Thursday, August 25, 2011

Missing the Oil Story

Missing the Oil Story

Only two articles in the American media since September 11 have tried to describe how Big Oil might benefit from a cleanup of terrorists and other anti-American elements in the Central Asia region.
Recently I attended one of those legendary Washington dinner parties, attended by British cosmopolites and Americans in the know. A few courses in, people were gossiping about the Bush family's close and enduring friendship with the Saudi ambassador, Prince Bandar, dean of the diplomatic corps in Washington. By the end of the evening, everyone was talking about how the unfolding events were going to affect the flow of oil out of Central Asia.
I left wondering whether 6,000 Americans might prove to have died in New York for the royal family of Saud, or oil, or both. But I didn't have much more than insider dinner gossip to go on. I get my analysis from the standard all-American news outlets. And they've been too focused on a) anthrax and smallpox, or b) the intricacies of Muslim fanaticism, to throw any reporters at the murky ways in which international oil politics and its big players have a stake in what's unfolding.
A quick Nexis search brought up a raft of interesting leads that would keep me busy for 10 years if the economics of this war was my beat. But only two articles in the American media since September 11 have tried to describe how Big Oil might benefit from a cleanup of terrorists and other anti-American elements in the Central Asia region. One was by James Ridgeway of the Village Voice. The other was by a Hearst writer based in Paris and it was picked up only in the San Francisco Chronicle.
In other words, only the Left is connecting the dots of what the Russians have called "The Great Game" -- how oil underneath the 'stans' fits into the new world order. Here's just a small slice of what ought to provoke deeper research by American reporters with resources and talent.
Start with father Bush. The former president and ex-CIA director is not unemployed these days. He's been globetrotting as a member of Washington's Carlyle Group, a $12 billion private equity firm which employs a motorcade of former ranking Republicans, including Frank Carlucci, Jim Baker and Richard Darman. George Bush senior and colleagues open doors overseas for The Carlyle Group's "access capitalists."
Bush specializes in Asia and has been in and out of Saudi Arabia and Kuwait (countries that revere him thanks to the Gulf War) often on business since his presidency. Baker, the pin-striped midwife of 'Election 2000' was working his network in the 'stans' before the ink was dry on Clinton's first inaugural address. The Bin Laden family (presumably the friendly wing) is also invested in Carlyle. Carlyle's portfolio is heavy in defense and telecommunications firms, although it has other holdings including food and bottling companies.
The Carlyle connection means that George Bush Senior is on the payroll from private interests that have defense business before the government, while his son is president. Hmmm. As Charles Lewis of the Washington-based Center for Public Integrity has put it, "in a really peculiar way, George W. Bush could, some day, benefit financially from his own administration's decisions, through his father's investments. And that to me is a jaw-dropper."
Why can we assume that global businessmen like Bush Senior and Jim Baker care about who runs Afghanistan and NOT just because it's home base for lethal anti-Americans? Because it also happens to be situated in the middle of that perennial vital national interest -- a region with abundant oil. By 2050, Central Asia will account for more than 80 percent of our oil. On September 10, an industry publication, Oil and Gas Journal, reported that Central Asia represents one of the world's last great frontiers for geological survey and analysis, "offering opportunities for investment in the discovery, production, transportation, and refining of enormous quantities of oil and gas resources."
It's assumed we need unimpeded access in the 'stans' for our geologists, construction workers and pipelines if we are going to realize the conservation-free, fossil-fueled future outlined recently by Vice President Cheney. A number of pipeline projects to carry Central Asia's resources west are already under way or have been proposed. They would go through Russia, through the Caucasus or via Turkey and Iran. Each route will be within easy reach of the Taliban's thugs and could be made much safer by an American vanquishment of Muslim terrorism.
There's also lots of oil beneath the turf of our politically precarious newest best friend, Pakistan. "Massive untapped gas reserves are believed to be lying beneath Pakistan's remotest deserts, but they are being held hostage by armed tribal groups demanding a better deal from the central government," reported Agence France Presse just days before September 11.
So many business deals, so much oil, all those big players with powerful connections to the Bush administration. It doesn't add up to a conspiracy theory. But it does mean there is a significant MONEY subtext that the American public ought to know about as "Operation Enduring Freedom" blasts new holes where pipelines might someday be buried.

2 comments:

  1. Missing the Oil Story. (War for Oil).(economic and political issues surrounding War on Terrorism, 2001-)(Brief Article)
    Synthesis/Regeneration

    Recently I attended one of those legendary Washington dinner parties, attended by British cosmopolites and Americans in the know. A few courses in, people were gossiping about the Bush family's close and enduring friendship with the Saudi ambassador, Prince Bandar, dean of the diplomatic corps in Washington. By the end of the evening, everyone was talking about how the unfolding events were going to affect the flow of oil out of Central Asia.

    I left wondering whether 6,000 Americans might prove to have died in New York for the royal family of Saud, or oil, or both. But I didn't have much more than insider dinner gossip to go on. I get my analysis from the standard all-American news outlets. And they've been too focused on (a) anthrax and smallpox, or (b) the intricacies of Muslim fanaticism, to …

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  2. Libya. Oil. War. Is it that simple?
    Obama cited national security and potential massacres as reasons for intervention. But the price of gas also counts
    By Andrew Leonard
    AP/Hussein Malla
    A Libyan oil worker walks in front of a refineryCritics on both the left and right are asking the same question: On what grounds can President Obama justify military intervention in Libya that do not also mandate immediate action in Bahrain and Yemen? In all three cases, authoritarian governments are cracking down on protesters and dissent with murderous reprisals. Moammar Gadhafi might boast the honor of being the craziest dictator in the North African-Mideast region, but sheer insanity doesn't seem quite enough of a rationale for raining down Tomahawk missiles.

    Could the answer be as simple as oil? The politics of fossil fuel have explained a century of foreign interventions in the Mideast -- why not this one? And you don't have to be a war-protesting no-blood-for-oil-sign-waving critic to make the claim: On Monday, an influential Democratic congressman suggested Obama's intervention was all about the black gold.

    From The Hill:


    Rep. Edward Markey (D-Mass.), the ranking member of the House Natural Resources Committee, said that he agreed with President Obama's decision to launch, along with allies, attacks against Libya and its leader, Moammar Gadhafi. But Markey said the attacks were primarily motivated by oil.

    "We are in Libya because of oil," Markey said on MSNBC. "It all goes back to the 5 million barrels of oil we import from OPEC on a daily basis."

    (Democratic Senator James Webb made similar points in a Tuesday afternoon interview with NBC's Andrea Mitchell.)


    Libya is the 16th largest producer of oil in the world, responsible, before the recent turmoil, for about 2 percent of world production, or around 1,600,000 barrels per day. Yemen and Bahrain are also oil producers -- but far smaller. Bahrain pumps out 45,000 barrels per day; Yemen, 260,000.

    Since civil war broke out in Libya, production has fallen by about 75 percent. But the quality of Libya's oil may be more important than the sheer volume of production. Libya's "sweet light crude" oil is extremely low in sulfur content, which makes it highly desirable in global markets: It's cleaner burning and easier to refine into gasoline. Saudi Arabian oil, in contrast, contains much more sulfur. Swap in Saudi oil for missing Libyan oil and you end up maxxing out world refinery capacity, and hiking downstream prices for gasoline.

    Rising oil prices are considered a major threat to U.S. economic recovery. So if you're looking for a tidy explanation for Western willingness to intervene in Libya, there you have it. Instability in Egypt, Tunisia, Bahrain or Yemen has little potential for roiling world energy markets. Libya is a major player -- what happens there can and will affect the global economy.

    The fact the European oil companies like Italy's Eni and Spain's Repsol have the biggest foreign presence in Libya also goes a long way toward explaining why the U.N. Security Council agreed to act. But the explanation becomes a little less tidy when you consider that the quickest way to restore order to world oil markets would simply have been to let Gadhafi wipe out the rebels, something he seemed poised to do before the U.N. Security Council vote authorizing a no-fly zone. That would have been hard-headed realpolitik.

    The situation we're in now, in which Western military might prevents Gadhafi from a quick victory, but keeps in place the conditions for a long-drawn-out civil war, actually predicts the worst possible outcome for oil markets. The brutal truth about intervention in Libya is that whether or not it was motivated by oil or economic concerns, the prospects for a quick resolution and ensuing calm in oil markets are bleak. That's a lesson we should have learned from Iraq.

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