The discussion about the Saudi-Fannie-Freddie relationship near the end was rather good.

No doubt the Iraq war has contributed to higher gas prices, but the contrast Palast makes between Iraq’s oil potential and its actual, post-invasion production, is quite misleading. He referred to Iraq as the world’s second biggest oil producer. Though that was just carelessness, it is likely to mislead some. What he no doubt meant to say is that Iraq holds the second largest _reserves_ – the standard claim in the media when Iraq’s oil is discussed.

(Under the terms of a little-publicized Reserves Sharing Agreement (RSA) among Canada, Iraq and Iran, the “world’s second largest reserves of oil” are transferred automatically via a Swiss bank to whichever of the three countries’ reserves are being discussed in the media at a given moment. A similar, but less often invoked, agreement between Saudi Arabia and Venezuela governs the disposition of the “world’s largest reserves of oil.”)

What Palast and the rest of the media almost never mention, is that the reserve _claims_ of OPEC are completely unverified, with many knowledgeable observers arguing that they are overstated by at least the 300 billion barrels that were created during the “race to declare higher figures for reserves, driven by the anxiety about the quota system, which everybody knows” (as acting OPEC Acting Secretary General Shihab-Eldin admitted in Oct. 2005, protesting only that the higher figures should nevertheless be believed). The 5 main Persian Gulf producers raised their declared reserves by huge amounts – between 50 and 200 percent – literally, in each case, from one year to the next, and the said increases were not accompanied by announcements of major new discoveries. Significantly, the reserves figures for the Neutral Zone shared by Saudi Arabia and Kuwait underwent no increase, but continued to gradually decline with production.

So Iraq’s declared reserves stood at 47 billion barrels at the start of 1987. A year later they were claimed to be 100 billion barrels. By the end of Saddam’s reign Iraq’s _claimed_ (anything but proved!) reserves stood at 115 billion barrels. The increase from 100 to 115 occurred during a decade during which Iraq made exactly one (relatively small) hydrocarbon discovery (Akkas field, 1993).

Palast invokes Iraq’s prewar _quota_ of 3 million barrels a day (not actual production levels) to contrast it with the lower post invasion production levels, and asserting that Iraq could easily produce double its quota. But once again, the claim is entirely dubious (I recall that Robert Ebel called the notion “ridiculous” as quoted in Armed Madhouse). Roughly 80 percent of Iraq’s output in recent years has come from 4 old fields (Kirkuk, North and South Rumaila and Zubair – call them KRZ, for short) – fields that have been in production for 50 to 80 years. Those were precisely the fields that were heavily damaged by production practices under sanctions resulting in “permanent loss of huge reserves of oil” (UN experts report, 2000). Those fields must be at or near the point of permanent decline. One might argue that non-KRZ production has the potential to grow well into the future, based on undeveloped field and future discoveries. But but it is completely implausible that Iraq could double or triple its current levels of output by these means – or that it would be in the interests of the Iraqi people to do so. For example, NYT article on Kurdistan’s oil potential a few months ago described two fields being newly developed (one old discovery and one brand new), both with anticipated production levels of about 50 thousand b/d. Iraq would need 50 such fields to roughly match its recent highs. Yes, production has been lower since the invasion, in part because of the invasion. But arguably Iraqi oil continues to be _overproduced_ as short term interests – currently, those of the occupying power which faces declining or uncertain supplies from its 5 leading sources of oil imports – outweigh future considerations. And Iraq remains’s the U.S.’s #6 source of oil imports – about where it stood before the invasion – another key fact not mentioned during the program.

I fundamentally disagree with your premise, so anything after that will have no bearing on how I view this situation.

You might know a lot, but even birlliant people can be fooled or taken in by lies and propaganda. I do not doubt your strong and in-depth knowledge of the oil industry, but I do not agree with your premise that big oil corporations do not suppress oil output so they can increase prices.

I also believe and with good reason, that big oil corporations lie to the public on a daily basis—-just look at how much money these oil corporations have been putting into their public relations campaigns lately.

Public relations is another name for promoting propaganda and corporations like big oil are very capable of doing a fine job in this regard.

As for peak oil not being a problem _now_, are you aware of the data which indicates that _net oil exports_ globally have in fact decreased for each of the past two years (though total oil production remains around the historic maximum). Look at the top 5 sources of oil exports to the U.S. esp. Mexico, Venezuela and Nigeria and what is in fact happening to their exports to the U.S. Sorry again I don’t have time to elaborate now.

As for Heinberg, I regard him as a very thoughtful writer on these subject. Obviously he’s getting income recently from books and speaking engagements.

Additionally, one should always have the Mises Reflex: http://mises.org/story/1892

Shut up already and get off your lazy asses and read the frickin book Greg Palast wrote—”Armed Madhouse.”

Otherwise keep your pie holes shut!

I have done research on this topic. And I do not believe the narrative of the big oil corporations or the government. I suggest you get an open mind and open your blind or lying eyes.

Why should I believe what Richard Heinberg says anyhow? Who pays Heinberg anyway? Where is he getting paid from?

Why did Cheney suppress who attended the energy meetings in 2001 if it was so “inncoent?” The oil companies have a virtual monopoly and act like the Mafia in the way it prices the pump. Anyone with half a brain can figure this sham out. And its a sham, alright. Yes, the oil companies are liars and screwing people at the same time. I do not give a rat’s ass what you think.

Oil companies are not yelling that there is “peak oil?” That is news to me, fella. So funny indeed that they are claiming they need to drill to cover the shortages.

Yes, it is a sham that there is a “peak oil” crisis right now. And yes, oil is suppressed to raise prices—I suggeswt you open your EYES ALREADY Mister! You are the one who is easily fooled and by those liars you cited.

You characterize concern over the peaking of world oil production as a “lie” and a “sham,” and juxtapose each statement with another to the effect that the big oil corporations are manipulating prices. The impression you give is that the big oil corporations are the ones promoting this “sham.” However this is certainly not the case, as the big oil corporations have mostly been either outright deniers of imminent peak oil (e.g. Exxon) or belated, none-too-explicit, and half-hearted endorsers (e.g. Chevron). The real work is being done on sites like The Oil Drum, Energy Bulletin, and Global Public Media. Counting myself among those trying to bring attention to this issue, I of course don’t like your labelling of us this way, but I find it even more worrying that intelligent people (judging by the fact that they listen to Scott Horton) are so quick to to reach the conclusion that any problems with the supply of the 20 million person-years per day of hard labor (which is what the U.S. uses in oil-based energy per day) must be the result of the oil companies trying to pull a fast one on us.

You might want to do a little research on the subject before jumping to such conclusions. Did U.S. oil production not in fact peak in 1970? Did not the largest oil field in North America (Prudhoe Bay) begin to rapidly decline (about 10 percent per year) only about 12 years after its first production? Has not Mexico’s Cantarell (formerly the second most prolific in the world) been declining on the order of 20% per year for the past few years, despite continuing work on it? Is North Sea production not down about 40 percent from its 1999 peak? Is Australian oil production not down 35% from 2000? Is the largest field in Eastern Canada (Hibernia) not down 35 percent from its 2004 peak? I suppose you could say that all these are part of the oil companies plan to restrict output, but why not do some research to show that this is so? You would have a really big scoop.

I’m not aware that the writers you cite have addressed these issues. Certainly Lendman and Palast, have in the past cited very misleading figures for heavy oil resources in Venezuela – the total quantity of hydrocarbons in place in the ground the ground (taking those figues as true estimates) is far, far above any reasonable estimate for the amount of it that could actually ever be converted into usable barrels, and critically, the _rate_ that such barrels could flow, even with much larger investments, is not very significant compared to the amount of new production that has to come on line every year to make up for declines in the existing base of global production (Richard Heinberg’s “Open Letter to Greg Palast” is a good place to start on this). The abiotic hypothesis about oil’s origins – which the former peak oil advocate Engdahl now believes – is certainly interesting (Heinberg also wrote a good critique of it a few years ago), but it is largely irrelevant to the question of whether global oil production must soon descend after having risen for 150 years.