com/chapters.html
http://www.crrh.org/cannabis/industrial.html
http://en.wikipedia.org/wiki/Hemp
http://www.grassrootsnaturalgoods.com/hemp_news/index.html
http://www.sdearthtimes.com/et0199/et0199s11.html
http://www.ccguide.org.uk/petitions.php

2: Culpeper's complete herbal is still in print after over one hundred and eighty years, or thereabouts. My copy has served me very well for not quite that long, but still.

posted by cor @ Fri 12th January 12:54 pm

On the TNIK-BP arrests ..

On the surface it is a straightforward case of industrial espionage.

The Kremlin wants to regain control over Russia's energy assets

Russian security agents arrest two Russian-American brothers, one of whom works for a large Anglo-Russian oil company, and charge them with stealing industrial secrets.

The statement from the federal security service (FSB) says the men were caught in an "attempt to receive confidential information and commercial secrets from a Russian citizen".

It says the information was intended "for the use of foreign oil and gas companies with the goal of obtaining a concrete advantage over Russian competitors".

And that may be exactly what happened.

But the immediate reaction of people in the oil industry here in Moscow has not been: "Did they do it?" but instead: "What is the Russian government up to this time?"

Many suspect that the charges against Ilya Zaslavsky and his brother are politically motivated.

State secrets

First there is the nature of secrets in Russia.

As one oil industry analyst put it to me: "In Russia all geological information regarding oil and minerals is still classified as a state secret. Sending any such information out of Russia, even for the purposes of a financial audit, could be considered illegal."

In other words it would not be difficult for the Russian security services to come up with evidence of wrongdoing if they really wanted to.

But why would they want to?

Very few in the oil industry here believe the case of the Zaslavsky brothers is a straight-forward one of industrial espionage

Perhaps because someone in the Russian government wants to put pressure on someone in the Anglo-Russian oil giant TNK-BP.

It is no secret that the Kremlin wants to regain control over all of Russia's strategic energy assets.

Over the last few years it has methodically, and sometimes brutally, moved to retake control of many of the oil and gas fields sold off by President Boris Yeltsin in the 1990s.

The most infamous example was the prosecution, bankruptcy and dismemberment of Russia's biggest private oil company, Yukos.

Its former boss, Mikhail Khodorkovsky, is still languishing in a Siberian labour camp.

Asset grab?

Later the Russian authorities went after Royal Dutch Shell, accusing it of breaking environmental laws on its huge Sakhalin II gas field.

Eventually Shell sold a controlling stake to the Russian state, and the environmental problems disappeared.

Now many believe the Kremlin wants to get its hands on the assets of TNK-BP.

In particular they want BP to sell the huge Kovytka gas field in Eastern Siberia to state run Gazprom. BP has agreed to sell, but the two sides can not agree on a price.

Others think the Kremlin wants to get its hands on the whole company.

Rightly or wrongly, very few in the oil industry here believe the case of the Zaslavsky brothers is a straight-forward one of industrial espionage.

Kremlin hand behind spy charges?
http://news.bbc.co.uk/2/hi/europe/7307716.stm

Russia charges Zaslavsky brothers with 'spying' after BP raids

The article from the Times link ..

Russia politics and oil .. St. Petersburg Times

Here is an article to help you get the Russian political and oil picture all at once.

Excellent piece!!

NEWS ANALYSIS

How the State Got a Grip on Energy, Putting Natural Resources Back in the State’s Hands

By Miriam Elder Staff Writer The Associated Press President Vladimir Putin shaking hands with workers during a presidential campaign stop at an oil field in Surgut on March 3, 2000. His presidency saw a move to state ownership in the sector. It was early March 2000 when Vladimir Putin landed in Surgut, one stop on a long campaign trail that would help take the acting president to the official seat in the Kremlin. He toured the oil fields that surrounded the bleak west Siberian city, shaking hands with the men who toiled to produce the black gold that was the country’s lifeblood. It was in Surgut — before the high-profile arrests and well before the days of $100-per-barrel oil — that Putin first gave a glimpse into what would become a defining strategy of his eight-year rule. “We will support [oil and gas companies] by all means, but we will also control their work,” he said, hinting at a sector-wide review that would boost the state’s presence in an industry that had become the domain of dueling oligarchs. Eight years later, two state champions — Rosneft in oil and Gazprom in gas — tower over a sector that provides for two-thirds of the federal budget and forms the foundation of the country’s swaggering foreign policy. The road to majority state control was rough, leaving a number of private businessmen jailed or exiled and foreign companies largely sidelined. Most worrisome, insiders and analysts said, was that the strategy of state control has left production stagnating at near crisis levels, as the firms were encouraged to focus on acquisitions rather than making much-needed investments in new fields. “We had high hopes that this period, an eight- to 10-year period, would be one of the major breakthroughs in developing certain very important projects,” said Vladimir Milov, a former deputy energy minister. Instead, Milov, who became a Kremlin critic after leaving the Energy Ministry in 2002, speaks of an era of “disappointed expectations.” “Putin’s legacy is largely a bunch of heavy discussions with few delivered projects,” he said. “Putin’s presidency has mostly focused on the redistribution of ownership and using energy resources as a tool for expanding Russia’s international influence.” An Encouraging Start When Putin came to power around 90 percent of the country’s oil production lay in private hands. Foreign oil companies, like Shell and ExxonMobil, ran huge projects in the east, after concluding preferential contracts in the mid-1990s that offered them favorable terms in order to compensate for the country’s volatile tax and legal system. It was a total departure from the policy of the Soviet state that built Putin and an anathema to the powerful state that he hoped to rebuild. He took notice of the fact early, devoting a 1997 doctoral thesis at the St Petersburg Mining Institute to the state’s role in managing natural resources. That role was impossible to realize while the country was run by a gaggle of oligarchs long used to pulling the Kremlin’s strings. Putin quickly moved to rein them in, calling a meeting in late 2000 to announce: Stay out of politics and business is yours. Investors were encouraged. Putin appointed liberals to top government spots. In September 2000 he visited the far eastern island of Sakhalin and called for foreign investors to be supported. He urged a revitalization of the energy industry by bringing online new oil and gas fields in the largely untouched eastern Siberia and offshore regions, as well as new export pipelines, such as a major route to the northern port of Murmansk. The optimism reached its peak in February 2003, when a trio of oligarchs joined with British oil major BP to form TNK-BP, a 50-50 venture formed around the flagship gas field of Kovykta, in largely untapped eastern Siberia. Announcing the deal, Mikhail Fridman, head of TNK-BP shareholder Alfa Group, said: “It is a reflection of the political change that has taken place in Russia over the past three years. Russia has stopped being associated with instability and nontransparency.” The Yukos Attack Five months later, Platon Lebedev, a major shareholder in oil firm Yukos, was arrested on suspicion of illegally acquiring shares in a fertilizer firm Apatit back in 1994. In October 2003, Khodorkovsky, Yukos CEO and then the country’s richest man, was arrested and the legal onslaught on the country’s largest oil company began, forever changing the landscape of the energy sector and the view of Russia and Putin’s Kremlin. What precisely prompted the arrest is anybody’s guess — that Khodorkovsky was on the verge of selling a 25 percent stake in Yukos to a U.S. oil company, that he was planning to build a pipeline to China to bypass state-run pipeline monopoly Transneft, that he was openly funding opposition deputies ahead of December’s State Duma vote, or that he planned to grow even larger through a merger with Roman Abramovich’s Sibneft. The final straw came in February 2003, when Khodorkovsky publicly criticized Putin for state-run Rosneft’s murky acquisition of medium-sized producer Severnaya Neft. “We knew we would have serious problems,” said Alexander Temerko, a former Yukos vice president now living in self-imposed exile in London. “While they had a monopoly position in gas [with Gazprom], they didn’t have one in oil.” Khodorkovsky was sentenced in 2004 to eight years in prison on charges of fraud and tax evasion, and the lion’s share of Yukos assets went to Rosneft in a series of orchestrated auctions, epitomized by the December 2004 sale of Yuganskneftegaz. He accused Igor Sechin, Putin’s powerful deputy chief of staff and chairman of Rosneft’s board, of orchestrating the attack on Yukos. Yuganskneftegaz, which produces 11 percent of all Russian oil, went to an obscure company called Baikal Finance Group for just $9.4 billion. Rosneft bought Baikal weeks later, tripling its own production overnight and putting it on the path to becoming the country’s largest oil producer — a goal it achieved last year after buying the two remaining large Yukos units up for grabs. “We are a state company and at the same time a public company, and one of our strategic priorities is to continue to improve our operations in order to demonstrate to our main shareholder that we are the best partner for developing new assets in Russia,” said Rosneft vice president Peter O’Brien, an American who was brought to the company ahead of its July 2006 initial public offering in London, which saw nearly 15 percent of the company sold off. “During the IPO process, clearly some market participants, whether press or investors, did have a view toward the Yukos process which inhibited them from taking part in the IPO,” he said, but added, “Since the IPO, as we’ve followed through on increasing transparency and profitability, interest and share ownership by leading global institutions has accelerated.” Alexanderr Belenky / The St. Petersburg Times Rosneft’s Yukos acquisitions, plus Gazprom’s purchase of Sibneft in 2005, drastically boosted the state’s share in the energy game. The approach was codified as early as May 2003, when the Cabinet passed an energy strategy through 2020 that signaled the beginning of the end of private reign over the sector. Temerko, the former Yukos vice president, said that, after reading the strategy, “we knew they’d go after some company.” The first line of the strategy reads: “Russia possesses great energy resources and a powerful fuel and energy complex that provide the basis of economic development and are the instrument for carrying out domestic and foreign policy.” “It was then we realized the state runs everything,”

Temerko said. It took foreign oil companies and foreign capitals longer to wise up. The euphoria of the TNK-BP deal faded into widespread concern over the role foreign firms would play, as they functioned in a legal vacuum while the state carved out its strategy through practice rather than regulations. “[TNK-BP] represented the end of that chapter, when foreign companies could get almost unrestricted access to Russia’s energy sector,” said Chris Weafer, chief strategist at UralSib. A notable exception is ConocoPhillips’ 2004 acquisition of a small stake in private oil firm LUKoil, which it has since increased to 20 percent. Foreign oil firms rushed the country in the mid-1990s, capitalizing on its chaotic industrial landscape to win major contracts in the country with the world’s largest proven gas reserves and vast untapped oil fields. For the most part, they were awarded production-sharing agreements, which ensured that the firms would win back all expenditures before paying out revenues to the state. With the oil price inching ever higher on the back of instability in the Middle East and rising demand from China and India, Putin realized that the state was missing out on billions of dollars per year and soon joined the trend of global resource nationalism. Sustained campaigns led by Oleg Mitvol, the deputy head of the Natural Resources Ministry’s environmental watchdog, cast shadows over Royal Dutch Shell’s PSA at Sakhalin-2 and TNK-BP’s flagship Kovykta project. Months of pressure, during which Mitvol threatened to revoke the firms’ licenses over purported environmental violations, ended with Shell handing a controlling stake in Sakhalin-2 to Gazprom and TNK-BP selling the entirety of its 63 percent stake in Kovykta to Gazprom. Rather than codifying a long-awaited law on strategic sectors, which would limit foreign involvement to 49 percent stakes, Putin laid out his strategy through practice. “It’s a strategic sector and certain rules are being applied, like in every country of the world,” Kremlin spokesman Dmitry Peskov said. “The situation with Sakhalin and Kovykta occurred when foreign companies, foreign major shareholders, were having problems with Russian law. It is easier for every company to have a joint venture with Russian partners to avoid that,” he said. Gazprom’s stake in Sakhalin-2, a sprawling project in the Far East, gave it a foothold in the country’s first foray into liquefied natural gas, in which gas is cooled to liquid form so it can be easier stored and shipped on tankers, rather than confined to pipelines. Yet it has failed to follow through on decades-long promises to develop much-needed fields on the Yamal Peninsula and has delayed plans to produce from Shtokman, a field in the Arctic offshore estimated to hold 3.7 trillion cubic meters of gas. “It is much easier to use the windfall to acquire companies that already generate cash” than bring new projects online, Milov said. “I’ll quote a top Gazprom manager, who once said to me, ‘Why should we bury money in Yamal, in the development of projects that will start to deliver in a decade, when many Gazprom managers will be long gone?’” This has prompted concern in Europe, which relies in Russia for one-quarter of its gas supplies — an amount expected to grow to half by 2030. The Gazprom Behemoth Many had held high hopes that Putin would seek to reform Gazprom after replacing Yeltsin’s management team with his own, led by St. Petersburg native Alexei Miller as CEO. Yet, eight years later, Gazprom remains an unwieldy behemoth, employing some 500,000 people and the domain of competing clans eager to shape what has become the country’s largest firm by market capitalization, with a value of $312 billion. Its current chairman is President-Elect Dmitry Medvedev. A politically tinged pricing dispute with Ukraine in January 2006 signaled to Europe the return of “the Russian bear.” “EU fears of over-dependence on Russian gas are a concrete expression of the progressive breakdown of political relations with Moscow, stemming from a range of issues of Russian domestic and international politics,” said Jonathan Stern, gas expert at the Oxford Institute of Energy Studies. Just months after Ukraine’s Orange Revolution ushered in a Western-leaning government, Gazprom abruptly announced its own brand of shock therapy in December 2005, cutting subsidies to Kiev and drastically raising gas prices to its eastern neighbor. When Kiev couldn’t pay, Gazprom shut the taps, reducing shipments not only to Ukraine, but also to Europe, which gets some 80 percent of its Russian gas shipments through pipelines that crisscross the country. “I don’t think it really led to any serious change with Europe, which is traditionally our biggest market,” said Ilya Kochevrin, executive director at Gazprom Export. “The only recognition is that we need to be more proactive in explaining our position.” Igor Tabakov / The St. Petersburg Times Mikhail Khodorkovsky on trial Kochevrin said he did not believe that resistance to Gazprom expansion into Europe, as well as Brussels’ proposal last year to bar non-EU firms from owning majority stakes in pipelines or power grids in the absence of reciprocal agreements, were direct responses to Gazprom’s growing politicized clout. Pricing disputes with neighboring countries prompted Gazprom to pursue a strategy of direct shipments to Europe, including the Nord Stream pipeline, which will pump gas directly to Germany, and South Stream, which will send gas to the Balkans. Putin has spent the past few years eagerly pushing “strategic reciprocity,” hoping to gain a solid foothold in the European market beyond long-term gas supply deals and pipeline agreements. Yet, with the notable exceptions of Germany and Italy, Europe’s two largest gas importers, the opposition has been stiff. “When we talk about the energy sector in Russia it is impossible to separate politics and economics, and that’s never going to change,” said Weafer of UralSib. It is also impossible to separate the personal and professional, since, as one former bureaucrat put it, “everyone is trying to be the next Armand Hammer,” referring to the U.S. oil magnate who won key deals during the Soviet era through strong relationships with the leadership. Putin’s close relationship with Gerhard Schroeder put the former German chancellor at the head of the Nord Stream consortium. Those who fall afoul of the regime and its energy champions tend to suffer. William Browder, CEO of Hermitage Capital Management, then Russia’s biggest foreign portfolio investor, was denied entry into the country upon landing at Sheremetyevo Airport in November 2005, on the suspicion that he posed a threat to national security. The move was widely seen as retaliation for Browder’s outspoken calls to improve Gazprom’s transparency. Supply Shortages One of the most worrisome results of the past eight years, insiders and analysts said, is that Russia may soon face the prospect of failing to produce enough oil and gas supplies to feed growing markets both at home and abroad. One hallmark of Putin’s presidency was the decision to liberalize gas prices inside the country, due to be achieved by 2011, in order to make the domestic market more attractive for its producers. Yet, the fact remains that production at Soviet-era fields in western Siberia is dwindling, and political distraction, in addition to unfavorably high tax regimes, means that the Arctic and eastern offshores remain largely undeveloped. “This is the result of the fact that private initiatives have been curbed and the advantage has been given to state companies, whose interest is not in production, but in the redistribution of control,” Milov said. This has also increased Russia’s dependence on buying gas from Central Asia, in the absence of long-term supply contracts and amid signs that countries like Turkmenistan are seeking to raise their own prices to market levels. Milov said Central Asian gas comprised 8 percent of Gazprom’s reserve base, up from 4 percent in 2002. And oil production, after years of a steady rising, faces the specter of falling flat this year. “Without Rosneft, Russian production recently has basically been flat. With Rosneft, it’s growing 1 to 2 percent annually,” said O’Brien of Rosneft. “The vast majority of other oil producers are now fighting declining production. “Ruble appreciation and inflation and a tax regime that is outdated will soon make it difficult to approve some potential projects,” O’Brien said. “Many projects look questionable in terms of future profitability, even with fairly optimistic, that is, low, inflation assumptions.” “If something is not done soon, then many companies, particularly those with older portfolios, will need to reject investment proposals and as a result will see an accelerating decline in their oil production,” he said. Putin has followed through on promises to reassert the state’s influence. Around 42 percent of Russian production now lies in state hands, versus 10 percent when he first took the reins, according to UralSib research. That proportion is expected to rise if troubled oil producer Russneft, whose former owner Mikhail Gutseriyev last year accused the Kremlin of forcing him to sell, ends up in state hands. The fate of TNK-BP also remains unclear. The world of energy reflects the broader state of the country. Its firms are staffed with Putin’s friends and FSB agents, from new Transneft chief Nikolai Tokarev to Andrei Patrushev, the younger son of Federal Security Service director Nikolai Patrushev who acts as an adviser at Rosneft. It is fiercely controlled from the Kremlin. Before Putin announced that he would take the prime minister’s seat upon Medvedev’s election to the presidency, Moscow’s chattering classes proposed that he might move to chair Gazprom’s board. Beyond the importance of the state’s control over the energy sector, the energy sector’s control over the state is just as key. Despite loud pronouncements on the need to diversify, Russia’s economy remains inextricably linked to the dipping production of oil and gas, with revenues squirreled away in a $168 billion stabilization fund that is intended in large part to encourage wider economic growth. Yet the problem of its politicization remains. “The government has become used to a high oil price that suits what it wants to do in the economy,” Weafer said. An announcement last month that the three-year budget would boost its oil-price prediction to $74 per barrel — a sum that is, for the first time ever, higher than the previous year’s average — provoked worry. UralSib predicts that the country will begin eroding its surplus if the price dips to $64. “It’s a real threat to the fiscal prudence we’ve had, which is part of the Russian story of the past eight years,” Weafer said. “The legacy of the Putin era is that, at the end of it, Russia is even more dependent on energy than . It was at the start of it,” he said

Energy Milestones

September 2000: Putin promises to support foreign investors and production-sharing agreements.

May 2001: Putin replaces Gazprom CEO Rem Vyakhirev with longtime St. Petersburg ally Alexei Miller.

February 2003: TNK-BP formed through BP’s $6.75 billion investment into the joint venture with three oligarchs, the largest ever equity deal in Russia at the time.

February 2003: Yukos CEO Mikhail Khodorkovsky publicly questions Putin on state-run Rosneft’s acquisition of mid-level producer Severnaya Neft.

May 2003: The Cabinet passes a state energy strategy through 2020, calling the energy sector an instrument for carrying out domestic and foreign policy.

July 2003: Major Yukos shareholder Platon Lebedev is arrested.

October 2003: Khodorkovsky is arrested.

December 2003: Yukos hit with a back tax bill of $3.5 billion, the first in a series that eventually reaches $33 billion.

July 2004: Putin’s powerful deputy chief of staff Igor Sechin replaces Economic Development and Trade Minister German Gref as chairman of Rosneft.

September 2004: U.S. oil firm ConocoPhillips buys a 7.59 percent stake in LUKoil for $2 billion.

December 2004: Yukos’ largest production unit, Yuganskneftegaz, is sold at auction for a knockdown price to Baikal Finance Group, later bought by Rosneft.

December 2004: The Energy Ministry approves oil pipeline monopoly Transneft’s plans to build a major pipeline eastward, amid wrangling whether it will end in China or Japan.

May 2005: Khodorkovsky and Lebedev are found guilty of fraud and tax evasion and sentenced to eight years in prison.

May 2005: Gazprom and Rosneft call off a floated merger.

August 2005: Khodorkovsky accuses Sechin of orchestrating the attack on Yukos.

September 2005: Gazprom buys Roman Abramovich’s Sibneft for $13.01 billion in the biggest takeover deal in Russian history at the time.

September 2005: Germany and Russia agree to build Nord Stream pipeline, providing direct gas deliveries to Europe.

November 2005: William Browder, CEO of Hermitage Capital Management and activist Gazprom minority shareholder, is barred from entering Russia on grounds that he poses a threat to national security.

January 2006: Gazprom cuts gas deliveries to Ukraine for three days following a pricing dispute.

March 2006: Putin, during a trip to China, signs a deal pledging to eventually sell gas to the country.

July 2006: Rosneft raises $11 billion during an initial public offering in London.

August 2006: A Moscow court declares Yukos bankrupt.

October 2006: Gazprom says it will develop the Shtokman gas field alone and retain 100 percent ownership, shutting down years of negotiations with foreign partners.

December 2006: Royal Dutch Shell, Mitsui and Mitsubishi each halve their shares in Sakhalin-2 to hand Gazprom a controlling stake in the project for $7.45 billion following months of pressure from environmental authorities.

February 2007: Putin says he finds the idea of a gas OPEC “interesting.”

May 2007: Rosneft buys Samaraneftegaz and Tomskneft, Yukos’ final two production units, at auction for $13.2 billion.

June 2007: TNK-BP seals a deal to sell its 62.9 percent stake in its flagship Kovykta field to Gazprom for $700 million to $900 million following months of pressure from environmental authorities.

July 2007: Russneft owner Mikhail Gutseriyev flees the country after accusing the state of forcing him to sell his firm through the levying of politicized tax charges; Oleg Deripaska’s Basic Element says it is in talks to buy the firm.

July 2007: Reversing course, Gazprom gives France’s Total a 25 percent stake in developing Shtokman.

September 2007: The EU issues proposals on unbundling of its power industry, seen as a move to bloc Gazprom’s access.

October 2007: Gazprom gives Norway’s StatoilHydro a 24 percent stake in developing Shtokman.

— MT

War and Peak Oil (My ex-husband told me ALL this back in 1982) Confessions of an ‘ex’ Peak Oil believer By F. William Engdahl

Global Research, September 26, 2007

Confessions of an ‘ex’ Peak Oil believer The good news is that panic scenarios about the world running out of oil anytime soon are wrong. The bad news is that the price of oil is going to continue to rise. Peak Oil is not our problem. Politics is. Big Oil wants to sustain high oil prices. Dick Cheney and friends are all too willing to assist. On a personal note, I’ve researched questions of petroleum, since the first oil shocks of the 1970’s. I was intrigued in 2003 with something called Peak Oil theory. It seemed to explain the otherwise inexplicable decision by Washington to risk all in a military move on Iraq. Peak Oil advocates, led by former BP geologist Colin Campbell, and Texas banker Matt Simmons, argued that the world faced a new crisis, an end to cheap oil, or Absolute Peak Oil, perhaps by 2012, perhaps by 2007. Oil was supposedly on its last drops. They pointed to our soaring gasoline and oil prices, to the declines in output of North Sea and Alaska and other fields as proof they were right. According to Campbell, the fact that no new North Sea-size fields had been discovered since the North Sea in the late 1960’s was proof. He reportedly managed to convince the International Energy Agency and the Swedish government. That, however, does not prove him correct. Intellectual fossils? The Peak Oil school rests its theory on conventional Western geology textbooks, most by American or British geologists, which claim oil is a ‘fossil fuel,’ a biological residue or detritus of either fossilized dinosaur remains or perhaps algae, hence a product in finite supply. Biological origin is central to Peak Oil theory, used to explain why oil is only found in certain parts of the world where it was geologically trapped millions of years ago. That would mean that, say, dead dinosaur remains became compressed and over tens of millions of years fossilized and trapped in underground reservoirs perhaps 4-6,000 feet below the surface of the earth. In rare cases, so goes the theory, huge amounts of biological matter should have been trapped in rock formations in the shallower ocean offshore as in the Gulf of Mexico or North Sea or Gulf of Guinea. Geology should be only about figuring out where these pockets in the layers of the earth, called reservoirs, lie within certain sedimentary basins. An entirely alternative theory of oil formation has existed since the early 1950’s in Russia, almost unknown to the West. It claims conventional American biological origins theory is an unscientific absurdity that is un-provable. They point to the fact that western geologists have repeatedly predicted finite oil over the past century, only to then find more, lots more. Not only has this alternative explanation of the origins of oil and gas existed in theory. The emergence of Russia and prior of the USSR as the world’s largest oil producer and natural gas producer has been based on the application of the theory in practice. This has geopolitical consequences of staggering magnitude. Necessity: the mother of invention In the 1950’s the Soviet Union faced ‘Iron Curtain’ isolation from the West. The Cold War was in high gear. Russia had little oil to fuel its economy. Finding sufficient oil indigenously was a national security priority of the highest order. Scientists at the Institute of the Physics of the Earth of the Russian Academy of Sciences and the Institute of Geological Sciences of the Ukraine Academy of Sciences began a fundamental inquiry in the late 1940’s: where does oil come from? In 1956, Prof. Vladimir Porfir’yev announced their conclusions: ‘Crude oil and natural petroleum gas have no intrinsic connection with biological matter originating near the surface of the earth. They are primordial materials which have been erupted from great depths.’ The Soviet geologists had turned Western orthodox geology on its head. They called their theory of oil origin the ‘a-biotic’ theory—non-biological—to distinguish from the Western biological theory of origins. If they were right, oil supply on earth would be limited only by the amount of organic hydrocarbon constituents present deep in the earth at the time of the earth’s formation. Availability of oil would depend only on technology to drill ultra-deep wells and explore into the earth’s inner regions. They also realized old fields could be revived to continue producing, so called self-replentishing fields. They argued that oil is formed deep in the earth, formed in conditions of very high temperature and very high pressure, like that required for diamonds to form. ‘Oil is a primordial material of deep origin which is transported at high pressure via ‘cold’ eruptive processes into the crust of the earth,’ Porfir’yev stated. His team dismissed the idea that oil is biological residue of plant and animal fossil remains as a hoax designed to perpetuate the myth of limited supply. Defying conventional geology That radically different Russian and Ukrainian scientific approach to the discovery of oil allowed the USSR to develop huge gas and oil discoveries in regions previously judged unsuitable, according to Western geological exploration theories, for presence of oil. The new petroleum theory was used in the early 1990’s, well after the dissolution of the USSR, to drill for oil and gas in a region believed for more than forty-five years, to be geologically barren—the Dnieper-Donets Basin in the region between Russia and Ukraine. Following their a-biotic or non-fossil theory of the deep origins of petroleum, the Russian and Ukrainian petroleum geophysicists and chemists began with a detailed analysis of the tectonic history and geological structure of the crystalline basement of the Dnieper-Donets Basin. After a tectonic and deep structural analysis of the area, they made geophysical and geochemical investigations. A total of sixty one wells were drilled, of which thirty seven were commercially productive, an extremely impressive exploration success rate of almost sixty percent. The size of the field discovered compared with the North Slope of Alaska. By contrast, US wildcat drilling was considered successful with a ten percent success rate. Nine of ten wells are typically “dry holes.” That Russian geophysics experience in finding oil and gas was tightly wrapped in the usual Soviet veil of state security during the Cold War era, and went largely unknown to Western geophysicists, who continued to teach fossil origins and, hence, the severe physical limits of petroleum. Slowly it begin to dawn on some strategists in and around the Pentagon well after the 2003 Iraq war, that the Russian geophysicists might be on to something of profound strategic importance. If Russia had the scientific know-how and Western geology not, Russia possessed a strategic trump card of staggering geopolitical import. It was not surprising that Washington would go about erecting a “wall of steel”—a network of military bases and ballistic anti-missile shields around Russia, to cut her pipeline and port links to western Europe, China and the rest of Eurasia. Halford Mackinder’s worst nightmare--a cooperative convergence of mutual interests of the major states of Eurasia, born of necessity and need for oil to fuel economic growth--was emerging. Ironically, it was the blatant US grab for the vast oil riches of Iraq and, potentially, of Iran, that catalyzed closer cooperation between traditional Eurasian foes, China and Russia, and a growing realization in western Europe that their options too were narrowing. The Peak King Peak Oil theory is based on a 1956 paper done by the late Marion King Hubbert, a Texas geologist working for Shell Oil. He argued that oil wells produced in a bell curve manner, and once their “peak” was hit, inevitable decline followed. He predicted the United States oil production would peak in 1970. A modest man, he named the production curve he invented, Hubbert’s Curve, and the peak as Hubbert’s Peak. When US oil output began to decline in around 1970 Hubbert gained a certain fame. The only problem was, it peaked not because of resource depletion in the US fields. It “peaked” because Shell, Mobil, Texaco and the other partners of Saudi Aramco were flooding the US market with dirt cheap Middle East imports, tariff free, at prices so low California and many Texas domestic producers could not compete and were forced to shut their wells in. Vietnam success While the American oil multinationals were busy controlling the easily accessible large fields of Saudi Arabia, Kuwait, Iran and other areas of cheap, abundant oil during the 1960’s, the Russians were busy testing their alternative theory. They began drilling in a supposedly barren region of Siberia. There they developed eleven major oil fields and one Giant field based on their deep ‘a-biotic’ geological estimates. They drilled into crystalline basement rock and hit black gold of a scale comparable to the Alaska North Slope. They then went to Vietnam in the 1980s and offered to finance drilling costs to show that their new geological theory worked. The Russian company Petrosov drilled Vietnam’s White Tiger oilfield offshore into basalt rock some 17,000 feet down and extracted 6,000 barrels a day of oil to feed the energy-starved Vietnam economy. In the USSR, a-biotic-trained Russian geologists perfected their knowledge and the USSR emerged as the world’s largest oil producer by the mid-1980’s. Few in the West understood why, or bothered to ask. Dr. J. F. Kenney is one of the only Western geophysicists who has taught and worked in Russia, studying under Vladilen Krayushkin, who developed the huge Dnieper-Donets Basin. Kenney told me in a recent interview that “alone to have produced the amount of oil to date that (Saudi Arabia’s) Ghawar field has produced would have required a cube of fossilized dinosaur detritus, assuming 100% conversion efficiency, measuring 19 miles deep, wide and high.” In short, an absurdity. Western geologists do not bother to offer hard scientific proof of fossil origins. They merely assert it as a holy truth. The Russians have produced volumes of scientific papers, most in Russian. The dominant Western journals have no interest in publishing such a revolutionary view. Careers, entire academic professions are at stake after all. Closing the door The 2003 arrest of Russian Mikhail Khodorkovsky, of Yukos Oil, took place just before he could sell a dominant stake in Yukos to ExxonMobil after Khodorkovsky had a private meeting with Dick Cheney. Had Exxon got the stake they would have got control of the world’s largest resource of geologists and engineers trained in the a-biotic techniques of deep drilling. Since 2003 Russian scientific sharing of their knowledge has markedly lessened. Offers in the early 1990’s to share their knowledge with US and other oil geophysicists were met with cold rejection according to American geophysicists involved. Why then the high-risk war to control Iraq? For a century US and allied Western oil giants have controlled world oil via control of Saudi Arabia or Kuwait or Nigeria. Today, as many giant fields are declining, the companies see the state-controlled oilfields of Iraq and Iran as the largest remaining base of cheap, easy oil. With the huge demand for oil from China and now India, it becomes a geopolitical imperative for the United States to take direct, military control of those Middle East reserves as fast as possible. Vice President Dick Cheney, came to the job from Halliburton Corp., the world’s largest oil geophysical services company. The only potential threat to that US control of oil just happens to lie inside Russia and with the now-state-controlled Russian energy giants. Hmmmm. According to Kenney the Russian geophysicists used the theories of the brilliant German scientist Alfred Wegener fully 30 years before the Western geologists “discovered” Wegener in the 1960’s. In 1915 Wegener published the seminal text, The Origin of Continents and Oceans, which suggested an original unified landmass or “pangaea” more than 200 million years ago which separated into present Continents by what he called Continental Drift. Up to the 1960’s supposed US scientists such as Dr Frank Press, White House science advisor referred to Wegener as “lunatic.” Geologists at the end of the 1960’s were forced to eat their words as Wegener offered the only interpretation that allowed them to discover the vast oil resources of the North Sea. Perhaps in some decades Western geologists will rethink their mythology of fossil origins and realize what the Russians have known since the 1950’s. In the meantime Moscow holds a massive energy trump card. F. William Engdahl is author of A Century of War: Anglo-American Oil Politics and the New World Order, Pluto Press Ltd.. To contact: www.engdahl.oilgeopolitics.net. His most recent book, forthcoming with Global Research, is Seeds of Destruction, The Hidden Agenda of Genetic Manipulation.