A History of Oil - 'Oil, Smoke and Mirrors'

Yes, another thread about Oil

However!

I hope this one will be different from any of the others you shall read today. This is NOT about the Oil Spill in the Gulf nor is it about Peak Oil. This thread examines the intricate ties between Oil and War. I hope to delve deep into the history of Oil Production and expose the common and recurring elite ideology that bounds our thirst for Oil with our Hunger for War.

Let us begin, at the beginning...


World War One

On the 28th June 1914 Archduke Franz Ferdinand of Austria, heir to the Austro-Hungarian throne, and his wife, Sophie, Duchess of Hohenberg, were shot dead in Sarajevo, by Gavrilo Princip, one of a group of six Bosnian Serb armed members of the nationalist movement Young Bosnia.

This assassination led to the July Crisis – a diplomatic crisis amongst the major powers of Europe which eventually saw Austria-Hungary declare war on Serbia. The Great War had begun.

This is the official version of events, the version of events that I was taught during my history lessons in school and there is no doubt that this event was a catalyst for war. However, there is a part of WW1 history that isn’t taught and that is the British invasion of Iraq.

“What!? What would Britain possibly want from Iraq?”

Well, what do you think?

Lets go back in time, to 1903...

In 1903 the German Empire began their development of the Berlin-Baghdad Railway which was to connect Berlin with the (then) Ottoman Empire city of Baghdad with a 1,600 kilometres (990 mi) line through modern-day Turkey, Syria, and Iraq. Of course there is already track laid from Berlin to Constantinople thanks to the Orient Express so all Germany had to do was complete the remaining 990 miles and they would have direct access to Baghdad. (Direct access to Oil).

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This project was met with much opposition from the major powers in Europe who realised that this new railway coupled with the fact that the Germans had gained access to and ownership of oil fields in Iraq meant that the Germans would have gained better access to the eastern parts of the German colonial empire – strengthening their global position.

But the key here is the German acquisition of Iraqi Oil.

The reason this is so important? In 1908 the Royal Navy still ran on coal but had already decided on a switch to oil, which burned more efficiently. This was a bold move on Churchills part considering that Britain had an abundance of coal and barely any access to Oil whatsoever. ..

From that point, oil conversion of the British fleet dictated national security priority to secure large oil reserves outside Britain. In 1913 less than 2% of world oil production was produced within the British Empire.

(Anton Mohr, The Oil War, (New York, Harcourt, Brace & Co., 1926), 118-120.)

Churchill recognised this when he stated:

"The oil supplies of the world were in the hands of vast oil trusts under foreign control. To commit the navy irrevocably to oil was indeed to take arms against a sea of troubles. If we overcame the difficulties and surmounted the risks, we should be able to raise the whole power and efficiency of the navy to a definitely higher level; better ships, better crews, higher economies, more intense forms of war power - in a word, mastery itself was the prize of the venture."

The final step was finding a source, and toward that end a delegation went to the Persian Gulf to examine oil fields. Two companies were the likely choice of supply: the powerful Royal Dutch Shell Group and smaller Anglo-Persian Oil Company. After considerable maneuvering, and largely through Churchill's encouragement, the government decided to maintain competition in the oil industry and ensure supplies by investing directly in Anglo-Persian (now known as BP). The government acquired 51% of company stock, placed two directors on its board and negotiated a secret contract to provide the Admiralty with a 20-year supply of oil under attractive terms. - www.epmag.com...

So the British government became de facto hidden power behind the oil company and had secured themselves a supply of Oil for the foreseeable future. But they still greatly feared the German Empire and needed to limit their access to Oil as much as possible.

Which is why, upon the outbreak or WW1, the very first British Regiment to be deployed in the First World War – the Dorset Regiment – goes to......Basra. There is it joined by 51 other British Divisions, the first of many British invasions of Iraq had begun and as usual it was fuelled by Oil.

And it worked perfectly as in 1919, the Treaty of Versailles cancelled all German rights to the Baghdad Railway.

People in Turkey, Italy, France, and Britain created various arrangements that gave a certain degree of control over the Baghdad Railway to various indistinct interests in those nations. Investors, speculators, and financiers were involved by 1923 in secretive and clandestine ways.
The British Army had completed the southeastern section from Baghdad to Basra, so that part was under British control.

The southeastern section being strategically the most important regarding Oil supplies. Go figure

World War Two

Now, stating that the Second World War was also deeply rooted in issues with Oil may be a bit of a stretch. However, it did have a part to play.

Firstly, Pearl Harbour...

The Japanese attack on Pearl Harbor had its origins, at least in part, in a decision by the United States to limit oil exports to Japan in 1941 in response to the Japanese invasion of China.
Japan was almost totally reliant on imported oil, mainly from the United States, and it needed oil for its navy.
It concluded that if the American tap was going to be turned off, it would have to get its oil elsewhere. This was a factor in its decision to invade the oil-rich Dutch-held Indonesian islands. - news.bbc.co.uk...

Another example of Oil (or a lack of it) causing conflict.

However, the part that Oil plays in WW2 is far more underhand than a blatant all out invasion ...

The Standard Oil group of companies, in which the Rockefeller family owned a one-quarter (and controlling) interest, was of critical assistance in helping Nazi Germany prepare for World War II. This assistance in military preparation came about because Germany's relatively insignificant supplies of crude petroleum were quite insufficient for modern mechanized warfare; in 1934 for instance about 85 percent of German finished petroleum products were imported. The solution adopted by Nazi Germany was to manufacture synthetic gasoline from its plentiful domestic coal supplies. It was the hydrogenation process of producing synthetic gasoline and iso-octane properties in gasoline that enabled Germany to go to war in 1940 — and this hydrogenation process was developed and financed by the Standard Oil laboratories in the United States in partnership with I.G. Farben.

Evidence presented to the Truman, Bone, and Kilgore Committees after World War II confirmed that Standard Oil had at the same time "seriously imperiled the war preparations of the United States."2 Documentary evidence was presented to all three Congressional committees that before World War II Standard Oil had agreed with I.G. Farben, in the so-called Jasco agreement, that synthetic rubber was within Farben's sphere of influence, while Standard Oil was to have an absolute monopoly in the U.S. only if and when Farben allowed development of synthetic rubber to take place in the U.S.:
Accordingly [concluded the Kilgore Committee] Standard fully accomplished I.G.'s purpose of preventing United States production by dissuading American rubber companies from undertaking independent research in developing synthetic rubber processes.

Regrettably, the Congressional committees did not explore an even more ominous aspect of this Standard Oil — I.G. Farben collusion: that at this time directors of Standard Oil of New Jersey had not only strategic warfare affiliations to I.G. Farben, but had other links with Hitler's Germany — even to the extent of contributing, through German subsidiary companies, to Heinrich Himmler's personal fund and with membership in Himmler's Circle of Friends as late as 1944.

I’m sure many of you are aware of this case and so I shall not delve any further into it now, other than to leave you with the following source should you wish to read more - source

1953 Iranian coup d'état

In 1951 Mohammad Mosaddegh was democratically elected Prime Minister of Iran in a landslide victory on a mandate that included nationalising the Anglo-Persian Oil Company (now BP). This is the very same Anglo-Persian Oil Company that in 1913 Winston Churchill had negotiated, on behalf of the British Government, a 51% shareholding majority in – therefore it was under British control.

Mosaddegh explained his nationalisation policy in a 21 June 1951 speech:

”Our long years of negotiations with foreign countries… have yielded no results this far. With the oil revenues we could meet our entire budget and combat poverty, disease, and backwardness among our people. Another important consideration is that by the elimination of the power of the British company, we would also eliminate corruption and intrigue, by means of which the internal affairs of our country have been influenced. Once this tutelage has ceased, Iran will have achieved its economic and political independence.”

And Mosaddegh was by no means exaggerating, in fact, he wasn’t doing justice to just how crippling the British ownership of Irans Oil supply had been...

By 1951 Iranian support for nationalization of the AIOC was intense. Grievances included the small fraction of revenues Iran received. In 1947, for example, AIOC reported after-tax profits of £40 million ($112 million) - and gave Iran just £7 million.

Conditions for Iranian oil workers and their families were very bad. The director of Iran's Petroleum Institute wrote that:

Wages were 50 cents a day. There was no vacation pay, no sick leave, no disability compensation. The workers lived in a shanty town called Kaghazabad, or Paper City, without running water or electricity, ... In winter the earth flooded and became a flat, perspiring lake. The mud in town was knee-deep, and ... when the rains subsided, clouds of nipping, small-winged flies rose from the stagnant water to fill the nostrils .... Summer was worse. ... The heat was torrid ... sticky and unrelenting - while the wind and sandstorms shipped off the desert hot as a blower. The dwellings of Kaghazabad, cobbled from rusted oil drums hammered flat, turned into sweltering ovens. ... In every crevice hung the foul, sulfurous stench of burning oil .... in Kaghazad there was nothing - not a tea shop, not a bath, not a single tree. The tiled reflecting pool and shaded central square that were part of every Iranian town, ... were missing here. The unpaved alleyways were emporiums for rats. - en.wikipedia.org...

The British government could not let nationalisation happen and knew that they needed to get rid of Mosaddegh if they were to stand any chance of keeping a stranglehold on Irans Oil. This was going to be a problem for the British because its embassy and officials had been evicted from Iran in October 1952. So they turned to America for assistance. At first the US was not interested in what they saw as a burden – especially considering the US were involved in Korea at the time. However the British Foreign Office played the ‘Communist’ card, warning that Mosaddegh was a Communist sympathiser and that Iran would eventually become a Communist nation.

Soon enough the US agreed to the Coup and ‘Operation Ajax’ was underway. Five days later and it was all over.

Mosaddegh, was arrested, tried, and originally sentenced to death until the sentence was commuted to three years' solitary confinement in a military prison, followed by house arrest until his death in 1967. In his place the CIA installed Mohammad-Rezā Shāh Pahlavi as absolute Dictator of Iran and continued to pull his strings until the Iranian Revolution of 1979 saw him overthrown. During this time Pahlavi established, with the assistance of the CIA, the domestic security and intelligence service SAVAK (think Nazi Germanys Gestapo/SS and you have the right idea), famous for their methods of torture. In 1976, Amnesty International reported that Iran had the “highest rate of death penalties in the world, no valid system of civilian courts and a history of torture which is beyond belief. No country in the world has a worse record in human rights than Iran.”

However it is now understood that the US were aware that Iran was highly unlikely to become a Communist state and that this excuse was merely used as a smokescreen. This became obvious when as a condition for restoring the Anglo-Iranian Oil Company, the U.S. wanted to collapse the AIOC's monopoly; five American petroleum companies, Royal Dutch Shell, and the Compagnie Française des Pétroles, were to draw Iran's petroleum after the successful coup d'état.

Middle East historian Ervand Abrahamian highlighted the importance of this Coup to American interests when he stated:

"If Mosaddegh had succeeded in nationalizing the British oil industry in Iran, that would have set an example and was seen at that time by the Americans as a threat to U.S. oil interests throughout the world, because other countries would do the same."

Iraq

In the 102 years since Mesopotamian Oil was first struck at Masjed-Soleyman, Britain has been at war with or occupying Iraq for 52 of them.

But it’s not just Britain that realised the important role Iraq would play in future events, it seems the US also had its beady eye on Iraq’s Oil when in 1946 a US State Dept. report described Iraq as:

".. a stupendous source of strategic power and the greatest material prize in world history".

This became self evident when in 1995 the UN established established UN Security Council Resolution 986, which later became known as the Oil-for-Food Programme. It allowed Iraq to sell oil on the world market in exchange for food, medicine, and other humanitarian needs for ordinary Iraqi citizens without allowing Iraq to boost its military capabilities. However, it was also seen as a way for the US/UN to control Iraqi Oil and therefore control its profits.

Hans von Sponeck, who served as a UN Assistant Secretary-General and UN Humanitarian Coordinator for Iraq, described it by stating:

"What is proposed at this point in fact amounts to a tightening of the rope around the neck of the average Iraqi citizen"; claimed that the sanctions were causing the death of 150 Iraqi children per day; and accused the US and Britain of arrogance toward Iraq, such as refusing to let it pay its UN and OPEC dues and blocking Iraqi attempts at negotiation.

There were also numerous abuses of the system (see here) one of which involved funds allegedly being used to finance Al-Qaeda.

If the first Gulf War was concerned with limiting and controlling Iraqi Oil then the second Gulf War can only be seen as a complete take over.

The reason this is so important to America is that the US is by far the biggest consumer of Oil on the planet:

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And they have been relying heavily on foreign Oil for nearly 40 years now:

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Outlining what US foreign policy objectives would be over the coming years, Clinton's Defence Secretary William Cohen said:

"Unilateral use of military force to ensure uninhibited access to key markets, strategic resources and energy supplies".
(Annual Report to the President and Congress, 1999,(US Dept. of Defence, 1999).

So as early as ’99 the US had their eyes on the prize. But what Iraq did next all but sealed their fate....

In 1971 OPEC had a meeting where it was decided that any transaction for a barrel of oil was to be conducted in US dollars. This essentially gives the Federal Reserve a blank cheque. The money goes around the global system in US dollars and the cheques never come back to the bank.

However, on the 30th October 2000 the Iraqis changed their Oil for Food program money from a dollar denominated account to a Euro denominated account. The Euro then gains 25% against the dollar thanks to strong sales of Moon Safari by Air which forces Iran to change to the Euro also. Next, North Korea changes not just its oil transactions but ALL its business to Euros. There was then a meeting speculating on the possibility of changing all oil transactions to Euros –the worst nightmare of the Federal Reserve.

Three months later and the US kicked into action. Newly elected George W. Bush was only two weeks in office when he created the National Energy Policy Development Group; otherwise known as the Energy Task Force.

This group was intended to “develop a national energy policy designed to help the private sector, and, as necessary and appropriate, State and local governments, promote dependable, affordable, and environmentally sound production and distribution of energy for the future."

On May 16, 2001, the NEPDG released its final report.

Since its inception it has been marred by controversy:

The Washington Post reported on November 15, 2005 that it had obtained documents detailing how executives from major oil corporations, including Exxon-Mobil Corp., Conoco, Royal Dutch Shell Oil Corp., and the American subsidiary of British Petroleum met with Energy Task Force participants while they were developing national energy policy.

In the week prior to this article revealing oil executive involvement, the Chief Executives of Exxon-Mobil and ConocoPhillips told members of the US Senate that they had not participated as part of the Energy Task Force, while the CEO of British Petroleum stated that he did not know. Regardless of whether the executives were under oath, if these statements were knowingly and materially false and deceptive then they were illegal per the The Fraud and False Statements statute (18 U.S.C. 1001)

Energy Task Force Documents Show Industry Influence

These revelations came about after a Freedom of Information Act request forced the Energy Task Force to release some of its documents. But within these grudgingly released documents there were even more startling revelations to be found. It seems that the US were, in early 2001, already apportioning Iraq’s oil...

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From the report:

“The Gulf region is the main energy-producing region of the world. It has been since the Second World War. It’s expected to be at least for another generation. It’s a huge source of strategic power, of material wealth. And Iraq is absolutely central to it. It has the second largest oil reserves. It’s very easily accessible, cheap. To control Iraq is to be in a very strong position to determine the price and production levels, not too high, not too low, to probably undermine OPEC, and to swing your weight around throughout the world. That’s been true since the Second World War.”

Still think the Iraq war is about WMD?

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Hopefully I have demonstrated that Oil and what it represents - energy - has always been a source of conflict. But even more than this I hope that I have exposed to you the fact that we are being consistently lied to about the reasons for these wars. Wars that see many, many thousands of innocent people killed.

Yes, we need Oil. But at what price?

“Your good war, your just war has always been presented as a one off, a discreet event no more connected to other wars than consecutive productions of the same musical because all the ‘just war’, ‘humanitarian’ arguments begin to unravel if ever a war is seen to be part of a continuous foreign policy that has remained absolutely consistent for decades.” - Rob Newman (History of Oil)

Sources & References

WW1

www.spectator.co.uk...
www.1914-1918.net...
www.epmag.com...
en.wikipedia.org...
en.wikipedia.org...
www.engdahl.oilgeopolitics.net...
Anton Mohr, The Oil War, (New York, Harcourt, Brace & Co., 1926), 118-120.

WW2

en.wikipedia.org...
www.reformed-theology.org...
news.bbc.co.uk...

IRAN

en.wikipedia.org...
en.wikipedia.org...
revcom.us...
en.wikipedia.org...
en.wikipedia.org...
en.wikipedia.org...

IRAQ

en.wikipedia.org...
en.wikipedia.org...
www.un.org...
www.spinwatch.org...
www.oilcrisis.com...
en.wikipedia.org...
www.corpwatch.org...
en.wikipedia.org...
en.wikipedia.org...
A Century of War: Anglo-American Oil Politics and the New World Order - F. William Engdahl
Petrodollar Warfare - Oil, Iraq and the Future of the Dollar - William R. Clark

My main source of information and direction was the following stand-up history show 'History of Oil' by comedian Robert Newman (whose title I borrowed). "Stand-up history", I hear you ask. Well, yes. Give it a chance, it is ABSOLUTELY BRILLIANT.

Robert Newman gets to grips with the wars and politics of the last hundred years - but rather than adhering to the history we were fed at school, he places oil centre stage as the cause of all commotion. This innovative history programme is based around Robert Newman's stand-up act and supported by resourceful archive sequences and stills with satirical impersonations of historical figures from Mayan priests to Archduke Ferdinand. Quirky details such as a bicycle powered street lamp on the stage brings home the pertinent question of just how we are going to survive when the world's oil supplies are finally exhausted. - www.robnewman.com...

Another big help was the following documentary 'Oil, Smoke and Mirrors', whose title I also borrowed for this thread.

"Oil Smoke & Mirrors" offers a sobering critique of our perceived recent history, of our present global circumstances, and of our shared future in light of imminent, under-reported and mis-represented energy production constraints. - oilsmokeandmirrors.com...

Oh I forgot this...

Iraq: Good-Bye and Good Luck

The last election made Iraq’s sectarian and ethnic rivalries even sharper, if that is possible. The corruption is universal and shameless. Dozens of people are still being killed by suicide bombers every week. But the country cannot really fail, because there is just so much oil.

After three decades of foreign wars, U.N. sanctions and American occupation, Iraq’s oil exports bottomed out at 1.8 million barrels per day, or b/d, in 2008, but they are already back up to 2.5 million b/d – and Baghdad plans to be producing 9.9 million b/d only ten years from now. That would make it the world’s first, second or third-largest exporter (depending on what happens to Saudi Arabian and Russian production), and drown it in a tidal wave of cash.

The target is plausible, because this is not speculation about production from new oilfields; it is just enhanced production from existing fields. Contracts to build the infrastructure to pump that extra oil have already been signed with two dozen foreign oil companies. Since the foreigners are only paid a fee per barrel, Iraq gets most of the profits.

On the reasonable assumption that the price of oil will not drop below $50 per barrel in the next decade, that means that the Iraqi government will have an oil income of at least $150 billion a year by 2020. Two-thirds of the current government’s income is stolen by the political elite and there is no reason to think that this will change, but that would still allow some $50 billion a year to trickle through and serve the needs of ordinary Iraqis. - www.hurriyetdailynews.com...

'Yer, we have what we want, we will install a corrupt government, we will continue to steal your Oil...goodbye and good luck.'

I can't believe how blasé this article is, although it does sum up perfectly the situation over in Iraq.

Next target: Iran!

reply to post by LiveForever8


S&F, good work champ. You deserve it.¨
I think you could be capeable to do a thread about free-energy.
Keep it up.

Sighing off.

reply to post by Durabys


Thanks, I appreciate it

Free energy is something I have been looking into actually, maybe in the near future

I am bumping this thread.

Thanks for a really good read, LiveForever8! Learned a great deal from your OP, thank you.

reply to post by ziggystar60


No problemo

Make sure you check out Robert Newmans 'History of Oil' that I linked, it's most splendid

I forgot another very important article.

On July 11th 2002 The Times newspaper ran the unbelievable headline:

'West Sees Glittering Prizes Ahead in Giant Oilfields'

This was a very rare moment of absolute truth from our corporate media and an early warning about the real reason for war in Iraq.

THE removal of President Saddam Hussein would open Iraq's rich new oilfields to Western bidders and bring the prospect of lessening dependence on Saudi oil.

No other country offers such untapped oilfields whose exploitation could lessen tensions over the Western presence in Saudi Arabia.

After Kuwait's liberation by US-led forces in 1991, America monopolized the postwar deals, but the need to win international support for an invasion is unlikely to see a repeat.

Russia, in particular, and France and China all permanent members of the United Nations Security Council have high hopes of prizing promises of contracts in a liberated Iraq from a United States that may need their political support.

President Bush has used the War on Terror to press his case for drilling in a protected Arctic refuge, but predicted reserves in Alaska are dwarfed by the oilwells of the Gulf. Anthony Cordesman, of the Center for Strategic and International Studies in Washington, said that the issue for the US was as much the security of the Gulf as access to particular oilfields.

"You are looking down the line to a world in 2020 when reliance on Gulf oil will have more than doubled. The security of the Gulf is an absolutely critical issue."

Gerald Butt, Gulf editor of the Middle East Economic Survey, said: "The removal of Saddam is, in effect, the removal of the last threat to the free flow of oil from the Gulf as a whole." - www.commondreams.org...

This is one of those fantastic threads that get lost in all the mush. Quite possible one of the most underrated yet informative threads I have read in a long time. I would give you a S&F but I already have and ATS only lets me give you one.

Keep it up, you truly are helping us to deny ignorance.

reply to post by kevinunknown


Cheers muchos appreciated

Something I missed out...

Deals with Iraq are set to bring oil giants back

Four Western oil companies are in the final stages of negotiations this month on contracts that will return them to Iraq, 36 years after losing their oil concession to nationalization as Saddam Hussein rose to power.

Exxon Mobil, Shell, Total and BP — the original partners in the Iraq Petroleum Company — along with Chevron and a number of smaller oil companies, are in talks with Iraq's Oil Ministry for no-bid contracts to service Iraq's largest fields, according to ministry officials, oil company officials and an American diplomat.

www.nytimes.com...

reply to post by LiveForever8


I hope this sheds light on the area. www.youtube.com... An eye openner, a must see.

reply to post by nite owl


Thanks for that

I've seen it before (and many others like it) but I enjoy watching videos like that numerous times just so it all sinks in. Check out some of the links in my OP, there are so great video sources in amongst them somewhere.

Just about to start reading your 3rd post but ahhh, I just have to get this out...I'm so glad you're back with your great threads haha. I've missed them.

Being the ignorant person I am...I actually didn't know about this: www.reformed-theology.org...

Really, really informative thread, absolutely amazing

reply to post by BlackPoison94


Well thanks BP but this is actually an older thread I had forgotten about

I have a couple of interesting threads in the works though. Well, I think they're interesting.

But yeah, there's plenty of interesting reading to be done on this very topic. Luckily for me I was introduced to them during my study of History at GCSE and A-Level otherwise I may not have known about them either!