Tag: Oil Revenues

Whose Oil Is It Anyway?

Do you think that once Saddam was executed and the oil starting flowing again that the resource was turned over to the Iraqi people…..if so think again….

Now that the Iraqi government elections did not turn out the way the US wanted their only source of income is being threatened….

Iraq had a parliamentary election in late 2025, with the results ratified in mid-December. This, as usual, led to a scramble to try to form a majority coalition out of a large number of political parties that gained meaningful seats in a situation where the plurality was only 11.74%, far short of the ability to form a government without a slew of partners.

This is always a challenge, and involves a lot of internal compromise over cabinets and coalition structure. The US, however, is making this dramatically more challenging by threatening to withhold materially all of Iraq’s oil revenue from the Iraqi government if the coalition isn’t to their satisfaction.

The US is able to do this, because in post-occupation Iraq, their oil revenue is held in US dollars at the Federal Reserve Bank of New York, right where the US can easily get at it or restrict its transfer to the Iraqis whenever the mood suits them.

Shi’ites have a majority of the seats in Iraq’s parliament in practice. That’s no surprise as they are the majority of the population. Carving out a coalition of Shi’ites is easier said than done, however, because many of the parties are at odds with one another. Adding to that, the US has decided that Shi’ite parties that are still aligned with armed factions are “Iran-backed” and therefore “incompatible with building a strong partnership between the United States and Iraq.”

In practice this means that the threat is if the government includes any of the Shi’ite blocs which the US considers “Iran-backed” then Iraq will immediately lose all of its oil revenue for displeasing the US.

It’s a bigger problem then it seems on the surface, because the major Shi’ite blocs almost all have some ties with militias in some form or another. The expectation had been that the State of Law Party might parlay their 6% vote and fourth place finish into a return to power for former premier Nouri al-Maliki. Controversial given Maliki’s past, it is also seemingly impossible to argue that State of Law isn’t aligned with armed factions.

A lot of big parties have some ideological and practical ties to the Popular Mobilization Units (PMU), which are Iran-backed and while nominally integrated into Iraq’s own military, it’s almost impossible for any meaningful Shi’ite faction to not have any ties to them.

The PMU were historically scores of smaller militias, generally Shi’ite, generally Iran-aligned, and they merged over a decade ago to counter the rise of ISIS, which seemed convenient at the time, but which the US now seems to see as politically unpalatable.

This is not the first time the US has threatened to use their de facto control over Iraq’s oil revenue to coerce them. In 2020 after the assassination of Qassem Suleimani, Iraq threatened to expel US forces from Iraq in protest, and President Trump at the time threatened to seize their oil revenue in retaliation if they did so.

US Threatens To Cut Iraq Off From Oil Revenue Over Government Composition

I post this to posit a question….is this type of blackmail what the Venezuelan people have to look forward to in the future…..if their elections do not turn out the way we want we steal their oil from them?

At least Iraqi oil revenue is held in the Federal Reserve and not like Venezuelan oil which is in an offshore account where Donny can get his grubby hands on easily.

And now Iran is being threatened….and they have a huge reserve of oil….will they be the next in a long line for thievery?

I Read, I Write, You Know

“lego ergo scribo”

Iraq Runs Out Of Gas

I wish I was writing about the end of the Iraq War but sadly that will go on and on…..but this time I am writing about Iraq’s use of nat gas for the society.

I recently read an article about Iraq that I found odd….especially for a country with massive oil reserves.

Iraq’s capital Baghdad and other cities are at risk of serious power shortages after Iran slashed gas exports, the electricity ministry said on Sunday, potentially placing further pressure on the government of Prime Minister Mustafa al-Kadhimi.

Iran has reduced gas exports to Iraq to five million cubic metres from 50 million cubic metres two weeks ago citing unpaid bills, a ministry spokesman said.

It also officially informed Iraq’s electricity ministry on Sunday that it plans to cut shipments further to three million cubic metres, the spokesman said.

Iraq has lost around 6,550 megawatts of electricity, spokesman Ahmed Moussa said.

Iraq’s daily consumption during peak hours of winter reaches around 19,000 megawatts while the country generates around 11,000 megawatts, replying on imports to fill the gap, he said.

(reuters.com)

Seriously?

A country with millions of barrels of oil reserves and they need to import energy from Iran……Why?

Iraq cannot afford to heat or any domestic energy….could it have anything to do with 2008 and the return of big oil to Iraq?

I know…what?

This explains what I am talking about……https://lobotero.com/2008/06/20/big-oil-to-return-to-iraq/

The deals are that big oil returns and they run off with most of the profits….thanx to something called a “PSA”…..and I educated my readers about this as well….https://lobotero.com/2007/03/11/who-gets-iraqs-oil/

If for some unknown reason you would like another take on what happened to Iraq’s oil….then maybe this will satisfy your curiosity….https://theconversation.com/iraq-what-happened-to-the-oil-after-the-war-62188

Now I ask why if there is so much oil in Iraq why they cannot produce crude and nat gas for their consumption?

Does their lack of sufficient energy for the nation have anything to do with big oil and the PSA or is it the prices are too low for the production to be profitable?

The most important is….why would a nation with massive oil reserves need to import energy from another oil producing country?

Time for Iraq to be in control of their own reserves…..

I Read, I Write, You Know

“lego ergo scribo”

When The Oil Stops

Let’s look at the oil industry and Saudi Arabia…..the Saudis amass a fortune by the only resource….oil…..but what will KSA do if and when the oil stops?

Recently the oil futures dropped into negative territory….a place it has NEVER been in…..the Saudis were crying…..not to worry the US will do stuff to prop up a worthless regime on macho slugs.

Global Research took a look at the possibilities…..

Mohammed bin Salman can see for himself just how big a mistake that call was. The price of oil has collapsed, storage will rapidly run out, and oil companies face the real prospect of having to cap wells. The oil and gas sector accounts for up to 50 percent of the kingdom’s gross domestic product and 70 percent of its export earnings. This has just disappeared.

As anyone who has met Putin will tell you, you can bargain as hard as you like with the Russian president. You can even be on opposing sides of two regional wars, in Syria and Libya, and still maintain a working relationship, as the Turkish President Recep Tayyip Erdogan continues to do.

But what you must not do is back Putin into a corner. This is what the Saudi crown prince did by giving Putin ultimatums and shouting at him. Putin just shouts back, knowing that the Russian balance of payments is in better shape to play that game of poker than the Saudi one is.

MBS is finding out now how weak his cards are. To be fair, before he made that call, he took advice from someone as arrogant and unthinking as he is. US President Donald Trump’s son-in-law and Middle East advisor Jared Kushner listened to what the Saudi crown prince was about to do and did not object.

This explains why Trump’s first reaction was to welcome the oil crash. Trump thought for every cent cut from the price of oil, a billion dollars of consumer spending power would be released at home. That was until his attention turned to what the oil price collapse was doing to his own oil industry.

Saudi Arabia: What Happens When the Oil Stops

Best thing that could happen to the Middle East…..a KSA that cannot afford to flex its muscle in the region (but that is just my opinion)….

I Read, I Write, You Know

“lego ergo scribo”

What Goes Up, Must Come Down

The story of 2014 and now into 2015 is the drastic drop in oil prices and thus in the price of gas……(and the peasants danced!)

Americans are delighted at the drop in gas prices….most could care less what the reason may be…..just that it continues to drop….but for those that care are asking just what the Hell is going on?

Let me try to assist in clearing up the muddy atmosphere…..

Wonder whether gas prices will hold at their incredible $2.20 national average? Based on today’s news, filling up the tank won’t get harder over the next few weeks, the Wall Street Journal reports. US oil prices dipped below $50 a barrel for the first time in nearly six years, breaking a psychological barrier and sending a message: the high-supply, low-demand, low-price perfect storm will only continue. Here’s more:

  • Why: Plentiful worldwide oil production—including historic US highs, reports Bloomberg—ran into a weak global economy last year, lowering oil prices. Saudi Arabia, which produces oil more cheaply than many rivals, opted to maintain its market share by keeping the oil pumping. Prices dropped by 50%.
  • What it may mean: “[It] is very plain for all to see that oil supply growth exceeds oil demand growth and from a producer point of view this imbalance has to be rectified,” says the CEO of broker PVM, the Financial Times reports.
  • Upshot 1: The number of US rigs drilling for oil has dropped for the past month. Many say US shale-oil drilling stopped being profitable at roughly $60 per barrel: “We’re certainly in new territory here,” says a portfolio manager.
  • Upshot 2: Analysts say we’re near bottom but could hit $40 a barrel before a rebound in a couple of months. Some traders are even betting on $20 oil, Marketwatch reports.
  • Upshot 3: Cheap oil could cause geopolitical disruption in nations like Venezuela and Libya, and limit Vladmir Putin’s global ambitions, an analyst tells Fortune.

The one possible end to this story is the demise of OPEC……to some this will be a good thing…..but to others they see a recession coming and the possibility for a world reaction to that down turn.

Pain At The Pump

A lot of lip flapping going on and We all suffer from pain at the pump….we bitch and we moan and we drive down the driveway to pick up the morning paper……we are a country of addicts…..gas addicts!

one of my pages describes this…..lobotero.wordpress.com/will-the-addic… …..I wrote this about 4 years ago and it is all repeating itself as it has time after time…..

And then when things are offered up the attack machine goes into full swing….like to end all subsidies to oil companies…..

Obama has proposed eliminating subsidies to oil and gas companies, which the administration pegs at $4 billion. Republicans have argued that they are necessary to keep the energy industry competitive and encourage domestic oil exploration.

A Boehner spokesman quickly shot down the possibility that the speaker was moving closer to the president’s proposal.

“The speaker wants to increase the supply of American energy and reduce our dependence on foreign oil, and he is only interested in reforms that actually lower energy costs and create American jobs,” Boehner spokesman Michael Steel said. “Unfortunately, what the president has suggested so far would simply raise taxes and increase the price at the pump.”

Oil prices are controlled by speculation and there is an answer to that problem also…..

The Wall Street reform law enacted last year required the commission to impose so-called position limits, which would restrict the amount of oil that speculators could trade in the energy futures market. The law called for the tough new regulations to take effect by Jan. 22. The commission balked. Now, three months later, the price of gasoline has gone up 80-cents a gallon because of the commission’s hands-off approach to the markets it is supposed to regulate.

Only two of the five sitting commissioners support strong limits that the new Wall Street law envisioned. It takes three commissioners to adopt a new rule. The president, Sanders said, should insist that the law be enforced and demand the immediate resignation of commissioners who refuse to do their job.

You may not appreciate the financial reform bill that was signed into law last year, but there is a way to control the price of gas and to blame Obama ‘s war on subsidies as the reason for raising gas prices is just plain WRONG!

Even Goldman-Sachs has reported that the rise in gas prices is caused by speculators…..and to allow it to continue will bring any economic recovery to a grinding halt…..so to oppose any effort to get these speculators to cool down is NOT in the best interests of the country….

But a economist with  Platts and energy information group has said and he should know….

The tax breaks on oil are part of the endless discussion about how to tax an economic activity. Do you tax it at 0%? Do you tax it 100%? Or do you tax it in between? You want to tax it at the rate that provides the most money for the government while not inhibiting economic activity.

But that is not a subsidy. My demand for oil isn’t going to change one iota because of the changes that are under consideration, and therefore it won’t change the price of gasoline.

Oil companies will argue that the changes in the tax rate could change supply.  Now you could build some theoretical model that says, if the tax rate is changed, it MIGHT inhibit production, and therefore down the road, supplies would be less than they would be otherwise. Therefore, the price could be higher and my demand might be less. This is not as crazy as it sounds. If the rate on these forms of exploration went to 100%, obviously, no company would produce that oil, the overall market would tighten, and the price could go up. But that’s not in question; the administration is not proposing a 100% tax rate.

There you are…..we have an answer….now just DO IT!  You want to cut spending….then start here and prove that you Repubs are not anti middle class….just a thought!

Newt Echoes “Drill Baby Drill”

Remember the good old days of the ’08 presidential campaign?  McCain and especially our darling of the Right, Sarah Palin….used the cute little slogan of “Drill Baby Drill”….trying to promote more domestic drilling for oil which would let the gas prices drop in price……I covered it then….and I covered it when I saw bumper sticker saying the same thing…well basically the same thing……

And now, in a recent interview presidential hopeful Newt when trashing the Prez on his finally four picks….gave his idea of the real final four……typical non specific lame-atude….but let me say this one more time and see if it can get through the clutter and the snooze factor…….

The idea of more domestic drilling has a couple of holes in the theory…….first, any oil taken out of the ground in the US will not make it to market for about 2 years and that is after the drilling part is done and that could take 3-5 years…..second, Newt boy said that it would take gas from $4 a gallon and drop it to $2…….third, what in this would lead you to believe that Exxon (one of many) would drop the price of gas?  You truly believe that Exxon would give up 50% of its profit to help the country?…..fourth, does his estimates include the Federal, state and local taxes that are tacked onto the price of gas?…….fifth, what about the cocktail of gases that are being pumped in the country….how would his proposal effect the price of the additives……

Finally……stop believing these people when they start their creepy and misinformed promises of cheap gas….if only we would drill here in this country……nothing will change…you will still be paying through the nose for the gas…..no matter where it is drilled up!  BTW, you still pay a whole lot less than our friends in Europe…..here is another idea…conserve and stop buying the status symbol vehicles that get 2 gallons to the mile!

A Ranting I Will Go #2

From time to time I either see, read or hear something that makes me hit myself in the head and ask just how stupid are they?  Usually the TV is the prime source of aggravation, but this time it is a bumper sticker……while driving to the store I got behind a Hummer, you know the vehicle that gets 4 gallons to the mile?…..anyway the sticker said…….”Drill Here….Drill Now….Pay Less”…..

Okay the section out there with the mental midgets…….if oil is drilled for here, how many really think that you will pay less?  (Pause here to give the multitude a chance to contemplate the question)……..

Do you seriously believe that if gas is $4 a gallon and it is drilled for here the price will come down?  Exxon, Shell, Texaco, etc….will screw themselves out of all that profit?  But I guess if I was driving a Hummer I would be delusional also……

Just yet another illustration of the sheer stupidity of the American people….they buy into some lame ass slogan and embrace it as fact……you tell if that is a way to go through life?  The statement is stupid, ignorant, moronic and completely fictional….but then that is how Americans vote…..(yawn)…..

Wait there is More!

On MLK Day a bomb was found along the parade route and disarmed before it could do any damage…the officials said that they did not know who placed it or what is was suppose to do (paraphrase)…..think about that!  They did not know what it was suppose to do…..how about f*ck up the parade and injure many people….that is called DOMESTIC TERRORISM!

Now, why has there been very little about this on the news?  Short of an initial report………apparently if it had been a Muslim who did it it would be a two week diatribe on all the stations…..why is domestic terrorism not that important for the media?  But yet they will show ambulance driving slowly from a hospital to an airport…….I kept waiting for a white Bronco to go by…….(thanx to Phillip for the anology)

Now tell me that the media does NOT drive national conversations!

Can The Addict Be Weaned?

Daily Agitator

It is all the rage now on the airwaves, everybody has jumped on the bandwagon of trying to break the US addiction to oil.  All I can say is…..GOOD LUCK with that.

First a little history in case you are not aware of the facts about our energy issues…..

From Info Ink page, “Will The Addict Return?”

If you can remember back to the 70’s when there was an energy addiction that made for an energy crisis.  We all started to think of ways to kick our oil habit like alt energy, wind, solar and other energy saving measures and for awhile we were moving in the right direction and were kicking the monkey on our backs.  But unfortunately we fell off our wagon.  The pushers, the oil companies, in the 80’s made the price of gas and oil cheaper and we stated thinking that we were not all that bad for the addiction.  It was something that we could live with.  We wanted our 4 gallon to the mile Hummers.  We began feeding our need heavier than before.

So the idea of a more liberal alt energy program as something new is just ignorant…….every president since Jimmy Carter has had the plan to break our dependence and so for we are more heavily addicted with the passing of each president.  The question to ask is, “Are we truly serious about breaking our dependence on foreign oil?”

You, personally, may be….but the government is NOT!  As usual, the government is offering a band-aid for a gunshot wound….absolutely NO one in Washington is truly supporting a total independence……they were not in the 70’s and they are NOT today.

Americans have talked a mean game, but NO where are they prepared to give up their addiction.  As long as the drug of choice is inexpensive enough to allow them to drive a car that gets 4 gallons to the mile then they will continue to use and use and use…..no matter how good the intention…actions speak louder.

So, to answer the question, “Can the addict be weaned?”….the answer is yes but it will be painful….and that is politically bad and will not be used….they will continue to offer up incremental changes that does little to solve the addiction problem….like the CAFE……does little about consumption of the drug…..the addict is here to stay and the government will make sure of it, as long as they work as paid agents for the suppliers of the drug….. oil industry.

A Side Note:  The new Energy bill is living proof of how the oil industry has its tentacles into the process……here is the new bill synopsis:

The bill includes as its centerpiece “oil spill response” legislation that would: require BP to pay for damage from its spill; require oil companies to invest in new spill cleanup and prevention technologies; improve federal spill response; reform the Minerals Management Service; and update maritime laws.

But other aspects of the bill, according to a draft summary of the legislation, step into other energy arenas by:

  • Providing incentives for turning the nation‘s heavy truck fleet to natural gas and toward electrification of the nation‘s transportation sector.
  • Promoting “clean energy job creation” providing $5 billion of rebates to encourage homeowners to make efficiency upgrades as part of the Home Star program.
  • Fully funding a Land and Water Conservation Fund over the next five years to ensure that vital US lands and waters are protected into the future from climate change damage.
  • Increasing the $1 billion liability cap of the Oil Spill Liability Trust Fund to $5 billion and increasing fees to pay for it by requiring that oil companies pay 49 cents per barrel into the Oil Spill Liability Trust Fund.

This bill is a FAR cry from the bill promised by the Prez and his boyz…..it is weak…it is wimpy….it is impotent!   Nothing to control emissions…..EMISSIONS……that is the main problem that needs to be addressed and nothing……..all I can say is that the money spent by energy companies was well used….

So “Can the addict be weaned”?….. NOT BY THIS BATCH OF COWARDS!

Another side note:  the new Chevy electric car will start at $41,000…..yea!  That should get the Americans to think about a change……how many working people can afford that price?

What Did Palin Do To The Alaskan Oil Industry?

These are exerpts from a piece in the WSJ.

Oil companies in Alaska are paying more money in taxes than ever before. The state’s oil and gas tax revenues for its just-ended fiscal 2007 topped $10 billion. That’s twice as much as fiscal 2006 and four times more than 2004.

Some supporters of Barack Obama see that money coming in and say that John McCain’s running mate, Alaska Gov. Sarah Palin, must have done what Sen. Obama wants to do — sock those companies with a big fat windfall profit tax. This is a deeply misleading reading of her 2007 tax reform.

A few years ago, Alaska had a big problem. Despite high oil prices, the state’s fiscal future was in peril because the state relies on only three aging oilfields for 80% of its oil and gas tax revenue.

As a new governor in 2007, Mrs. Palin stepped in to address the fiscal crisis and restore accountability. Working with Democrats and Republicans alike, she chose a 25% profits tax. But in lean years the state reverts to a 10% gross revenue tax on legacy fields that do not require massive continuing inputs of new capital.

Relative to the old system, Mrs. Palin’s plan — called “Alaska’s Clear and Equitable Share” (ACES) — improves incentives for developing new resources. It ensures the state does well in boom times — as it is doing now — when oil prices are high. But it also hedges against low prices in the future by ensuring that oil companies exposed to commodity price swings don’t face a crushing tax burden when commodity prices fall.

Her plan includes an escalator clause that gives the state a larger share of revenues when oil prices rise. This is common to production-sharing agreements all over the world.

Mr. Obama proposes to give each American a $1,000 check funded by windfall profit taxes to ease the pain of high energy prices. Some say Mrs. Palin’s ACES is like that, because this year every Alaskan will receive a $1,200 check as a share of the oil bonanza. (The check comes in addition to the approximately $2,000 every Alaskan will receive this year as a dividend from the Permanent Fund, which was established by state constitutional amendment in 1976 as a way of sharing the state’s mineral wealth with the people.)

The real comparison is not between Mr. Obama’s windfall profit tax and Mrs. Palin’s risk-and-profit-sharing plan. It is between Alaska’s constitutional rule — that the people must share directly in the state’s mineral wealth — and Mr. McCain’s proposal that coastal states should share in federal offshore oil revenue. His plan is for the funds to be used for public purposes like roads, schools and conservation. A share of royalties dramatically improves the coastal states’ incentive to support drilling. But if Mr. McCain offered every individual American a royalty check too, he might find it easier to sell his program.