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oil problems

by Charles whalen

But my biggest worry in the meantime, and specifically this year, is that I think there's a better than even chance that the US and/or Israel is/are going to launch an aerial bombing campaign with air strikes and cruise missiles on Iran's nuclear facilities sometime this year. If (or rather *when*) that happens, we're going to see oil at over $300 and gasoline over $10 at the pump. Iran already has its retaliatory plans in the works. They are going to launch massive (conventional) missile strikes on Saudi Arabia's Ras Tanura oil terminal (less than 200 miles across the gulf from Iran), which is the largest oil terminal in the world through which the vast majority of Saudi oil is shipped and which Iranian missiles can destroy with great accuracy. This will take most of Saudi Arabia's oil exports offline for months if not years. The Saudis can divert some of their output to the Yanbu oil terminal on the Red Sea via their cross peninsula pipeline (that is if Iranian missiles don't destroy that pipeline as well), but that pipeline's capacity, as well as that of the Yanbu terminal, can probably handle less than a quarter of the current output from Ras Tanura.

Furthermore, the Iranians are planning to completely block and shut down all shipping traffic through the Straits of Hormuz, the narrow chokepoint of passage into and out of the Persian Gulf, only about 40 miles wide at its narrowest point. They will do this by firing anti-ship missiles at oil tankers passing through the narrow straits. Sinking several large oil tankers in the narrow straits will render the waterway impassable. Plus the Iranians are also going to massively mine the straits. All of this will shut down all shipping traffic into and out of the Persian Gulf for months and possibly years.

Of course the US military is well aware of Iran's plans and is planning its own countermeasures, but such countermeasures will not be very effective because our best anti-missile/missile-defense systems have proven inadequate against these types of attacks, especially if the missile attacks coming from Iran are massive; a few will be knocked down, but most of the Iranian missiles will get through US missile defense shields and hit their targets.

Everything I see and read tells me that this clash and conflict is probably now inevitable, especially due to the belligerent, bellicose, intransigent, uncompromising nature of the antagonists on each side whose positions and rhetoric are becoming increasingly hardened and dug in. The world is becoming increasingly polarized in this brewing conflict, with the Europeans now becoming more unified and pushed into the American camp by the whole Prophet Muhammed cartoon affair with all of its targeted violence directed against Denmark, Norway, France, Britain, and Germany. On Iran's side, you have Russia, China, Syria, and Venezuela (which is the United States' third largest oil supplier, after Canada and Mexico, and whose president, Hugo Chavez, has said that he would cut off all oil exports to the US in the event of any US attack on Iran). The other Arabs and the Turks seem to be caught somewhere in the middle at the moment. The battle lines are hardening. I can see the train wreck coming. The repercussions will be devastating. As I said, we'll have oil over $300 and gasoline over $10. We will see a worldwide depression on a scale not seen since the Great Depression of the 1930s. The US dollar will collapse against the euro and go into free fall. China will use the opportunity to seize Taiwan. The Chinese will also engage in economic sabotage against the US through the enormous financial leverage they have over us with their massive US Treasury debt holdings, which they will dump en masse on world financial markets. Yes, that's a bit like shooting oneself in the foot, but at that point it won't matter any more because things will have moved way beyond such considerations.

If this escalates as I see it likely happening, I think the US will probably end up using tactical nuclear weapons against Iran's underground nuclear facilities (which are the only type of weapon that can successfully take out Iran's hardened nuclear facilities deep underground), and in fact Bush has already formally authorized in writing a battle plan that includes the use of tactical nuclear weapons against Iran's hardened, deep underground nuclear facilities. Given that Iran has deliberately built these nuclear facilities in (and under) heavily populated areas, such a nuclear attack by the US, even just a *tactical* nuclear attack, will likely end up killing hundreds of thousands, if not a million or more, Iranians (in a heavily populated country of over 70 million people). There still remains considerable moral ambivalence in the world about Hiroshima and Nagasaki more than 60 years later. There will be no such ambivalence about US tactical nuclear attacks on Bushehr, Natanz, Isfahan, and other locations in Iran. I hesitate to say that this will elevate Bush into Hitler and Stalin territory, but he will certainly be heading in that direction, at least in the eyes of much of the world.

The top corporate leadership in this country is well aware of the perils of this current standoff and nuclear brinkmanship with Iran and can see this entire scenario unfolding and escalating out of control exactly as I have described above, which would be in no one's interest as the entire world would suffer from a longtime -- and possibly permanent and terminal (given the imminence of peak oil, which this would accelerate by a few years) -- worldwide depression of unprecedented magnitude with tens of millions of people losing their jobs, corporations going bankrupt, entire economies failing, etc. So top corporate leaders are privately urging the White House to tone down the rhetoric and go slow on all of this so as not to overturn the global economic apple cart. Even some of the ayatollahs in Qom are becoming concerned that Ahmedinajad is going too far and pushing too hard in his radicalism, beyond the requisite (and politically correct) anti-Semitic and anti-American rhetoric, and are becoming alarmed at his doomsday personal cult of martyrdom that he apparently seeks to project onto the entire Iranian nation, which he seems to have no qualms about sacrificing to the greater glory of his mystical apocalyptic visions.

I wish it were simply as easy as just saying that "hopefully cooler and saner heads will prevail in Washington and Tehran & Qom", for were it only dependent on such, then I think there might be a decent chance that all of this could be defused and Armageddon avoided, that both sides could slowly back away from the edge of the precipice, from which we are presently staring into the abyss. But of course it is not just dependent on Washington and Tehran & Qom because other parties are involved and have just as large stakes in all of this, namely the Israelis, who perceive this as an existential life-and-death crisis for them (and I wouldn't disagree with that perception given the repeated statements of Ahmedinajad over the last several months about wiping Israel off the map, and this from a country that is proudly boasting of its ambition and its right to develop nuclear weapons). My big fear is that the Israelis -- with their own exigencies, imperatives, and agendas (being very different from ours), including even the relatively moderate Ehud Olmert and his Kadima party, who are likely to win the upcoming March election -- will see that cooler and saner heads are indeed prevailing in Washington and starting to defuse the crisis, upon which they (the Israelis) will feel compelled to force the issue to a head and force it upon us whether we want it or not by precipitating a full-blown military crisis by launching preemptive air strikes of their own on at least some of Iran's nuclear facilities, whereupon with the resulting mayhem and devastation that will ensue (including Iranian, Syrian, and Lebanese-Hezbollah missile strikes on Tel Aviv and Haifa), it will be left to the US military to finish the job with massive aerial bombing and missile strikes on Iran's nuclear and military facilities. So I'm afraid that Israel is going to preemptively force our hand in this matter and force us into a war with Iran whether we want it or not.

The Israeli Mossad already has a base in the mountains of Iraqi Kurdistan (with the knowledge and tacit consent of the Kurdish leadership), east of Suleimaniyah, near the Iranian border, from which Israeli agents are eavesdropping on Iranian military communications as well as conducting clandestine cross-border surveillance and sabotage planning missions into Iran. But the big question is how Israeli war planes are going to get from Israel all the way over to Iran to launch their payloads when the time comes that the Israeli leadership decides to pull the trigger and launch their preemptive strike on Iran. It is doubtful that Turkey would allow Israel to use its airspace for such a purpose, which means that Israeli planes, in addition to flying over Jordan (which could probably be finessed), would have to transit Iraqi airspace, which of course is controlled by the American military. If George Bush wants to avoid the scenario I've just outlined above where Israel forces us into a war with Iran, then he will have to make it abundantly clear to Ehud Olmert, in no uncertain terms and be very adamant and steadfast about it, that the US will under no circumstances tolerate any Israeli incursion into Iraqi airspace and that any such incursion will be met with stiff resistance and deadly force from the US military. But given Bush's extremely close relationship with (the now apparently terminally comatose) Ariel Sharon, which has presumably carried over to his designated successor, Ehud Olmert, and given the neo-conservatives' dominance, sway, and stranglehold over the Bush administration at its highest levels, when this matter is eventually forced to a head and push comes to shove, I have a hard time seeing Bush being so resolute and standing up to and resisting all of the pressure that will come from those closest to him who have access to the president and have his ear.

So I guess you could say that my outlook for 2006 is not the most sanguine and that I have some serious geopolitical concerns. Add to that the additional negative prognostication that I am now re-revising my own personal forecast for peak oil by moving it forward from the 2010-2015 timeframe to 2008-2010, which is what I had earlier predicted up until the second half of last year, when I had read some slightly more optimistic (and what I thought at the time were more balanced) analyses of some younger, still-practicing petroleum geologists, such as Sadad al-Husseini and Jack Zagar, who have access to proprietary Middle East oilfield production and reserve data of current or more recent vintage, unlike some of the older, more pessimistic and alarmist petroleum geologists who retired 10-20 years ago and have not had access to such proprietary data for that amount of time and thus were basing their conclusions on very old, out-of-date data. But in just the last two months, I have read a number of new analyses, including in the Wall Street Journal and other respected publications, which would appear to support the more pessimistic predictions of those older experts like retired petroleum geologist Colin Campbell and energy investment banker extraordinaire and George W. Bush presidential advisor Matthew Simmons which put peak oil somewhere between now and 2010. In particular, it has just recently come out and been revealed that the world's three largest oilfields have now peaked and are in decline. The world's third largest oilfield, Burgan in Kuwait, which at 1.7 million barrels a day accounts for 68% of Kuwait's total output and has been in production for over 50 years, has now peaked and is in irreversible decline. The same is true of the world's second largest oilfield, Cantarell in Mexico, which at 2 million barrels a day accounts for 60% of Mexico's total output and is expected to decline at a rate of over 50% this year and then another decline of over 50% again next year. The oilfields of Alaska and the North Sea have been declining at over 10% a year for several years now. Then of course there is the world's largest oilfield, Gharwar in Saudi Arabia, which at 4.5 million barrels a day accounts for 40% of Saudi Arabia's total output and has been in production for over 60 years. Gharwar is believed by most serious analysts to now be in decline; it has an enormous water cut with the Saudis pumping in 7 million barrels a day of seawater in an uphill struggle and sagging effort to try to maintain the pressure of the oil in the field, for only 4.5 million barrels a day of oil that they're getting out.

If the US and/or Israel do not attack Iran this year or next year, and if there are no other major (internally-generated or externally-perpetrated) geopolitical upheavals or cataclysms in other major oil provinces like Venezuela and Nigeria (in addition to the one presently playing out in Iraq, where oil production is down to 1.1 million barrels a day from a pre-war level of 2.8 million barrels a day), then I would expect global oil peak to occur in the 2008-2010 timeframe at no more than 92 million barrels per day. But if the US and/or Israel launch a preemptive strike on Iran's nuclear facilities this year, then the 84 million barrels a day of oil produced in 2005 will turn out to have been the global peak, which shall never again be seen and from which we will start an abrupt and inexorable decline.

Charles Whalen

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its from a blog

this is part two

http://www.evworld.com/blogs/index.cfm?pag...d=194&archive=0

Jesus. And were here talking about the price of houses?

exactly

try doing a bit more reading on peak oil and US monetary policy if you really want to wind yourself up

Edited by RobertPaulson

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Well they say that 7 of the last 8 recessions were caused by energy crisis's. sp.

And we all seem to be aware that we are heading for a recession and that's why house prices aren't on the up. I think it's going to get tough for people after all work involves using up energy in some form.

And Mr Whelan is a sobering chap isn't he.

Flip, flop the oil's gonna stop. And Russia with piles of Gas is gonna be strong. Maybe we picked the wrong side in the cold war.

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What a complete load of drivel. Charles Whalen has been reading too much Tom Clancey.

When you're able to construct such an elaborate and plausible doom laden scenario, it's because you're invariably dealing with two or more powerful (albeit in different ways) forces. In such cases, diplomacy and compromise tend to prevail over force. It simply isn't in any ones interest to make the first strike.

Look to the cold war for example.

It did make for a good read though. They should make it into a film. :D

I agree that the above seems a bit too apocalyptic. In the late 60s there were loads of people pridicting nuclear armageddon, but luckily nobody was stupid enough to make the first strike.

Interestingly, there is a film being released in the next couple of weeks called something like "Syriana" (spelling?) It's seems to be the first time the issue of Peak Oil has been addressed in a Hollywood movie. Slowly but surely the issue is drifting into the common consciousness.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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