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Right click to open full image… Pictograph Courtesy of Viral..
So, can someone tell me again, why we shouldn’t tax the rich, and instead, balance the budget on the backs of everyone else?…….
I seem to be missing that little detail where that all makes sense……
It was as if the whole town was getting excited about the new Wal*Mart coming in on it’s edges, and the town council votes to allow it, only if the owner of that town’s businesses, can be in charge and set Wal*Mart’s prices.
What then is the point?
That, my friends, is what Health Care Relief is, without the public option…
Don’t take my word for it: Here are the words of Republican chairman Michael Steele, in an recent ad lit piece seeking donations to the RNC….
“Obama and liberal Democrats in Congress are pushing for a government-run, health-care scheme that is inefficient, limits choices and hemorrhages taxpayer money like the Post Office,”
Great Point: It costs me, if I use Federal Express, $7.95 for them to come to my door and pick up a letter… It costs me .44 cents if I choose to use the inefficient, choice limiting, and taxpayer hemorrhaging U. S. Post Office to drop by and pick up the same letter…
If the same were true for health care, which would benefit you for the same service? The cheaper inefficient, choice limiting, and taxpayer hemorrhaging bureaucratic public option, that happened to be much cheaper, or a service that charges 1700% more for the same option, which no one can afford?
The sprawling bureaucracy is starting to look good…
It is obvious why Steele brings up this point. The Democratic reform plan modifies the current price structure and that threatens their enormous profits, generated from hospital charges like $6,000 a day for semi-private rooms, $30 for two aspirin and a single round of chemotherapy for $13,000. Of course such costs are ridiculous; but they get collected every day, because there is no other option for citizens to turn to…
Public option is the only way Health Care can be reformed… There can be no relief, no lowered costs, and by default, no hope for America, if the public option is not somewhere in the Health Care Plan that passes Congress.
Private only? Might as well not build that Wal*Mart on the town’s edge if your going to keep the same high prices Colonel Potter charges in his downtown businesses, simply because he can….
Public option is the Wal*Mart of Health Care… Without it. We’re poor.
Despite the economic downturn, Wal*Mart has done well…
It would make sense to use the same approach with health care… Of course Wal*Mart is a private corporation…. But since no private corporation is willing to jump into the fray of reforming health care, it befalls the people, through their representative government to do it for them…
Biden decribed how it works
“So, the profits might not be as high per person they cover, but there will be a much larger pool of paying customers,” he said.
That is exactly how Wal*Mart works. Each of us pays much less for each of our individual products. We see savings. However as a whole, enough of us shop there allowing Wal*Mart to do rather well, compared to most other entities…
Some say the public option will bankrupt those private ones… Examples? None. Examples of the alternative? FedEx, DHL. and UPS all compete with the U. S. Postal Service. You get what you pay for..
So all those protesting the public option who use the post office to spread their literature, are really arguing against what works best for them… Kind of hard to take them seriously, isn’t it?
A public option lowers rates for everyone… Of course some people will be hurt… Those current Health insurance executives with 7 or 8 homes, will only be able to afford 4 extra homes now. But you and me? We will be able to afford going to the doctor….
Weed-whacking and Symbiosis
Anyone who has raised their own food in their backyard, knows a little about weeds. As often as you pull them out, they return to begin the process anew. So it is with arguments against offshore wind. Each time a new person ponders the issue and feels they have been genetically gifted with unique insight, we see two leaves sprout of an argument that has been debunked months before.
So like weeding ones garden, one must periodically revisit those areas to remove ideas that faulty genetic engineering has placed in places where they do not belong. And so:
What about buying Land based wind power which costs less than that offshore?
This may sound good if one is looking for the lowest cost. But as often as advice comes cheap, its value should be trusted only as deep as its analysis. I can tell you that overall a brand new Mercedes CLK63 sedan is cheaper then a used Dodge Neon. And you may not believe me. But only by investigating the analysis will we know if buying a CLG63 is better for us in the long run….(It’s not.)
So let us first examine the myth that land based wind is cheaper and secondly, probe the economics behind that myth that are always happy to propel that myth forward.
Of course anytime one makes generalizations as I just did, one risks the case that an exception will prove that the overall statement is not correct. It is possible for example in North Dakota, to build a simple small windmill, free on public land, close to existing transmission lines and do it cheaper than build a towering work of engineering on an offshore platform eleven miles into the ocean. That makes sense.
Therefore we need a common denominator or formula that translates all power sources to a single cost effective denominator so we can compare apples to apples as the saying goes, and not find ourselves comparing apples to paramecium, disintegrating pop stars, classic cars, or even oranges.
The best bet found so far for the simplistic comparison of power sources, is the $ per MW that many of you following this argument, have seen repeated over and over. Since at this same time last year even I had no idea what $ per MW was, I will take a moment to explain.
Most of you who pay for your own electricity have at least seen the kilowatt listed on your Delmarva or Electric Co-op bills. This is the standard method of measuring the amount of electricity coming into your home. It traces its origins to James Watt who by many is considered to be the founder of the Industrial Age by his invention of the steam engine. Watt needed a method to measure work produced, and electric companies were quick to apply it to their needs a hundred years later. A watt is a rather small measure. It takes a hundred to power a light bulb. Therefore the standard measure is considerably larger, a thousand times to be exact, and because of that precise level of expansion it is called a kilowatt, or a thousand watts. One kilowatt supplies ten 100 watt bulbs, and is roughly equal to 1.34 horsepower, which is enough to power a large Wal*Mart-bought automatic lawnmower. Therefore for household usage, a kilowatt is the preferred level of measuring electric energy. Since we humans are habitual measurers of time, the amount of energy it takes to supply a kilowatt over the time frame of one hour, is simply called a kilowatt hour. Keep in mind there is a difference between a kilowatt and a kilowatt hour. One can survive a 300 kilowatt lightning strike, but would eventually succumb it it had to undergo that ordeal for a full hour. Therefore on our electric bills we pay for kilowatt hours (kWh), which is simply the amount of electricity required to burn those ten light bulbs for one hour.
A megawatt or (MW) is a thousand kilowatts ( kw), just like a Megabyte (MB) on your computer is a thousand Kilobytes (KB). So if we are measuring power to a system of homes numbering in the thousands, it would make sense to use MWh to do so….( For the geeks and trivial buffs the next levels upward are giga, tera, peta, exa.) For principals of scale, the entire US power supply is around 4 petawatts, up from 2.7 PW in 1992)
Therefore when comparing the costs of different energy applications we need to consider the cost per MWh of energy produced. Then if that source is close or far away, we need supplement that generation cost with transmission costs to get a true idea of what we pay. It is easy really. It would be similar to you comparing how much a head of lettuce would cost to grow outside your kitchen window, and how much it would cost to drive both ways to purchase it at a store.
Bluewater wind according to the latest contract that almost, almost became reality last December had members of Delaware’s Legislative Committee not interfered, was costed out at at $98.93 MWh. So for the price of filling ones gas tank at today’s prices, Bluewater Wind will provide Delmarva the yearly average electrical needs of around a 876 homes for that one hour! Wow! For you non math-wizards this gives the average household a monthly charge for the usage part of their utility bill close to $81.31. (Keep in mind we pay an additional charge for demand as well).
What about buying Land based wind power which costs less than that offshore?
First of all, despite common assumptions, does it?
Remarkably the global experts live here in Delaware. Their names may be familiar to some: Jeremy Firestone and Willett Kempton. Their conclusion:
“The bottom line is that, with the refinements to our comparison offered by WGES, along with the final price of the Delmarva/Bluewater Power Purchase agreement (PPA), the Bluewater Wind price still appears to be lower than the price offered today by WGES. (Washington Gas & Electric Service)
So how much lower is Bluewater Wind’s offshore 25 year contract cost compared to a 2 year contract with WGES ‘s offer based on land based wind? Compare $98.03 MWh with $145.00MWh and you have your answer. This is not slanted analysis. These are the two actual choices on the table for those Delawareans who currently subscribe to Delmarva. That $46.96 dollar savings (per MW) is what Charlie Copeland, Thurman Adams, Harris McDowell, Tony Deluca and others, has just prevented you and your children from receiving irregardless or whether it is spread to all Delawareans or not! Not just for two years, but twenty-five.
But how can that be? How can offshore wind be so much better and cheaper than that produced on shore?
The three answers lie in 1) economies of Scale, 2) more available wind offshore, and 3) proximity to our market thereby reducing transmission costs.
The head of Delmarva, Gary Stockbridge, frequently misquoted we could get cheaper wind power on land from Pennsylvania. Naturally the next question that popped into everyones head was: how much wind power is available from Pennsylvania? Apparently not much. Currently there are 89 MWh of PA wind power. Proposed? As of last week, 211 MW which have yet to go through the process Bluewater Wind has already begun. Total PA potential? 300MW! And we are to expect that all of this meager total will benevolently be sent to Delaware, so we can benefit from wind power that is already more expensive than that made offshore?
It would also be wise to remember that demand for a product has as much to do with determining the price of something as does the cost required to produce it. By 2020 almost 1/6 of the Northeastern Corridor’s electrical load will be required to come from renewable sources. (Right click on image below to see the Northeastern Corridor.)
That includes Delaware’s 20%. From what source is this to come? And what if there are too few sources to provide this phenomenal demand? The price goes up, and up, and up. So much for wind remaining a cheap source of electricity if we try to get it from another state besides Delaware.
The offshore wind farm was originally planned for a capacity of 600 MW. In the deal approved with Delmarva it was narrowed to a capacity of 450 MW. Towers offshore can be built higher than onshore. The rotors can be built larger, since they are transported by ships, instead of trucks switchbacking up winding mountain roads. At altitudes of 80 m (or 250 feet) the wind blows uninterrupted as opposed to ground level due to the lack of turbulence that land objects create. Anyone who has ever sailed on open ocean knows how the wind seems to blow continuously instead of in bursts as we experience here on land. Therefore those offshore turbines tend to produce more electricity than those wind mills locked down on shore. We communicate this in our discussions by saying offshore wind has a higher capacity to be busy making power, than that capacity found on shore.
Everyone knows that wind does not blow all the time. Therefore when considering where to put a wind farm, (NOAA already has all the data), one looks for a place with a higher capacity for making power. This higher potential of offshore wind, is based on solid evidence. The combination of larger turbines which are able to generate as much as 5MW of power compared to land based units making 1MW, and the greater chance that the wind will blow offshore than it does onshore, ultimately mean that despite the higher cost of construction required for a wind farm built in water, the cost per MW will be lower…It is exactly the same principal that occurs in transportation where even though a bus costs more to rent a does a car, if you want to transport 450 people to Washington DC, it is better to rent buses to do so in order to achieve a lower cost per person, instead of finding a fleet of cars to carry them.
The third reason offshore wind in Delaware is cheaper than importing outrageously expensive onshore wind from Pennsylvania, is the cost of getting it here. Remember from Chapter 2 that transmission lines lose 10% of the power they carry in form of heat. Bluewater’s power ties into the grid at the Bethany Beach sub station, and that location is where the transaction price will occur. This higher level of efficiency means the entire system saves 10% over that of another system including us and stretching over 300 miles away. 10% is a lot to waste.
So even though a bus costs more than a car, the “cheaper-to-construct” land base wind power provides its electricity per MW at a much higher price than any local offshore wind farm would for Delawareans.
Symbiosis:
Anyone who has studied “systems” knows that any system that is balanced usually maintains the fine line of survivability. In politics, one has to look only as far as our three branches of government to see stability lies in balance. Likewise any parent of a student creating a terrarium knows the very fine line of balancing all the parts to create a whole that works.
It is obvious that deregulation in its current state does not work. It is equally obvious that offshore wind on the Atlantic Coast, due to its proximity to the largest power consumer on this planet, is a definite good investment. Any capacity from any North Atlantic wind farm built, will be sucked up by the power hungry Northeast corridor with barely a blip. But if wind power is allowed to become a producer of cheap energy, and able to sell that energy at rates way below that of Carbon fuel, as will happen in the future, then the free market that was set in part by the movement to de-regulate electrical generation, will possibly be able to succeed after all. The only reason we are paying 60% more under this arrangement, is because there is no other entity to compete with Delmarva and force down its inflated prices. Well guess what, with Bluewater Wind……now there is.
And here is the kicker:
As carbon fuel continue to skyrocket and wind continues to become cheaper, the entire Eastern Seaboard will one day become one long wind farm. It will happen as did cell towers spring overnight across this country, as were fiber optics buried from one shore to the other, as were four lane highways carved out of mountains and spanned across American rivers, as were airports built outside every large American city, as was a canal carved across Panama, as did steam ships replace graceful clippers, as iron horses replaced living ones.
And to think……if a tiny band of horse-shit shoveling farmers had been as successful in their attempt to block the very first railroad from being built, simply because it would make their livery business obsolete?
How different our world would be?
Just as those who saw the railroad’s potential, and looked westward at 3000 miles of unexplored wilderness, knew of its inevitability, those of us who see the end of an era of carbon energy approaching with the speed of a summer storm, know too offshore wind spanning the length of the Atlantic Seaboard is also inevitable.
Courtesy of ENS (Environmental News Service)
And where will the new cottage industry of off shore wind be settled, like the Silicon Valley of chip technology? Obviously where it was first done….
There is no time to lose if that central hub of expert manufacturing on this side of the Atlantic is to be located in Delaware………We are in the race, like it or not.
As I pulled up to the pump this morning, due to a set of bizarre circumstances, I was able to remember exactly the price of gas I paid for at the same time, at the same gas station this time last year. For those of you with long memories you also may remember at this time in 2006 we were paying around 3.29 per gallon of regular.
Of course with public outrage, we were told there was nothing that could be done about it. Refineries were off line. Crude was too high, world wide demand was forcing up the price. We grumbled and willingly paid and then found out that Big Oil scored a 35 billion profit in one quarter.
No one mentioned the real reason. That was because republicans controlled all three branches of government. There was no way the people could investigate and determine whether they were paying a fair price, or being gouged. And for some unknown reason, any attempt by a Democrat to hold a public hearing, was squashed by both Hastert and Frist.
Face reality. If there is no reason to not to raise prices, why would one forgo the extra money pouring into the corporate coffers? And because of the tremendous amounts of money funded to “W” for both his campaigns, and the tight connections between Cheney and the Big 4 oil executives, they were guaranteed no interference from any of the branches of our republican government.
But that changed in November. Due to Rove’s miscalculation and an underestimation of the number of fake votes needed to win the election, Democrats were able to gain the upper hand in both the House and Senate.
Of course the republican complicity in this was brought up at election time. And of course the republicans tried hard to dismiss it, but the voters this time, did not buy it. Perhaps more than any other reason, dissatisfaction with republican leadership over this one issue, caused massive defections over to the other side.
So where are the facts? If you take a hard look at this chart, anyone with a smattering of economic knowledge will see that for all intents and purposes, that the price of gas should be even higher this year than last, not 50 cents per gallon lower. So by default, that means that whereas gas was 3.29 a gallon, it really could have been sold fairly at say 2.79 a gallon.
The same excuses use by republicans last year to pump up the costs, are even higher this year. The only difference between the two summers is that during this summer, we have Democratic control of the Congress. For this alone, Americans need to hold republicans accountable for all the lost money that was robbed from them last year.
How much was that? At 50 cents a gallon times each 40 gallon fill-up, that would be an extra 20 dollars per fill-up. At two fill-ups per week times the twelve weeks of summer, the republican gasoline scam cost most families around 480 dollars last summer.
So ladies and gentlemen,…. the Democrats, ….just by being in control of only one branch of government, have saved every American family at least 480 dollars over this summer. I don’t know about you, but that is what I call ……real politics………………
Fake politics is deciding to drop the price the day campaign season starts in earnest on Labor Day. A summer of profit taking, …….that’s all it was.
Remember the movie Matewan? When courageous West Virginian miners stood up to the union busting coal companies, and risked everything to win their right to live as Americans should? Today, American unions aren’t the same. Perhaps spoiled by their success during the twenty’s, today they rarely show that much muscle and instead pat themselves on each others backs whenever they finagle an agreement that often capitulates to corporate owners, but, in turn, increases their own personal net worth as wealthy individuals.
Fortunately that is not the case in Iraq. In a little known story, the unions of oil workers, located in the southern area of Iraq near Basra, organized and stood up to first Bremer’s coalition government, then Halliburton’s storm troopers, and now the puppet government of Maliki. As we now are coming to realize, the current military buildup or Surge as it is called, which we all knew had little chance of overall success, is simply a political move to apply pressure and force Iraqi passage of the Hydrocarbon’s Act, which as mentioned elsewhere, guarantees a whopping 70% instead of a normal 10% of Iraqi oil profits to American oil companies. The surge is there not just to protect a few American supporters, but is intended to intimidate and to suppress any Iraqi opposition that would naturally be expected to occur whenever one nation is forced to give up its national treasure to another. But as is often the case, when one pushes too hard to exert a pressure, a counter-resistance grows beneath their thumb.
So it is with the Iraqi unions. Their broken country is saturated by corruption, fed by the US interests, Exxon-Mobil, Phillips-Conoco, and Chevron, all of which exert a strong influence upon those “oil ministers” who were groomed on these shores months before this war began. In this environment, it is only the labor unions who have found the moral courage, as did Americans of old, to stand up against impossible odds, and proclaim “no, this just isn’t right.”
What bravery those unions are showing against impossible odds, is even more admirable when compared to the ethics of those at home, right here in our “land of the brave”.
Unfortunately, the moral courage, once possessed by our reporters and newsman on which many of us were weaned during the Nixon-Watergate years, now seems to have ebbed somewhat. Today if one wants truth, only the blogs are speaking it.
Just recently Kucinich’s magnificent 50 min speech which only got to the floor by a rare parliamentary move, outlines for the first time on the hallowed floors of Congress, exactly the horrific terms we are forcing upon the Iraqi’s with this Hydrocarbon Bill. Any mention of this historical event was buried deep on the back pages of America’s mainstream media, or worse, met with silence.
But bloggers jumped all over it. One must shake his head in shame. How can one honestly explain why newspapers, which of course, are primarily funded through advertising revenues, could possibly be loathe to print, and want to bury, a news story that now rivals the Watergate cover-up as the prime example of our government going over the edge? Does not this Hydrocarbon Bill, developed here inside the Beltway’s oil-funded think-tanks, and now being forced through the Bush administration’s approved and appointed Iraqi ministers, when read fully, prove without a doubt that we went to war for oil? Can any reasonable person assume a different outcome? Can anyone also explain why none of 2008′s front runners, also funded primarily through large corporate donors, have dared to mention this outrage in any of their campaign whistle stops?
Afraid of something they must be.
Are PSA’s really that bad? Here is what the Oxford Institute for Energy Studies (page 87) had to say about them.
“PSAs are the oil industry’s equivalent of sharecropping contracts. As with the latter, economic theory suggests that PSAs are inefficient contract forms because the FOC
does not receive its marginal product. Thus, the question arises how and why this inefficient form of an oil contract flourishes. Principal-agent theory helps to explain
how risks and rewards have to be balanced in order to nonetheless let this type of arrangement prosper. The fact that PSAs are one of the dominant exploration and
development agreements points towards their efficiency as an institutional arrangement for risk sharing even if they are inefficient in terms of economic theory. In that sense it can be argued that a PSA is a political rather than an economic contract.”
What this says in “Oxford”ese, is that PSA’s are simply one sided agreements, like slavery, that cannot occur in free markets where both parties are willing. They can however, occur in forced arrangements.
We have taken the Matrix pill. And now it is clear. This is why we went to war. This is why we are spending a Trillion Dollars. This is why Rumsfeld hamstrung the Pentagon so success on the ground could not happen. This is why Cheney was so adamant not to release the Energy Task Force’s documents to the GAO. This is why the Vice President went to such great lengths, resulting in his imprisoned chief of staff, to discredit the notion that Iraq did not have nuclear weapons. This is why, against US law, records of who visited the Vice President, were erased. This is why Wolfowitz was put in charge of the IMF. This is why, when the officers on the ground, who we were repeatedly told were the ones being listened to, said emphatically that the surge was a waste of men and money, many names were passed over until a military commander was found who would say, even if only indirectly, that he could support it.
But enough about cowardly squeamishness. I came to praise the Iraqi Oil Unions….
Just last week they received concessions from the Maliki government, and a strike was averted. This threatened strike would have, if it had occurred, shut down all oil flowing onto tankers out of southern Iraq. Those of you who understand Moslems, know that they place great symbolism upon certain numbers. Very important to them is the number 14. Article 14 in their demands states as follows:
14- Submit the draft of the new oil law for our union to study; we have reservations and questions concerning it.
If one continues reading one soon finds this clause in their list of initial demands.- Make a determination on oil companies’ profits margins on the basis of the amendments to which you agreed and to determine those margins according to the certification/attestation from the south region financial/tax jurisdictions, not according to the formula adopted by the Minister that has been deemed detrimental to our membership.
In American prose, that means “Don’t go with the American plan.” Perhaps I alone am guilty of showing my personal ignorance in my assuming that the barbarity of Saddam’s regime flowed through all Iraqis, and that the cruel bombings of civilians showed a lack of polish on their entire culture. I was somewhat take back by the civilized beauty of this statement.
It was our hope, after the fall of that statue, to witness the dawn of a new era marked by the recognition of the legitimate rights of our members in the oil sector. This sector that for so long has suffered injustice and been denied equity. Since the advent of this new era, we focused our efforts into effectively thwarting all attempts to exploit this sector and tamper with our resources. You have been informed of how we stalled foreign companies in their attempts to control our oil fields and refineries, and how we forced them to leave. In addition, we worked hand in hand with the ministries and agencies to accelerate the pace of oil production, and to safeguard the means of production, and raise awareness amongst workers of investing to boost the chances of success for the new era. Unfortunately, our demands for entitlements were ignored, despite four years of continued promises by ministry and government officials. In fact, we took our demands to the highest levels of the government.
We kept the prime minister apprized of our demands, but were disappointed when we came to realize that our demands fell on deaf ears. Throughout this period we worked to defuse anger and resentment and address criticism leveled by our members who mistakenly thought of us as the ones failing to put forth their legitimate demands.
In a joint statement, the Iraqi Labor Unions demand that the new oil laws be renegotiated. Knowing more than anyone else, what was at stake, this group has tried everything possible to convince rational human beings that these laws are not fair to the average Iraqi citizen.
In some commentary spoken in London, Hassan Juma’a, President of the General Union of Oil Employees in Basra, gave some illuminating testimony.
Particularly he provide some insight how Iraqi’s feel towards us when it comes to our actions with their oil. One can see the heavy hand of Bremer was instrumental in many of the problems we face today.
Paul Bremer’s decrees banned the formation of trade unions and associations in order to protect US interests. [They said that the 1987 decree remained in force]. We expected that the living standards of the workers would increase, but a table of wages was issued by Paul Bremer with eleven steps, where the oil workers’ wage was set at the equivalent of $35. That was strange for a country which has the second largest oil reserves in the world.
Meanwhile, workers brought from Asia by KBR [a subsidiary of the US corporation Hallliburton, granted contracts by the occupation authorities for reconstruction] were getting twenty times as much.
Then, in subtle understatement he describes the struggle, that must have mirrored the struggle at Matewan.
In the oil union we objected to the wages decision. The US administration refused to listen to us, so we staged a strike on 10 August 2003. We stopped oil exports for three days. It forced the Americans, the Oil Ministry, and the Finance Ministry to scrap the two lowest scales in the wages table.
We think it’s important KBR gets out, because we believe that US strategy is that military occupation should be followed by economic occupation.
So why has it taken so long for oil revenues to pay the cost of rebuilding Iraq. The finger again points to Cheney. According to the Union:
The Federation has announced it “will endeavor to to prevent exploitation by foreign companies and their flagrant interference in production and exports,” blaming the companies for “exploiting the current political vacuum and chaos in the country.” They claim that the Iraqi oil industry, far from needing external investment, is in fact being deliberately starved of funds to the tune of $4.5 billion this year, simply to worsen the country’s negotiating position as infrastructure slowly collapses. In fact the unions have been active in voluntarily maintaining infrastructure to fend off the need for external investment. They are also working on publicizing these secretive deals and building resistance.
As evidence accumulates one story at a time, the trend becomes very disheartening to any American familiar with the story of our founding Fathers. It will be hard to explain to our children, our complicity in letting Cheney do to Iraq, what we rebelled against Great Britain for doing to us.
Cheney took us in to rape Iraq. That is the only conclusion one can reasonably assume when presented with all of the unadulterated evidence.
It is truly ironic that American values are much more prevalent in a labor union halfway across the globe, than they are here within our hallowed halls of government.
1) Republicans want the surge to last till September. Why?
2) Dick Cheney is off somewhere in the middle east, on another secret mission, immediately just after Rice got back. Why?
3) We still do not have oil flowing from Iraq, four years after ‘mission accomplished”, Why?
Is there a connection between these three threads?
Now four years after the war was won, we still do not have a contract with a legitimate Iraqi government to remove the oil from Iraqi sands. What is wrong with those Iraqi’s. Don’t they want our oil revenues to rebuild their country?
The holdup seems to be what is known as the PSA’s (production sharing agreements). These clauses guarantee US oil companies 70% of the profits up to amortization and 20% after that, whereas the going standard rate is 10% of profits to oil companies, and 90% to the country. This oil bill must be passed before the Iraqi congress goes on recess May 31st, just 21 days from the date of this posting.
The oil companies estimate that it will cost between 1$ and 1.50$ to extract a barrel of Iraqi gold, the premium of all crudes. At today’s prices of 75$ a barrel this rate of return would be equivalent of kicking a baby in its face and stealing its candy.
Iraqi resistance understands this. And yet this insider’s fact has not even made our evening news.
This is not the result of a random compilation of events.
As we moved in immediately after the invasion, instead of allowing Iraqi’s oil engineers to redevelop their own oil fields, (we are talking about the same men who kept the oil flowing during the sanction years to the amazement of the world, with little more than ingenuity), two Texan companies, Halliburton and Bechtel, were both put in charge. As recent congressional hearings have discovered, these non-bid corporations were paid on a nominal cost-plus basis, meaning they used the most expensive technology available, thereby running up the costs as well as their percentages, and then stopped, unfinished, right before the wells were working. Now, at this point in time, no one else but either of these two companies can “turn on ” the wells, with the quick installation of one or two mother-boards. They sit now, bidding their time, while they wait for a “legitimate contract” which once passed, will guarantee at least 70% of the substantial profits.
This is actually the fuel that flames the insurgency. Iraqis want the oil developed, not stolen. The bomb we saw that killed the Iraqi Vice President Mahdi, a feverish PSA oil law supporter, was detonated at the same time while the preliminary oil bill was being debated in their congress. As with all Arab attacks, the timing of these events is important; it is meant to send a message. Again, as far as I know, no one in the US news media, has yet made the connection.
This rape of the Iraqis’ oil rights, finally explains why Iraqi sentiment shifted so drastically after the war. In the beginning the Iraqi’s welcomed us with open arms, (Viva George Bush) until they realized we really were moving in on their oil. This also explains the timing of the insurgency, and why the fighting continues, as well as to why there is a Civil War.
The Sunnis benefit if the oil bill is to pass, since they will get 10% of the profits: (1/3 of 30%); Sunni’s have little or no oil resources on their territory if the country splits into three federations. The Shiites, and Kurds, both who have an abundance of oil, want Iraq to develop their own oil at contracts similar to their neighbors, with oil company’s taking a paltry 10% of the profits, and 90% coming back to Iraq.
So what’s behind the Cheney visit? Why now?
Last week, the Kurds signed deals with both Norwegian and Turkish companies to develop new oil fields in their province. These were not at 70% PSA rates.
This electrified Cheney and his Iraqi leadership, which said that any contracts signed before the new law was passed, would be invalid and illegal.
Right now the Kurds hold 58 out of the 275 seats in the Iraqi Congress. At a 29.10 % voting bloc, the oil bill can be passed without one Kurdish vote, if the Sunnis decide to hold firm and in one bloc vote together. Hence Cheney’s visit to Saudi Arabia, Jordan, Egypt, and now Iraq.
He needs to persuade (pressure) those governments to lean on the Iraqi Sunnis and force them to line up behind the Oil Bill, so that none of the votes of the Kurds are needed.
In a democracy it is commonly assumed that open discussion will generate the best results. However as of May 6, the Iraqi legislature had not yet seen a draft of the Oil bill that Cheney wants passed by May 31st. Who has seen it? Here is what Chinese intelligence had to say about it:
The law was in essence drafted, behind locked doors, by a US consulting firm hired by the Bush administration and then carefully retouched by Big Oil, the International Monetary Fund, former US deputy defense secretary Paul Wolfowitz’ World Bank, and the United States Agency for International Development. It’s virtually a US law (its original language is English, not Arabic).
The right to self determination in a democracy apparently does not apply to oil. Condoleeza Rice was ineffective in her tactics of persuasion and now Cheney (not as Vice President, but as a representative of “Big Oil”), has gone to play hardball. Expect him to say behind closed doors: “Our meters are on your wells. You will have NO oil, and no income period, unless you give me the PSA’s. If you refuse, you no longer have our confidence in your leadership. Without our protection, you are at the mercy of your own people…….”
And we saw what happened to VP Mahdi even with our protection.
With this much pressure being placed by the US on this one bill, we can now understand why Cheney and his supporters told us the surge was so important. He needed it to provide enough stability in Baghdad so this bill could pass. It is now clear why Republicans are saying “wait till September”. At that point we will have our 70% rate of return. We can further decipher why Democrats are saying “we will know by June”. They are implying you’ve got till May 31st, Mr. President, or we are pulling the plug.
In the meantime, people who we were told are terrorists, continue to fight a nation who seems intent on stealing their livelihood from out of the very ground they stand on.
Thanks to Chatterjee and CorpWatch for this reporting. This is one more grain of evidence that this war was fought not for the benefit of America, but for the benefit of Cheney’s stock futures which expire in 2009, well after his current term has ended. Harsh as that statement may sound on its surface, if one uses this frame of reference as a polarizer, then the “idiotic decisions” that have led this country to its current situation inside of Iraq, actually make financial and rational sense.
What idiotic decisions? Those very decisions that seem to prolong the war, instead of resolving it.
The trail starts with a map found in Cheney’s drawer showing Iraq carved up into parcels of real estate. It runs through the Energy Task Force, through his private “Iraqi reading room” in Langley Field; it continues through deliberately misleading America in the case to invade Iraq, through micromanaging the personnel decisions within Garner’s team at the onset of the Iraqi reconstruction, through the shifting of funding from successful Iraqi programs to unsuccessful ones, through his insistence of “no-bid” contracts, and now through these new revelations.
What was revealed six days ago was that the meters measuring the Iraqi crude now being pumped into tankers at the mouth of the Euphrates, do not work. And have not worked since the invasion in 03. The responsible party is none other than Halliburton. This supposedly quick fix, is still pending. Basically no one, no one, can monitor how much crude is leaving Iraq.
According to this contributor at the Stars and Stripes, a back of the envelope calculation, that every centimeter lowering of a tanker equals 6000 barrels of crude, is how business is done. A miscalculation by a couple of inches, can mean the difference of 30,000 barrels or oil or at today’s price of 75 dollars a barrel, 2 ¼ million unreported dollars.
If you don’t already have stock in Halliburton, you need to invest today. In fact, being a betting person, I would say the odds are good that Mitch McConnell, John McCain, Mike Castle, and every other congressperson who votes in line with Cheney on this issue, has some Halliburton hidden somewhere in their portfolio. For they are certainly not voting for the American people.
For if truth is to be known, as long as there is chaos in Iraq, Halliburton will continue to reap enormous profits. Ironically, it is only when we actually do succeed, and the Iraqi’s can proclaim their own self rule, will the bonanza end for all of those holding stock options in Halliburton. Ending the war early, will no doubt cost Republicans dearly, literally.
