High Oil Prices Yield Iraq $79 Billion Surplus

Since the US invaded Iraq, we have spent $48 billion rebuilding the country. In 2009, the United States is predicting a record budget deficit of $482 billion.

The New York Times reports that the Government Accountability Office (GAO) has concluded in an analysis released on August 5, 2008, the soaring price of oil will leave the Iraqi government with a cumulative budget surplus of $79 billion by end of this year. The unspent windfall, which covers surpluses from oil sales from 2005 through 2008.

Over all, the report from the GAO estimates, Iraqi oil revenue from 2005 through the end of this year will amount to at least $156 billion. And in sick financial twist, large amounts of the surplus money is sitting in an American bank in New York — nearly $10 billion at the end of 2007, with more expected this year.

The report was requested by two senior senators, Carl Levin (D-MI) and John W. Warner (R-VA), and on Tuesday they were quick to express strong dissatisfaction over the contrast between American taxpayer spending on reconstruction and the weak record of spending by Iraq itself, in spite of the colossal surpluses. Sen. Levin is quoted as saying, "We should not be paying for Iraqi projects while Iraqi oil revenues continue to pile up in the bank, including outrageous profits from $4-a-gallon gas prices in the U.S. We should require that U.S. taxpayers be reimbursed for the cost of large projects."

The senators pointed out in a statement that in 2007, for example, Iraq actually spent only 28 percent of its $12 billion dollar reconstruction budget according to the accountability office – and even that number could overstate the success rate in most of Iraq, since $2 billion of the spending took place in relatively peaceful confines of the northern Kurdish region.

In response to this report, Deputy Treasury Secretary Andy Baukol agreed with the figures while also stressing “Iraq’s commitment to use its growing revenues.” The remark may sound a bit farcical, since the US is poised to post its biggest budget deficit EVER! To make matters worse, 90 percent of Iraqi’s revenues are from oil, the surging price of which has pushed gasoline prices north of $4 per gallon and has wreaked havoc on the U.S. economy.

In 2003, then-Deputy Secretary of Defense Paul Wolfowitz told the House Appropriations Committee, "We're dealing with a country that can really finance its own reconstruction, and relatively soon."

Read the entire New York Times article on the Iraqi surplus here and here.

Read the entire CNN.com article on the Iraqi surplus here.


plez sez: ONE MORE REASON to IMPEACH George W. Bush and Dick Cheney!

on top of their lies, a new Ron Suskind book alleges that the bush administration ordered the CIA to forge documents from iraqi intelligence to saddam hussein while making case for war in 2003), the iraqi government is housing BILLIONS in oil revenue surpluses in american banks (drawing MILLIONS in interest) while our economy has been driven to the brink of disaster (the eighth american bank this year failed last week in florida).

as if the lies and weak economy weren't enough, the US is spending BILLIONS of dollars rebuilding a country that is literally sitting on BILLIONS of dollars. there is no plan for repayment, no plan for restitution to the american taxpayer who has shouldered the burden of the war in iraq as well as the rebuilding effort. the oil companies are lining their pockets, thanks to the no-bid contracts they were awarded last month in iraq.

after it is all said and done... the american people, well, the poor and middle-class american people are being screwed (AGAIN!) by the bush administration. is anyone surprised?!?

Obama, McCain, and The Tire Gauge

Sen. Barack Obama was in Missouri a few days ago and he had a suggestion about how the US can reduce its dependence on foreign oil. How out of touch is Barack Obama? He's so out of touch that he suggested that if all Americans inflated their tires properly and took their cars for regular tune-ups, they could save as much oil as new offshore drilling would produce.

Time.com reports that since Monday, gleeful Republicans have made this their daily talking point, Rush Limbaugh is having a field day, and the Republican National Committee is sending tire gauges labeled "Barack Obama's Energy Plan" to Washington reporters.

The Bush administration estimates that expanded offshore drilling could increase oil production by 200,000 barrels per day by 2030. We use about 20 million barrels per day, so that would meet about 1% of our demand two decades from now. Meanwhile, efficiency experts say that keeping tires inflated can improve gas mileage by 3%, and regular maintenance can add another 4%. Many drivers already follow their advice, but if everyone else did, we could reduce demand several percentage points immediately.

In other words: Obama is right.

The real problem with the attacks on his tire gauge plan is that efforts to improve conservation and efficiency happen to be the best approaches to dealing with the energy crisis — the cheapest, cleanest, quickest and easiest ways to ease our addiction to oil, reduce our pain at the pump and address global warming. It's a pretty simple concept: if our use of fossil fuels is increasing our reliance on Middle Eastern dictators while destroying the planet, maybe we ought to use less.

The McCain Camp is trying to make the tire gauge a symbol of unseriousness, as if only the most foolish of Americans believed we could reduce our dependence on foreign oil without doing the bidding of Big Oil. But the tire gauge is really a symbol of a very serious piece of good news: We can use significantly less energy without significantly changing our lifestyle.

The energy guru Amory Lovins has shown that investment in "nega-watts" — reduced electricity use through efficiency improvements — is much more cost-effective than investment in new megawatts, and the same is clearly true of nega-barrels. It might not fit the worldviews of right-wing global-warming denyers who insist that reducing emissions would destroy our economy, or left-wing earth-firsters who insist that maintaining our creature comforts would destroy the world, but there's a lot of simple things we can do on the demand side before we start rushing to ratchet up supply.

There are other energy efficient things we can do to cut down our reliance on foreign oil: we can use those twisty carbon fluorescent light bulbs. We can unplug our televisions, computers and phone chargers when we're not using them. We can seal our windows, install more insulation and adjust our thermostats so that we waste less heat and air conditioning. We can use more efficient appliances, build more efficient homes and drive more efficient cars, preferably with government assistance. And yes, we can inflate our tires and tune our engines. While we're at it, we can cut down on idling (by getting out of our cars instead of sitting in fast food drive-thru lanes), which can improve fuel economy another 5%, and cut down on speeding and unnecessary acceleration, which can increase mileage as much as 20%.

To spotlight the "inflating their tires" part of the quote, the McCain campaign and the Republican National Committee have been handing tire gauges out to reporters in sarcastic celebration of Obama's birthday on August 4th.

The RNC is giddy with excitement over this latest "gaffe" by Obama, in a press release they wrote:

...the RNC is providing members of the media with complimentary tools related to Barack Obama’s energy plan – a brand new tire gauge. Because, instead of actually increasing America’s domestic oil supply, this is how Obama thinks Americans should try to alleviate burdensome pain at the pump.

The McCain campaign also used the tire gauge gimmick in a fundraising plea today:

Today, I'm asking for your help in putting Senator Obama's 'tire gauge' energy policy to the test. With an immediate donation of $25 or more, we will send you an "Obama Energy Plan" tire pressure gauge. Will simply inflating your tires reduce the financial burden of high gas prices on your wallet?

Now the Obama campaign has responded to the tire gauge rhetoric:

As Senator McCain knows, Barack Obama has a comprehensive plan to provide real relief to Americans struggling with soaring prices and make the long-term investments we need to break our addiction to oil.

And while the McCain team may is busy amusing themselves, the fact is that the idea they’re attacking is supported by, among others, top McCain surrogate Joe Lieberman, conference call host Mike Rogers, Governors Charlie Crist and Arnold Schwarzenegger, the Department of Energy, and NASCAR — all of whom have urged Americans to help save energy by minding tire pressure. But hey, who ever let the facts — or supporters’ positions — get in the way of a political attack? Aboard the Low Road Express, that’s no problem at all.

Read the entire Time.com article about McCain and Obama's Tire Gauge Policy here.

Read the entire CBSNews.com article about McCain and Obama's Tire Gauge Policy here.

Read Barack Obama's very detailed Energy Policy here.

Windfall Profits Tax on Oil Companies

plez sez: what do you expect from the mccain campaign?!? they ran out of fresh ideas back in 2000 when he was losing to george w. bush! imagine, losing to that loser! i guess two times is the charm, because he's gearing up for a royal ass whuppin' at the ballot box of Barack Obama.

what childish and churlish group for nincompoops sat around and thought up this tire gauge joke? they should lose their campaign credentials and get the boot! not only are they joking about a very serious matter, but they are also WAAAAAAAAY off base, because what Obama said is TRUE! real gasoline savings can be realized with some very inexpensive car maintenance... and i should know, i drive a 10-year old gas GUZZLIN' Ford SUV!

the sad part about this whole episode (once again) is that the chatter emanating from the mccain camp drowns out the sound reason and good judgement from Barack Obama. they must sit around like writers for the jay leno show waiting for a sound bite upon which to write their rye joke. instead of offering capable alternatives, the best the mccain camp can do is come up with a childish prank and misinformed attacks (buoyed by the rnc and their lapdog, rush limbaugh).

i'm still waiting to hear mccain's plan... other than waiting 5 to 10 years for the oil from off-shore drilling to make its way into the market!

For All the Oil in Iraq - Part 2

About ten days ago, plezWorld went out on a limb and opined that the US had everything to do with the Iraqi oil field no-bid contracts going to American oil companies. The New York Times reports that a group of American advisers led by a small State Department team played an integral part in drawing up contracts between the Iraqi government and five major Western oil companies to develop some of the largest fields in Iraq.

Excerpts from the article continue:

The disclosure, coming on the eve of the contracts’ announcement, is the first confirmation of direct involvement by the Bush administration in deals to open Iraq’s oil to commercial development and is likely to stoke criticism.

In their role as advisers to the Iraqi Oil Ministry, American government lawyers and private-sector consultants provided template contracts and detailed suggestions on drafting the contracts, advisers and a senior State Department official said. It is unclear how much influence their work had on the ministry’s decisions.

At a time of spiraling oil prices, the no-bid contracts, in a country with some of the world’s largest untapped fields and potential for vast profits, are a rare prize to the industry. The contracts are expected to be awarded Monday to Exxon Mobil, Shell, BP, Total and Chevron, as well as to several smaller oil companies.

The deals have been criticized by opponents of the Iraq war, who accuse the Bush administration of working behind the scenes to ensure Western access to Iraqi oil fields even as most other oil-exporting countries have been sharply limiting the roles of international oil companies in development.

Read the entire New York Times article on about the US government's involvement in the awarding of no-bid oil field contracts in Iraq here.



plez sez: it's good to see that the ole crystal ball still works!

the funniest line in the article (more than likely added by the editor for some comic relief): "It is unclear how much influence the [US government's] work had on the ministry’s decisions."

since the bush administration is getting ready to vacate the white house, i guess it is time for all of the weasels to come out and start claiming their booty in iraq. it is a shame that bush (and cheney) will not be brought to task for their high crimes and profiteering associated with the invasion and occupation of iraq. gasoline has topped $4 a gallon here in atlanta (i'm paying about $4.20 a gallon for midgrade) and the bush and cheney are riding to the bank on the backs of every american who puts fuel in their car and truck... enough to make me ill!

...for all the oil in Iraq!

For All the Oil in Iraq

Thirty-six years ago, Saddam Hussein rose to power in Iraq. From his lofty perch, he nationalized the Iraqi oil fields and kicked all of the oil companies out of the country.

Since that time, Iraq has gone to war with Iran (that lasted about 10 years). He tried to invade Kuwait and was repelled by US forces. And then on September 11, 2001, the United States was attacked by Al-Qaeda terrorists at the behest of Osama bin Laden (who was holed up in Afghanistan), and a few years later we declared war on Iraq. The US has been at "war" with Iraq for over five years, even though, Saddam Hussein was captured and hanged less than a year into the conflict.

Well, the New York Times reports that Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq’s Oil Ministry for no-bid contracts to service Iraq’s largest fields. Only 4,000 US troop deaths into the War in Iraq and the greedy US oil companies are slithering into the Iraq for what they've been waiting for these long five years. The deals, expected to be announced on June 30, will lay the foundation for the first commercial work for the major companies in Iraq since the American invasion, and open a new and potentially lucrative country for their operations.

There was suspicion among many in the Arab world and among parts of the American public that the United States had gone to war in Iraq precisely to secure the oil wealth these contracts seek to extract. The Bush administration has said that the war was necessary to combat terrorism. It is not clear what role the United States played in awarding the contracts; there are still American advisers to Iraq’s Oil Ministry.

Read the entire New York Times article on how US oil companies are chomping at the bit to do business in Iraq here.

plez sez: cajones... mucho gusto cajones

i guess someone has to refurbish the crumbling iraqi oil field infrastructure. someone has to get them on the right footing. it may as well be companies from the country that liberated iraq, right?

and dick cheney and those americans who advise the iraqi oil ministry had nothing to do with the awarding of no-bid contracts to the biggest and greediest oil companies in the us!

do you think this will increase the supply of crude oil enough to drop the price of gasoline back to $2 a gallon? me neither!

plezWorld & High Gas Prices

On April 26, 2006, I wrote the following:

plez sez: Just in time for the November elections. We'll be nice and desensitized to paying over $3.00 per gallon, and this will be a non-issue. Frankly, I've already forgotten what it's like to have gasoline for under $2.00 per gallon (and that was just 12 months ago)!

You can read the entite blog post here.

two years ago, i longed for the days of $2.00 gasoline. now plezWorld is paying double that per gallon and spending more than $80 to fill up the ole' Eddie Bauer. i like the get-up-and-go of a 5.0 liter V-8 engine, but it doesn't make much sense to drive around in something that literally guzzles gas. i am planning on getting a new car in a few years, but that cold-blooded Cadillac Escalade is not looking like a wise investment... even though, i could probably get a good price on one!

when is the escalating gas prices going to end? will the price ever go down to under $3 a gallon?

$4 Per Gallon of Gas in Our Future?

Over the weekend, plezWorld pumped $30 of gasoline into the SUV, that thirty dollars filled less than half of the tank! I drove to DisneyWorld a few weeks ago, other than tickets to the parks, the cost of gasoline was our biggest expense (over $300).

A report in the New York Times says that for the first time, regular unleaded is over $3.50 a gallon nationwide. According to AAA, gasoline prices will be at or near $4 a gallon by this summer.

Simple economics is a major driver of price: OPEC countries (which control about 40% of the oil production) have kept their supplies to the global market constant as the demand for oil has risen with emerging economies in Asia. The demand here in the United States is as high as it ever was. The price of gasoline is 22% higher than last year.

The price of oil topped $100 a barrel earlier this year, it is now hovering around $120. Some analyst expect the price to reach $125 per barrel this year. The price of crude oil has quadrupled in the past five years!

In addition to the increased demand for steady supply, the slowing economy and the weak dollar in the US has also played a role in the higher prices.

Unless we reduce our demand for oil or we find another BIG ASS supply (the US consumes about 20 million barrels of oil per day), the prices will remain high.

Read the entire New York Times article here.


plez sez: so much for the guaranteed oil that was going to help pay for the war in iraq. so much for having an "oil man" in the white house.

at four dollars a gallon, it will take close to $80 to fill up my suv. i'm kind of tall and don't want to have to by a Prius... i guess we're going to have to suck it up and steel ourselves against gasoline prices when they go over four dollars a gallon!

i had a blog post almost 2 years ago (April 2006) where plezWorld decried $3 per gallon gasoline. what i wouldn't give for $3 gasoline today!

labels: oil, gasoline, economy, opec, war in iraq, george bush,

Billions in Oil Missing in Iraq

In a story published by the New York Times, between 100,000 and 300,000 barrels a day of Iraq's oil production over the past four years is unaccounted for. The reports used an average of $50 a barrel which translates to almost $15 million daily is missing. Almost 2 million barrels are pumped by Iraq every day, so over 10% of the oil production is being siphoned off and no one knows where it is going. The report, which was prepared by the United States GAO, states that the oil may be part of an overstatement of production levels in an effort by Iraq and the State Department to show progress in Iraq. But it can also be part of inaccurate reporting or theft by Shiite militias.

The article quotes Philip K. Verleger Jr., an independent economist and oil expert, “That’s a staggering amount of oil to lose every month, but given everything else that’s been written about Iraq, it’s not a surprise.”

Read the entire New York Times article here.

plez sez: one of the biggest blunders in the history of the US military is being compounded by this discovery. we are pouring billions of our taxpayers money into a lost cause, while the Iraqi's are pissing away billions more in oil revenues.

if the figures are simply part of an overstatement by the Iraqi's, then it is obvious that the "recovery" in war-torn Iraq isn't going much better than the "recovery" in Katrina-torn New Orleans! if the oil is being siphoned off and sold on the black market, then our troops are protecting a source of income for the insurgents who are shooting at them every day! this war has been a lose-lose situation for the US, since our jets first strafed Baghdad back in March 2003.

In light of his most recent veto, Congress has to go back to President Bush with an ultimatum on financing this war: we either begin to pull out of Iraq now or Congress will no longer fund the war. PERIOD! since 2003, this war has been plagued with poor execution, a private vendetta (by Bush against Saddam Hussein), an amorphous target (The Terrorist Boogeyman), and too few troops to secure the region ... we cannot win the war.

HELL! we're only there because of the oil anyway and we can't even keep up with that! let's cut our losses, save the remaining soldiers' lives who are heroically fighting in a losing battle, secure our borders against additional terrorist attacks, beef up our international intelligence, and rejoin the world community!