Moon of Alabama Brecht quote
August 17, 2007

Peak Oil vs. Peak Wealth

by Malooga
(lifted from a comment)

While I do believe that the concept of Peak Oil is real and will one day arrive, I see no evidence whatsoever that Peak Oil has arrived. The evidence is clear that fully 5% of world oil production is intentionally being kept off the market by the ongoing war in Iraq. The oil companies are in a win/win situation: oil off, prices high; oil laws signed, production rises, profits and control ensured.

It is pure bullshit that big oil was not in favor of invading Iraq. They are too powerful, and it would not have happened without their acquiescence; they are just too smart, and like all official secrets, they managed to keep it mum. It is like the same b.s. story of how US auto manufacturers REALLY want national health insurance to keep their costs competitive. There is simply no evidence that the big three have done any lobbying whatsoever for single payer universal coverage; it is just a cover-your-ass myth perpetuated to keep the dumb consumer thinking that the companies "care" about people. No, they don't. They would be happy to off-shore all production, and that is the way they are moving.

Back to Big Oil:

An additional 1% is kept off markets in Nigeria do to the kleptocracy not sharing with gulf locals. And what about the Falklands, whose huge reserves have yet to be tapped? What Big Oil (and the US government) wants is complete control of the amount of oil being put on the market at any time. Control of the "shortages" and the surpluses, so that the financial sharks can make money in the market both ways. At that level, it is all a rigged game.

Peak Oil is very much a function of social justice. There will be no freedom allowed in producer nations.

Peak Oil is also just another scam to squeeze the middle class. If it were a real crisis, there would be national mobilization for efficiency programs and subsidies. But the ruling elite do not want national mobilization about anything; they want a dumb, divided, easily controlled, populace -- which is what they strive to create. So with the Peak Oil excuse, the middle class gets squeezed still further about something they feel is a law of nature and they have no control of, the poor stay poor, and the rich continue to build bigger and bigger houses, and buy more and more oil consuming toys and trinkets.

Peak Oil is one of a number of myth/scams to move along the process of Peak Wealth Redistribution, made easier by fear.

What Peak Oil does in the US, as proven by experience in Germany, is create a Green Party/environmental movement of educated, well-off, middle class in hysterical opposition to the dumb, dirty, underclass and how they live, and in opposition to all social justice/income equality movements.

Peak Oil is very much a function of social justice. There will now be no freedom allowed in consumer nations.

I have seen this here where I live, where well-off, upper-middle class people are hysterically proposing draconian rules which will result in the complete social control of society, especially the poor and underclass. They refuse to look at the oil consumption curve, which continues to show that oil is consumed in inordinate amounts by the ultra-wealthy, and that conservation can best be accomplished by taxing the rich, rather than penalizing the poor. Yeah, so maybe the rich wouldn't be able to fly all over the world several times a month, boo hoo!

So yes, Peak Oil is a real phenomenon on a finite planet, and one day it will arrive. But it has not arrived yet, and right now it is being used as a form of social control. God is always in the details. Be very careful, folks, and always think deeply about the implications of all of your actions.

If we really want to conserve oil and are concerned about growth, how about a law like this: If you make over 100K you are only allowed one child,; if you make over 200K, no children. That would even out consumption a bit. You want children, you can't be wealthy, because wealthy people burn more than their share of oil.

The poor of the world, the favelas, are not using up all the world's oil; the rich are. The real problem is income distribution. We always pay lip service to "solving the problem of the poor," which really means some sort of media campaign so that the middle class can ignore the poor with a clear conscience. But the problem is the opposite. If we can solve the problem of the rich, we can live on a sustainable planet.

There simply is no such thing as a rich person who is environmentally conscious. Rich people consume more resources than the poor -- even those rich who live in Green houses. Solve the problem of the rich, who are destroying the world in every way possible, and you solve the problems of a sustainable life.

Don't worry about Peak Oil; worry about Peak Wealth. If we run out of oil, we can always burn the rich. Rich people's oil may not be of quite the quality of the whale oil used to power the last century, but it will do. It will do.

Posted by b on August 17, 2007 at 01:22 AM | Permalink



"There simply is no such thing as a rich person who is environmentally conscious." I fear you are starting to wander off towards the lunatic fringe.

We live in Germany: we count among the richest people in the world just for living here. Even a welfare recipient in Germany lives better than a lot of the developing world.

And even if we did not drive autos, just growing and transporting the food we eat consumes a disproportionate share of the world's resources.

Oil is the preferred source of energy for corporate capitalists becasue it is a lot more easily controlled than other renewable sources, which is why we have been clinging to it even though we have been aware of the problems it causes for over a half a century.

Posted by: ralphieboy | Aug 17, 2007 3:27:07 AM | 1

I think part of the gambit of the "elites" is just to keep us all guessing--How much oil is there REALLY? What is happening to the climate?? Uh-oh the great unwashed are finding out some facts-- Quick, destroy their libraries!.!...(By the way Bushco closed out a bunch of environmental libraries last year...

Anyone remember the Carter years and the oil crisis, same shit, same players...

Posted by: Uncle $cam | Aug 17, 2007 4:16:33 AM | 2

It is very difficult given the evidence to believe that man can fix or modify reality. Today is announced that three rescuers died during the Utah mine rescue operation. Do we remember the Mayaguez incident where more American personnel died than the number that had to be rescued and so on? To be conscious of something does not mean that there is a solution since we lack the necessary perspective that might enable us to modify reality, and we cannot modify reality because we are part of it. When the matter is a concrete one, let's say fighting a given infection it is possible to develop an antibiotic that will eliminate it and during that elimination it will be discovered that some untoward effects go together with the cure. That is a concrete problem but to want to correct society is an altogether different problem, actually is not a problem at all because it has no solution. All the solutions devised for abstract problems end in murder and devastation. I have finally come to realize that only specific concrete problems can be solved and the solution drawbacks accepted. To want to fix the world is not a problem it is merely a longing, expressed verbally, for a Golden Age, a Paradise.

Posted by: jlcg | Aug 17, 2007 4:20:13 AM | 3


The piece is by Malooga. I thought it to be worth some discussion and did the copy and paste. That doesn't imply that I agree with its statements or conclusions, especially not with the last satirical sentence.

As for Malooga's quote There simply is no such thing as a rich person who is environmentally conscious.

Seen in a general global perspective, I do believe this to be true. Locally some may be conscious, but consequential? There is no environment friendly two ton heavy vehicle for personal transport. Simple physics: less weight = less energy needed to move. But look what's driving on the roads.

Energy is taxed and sold on a degressive price scale. Those who use more get it cheaper per unit than those who use less. (See industrial electricity prices vs. household prices.) Additionally a big part of the costs of energy use, environmental and political/war issues, are socialized. The poor have to pay for them, even when they use less energy.

Posted by: b | Aug 17, 2007 6:44:01 AM | 4

We have already begun to reach the stage where we are forced to apply technological innovation towards fixing the other problems that our technology has created instead of using them to make progress.

Posted by: ralphieboy | Aug 17, 2007 6:50:48 AM | 5

Malooga has written an excellent essay here.

But why the emphasis in it, and in the follow on comments, upon the rich?

If the world's human population is represented as one hundred human beings, proportionally, you will instantly see that one of them has virtually ALL the money, and assets, and virtually all economic and political power.

He's the rich one percent. The money master.

And it is instantly apparent that this lucky creature enjoys his position not by Divine Grace, nor membership in the master race, nor by native smarts or brute strength, or breeding.

He enjoys his exquisite status because he has a capital-extraction system behind him that taxes the labor of the other 99 humans. He owns a cash cow, and through it the wealth of the 99 flows consistently and persistently to him.

If those 99 lesser creatures were to simply sit down upon their monied master, that would be the end of him. If they held him down and went through his pockets, that would end his reign. If they "nationalized" his factories and banks and mines, they would all eat better and see the dentist and doctor on a maintenance basis, instead of meeting with medical care only when they are carried in on death's door.

The wonder is that the 99 are alienated from their own lives, divided off from the surplus that their labor and creativity produces, and set one against the other in a competition to sit closer to their monied master, or to talk like him, dress like him, recite his talking points and philosophy, and protect him at the cost of their own lives.

They go to war for him, at his sole bidding, in exchange for brightly colored cloth ribbons, just as Napoleon described.

Let's discuss the wonder of the ninety-nine.

The wonder is that this vast, sleepy herd is composed of full blown human beings.

I would prefer to discuss and discover the potion that brings about such idiotic complacency among the 99, rather than discuss that one rich fellow.

He is a nobody. His money is somebody, but then -- that money is somebody else's.

Posted by: Antifa | Aug 17, 2007 10:25:21 AM | 6

Two more thoughts on this:

- Mankind will have moved to other forms of energy, long before the oil wells run dry.

- If one "kills the rich", there will still be some richer than others. There has never been a society (to my knowledge) that had achieved absolut material equality.

The aim should therefore be to achieve a more mosted degree of difference between rich and poor. At best and without the least resistance by letting rich grow richer only very slowly while making the poor richer fast.

Posted by: b | Aug 17, 2007 11:08:31 AM | 7

I agree with Malooga that the (big) oil companies were perhaps in part for the Iraq invasion. Some of them are very close to the US Gvmt, etc. That they were all against it is a myth. However, let us not forget that oil cos. want fundamentally one thing, and that is to do business. One might add, therefore they want control. But of a kind only; they want contracts and arrangements in a stable world. How exactly the world around it is organized is not something they are competent to take on.

They need stability above all - the lead times are long - 15, 20 years for certain projects. They need trustworthy partners, etc. For ex. the iraq gvmt. banned all public services unions, including the oil workers union, on the basis of a 1987 Saddam law. Would oil companies have done this? They live on the ground meaning where they are working, etc. A rational mind geared to profit would allow such a Union, to have a partner with whom to negotiate, and peace in the workplace, and in the territory around it. The banning was the work of the US and Maliki - another mad irrational (or secretely murderous) move, such as disbanding, forbidding, the Baath, sending the army home, etc. - all in the same line.

Now, one might argue that sanctions had the aim of keeping Iraq oil in the ground, pending decisions about what else to do. Those decisions were taken, and it is now 4 some years on and ‘US’ or ‘major, multinational’ oil Cos. still have no access to Iraqi oil. This was not hard to predict, and I suppose many did predict it. (Say - too tired to hunt up refs.) Oil Cos. are lower on the pole than the US Gvmt. and they do not have the power to influence world events in the way Mallooga hints at imho.. Of course they want profit - of course they will screw over workers if they can get away with it - but to make a profit you have to be able to act. Seeing the Oil cos. as the evil manipulators and the secret hand is a kind of leftie anti-corp projection.

To my mind, the most dismaying aspect of it is that the comforting slogan (oh those evil corps!) obscures the real issues with a fantasy, namely that if one put a halt to the obscene profits they make (err only from time to time...), everything would be fine. In short, it is corporate greed that is the problem, not geology or the laws of thermodynamics, or for that matter, capitalism, democracy, which is usually not attacked. (M makes ref to this dimension, I was speaking generally here.)

Posted by: Tangerine | Aug 17, 2007 12:01:02 PM | 8

maybe you should go eat some more tangerines

Posted by: annie | Aug 17, 2007 12:30:29 PM | 9

Although I am a big fan of the free market as a preferable tool to balance supply and demand as well as directing the flow of capital to where it does the most benefit, it can grow to be truly perverted when it comes to distributing natural resources.

Firstly, because of the supply/demand issue: a rare commodity can be even more profitable than one that is readily available. And because of the ownership issue. I am still one of those idealists who believes that the Earth's resources belong to all of humanity.

Those who take the risk and make the effort to extract and utilize them should be justly rewarded, but not those who simply sit on top of them and/or hoard them to keep prices up.

And if we had a truly "free" market, then oil would be just considered one source of energy among others and given no preferential treatment. But since it is treated as a matter of national security, oil companies are allowed to enjoy all the benefits of the free market while also enjoying indirect government subsidies in the form of military protection for their oil sources.

And when Cheney and his oil company cronies meet to discuss national energy policies, these meetings are held in secret - for security reasons, of course. But in fact, it is just another form of cartel meeting to divvy up market shares and assign potential profits.

Posted by: ralphieboy | Aug 17, 2007 12:37:34 PM | 10

I think that the law against Iraqi oil unions stems from a contractor preference for importing south asian labor. It seems insane for the government to undercut employment in Iraq by aiding contractors in their desire to avoid hiring Iraqis, unless you rethink the role of government.

As far as oil co's not wanting this or that, as someone commented many threads ago, they don't come right out and say it, they fund think tanks like AEI and their brethren to say it. Policy is produced there for hire, drafted into law by staffers, and pork-bribed/arm-twisted into place by the congressional leadership and party headquarters. That is the state of the republic. SOrry for stating the obvious

Posted by: boxcar mike | Aug 17, 2007 12:45:08 PM | 11

I would argue that since oil companies are allowed to make obscene profits and cause a great deal of mischief by hindering development of alternative energy sources all the while receiving protection and security from their customers that the logical conclusion is to nationalize them all.

the present situation is far too lopsided. all reward, no is that free capitalism?

Posted by: dan of steele | Aug 17, 2007 12:46:57 PM | 12

Peak oil is reality, though it is impossible at the moment to date it, and the precise date itself is not germane.

Gradually, less and less easy to harvest, therefore cheap, high energy density fuel will be available to the rich west. Maybe 2.5% less a year, or 5 or more, from now on, and that is optimistic.

None of the replacements touted by whomever can compete in any way. Ppl burble about electric cars, but electricity, in the US, as an example, is made from nat gas and coal (mainly) .. Ethanol from corn is pure fantasy. That spells recession or depression, in economic terms. International competition also looms: why should Russia or Saudi export when they need, or can use, their own energy?

There are big problems with wealth distribution. For sure. (Politics.) But peak wealth is not a meaningful concept unless it is laid out. Feudal lords in Europe were good at energy harnessing, mostly by dominating ppl. They did very well for a time. The US used its geological energy capital (coupled to agri, which is run by oil/gas/water extraction by machines, all those tractors...) and investment in WMD, to dominate, oppress, control, and grab more resources.

That investment is now being put to use. The endgame is being played out.

Posted by: Tangerine | Aug 17, 2007 1:04:32 PM | 13


of your 99 followers, how many are truly comfortable being followers? My guess is the vast majority of them simply don't want to be bothered thinking about stuff and having to make decisions which could very well turn out to be bad ones. It is so much easier to do what you are told and ask an authority figure when there is any doubt.

of those who are not content to be followers, they are faced with some fairly daunting tasks. They have to have a better deal than the 1 rich leader or at least make it seem to the other 51% that they do, and they have to work without support systems in the form of propaganda (corporate media), protection (legal system and police force), resources (banks and other financial systems) and social networks (old money and good ole boy network).

like the strays that wander off from a herd of cows, they are easily picked off by predators.

so what do you do if you can't be the leader of the pack? shut up and color?

there is always an alpha in the group, perhaps the best we can hope for is to have a fair and compassionate one.

Posted by: dan of steele | Aug 17, 2007 1:05:30 PM | 14

maybe you should go eat some more tangerines

American democrats or soft leftist loonies, don’t generally bash Amgen, Wells Fargo, or Caterpillar.

(They own shares, or their pension fund does, or their rich auntie does, or they think that is too coool, more than 5% return, etc.)

Chrysler is dissed for inefficiency, now outsourcing (Chery), but without any examination of pension funds, other problems (sure they are idiots) etc. Diebold - huge - is damned, but is is very profitable, so OK. Some leftist noise, right. Too awful, they might control elections - that is right they **do**, but they do it for all those on top of the heap who know where there money is to come from. So everyone shuts up or postures.

What about Ecolab, that is just one example from Forbes?>forbes

Leftists LOVE capitalism, and they LOVE to waste energy on denouncing one or the other company, industry, like oil companies. It gets them some votes. Everyone knows it is pathetic noise, pandering to the loosers, to give them an outlet.

This contradiction is the reason they have lost power - forever.

They can get crumbs, in money, position, because the voters are still there.

(the same applies all over the West, this is not bashing the US)

Posted by: Tangerine | Aug 17, 2007 1:57:52 PM | 15

For b at #7, who said in part, "There has never been a society (to my knowledge) that had achieved absolut material equality."

That remark brings to mind the more "primitive" cultures like American Indian tribes, some African and Brazilian tribes, and the aborigines of Australia. Sure some of them may gift the chief with the best stuff but all are into survival together.

It has always impressed me that these small tribes have not been corrupted by money. They are generally small enough communities that they don't need money.

Here is a story from my Coast Guard years in the late 60s.

I was a sailor on CG's only freighter in the Pacific, the mission of which was to service isolated stations (we operated LORAN towers around the world for navigation aid before satellites took over).

The ship delivered some new medical equipment to a tiny island in the Pulap archepelago for the Peace Corps. Small lagoon & palm trees just like in the cartoons. Population was maybe 50 to 100 people, who had almost NO contact with or products from the outside world. They carved their own boats and paddles, wore just a little bit of clothing - that's it. The Chief and a select crew of sailors would take the "big boat" 150 miles to the main island once a year or so for essentials. They navigated by the stars wind and waves.

A few of our Coast Guard crew traded govt issue ballpoint pens for hand-carved paddles until the Exec forbade it as soon as he noticed. These natives were absolutely innocent.

By the way you may have heard that Henry Kissinger, a few years after my experience in the Pacific, declared that all Pacific islanders in US administered territories would heretofore be fed and clothed by the govt, to keep them fat, happy and silent.

Compare this tiny innocent island of people with the labor forces around us every day - who is happier?

I guess the point of this story is that we really don't NEED to deplete resources in order to live right. For a much more detailed long discussion of this topic go to Rigorous Intuition, the blog section and read comments by iridescent cuttlefish. He reads a lot and he knows his stuff.

Posted by: rapt | Aug 17, 2007 2:05:04 PM | 16

I am for the polar opposite of nationalizing oil companies: let them be treated to a good dose of their vaunted Free Market: if they need defense services to help protect their oilfields & pipelines abroad, let them hire Blackwater or some other rent-a-goon security company.

Let them pay to clean up their oil spills, and to treat the emphysema, asthma and other illnesses caused or aggravated by burning their products. And if they can't make a profit, then let them be taken over by other companies that can.

Posted by: ralphieboy | Aug 17, 2007 2:51:31 PM | 17

tangerine, excuse my morning brevity.

However, let us not forget that oil cos. want fundamentally one thing, and that is to do business. One might add, therefore they want control. But of a kind only; they want contracts and arrangements in a stable world.

only if the stable world leaves them in control, otherwise they are quite comfortable w/chaos and war which is considered just the cost of 'doing business'.

doing business is different than just 'making money'. some of these control freaks are in the business of war/oil/mercenaries because it all feeds off itself and extracts money from the masses in a state sanctioned way. they make business by creating instability. how are they going to get the US army to provide security conditions for their business without creating instability? obviously we wouldn't be in these messes in the middle east or africa if it weren't for the way they 'do business'. there is plenty of money to go around but they must dominate the oil business because they feed from the same troph as the war machine who depends on the oil to be the superpower and it just seems natural and simpler if the oil guys run the gov! it is a perpetuating cycle of destruction that feeds off who? us!

so no, i don't buy it that they just want stability and contracts. sure, the kind of stability a master gets from his slaves, which goes against human instinct. as long as people want their independence there will always be friction and the corps accept that as a given, so they make war, because they can. obviously it doesn't have to be that way. look at chavez. there should be restrictions on natural resources being privatized. especially that which is used by the state.

the only way to really hamper the US war machine is to restrict its ability to purchase energy. and don't they know it. they go hand in hand. until we have a thorough weapons system not dependent on oil, it will remain our defense priority, and don't they know it.

Posted by: annie | Aug 17, 2007 10:21:24 PM | 18

if they need defense services to help protect their oilfields & pipelines abroad, let them hire Blackwater or some other rent-a-goon security company.

are you kidding me! the onlt reason blackwater and mercenaries are plausible if, and only if, they are coordinated in such a way a having state sanctioned immuntiy. therefore the oil companies have to operate in conjunction w/the state. they are not held accountable. this is the reason you don't see unions in iraq. they don't want to be hamstrung by little things like regulations for workers. can you imagine if they had to hire iraqi security? the whole war will be privatized once those contracts are signed. bring home 'our soldiers' and double up the privatized armies in the guise of oil employees.

the only way mercenaries for oil companies could work is if oil companies were nationalized and the workers 9security) were bound by the same rules and rgulations as all workers, safety, pensions, penalties for human rights violations etc. this concept of having private militias in other countries who citizens can be considered other/lessor than is a recipe for disaster.

Posted by: annie | Aug 17, 2007 10:29:26 PM | 19

two things that i read recently pertaining to this topic

first, from the book global rift: the third world comes of age, by l.s. stavrianos, published in 1981

Since U.S. oil imports and the resulting trade deficits are important factors in these global dysfunctions, a simple way out is suggested by two studies completed in 1981 of the American energy situation. The first was conducted for the U.S. Department of Energy by the Solar Research Institute in Golden, Colorado. The study concluded that heavy investments to promote energy efficiency and the use of renewable resources could reduce American energy consumption 25 percent by the end of the century, and thus eliminate the need for any oil imports. The second study, by the Energy Productivity Center of the Carnegie Mellon University in Pittsburgh, reached the same conclusion. Energy conservation measures could reduce expenditures for foreign oil from about $80 billion in 1980 to an average of $15 billion annually in the 1990s to zero expenditures after the year 2000.

Despite the findings of these two reports, the Department of Energy announced in March 1981 that it was preparing legislation to eliminate or drastically curtail all programs to encourage energy conservation and to develop renewable fuel sources and other alternatives to oil. This list of federal programs affected by the proposed legislation includes: solar energy research and development, wind energy and ocean thermal development, research on electric vehicles and methane-fueled transport, residential energy efficiency, energy conservation for commercial buildings, consumer education on energy conservation, small-scale hydroelectric projects and energy audits by public utilities.

If the proposed Energy Department legislation is passed and implemented, the consequences are self-evident: continued unprecedented profits for the multinational oil companies currently supplying U.S. oil needs; continued unprecedented profits for the five multinational grain corporations now controlling 80 percent of the world's grain trade; and continued U.S. dependence on foreign oil, especially from the Persian Gulf region.

Little imagination is needed to extend this scenario. ... In January 1980 a CIA analyst called in two reporters from Newsweek and the Washington Star to confirm that the agency had warned the Carter administration that the survival of the Saudi regime "could not be assured beyond the next two years."

Should the CIA warning prove justified, Washington doubtless would use its naval units in surrounding waters and bases, and dispatch its Rapid Deployment Forces now being strengthened for precisely such contingencies. ... Two army officers who worked in the White House, Major Daniel W. Christman and Major Wesley K. Clark, concluded in a study entitled "Foreign Energy Sources and Military Power," that "U.S. military forces will be ineffective in coercing petroleum-producing states to respond to America's wishes." Instead, the outcome could be the disruption of oil operations in the Persian Gulf, with repurcussions far surpassing those of Vietnam... [pp. 813-14]

Little imagination is needed to extend this scenario. if he only knew...

those responsible for reversing so many of the efforts from the 1970s to address energy conservation on a national scale are truely criminals.

the second excerpt has to do w/ tangerine's under-informed opinion above that "Oil Cos. are lower on the pole than the US Gvmt. and they do not have the power to influence world events in the way Mallooga hints at," and it comes from peter dale scott's valuable book the road to 911: wealth, empire, and the future of america, which is just being published.

Domination of the public state by private wealth is not a novelty in America... The novelty since World War II, however, lies in the secret growth and articulation of this top-down power within government. In particular, the Office of Policy Coordination (OPC), a group hidden from the public eye, was created in June 1948 and dominated at first by a small ex-Office of Special Services (OSS) elite from Wall Street. Wall Street's secret intrusion of its views and personnel into American covert policy justifies our speaking of an American "overworld" -- that realm of wealthy or privileged society that, although not formally authorized or institutionalized, is the scene of successful influence of government by private power. [p. 2]
In using the term "overworld," we must be careful not to reify it or attribute to it a unity and coherence it does not possess. It is a term of convenience to indicate, as least initially, a somewhat amorphous realm of sociopolitical change on which we should focus attention. The overworld is emphatically less cohesive than a class... Ultimately its much discussed institutions, like the Council on Foreign Relations (CFR) and the Trilateral Commission, are more significant as symptoms and evidence rather than as sources of overworld power.

The overworld was clearly centered in Wall Street in the 1940s and CIA was primarily designed there. With the postwar shifts of U.S. demographics and economic structure southward and westward, the overworld has shifted, becoming less defined by geography than by the interrelated functions of the petroleum-industrial-financial complex. [pp. 5-6]
[jump ahead to the 1950s]
Soon what Eisenhower would label the "military-industrial complex" was asserting itself through new lobbying groups, notable the American Security Council (ASC), founded in 1955. The ASC united old-wealth oil and military corporations with new-wealth businesses in the South and West, some of which incorporated investments from organized crime. [p. 18]
Violent U.S.-supported overthrows of democratically elected leaders in the 1960s -- such as those in Brazil, Ghana, and Indonesia -- were followed by a radical increase of overseas U.S. direct and indirect ivestment in these same countries, particularly in fossil fuels. This was relected in changes in the American overworld (now less dominated by the Europe-oriented Council on Foreign Relations) and in the deep state. The CFR became more and more allied with the traditionally powerful petroleum lobby, once primarily domestic but now increasingly global in its concerns. Especially before the withdrawal after 1967 of the British Navy from the Indian Ocean, U.S. strategy in the Middle East was dominated by CIA and international oil players, rather than by the Pentagon. Their policies were in the main pro-Arab and above all pro-Saudi, with the oil companies acquiescing in and even subsidizing the Saudi policy of expanding influence of its extremist and anti-Western Wahhabi sect throughout the Muslim world.

The oil industry is the largest, richest, and most powerful lobby in the world. But the power in Washington of the pro-Arab oil lobby (which journalist Ovid Demaris once characterized as "in itself a subgovernment, with roots planted deep in the soil of real goverment") was increasingly matched by the legislative lobbying of the American Israeli Public Affairs Committee (AIPAC). Today, U.S. policies on the Middle East, particularly with respect to Iraq and Iran, reflect a consensus of the expansionist agendas of both lobbies. [p. 19]
[on military strategy for full-spectrum dominance of the globe to open & protect more markets for u.s. investments]
The same sense of mission as protecting investment can be seen in an article from the Foreign Military Studies Office of Fort Leavenworth, Kansas, which was published three months before the 2001 World Trade Center attacks: "The Caspian Sea appears to be sitting on yet another sea -- a sea of hydrocarbons. ... The presence of these oil reserves and the possibility of their export raises [sic] new strategic concerns for the United States and other Western industrial powers. As oil companies build oil pipelines from the Caucasus and Central Asia to supply Japan and the West, these strategic concerns gain military implications."

U.S. oil companies had worked actively to ensure this military interest. Since 1995, they had been united in a private foreign oil companies group to lobby in Washington for an active U.S. policy to promote their interests in the Caspian basin. Their meeting with NSC energy expert Sheila Heslin in the summer of 1995 was followed shortly by the creation of an interagency govenmental committee to formulate U.S. policy toward the Caspian. Heslin told Congress in 1997 that U.S. policy in Central Asia was "to in essence break Russia's monopoly control over the transportation of oil [and gas] from that region, and frankly, to promote Western energy security through diversification of supply." A former CIA officer later complained about Heslin's subservience to the oil lobby in the Clinton administration. That oil company influence did not diminish with the election, financed in large part by oil companies, of President George W. Bush (formerly a Saudi-financed oilman) and Vice President Dick Cheney (formerly CEO of Halliburton and board member of the U.S.-Azerbaijan Chamber of Commerce.) [pp. 20-1]

we could make a list of world events influenced by the big oil interests someday. i bet many people would be surprised.

Posted by: b real | Aug 18, 2007 12:05:04 AM | 20

thank you b real

Posted by: annie | Aug 18, 2007 1:00:31 AM | 21

Sounds like the Three Indian Oil Fakirs Parable here at MoA.

Bushco, that is, private investors like Carlyle Group and Cerberus, saw Iraq as a way to bump their $12/bbl oil stocks to $75/bbl, and at the same time, sell $30B worth of arms to the Israeli's, who resell them to the Saudi's, who gift the Repug's baaksheesh in time for the 2008 elections. Duhh!

There is a side story. The oil companies were being forced to develop low sulfur diesel blends, and the only way to pay for this capital investment, was to gift them that $75/bbl oil.
Still, refinery capital investment today is historically low, which goes to another side story, the incredible consolidation monopoly that $75/bbl quadupled-profit-margin allowed Big Oil.

Bush Sr took $12/bbl oil up to $45. Bush Jr took $15/bbl oil clear up to $75. Clearly Bush Sr was a wimp compared to Jr, yet he was head of the CIA, so what does that tell you about the strings Jr is able to pull today, and why we shiver....

Which goes back to the Three Fakirs, and puts the kabosh on all that Peak Oil bullshit, just Gold Bugs in Black Satin. Every point they pump-and-dump is a point in their pockets.

Posted by: Peris Troika | Aug 18, 2007 1:22:52 AM | 22

OK annie I can roughly agree with what you say at 18 - I was perhaps being too soft on the oil cos, or addressing just one aspect. The attitude ‘it is all the fault of the oil cos’ sometimes gets my back up..for being too simplistic.. (I’m not saying Malooga said that explicitly.) Then I go on to relate everything to capitalism! Argh!

So lets flesh it out a bit more. One effect of the oil.cos actions has been to kill off the competition, alternative forms of energy. That is really nefarious. (I see that is mentioned in a subsequent post.) With the recent exception of ethanol and bits of burble about ‘bio fuels’ - because they know these forms can never compete; they are just serving their image, and selling their product to farmers as before. Even on this point, however, one might argue that their dominance is in part simply due to the efficiency of the product they sell and the capitalist system. Second, as Uncle Scam points out, they have lied. They have lied thoroughly and consistently, and continue to do so today, about the availability of their product, or peak oil. They publish numbers, charts, position papers, give speeches, etc. in cahoots with some of the big energy agencies - lies in the form of obfuscations, lack of clarity and comprehensibility, cherry picking, dubious categorizations and calculations, and so on. In this they have world wide support - other oil. cos, Gvmts. and organisations do the same (OPEC, etc.) Peak oil is not a plot against anyone, it is a (now badly covered up) dirty secret.

Posted by: Tangerine | Aug 18, 2007 6:51:25 AM | 23

michael klare: Entering the Tough Oil Era: The New Energy Pessimism

Just to satisfy a demand for an extra 10 million or so barrels per day between now and 2012, two million barrels per day in new oil would have to be added to global stocks yearly. But even this calculation is misleading, as Eagles of the IEA made clear. In fact, the world would initially need "more than 3 million barrels per day of new oil each year [just] to offset the falling production in the mature fields outside of OPEC" -- and that's before you even get near that additional two million barrels.

In other words, what's actually needed is five million barrels of new oil each year, a truly daunting challenge since almost all of this oil will have to be found in Iran, Iraq, Kuwait, Saudi Arabia, Algeria, Angola, Libya, Nigeria, Venezuela, and one or two other countries. These are not places that exactly inspire investor confidence of a sort that could attract the many billions of dollars needed to ramp up production enough to satisfy global requirements.

Read between the lines and one quickly perceives a worst-case scenario in which the necessary investment is not forthcoming; OPEC production does not grow by five million barrels per day year after year; ethanol and other substitute-fuel production, along with alternate fuels of various sorts, do not grow fast enough to fill the gap; and, in the not-too-distant future, a substantial shortage of oil leads to a global economic meltdown.

just might have to break into that premium grade vivoleum :)

Posted by: b real | Aug 18, 2007 11:15:49 PM | 24


Blackwater was not such a good idea - they are too closely connected to the government. Let the oil companies hold their own draft: anyone driving a Humvee would be liable to be called up for a year's tour of duty guarding his source of supply.

And these tours of duty could be extended if the oil companies issue a "stop-loss" order.

And being private enterprise, the draftees themselves would have to ante up for the vehicle and body armor, not to mention the weapons, although the latter are easy enough to pick up in Iraq for a bargain price...

Posted by: ralphieboy | Aug 19, 2007 6:23:53 AM | 25

so ralphieboy, you kind of like the idea of robber barons with private militias? and why is this better than having a resource as important as air or water under public supervision and control?

what other examples of this kind of thing do you see in the real world right now?

again, I am having a hard time following your logic on this.

Posted by: dan of steele | Aug 19, 2007 9:22:12 AM | 26

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