Is Gates Stirring Up Trouble With Iran To Boost Oil Prices?

[bigtree]

February 9, 2007

Defense Chief Robert Gates knows well what the effect of escalating rhetoric against a major oil-producing nation like Iran can have on the price of oil.

After he gave up his CIA chiefdom, Robert Gates spent part of his time engaged in an event in 2005 called Oil Shockwave.

'Shockwave' was a joint project sponsored by a couple of energy think-tanks - the National Commission on Energy Policy and Securing America's Future Energy - which simulated a world oil crisis and evaluated its effects on markets and on the price of oil.

Participants included:

-Robert M. Gates, former Director of Central Intelligence;
-Richard N. Haass, former Director of Policy Planning at the Department of State;
-General P.X. Kelley, USMC (Ret.), former Commandant of the Marine Corps, member of the Joint Chiefs of Staff;
-Don Nickles, former U.S. Senator;
-Carol Browner, former Administrator of the Environmental Protection Agency;
-Gene B. Sperling, former National Economic Advisor;
-Linda Stuntz, former Deputy Secretary of Energy;
-Frank Kramer, former Assistant Secretary of Defense for International Security Affairs, and;
-R. James Woolsey, former Director of Central Intelligence.
-Senators Richard Lugar (R-IN) and Joe Lieberman (D-CT) served as co-chairs of the Oil ShockWave event.

Scenarios included: a very cold winter in the Northern hemisphere, and terrorist attacks on Saudi Arabian and Alaskan oil ports, Al-Qaeda terrorists hijacking oil tankers and crashing them into the docking facilities at ports . . .

Wiki: "The scenarios are set up by pre-produced news clips from scripted news broadcasts. Participants are also given briefing memos with background information relating to their specific cabinet positions. The participants discuss and prepare policy recommendations for an unseen Chief Executive after each part of the scenario."

According to the conclusions of the study, published by the National Commission on Energy Policy, Gates and the other participants found that: "taking less than 4% of oil off the global market due to small incidents of political unrest and terrorism would cause prices to rise dramatically to more than $161 bb. It also showed that once an oil supply disruption occurs there are few short-term options for protecting the U.S. and global economy."

"The threat is real and urgent, requiring immediate and sustained attention at the highest levels of government" stated Dr. Robert Gates, (then) former Director of Central Intelligence and the Oil ShockWave National Security Advisor. "To protect ourselves, we must transcend the narrow interests that have historically stood in the way of a coherent oil security strategy and implement policies that will meaningfully address both the supply and demand aspects of our current oil dilemma."

Today, Gates was said by the media to have confirmed that the U.S. has "evidence" that Iran is aiding in attacks on our soldiers in Iraq. "Serial numbers and markings on explosives used in Iraq provide "pretty good" evidence that Iran is providing either weapons or technology for militants there, Defense Secretary Robert Gates said.

Gates continued: "I think there's some serial numbers, there may be some markings on some of the projectile fragments that we found," that point to Iran."

"Think?"

"May be?"

That's "pretty good?" Where's the EVIDENCE?!

Coming at the same time as Gate's rhetorical lashing of Iran, the WaPo reported today that oil prices rose above $60 a barrel Friday following a $2 jump the day before, stirred, in part, by Iran-U.S. tension.

Did Gates come into his position as Defense Secretary with the intention of using the military to implement his own version of an "oil security strategy" to "address both the supply and demand aspects" which interest the present oil cabal in the White House? Is his elevating of flimsy evidence against Iran of aiding in attacks against out troops in Iraq simply a ploy to draw Iran into a conflict to "protect" those interests? Or, is he merely just another bought and sold executive helping his oil bosses jack up the price of oil?


“The real lesson here it only requires
a relatively small amount of oil to be taken
out of the system to have huge economic
and security implications.”

robert m. gates, oil shockwave national security advisor


http://journals.democraticunderground.com/bigtree

[dogday]

1. I guess all those billions in profits is just

not enough for these greedy oil mongers..... :thumbsdown:

[bigtree]

2. they NEVER get enough of our blood and sacrifice

they need to be removed from any position of authority over us

[Jim Warren]

3. Um, sure........probably

Why do you ask?

[bigtree]

4. rhetorical hook

[Jim Warren]

5. Sorry, no disrespect meant

to your informed post.

Consternation and frustration leads to the flippancy of my reply with most of the current political crisis we find ourselves in, newly empowered Dems themselves dancing with the devil and at times it seems
the time for talk is through.

[bigtree]

6. none taken

here's a link to a final (hopefully edited) version

http://www.opednews.com/articles/opedne_ron_full_070209_is_gates_stirring_up.htm

[Blackhatjack]

7. Nice coordination w/Bush announcement to 'refill' national strategic oil reserve....

There is no better time to refill the national strategic oil reserve than when the price of oil is dropping. Taking that oil off the market, has to drive the price up. Not to mention it is occurring at the same time that tensions are being ratcheted up with Iran.

[bigtree]

8. great point

from HuffPo: http://www.huffingtonpost.com/raymond-j-learsy/our-strategic-petroleum-r_b_40527.html

Our Strategic Petroleum Reserve -- Iran's WMD

Iran's Weapons of Mass Destruction -- Our SPR. How so?

Let me try to explain. First, let me state categorically that in this unstable world having a Strategic Petroleum Reserve is a decided plus. But filling the reserve blindly without considering the ramifications it signals to markets and policy makers echoes the one dimensional thinking that is inherent to so much of this administration's policies.

{snip}

Just over a week ago when word got out that President was going to double the oil stored in the SPR to near 1.5 billion barrels, the price of oil jumped by some 6 percent ($2.40/bbl on one day alone) to $55/bbl. It has continued to climb and has now reached $59. At that current price it will mean a transfer of wealth to the oil industry of some $42 billion in what the government will pay or credit for oil . With financing costs, custodial costs, transport and handling the total cost to tax payers will approach $65 billion.

Since the president's announcement the price of oil has jumped nearly 15 %. The advent of cold weather at this late stage of the winter had but a minimal impact on storage conditions that were brimming to capacity to the point where ships at sea had to cut steaming speed because off loading capacity was limited at their destination ports. Before the Presiden'ts announcement the price of oil was reeling and heading below $50. Many predictions were made of $40/45 levels.

At the time of Department of Energy's announcement that it would begin purchases of oil for the SPR the price hovered around $52/bbl. The last close as of this writing was $59.

That's $7 a barrel difference. American's consume some 21 million bbls of oil a day. That means in the U.S. alone an additional $150 million/day or $1 billion/week is transferred to the oil industry and oil interests in this country alone. It represents a tax on all of us, and the irony is that we are being taxed by a runaway industry (see Exxon/Mobil's last years profits just announced) while our dollars are going to pay for the oil being purchased for the SPR stockpile. In other words, they have us coming and going.

But if that's not enough consider this. That $7 increase means a transfer of wealth to Iran of some 1 billion dollars in value and revenues every month. Iran produces over 4million barrels of oil per day (their dependency on oil revenues was outlined in a previous post, "Iran's Khamenei Warns Teheran May Use Oil Weapon. Let Them, Its Time To Call Their Bluff" 6.04.06). And much of that money is going to fuel insurgencies all over the Middle East and supplying militias in Iraq. Had there been any interest by this government in holding the price to say $35 barrel, a reasonable and very healthy commodity price increase over 2001 prices, Iran's current account wealth would have been curtailed by some $3 billion each month or $36 billion a year. An already shaky economy would not have had the luxury of exporting hundreds of millions to stir up trouble around the Middle East and elsewhere in the world. As for the Saudis and their cash flow at these prices which is providing the billions that find their way to radicalize schools and mosques throughout the world and fund in part the Sunni insurgency in Iraq. Well, let's not go there, the numbers are too enormous.

Mr. President, the oil industry, Iran, Saudi Arabia and even Mr. Chavez (he's a devil of a guy) and President Putin thank you. While the rest of us are asked to absorb 54 cents a gallon duty on sugar based ethanol imports from Brazil.

[Rosemary2205]

9. I think it's more like a twofer.

I have no doubt Bush would like nothing better than to make war on the entire middle east in some twisted "Revelations" fantasy game. But they will drag it out as long as they can to milk the last dime out of the profiteering.

[bigtree]

12. they thrive on chaos

sick

[pampango]

10. If he is, he is doing Iran and Venezuela a favor.

As was pointed out here recently, Iran and Venezuela have oil deposits that are more expensive to drill. When oil prices drop it hurts Iran and Venezuela more than it does the low cost producer. Saudi Arabia recently increase their production, in order to lower the price and hurt Iran's oil industry, since they perceive Iran as a major competitor in the region.

[bigtree]

11. so, the oil, in that equation, is ancillary to their naked desire to militarily dominate Iran

. . . the embargo and sanctions meant to depress Iran's oil flow and lessen the upward impact (and benefit in Iran) that the escalation of rhetoric and activity has on the oil price.

[bigtree]

13. To stay above US$60 would take some confirmation the Iran situation is deteriorating further

Iran's Supreme Leader Ayatollah Ali Khamenei said yesterday the Islamic Republic would target US interests worldwide if it came under attack over its nuclear programme.

Traders were also nervous ahead of the anniversary on Sunday of the 1979 Islamic Revolution, analysts said, citing worries the war of words could intensify between Opec oil producer Iran and the United States over Tehran's nuclear programme.

But they had yet to be convinced today's price gains would be maintained.

"To stay above US$60 on a sustainable basis would take some confirmation the Iranian situation is deteriorating further," said Olivier Jakob of Petromatrix.

http://www.nzherald.co.nz/category/story.cfm?c_id=37&objectid=10423343

[bigtree]

14. India Optimistic Gas Deal With Iran Moving Forward

By Steve Herman, VOA, New Delhi

A deal that has been in the works for years to send natural gas from Iran to India through Pakistan is moving forward, with an agreement anticipated within months. However, some early supporters are questioning whether the time has passed for the proposed pipeline, which also faces opposition from the United States. VOA's Steve Herman in New Delhi reports.

Indian External Affairs Minister Pranab Mukherjee discussed the $7 billion project project with Iranian officials in Tehran during a two-day visit this week.

Iran has offered to hold a summit for heads of governments of the three countries to sign the deal, which would send 70 million cubic meters of gas a year to India.

The United States, at odds with Iran because of its nuclear programs, opposes the pipeline. It is expected to apply pressure on both New Delhi and Islamabad to abandon it.

During his visit to Tehran, India's external affairs minister said his country's relationship with Iran is independent of its relationship with any other country, indicating U.S. pressure might not affect the pipeline plan.

Under U.S. law, Washington is required to penalize any foreign company investing more than $40 million in Iran's energy sector.


http://www.payvand.com/news/07/feb/1108.html

[Swamp Rat]

15. It's all part of the plan... OSP