EB: US gov't awareness of peak oil

Peak oil is one reason given for why Bush & Cheney wanted to invade Iraq so bad.
Guess that hasn't worked out!
Yeah Dave, I think they had envisioned US & UK oil companies heavily engagd in exploration and production in Iraq by now.  Controlling the world's second largest oil reserves would give any government great power in the post-peak era.
The war in Iraq has actually been a success.  The U.S population, and certainly the anti-Bush crowd does not understand global commodity finance.  Let me explain how world oil markets really work.  People don't understand that most oil in the US is imported from Canada and Mexico and Venezuela.  So why does it matter what happens to middle east oil?  That's because oil is a global market.  It's all one big pot that is traded on the comex exchange.  That's why if Katrina shuts down oil production in the gulf of mexico, the oil price in India is raised, even though they get most of their oil from the Persian gulf.

 The key thing that everything hinges on though is that oil is priced in dollars.  If oil is priced in dollars all the oil in the world belongs to the United States and is given out to other countries at our discression.  The War in Iraq prevented Iraq from joining the Iranian Oil Market in Feb 2006 that would be denominated in Euros which would have undermined the U.Ss ability to print its way out of oil shortage to the detriment of the other world economy's consumption.  So with Iraq and the Saudis on our side we can prevent the Iranian oil market from gaining a strong foothold.  The war in Iraq was expensive but the end of the petro dollar would have been catastrophic.  

Well that experiment certainly did not pan out.

Speaking of Iraq, more on the latest pipeline bombing there:

Posted GMT 9-3-2005 17:37:44

KIRKUK, Iraq (Reuters) -- All exports of Iraq's Kirkuk crude oil through a major pipeline to Ceyhan on Turkey's Mediterranean coast were stopped on Saturday after a bomb blast set the pipeline on fire, an oil ministry source said.

Although the Kirkuk-Ceyhan pipeline has a nominal capacity of close to 1.5 million barrels per day, throughput has typically averaged only around 200,000 bpd since the U.S. invasion of March 2003 because of frequent attacks on the line. It has also been closed for long periods.

By 2:30 p.m. (1030 GMT) the fire had been extinguished, a fire department official from Iraq's North Oil Company told Reuters. But he added that oil leaking from the pipeline had spilled some 2 km (1.2 miles) from the site of the explosion.

It was not immediately clear how long it would take to repair the line and bring it back to full capacity.

Just want to note Big Gav's latest post at Reaping The Whirlwind. This is linked in at the site Energy Bulletin site PG mentions. Lots of good stuff there.
A couple of points:

First, OF COURSE the US federal gov't knows about peak oil.  Anyone who thinks otherwise, or thinks that they're just now learning about it is kidding him or herself.

Second, while I am absolutely convinced that the Iraq war was about oil, it wasn't about oil in the way that many people assume.  The goal was not to grab Iraq's oil and immediately develop it into a gusher of cheap energy.  The goal was to ensure that the US could not be locked out of access to that oil by, say, China.  Bush knows that we need to make the transition away from cheap oil at the fastest rate possible without destroying the economy.  I'm convinced that he knew the supply of oil from Iraq would flat line in the short run, contributing to high (but not disastrously so) prices.  This results in massive profits for oil companies (something Bush isn't exactly against), moves us along in the transition, and still guarantees the US a future supply.

In that light, the Iraq war has succeeded brilliantly.  In terms of how it is affecting the US troops and the innocent Iraqi civilians, as well as the US reputation around the world, it's an unmitigated disaster.  

And that ends the extent of my political comments on this site for the next three months, at a minimum.  

Re: Lou's "and still guarantees the US a future supply....In that light, the Iraq war has succeeded brilliantly"

Huh? I'm not getting this, Lou, what are thinking Iraqi production looks like down the line? The whole thing is screwed up beyond repair, not just now but indefinitely in the future.... We will be forced at some point to withdraw, perhaps after some Nixonian "Peace With Honor" kind of bullshit.... Our future supplies will come from elsewhere. The whole thing is a total disaster. What are you thinking?
I think the crew who thought this up (Iraq II) were so foolish that they actually thought they'd get a privatized oil buisiness going in a democratic Iraq.  I think at the time they had more in mind about OPEC and radicals than Chinese, but maybe that's just a guess,  The main thing is not to judge their plans on rational terms - that gives them too much credit.  Look instead at what they irrationally and foolishly thought they could do.
I'm a conservative and remain shocked at the lies told to con the American people and Congress into supporting the war in the first place.

I do, quite frankly, hope that Bush, Cheney, Rumsfeld, Feith, Wolfowitz and others get tagged with international war crimes indictments one day.

Invading Iraq to secure American access to oil is no less reprehensible than China threatening to invade Taiwan or Japan invading China or the US invading the Philippines oh so long ago or Hitler invading Europe or the Soviet Union invading Afghanistan or Hussein invading Kuwait. I could go on.

Apparently Mr. Bush believes in "freedom" only when freedom means being free to invade any country with oil, or strategically positioned near oil.

Newsflash: China won't invade anyone -- they'll simply use hard cash to buy what they want.

Which strategy do YOU think will work in the long run?

Think really long run...

By the way, bomb attacks on oil assets in IRAN yesterday; the Kirkut pipline in IRAQ blown apart again (2km oil spill and growing); what's next...

Yes, his strategy and implementation plans have worked out to be an unmitigated disaster.

Katrina is a potential catalyst event which the disbursed, decentralized and global terrorist groups may take advantage of. Its a golden opportunity for them, isn't it?

Ironic, isn't it: Iraq, pre-war, was in a position to come to the aid of the world. Post war its been reduced to a barely functional oil exporter of diminishing returns.

The real possibility of the US having to make a total exit from Iraq exists. How that will play out into energy security for the US who can tell, but its not likely to be positive.

And hurricane season isn't even over.

"Bush knows that we need to make the transition away from cheap oil at the fastest rate possible without destroying the economy."

Say what?

That was my reaction too - if I thought that was the plan then I could actually understand what is going on.

Controlling middle east oil as we go over the peak is worthwhile only if a crash program to eliminate oil dependence is underway. What is happening instead is a pillaging of the US treasury (and Iraqi oil revenue) by what Eisenhower would have called the "military industrial complex", with no efforts at all to shift away from oil dependence (other than creating all sorts of events that push the oil price higher).

It seems quite possible that we'll have a destroyed economy, still be dependent on oil and face a midle east in open revolt along with a unified chinese-russian block in Eurasia if present trends continue for a few more years. How can one gang of people be so stupid and so immoral at the same time ?

When I was younger one of my friends mother thought that when Nixon went to China, the Chinese kidnapped him and substituted a fake Nixon!  I used to think that was one of the funniest things I had ever heard.

The little shit we have in office now couldn't have done more damage to this country if he had been a foreign agent working for our worst enemy.

What if ... what if ... the bulge in the back is controlled by Ridyah rather than Halliburton? Hmmm ....

You take out Saddam because he threatens the House of Suad, not becuase "he tried to kill ma daddy". This is business, pure and simple.

What if ... what if .. Simmons is right and Gahwar is running low. There are all those untapped Iraqi fields right across the border. Why have noble Saudi's die when the dumb Americans will do it for us? Hmmm ...
"controlling middle east oil"

One country (well two with UK help) unilaterally taking control of middle east oil is a sure fire way to World War III, IV and V.

If you are ok with that, then we've no problems.

If you think that quality of life following oil wars is likely to be worse off than quality of life following a concerted effort to move, in a peaceful way, to a post-oil era, then we have big problems -- today -- for the path we are on is the former, not the latter.

Hmm, first a hurricane takes out a bunch of oil production and import facilities, followed by bombings targeting oil production elsewhere. Sounds like a movie I heard about.
cue the Wahabis.
Regarding the extent of Irak's oil reserves, which I think is a quite important part of the question, I know at least two important people than don't agree over it. One is a well-know Texan energy banker, and he thinks those oil reserves are overstated. The other guy is an iranian petroleum engineer, also well known among the peak oil crowd, and he says exactly the opposite...

The pity is that this year in Lisbon, one of them could come... because of diplomatic problems, but this lack of accord stills buggers me.

Sorry, I can't provide links or quotes for that, as I learned those things "off the record".

Uh, I meant "one of them COULDN'T come", sorry, no English mother tongue!
I'm with your mysterious iranian oil engineer on that one (read my "Is Iraq the greatest prize of all" post) but it makes absolutely no difference in the long run, even if Iraq does have 350 billion barrels sitting under the sand...
I've seen a few references saying that Iran could be come a net oil importer by 2010 because of production declines, plus subsidized prices and an exploding population that are growing consumption. One cite for this:

Kenneth Katzman, "The Iran-Libya Sanctions Act (ILSA)," CRS Report for Congress, updated July 31, 2003, p. 2.

If Iran becomes a net importer, it doesn't really matter how big their reserves are.

Yes the US is in Afghanistan and Iraq but more importantly it is in the centre of the most important oil-producing region. A massive army is in place as a warning to those thinking of attempting any meaningful independent strategy. Two political rivals, Russia and China, are being sent a message too. Come on...it's not just about Iraq!
It's interesting that many think the US's adventure in Iraq and Afghanistan is about detering China.  Yet at the same time, China is effectively funding the US war in the ME by financing a big part of the trade deficit/current account.  Without vast flows of funds from China, the US would have to either raise taxes substantially to pay for the war - or raise interst rates to attract foreign capital to finance the deficit from other countries.

Or maybe China is glad to see the US as a giant Gulliver tied down in the ME, unable to move, to defend even its own major cities from diaster, and with no national savings left to invest in future growth.

I think the latter case is much more likely.

Big Gav at Peak Energy blogspot recently posted the following:

"On the topic of FEMA, this week's award for strangest domain sighted in my server logs goes to them: they appear to be researching peak oil (coming in via Wikipedia's peak oil page) and there was some indications that they are producing an EOP (Emergency Operations Plan), which I found interesting - though not as interesting as I'd find the contents of such a plan if anyone happened to email me a draft of it. If this sounds a bit too boring I guess I could make up a conspiracy theory about it being one of FEMA's more Gestapo type of operations getting cranky about all the unpleasant conclusions I draw about American foreign policy and the actions of a lot of its leading government figures - if I stop posting in the near future you'll all know what happened - dragged off to Gitmo in the middle of the night (I'm joking of course - I think)..."