Published Jul 6 2009 by Energy Bulletin
Archived Jul 6 2009

Conflict - July 6

by Staff


Thirty contestants, only one winner in the Iraqi oil licence gameshow

David Strahan, The Independent
There's a lot of oil to be pumped and the government is desperate for the cash, so why did the major players walk away?
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The auction of Iraqi oil production licences last week was truly historic – not least because it was the first such exercise ever to be broadcast live on TV.

More than 30 companies were expected to compete for eight contracts, all in front of the cameras. In effect, the Iraqis had set up a high-stakes reality TV show, with Hussain al-Shahristani, Iraq's minister of oil, in the role of Sir Alan Sugar, and company executives as the desperate wannabes. Some bidders feared it would degenerate into an unseemly scramble, and with good reason.

The prize was far more valuable than an apprenticeship. Iraq not only has the world's third-biggest official reserves at 115 billion barrels, but its giant fields are uniquely underexploited, following three decades of war, sanctions and insurgency. "Iraq is the last big, low-cost play in conventional oil anywhere in the world," says Bill Farren-Price, a Middle East expert and energy director at Medley Global Advisors. The licence round was meant to raise Iraqi oil production from 2.4 million barrels a day to 4 million, and with so much to fight over, the Iraqis seem to have assumed the working title for their gameshow was "I'm an Oil Company, Get Me into Here!" But that's not quite how it turned out.
(5 July 2009)



Eager to Tap Iraq's Vast Oil Reserves, Industry Execs Suggested Invasion

Jason Leopold, truthout
Two years before the invasion of Iraq, oil executives and foreign policy advisers told the Bush administration that the United States would remain "a prisoner of its energy dilemma" as long as Saddam Hussein was in power.

That April 2001 report, "Strategic Policy Challenges for the 21st Century," was prepared by the James A. Baker Institute for Public Policy and the US Council on Foreign Relations at the request of then-Vice President Dick Cheney.

In retrospect, it appears that the report helped focus administration thinking on why it made geopolitical sense to oust Hussein, whose country sat on the world's second largest oil reserves.

"Iraq remains a destabilizing influence to the flow of oil to international markets from the Middle East," the report said.

"Saddam Hussein has also demonstrated a willingness to threaten to use the oil weapon and to use his own export program to manipulate oil markets. Therefore the US should conduct an immediate policy review toward Iraq including military, energy, economic and political/diplomatic assessments."

The advisory committee that helped prepare the report included Luis Giusti, a Shell Corp. non-executive director; John Manzoni, regional president of British Petroleum; and David O'Reilly, chief executive of ChevronTexaco.

James Baker, the namesake for the public policy institute, was a prominent oil industry lawyer who also served as secretary of state under President George H.W. Bush, and was counsel to the Bush/Cheney campaign during the Florida recount in 2000.

Ken Lay, then-chairman of the energy trading Enron Corp., also made recommendations that were included in the Baker report.

At the time of the report, Cheney was leading an energy task force made up of powerful industry executives who assisted him in drafting a comprehensive "National Energy Policy" for President George W. Bush.

It was believed then that Cheney's secretive task force was focusing on ways to reduce environmental regulations and fend off the Kyoto protocol on global warming.

But Bush's first treasury secretary, Paul O'Neill, later described a White House interest in invading Iraq and controlling its vast oil reserves, dating back to the first days of the Bush presidency.

... "Conspiracy Theory"

However, both before and after the invasion, much of the US political press treated the notion that oil was a motive for invading Iraq in March 2003 as a laughable conspiracy theory.

Generally, business news outlets were much more frank about the real-politick importance of Iraq's oil fields.
(3 July 2009)



The unemployment timebomb is quietly ticking

Ambrose Evans-Pritchard, Telegraph
One of my odd experiences covering the US in the early 1990s was visiting militia groups that sprang up in Texas, Idaho, and Ohio in the aftermath of recession. These were mostly blue-collar workers, – early victims of global "labour arbitrage" – angry enough with Washington to spend weekends in fatigues with M16 rifles. Most backed protest candidate Ross Perot, who won 19pc of the presidential vote in 1992 with talk of shutting trade with Mexico.

The inchoate protest dissipated once recovery fed through to jobs, although one fringe group blew up the Oklahoma City Federal Building in 1995. Unfortunately, there will be no such jobs this time. Capacity use has fallen to record-low levels (68pc in the US, 71 in the eurozone). A deep purge of labour is yet to come.

... We are fortunate that the US has a new president enjoying a great reservoir of sympathy, and a clean-broom Congress. Other nations must limp on with carcass governments: Germany's paralysed Left-Right coalition, the burned-out relics of Japan's LDP, and Labour's death march in Britain. Some are taking precautions: Silvio Berlusconi is trying to emasculate Italy's parliament (with little protest) while the Kremlin has activated "anti-crisis" units to nip protest in the bud.

We are moving into Phase II of the Great Unwinding. It may be time to put away our texts of Keynes, Friedman, and Fisher, so useful for Phase 1, and start studying what happened to society when global unemployment went haywire in 1932.
(4 July 2009)



Interview: Hungary—“Where we went wrong”

International Socialism
GM Tamás, a prominent Hungarian dissident and now professor of philosophy in Budapest, spoke to Chris Harman about developments in Eastern Europe since the fall of Stalinism.

Q: Tell me some things about Hungary today.

While industry and agriculture were collapsing, the dominant political forces said they were about to transform Hungary into a financial services centre of the world. It was nonsense. After the total collapse of the early 1990s some foreign investment arrived and, cheap labour being copiously available, there was some construction here and there. But the buy-outs were mostly for liquidating competitors and clearing consumer markets for the multinationals. However, as workers lost their jobs, these consumer markets naturally went up into thin air. By now the multinationals are packing up and leaving. On the whole it was still the state that somehow tried to provide for the increasing number of people left without any resources. We have many more pensioners than gainfully employed people in the private sector. Living standards have plummeted, working hours have got longer for those still employed, and unemployment is everywhere, with the dole for only six months. Many people are going hungry and they are not used to it. In the 1970s and 1980s Hungary was prosperous compared to the rest of the region, especially in the 1970s when there were rising living standards. All this is collapsing.

What determines the political conflicts here is a desperate fight for diminishing state resources. It is a fight between the middle class and the rest. This is the basis of the extreme right. There is not enough for everybody. There is a desperate scramble for social assistance, income support, social housing benefits, European grants, etc, and the “socialist” government’s policy of cuts, more cuts and then some cuts opposes the middle class to the “modernisers” representing multinational capital, and thus “foreigners”.

The opposition to neoliberal globalisation takes in the main nationalistic forms. It is necessary within a more or less democratic country to explain to the nation how and why they dare to deny such resources to the needy. The answer is criminalising and racialising the conflict—to say that all the people who need social assistance are racially different from us, racially inferior in the case of the Roma, or ne’er do wells and lazy, benefit-dependent spongers in the case of the “white trash”. The answer then is to build more prisons, get more police and keep the proletariat, the precariat and the underclass in their place as inferiors. It is quite extraordinary how much the general response to the crisis, to galloping anomie and to spreading poverty is anti-plebeian. The open hatred against old age pensioners, the unemployed and social welfare claimants as “parasites” is counterbalanced by a hatred of the ruling order of capital as “foreign”. Western liberal criticism of East European racism, xenophobia and neo_fascism is perceived as a feint to subdue “national” resistance to rootless cosmopolitan finance capital and life-destroying “political correctness”. The strengthening of the right is not only disgusting quasi-fascist traditions coming back to life but also a response to social collapse and disintegration. The right is promising order, social cohesion and survival for the middle class, especially for young white, gentile, Christian middle class families.

And this is happening at a time when the working class is without any political representation, even of a minority or vanguard type representation that may make a difference in a situation of conflict. There is not even a symbolic representation such as the Labour Party or radical minority representation like yourselves in the Socialist Workers Party. The working class here is silent. It is the slumbering giant. It is the only class in Eastern Europe that is waiting, that is not doing anything, that is politically inexistent. They are neither joining the extreme right in its gallant fight against the underclass nor are they joining any socialist or social democratic opposition because it does not exist. The trade unions are scared out of their wits in case they lose their privileges and their usual bargaining positions.

I do not know how long things will stay like this. For the moment the only visible fight is that of the middle class against the underclass and against the crisis, which is conceived as a conspiracy from abroad, as something imposed on us by the West, by the plutocratic, cosmopolitan, anti-Hungarian, anti-Polish global order. On the one hand, we have the neoconservative parties in power at the moment—representing the global capitalist wing of the dominant forces—and on the other a “national conservative” right that is symbolically representing middle class interests but not declaring itself as such
(24 June 2009)
Long interview about Hungarian politics. This selection about the current situation comes towards the end.

I think political tensions like those described by GM Tamás are what are in store for us -- not the visions of pillaging urban mobs beloved of survivalists.

Ironically, the stand off in California (California gridlock - a harbinger?) has a similar dynamic, though the conservative and nativist Right is not as strong. - BA