Folks,

For all but one of the last 10 straight trading sessions, crude oil prices have hit record highs. As discussed here previously, two of the major factors are the situation with the Yukos oil company of Russia, and last Sunday’s recall vote on Venezuela’s Chavez, which he survived. But are we really getting the real scoop?

The outside stories, for public consumption, are that Yukos is in bankruptcy proceedings because it owes $3 billion in taxes to the state, and that the referendum vote on Chavez was initiated by “opposition leaders” who say he is authoritarian and has managed a rich economy badly.

But the inside stories are quite different. In the case of Yukos, apparently the back taxes are really just a “sham” to give the state a way to wrest control of Russia’s major export away from a wealthy industrialist who had gotten cozy with Big Oil in the U.S., so that Prime Minister Putin can “exert more influence on U.S. foreign policy and global economic affairs.”

In the case of Chavez, Greg Palast reports that what’s really going on is a race and class war, between Venezuela’s first indigenous president, who favors bringing his people out of poverty by giving them a larger share of the oil revenue, and white, middle-class business leaders who are cozy with–surprise–Big Oil interests in the U.S.

Chavez asserts that U.S. military leaders met with the plotters of the failed April 12, 2002 coup against him. (See Palast’s article: Venezuela and Argentina: A Tale of Two Coups - 2004 Project Censored Award.) Why? Venezuela is the third-largest supplier of foreign petroleum to the U.S., and Chavez has used Venezuela’s production capacity to reinvigorate the price control ability of OPEC. But at the time of the coup, “Iraq and Libya were trying to organize OPEC to stop exporting oil to the US to protest American support of Israel” and so the US, under the cover of Venezuela’s business elite, tried to replace Chavez with a puppet, in order to thwart a renewed Arab oil embargo.

Politics and intrigue are as thick as Saudi crude in the energy business, as the world holds its breath and hopes to keep the lights on and the transports running.

[Further reading: Other Greg Palast articles on Chavez]

–C

Using Oil as a Weapon

Russia On Trial

Russia is currently the number two oil producer in the world, and plans to be on par with Saudi Arabia by 2010. As the U.S. looks beyond the Middle East for alternative sources of oil, President Vladimir Putin is positioning his oil-rich nation to take Saudi Arabia’s place.

Putin’s ambition to become a major supplier of oil to the U.S. is a clear bid to exert more influence on U.S. foreign policy and global economic affairs. And he doesn’t want Russian oil companies in charge. He wants the Kremlin calling the shots.

Putin has been actively asserting greater state control over Russia’s oil industry in the last two years. One of his most daring moves has been an all-out campaign to renationalize YUKOS Oil , a major Russian oil company that forged close ties with the U.S. YUKOS executives, including ex-CEO Mikhail Khodorkovksy, have been thrown into jail or forced into exile, and the company is being driven into bankruptcy through sham tax evasion charges. Once YUKOS is in bankruptcy, the state will undoubtedly take control.

Putin’s takeover of YUKOS directly interferes with negotiations the private company was pursuing with the U.S. Mikhail Khodorkovsky had already met with Vice President Cheney, Energy Secretary Abraham and other U. S. officials to discuss oil exports to the U.S. The first shipment arrived in Texas in 2003, offering hope that the U. S. would at last have a major alternative source of oil imports. That was before Mr. Khodorokovsky’s imprisonment. Russian authorities also have blocked ExxonMobil’s plans to invest in YUKOS and derailed efforts to build pipelines in Russia to transport oil to Russian ports for shipment to the U.S.

In addition to YUKOS, Russian officials appear poised to nationalize or exert more control over other oil companies too. Tax officials recently announced they will conduct an assessment of the effects of privatization in Russia , and said they will review the tax payments of major oil companies such as Sibneft, Lukoil and Transneft. This is how the Kremlin went after YUKOS too…

The bottom line: If Putin is successful in exerting control over the Russian oil industry, the U.S. economy will be directly dependent on decisions made by the Russian president and Kremlin. President Putin, a former KGB operative who has systematically populated the top tiers of Russian government with anti-western members of Russia’s current and former security service, will hold the reins of U.S. oil imports.

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  Dick Cheney, Hugo Chavez and Bill Clinton’s Band
  By Greg Palast
  gregpalast.com

  Monday 16 August 2004

Why Venezuela has voted again for their ‘Negro e Indio’ president.

  There’s so much BS and baloney thrown around about Venezuela that I may be violating some rule of US journalism by providing some facts. Let’s begin with this: 77% of Venezuela’s farmland is owned by 3% of the population, the ‘hacendados.’

  I met one of these farmlords in Caracas at an anti-Chavez protest march. Oddest demonstration I’ve ever seen: frosted blondes in high heels clutching designer bags, screeching, “Chavez - dic-ta-dor!” The plantation owner griped about the “socialismo” of Chavez, then jumped into his Jaguar convertible.

  That week, Chavez himself handed me a copy of the “socialist” manifesto that so rattled the man in the Jag. It was a new law passed by Venezuela’s Congress which gave land to the landless. The Chavez law transferred only fields from the giant haciendas which had been left unused and abandoned.

  This land reform, by the way, was promoted to Venezuela in the 1960s by that Lefty radical, John F. Kennedy. Venezuela’s dictator of the time agreed to hand out land, but forgot to give peasants title to their property.

  But Chavez won’t forget, because the mirror reminds him. What the affable president sees in his reflection, beyond the ribbons of office, is a “negro e indio” — a “Black and Indian” man, dark as a cola nut, same as the landless and, until now, the hopeless. For the first time in Venezuela’s history, the 80% Black-Indian population elected a man with skin darker than the man in the Jaguar.

  So why, with a huge majority of the electorate behind him, twice in elections and today with a nearly two-to-one landslide victory in a recall referendum, is Hugo Chavez in hot water with our democracy-promoting White House?

  Maybe it’s the oil. Lots of it. Chavez sits atop a reserve of crude that rivals Iraq’s. And it’s not his presidency of Venezuela that drives the White House bananas, it was his presidency of the Organization of Petroleum Exporting Countries, OPEC. While in control of the OPEC secretariat, Chavez cut a deal with our maximum leader of the time, Bill Clinton, on the price of oil. It was a ‘Goldilocks’ plan. The price would not be too low, not too high; just right, kept between $20 and $30 a barrel.

  But Dick Cheney does not like Clinton nor Chavez nor their band. To him, the oil industry’s (and Saudi Arabia’s) freedom to set oil prices is as sacred as freedom of speech is to the ACLU. I got this info, by the way, from three top oil industry lobbyists.

  Why should Chavez worry about what Dick thinks? Because, said one of the oil men, the Veep in his Bunker, not the pretzel-chewer in the White House, “runs energy policy in the United States.”

  And what seems to have gotten our Veep’s knickers in a twist is not the price of oil, but who keeps the loot from the current band-busting spurt in prices. Chavez had his Congress pass another oil law, the “Law of Hydrocarbons,” which changes the split. Right now, the oil majors - like PhillipsConoco - keep 84% of the proceeds of the sale of Venezuela oil; the nation gets only 16%.

  Chavez wanted to double his Treasury’s take to 30%. And for good reason. Landless, hungry peasants have, over decades, drifted into Caracas and other cities, building million-person ghettos of cardboard shacks and open sewers. Chavez promised to do something about that.

  And he did. “Chavez gives them bread and bricks,” one Venezuelan TV reporter told me. The blonde TV newscaster, in the middle of a publicity shoot, said the words “pan y ladrillos” with disdain, making it clear that she never touched bricks and certainly never waited in a bread line.

  But to feed and house the darker folk in those bread and brick lines, Chavez would need funds, and the 16% slice of the oil pie wouldn’t do it. So the President of Venezuela demanded 30%, leaving Big Oil only 70%. Suddenly, Bill Clinton’s ally in Caracas became Mr. Cheney’s — and therefore, Mr. Bush’s — enemy.

  So began the Bush-Cheney campaign to “Floridate” the will of the Venezuela electorate. It didn’t matter that Chavez had twice won election. Winning most of the votes, said a White House spokesman, did not make Chavez’ government “legitimate.” Hmmm. Secret contracts were awarded by our Homeland Security spooks to steal official Venezuela voter lists. Cash passed discreetly from the US taxpayer, via the so-called ‘Endowment for Democracy,’ to the Chavez-haters running today’s “recall” election.

  A brilliant campaign of placing stories about Chavez’ supposed unpopularity and “dictatorial” manner seized US news and op-ed pages, ranging from the San Francisco Chronicle to the New York Times.

  But some facts just can’t be smothered in propaganda ink. While George Bush can appoint the government of Iraq and call it “sovereign,” the government of Venezuela is appointed by its people. And the fact is that most people in this slum-choked land don’t drive Jaguars or have their hair tinted in Miami. Most look in the mirror and see someone “negro e indio,” as dark as their President Hugo.

  The official CIA handbook on Venezuela says that half the nation’s farmers own only 1% of the land. They are the lucky ones, as more peasants owned nothing. That is, until their man Chavez took office. Even under Chavez, land redistribution remains more a promise than an accomplishment. But today, the landless and homeless voted their hopes, knowing that their man may not, against the armed axis of local oligarchs and Dick Cheney, succeed for them. But they are convinced he would never forget them.

  And that’s a fact.

  ——

  Greg Palast’s reports from Venezuela for BBC Television’s Newsnight and the Guardian papers of Britain earned a California State University Journalism School “Project Censored” award for 2002. View photos and Palast’s reports on Venezuela at www.GregPalast.com.

  

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Support for Chavez Unwavering in Slums of Venezuelan Capital

  By Ken Silverstein
  Los Angles Times

  Monday 16 August 2004

  CARACAS, Venezuela - The rich hate him, saying he has stirred up class warfare. The privately owned media, closely aligned with his political opponents, pillory him daily as an enemy of democracy. And the Bush administration, which supported those who briefly overthrew him in 2002, describes him as a dangerous leftist.

  But in the shantytowns here in the capital, President Hugo Chavez is revered as a national savior.

  ”Our hope is with Chavez,” said Carlos Contreras, who urged residents to support the president in Sunday’s recall vote. “All of our other presidents promised to help the poor, but he’s the first one who has kept his word.”

  Chavez’s support is concentrated among the poor, who make up a majority of this country’s 25 million people. The soaring price of oil, a major export, has flooded the national treasury, allowing the government to spend heavily on social programs and fund what Chavez calls a “Revolution for the Poor.”

  Like many in the winding, hillside shantytown of brick-and-tin shacks in Catia district, Contreras has no steady work. He owns a truck and occasionally is hired as a mover or for other odd jobs.

  Even so, he said life had improved dramatically since Chavez was elected in 1998. From a spot that offers a sweeping view of the neighborhood, Contreras pointed to a new health clinic staffed by Cuban doctors. The government has also opened several nearby markets that sell subsidized food to the poor.

  There are new literacy programs, and Contreras, who is 47 and hadn’t studied beyond third grade, now attends a school built by the government. He hopes to earn a high school degree.

  If the opposition has support here, it does not readily show its face other than a handful of “Yes” signs scattered about the neighborhood. The walls of the shantytown and windows in homes are covered with red signs urging a “No” vote in the recall referendum.

  ”This whole street is Chavista,” Contreras said as he led a tour through the neighborhood. “Maybe one in a hundred is for the opposition.”

  Nationwide, voters are divided over the recall, but in poor neighborhoods like this one, the president appears to have overwhelming support.

  The opposition and the Bush administration have attacked Chavez for his close friendship with Cuban leader Fidel Castro, but that relationship doesn’t bother poor Venezuelans who receive free treatment at government health clinics from Cuban doctors. Before, the poor had, at best, little access to healthcare.

  ”Chavez has love for the people,” Contreras said. “He was poor and he understands the needs of the poor.”

  Chavez also benefits from poor Venezuelans’ skepticism of his opponents, whom they see as remnants of the country’s discarded political past.

  Before Chavez won power, two elite parties exchanged power for four decades. Those governments were widely considered corrupt and squandered much of the country’s oil wealth.

  Nelson Ortiz, a stocky man standing in front of a store where he sells live chickens, said he planned to vote for Chavez.

  ”There are good things and bad things about the government, but with another president things would be worse,” he said. “I have to thank this man because he is the first one who has used our oil for the poor.”

  Similar sentiments were voiced in a number of other Caracas shantytowns, which have benefited from the same social programs seen in Catia.

  People were especially enthusiastic in the January 23 neighborhood, which is dominated by huge, dilapidated apartment buildings built in the late 1950s. From the windows, laundry hangs alongside large banners painted with a popular Chavez campaign slogan, “No al Pasado” (”No to the Past”).

  ”Here, you don’t have to ask,” a young woman said when asked how she would vote. “Everyone in this neighborhood is with the president.”

  Nearby, a crowd gathered on a square in front of a neighborhood school where Chavez was expected to vote.

  Around noon, the presidential motorcade arrived, leading to a burst of fireworks and cheers from the crowd. As Chavez emerged from a blue sport utility vehicle, people began singing a campaign song, “Uh, Ah, Chavez No Se Va” (”Ooh, Ah, Chavez Isn’t Leaving”).

  Pastora Sivira, a primary school teacher, was among those singing the loudest. “We know he will win,” she said. “We have waited for this president for too long to lose him now.”

Folks,

After all the information I have posted about the problems of our energy policy, I decided it was high time to focus on some positive options for the future.

I have been greatly encouraged lately by the way that some parts of the media, and the American discourse in general, have finally started to focus on energy. I came across several pieces today that can inspire some hope, so I’m sharing them with you.

On PBS tonight, I saw a fairly well-done half hour piece called “Power Shift” that highlighted the renewable energy options we have, and made the point that the power is still in our hands to make different choices, and choose a future where we generate all the power we need, renewably. It’s a grand vision, and through my little role in the solar power business, I support and reach for it. But what we really need is for all people to understand how the power they use every day is generated, and how small changes in the way each of us consume it can add up to major changes in our whole society’s consumption. That piece was a good start in the public education effort.

Two short animated video pieces about our oil addiction and renewable energy options came to my attention today too, produced by the Apollo Alliance and available from the web site of the Campaign for America’s Future. These are fun, check them out:

Two short videos about energy policy

Another bit was this article from Science Daily, which focuses on the problem of global warming and what might be done about it.
We already have the technology to control emissions and stop global warming, and we’ve had it for a good long while now. All that we lack is
the political will to do it.

Technology Already Exists to Stabilize Global Warming

There is much that you can do, from installing compact fluorescent bulbs, to replacing inefficient appliances, to replacing your car with a hybrid. (If every regular car in America were replaced with a hybrid, we would not need to buy any oil from the Middle East. Think about that.) There is much that the US government can do, to improve efficiency, increase renewable energy generation, and stop global warming from getting any worse. It all starts with you: with what you buy, what you use, and who you vote for. Take a moment to think about all the energy that is wasted in our daily lives, and then imagine a future where waste is minimal, and where we don’t need any imported oil to keep our way of life going. The choice is in your hands.

I’ll return with more doom ‘n gloom stuff soon enough, I just thought maybe you’d like a break from that to start thinking about how to make a better world. Check out the Apollo Alliance, I think they’re really going in the right direction.

–C

Folks,

I know from past experience that when parallels are noted between fascism and the extreme right of American politics, lots of conservatives cry foul, and lots of lefties nod their heads knowingly.

But how many of us know what “fascism” really means?

As the 1983 American Heritage Dictionary noted, fascism is: “A system of government that exercises a dictatorship of the extreme right, typically through the merging of state and business leadership, together with belligerent nationalism.”

“Fascists have an agenda that is primarily economic. As the Free Dictionary (www.thefreedictionary.com) notes, fascism/corporatism is ‘an attempt to create a “modern” version of feudalism by merging the “corporate” interests with those of the state.’”

Sound familiar?

It’s not enough to know about Hitler, the modern poster boy of fascism. There is more to it, and if one really looks at the tactics and beliefs of fascism from history, the parallels with our current administration are startling indeed.

In 1944, writing about the rise of fascism in America, Vice President Henry Wallace wrote:

“They claim to be super-patriots, but they would destroy every liberty guaranteed by the Constitution. They demand free enterprise, but are the spokesmen for monopoly and vested interest. Their final objective toward which all their deceit is directed is to capture political power so that, using the power of the state and the power of the market simultaneously, they may keep the common man in eternal subjection.”

That comment stands as true today as it did in 1944. My first impulse when I started reading this article was to throw it out. But by the time I got to the end, I decided it was worthy of broader circulation. This is a history lesson none of us–especially true conservatives–can afford to miss.

–C

The Ghost of Vice President Wallace Warns: “It Can Happen Here”

by Thom Hartmann

Published on Monday, July 19, 2004 by CommonDreams.org

The Republican National Committee has recently removed from the top-level pages of their website an advertisement interspersing Hitler’s face with those of John Kerry and other prominent Democrats. This little-heralded step has freed former Enron lobbyist and current RNC chairman Ed Gillespie to resume his attacks on Americans who believe some provisions of Bush’s PATRIOT Act, his detention of American citizens without charges, his willingness to let corporations write legislation, and the so-called “Free Speech Zones” around his public appearances are all steps on the road to American fascism.

The RNC’s feeble attempt to equate Hitler and Democrats was short-lived, but it brings to mind the first American Vice President to point out the “American fascists” among us.

Although most Americans remember that Harry Truman was Franklin D. Roosevelt’s Vice President when Roosevelt died in 1945 (making Truman President), Roosevelt had two previous Vice Presidents - John N. Garner (1933-1941) and Henry A. Wallace (1941-1945). In early 1944, the New York Times asked Vice President Henry Wallace to, as Wallace noted, “write a piece answering the following
questions: What is a fascist? How many fascists have we? How dangerous are they?”

Vice President Wallace’s answer to those questions was published in The New York Times on April 9, 1944, at the height of the war against the Axis powers of Germany and Japan.

“The really dangerous American fascists,” Wallace wrote, “are not those who are hooked up directly or indirectly with the Axis. The FBI has its finger on those. The dangerous American fascist is the man who wants to do in the United States in an American way what Hitler did in Germany in a Prussian way. The American fascist would prefer not to use violence. His method is to poison the channels of public information. With a fascist the problem is never how best to present the truth to the public but how best to use the news to deceive the public into giving the fascist and his group more money or more power.”

In this, Wallace was using the classic definition of the word “fascist” - the definition Mussolini had in mind when he claimed to have invented the word. (It was actually Italian philosopher Giovanni Gentile who wrote the entry in the Encyclopedia Italiana that said: “Fascism should more appropriately be called corporatism because it is a merger of state and corporate power.” Mussolini, however, affixed his name to the entry, and claimed credit for it.)

As the 1983 American Heritage Dictionary noted, fascism is: “A system of government that exercises a dictatorship of the extreme right, typically through the merging of state and business leadership, together with belligerent nationalism.”

Mussolini was quite straightforward about all this. In a 1923 pamphlet titled “The Doctrine of Fascism” he wrote, “If classical liberalism spells individualism, Fascism spells government.” But not a government of, by, and for We The People - instead, it would be a government of, by, and for the most powerful corporate interests in the nation.

In 1938, Mussolini brought his vision of fascism into full reality when he dissolved Parliament and replaced it with the “Camera dei Fasci e delle Corporazioni” - the Chamber of the Fascist Corporations. Corporations were still privately owned, but now instead of having to sneak their money to folks like Tom DeLay and covertly write legislation, they were openly in charge of the government.

Vice President Wallace bluntly laid out in his 1944 Times article his concern about the same happening here in America:

” If we define an American fascist as one who in case of conflict puts money and power ahead of human beings, then there are undoubtedly several million fascists in the United States. There are probably several hundred thousand if we narrow the definition to include only those who in their search for money and power are ruthless and deceitful. … They are patriotic in time of war because it is to their interest to be so, but in time of peace they follow power and the dollar wherever they may lead.”

Nonetheless, at that time there were few corporate heads who had run for political office, and, in Wallace’s view, most politicians still felt it was their obligation to represent We The People instead of corporate cartels. “American fascism will not be really dangerous,” he added in the next paragraph, “until there is a purposeful coalition among the cartelists, the deliberate poisoners of public information…”

Noting that, “Fascism is a worldwide disease,” Wallace further suggest that fascism’s “greatest threat to the United States will come after the war” and will manifest “within the United States itself.”

In Sinclair Lewis’s 1935 novel “It Can’t Happen Here,” a conservative southern politician is helped to the presidency by a nationally syndicated radio talk show host. The politician - Buzz Windrip - runs his campaign on family values, the flag, and patriotism. Windrip and the talk show host portray advocates of traditional American democracy as anti-American. When Windrip becomes President, he opens a Guantanamo-style detention center, and the viewpoint character of the book, Vermont newspaper editor Doremus Jessup, flees to Canada to avoid prosecution under new “patriotic” laws that make it illegal to criticize the President.

As Lewis noted in his novel, “the President, with something of his former good-humor [said]: ‘There are two [political] parties, the Corporate and those who don’t belong to any party at all, and so, to use a common phrase, are just out of luck!’ The idea of the Corporate or Corporative State, Secretary [of State] Sarason had more or less taken from Italy.” And, President “Windrip’s partisans called themselves the Corporatists, or, familiarly, the ‘Corpos,’ which nickname was generally used.”

Lewis, the first American writer to win a Nobel Prize, was world famous by 1944, as was his book “It Can’t Happen Here.” And several well-known and powerful Americans, including Prescott Bush, had lost businesses in the early 1940s because of charges by Roosevelt that they were doing business with Hitler. These events all, no doubt, colored Vice President Wallace’s thinking when he
wrote:

” Still another danger is represented by those who, paying lip service to democracy and the common welfare, in their insatiable greed for money and the power which money gives, do not hesitate surreptitiously to evade the laws designed to safeguard the public from monopolistic extortion. American fascists of this stamp were clandestinely aligned with their German counterparts before the war, and are even now preparing to resume where they left off, after ‘the present unpleasantness’ ceases.”

Fascists have an agenda that is primarily economic. As the Free Dictionary (www.thefreedictionary.com) notes, fascism/corporatism is “an attempt to create a ‘modern’ version of feudalism by merging the ‘corporate’ interests with those of the state.”

Feudalism, of course, is one of the most stable of the three historic tyrannies (kingdoms, theocracies, feudalism) that ruled nations prior to the rise of American republican democracy, and can be roughly defined as “rule by the rich.”

Thus, the neo-feudal/fascistic rich get richer (and more powerful) on the backs of the poor and the middle class, an irony not lost on author Thomas Frank, who notes in his new book “What’s The Matter With Kansas” that, “You can see the paradox first-hand on nearly any Main Street in middle America - ‘going out of business’ signs side by side with placards supporting George W. Bush.”

The businesses “going out of business” are, in fascist administrations, usually those of locally owned small and medium-sized companies. As Wallace wrote, some in big business “are willing to jeopardize the structure of American liberty to gain some temporary advantage.” He added, “Monopolists who fear competition and who distrust democracy because it stands for equal opportunity would like to secure their position against small and energetic enterprise [companies]. In an effort to eliminate the possibility of any rival growing up, some monopolists would sacrifice democracy itself.”

But American fascists who would want former CEOs as President, Vice President, House Majority Whip, and Senate Majority Leader, and write legislation with corporate interests in mind, don’t generally talk to We The People about their real agenda, or the harm it does to small businesses and working people. Instead, as Hitler did with the trade union leaders and the Jews, they point to a “them” to pin with blame and distract people from the harms of their economic policies.

In a comment prescient of George W. Bush’s recent suggestion that civilization itself is at risk because of gays, Wallace
continued:

” The symptoms of fascist thinking are colored by environment and adapted to immediate circumstances. But always and everywhere they can be identified by their appeal to prejudice and by the desire to play upon the fears and vanities of different groups in order to gain power. It is no coincidence that the growth of modern tyrants has in every case been heralded by the growth of prejudice. It may be shocking to some people in this country to realize that, without meaning to do so, they hold views in common with Hitler when they preach discrimination…”

But even at this, Wallace noted, American fascists would have to lie to the people in order to gain power. And, because they were in bed with the nation’s largest corporations - who could gain control of newspapers and broadcast media - they could promote their lies with ease.

“The American fascists are most easily recognized by their deliberate perversion of truth and fact,” Wallace wrote. “Their newspapers and propaganda carefully cultivate every fissure of disunity, every crack in the common front against fascism. They use every opportunity to impugn democracy.”

In his strongest indictment of the tide of fascism the Vice President of the United States saw rising in America, he added, “They claim to be super-patriots, but they would destroy every liberty guaranteed by the Constitution. They demand free enterprise, but are the spokesmen for monopoly and vested interest. Their final objective toward which all their deceit is directed is to capture political power so that, using the power of the state and the power of the market simultaneously, they may keep the common man in eternal subjection.”

Finally, Wallace said, “The myth of fascist efficiency has deluded many people. … Democracy, to crush fascism internally, must…develop the ability to keep people fully employed and at the same time balance the budget. It must put human beings first and dollars second. It must appeal to reason and decency and not to violence and deceit. We must not tolerate oppressive government or industrial oligarchy in the form of monopolies and cartels.”

This liberal vision of an egalitarian America in which very large businesses and media monopolies are broken up under the 1890 Sherman Anti-Trust Act (which Reagan stopped enforcing, leading to the mergers & acquisitions frenzy that continues to this
day) was the driving vision of the New Deal (and of “Trust Buster” Teddy Roosevelt a generation earlier).

As Wallace’s President, Franklin D. Roosevelt, said when he accepted his party’s renomination in 1936 in Philadelphia, “…out of this modern civilization, economic royalists [have] carved new dynasties…. It was natural and perhaps human that the privileged princes of these new economic dynasties, thirsting for power, reached out for control over government itself. They created a new despotism and wrapped it in the robes of legal sanction…. And as a result the average man once more confronts the problem that faced the Minute Man….”

Speaking indirectly of the fascists that Wallace would directly name almost a decade later, Roosevelt brought the issue to its core: “These economic royalists complain that we seek to overthrow the institutions of America. What they really complain of is that we seek to take away their power.”

But, he thundered in that speech, “Our allegiance to American institutions requires the overthrow of this kind of power!”

In 2004, we again stand at the same crossroad Roosevelt and Wallace confronted during the Great Depression and World War II. Fascism is again rising in America, this time calling itself “compassionate conservatism.” The RNC’s behavior today eerily parallels the day in 1936 when Roosevelt said, “In vain they seek to hide behind the flag and the Constitution. In their blindness they forget what the flag and the Constitution stand for.”

It’s particularly ironic that the CEOs and lobbyists who run the Republican National Committee would have chosen to put Hitler’s fascist face into one of their campaign commercials, just before they launched a national campaign against gays and while they continue to arrest people who wear anti-Bush T-shirts in public places.

President Roosevelt and Vice President Wallace’s warnings have come full circle. Which is why it’s so critical that this November we join together at the ballot box to stop this most recent incarnation of feudal fascism from seizing complete control of our nation.

Thom Hartmann (thom at thomhartmann.com) is a Project Censored Award-winning best-selling author and host of a nationally syndicated daily progressive talk radio show. www.thomhartmann.com. His most recent books are “The Last Hours of Ancient Sunlight,” “Unequal
Protection: The Rise of Corporate Dominance and the Theft of Human Rights,” and “We The People: A Call To Take Back America.” His new book, “What Would Jefferson Do?: A Return To Democracy,” based on four years of research in Jefferson’s personal letters, begins shipping this week from Random House/Harmony.

Folks,

I was planning to take a little break from stories on Peak Oil–no really, I was!–but then we encountered a very short leash on oil production capacity, the markets went nutty, and now it’s all over the news. So when this little goodie from Aljazeera came in, I couldn’t pass it up. Aljazeera updates the Peak Oil story with some important new numbers, and quotes the head of the Iranian National Oil Company as saying, “Cheap oil is dead. You are never going to see oil priced at $25 a barrel again. These high prices, yes, they are exacerbated by Yukos, Iraq and so on, but more importantly they are a sign that we have major structural problems with supply. They are a sign that there is now no spare capacity for the fluctuations of the markets.”

In response to those wild fluctuations, and the setting of new record prices for oil futures nearly every day for several weeks now, the Saudis tried to calm the markets today by announcing that (despite what many experts have said) they do in fact have excess production capacity of 1.3 million barrels of oil a day.

However, if you read my post from Monday (“New Peak Oil stories from around the world”), that wouldn’t give you much comfort, because as T. Boone Pickens correctly observed, that additional production will be sucked up by increasing demand by the end of the year. Of course, the Saudis realize that they are nearly a paper tiger already, and are doing what they can to retain some measure of control over spiraling oil prices.

The markets today were only briefly assuaged.
“Oil prices ended higher after a volatile day in which Iraq revealed that its production has been cut in half by sabotage in the country’s southern region. Prices eased in the late morning after Saudi Arabia said it had an additional 1.3 million barrels of oil a day at its disposal, but Nymex crude for September delivery eventually closed up 28 cents to $44.80, just shy of the record high of $44.84 touched Monday.” [Source: TheStreet.com]

Of course there are several other factors affecting oil prices, from the Yukos bankruptcy proceeding, to uncertainty over this coming Sunday’s referendum vote on Chavez in Venzuela, to battening down the facilities around the Gulf of Mexico in anticipation of Tropical Storm Bonnie, on its way to becoming a true hurricane.
(For more on the fluctuation of oil prices in the market today, see A Bouncy Day for Oil Prices)

But perhaps the most startling news today was another part of the Aljazeera article,
which noted that the recently retired executive vice president of Saudi Aramco, Sadad al-Husayni, has frightened the markets with recent articles in Oil & Gas Journal, stating that the Saudis’ “proven developed reserves” are only “130bn barrels”, half of what Saudi Arabia normally claims to have underground. The lack of transparency in the reserve numbers claimed by Saudi Arabia continues to be the biggest X factor of all.

That assertion is echoed in an editorial by the Petroleum Review journal, which details some equally startling numbers:

On p26 Dr Salameh tackles the thorny question of how accurate are Middle East reserve estimates. His conclusion that these may be overstated by up to 300bn barrels, or roughly five North Seas, will certainly give pause for thought. If his assessments are right, the world faces very major challenges in developing and securing the oil supplies it will require.

And as far as immediate production capacity goes:
“early August production will exceed 33mn b/d. After that, the only incremental capacity is the, definitionally unsustainable, surge capacity…” That article is posted below as well.

Further reading: for an excellent article on the problem of the Saudis’ reserve numbers, see this article by Julian Darley, special to From the Wilderness:

A Tale of Two Planets

A Report on the Conference
“Future of Global Oil Supply: Saudi Arabia”
held at CSIS, Washington DC, February 24th 2004

by Julian Darley

More to come!

–C

The Death of Cheap Crude

Aljazerra

By Adam Porter in France

Wednesday 04 August 2004

Oil prices are in a state of flux or so we are told. But the truth of the matter may be far simpler than that; maybe production cannot meet soaring global demand.

As prices hit record highs, some analysts’ remarks, and much of the comment in the media, are directed at uncertainty surrounding Russian company Yukos, Iraqi pipeline attacks, Nigerian strikes and a forthcoming presidential referendum in Venezuela.

Yet behind the easy headlines, so called emerging economies such as China and India, added to rising American demand, are putting pressure on the price of energy. Meanwhile, major oil fields are withering, no new ones are being found and supplier countries are already pumping at their production limits.

Major problems

As an example, in the same year as China’s consumption rose by a crushing 26% its main oilfield, Daqing, started to decline.

The Chinese state, not known for releasing accurate figures on anything, said the decline would be abour 7% a year. It may well be faster.

As Daqing produced about 50% of China’s total oil needs, one does not need to be a mathematician to see the problem. China will need to import large quantities of oil to satisfy its astronomical growth in consumption - growth which shows little sign of slowing.

The Yukos crisis may be only
part of a very big problem

Ali Bakhtiari, head of strategic planning at the Iranian National Oil Company (NIOC), dismisses the media chat, as just that.

“Cheap oil is dead. You are never going to see oil priced at $25 a barrel again. These high prices, yes, they are exacerbated by Yukos, Iraq and so on, but more importantly they are a sign that we have major structural problems with supply.

“They are a sign that there is now no spare capacity for the fluctuations of the markets.”

Then we can add some other major determinants. That the North Sea oilfields, long a cash cow for the British and Norwegian governments, have peaked and are declining at a faster rate than analysts expected.

Then factor in the millions of “lost” barrels of oil that were misrepresented by Royal Dutch Shell, to the tune of 23% of their total reserves. Mix up the fact that no major oilfields were discovered in the last 18 months, despite increased technological innovation.

And round it all off with the OPEC statement that producer countries have “no more supply” according to spokesman, Indonesian oil minister Purnomo Yusgiantoro. This just weeks after OPEC assured markets production was “no problem”.

Panic pricing

Thus the underlying reasons for high oil prices seem to be that demand is outstripping possible production.

Additional worries such as Yukos, Iraq, Nigeria and Venezuela are the icing on the crumbling energy cake.

Indeed Yukos is still pumping oil at record levels, Nigeria produced more oil in June 2004 than it has done for six years and a lack of Iraqi oil on the market place did not drive prices to $43 during the 12 years of sanctions. Indeed there is more Iraqi oil reaching refineries now than since the first Gulf war.

“Remember on June 3, when oil was $43 a barrel?” continues Bakhtiari. “Then OPEC said they would increase production, by 2.5m barrels a day from July 1. It did make a small dent in the price for a while, but now we are already back where we started.”

Critical point

Dr Colin Campbell is former executive vice president of oil company Total. He is one of the leading industry figures who have long stated that oil prices are set to rocket, as production fails to meet soaring demand.

“Because of the way the market works, what was previously a minor strike in Nigeria or a commercial row in Russia is now a straw that will break the camel’s back.

“Once you are producing flat-out, there is nothing you can do about disruptions. Once a slight imbalance occurs, then traders, who are there to make money, will price oil accordingly.”

Of course, a surge in oil prices does benefit some areas of the global community, the oil companies.

BP has reported record 2nd quarterly profits of $3.9bn to June, a 23% yearly increase. The market was disappointed it did not make more.

Lord Browne, chairman of the super-giant, acknowledged that prices would “stay high for the short term”, adding unconvincingly that they would come down “one day”. That one day may be in the form of a recession.

Bleak prospects

Then there is the Saudi Arabian angle. Another major oil figure, the recently retired executive vice president of Saudi Aramco, Sadad al-Husayni, has frightened the markets with recent articles in Oil & Gas Journal.

In them he cites “proven developed reserves” of Saudi Arabia at only “130bn barrels”, half of what Saudi Arabia normally claims to have underground.

A lack of transparency over reserve figures, many of which are thought to be groundless, has further undermined confidence in oil producers to match demand.

Add to this that Russia’s oil minister has claimed that Russian output will fall in 2005 and that Indonesia became the first OPEC country to admit, in June, that it had become a net importer and one can see the underlying trend.

Campbell draws some difficult conclusions. “It could be that the long awaited peak in oil production is either here or about to arrive. We are seeing that nowhere has the capacity to increase production.”

Bakhtiari agrees. “We are approaching the plateau of production; these are the first signs that we are there. As I said, cheap oil is history.”

If they are right, there are harsh times ahead.

Go To Original

---

Global oil production now flat out

Petroleum Review - Editorial - August 2004

By Chris Skrebowski, Editor of Petroleum Review

By the time this is being read, currently available oil production capacity all around the world will be producing flat out. How sustainable this proves to be remains to be seen.

For many years now non-Opec production has been operated at capacity, leaving Opec to fine tune production in order to achieve its price objectives. In economic terms, because no company or country had the capacity to challenge Opec, they had no choice but to be price takers, maximising earnings by maximising production.

Opec’s record production of 31.7mn b/d in 1977 wasn’t exceeded until November 2003, since then it has never been under that level. It reached 32.2mn b/d in March, dropped back a little in April and May, and then in June reached 32.65mn b/d.

The utilisation of the final bits of readily available capacity in Saudi Arabia - in line with the 0.5mn b/d expansion in Opec quotas from August - means that early August production will exceed 33mn b/d. After that, the only incremental capacity is the, definitionally unsustainable, surge capacity and any new capacity that comes onstream. On p38 of the August issue Petroleum Review has tabulated the most up-to-date version of its megaprojects database. Although one or two projects have been added since it was last published (Petroleum Review, January 2004 - unfortunately now out of print). Most of the changes are project delays, most notably the Nigerian offshore Bonga, Erha and Agbami projects.

On p42 is Petroleum Review’s annual re-presentation of global oil production from the latest BP Statistical Review, June 2004. This shows that 18 major oil producers are now in decline, handsomely offset by rapidly expanding production from the 15 countries growing at over 5%/y and the eight growing at over 10%/y. A straw in the wind, however, is that decline is now running at over 1.1mn b/d and there is evidence of decline rates increasing.

The feature on p18 confirms the view that the industry is now making a massive commitment to new LNG projects. This potential investment boom is being driven by three factors - the desire to monetise stranded gas, the need to make up for US and Canadian gas production shortfalls, and the attractions of probably the fastest growing area of the whole oil and gas business - LNG. As part of this feature we have produced our first tabulation of all the gas megaprojects. What this clearly shows is that if all these LNG and GTL projects go ahead, by the end of the decade there will be few gas discoveries not in production or queued for production. Equally certain is that declining gas production in Canada and the US is providing a major, and potentially rapidly growing, market for LNG. Our annual reviews of recent developments in the US and Canada are on p14, 24 and 30.

On p26 Dr Salameh tackles the thorny question of how accurate are Middle East reserve estimates. His conclusion that these may be overstated by up to 300bn barrels, or roughly five North Seas, will certainly give pause for thought. If his assessments are right, the world faces very major challenges in developing and securing the oil supplies it will require.

However, the most minimal concern must be the latest developments in Russia. The nerve twisting drama of Yukos and the tax demands has now taken a dramatic and deeply disturbing twist. It now appears that the tax authorities wish to remove the bulk of Yukos’ production assets and so, we are told, sell them for a fraction of their worth. If this proves true, the hopes that Russia could be safely invested in, with law and regulation being fairly applied, are undermined. Investors with liquid assets will leave, those left will not be sure if they have paid good money for assets or liabilities. If the situation is not regularised very quickly - by Presidential intervention if necessary - then the outlook is very bleak indeed.

In the preparation of our megaprojects tables every effort has been made to ensure they are as accurate as possible. Our time and resources are necessarily limited, so if any reader has better information we would be very pleased to hear from them. We extend our thanks to all who have helped in the past.

The Energy Institute is to hold a major conference on oil depletion on 10 November, in which all aspects of the topic will be discussed. For further details, contact the EI Events Department t: +44 (0)20 7467 7100 or www.energyinst.org.uk

Chris Skrebowski

The opinions expressed here are entirely those of Chris Skrebowski, Editor of Petroleum Review, and do not necessarily reflect the view of the EI.

Folks,

I hope you caught Paul Krugman and Bill O’Rielly duking it out on Tim Russert’s show last night. It didn’t really come to blows, but I think if Krugman hadn’t continually taken the high ground, ignored O’Rielly’s personal attacks and partisan barbs, and tried to steer the debate back to substantive issues, it very well might have.

If you didn’t catch it, then here’s the transcript. I doubt it will communicate the tension in that exchange, but it’s interesting stuff. I wish other Democratic talking heads had the mettle to challenge the right’s lies and dirty tactics the way that Krugman did. O’Rielly showed himself, more than ever, to be an uninformed, common playground bully.

Transcript of Krugman - O’Rielly “Shootout”

–C

Folks,

Even though I just wrote yet another big blog entry on Peak Oil, I couldn’t let today pass without pointing your attention to today’s article by Truthout’s William Rivers Pitt.

Pitt writes about his discussions with a Reuters photographer who just returned from Iraq. The story that he pieces together confirms what most Americans already believe, and what this blog has asserted for nearly three years: that the war on Iraq is, and always was, about control over Middle East oil. And the Halliburton contracts in Iraq are too: the billions the US has given to Halliburton aren’t being used to rebuild Iraq so much as they are to build US military bases. And the military convoys are mainly occupied protecting convoys of oil and oil field equipment.

There are some startlingly frank quotes in this article. You won’t see any of this on CNN. Read it.

–C

The Writing on the Latrine Walls

William Rivers Pitt

Truthout

    I sat with a photographer from Reuters who had just returned from a six-month tour of Iraq. He had been tagging along with the Kellogg Brown & Root operation, subsidiary of Halliburton, and saw everything there was to see. He went from new military base to new military base, from the oil work in the north and back to the south, observing how busy were the contactors for Halliburton.

    ”I feel like I compromised every one of my principles by even being over there,” he told me after the story had been spun out a bit. His eyes, which had seen too many things through the lens of his camera, were haunted.

    It was two years ago that talk about invading Iraq began to circulate. Reasons for the invasion were bandied about - they had weapons of mass destruction, they had a hand in September 11, they will welcome us as liberators - but it wasn’t until the Project for the New American Century got dragged into the discussion that an understanding of the true motives behind all this became apparent.

    The Project for the New American Century, or PNAC for short, is just another right-wing think tank, really. One cannot swing one’s dead cat by the tail in Washington D.C. without smacking some prehensile gnome, pained by the sunlight, scuttling back to its right-wing think tank cubicle. These organizations are all over the place. What makes PNAC different from all the others?

    The membership roll call, for one thing:

• Dick Cheney, Vice President of the United States, former CEO of Halliburton;
  
• Donald Rumsfeld, Secretary of Defense;
  
• Paul Wolfowitz, Deputy Secretary of Defense;
  
• Elliot Abrams, National Security Council;
  
• John Bolton, Undersecretary for Arms Control and International Security;
  
• I. Lewis Libby, Cheney’s top National Security assistant;

    Quite a roster.

    These people didn’t enjoy those fancy titles in 2000, when the PNAC manifesto ‘Rebuilding America’s Defenses’ (Adobe document) was first published. Before 2000, they were just a bunch of power players who had been shoved out of the government in 1993. In the time that passed between Clinton and those hanging chads, these people got together in PNAC and laid out a blueprint. R