THE Iraqi Oil Thread pt 2 (merged)

[Graeme]

Who Will Get the Oil?

Iraq's postwar oil bonanza remains a mirage. The country has the second- or third-largest reserves in the world, making petroleum the heart and vast bulk of its economy. Thus in March 2003 did Paul Wolfowitz assure Congress that Iraq would "finance its own reconstruction, and relatively soon." American planners predicted that Iraq's oil production would triple to a feverish 6 million barrels per day by 2010.

thenation

[AirlinePilot]

I honestly don't see any reason why it won't be like all the other oil produced. It will go for sale on the world market. Why does everyone automatically assume the US will take it? As to 6 mbpd? I'll believe it when I see it.

[killJOY]

Why does everyone automatically assume the US will take it?

'zackly. Which is the irony: the bushites don't even represent "us" the people. they represent big-o business. o they stand to profit, o.

[Bleep]

391 reasons it's not at 6 Mbpd now.

[I_Like_Plants]

Ultimately, does the American Empire get it? Or does China collapse the dollar and move in after we've built the bases, use them themselves (and probably run Iraq ruthlessly, as in, spit on the sidewalk = death) and they get the oil. Or does Russia, that much closer you know, move in and hold China off?

It's exactly like the scene in Mad Max with the different groups circling the tank of fuel, and the viewer watches wondering who will get it....

[Pfish]

phffffft.....Americans. Next question.

[rkdennis]

The world scene will change dramatically when the demand for oil exceed's the earth's supply of oil, and in all probably, we are at or very near this point and it will only become worse as oil is finite commodity. When it becomes clearly evident to more people on the planet that their way of life is being altered economically (think decreased standard of living) due to the high cost of oil, they will demand action by their respective government's.
This is the problem that we face in the US, and the problem is compounded by the sophomoric, infantile, and inept foreign policy of the Bush Administration. America will in all probability not win at this game. No doubt, the US is the world's paramount military power, however, to assume that the US is omnipotent, will be a fatal flaw in thinking. To think that the US has the ability to forcefully control the Mid East oil is delusional. That was the thinking in Vietnam, but with all of its money, high tech military equipment, and 500+K men it was driven out by a third world country by people running around in pajamas and slipper's who were willing to accept 10 to 1 kill ratios. The US certainly is not "winning" in Iraq. The US military is strained with only 140 K troops and would need several hundred thousand to begin to think that they could control that country. You can bet that countries such as China, Russia will not sit by and watch the US take control of Mid East oil. Also, the indigenous inhabitants of the oil producers will not be idle. If they can't have it, you can bet that they will be capable of causing enough damage so the US can't have it either.

[Twilight]

At the moment, with oil being traded freely around the world, it doesn't matter who buys it in the first instance. What is more important is in whose banks the money ends up, and who has their hands on the chokepoints. Obviously it is in the West's interests to make sure the revenues are invested in its companies and it continues to exercise control over the transportation logistics.

Should this balance be upset, the result is self-evident, the oil gets stranded and no-one actually gets it. Although that won't stop a lot of people from trying.

[WildRose]

Regarding huge Iraqi oil reserves, Greg Palast suggests that's the case in his 2006 book, "Armed Madhouse". Also, I heard today on CNN on Wolf Blitzer's Sunday show that Iraq's reserves are second only to Saudi Arabia, though I don't remember whether it was Wolf or one of his guests that said it.

This is what I've suspected for a while, and it makes sense when you think about the US occupation of Iraq and how important it is that it's "successful".

[dissident]

Sounds like the stream of BS from Saudi Arabia. Iraq's oil fields are old and just like in Saudi Arabia they don't find a new one every time they sink a test well. I have also read somewhere that Saddam's regime managed to damage some of the oil fields by over-production. But I suppose that all it takes is for Cheney to buy the BS.

[TorrKing]

Sounds like the stream of BS from Saudi Arabia. Iraq's oil fields are old and just like in Saudi Arabia they don't find a new one every time they sink a test well. I have also read somewhere that Saddam's regime managed to damage some of the oil fields by over-production. But I suppose that all it takes is for Cheney to buy the BS.

I thought Cheney usually fabricated the BS...

[pup55]

Personally, I think it's an utter miracle that they are able to export 1.6 million barrels of anything out of that madhouse, much less a flammable substance.

At or about 1979, when we were friendly with Saddam and we were using them to counteract Iran, they produced 3 mbpd, about twice what they are doing now, by all reports.

As of 1985 they claimed 65 gb reserves. This was during the 10-year long war with Iran. Since then there was the 1991 trashing of the oil fields durng GW-one, the ten-year long "oil for food" program and sanctions, which led them to do practically no maintenance on their oil infrastructure, and since 2003, well, we all know what has happened.

If the BP Review data is right, they pumped out a total of 12 gb of oil since 1985.

They claim on paper to have this 115 gb of reserves, so the first red flag should be to figure out how they managed to come up with essentially doubling their reserves despite all of the disasters that have gone on in the last 20 years.

Secondly, you have to ask the question, even if Iraq did have the reserves, what investment in security would be required to keep the friendly citizens of Iraq from suicide bombing the production just to spite the US. As far as I can tell, it's taking about $300 billion per year for us to keep our military over there, and that has resulted in the 1.6 mbpd production rate, so I suppose that comes to about $513 per barrel, if my spreadsheet is right, so who (besides GWB) is going to be willing to pay twice this much to get production back up to 3 mbpd, even if they can?

So you can do several scenarios:

1. We make the security investment, and can start pumping the oil at 3 mbpd (1 gb per year) ($500 per barrel) and then find out the reserves are only 53 gb per year (65 minus 12), at which point they have 17 years of oil left. The net improvement to global capacity is 1.4 mbpd, which is about what the US growth rate is. How long can the taxpayers afford to do this?

2. We keep going the way we are (unsustainable), the oil continues to trickle out of there, they actually do have 115 gb of reserves, but we cannot get it out. Stable production for 60 years or so, but just a trickle. no one (apparently) is willing to back off of the current "investment" we are making in the region, so we continue to pay this amount per barrel indefinitely.

3. The Islamic Messiah is comes down and calms down all of the violence, we are able to pump 3 mbpd (1 gb per year), the reserves are what they say they are, and the reserves last 100 years but the rest of the world is a smoking ruin because even that is not enough to take care of the depletion of current fields elsewhere.

4. Same thing as (3) happens but somebody invests the $300b per year in reconstruction to rebuild their oil industry. Maybe they get up to 10 mbpd, which is what Saudi is capable of producting, at which point they are out of business in somewhere between 4 and 30 years depending on how truthful they were on the reserves.

Data source: 2006 BP Review

So, even the most wildly optimistic, messiah scenario says that even at full production, Iraq will not be able to give any relief to the real problem for more than a few years, and even this will be at the expense of at least $30 per barrel of oil, and maybe a lot more than that.

So the whole thing seems like a really terrible business proposition, any way you look at it.

[Tanada]

IHS news

It took more than a year of research to develop the Iraq Atlas using IHS software and a number of IHS and Iraqi geological and petroleum engineers with an average of more than 30 years of regional expertise in the Iraq exploration and production sector. The Iraq Atlas provides insight on investment issues and a host of other features across the geo-political and geological landscape.

The Iraq Atlas estimate of up to another potential 100 billion barrels of oil reserves is largely based on the establishment of new play concepts in the Western Desert of Iraq, which have been generated from a recent study of the Western Arabian Platform. The Western Desert of Iraq is widely regarded as being substantially under explored with only one commercial discovery in the region largely because Iraq has had a surplus of oil to date and little incentive for exploration.

“Most of Iraq’s oil production comes from the south of Iraq and is exported via the Persian Gulf because of repeated sabotage attacks on facilities in the north,” said Mohamed Zine, IHS regional manager for the Middle East. “This has resulted in a current production capacity of two million barrels of oil per day. However, the Iraq Atlas estimates indicate that given a stable political and civil environment, Iraq has the potential to produce four million barrels a day in the near term if necessary investments are made in repairing and modernizing facilities.”

Zine added: “The cost to produce oil in some Iraq fields is less than $2 per barrel according to our estimates and investments involved in developing the fields are minimal.”

[Twilight]

I wonder what the EROEI is going to be if you include a war involving a quarter million men for the duration of production. We can take that as the Low Case. Half a million for High Case.

[WildRose]

The Western Desert of Iraq - I'm currently looking at a map of that area that was studied by Cheney's task force on energy in 2001. Sorry, I don't have a link for the map (I've got Linda McQuaig's new book, "It's the Crude, Dude" in front of me), but many on this board have seen it, with the western desert area marked off into blocks.

So now the US-friendly Iraqi government, which is in the process of passing new Iraqi oil laws, will essentially be passing control of this oil and gas-rich region into the hands of mostly US big oil companies. That potential for 4-million-plus barrels a day of oil could go a long way towards helping the US avoid the problems of oil shortages, especially if Iraq's oil resources are nationalized and most of the oil goes to the US instead of into the world oil market.

If you ever needed evidence that American soldiers are in Iraq for the oil, this is it!

Makes sense to me.

[grink1tt3n]

I wonder what the EROEI is going to be if you include a war involving a quarter million men for the duration of production. We can take that as the Low Case. Half a million for High Case.

Earth is carrying a 6-7 billion population with rapidly declining resources.

Fortunately, as far as war is concerned, men are an oversupplied commodity.

[Twilight]

Earth is carrying a 6-7 billion population with rapidly declining resources.

Fortunately, as far as war is concerned, men are an oversupplied commodity.

Yeah, but not their equipment and supplies.

[Gazzatrone]

"The Iraq Atlas estimate of up to another potential 100 billion barrels of oil reserves"

So we were right to go to war and secure our energy after all. 100 billion barrels! We're all saved!

Lets see, at current consumption rates of over 30bbpy, 100 bb's barely gives us 3 years of what will surely be very expensive oil.

3 years? Whoopee-fucking-do!!!!!!!!!

[killJOY]

The key word is "may."

It "may" also have half of what is thought.