SELECTED PRESS ITEMS
Oil Majors Get Richer Stake in Mideast
Posted:Wednesday, July 05, 2006
London
Expensive oil and big new projects have boosted the value of international energy firms' stake in the Middle East, but they must still battle for access to the region's reserves, consultancy Wood Mackenzie said.
Overall asset values have been increased by around 87 per cent as major projects have been approved in Qatar, Abu Dhabi and Oman.
Other projects have stalled over political difficulties and international companies have access to less than 10 percent of the region's oil and gas reserves.
National oil companies all individually hold much larger reserves and far more valuable upstream portfolios than any international company in the region.
"Patience, persistence and pragmatism remain pre-requisites for success," the Edinburgh-based consultancy concluded in its latest report, entitled Positive developments for international oil companies in the Middle East.
"Although several development contracts have been awarded over the past year, other long-awaited projects in Iran, Iraq and Kuwait continue to be delayed," said senior Wood Mackenzie analyst Colin Lothian.
"Political uncertainty in Iran and the continued instability in Iraq continue to hinder contract awards, whilst Project Kuwait remains sidelined by differences between government and parliament".
International companies have already been waiting around a decade for the opening up of Kuwait's oil reserves through a scheme labelled Project Kuwait, which has been repeatedly blocked by conservative political elements.
Wood Mackenzie finds ExxonMobil holds the most valuable upstream portfolio and has stretched its lead at the top of the table.
Its estimated value of around $18 billion is dominated by giant gas and LNG assets in Qatar and supplemented by its newly-acquired 28 per cent share of the super-giant Upper Zakum oilfield in Abu Dhabi.
Royal Dutch Shell and Total, which rank second and third respectively, retain largely the same portfolios as last year, although their buy-back contracts in Iran through which foreign firms are repaid with proceeds from oil output have matured.
Both companies have also benefited from improved expectations of oil price, enhancing the value of their assets in Oman and Syria.
It has added the Mukhaizna heavy-oil field in Oman to its varied portfolio of developments, which includes shares in the Dolphin gas project and the Idd el Shargi fields in Qatar.
The past year has also been significant for Maersk, with approval of its phase three development at the Al Shaheen field in Qatar, which will soon become one of the more prolific, offshore oilfields in the region, Wood Mackenzie said.-Reuters
Hopes Rise for Iraqi Oil
ITP.net
by Nicholas Wilson
Within minutes of announcing the death of Al Qaeda leader Al Zarqawi, Iraqi prime minister, Nouri Al Maliki, announced the resolution of the political crisis that had paralysed Iraq’s new government. He named Shia figures as the ministers of national security and the interior, and a Sunni was given the defense job.
Both news items were what international energy companies have been waiting to hear before they start massive, long-term investment in Iraq: They want an internationally recognised government and an end to the insurgency. The former has now happened, and the latter may be a step closer with Al Zarqawi’s slaying weakening Al Qaeda, which has deliberately targeted Shias in order to create chaos and near-civil war conditions.
It was all good news for Iraqi’s new oil minister, Hussain Al Shahristani, who says his country needs investment of US $12 - 20 billion to raise oil production to six million barrels per day (bpd) by 2012. “This means $2 - 3 billion of investment a year,” he said at a Turkish-Arab economic conference, when visiting Turkey last month to stump up the cash. Iraq is producing 2.1 million bpd—below the pre-invasion levels. The sector has been crippled by war, sanctions, lack of investment, corruption and mismanagement.
And still more good news for Al Shahristani came when the chief executive officer of Italian energy giant ENI, Paolo Scaroni, said in June the company was considering possible business opportunities in Iraq, at least in the least violent areas of the country.
Al Shahristani has said that he will launch wide-ranging contacts with international oil companies.
Hydrocarbon resources cannot be developed through local efforts alone, because Iraq has neither the means nor the technology to do it.
Al Shahristani also announced last month that a new investment code would be approved this year. The government has given itself two months to draft the law before it goes to parliament he said. And this announcement, while not grabbing headlines in the way that Al Zarqawi’s killing did, is a dramatic leap for the prospects of foreign firms getting access to oil. Currently, it is not even clear if Saddam-era contracts, such as those that Chinese firms had, will be honoured.
Nor are the details and the new government’s interpretation of the constitution clear. The constitution addresses the control and distribution of oil resources in general terms, but exactly how oil revenues will be distributed has not been spelled out. The government has not said if Iraq will form a new state-owned Iraqi National Oil Company (INOC). Without a legal framework as well as security few majors will want to tread on what could become a minefield. The Iraqi government is also likely to be cautious in where it treads too—giving concessions to US and UK firms could be seen as handing over the spoils of war to the victors.
But with creeping energy nationalism spreading in South America and Russia, the number of fields where the majors are likely to get lucrative production sharing agreements has diminished, making Iraq an even more tempting proposition.
According to the Energy Information Authority, Iraq contains 115 billion barrels of proven oil reserves, the third largest in the world (behind Saudi Arabia and Canada), and only about 10% per cent of the country has been explored. Some analysts, including the Baker Institute, Center for Global Energy Studies, and the Federation of American Scientists, believe that deep oil-bearing formations located mainly in the vast Western Desert region could yield another 100 billion barrels of oil. Modern exploration techniques from the past two decades, such as 2-D and 3-D seismic imaging, have never been used in Iraq. “They say Iraq has the third largest reserves in the world, but I think Iraq is really the first because there has been no exploration or investment for all these years,” Al Shahristani said.
Firms will, however, demand a risk premium to work in the country.
Insurgents have repeatedly targeted Iraq’s oil infrastructure over the past three years, hitting pipelines and pumping stations, which are often in an advanced state of disrepair because of under investment. Furthermore, Iraq will need oil revenue to pay off its debts—around $100 billion incurred by the Saddam regime, and a further $250 billion in war reparations to Kuwait. And Kuwait has started drilling for gas in a field that is disputed by Iran, increasing tension near Iraq’s export outlet.
Eliot tackles Brooklyn spill
DEC gives up trying to get ExxonMobil cleanup deal
BY ELIZABETH HAYS
DAILY NEWS STAFF WRITER
Attorney General Eliot Spitzer has thrown his weight behind an effort to clean up a massive, decades-old oil spill lurking beneath Greenpoint, Brooklyn.
The move comes after the Department of Environmental Conservation agreed to hand over dealings with accused polluter ExxonMobil after years of lobbying by environmental advocates.
The DEC had come under increasing criticism by advocates for failing to force ExxonMobil to clean up the 30 million-gallon spill - discovered in 1978 - quickly.
"This is the beginning of the end of Exxon's treachery," said Basil Seggos of Riverkeeper, which has been leading the fight. "This case hasn't been handled well for 15 or 20 years."
Advocates hoped Democratic gubernatorial candidate Spitzer would be able to force a more rapid cleanup of the spill - which is much larger than the 1989 Exxon Valdez spill in Alaska.
"We are doing a very vigorous investigation," said Spitzer policy adviser Judith Enck, who added that Spitzer could seek a legally binding cleanup agreement - or take ExxonMobil to court.
"This is a really huge sign of hope for Greenpoint," said resident Teresa Toro. "We finally feel like the government is on our side."
The DEC hammered out a consent order with ExxonMobil in 1990, but critics have called the deal "toothless" because it lacked penalties and time limits. Nine million gallons have been recovered so far.
A DEC spokeswoman said officials had been working on a new consent order, but referred the matter to Spitzer "when [ExxonMobil] did not present offers that were satisfactory to us after extensive negotiations."
ExxonMobil already is facing three lawsuits, including a federal case brought by Riverkeeper and a class action suit by Greenpoint homeowners in which environmental crusader Erin Brockovich is involved.
An ExxonMobil spokesman said the company was "disappointed" that the DEC had handed the case to Spitzer and said legal action is "unwarranted."
"Should any legal actions progress, however, we stand ready to present the appropriateness of our actions," said spokesman Brian Dunphy.
City Councilmen David Yassky (D-Brooklyn) and Eric Gioia (D-Queens), who, with Borough President Marty Markowitz, joined Riverkeeper's suit, said they welcomed Spitzer's involvement.
"This is the first good step the DEC has done to hand this over to Eliot Spitzer," Yassky said.
Said Gioia: "After being coddled for decades by a hapless state agency, Exxon will finally get what it deserves."
UPDATE 2-Iraq sells 4 mln barrels Kirkuk oil to Exxon,Tupras
Sun Jun 25, 2006 10:06 AM ET
(Adds oil ministry official comments, background)
DUBAI, June 25 (Reuters) - Iraq has sold 4 million barrels of Kirkuk crude to U.S. oil major Exxon Mobil and Turkish oil refiner Tupras <TUPRS.IS>, the first exports from its troubled northern Kirkuk fields in nearly a year.
Iraq's state oil marketer SOMO said in a statement that both companies would take 2 million barrels each. It gave no further details and SOMO officials were not immediately available for comment.
Iraq on June 19 issued its first tender since last August to sell 6 million barrels of Kirkuk, loading between June 27 and July 1.
Iraq is aiming to sustain crude exports from its giant Kirkuk oilfields and hopes to issue a second sales tender at the end of next month.
Shamkhi Faraj, director general of marketing and economics at Iraq's ministry of oil, said that stocks of Iraqi crude at the Turkish port of Ceyhan were now at more than 7 million barrels. Ceyhan tanks can hold up to eight million barrels.
"So far, so good. If it continues at this rate, we will have to have contracts instead of tenders," Faraj told Reuters by telephone.
SOMO has been forced to hold infrequent sell tenders only after sufficient oil has been pumped from its Kirkuk oilfields to the terminal of Ceyhan.
Tenders to sell crude from the Kirkuk field have been rare since the U.S.-led invasion in 2003 as a result of frequent sabotage along the Iraq-Turkey pipeline.
The last tender was in August 2005, in which Iraq awarded up to three million barrels of Kirkuk crude to UK major BP, Spain's Cepsa and France's Total.
Prior to the war, Iraq was exporting steady Kirkuk volumes of at least 700,000 barrels per day (bpd) from Turkey.
With the sale of the 4 million barrels of Kirkuk crude, Baghdad would boost overall exports by around 130,000 bpd in July. Total exports stood at 1.5 million bpd in May.
Iraq has been relying almost exclusively on southern exports of Basra Light crude from its own Gulf terminal.
Iraq resumed sporadic flows along its northern oil pipeline earlier this month after a four-month halt. The export route is still beset by problems, so technicians are collecting batches of about 400,000 barrels, then injecting them down the pipeline.
Analysts say real progress towards reliable supply of Kirkuk crude hinges on violence abating in the country that has been battling an insurgency against U.S.-led forces and the Iraqi government as well as sectarian bloodshed.
Iran Offers Shanghai Bloc Energy Ties
Thursday 15 June 2006, 9:59 Makka Time, 6:59 GMT
Aljazeera.net
The Iranian president has offered energy co-operation to China, Russia and Central Asian countries.
Mahmoud Ahmadinejad made the offer at a summit of the Shanghai Co-operation Organisation (SCO) on Thursday.
He was attending as one of four observer states, but his presence threatened to overshadow the meeting, upstage his hosts and irritate the United States.
"Iran is ready to further expand co-operation with SCO member states in the interest of international peace and security," Ahmadinejad said in a speech broadcast on Chinese television.
He was speaking after leaders of the SCO's six members, China, Russia, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan, had assembled for the one-day summit in China's financial capital, hoping to tighten security co-operation.
He said Iran, the world's fourth-largest oil producer, was ready to host a meeting of energy ministers from SCO countries to explore more effective co-operation in the exploration, exploitation, transport and processing of oil and gas.
Iran is China's third-biggest supplier of crude oil imports.
The SCO was set up out of the "Shanghai Five" which was founded in 1996 to demilitarise the border between China and the former Soviet Union.
US opposition
Iran's inclusion in the group - albeit as an observer along with India, Pakistan and Mongolia - has particularly angered the US.
Donald Rumsfeld, the US defence secretary, said: "It strikes me as passing strange that one would want to bring into an organisation that says it's against terrorism one of the nations that's the leading terrorist nation in the world."
But leaders of China, Russia and Central Asia defended the participation of Iran, saying that the group served as a force for stability and not as an emerging anti-US bloc.
The group leaders did not directly address Tehran's standoff with the West over Iran's nuclear programme. But they defended the SCO's embrace of Iran as positive for regional stability.
ExxonMobil, City of St. Paul in Eminent Domain Battle
FOX NEWS
June 6, 2006
ST. PAUL, Minn. — ExxonMobil and the city of St. Paul, Minn., are in an eminent domain battle for land that stored fuel from the 1940s to the early 1990s.
The city wants to use land once owned and operated by Koch Petroleum Group and ExxonMobil for residential development. Koch Petroleum gave the land to the city to begin building.
Yet ExxonMobil refused, claiming the land is contaminated.
"Our St. Paul site has a long history of industrial use," the company said in a statement. "Ongoing remediation activities are being conducted and there are continuing uncertainties regarding public health and safety risks."
St. Paul's Mayor Chris Coleman cannot understand the resistance, since, he said, Minnesota's Pollution Control Agency studied the property and said development could proceed.
"This is the world's most profitable corporation in history. They made more money last year than any corporation has ever…this is insignificant to them in a worldwide enterprise. It's unbelievably important to the city of St. Paul," Coleman said.
So far, two lower courts have sided with the city, leaving ExxonMobil to appeal to Minnesota state Supreme Court.
Even though legal disputes have not ended, development will begin on the land. The first homeowners are expected to move in this summer.
Greenspan: Oil Cost Taking Toll
Energy prices cramp U.S. growth
By Josef Hebert
The Associated Press
Washington - Former Federal Reserve Chairman Alan Greenspan said Wednesday that while the country has been able to absorb sharp increases in oil prices, high energy costs are beginning to stunt economic growth.
But he also said higher oil prices have not produced any "serious erosion" of world economic activity.
"The United States, especially, has been able to absorb the huge implicit tax of rising oil prices so far," Greenspan told a Senate hearing. It was his first appearance before Congress since leaving the Federal Reserve in January.
However, he added, "recent data indicate we may finally be experiencing some impact."
Greenspan said high oil prices, exceeding $70 a barrel and pushing gasoline costs beyond $3 a gallon in many areas, are due to a sharp decline in spare global oil production capacity, refinery shortages and, to some extent, market speculation.
But he said market speculators also have been able "to hasten the adjustment" to higher prices and ease the shock to the economy.
American business "to date has largely succeeded in finding productivity improvements that have contained energy costs," he said.
But he said consumers "are struggling with rising gasoline prices."
Greenspan said with limits on U.S. oil reserves "we are not going to be a price setter in oil anywhere in the foreseeable future" unless there is a significant reduction in demand.
"We're out of the market, essentially, as a very critical player with respect to price," Greenspan told the Senate Foreign Relations Commit-
tee.
But he said "current oil prices over time should lower to some extent our worrisome dependence on petroleum" with the development of alternative fuels and broader use of electric-hybrid cars. This "would help to wean us of our petroleum dependence," Greenspan said.
"We are gradually ... weaning ourselves off petroleum. It is slow and in many ways like watching grass grow," Greenspan told the senators. He said if the shift "happens smoothly, that is the best of all contingencies. ... But what happens if it doesn't go smoothly?"
Greenspan said ethanol can become a significant alternative to gasoline, but that the answer in the long run is not in corn, now the sole commercial source of the fuel, because of limited supplies. He urged rapid expansion of research into the development of cellulosic ethanol - made from wood chips, saw grass or other material.
"Find out if [it] really is a practical alternative," he said, adding that only cellulosic ethanol will create the volumes adequate to replace large amounts of gasoline.
He said the United States has been able to "absorb the huge impact of rising oil prices with little consequences to date because it has become far more flexible" over the past three decades because of less regulation and globalization.
But he warned against import or price restrictions or other interference in the market.
"Growing protectionism would undermine that flexibility and make our nation increasingly vulnerable to the vagaries of the oil market," he said.
8 Expats Abducted From Nigeria Oil Rig
CNN.com
LAGOS, Nigeria (CNN) -- Eight foreign oil workers including one Canadian, six Britons and a U.S. citizen have been kidnapped in an attack on an offshore oil rig in Nigeria, a company spokesman said.
A spokesman for Norwegian holding company Fred Olsen, which oversees platform operator Dolphin Drilling, told CNN the workers were abducted at 5 a.m. local Friday from the Bulford Dolphin rig, 40 miles (64 kilometers) off the coast of the west African country.
CNN journalist Christian Purefoy, speaking from Lagos, said between 20 and 40 men were involved in the incident, the latest trouble to hit the Niger Delta, where militant rebels have staged regular attacks to disrupt the resource-rich country's oil operations.
The kidnappings are likely to cause embarrassment to Nigerian authorities and particularly the navy, which was due to celebrate its 50th anniversary with an international fleet review by President Olusegun Obasanjo in Lagos later on Friday, the Reuters news agency reported.
"The timing of the attack comes as things in the Delta seem to be getting worse," Purefoy said.
"No one has owned up to the attack, but it does show increasing lawlessness in the area."
There was no immediate indication of any link to a campaign of attacks and abductions by the militant Movement for the Emancipation of the Niger Delta (MEND), which has cut Nigeria's oil exports by a quarter.
MEND has usually claimed its attacks within minutes by sending emails to media, but there was no word from the group on Friday and they did not immediately respond to messages, Reuters said.
MEND's campaign of attacks and kidnappings in January and February forced oil companies to shut down a quarter of OPEC member Nigeria's 2.4 million barrels per day production of crude.
The attacks contributed to several spikes in world oil prices. Nigeria is the world's eighth-biggest exporter of oil and the fifth largest supplier to the United States, where its sweet, easy-to-refine crude is highly prized.
"Dream Team" Plans a Crude Awakening
Dateline:Thursday, May 25, 2006
By Phil Guie
Last week, Greenpoint residents got answers about the oil that has been gathering underneath their homes for the past 30 years.
The plume of crude, estimated at 55 acres and between 17 and 30 million gallons, has stemmed from leaks at an ExxonMobil refinery adjacent to Newtown Creek. In recent years, several lawsuits have been filed - one against ExxonMobil specifically, the other against several oil firms - demanding a clean-up as well as financial restitution.
Although the spill was first sighted by a Coast Guard helicopter in 1978, an independent study has never been commissioned to determine its exact size. Nor has the extent of the contamination to the area near the spillage been fully realized. Because of that lack of information, a little over two weeks ago State Comptroller Alan Hevesi asked the New York State Department of Environmental Conservation (DEC) to stop negotiating a new order of consent with ExxonMobil until such tests are performed.
That update and more was addressed at Wednesday's meeting at the St. Stanislaus Kostka School on Newell Street. Shawn McCann, an associate at Girardi & Keese - which is representing some Greenpoint residents in one suit - said that the amount of loose product from the refinery could equal two to three times as how much oil was spilled in the Exxon Valdez disaster. He also said that the environmental consulting firm Roux Associates, which was hired by ExxonMobil to perform tests, had been added to the lawsuit as a defendant.
"Delta [Environmental Consultants, Inc.] looked over the results and said it looked like Roux wasn't trying to find oil, it looked like Roux was looking to avoid finding oil," McCann said.
As for the independent tests proposed by Hevesi, they would check the location and size of the spill, as well as test surrounding vapors to determine their effect on residents. McCann said that it perplexed him why DEC, which is entrusted with safeguarding the local environment, would rely solely on results paid for by an oil company.
"Everyone wants answers," he said. "I myself cannot figure out why DEC would not go forward with independent tests to find out the answers everyone is looking for."
After lobbing that opening salvo at ExxonMobil, Roux Associates, and the state, McCann stepped aside to let local politicians rally the crowd. Evelyn Cruz, representing Congresswoman Nydia Velasquez' office, spoke about the importance of protecting both aquatic and human life, and making firms such as ExxonMobil accountable for the results of their actions. "It is daunting and scary when corporations hire other corporations to do the work that they are supposed to be doing," she said.
Just about every public servant who addressed the audience thanked them for a terrific turnout. Assemblyman Joseph Lentol, however, said that showing this time would not be enough to see the fight through.
"We have an opportunity here with the lawyers present to really put pressure on state legislators, and we have to continue to put pressure on them or they will go way and forget us like they always do," he said. "Your role as plaintiffs is the key. You have to keep pressure on me, you have to keep pressure on Congresswoman Velasquez, to make sure we do our job and that we do it as best as we possibly can."
Lentol added that he was happy to hear about lawsuits that would pay money for damages, but said it was more important that oil companies clean up their mess properly. "We don't know which of us lives in the plume or not, but we don't want this to continue 15 more years," he said. "We don't want this to continue five more years. We want the clean-up to be done now, and as humanely as possible."
Following the politicans' remarks, it was time for those at the front lines of the fight to speak. McCann introduced Chief Investigator Basil Seggos of the non-profit environmental group Riverkeeper, who received a loud and extended ovation from the crowd. Seggos, however, sounded as if he would rather have been visiting Greenpoint under different circumstances.
"We really shouldn't be here tonight," he told the 80-plus audience members. "We really shouldn't be here talking about this. It's been 30 years since we knew about this problem, so why are we here now? Because the oil companies have treated this community like a giant storage tank, and the government has been asleep at the switch at best."
Seggos talked about the lawsuit as a multi-year process, which had started in 2002 when Riverkeeper realized it had a large spill on its hands. "We knew that it was just the tip of the iceberg," he said. "So after a year of investigational probing, and [perusing] the massive documents in the government's possession, we learned quite a bit about the spill that was quite shocking."
Indeed, less than a month ago, the environmental organization discovered court papers originally released by the Department of Environmental Protection which stated that ExxonMobil executives knew for ten years that potentially toxic gases had escaped from the oil spill. Riverkeeper filed a federal lawsuit in 2004 on behalf of the environment to have the oil plume cleaned up. Seggos said that the main concerns of his organization, and the lawyers at Girardi & Keese, now pertain to the amount of damage done to Newtown Creek, and how much product currently sits underneath people's homes. "We don't actually know how big [the plume] is," he said.
He added that vapors and the groundwater beyond the delineation of the plume have to be considered as well, since the delineation itself is just product, and does not measure the full extent of contamination.
The next few speakers addressed different aspects of the current predicament with contrasting attitudes. Stanley Alpert, a former district attorney as well as chief of Environmental Litigation, sounded confident in the roster of lawyers assembled to take on ExxonMobil. He referred to Tom Girardi of Girardi & Keese as one of the country's most powerful trial attorneys, and said their group also featured a strong local presence in litigators such as Justin Bloom, Jeff Caufield of Caufield & James LLP, and the community's own Adam Pearlmutter.
But Alpert, who runs his own New York-based firm, said they also had a secret weapon, someone who spent the last ten years litigating cases against ExxonMobil: Stanley Alpert himself.
"We're gonna fight very hard for individual rights," he promised the audience. "There's been a lot of talk about what the government and DEC are gonna do. But in addition to that, those who own homes and have been contaminated all this time need to have their rights represented properly."
Pearlmutter, who has lived in Greenpoint for more than a decade, referred to the group as "an environmental Dream Team" - due to each member's experience fighting for ecological causes. For their 6th man off the bench, however, he looked no further than his neighbors in the audience. "When we fight together, we are a mighty, mighty force," he said. "We have taken on Con Ed, Keyspan, Transgas. We're gonna take on Exxon and we're gonna win again."
But in contrast to his associates, Robert Bowcock of Integrated Resource Management, LLC (IRM) offered sobering data explaining how the crisis came about, and how bad the situation has gotten. He explained that before 1978, Greenpoint had a well that it drew from for its drinking water. When the contaminants from the oil spill reached the well, the city turned it off, which caused the pollutants to leak into Newtown Creek.
Standing before a projected delineation of the oil plume, Bowcock said there could be a "smear," or contaminants that run in a semi-circle, flowing down into Newtown Creek. He said that the delineated area would experience the effects of the free product; however, he also cautioned that the area outside the lines could be contaminated worse. The reason: Contaminated liquid sitting adjacent to the plume.
"There is water, no longer being used for drinking, underneath the oil," Bowcock said. "For every gallon of oil we see in Newtown Creek, there are thousands of gallons of water underneath with not less than 50 known contaminants. [And] for those thousands of gallons of contaminated water seeping into Newtown Creek, some kind of contamination is taking place on top of the oil through hazardous vapors."
The audience seemed to know exactly what Bowcock meant when he referred to a bad stench emanating from the creek. In fact, they seemed more surprised when he said that ExxonMobil argued the contrary. "In February of 2006, one month after the DEC meeting, Exxon published a report that read: 'While we don't understand why we are doing soil vapor testing, we will comply. But there has never been any report of soil vapor smells in Greenpoint.'" That provoked laughter throughout the room.
Meanwhile, their expert was dead serious that wrongs had been committed against the community. "For 30 years, ExxonMobil has made a management decision, rather than clean up the oil, to store it under your homes with no concern about the damage it has caused," he said. Although the oil giant has a process by which they "remediate" - that is, collect the oil from the soil, and lately re-refine it and sell it - Bowcock argued that their technology was outdated back in 1978. "Since 1990, they have been extracting oil and selling it in as menial a rate as possible, from a very limited area," he said.
After that wealth of information was shared, McCann returned and led attendees through a question-and-answer period. Someone asked what the main defendant was doing right now with respect to the case. The Girardi & Keese lawyer said that ExxonMobil was adhering to the status quo. "So far, in all the media, they're denying any and all health effects, saying that they're doing everything they can to clean up the oil spill, and have yet to take any responsibility for causing the spill," he said.
Many of the inquiries from residents had to do with potential health problems stemming from the contaminants discussed. McCann said that he could not answer anything on that topic for certain, since there had never been independent testing to determine how much oil exists in a given spot, which would affect the answer. He did point out, however, that Benzine, a known carcinogen, had been identified as a contaminant. The highly flammable methane had also been found. "Right now, there's not enough information to give you a full, complete, and right answer," McCann said. "We don't want to give you false information."
Then somebody asked him if he would raise a family in Greenpoint, knowing what he knows. After some pressing, McCann admitted that he would not. "I'll be honest," he said. "I would not buy a house in Greenpoint."
Pearlmutter, however, intervened and closed the meeting on a note of solidarity. "Many families have been living here for over a century," he said. "It's where we're from. The question shouldn't be whether we should be living in Greenpoint, it's what can be done to clean this up as quickly as possible. We don't know the full effects. We don't want to set off a general panic, that's not what we want to do here. Yes, I'm raising my family in Greenpoint. But like you, I have concerns and I'm trying to get to the bottom of them."
Nuclear Scientist to Head Iraq's Oil Ministry
By Mariam Karouny
Reuters.com
BAGHDAD (Reuters) - Nuclear scientist Hussain al-Shahristani, jailed and tortured under Saddam Hussein, is a newcomer to an oil industry he must rescue from corruption, poor investment and violence.
A prominent Shi'ite Islamist, Shahristani, who is to named Iraq's oil minister by Prime Minister Nuri al-Maliki, will have to display both a firm hand to stamp out graft and smuggling and a silk glove to negotiate huge oil contracts.
Shahristani was once seen as a potential premier himself and became deputy speaker of parliament, but oil industry officials have voiced reservations about his lack of experience in the industry and his reputation as being unreceptive to advice.
A devout man close to Shi'ite religious figures, Shahristani edged out other candidates considered more suitable to lead a ministry that oversees the world's third largest known reserves of oil, including technocrat Thamir Ghadhban. But Iraq's volatile sectarian politics could have played in his favor.
He told close aides he was determined to fight corruption in the oil industry. Some negotiators said they were confident of his skills to help develop the sector because of his firmness and strong personality.
CRIPPLED SECTOR
Born in August 1942, Shahristani, who says he recited mathematical formulas to help him survive in Saddam's torture chambers, has his work cut out.
Decades of war, international sanctions, under-investment and now widespread sabotage attacks have crippled Iraq's oil sector, which now has to import nearly half of its gasoline.
Oil multinationals eyeing the giant, largely undeveloped oilfields, are waiting until a new investment code with a legal and regulatory framework is in place, before they venture in.
Bombings, shootings and kidnappings that have scared foreign investors have cut oil exports down to 1.6 million barrels per day (bpd), below pre-war levels of about 2 million bpd.
Iraq relies heavily on its southern crude oil exports because sabotage bombings of pipelines have repeatedly hurt efforts to export from the north via Turkey. Exports from the north are still on hold.
Reviving oil sales is key to rebuilding the country's shattered economy. But sharing oil revenues is a major bone of contention among competing Shi'ite, Sunni Arab and Kurdish communities, so the soft-spoken Shahristani will have to tread lightly to avoid inflaming Iraq's explosive sectarian politics.
A confidant of top Shi'ite cleric Grand Ayatollah Ali al-Sistani, Shahristani, 64, played a vital role in forming the powerful Shi'ite Alliance bloc, which has a near-majority in parliament.
Shahristani says he was tortured by Saddam for refusing to work on a nuclear arms program.
Saddam's agents arrested Shahristani and told his wife and three children he would be away for three days. He spent 11 years in jail, some in solitary confinement.
After escaping from the notorious Abu Ghraib prison during the 1991 Gulf war, he spent the next 12 years in exile in London and Iran. His opponents, including many Sunni Arabs, have accused him of being too close to non-Arab, Shi'ite Iran.
The U.S.'s Geopolitical Nightmare
By F. William Engdahl
Asia Times Online
By drawing attention to Iraq and the obvious role oil plays in US policy today, the George W Bush-Dick Cheney administration has done just that: it has drawn the world's energy-deficit powers' attention firmly to the strategic battle over energy, and especially oil.
This is already having consequences for the global economy in terms of US$75-a-barrel crude-oil price levels. Now it is taking on the dimension of what one former US defense secretary rightly calls a "geopolitical nightmare" for the United States.
The creation by Bush and Cheney, Defense Secretary Donald Rumsfeld and company of a geopolitical nightmare is also the backdrop to comprehend the dramatic political shift within the US establishment in the past six months, away from the Bush presidency. Simply put: Bush and Cheney and their band of neo-conservative war hawks, with their special relationship to the capacities of Israel in Iraq and across the Mideast, were given a chance.
The chance was to deliver on the US strategic goal of control of petroleum resources globally, to ensure the US role as first among equals over the next decade and beyond. Not only have they failed to "deliver" that goal of US strategic dominance, they have also threatened the very basis of continued US hegemony, or as the Rumsfeld Pentagon likes to term it, "Full Spectrum Dominance".
The move by Bolivian President Evo Morales, after meetings with Venezuela's Hugo Chavez and Cuba's Fidel Castro, to assert national control over oil and gas resources is only the latest demonstration of the decline in US power projection.
The Bush Doctrine in the balance
As the reality of US foreign policy is obscured by the endless rhetoric of "defending democracy" and the like, it is useful to recall that US foreign policy since the collapse of the Soviet Union has been open and explicit. It is to prevent at any cost the congealing of a potential combination of nations that might challenge US dominance. This is the US policy as elaborated in Bush's June 2002 speech at the United States Military Academy in West Point, New York.
There the president outlined a radical departure in explicit US foreign policy in two vital areas: a policy of preventive war, should the US be threatened by terrorists or by rogue states engaged in the production of weapons of mass destruction; second, the right of self-defense authorized the US to launch preemptive attacks against potential aggressors, cutting them off before they were able to launch strikes against the US.
The new US doctrine, the Bush Doctrine, also proclaimed "the duty of the US to pursue unilateral military action when acceptable multilateral solutions cannot be found". It went further and declared it US policy that the "United States has, and intends to keep, military strengths beyond challenge". The US would take whatever actions necessary to continue its status as the world's sole military superpower. This resembled British Empire policy before World War I, namely that the Royal Navy must be larger than the world's next two largest navies put together.
The policy also included proactive regime change around the world under the slogan of "extending democracy". As Bush stated at West Point, "America has no empire to extend or utopia to establish. We wish for others only what we wish for ourselves - safety from violence, the rewards of liberty, and the hope for a better life."
Those policy fragments were gathered into an official policy in September 2002, a National Security Council text titled the "National Security Strategy of the United States". That text was drafted for the president's signature by then national security adviser Condoleezza Rice.
She in turn took an earlier policy document prepared under the 1992 presidency of George Bush Sr by neo-conservative Paul Wolfowitz. The Bush Doctrine of Rice had been fully delineated in 1992 in a Defense Planning Guidance "final draft" done by then under secretary of defense for policy Wolfowitz, and known in Washington as the Wolfowitz Doctrine. Wolfowitz declared then that, with the threat of a Soviet attack gone, the US was the unchallenged sole superpower and should pursue its global agenda, including preemptive war and unilateral foreign-policy actions.
An internal leak of the draft to the New York Times then led Bush Sr to announce that it was "only a draft and not US policy". By 2002, it was officially US policy.
The Bush Doctrine stated that "military preemption" was legitimate when the threat was "emerging" or "sufficient, even if uncertainty remains as to the time and place of the enemy's attack". That left a hole large enough for an Abrams tank to roll through, according to critics. Afghanistan, as a case in point, was declared a legitimate target for US military bombardment because the Taliban regime had said it would turn Osama bin Laden over only when the US demonstrated proof he was behind the New York World Trade Center and Pentagon attacks on September 11, 2001. Bush didn't give proof. He did launch a "preemptive" war. At the time, few bothered to look to the niceties of international law.
The Bush Doctrine was and is a neo-conservative doctrine of preventive and preemptive war. It has proved to be a strategic catastrophe for the US role as sole superpower. That is the background to comprehend all events today as they are unfolding in and around Washington.
The future of that Bush Doctrine foreign policy - and in fact the future ability of the US, as sole superpower or sole anything, to hold forth - is what is now at stake in the issue of the future of the Bush presidency. Useful to note is that Wolfowitz wrote his 1992 draft for then defense secretary Cheney.
Bush administration in crisis
The most fascinating indication of a sea-change within the US political establishment toward the Bush Doctrine and those who are behind it is the developing debate around the 83-page paper, first published on the official website of Harvard University, criticizing the dominant role of Israel in shaping US foreign policy.
The paper was initially trashed by the B'nai Brith and select neo-conservative writers as "anti-Semitic", which it is not, and one commentator tried to smear it as "echoing the views of former KKK [Ku Klux Klan] leader and white-power advocate David Duke", who has also attacked the Israel lobby.
However, profoundly significant is the fact that this time leading mainstream media, including Richard Cohen in the Washington Post, have come to the defense of authors Stephen Walt and John Mearsheimer. Even certain sections of the Israeli press have done so. The taboo of speaking publicly of the pro-Israel agenda of neo-conservatives has apparently been broken. That suggests that the old-guard foreign-policy establishment, types such as Zbigniew Brzezinski and Brent Scowcroft and their allies, are stepping up to retake foreign-policy leadership. The neo-cons have proved a colossal failure in their defense of America's strategic interests as the realists see it.
The paper, "The Israel Lobby and US Foreign Policy", was written by two highly respected US foreign-policy realists and consultants to the State Department. The authors are neither neo-Nazi skinheads nor anti-Semites. Mearsheimer is political-science professor and co-director of the Program on International Security Policy at the University of Chicago. Walt is academic dean and a chaired professor at Harvard's Kennedy School of Government. Both are members of the Coalition for a Realistic Foreign Policy. They are so-called "realists", along with Henry Kissinger, Scowcroft and Brzezinski.
# Some of their conclusions about the Israel lobby's goals:
"No lobby has managed to divert foreign policy as far from what the American national interest would otherwise suggest, while simultaneously convincing Americans that US and Israeli interests are essentially identical."
# US supporters of Israel promoted the war against Iraq. The senior administration officials who spearheaded the campaign were also in the vanguard of the pro-Israel lobby, eg Wolfowitz; under secretary of defense for policy Douglas Feith; Elliott Abrams, Mideast affairs at the White House; David Wurmser, Mideast affairs for Cheney; Richard Perle, first among neo-con equals, chairman of the Defense Policy Board, an influential advisory body of strategic experts.
# A similar effort is now under way to bomb Iran's nuclear facilities.
# The American Israeli Public Affairs Committee (AIPAC) is fighting registering as foreign agents because this would place severe limitations on its congressional activities, particularly in the legislative electoral arena. American politicians remain acutely sensitive to campaign contributions and other forms of political pressure and major media outlets are likely to remain sympathetic to Israel no matter what it does.
It's useful to quote the official goals of the Coalition for a Realistic Foreign Policy, of which Walt and Mearsheimer are members, to have a better indication of their factional lineup in the current factional battle inside the US elite. The website of that coalition states:
Against the backdrop of an ever-bloodier conflict in Iraq, American foreign policy is moving in a dangerous direction toward empire. Worrisome imperial trends are apparent in the Bush administration's National Security Strategy. That document pledges to maintain America's military dominance in the world, and it does so in a way that encourages other nations to form countervailing coalitions and alliances. We can expect, and are seeing now, multiple balances of power forming against us. People resent and resist domination, no matter how benign.
Authors Walt and Mearsheimer also note that Perle and Feith put their names to a 1996 policy blueprint for Benjamin Netanyahu's then incoming government in Israel, titled, "A Clean Break: A New Strategy for Securing the Realm" (Israel).
In that document, Perle and Feith advised Netanyahu that the rebuilding of Zionism must abandon any thought of trading land for peace with the Palestinians, ie, repeal the Oslo accords. Next, Saddam Hussein must be overthrown and democracy established in Iraq, which would then prove contagious in Israel's other Arab neighbors. That was in 1996, seven years before Bush launched a near-unilateral war for regime change in Iraq.
When NBC-TV's Tim Russert on the widely watched Meet the Press asked Perle about his geopolitical laundry list for Israel's benefit, Perle replied, "What's wrong with that?"
For all this to succeed, Perle and Feith wrote, "Israel would have to win broad American support." To ensure this support, they advised the Israeli prime minister to use "language familiar to Americans by tapping into themes of past US administrations during the Cold War, which apply as well to Israel". An Israeli columnist in Ha'aretz accused Perle and Feith of "walking a fine line" between "their loyalty to American governments and Israeli interests".
Today, Perle has been forced to take a low profile in Washington after initially heading Rumsfeld's Defense Policy Board at the Pentagon. Feith was forced to leave the State Department for the private sector. That was more than a year ago.
Wave of Bush resignations
The White House chief of staff and a man who was a Bush family loyal retainer for 25 years, Andrew Card, has left, and in an announcement that apparently shocked neo-conservative hawks such as William Kristol, on Friday Bush's pro-neo-conservative Central Intelligence Agency (CIA) head Porter Goss abruptly announced his resignation in a one-line statement.
Goss's departure was preceded by the growing scandal involving his No 3 man at the CIA, executive director Kyle "Dusty" Foggo. Last December, the CIA inspector general opened an investigation into Foggo's role in Pentagon-CIA contract fraud. Foggo is also being linked to an emerging White House-Republican Party sex scandal that could pale the Monika Lewinsky affair that so troubled former president Bill Clinton. As Goss violated seniority precedence in naming Foggo to No 3 at the CIA, the Goss resignation and the imminent breaking sex and bribery scandals around Foggo are being linked by some media.
The Foggo case is tied to disgraced Republican congressman Randall "Duke" Cunningham. Federal prosecutors have accused, as an unindicted co-conspirator, one of Foggo's closest friends, San Diego businessman Brent Wilkes, of participating in a scheme to bribe Cunningham, the former Republican congressman from San Diego.
Cunningham in turn is linked to convicted Republican money-launderer and fix-it man Jack Abramoff. Foggo oversaw contracts involving at least one of the companies accused of paying bribes to congressman Cunningham. The Wall Street Journal reports that Foggo has been a close friend, since junior high school, with California defense contractor Brent R Wilkes. They report that an ongoing "criminal investigation centers on whether Mr Foggo used his postings at the CIA to improperly steer contracts to Mr Wilkes' companies".
Wilkes was implicated in the charges filed against Cunningham as an unindicted co-conspirator who allegedly paid $630,000 in bribes to Cunningham for help in obtaining federal defense and other contracts. No charges have been filed against Wilkes, though federal prosecutors in San Diego are working to build a case against him, as well as Foggo.
The Federal Bureau of Investigation and federal prosecutors are investigating evidence that Wilkes had given gifts to Foggo and paid for various services, including alleged sex orgies at the Watergate (now Westin), while Foggo was in a position to help him gain particular CIA contracts.
The Goss resignation follows on the heels of public calls for Rumsfeld's immediate resignation over the Iraq military debacle coming from a growing chorus of retired US military generals.
The latest in the slow, systematic "let 'em twist in the wind" process of downsizing the Bush regime was an incident in Atlanta last Thursday before a supposedly friendly foreign-policy audience where Rumsfeld spoke. During the question period, he was confronted with his lying about the grounds for going to war in Iraq.
Ray McGovern, a 27-year CIA veteran who once gave then-president George H W Bush his morning intelligence briefings, engaged in an extended debate with Rumsfeld. He asked why Rumsfeld had insisted before the Iraq invasion that there was "bulletproof evidence" linking Saddam to al-Qaeda.
"Was that a lie, Mr Rumsfeld, or was that manufactured somewhere else? Because all of my CIA colleagues disputed that and so did the 9-11 Commission," McGovern said to a startled Rumsfeld. "Why did you lie to get us into a war that was not necessary?"
Significant in terms of the shift reflected in how the establishment media handle Rumsfeld, Cheney and Bush today is the following account in the Los Angeles Times:
At the start of the exchange, Rumsfeld remained his usual unflappable self, insisting, "I haven't lied; I did not lie then," before launching into a vigorous defense of the administration's prewar assertions on Iraq's weapons of mass destruction.
But Rumsfeld became uncharacteristically tongue-tied when McGovern pressed him on claims that he knew where unconventional Iraqi weapons were located.
"You said you knew where they were," McGovern said.
"I did not. I said I knew where suspected sites were," Rumsfeld retorted.
McGovern then read from statements the defense secretary had made that weapons were located near Tikrit, Iraq, and Baghdad ...
Rumsfeld was stone-silent. The entire episode was filmed and shown on network television.
Rumsfeld's days are clearly numbered. Karl Rove is rumored to be days away from being co-indicted with Cheney aide Lewis "Scooter" Libby for the Valerie Plame CIA leak affair. Recall that that affair was over alleged Niger uranium evidence as basis for persuading Congress to waive a war declaration on Iraq and give Bush carte blanche.
All threads are being carefully woven, evidently by a re-emerging realist faction, into a tapestry that will likely spell impeachment, perhaps also of the vice president, the real power behind this presidency.
A foreign policy disaster over China
In this context, the recent diplomatic insult from Bush to visiting Chinese President Hu Jintao is doubly disastrous for the US foreign position. Bush acted on a script written by the anti-China neo-conservatives, deliberately to insult and humiliate Hu at the White House.
First was the incident of allowing a Taiwanese "journalist", a Falungong member, into the carefully screened White House press conference, to rant in a tirade against Chinese human rights for more than three minutes, with no attempt at removal, at a filmed White House press conference.
Then came the playing of the Chinese national anthem for Hu, which was introduced as the anthem for the Republic of China - Taiwan. It was no slip-up by the professional White House protocol people. It was a deliberate effort to humiliate the Chinese leader.
The problem is that the US economy has become dependent on Chinese trade imports and on Chinese holdings of US Treasury securities. China today is the largest holder of dollar reserves in the form of US Treasury paper worth an estimated US$825 billion. Were Beijing to decide to exit the US bond market, even in part, it would cause a dollar free-fall and collapse of the $7 trillion US real-estate market, a wave of US bank failures, and huge unemployment. It's a real option, even if unlikely at the moment.
Hu, though, didn't waste time or tears over the Bush affront. He immediately went to Saudi Arabia for a three-day state visit where he signed trade, defense and security agreements. This is no small slap in the face to Washington by the traditionally "loyal" Saudi royal house.
Hu signed a deal for Saudi Basic Industries Corp (SABIC) of Saudi Arabia to build a $5.2 billion oil refinery and petrochemical project in northeastern China. At the beginning of this year, Saudi King Abdullah was in Beijing for a full state visit.
Since the Franklin D Roosevelt-King Ibn Saud deal giving US Aramco and not the British exclusive concession to develop Saudi oil in 1943, Saudi Arabia has been regarded in Washington as a core strategic sphere of interest.
Hu then went on to Morocco, Nigeria and Kenya, all regarded as US spheres of interest. And only two months ago Rumsfeld was in Morocco to offer US arms. Hu is offering to finance energy exploration there.
The SCO and Iran events
The latest developments surrounding the Shanghai Cooperation Organization (SCO) and Iran further underscore the dramatic change in the geopolitical position of the United States.
The SCO was created in Shanghai on June 15, 2001, by Russia and China along with four former Soviet Central Asian republics, Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan. Prior to September 11, 2001, and the US declaration of an "axis of evil" in January 2002, the SCO was merely background geopolitical chatter as far as Washington was concerned.
Today the SCO, which has to date been blacked out almost entirely in US mainstream media, is defining a new political counterweight to US hegemony and its "unipolar" world. At the next SCO meeting on June 15, Iran will be invited to become a full SCO member.
And last month in Tehran, Chinese Ambassador Lio G Tan announced that a pending oil and gas deal between China and Iran was ready to be signed.
The deal is said to be worth at least $100 billion, and includes development of the huge Yadavaran onshore oilfield. China's Sinopec would agree to buy 250 million tons of liquefied natural gas over 25 years. No wonder China is not jumping to back Washington against Iran in the United Nations Security Council. The US had been trying to put massive pressure on Beijing to halt the deal, for obvious geopolitical reasons, to no avail. Another major defeat for Washington.
Iran is also moving on plans to deliver natural gas via a pipeline to Pakistan and India. Energy ministers from the three countries met in Doha recently and plan to meet again this month in Pakistan.
The pipeline progress is a direct rebuff to Washington's efforts to steer investors clear of Iran. Ironically, US opposition is driving these countries into one another's arms, Washington's "geopolitical nightmare".
At the same SCO meeting next month, India, which Bush is personally trying to woo as a geopolitical Asian "counterweight" to China, will also be invited to join the organization, as well as Mongolia and Pakistan. The SCO is gaining in geopolitical throw-weight quite substantially.
Iranian Deputy Foreign Minister Manouchehr Mohammadi told ITAR-Tass in Moscow last month that Iranian membership in the SCO could "make the world more fair". He also spoke of building an Iran-Russia "gas-and-oil arc" in which the two giant energy producers would coordinate activities.
US out in cold in Central Asia
The admission of Iran into the SCO opens many new options for Iran and the region. By virtue of SCO membership, Iran will now be able to take part in SCO projects, which in turn means access to badly needed technology, investment, trade and infrastructure development. It will have major implications for global energy security.
The SCO has reportedly set up a working group of experts ahead of the June summit to develop a common SCO Asian energy strategy, and discuss joint pipeline projects, oil exploration and related activities. Iran sits on the world's second-largest natural-gas reserves, and Russia has the largest. Russia is the world's second-largest oil producer after Saudi Arabia. These are no small moves.
India is desperate to come to terms with Iran for energy but is being pressured by Washington not to.
The Bush administration last year tried to get "observer status" at the SCO but was turned down. The rebuff - along with the SCO's demands for a reduced US military presence in Central Asia, deeper Russia-China cooperation, and the setbacks to US diplomacy in Central Asia - have prompted a policy review in Washington.
After her October 2005 Central Asian tour, Rice announced reorganization of the State Department's South Asia Bureau to include the Central Asian states, and a new US "Greater Central Asia" scheme.
Washington is trying to wean Central Asian states away from Russia and China. President Hamid Karzai's government in Kabul has not responded to SCO's overtures. Given his ties historically to Washington, he likely has little choice.
Gennady Yefstafiyev, a former general in Russia's Foreign Intelligence Service, said, "The US's long-term goals in Iran are obvious: to engineer the downfall of the current regime; to establish control over Iran's oil and gas; and to use its territory as the shortest route for the transportation of hydrocarbons under US control from the regions of Central Asia and the Caspian Sea, bypassing Russia and China. This is not to mention Iran's intrinsic military and strategic significance."
Washington had based its strategy on Kazakhstan being its key partner in Central Asia. The US wants to expand its physical control over Kazakhstan's oil reserves and formalize Kazakh oil transportation via the Baku-Ceyhan pipeline, as well as creating the dominant US role in Caspian Sea security. But Kazakhstan isn't playing ball. President Nursultan Nazarbayev went to Moscow on April 3 to reaffirm his continued dependence on Russian oil pipelines. And China is making major energy and pipeline deals with Kazakhstan as well.
To make Washington's geopolitical problems worse, despite securing a major US military basing deal with Uzbekistan after September 2001, Washington's relations with Uzbekistan are disastrous. The US effort to isolate President Islam Karimov, along the lines of the Ukrainian "orange" revolution tactics, is not working. Indian Prime Minister Manmohan Singh visited Tashkent late last month.
As well, Tajikistan relies heavily on Russia's support. In Kyrgyzstan, despite covert US attempts to create dissensions within the regime, President Kurmanbek Bakiev's alliance with Moscow-backed Prime Minister Felix Kulov is holding.
In the space of 12 months, Russia and China have managed to move the pieces on the geopolitical chess board of Eurasia away from what had been an overwhelming US strategic advantage, to the opposite, where the US is increasingly isolated. It's potentially the greatest strategic defeat for the US power projection of the post-World War II period. This is also the strategic background to the re-emergence of the so-called realist faction in US policy.
F William Engdahl is the author of A Century of War: Anglo-American Oil Politics and the New World Order, Pluto Press Ltd. He may be contacted at www.engdahl.oilgeopolitics.net.
The Corporate-U.S. Takeover of the Iraq Economy
By Kevin Zeese
The Peoples Voice
How the Iraq occupation embedded US corporations into the Iraq economy,
satisfying a multi-decade design on Iraq's oil wealth
The roots of the economic takeover of Iraq are long and deep. They became more aggressive after the strongest U.S. ally in the region, the Shah of Iran, was deposed in the 1979. The roots of the quest of dominance of the oil-rich region are found in both the Democratic and Republican Party, but the most aggressive pursuit has been by George W. Bush.
[More:]
Former President Jimmy Carter wrote in his memoirs that many Americans “deeply resented that the greatest nation on the earth was being jerked around by a few desert states.” And, when he was president he put forward “the Carter Doctrine” in a State of the Union Address in 1980 that acknowledged “the overwhelming dependence of the Western democracies on oil supplies from the Middle East” and promised military force would be used to ensure access to Middle East oil: “Any attempt by an outside force to gain control of the Persian Gulf will be regarded as an assault on the vital interests of the United States of America and . . . will be repelled by any means necessary including the use of force.”
But, according to a book by Antonia Juhasz, “The Bush Agenda,” it was the Reagan, Bush I and Bush II administrations that most aggressively pursued the Iraq oil economy. Her excellent book tells a story that explains the reasons for the invasion and occupation of Iraq. It shows how the Reagan and Bush I administrations began by building a friendly trade relationship that provided money, arms, intelligence, and political protection to Saddam Hussein – despite his brutal record as a despotic dictator. And, how the Clinton years led to 'regime change' in Iraq becoming the policy of the United States and naturally following that was the Bush II's military invasion of the country.
She highlights the web of corporate interests from the oil, oil engineering and military sectors of the U.S. economy that have combined with government to the build-up to the invasion of Iraq. Many of the corporate players – Chevron, Bechtel, Lockheed Martin and Halliburton – have corporate leaders who went into and out of government over the years, influencing the direction of U.S. policy and then ensuring that their corporations profited mightily from the policies they put in place. Juhasz points to Dick Cheney, Donald Rumsfeld, L. Paul Bremer, Scooter Libby, Robert Zoellick, Paul Wolfowitz, Zalamy Khalizad and George Shultz, as key players in the long term quest to takeover of Iraq's economy.
The Root of the Problem: Peak Oil in the U.S. and Corporate Globalization of Trade
The story of the invasion of Iraq and theft of the Iraqi economy is part of a larger story of multi-national corporations and corporate globalization affecting much of the world. Under the guise of “free trade” economic policies that make multinational corporations more powerful than governments. Laws favoring corporations are put in place: less regulation, less commitment to specific locations, and restrictions on government preventing the shift of economic benefit away from small, local business, workers, consumers and the environment. Globalization of trade claims to benefit by trickling down the profit, but in reality it continues to funnel wealth to the top – making the rich richer, the poor poorer and the middle class class smaller.
In 1970, U.S. domestic oil production hit its peak. The United States began to rely on foreign sources of oil, and went deeper into an oil addiction that continues to this day. It was also the decade where Middle East oil producers began to flex their muscles. OPEC used oil as a weapon in response to the 1973 Arab-Israel War, imposing an embargo on the United States. The embargo ended in March 1974, but the threat was heard.
President Carter fought back, in 1977 his Defense Secretary, Harold Brown, described the insecurity around oil as the most “serious threat to the long-term security of the United States.” In 1978 the second oil shock hit with the Iranian oil embargo, reducing supplies by 5 percent, increasing oil prices by 150 percent causing inflation and interest rates to skyrocket in the U.S. and the debt load of developing countries to rapidly rise. Carter threatened military force to protect access to oil and turned to the World Bank to find more oil – by 1981 the World Bank had 28 oil projects underway.
President Reagan took the World Bank to another level – forcing countries to change their laws so that U.S. corporations would have direct access and control of oil. Reagan increased World Bank oil projects from 1982 to 1984 to more than 55. Reagan also aggressively put forward the trickle down theory – at home and abroad – making the wealthy wealthier would, in theory, trickle down resources to all. But the facts were the opposite. Juhasz points out that in the thirteen years before Reagan the income divide was shrinking – from 1967 to 1980 the poorest in the U.S. increased their share of total income by 6.5 percent. Reagan's aggressive redistribution of wealth to the wealthiest reversed that trend and from 1980 to 1990 the Census reports that the poorest Americans lost more than 10 percent of the income pie, while the wealthiest gained almost 20 percent.
Reagan and Bush I also dramatically increased trade with Iraq. They knew of Saddam's human rights atrocities, and that Iraq was on the U.S. terrorism list but they supplied money, arms, and commercial products to Iraq. They even allowed U.S. corporations to provide the ingredients for weapons of mass destruction. See the Arming of Iraq, http://democracyrising.us/content/view/30/74/. Reagan removed Iraq from the list of terrorist nations in March 1982 to open up more trade. There was virtually no trade with Iraq in 1981 but by 1989 annual trade was up to $3.6 billion and had been expected to double in 1990 before Iraq's invasion of Kuwait. When Saddam refused U.S. efforts to build an oil pipeline, the strategy changed to the removal of Saddam from office. The first effort the Gulf War and the aftermath failed to achieve that goal.
The Blueprint for the Economic Takeover of the Middle East
The initial blueprint for the takeover of Iraq came in 1992 in the final year of the Bush I administration. The 1992 “Defense Planning Guidance” (DPG) describes America's overall military strategy and represents guidance from the president and secretary of defense. The 1992 DPG was written by Dick Cheney, Paul Wolfowitz, Zalamy Khalizad, Scooter Libby, Eric Edelman and Colin Powell – six men who served Bush I and II, most worked in the Reagan administration as well.
The DPG was written after the success of the 1991 Gulf War, and the failure to remove Saddam Hussein from power – two years after the fall of the Berlin Wall and the emergence of the U.S. as a sole superpower. The document, built on the Carter Doctrine and remained in effect through the Clinton years, states the goal clearly – the objective of the United States in the Middle East is “to remain the predominant outside power in the region and preserve U.S. and Western access to the region's oil.” The document describes an aggressive, unilateral, preemptive military agenda – that includes ad hoc coalitions of countries – rather than working through organizations like the U.N.
Many in this same group reunited in 1997 to establish the Project for the New American Century. PNAC restated support for the DNG and sought U.S. military dominance in the world. They recognize the importance of economic dominance as a compliment to unrivaled military power. They proposed an annual increase in military spending of $15 to $20 billion. Being able to act preemptively in the Middle East gets special attention noting that “the United States has for decades sought to play a more permanent role in Gulf regional security.” They describe Saddam Hussein as providing an “immediate justification” for a “substantial American force” in the Middle East. In January 1998 PNAC wrote President Clinton urging the removal of Saddam Hussein from power noting that Hussein was a threat to “a significant portion of the world's supply of oil.”
Another key group was the Committee for the Liberation of Iraq. The group was founded in 2002 by Robert Jackson, a Lockheed Martin executive who wrote the Republican Party foreign policy platform in 2000. He formed the Committee while at Lockheed and advocated aggressively for the overthrow of Saddam Hussein. The Chairman of the Committee was former Secretary of State and Bechtel executive, George Shultz. Shultz wrote a column in The Washington Post in 2002 claiming the US must “ACT NOW. The danger is immediate. Saddam must be removed.” The article argued heavily for an immediate attack because of weapons of mass destruction and Saddam's ties to terrorism saying: “If there is a rattlesnake in the yard, you don't wait for it to strike before you take action in self-defense.” Shultz fanned the flames of fear saying the risk is “tens or hundreds of thousands killed by chemical, biological or nuclear attack.” After the occupation Lockheed Martin received more than an $11 billion increase in sales and contracts including $5.6 million for work with the Air Force in Iraq. Bechtel received nearly $3 billion in Iraq reconstruction contracts.
The pro-military dominance advocates worked in other spheres as well. Paul Wolfowitz left the Clinton administration and went to Johns Hopkins School of Advanced International Studies, where he began to advocate for a second Gulf War – this time including the overthrow of Saddam Hussein. Zalmay Khalilzad, the current U.S. ambassador to Iraq, went to the Rand Corporation and founded the Center for Middle Eastern Studies and also served as a paid adviser to Unocal Oil Corporation (purchased by Chevron in 2005) where he openly advocated for a close relationship with the Taliban in order to build a 890 mile natural gas pipeline. In a Washington Post Oped he urged re-engaging the Taliban as “The Taliban does not practice the anti-U.S. Style of fundamentalism practiced by Iran.”
Bush II united military and corporate globalization into what Juhasz calls “one mighty weapon of Empire.” She points out that Bush's unilateralism became evident before 9/11 with the withdrawal from the Anti-Ballistic Missile Treaty, opposition to the Comprehensive Test Ban Treaty, rejection of the International Criminal Court and the Biological and Toxin Weapons Convention protocols. Instead of a new DPG, Bush issued a National Security Strategy which makes U.S. status as the only superpower a reason to expand U.S. military spending to dissuade others from challenging U.S. dominance. Bush also put forward that America “will not hesitate to act alone, if necessary, to exercise our right of self defense by acting preemptively.”
Embedding U.S. Corporations in the Iraq Economy
After George W. Bush became president, those who had planned and advocated an attack on Iraq to remove Saddam took power. Dick Cheney held meetings under his “Energy Task Force” with corporations including Halliburton, Bechtel and Chevron. A draft of the Task Force's recommendations came out to the media in April 2001. The first recommendation under Strengthening Global Alliances included a graph of Iraq oil output to the United States in 2000 and said a goal was to “make energy security a priority of our trade and foreign policy.” The second goal was for the U.S. to “support initiatives by [Mid East] suppliers to open up areas of their energy sectors to foreign investment.” In 1998 Chevron's CEO said: “Iraq possesses huge reserves of oil and gas – reserves I'd love Chevron to have access to.” His dream was about to be realized.
The well-known drum beat for war with Iraq began and after the success of the invasion the economic takeover began. The initial U.S. czar of Iraq, Jay Garner headed the Office of Reconstruction and Humanitarian Assistance. He advocated for putting Iraqis in charge as soon as possible, with elections held quickly. Garner was fired by Rumsfeld on the night he arrived in Iraq – fired, he believes because of these views. He was replaced by neo-con Paul Bremer and the Coalition Provisional Authority.
Bremer was in charge from May 6, 2003 to June 28, 2004. He had complete legislative, executive and judicial authority over Iraq. Bremer had four decades of corporate and government experience, working with Kissinger as managing director of Kissinger and Associates, as well as working in government with George Shultz and Donald Rumsfeld.
Prior to the invasion, Bearing Point received a $250 million contract from US AID to develop a blueprint for the remaking of Iraq's economy into a 'free-market' economy friendly to U.S. corporate interests. Bremer's job was to implement the Bearing Point plan. Juhasz points out that while there may have been an inadequate military plan, there was in fact a plan for the takeover and remaking of the economy of Iraq.
Bremer had the power to create laws by issuing “binding instructions or directives.” Bremer issued 100 Orders, Juhasz in 2005 interview describes some of the key orders:
“Order No. 39 allows for: (1) privatization of Iraq's 200 state-owned enterprises; (2) 100% foreign ownership of Iraqi businesses; (3) "national treatment" — which means no preferences for local over foreign businesses; (4) unrestricted, tax-free remittance of all profits and other funds; and (5) 40-year ownership licenses.
“Thus, it forbids Iraqis from receiving preference in the reconstruction while allowing foreign corporations — Halliburton and Bechtel, for example — to buy up Iraqi businesses, do all of the work and send all of their money home. They cannot be required to hire Iraqis or to reinvest their money in the Iraqi economy. They can take out their investments at any time and in any amount.
“Orders No. 57 and No. 77 ensure the implementation of the orders by placing U.S.-appointed auditors and inspector generals in every government ministry, with five-year terms and with sweeping authority over contracts, programs, employees and regulations.
“Order No. 17 grants foreign contractors, including private security firms, full immunity from Iraq's laws. Even if they, say, kill someone or cause an environmental disaster, the injured party cannot turn to the Iraqi legal system. Rather, the charges must be brought to U.S. courts.
“Order No. 40 allows foreign banks to purchase up to 50% of Iraqi banks.
“Order No. 49 drops the tax rate on corporations from a high of 40% to a flat 15%. The income tax rate is also capped at 15%.
“Order No. 12 (renewed on Feb. 24) suspends "all tariffs, customs duties, import taxes, licensing fees and similar surcharges for goods entering or leaving Iraq." This led to an immediate and dramatic inflow of cheap foreign consumer products — devastating local producers and sellers who were thoroughly unprepared to meet the challenge of their mammoth global competitors.”
Full interview at: http://democracyrising.us/content/view/180/164/
The result of these orders was to create an economic environment more favorable to U.S. corporations than laws in the United States. As a result Iraq corporations, and Iraqi workers have been excluded from the rebuilding of Iraq. And, the Iraq reconstruction has failed to provide adequate electricity, food, sewage treatment and even gasoline – but U.S. corporations have profited handsomely from this failed reconstruction.
Juhasz describes the impact of U.S. policies on the Iraqi economy:
“The new economic laws have fundamentally transformed Iraq's economy, applying some of the most radical, sought-after corporate globalization policies in the world and overturning existing laws on trade, public services, banking, taxes, agriculture, investment, foreign ownership, media, and oil, among others. The new laws lock in sweeping advantages to U.S. corporations including greater U.S. access to, and corporate control of, Iraq's oil. And the benefits have already begun to flow. Between 2003 and 2004 alone, the value of U.S. imports of Iraqi oil increased by 86 percent and then increased again in the first three quarters of 2005.”
To further embed a U.S. corporate economy in Iraq, the Iraq Constitution contained provisions that approve the Bremer Orders. The new Iraqi Constitution specifically repealed the Transitional Administrative Law, but did no such thing for Bremer's Orders and therefore they continue to be the law of the land. Thus, U.S. corporations continue their hold on the reconstruction of Iraq, and U.S. contractors continue to have full immunity from prosecution in Iraq. Beyond that, several articles of the Constitution re-enforce the Bremer Orders, e.g. Article 25 requires “modern economic principles that insure the full investment of its resources, diversification of its sources and the encouragement and development of the private sector; Article 26 “guarantees the encouragement of investment in various sectors,” Article 27 allows for the privatization of state property. Juhasz points out that modern economic principles means corporate globalization and the market principles of the Bremer Orders, and private investment means foreign investment.
Further, the Iraq Constitution does nothing to end the military occupation. Early drafts of the Constitution included provisions that forbid Iraq “to be used as a base or corridor for foreign troops” and “to have foreign military bases in Iraq.” These provisions were deleted in the final draft.
The Future: Oil Takeover, US Economic Dominance of the Middle East and the Battle Lines of World War III
The next stage for Iraq is a national oil law that will allow for oil companies to sign contracts with Iraq that gives them access and control over Iraqi oil. Juhasz points out that U.S. oil companies were brought into to advise the Bush administration on Iraq oil policy six months before the invasion. Further, the State Department's “Future of Iraq Project's Oil and Energy Group,” which included Ibrahim Bahr al-Ulou,, a U.S. educated oil industry who served as Iraqi Minister of Oil from September 2003 and again beginning in May 2005, agreed that Iraq “should be opened to international oil companies as quickly as possible after the war.”
The method being used for U.S. control of Iraq's oil is Production Sharing Agreements. PSA's favor private companies at the expense of exporting governments as the entire exploration, drilling and infrastructure-building process are turned over to private companies in contracts that last twenty-five to forty years. These contracts lock in the laws at the time the contract is signed. Thus contracts signed now would have the Bremer Orders as their law no matter what a future Iraqi government did.
Interim Prime Minister Allawi submitted guidelines for Iraq's new petroleum law in September 2004. The guidelines put “an end to the centrally planned and state-dominated Iraq economy” and urged the “Iraqi government to disengage from running the oil sector.” Further, he recommended privatization stating the industry “should be exclusively based in the private sector, that domestic wholesale and retail marketing of petroleum products should be gradually transferred to the private sector, and that major refinery expansions or grassroots refineries should be built by the local and foreign private sectors.” Finally, Allawi called for all undeveloped oil and gas fields to be turned over to private international oil companies. This, at a time when only seventeen of Iraq's eighty known oil fields have been developed. Article 109 of the Iraq Constitution re-enforces this goal stating that the federal government only administers existing oil and gas fields. The plans for a new Iraq petroleum law were made public at a press conference in Washington, DC by Adel Abdul Mahdi, formerly the Finance Minister, and now a Deputy President of Iraq.
Thus, the goal is about to be realized, control of Iraq's oil and the Iraqi economy. Iraq will be dominated by U.S. corporations, supported by the U.S. military. Ending the economic occupation of Iraq may be more difficult than ending the military occupation. The embedding of laws favoring foreign investment through the Bremer Orders and the Iraq Constitution will make it difficult to give Iraq back to the Iraqis.
The U.S. is already moving to gain control of the broader Middle East economy. The U.S. is aggressively pushing the U.S.-Middle East Free Trade Area. MEFTA is modeled after NAFTA and seeks to economically tie the region – where 54 percent of the world's oil reserves exist – to the United States. MEFTA seeks to cover 20 countries in the Middle East and North Africa. MEFTA is being developed through bi-lateral negotiations with each country, leading to a region-wide agreement. The U.S. is using the “us against them” strategy – those that oppose us will be viewed as against us. Part of the negotiation includes Generalized System of Preferences (GSP) which provide for duty free import into the United States. Unique in the Middle East is the trilateral nature of these agreements – the U.S. and another country plus Israel. To get duty free entry to U.S. markets a certain percentage of goods must go through Israel allowing Israel to take a piece of the profit.
Iraq is the first economy to fall. The massive U.S. Embassy in Baghdad shows it will be the base of U.S. operations in the region. Juhasz subtitles her book “Invading the World, One Economy at a Time.” This is consistent with the views of PNAC, the 1992 DPG, and the 'access of evil' speech. As John Gibson, the founder of Committee for the Liberation of Iraq and a Lockheed Martin executive, said in 2003 “We hope Iraq will be the first domino and that Libya and Iran will follow. We don't like being kept out of markets because it gives our competitors an unfair advantage.” PNAC labeled the countries of greatest concern 2000 as Iraq, Iran and North Korea – the future 'axis of evil' of George W. Bush. They placed Iran as the second target saying “Over the long-term, Iran may well prove as large a threat to U.S. interests in the Gulf as Iraq has.”
President Bush has declared that we are now in World War III. While this World War is framed in terms of good vs. evil – terrorism against the United States – what it may really be about is U.S.-corporate and military dominance of the world. As Juhasz says – the U.S. taking over one economy at a time.
For more information on “The Bush Agenda: Invading the World One Economy at a Time,” by Antonia Juhasz, Harper Collins, 2006 visit www.TheBushAgenda.net. Juhasz is a leading expert on corporate globalization, formerly the Project Director of the International Forum on Globalization and currently a visiting scholar at the Institute of Policy Studies. This is a must read book for those who want to understand how we have gotten where we are in Iraq, and where the next phase of 'World War III' will take the U.S.
-###-
May 8, 2006 Kevin Zeese is Director of Democracy Rising (www.DemocracyRising.US) and a candidate for U.S. Senate in Maryland (www.ZeeseForSenate.org)
Iraq On The Verge of Collapse
Wednesday, May 03 2006 @ 11:00 AM PDT
Contributed by: arch_stanton
http://www.infoshop.org/inews
The British and the Americans are guarding Iraq's Persian Gulf oil platforms -- the troubled country's only real sources of revenue -- like crown jewels. But Iraqi oil is flowing sluggishly at best, while hoped-for investments haven't materialized and the Iraqi oil industry is on the verge of collapse -- both technical and political.
On the Verge of Collapse
By Bernhard Zand
The British and the Americans are guarding Iraq's Persian Gulf oil platforms -- the troubled country's only real sources of revenue -- like crown jewels. But Iraqi oil is flowing sluggishly at best, while hoped-for investments haven't materialized and the Iraqi oil industry is on the verge of collapse -- both technical and political.
The HMS Bulwark, Her Majesty Elizabeth II's most state-of-the-art warship, has been bobbing at the mouth of the Shatt al-Arab River for days. With its crew of more than 600 men, the amphibious ship, outfitted with landing craft and the latest technology, has a mission in fragile spots in the Persian Gulf -- but nothing happens. The coasts of Kuwait, Iraq and Iran are dimly visible on the horizon. The sea is calm as a dozen fishing boats crisscross the waters around the ship. Sometimes the calm lasts for days.
And then, suddenly, after weeks of monotony, something does happen. Four Iranian patrol boats traveling at high speeds -- 45 knots, or about 80 kilometers per hour (50 mph) -- approach the Bulwark from the East. They're manned by members of the Iranian Revolutionary Guards -- not regular navy personnel. It's considered an ominous sign.
Captain Clive Johnstone sprints from his cabin to the command deck, and for a moment he loses his typically British cool. "All men without orders leave the bridge immediately!" he barks. Johnstone anxiously has his crew establish radio contact with the Iranians. It takes a few minutes to make the connection, but by then the Revolutionary Guards, or Pasdaran, have already stopped their boats -- at a point they believe marks the nautical border between Iran and Iraq.
The enemy that's making officers of the Royal Navy on the Bulwark so nervous consists of bearded men piloting small, agile, high-speed boats. Even the mightiest warship is vulnerable, as the suicide attack on the USS Cole in the Yemeni port city of Aden in October 2000 illustrates. In that incident, explosives hidden on a fishing boat manned by al-Qaida terrorists ripped an enormous hole -- six by 12 meters (19 by 39 feet) -- into the hull of the American destroyer, killing 17 American sailors.
Far more would be at stake if the same kind of attack were to occur here in the northern Gulf. The Bulwark lies at anchor between two giant oil platforms, the Basra and the Khawr al Amaya terminals. Two pipelines running along the ocean floor connect the platforms with the mainland 20 kilometers (12 miles) away. When both platforms operate at full capacity, they can load about 2 million barrels of oil onto waiting tankers -- about as much oil as France consumes in a day, or more than 2 percent of daily global demand. "A successful attack on one of these terminals would raise the world market price by several dollars within hours," says Commodore Bruce Williams, commander of the multinational fleet that monitors the waters off the Iraqi coast from its base on the Bulwark.
The world's most vulnerable economy
Because its northern pipeline into Turkey has been out of commission for months as a result of ongoing terrorist attacks, Iraq currently processes all its oil exports through the two terminals on the Gulf, where it earns about 80 percent of its revenues. No other country or economy in the world is quite as vulnerable at a single point.
That's because oil revenues represent the only leverage remaining to the government in Baghdad. This became abundantly clear last week when Prime Minister Ibrahim al-Jaafari withdrew his bid for reelection and, in doing so, eased a months-long stalemate and reopened the wrangling for the government's 32 unoccupied ministerial positions. The Kurds promptly made it clear that they were interested in the oil ministry. According to Kurdish member of parliament Mahmoud Osman, the Kurds would even be willing to part with the post of foreign minister, which they currently hold, in exchange for the oil or finance ministry.
To this day, many Iraqis see the West's interest in Iraqi oil as the real reason behind the 2003 US-led invasion. However, a look at the actual state of the oil sector three years after coalition forces marched into the country calls this view into question.
It isn't as though the occupying powers haven't tried to secure control over Iraqi oil. Heavy new security nets hang down into the sea from the rusty frame of the Basra platform, which dates from the 1970s. Heavy gun emplacements have been set up, and about 100 American and Iraqi soldiers are permanently stationed on the platform. "Welcome to the Basra Terminal Hotel -- nice view -- huge swimming pool" the Americans have written on a steel girder in front of the containers that serve as their sleeping quarters. Posters of Grand Ayatollah Ali al-Sistani hang on the walls in the stifling section of the platform where the Iraqi oil workers are housed.
A US destroyer and several coast guard vessels patrol a two-kilometer perimeter around each of the terminals, while ships operated by the fledgling Iraqi navy are stationed farther out. Their mission is to escort the incoming supertankers operated by international shipping companies to their berths where, depending on their size, they spend up to two or three days being tanked. It's a dangerous amount of time, but the platform crews take as many precautions as possible -- the result of previous attacks.
In April 24, 2004, three fishing boats approached the two loading stations. Two exploded prematurely, putting the terminals out of commission for a short time. But it was still long enough to cause $28 million in lost revenues and a jump in the global oil price from $33 to almost $40 a barrel. Terrorist leader Abu Musab al-Zarqawi claimed responsibility for the attack.
Although it's difficult to imagine a comparable attack succeeding today, Commodore Williams admits that other threats exist instead. "I'm really an ecologist," says the British fleet commander. "That could come into good use here one day." According to Williams, the condition of the two terminals, especially the Khawr al Amaya platform, which was heavily damaged in the Iran-Iraq war, is deplorable and the pipelines haven't been properly serviced in years. "Much of the infrastructure needs improvement," he adds.
A disaster waiting to happen
It's a diplomatic way of describing a potentially devastating problem. Before the Iraq war, Mohammed Said, then manager of the Subeir pumping station 250 kilometers (155 miles) inland, warned against an environmental catastrophe in the Persian Gulf. He claimed that the pipelines, installed in the 1960s and 1970s, were full of holes and had defective valves, and that a reserve basin for emergencies was nonexistent. "Whenever a tanker docks at the offshore terminal and I start up the pump, I pray to God that nothing happens," he says.
At the time Iraqi oil engineer Said, toeing the government's propaganda line, blamed the problems on damage from the first Gulf war in 1991 and sanctions the United Nations subsequently imposed on the Saddam Hussein regime. Baghdad, he said, simply didn't have the means to repair its oil facilities.
But to this day, three years after the invasion and the lifting of UN sanctions against Iraq, there has been no significant improvement in the condition of these facilities. The Southern Oil Company's (SOC) ailing equipment continues to operate on the verge of collapse. The safety valves on the Fao Peninsula, the last sluice before the giant 48-inch pipelines drop to the ocean floor, are permanently open. "They're so heavily corroded," says a British engineer on board the "Bulwark," "that they probably can't even be closed completely anymore."
Even today, there would hardly be any reserve tanks available in the event of a leak in the underwater pipelines or an accident on the platform. After the war, the US government awarded repair contracts worth more than $10 billion to companies like oil multinational Halliburton -- and yet the central Subeir pumping station is still marked by deep craters once occupied by tanks with holding capacities of up to 33,000 cubic meters (about 1.2 million cubic feet). The Hamden Junction south of Basra, formerly the point of control for the flow of oil to the two terminals, is out of order. To this day, the remark "all storage destroyed" is written next to the locations of the Rumeila 1 and Fao storage tanks on British technical maps.
Experts describe the condition of the oil wells themselves in even more dramatic terms. Saddam began a policy of overexploitation of Iraq's oil resources in the 1980s that included neglecting to replace depleted oil with gas or water to maintain the necessary pressure in the wells. Many of the approximately 850 oil wells in southern Iraq are now "dead" and, with the exception of the West Kurna reservoir, all so-called super-giant fields are exhausted, writes oil engineer Abd al-Jabbar al-Halfi. "We milked them like cows -- but without giving them anything to eat."
After the fall of the Saddam regime, Iraq's oil technocrats hoped for a turnaround -- but in vain. "The new government is also constantly demanding that we step up oil production, even though our equipment is outdated and primitive, the situation at the oil wells is deteriorating and the pipelines are corroding," says Halfi.
Whereas the insurgency has hampered reconstruction in central Iraq, the southern part of the country has been relatively secure until now, and yet little has been achieved. On the eve of the war, Iraq was pumping about 2.5 million barrels of crude oil per day. In the first three months of this year, the rate of export was just over 1.7 billion barrels -- a far cry from the predictions the Americans had given the Iraqis after the invasion, when US officials were talking about production levels of more than 6 million barrels a day by 2010.
A political tug o' war
The failure of the Southern Oil Company is politically explosive material in Iraq's ethnically and religiously heated climate. In February, the company's 15,000 workers and engineers sent an urgent letter to Baghdad, in which they accused the government of "deliberately" neglecting their company. "Our company," the letter read, "has the world's largest oil reserves -- but we have yet to find someone who will listen to us." The regime in Baghdad, the oil company employees wrote, even spent months blocking the decision to lease a pair of new, more powerful tugboats so that large oil tankers could be safely guided into the terminals in rough weather.
The solution the SOC employees have proposed -- that the company be made independent of Baghdad -- is part of a political trend. "What we want is an energy council operating directly within the provincial government in Basra," says oil engineer Halfi. "This council could then find ways to attract foreign investors to the region, as is already being done in Kurdistan."
In fact, the Kurds are already pursuing a largely independent oil policy with almost no regard for the central government in Baghdad. Some of the Turkish, Canadian and Norwegian companies drilling for oil in Kurdish northern Iraq have signed contracts directly with the regional administration in Arbil, bypassing the oil minister in Baghdad -- a model the Shiites in southern Iraq apparently wish to emulate.
Baghdad appears to have accepted the change as inevitable. "According to the constitution, the central government retains authority over oil wells that are already producing," says the former and possibly future Oil Minister Ibrahim Bahr al-Ulum. "But the provinces have control over newly developed resources."
That's one way of reading the Iraqi constitution, and it's the interpretation favored by the Shiites and Kurds. But Iraq's Sunnis have a different view. They see it as unconstitutional when regional parliaments negotiate oil contracts directly, circumventing the central government.
There is a simple reason behind the Sunnis' opposition. Iraq's oil reserves are estimated to be at least 115 billion barrels, and the most productive fields lie in the country's Kurdish north and Shiite south. The Sunni-dominated center, on the other hand, is dry.
http://service.spiegel.de/cache/international/spiegel/0,1518,druck-413981,00.html
ExxonMobil Still Evaluating Bolivian Nationalisation
Tuesday May 2, 2006
www.TodayOnline.com
ExxonMobil Corp., the world's biggest energy company, said it was too
early to say what the impact will be of Bolivia's decision to nationalise
its oil and gas industry.
"It is too premature to make a statement. We are monitoring the situation
and we'll see what the developments are," company spokesman Bob Davis
said.
ExxonMobil has a stake of 34 percent in Bolivia's Itau natural-gas
reserves, a non-producing field operated by Total of France in which
Britain's BG Group is also a partner.
Chevron Corp. and ConocoPhillips, the next two biggest US energy giants
after ExxonMobil, are not present in Bolivia. ExxonMobil has no upstream
activities in the country.
Bolivia's left-wing President Evo Morales issued a formal decree Monday to
nationalise the country's crude and natural gas resources.
Bolivia has the second-highest natural gas reserves in Latin America,
behind Venezuela, with an estimated 54 trillion cubic feet of natural gas
reserves. But it is a relatively minor player in crude oil.
The measure is expected to affect about 20 foreign energy companies,
including Spain's Repsol, Petrobras of Brazil, Britain's BP and Total. -
AFP
Exxon Plays Hardball -- and Hebron One Example
Shawn McCarthy
The Globe and Mail
NEW YORK -- Propelled by soaring world oil prices, ExxonMobil Corp. has become the world's largest corporation by revenue. But more important, says its chairman Rex Tillerson, is its industry-leading return on capital that he refuses to squander on the demands of politicians such as Newfoundland and Labrador Premier Danny Williams.
From Atlantic Canada to Venezuela to Indonesia to eastern Russia, Exxon is used to playing hardball, refusing to proceed with developments where governments insist on conditions that would lower the corporation's return on capital below what it considers to be an acceptable level.
ExxonMobil is the world's most successful oil company. It boasted a 31-per-cent return on capital employed last year, a full 50 per cent higher than its nearest competitor. It did so, Mr. Tillerson says, by sticking to its long-term strategy of investing in only the most profitable developments and strictly controlling costs.
The Irving, Tex.-based company refused requests for interviews with its new chairman, who took the helm at the beginning of the year, or with senior vice-president Stuart McGill. But in speeches, press conferences and analyst meetings, the executives have spelled out the company's strategy for staying on top while dealing with nationalistic political leaders, Middle East turmoil and what some analysts claim to be the coming peak for global oil production.
"The disciplined approach to pursuing and selecting the most attractive investment opportunities continues to distinguish ExxonMobil," Mr. Tillerson told analysts in New York last month. "We are long-term driven, and we're patient. And we're not opportunity constrained."
Last year, ExxonMobil earned $340-billion (U.S.) in revenue and a stunning $36-billion in profit, dethroning Wal-Mart Corp. as the largest publicly traded company by revenue.
Despite warnings of supply constraints in the face of rising demand, the global oil industry -- led by ExxonMobil -- has more projects in the pipeline than capital budgets and skilled manpower can handle at any one time.
It expects to increase its oil and gas output from the equivalent of four billion crude oil barrels a day, to five billion by 2010 and six billion by 2015. With a half-dozen major projects slated to come on stream each year for the next several years, Exxon is constantly re-evaluating its investments to determine which will provide the best long-term payoff.
In Fort McMurray, Alta., for example, the company is responding to soaring development costs with a go-slow approach to its Kearl oil sands project, which contains an estimated four billion barrels of crude oil.
"We are being judicious about the development pace, and designing strategies to mitigate the overheated cost environment in the Fort McMurray area," Mr. McGill told analysts. "We will invest in this large, high-quality resource when the project is ready and robust."
Given the ample opportunities worldwide, Newfoundland and Labrador is making a risky bet that the oil companies are engaging in negotiating tactics by shelving the Hebron offshore project. When a four-company consortium failed to reach agreement with Mr. Williams' government to develop the Hebron oil field in the waters off Newfoundland and Labrador, the operator, Chevron Corp. quickly reassigned its engineers and skilled work force to other projects around the globe.
The Premier has singled out consortium partner ExxonMobil, which owns the largest stake in the project, for its failure to proceed after the province demanded an equity stake. And, with Exxon in mind, he has threatened to pass legislation that would require companies to develop a known resource in a specified time frame or lose title to it.
Exxon officials refused to comment on the Newfoundland and Labrador logjam last week. Instead, they responded to a series of questions by drawing on past comments from Mr. Tillerson and Mr. McGill.
In contrast to analysts who argue the world should expect permanently higher oil prices, Exxon is less bullish, and bases its capital expenditures on a far more conservative outlook.
"There is really no explanation for why oil trades where it does today at these prices," Mr. Tillerson said in a recent speech. "If you look to the long term, our view is that supply and demand fundamentals are going to return to levels that are reflective of prices that are more in line with historic prices than today."
As a result, Exxon is not opening the spigots to throw money at resource development.
In fact, it allocated more to its share buyback program in 2005 than it did on its capital budget to expand production, with $23-billion spent on share repurchases compared with an $18-billion capital budget. It plans to increase that capital expenditure to $20-billion within a few years.
Exxon officials won't talk about Newfoundland, but its approach in Indonesia and Venezuela -- where it encountered government demands to increase public participation in projects -- speaks volumes.
In Indonesia, Mr. Tillerson concluded a deal with the government earlier this year that ended a five-year dispute over development of Indonesia's largest untapped oil field, an impasse that some in the country blamed for drying up foreign investment.
While Exxon is now prepared to proceed, the government fired the head of the national oil company, who had opposed the deal.
Similarly in Venezuela, Exxon has said it is prepared to work with President Hugo Chavez to develop the country's vast heavy oil resources. But it has rejected Mr. Chavez's demands for increased royalty rates, and said it will proceed with the project only if the investment climate is favourable.
"They'll either create the conditions that allow major new investments, or they will not create those conditions. And the major new investments then, at least for us, are unlikely to take place," Mr. Tillerson told the analysts in New York.
"We will remain interested in the country. We see opportunities there, and it's just a question of how they want to go forward."
(Thursday, April 20, 2006, B2)
CORRECTION
Exxon Mobil Corp. expects to increase its output from the equivalent of four million barrels of crude oil a day to five million by 2010 and six million by 2015. Incorrect information was published Monday.
THINGS YOU CAN DO TO PROTECT YOURSELF FROM RISING GAS PRICES
As gasoline prices once again rise above $3 a gallon, there are things you can do to protect yourself and save energy. These changes will require adjusting your habits and more walking, but we are in a time when major changes are inevitable.
The Federal government could act in the following ways to moderate oil prices and keep money in your wallet, but in my opinion none of these things will be done:
1. Immediately withdraw U.S. forces from Iraq. - The current level of world oil prices, around $70 a barrel, is directly related to fears that warfare will further disrupt oil shipments. It has been estimated that high oil prices related to the Iraq War deprive U.S. consumers of $25 billion a year at level of $50 a barrel, of course the amount is now higher. It has also been estimated that $7 billion of ExxonMobil's $36 billion in profits in 2005 is traceable to market conditions created by the Iraq War. These windfall, war profiteering profits, continue to flow into the accounts of ExxonMobil and the other major oil companies, unchecked.
2. Immediately declare that there will be no U.S. or Israeli attack on Iran. - The threat of attack on Iran has been the primary "extra" boost that shoved world oil prices from the low $60s to the $70s level. The fear factor related to the possible use of nuclear weapons further heightens speculation in the oil market. There is every possibility that any kind of attack on Iran could bring massive disruption in the world oil market, beyond comprehension.
3. Immediate efforts to mediate conflicts between oil companies, popular movements and governments in Nigeria, Chad and Venezuela. This would require the U.S. government to take a neutral position toward U.S. oil companies and assist in negotiating taxes and royalties that are more equitable to citizens of the countries just mentioned. Attacks on oil facilities in Nigeria by popular movements seeking a larger share of oil revenues has been a continuing factor in maintaining high oil prices.
4. Gasoline rationing - Gasoline rationing is needed simply so that low- and middle-income people can have access to enough fuel to enable them to go to work without bankrupting them. It is also a means of conserving petroleum products in an equitable way. As demonstrated in wartime, price is not a satisfactory means of conservation and distribution. I believe we are entering a time when gasoline rationing will become a permanent part of life, and the sooner the better for our pocketbooks.
5. Investigation of price fixing - Politicians call for price-fixing or price gouging investigations everytime there is a spike in gasoline prices, knowing full well that the Federal government is unprepared to investigate and that courts are likely to favor oil companies in price fixing cases. Congress could change the imbalances with adequate funding for investigation and prosecution, but is unlikely to do so.
In this situation, here are things we can do to try to cut our losses:
1. Lobby for all the above and boycott ExxonMobil and firms connected to its board of directors for reasons described on the ConsumersforPeace.org website.
2. View your car as your enemy. Use it as little as possible. Every day you don't use your car is a good day. Walk to anywhere you have to go that is under a mile. For shopping, use a fold-up grocery cart. Make no quick trips to the store; do without unless what you need is an emergency. Share cars when you can.
3. Shift your diet toward a vegetable base and away from processed foods. Meat, chicken and fish are energy-intensive as are processed foods. Try to buy foods that are produced locally, not requiring much truck transport. The goal here is to reduce the overall demand for petroleum in the food system, and you will also save money.
4. Try to save at least $5 a day. No matter what, put a $5 bill in a jar every day. Don't raid it. Encourage everyone in your family who drives a car to do the same. At the end of the year, you will have at least $1,820 that you don't have now that you can put in a CD. Saving will help compensate for what you are losing at the gas pump and will give you some real control over your economic life.
If you have additional suggestions for coping with gasoline prices, please let us know. Remember, you're on your own.
And please remember that the invasion and occupation of Iraq and the threat of nuclear attack or any other kind of attack on Iran are violations of international law and any code of human decency. The answer to our plight is not only in changing our purchasing and transportation habits but in changing our government and prosecuting those responsible for the illegal behavior that has brought us to this point.
Refinery To Blame For Grime and Illness Over the Years, Residents Say
Aneth Navajo longs for the clean, healthy days, before oil flowed
By Jesse Harlan Alderman
Special to The Tribune
Salt Lake Tribune
ANETH - A few hundred feet from her three-room hogan in the shadow of an ExxonMobil oil refinery and a tall, hissing flare, Emma Begay buried her son.
Weeks later, oil spilled into the burial site from a ruptured pipeline, blanketing the grave under a black film.
Workers came and removed the oil-contaminated soil and covered it with new dirt. But the earth atop the grave is still tarred with oil.
"The air was clean before all this oil was moved in. There was vegetation right here," Begay says through an interpreter, pointing to a barren flat where chickens bob up and down among littered appliances and a rusted pickup truck.
"Now when you go down to the creek you see tracks of salt and slime. It's slick. When the wind blows, you can smell the air."
A discovery drilling rig first struck oil in Aneth in 1956, and since then the field has produced 420 million barrels of oil and 370 billion cubic feet of natural gas, and, according to federal and tribal environmental officials, also has created one of Utah's most troublesome oil fields.
Now, residents of this area of the Navajo Reservation are living with air pollution, spills, noise, dust and health problems in their remote corner of the West's oil and gas boom that has taken off as energy prices have soared.
Here, in far southeast Utah, the boom is pitting some local Navajos against Navajo Nation regulators and elected officials, and the pollution of the watershed, grazing lands and the air with almost no compensation against the lease payments that go to the Navajo government in Window Rock, Ariz.
Years of distrust: The injection station and companion refinery visible from Begay's dirt-pocked window are owned by ExxonMobil, the company that last year netted a $36 billion profit, the highest ever for an American company.
After dozens of oil spills, members of the Aneth Chapter, the local governing body of the Navajo Nation, are wary of the aquifer that feeds their underground wells.
Like most of the nearly 1,000 Navajos living in the Paradox Basin, Begay hauls water in 55-gallon drums for cooking and nourishing her sheep. The water comes from Cortez, Colo., about 50 miles away.
In the past three years, the Environmental Protection Agency's regional office in San Francisco, which oversees southern Utah, has fined ExxonMobil and the field's other primary operator, Chevron Corp., more than $8 million for violations in the Aneth field.
In addition to millions of dollars slated for improvements, ExxonMobil and Chevron both pledged large sums to build a pipeline to remote homes cut off from drinking water.
The years of neglect have left scars on the Aneth area in the form of rusted pipelines, abandoned wells and lingering health concerns, said Dave Basinger, an EPA engineer active in the field's cleanup. But the days of reckless spilling and lax supervision have passed, he said.
"Going back in the years, there was less regulation," he said from San Francisco. "The history is people don't trust these companies because they have not had to pay attention like they do now. The Navajos are becoming more astute."
Banding together: Last year, Aneth-area Navajos formed an environmental group, the Utah Diné Bikeyah Committee. Diné Bikeyah means Navajo lands.
The group is calling for environmental concessions from oil companies leasing lands in the Aneth field and demanding millions of dollars in back payments to the Aneth Chapter, claiming money from the EPA settlements should be spent locally and not by the Navajo Nation on projects across the reservation.
The demands come as environmental regulation by the Navajo Nation is at a crossroads.
The Navajo Nation Environmental Protection Agency is about to receive an unprecedented degree of authority to enforce its own regulations under provisions of the 2005 Federal Energy Bill.
But Aneth activists fear the tribe may do little better than the federal EPA in regulating pollution.
The government in Window Rock, says Helen Archie, co-founder of the Utah Diné Bikeyah Committee, has unveiled a proposal that opens the door to increased drilling.
On Feb. 21, the Navajo Nation Resources Committee put a bill before the Navajo Nation Council to request $200,000 from the Bureau of Indian Affairs for a seismic survey to determine to what extent more oil drilling is feasible in a 42-square-mile tract near Aneth.
A hope for more jobs: Because of the impoverished tribe's bleak fiscal picture, Navajo Nation President Joe Shirley Jr. has invited development of a $2.2 billion power plant in New Mexico, and more coal mining and oil and gas drilling.
While Shirley is mindful of the Aneth Chapter's concerns, boosting the coffers of the Nation's 110 chapters is the priority, said spokesman George Hardeen.
"You need to bring in the whole economic picture on the Navajo Nation," Hardeen said. "Our biggest export is cold cash. With a weak economy, you need to do anything to stimulate jobs."
Tribal elder Annie Oldman said the tribe has sacrificed the health of its members in the name of oil royalties.
Oldman has lived a few hundred feet from ExxonMobil facilities her entire life. She says she suffers from chronic headaches, asthma and hypertension - ailments that never touched her parents and grandparents who lived here before the oil boom.
Oldman complains that ExxonMobil technicians speed down Aneth's rock-cobbled roads in shiny white pickups. Yet, she says, the company and the tribe refuse to pay medical bills, refuse to pave the road and refuse to contribute any funds other than annual $350 nuisance fees to affected people.
"We asked ExxonMobil to help us with the road, but they would not," she said. "Superior [purchased by Exxon in 1984] used to help us. They would grade the road, but Exxon tells us there's no money all the time."
Susan Reeves, an ExxonMobil spokeswoman in Houston said the company is continually improving its flaring equipment and performing maintenance throughout the field to curtail oil spills and limit emissions.
The EPA settlements, she said, were the "most appropriate long-term solution for the area." But she added in an e-mail that the pacts do not "constitute an admission of either any facts or liability by the company."
Local demands: In about 15 interviews with Navajos in the Aneth area, tribal members lashed out at oil companies. Some mentioned a refinery explosion in 1997 that spurred a mass evacuation.
Others complained of sick livestock and animals that drink from open oil pits.
Susie Philemon, co-founder of the Utah Diné Bikeyah Committee, said as a child she picked up mercury from well sites and rubbed it on her jewelry to make it shiny.
In 1978, a group of Navajos took over Texaco's main pump station in Aneth and halted production.
Today, through resolutions passed by the Aneth Chapter, the Utah Diné Bikeyah Committee is arguing environmental oversight should bypass Navajo environmental agencies.
In September, the chapter demanded funding from the Navajo Nation for independent environmental surveys and health testing for all Aneth residents.
Subsequent resolutions demand the Navajo government funnel all money received from EPA settlements directly to Aneth. Another calls on the Navajo Nation to provide $10 million for the Aneth Chapter to develop its own environmental regulations under the new oversight powers afforded by the federal 2005 energy bill.
"It could have been forgotten, the way they treated our people," said Zena Archie, Helen Archie's 20-year-old daughter. "This could have been a new day, a new generation. But what they are doing now is worse than what we had in the past. They are killing off our elderly, slowly, and we're next."
Hope for the future: At her kitchen table, spread with a stack of coupons and a transistor radio, Emma Begay said she is too old to join the nascent political movement in Aneth.
Still, the new generation, she hopes, will restore the land to the condition before drilling.
Then she turns toward the window and whispers:
"Because this is not a pretty place."
Open Letter to the New ExxonMobil Chairman, Rex Tillerson
by Ralph Nader
Published on Saturday, April 1, 2006 by CommonDreams.org
Mr. Tillerson:
You have to be feeling pretty good about your new position heading the world's largest oil and gas company. You stand astride the globe where, with few exceptions, the Congress is like putty in your hands, the White House is your House and the consuming public is powerless. Governments in the Third World may huff and puff, but Exxon/Mobil pretty much gets its way in dozens of arrangements completed and about to be concluded.
Seven years ago, your predecessor, Lee Raymond, took over Exxon's main competitor, Mobil Oil Company, through a merger approved by the misnamed Antitrust Division of the Justice Department. Really, what is left of antitrust standards when the number one and number two companies in an industry are permitted to marry?
Profits of your company are beyond your dreams of avarice. Over $36 billion last year, after modest taxes, yet you blithely ignored urgent pleas by members of Congress, especially that of the powerful Chairman, Senator Chuck Grassley (Rep. Iowa) to contribute some significant deductible money to charities which help impoverished American families pay the exorbitant prices for heating oil this past winter. Rarely has there been such a demonstration of corporate greed and insensitivity by a company that has received huge government welfare subsidies, de-regulation and tax expenditures over the years at the expense of the smaller taxpayers of America.
Exxon/Mobil even relishes the latest "Big Oil's Big Windfall," to use the phrase in a recent /New York Times/ editorial, which wrote that "oil companies stand to gain a minimum of $7 billion and as much as $28 billion over the next five years under an obscure provision in last year's giant energy bill that allows companies to avoid paying royalties [to Uncle Sam] on oil and gas produced in the Gulf of Mexico. This welfare payment at a time of record crude oil, refined oil and natural gas prices appears too much even for one of your industry's giants. A Shell official told the /New York Times/ reporter, Edmund L. Andrews, "Under the current environment, we don't need royalty relief."
Exxon/Mobil doesn't feel any need to say something like that. You're a corporate superpower at the pinnacle of your superpowers. No Ida Tarbell, no Fred Cook, no Senator Phil Hart, no Sixty Minutes program can effectively expose you, because the company has been exposed and exposed and nothing changes your corporate policies.
Unchanged is Exxon/Mobil's stubborn refusal to pay the modest $5 billion punitive damage award following the Exxon Valdez oil spill that damaged or put so many small businesses out of business. They are still waiting, according to a recent network television expose. Last year your company made that much post-tax profits in about seven weeks. After the devastating spill in Alaskan waters, your gasoline prices rose sharply in California and you made money there. And your delay for 12 years resisting the court ordered payout by legal maneuvers has returned in interest on that award about that amount. Not that many years ago, a company in your mega-profitable position would have considered the public relations if not the simple justice benefits before dragging on the proceedings. Not so, with the impregnable Exxon/Mobil.
While BP and Shell move to build and talk about a solar power business, including wind power, you continue to parade that window dressing pittance of a project at Stanford University that is going nowhere. Your company is still seen as a resistant skeptic among a swarm of multinational companies including BP, that recognize Global Warming and its direct fossil fuel connections.
To make matters worse, Exxon/Mobil has funded over three dozen organizations to undermine scientific findings about global warming or as front groups to engage in obstructionist or harassment activities.
These and other derelictions have led environmental groups to urge a boycott (See exposeexxon.com) of Exxon/Mobil products and employment refusals by university graduates. Only company insiders know how effective such a boycott has been at the gasoline pump and elsewhere. My guess is that you're shrugging it off as inconsequential. The boycott clearly needs more imagination in getting its message out.
The lessons of history teach that the arrogance of corporate power eventually meets its match, either through the decay of internal hubris or the rise of public law enforcement or from private challenges-innovative, civic or competitive.
Remember, the awesome power and market position of General Motors years ago, or the dominance of IBM. When you're on top is when you should be most alert to the misuses of power that are sowing the seeds of future decline. The mean-spirited image of your company, the stinginess of transferring some of your corporate welfare windfalls to the welfare of millions of shivering children and their penurious parents are upsetting even Republican members of Congress hearing from their indignant constituents about sky high fuel prices.
So observers of your company-official and regular people-will be waiting for signs of the post-Raymond, clenched jaw era of Exxon/Mobil under the command of your group of executives. Let's see if the change is just one of style or one of more sincere responses to the ways the approaching winds are blowing.
Sincerely,
Ralph Nader
IRS Audited Greenpeace At Request of ExxonMobil-Funded Group
DemocracyNow.org
The Wall Street Journal revealed this week a little-known watchdog group was responsible for getting the IRS to audit the environmental organization Greenpeace. Two years ago, Public Interest Watch challenged Greenpeace's tax-exempt status and accused the group of money laundering and other crimes. According to the Journal, tax records show more than 95 percent of the funding of Public Interest Watch was provided by the oil giant ExxonMobil.
On its website, Public Interest Watch says it was founded "in response to the growing misuse of charitable funds by nonprofit organizations and the lack of effort by government agencies to deal with the problem." The group describes its mission as: "Keeping an Eye on the Self-Appointed Guardians of the Public Interest."
Greenpeace, meanwhile, has been one of ExxonMobil's fiercest critics. The group has protested ExxonMobil's meetings and company gatherings as well as its oil tankers and filling stations. Greenpeace has labeled ExxonMobil the "No. 1 Climate Criminal" over its environmental practices.
- Steve Stecklow, senior special writer at the Wall Street Journal, he wrote the article about Exxon's funding of Public Interest Watch. He speaks to us from Boston.
- Read article by Steve Stecklow
- John Passacantando, Executive Director of Greenpeace USA.
- Representatives from ExxonMobil declined to appear on Democracy Now. A spokesperson said the company had nothing further to say on the topic. Public Interest Watch did not respond to our interview request.
This transcript is available free of charge. However, donations help DemocracyNow.org provide closed captioning for the deaf and hard of hearing on their TV broadcast. Thank you for your generous contribution.
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AMY GOODMAN: Joining us to discuss this story is Steve Stecklow, senior special writer at the Wall Street Journal. He wrote the piece about Exxon’s funding of Public Interest Watch, speaking to us from Boston. Also, in Washington, D.C. studio, John Passacantando, Executive Director of Greenpeace USA. Representatives from ExxonMobil declined to appear on Democracy Now! A spokesperson said the company had nothing further to say on the topic, besides what they said in the Wall Street Journal. Public Interest Watch did not respond to our interview request. Let's begin with Steve Stecklow. Why don't you lay out the story?
STEVE STECKLOW: Well, basically, a couple of years ago this fairly little known organization called Public Interest Watch started attacking a number of nonprofits and challenging their tax-exempt status. And their main target was Greenpeace, and they wrote a letter to the Internal Revenue Service, accusing Greenpeace of literally money laundering and crimes and quite serious allegations. And then I got a tip a few months ago that Greenpeace had, in fact, been audited, and I started looking into it, and I discovered this connection with Public Interest Watch and their calls for the audit.
And I did some checking on their tax records, their tax records. They have never disclosed where they receive their funding from, but it turns out that a year ago they filed tax records with the Internal Revenue Service, which showed that in 2003-2004, they received virtually all their money from ExxonMobil. So, anyway, I started doing some checking and did a story on that. This comes against a backdrop where a number of conservative groups have been attacking nonprofits and NGOs over their tax-exempt status. There have been hearings on Capitol Hill. There have been a number of conservative groups in Washington who have been quite critical. So, that's the backdrop of this.
JUAN GONZALEZ: And, John Passacantando, when did the I.R.S. first approach Greenpeace about the audit? And how did you know about the connection between them and this watchdog group?
JOHN PASSACANTANDO: Well, we didn't know fully the connection until we -- until Steve from the Wall Street Journal called us, interviewing us about the story, but we got notified by the I.R.S. this past December that we were to be audited. Several years prior is when we saw that Public Interest Watch report, making all these erroneous claims about money laundering, very, you know, extreme charges with no factual basis for it. It was clearly propaganda.
Nevertheless, this report was moved around, mostly, I have to say, the Murdoch media chain. We were getting calls from reporters, but always linked to some kind of Murdoch operation, and we would explain. We would say, “Come in. Look at the books. We can show you that this is completely erroneous.” And you would have journalists who actually weren't interested in looking at the books. They weren't interested in refuting the claims in this report, so the report went out and it went into what some would call sort of the “rightwing echo chamber.” And it bounced around the world, never honestly in a reputable publication.
We stayed on it. We always had – you know, we're willing to counter the charges. Then we got some calls from a subcommittee to the House Ways and Means Committee, saying they wanted to look into this more carefully. And we gave them -- and now that committee was willing to look at further information. We gave them full disclosure. They came no further. And then, this past December, we got the letter from the I.R.S., saying we were indeed being audited, and the I.R.S. was in our offices for three months.
It's important to know that we came out of this with flying colors. Greenpeace, in the auditor's words -- and I have to say I think it's inappropriate the way the I.R.S. came in, but then the audit was done professionally, and the auditor told me, ‘This is as clean an operation as I've been in. You guys were transparent and forthcoming, and you should be proud of the way you keep your books.’
AMY GOODMAN: How did the I.R.S. come in, when you say it was inappropriate? Just in terms of what sparked this whole audit?
JOHN PASSACANTANDO: Yes. You know, my initial -- my opening question to the auditor was, “Were we a random selection?” If we're a random selection, that's appropriate then; that's the way the I.R.S. should work. There should be that level of scrutiny, but the I.R.S. should not be a tool of the government to silence its critics. The government, meaning the Bush administration and ExxonMobil, who have been tied at the hip in denying, refuting the reality of global warming. Greenpeace has been countering that, been pushing hard on that. ExxonMobil and the Bush administration have been the real gridlock on action to stop global warming.
So, when the auditor came in, one of the very first things he said was -- he looked at a picture that we had of a peaceful protest at an Exxon station, where our people were occupying an Exxon station, and he said, “This illegal activity has got to stop.” And I said, “In fact, there is a long precedent of nonprofits using a small amount of their resources to do peaceful activities such as this, from Martin Luther King in the Civil Rights Movement, right up through Randall Robinson’s TransAfrica work.” And I said, “I don't think you have your facts right, but we'll give you all the information you need.”
And, of course, we came out of this with flying colors, but the auditor did tell us at the end that the I.R.S. was ultimately responding to this report from Public Interest Watch. In other words, a political -- it was a political audit. He said this was indeed a political audit. The lawyers that we worked with to get through this audit told us this has not been happening until the Bush years. The political referrals were not being listened to at the I.R.S., that, indeed, they are now. So, this is a resurgence of this kind of activity, not seen since Richard Nixon was using the I.R.S. to audit his enemy's list.
JUAN GONZALEZ: Well, Steve Stecklow, I'd like to ask you, the writer at the Wall Street Journal who broke this story, clearly there has been more public concern or attention around these types of audits. Obviously, the NAACP had a much publicized interaction with the I.R.S., as well. Who runs Public Interest Watch, and what are the other kinds of organizations that they have attempted to raise concerns about?
STEVE STECKLOW: Well, Public Interest Watch was founded by a guy named Michael Hardiman who I interviewed, and he's a Washington-based lobbyist. He's a Republican. He's worked for a number of -- he's lobbied on behalf of a number of organizations, including the American Conservative Union and the American Trucking Association. He started the organization in 2002, but it didn't seem to really gain steam until 2003, when the records show he started to get a lot of money, you know, almost all of it from ExxonMobil.
In fairness, they didn't simply go after Greenpeace. They went after a number of groups, and some of them wouldn't -- you know, they included, for example, the American Heart Association. Another -- but he did go after a number of environmental groups, and one of them was the group down in North Carolina called Dogwood Alliance. They also called for an audit -- an I.R.S. audit of Dogwood Alliance, questioning its tax-exempt status, and the head of that organization told me that, in fact, they, too, were audited back in 2004. And, once again, the I.R.S. found that there weren't problems enough to merit taking away their tax-exempt status. They also went after a few others, but, again, there were at least two that were audited.
Now, whether the I.R.S., in fact, audited Dogwood Alliance, the person there believes that it was because of Public Interest Watch; however, she said that the -- unlike in the Greenpeace case, the auditor who was there, who was local, said he didn't know what had prompted the audit. But they're convinced, and after I talked to Hardiman, he claimed credit for it, although I have to say, when I first interviewed him, he was not aware that the I.R.S., in fact, had audited either Greenpeace or Dogwood Alliance, and seemed a little surprised. But then, when I spoke with him a second time, he seemed quite proud of the fact and said it showed what great work he did.
AMY GOODMAN: I wanted to turn to John Passacantando, head of Greenpeace USA, and read an excerpt of a piece that came out last year in Mother Jones magazine by Chris Mooney, called “Some Like It Hot." It's about some 40 public policy groups that have this in common: “They seek to undermine the scientific consensus that humans are causing the earth to overheat, and they all get money from ExxonMobil.” And Chris Mooney writes, "Mother Jones has tallied some 40 ExxonMobil-funded organizations that either have sought to undermine mainstream scientific findings on global climate change or have maintained affiliations with a small group of 'skeptic' scientists who continue to do so. Beyond think tanks, the count also includes quasi-journalistic outlets like TechCentralStation.com (a website providing 'news, analysis, research, and commentary' that received $95,000 from ExxonMobil in 2003), a FoxNews.com columnist, and even religious and civil rights groups. In total, [the groups] received more than $8 million between 2000 and 2003...ExxonMobil [chair] and CEO Lee Raymond serves as vice [chair] of the board of trustees for the AEI," -- that's American Enterprise Institute -- "which received $960,000 in funding from ExxonMobil. The AEI-Brookings Institution Joint Center for Regulatory Studies, which officially hosted [writer Michael] Crichton, received another $55,000. When asked about the event, the center’s executive director, Robert Hahn—who’s a fellow with the AEI—defended it, saying, ‘Climate science is a field in which reasonable experts can disagree.’ (By contrast, on the day of the event, the Brookings Institution posted a scathing critique of Crichton’s book, [State of Fear]).”
Can you talk about the power of ExxonMobil? And I have to say, I wish they were joining us to talk themselves.
JOHN PASSACANTANDO: Yes, well, and the reason they're not joining us is their power has been behind the scenes. Their power has been to keep their names off of things, but fund a whole range of groups that literally go out there and deceive the public, in the name -- and use names like, you know, Public Interest Watch or some kind of independent think tank. They are Exxon tools. They are funded by Exxon to do Exxon's bidding, which is to continue to confuse the public in their knowledge of the enormity of what’s coming on us on global warming. I believe that when we’re past this era, and we are indeed reorienting our economy to stop global warming, when we ask, “Why did we wait so long? What was the reason for the delay?” we will know that it was ExxonMobil that held the world back.
Greenpeace's main role in this, in addition to our protests of ExxonMobil around the world, we built a database to delineate all the money that we could find from ExxonMobil to these groups that are essentially out there lying about global warming, and we put it all online. It’s called exxonsecrets.org, and it's essentially a website for researchers, and all our documentation is on it, so people can look at it and then go actually find the hard copies of this data and prove it to themselves. Exxon has intentionally spent millions of dollars to deceive the public, to lure us into this complacency, so we wouldn't worry about global warming, all in order to protect their short-term oil profits. Meanwhile, this storm of damages from global warming is building in strength, and we have an administration and a congress that have looked the other way and have been able to sort of count on a confused American public. And that has been the tragedy of this.
JUAN GONZALEZ: Exxon, of course, can afford to spend that money, having just recently reported $36 billion in profit last year, the greatest profit of any corporation in the history of the world, and a sum larger than the budgets of 123 countries in the world. Your organization has continued to have major confrontations or criticism of ExxonMobil, obviously, over the years. What was the latest, in terms of your organizations having to deal with that?
JOHN PASSACANTANDO: Well, what we've continued to do is expose them. When people have leaked us papers, there have been a number of times we have continued to show this link between ExxonMobil and the misinformation in the news. There was an employee at the Council on Environmental Quality, who was editing one of the E.P.A. officials, career official Rick Piltz, who was writing about global warming in a required report coming out of the Bush administration, coming out of our government, and this fellow, Phil Cooney, was editing out all the references to global warming and softening everything. This was revealed. This was broken on 60 Minutes this past Sunday evening.
This particular fellow worked for the American Petroleum Institute before he went into the Bush administration. And then, when it was revealed that he was -- when he got caught red-handed editing out this global warming reality from this government report, he was then hired by ExxonMobil. So, we spend a lot of time tracking these people, who they are, where they’ve come from, where they've gone, and all roads do lead to ExxonMobil.
AMY GOODMAN: Interesting also, Mother Jones, in that piece, reported that less than a month after President Bush took office, an ExxonMobil lobbyist named Randy Randol sent a memo suggesting certain climate experts from the Clinton administration should be “removed from their positions of influence.” A year later, the Bush administration blocked one of the scientists, Robert Watson, from his post to the Intergovernmental Panel on Climate Change.
JOHN PASSACANTANDO: That’s absolutely right.
AMY GOODMAN: What’s that, John?
JOHN PASSACANTANDO: Our point is that ExxonMobil has played an unbelievably aggressive role. Many of the other big oil companies have backed off of this, don’t want their integrity impugned by getting involved in this kind of nefarious work of essentially lying to the public. ExxonMobil has had a very strong hand in this and has worked very closely with this White House to continue to confuse the American public, so it can continue to stall actions to stop global warming.
AMY GOODMAN: Well, we want to thank you both very much for being with us. John Passacantando, head of Greenpeace USA in Washington, and Steve Stecklow, senior special writer with the Wall Street Journal. We will link to the piece on our website.
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SPECIAL PROSECUTOR NEEDED TO INVESTIGATE CHENEY OIL DEALINGS, POSSIBLE PLAME CONNECTION
by Nick Mottern
Coordinator, ConsumersforPeace.org
This article argues for the appointment of a special prosecutor to investigate the past and current involvement of Vice President Richard Cheney in the global, sometimes illegal, activities of independent oil traders, activities that have been dominated by billionaire Marc Rich and his associates.
Additionally, it raises questions about possible connections between this oil trading and the "outing" of Valerie Plame as an undercover CIA employee.
This article is based on internet research focused on exploring connections between Mr. Cheney and the world of independent oil trading, particularly in relation to his tenure from 1995 to 2000 as chief of Halliburton Company. There is extensive, highly provocative coverage of independent oil trading and Halliburton on the internet that should be receiving systematic examination by major news organizations and the Congress.
MARC'S "SCOOTER"
An investigation of independent oil trading and Marc Rich, published in July 2005 by Business Week, described Rich, then 70 and reportedly worth at least $8 billion, as the creator a shadowy, global oil trading system in which great profits can be made by buying oil from "some of the most corrupt or politically unstable places on earth...These are the new frontiers where major U.S. oil companies fear to tread because of sanctions, embargoes and anti-bribery and anti-terrorism laws."
And the article notes: "The majors (major oil firms) are the bread and butter" of Rich and his associates. It cites a Senate report saying that half the crude oil shipped out of Iraq through bribery under the Oil for Food Program was sold to major oil companies.
Rich is reported by various articles to have been not only involved in illegal oil trading with Iraq but that, over the years, he has violated sanctions against oil trade with apartheid South Africa, Iran, Cuba and Libya.
Rich fled the United States in 1983 for Switzerland to escape prosecution for racketeering and non-payment of $48 million in corporate taxes and, Business Week reported, "other violations that could have resulted in 300 years of jailtime." His companies pleaded guilty to some charges, the article said, paying about $200 million in fines, but Rich remained "the most wanted white-collar criminal in U.S. history until his controversial pardon on President Bill Clinton's last day of office in 2001."
When Congress held hearings on the Rich pardon in 2001, one of those testifying on Rich's behalf was I. Lewis "Scooter" Libby. Libby told Congress that Rich's tax problems resulted from faulty legal interpretations by the Justice Department. Libby, who was to become Cheney's chief of staff, provided legal representation for Rich from time to time between 1985 and 2000.
Libby was indicted in October 2005 for lying and obstruction of justice in the investigation of the Bush Administration's "outing" of CIA employee Valerie Plame.
CHENEY PLAYS IN "RICHLAND"
In a detailed examination of Cheney's lucrative job as head of Halliburton from 1995 to 2000, Jane Mayer, writing for The New Yorker in February 2004, describes Cheney as having been able to override Central Intelligence Agency and State Department objections to win a U.S. government Export-Import Bank loan of nearly $500 million for the Russian Tyumen oil firm. This deal enabled Halliburton to contract with Tyumen for oil development in Siberian oil fields. Halliburton's press release announcing the deal in October 1998 said Tyumen is "one of the six largest Russian oil companies" with "proven oil reserves of 4.3 billion barrels and probable and possible reserves of 6.1 billion barrels."
Mayer reports that Cheney "almost lost the Export-Import loan when the State Department attempted to block it, on the ground that Tyumen was involved in illegal activity." Cheney, the report continues, who personally lobbied for the loan, "was particularly incensed by the involvement of the Central Intelligence Agency, which sided with the State Department."
In the Tyumen initiative, Cheney was engaging Halliburton in a part of the world where Rich was a central figure in oil. "In the early 1990s after the Soviet Union collapsed," Business Week said, "Rich quickly became the most powerful trader there." And: "Rich had long ties with Mikhail Fridman, and his mammoth Alfa Group," which owns Tyumen Oil, the recipient of the Export-Import loan.
The Public i reported in 2000 that Tyumen's lead lawyer at the influential Washington law firm Akin Gump was James Langdon, a Bush "Pioneer", that is a person who raised $100,000 or more for the Bush campaign. In June, 2000, the report said, Langdon organized a $2.2 million fund-raiser for Bush.
HALLIBURTON AT THE SADDAM OIL PARTY
Business Week reports that Fridman's Alfa group paid "illegal surcharges to Saddam (Hussein) during Oil for Food, which Alfa denies."
The article also reports that Rich bought oil from Alfa units during Oil for Food; one of the units was Tyumen, Halliburton's oil development partner. Various reports suggest that Rich and his associates played a substantial role in getting oil past sanctions against Iraq.
Halliburton is also connected to Iraq oil through one of its branches, Dresser Industries, which provided oil equipment to Saddam. Mayer reports, as do others, that Halliburton "illegally evaded U.S. sanctions by conducting its oil-service business through foreign subsidiaries that had once been owned by Dresser (Industries)", a firm Halliburton bought in 1998 under Cheney's guidance. And Mayer says, "The use of foreign subsidiaries may have helped the company to avoid paying U.S. taxes."
The Iraq oil world under Saddam appears to be much like the Iraq oil world of today, one made for, and to some extent by, Rich and his colleagues, a world in which there is no accountability and in which great wealth can be accumulated illegally. There has been no reporting on the current handling of Iraqi oil in terms of who is buying and shipping it and who are the beneficiaries.
WELCOME TO NIGERIA AND OTHER PLACES OF SADNESS
Rich has long involvement in Nigerian oil, getting purchasing priviliges from succeeding governments. Chido Nwanga, writing for USAfricaonline in March 2001, reported that "Rich has been a key player for well over 25 years in Nigeria's export of its crude oil...In fact, at certain points in Nigeria's recent economic history, Marc Rich has been the kingpin." Reports say that Rich was involved in shipping Nigerian oil into apartheid South Africa and that he may have been the primary oil sanctions buster.
Halliburton is reported to be under investigation by Justice Department, the Securities and Exchange Commission and French officials in connection with bribery charges in Nigeria. An SEC spokesman said that the agency would have no comment on whether or not an investigation is underway.
Mobolaji Aluko reported in Nigeria Village Square in June 2004 that the Halliburton investigation involved $180 million in bribes that may have been paid by the firm to smooth the way for a $6 billion gas liquification plant it built for Shell Oil. The bribes, which were said to have been paid between 1995 and 2000, are believed to have passed through a company, Aluko reported, "operated by a British lawyer, Jeffrey Tesler (a Halliburton employee for 30 years), alleged to be connected with high government officials such as former Oil Minister Don Etet and military head of state late General Sani Abacha."
USAfrica cited a report in 1998 by James Rupert of the Washington Post Foreign Service that: "Nigeria's main trading partners in the Abacha era have been the London-based firms Arcadia and Addax, and the Swiss-based Glencore, which was under the control of Marc Rich..." The Nation reported in October 2004 that "Tesler was the financial advisor to the late dictator Gen. Sani Abacha and controlled his personal fortune, while at the same time working for Halliburton."
The Nation also reported that French investigators were targetting Cheney in relation to the bribes, which occured during his tenure as head of Halliburton. The French got involved because a French company was part of the construction venture. And the Nation quoted Journal du Dimanche: "...it is probable that some of the 'retrocommissions (bribes)' found their way back to th U.S.", and the French report asked whether the money might have gone to Halliburton officials or the Republican Party. The Nation noted: "These questions have gone unasked by America's media."
In addition, Truthout reported, "in oil-rich Nigeria, Halliburton worked with Shell and Chevron, which were implicated in gross human rights violations and environmental calamities in that country. Cheney's firm increased its involvement in the Niger Delta after the military government executed several ecology activists and crushed popular protests against the oil industry."
Truthout reported also: "Human rights activists have also criticized Cheney's company for its questionable role in Algeria, Angola, Bosnia, Croatia, Haiti, Rwanda, Somalia, Indonesia and other volatile trouble spots."
It has also been reported that Rich-style oil trading has been pulling oil out of the large reserves in Sudan, whose government has been charged with hundreds of thousands of deaths in western Sudan. The U.S. government, however, has taken a relatively soft position toward the behavior of the Sudanese leadership.
A PLAME GAME?
The Daily Kos reported in July 2005, that Valerie Plame, who was "outed" to journalists as a CIA undercover employee as early as June 2003, was working for a CIA cover business called Brewster Jennings and Associates and that this entity, shut down after the "outing", apparently had the responsibility to monitor developments in weapons of mass destruction. But it was involved in reporting on the oil trade, particularly as it related to Saudi Arabia and the Arabian American Oil Company (ARAMCO). ARAMCO is a combine, involving the Saudi royal family and major U.S. oil companies, that runs Saudi Arabia's oil fields. Plame described herself to friends as an energy analyst.
Depending on Plame's responsibilities within Brewster Jennings, she would have been in a position to know a little or a great deal about Marc Rich, his colleagues and relationships that may exist between Rich, Cheney and Halliburton. Plame's "outing" has been viewed as a punishment for an attack by her husband, former ambassador Joseph Wilson, on Bush pre-occupation claims about Saddam's nuclear capability. However, recent reports that Plame's CIA work may have been disclosed to one or more reporters before Wilson's attack was published, raise questions about the intent of the "outing". The Washington Post reported Nov. 13, 2005 that Cheney "is shown by the indictment (of Libby) to be interested in Plame and her CIA status long before her cover was blown."
Wilson was reported to have begun work on the John Kerry presidential campaign in May, 2003 as an unpaid foreign policy consultant. Might it be possible that administration officials feared that Plame could provide her husband with damaging information in the run-up to the 2004 election, particularly as she might have been in a position to continually monitor the growth of the new "Rich World" in Iraq. Possibly Cheney had come in contact with Plame when the CIA challenged the deal he was promoting to get the Export-Import loan for Tyumen Oil.
OILY DRUGS?
There are internet reports suggesting that CIA objections to the Tyumen Export-Import loan may have been related in part to drug trade. Thunderbay, indymedia.org, reported, for example, that in 1995, drugs were found in a railroad container leased by Alfa Echo, part of the Alfa Group, which also owns Tyumen. "The drug smuggling route was further exposed after the (the Russian) Ministry of Internal Affairs raided Alfa Echo buildings and found drugs and comprising documentation."
The issue of drug smuggling through Russia has become more significant since the explosion of opium production in Afghanistan following the U.S. occupation of that country in 2001. A 2003 report from NATO Parliamentary Assembly said that 70 percent of the opium and 100 percent of the herion consumed in Europe comes from Afghanistan. The drug route through Tadjikistan, Turkmenistan, Kyrgyzstan, Uzbekistan, Kazakhstan and Russia, the report said, "is more and more widely used by drug dealers for deliveries of herion and opium to European countries."
The report noted that officials in Afghanistan are involved in drug trafficking and that a provincial police chief "engaged U.S. helicopters given by the U.S. command to combat terrorists and the Taliban fighters (for) his own purposes. He engaged the helicopters to transport large shipments of drugs to the north of the country from where they were smuggled to drug dealers in the neighboring Central Asia states."
There are no reports to suggest that Plame knew of connections between oil and drug trading. However, her position at the CIA, at what may have been a center for reporting on these matters, raises some extremely important questions. For example, is there evidence of connections between oil trading and drug trafficking? To what degree are U.S. military, mercenary, intelligence forces and U.S. firms involved in illegal oil trade or drug trafficking? Is oil or drug money being used to help finance the Iraq and Afghanistan wars in the way that drug money was used to finance other U.S. wars?
As Oil Company CEOs Prepare to Testify, Congress Should Pursue Windfall Profits Tax
Statement of Tyson Slocum, Acting Director of Public Citizen's Critical Mass Energy Program
commonDreams.org
WASHINGTON - March 13 - On Tuesday, executives from America’s six biggest oil companies will be defending their record profits before the Senate Judiciary Committee at a time when Americans have been paying record high prices for oil and natural gas. Considering that these record profits are due in part to anti-competitive practices by the major oil companies and that President Bush has said we need to finance alternative energy so we are not “addicted to oil,” a windfall profits tax on oil company earnings is necessary to protect consumers from high prices and to fund alternative energy, conservation and mass transit solutions.
In 2005, the six companies testifying before the Senate Judiciary Committee – ExxonMobil, ChevronTexaco, ConocoPhillips, BP, Shell and Valero – enjoyed profits of $112 billion. Since Bush took office, these companies have accumulated profits of $321 billion.
Oil companies downplay these earnings, highlighting the small profit margins (typically around 8 to 10 percent) that measuring net income as a share of total revenues produces when compared to other industries.
But measuring earnings as a share of revenues is not an accurate calculation of return on investment. In fact, when communicating to Wall Street and investors, companies like ExxonMobil emphasize a completely different methodology to measure profitability, as evidenced by the following excerpt from the company’s 2004 annual report: “ExxonMobil believes that return on average capital employed is the most relevant metric for measuring financial performance in a capital-intensive industry such as” petroleum.
ExxonMobil’s 2005 annual report filed with the Securities and Exchange Commission shows that that company’s global operations enjoyed a 30.9 percent rate of return on average capital employed. The company’s rate of profit in the United States was even higher: domestic drilling provided a 46 percent rate of return on average capital employed, while domestic refining returned 58.8 percent.
This is why a windfall profits tax is justified. It will cost billions of dollars to finance the investments needed to shift our economy away from oil, provide more money to encourage energy efficiency in our homes and cars, and provide more capital for mass transit improvements. All of this can be done with the implementation of a windfall profits tax.
Naysayers argue that the windfall profits tax didn’t work the last time we tried it. The windfall profits tax of 1980-88 was ineffective not because of the tax itself, but because oil prices fell shortly after enactment of the tax due to energy-conserving fuel economy standards that reduced demand and global events unrelated to U.S. tax policy. Congress enacted the tax in 1980 after U.S. oil company profits surged following the Iranian Revolution and the resulting Iran-Iraq war, which caused oil prices to increase from $14 per barrel in 1979 to $35 per barrel by January 1981. But after 1981, crude oil prices steadily decreased until bottoming out in 1986-87 as demand slackened and other oil-producing countries increased their output. As the value of the commodity subject to tax (oil) fell, the effectiveness of the tax diminished.
But that was then. World oil markets aren’t going to collapse any time soon, because the major oil producers are already producing at full capacity, unlike the 1980s.
A windfall profits tax is also justified because government investigations have found that oil company profits are partially tied to anti-competitive practices. A 2001 Federal Trade Commission investigation revealed evidence of unilateral withholding, which occurs when an oil company controls such a large share of the market that it doesn’t even need to collude with other companies to manipulate supplies and prices – it can do so on its own.
And big oil companies certainly do control the market. In 1993, the five largest U.S. oil refining companies controlled 34.5 percent of domestic oil refinery capacity while the top 10 companies controlled 55.6 percent. By 2004, the top five companies – ConocoPhillips, Valero, ExxonMobil, Shell and BP – controlled 56.3 percent, and the top 10 refiners controlled 83 percent. So as a result of all of recent mergers, the largest five oil refiners today control more capacity than the largest 10 did a decade ago.
The time for Congress to act is now.
Protesters Lift Siege of Exxon Nigeria Oil Terminal
Source: Reuters
March 9, 2006
LAGOS, March 9 (Reuters) - Protestors lifted a siege of ExxonMobil's <XOM.N> main oil export terminal in Nigeria on Thursday morning after the company agreed to discuss compensation for victims of an oil spill in 1998.
Hundreds of protesters had barricaded on Wednesday afternoon the entrance to the U.S.-based company's Qua Iboe terminal, which exports about 420,000 barrels per day, forcing workers to stay overnight in the compound. "Everyone left at six this morning after they agreed to have a meeting in 10 days," a protester said, asking not to be named. A company spokesman said oil production and exports were unaffected. Protesters held placards demanding payment of compensation for the oil spill in January 1998, which they said spoiled the environment and destroyed fishing activities. The protest was staged by a group called the Movement for the Survival of Ethnic Nationalities in the Niger Delta. An allied group, the Niger Delta People's Salvation Front, issued a statement accusing the company of playing judicial games for eight years instead of compensating the victims.
Philbrick Vows Stiff Fines For ExxonMobil Spill
State Environment Chief Also Pledges Tighter Control's On States Gas Stations
By Timothy B. Wheeler and Laura Barnhardt
Sun Reporters
The Baltimore Sun
March 9, 2006, 10:30 PM EST
Maryland's top environmental official pledged Thursday to impose stiff penalties on ExxonMobil Corp. and to tighten regulatory controls on service stations throughout the state in the wake of a 25,000-gallon gasoline leak in the Jacksonville area of Baltimore County.
At a news conference across from the Exxon station where the leak occurred, Kendl P. Philbrick, secretary of the state Department of the Environment, called the Jacksonville leak "catastrophic" and announced that he is ordering immediate checks of leak detection systems by all 3,500 regulated fuel tank owners in the state, to be followed by new emergency regulations that would enhance efforts to catch leaks quickly.
Later, Philbrick appeared at a contentious community meeting and told more than 500 area residents that testing of sample wells would be expanded to a half-mile radius of the Exxon station at the Four Corners intersection of Jarrettsville Pike and Paper Mill Road.
"We are quite frankly baffled as to how someone -- with all the regulatory controls we have in place -- can explain the release of hundreds of gallons per day that went apparently undetected, unreported and with no intervening action for over a month," Philbrick told the crowd, repeating what he had read from a prepared statement at the news conference. People who packed the meeting room at Cockeysville Middle School applauded the words -- their only positive reaction during the more than two-hour session.
Exxon officials apologized for the leak and said they would take full responsibility for the cleanup.
Philbrick said at the news conference that the state is investigating possible civil and criminal action against ExxonMobil for the Jacksonville leak -- one of the largest ever reported in Maryland. Gasoline apparently escaped from a punctured underground line at the rate of 675 gallons a day for 37 days before it was reported to state environmental regulators.
Though the investigation is continuing, Philbrick said "strong enforcement action" will be taken against the oil company.
Penalties could also be imposed against the dealer who operated the station under a contract with ExxonMobil, said Herbert Meade, the MDE official overseeing fuel tank regulations. But Meade said the state's preliminary investigation indicated that the station's managers maintained proper records and reported the loss of gasoline before ExxonMobil reported the leak Feb. 17.
Amid indications, reported last week in The Sun, that the Exxon station's automatic leak detection system apparently malfunctioned, Philbrick said station operators statewide would have 30 days to verify that their leak detection systems are working and report back to his agency.
MDE plans to follow up by proposing emergency regulations that would increase from annual to twice yearly required checks of leak detection systems at all gas stations in areas of the state where residents get their water from wells. Station operators also would be required to monitor their gasoline inventories more closely and report discrepancies to the state even if a leak has not been confirmed.
State officials say the leak at the Jacksonville Exxon apparently occurred Jan. 13 when a contractor accidentally punctured an underground fuel line. It was not reported to regulators until mid-February.
At Thursday night's meeting, ExxonMobil publicly detailed for the first time various alarms that indicated a problem, beginning Jan. 13 when the regular-unleaded fuel line was hit. Jim McDonald, a regional manager of service stations for ExxonMobil, said the company initially thought a motor was causing the problem that alerted a monitoring center in Greensboro, N.C. He said the company sent officials to the station twice between Jan. 14 and Feb. 14 to inspect the station, which was passing monthly tests. None of the "message codes" indicated a leak, he said.
On Feb. 17, a manual test of fuel lines at the station showed there was a leak, and MDE was notified, McDonald said.
The company has said it is investigating why the leak was not detected sooner, and has vowed to aggressively clean up gasoline in the area.
Andrea Loiero, whom Meade identified as the station manager, referred a reporter's call to ExxonMobil.
At Cockeysville Middle School, an Exxon official said the company has no intention of reopening the station.
Residents had numerous questions for Exxon and state environmental officials, ranging from how long the cleanup would take to whether the air they breathe is being affected by the spilled gasoline.
Meade said exhaust from the vacuum trucks engaged in the cleanup is more of a hazard to breathing than the gasoline in the ground. Cleanup and testing in Jacksonville likely will continue for several years, state and company officials said.
Gary Dorsch, a Jacksonville resident, asked, "Is it time to bring in the federal government? Is this a Superfund site?" Meade replied that state officials have worked on other large spills and were consulting daily with a hydrologist from the federal Environmental Protection Agency.
John DiTullio, a global remediation manager for ExxonMobil, said, "We are sorry that this happened. We take full responsibility for cleaning up the leak. Our strategy is twofold: Get the gas out of the ground as quickly as possible, and prevent the gas from spreading underground."
State officials say more than 7,500 gallons of unleaded gasoline have been recovered from a network of wells drilled at and around the Exxon station and from the ground, using vacuum trucks. Meade said such efforts might recover most of the lost gasoline, but "the biggest fear" would be that methyl tertiary butyl ether, a toxic gasoline additive that spreads easily in ground water, could permeate the area and taint wells for years.
tim.wheeler@baltsun.com
laura.barnhardt@baltsun.com
Exxon: Torture Suit May Set Bad Precedent
By Slobodan Lekic, Associated Press Writer
article from usatoday.com
JAKARTA, Indonesia — ExxonMobil (XOM) warned that a U.S. judge's decision to allow villagers to file a lawsuit against the oil company for alleged abuses by Indonesian troops at ExxonMobil facilities could set a precedent for all American companies operating abroad.
But the company has not yet decided whether it will appeal the ruling, spokeswoman Susan Reeves said Wednesday in a telephone interview.
The International Labor Rights Fund filed a lawsuit in 2001 on behalf of 11 villagers who said Exxon's Indonesian subsidiary allowed its facilities to be used by soldiers to torture locals and to commit other human rights abuses.
The hearings were postponed in 2002 after the State Department said the lawsuit could harm American interests, but U.S. District Judge Louis Oberdorfer in Washington ruled last week the case could proceed.
"The lawsuit created the potential for any U.S. company operating overseas to be held vicariously liable for host government actions," Reeves said. "Such action would risk interference with U.S. foreign relations and diplomacy."
Aceh, a province of 4 million people on the northern tip of Sumatra island, has seen a series of guerrilla wars since the Dutch occupied it in the 1870s.
The latest round of fighting, which broke out in 1976 when insurgents picked up arms to carve out an independent state, claimed 15,000 lives before it ended with the signing of a peace agreement last year.
Exxon has previously said the military deployed four infantry battalions and an armored cavalry unit during the conflict to protect a natural gas field and pipeline operated by the company on behalf of Indonesia's state-run Pertamina energy conglomerate.
Human rights groups applauded Oberdorfer's ruling Wednesday, saying Exxon should be held responsible for crimes carried out by soldiers and police on its property.
"The Acehnese have right to file a lawsuit," said Yusuf Pase, a prominent lawyer and rights activist.
Sofyan Dawood, a former spokesman for the Rebel Free Aceh Movement, said Exxon is "part of the problem" in Aceh.
"It even provided places in which torture and violence against civilians took place," he said.
Exxon's troubles are the latest example of the challenges U.S. firms have faced in recent years when operating in Indonesia.
Freeport-McMoRan Copper & Gold was forced to temporarily shut its mine in Papua province last month after protesters blockaded a road, demanding they be allowed to sift through the mine's waste ore.
And the American director of Newmont Mining's local subsidiary faces a possible 10-year prison sentence for allegedly allowing the company to dump arsenic and other heavy metals into a bay on Sulawesi island. Separately, the Denver-based company agreed last month to pay $30 million in an out-of-court settlement to fund environmental monitoring and community development around its massive gold mine.
Created 2006-03-07 09:06
[1] Andy Shallal.
A delegation of women from Iraq told stories last night in Washington, D.C., unlike anything we've ever heard about this war from the media in the United States. And the media was not there, so I'm going to tell you what they said.
The event was held at Busboys and Poets, the restaurant that serves as the gathering place for all social justice groups in Washington. The restaurant's owner is Andy Shallal, an Iraqi American and an active opponent of the war. Shallal spoke briefly, and then Gael Murphy of CODE PINK introduced six women.
[2] Gael Murphy of CODE PINK introduces Elaine Johnson, Eman Khamas, and Entisar Ariabi.
Elaine Johnson is an African American woman from South Carolina who lost her son in the war. She said:
"When I met George Bush, five or six days after my son was killed, I promised him one thing, that he will forever see my face….[drowned out by applause]
"You send a son, and you get back a coffin, but you don't know who's in the coffin. So, a little part of me is hoping I'll get a knock on the door, and my only son will say 'Mom, I'm home.'
"I don't understand why Bush is still in office. But as long as Elaine is out here and I got y'all backing me, we gonna get him!"
[3] From left: Elaine Johnson, Eman Ahmad Khamas, Entisar Mohammad Ariabi, Faiza Al-Araji, Souad Al-Jazairy, Nadje Al-Ali.
Eman Ahmad Khamas is a human rights advocate who has documented abuses by the U.S. military in Iraq. She is a member of Women's Will, and is married with two daughters. She said:
"Hundreds of Iraqi mothers and wives are, like you, waiting for a knock on the door…
"This occupation has destroyed Iraq. Americans don't know that tens of thousands of Iraqis are in prisons. Americans don't know how many have been killed. Lancet reported 100,000 in 2004, not counting Falluja. Now it is something like double this number.
"Hundreds of thousands of families must search for men who are missing, and they are left with nothing to support themselves.
"Many people do not know about the bombing of cities. Bush said the war ended on May 1, 2003. That's not true. Many Iraqi cities have been bombed severely. And families are buried in the rubble.
"'Get the troops back home' is not enough. Yes, the occupation has to end immediately, but those responsible for these crimes have to be held responsible." [huge applause]
[4] Eman Khamas with microphone.
Entisar Mohammad Ariabi is a pharmacist at the Yarmook Teaching Hospital in Baghdad who has documented the deteriorating health system. She is married with five children. She said in Arabic, with Khamas interpreting:
"Bush promised to keep civilian casualties as low as possible.
"I work in the second biggest hospital in Baghdad as director of the pharmacy department, and my office is across from the emergency department. From 8 a.m. to 3 p.m. the bodies don't stop coming in, injured or killed, and the crying and the agony of the mothers and wives.
[with voice breaking] "In the emergency department I see the bodies cut into parts, dead, or injured, blood everywhere. I ask what happened, and they tell me stories. They were driving and the Americans began shooting randomly….
"I feel the sadness of these mothers, but I am also afraid that one day this will happen to me and my family. Iraqi families say goodbye in the morning to go to work or school, and pray to come home alive or if shot to die immediately, because if you are injured they will not find the medicines….
"To come here was not easy and not safe, but the most difficult part is that every minute we think of our families back home, and we are worried."
[5] Entisar Ariabi with microphone.
Faiza Al-Araji is a civil engineer, a blogger (http://afamilyinbaghdad.blogspot.com [6] ) and a religious Shia with a Sunni husband. She has three children. After one of her sons was recently held by the Ministry of the Interior, the family fled to Jordan. She said, very rapidly, very passionately:
"Please work on ending this occupation. You live in a beautiful country. We are human, like you. And we deserve to have a life, like you.
"This will destroy our country. People are dying day and night. And your media is telling you the lies. Baghdad was shining. It was very nice. Even under Saddam it was the shining Baghdad. Now it is full of garbage and tanks and barriers. People are dying. They are not normal people. You cannot see three years of dying and lack of security and lack of medicine, lack of everything.
"We see Mr. Bush on television lying that Iraqis are happy for their freedom. Oh, my God! Who will come to tell you the truth? We are come to tell you the truth. And what we have done? This is what we are always asking: What we have done?
"And where is the media? They will stay in the Green Zone and tell you the stories of the occupation leaders. Sixty reporters have been killed, because they do not want you to hear the stories of Iraqi people.
"They are provoking Iraqis against each other to make civil war to make justification to stay forever in Iraq. We are not stupid.
"Iraq for the Iraqis!"
Souad Al-Jazairy is an Iraqi now living in the United States, a writer, journalist and TV producer. She is active with the Iraqi Women's League. She said:
"I don't know what to say anymore. I'm a Kurd from Iraq. I'm a refugee from Iraq. I knew when they bombed in 1998 that it was the start of invading Iraq. I do not support this war at all. My family is still there.
"What are these children going to grow up to be?
"There were 30 years under the dictatorship of Saddam, brought by the CIA to Iraq. Then 13 years with no food. Then the bombs. Now they're destroying Iraq by dividing them. They want to provoke a civil war. They are turning neighbors against neighbors. It's not just about oil, in my opinion. They want to control all of Asia."
Nadje Al-Ali is a writer/researcher specializing in women in the Middle East. She is a founding member of Act Together: Women's Action on Iraq and mother of a three-year-old daughter. She is currently living in the UK and working on a book about women in Iraq. She said:
"Iraqis have not just suffered for three years. At least 5,000 children per month died according to UNICEF under 13 years of sanctions. And prior to that the regime was backed by the US.
"Bush has said he will bring women rights in Iraq.
"I was on National Public Radio, and Charlotte Ponticelli from the State Department said Iraqi women were not allowed to go to university.
"You don't have to create these lies to show that it was a dictatorship! We know it was a dictatorship!
"But Iraqi women were the most well educated in the Middle East. There was free child care and free transportation. Which countries do this? Not your country.
"Women are suffering. Everyone is scared, but if a woman is kidnapped – and most middle-class families have had a member kidnapped) she can be sexually molested or raped. A lot of families keep their women folk inside. This was not the case before.
"On August 6, 1990, the crime against humanity – the sanctions – began. The economy was devastated, and women were the first sent home."
Gael Murphy thanked the women who had spoken, and the crowd at Busboys and Poets gave extended applause. Gael recognized the many women from Global Exchange and CODE PINK who had traveled to DC to be with the Iraqi women. And she reminded the crowd that two Iraqi women had been denied visas, because the US had killed their families (the US State Department now argues that they would have no reason to return to Iraq and so cannot be permitted to visit the US).
"Another woman," Gael said, "a doctor, has been sitting in Amman for a week, waiting for her goddamned approval to come through. Know that about your State Department!"
[7] Congresswoman Lynn Woolsey with microphone.
"Lynn has helped us get the visas," Murphy said, turning to Congresswoman Lynn Woolsey, the sole Congress Member in the room.
Woolsey rose and said: "Standing up here with these beautiful women who have done so much and sacrificed so much, I feel inept.
"We have an Out of Iraq Caucus that is the largest Caucus in the Democratic Caucus, and a Progressive Caucus, which I co-chair, which has 62 members and growing. And every single one of us is dedicated to ending this war.
"They say if we leave there will be civil war. But we have a civil war produced by hatred of the occupation. We need to get out, give Iraq back, leave no bases, and not take over your oil industry.
"When we do, there will have been many lives lost. But there will be fewer lives lost the minute, the second, Iraqi insurgents know we're leaving.
"The American people know we shouldn't be there, and they want our troops home….It's coming sooner than later, I promise you. And I apologize for everything you've had to live through because we do not have a nice president."
Eman Khamas then introduced Jodie Evans of CODE PINK, saying that when she first met Jodie, Jodie promised to get her $5,000 for a town that had no health clinic. Then Jodie sent her $6,000. She used $3,000 for the clinic and the other $3,000 for a delivery room, because pregnant women had been shot in cars trying to get to a hospital. Khamas thanked Jodie, to huge applause.
"Do what you can," Evans said, "to witness this. I remember when Elaine came to Camp Casey and I thanked her for coming, and she said 'I came for the love.'
"We have to quit disrespecting the Iraqi people and know that they can solve this themselves. We need to give them their country back."
Jodie said there are 90,000 signatures on the petition at www.womensaynotowar.org [8] and they need 100,000 before taking it to the White House and possibly the State Department on Wednesday.
Medea Benjamin and Cindy Sheehan were expected at Monday's event, but got held up in New York by being arrested at the United Nations.
This paper, presented by Ardeshir Ommani at a forum in White Plains, New York, on March 4, 2006, provides a perspective on Iran's nuclear activities not often appearing in the United States press.
U.S.-E.U. Conspire against the Nuclear Non-Proliferation Treaty (NPT)
By Ardeshir Ommani, Iranian Political Analyst
On February 4, 2006, the five powerful gentlemen of the United Nations’ Security Council, among other things, endowed with the legitimacy of the “world community”, decided to hang the Sword of Damocles over the head of the Iranian people and then sat back, playing ‘good cop – bad cop’, and waited to see if before the day of reckoning on March 6, a crack and schism occurs either within the governing body of the Islamic Republic itself or between it and the more affluent strata of the population with greater interests in commerce with the U.S. and the West.
Vice-President Dick Cheney, whose popularity score has plunged to a mere 27%, even lower than his boss, George Bush, Jr. who has managed to please only 34% of the American public, once said that the country that controls Middle East oil can exercise a “stranglehold” over the global economy. Did Cheney let the cat out of the bag?
Far back in 1997, Zbigniew Brzezinski, the former National Security Advisor to President Carter, in an article entitled “A Geo-strategy for Eurasia” that appeared in Foreign Affairs magazine, wrote:
“A power that dominated Eurasia would exercise decisive influence over two of the world’s most economically productive regions, Western Europe and East Asia. A glance at the map also suggests that a country dominant in Eurasia would almost automatically control the Middle East and Africa.”
On the basis of what transpires from these expressions one can undoubtedly reach a conclusion that the U.S. has been in the deadly business of dominating the world, and at this juncture targeting Iraq, Iran and Syria, the three countries that have dared to differ with the U.S. whims and wants. The act of U.S. belligerency against other nations and countries can take many forms, including economic and trade sanctions, diplomatic containment, orchestrating an environment of isolation, spreading fabricated propaganda and outright lies, intruding into the air space, carrying out acts of sabotage, buying off individuals to commit acts of treason, bribing other governments to take its side, or carrying out naked acts of aggression and war to subvert or overthrow a government. In the language of the U.S. government all these acts are committed under the cover of spreading “American democracy”. And now an old all-too-familiar argument is being resurrected to bring countries into line with U.S. domination plans for the Middle East: that Iran cannot be ‘trusted’ and must be “thwarted” in its plans to develop nuclear energy.
To deny Iran or any other country from ‘researching, developing and producing nuclear energy for peaceful purposes’ is a violation of the right of not only Iran, but other nations, as is embodied in the 4th paragraph of the Nuclear Non-Proliferation Treaty (NPT), administered by the International Atomic Energy Agency (IAEA) which is currently headed by Mohammed El Baradei.
This U.N. monitoring agency has visited the Iranian nuclear facilities innumerable times in the last two and a half years and held meetings with the Iranian authorities in charge of the nuclear energy programs. Throughout this long period, the U.S. has adamantly claimed (without a shred of proof) that Iran has a plan of producing nuclear bombs and therefore must be denied the right of uranium enrichment, a process for production of nuclear fuel used in nuclear reactors. All along the U.S. has brought pressure on the agency and its governing board to pass a resolution stating that Iran is in violation of the NPT (again a charge unsubstantiated by proof), and must be referred to the U. N. Security Council for possible economic sanctions.
And what has been Iran’s response? For the purpose of confidence building, Iran, in addition to allowing the regular inspection by the IAEA, accepted the additional protocol, which permits the nuclear agency to inspect any nuclear site without prior warnings. It is interesting to know that Israel is not a party to the NPT agreement, and has more than 250 nuclear bombs in its ‘secret’ arsenal, is building a huge apartheid wall on Palestinian land, against international law, but has never been referred anywhere for any reason! Also, “the United States has not yet adopted the necessary implementing legislation for the additional protocol to become a law”, according to the Arms Control Association’s fact sheet of January 2005. In addition to the on-going inspections by the IAEA, Iran held joint meetings with the three major western European powers and for the purpose of “confidence building” it “voluntarily” suspended its operations of nuclear enrichment for almost a year.
After a year’s meetings between the three European and the Iranian representatives, Europe extended the period without coming up with a resolution that would assure Iran’s right to produce its own fuel for nuclear reactors. On the contrary, they intended to use this period of suspension and set a precedence so that if Iran decided to resume the enrichment process, in the eyes of the so-called international community it would be considered a violation. In other words, the European enthusiasm for meeting with the Iranian government was a set-up, which would have served the U.S. policy of containment and imposition of sanctions, usurping once again like in Iraq, the offices of the U.N. to commit a genocidal crime against the people of Iran.
Learning from this experience, the Iranian government under the new President, Ahmadinejad, decided to withdraw from the endless meetings and bickering, and began not the process of uranium enrichment, but the earlier stage of turning yellow cake (uranium raw material) into a gaseous state called tetrafluoride.
A day did not pass that the major European countries, U.K., France, Germany, and the U.S. lurking in the dark, declared Iran in utter violation, pressed the IAEA for passing a resolution as to referring Iran to the U.N. Security Council for probable economic and trade sanctions. At this stage of development, Europe had completely capitulated to the foreign policy designs of the U.S. against not only Iran, but all the countries in the M.E., particularly Afghanistan, Iraq, Syria and Palestine. It did not take much persuasion on the part of the U.S., to make the European social democracy and the U.K.’s labor government to show their true imperialist colors.
In the history of the IAEA, no resolution had passed without a total consensus on the part of its board, composed of 35 members. In this case, albeit the resolution lacked muscle and teeth, the U.S. and the European social-imperialist powers could not muster a consensus. Without a deadline for referral, the IAEA resolution passed with 26 for, 8 abstentions, including China and Russia and one against, which was the vote from Venezuela.
The Iranian response to the resolution was an ultimatum that should it be referred to the U.N. Security Council, it may decide to withdraw from the IAEA and its membership in the Nuclear Non-Proliferation Treaty.
It was at this point that George Bush and Tony Blair of London declared that no measure with regard to Iran is off the table. In other words, they were implying the use of force and war against Iran. It was at this juncture that, according to Aljazeera’s Nov. 9th report, Iran decided to set up oil and associated derivatives market that invoice energy contracts in Euro’s rather than dollars. Aljazeera writes, “The contention that this could unseat the dollar’s dominance as the defacto currency” of reserve for oil and major commercial and world financial transactions “may be overstated, but this has not stopped many commentators from linking America’s political disquiet with Iran to the proposed Iranian Oil Bourse (IOB). The plan to set up the IOB was put forward, for the first time, in Iran’s Third Development Plan of 2000-2005. But the depreciation of the dollar since the year 2000 has been one strong reason for the shift to Euros.
It is a general consensus that if successfully implemented, the IOB will reward Iran with concrete economic benefits, especially if more of the invoices of its energy contracts are issued in Euros. From the economic and geopolitical point of view, invoicing in Euros is a rational strategy, since 45 percent of total trade with the Euro zone. Furthermore, Europe is the final destination for 1/3 of Iran’s oil exports, while the U.S. is not a direct purchaser of Iran’s oil production. Every student of economic discipline is aware that the U.S., by fixing the dollar in the position of world reserve currency, it has enjoyed tremendous advantage in international trade and benefited handsomely for more than half a century. According to Emilie Rotledge of Aljazeera.net, “George Perkovich of the Washington-based Carnegie Endowment for International Peace, has argued that Iran’s decision to consider invoicing oil sales in euros is ‘part of a very intelligent strategy to go on the offensive in every way possible and mobilize other actors against the U.S.’”
Iran’s decision to begin the process of converting yellow cake to the gaseous state of tetrafluoride invited an immediate reaction by George Bush and Tony Blair. Both threatened Iran with isolation and Blair warned that Iran will face “a much more difficult life” if it does not follow the direction set by the Western states, according to ABC online of November 3, 2005.
Realizing that the Iranian people, with their presence on the streets of many cities of Iran by millions, could not be cowed into accepting the language of force and violence, the U.S.-E.U. coalition of imperialists came up with a new design, for a new day. This fresh mirage, in its appearance, looked like a compromise that Iran cannot reject in the eyes of the so-called international community, another name for the big powers who rule the world. The new plan proposed to grant Iran the right of continuing, as it has done since August of 2005, the conversion process, the technical stage before the enrichment of uranium. But the process of enriching uranium would be done in Russia, which would ship the fuel for energy reactors back to Iran. From the start of this plot, they knew that the Iranian people and its government would not accept such a pseudo solution to its inviolable right of leading its own destiny. Meanwhile, Condoleeza Rice was shuttling between Moscow and Beijing to coerce or grease the palms of the leaders of those countries to bring pressure on Iran to give up its right to a full-fledged nuclear energy program and accept the solutions of ever-dependency on other countries for the future generations to come. According to The New York Times of Nov. 10th, the new proposal…is an effort to give Iran a face-saving way out of its standoff, reflecting the views of the officials from both the U.S. and Europe.
The Iranian response on November 14th to the fraudulent proposal was a resounding NO! But Iran went a step further and announced that it will be ready to cooperate with other countries in joint venture to produce fuel for the civilian nuclear energy reactors. Both Russian and Chinese leaders have numerously stated that Iran has an inalienable right to the uranium enrichment process within the framework of the nuclear Non-Proliferation Treaty, and also, they disassociated themselves from the new scheme of Washington and London. On the other hand, Bush and Blair came into the possession of a new propaganda tool against Iran, with the hope of influencing the attitude of the IAEA board members in its November 24th meeting, in favor of referring Iran to the U.N. Security Council. The problem for Washington and London is that the composition of the board will change by that date and the newcomers will be Cuba, Belarus, and Syria, who certainly will be on the side of Iran. Furthermore, in mid-October Condoleeza Rice admitted that the U.S. might lack a sufficient number of votes to pass a second resolution for referring Iran by a certain deadline to the U.N. Security Council.
Meanwhile, by early November, Iran invited the U.N. monitoring agency (IAEA) to inspect its Parchin facility, a military base that the U.S. had all along claimed to be the most intensive Iranian nuclear enrichment plant for the production of nuclear bombs. According to a spokeswoman for the U.N. agency, Melissa Fleming confirmed that the U.N. inspectors “were allowed to visit everywhere at the complex, do interviews, and take samples.” She reaffirmed that “we are pleased, we got access; it was not restricted. We were allowed to see all the buildings and to take environmental samples.” (NYT, Nov. 7th, 2005).
But anytime the imperialist establishments and their henchmen in the U.S. or abroad do not like what they hear from the international agencies, they begin discrediting their results and challenge the legitimacy and credibility of its findings, the same pattern that the U.S./Britain and company pursued before the war in Iraq. For example, the Canadian newspaper, Toronto Star, wrote on October 14th, about ten days after the U.N. inspection of the Iranian facilities, “the IAEA’s history is not completely rosy.” It added, “Before the Gulf War, Iraq deceived IAEA inspectors and pursued a uranium enrichment program.” As one can see, the Toronto Star discredits the U.N. agency but says not a word about Israel that, with the assistance of the U.S. and Britain, has already amassed a stockpile of nuclear weapons, without even becoming a party to the nuclear Non-Proliferation Treaty. Apparently, Toronto Star editors think that some countries and classes of people are above the law.
Frustrated from its inability to defeat the freedom fighters in Iraq and to bring Iran to its knees, the U.S. has resorted to its old tricks; ones concocted in the laboratories of the CIA and the office of the President and Vice-President Dick Cheney who defended the U.S. military exemption from the ban on torture of prisoners kidnapped around the world. For its final act of deception before the IAEA’s meeting on September 24th, U.S. government publicized that it is in the possession of a laptop that decodes Iran’s “intention” of planning to construct atomic warheads, which could fit its new missiles, called Shahab (Shooting Star). The Bush administration, apparently understanding the depth of its credibility deficit, discusses the content of the laptop computer in private and secret settings. So far the U.S. has performed a dozen such private briefings. One can see that the mystery is an “open secret”. The content of the laptop is not an actual data, material from a practical research study or test results, but simply a simulation.
In mid-July, a group of senior CIA officials invited a few top officials of the international atomic inspection agency to the top of a skyscraper in Vienna, Austria to reveal the figments of their imagination, which were entirely a simulation of fabricated images. In the best of all possible worlds, few, if any, unbiased individuals are willing to accept the U.S. weapons intelligence without a host of questions. A European diplomat who was privy to the secret meeting said after the gathering that, “I can fabricate that data.”
U.K. Activists Take On Oil Giant With A Ladder and Banners
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This video shows a demonstration opposing the construction by Shell of a pipeline in Ireland. Because of technology limitations, we have to show a report sequence about youth imprisonment before the story about the Shell action.
YouTube.com
Here is a powerful video report of an imaginitive way in which people in the United Kingdom challenged the plans of oil giant Shell to build a gas pipeline in the Irish countryside.
Please note, the report starts about 1/4 of the way into the entire broadcast.
Venezuela Cautions U.S. It May Curtail Oil Exports
By JUAN FORERO
BOGOTÁ, Colombia, Feb. 26 — Venezuela's oil minister, in blunt comments published in a Caracas newspaper on Sunday, warned the United States that it could steer oil exports away from the United States and toward other markets.
The minister, Rafael Ramírez, said Venezuela, which is the world's fifth-largest oil exporter and supplies more than 10 percent of American oil imports, could act in the face of what he described as aggression by the Bush administration.
Although such warnings have become part of President Hugo Chávez's verbal arsenal against the Bush administration, the comments by Mr. Ramírez, coupled with the increasing sale of oil to China, are seen by oil experts and political analysts as a signal that Venezuela is serious about finding new buyers.
"Physically it's very feasible, and politically it's very feasible," said Lawrence Goldstein, president of the Petroleum Industry Research Foundation, a New York policy analysis group financed by the industry. "It comes with an economic penalty, but apparently Chávez is willing to pay that price."
That economic penalty comes in the increased costs to transport crude from oil-rich Latin America to as far away as China and India, two fast-growing, energy-hungry giants that are eager to buy Venezuelan oil. China is a 30-day tanker trip from Venezuela, while the United States is just 5 days away and is well-equipped to refine the heavy, highly sulfurous Venezuelan oil .
Mr. Chávez's government, which has increasingly been sparring with the Bush administration over everything from the Iraq war to the Venezuelan leader's close ties to Cuba, is moving swiftly to forge energy ties with China. Venezuela has said that this year it will double exports to China, to 300,000 barrels a day. Venezuela ships about 1.5 million barrels a day to the United States.
Mr. Ramírez, in an interview with the daily newspaper Últimas Noticias, played down the hurdles in replacing the United States as a buyer. "We're prepared to diversify our markets and will work toward that," he was quoted as saying. "The easiest thing is locating it. That will not be a problem."
Echoing Mr. Chávez's fears of an American attack on Venezuela, Mr. Ramírez said that Venezuela would respond by shutting off exports. To consume more Venezuelan crude, China would have to configure more of its refineries to process Venezuela's particular type of crude. Venezuela also would have to increase its fleet of tankers and build a pipeline to Colombia's Pacific coast.
The threats out of Caracas have not been lost on the White House, high-ranking American military officials and Republicans in Congress, who in public hearings and closed-door sessions have addressed both Mr. Chávez's warnings about diversifying oil markets and China's increasing role in Latin America.
"I think they're not as quick to dismiss his bluster as they used to be," said Michael Shifter, a senior analyst at the Inter-American Dialogue, a Washington policy group that follows American-Venezuelan relations.
"His intention to switch his markets away from the United States is quite clear," Mr. Shifter said. "The question is, does he have the capacity to carry it out and how quick could he carry it out. The concern in the White House is that he's moving more quickly than they thought he was able to move."
Oil analysts say that if Venezuela does shift markets, the United States would be able to find other suppliers, but it would take time and cost more. "It's a global, homogeneous market, so if China gets supplies from Venezuela, then they're not getting supplied from the Middle East and elsewhere," said Mr. Goldstein of the petroleum foundation. "That all then becomes available. There's no change in supply. There's a change in redirection of supply, at a higher cost."
U.S. Has Royalty Plan to Give Windfall to Oil Companies
February 14, 2006
By EDMUND L. ANDREWS
nytimes.com
WASHINGTON, Feb. 13 - The federal government is on the verge of one
of the biggest giveaways of oil and gas in American history, worth an
estimated $7 billion over five years.
New projections, buried in the Interior Department's just-published
budget plan, anticipate that the government will let companies pump
about $65 billion worth of oil and natural gas from federal territory
over the next five years without paying any royalties to the government.
Based on the administration figures, the government will give up more
than $7 billion in payments between now and 2011. The companies are
expected to get the largess, known as royalty relief, even though the
administration assumes that oil prices will remain above $50 a barrel
throughout that period.
Administration officials say that the benefits are dictated by laws
and regulations that date back to 1996, when energy prices were
relatively low and Congress wanted to encourage more exploration and
drilling in the high-cost, high-risk deep waters of the Gulf of Mexico.
"We need to remember the primary reason that incentives are given,"
said Johnnie M. Burton, director of the federal Minerals Management
Service. "It's not to make more money, necessarily. It's to make more
oil, more gas, because production of fuel for our nation is essential
to our economy and essential to our people."
But what seemed like modest incentives 10 years ago have ballooned to
levels that have alarmed even ardent supporters of the oil and gas
industry, partly because of added sweeteners approved during the
Clinton administration but also because of ambiguities in the law
that energy companies have successfully exploited in court.
Short of imposing new taxes on the industry, there may be little
Congress can do to reverse its earlier giveaways. The new projections
come at a moment when President Bush and Republican leaders are on
the defensive about record-high energy prices, soaring profits at
major oil companies and big cuts in domestic spending.
Indeed, Mr. Bush and House Republicans are trying to kill a one-year,
$5 billion windfall profits tax for oil companies that the Senate
passed last fall.
Moreover, the projected largess could be just the start. Last week,
Kerr-McGee Exploration and Development, a major industry player,
began a brash but utterly serious court challenge that could, if it
succeeds, cost the government another $28 billion in royalties over
the next five years.
In what administration officials and industry executives alike view
as a major test case, Kerr-McGee told the Interior Department last
week that it planned to challenge one of the government's biggest
limitations on royalty relief if it could not work out an acceptable
deal in its favor. If Kerr-McGee is successful, administration
projections indicate that about 80 percent of all oil and gas from
federal waters in the Gulf of Mexico would be royalty-free.
"It's one of the greatest train robberies in the history of the
world," said Representative George Miller, a California Democrat who
has fought royalty concessions on oil and gas for more than a decade.
"It's the gift that keeps on giving."
Republican lawmakers are also concerned about how the royalty relief
program is working out.
"I don't think there is a single member of Congress who thinks you
should get royalty relief at $70 a barrel" for oil, said
Representative Richard W. Pombo, Republican of California and
chairman of the House Resources Committee.
"It was Congress's intent," Mr. Pombo said in an interview on Friday,
"that if oil was at $10 a barrel, there should be royalty relief so
companies could have some kind of incentive to invest capital. But at
$70 a barrel, don't expect royalty relief."
Tina Kreisher, a spokeswoman for the Interior Department, said Monday
that the giveaways might turn out to be less than the basic forecasts
indicate because of "certain variables."
The government does not disclose how much individual companies
benefit from the incentives, and most companies refuse to disclose
either how much they pay in royalties or how much they are allowed to
avoid.
But the benefits are almost entirely for gas and oil produced in the
Gulf of Mexico.
The biggest producers include Shell, BP, Chevron and Exxon Mobil as
well as smaller independent companies like Anadarko and Devon Energy.
Executives at some companies, including Exxon Mobil, said they had
already stopped claiming royalty relief because they knew market
prices had exceeded the government's price triggers.
About one-quarter of all oil and gas produced in the United States
comes from federal lands and federal waters in the Gulf of Mexico.
As it happens, oil and gas royalties to the government have climbed
much more slowly than market prices over the last five years.
The New York Times reported last month that one major reason for the
lag appeared to be a widening gap between the average sales prices
that companies are reporting to the government when paying royalties
and average spot market prices on the open market.
Industry executives and administration officials contend that the
disparity mainly reflects different rules for defining sales prices.
Administration officials also contend that the disparity is illusory,
because the government's annual statistics are muddled up with big
corrections from previous years.
Both House and Senate lawmakers are now investigating the issue, as
is the Government Accountability Office, Congress's watchdog arm.
But the much bigger issue for the years ahead is royalty relief for
deepwater drilling.
The original law, known as the Deep Water Royalty Relief Act, had
bipartisan support and was intended to promote exploration and
production in deep waters of the outer continental shelf.
At the time, oil and gas prices were comparatively low and few
companies were interested in the high costs and high risks of
drilling in water thousands of feet deep.
The law authorized the Interior Department, which leases out tens of
millions of acres in the Gulf of Mexico, to forgo its normal 12
percent royalty for much of the oil and gas produced in very deep
waters.
Because it take years to explore and then build the huge offshore
platforms, most of the oil and gas from the new leases is just
beginning to flow.
The Minerals Management Service of the Interior Department, which
oversees the leases and collects the royalties, estimates that the
amount of royalty-free oil will quadruple by 2011, to 112 million
barrels. The volume of royalty-free natural gas is expected to climb
by almost half, to about 1.2 trillion cubic feet.
Based on the government's assumptions about future prices ? that oil
will hover at about $50 a barrel and natural gas will average about
$7 per thousand cubic feet ? the total value of the free oil and gas
over the next five years would be about $65 billion and the forgone
royalties would total more than $7 billion.
Administration officials say the issue is out of their hands, adding
that they opposed provisions in last year's energy bill that added
new royalty relief for deep drilling in shallow waters.
"We did not think we needed any more legislation, because we already
have incentives, but we obviously did not prevail," said Ms. Burton,
director of the Minerals Management Service.
But the Bush administration did not put up a big fight. It strongly
supported the overall energy bill, and merely noted its opposition to
additional royalty relief in its official statement on the bill.
By contrast, the White House bluntly promised to veto the Senate's
$60 billion tax cut bill because it contained a one-year tax of $5
billion on profits of major oil companies.
The House and Senate have yet to agree on a final tax bill.
The big issue going forward is whether companies should be exempted
from paying royalties even when energy prices are at historic highs.
In general, the Interior Department has always insisted that
companies would not be entitled to royalty relief if market prices
for oil and gas climbed above certain trigger points.
Those trigger points ? currently about $35 a barrel for oil and $4
per thousand cubic feet of natural gas ? have been exceeded for the
last several years and are likely to stay that way for the rest of
the decade.
So why is the amount of royalty-free gas and oil expected to double
over the next five years?
The biggest reason is that the Clinton administration, apparently
worried about the continued lack of interest in new drilling, waived
the price triggers for all leases awarded in 1998 and 1999.
At the same time, many oil and gas companies contend that Congress
never authorized the Interior Department to set price thresholds for
any deepwater leases awarded between 1996 and 2000.
The dispute has been simmering for months, with some industry
executives warning the Bush administration that they would sue the
government if it tried to demand royalties.
Last week, the fight broke out into the open. The Interior Department
announced that 41 oil companies had improperly claimed more than $500
million in royalty relief for 2004.
Most of the companies agreed to pay up in January, but Kerr-McGee
said it would fight the issue in court.
The fight is not simply about one company. Interior officials said
last week that Kerr-McGee presented itself in December as a "test
case" for the entire industry. It also offered a "compromise," but
Interior officials rejected it and issued a formal order in January
demanding that Kerr-McGee pay its back royalties.
On Feb. 6, according to administration officials, Kerr-McGee formally
notified the Minerals Management Service that it would challenge its
order in court.
Industry lawyers contend they have a strong case, because Congress
never mentioned price thresholds when it authorized royalty relief
for all deepwater leases awarded from 1996 through 2000.
"Congress offered those deepwater leases with royalty relief as an
incentive," said Jonathan Hunter, a lawyer in New Orleans who
represented oil companies in a similar lawsuit two years ago that
knocked out another major federal restriction on royalty relief.
"The M.M.S. only has the authority that Congress gives it," Mr.
Hunter said. "The legislation said that royalty relief for these
leases is automatic."
If that view prevails, the government said it would lose a total of
nearly $35 billion in royalties to taxpayers by 2011 ? about the
same amount that Mr. Bush is proposing to cut from Medicare, Medicaid
and child support enforcement programs over the same period.
BUSH POLICIES PUSH UP OIL PRICES
contact Nick Mottern (914) 806-6179
or via email
United States international military and political policies toward Iraq, Iran and Venezuela are contributing to oil price increases that could push U.S. gasoline prices back above $3 a gallon, according to ConsumersforPeace.org.
"The world oil market is very skittery right now because of attacks on oil facilities in Nigeria," said Nick Mottern, coordinator for ConsumersforPeace.org, "and much of the uncertainty is because these attacks come on top of the continuing U.S. military presence in Iraq, the United States goading of Venezuela's President Hugo Chavez and the threat of a U.S. attack against Iran."
The struggle of Nigerians living near oil facilities to get more benefit from their oil has brought attacks on oil terminal and platform installations that in the last few weeks has caused a drop of about 25% in Nigerian oil production. Nigeria is the world's eighth largest oil exporter and the fifth largest supplier to the U.S. This strife caused world oil prices to rise yesterday; the price of the much desired light sweet crude rose $1.27 a barrel to $61.15.
"The United States has gasoline stockpiles at the moment that should prevent an immediate rise in gasoline prices," Mottern said, " but the major oil companies are likely to use the crude oil prices increases to justify immediate increases at the gasoline pump." Prices could quickly exceed $3 a gallon if the Nigerian attacks continue, as promised, and violent action is taken by the U.S. in Venezuela or Iran.
"These stockpiles will not cushion U.S. consumers for long if the U.S. tries to remove the Chavez government or undertakes bombing of Iran in an attempt to remove its government," Mottern continued. "U.S. consumers are paying and will continue to pay at the gasoline pump for the U.S. occupation of Iraq, that is illegal, and for the totally unwarranted implied threats against Venezuela and Iran. Action against the latter countries will cost even more, on many levels."
"There are 2m-5m barrels (of oil) a day missing because of Iraq," Thierry Desmarest, head of the French oil company Total, said last week, according to the Financial Times. And the paper reported that "Iraq's chaos" has meant that the Organization of the Petroleum Exporting Countries (OPEC) has not had much spare production capacity to compensate for drops in world oil production, such as that occuring in Nigeria.
"This meant the oil price now rose quickly because of political concerns," the Times said, "such as Iran's nuclear programme..." Scott Ritter, former U.N. weapons inspector, has said he believes the United States has already sent covert military teams into Iran to prepare for an attempt to remove its government. The price is also unstable because there is concern that the United States may try to remove President Chavez and his government.
Defense Secretary Donald Rumsfeld recently compared Chavez to Hitler, and Secretary of State Rice has identified him as a problem, in part, she told Congress, because of his friendship with Fidel Castro. Articles in the business press have also described Chavez as a person that corporations cannot do business with.
These types of commentary have preceded U.S. interventions in Latin America, and should the U.S. administration be planning an assault on Iran, it might wish to have a more friendly government in place in Venezuela to ensure a secure oil supply from that country. Chavez has established friendly relations with the Iranian government.
The United States gets about 14 percent of its oil imports from Venezuela and 11 percent from Nigeria. It does not import oil from Iran, but Iran is the second largest producer in OPEC, hence its major impact on world oil prices. The top sources of U.S. imported oil are: Canada, Mexico and Saudi Arabia, in that order, followed by Venezuela and Nigeria.
Government may waive near $7 bln in oil, gas royalties: report
The government may waive up to $7 billion in royalty payments from companies pumping oil and natural gas on federal territory in the next five years, the New York Times reported on Tuesday, citing administration officials and budget documents.
The royalty relief would amount to one of the biggest giveaways of oil and gas in U.S. history, even though the administration assumes oil prices will remain above $50 a barrel throughout that period, the Times report said.
The report cited estimates in the Interior Department's recent budget plan that would allow companies to pump about $65 billion in oil and natural gas without paying royalties.
Administration officials cited by the report said the benefit stems from regulations dating back to 1996, when energy prices were relatively low and lawmakers wanted to encourage exploration in higher cost areas such as the deep waters of the Gulf of Mexico.
Much of the oil and gas from such leases is just beginning to be pumped due to the time required to explore deep waters and build large offshore platforms.
"We need to remember the primary reason that incentives are given," said Johnnie M. Burton, director of the federal Minerals Management Service, according to the report. "It's not to make more money, necessarily. It's to make more oil, more gas, because production of fuel for our nation is essential to our economy and essential to our people."
SPECIAL PROSECUTOR NEEDED TO INVESTIGATE CHENEY OIL DEALINGS, POSSIBLE PLAME CONNECTION
by Nick Mottern
Coordinator, ConsumersforPeace.org
This article argues for the appointment of a special prosecutor to investigate the past and current involvement of Vice President Richard Cheney in the global, sometimes illegal, activities of independent oil traders, activities that have been dominated by billionaire Marc Rich and his associates.
Additionally, it raises questions about possible connections between this oil trading and the "outing" of Valerie Plame as an undercover CIA employee.
This article is based on internet research focused on exploring connections between Mr. Cheney and the world of independent oil trading, particularly in relation to his tenure from 1995 to 2000 as chief of Halliburton Company. There is extensive, highly provocative coverage of independent oil trading and Halliburton on the internet that should be receiving systematic examination by major news organizations and the Congress.
MARC'S "SCOOTER"
An investigation of independent oil trading and Marc Rich, published in July 2005 by Business Week, described Rich, then 70 and reportedly worth at least $8 billion, as the creator a shadowy, global oil trading system in which great profits can be made by buying oil from "some of the most corrupt or politically unstable places on earth...These are the new frontiers where major U.S. oil companies fear to tread because of sanctions, embargoes and anti-bribery and anti-terrorism laws."
And the article notes: "The majors (major oil firms) are the bread and butter" of Rich and his associates. It cites a Senate report saying that half the crude oil shipped out of Iraq through bribery under the Oil for Food Program was sold to major oil companies.
Rich is reported by various articles to have been not only involved in illegal oil trading with Iraq but that, over the years, he has violated sanctions against oil trade with apartheid South Africa, Iran, Cuba and Libya.
Rich fled the United States in 1983 for Switzerland to escape prosecution for racketeering and non-payment of $48 million in corporate taxes and, Business Week reported, "other violations that could have resulted in 300 years of jailtime." His companies pleaded guilty to some charges, the article said, paying about $200 million in fines, but Rich remained "the most wanted white-collar criminal in U.S. history until his controversial pardon on President Bill Clinton's last day of office in 2001."
When Congress held hearings on the Rich pardon in 2001, one of those testifying on Rich's behalf was I. Lewis "Scooter" Libby. Libby told Congress that Rich's tax problems resulted from faulty legal interpretations by the Justice Department. Libby, who was to become Cheney's chief of staff, provided legal representation for Rich from time to time between 1985 and 2000.
Libby was indicted in October 2005 for lying and obstruction of justice in the investigation of the Bush Administration's "outing" of CIA employee Valerie Plame.
CHENEY PLAYS IN "RICHLAND"
In a detailed examination of Cheney's lucrative job as head of Halliburton from 1995 to 2000, Jane Mayer, writing for The New Yorker in February 2004, describes Cheney as having been able to override Central Intelligence Agency and State Department objections to win a U.S. government Export-Import Bank loan of nearly $500 million for the Russian Tyumen oil firm. This deal enabled Halliburton to contract with Tyumen for oil development in Siberian oil fields. Halliburton's press release announcing the deal in October 1998 said Tyumen is "one of the six largest Russian oil companies" with "proven oil reserves of 4.3 billion barrels and probable and possible reserves of 6.1 billion barrels."
Mayer reports that Cheney "almost lost the Export-Import loan when the State Department attempted to block it, on the ground that Tyumen was involved in illegal activity." Cheney, the report continues, who personally lobbied for the loan, "was particularly incensed by the involvement of the Central Intelligence Agency, which sided with the State Department."
In the Tyumen initiative, Cheney was engaging Halliburton in a part of the world where Rich was a central figure in oil. "In the early 1990s after the Soviet Union collapsed," Business Week said, "Rich quickly became the most powerful trader there." And: "Rich had long ties with Mikhail Fridman, and his mammoth Alfa Group," which owns Tyumen Oil, the recipient of the Export-Import loan.
The Public i reported in 2000 that Tyumen's lead lawyer at the influential Washington law firm Akin Gump was James Langdon, a Bush "Pioneer", that is a person who raised $100,000 or more for the Bush campaign. In June, 2000, the report said, Langdon organized a $2.2 million fund-raiser for Bush.
HALLIBURTON AT THE SADDAM OIL PARTY
Business Week reports that Fridman's Alfa group paid "illegal surcharges to Saddam (Hussein) during Oil for Food, which Alfa denies."
The article also reports that Rich bought oil from Alfa units during Oil for Food; one of the units was Tyumen, Halliburton's oil development partner. Various reports suggest that Rich and his associates played a substantial role in getting oil past sanctions against Iraq.
Halliburton is also connected to Iraq oil through one of its branches, Dresser Industries, which provided oil equipment to Saddam. Mayer reports, as do others, that Halliburton "illegally evaded U.S. sanctions by conducting its oil-service business through foreign subsidiaries that had once been owned by Dresser (Industries)", a firm Halliburton bought in 1998 under Cheney's guidance. And Mayer says, "The use of foreign subsidiaries may have helped the company to avoid paying U.S. taxes."
The Iraq oil world under Saddam appears to be much like the Iraq oil world of today, one made for, and to some extent by, Rich and his colleagues, a world in which there is no accountability and in which great wealth can be accumulated illegally. There has been no reporting on the current handling of Iraqi oil in terms of who is buying and shipping it and who are the beneficiaries.
WELCOME TO NIGERIA AND OTHER PLACES OF SADNESS
Rich has long involvement in Nigerian oil, getting purchasing priviliges from succeeding governments. Chido Nwanga, writing for USAfricaonline in March 2001, reported that "Rich has been a key player for well over 25 years in Nigeria's export of its crude oil...In fact, at certain points in Nigeria's recent economic history, Marc Rich has been the kingpin." Reports say that Rich was involved in shipping Nigerian oil into apartheid South Africa and that he may have been the primary oil sanctions buster.
Halliburton is reported to be under investigation by Justice Department, the Securities and Exchange Commission and French officials in connection with bribery charges in Nigeria. An SEC spokesman said that the agency would have no comment on whether or not an investigation is underway.
Mobolaji Aluko reported in Nigeria Village Square in June 2004 that the Halliburton investigation involved $180 million in bribes that may have been paid by the firm to smooth the way for a $6 billion gas liquification plant it built for Shell Oil. The bribes, which were said to have been paid between 1995 and 2000, are believed to have passed through a company, Aluko reported, "operated by a British lawyer, Jeffrey Tesler (a Halliburton employee for 30 years), alleged to be connected with high government officials such as former Oil Minister Don Etet and military head of state late General Sani Abacha."
USAfrica cited a report in 1998 by James Rupert of the Washington Post Foreign Service that: "Nigeria's main trading partners in the Abacha era have been the London-based firms Arcadia and Addax, and the Swiss-based Glencore, which was under the control of Marc Rich..." The Nation reported in October 2004 that "Tesler was the financial advisor to the late dictator Gen. Sani Abacha and controlled his personal fortune, while at the same time working for Halliburton."
The Nation also reported that French investigators were targetting Cheney in relation to the bribes, which occured during his tenure as head of Halliburton. The French got involved because a French company was part of the construction venture. And the Nation quoted Journal du Dimanche: "...it is probable that some of the 'retrocommissions (bribes)' found their way back to th U.S.", and the French report asked whether the money might have gone to Halliburton officials or the Republican Party. The Nation noted: "These questions have gone unasked by America's media."
In addition, Truthout reported, "in oil-rich Nigeria, Halliburton worked with Shell and Chevron, which were implicated in gross human rights violations and environmental calamities in that country. Cheney's firm increased its involvement in the Niger Delta after the military government executed several ecology activists and crushed popular protests against the oil industry."
Truthout reported also: "Human rights activists have also criticized Cheney's company for its questionable role in Algeria, Angola, Bosnia, Croatia, Haiti, Rwanda, Somalia, Indonesia and other volatile trouble spots."
It has also been reported that Rich-style oil trading has been pulling oil out of the large reserves in Sudan, whose government has been charged with hundreds of thousands of deaths in western Sudan. The U.S. government, however, has taken a relatively soft position toward the behavior of the Sudanese leadership.
A PLAME GAME?
The Daily Kos reported in July 2005, that Valerie Plame, who was "outed" to journalists as a CIA undercover employee as early as June 2003, was working for a CIA cover business called Brewster Jennings and Associates and that this entity, shut down after the "outing", apparently had the responsibility to monitor developments in weapons of mass destruction. But it was involved in reporting on the oil trade, particularly as it related to Saudi Arabia and the Arabian American Oil Company (ARAMCO). ARAMCO is a combine, involving the Saudi royal family and major U.S. oil companies, that runs Saudi Arabia's oil fields. Plame described herself to friends as an energy analyst.
Depending on Plame's responsibilities within Brewster Jennings, she would have been in a position to know a little or a great deal about Marc Rich, his colleagues and relationships that may exist between Rich, Cheney and Halliburton. Plame's "outing" has been viewed as a punishment for an attack by her husband, former ambassador Joseph Wilson, on Bush pre-occupation claims about Saddam's nuclear capability. However, recent reports that Plame's CIA work may have been disclosed to one or more reporters before Wilson's attack was published, raise questions about the intent of the "outing". The Washington Post reported Nov. 13, 2005 that Cheney "is shown by the indictment (of Libby) to be interested in Plame and her CIA status long before her cover was blown."
Wilson was reported to have begun work on the John Kerry presidential campaign in May, 2003 as an unpaid foreign policy consultant. Might it be possible that administration officials feared that Plame could provide her husband with damaging information in the run-up to the 2004 election, particularly as she might have been in a position to continually monitor the growth of the new "Rich World" in Iraq. Possibly Cheney had come in contact with Plame when the CIA challenged the deal he was promoting to get the Export-Import loan for Tyumen Oil.
OILY DRUGS?
There are internet reports suggesting that CIA objections to the Tyumen Export-Import loan may have been related in part to drug trade. Thunderbay, indymedia.org, reported, for example, that in 1995, drugs were found in a railroad container leased by Alfa Echo, part of the Alfa Group, which also owns Tyumen. "The drug smuggling route was further exposed after the (the Russian) Ministry of Internal Affairs raided Alfa Echo buildings and found drugs and comprising documentation."
The issue of drug smuggling through Russia has become more significant since the explosion of opium production in Afghanistan following the U.S. occupation of that country in 2001. A 2003 report from NATO Parliamentary Assembly said that 70 percent of the opium and 100 percent of the herion consumed in Europe comes from Afghanistan. The drug route through Tadjikistan, Turkmenistan, Kyrgyzstan, Uzbekistan, Kazakhstan and Russia, the report said, "is more and more widely used by drug dealers for deliveries of herion and opium to European countries."
The report noted that officials in Afghanistan are involved in drug trafficking and that a provincial police chief "engaged U.S. helicopters given by the U.S. command to combat terrorists and the Taliban fighters (for) his own purposes. He engaged the helicopters to transport large shipments of drugs to the north of the country from where they were smuggled to drug dealers in the neighboring Central Asia states."
There are no reports to suggest that Plame knew of connections between oil and drug trading. However, her position at the CIA, at what may have been a center for reporting on these matters, raises some extremely important questions. For example, is there evidence of connections between oil trading and drug trafficking? To what degree are U.S. military, mercenary, intelligence forces and U.S. firms involved in illegal oil trade or drug trafficking? Is oil or drug money being used to help finance the Iraq and Afghanistan wars in the way that drug money was used to finance other U.S. wars?
U.S. occupation of Iraq brutal and corrupt
President George Bush keeps trying to sell the occupation of Iraq as a noble humanitarian effort, implemented effectively, worth its cost in U.S. and Iraqi lives and the enormous wealth it swallows up. But the truth is that the occupation is brutal, corrupt and a horrible waste of human and material resources. It is almost certain to end up with a defeat for the most destructive military machine humanity has known. A new vicious side to the U.S. occupation these last few months has been the Pentagon’s air war against the Iraqi population. Little is seen or reported of this war. For one thing, the Pentagon doesn't invite even “embedded” reporters to join the flights. For another, the brass provides only minimal information to the media.What the Pentagon does provide is this: Up until last August, there were about 25 air strikes per month. By November it had risen to 120. By January it was 150.The air strikes on the far western corner of Iraq during Operation Steel Curtain hit the town of Husaybah hard. One week into this assault, Dr. Zahid Mohammed Rawi from that region said that medical workers recorded the deaths of 97 civilians along with 38 guerrilla fighters. (Washington Post, Dec. 24) This gives an idea of what increased air strikes will bring. Many U.S. military analysts and even alleged war opponents like Rep. John Murtha are advocating pulling out U.S. ground troops and increasing the air war. This may not enable U.S. imperialism to conquer Iraq, but is certain to kill lots of Iraqis.
A cesspool of corruption The Bush administration had planned to work the Iraqi oil wells effectively enough to pay the expenses of the occupation. It hasn’t been able to go beyond the pre-war level of production. But it doesn’t mean that no one is making money from the occupation. Robert Stein, a contractor with a 1998 conviction for fraud, nevertheless worked for the Coalition Provisional Authority, the body headed by Paul Bremer who ran Iraq for about a year after the U.S.-led invasion. On Feb. 2, Stein pled guilty to counts of conspiracy, bribery, money laundering, unlawful possession of machine guns and being a felon in possession of a firearm. In his role as government official, Stein “admitted to stealing over $2 million in cash and taking enormous bribes from the businessman, Philip Bloom, in 2003 and 2004 in return for accepting rigged bids on construction contracts that Bloom was guaranteed to win,” according to the Feb. 2 New York Times.An Associated Press story Jan. 30 made it clear that the corruption went far beyond the connivance between Stein and Bloom. A U.S. government audit showed that the CPA wasted tens of millions of dollars. Lots of the money just disappeared from the books. Some was stolen.The U.S. had seized cash from the Iraqi government or got it from Iraqi oil revenues. The officials in the south-central region of Iraq—an area where the resistance has not been particularly strong—kept large amounts of cash, millions of dollars, in their foot lockers. According to a report by the Special Inspector General for Iraq Reconstruction, “tens of millions of dollars in cash had gone in and out of the South-Central Region vault without any tracking of who deposited and withdrew the money, and why it was taken out.”Other items in the reports stated that: Of $23 million earmarked for civilian and military project and contracting officers to pay contractors, only a quarter ever reached the contractors and the CPA paid one contractor $14,000 for the same job four times.The audit reports on the other regions of Iraq have not been published yet. There is no reason to expect that these will show any less theft and overall corruption by the U.S. occupation force.
Infrastructure near collapse There are many reasons the Iraqi infrastructure is in such poor shape. Twelve years of bombing and sanctions prevented real maintenance and repair under the Saddam Hussein regime. But it’s also obvious that U.S. rule not only has brought no improvement and the infrastructure has further deteriorated.For the first time in winter there have been severe water shortages in Baghdad’s suburbs. Iraqis have running water only a few hours daily. Another item in short supply is cement, with 13 state-owned plants running at 25 percent capacity. The U.S. economic advisers suggest that the cement plants be privatized.Any attempt to repair the oil infrastructure is hampered by the resistance, and now by a new kind of “corruption.” According to an article in The New York Times Feb. 5, “a sitting member of the Iraqi National Assembly has been indicted in the theft of millions of dollars meant for protecting a critical oil pipeline against attacks and is suspected of funneling some of that money to the insurgency.”
Courtesy news.nabou.com
More belt-tightening in store for Iraqis
February 12, 2006
eDinar Financial
The outgoing government is reported to have agreed to these conditions, which among other things, require that Iraq to enter into long-term partnership deals with foreign firms to develop the country’s massive oil wealth.
Sources, refusing to be named, leaked information of the deal which the government has so far opted to keep under wraps.
Fuel prices will have to be raised to levels comparable to those in neighboring countries, according to the deal.
The expected upsurge in fuel prices will come on top of the hikes the government made recently and which led to demonstrations across the country.
The sources said millions of Iraqis dependent on food rations for a living need now to prepare themselves to do without government-subsidized food.
The deal will have to be ratified by the parliament but the outgoing government of Prime Minister Ibrahim al-Jaafari, though agreeing to it, has refused to send it to the legislators.
World Bank, International Monetary Fund and creditor countries have written off most of Iraqi debts.
But these institutions and countries, the sources said, would like Iraq to open up its oil fields to foreign investments.
Any further hikes in fuel rates are bound to backfire on the new government and are very likely to lead to large-scale rioting.
But the scrapping of food rations will have far graver consequences as millions of Iraqis will find it almost impossible to make ends meet without them.(Source)Nidhal al-Laithi, Azzaman
Analysis - Madagascar Faces Challenge of Oil Governance
Madagascar: January 31, 2006
planetark.com
ANTANANARIVO - The prospect of oil in Madagascar has raised hopes of rapid development, but the poor island nation faces a tough challenge if it wants to avoid the troubled experiences of some of Africa's existing oil producers.
Top officials from ExxonMobil, the world's biggest oil company, opened an operation in Madagascar on Friday.
Exxon is ramping up exploration on the world's fourth largest island, where it thinks its leases off the northwest coast could hold as much as 7 to 10 billion barrels of oil.
The company plans to start drilling its first exploratory well later this year or in early 2007, which would be the first-ever deepwater well to be drilled off Madagascar.
"Before a well is drilled, we'll have no idea of the outcome. (They are) wild cat wells," Tim Cejka, head of ExxonMobil Exploration Company, told journalists at the company's new office in Antananarivo.
Cejka told Reuters the chances of finding economically recoverable reserves were in the 10 to 20 percent range but still worth the risk given the enormous potential.
For Madagascar's government, keen to attract investment on the island of 17 million, three quarters of whom live on less than a dollar a day, the arrival of an oil company the size of Exxon is a big step.
"ExxonMobil coming to Madagascar marks a new phase," Prime Minister Jacques Sylla, told Reuters in an interview on Friday. "The government has made huge efforts to attract investors. We are now seeing the fruits of those efforts."
OTHER OIL GIANTS
The government is in the process of negotiating concessions with several other oil giants, including Chevron Texaco, Royal Dutch Shell, BP, Total, Statoil and China's National Petroleum Corporation.
Mining companies are also exploring Madagascar, looking for gold, gemstones, nickel and bauxite. In August, Rio Tinto, the world's second biggest mining company, confirmed it would go ahead with a $775 million ilmenite mine in the south.
Ilmenite is the ore from which titanium is produced.
But Madagascar is keen to avoid repeating the mistakes of other resource-rich African countries, where petrodollars have spawned corruption and failed to raise living standards.
Mismanagement of Nigeria's oil wealth has bred instability in the oil-rich Niger delta region, with militants attacking oil facilities in recent weeks, disrupting supplies.
"We are going to develop the country. We plan to manage (oil revenues) in the best possible manner, so that majority of the population benefits," said Sylla.
But analysts warn that such benefits will only accrue if strong institutions are put in place to govern oil revenues.
"The key is political openness," said Global Insight analyst Olly Owen. "If you have a government like this one, susceptible to cronyism and cracking down on democratic freedoms, and you put oil in the mix, it could go wrong."
Owen said Madagascar would need to work to prevent graft.
"If you put institutions in place to filter the oil money, with legislative oversight, there's a good chance of making it work."
DONOR RESPONSIBILITY
Petter Langseth, a Norwegian adviser to president Marc Ravalomanana, said donors must take a greater responsibility for ensuring oil does not breed bad government.
"I'm embarrassed to see how the donor community is watching how one African oil country after another is getting into serious problems and social unrest from not managing (oil) more seriously," he said.
Langseth said oil companies operating in Madagascar would be held accountable for their impact.
"The oil industry has been getting away with not taking their global citizenship responsibilities seriously," he said. "Exxon should build capacity in Madagascar by (helping with) accountability."
Some oil companies, like BP, have recently pledged to be more transparent in their dealings with governments and to help them prepare their economies for the huge sums of dollar revenue that flood in when oil production starts.
But ExxonMobil says oil companies have no right to involve themselves in good governance or anti-corruption initiatives in the countries in which they operate.
"We're a company, not a country," said Cejka. "As much as I can't tell the US government what to do with the royalty I pay, I can't tell the Nigerian or the Chadian government how to deal with their money. That's their business."
The government says it has the benefit of hindsight.
"Madagascar's good luck is that we have the experience of other oil-producing countries, good and bad," said Elise Razaka, head of the strategic resources office. "We are taking steps to avoid the kinds of events happening in Nigeria."
Story by Tim Cocks
Story Date: 31/1/2006
U.S. thirst for oil could send Africa on Mideast's path
G. Pascal Zachary
Sunday, January 29, 2006
sfgate.com
Kribi, Cameroon -- Standing on a rocky African beach, at the base of a gorgeous waterfall, I am peppered with requests from African men. One is peddling a canoe ride. Another wants to sell me some polished shells. A third asks if he can be my guide. A fourth wants me to visit his art shop. A larger group of men play a game of cards, passing the time.
These men are poor, a condition not unusual in these parts but made more painful by their awareness that a short distance across the water sits a mammoth offshore oil terminal run by ExxonMobil,
The men crowd around me and ask me why does the pipeline, which carries oil underneath their coastal village and out to sea, employ so few people -- and none of them. They suspect, they say, that they are members of the wrong tribe, that the government cares nothing about them, and that ExxonMobil prefers foreign workers. I know the truth. These men are not needed. They lack the right skills and, anyway, very few people are needed to keep the oil flowing.
I cannot share my rude truth with these men for I fear their anger. When I tell them I am not an employee of ExxonMobil but a journalist, they are unsatisfied. They crowd around me, agitated. To them, I am simply an American, a representative from the country consuming African oil.
I plot my escape, and, when safe in my four-wheel drive, I have time to ponder how high a moral price are we gas-guzzling Americans willing to pay for an uninterrupted flow of crude oil?
The question keeps popping up around the world as the United States, which relies on foreign oil for nearly 60 percent of its needs, scrambles to secure sources. The Faustian bargains made by the U.S. government with repressive oil-producing Muslim states of the Persian Gulf are well known. We now face an endless war in Iraq; an Iran striving for nuclear technology; a Saudi Arabia incubating anti-American terrorists and perhaps teetering on the verge of collapse.
Can the United States avoid repeating in Africa this dangerous pattern of first cosseting oil dictators and then suffering a painful blowback?
That's the big question that looms over America's growing oil dependence on tropical Africa. Depicted by rock stars and philanthropists as mired in disease, disorder and malnutrition, Africa is nevertheless America's fastest-rising source of imported oil. Already, three of the top 15 foreign oil suppliers to the United States are African, and the region could provide as much as 25 percent of U.S. imports by 2025.
It is imperative that the United States forge a new bargain with Africa's oil-producing countries. Africa is the poorest part of the planet and it would be disgraceful for Americans to support an oil system that reinforces poverty, fuels corruption and promotes social unrest. Oil could be a boon for Africa, but if mismanaged this precious resource will ultimately be a source of shame.
The results of America's oil dealings with Africa are troubling so far. African governments routinely loot oil revenue. People living closest to the oil wells, meanwhile, are often the poorest of the poor. This is the story in Angola and Nigeria, two of America's top seven sources of imported oil.
Trying to write a new script for African oil, international do-gooders such as the World Bank and Oxfam concocted an innovative plan: Help those African countries to develop an oil sector only if they pledge to spend oil revenue wisely.
The impoverished landlocked country of Chad is the first test of this new way of dealing with African oil. The opening went well. Chad needed loans to build an oil infrastructure, in particular a pipeline that would carry its oil hundreds of miles to an Atlantic port in Kribi, Cameroon, where the oil could be exported. In exchange for loans from the World Bank and international support for billions of dollars of needed private investment, Chad passed a law that bound the government to spend its oil money wisely -- on education and health, not its military.
Oil started pumping in 2003, under the management of U.S. oil giant ExxonMobil. Chad's share of the revenue so far is about $300 million, two-thirds of which the government says it has spent on social programs.
But last month, Chad's government suspended its oil law, breaking its promise with the international do-gooders by declaring it will spend more of its oil money on security and abolish a "future generations fund," a savings account that was to kick in when the country's estimated 1 billion barrels of oil are gone. Observers expect the worst because Chad has a long history of instability and violence. Critics are upset because there is already evidence that the Chad government wasn't living up to the deal anyway.
The World Bank has retaliated by banning any future loans to Chad. More needs to be done. The U.S. government should urge ExxonMobil, which has been silent on the Chad issue, to halt oil payments to the Chad government.
ExxonMobil also needs to pay more attention to the resentment building along its pipeline. The company may ultimately face the exhausting problem afflicting Chevron, another big U.S. oil company that has important operations in Nigeria's Delta region. Kidnappings of Chevron's workers are routine, the company's oil platforms and pipelines face regular assault and Chevron's community relations are strained.
As a result, the trend in Nigeria and neighboring Cameroon is to shift oil operations offshore as much as possible. But the relative safety of the sea reinforces the sense that oil companies want to reduce to a minimum their contact with ordinary Africans.
Oil companies are understandably reluctant to try to reform wayward governments. But they can do better in Africa by adopting a common standard in doing business, including a requirement that payments to governments be made transparent. The trouble is that oil companies are looking for a competitive advantage, making cooperation difficult. Indeed, some oil companies are actually government agencies. China's state-owned oil company, for instance, recently agreed to pay $2.3 billion for a stake in a Nigerian oil and gas field.
Because oil companies can't be expected to monitor international morals, the U.S. government must intervene. The Bush administration should begin by asking Chad President Idriss Deby to reverse his government's decision to break its oil promises. The United States might even threaten to cut off all military aid to Chad, which is part of a five-year $500 million Pentagon program to assist nine African governments in expanding their military capacity, purportedly to help in the war on terrorism.
Nigeria and Angola can also benefit from U.S. pressure. These superstars of African oil should be asked to account completely for their oil revenues -- and allow international inspectors to see where these governments claim to be spending their money.
Nigeria recently released an audit of payments made to the government from large oil companies for 2003 and 2004. The audit, while incomplete, suggests that some Nigerians see the need for greater accountability. The Bush administration should support a wider audit, covering all Nigeria's revenues, which exceeded $30 billion last year.
For the foreseeable future, America can't get along without African oil, and revenue from oil sales can help Africa in its long and difficult climb from poverty and disorder. But America must avoid replaying the same pattern in Africa as it has created in the Persian Gulf. America can be a smart consumer, prodding its suppliers to improve their behavior. That will mean tough decisions for Americans who too often seem willing to purchase oil at any moral price.
G. Pascal Zachary is a fellow of the German Marshall Fund, researching African affairs. He teaches journalism at Stanford University. Contact us at insight@sfchronicle.com.
BREAK EXXONMOBIL'S THRUWAY STRANGLEHOLD, NEW YORK GROUPS SAY
Oil Giant Stonewalls Consumer, Environmental Safeguards While Reaping Record Profits on Soaring Petroleum Prices
Press contact: Jon Coifman, 212-727-4535 or 917-575-1885
NRDC.org
ALBANY (February 1, 2006) -- Consumer and environmental groups are calling on state regulators to end ExxonMobil's longstanding government-granted grip on 13 New York State Thruway fueling stations because of the company's longstanding negative track record toward motorists and the environment -- a record that sets the world's largest corporation apart from others in the oil industry. The lucrative five-year contracts to operate the stations are up for review and renewal this week. The Natural Resources Defense Council (NRDC) and four other organizations made their appeal this week to John L. Buono, chairman of the New York State Thruway Authority. They also want to make sure that ExxonMobil does not wind up controlling the stations by way of a franchise operator, or as the supplier to another company. "ExxonMobil has gone out of its way time and again to distinguish itself from its competitors as the most anti-environmental oil company in the business. It's company policy, and we should not be rewarding it," said NRDC attorney Eric A. Goldstein. "Our message to the Thruway Authority is, 'Deliver us from Exxon.'"This week ExxonMobil has been downplaying its record-setting $36 billion profit for the year, a 40 percent increase over 2004, which also was a banner year. The company's total revenue in 2005 even exceeded the national income of Saudi Arabia, according to the New York Times. Among the concerns voiced by the groups about the company:
- ExxonMobil has aggressively opposed limits on the heat-trapping pollution that causes global warming, and has funded professional skeptics to try to undercut broad scientific consensus on the problem.
- ExxonMobil's 1999 merger, combining the former number-one and -two oil companies in the industry, has been costly for consumers, adding four to five cents to the price of a gallon of gasoline sold by the combined company, according to a recent Government Accountability Office report.
- ExxonMobil is the only oil company still participating in Arctic Power, the single-issue group lobbying hard to open the Arctic National Wildlife Refuge to oil drilling.
- ExxonMobil is the subject of a major class action lawsuit by station dealers who say the company overcharged them. In May 2005, a federal court ruled that ExxonMobil acted improperly in seeking to delay and complicate the claims process, and imposed extra sanctions. In December the company offered to settle for $1.075 billion, a cost that likely would be passed on to consumers.
- Sixteen years after the nation's worst oil spill, ExxonMobil still has not paid all of the punitive damages awarded to thousands of fishing industry workers who were forced out of business by the 1989 break-up of the Exxon Valdez tanker in Price Williams Sound.
In addition to NRDC, groups calling on the Thruway Authority to break ExxonMobil's grip on New York motorists include the New York Public Interest Research Group (NYPIRG); Environmental Advocates; Riverkeeper; and the Atlantic chapter of the Sierra Club.
The Natural Resources Defense Council is a national, nonprofit organization of scientists, lawyers and environmental specialists dedicated to protecting public health and the environment. Founded in 1970, NRDC has 1.2 million members and online activists nationwide, served from offices in New York, Washington, Los Angeles and San Francisco.
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State Government and Native American tribes signed deals with CITGO
Venezuela's CITGO, Maine Gov. and Tribes Sign Low-Cost Heating Oil Deal
Thursday January 12, 2006
By: Venezuelanalysis.com
Jan 12, 2006.- Today it was announced that the government of Venezuelan President Hugo Chávez continued its program to provide relief for low income U.S. residents by delivering cheaper oil products.
Today, Maine State Governor John Baldacci, along with representatives from the state’s heating oil assistance program, signed an agreement with CITGO Petroleum Corporation, the century-old U.S. refining and retailing arm of Venezuela´s state oil company Petróleos de Venezuela - PDVSA, to provide 8 million gallons of heating oil at a 40% discount to low-income residents in the state of Maine.
This humanitarian aid will also reach four Native American tribes and homeless shelters in the state of Maine.
Maine Gov. John Baldacci signed the agreement with CITGO at the home of the Lyons, a retired couple who have raised five children of their own and has eight foster children.
“It is imperative we act to ensure our citizens are safe and warm this winter. The cost of heating oil has risen dramatically and the federal government has failed to provide the resources needed to help Maine citizens. We are grateful to CITGO and the Venezuelan government for their generosity,” Governor Baldacci said.
Under the terms of the agreement, recipients of the U.S. Low Income Home Energy Assistance Program (LIHEAP) will receive an additional $100 in LIHEAP benefits. These additional funds have been donated by Venezuela for distribution through LIHEAP. The amount of the donation will be equal to a 40% discount on the spot market price of 8 million gallons of heating oil.
Maine estimates that CITGO’s donation will be approximately 5.5 million dollars.
In addition, the government of Venezuela has agreed to provide 120,000 gallons of heating oil to homeless shelter in Maine. This oil will be delivered to more than 40 homeless shelters by their heating oil suppliers. Moreover, 900,000 gallons of heating oil at a 40% discount to four Native American tribes.
Venezuelan Ambassador Bernardo Alvarez denied that politics is behind the decision to make the donation. “Some have tried to read politics into these outreach programs”, he said. However, critics of the Venezuelan government argue that this gesture is aimed at embarrassing the U.S. government, which has ideological differences with the left-wing policies of Venezuelan President Chavez.
“This program has a human face. Venezuelan President Hugo Chavez made a promise in New York City following hurricanes Katrina and Rita and this Maine heating oil program represents the goodwill between the people of Venezuela and the United States. Help for those who need it most is a cornerstone of the new Venezuelan economy under President Chavez, and this program, following similar ones in Massachusetts and the Bronx, is part of a new effort to increase regional integration.”
"This is about life"
“CITGO is pleased to be part of another assistance program for those in need,” said CITGO’s CEO Felix Rodriguez.
“CITGO has over 160 gas stations in Maine, and we are proud to be responsible corporate citizens in the communities in which we operate, especially when the need is great. This is not about politics, this is not about oil. This is about life, about improving the lives of poor people. This is about people helping people.”
“Thanks to Venezuela for making this help available to us,” said Maine Resident Mary Lyons.
The Government of Venezuela announced a statewide heating oil assistance program in Massachusetts on Nov. 22, and a similar program in The Bronx borough of New York on Dec. 6, 2005. Discussions for further expansion of the program are underway in several other states, including Delaware, Vermont, Connecticut and Pennsylvania.
Last week, the Chicago Transit Authority (CTA), the entity in charge of the city of Chicago´s public transportation, rejected an offer from CITGO to provide discounted diesel for its fleet of public buses. However, faced with a 17 million budget deficit, and under pressure from local and Illinois state politicians and community leaders, the CTA agreed to sit down with CITGO to find ways to accept the fuel. To cover for the deficit, the CTA had authorized an increase in cash bus fares, which went into effect in recent weeks.
“If other major cities are working with CITGO to reduce the strain of skyrocketing energy prices this winter, why is the CTA leaving Chicago out in the cold?” U.S. Congressman Luis Gutierrez asked at a press conference.
CITGO and Chicago officials will meet again before the end of January.
Given the record profits made by oil companies, last year, a group of U.S. senators urged 10 major oil companies to donate a portion of their profits to help the poor. So far, only CITGO has responded.
According to an article by USA Today, U.S. President George Bush praised CITGO´s aid efforts in the aftermath of Hurricane Katrina. "The good works of CITGO demonstrate the character and great strength of our nation," Bush wrote CITGO Sept. 27.
Both the U.S. State Department and the Energy Department have provided tacit support for CITGO´s efforts. State Department spokesperson Adam Ereli provided no objections to the CITGO's offers at a Dec 8 briefing.
U.S. Energy Secretary Samuel Bodman said that the U.S. government has no problems with Venezuela's offer. "We view it, as corporate philanthropy. We're all for that. Nobody in the Energy Department, or in the government for that matter, is going oppose that. If that's what Mr. Chavez and his colleagues who own CITGO choose to do, I'm certainly not going to criticize," Bodman told CNN Dec 9.
See also:
At Exxon Mobil, a Record Profit but No Fanfare
Published January 31, 2006
NYTimes.com
HOUSTON, Jan. 30 — Exxon Mobil, aided by strong energy prices, disclosed Monday that it had set a record for profits among American companies, reporting $36 billion in annual income. But while most companies would be proud to trumpet record profits, Exxon Mobil did everything it could to play down the news.
For Exxon Mobil, which also handily widened its lead over Wal-Mart as the company with the largest revenues in the nation, the report was an embarrassment of riches. Anxious about criticism of the results, executives began laying the groundwork months ago to try to prevent a political reaction against the company and the energy industry.
For example, Exxon Mobil paid for advertisements in leading newspapers arguing that profit margins in the industry lagged far behind those of other industries, like pharmaceuticals and banking.
Still, growing oil profits are generating new scrutiny of the industry, with legislators and taxpayer groups expressing concern over Big Oil's good fortune, as soaring energy prices put increasing pressure on the pocketbooks of consumers.
"If it's Google, no one asks about the profits because they're too busy buying the stock," said Amy Myers Jaffe, associate director of the energy program at Rice University. "Exxon is different. We have these emotional feelings related to gasoline because there's no readily available substitute."
Exxon Mobil's results on Monday, of course, caused jaws to drop; by some measures, the company became richer than some of the world's most pivotal oil-producing nations. Exxon Mobil reported a 27 percent surge in profit for the fourth quarter as elevated fuel prices gave rise to a full-year profit in 2005 of $36.13 billion on revenue of $371 billion. Exxon Mobil said its overall profit climbed more than 40 percent last year, while its tax bill rose only 14 percent.
"It's outrageous for big oil to be making these kinds of profits," said Representative Eliot L. Engel. Mr. Engel, a Democrat from New York, has sponsored legislation with a leading House Republican, Representative Jack Kingston of Georgia, to provide new incentives for alternative fuels and energy conservation technologies.
"We don't need any more tax breaks for the industry, any more sops to the industry that's making record profits," Mr. Engel said.
Gasoline prices at the pump are rising again, with the average price of regular unleaded gasoline up nearly 7 percent from a month ago, to $2.34 a gallon, according to AAA, the automobile club.
In one measure of Exxon Mobil's wealth and influence, its revenue of $371 billion surpassed the $245 billion gross domestic product of Indonesia, an OPEC member and the world's fourth most populous country, with 242 million people.
The company's huge profit report came as no surprise to the White House or to lawmakers in either party, but it arrived just as Congress was preparing to resume a fight over imposing a one-time windfall profits tax on the major oil companies.
Last fall, the Republican-controlled Senate passed a bill to extend about $60 billion worth of tax cuts over the next five years, but it also included a provision that would impose a one-year tax increase of $5 billion on the nation's largest oil companies. The measure is unlikely to survive. President Bush has already threatened to veto the tax bill if it includes the tax on oil companies, and House Republicans included no comparable measure in their own tax bill.
Another measure approved in the Senate would effectively remove the foreign tax credit that the nation's three largest oil companies, Exxon Mobil, Chevron and ConocoPhillips, receive for taxes paid in other countries. Most energy analysts do not see the measures winning approval in the House, but Exxon Mobil executives remain concerned.
"We take these issues very seriously," said Mark Boudreaux, a company spokesman. "We realized that we needed to do a better job of explaining how the industry works."
To help make its case, the company organized slide shows for groups of journalists ahead of the report, explaining that its operations accounted for only 3 percent of global oil production.
Republican lawmakers were on the defensive on Monday. Not only are they under heavy pressure from party leaders and from the White House to kill the proposed tax on oil companies, but they also inserted more than $2 billion in additional tax breaks for oil and gas companies in the energy bill that Congress passed last November.
A spokesman for the House speaker, J. Dennis Hastert, said the oil companies had to explain themselves better and to offer more information on their plans to lower fuel prices by expanding their refining capacity in the United States.
"The message from the speaker is that oil companies need to do more work to bring oil and gas prices down," said Ron Bonjean, a spokesman for Mr. Hastert, who is scheduled to meet on Tuesday with the president of the American Petroleum Institute.
"Companies make profits, and that's O.K.," Mr. Bonjean said. "But when you're dealing with a family's bottom line, we'd like to see some kind of plan to address rising costs."
Executives at Exxon Mobil, which is based in Irving, Tex., have been trying in recent weeks to reposition the public discussion of the company's profit by comparing the industry's results to those of other industries.
For instance, pharmaceutical companies earned 18.6 cents for each dollar of sales in the third quarter of 2005, and banks 18 cents, compared with 8.2 cents at oil and natural gas companies, said Mr. Boudreaux, the Exxon Mobil spokesman.
Still, the company's profits stand out by almost every measure. Exxon Mobil's profit last year of $36.1 billion easily surpassed the earlier record of $25.3 billion, which Exxon Mobil had set in 2004, according to Howard Silverblatt, senior index analyst at Standard & Poor's in New York. Among industrial companies, only the Ford Motor Company's profit of $22 billion in 1998 comes close to Exxon Mobil's success in recent memory, Mr. Silverblatt said. Wal-Mart, in the year that ended Jan. 31, 2005, had net income of about $10.3 billion on sales of $285 billion.
Exxon Mobil's profit climbed last year thanks largely to higher prices for oil and natural gas, but also for other reasons, including higher margins at its refineries, the start of oil production at a project on Sakhalin Island in Russia's Far East and a gain from the sale of a stake in Sinopec, an energy concern controlled by China's government.
Exxon Mobil shares surged to $63.11, up $1.82, or 2.97 percent. However, even as investors applauded Exxon Mobil's new chief executive, Rex W. Tillerson, who succeeded Lee R. Raymond at the start of this year, Exxon Mobil's results masked potentially weaker profits if oil and gas prices begin to decline.
Production on an oil-equivalent basis at Exxon Mobil's oil fields around the world declined 1 percent in 2005, excluding stoppages at platforms in the Gulf of Mexico from last year's hurricanes. This illustrates an industrywide problem: an inability to tap into the world's richest oil exploration areas in the Middle East and Venezuela because of political barriers.
"Lack of access to new reserves is the most important problem Exxon and the other large oil companies are facing," said Michael J. Economides, an influential professor of chemical engineering at the University of Houston. "It should make them paranoid about the future."
Political uncertainties in oil-rich nations, however, also worked in Exxon Mobil's favor in recent months, as concern over Iran's nuclear ambitions and tension in Nigeria and Venezuela kept oil prices high.
Crude oil prices have doubled in the last two years, driven largely by strong demand in the rising economies of Asia and in the United States, which alone consumes about a quarter of the world's oil production.
Oil for March delivery rose Monday to $68.35 a barrel, up 59 cents, in New York trading.
Part of the reason for Exxon Mobil's quarterly gains was that oil and natural gas prices were driven higher by Hurricanes Rita and Katrina; profit climbed to $10.7 billion in the quarter from $8.42 billion.
Revenue in the quarter reached $99.7 billion, an increase of 20 percent.
Some Democratic lawmakers pounced on the Exxon Mobil profit report to attack Republicans' recent willingness to give the industry additional tax incentives at a time of record profits.
"A real bill should concentrate on alternative fuels, corn and ethanol and hybrid cars and all these new technologies," said Mr. Engel, the Democratic congressman from New York.
Edmund L. Andrews reported from Washington for this article.
Crumbling foundations of Western debacle in Iraq
By Tariq Ali
Published: January 20,2006
TheAge.com.au
By year three of Iraq's occupation, for most Western citizens the fact that they live in a world subjugated by lies, half-truths and suppressed facts has become part of everyday life. In Iraq, a preoccupation for many of the country's citizens, including some who initially supported the war, is whether their country will survive or whether Western recolonisation will mean disintegration. A Hobbesian landscape today could lead to a tripartite division tomorrow.
In the last half of the preceding century, the great Iraqi poet Muhammad Mahdi al-Jawahiri, himself the son of a Shiite cleric and born in the holy city of Najaf, could express his detachment from religious sectarianism and affirm his faith in an Iraqi nationalism: ana al-Iraqu, lisani qalbuhu, wa dami furatuhu, wa kiyani minhu ashtaru (I am Iraq, her heart is my tongue, my blood her Euphrates, my very being from her branches formed). It seems a very long time ago.
What lies ahead? The US occupation is heavily dependent on the de facto support of the Shiite political parties, especially SCIRI (the Supreme Council for the Revolution in Iraq), Tehran's instrument in Iraq. Ayatollah Ali al-Sistani, who, soon after the fall of Baghdad told Iraqis of every hue that he favoured an independent and united Iraq, may have meant it at the time, but events have moved on. When Sistani prevented Shiite groups from waging their own struggle and persuaded Muqtada al-Sadr to cease resistance, he also dented the unity of the country. A unified resistance fighting on two fronts could have led to a unified government later. Unsurprisingly, Thomas Friedman, of The New York Times, has demanded that Sistani be awarded the Nobel peace prize.
Had the Shiite parties decided to resist the occupation, it would have been over a long time ago, if indeed it had taken place at all. The clerics in power in Iran made it clear to Washington that they would not oppose the overthrow of the Taliban or of Saddam Hussein. They did so for their own motives and in their own interests. Had the Baathists and military nationalists not resisted, instead denying Bush and Blair the glory of which they dreamed and creating a crisis of confidence in Washington and London, regime change in Tehran might have remained on the agenda, despite Iranian support for the US.
It is the resistance in Iraq that has made any such adventure impossible in the medium term. The US Army high command, overstretched in Iraq, is seriously divided on the war and there is little doubt that some senior figures in the Pentagon favour a rapid withdrawal for purely military reasons. Could the empire, at stalemate militarily, pull off a political triumph? A break-up of Iraq, which besides Syria was the only state resisting US domination, would mean a victory of sorts. There should be no doubt on this score.
The Iraqi group that has benefited the most from the occupation is the Kurdish tribal leadership. The Kurds received a great deal of funding for 12 years before the war, and US intelligence agencies used the region as a base to penetrate the rest of the country. The Kurds dominate the puppet army and police; they have determined the ultra-federal character of the constitution and make no secret of the fact that they favour an "ethnic cleansing" of Arabs and other non-Kurds in Kirkuk. Oppressed minorities in one epoch can rapidly become oppressors in another as Israel continues to demonstrate. The Kurdish leaders, with Kirkuk in their bag, are happy to become a Western protectorate.
If the clerically enforced unity of the Shiite groups collapses, and it could if denied the luxury of American troops and air support, a new deal might be possible to prevent the Balkanisation of Iraq. The same could happen if Tehran decides that a genuinely independent Iraq is in the best interests of the region, but rational calculation has not always been the mullahs' strongest suit. A happy ending is not in sight.
And the oil? The model being prepared at the moment will cost Iraq billions in lost revenue while global corporations reap the harvest. The contracts being prepared would provide them with returns of 42 per cent to 162 per cent in an industry in which the minimum returns are in the region of 12 per cent. While the oil will remain the legal property of the state, the production-sharing agreements will give the concessions to private companies. This too would be seen as a victory by Halliburton and its political patrons. As long as an Iraqi government backs the agreements, the US and Britain could withdraw their troops and claim a victory. The triumph of freedom would be reflected in the oil agreement.
After all, little else counts. But could such a deal be maintained indefinitely without the presence of imperial troops? Unlikely. Oil has in the past revitalised nationalist movements and transformed politics in Iran and Iraq. Times are different, but the basic problems remain, and the struggle for the oil could be a protracted one.
Tariq Ali's latest book is Rough Music: Blair, Bombs, Baghdad, London Terror.
Fairness & Accuracy In Reporting (FAIR)
http://www.fair.org
Media Advisory
Editing Chavez to Manufacture a Slur
Some outlets spread spurious charges of anti-Semitism
1/23/06
fair.org
It began with a bulletin from the Simon Wiesenthal Center in Los Angeles (
1/4/06) accusing
Venezuelan President Hugo Chavez of invoking an old
anti-Semitic slur. In a Christmas Eve speech, the Center said, Chavez declared that "the world has wealth for all, but some minorities, the descendants of the same people that crucified Christ, have taken over all the wealth of the world."
The Voice of America (1/5/06) covered the charge immediately. Then opinion journals on the right took up the issue. "On Christmas Eve, Venezuela's President Hugo Chávez's Christian-socialist cant drifted into anti-Semitism," wrote the Daily Standard (
1/12/06), the Weekly Standard's Web-only edition. The American Spectator (
1/6/06) was so excited about the quote, which it called "the standard populist hatemongering of Latin America's new left leaders," that it presented it as coming from two different speeches:
Venezuela's Chavez in his 2005 Christmas address couldn't resist commenting that "the descendants of those who crucified Christ" own the riches of the world. And on a Dec. 24 visit to the Venezuelan countryside, Chavez stirred up the peasants by claiming that "the world offers riches to all. However, minorities such as the descendants of those who crucified Christ" have become "the owners of the riches of the world."
Then more mainstream outlets began to pick up the story. "Chavez lambasted Jews (in a televised Christmas Eve speech, no less) as 'descendants of those who crucified Christ' and 'a minority [who] took the world's riches for themselves,'" the New York Daily News' Lloyd Grove reported (
1/13/06). A column in the Los Angeles Times (
1/14/06) used the quote to label Chavez "a jerk and a friend of tyranny." The Wall Street Journal's "Americas" columnist, Mary Anastasia O'Grady (
1/16/06), called Chavez’s words "an ugly anti-Semitic swipe.”
One can see why the words attributed to Chavez provoked outrage. After all, descriptions of the Jews as a wealthy minority that "crucified Christ" have been an anti-Semitic stock in trade for centuries. But the criticisms of Chavez almost uniformly used selective, even deceptive editing to remove material that put his words in a different context.
Here's a translation of the full passage from Chavez's speech (VoltaireNet,
1/18/06):
The world has an offer for everybody but it turned out that a few minorities--the descendants of those who crucified Christ, the descendants of those who expelled Bolivar from here and also those who in a certain way crucified him in Santa Marta, there in Colombia--they took possession of the riches of the world, a minority took possession of the planet’s gold, the silver, the minerals, the water, the good lands, the oil, and they have concentrated all the riches in the hands of a few; less than 10 percent of the world population owns more than half of the riches of the world.
The biggest problem with depicting Chavez's speech as an anti-Semitic attack is that Chavez clearly suggested that "the descendants of those who crucified Christ" are the same people as "the descendants of those who expelled Bolivar from here." As American Rabbi Arthur Waskow, who questioned the charge, told the Associated Press (
1/5/06), "I know of no one who accuses the Jews of fighting against Bolivar." Bolivar, in fact, fought against the government of King Ferdinand VII of Spain, who reinstituted the anti-Semitic Spanish Inquisition when he took power in 1813. According to the
Jewish Virtual Library, a Jewish sympathizer in Curacao provided refuge to Bolivar and his family when he fled from Venezuela.
Most of the accounts attacking Chavez (the Daily Standard was an exception) left the reference to Bolivar out entirely; the Wiesenthal Center deleted that clause from the speech without even offering an ellipsis, which is tantamount to fabrication.
As Waskow further pointed out, in the Gospel accounts, "it was the Roman Empire, and Roman soldiers, who crucified Jesus." While it's true that anti-Semites often accuse Jews of killing Jesus, it's not fair to assert that anyone who refers to the crucifixion of Jesus is attacking the Jewish people.
That Chavez's comments were part of some anti-Semitic campaign is directly contradicted by a
letter sent by the Confederation of Jewish Associations of Venezuela to the Wiesenthal Center (AP, 1/14/06). "We believe the president was not talking about Jews," the letter stated, complaining that "you have acted on your own, without consulting us, on issues that you don't know or understand." The American Jewish Committee and the American Jewish Congress agreed with the Venezuelan group's view that Chavez was not referring to Jews in his speech (Inter Press Service,
1/13/06).
In context, the Chavez speech seems to be an attempt by Chavez to link the attacks on his populist government to the attacks on his two oft-cited heroes, Jesus and Bolivar; the "minority" that would link the two would be the rich and powerful minority of society. The reference to "less than 10 percent of the world population" owning half the wealth also makes the idea that Chavez was talking about Jews far-fetched; 10 percent of 6 billion would be 600 million people. (According to the
Encyclopedia Brittanica, there are approximately 15 million Jewish people in the world.)
Jim Lobe of Inter Press Service (
1/13/06) pointed out the irony of conservative outlets like the Wall Street Journal and the Daily Standard, edited by William Kristol, promoting dubious accusations of anti-Semitism in Latin America:
Kristol's father, Irving Kristol, and the Journal's editorial page to which he contributed, led a public campaign to discredit Argentine publisher Jacobo Timerman when he emerged in 1980 from two-and-a-half years of imprisonment in secret prisons in Argentina claiming that Jews like himself had been systematically singled out for the worst treatment and torture by a military regime whose ideology was as close to Nazism as any since World War II.
Lobe pointed out the difference between Chavez's Venezuela and Argentina under military dictatorship: "Unlike Venezuela today, Argentina was then seen by the incoming Ronald Reagan administration (1981-1989) and its neo-conservative backers as a vital Cold-War ally." Surely anti-Semitism is a problem that deserves to be treated seriously, and not used as a pretense to bash official enemies.
Note: Some readers pointed out that before the Weisenthal Center, the Jewish Telegraphic Agency led the attack on Chavez's speech (12/30/05).
'Twenty-four hours is not good enough. We want it at one.' — JIM INDEST, Texas Commission on Environmental Quality
Delay in oil-spill notification probed
Government officials question why Exxon Mobil took so long to alert them
By DINA CAPPIELLO
Published: January 26, 2006
© 2006 Houston Chronicle
State and county environmental officials Wednesday launched independent investigations into a spill at Exxon Mobil's Baytown refinery that showered a public housing project with processing oil.
Officials with the Texas Commission on Environmental Quality and Harris County's Pollution Control and Environmental Health Division said that one question they want answered is why it took Exxon Mobil more than a day to inform authorities that the pollution had entered a community.
State law requires companies to update the agency within 24 hours with any new information pertaining to a pollution release.
But some officials on Wednesday, saying the Exxon Mobil incident "fell through the cracks," said that to protect public health and to arrive on the scene in time to collect evidence, companies would need to report events much sooner — within an hour or less — which would require a change of the law. The federal government requires companies to report spills as soon as they are aware of them.
"They are required to tell us about it, clean it up and send in proof that it has been cleaned up," said Jim Indest, team leader of the TCEQ's emergency response group for the Houston region.
"Very simply, their initial report did not tell us it was getting offsite. That was incorrect."
The incident, according to Exxon Mobil, occurred at 12:01 a.m. Monday. That's when a 150,000-barrel storage tank holding process gas oil heated to 200 degrees Fahrenheit mysteriously failed, releasing 1,400 barrels of oil onto the ground and sending a cloud of steam and oil droplets across the street into the Archia Courts public housing complex.
The company's first call to the TCEQ to report the spill occurred 12 hours later, around noon, just about when the refinery's phones started ringing with complaints from residents describing a waxy film on their cars, plants and homes. Exxon Mobil, which said it tested the air before sunrise Monday and found nothing, told the agency the spill had been contained on the plant property.
"We did fenceline monitoring within hours and there was no hydrocarbon vapor detected," said Jeanne Miller, a spokeswoman for the company's Baytown refinery, which ranks as one of the largest in the country. Miller confirmed that the company was in the neighborhood Monday, "taking a look at it," adding that "both activities are very important, working with the neighbors and working with agencies."
Quick cleanup
All day Tuesday, after getting permission from the Baytown Housing Authority to enter the property, the company cleaned — scrubbing oil splatter off houses, detailing cars and wiping down the playground. It wasn't until Tuesday evening that the TCEQ was told that the incident went off the plant's grounds. County officials didn't know until reading about it in the newspaper Wednesday.
Residents, who were told in a letter from the company delivered to their homes Tuesday morning that the appropriate agencies had been contacted, expressed shock Wednesday that authorities had not been informed initially.
"Oh, my god. I am really scared," said Patricia Robinson, 55, who has lived in Archia Courts for 40 years, and watched Wednesday as Exxon Mobil contractors continued to wash cars and dig up the complex's playground.
The excavation, according to the company, had nothing to do with the spill, but, rather, was to improve the playground, which was missing seats on swingsets and was too close to power lines.
"Exxon must be hiding something," Robinson said. "They are trying to get it cleaned up so fast."
The delay, according to state officials who arrived on scene Wednesday, resulted in little evidence being available to reconstruct what happened. Investigators as of Wednesday afternoon still were having trouble deciding whether to classify it as an air pollution event or an oil spill.
"When we got there today, everything was clean," said Indest. "They had more than 24 hours to do their work. There was nowhere ... to take a sample.
"Twenty-four hours is not good enough. We want it at one," he added, noting that the TCEQ often hears about pollution episodes from third parties.
"We are usually out there a lot sooner than the company ever lets us know," Indest said. In the case of Exxon Mobil, he said "there is enough people working there to notify many agencies and people at the same time."
Samples collected
County investigators, meanwhile, managed to collect two samples of the oily residue from cars, one from a plant and a single water sample. If the release was a gas, evidence would have been much harder to find, said Paul Newman, an air quality permit program manager for Harris County.
"Let's say this was a release of a gas and it migrated through the neighborhood," Newman explained. "You want to know what that was as quickly as possible, and certainly 24 hours later that emission is long gone."
State and local authorities also will be exploring whether the spill created a nuisance condition — infringing on the enjoyment or use of property. Even without a lot of samples, testimony from neighbors and Exxon Mobil's own analysis could be used to make that case.
The penalties for reporting late and creating a nuisance run between $2,500 and $10,000.
Neil Carman, air quality director for the Sierra Club, said the case showed a breakdown in the system. "If there is a potential for public health impacts, then there should be notice as soon as possible," Carman said.
dina.cappiello@chron.com
As Profits Soar, Companies Pay U.S. Less for Gas Rights.
By Edmund L. Andrews
Published: January 23, 2006
See article on New York Times' website
WASHINGTON, Jan. 22 - At a time when energy prices and industry profits are soaring, the federal government collected little more money last year than it did five years ago from the companies that extracted more than $60 billion in oil and gas from publicly owned lands and coastal waters.
If royalty payments in fiscal 2005 for natural gas had risen in step with market prices, the government would have received about $700 million more than it actually did, a three-month investigation by The New York Times has found.
But an often byzantine set of federal regulations, largely shaped and fiercely defended by the energy industry itself, allowed companies producing natural gas to provide the Interior Department with much lower sale prices - the crucial determinant for calculating government royalties - than they reported to their shareholders.
As a result, the nation's taxpayers, collectively, the biggest owner of American oil and gas reserves, have missed much of the recent energy bonanza.
The disparities in gas prices parallel those uncovered just five years ago in a wave of scandals involving royalty payments for oil. From 1998 to 2001, a dozen major companies, while admitting no wrongdoing, paid a total of $438 million to settle charges that they had fraudulently understated their sale prices for oil.
Since then, the government has tightened its rules for oil payments. But with natural gas, the Bush administration recently loosened the rules and eased its audits intended to uncover cheating.
Industry executives deny any wrongdoing, arguing that the disparities stem primarily from different rules for calculating the sale prices for paying royalties and the sale prices for informing shareholders.
"The price of gas downstream is always going to be higher because you have costs that have to be recouped for getting it to the customer," said Robert H. Davis, a spokesman for Exxon Mobil. "You have to process the gas. You have to transport it, and you have to sell it. There will always be a discrepancy there."
Companies that pump oil and gas on federal property are required to pay the government royalties, usually 12 percent to 16 percent of the value of what they sell.
Royalties for natural gas have climbed sharply in the last three years. But while prices nearly doubled from 2001 to 2005, the $5.15 billion in gas royalties for 2005 was less than the $5.35 billion in 2001. When oil and gas are combined, royalties were about $8 billion in 2005, almost the same as in 2001.
Because much of the information about specific transactions is kept secret, it remains unclear to what extent, if at all, the weakness in royalty payments stems from deliberate cheating or from issues with the rules themselves.
But one major producer, Burlington Resources, admitted to shareholders last year that it might have underpaid about $76 million in gas royalties in the 1990's. And in Alabama, a jury ruled in 2003 that Exxon had cheated on $63.6 million worth of royalties from gas wells in state-owned waters. The jury awarded $11.9 billion in punitive damages, which a judge later reduced to $3.5 billion. Exxon disputes the charges and is appealing the verdict.
The possible losses to taxpayers in gas could be even higher than the losses tied to the scandals over oil royalties. For one thing, natural gas production on federal land is worth twice as much as oil.
Moreover, the Interior Department has scaled back on full audits, pushed out a couple of its more aggressive auditors and been criticized by its own inspector general for the audits that it did pursue.
"We are talking about the same issues and in many cases the same players as before," said Danielle Brian, executive director of the Project on Government Oversight, a nonprofit watchdog group that exposed many of the oil royalty scandals.
"These companies had knowingly been cheating on oil for years, if not decades," Ms. Brian continued. "To ignore the likelihood that the same thing is happening on the gas side is absurd."
Johnnie M. Burton, director of the Interior Department's Minerals Management Service, said the disparities were mostly the result of deductions that the regulations let companies take, reducing the sale prices they report to the government.
But Ms. Burton said she had not known and could not explain why companies were reporting higher sale prices to their shareholders and to the Securities and Exchange Commission than to her office.
"I can't answer because I don't know," she said in an interview. "We don't look at S.E.C. filings. We don't have enough staff to do all of that. If we were to do that, then we would have to have more staff and more budget. You know, there is such a thing as budget constraint, and it's been real tough, let me tell you." The contrasts between what companies are telling the government and what they are telling shareholders is stark.
The Interior Department, using the numbers given by companies paying royalties, said the average sale price of natural gas on federal leases was $5.62 per thousand cubic feet in fiscal 2005, which ended Sept. 30.
By contrast, Exxon told shareholders that it received about $6.88 per thousand cubic feet in the nine months that ended Sept. 30. Chevron said its average price in that period was $6.49. Kerr-McGee, which suffered huge losses from hedging against a drop in prices, nonetheless said it still received an average price of $6.59.
"There's no reason why what the companies report to their shareholders should be higher than what they report" to the Minerals Management Service, said Lee Helfrich, a lawyer who has represented California in many battles with the industry over royalties. "The ultimate goals or mission of the S.E.C. and the M.M.S. are different, but the information reported to each should be the same."
In the scandals over oil royalties in the 1990's, government investigators, aided by industry whistle-blowers and investigation by the Project on Government Oversight, found that companies were using a host of tricks to understate their sale prices.
These included buy-sell agreements in which producers swapped oil with each other at artificially low prices and then resold it at higher prices. Companies also sold oil at below-market prices to their own affiliates, classified high-priced "sweet" oil as much cheaper "sour" oil and padded their deductions for transportation costs.
In the wake of the scandals, the outgoing Clinton administration pushed through tough new rules for valuing crude oil, which relied on comparing company reports with an index of spot market prices.
A Pro-Industry Approach
But the Bush administration did not close any loopholes for valuing natural gas. Indeed, in March 2005 it expanded the list of deductions and decided against valuing sales at spot-market prices when companies were selling to their own affiliates.
The industry-friendly stance was intentional. Mr. Bush and top White House officials also placed a top priority on promoting domestic energy production. Vice President Dick Cheney's energy task force called for giving lucrative new incentives to companies that drill in the Gulf of Mexico and other high-risk areas.
The Bush administration also took a much more relaxed approach to auditing and fraud prevention. In 2003, the Interior Department's inspector general declared that the auditing process was "ineffective" and "lacked accountability" and that many of the auditors were unqualified.
In one instance, inspectors discovered that auditors had lost the working papers for an important audit and tried to cover up their blunder by creating and back-dating false documents. Rather than punish anybody, the inspector general recounted, the minerals service gave the employee who produced the new documents a financial bonus for "creativity."
Administration officials said last week that they had addressed most of the criticisms and that the inspector general had since said its corrective actions were "sufficient."
The Interior Department also fired two of its most aggressive and successful auditors. One of them was Bobby L. Maxwell, a veteran auditor who had recovered hundreds of millions of dollars in underpayments over a 22-year career and received an award for meritorious service in 2003 from Interior Secretary Gale A. Norton.
Mr. Maxwell was fired in early 2005 after clashing with superiors over his belief that Kerr-McGee had shortchanged the government $12 million. Mr. Maxwell charged that he had been wrongfully fired, and the government paid him an undisclosed amount of money to settle out of court.
Mr. Maxwell is now pursuing Kerr-McGee, which has denied any guilt, with his own lawsuit under the False Claims Act, which allows private citizens who prove fraud to collect some of the money they help recover.
Patrick Etchart, a spokesman for the Minerals Management Service in Denver, said that Mr. Maxwell lost his job because of a reorganization and that he had declined an offer to move to a different city.
But lawmakers who wrestled with the government over previous royalty scandals are dubious.
"It's all gotten worse, not better," said Representative Carolyn B. Maloney, Democrat of New York, who led Congressional investigations into cheating on oil royalties in the 1990's. "They make the process so complicated that no one can really follow the money."
Ending Detailed Inspections
Perhaps the most striking example of sluggish auditing is the government's effort to collect back royalties from companies that blatantly ignored one of the government's basic rules.
Under current rules aimed at promoting energy production in deep waters, companies can produce large volumes of oil and gas without paying royalties at all. But the rules also require companies to start paying royalties if market prices climb above certain "threshold" levels.
As it happens, market prices have been above those levels since the 2003 fiscal year. But even though dozens of companies never bothered to start paying, Ms. Burton said earlier this month that the government had yet to demand repayment three months into the 2006 fiscal year.
"It's more complicated than you might think," said Lucy Querques Dennett , associate director of the Minerals Management Service in charge of the issue.
But enforcing the rules about price thresholds is easy compared with verifying the actual sale value of natural gas.
Over the last four years, the Bush administration has ordered its auditors to move away from detailed inspections in favor of a more cursory approach of looking for anomalies in company reports. If a company in Louisiana, say, reported prices that differed from those of other companies in the same region, it would attract closer scrutiny.
Mr. Etchart, the agency's spokesman, said that the number of full-scale audits had declined slightly over the past few years and that the budget for compliance had fallen.
But he said the government still took a "close look" at 71 percent of oil and gas production. "Our strategy would obviously be to focus on anomalies," he said, "but it is also to focus on large producing areas."
The agency's strategy has drawn protests, however, from many states, which are entitled to a share of federal royalties, and from some of the Interior Department's most aggressive auditors.
One of those auditors was Kevin Gambrell, director of the Federal Indian Minerals Office in Farmington, N.M. Mr. Gambrell fought with his superiors over many issues, one of which was their demand that he do fewer audits and simply monitor posted prices of companies in the same area.
"Where the M.M.S. approach falls short is that there are so many different types of deductions you can take in getting gas and oil to the market, and there are so many premiums and bonuses in the contracts," Mr. Gambrell said in a recent interview. "You have to take a detailed look at the contracts to know what's going on."
The Interior Department forced Mr. Gambrell out in 2003, charging that he had improperly destroyed office documents. Mr. Gambrell sued for wrongful termination, arguing that he had discarded only copies of documents. He also presented evidence that his office had recovered eight times as much money as offices that used the administration's preferred approach.
The government settled his case in 2004 by clearing him of any wrongdoing and paying him an undisclosed amount of money.
For practical purposes, the biggest cost to taxpayers may have less to do with cheating and fraud than with the government's inscrutable rules.
Consider the case of Burlington Resources, a Houston-based producer that ConocoPhillips acquired in December for $35.6 billion. Burlington paid $8.5 million in 2001 to settle charges of cheating related to its oil royalties. Last March, Burlington disclosed that it might also have underpaid gas royalties by about $76 million during the 1990's. It set aside $81 million to cover possible litigation costs.
Unlike others, Burlington executives provided information to The Times on the royalties it paid for natural gas and on the sale prices that it has reported to the Interior Department since 2002.
During those four years, Burlington said it paid $627 million in gas royalties and that its annual payment shot up from $89 million in 2002 to $233 million in 2005.
That surge in royalties does track closely with the rise in market prices. But Burlington's numbers also highlight the essential issue raised by many critics: the rules let companies understate the value of their gas sales by taking scores of deductions.
Those deductions include the cost of transportation, processing, brokerage fees, pipeline reservation fees and even certain "theoretical losses" for companies that own their own pipelines.
In 2001, Burlington reported an average price of $1.98 per thousand cubic feet to the government but an average sale price of $3.20 to its shareholders. In 2005, the company reported an average sale price of $5.75 to the government and $6.46 to shareholders.
Keeping Royalties Secret
James Bartlett, a spokesman for Burlington, said part of the discrepancy resulted from the fact that much of Burlington's production is in the Rocky Mountains, where natural gas fetches lower prices.
The federal government does not require companies to divulge the amount of royalties they pay or what they tell the government about sale prices. And unlike Burlington Resources, Exxon and most other major oil companies refused to disclose the information when asked.
"It's not required information," said Mr. Davis of Exxon, echoing responses from Chevron, Royal Dutch/Shell and other big producers. "We're not going to publish it."
