Help with writing oil-themed magazine article

[tristan]

Hi all,

Its been a while since I logged in here, to be truthful I let thinking about Peak Oil take over things a bit too much, but after my 'peak-break' I hope to get into back reading and contributing.

I am writing an article for a magazine aimed at City types, (a kind of high-brow lifestyle mag), and they have asked me to write a piece on Iraq and the new oil law. This law cedes 63 out of Iraq's 80 oil wells, as well as any undiscovered oil, to Western (mainly US) oil firms and oil service companies. My take is that this kind of exploitation, aside from being morally repugnant, will cause us many problems in the future.

The editor would like the piece to outline the Iraqi oil in the context of the world's oil situation. I think here is where some highlighting of some peak oil themes could come in - that the world's spare production is incredibly tight, that most of the world's production is in decline, that OPEC's grip on prices could be loosened by Iraqi oil etc.

So my question is - how does Iraq's oil fit into the grand scheme of things? What themes of peak oil can I subtly (the editor knows I am a PO convert and doesn't want it directly mentioned) add in? Who should I talk to about it, and perhaps quote in the piece?

Thanks for any help.

[PS_RalphW]

Excellent questions.

On paper Iraqi oil is a huge colonial prize. It has the second largest official reserves of any OPEC country, but due to decades of war and Western imposed sanctions it's production and infrastructure are in a terrible state. It has the largest official untapped reserves in the world, on nice dry land, mostly empty desert. It <should> be the investment opportunity of a lifetime for high tech Western oil companies.

Except there are a few problems. We all know that OPEC reserves are vastly exaggerated to enable each country to claim a larger slice of the OPEC oil export quota. We strongly suspect that during the rough times the existing wells were badly managed, seriously reducing their future geologic potential for economic oil extraction. Iraq is to a large extent still a war zone, and the Sunni, Shia and Kurdish areas could very easily explode into internecine or anti Western warfare at the drop of a hat. A large part of the Iraqi people view the whole invasion thing as simply an oil grab, and so have systematically sabotaged the remaining export infrastructure for the last four years. An recent US official report on Iraqi oil reserves quoted tens of billions of barrels reserves in the largely unmapped western desert. This is best viewed as a wish list, if not pie in the sky. Until recently, the life expectancy of an unguarded Western oil worker in downtown Bagdhad was about 22 minutes.

So the bottom line is how desperate are you for oil? Iraq does have a lot of oil, and if it was in Texas, it would be a huge prize. If the US can keep the lid on the insurgency for another couple of years, you might see the oil majors sending in drilling rigs, if they can afford the danger money.

[Erik]

(the editor knows I am a PO convert and doesn't want it directly mentioned)

Just out of interest, has he said why he doesn't want PO directly mentioned? Actually I can imagine... "highbrow lifestyle interests" are not very compatible with "preparations for permanent energy descent" are they?!

Good luck with the piece anyway - hope it's available on-line too eventually.

[Vortex]

The editor knows I am a PO convert and doesn't want it directly mentioned)

Your editor already knows the answer before you have posed the question.

Ask him what he wants you to write ... and then write it.

Less wasted time, less grief, better promotion chances ... everyone's happy.

[tristan]

Its a chance to make some important points about the oil problem and the repercussions of our neo-colonial adventures, even if it is in a lifestyle magazine.

I'm writing freelance - I have an ok paid job outside of journalism, this is some fun and pocket money. I also find getting my thoughts on paper helps to crystallise them, and being lazy I wouldn't bother otherwise.

Aside for my request for help, its a topic well worth discussing anyway.

[Adam1]

There's some good stuff in the first chapter of the David Strahan book covering this.

[snow hope]

But why does the Editor not want to mention Peak Oil??

This is strange and needs to be questioned imo.

[tristan]

I'm sure I could mention it in fact but not at length. I should have explained better - he doesn't want it to turn into a peak oil piece, and it is really about the repercussions of exploitation.

Any thoughts as to my questions Snow Hope?

[snow hope]

Well, I would try to get to talk to/quote somebody well known in the industry/PO circles, Matt Simmons would be a scoop, or as Adam mentioned, David Strahan.

I would mention that Alan Greenspan stated in his auto-biography that the Western invasion of Iraq was for their oil. I would ask the rhetorical question of why they decided to do this now - imminent peak.

Off the top of my head I think they have about 2m b/d and that they have the potential to increase to maybe 4m b/d. This is what America (and Britain) were/are after imo.

I would talk about how the last 100 years of growth has been shaped and indeed built-upon the platform of cheap energy, of which coal and then oil and gas played a major part. I would discuss what depletion (maybe highlight the North Sea) might mean for economic growth, world stock markets, pensions - all the things that matter to the city types....... in fact what seems to be happeneing to the markets right now!

We need to get these people thinking...... we need to wake them up!

[EmptyBee]

You could talk about how the dominance of national oil companies and rising Anti-Americanism globally may have reduced the prospects of the multinational oil companies. Also, how the Shell reserve downgrades a few years ago reveals an increasing difficulty of multinationals to access the richest oil prospects and have increasingly turned to "mining Wall Street" and merging companies in order to increase booked reserves.

You could mention the hopes prior to the Iraq invasion by some that Iraqi production could be doubled or tripled if Iraq was "opened up" to western companies. You might allude to Greg Palast's BBC coverage (for Newsnight) that discovered documentary evidence of the split between the neocons and the State department over the future of Iraq's oil. (The BBC seems to have finally taken down Palast's Newsnight report unfortunately).

You might mention Cheney's secretive March 2001 Energy Task Force meetings, which FOIA requests revealed an evident interest in the oil fields of Iraq and other Persian Gulf nations. (http://www.projectcensored.org/publications/2005/8.html and http://www.flickr.com/photos/gregpalast ... 152838701/)

I don't know, is this too controversial?

[tristan]

This is all very useful stuff guys, my thanks and please don't stop.

In fact you have inspired me to make it rather more about PO, maybe starting:

Alan Greenspan tells us that he is ?saddened that it is politically inconvenient to acknowledge what everyone knows: the Iraq war is largely about oil.? Currently Iraq?s parliament is processing an oil law that will cede 75% of its oil reserves and all of its undiscovered oil to foreign oil companies.

Why did the US invade a Muslim nation, allow hundreds of thousands of people to die in the ensuing quagmire, sacrifice thousands of its own troops, spend one trillion dollars on invasion and occupation and then enact oil laws so incredibly transparent in their bias that they would ensure violent hatred from an entire culture for generations to come?

It is hardly controversial to suggest that energy security is a top priority for the world?s largest economy and its willing supplicants. What is less understood is the invasion of Iraq was part of a geo-political plan that has its origins in the state of world oil production.

[PS_RalphW]

You could also mention that the only ministry building protected by US troops in the post-invasion looting was the ministry of oil....

[EmptyBee]

The April 2001 Baker Institute study: "STRATEGIC ENERGY POLICY: CHALLENGES FOR
THE 21ST CENTURY" is quite an interesting read in hindsight, and gives significant insight into concerns amongst at least some sections of the foreign policy establishment.

For the most part, U.S. oil policy has relied on
maintenance of free access to Middle East Gulf oil and
free access for Gulf exports to world markets, relying
heavily on military preparedness. The U.S. has forged a
special relationship with certain key Middle East exporters
that had an expressed interest in stable oil prices
and, we assumed, would adjust their oil output to keep
prices at levels that would neither discourage global
economic growth nor fuel inflation. Taking this depen
dence a step further, the U.S. government has operated
under the assumption that the national oil companies
of these countries would make the investments needed
to maintain enough surplus capacity to form a cushion
against disruptions.

But recently, things have changed. These Gulf allies
are finding their domestic and foreign policy interests
increasingly at odds with America?s strategic considerations.
They have become less inclined to lower oil
prices in exchange for security of markets, and evidence
suggests that adequate investment is not being made in
a timely enough manner to increase production capacity
in line with growing global needs. The opening of
new media outlets in the Middle East has also increased
the likelihood that a linkage will emerge in the minds of
citizens there between the U.S. alliance with Israel and
cooperation on oil prices. Moreover, a trend toward
anti-Americanism could affect regional leaders? abilities
to cooperate with the U.S. in the energy area. The resulting
tight markets have increased U.S. and global vulnerability
to disruption and provided adversaries undue
potential influence over the price of oil. Iraq has become
a key ?swing? producer, posing a difficult situation
for the U.S. government.

In the past, energy crises have appeared simply to
fade away over time. Sometimes, as in the late 1970s
and early 1980s, recession solved the problem by radically
reducing global energy demand. At other times,
additional capital marshaled technological improvements,
reduced costs, and created new efficiencies on
both the supply and demand sides, fostering complacency
among policy makers. Government attention to
energy issues tends to fade as prices fall. That complacency
could be justified so long as surplus capacities existed.
But in a world of energy capacity constraints, complacency
could shackle the American economy for years
to come. If it does not respond strategically to the
current energy situation, the U.S. risks perpetuating the
unacceptable leverage of adversaries and leaving the
country?s economy vulnerable to disruptions and volatile
energy prices.

****

Persistently tight crude oil markets highlight the
concentration of resources in the Middle East Gulf
and the vulnerability of the global economy to domestic
conditions in the key producer countries.
The Gulf nations have one major asset: their oil and
gas reserves. They, like Russia, Mexico, Indonesia,
Nigeria, Venezuela, and some other oil producing
nations, depend heavily on hydrocarbons to support
their citizens. If the current regimes in the
Gulf cannot deliver a better standard of living for
rapidly increasing populations, social upheaval
could result, and anti-Western elements could gain
power. Similar concerns exist with respect to some
other producing countries outside the Gulf.

One Recommendation:

e. Review Iraq policies to lower anti-Americanism
in the Middle East and elsewhere; set the
groundwork to eventually ease Iraqi oil field investment
restrictions

Interestingly Matt Simmons was one of the Task Force members that contributed to the study. It's a long list mind you; Even Ken Lay of Enron is on there (hahaha).

Overall it's quite a sane document and its interesting to note how few of recommendations have been taken up by the Bush Administration.

For a more up to date publication from the Baker Institute, perhaps more directly relevant to your article, check out THE CHANGING ROLE OF NATIONAL OIL COMPANIES IN INTERNATIONAL ENERGY MARKETS