www.crikey.com.au Stephen Mayne and Kate Jackson Keeping an eye on George Dubya's Oilies January 31, 2003

With war in the Middle East looming we look at the top ten oil producing nations and their proven reserves, and consider just who is influencing foreign policy in the Bush administration.

Biggest oil producing countries There has been much discussion of late about the motivation of a US led attack on Iraq. Many people have mentioned oil as a motivation, but who really knows which countries produce the most oil and which have the largest reserves? We have compiled a list of the top 10 crude oil producing countries and the countries top 10 crude oil reserves (and those just outside the top 10).

World crude oil production by country in 2001 (barrels daily)

1. Saudi Arabia - 8,768,000
2. USA - 7,717,000
3. Russian Federation - 7,056,000
4. Iran - 3,688,000
5. Mexico - 3,560,000
6. Venezuela - 3,418,000
7. Norway - 3,414,000
8. China - 3,308,000
9. United Kingdom - 2,503,000 10.Iraq - 2,414,000
10. United Arab Emirates - 2,422,000
11. Nigeria - 2,148,000
12. Kuwait - 2,142,000
13. Libya - 1,425,000
14. Indonesia - 1,410,000

World proven crude oil reserves by country in 2001 (thousand million barrels)

1. Saudi Arabia - 261.8
2. Iraq - 112.5
3. United Arab Emirates - 97.8
4. Kuwait - 96.5
5. Iran - 89.7
6. Venezuela - 77.7
7. Russian Federation - 48.6
8. USA - 30.4
9. Libya - 29.5 10.Mexico - 26.9
10. Nigeria - 24.0
11. China - 24.0
12. Qatar - 15.2
13. Norway - 9.4

Stats from BP's Stastical Review of World Energy

In the PDF file "table of proved reserves at end 2001" you'll see how Iraq's proven reserves have rocketed from 29.7 billion barrels in 1981 to 112.5 billion barrels in 2000 - second only to Saudi Arabia which has 261.7 billion barrels.

The key statistic here is that Iraq is the tenth biggest producer but has the second largest amount of proven reserves. Given that the Bush administration is full of oilies, it does suggest that oil is a big motivation in the move to oust Saddam.

In other words, Saddam is sitting on proven oil reserves worth an incredible US$3 trillion based on current oil prices (+US$30).

At the moment the French, Chinese and Russians are best positioned to exploit this. No wonder they are reluctant to back George W and let Exxon, Chevron, Texaco and the like in there.

The USA's proven oil reserves have fallen from 36.5 billion barrels to 30.1 billion over the past 20 years whilst NAFTA has dropped from 102 billion barrels to just 64.8 billion, presumably due to all that Yankee gas-guzzling as the economy has boomed.

The ratio of NAFTA reserves to annual USA oil consumption has never been lower. If the Yanks were only relying on NAFTA, their annual consumption of 7 billion barrels would suck the whole of North America dry in less than 10 years.

Yet Saddam is sitting on decades worth of US oil consumption. When you've got an administration full of oilies and these are the cold, hard facts, it is very hard to dismiss the widely held view that this war is all about oil.

Meanwhile, pitiful Australia only has 2.9 billion barrels in proven reserves and we've recently given East Timor a slice of this, although the treaty is still to be signed. The Yanks certainly won't be invading if Simon Crean or Bob Brown ever became Prime Minister.

What others are saying:

The topic of America's oil obsession is also gaining mainstream coverage in the media. Tony Walker observed in the Fin Review on 31 January that, "The US is a net importer of 52 per cent of its oil requirements. By contrast, Australia imports about 8 per cent of its oil requirements, most of that form Asia, with a small amount from the Middle East.

No great arguments there for Australia's legions to march across the desert sands of Iraq, although Australian officials in Canberra are understood to have had preliminary talks with their American counterparts in Washington about the possibility of BHP and Woodside sharing in some of the post-war action in Iraq.

The gas guzzling US consumes more than 25 per cent of oil produced worldwide. And where does the US get its oil imports? In 2000, nearly 55 per cent of US gross oil imports came from four countries: 15 per cent from Canada, 14 per cent from Saudi Arabia and Venezuela and 12 per cent from Mexico. Iraq supplied 5 per cent to 6 per cent.

But - and this is a huge "but" - according to the US Energy departments own projections, the US and its major trading partners are set to become much more dependent on Gulf oil over the nest two decades."

Meanwhile the eleven members of the Organisation of Petroleum Exporting Countries (OPEC) are still collectively suppling about 40 per cent of the world's oil output, and possess more than three-quarters of the world's total proven crude oil reserves. At the end of 1999, OPEC had proven reserves of 811,526 million barrels of crude oil, representing 77.8 per cent of the world total of 1,042,536 million barrels.

The member countries are Algeria, Indonesia, Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela. There are a few countries with which the US has deliberately cultivated relationships, such as Kuwait and Saudi Arabia. Not countries you would expect the US to be friends with if oil were not in the equation.

Bush's oil industry connections

It is well known that George W. followed his father into the Texas oil business years before following him into the White House. But the links between his administration and the oil industry do not stop there.

Vice President Dick Cheney previously served as chairman and chief executive of Halliburton Co., the world's largest oilfield services company, which has operations in Azerbaijan. Cheney and Commerce Secretary Donald Evans both ran energy-related companies, earning millions of dollars.

National security adviser Condoleezza Rice, was on Chevron's board of directors from 1991 until January of this year, and has a company oil tanker named after her.

Christine Todd Whitman, the administrator of the Environmental Protection Agency, owns interests in oil wells in Texas and Colorado valued at between $55,000 and $175,000. She has promised to divest of them to meet ethics guidelines.

Defence Secretary Donald Rumsfeld has between $3.25 million and $15.5 million worth of investments in energy-related companies. He is divesting himself of many financial holdings but has not provided details.

The law firm of former Secretary of State James Baker, a Bush family adviser, represented several oil companies with interests in Azerbaijan, among them Exxon-Mobil Corp.

Brent Scowcroft, a Rice adviser who was national security adviser in the administration of Bush's father, has industry connections that include sitting on the boards of Pennzoil-Quaker State Co. and Enron Global Power & Pipelines, a unit of Enron Corp.

Deputy Secretary of State Richard Armitage is a former co-chairman of the U.S.-Azerbaijan Chamber of Commerce.

With such strong oil connections in the administration it is very hard to imagine how access to Middle East oil reserves could not be a large factor in Bush's decision to go to war. Not to mention the fact that many of these large energy companies donated money to the Republican Party. After all, it wasn't long ago that former head of Enron, Kenneth Lay and the President were best friends.

USA Energy

United States of America

The United States of America is the world's largest energy producer, consumer, and net importer. It also ranks eleventh worldwide in reserves of oil, sixth in natural gas, and first in coal.

Information contained in this report is the best available as of April 2001 and is subject to change. For the latest monthly U.S. outlook by the Energy Information Administration, please see the "Short-Term Energy Outlook".

www.heraldtribune.com By H. JOSEF HEBERT Associated Press Writer

As the United States and Iraq move closer to war, oil markets seemed to be taking it all in stride. Global crude oil stocks are growing, prices declining and some analysts are talking cautiously of a possible oil glut on the horizon. Lower energy prices probably would follow.

That is, energy experts warned, if a war in Iraq doesn't drag on and Iraqi leader Saddam Hussein doesn't torch his oil fields or, in the worst case, finds a way to disrupt other Persian Gulf supplies.

For now, the markets are betting those things won't happen and that the war will be a swift one.

Oil prices dropped by more than $3 a barrel, or about 9 percent, on Tuesday, falling to their lowest in more than two months as traders believed there is enough crude in the system to make up for Iraq's lost production if war erupts.

Oil traders "are beginning .. to realize there's a bit of a glut of oil around," said Leo Drollas, chief economist of the London-based Center for Global Energy Studies.

But that oil has yet to reach the U.S. markets.

The Energy Department said Wednesday U.S. crude oil stocks remained uncomfortably low at 270 million barrels, roughly where inventories have been most of this year and at the minimum industry says is needed for smooth refinery operation. The U.S. stocks increased only slightly over a week ago.

Crude inventories have consistently been 300,000 to 400,000 barrels below a year ago, said Doug MacIntyre, an oil analyst for the Energy Information Administration. Imports also have been down from previous levels, although OPEC producers other than Iraq and strife-torn Venezuela have been pumping more oil for weeks.

The low U.S. inventories reflect transportation delays, but also reluctance by refiners to buy oil when the price has been $35 to $37 a barrel, analysts said.

Much of that oil is now in storage in the Persian Gulf or in tankers on the high seas, say oil analysts. Saudi Arabia is believed to have as much as 50 million barrels in storage in the country and more en route to other storage facilities. That's enough to replace Iraq's 1.5 million to 2 million barrels a day for about a month.

Larry Goldstein, president of the private Petroleum Industry Research Foundation, said the markets also have been calmed because the Bush administration has made clear that it's ready to use some of the 600 million barrels in the Strategic Petroleum Reserve to counter shortages.

Rep. Billy Tauzin, R-La., chairman of the House Energy and Commerce Committee, said this week he is convinced the reserve is capable of providing oil quickly on orders from President Bush. It has shifted "from the fill mode to the flow mode," Tauzin said.

Still, there remains some trepidation among oil traders and analysts should war in Iraq last a while. Crude oil prices are likely to remain volatile in the months to come, they cautioned.

"This thing could go right back up," said Tom Bentz, an analyst at BNP Paribas in New York, suggesting prices could rebound once fighting erupts. "We're still vulnerable because inventories are tight."

When prices jumped in the weeks before the Gulf War, oil inventories already were high. That helped cushion the impact on prices, which jumped briefly to more than $40 a barrel and then declined rapidly when it became clear that the war would be settled quickly.

The biggest fear in the market is that oil facilities in other Middle Eastern countries, such as Kuwait or Saudi Arabia, could be attacked - a scenario that would cause oil prices to shoot higher very quickly, said Fadel Gheit, senior oil analyst at Fahnestock & Co. in New York.

Short of that happening, there is plenty of oil, Gheit said, and the recent price declines make clear that for the time being the "war premium" has disappeared. He said prices could drop an additional $5 a barrel in the coming days.

Energy experts say a glut could result if war in Iraq doesn't drag on and Iraqi leader Saddam Hussein doesn't torch his oil fields or disrupt other Persian Gulf suppliers.

For now, the markets are betting those things won't happen and that the war will be a short one.

Associated Press Writer Brad Foss in New York contributed to this report.

Last modified: March 19. 2003 11:39AM

Growth Response to Very High CO2 Concentrations

Summary

Plants grown in elevated CO2 environments typically exhibit increased rates of photosynthesis and biomass production. Most of the studies that have established this fact have historically utilized CO2 concentration increases on the order of 300 to 600 ppm. So what happens if the air's CO2 content is super-enriched, to a concentration on the order of 10,000 ppm? Is the effect of the extra CO2 still positive?

................Finally, in an important field study, Fernandez et al. (1998) investigated the effects of even higher CO2 concentrations (some as great as 35,000 ppm) on an herb and a tree growing in the vicinity of natural CO2 springs in Venezuela. These high CO2 concentrations stimulated the photosynthetic rates of both plants in all seasons of the year. In the dry season, this effect was particularly important; for plants exposed to elevated CO2 continued to maintain positive net photosynthetic rates, while those exposed to ambient air a few tens of meters away exhibited negative rates that, if prolonged, would be expected to lead to their eventual demise. The authors noted their work provides "a positive answer to the question of whether increases in carbon assimilation will be sustained throughout the growing season and over multiple seasons." It also demonstrated that high atmospheric CO2 concentrations, even as much as 100 times greater than the current global mean, were not detrimental to the plants investigated. Indeed, they helped them.................

Canada Energy

Canada is a net exporter of oil, natural gas, coal, uranium, and hydropower. It is one of the most important sources of U.S. energy imports.

Note: Information contained in this report is the best available as of February 2001 and can change.

Canada currently has a bright economic outlook, with projected gross domestic product (GDP) growth of 3.2% in 2001. Liberal Prime Minister Jean Chretien won his re-election bid in November 2000, enlarging his party's majority in the parliament. Chretien plans to reduce taxes, which is expected to lead to increased consumer spending and business confidence. Unemployment is at historic lows.