Wednesday, September 21, 2005


The politics of (Iraqi) oil

Michael Klare has a nice piece on the blunder US leaders from FDR onward have made in believing that military force was what protected access to oil. Some leaders blundered more than others. Democrats and moderate Republicans tended to believe in a mix of diplomacy, bribery, chicanery, and force, while conservative Republicans with their reptile brains believed force alone was enough. Anyway, Klare points out something interesting about Iraq: The corruption and mismanagement has had another serious consequence for Iraq's long-term oil potential: in order to maximize output now, and thereby keep the dollars rolling in, Iraqi oil executives are employing faulty pumping methods, thus risking permanent damage to underground reservoirs. For example, managers are continuing to pump oil from Iraq's main Rumailia oilfield, one of the world's largest, even though water injection systems (used to maintain underground pressure) have failed; in so doing, they are thought by experts to be causing irreversible damage to the field. "The problem is that [underground] pressure problems could lead to a permanent decline in production," observed one European buyer of Iraqi oil quoted in the Financial Times last June. That would add another 50 cents or a dollar to the price of gasoline, as a W.A.G. Klare also points out that behind ethnic strife is an economic fact. The oil is in Shiite and Kurdish regions. There will be no peace.
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