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FTR #478 The Bush Administration, The Underground Reich and the Peak Oil Controversy

REALAUDIO [1]
NB: This stream con­tains both FTRs 477 and 478 in sequence. Each is a 30 minute broad­cast.

High­light­ing many of the insti­tu­tions and indi­vid­u­als that are pub­li­ciz­ing the notion of “Peak Oil”—the con­cept that world petro­le­um pro­duc­tion has “peaked” and will decline (with increas­ing prices for the consumer)—this pro­gram notes how many of them are con­nect­ed to the fos­sil fuels indus­try. Of course, the indus­try will prof­it from increas­ing prices dur­ing the inevitable decline in avail­abil­i­ty of nat­u­ral­ly derived oil. In par­tic­u­lar, the pro­gram notes the piv­otal posi­tion of IHS Ener­gy Con­sul­tants in the Peak Oil con­tro­ver­sy. This firm (for­mer­ly known as Petro­con­sul­tants) is a sub­sidiary of the Thyssen-Borne­misza firm. The lat­ter is one of the pri­ma­ry indus­tri­al firms link­ing the Bush fam­i­ly to Nazi Ger­many and is one of the most impor­tant ele­ments in the Bor­mann orga­ni­za­tion. Two inter­est­ing ele­ments of spec­u­la­tion con­cern the Thyssen firm’s inter­est in the Leu­na oil refin­ery in the for­mer East Ger­many and the pos­si­ble influ­ence of the Peak Oil hypoth­e­sis on the deci­sion to invade Iraq. Was the Thyssen firm’s maneu­ver­ing around the Leu­na facil­i­ty (see FTR#’s 193, 276, 278, 385, 407 [2]) con­duct­ed in antic­i­pa­tion of Peak Oil and pos­si­ble use of the facil­i­ty to gen­er­ate syn­thet­ic oil? What role did IHS Ener­gy Con­sul­tants play in gen­er­at­ing the ratio­nale for the Bush administration’s deci­sion to invade Iraq? Was the US lured into a trap by the Under­ground Reich, bait­ed with dire pre­dic­tions of a scarci­ty of oil? These are impor­tant ques­tions to answer.

Pro­gram High­lights Include: Bush admin­is­tra­tion con­sul­tant Matthew Sim­mons’ cen­tral posi­tion in the Peak Oil con­tro­ver­sy; a basic endorse­ment by Wal­ter Sheas­by (the author of the arti­cle upon which the broad­cast relies) of the fun­da­men­tals of the Peak Oil con­tro­ver­sy; the strange, untime­ly death of Wal­ter Sheas­by in August of 2004.

1. Before launch­ing into the Sheas­by arti­cle, we should note that Sheas­by does not dis­pute the fun­da­men­tal the­sis of Peak Oil. He points out, how­ev­er, that much of the “mus­cle” behind the pub­lic rela­tions effort to pub­li­cize (and politi­cize) the Peak Oil sit­u­a­tion comes from inter­ests that stand much to gain from a cyn­i­cal exploita­tion of the cri­sis. “Psst! Hey there. You believe that we are fac­ing a cri­sis, an Immi­nent Peak of World Oil Pro­duc­tion, right? Well, the insid­ers in the President’s Ener­gy Strat­e­gy Team would like you to join with them in solv­ing this new sud­den cri­sis. In fact, you may already have been induct­ed. You pan­ic at the idea of West­ern civ­i­liza­tion col­laps­ing as the engines and machines grind to a halt, uh-huh? You agree with Ron Swen­son of Ecosys­tems that ‘The world is about to expe­ri­ence a real ener­gy cri­sis, like­ly to be a calami­ty unpar­al­leled in human his­to­ry’ (Swen­son, 1996).”
(“The Com­ing Pan­ic over the End of Oil—Coming to a Bal­lot Box Near You” by “Scoop”.) [3]

2. “You think, as oil geol­o­gist Col­in J. Camp­bell says, that ‘the very future of our sub­species ‘Hydro­car­bon Man’ is at stake,’ right? You agree with Vir­ginia Aber­nathy that there are too many immi­grants using up our resources, I’m sure. You prob­a­bly real­ize, as many do not, that the Era of Cheap Oil and Gas is over. As Matthew E. Sim­mons, the CEO of the ener­gy invest­ment bankers of Sim­mons and Co. Inter­na­tion­al, recent­ly said: ‘I think basi­cal­ly that now, that peak­ing of oil will nev­er be accu­rate­ly pre­dict­ed until after the fact. But the event will occur, and my analy­sis is lean­ing me more by the month, [toward] the wor­ry that peak­ing is at hand; not years away. If it turns out I’m wrong, then I’m wrong. But if I’m right, the unfore­seen con­se­quences are dev­as­tat­ing.’” (Idem.)

3. Among the most vis­i­ble and promi­nent of the Peak Oil advo­cates is Matthew E. Sim­mons. He is also one of the Bush administration’s most impor­tant ener­gy advi­sors. Sim­mons par­tic­i­pat­ed in Cheney’s ener­gy task force in 2001. “Well, guess what? Sim­mons is not only an oil­ion­aire him­self, but he has been a key advi­sor to the Bush Admin­is­tra­tion and to Vice Pres­i­dent Cheney’s 2001 Ener­gy Task Force, as well as sit­ting on the Coun­cil of For­eign Rela­tions. Sim­mons is a board mem­ber of Kerr-McGee Corp., a major oil and gas pro­duc­er. He insists that the US gov­ern­ment is very wor­ried about oil deple­tion. How­ev­er, Cheney’s secre­tive Nation­al Ener­gy Pol­i­cy Devel­op­ment Group (NEPDG) refused to make its records of closed-door meet­ings with indus­try exec­u­tives pub­lic. The Indus­try has tak­en a beat­ing in pub­lic opin­ion since the Kyoto sum­mit put the spot­light on glob­al warm­ing. And now Sim­mons appar­ent­ly wants to make the public’s fear of The End of Cheap Oil the drum beat of the 2004 Re-elect Bush and Cheney Cam­paign, although a more enlight­ened ener­gy pol­i­cy, he wor­ries, ‘is going to take a while.’” (Idem.)

4. Again, Sheas­by (“scoop”) does not dis­pute the fun­da­men­tals of the Peak Oil sit­u­a­tion. He’s focus­ing on who is exploit­ing Peak Oil and for what rea­son. “[Editor’s note, by ‘scoop’] I hap­pen to believe that Peak Oil must be an accu­rate mod­el of the facts, and I don’t believe this arti­cle dis­putes those facts. But it does draw some inter­est­ing con­nec­tions. Caveat Emp­tor.” (Idem.)

5. Ele­ments around the Bush admin­is­tra­tion and the fos­sil fuels busi­ness that dom­i­nates it have cyn­i­cal­ly used Peak Oil to jus­ti­fy a “damn-the-envi­ron­ment-full-speed-ahead” atti­tude toward ener­gy: “On July 3, 2003, the same day that the World Mete­o­ro­log­i­cal Orga­ni­za­tion warned that glob­al warm­ing was cre­at­ing an unprece­dent­ed pat­tern of extreme weath­er, Con­gress was con­sid­er­ing a bill that would cre­ate a con­tro­ver­sial new nation­al ener­gy pol­i­cy (Inde­pen­dent, 2003). The bill allows new oil explo­ration all along the Out­er Con­ti­nen­tal Shelf (OCS) using inva­sive tech­nolo­gies that will dam­age sea life and ocean habi­tat in envi­ron­men­tal­ly sen­si­tive areas. In addi­tion, the bill would open our pub­lic lands to fur­ther destruc­tive drilling and min­ing oper­a­tions. Two years ago Pres­i­dent Bush demand­ed that Con­gress pass an ener­gy pol­i­cy cen­tered around more drilling for oil and gas in the Arc­tic Nation­al Wildlife Refuge, but that red flag has been dropped from the new ener­gy bill, S. 14, the Ener­gy Pol­i­cy Act of 2003.” (Idem.)

6. “Giv­en the imme­di­ate con­cern with nat­ur­al gas sup­plies, lit­tle strate­gic plan­ning is like­ly to come out of Con­gress this July, so atten­tion is focused on reviv­ing the ideas of 2001 in 2004 to have a man­date for change in the sec­ond term. Sim­mons said last year that ‘The [2001] plan devot­ed almost as many pages to the need to increase alter­na­tive ener­gy sources like wind and fuel cells as it did for the need to pro­tect the sup­ply of oil and gas. It called for a giant amount of new pow­er plants . . . . The plan called for Amer­i­ca to begin address­ing the need for a return to more nuclear ener­gy and clean coal . . . . none of these new ener­gy sources [wind and fuel cells, etc.] can grow fast enough to be a real alter­na­tive to oil OR nat­ur­al gas even by 2020’ (Sim­mons, 2002).” (Ibid.; pp. 1–2.)

7. “These days Sim­mons is get­ting a lot of help from folks all over the polit­i­cal spec­trum, from some of the glob­al moguls them­selves, like Schlum­berg­er and Hal­libur­ton, to the envi­ron­men­tal­ist-lite Repub­li­cans of REP Amer­i­ca (Green Ele­phant, 2001), to some of the anar­cho-prim­i­tivists and Lud­dites who admire Ted Kaczyn­s­ki (Xsi­lent, 2003), and from plen­ty of mid­dle-of-the-road envi­ros in between.” (Ibid.; p. 2.)

8. “On May 27th, 2003 Sim­mons addressed the sec­ond inter­na­tion­al con­fer­ence of
ASPO, the Asso­ci­a­tion for the Study of Peak Oil [and Gas] which was meet­ing at the French Petro­le­um Insti­tute (IFP) via a satel­lite tele­con­fer­ence video link from his Hous­ton offices. His remarks were tran­scribed by Mike Rup­pert, the ex-cop who chal­lenged the CIA for its role in the drug trade. Since 9–11-01, accord­ing to his web­page [4], Rup­pert has pio­neered the effort to edu­cate the world about the con­se­quences of Peak Oil, the fact that the world is run­ning out of ener­gy, and what this might mean for human civ­i­liza­tion (Rup­pert, 2003).” (Idem.)

9. “Sim­mons gained a pow­er­ful ally this spring when the Paris-based Inter­na­tion­al Ener­gy Agency (IEA) of the Orga­ni­za­tion for Eco­nom­ic Coop­er­a­tion and Devel­op­ment (OECD) report­ed for the first time that the peak of world oil pro­duc­tion is in sight.” (Idem.)

10. “Spencer Abra­ham, the US Ener­gy Sec­re­tary, called an emer­gency meet­ing of the Nation­al Petro­le­um Council’s Nat­ur­al Gas Sum­mit on June 26, 2003, amid calls for the admin­is­tra­tion to deal urgent­ly with the acute short­age of nat­ur­al gas this year: ‘it is a nation­al con­cern that will touch vir­tu­al­ly every Amer­i­can,’ Abra­ham told the sum­mit of experts and indus­try execs. ‘It is our hope that the ener­gy bill will con­tain pro­vi­sions that help spur domes­tic pro­duc­tion of nat­ur­al gas and enhance our impor­ta­tion facil­i­ties to boost sup­plies, while reduc­ing our nation’s grow­ing over-reliance on this one source of ener­gy.’ Daniel Yer­gin, author of the 1991 book about the oil indus­try, The Prize [5], and founder of Cam­bridge Ener­gy Research Asso­ciates, coun­seled that the fault was not with mar­kets: ‘Rather it is the result of dis­ap­point­ing geo­log­i­cal expe­ri­ence over the last few years plus restric­tions on explo­ration, com­bined with a shift to new uses of gas that will cer­tain­ly grow con­sump­tion’ (Picer­no, 2003). Spurring domes­tic pro­duc­tion of gas will also sub­si­dize oil drilling, and diver­si­fy­ing sources will entail more use of coal, so this ener­gy bill does not quite entail the imme­di­ate end of Hydro­car­bon Man.” (Idem.)

11. “With­out a doubt, despite the talk of alter­na­tive fuels, the use of gov­ern­ment to stim­u­late the explo­ration and dis­cov­ery of new oil and gas fields is at the top of the agen­da. Sim­mons believes that the rea­son oil reserves have fall­en so far behind oil and gas con­sump­tion is that ‘we drill far less wells. We also stopped doing most gen­uine explo­ration.’ High­er oil prices are essen­tial, since ‘The high­er the cost, the more you can extend, recov­er­ing more and more of the hard­er and hard­er to get resources.’ Sim­mons funds the remain­ing wild­cat­ters, han­dling an invest­ment port­fo­lio of approx­i­mate­ly $56 bil­lion, so he should know (Sim­mons, 223a).” (Idem.)

12. Among the ear­li­est fore­cast­ers of Peak Oil was Mar­i­on King Hub­bert. “In fact, the coali­tion that is push­ing for a rad­i­cal new ener­gy pol­i­cy is large­ly com­posed of those who stand to ben­e­fit from a revival, not a phase out, of oil and gas devel­op­ment. The intel­lec­tu­al and activist core of the coali­tion is made up of those vet­er­an oil geol­o­gists and engi­neers who use the method of mod­el­ing the ratio of reserves to pro­duc­tion devel­oped by the mav­er­ick research geo­physi­cist Mar­i­on King Hub­bert, who died in 1989. He believed that the peak of pro­duc­tion is reached when half of the esti­mat­ed ulti­mate­ly recov­er­able resource, deter­mined by what has been dis­cov­ered and logged cumu­la­tive­ly as actu­al reserves, has been pumped. In1956 at the Shell Oil Lab in Hous­ton, Hub­bert star­tled his col­leagues by pre­dict­ing that the fos­sil fuel era would be over very quick­ly. He cor­rect­ly pre­dict­ed that US oil pro­duc­tion would peak in the ear­ly 1970’s.” (Idem.)

13. “In the 1970’s, Hub­bert embraced solar pow­er, say­ing ‘I’m con­vinced we have the tech­nol­o­gy to han­dle it right now. We could make the tran­si­tion in a mat­ter of decades if we begin now’ (Hick­er­son, 1995). Although his think­ing was def­i­nite­ly in the eco­topi­an tra­di­tion, he has often been mis­tak­en for a cyn­i­cal dystopi­an by those who swear by Hub­bert as the prophet of the Great Malthu­sian Die Off (Han­son, 2003.)” (Idem.)

14. “The dean of the old­er Hub­ber­tians is Ken­neth Def­feyes, Pro­fes­sor Emer­i­tus at Prince­ton and author of Hubbert’s Peak: the Impend­ing World Oil Short­age [6] (2001). Def­feyes, who worked with Hub­bert in Hous­ton for Shell Oil, says ‘I nev­er came to iden­ti­fy with man­age­ment.’ Con­vinced of Hubbert’s the­o­ry ‘I real­ized that a con­tract­ing oil indus­try was not a good career prospect,’ he says, ‘so I decid­ed to get out and go into acad­e­mia’ (Guterl, 2002). Besides, he thinks that ‘crude oil is much too valu­able to be burned as fuel.’ (Dunn, 2002).” (Ibid.; p. 3.)

15. Unlike Hub­bert and Def­feyes, Mon­sieurs Lahar­rere, Camp­bell and Ivan­hoe advo­cate more oil explo­ration, as opposed to alter­na­tive fuel devel­op­ment. As we shall see Petroconsultants—the firm that employed all three—is close­ly con­nect­ed to the Thyssen busi­ness empire. “Sup­port for a reme­di­al pro­gram of oil explo­ration and devel­op­ment ver­sus switch­ing to research and devel­op­ment of alter­na­tive ener­gy sources tends to be found among oil experts who are con­sul­tants to the indus­try. While accept­ing some of the val­ues of the New Age, they large­ly remain loy­al tot heir call­ing as oil geol­o­gists and wild­cat­ters. The lead­ing trio of Jean H. Laher­rere, Col­in J. Camp­bell, and L.F. (Buz) Ivan­hoe have worked for, or with, the lead­ing firm mod­el­ing oil fields, Petro­con­sul­tants of Gene­va. Since the 1950’s they have been fed data on oil explo­ration and pro­duc­tion by just about all the major oil com­pa­nies, as well as by a net­work of about 2000 oil indus­try con­sul­tants around the world. They use this data to pro­duce reports on var­i­ous mat­ters per­ti­nent to the oil indus­try, which they sell back to the indus­try. ‘This much is known, Ken­neth Def­feyes writes, ‘the loud­est warn­ings about the pre­dict­ed peak of world oil pro­duc­tion came from Petro­con­sul­tants’ (Def­feyes, 2001: p. 7).” (Idem.)

16. The epi­cen­ter of the Peak Oil hypoth­e­sis is IHS Ener­gy Group—which evolved out of Petroconsultants—a Thyssen-Borne­misza sub­sidiary. The pro­gram sets forth the Petroconsultants/Thyssen link at length: “In a late 1998 merg­er, Petro­con­sul­tants became IHS Ener­gy Group, a sub­sidiary of Infor­ma­tion Han­dling Ser­vices Group (IHS Group), a diver­si­fied con­glom­er­ate owned by Hol­land Amer­i­ca Invest­ment Corp., IHS Group’s imme­di­ate par­ent com­pa­ny, for the Thyssen-Borne­misza Group (TBG, Inc.). [Empha­sis added.] In the 1920’s, George Her­bert Walk­er and his son-in-law, Prescott Bush, had helped the Thyssen dynasty finance its acqui­si­tions through Union Bank­ing Corp. and Hol­land-Amer­i­can trad­ing Corp. (Wikipedia, 2003). Until his death last year, Hans Hein­rich Thyssen-Borne­misza, the nephew of the Nazi steel and coal mag­nate, was one of the world’s rich­est men. Some of the old Hub­ber­tians would prob­a­bly flinch at such an asso­ci­a­tion.” (Idem.)

17. “In 1995, a report by Camp­bell and Laherre on world oil resources, World Oil Sup­ply 1930–2050 (Petro­con­sul­tants Pty. Ltd., 1995), writ­ten for oil indus­try insid­ers and priced at $32, 000 per copy, con­clud­ed that world oil pro­duc­tion and sup­ply prob­a­bly would peak as soon as the year 2000 and decline to half the peak lev­el by 2025. Large and per­ma­nent increas­es in oil prices were pre­dict­ed after the year 2000. . . .” (Idem.)

18. “ . . . Col­in J. Camp­bell, the leader of the Neo-Hub­ber­tians, is a petro­le­um geol­o­gist from Bal­ly­de­hob, Ire­land, and author of The Com­ing Oil Cri­sis (1997). He worked for Tex­a­co as an explo­ration geol­o­gist and then at Amo­co as chief geol­o­gist for Ecuador. He is a Trustee of the Oil Deple­tion Analy­sis Cen­ter (ODAC) and the founder of the Asso­ci­a­tion for the Study of Peak Oil and Gas (ASPO), orig­i­nal­ly a net­work of 24 oil sci­en­tists. ASPO has Asso­ciate mem­bers like Hal­libur­ton and finan­cial spon­sors like Schlum­berg­er, but Camp­bell is crit­i­cal of the Bush-Cheney Admin­is­tra­tion for ‘col­lec­tive­ly hav­ing per­son­al invest­ments of as much as $150 mil­lion in oil com­pa­nies’ (ASPO, 2002).” (Idem.)

19. Tak­en in the con­text of Peak Oil, the Thyssen firm’s inter­est in the Leu­na facil­i­ty in the for­mer East Ger­many takes on added sig­nif­i­cance. Col­in Camp­bell notes the pos­si­ble use by Ger­many of its coal resources to sup­ple­ment its ener­gy diet. It was Ger­man coal—utilized in the hydro­gena­tion process—that pro­vid­ed the Third Reich with the foun­da­tion for its syn­thet­ic fuel project in World War II. The Leu­na facil­i­ty was the largest of those instal­la­tions. Is Thyssen (and Total­fi­na Elf) gear­ing up for pos­si­ble use of the Leu­na facil­i­ty to man­u­fac­ture syn­thet­ic oil? Again, for more about the com­plex maneu­ver­ing around Leu­na in the CDU fund­ing scan­dal, see FTR#’s 193, 276, 278, 385, 407 [2]. “Camp­bell has laid out his pre­scrip­tion for var­i­ous con­sumer gov­ern­ments, for exam­ple: ‘Ger­many should resist Green pres­sure to give up nuclear pow­er at pre­cise­ly the moment it needs more ener­gy, as oil peaks and declines. Ger­many has coal and pos­si­bil­i­ties for coalbed methane. This indus­try needs to be redis­cov­ered. It may become eco­nom­ic again. [Empha­sis added.] Ger­many should encour­age its motor man­u­fac­tur­ers to move to more effi­cient engines and hydro­gen fuels, espe­cial­ly those made by solar means. It should pro­vide what­ev­er fis­cal incen­tives are need­ed.’ (Camp­bell, 2000).” (Ibid.; pp. 3–4.)

20. “Jean H. Laher­rere is a petro­le­um con­sul­tant resid­ing in Paris, France. Laherrere’s ear­ly work on seis­mic refrac­tion sur­veys con­tributed to the dis­cov­ery of Africa’s largest oil field. He retired in 1992 after 37 years with Total CFI and its sub­sidiaries in explo­ration activ­i­ties in the Sahara, Aus­tralia, Cana­da and Paris. Since retir­ing from TOTAL, Laher­rere has con­sult­ed world­wide on oil and gas poten­tial and pro­duc­tion, as a Petro­con­sul­tants Asso­ciate, and he serves on boards of the Soci­ety of Petro­le­um Engineers/World Petro­le­um Con­gress. . . .” (Ibid.; p.4.)

21. The pro­gram con­cludes with a look at the untimely—some might say suspicious—death of Wal­ter Sheas­by, whose arti­cle blows the whis­tle on the Petroconsultants/Thyssen/Bush admin­is­tra­tion role in pub­li­ciz­ing the Peak Oil sit­u­a­tion. West Nile virus has not claimed that many lives. Sheas­by was one of just a very small num­ber of vic­tims of this ail­ment. West Nile Fever has also been stud­ied by a num­ber of coun­tries as a pos­si­ble bio­log­i­cal war­fare instru­ment. “Health offi­cials con­firmed today that a 62-year-old Clare­mont man died due to com­pli­ca­tions from West Nile virus, mak­ing him the fourth Los Ange­les Coun­ty res­i­dent to per­ish from the mos­qui­to-borne dis­ease. The Green Par­ty activist Wal­ter Sheas­by died Thurs­day at a Fontana hos­pi­tal of encephali­tis, or swelling of the brain. . . .”
(“Health Offi­cials Con­firm West Nile Death”; ABC News; 8/24/2004.) [7]