sartesian at earthlink.net
Mon Apr 17 07:01:35 MDT 2006
Certainly attacks against Iran are closer than just on the horizon-- but
that doesn't make Rumsfeld any less "mad" or "incompetent." It just
makes him a faithful agent of what capital requires-- destruction of the
means of production. Why, some of us way back in 2001 suggested Iran
was the real target of the attacks on Afghanistan, given Iran's
proximity to the Caspian Sea, Iran's use of gunboats to enforce its
disputes with US friendly govts in the Sea, the impending pipeline
completion, etc. Some of those suggesting that were dismissed as
"conspiracy" theorists... way back then. Now?
As everyone knows I do not believe there is any shortage of oil, any
production peak approaching, any depletion of total reserves. Shortage,
surplus, price, are social, not geological functions. We live in a
world of the limits of capital, not geology.
"Cheap" supplies of petroleum are plentiful. Actual increases in per
barrel "lifting costs" are attributable to taxes and royalties, with
only small portions attributable to actual increases in production
costs-- for the most part increases based on commodity prices spiked by
the price of oil itself, as happened in the 70s. Worldwide petroleum
stocks are at record levels.
Regarding costs of production of "non-conventional" reserves, and
extracting oil from abandoned fields: we should keep in mind, plans and
investment to process the heavy oil from Venezuela's Orinoco basin go
back to 1995-1997, with estimates that production costs could be brought
down to $10 per barrel, and acceptable rates of return could be achieved
at prices of $17-20 per barrel. Then 1998 happened and prices plunged
below the $10 mark. Enter OPEC in 1999.
Similarly in the US, in the Wyoming, Montana, North Dakota 'Bakken"
basin oil production has resumed at fields earlier abandoned with
estimates that the reservoir holds 200-400 billion barrels with at least
10% recoverable by current technology. This is an interesting story, as
the oil is trapped between and in two layers of rock. In 1997, small
companies looked at recovery attempts, but lacking the capital and
technology, sought out bigger partners and the oil was accessed. But
then.... yep, good old 1998 again. And development stopped. Until
2000. Enter Halliburton, our home-front OPEC, as a partner. Enter
horizontal drilling. Here comes the oil.
It is the overproduction of oil, the overaccumulation of capital that
drives both the frenzy in the markets and the war talk against Iran.
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