High Petrol Prices and High Gas Prices - unfolding
Period: 140 million years to 2005

History of the rise of the cheap petrol economy - commentary and speculation on its fading
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Sites of note

140 mya - 140 million years ago Middle East and North Sea oil forms from the continuous rain of dead bodies of tiny plant and animal plankton in the seas of this time.

90 mya - 90 million years ago North and Central American oil forms from the continuous rain of dead bodies of tiny plant and animal plankton in the seas of this time.

74 mya - 75 million years ago - oils generated from the organic-rich marine carbonates deposited in the Jurassic era thermally mature and are expelled from the carbonate rock into anhydrite capped reservoirs deep within the ground. These trapped oils form the worlds largest oilfield, the super-giant Ghawar field of Arabia.

1848 - the first ever oil well is drilled in Baku, Georgia.

1850 - most homes in the west are lit by smoky, smelly, whale oil lamps. The beginning of a turn to clean burning kerosine.

1858 - The first oil well drilled on the continent of  North American is drilled in Ontario, Canada.

1859 - first ever U.S. oil well drilled in Pennsylvania by the Pennsylvania Rock Oil Company at the site of seeping oil at Oil Creek, Titusville. Oil is struck at 21 meters. Numerous refineries spring up in the oil region. Gasoline is an unwanted by-product of kerosine refining.
1870 - John D Rockerfeller founds the Standard Oil Company.

1878 - Standard Oil controls 90% of the refining capacity in USA. Kerosine for lighting is a main product, as whale oil for lighting is now increasingly expensive as whale catches have peaked, and are now declining year on year.

1877 - Worlds first oil tanker (steam driven) plys the Caspian sea, carrying kerosine.

1878 - Invention of the lightbulb -death knell of the kerosine lamp.

1882 - Karl Benz, a German inventor, develops and builds the first automobile. The vehicle uses 'benzine' distilled from coal. Later, Benz switches to 'petroleum', refined from crude oil.

1892 - In a technological breakthrough, French car builder Peugeot creates the first petrol-engined 4 wheel car that has rubber tyres.

1901 - Spindletop oilfield in Texas drills a well that gushes 100,000 barrels of oil a day.

1901 - William Knox D'Arcy, ultimate founder of British Petroleum company, buys a 480,000 square mile concession from the Grand Vizier in Teheran, Persia (Iran) to search for oil.

1901 - Englishman Wheatman Pearson buys oil concessions in Mexico.

1903 - Ford motor company incorporated.

1903 - the British Foreign Secretary warns Russia and Germany that Britain would "regard the establishment of a naval base or of a fortified port in the Persian Gulf by any other power as a very grave menace to British interests, and we should certainly resist it with all the means at our disposal." The economic importance of the region to colonial corporate interest was recognised as a prize worth fighting for.

1905 - William Knox D'Arcy, in a partnership with the Burmah Oil company, finally strikes oil in his Persian concession. The partners form the Anglo-Persian Oil Company, later to be renamed British Petroleum.

1906 - There are about 100,000 cars and trucks in USA.

1908 - First mass production of automobiles, with the introduction of the model T ford.

1908 - Irans first oilfield, the Masjed Soleiman field in southwestern Khuzestan Province, is discovered. It is estimated to hold 6 billion barrels.

1908 - Shell oil buys oilfields in Egypt.

1910 - Shell oil buys the Ural-Caspian oilfields in Russia.

1910 - the British navy commences switching from coal powered ships to oil powered ships.

1911 - In a world of relatively small companies, the oil companies are already giants. Standard Oil and Royal Dutch Shell have oifields in Indonesia, Russia, USA, Venuezuela and Mexico. These two giant companies have pipelines, refineries, tankers, storage depots, and huge shipping fleets operating worldwide.

1911 - Standard Oil found by US courts to be an "unreasonable" monopoly as is broken up into 34 smaller companies.

1912  - Peugeot create the first petrol engine with twin overhead cams and 4 valves per cylinder.

1913 - world navies switch from burning coal (steam) to increase the speed and range of warships.

1914 - The British Government takes a 51% holding in the Anglo-Persian oil company just prior to world war 1, and changes the rules so that only British citizens may be company directors. This company will provide handsome profits to the British government treasury.

1914 - major industrialised nations give up the gold standard whereby each currency was fixed at a given amount of gold, and could be freely exchanged for that physical gold equivalent. All balance of payment deficits between one country and another were settled by transfer of gold, reducing the currency available for circulation in the debtor nation and curbing public spending in the debtor nation, thus driving down domestic prices and making exports competitive once more.

By abandoning the gold standard, long term bonds could be raised to finance war.

1914 - 1918 - oil found to be of even greater militarily importance as use of trucks and tanks in battle commences. First oil supply shortage, but the Allied army has a much greater access to oil.

“the Allied cause has floated to victory upon a wave of oil.”
-Lord Curzon, member of the British War Cabinet

1918 - The British, aware Mosul and Bhagdad are rich prospects, seize the oil region of Mosul, fighting on after the armistice in order to seize it, and block French interests in the area. In the aftermath of the collapse of the Ottoman empire, Britain draws up the boundaries of the British-created state of Iraq, making sure it contained the most oil-prospective sectors for its oil companies. The UK Secretary of the War Cabinet, noted in cabinet letter that oil was a “first class war aim.”Curzon lies about UK economic interests, saying,

“Oil had not the remotest connection with my attitude over Mosul..”

1919 - The USA Government, concerned about domestic oil shortages, and without overseas sources, demands that USA oil companies be included in concessions in Iraq. A new consortium was created, including USA companies, and named the 'Iraq Petroleum Company'. It consisted of of BP, Exxon, Gulf, Texaco, Mobil, and a private entrepreneur.

1919 - Shell buy Wheatman Pearson's by now large Mexican oil concessions.

1919 - Exxon buys significant sized Texas oil company.

1920 - Exxon buys Russian oilfields.

1920's - 'roaring twenties' - the British Empire is declining, British Imperial forces are overextended across the globe. British armed forces occupy Iraq and spend 10 years 'pacifying' Iraq with poison gas, troops, incendiary munitions and armoured vehicles in order to protect their oil company interests. Maintaining the Imperial reach is a huge drain on government funds. As a result, Britain has a huge government budget deficit, which it 'manages' by devaluing the pound and borrowing heavily from overseas. It imports far more by value than it exports, i.e. has a huge foreign trade deficit. By the late 1920's the western world start to abandon 'holding' British pound debt and repatriate their capital. The pound falls heavily as a currency of value.

In USA, from 1921 to 1929, there is a huge expansion of easy credit. Undercapitalized banks and loan agencies proliferate. Huge amounts - an estimated $US28 billion - of money are created through easy loans. Banks cut each others throats to match low interest rates and attract borrowers. America promotes unsound loans of American dollars overseas in order to stimulate overseas markets to buy US farm exports, thus keeping unemployment in the USA low.

1920's - Competition between oil companies is fierce, with much price slashing and below-cost selling to gain market share. The two main oil exporting countries are USA and Mexico. All oil prices are 'benchmarked' to the price of oil in the Gulf of Mexico plus transportation costs from the Gulf of Mexico to the point of delivery, regardless of where in the world the oil was actually produced or actually delivered. All contracts are in USA dollars.

1920 - there are approximately 9 million cars in USA, consuming about 3 billion US gallons of petroleum a year. The US Geological Survey expresses concern that at this rate of consumption, there may be only enough oil for about the next 20 years.

1924 - North America is by far the world's largest oil producer, pumping out 2.3 million barrels a day. Europe is a far distant second, producing 179,000 barrels a day. The Far East produces 95,000 barrels of crude a day, and the Middle East, only 83,000 barrels of oil a day.

1926 - Arabian tribal king, Ibn Saud, completes his conquest of the Arabian Peninsular and names the country after his family - 'Saudi' Arabia.

1927 - Gulf oil buy the oil concession of the Sheikdom of Kuwait.

1928 - (september) Major USA and UK oil companies Exxon, Shell, and BP meet at Achnacarry Castle in Scotland and agree not to compete against each other in a global price-fixing collusion.

1928 - An agreement is signed by USA and the UK giving the Iraq Petroleum Company oil-drilling rights in every part of the old Ottoman Empire, from Turkey to the southern tip of  Saudi Arabia. In the post-Ottoman era boundaries were somewhat fluid, so a red line was drawn by USA and UK on a map to show what areas where covered. This came to be known as the 'red line agreement'. The line enclosed almost all likely oil prospects, except for Kuwait and Persia (Iran).

The Iraqi British 'puppet' government 'settles' on a royalty of 4 gold shillings per ton. Oil companies make a profit of around two times the sum they pay the Iraqi government.

1929 - The 'great depression'. USA credit bubble collapses as shonky US banks fail in July 1929, paper companies on the US sharemarket fail and the sharemarket bubble pops in october 1929.

1930 - by the early months of 1930 the USA economy more or less collapses.There is 30% unemployment, house prices collapse, domestic farming prices fall as spending power disappears. Small farmers in some impoverished states with endemic erosion problems are badly hit, other regions are much less badly affected. In the UK there is depression in the north, but little effect in the south as new industries around based on electricity and new technologies expand.

1930 - USA imposes the Smoot-Hawley tariffs to protect local industry. The US protectionist anti-fair trade impulse first established by the US Constitution is re-invigorated. World trading economies are chilled.

1932 - Iraq is granted independence by Britain, the occupying power. But Britain continues to rule by indirect proxy means and via stooges. It leaves a large military force and a large military air base in the country to ensure it's highly profitable oil interests are protected.

1933 may 29th - King Saud follows the advise of his English advisor Harry Philby and sells a concession to Standard Oil of California to search for oil reserves. Short of capital, Standard Oil of California (SOCAL) on-sells half its concession in Saudi Arabia to Texaco, via a joint venture called Aramco.

1934 - Gulf Oil and BP form a joint venture to develop prospects in Kuwait.

1938 - First Middle East oil well commences production at Dhuhran, eastern Saudi Arabia.

1938 - Kuwaits giant Burgan field discovered by the Gulf Oil-BP joint venture.

1938 - Mexico nationalises all 17 foreign oil companies controlling Mexico's oil resource, and established the state run Permex company. Permex is forced to pay compensation for nationalised fields.

World War II - Britain attempts to persuade King Saud to transfer the Texaco-Standard Oil concession to BP by advancing the King around 20 million dollars. The American companies lobby USA president Roosevelt, and the USA government trumps the British offer. Britain and Russia invade Iran to secure oil and supply routes after the 'shah' of Iran harbours nazi operatives.

USA supplies allies with goods to prosecute the war, including most of the oil. Payment in gold is demanded. USA accumulates a large portion of the worlds gold reserves.

1941 (July) - USA freezes all Japan's financial assets in USA. These assets were used by Japan to pay for oil imports - 80% of which come from USA. Three days later Japan invades Indonesia to seize control of the Royal Shell Petroleum oil fields in southern Indonesia.

1943 - Realising the huge strategic importance of oil to a modern army,  President Roosevelt declares the "the defense of Saudi Arabia is vital to the defense of the United States."

1944 - Bretton Woods agreement leads to the gold standard being re-introduced, but this time the US dollar is allowed to be exchanged for gold - i.e. a gold/US dollar interchange standard, but only with foreign governments, not citizens. IMF established, with USA having veto rights on any major decisions made.

1945 - As oil is of clear military strategic significance, US President Roosevelt meets with King Abd al-Aziz Ibn Saud, feudal monarch of the around 5 million people of the vast Arabian desert and commandeer of vast Arabian oil reserves. Agreement is reached to protect the founder of the Saud dynasty from competitors and external forces in return for privileged access to Saudi oil. Secret plans are made to destroy oil fields - even nuclear bombs are considered - if the Russians gain influence or control of the Saudi fields.

1945 - The USA government forms an agreement with Saud that Aramco would pay it's USA taxes to Saud, not to the USA government. This became known in USA government circles as 'the golden gimmick' that kept Saudi Arabia happy while USA supported the return of some of the 'Israeli' arab diaspora into a specially contrived 'homeland' separated from the other indigenous arab tribes of the Palestinian area.

early 40's - US oil companies - State Oil and Texaco bring Exxon and Mobil into the partnership Company, Aramco.

1945 - US State department recognises that the Middle East oil reserves are "a stupendous source of strategic power, and one of the greatest material prizes in world history." ref

1940's and 1950's  - Giant oil fields found in the Middle East, including the world's largest oilfield (supposedly holding 115 billion barrels of oil), the Ghawar field (discovered in 1948, and first production in 1951). As British colonialisation melts away, Middle East nations take back control of their only significant resource, oil. Iran regains its own oil resources by nationalising all oil production. Resentment of foreign control of the impoversihed middle easts only worthwhile resource grows.

1945 - Oil from the Middle East is so important in Europe that the oil price 'benchmark' is left at Gulf of Mexico prices plus the actual cost of transport  (i.e. not the 'make believe' system of using the cost of transport as if from the Gulf of Mexico for calculating the transport cost of Middle East oil to Europe!).

1947 - The Arabian American Oil Company (ARAMCO) is formed in 1947 with the Saudi feudal king, finally achieving the USA's objective of elbowing British and French oil interests out of the Arabian Peninsular.

1947 - (october) - first oil producing well drilled 10 miles offshore from Louisiana, in the Gulf of Mexico, USA

1949 - Qatar's Dukhan onshore oil and gas field comes into production.

1950 - the Saudi King demands a higher price for the oil concessions granted Aramco. In response, the USA State department allows Aramco to deduct the money paid to Saud from their USA tax liability, making oil companies one of the lowest taxed industries in USA.

1950 - world oil consumption is about 10 million barrels a day.

1950 - China uses about 10,000 tons of oil a month, almost all from domestic production.

1951 - The two most common plastics derived from petroleum products (polythene is best known) are invented.

1951 - Korean war causes a boom in market economies as supply contracts for the war stimulate western industries.

1951 - Iran elects Dr. Mossadeq Prime Minister. He nationalises the BP oilfields and creates the 'National Iranian Oil Company'. BP boycotts Iranian oil. The British Government uses a fighter plane to highjack a Panamanian oiltanker that had loaded at an Iranian oil terminal and force it to the British colony of Aden.

1951 - oil prices briefly spike, and with them, inflation (to around 8%)

1952  - USA Senate Committee releases a report 'The International Petroleum Cartel' accusing the seven largest oil companies (the 'seven sisters') of colluding to 'fix' world prices and 'fix' global market share between them. However, with the change in presidency, the focus of concern became 'the communist threat', and concerns about cartels were forgotten.

1953 - USA's CIA , with British help, backs a plot ('operation Ajax') against the legal government of Iran, successfully installing their puppet, the son of the previous 'shah' of Iran, complete with CIA trained secret police to murder and torture. The head of the CIA at the time, Allen Dulles, was previously a leading oil industry corporate lawyer. American and British companies formed a consortium to buy and develop Iranian oil resources. While nominally Iranian, the 'National Iranian Oil Company' is placed under USA, British and French oil company operational control.

1953 - USA Departments of State, Defense and Interior say USA oil companies are instruments of US foreign policy.

1953 - USA government directive to USA oil companies says it is "in the security interests of the United States" for those USA companies to help "provide to the friendly government of Iran substantial revenues on terms which will protect the interests of the Western World in the petroleum resources of the Middle East." The USA is ordering USA oil companies to join a consortium to exclusively exploit Irans oil resources, as was done in Saudi Arabia.

1953 - USA president calls for the antitrust actions being taken against the USA oil companies to be dropped.

1954 - USA uses about 3 million barrels a day in motor vehicles, and about 2 million barrels of oil a day in industry. Another 1.5 million barrels or so are used in various other sectors, including shipping and heating.

1954 - there are 511,000 oil wells in the USA, with an average production of 12.4 barrels of crude a day .

1955 - USA oil companies now control 40% of Iranian oil production.

1956 - Suez Crisis - Egypt seizes the Suez canal from the foreign-owned 'Suez Company'. With the main route to the Mediterranean blocked, oil shortages develop and fuel prices climb abruptly.

1956 - USA geophysicist M King Hubbert predicts in a paper presented to a meeting of the American Petroleum Institute that oil production in continental US would peak sometime between 1965 and 1970. He predicts world production will peak around the turn of the millenium.

1956 - The number of motor vehicles in the UK is now 6.3 million.

Late 50's  - following the Suez fuel crisis, Germany produces a range of 'bubble cars', tiny cheap low fuel consumption cars made to transport two people without getting wet. The most popular are the three wheeled BMW Isetta, the Messeerschmitt, and the Heinkel Trojan. The UK produces a few three wheelers - Scootacar, Bond, Peel - before the mini is introduced in 1959, when their popularity then plummets.

1960 - world oil consumption about 20 million barrels a day. A plant at Abqaiq is built to compress and liquify the waste petroleum gas into 'liquefied petroleum gas' (LPG). The 'natural gasoline' liquids in the gas were also captures. Previously the gas was 'flared off' at the wellhead as there was no market for it, piping it onshore to remove it was hugely expensive, and it often contained elements corrosive to the oil pipelines.

1960 - ARAMCO finds a way to use the waste gas from oil fields. 1960, the company constructs a plant in Abqaiq, Saudi Arabia, to compress and liquefy what are called natural gas liquids (NGL) - composed of propane, butane and natural gasoline.

1960 - Peak of discovery of Chinese oil, with nearly three quarters of discoveries being in parts of giant fields. The Daquing megafield is brought into production in may of this year.

1960 - OPEC forms with five members - Iran, Iraq, Kuwait, Saudi Arabia and Venezuela

mid 60's - historically, the peak of new oil discovery (in volume terms), with an all-time annual record rate of 45 billion barrels of oil discovered per year. The yearly consumption rate at this time was about 15 billion barrels - far below the rate at which new discoveries were adding to the global pool of oil reserves. Global oil reserves continue to swell and build.

1961 - (april) E.F. Schumacher states in a report published by the UK National Coal Board entitled 'Prospect for Coal'-
 "The oil crisis will come, not when all the world's oil is exhausted, but when world oil supplies cease to expand. If this point is reached, as our exploratory calculation would suggest that it might, in about twenty years' time [1980], when industrialization will have spread right across the globe and the underdeveloped countries have had their appetite for a higher standard of living thoroughly whetted, although still finding themselves in dire poverty, what else could be the result but an intense struggle for oil supplies, even a violent struggle, in which any country with large needs and negligible indigenous supplies will find itself in a very weak position."

1961 - December - first shipments of LPG leave Saudi Arabia. Capacity is about 4,000 barrels of liquid a day.

1958 to 1972 - price of oil slowly falls in real terms (inflation adjusted), from $US3 (about $US15 when adjusted to 2005 dollars) in 1958, to $US3.75 in1972, i.e. about $US11 (2005 adjusted).

1952 to 1971 - USA dollars pouring postwar reconstruction into Europe are not looked on favorably, as the France, Germany and Switzerland regard the printing of dollars as inflationary. Huge dollar printing to fund the American war against Vietnam compounds the inflation. As a result, European central banks convert the greenback into its redeemable gold value from the USA central bank. The 20,000 tonness of USA Fort Knox gold reserves falls to about 8,500 tonnes.

1965 - Russias giant Samotlor field discovered. The Samotlor field has reserves of about 57 million tons of high-viscosity oil in Cenomanian deposits.

1967 - Iran - a five-megawatt research nuclear reactor is given to Iran by the United States under the Eisenhower 'Atoms for Peace Program'.

1967 - Arab oil embargo. Texas, with unused production capacity, pumps furiously and floods world markets with oil.

1967 - "In the absence of the gold standard, there is no way to protect savings from confiscation through inflation. There is no safe store of value. If there were, the government would have to make its holding illegal, as was done in the case of gold. If everyone decided, for example, to convert all his bank deposits to silver or copper or any other good, and thereafter declined to accept checks as payment for goods, bank deposits would lose their purchasing power and government-created bank credit would be worthless as a claim on goods." Alan Greenspan.

1967-1968 - Russias giant Siberian fields developed.

1968 - the giant Shaybah oilfield straddling the United Arab Emirate and Saudi Arabian border is discovered. This field is one of the largest onshore oilfields in the world.

1968 - USA one of North Americas largest oil fields is found at Prudhoe Bay in Alaska.

1969 - USA production of oil from Prudhoe Bay starts.

1970 - major oil export pipeline (the TAP line) taking oil from Saudi Arabia to the Mediteranean is attacked in Syria. Oil has to be taken by tanker, resulting in high tanker transport rates until the end of the year. This is the first significant exposure of the vunerability of the west to oil and gas pipeline attack as a means of political suasion.

1970 - (october) US (lower 48 states) oil peaks. US demand for petrol and oil products continues to increase.

1970 - USA produces 10 million barrels of oil a day (peak production, pretty much as Hubbert predicted).

1970 - Oil is about $US16 a barrel adjusted to todays (2005) dollars.

1970 - The USA Department of Commerce estimates the net assets of the petroleum industry in the Middle East alone at $US1.5 billion, with a profit yeild of $US1.2 billion - a return on investment of an astonishing 79%.

1970 - (december) OPEC meeting sets a minimum tax rate of 55% on foreign oil companies operating in OPEC countries.

1970 - UK consumes 28 million tonnes of oil in road transport (private and commercial).

1970 - UK now consumes 1.2 million tonnes of oil per year in rail transport (passenger and freight).

1971 - Qatar, Libya, United Arab Emirates, Algeria, Nigeria and Indonesia have added to OPEC's member nations.

1971 - (feb 14) Foreign oil companies operating in OPEC countries accept a 55% tax rate, and further progressive increases. In return, foreign oil companies are given freedom to extract as much oil as they like for the next five years. However, only Saudi Arabia has significant spare capacity.

1971 - (feb 24) Algeria nationalises just over 50% of French oil company concessions in Algeria.

1971 - (april 2) Saudi Arabia, Iraq, Algeria and Libya negiotiate an increase in the price per barrel of oil delivered to the Mediterranean from US$2.55 to US$3.45. The price is also indexed to inflation.

1971 - (july 31) Venezuela introduces a law to transfer all "unexploited concession areas" to government ownership by 1974.

1971 - (august 15) America under Nixon unilaterally decouples the dollar from the gold standard. The dollar can no longer be redeemed for gold. America now has an "alarming" federal budget deficit of 23 billion dollars. European banks prudential practise to redeem US dollars holdings from the USA gold backing is unilaterally defaulted on. USA, with huge debts it has no intention of paying with real money (gold) is technically bankrupt.

Now the US dollar is the only world reserve currency that can be printed at (USA) will. No longer is the dollar a benchmark currency interchangeably backed by gold, with other currencies pegged to it, with little need to adjust relative values, little need for cross border currency flow for financing, and thus no ability to speculate on currency movements.

The US dollar is currently the sole currency of trade for oil, so the dollar is, for now, backed and inter-changed with 'black gold'.

No longer backed by gold, and with vast amounts of dubious 'promise to pay paper treasury bonds on issue' the US dollar devalues immediately.

Nixon brings down a 90-day wage, price, and rent  freeze to try to control inflation.

1971 - In the US, oil is placed on governmental price control.

1971 - (september 22) - OPEC commences negotiations with oil companies to raise oil prices to retrieve the value lost by the sudden drop in value of the US dollar.

1971 - (december) - Libya nationalises the BP oil concession.

1971 - Norway - oil production commences.

1971 - Russias giant Samotlor oil field in western Siberia commences production, initially producing over 100,000 barrels of oil a day.

1971 - The single largest gas reservoir in the world is found off the shores of Qatar. Recoverable reserve estimates are put at around 380 trillion cubic feet. 

1971 - Up until now, Texas oil producers had held the balance of power, manipulating oil price by limiting production. USA energy requirements meant Texan rate limiting had to be abandoned, and OPEC gains strategic degrees of freedom to copy the USA and rate limit supply.

1972 - With rate limiting gone, production in Texas increases, but only by very little - Texas oilfields have peaked at about 3.5 million barrels a day.

1972 - (january 20) - Agreement is reached with Western oil companies that crude oil prices from the Middle East will increase by 8.49% to offset the loss rising from the devalued US dollar.

1972 - oil interests contribute an estimated $US2.7 million to Richard Nixon's campaign for presidency.

1972 - Iraq nationalises some of its oil. Exxon, BP, Shell and Chevron lose control of Iraq's oil.

1972 - Iraq's North Rumaylah field starts production, producing about 29 million barrels of crude.

1972 - Oil is just over $US2 a barrel in dollars of the day. Weak US dollar means returns to exporters are lower than they seem.

1972 - large US oil companies maintain USA domestic reserves at low levels, waiting to produce more when global prices rise again.

1972 - december 21 - OPEC (with the exception of Iraq) signs an agreement with western oil companies providing for 25% government ownership of all Western oil interests operating in Saudi Arabia, Kuwait, Qatar, and Abu Dhabi. The agreement is to begin on January 1st, 1973. Ownership is to increase to 51% by January 1st, 1983.

1972 - (september 11th) Chile - Democratically elected president Allende is murdered by military general Augusto Pinochet and his army conspirators in an act of criminal terrorism sponsored by the USA presidential offices 'secret agent' branch, the ironically named 'Criminal Investigation Agency'. Pinochet, his army, airforce and navy form an 'axis of evil', whose 'rogue state' commits horrific crimes against humanity including the brutal murder of more than 3,000 innocent citizens and the torture of 27,000 more.

The USA, a very very weakly democratic country, says voters in Chile are "irresponsible" to exercise their democratic right to select the government of their choice in their own country; and the USA government says that "irresponsible" behaviour (i.e. democracy) needs to be "rectified" (i.e. subjugate citizens under an unelected, totalitarian, criminal, fascist regime). To rectify something is to make it 'right'. Apparently murder and torture are 'right' in the view of the USA government of the day. Therefore, the USA government view of democracy at that time was that democracy is 'wrong'.

1972 into 1973 - economic boom times in Europe and USA creates an accelerated demand for oil. Many OPEC producers are near the limits of their pumping capacity - except for Saudi Arabia.

1973 - (april) USA's Henry Kissinger, in a "Year of Europe" explicitly gives voice to the USA administrations fear that Europe could become an economic and political entity as strong as the U.S. and might develop the same strong bilateral economic and political links with the Middle East and North Africa America currently considers to be its 'right'. He goes on to state that if that were ever allowed to happen, the U.S. would no longer be the only pre-eminent world power. Clearly, the doctrine of preventing economic rivals from having access to oil has deep roots.

"The illegal we do immediately. The unconstitutional takes a little longer"
- Henry Kissinger, New York Times, Oct. 28, 1973

1973 - (jan) USA experiences a cold winter. Price controls are now 'voluntary'. Heavy demand and low US heating oil reserves cause a shortage of product. Heating oil prices skyrocket. Price control on heating oil is re-imposed.

1973 - USA government guarentees to support the tribally-based feudal Saud family dictatorship in exchange for guarantees the Saud family will accept only the rapidly de-valuing USA dollar for oil. Saudi oil is effectively being used as a 'black gold' backing for the dollar.

1973 - USA oil companies state they plan to continuously expand Saudi oil production into the future based on the premise that continously expanding Saudi production would be required to offset the declines elsewhere in the world.

1973 - the Saudi Government increases its share in the US oil company Aramco (which has 'locked up' the rights to Saudi oil field exploration and production) from 'tiny' to 'minor' (25%).

1973 - (jan) Shah of Iran decrees that the 1954 operating agreement between a government and oil company consortium would not be renewed when it expires in 1979. The consortium is made up of  USA's Standard Oil, SOCONY-Vacuum, Texas Oil, Gulf Oil, Europe's Royal Dutch-Shell and Compagnie Francaise de Petroles. It included the government backed but relatively powerless Anglo-Iranian Oil Company (AIOC).

1973 - (march) USA re-imposes price control on the 23 largest oil companies selling oil products in USA.

1973 - (march) Iraq and oil consortium members agree to nationalise oil immediately in return for a guarantee of 20 years supply.

1973 - (june 14) USA has a 60 day price freeze re-imposed by Nixon.

1973 - Oil is about $US8 a barrel in dollars of the day - approximately $US13 in todays (Q1 2005) inflation-adjusted dollars

1973 - (september 1) Libya takes a 51% part of nine foreign oil companies concessions (Mobil, Esso, Texaco, Libyan-American (ARCO), SoCal, Grace, Shell, Gelensberg, Libya/Sirte)

1973 - (early october) Arab countries win control of their own oil resources by repudiating all previous agreements with foreign oil companies and nationalising many of the foreign oil businesses operating in their countries. Oil producing countries governments now decide how much oil should be produced and sold, and at what price, not the foreign oil companies.

1973 - (october 6) The Arab-Israeli war. Syria and Egypt attack Israel. USA backs Israel. Syria and Egypt suffer a humiliating defeat.

1973 - (october 7) Iraq nationalises Mobil and Exxon oil companies 23% share of Basrah Petroleum.

1973 - Saudi's Abqaiq oil field peaks at just over a million barrels a day.

1973 - USA is now importing 33% of its oil requirements. It can no longer influence oil prices by flooding the market with US oil to moderate prices

1973 - USA conventional natural gas production peaks at about 63 billion cubic feet per day, or about 11.3 million barrels of oil equivalent per day.

1973 - USA bankers bring Japan, emerging as an industrial giant, into the dollar system. Japan has no oil resources, so imports huge quantities of oil, which it now agrees to pay for exclusively with American dollars, in effect helping back the US dollar with gold, black gold. Oil. The export earnings are 'invested' in USA treasury bonds (IOU's written by the American government). The Japanese funds help pay the US government deficit.

1973 - (october 16) the so-called 'Gulf Six" - Saudi Arabia, Iran, Iraq, Abu Dhabi, Kuwait - raise the posted price of Saudi light crude by 17%, from $US3.12. to $US3.65 a barrel. Simultaneously, they announce they will cut production, returning them to more normal levels (after the oil companies had sold increasingly large volumes of Saudi oil at low prices).

1973 - (october 19-20) Oil embargo placed on Israel and it's supporters in the west by OPEC to punish Israels western supporters. Saudi Arabia and other Gulf states refuse to sell oil to the United States. (USA imports around 36% of its oil needs.)

1973 - (november) - oil embargo now also includes Netherlands, Portugal, Rhodesia, and South Africa.

1973 - (november and december) Gas station run out of petrol. Petrol supply is rationed in many western countries.

1973 - (november and december) - peak of the
oil embargo by members of Arab OPEC (Saudi Arabia, Kuwait, the United Arab Emirates, Qatar, Libya, Algeria and Iraq). About 2.67 million barrels a day of production is lost.

 'The first oil crisis'. While at the peak of the crisis around 2.57 million barrels a day are lost to world production due to the direct effect of the oil emabargo, another about 1.3 million barrels a day drops out due to indirect recessionary conditions, more unemployment, less driving, less demand. (1 million barrel is regained from extra pumping capacity by non-OPEC suppliers).

At its peak, the nett drop in world production is about 6%.

Recession spanning late 1973 into 1974 in many Western countries, the worst since World War II.

1973 - USA - Oil shock recession. 97 billion dollars is wiped from the New York stock exchange. The Dow-Jones Stock Market index falls 47%. Some interest rates hit 20%. Extensive unemployment and under-employment.

1973 (november 27) USA Nixon signs the Emergency Petroleum Allocation Act to enable the government to control the production, marketing, and pricing of petroleum in USA.

1973 - The USA presidential/military/industrial complex considers (but does not act on) plans to use the USA military to invade parts of Saudi Arabia, Kuwait, and Abu Dhabi and seize some of their biggest oil fields for USA use. Instead, major OPEC countries are required to 'invest' all their US dollar profits from oil sales in USA treasury bills, with half the interest payable by the USA in the form of USA goods and services - substantial parts of it being USA built military equipment and training.

1973 - (november) USA - The US president, Nixon, announces "Project Independence" which he claims will free United States dependence on foreign oil by 1980. He is unlikely to believe this is feasible - it is likely he is lying to the public in order to justify US oil companies exploiting Alaskan hydrocarbon resources.

1973 - USA trans Alaska pipeline from ice bound Prudhoe Bay 800 miles to ice free Valdez is initiated.

1974 - (january) Kuwait takes 60% in the BP-Gulf Oil Kuwaiti concession.

1974 - (early) Oil prices skyrocket by 400% due to OPEC continuing to limit supply. Prices reach $US25, which is about $US40 in todays (Q1 2005) dollars.

1974 - (january) USA - law passed to limit speed to 55 miles per hour in order to conserve petrol and diesel during the petrol shortage crisis.

1974 - (january) USA - the winter is particularly cold. Natural gas inventories are alarmingly low. The US government orders businesses, shops, malls and all public buildings to reduce their hours of operation during weekends and at night in order to conserve gas used for space heating. 

1974 - (january) USA - independant truckers livelihood hit hard and they strike in protest at the high cost of diesel and difficulty in getting supply.

1974 - (january) Saudi and Kuwaiti oil embargo is, for practical purpose, over. Oil prices remain at a new higher, more realistic level.

1974 - (february) - USA - petrol now 50 cents a gallon (dollars of the day). People 'garage' or sell large 'gas guzzling' cars, Some switch to public transport, some buy small cars. Demand for fuel efficient cars skyrockets within the space of a few months.

1974 - (february 11) USA announces Nixons "project Independance' to make USA energy independant.

1974 - (february 11) Libya nationalises the 3 USA oil companies which refused to allow a Libyan controlling interest in september last year.

1974 - (march) OPEC embargo against USA officially ends. Embargo on other countries continues. The repercussions continue to reverberate through western economies.

1974 (june 4) - the Saudi Government increases its share in the US oil company Aramco (which has the rights to Saudi oil field exploration and production) to 60%.

1974 - (may) Nigeria takes a 55% controlling ownership of all foreign oil concessions.

1974 - (june) - USA petrol is about 55 cents a gallon, or $2.29 a gallon in 2005 dollars.

1974 - (june) German oil import costs have now risen by an additional 17 billion Deutchemarks. Inflation has reached 8%. Transport, agriculture and the industrial sector have been badly hit, especially energy intensive businesses such as steel production, chemical industries and shipbuilding. The oil shock is estimated to have caused 500,000 job losses by now.

1974 - (october) Saudi Arabia increases the tax rate on the oil consortium profits to 85% and royalty rate to 20%.

1974 - structural inflation from high oil prices has fed throughout the western economies by the end of 1974. Inflation in western oil-dependant economies is 11% - 15%. Resultant recession, with low economic activity and high unemployment, continues. The combination of stagnant economies and high inflation is tagged 'stagflation'.

1974 - Less-developed economies suffer a 400% overnight increase in the cost of energy imports. Indias total foreign exchange reserves of $US629 million cannot meet the the oil import bill of  $US1,241 million a year. This deficit in the balance of payments is now echoed around all the third world nations.  Developing countries now have an enormous trade deficit of $US35 billion, which is, unco-incidentally, four times (400%) larger than their deficit prior to the 1973 oil shock.

1974 Onward - the 'petrodollar era -vast flood of dollars into Middle East as USA and Europe have to pay higher oil prices in US dollars. Deposited in US and UK banks, these dollars were interest-bearing to the oil nations, so had to be re-lent by the depository banks. Banks can loan 'fictional money' of up to around 10% of actual deposits they hold. These 'imaginary dollars' were re-lent as eurodollar bonds to third world countries that didn't have the dollars to pay for oil imports. This recycling from oil nations to third world nations and back to oil nations became known as 'recycling petrodollars'. Banks 'clicked the ticket' via interest rates each time it went around. Both banks and oil companies make huge profits from the third world.

1974 - In the USA, the consumer price index increases by 12%. High meat prices spark consumer revolts. Some Washington State butchers offer horsemeat for sale. Recipes for cheap pasta based dishes abound. A drought in Washington State makes life worse by reducing water supply to the hydro dams. Brown out results.

1974 - USA. The higher price of oil leads to an increase in the number of US wells brought into production, wells which prior to 1973 would not have been economic to produce oil or gas from (and would have been regarded as 'dry' for economic reasons, in spite of the presence of oil). It also leads to the major US oil companies urging the Saudis to pressurise their reservoirs with water to increase flow from the pumps, in spite of the risk it might reduce the ultimate yeild expected from the reservoirs.

1974 - UNESCO consultant Harry Lustig writes in 'Courier' monthly magazine of January 1974 -
" To what extent is the world energy crisis upon us now and how much time do we have before it will reach truly disasterous proportions?
What is the lead time necessary for producing needed technological innovations and economic and social rearrangements?
How reliable are the estimates of fossil fuel reserves?
How long will the world's stocks of natural nuclear fuel last and how good are the prospects for controlled fusion?
What is the relative availability , exploitability and cost (economic and environmental) of the "natural" substitutes: solar, wind, geothermal and tidal energy?"

1974 - Norways Statfjord oilfield discovered.

Expressed in todays dollars (Q1 2005), oil prices will remain, on average, around $US38 - $US40 level for the next 5 years.

1974 - Iran - the 'shah' announces a policy of developing 23,000 megawatts of nuclear energy in Iran for electricity and to desalinate water. It is clear to the government that by 2100 Irans oil and gas reserves would be too expensive to waste in generating electricty. The option of also "exploring" its use for "military purposes" is quietly discussed with USA and other Western states. The US react by using their influence with to ensure that two US constructors, General Electric and Westinghouse, have a preferred status in pitching their reactors to Iran. Ultimately, the shah awards the contracts to France and Germany.

1975 - USA economy still in "the worst business slump since the great depression". In the worst week, there are 1 million newly unemployed register for jobless benefit. LA police department trains its officers in crowd control in case of possible food riots.

1975 - (December 22) USA - law signed to establish a 'Strategic Petroleum Reserve' as a result of the lesson of the 'oil shock'. It also allows government control of domestic oil prices if necessary.

1975 - Saudi agree that to accept American dollars exclusively for the sale of their oil.

1975 - (december) Iraq completes the nationalisation of Basrah oil by re-nationalising the concessions controlled by BP, Shell and CFP.

1970's - as the US dollar becomes the de facto world reserve currency, central bank gold reserves become a 'non-performing asset' as they do not yeild interest. Many central banks begin to reduce their holdings of gold.

1976 - number of USA oil workers (mainly US controlled ARAMCO oil company) in extremely fundementalist feudal Saudi Arabia now peaks at 30,000. USA exports from the USA industrial-government-military complex to Saudi Arabia reach $2.8 billion. Saudis increasingly concerned about US de facto economic colonisation.

1976 - date all benefits of Armaco are ear-marked to go to the Saudi government in several years time.

1976 - Saudi Arabia has somewhere between 5 and 10 billion dollars 'invested' in USA treasury bonds by now. The dollar firms as a result, and the stockmarket has now rebounded. 'Kindness' must be rewarded.

1976 - the year the last new oil refinery is built in the USA

1976 - Saudi's Berri oil field peaks at around 800,000 barrels a day.

1976 - China's Daqing mega-oilfield peaks at 916,191 barrels crude a day.

1976 - USA president Ford signed a directive offering Iran an option to buy and operate a US-built nuclear fuels reprocessing facility as part of an Iraqi owned and operated nuclear energy program using Iraqs own uranium deposits. The proposal is for reactors powered by nuclear fuels processed from Iraqi-mined yellowcake which are then reprocessed after use in the reactor to extract plutonium. This regenerated fissile material is then used as fuel once more. The plutonium created from the spent nuclear fuel could, of course, be further processed into a grade usable in nuclear weapons. The chief of staff of the White House, Dick Cheney, and Secretary of Defense Donald Rumsfeld both endorse the proposal.

1976 - oil (Saudi light) is $US12.37 a barrel.

1977 (july) - USA - The purchase of salt caverns in the Gulf of Mexico for the 'strategic petroleum reserve' for use in emergencies is now complete, and filling commences - 412,000 barrels of light crude oil are deposited in the first of the salt caverns in southern Louisiana and East Texas, close by oil refineries. Total capacity of the reserve is 117 million barrels.

1977 (july) - oil is $US13.66 a barrel.

1977 - USA - Oil imports are now 6.6 million barrels a day.

1977 - 8 billion dollars and 800 miles later, oil flows from the trans-Alaskan pipeline from Prudhoe Bay.

1977 - USA - Severe winter co-incides with a natural gas shortage. Prices rise dramatically.

1977 - USA - President Carter gives a televised address in which he warned that oil consumption was exceeding the rate at which new oil was being found and outlining a government programme of conservation and switch to coal, nuclear, and renewable energy.

1977 - Iraq completes a pipeline from Kirkuk oilfields across Turkey to a terminal in the Mediterranean at the port of Dortyol.

1977 - Saudi Arabia now produces 10 million barrels of crude a day.

1977 - Saudi Arabia's production is cut in half due to a fire in a separation facility in the Abqaiq field. Prices barely move, as many other countries have spare capacity.

1978 - crude oil is $US14 a barrel.

1978 - Prudhoe Bay oil field pipeline to Valdez (the Trans Alaska Pipeline) finally opens after 2 years of construction and expenditure of around $US8 billion.

1978 - Saudi Arabia - last exploration well brought into production from the salt domed structures of northern Arabia, mostly offshore. Since start of exploration of this province in 1938, 12 oilfields yeilding a million barrels a day of oil were found. The earliest fields discovered have the greatest total reserves. The 6 fields found 1938 to 1963 had total reserves of about 5,500 million barrels of oil. The 6 fields found this year have a total of about 1,000 million barrels of oil.

1978 - (june) - bloc of OPEC members seek higher prices for crude, and try to get acceptance for oil being priced in a more stable currency than the US dollar. Saudi Arabia and Iran block the move.

1978 - Iran's 'Shah' puts the country under military control as agitation for a muslim religion-based state continues.

1978 - (october) Fire in an Iranian pipeline drops production by over 300,000 barrels a day.

1978 - (mid december) Iranian production is 1.5 million barrels a day.

1978 - (end of december) Iranian production drops precipitously to about 500,000 barrels a day.

1979 - OPEC, mainly Saudi, production increases by an additional 1.6 million barrels a day by end of february to make up Iran's shortfall as Iranian domestic turmoil continues.

1979 - (january 20) Saudi Arabia turns up the heat by announcing that it will cap its production at 9.5 million barrels a day during the first quarter of 1979 (in the end it doesn't). Oil prices rise by 36%.

1979 - (january) USA uses its compulsory buy-sell laws to allocate crude oil resources and to cap the price of oil products.

1979 - UK becomes oil independant - all domestic requirements are met from the North Sea fields. However, while supply is secure, oil is sold by the oil companies at global prices. The UK pays the same high prices as everyone else, albeit the government receives a better royalty.

1979 - Mexicos supergiant oil field, the Cantarell Complex, with massive reserves of 35 billion barrels of oil, (destined to become the second largest oil producing field in the world, after the massive supergiant Saudi Ghawar field), comes into production.

1979 - Final audit of Saudi oil fields by foreign petroleum companies to establish true value of Saudi field assets. The audit established around 110 billion barrels of proven reserves.

1979 - (feb 12) Iranian revolution commences as the Shah has fled and the interim government loses the support of the military.

1979 - (march 5) Iran starts to export oil again.

1979 - (Q2) oil once more plentiful, but global stocks of refined petrol have been drawn right down, and refineries are playing 'catch-up' and can't meet demand. Some states in USA are short of gasoline and ration it, other states have ample supply.

1979 - USA - Energy saving policies introduced, including requiring public buildings to be heated no higher than 65 degrees in winter. In order to conserve petrol, gas stations in some states open only on alternate days.

1979 - July 15  - USA President Carter gives a speech to the nation - 

"In little more than two decades, we've gone from a position of energy independence to one in which almost half the oil we use comes from foreign countries, at prices that are going through the roof. Our excessive dependence on OPEC has already taken a tremendous toll on our economy and our people.
This is the direct cause of the long lines which have made millions of you spend aggravating hours waiting for gasoline. It's a cause of the increased inflation and unemployment that we now face.
This intolerable dependence on foreign oil threatens our economic independence and the very security of our nation."

1979 - Uranium "yellowcake" spot prices reach a record high of $US43

1979 - (july 30) New Zealand faces a petroleum shortfall and institutes fuel conservation measures, including 'carless days' when owners must designate (via a windshield sticker) a day of the week on which they will not drive their car. The speed limit is reduced, and sale of gasoline in weekends is banned. The restrictions remain in place for the next 6 months.

1979 - (october) Canada stops supplying light crude to USA refineries in order to conserve domestic supplies.

1979 - (november) Iranian 'revolutionary guards' take USA embassy hostages. USA stops all Iranian imports. Iran cancels all contracts with USA oil companies.

1979 - (december) nervousness over the Iranian revolution continues. Oil is $US32.50 a barrel (dollars of the day)

1979 - USA president Carter sets up the US Central Command - a military quick reaction strike force prepared to bomb, invade and control any oil supplying Middle East country at any time the presidential-administrative/military/industrial complex dictates.

1979 - the world uses about 63 million barrels a day.

1980 - USA - the Maryland Cove Point LNG regasification plant is closed.

1980 (january) - Iranian 'shah' deposed. The second 'oil shock'. Oil production of 2 to 2.5 million barrels a day disappears from the market. 'The second oil crisis'. Oil price literally skyrocketed straight up from $US15 per barrel to nearly $US40 per barrel (dollars of the day), also partly fuelled by a surge (and speculation) in the prices of commodities in general. In 2004 dollars this is estimated at about $US110 a barrel.

1980 (january 23rd) - following the deposing on the US supported 'shah' of Iran and the Russian invasion of Afghanistan, US president Jimmy Carter establishes what became known as 'the Carter Doctrine', the doctrine of openingly using the presidents military for economic purposes - to both secure other countries oil resources for USA use, and keep Middle East supply lines under USA control.

"Let our position be absolutely clear: An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States of America, and such an assault will be repelled by any means necessary, including military force." - President Jimmy Carter (emphases added)

The USA presidential office will in future use his soldiers to kill and maim civilians (including children), to fight and themselves die, to either maintain direct access to (mainly) Middle East oil reserves, or maintain other nations oil-supply access to the Middle East, whether via the Straits of Hormuz, or in general.

A blockade in the Straits would make no direct impact on USA as it gets less than 20% of its supply from the Middle East; but if other countries cannot obtain Middle East oil they will bid up the price of oil from other sources outside the Middle East, oil that USA relies on.

1980 - USA funds and supports Saudi Arabia's Osama bin Laden, amongst others, to fight the Russians in Afghanistan. He, and others like him, promote the brutally violent and chauvinistic Saudi Arabian fundementalist version of their religion - including killing anyone who doesn't hold their particular religious views.

1980 - Saudi regime agrees to pump excess oil to keep prices low so that Russia will have insufficient revenue to spend on the arms race at the same time as it has to finance a brutal invasion of Afghanistan.

1980 - Saudi government given retroactive ownership of all Saudi National oil via full ownership of Aramco. In addition, all financial benefits of the company since 1976 are given to the Saudi government. Payback time.

1980 - (september 17) Iraq unilaterally breaks the 1975 treaty with Iran over territorial rights in the Shatt al-Arab waterway and claims it in its entirety for itself.

1980 - (september 23) Iraq invades Iran. Both sides bomb each others oil installations.
Iraqi oil production falls by 2.7 million barrels a day.
Iranian oil production falls by 600,000 barrels per day.
Oil prices reach an all time high - $US35 a barrel by years end, or $US92 when translated to todays (Q1 2005) dollars (some commentators compute it at $US80 in inflation adjusted terms, others at $US100, inflation adjusted).
Gold price is inflated by speculation to an all time high - $US840 in dollars of the day.

1980 - Post oil shock deep recession in the west - partly created by a major shift in USA monetary policy by Federal Reserve Chairman Paul Volker (restricted money supply to try to curb Americas raging inflation, causes volatile and high interest rates, reduced business investment, and an historic low in the value of the greenback).

In addition, structural oil-inflation helps overall inflation reach 10%. Unemployment in USA is 8%, interest rates reach nearly 20%. Double digit interest rates mean some businesses and households can no longer pay their savings and loan debts. The USA  Federal Deposit Insurance Corporation fails under the sudden burden of savings institutes declaring bankruptcy, and has to be bailed out.

1980 - the deep recession results in global "demand destruction" and a consequent drop in demand for crude. More than this, it prompts a move to insulate new homes, retro-insulate existing homes, attention to energy efficiency in industry as well as in housing. In countries with heavily taxed petrol, there is a re-focus on fuel efficient cars and public transport.

1980 -1988 - US and the UK governments and businesses supply Saddam Husein with armaments, chemical and biological weapons of mass destruction precursors, naval support, military training, and access to satellite targeting.

As the Iraq-Iran war drags on, great damage is done to oilfields and civil infrastructure on both sides. Oil supply is interrupted. More than a million people are killed, combatants and civilians alike.

1980-1981 - Oil supply shortfall has created actual shortfalls in supply in some countries. Some countries institute a system of carless days, when private automobiles may not be driven on a self-selected designated day. The car-less day is indicated by a sticker on the windscreen. Transgressors are heavily fined.

1980-1981 - winter heating oil in USA tips over $US2.50 a gallon in 2004 inflation adjusted dollars.

1981 - US government removes price control on US domestic oil produced, domestic producers raise their prices rapidly.

1981 - (january) major offensive by Iraq against Iran is beaten back by the Iranians.

1981 - USA residual petrol price and allocation controls are lifted.

1981 - (march) 'oil shock' gasoline prices in USA reach an historic high - $US1.42 per gallon; inflation adjusted, about $US3.10 per gallon in 2005 dollars. 

1981 - Predictions of crude oil prices reaching $US100 a barrel sets off an oil exploration frenzy within USA

1981 - USA has 324 refineries whose total capacity to refine crude oil is18.6 million barrels a day.

1981 - USA strategic reserve capacity is increased to 257 million barrels.

1981-1982. In the period 1979 to 1982 global oil demand growth falls off by 9.6%.

1981 - the East-West Crude Oil Pipeline (Petroline) operated by Mobil Oil Co is completed. This single, 48-inch pipe line (AY-1) transports Arabian light and super light crude to refineries in the Saudi Arabia's Western Province and to terminals on the Red Sea for export to Europe. Capacity is 1.85 million barrels a day.

1981-1982 - Recession drops demand for oil at the same time Saudi Arabia completes major new pumping capacity. Oil glut results. OPEC temporarily loses control of price setting for oil.

1981 - Saudi's Ghawar super-giant field (the world's largest) peaks at a little less than a massive 5.7 million barrels a day.

1981 - Saudi's Safaniya field peaks at a lttle more than 1.5 million barrels day.

1981 - Mexicos giant Cantarell complex reaches peak of supply at 1.1 million barrels a day.

1981 - Russia giant Samotlor field peaks at about 3 million barrels a day. The around 16,700 wells of this giant field produce close to a quarter of Russias oil, almost 150 million tons a year.

1982 - USA - Texas oil production has now dropped by 29% since peak of production in 1972, in accordance with the curve described by Hubbards theory of oil production in a field increasing, peaking, and declining.

1982 - Number of rigs looking for oil and gas in USA (due to 1980 oil shock) has doubled from 1980 levels.

1982 - (march) Syria closes the 400,000 barrel a day trans-Syria pipeline carrying Iraqi oil in support of Iran.

1982 - (june) tide of war turns against Iraq. Iraq announces a ceasefire. Iran pushes into Iraqi territory. Iraq responds by launching missiles into Iran.

1982 - (august) Mexico defaults on the vast debt owed to banks recycling petrodollars.

1983 - Colombia - USA's Occidental petrol commence production from the giant Caňon-Limon field (with reserves of 1.1 Gigabarrels).

1983 - Trading in contracts for future supply (betting on whether oil will have increased or decreased in price at a defined future date) commences on the New York Mercantile Exchange. The previously used fixed long-term supply contracts decline in importance. The existance of numerous traders and re-traders helped keep willing supply ahead of demand, and increased the quick replacement of oil lost from source (for whatever eason) with oil from another source (via intermediaries). Targeted embargoes are now virtually impossible - any oil sold to a trader can be re-sold numerous times, and end up literally anywhere. The producing country no longer controls the destination.

1983 - world consumes reduced oil due to higher prices and recessionary effects - still only roughly 55 million barrels of oil a day.

1983 - (july - October) Heavy fighting between Iraq and Iran, with Iraq close to capturing the Kirkuk pipeline, and the USA threatening military intervention to keep open the Persian Gulf tanker navigation ways.

1984 - Iraq Iran war moves into the "tanker war" phase. 44 ships and tankers - Saudi Arabian, Iranian, Iraqi, Kuwaiti - are attacked and damaged by Iraqi or Iranian warplanes or mines.

1984 - Saudi LPG production capacity is now 600,000 barrels of liquid a day.

1982 -1985 - Oil is now over-supplied, partly due to the 'demand destruction' lingering on from the second 'oil shock', with Norway, UK and Nigeria cutting prices in 1984. Oil drops to about $US60 in 2004 dollar terms (in 1984 light crude was around $US57 - $US69 in adjusted year 2005 terms). OPEC members regularly exceed their OPEC quotas as there is no method of enforcing breaches. Saudi Arabia regularly acts to cut its own output to try to prevent the price falling too far. OPEC members suddenly 'find' much larger reserves in order to have a larger quota for sale. OECD and US escape the recession slipping into depression -  resume previous growth off the back of the balanced budgets of 1979/80.

1985 - after a series of oil price dips due to dampened demand due to previously high crude prices and OPEC lack of discipline, Norwegian and North Sea oil comes on stream creating even higher supply, OPECs market share falls by 50%. New capacity allows better market balance.

These finds mark the very temporary return to 'cheap oil' for the next decade or so, until they start to peak and the Middle East fields once more gain greater world market share.

mid 1980's - Cheap oil and US government need to artificially back its dollar with oil, combined with US 'petrodollar' greed, start to destroy western manufacturing and jobs as USA banks, via the IMF, require deeply indebted third world countries to make their natural resources, infrastructure assets, and labour available very cheaply to foreign firms ('globalisation') as a price of rolling over their crippling petrodollar debt. A debt now totally unmanageable due to interest rate increases. A debt denominated in dollars, supporting USA ability to print money. 'Outsourcing' starts to erode the viability of European and USA manufacturing businesses as they can no longer compete with the semi-slave conditions and absent pollution regulations of third world labour and industry.

1980's - USA - uneconomic oil refineries are closed down.

1985 - continuous decline in USA capacity to produce oil relative to the previous years confirms USA oil fields have indeed passed their peak of production and are declining overall. [2]

1985 - USA - increased local production plus residual demand destruction keeps imports of oil to USA at 3.2 million barrels a day, about half pre-oil shock levels.

1985 - Iraq and Iran commence heavy bombing of each others cities, Iraq responds with lightening raids into Iran, Iran responds with strikes against Iran's Kharg Island oil terminal, from which a large part of Iran's oil is exported.

late 1980's - Iran - work starts on rebuilding the war damaged economy. Hydrocarbons - oil and gas - are earmarked for sale to earn foreign exchange to fund reconstruction. Work starts on rebuilding the Bushehr nuclear power plant to provide replacement electricity now provided by oil and gas burning generators.

december 1985 - OPEC in disarray as members undercut agreed prices in order to secure market share. A price war develops. OPEC countries are allowed to produce and sell oil in proportion to their reserves. The more reserves a country reports it has, the more its share of the OPEC quota it gets.

1986 - USA oil exploration industry is severly cuts as oil prices drop (one of the biggest one day drops was from $US29.00 to $12.00 for Gulf coast sweet). Staff cuts of experienced oil personnel reach 50% in some firms. Many experienced riggers leave the industry entirely, as no jobs can be found. No young staff are taken on. As the domestic industry implodes into depression, some oilmen commit suicide, some escape to drugs and alcohol. Many take enforced pay cuts.

1986 - Saudi Arabia stops trying to keep prices up by cutting its own production and links prices to the spot market. The Saudis increase production from 2 million barrels a day to 5 million barrels a day, substituting volume for reduced price. In the face of this huge oversupply, prices collapse below $10 a barrel (dollars of the day).

Expressed in todays dollars (Q1 2005), oil prices will once more remain, on average, around the $US38 - $US40 level for the next 15 years. Drilling becomes much more cost effective, using enhanced techniques such as 3-D seismic data, targeted directional drilling, and CO2 flooding to maximise success and enhance productivity from existing reservoirs. In spite of these techniques, exploration in USA is increasingly unproductive, and exploration falls away steadily. The wells that are drilled are much more successful than in earlier years. Technology allows far more accurate decision to be made about whether to drill or not, and only highly prospective formations are tested.

1986 (may) - Iraq bombs a refinery in the capital city of Iran.

1986 (june and july) - Iraqi jets attack a satellite station and the city of Arak in central Iran. Iran threatens to use missiles against any gulf state supporting Iraq.

1986 - (august) Iran launches missiles against a refinery near Bhagdad. Iraq responds by damaging the Iranian export terminal at Sirri Island.

1986 - (december) - USA - unleaded petrol is now US0.80 cents a gallon.

1986 - Peru - The gas Camisea fields are discovered. Reserves are estimated at 13 trillion cubic feet of natural gas and 660 million barrels of condensate.

1987 - Monday October 19th - Global stock market crash. Under conditions of cheap oil, frenzied buying and selling of stock, some in 'shell' companies that produced nothing, leads to insider trading and clampdown by regulators. In reaction, institutional investors buy heavily into futures contracts to cut loss in case of stock devaluations. In the USA, computers are now widely used to automatically trigger 'sell' orders if stocks reach a certain low point. As the USA dollar is devalued, the dollar-based Hong Kong exchange is sold down. A cascade of more sellers of both stocks and futures contracts than buyers leads to a lack of buyer confidence, panic selling of stock and (wildy leveraged) futures contracts. The Hong Kong market crashes, followed by Europe. In USA a cascade of selling occurs, quickening pace as further computer generated automatic sell trigger points are reached, and with no time for buyers to step in.. $US500 billion of value in the Dow Jones index is wiped out - within 1 day. Other markets had similar experiences, with Hong Kong's crash the most spectacular - over 45% of the value of the stocks on the market wiped is out.

USA responds by creating the 'Working Group for Financial Markets', known cynically as 'the Plunge Protection Team'. It is made up of of the US Federal Reserve, the Dept of Treasury, the Securities & Exchange Commission, and a few powerful banks & Wall Street stock broking firms.

1987 - the UK government after many years finally ends its very close association with the oil industry by abandoning its shareholding in British Petroleum and relinquishing its seat on the board of this private company.

1987 - The Saudi (Aramco acquired control in 1984)  East-West Petroline is now expanded due to the 'tanker war' in the Gulf to 3.2 million barrels a day, and a parallel 56-inch pipeline (AY-1L) is added.

1987 - Iraq/Iran war continues unabated.

1988 - Iran accepts a ceasefire offered by Iraq.

1988 - Article in Scientific American called “The End of Cheap Oil” predicts world oil production would peak in 2002 (it didn't) and warns “what our society does face, and soon, is the end of the abundant and cheap oil on which all industrial nations depend"

1988 - Vast Russian Shtokman gas field discovered in the Barents Sea. It is believed to contain 113 trillion cubic feet of gas
and 31 million tonnes of condensate. The hugely difficult arctic environment, and lack of capital, makes it impossible to develop.

1989 - Prudhoe Bay, which had produced around 1.5 million barrels a day for nearly 12 years reaches peak of its production.

1989 - Russia Samotlor oil field now produces about 2.75 million barrels of oil a day, and, only eight years on, enters a period of very steep decline.

1990 - Saudi Arabia re-estimate of its reserves takes them from 170 gigabarrels to a claimed 258 gigabarrels "overnight".

1990 - (august 2) Iraq invades Kuwait. Oil price almost instantly doubles, from $US15 to more than $US30 (dollars of the day) as 4 million barrels a day (544 000 tonnes/day) are removed from supply.

1990 - (august) USA secretary of defense Cheney notes “Our strategic interests in the Persian Gulf region, I think, are well known...We obviously also have a significant interest because of the energy that is at stake in the gulf.” He was (in part) referring to Iraq acquiring a further 10% of the world oil reserves by invading Kuwait. “Once [former Iraqi President Saddam Hussein] acquired Kuwait and deployed an army as large as the one he possesses, he was clearly in a position to be able to dictate the future of worldwide energy policy, and that gave him a stranglehold on our economy and on that of most of the other nations of the world as well...”

1990 - (august) USA's Bush (Snr) invokes the Carter Doctrine to send military to guard Saudi Arabia against the possibility of an Iraqi invasion.

1990 - (august 27) OPEC agrees to make up the shortfall by increasing production. Oil prices plunge lower again.

1990 - (august) the IPSA pipeline, a 48-inch Iraqi pipeline running across Saudi Arabia to the Saudi Red Sea port of Mu'ajjiz, just south of Yanbu, is closed by Saudi Arabia "indefinitely" due to the Iraqi invasion of Kuwait. The line has capacity of 1.65 million barrels a day.

1990 - (september 21) USA refinery problems generate reports that 200,000 barrels of crude a day may not be able to be processed. This news, coupled with Saddam Hussein saying he would strike first against regional oil facilities if threatened causes oil prices to soar once again.

1990 - (october) UK asserts force will be used if Iraq does not withdraw from Kuwait.

1990 - (november) Sufficient US forces are now in place to finally ensure the safety of Saudi Arabian oil fields. UN Security Council approves a U.S. sponsored resolution that if Iraq does not withdrawal from Kuwait by january 15th 1991 then force may be used to remove Iraq from Kuwaiti territory.

1990 - (december)
Iraq agrees to withdraw from Kuwait if it can keep the Rumailah oil and gas field and keep Bubiyan and Werbah islands. Peace talks break down.

1991 -
U.S. launches cruise missiles into southern Iraq to help defend the Kurdish safe haven areas of northern Iraq. This is followed by an historically large over-pumping of oil onto the world market, reduced Asian demand due to the Asian financial crisis and warm winters in the West cutting demand for winter fuel oil.

1991 - (january)
Oil prices spike upward by $US5 to over $US30 a barrel in dollars of the day as the 'deadline' draws near for Iraq to quit Kuwait.

1991 - (january 16) USA
declares war on Iraq and commences air attacks on Iraqi military targets. On the same day, USA releases over 38 million barrels of oil from its strategic reserve for sale or use. Oil prices immediately drop by up to $US10 a barrel on the news.

1991 - (january 17) USA liberation of Kuwait - Operation Desert Storm begins; 17.3 million barrels of USA 'strategic petroleum reserves' are dumped on the world market by Bush snr. The International Energy Agency also release oil and oil products from members strategic reserves. The price of oil drops even further to about $US15 (dollars of the day). Saudi Arabia uses excess productive capacity to help increase supply.

1991 - (january) Iraqi missiles launched against Saudi Arabian oil facilities.

1991 - USA bombs Iraqs civilian electricity generation stations. USA destroys around half the Iraqi generating capacity - reducing it from about 5,100 megawatts to about 2,300 megawatts.

1991 - (february 28) End of war. Saddam Hussein orders his troops to return. Iraqi forces set fire to or sabotage 700 Kuwaiti oil wells as they retreat.

1991 (november) Last damaged Kuwaiti oil well finally capped. Millions of tonnes of oil have been lost since January.

1991 - Columbian Cruz Beana oil field discovered, the largest oil resource found in the Western hemisphere since the 1970's. 

1991 - $US256 billion surplus taken from US Federal Social Security Trust Fund (alone) to help finance budget deficit rather than let it accumulate to finance the coming increased rate of retirees due to the 'baby boomer bulge'. This trend increases year-on-year as USA to fund gross oil dependance.

1991 - post Gulf war recession. People stop spending. Air travel is hit hard, with $US13 billion being wiped off airline income.

1991 - Russias Samotlor oil field has just experienced precipitous decline, and now only produces about 0.75 million barrels a day, partly as a result of poor field management practices.

1991 - (october) - Soviet Union suspends exports of petroleum products as a domestic shortage grows. Oil prices rise by about $US2 a barrel.

1991 - Qatars North gas field comes into production.

1991 (december) - Collapse of the Soviet Union, US oil companies were barred from bidding for the reserves.

Early 1990's - high expectations that significant amounts of the world's new oil and gas resources would come from the countries of the former Soviet Union and from China. Canadian consortium takes up concession in Sudan to develop its oil.

Early 1990's -  expert opinion in the oil industry generally agrees oil demand will remain at 66 million barrels a day far into the future

1992 - China imports oil for the first time ever.

1992 - USA oil field service and drilling costs per well (adjusted to 2005 dollars) are $US582,510.

1992 - Kuwait is now able to produce 400,000 barrels of oil a day. It's OPEC quota was 1.5 million barrels a day.

1992 - Dubai is now producing almost 400,000 barrels of oil a day

1992 (december) - Canada and Mexico sign a 'free' trade agreement with USA by which they are obliged to sell oil and gas to USA ahead of conserving it for their own future domestic needs.

1992 - Mexico produces an historically high amount of oil for the year, 2.75 million barrels a day.

1993 - Mexio buys a half interest in Shell's Deer Park refinery near Houston, Texas. The refinery is upgraded and converted to allow Mexicos Mayan medium sour (sulfurous) crude oil to be processed. This heavy grade makes up about 50% of Mexicos oil production. 'Residuals' from this heavy grade are used to generate electricity in Mexico City, contributing to air pollution. The initial shipments are around 140,000-160,000 barrels per day . In return Shell is guarenteed a thirty-year contract (expires 2023) of supply of the cheaper Mayan crude  The joint venture produces 35,000 to 45,000 bbl/d of unleaded gasoline which is sold to Mexico, filling roughly half Mexicos import needs for erfined fuel. Mexico has insufficient refinery capacity to refine enough for its domestic needs.

1993 - Europe - about 20% of passenger cars are powered by diesel engines.

1993 (november) - OPEC and North Sea overproduction weakens demand. Prices drop to almost $US15 a barrel.

1993 - Saudi Petroline capacity is now increased to 5 million barrels a day by boosting the pumping capability on the line. This was a strategic move, in case the Gulf was blocked by war.

1993 - China - as demand for fuels continues to surge, China becomes a nett importer of refined oil products.

1994 - Oil prices reach their lowest point in inflation adjusted terms since 1973 following the post Gulf War (1) recession. OPEC disciplines its members to cut oil production to drag the price off the ridiculously low $US10 per barrel mark (in inflation adjusted dollars, the lowest prices ever.). As supply decreases and demand increases again as the US and Asian economies pick up, we are back to about US$30 per barrel.

1994 - end of the flurry of oil exploration offshore in Saudi Arabia that started in 1987 and spurred on by the Gulf war. No wells capable of a million barrels a day are found, in contrast to earlier explorations.

1994 - China fills almost all its demand from oil from domestic supplies. China uses only about 3 million barrels of oil a day, but even so, China is now the world's fourth largest oil consumer, after USA (more than 15 million barrels a day), Japan and Russia. Coal is in temporary short supply, forcing a turn to oil as a substitute.

mid 90's - Columbian Cruz Beana oil fields production peaks at 500,000 barrels a day

1994 - USA gas fields in the 'lower 48' states (excludes Alaska) reach their peak of productive capacity, at 55 billion cubic feet a day. Production slides from this point.

1994 - Mexicos Cantarell complex, the second biggest oil producer in the world, continues down the decline side from peak, producing only 890,000 barrels of oil a day. Cumulative production from its very high initial reserves at the time of commencement of production is only 4.8 billion barrels.

1994 - USA imports about 600,000 barrels of oil a day from Iran.

1994 - The Baku-Tbilisi-Ceyhan pipeline contract is signed between US and British oil interests and Azerbaijan's Heydar Aliyev ( head of the local KGB in Soviet times). The objective is to secure oil for the US and Europe from other than Russian or Middle East sources.

1994 - some international financial institutions may now be commencing to artificially manipulate the price of gold so that it remains at about $US400 an ouince less than the expected price relative to currencies, and 'de-links' from the price of oil. Central banks, prohibited from selling more than 500 tons a year under the Washington Agreement, have devised various means to sell gold. One system is to 'swap' gold with each other, with each central banks 'swapped' gold being 'leased' to a lower tier bullion banks (who also trade in oil) at a very low interest rate, virtually 'on call'. These bullion banks sell the gold and invest the proceeeds in bank and treasury bonds at a yet higher rate of return. But if the central bank ever wants its gold back, bullion banks would then have to re-buy the gold at current market rates...Other manipulations involve complex forward hedging of undelivered gold. These schemes may fail when forward contracts are written for a higher volume of gold than is physically traded on the markets....

1995 - early - USA signs a rescue package with Mexico, loaning $US50 billion. In return, Mexico agrees to deposit a portion of oil revenues with the USA federal reserve as collateral for the loan, thereby helping back the USA dollar with oil.

1995 - Norwegian oil and gas companies sign a long-term supply contract with Gaz de France to supply 1.4 trillion cubic feet of gas to France starting 2001 and running to 2027.

1995 - Russia's Yeltsin, with the country nearly bankrupt following the breakup of the Soviet Empire and disasterously low oil prices, signs a $15.2-billion 'Production Sharing Agreement' (PSA) with ExxonMobil to develop oil and gas fields offshore Sakhalin Island at desperate 'giveaway' prices.

PSA’s are highly weighted in favor of the oil companies, and are usually used by major Anglo-American oil companies when dealing with weak and corrupt third world countries to maximise profit and minimise risk to the oil company. The PSA stipulates Russia will get nothing until all costs have been recovered, and only then will receive a share of oil or gas that is eventually produced. In effect, Russia pays all development and production costs. The deal also allows the oil majors to pay no tax to the Russian government.

The project - dubbed '
Sakhalin 1' -  will develop the Shayvo, Odoptu, and Arkutun-Dagi fields. These fields are estimated to contain about 2.5 billion barrels of oil and about 15 trillion cubic feet of natural gas. Exxons stake is 30%.

1995 - (april) USA unilaterally announces an oil embargo against Iran. No USA company may buy Iranian oil.

1995  - July 6 - Venuezuela commences a regime where it will open up exploration concessions to foreign companies, so long as the government retains a majority stake in developing fields where oil is found.

1995 - Saudi Arabia gives the development of the
7 billion barrel Shaybah oil field to the USA Parsons Corporation. When it comes on line it is expected to produce 500,000 barrels of crude a day.

1995 - Mexico starts pressurising the declining Cantarell formation with nitrogen gas to increase oil flow back to earlier levels.. New holes are added to increase the extraction rate.

1995 - US president signs an Executive Order (12959) prohibiting US oil companies from oil exploration or development with Iran.

1995 (august) - Iran cannot find a market for 200,000 barrels a day of crude oil since the USA imposed its unilateral oil embargo on Iran. Before the USA embargo, USA companies were buying about 400,000 barrels of oil a day from Iran so far this year.

1995 (october) - a rare late-season hurricane, hurricane Roxanne (category 3), stalls for days over the southern Bay of Campeche and severely damages much of Mexico’s production facilities in the Gulf of Mexico. Around 40 million barrels a day production  -  is lost for eight days. Production falls from 2.59 barrels a day to 600,000 barrels a day. Most of this would have been sent to USA refineries on the USA Gulf coast.  The refineries have insufficient time to fully compensate for the sudden disruption to their throughput planning.

1995 - Mexico now oil production increase to 2.85 million barrels a day by years end. This is the highest flow rate yet, and comes about from application of aggressive new technologies such aas horizontal drilling.

1995 - Mexico's revenues from oil exports are $US1 billion.

1995 - nearly 80% of Mexico's oil is exported to USA. In august it increased to 83%, about 1.25 billion barrels a day.

1995 - Iran commences a promotion of natural gas as an automotive fuel and electricity generating source. The objective is to conserve the oil reserves for export, as it is easier to ship oil than to ship compressed gas.

1995 - Syria is now producing 600,000 barrels of crude per day, and about 2 million cubic metres of natural gas per day.

1995 (december) - Angola is now producing about 690,000 barrels of oil a day.

1995 - Peak of funding in USA for research into hydrogen as a fuel. A CRS report for Congress notes  "Since considerable energy is consumed in the extraction process [of hydrogen from coal or gas or water], hydrogen should properly be considered an energy carrier rather than an energy source...hydrogen is somewhat like electricity, which must also be produced from some other energy source". In spite of this obvious fact, congress seems oblivious; funds are spent researching hydrogen fuel cells and storage systems, rather than exploring renewable energy sources such as photovoltaics.

1996 - Syria crude oil production peaks at around 604,000 barrels per day.

1996 - China is now a nett importer of crude oil for the first time.

1996 - The China National Petroleum Corporation, owned by the Communist Party government, buys a majority stake (40%) of the Sudan/Indian/Malaysian oil consortium (the Greater Nile Petroleum Operating Co). It builds Sudans largest oil refinery in conjunction with the Sudanese Energy Ministry.

1996 - The Iran-Libya Sanctions Act 1996 passed in USA. Having prohibited US companies from joining Iran in oil and gas development, the US administration attempts to frighten other countries away from benefiting from Iranian oil and gas. The chief purpose, however, was to prevent US oil companies investing in a proposed pipeline from the Caspian oil fields through Iran to the Persian Gulf. For strategic reasons, USA wants the Caspian oil to flow west to Turkey via the much longer and more expensive Baku-Tbilisi-Ceyhan pipeline. The objective was to break the Russian monopoly on oil exports from the region, and further isolate Iran.

1996 onward - From 1965 up to about 1996 the price of both gold and oil have been highly co-related. From about 1996 the price of gold 'de-couples' from the price of oil in the face of central bank manipulation of gold supply and a huge credit bubble from run-away bank lending for housing and lifestyle in both Eurasia and North America.

1996 (april 30) - USA - 28.1 million barrels of crude sold from the strategic reserve to raise money for the USA government. There are a total of 3 sales. The purpose the money was applied to was ostensibly to 'reduce the federal deficit'; but in truth it remains unclear.

1996 - Asian economies booming, with Asian banks making ill-advised business loans for expansions, mergers and aquisitions.

1996 - Start of trend of global growth in per capita consumption of coal, oil, and gas, structurally more heavily weighted to developing countries (initially low due to late industrialisation) with large, urbanising, and expanding populations as industry is out-sourced from the West. The Wests per capita consumption (already high due to early industrialisation) increase is less or level, as it has a smaller and slower growing population that is already urbanised, and whose per capita engagement in industry is falling with mature efficiency practises and outsourcing, while at the same time per capita engagement in less heavily oil dependant financial and service industries continues to rise. Even a small increase in demand per capita in China and India translates to a huge increase in global consumption demand. This means, even as decline in global production commences, higher oil prices are botth supported and made relatively price insensitive. When West Eurasian and North American demand for cheap goods is destroyed by internal recession and unemployment, then so to is per capita demand in East Eurasia, and recession and unemployment there is equally inevitable.

1996 - Russia exports over one billion barrels of oil a year, bringing in 20% of its foreign exchange earnings.

1996 - Cantarell flows are now producing 1.08 million barrels of crude a day as the fields are pressurised.

1996 - the Straits of Hormuz in the Persian Gulf now see 15 million barrels of oil a day tankered through them.

1996 - Venezuela signs a joint venture deal with USA's ARCO to develop and upgrade about 200,000 barrels of very heavy (9° API gravity) crude a day from the 270-billion barrel Orinoco Heavy Oil Belt. Once upgraded  to 25° API it will be exported to USA refineries. A similar deal has been signed with Conoco Oil.

1996 - USA - The national average per-well production for natural gas wells is about 174 million cubic feet of gas per day.

1997 - Over the last 7 years daily oil consumption has increased by an additional 6.2 million barrels a day, mostly driven by new Asian demand. OPEC increases its members quoatas to meet the increased demand.

1997 - Iraq - Looking ahead to when UN sanctions are lifted,
With costs of production the lowest in the world, rates of return of up to 20% are available to favoured oil companies. No non-US or UK oil company will be allowed to fulfil it's agreement.

1997 - UK - continuing its long association with the oil industry, British Petroleum Chief Executive David Simon is made 'lord' Simon of Highbury, and takes a place as an unelected Parliamentarian in the class-ridden British house of 'lords'. Simon is given the job of Blair’s Minister for European Trade and Competitiveness. In Blairs governemnt, at least 12 BP executives will hold government positions or be appointed to government advisory committees.

1997 - total 'North American' oil production (presumably USA and Canada combined) peaks [2]

1997 - USA - The strategic Petroleum Reserve capacity remains at a nominal 750 million barrels, as it has for the last 5 years. But the reserve has never been filled to capacity, usually holding around 550 million barrels of crude.

1997 - Oman's Yibal field peaks at 225,000 barrels a day. The field is intensively produced with all the latest technology of the day to maximise production flow.

1997 - Qatar inaugerates the world's largest liquefied natural gas (LNG) exporting facility, with a total output capacity of 6 million tons of LNG a year. An associated new sea port will have a capacity to handle 25-30 million tons of LNG a year. Qatar claims natural gas reserves of about 237 trillion cubic feet.

1997 - Norway -  the Ormen Lange offshore field is discovered, containing an estimated 375 billion cubic metres of gas.

1997 - Nigeria - Shell oil experiences 210,000 barrels a day of disrupted production at its Bonny terminal due to local protests.

1997 - Colombia -
USA's Occidental Petroleum and Colombia's Ecopetrol oil pipeline from the Cano Limon field is repeatedly attacked by dissendents, significantly disrupting oil exports.

1997 - (december) Slump in Thai Baht triggers Asian currency crisis and economic slump.

1997 - Commencement of deregulation of USA electricity supply. Commencement of wildly fluctuating prices in the energy daily 'spot market'. Commencement of un-cordinated overbuilding of plant based on gas tubines.

1998 - Asian economic crisis sees a reduction in demand in Asia coupled with an increased OPEC production quota. Weak consumption/demand leads to falling crude prices.

1998 - (december) The OPEC meeting of the previous month fails to reach agreement to reduce excess pumping. Oil again sells for 'give-away' prices of $US10 a barrel, a 12 year low. Some crudes hit a price slump of $US8 a barrel.

1998  onward - Dirt cheap oil and gas fuels an economic 'good times' boom in the 'developed' western countries. Natural gas sells for around $2 a Gigajoule (around US0.08 cents a cubic metre), even in winter.

1998 onward - major oil producers experience squeezed profit margins. Needed capital intensive new refineries in USA and Europe are pushed off the drawing board. Refineries provide less profit than pumping oil, and even pumping oil out of the ground is not that profitable right now.

1998 - Russia is in trouble at the new democracy falters in the face of low oil revenue and the cessation of international financial aid. Russia defaults on its debts after continually rolling over its (worthless) short term treasury notes finally fails. Unregulated and highly indebted hedge funds betting on currency value movements (long term capital "management") lose heavily, the US Federal Reserve (US taxpayers) then subsidise the financial 'geniuses' stupidity by bailing them out.

1998 - Extremely low oil returns coupled causes the Saudi budget deficit to reach 10% of GDP. Loans from the Gulf oil state of Abu Dhabi cover the cash crisis. With no cash on hand to pay for 'make work' schemes, unemployment rises to around 17% and 20% in those aged 20-29. Disaffected youths become prime recruits for the violent factions within Saudi Arabia's already extreme fundementalist version of Islam.

1998 - China - With its huge internal economy under state control, subsidised industries continue to burgeon, worsening the recurrent fuel shortages and requiring increasing levels of imports. China allocates 11 billion yuan (about $US1.31 billion) to the countries largest (state owned) coal producer to research and develop coal to liquids technology.

1998 - UK - Brent field starts its collapse. Decline rate doubles to an astonishing 20%. Production is now about 11,000 barrels a day.

1999 - UK North Sea fields reach overall peak of production at approximately 6 million barrels a day (small fields come into play, but nett of consumption there is an overall loss). Effective zero production is likely some time around or after 2020.

1999 - India - Reliance Industries Ltd's Jamnagar refinery, with a capacity to refine 660,000 barrels of crude per day, commences exporting petroleum products.

1999 - UK is the world's 9th largest oil producer. UK is an important nett oil exporter. A third of the North Sea oil production is exported.

1999 - BP buys Amoco oil for $US55 billion. BP would like to use AMOCO's sophisticated imaging technology in the deeepwater Gulf of Mexico, where, to date, its exploratory wells have been dry. Each well costs about 10 million dollars.

1999 - Canadian Ladyfern gas deposit discovered in Northern British Columbia - the largest natural gas discovery in North America. This deposit initially thought to be large enough to meet 25% of Canada needs. It is produced at a rate of 785 million cubic feet a day.

1999 - South Korea's Korea Gas Corporation (KOGAS) takes delivery of its contracted 4.9 million tonnes per annum of Qatari LNG.

1999 - (january) oil drops below $US10 a barrel. One estimate is that in real terms, this is half the price that oil was in the 1950's. Pump prices in USA are around 90 cents a gallon. Smaller oil companies fail. Hundred of thousands of long-time experienced oil employees lose their jobs. No one in their right mind signs up to work in explorations and drilling.

1999 - Saudi Arabia is now the single largest supplier of crude oil to the USA. Saudi Arabia preferentially supplies the USA as the USA guarentees the Saudi regimes safety from democracy. Oil sent to the USA earns less due to distance than if the oil was sent to adjacent Asian markets.

1999 - (february) US energy secretary persuades the Saudi regime to restrict the output of oil in order to push up the price and save the Russian economy. The US 'expects' oil to reach a more realistic $US18 a barrel.

1999 - (march) Saudi Arabia announces moves to cut its output from over 8 million barrels a day to 7.4 million barrels a day, and OPEC  to cut output more than 2 million barrels a day

1999 - (may) oil prices recover steadily, now stand at $US18.

1999 - Saudi dictatorship panic levels rise further as sharply decreased oil revenue from the past few years impairs the ability to pay for social benefits for the unemployed. The huge and youthful population increase has been created out of years of oil plenty. The current population is about 21.3 million, up by about 7 million people from a decade ago, when the population was about 14.4 million.

1999 - (july) Oil expert tells a British Parliamentary Committee that oil production has peaked, that after many years of growth "we may then experience a new downward trend", and that in his view it was absurd that "the depletion of the world’s supply of its most important fuel should be left to a few feudal families controlling the Middle East."

1999 - Dick Cheney, Chairman of Halliburton oil services company, (and soon to be vice president of the USA) notes the difficulty of finding enough oil to "offset our seventy one million plus barrel a day of oil depletion, but also to meet new demand". He bemoans the fact that nations and nation-owned oil companies are in control of 90% of their own oil resources, rather than USA and International private businesses owning it. He predicts "by 2010 we will need on the order of an additional fifty million barrels a day" above existing world oil production. He notes, from an American oil business perspective, "the Middle East with two thirds of the world's oil and the lowest cost, is still where the prize ultimately lies", but that while American private companies want access to oil owned by nations of the Gulf, "progress" in gaining access is slow.

1999 - USA Central Command has a plan to quickly invade and control  Iraq.

"When I was commander of CENTCOM, we had a plan for an invasion of Iraq, and it had specific numbers in it. We wanted to go in there with 350,000 to 380,000 troops. You didn't need that many people to defeat the Republican Guard, but you needed them for the aftermath. We knew that we would find ourselves in a situation where we had completely uprooted an authoritarian government and would need to freeze the situation: retain control, retain order, provide security, seal the borders to keep terrorists from coming in." - General Anthony Zinni

1999 - after 3 years of exploration and the expenditure of  $US410 billion, oil companies around the world have found only enough oil to keep their production static at 30 million barrels a day. While declining production from existing wells is compensated for by the new wells, not enough is found to meet rising demand.

1999 - Following the election landslide victory for Hugo Chavez in 1998 Venezuela adopts a new Constitution banning further foreign investment in the oil sector, in order to prevent oil profits enriching already wealthy foreigners when Venezuela is wracked with poverty - according to government figures, about 12% of people live in "extreme poverty", 25% in "poverty".  The democratically elected government has a huge social deficit from years of corruption, breath-taking International Monetary Fund 'debt for oil' loans, dictatorship, and sequestration of national wealth by the 'self-privileged' few. This minority of mostly white people with racist attitudes live in luxurious 'gated communities' isolated from the rest of the impoverished population, and regard the wealth of the nation as 'belonging' only to them. This small group has controlled the oil profits for their exclusive benefit more than a century. Venezuelas birth rate means it will be constantly playing catch-up even to stand still; a situation analogous to the exploding populations of the Middle East. Venezuela's economy and social well-being is utterly oil-dependant. 70% of Venezuelan exports are oil; 60% of government tax revenue is from oil.

The major oil companies currently in Venezuela are foreign owned American and West Eurasian - ChevronTexaco, Royal Dutch Shell, ExxonMobil, and British Petroleum. Venezuela has estimated reserves of 78 billion barrels of crude, and 1.2 trillion barrels of 'unconventional' super-heavy crude. Venezuela is relatively close to the USA, supplies 10% of USA domestic oil, and therefore likely to be a target for installation of a puppet regime under USA control.

1999 - First substantial revenue from Sudanese oil fields. Revenues reach $500 million. 80% of the money is used by the repressive Sudanese government to buy predominantly Chinese armaments, and build armaments factories to kill resistance fighters.

1999 - OPEC continues to try to reduce supply to meet slower demand. Prices start to regain from a 30 year low (inflation adjusted to year 2000 prices) of about $US10.

1999 - (september) - Iraq reduces exports by 1.2 million barrels per day in order to restrict supply and further drive up oil prices, which quickly reach $US22.

1999 - (november) Iraq suspends its UN sanctioned oil-for-food sales.

1999 - USA and the IMF discover there is a willing market for 'unused' central bank gold reserves when some stocks are offered at auction. Both banks are unnerved by the vote of confidence in gold versus the US dollar, in spite of moves to hold gold prices artifically low. Washington Agreement signed with 15 central banks  - "Gold remains an important element of Monetary Reserves" and banks will not sell more than 400 tonnes of their gold reserves in any one year for the next 5 years.

1999-2000 - (december- January) increased world oil demand growth coupled with OPEC and Iraqi pumping cut backs causes rapid rise in oil price.

2000 - (february) oil prices reach $30 a barrel.

2000 - (jan-feb) - USA shortage of heating oil in Northeast USA as very cold winter conditions increase fuel oil demand and hamper deliveries.

2000 - (march) Traders betting on future price oil price spike crude above $US30 per barrel.

2000 - Iraq resumes selling oil for food at the new higher price, and increases its smuggling of oil, mainly to Turkey.

2000 - Iraq takes payment for part of its oil in Euros, setting a precedent for other Middle East nations, and removing some of the value of the US petro-dollar. This move shakes USA's administrative/business/military complex deeply.

2000 - Two US professors at the University of Houston (and energy advisors to corporate America) state oil supply cuts could be used to damage the American economy, and that nothing short of a 'military response' could counteract a reduction in oil production by Saddam Hussein. They make no mention of Saudi reductions in supply.

2000 - (march) US administration does an 'about face' and threatens Saudi Arabia and OPEC that if they don't increase oil production to bring down the price, the US will dump it's strategic oil reserve on the world markets to flood them with oversupply and drive down the price.

2000 - Most OPEC suppliers - except for Saudi Arabia - are now pumping at full capacity to meet global demand.

2000- The world's oil tanker fleet is now operating at 97% of capacity - the first time since 1973.

2000 - global production of light sweet crude peaks, as predicted by Hubbard (the prediction was in effect for light crude as it was based on the production curve for West Texas sweet). From now forward, the amount of easily refined crude will fall year on year. Most light crude comes from OPEC countries. Saudi Arabia's Ghawar, Abqaiq and Berri fields supply almost all of the Saudi light crude supply.  Non - OPEC countries have relatively small amounts of light crude, and it is this that has been in demand, and has been produced first. The world must increasingly turn to those refineries able to handle 'heavy' and 'sour' sulphurous oils.

2000 - USA and European oil refineries are operating at, or near, full capacity.

2000 - USA oil stocks are at their lowest levels for 24 years as increased consumption keeps levels low.

2000 - USA now consumes 8.3 million barrels of crude in producing its petrol supply (43% of all crude is used to make petrol).

2000 - (march) OPEC (i.e. Saudi Arabia) agrees to pump more oil. But increased demand, eroding global pumping capacity, huge social debt in Saudi Arabia and Venezuela, speculation by the futures traders, and diminishing oil refinery capacity work together to hold prices. Saudi Arabia produces about a third (7.4 million barrels a day) of OPEC's output, and is the only OPEC nation with significant spare production capacity (around 2 million barrels a day).

2000 - (July) The Financial Times notes that "troubling trends" are provoking turmoil in "a commodity market where knowledge of true supply/demand balances is sketchy if not deliberately obscured by participants".

2000 - (July 10th) USA president Clinton orders the Department of Energy to establish 'the Northeast Heating Oil Reserve'. This 2 million barrel reserve is intended to provide a ten day 'cushion' in the event of especially cold winters causing an unmet demand due to Atlantic refineries not being able to produce enough. It takes ten days to bring ships (usually 1 million barrel class tankers) from the Gulf of Mexico refineries to New York.

2000 - By the end of the year oil is back at its historic value of about $US30 a barrel (when inflation adjusted to year 2000 dollars). This magnitude of price increase has not the slightest effect in stopping or even slowing demand growth. Gold re-links to the price of oil, albeit lagging in the relationship relative to previous history. OPEC members all strongly support the current pricing. The President of OPEC, Hugo Chavez, observes "We understand that they [consumers] start to feel uneasy when crude prices reach $30 a barrel, but they can imagine how it must have been for us when it fell to $8".

2000 - Prices spikes to $35, prompting some West Eurasian consumers to protest at the consumption tax on petrol - around 60-80%.

2000 - Eurozone governments ask OPEC to insist on a price lower than the market will freely pay. They argue oil costs Saudi Arabia $2.50 a barrel to pump from the ground (Dubai $6) so there is room to artificially accept a lower than market price. OPEC producers note that they take only 16% of the gas station pump price charged to the consuming public. Eurozone and other Western governments (except USA) take 60% - 80% of the sale price of petrol in tax, thus helpfully (for those governments) obscuring the real taxation rate its citizens must pay.

2000 - (august) USA - 'Sports Utility Vehicles' (SUVs) and other light trucks now comprise almost 50 percent of the new vehicles sold in USA. SUVs are not required under Corporate Average Fuel Economy (CAFE) standards introduced in 1975 to achieve good fuel economy (SUVs and light trucks only have to 'achieve' 20.7 miles per gallon), unlike cars (which have to achieve a pathetic 27 miles per gallon), so gas-gulping monsters continued to be churned out by the American auto industry.

2000 - Russia has greatly increased oil production from its mature Siberian fields to ovecome its financial problems, and is now meeting a very significant portion of new demand, due in part to greatly increased Chinese demand.

2000 - Asia-Pacific oil producers oil production peaks [2]

2000 - the Masjed Soleiman field in Iran has still only produced 1.2 billion barrels.

2000 - global consumption is about 68.4 million barrels crude a day - 2.4 million barrels a day higher than earlier expected.

2000 (september) Financial analysts are unaware of the increase in demand for oil and the proximity to supply limits to pumping and to refining what is pumped -  "The oil price has gone from $10 to $35 a barrel yet production has only altered by around 3%, the market is not functioning properly..." Production has only increased by 3% because that is close to all it is physically able to increase by. Demand is there. Supply is uncertain at the margin. The market is functioning perfectly well.

2000 (september) Financial commentators speculate that crude oil prices could be driven up "above $US35", even as high as $US40 for a period, and that this would be an 'oil shock'. Pump prices in USA are around $US1.60 per gallon.

2000 - (september 5th) UK truckers block the channel tunnel in response to additional duty (tax) on already high diesel prices. They follow by blocking the UK's largest oil terminal and almost all the UK oil refineries. Panic petrol buying breaks out. Huge queues form at gas stations, and over half the forecourts run out of supplies. Some public transport services are reduced, and some critical supplies critical health sector supplies such as oxygen almost run out. The blockade ends within a week when proposed fuel duty increases are postponed. The estimated cost is  nearly £1 billion. The lesson is that most industries, food distribution, and health services will run out of supplies within two weeks of a sudden and near-total switching off of petrol and diesel supplies. Coal, gas, and nuclear powered stations are relatively impervious, leaving around 70% of the generation capacity largely intact.

2000 - (september) USA tries to pressure the Saudi regime into pumping more of its excess capacity to bring down oil prices. Saudi Arabia refuses, noting that there is now a consensus in OPEC not to oversupply oil. In fact, only Saudi Arabia could in theory over-pump.

2000 - (september) USA a scorching summer cranked up demand for electricity as new high tech industries such as web server farms demand extra electricity supply. Low investment in gas exploration in the late 1990's due to low gas prices means there is a supply shortfall to generate electricity. The de-regulated electricity market means those building gas powered power plants have no idea how much competing demand for natural gas there is. Plants are built with no assured supply. Californian utilities are forced to cut power to some companies, colleges and office buildings. Winter power prices are expected to double.

2000 - (september) USA is faced with high prices for winter heating fuel - expected to cost 30% more - at the same time as a shortfall in natural gas supply for electricity. There is "near panic" in some US states. A wood-stove buying frenzy is sparked in the wooded north-eastern states, where over a third of homes rely on heating oil for winter warmth. Home owners stockpile barrels of heating oil to beat the rises ahead of winter peak demand. Californians buy diesel and petrol powered portable electricity generators. President Clinton orders the release of 30 million barrels of oil from the 571 million barrel US strategic reserve in order to bring down the price. It was intended to yeild an additional 3 to 5 million barrels of heating oil, but as USA refineries have almost no spare capacity to increase production, it was largely symbolic. This is the first time the strategic reserve has has been used for domestic economic purposes rather than military purposes.

2000 - (september) In response to intense pressure from USA, the Saudi regime finally agrees to increase production by 800,000 barrels a day. 500,000 barrels a day is probably a return to previous pumping levels. Only 300,000 barrels a day is available to meet the growth in demand.

2000 - (october) Following the terrorist attacks on the USS Cole in Yemen, the commander in chief of the US Central command testifies in Congressional committee his command's mission is to "deter aggression and stand ready to respond to attacks on our forces, our allies, our interests...to ensure uninterrupted access to regional resources and markets...(and) to counter the proliferation of weapons of mass destruction and other transnational threats....The region is historically unstable, yet remains vital to U.S. national interests. It contains vast energy resources, key air and sea lines of communication, and critical maritime choke points. Economic and political disruptions in our AOR have profound global consequences."

2000 - (0ctober) Iraq convinces the United Nations it should be allowed to sell its oil for euros, not dollars, to come into effect November 6.

2000 - (october) Iraq converts its $10 billion "oil for food" reserve fund from dollars to euros. Oil backs the USA dollar, as it is worthless without it. Converting to the euro, a fiscally sound currency, would erode the US governments ability to sell US treasury junk bonds in exchange for 'petrodollars'. Treasury junk bonds fund the large USA internal and external deficit.

2000 - High US treasury interest rates (6%) due to suspicion the US dollar may no longer be fully backed by oil, making bond purchases less attractive and other currencies more attractive. US stock market declines steadily.

2000 - Central banks respond to lack of confidence in the dollar by driving down their interest rates on bonds. This allows the USA fed to print and successfully sell more bonds. Central bank USA dollar reserves retain their value, and allows USA to import oil at a lower price than would otherwise have been the case, subsidising USA drivers.

2000 - November  - Russia's Lukoil  buys Getty Petroleum and its 1,300 gasoline service stations.

2000 - the U.S. Geological Survey estimate world oil reserves at nearly 416 billion tonnes. Oil industry sources estimate it at about 140 billion tonnes.

2000 - USA domestic and cargo airlines now consume 20.3 billion gallons of jet fuel a year .

2001 - Norways giant fields peak at 3.2 million barrels of crude and condensate a day.

2001 - India's Bombay High North and South oil fields, providing over 30% of Indias domestically produced oil, have been declining for some years. Production has dropped from 20 million tonnes to 12 million tonnes a year. A programme to "redevelop' them, probably by pressurisation, now starts.

2001 - Russia once  highly productive giant Samotlor oil field now produces only about 0.25 million barrels of oil a day. This giant field collapsed from peak in only about 20 years, and its decline was precipitous. It is a warning of what is likely to happen in Mexico and Saudi Arabia.

2001 - London's International Petroleum Exchange (IPE) is bought by a consortium of oil companies and financiers that includes BP, Goldman Sachs and Morgan Stanley. Money is made by predicting movements in oil prices and exchanging contracts for future delivery. Volitility and flux is a money earning asset for the exchange. Volatility and flux drive the ability to profit, with knowledge of the economy, and access to expert analysis from within the oil industry being key factors.

2001 - USA authorities forecast abundant future supplies of North American natural gas, meaning prices would not rise.

2001 - USA - California. Power crisis, with some 'brown outs'. Major energy companies accelerate the building of gas powered - electricity generation plants.

2001 - North American gas prices spike high over winter - increasing by nearly 300% in 6 months due to shortages. Gas prices peak at over $US12 a Gigajoule (about US.50 cents per cubic metre) Gas industry puts over 1,000 gas rigs to work (compared with 700 in 2000). Gas production increases by about 4%.

2001  - USA strategy to isolate Russia by actively engaging with and bringing former Russian colonies such as Poland and other Baltic Sea nations into NATO (in spite of Russia's alarm at its perceived 'encirclement' by USA forces) means that Russia's existing crude oil transit pipelines through Poland, Latvia, and Lithuania to its West European markets (and beyond) may fall effectively under USA-NATO control. In response, Russia's President Putin initiates a plan to build a new pipeline from the West Siberian and Timan-Pechora oil provinces to the port of Primorsk on the Russian shores of the Gulf of Finland. It is to be known as the Baltic Pipeline System (BPS), and is expected to carry 1.3 million barrels of oil a day. The projected cost is $US2.2 billion.

2001 - The Caspian Pipeline Consortium (CPC) is completed. This  $US2.6 billion crude oil pipeline  pipeline runs for 935 miles, from the Tengiz oil field in Kazakhstan to the Black Sea port of Novorossiysk  in Russia. The initial capacity of 500,000 barrels per day is expected to expand to around 1.4 million barrels per day by 2015.

2001 - American president installed allied to the oil industry. According to a 2005 BBC report, "planning began "within weeks" of Bush's first taking office in 2001" to install a puppet regime in Iraq via an American organised coup d'etat, and thus control Iraqs estimated 112 billion barrel oil reserves, the second largest in the world.

2001 -(february) - several weeks after Bush jr. becomes president of USA, an 'energy task force' headed by (oil-industry participant) vice-president Cheney is convened. Few details have been forced from the US Govt (via the Freedom of Information Legislation), but according to one correpondent

"… a map of Iraq and an accompanying list of "Iraq oil foreign suitors" were the center of discussion. The map erased all features of the country save the location of its main oil deposits, divided into nine exploration blocks. The accompanying list of suitors revealed that dozens of companies from 30 countries - but not the United States - were either in discussions over or in direct negotiations for rights to some of the best remaining oilfields on earth."
- Mark Levine, in The Nation.

The National Security Council directed staff to "cooperate fully with the Energy Task Force as it considered melding two seemingly unrelated areas of policy..." and join "the review of operational policies towards rogue states such as Iraq and actions regarding the capture of new and existing oil and gas fields."

The State Department had already created the "Future of Iraq Project," an "Oil and Energy Working Group" whose members were, according to The Financial Times, "Iraqi oil experts, international consultants" and State Department staff ( names were classified as a state secret). According to the book 'The Bush Agenda' by Antonia Juhasz one member would later serve as Iraq's oil minister. The working group stated that Iraq's oil "should be opened to international oil companies as quickly as possible after the war."

2001 - (april) - the Bush cabinet claims "Iraq remains a destabilising influence to the flow of oil to international markets from the Middle East" and "military intervention' is necessary" and labels this an 'unacceptable risk' to USA interests.

2001 - (may) Dick Cheney, now the vice president of America, tells the American president Bush via the 'National Energy Policy Report' that "By 2020, Gulf oil producers are projected to supply between 54 and 67 percent of the world’s oil”.

2001 - (may 17) The National Energy Policy Report, long on rhetoric about reducing demand for oil by promoting innovation and technology to make USA the world leader in efficiency and conservation, is actually intended as a deliberate smokescreen.
In fact, it appears to be the "mother of all smokescreens".
Toward the end of the report, the true policy is hinted at - a chart of net US oil consumption and production over time reveals US domestic production will decline from around 8.8 million barrels a day in 2002 to 7 million barrels a day in 2020. Demand in 2020 is expected to be 6.5 million barrels a day greater than 2002 levels, reaching 25.5 million barrels a day. Thus, of the 25.5 million barrels a day USA expects to consume, 18.5 million barrels a day will need to be imports from other countries.
Instead of discussing how to reduce this increased demand, it discusses 'removing' political, logistical, and legal obstacles to 'obtaining' it from oil rich regions and specified countries.

In other words, this policy is short-term 'me-generation' expediency in face of a crisis whose dimensions are known.
2001 - uranium 'yellowcake' hits an historic low price of $US7 per pound on the spot market.

2001 - USA, summer. Natural gas prices drop back nearly 300% to the normal trend line after winters demand spike.

2001 - USA backed big business in Venezuela uses the right-dominated Petroleum Workers Union to organize a general strike.

2001 - the highly nitrogen-gas pressurised declining Cantarell field in Mexico now produces 2.1 million barrels a day - nearly twice the flow rate achieved at the 'natural' peak of production for the field.

2001 - Iran signs a 25-year deal with the USA's ally Turkey to supply 4 billion cubic metres of natural gas, making Iran the second biggest supplier to Turkey after Russia.

2001 - (july) - Russia - Azerbaijan - Iran - UK - Azerbaijan joins agreements with Russia and Kazakhstan that the seabed only of the Caspian sea be assigned territorial rights to bordering states. Azerbaijan needs access to Russias pipelines to export oil and gas. Azerbaijan sends oil exploration vessels to explore the Araz-Alov-Sharg oilfields in these waters knowing the territorial boundaries are vigorously disputed by Iran. Iran threatens them with a warship and fighter planes and masses troops on the land border with Azerbaijan. The exploration was commissioned by British Petroleum.

The Caspian Sea is bordered by Russia, Kazakhstan, Azerbaijan, Iran, and Turkmenistan. Prior to the break-up of the Soviet Union, Russia and Iran split control of the Caspian between them. After the USSR breakup in 1998, in spite of agreements with the new states that Soviet divisions of the Caspian would remain in force, Russia and Kazakhstan agreed to divide their portion of the seabed only between them, and leave the issue of sea surface control unresolved.

Iran and Turkmenistan wanted "condominium" use of the sea or, alternatively, division of the Caspian into five equal sectors (not based on a countries abutting shore length). The Caspian is supposed to hold reserves of between 17 and 33 billion barrels of oil, and maybe 300 trillion or so cubic feet of natural gas.

Most of the reserves are offshore, but closest to the new post-Soviet states of Kazakhstan (which has the Tengiz and Kashagan fields) and Azerbaijan (which has the Baku Fields).  Azerbaijan and Turkmenistan continue to contest ownership of the Chirag and Azeri oilfields.

2001 - Turkey on-sells part of its Iranian gas to USA's dependent 'oil and gasless arab state' - Israel.

2001 - Ford Motor Company introduces a car, the P2000, with a hydrogen internal combustion engine saying it "could help bridge the gap between gasoline vehicles and the fuel cell vehicles of the future." Engine efficiency is about the same as a diesel, but the range is only 62 miles. Liquified natural gas or compressed natural gas gives much better range, and is a mature technology. Hydrogen gas must be 'made' by decomposing these gases, or by using electricity from a coal or gas fired power station (or nuclear station) to decompose water into hydrogen and oxygen. The idea a hydrogen powered vehicle could ever be widely and popularly available as a 'substitute' for mined gas shows no understanding that there are no 'reserves' of hydrogen to be 'mined'; hydrogen can be brought into existance only through burning fossil fuels or uranium.

2001 - September 11 - Saudi Arabian terrorists murder over 3,700 Americans in New York, setting the stage for America to invade Saudi Arabia Iraq, and kill an estimated 20,000 Iraqis.

2001 - (november) a paper published by eminent geologist Kenneth Deffeyes of the prestigous Princeton University says "The biggest single question is the year when world oil production reaches a Hubbert peak and then declines forever. Both the graphical and the computer fits identify 2004 as the probable year. The largest single uncertainty is the enormous reserves of Saudi Arabia."

2001 - USA - USA natural gas production peaks at 19.6 trillion cubic feet per year.

2002 - USA White House spokesperson Ari Fleischer “The only interest the United States has in the region is furthering the cause of peace and stability, not in [Iraq’s] ability to generate oil...” If you are going to tell a lie, tell a big one.

2002 - USA sponsored opposition attempt to violently overthrow the democratically elected government of Venezuela. Terrorists controlling the countries wealth form an 'axis of evil' with military generals to kidnap the popularly elected president. The terrorist leader, Pedro Carmona Estranga, head of the Venuzuelan federation of business, dissolves the constitution, dissolves the Supreme Court, dissolves the democratically elected national assembly. A massive popular uprising of over a million people takes to the streets, with support from the lower rank of the military, stops the terrorists and restores the popularly elected president. Astonishingly, the terrorists are not tried for treason, or homeland crimes, but are allowed to go free.

2002 - “Senior Defense official” - possibly Deputy Defense Secretary Wolfowitz - Pentagon leadership reveals in a Pentagon briefing paper that the Pentagon “have crafted strategies that will allow us to secure and protect those [Iraqi oil and gas] fields as rapidly as possible in order to preserve those prior to destruction.”

2002 - ExxonMobil semi-publicly admits world oil will peak before 2010 - Harry J. Longwell, director and executive Vice-President of ExxonMobil “The catch is that while demand increases, existing production declines. To put a number on it, we expect that by 2010 about half the daily volume needed to meet projected demand is not on production today – and that’s the challenge facing producers.” (World Energy, Vol 5 No 3, 2002).

2002 - a report from the Colorado School of Mines, titled 'The World's Giant Oilfields,' notes that nearly 50% of the world's crude oil supply come from the 120 largest fields in the world. The 14 'largest of the large' supply over 20%, and these 14 have an average age of nearly 44 years. The conclusion is that there are no more super giant fields in the world to be found.

2002 - USA gas production falls back to 2001 levels.

2002 - USA oil field service and drilling costs are now $1,057,510 per well (expressed in 2005 dollars). This reflects more geologically 'extreme' drilling conditions, where drilling would never in the past have been viable.

2002 - 2003 Oman's (Middle East) oil field drop production significantly as fields age

2002 - Columbian Cruz Beana oil fields production drops from previous levels to 200,000 barrels a day

2002 -  Latin American oil production might have peaked, but still a little too close to call [2]

2002 - (november) USA invades Afghanistan and installs 'the pipeline president'. USA wants to access all Central Asian former Soviet State gas and oil and send it south to Pakistan. The Pakistani president is suitably grateful. This means a pipeline has to cross Afghanistan - impossible while the Taleban and the Saudi terrorists control the country.

2002 - Commencement of the Baku-Tbilisi-Ceyhan (BTC) pipeline to bring oil from the Caspian Sea to the Mediterranean for on-shipment.

2002 - (december) The Caspian sea area, previously touted as "a new Saudi Arabia" has drilling results in that show not the expected 200 billion barrels, but about 39 billion barrels, much of it lower quality crude.

2002 - This years USA additional government debt is $US158 billion, most of which will be funded by issuing more treasury bonds.

2002- Saudi Arabia, Bahrain, Kuwait, Qatar, Oman and the United Arab Emirates peg their currencies to the US dollar to benefit by its strength. Almost 85% of the excess income of oil-producing Persian Gulf countries is invested overseas in US dollar-linked financial instruments.

2002 - Volkswagen announces a  project to develop a super-economy car that can travel 100 kilometers on 1 litre of fuel. It is called the “1-liter” car. The prototype, a lightweight single cylinder diesel capable of 120 kph (75 mph) does even better, 0.890 litres to the 100 kms (264 miles per gallon).

2002 - 1.2 million new cars were purchased in China this year.

2002 - China's national oil company buys an oil field in Indonesia from Spain's Repsol YPF SA and becomes the largest offshore oil producer in Indonesia.

2002 - The price differential between the more difficult and expensive to refine 'heavier' (more viscous) oils and 'sour' (higher sulfur content) crudes and the easily refinable 'light' 'sweet' (low sulfur) crudes is about $2 a barrel for the entire year. There is relatively little change in the differential in the US refinery 'stock up' period prior to the summer driving season in USA.

2002 - USA - Roughly 17,000 new natural gas wells were drilled this year.

2002 - Canada - About 9,000 new natural gas wells were drilled this year.

2002 - USA now imports 13% oil supply from Africa.

2002-2003 - USA winter demand over this period draws gas reserves dangerously low (40% below normal by the end of winter). Reserves were low because increased demand required increased storage in the 'off season' but pumping capacity was insufficient due to decreased supply. Spot market prices created 'spikes' as high as US$30 per million cubic feet ($US10.00 per Million British Thermal Units ), in equivalent energy terms, about $US9 a gallon for gas. Natural gas is also the primary feedstock to be decomposed into the risible USA 'hydrogen economy' smokescreen.

2003 - (january) - USA - demand for heating oil in the Northeast surges due to record cold temperatures in some regions. Consumption reaches 4.9 million barrels a day in the last week of january - a record high. Some regions experience a plunge in inventories of more than 30%, making supplies in some areas short. Concerns are raised that if the cold weather is prolonged, the emergency fuel oil reserve may need to be released. $200 million in emergency funds are released to states, most of which is used to subsidise heating fuel for low income households. Requests for heating assistance are up from 20% to 50% as the proportion of the USA population who are on low incomes or are impoverished increases year on year.

2003 (February 7) USA commercial crude oil stocks fall to about 270 million barrels (week ending February 7), the lowest crude oil stock level since 1975.

2003 - In the UK the number of petrol stations also equipped with LPG (liquified petroleum gas) reaches 1,200  - nearly twice the number of suppliers that existed in 2001. Government tax on LPG is considerably lower than petrol, and subsidises the cost of installation of dual fuel systems in new cars (and in some used cars, albeit at a lesser rate) at around £1,000. Savings on petrol pay for the buyers share of the installation within about 20,000 miles.

2003 - The number of motor vehicles in the UK is now 31.2 million.
27.7 million of these are private autos and light goods vehicles such as utes and vans.
Road transport accounts for about 75% of all oil used in the UK.

2003 - UK now consumes 42 million tonnes of oil per year in road transport (private and freight).

2003 - UK now consumes 0.3 million tonnes of oil per year in rail transport (passenger and freight)

2003 - China's oil resource probably peaked (as assessed from the Uppsala Hydrocarbon Depletion Study Group model). Remaining reserves estimated at 25.7 billions barrels.

2003 - China's largest oilfield at Daqing, produces 48.3 million tonnes for the year. This is the first production drop (down from about 50 million tonnes per year) in 27 years.

2003 - China relies on Iran for 14% of its oil needs.

2003 - China spends $US300 million doubling the capacity of the Sudan-China oil refinery.

2003 - (January) - A speech said to be by by China's Minister of Defense and vice-chairman of China’s Central Military Commission, Chi Haotian is put onto the internet under various titles, including “The War Is Approaching Us”, “A recent speech from a high ranking official in PLA”, “The War Is Approaching Us—Chi Haotian”, “China, Do You Still Have Ten Years’ Peacetime?”. The speech says "...China needs to import oil for its economic development, and to import raw materials such as lumber, in order to protect its environment from deforestation. This is very reasonable. But big powers have their own “reasons,” and a country like China will need to consume 100 million tons of oil in 2010, and 200 million tons in 2020. Will these big powers tolerate this?...Only by being prepared for war can China win space and time for her further development." Just what this "space" might be was uncertain at the time of publication, but would be clarified later...What is now clear to China is that China's oil imports will increase year on year, driving up the cost of manufacture, putting China in the same boat as the rest of the world.

2003 - the giant Shaybah oilfield on the border of United Arab Emirates and Saudi Arabia has now produced 1 billion barrels of crude (136 million tonnes).

2003 - Australias oil fields have peaked. Total production has fallen from about 650,000 barrels a day to around 430,000 barrels a day.

2003 - Oman's Yibal field production has in effect collapsed. It now produces only about 80,000 barrels per day, losing well over half its production in just 6 years.

2003 - Mexico's giant Cantarell field has 53 additional wells sunk to try to maintain falling production levels.

2003 - Indonesias production slide continues. It now exports 100,000 barrels of crude a day.

2003 - (early) Japanese companies take a 20% stake in developing the Iranian 1 billion barrel Soroush-Nowruz offshore field in the Persian Gulf, and later sign contracts for natural gas and gas liquids from it and other Iranian offshore fields.

2003 - USA national gas field production decline is estimated at roughly 3% a year.

2003 - UK North Sea fields production drops by 8.5% as decline continues (small fields come into play, but nett of consumption, there is an overall loss).

2003 - Canadian Ladyfield gas deposit now producing at only 300 million cubic feet per day, and the decline rate continues to be steep. Some charge the field has been overproduced, and should have yeilded more.

2003 - (january) US president Bush announces "Tonight I am proposing $1.2 billion in research funding so that America can lead the world in developing clean, hydrogen-powered automobiles." Either he had been badly advised, or he is incredibly ignorant of the science and previous reports. The technology to do it reasonably is not, and never will be, there. Technological feasibility is a trivial side issue anyway - hydrogen must come from gas or coal; or from electricity. There are no 'hydrogen mines' available to exploit; there is no cheap and abundant source of hydrogen even if it were a practical option for automotive transport. Which it isn't. Much of the funding will flow to Sandia Research Labororatories, a Lockheed Martin subsidary long involved in contracts for the business/military/presidential-administrative complex, a complex extremely heavily 'influential' in USA.

2003 - (february) - Irans phases two and three of the South Pars natural gas field come on-line. Together, they will produce an additional 55 million cubic meters (1.9 trillion cubic feet) of natural gas, and 1 million metric tons (11.6 million barrels) of liquefied petroleum gas a year, as well as 85,000 barrels of condensate liquids a day.

2003 - (february) Angola's Kizomba B offshore development project commences. The joint venture between the oil companies Exxon Mobil, BP, Eni, and Statoil is expected to cost $US3 billion. Production of 250,000 barrels of crude oil a day, starting 2006, is expected. Total recoverable reserves are estimated at around 1 billion barrels.

2003 - (march) Nigeria experiences fighting between soldiers and militants of various ethnic groups and factions in the Niger Delta. ChevronTexaco, Royal Dutch Shell, and TotalFinaElf are forced to shut in operations in the area, resulting in 800,000 barrels a day being lost - about 40% of Nigeria's total production.

2003 - (april) Production in Nigeria returns to normal.

2003 - (april) Brazil's largest ever natural gas field is discovered about 85 miles off the coast of Sao Paulo. It is estimated to have reserves of about 2.47 trillion cubic feet of natural gas.

2003 - (january) Iraqi oil production is about 2.8 million barrels a day. Saddam Husseins regime uses 80% of oil revenue to pay for food, 20% (worth about $US3 billion) for the military, governance, and kick-backs.

2003 - over the last 12 years United States has received about 37% of Iraq's oil, almost all of it via a network of foreign intermediaries.

2003 - Report for the Italian Government recommends that if USA invades Iraq Italy should make the oil field regions of Nasiriyah and Halfaya secure to protect their 1997 oil deal, "a deal worth 300 billion dollars".

2003 - (before April) According to reported information from a former Energy and CIA oil analyst, a secret plan was drafted by the American administration to the sell-off all Iraq's oil fields after a planned invasion. Republican administration 'hires' are said to have had the secret intention to destroy the power of the Opec cartel by large increases in oil production from the seized iraqi oil fields, busting the Opec quota levels.

2003 - (January) "The pentagons darling" Ahmed Chalabi, having already met with executives of three US oil multinationals, tells an American newspaper that "American companies will have a big shot at Iraqi oil". Not only does Iraq have the second largest oil reserves in the world, Iraqi oil is also one of the cheapest to produce in the world - some estimates are as low as 97 cents per barrel. North Sea oil cost around 3 to 4 dollars per barrel to produce. Estimated annual production would be worth somewhere between $US40 billion and $US80 billion per year (at 2003 oil prices). The USA proposes a 'production share agreement' with US and UK multinational oil companies, giving the multinationals heavily discounted concessions to Iraqs oil.

2003 - (january) Unnamed 'sources' in the office of Vice president Cheney claim some in the administration want to seize Iraqs oil as "spoils of war". Others argue that the proceeds of oil sales should go to pay the Americans for their costs incurred in invading and occupying Iraq. Some argue that Iraqs money belongs to Iraq, and should be held in trust to pay for repair to the damaged infrastructure and for normal governance. The Congressional Budget Office estimates the cost of occupation would be $12-48 billion per year, and occupation would only need to last until 2004 or 2005 before exiting, presumably leaving a puppet administration in place that will deliver Iraqi oil to USA and UK oil companies.

2003 - (march) USA president uses authorities in his International Emergency Economic Powers Act to confiscate the property of the Iraqi government under U.S. jurisdiction and vest the assets in the U.S. Treasury.

2003 - (march) USA General Franks, well aware of the 1999 invasion plan and in concordance on the troop numbers required to quickly restore order, assist establishment of a democratic government and get out of Iraq (as assessed in the 1999 plan) now refuses to supply General Eric Shinseki, the USA army commander with the agreed number following discussion with Rumsfeld.

2003 - (march) USA Navy SEALs seize the huge Basra off-shore oil terminal, of pivotal importance for exporting crude out of Iraq, and the smaller Khwar Al Amaya oil terminal. .

2003 - (april) USA business/military complex attacks Iraq on the pretext of the prescence of unspecified weapons of mass destruction. All major government buildings are attacked and either damaged or destroyed. The Iraqi Oil Ministry building is the only building left untouched. Only a little more than a third of the numbers of troops required to quickly impose civil order are sent. The least prepared units are sent, while the best prepared are held back. No plan or mandate for regulating or restoring civil life is given to the troops. Unsuprisingly, chaos results, with riots, theft, sabotage, burning of buildings, further damage to infrastructure, and the coalescing of previously minor insurrection groups.

The need for a US and UK long term military prescence in Iraq, ostensably to 'maintain order', is achieved.

2003 - (march) Lukoil declares it will sue any oil company developing Iraq's West Qurna oil field for at least $20 billion in the International Commercial and Industrial Arbitration Court. The case could take up to eight years, and all work by any party on the field would be stopped. Lukoil threatens to have the court seize tankers of Iraqi crude to recoup its $3.7 billion investment in West Qurna.

2003 - USA business/military complex achieves its objectives of protecting and controlling the more southerly oilfields. Saudi Arabia co-incidentally pumps at full capacity, something it has never done in recent times. The price of oil falls by $US10 for a few months.

2003 - (april) Iraq - civilian oil field engineers employed by Houston-based KBR travel with the invading USA Army Corps of Engineers to take the highly productive southern Iraqi fields and immediately assess and repair the most productive oil wells and the key oil pipelines, and collection and storage facilities.

2003 - Iraq - Prior to invasion, British Petroleum engineers in Kuwait, and retired engineers from Royal Dutch Shell in England teach troops of the 516 Specialist Team Royal Engineers how to run southern Iraqs oil fields. Immediately post-invasion, a senior BP manager is seconded by the UK government to manage the rebuilding of Iraqi refineries.

2003 - (may) - USA president George Bush signs executive order number 13303 stating "any attachment, judgment, decree, lien, execution, garnishment, or other judicial process is prohibited, and shall be deemed null and void", with respect to "all Iraqi petroleum and petroleum products, and interests therein...that come within the possession or control of United States persons [corporations]." In effect, Iraqi oil is made a safe prospect for any USA oil company, by presidential decree, and regardless of previous contracts or work by others.

2003 - (may) Russia's Yukos oil company signs an agreement worth $US150 billion with China's China National Petroleum Company. CNPC will buy 5.13 billion barrels of oil between 2005 and 2030; the oil to be delivered via a $2.5 billion pipeline from Russia's western Siberia fields to China's Daqing oil field.

2003 (june) - Russia signs a contract with Royal Dutch Shell and a consortium of Russian and Japanese companies to build Russia's first natural gas liquefaction facility in Sakhalin, on the Russian far Eastern coast. Design capacity is to produce 9.6 million tonnes a year. Tokyo Electric Power Company and Tokyo Gas sign an agreement to buy nearly a quarter of the projected production.

2003 - (june) Australia and East Timor agree on the development of the Bayu-Undan gas fields in the Timor Sea 'Joint Petroleum Development Area'. ConocoPhillips announces it will go ahead with its $1.5 billion liquefied natural gas liquefaction plant in Australia's Northern Territory.

2003 - (June) - Chevron oil company is awarded the right to buy an initial shipment of 8 million barrels of oil from Southern Iraqi fields, and thereafter 2 million barrels a month until december.

2003 - (July) - BP oil company is awarded the right to buy an initial shipment of 8 million barrels of oil from Southern Iraqi fields, and thereafter 2 million barrels a month until december.

2003 - (July) - Shell oil company is awarded the right to buy  2 million barrels of oil a month until december.

2003 - (July)  Quote of the month by Paul Wolfowitz, USA Deputy Defence Secretary, in an interview in the July 2003 issue of magazine Vanity Fair-

"For bureaucratic reasons we settled on one issue, weapons of mass destruction, because it was the one reason everyone could agree on."

2003 - Saudi Arabia arranges an extra 800,000 barrels of oil for world markets. Some or all of this may be from its tank farm reserves around the world, perhaps disguising less spare capacity than the world thinks it has.

2003 - Post invasion, commentators speculate Iraqs oil reserves are 200 billion barrels, and will bring an era of 'cheap oil' once again.

2003 - Italian Government sends in troops for "humanitarian" purposes. Italian troops guard a refinery and oil pipeline in Nasiriyah. 19 Italian soldiers die when a suicide bomber attacks the Italian base at Nasiriyah.

2003 - The USA invading force's self-appointed administration, the 'Coalition Provisional Authority', nullifys all Iraq's existing oil lease contracts with any Eurasian country signed in the period 1997-2002 . The contracts were worth about $US1.1 trillion.

2003 - Rumors that the USA controlled puppet governing council intended to privatise Iraqi oil encourages insurgent attacks on oil infrastructure, presumably on the premise the invaders should be denied the "prize" so deeply coverted by Dick Cheney in 1999.  Production of Iraqi oil does not meet expectations due to insecurity and sabotage, especially in the vunerable northern pipelines. The price of oil starts to climb again.

2003 - USA president uses authorities in his International Emergency Economic Powers Act to confiscate the assets of the deposed Iraqi government and vest the assets in the U.S. Treasury. Combined with the Iraqi assets seized in USA, this amounts to $US2.65 billion dollars. This Iraqi money is spent on the invading forces 'costs of occupation', mostly in administration and 'buying off' local resistance.

2003 (may) - Former CEO of Shell Oil USA takes control of Iraq's oil production for the US Government. He delays and obstructs the USA administration scheme to sell off Iraqi oil fields and oil infrastructure to private companies of the invading nation.

2003 (may) - United States, as the occupying power, "facilitates" and oversees the delivery, and distribution of gasoline, liquefied petroleum gas, kerosene, and diesel throughout Iraq. The USA occupying army uses $US2.3 billion of Iraqi money from the DFI not only to buy these products from 'overseas', but to pay for delivery. Army convoy tankers and guarding personnel are paid from this Iraqi fund. With most of Iraq's electricity infrastructure and some refineries damaged, the demand for these fuels for cooking, heating, personal transportation, and private power generation rises. Iraq’s operative refining capacity, already limited, cannot now cope.

2003 - Iran continues to invoice its oil sold in the Asian region in US dollars, but prefers payment in euros or alternative regional currencies. Most Iranian oil sales to europe are already in euros. 30% of Irans oil goes to European markets. Many of Irans imports come from Europe. If Iran had not switched to the euro, it would have experienced significant losses through having to pay for European imports with the depreciating USA dollar. As a result of European trade, 60% of Iran's foreign reserves are now held in Euros.

2003 - Strong Euro, 13% above the dollar, OECD interest rates hit a 50 year low.

2003 (june) - export of Iraqi oil re-commences. Iraqi oil is once more sold in US dollars, not Euros. Large amounts of 'Iraqi' revenue foregone as a result.

2003 - Dollar strengthens once more, treasury interest rates on bonds cut, Asian purchase of the bonds continues, USA banks with petrodollars recycling from the Middle East re-lend with few credit worthy requirements for housing and lifestyle, fueling the property bubble and fueling private debt, including purchase of gas guzzling SUV's. Conditions for the costs of the USA invasion to be met by USA printing money are ideal and unrestrained.

2003 - Strong resentment by Arab feudal chiefs and dictators at US seizing of Iraqi oil leads to Saudi Prince visiting Russia and the Saudi regime discussing closer cooperation with Lukoil and other Russian companies. OPEC countries reportedly are privately much more predisposed to sell oil in Euros, but are presumably too afraid of America to say so publicly.

2003 - (july) - Chad commences pumping crude oil for the first time. The oil takes several weeks to travel through a 650-mile pipeline through adjacent Cameroon to the Atlantic coast. Production is expected to eventually reach 225,000 barrels a day.

2003 - (july) Israel commences operation of its 1.2 million barrel a day capacity, bidirectional Eilat-Ashkelon pipeline. The pipeline links the Mediterranean with the Red Sea, by-passing the Egypts Suez canal. Initial capacity is 400,000 barrels a day.  Both these Israeli ports can handle 'very large crude carriers' (VLCCs), but the Suez canal can't.

2003 - (july) Offshore drilling begins at Sakhalin 1.

2003 - (july) - USA - Hurricane Claudette shuts in about 18% of the Gulf of Mexico's total gas production and about 21% of the GoM's oil production. Production is restored within a few days after the storm.

2003 - (july 25) - USA re-opens the Maryland Cove Point LNG regasification plant. The first tanker unloads 22 million gallons of LNG from Trinidad. The plant will eventually be able to supply 1 billion cubic feet of natural gas a day. At that point it will be the largest LNG regasification facility in the United States.

2003 - ExxonMobils revenue for the year is $US247 billion - an income greater than the annual income of all but 6 countries in the world (USA, Japan, Germany, UK, France, and Italy). ExxonMobil also has the highest profit of any company on the surface of the planet.

2003 - This years USA additional government debt is $US375 billion, most of which will be funded by issuing more treasury bonds.

2003 - USA - at the year-end winter heating season, fuel oil sells for about $US1.28 a gallon.

2003 - USA is now burning almost 9 million barrels of oil a day in motor vehicles.

2003 - US refineries are operating at 93% - 95% percent of capacity, which given downtime for essential maintenance, is in reality full capacity.

2003 - 40% of new passenger cars in Europe are now powered by diesel.

2003 - global diesel supplies expected to grow by 3% next year.

2003 - (august) - Saudi Arabia's light and medium grade crudes sell for only US40 cents a barrel more than its heavy and sour grades.

2003 - (august) USA - largest power blackout in USA history leaves 50 million people without power due to failure cascade in the aging USA grid. 50 billion dollars of economic damage is estimated to have been caused.

2003 - USA electricity generation capacity troubled at the margin by some nuclear power plants possibly having to shut down over summer to repair degraded reactor heads. Nuclear power supplies 10% of USA electricity.

2003 - (october) - Bolivia cancels plans to export  more than a billion cubic feet of LNG a day through Chile to the United States following massive popular protests in the poverty ridden country.

2003 - (december) Indonesia signs a contract with BP to export 500 million cubic feet of liquefied natural gas (LNG) a day of   from its Tangguh facility to ship to USA's Sempra Energy's proposed LNG import and regasification terminal in Baja, California.

2003 - (october) crude oil is $US30.35 barrel.

2003 - (october) gasoline pump price in the UK is 81.3 pence per litre.

2003 - China sold 2 million new cars this year - 70% more than the previous year.

2003 - China, having lost it's Iraqi concession signed in 1997 due to the US invasion of Iraq, now realises it cannot rely on one or two major suppliers in the Middle East. China intensifies its scouring of the world for oil fields to buy into to meet it's rising oil imports needs. It intensifies its 'string of pearls' - military bases in friendly countries protecting the sea sea lanes to China's coastal oil and gas imports terminals.

2003 - (september) a law is drafted in the Russian lower House, the Duma, called ‘The Law on Underground Resources.’ This would prevent private companies such as Yukos from gaining control of undeveloped oil and gas resources still in the ground, and prevent private pipeline routes being developed outside the Russian state pipeline network. Some commentators claim that the votes in the Duma have been bought by some fabulously rich oligarchs so that it cannot be passed.

2003  - (october) Yukos oil and gas makes a bid for its rival, Sibneft. YukosSibneft would together have control of 19.5 billion barrels of oil and gas. This company would then be second only to ExxonMobil (the largest and most powerful company in the world) in ownership of oil and gas reserves. A combined YukosSibneft would be the fourth largest crude oil producer in the world, able to produce 2.3 million barrels a day.

2003 - (october) Russian billionaire oligarch Mikhail Khodorkovsky, controller of Yukos oil and gas, is arrested on tax fraud charges. Khodorkovsky 'obtained' Yukos assets from the Russian state folowing the breakup of the Soviet Union under Yeltsin. His arrest is precipitated by a meetings he held with Vice President Dick Cheney and George H W Bush (of the secretive Washington Carlyle Group), said to be to discuss the sale of somewhere between 25% and 40% of Yukos to ExxonMobil and ChevronTexaco. This would have given the US military-industrial -presidential complex control of the major part of Russian energy resources and pipelines. Unsuprisingly, President Putin is angered by the attempt to subvert Russias interests by de facto selling Russias oil and gas resources, Russias major source of wealth, into American Government hands.

2003 - (november) Russia, China and Korea sign an agreement to go ahead with a project to develop the massive Kovykta condensate field in eastern Siberia. The plan is to pipe the gas 4,887 kilometres from Irkutsk to Manzhouli near the Sino-Russian border. Ultimately it will bifurcate to Beijing and Dalian. At Dalian, a submarine pipeline over 500 kilometres long will run gas to Pyongtaek in Korea. The Kovykta gas field contains between 1.4 - 2.1 trillion cubic meters of natural gas - enough to supply Russia, China, and Korea for more than 30 years at the rate of 34 billion cubic meters of gas per year. The project is estimated to cost US$17 billion. Russia will supply China with 600 billion cubic meters over 30 years, and supply Korea half that amount over the same time period. The three countries would like to deliver first gas supplies by about 2008.

2003  - USA - Roughly 19,000 new natural gas wells were drilled this year.

2003 - The year ends with Dubai medium 'sour' crude having sold for an average price over the year of $26.80 per barrel .

2004 - The US military guards 'US' oil supplies. USA signs a miltary base agreement with Principe and San Tome, two tiny islands off West Africa's coast. Curently Nigeria supplies around 400 million barrels a year to USA, and Angola 110 mb/yr. Offshore Nigerian and Angolan oil might contain 83 billion barrels in the long run. If it could be produced in significant volume it would probably meet demand for 3 or 4 years, according to some estimates. But there are large political and logistic problems in producing it.

2004 - Peace discussions between rebels and Sudanese government. Bitter rebel commanders suggest Chinas oil contracts may be terminated once they share in government power.

2004 - Sudan's government commits crimes against humanity in burning villages, bombing, torturing, and murdering people in order to drive people from their ancestral land to 'clear' land for oil exploration. 4 million have been dispossessed. 2 million are dead. They use guns and planes bought from the Chinese, and sometimes use oil company airstrips and facilities. UN wonders whether or not it is 'officially' genocide.

2004 - China National Petroleum Corp begins trial oil production from a field it almost totally owns in South Darfur, Sudan.

2004 - The Greater Nile Petroleum Operating Co consortium's (majority owned by China National Petroleum Corporation) Heglig and Unity oil fields in Sudan produces 350,000 barrels per day.

2004 - China now buys 10% of its oil needs from Sudan, which has estimated reserves of 563 million barrels.

2004 - (august) - China's state-owned Shenhua Coal starts building the first phase of a large-scale coal-to-liquids plant in Inner Mongolia's E'erduosi. The first phase will cost about $US1.25 billion. Break-even point for the plant is oil at $US22 a barrel so long as China's coal remains around about $US10-$US12.50 per ton. Once operational, phase1 is expected to annually produce 1.08 million tons of coal-derived oil products.

2004 - USA is now importing 60% of the oil it uses.

2004 - Yemen passes its peak of production and starts its decline.

2004 - Highly pressurised supergiant Cantarell complex in Mexico is now expected to "decline rapidly" from last years pressurised production of 2.1 million barrels a day.

2004 - Prudhoe Bay's production has declined to 350,000 barrels of oil a day.

2004 - UK North Sea fields production drops by 10% as decline continues (small fields come into play, but nett of consumption there is an overall loss). Production is now 30% below the 1999 daily average.

2004 - (january) USA - Massive spike in natural gas prices. A severe 3-day cold snap in the northeast results in sudden high demand for domestic electricity. Utility companies invoke the ability to cut supplies to industrial customers on cheaper 'interruptible' supply contracts so as to supply electricity to domestic consumers. Fully a quarter of the gas-fired utilities simply stopped generating electricity and on-sold their natural gas supply as an enormous profit.. Many industries are able to switch to fuel oil, but as oil is largely barged into these regions, supply cannot meet the surge in demand from industry. The supply shortfall is made worse by the policy of keeping only the minimum amount of oil stocks on hand to meet 'projected' demand. The cost of home heating fuel oil spikes high. Some areas of New York run out of fuel oil.

2004 - (january) Saudi Arabia opens its new Haradh oil and natural gas facility. The plant will increase Saudi natural gas production capacity by about 25%. Most of the gas will be used in the burgeoning domestic market. Like Iran, the Saudis are turning to domestic natural gas use to conserve the more easily transportable oil for export.

2004 - (january) New Zealand  - Diesel prices are NZ 65 cents/litre (US 44 cents/litre).

2004 - (february) Japan's Inpex Corporation signs an agreement with Iran to develop the massive Azadegan oil field. Reserves are estimated at 26 billion barrels.

2004 - (february) France's Total and Malaysia's Petronas companies sign a $US2 billion agreement with Iran to build Iran’s first liquefied natural gas (LNG) export facility, using gas from Irans South Pars field. It will have a capacity of 390 billion cubic feet a year, with expected to commence in 2009.

2004 - (March) US Department of Energy predicts oil prices to stay around $29 per barrel for the whole of 2005.

2004 - US Department of Energy forecasts world oil production won't peak until around 2037, asserting -
"The world production peak for conventionally reservoired crude is unlikely to be 'right around the corner' as so many other estimators have been predicting..."

2004 - US office of petroleum reserves report states "world oil reserves are being depleted three times as fast as they are being discovered. Oil is being produced from past discoveries, but the re­serves are not being fully replaced. Remaining oil reserves of individual oil companies must continue to shrink. The disparity between increasing production and declining discoveries can only have one outcome: a practical supply limit will be reached and future supply to meet conventional oil demand will not be available....Although there is no agreement about the date that world oil production will peak, forecasts presented by USGS geologist Les Magoon, the Oil and Gas Journal, and others expect the peak will occur between 2003 and 2020. What is notable ... is that none extend beyond the year 2020, suggesting that the world may be facing shortfalls much sooner than expected."

2004 - The head of the Association for the study of Peak Oil claims the massive Saudi Ghawar fields geological structure may have been damaged by pumping at full capacity, leaving some oil unable to be extracted. This field produces about 5 million barrels per day of the total Saudi output of around 9 million barrels per day.

2004 - (early) A Texas based American oil industry group headed by the former USA secretary of state James Baker (now said to also be a paid legal representative of both Exxon-Mobil and the Saudi Arabian government.) draws up plans for the USA administration which would create an Iraqi (nominally) state-owned oil company to apparently control Iraqi oil and Iraqi oil infrastructure. As Iraqi equity in its industry has been removed and its capital base destroyed, a shrewd guess would see it likely that the company would have to 'farm out' all its assets to overseas companies due to capital starvation (in return for a small percentage of residual profits, probably equal to the food bill for the Iraqi people). A fair speculation would be that it would also have to borrow heavily - from plainly visible or disguised US dollar currency interests. Repayments could possibly be in oil.

2004 - USA "provides" technical assistance and "support" to the Iraqi Ministry of Oil to "define" Iraq’s operational, legal, policy, and "investment frameworks" for the Iraqi oil industry.

2004 - Overall gas depletion in Europe is estimated at about 6% less production a year.

2004 - UK's Energy Institute estimates conventional global oil reserves are declining at the rate of about 4-6% a year, and staffer speculates the peak might be in 2008.

2004 - USA gasoline stocks are at the lowest levels since the 1970's oil shock.

2004 - (march) Petrol prices in USA are about $1.80 a gallon. In UK petrol cost $US5.30 a gallon. A substantial part of the difference is tax on petrol. The price signal in USA is, and always has been, to buy 'gas guzzling' cars with big engines. The price signal in the UK is, and always has been, to buy more economical cars with small engines. Can the USA national fleet abruptly change? In time. One estimate is fifteen years to change over half the fleet.

2004 - (March)  the International Energy Association (IEA), in response to China's sharply increased oil buying, raises their projections of the growth in demand for oil by an additional 220, 000 barrels a day, taking projected daily demand throughout 2004 to 1.65 million b/d.

2004 - (March)  US president re-signs Executive Order (12959) of 1995 prohibiting US oil companies from oil exploration or development with Iran. Presumably American plans are to take control of Iranian natural gas by any or all of - 'precision-strike' missile coercion (most likely); invasion; or sponsoring a coup d'etat and installing a puppet regime (least likely).

2004 - (April) Iran signs a deal allowing Thailand to explore and develop the small Saveh oil block.

2004 - (April) French firm CETAL commences work on Iranian gas pipelines to prevent them from freezing up in the coming winter. Iranians are heavily reliant on natural gas for domestic use, and winter freezes have interrupted supply. They now import much of their refined petroleum products as they have no real refining capacity for domestic use. Gasoline prices are heavily subsidised.

2004 - (April) Iranian oil and energy analyst Ali Bakhtiari tells an audience at the annual gathering of the Association for the Study of Peak Oil (ASPO) in Berlin  "By the end of the year we will see oil at $50 a barrel" .

2004 - (may) energy advisor to George W. Bush energy investment banker Matthew Simmons says for demand for oil to be 'controlled', oil would have to reach $US182 a barrel. At this price, gas prices would also rise, by his estimate, to the equivalent of $US7.00 per gallon. On 2003 experience, his price for natural gas may be conservative.

2004 - (may 1) Saudi terrorists storm the offices of a Houston-based oil company in the oil hub of Yanbu killing six west Eurasians and a Saudi man before being killed by Saudi security forces. Unlike the earlier fire at Abqaiq, production is not affected.

2004 - (may) USA average petrol prices breach $US2 per gallon for the first time.

2004 - (july) Shell admits it has overstated its reserves by almost 4.5 billion barrels. It is fined by the financial regulators.

2004 - (july) China buys oil to build its reserves  - some speculate it is starting to convert dollars of long term dubious value into gold - black gold.

2004 - (july) Chinas crude oil imports for the first 6 months are up by 334.8%.

2004 - USA 'lower 48 states now produce 5 million barrels of oil a day.

2004 - (august) USA drivers use over 9.2 million barrels of petrol a day in the summer 'touring season'.

2004 - (august) Russias privately held Yukos oil company may be forced to stop operations due to a supposed massive tax debt. Yukos supplies world market with about 1.7 million barrels of oil a day, about 2% of global oil.

2004 - (august) Oil prices rise to $US49 a barrel, the highest price since futures started being traded in 1983.

2004 - (september) Russian current oil production peaks at around 9.4 million barrels a day. 80% of Russian production comes from Siberia. It is uncertain what the proven reserves are in the undrilled parts of the region. No new oilfields have been found for 10 years. Russian oil companies currently pump out more oil than is replaced by new discoveries. Field production decline rates are estimated to be between 5% and 10% a year. Commentators guess that if known fields will production peak at 11 million barrels a day in 2010. Others speculate that discovered but undrilled reserves could in time make that ten times higher.

Of the as yet unproduced fields, the largest oilfield recently sold for development is the Trebs-Titov-Central Khorever Plateau group of oilfields in Timano-Pechyora Province. This grouping might have1.68 gigabarrels of oil. While large, this is not a giant field.

There are only two other fairly good sized fields, the Lodochnoye oilfield in Krasnoyarsk (estimated 313 million.barrels) and the Chayandinskoye oilfield ( estimated 365 million barrels). The other 50 or so fields sold are small. Another 100 fields may be sold, but there is little data on their size, but all are known to be smaller than Lodochnoye and Chayandinskoye.

2004 - Russia's giant Samotlor field production falls to 325,000 barrels a day. At peak, it used to produce 3,500,000 barrels a day. Production would have been even less if not for extensive use of USA companies (Halliburton and Schlumberger) to carry out hydraulic fracturing of the formation. As a result, wells are producing over 3 times what they were producing in 2000. In 2000, the wells were producing 5 times less than they were at peak.

2004 - (september) Russias new production since 2000 has now risen to 2.7 million barrels a day, an astonishing amount. Much of the increase has come from application of new technology (such as well perforation, well 'stimulation', directional and horizontal drilling, fracturing of low permeability strata ) to old Soviet era western and Siberain fields, which are known to be mature. These techniques are likely to cause Russian fields to maintain high volume, but play out earlier than currently assumed.

The increased global demand now stands at 5.88 million barrels a day. Russia now meets almost half that increased demand. Russian high volume production is now critical to global supply.

2004 - (september) Shell Oils total reserves fall by an unstated amount. New additions to its reserve estimates equate to only about 20% of this years production. Shell predicts the company will be producing the "equivalent of" 4.5 million barrels of oil per day by 2014. Presumably this includes gas.

2004 - Shell Oil finds moderate sized gas play in western Canada. While big relative to the usually shallow wells now in western Canada, expected daily production still only equates to 0.04% of total North American daily demand. Industry veterans note a field of about this size would need to be found every few months to flatten out the natural gas decline curve of fields in Western Canada.

2004 - (october) Canada - natural gas sells for over $5 per gigajoule.

2004 - (september) Hurricanes shut down many of the Gulf of Mexico wells and reduce production in Texas and Louisiana. Refineries in Louisiana shut. US Southern State crude oil import facilities close. Hurricane Ivan causes underwater mudslides, damaging 102 pipes taking oil and gas ashore. Seven platforms are destroyed, 20 others are badly damaged. 1.5 million barrels a day of oil production ceases. Crude prices surge. Saudi Arabia pumps at full capacity to make up the shortfall, and 11 days after the hurricane, oil is released from the USA strategic reserve.

2004 - (september 24) Hurricane Ivan reduces USA inventories of distillate sharply. Petroleum inventories fall by about 13 million barrels. Crude oil refining is down by 1.3 million barrels overall. Wholesalers draw down their stored inventories to make up the shorfall. Wholesalers inventories fall sharply as a result, at a time of year when they would normally be rising.

2004 - (september) Oil passes the $US50 a barrel price mark at the end of september.

2004 - (september) OPEC is now pumping crude at a 25 year high, producing 30.5 million barrels per day, the highest production rate since 1979. It has no impact on rising prices.

2004 - (october) crude oil prices reach $53 a barrel - a 20 year high. Only the few commentators familiar with 'peak oil' had predicted this level, but not this early.

2004 - (mid october) Oil hits $US55 a barrel.

2004 - (october) OPEC's 11 members pump 30.54 million barrels a day - the highest pumping rate since 1979.

2004 - (october) China signs a $100 billion memorandum of understanding with Iran for joint development of a major Iranian gas field including a 25 year supply contract for liquified natural gas to be produced from the field. Once the field is commissioned, the contract is for Iran to sell oil to China at a rate of 150,000 barrels per day for 25 years, at prevailing market prices. Iran is China's major source of oil.

2004 - (october) USA imports about 900,000 barrels of gasoline a day.

2004 - (mid october) Repairs to hurricane damage now allow all but 200,000 barrels a day of oil to flow again. There is a total production loss of  43.8 million barrels of oil from the Gulf of Mexico for the duration of the shutdown

2004 - (october) USA strategic oil reserves have been filling at the rate of more than 100,000 barrels a day, and are now 666 million barrels. USA adminstration decides to take it to 700 million barrels before stopping.

2004 - (november) OPEC revises its projection of oil demand growth for next year downward. It estimates likely demand for OPEC oil to average 28.2 million barrels per day over the fourth quarter 2004 and first quarter 2005. This is a 2 million bpd drop over the amount its own figures estimate as having been produced in october.

2004 - (november) - China signs an agreement with Brazil to jointly develop undersea oilfields off Brazil's coast, and to jointly construct a natural gas pipeline.

2004 - (december) China imports a record high of 12.1 million tonnes of oil this month (equivalent to 145.2 million tonnes a year). Chinas total oil use, domestic and imported, was 6.38 million barrels a day - a growth in total oil demand of 15.6% for the year. Imports of oil are now rising at the rate of  9% a year. China's rate of oil use may be higher than officials ever anticipated

2004 - (december 31st) China suspends the export of crude oil to help meet domestic demand.

2004 - (december) China signs a 25 year supply deal to import 3.3 million tonnes a year of liquified natural gas from Australia North West gas fields. Supply is due 2006.

2004 - (december) Chinas government-owned China National Offshore Oil Corporation buys a 5% stake in the consortium developing Australias North West Shelf gas reserves. Australias Woodside Petroleum and BHP Billiton each have a 12.5% stake, as does England's BP, America's ChevronTexaco, Japan's Japan Australia LNG (MIMI) and the Netherland's Royal Dutch Shell.

2004 - (late) Indonesia's Petramina oil and gas company cancels ten LNG shipments to Taiwan.

2004 - (december) Qatar, with the third largest gas reserves in the world (its giant field, the North field, holds 25 trillion cubic metres of proven reserves), produced 18 million tonnes of natural gas in the 2004 year.

2004 - (december) Qatar announces the Qatargas II project to deliver gas by train to Europe and then via a contract with ExxonMobil to deliver future supplies to England starting in the winter of 2007-2008. England will fill 20% of its needs from Qatari LNG. It is described as "the biggest deal in the history of the hydrocarbon industry". The Qatar government owns 70% of the project, the US oil giant ExxonMobil owns 30%. It plans to produce 60 million tonnes a year by 2010, which would make it the worlds biggest LNG exporter at that point.

2004 - Qatar's RasGas signs an agreement with Petronet LNG of India to supply 'up to' 7.5 million tonnes of LNG.

2004 - (december) USA Congress warned in testimony by UK energy expert  Dr. Daniel Yergin that "The US is facing a critical five-year period in which, unless new steps are taken by consumers, industry and government, there is significantly increased risk of higher, more volatile natural gas and electric power prices, job losses, demand destruction and industry relocations." Not only is the price of gas to industry going to rise, the price of  natural gas to power electricity generation plants will rise. Thus the cost of domestic and industrial energy will rise. Clearly, compressed natural gas as a substitute for petrol for domestic automotives will be more expensive than it has ever been, even if it retains a margin against petrol.

2004 - (december) USA Congress warned in testimony by UK energy expert  Dr. Daniel Yergin that while USA currently imports 16% of its gas needs from Canada, that supply is likely to slowly decline as Canadian domestic demand increases more quickly than the very modest yearly production increases.

2004 - USA onshore gas exploration reaches record levels. Productive capacity is not expected to grow meaningfully, and in total, is expected to fall below 2003 levels.

2004 - (december) - USA winter natural gas prices for domestic heating reach record high levels.

2004 - (december) - Canada and USA - The Canadian Association of Petroleum Producers say new Canadian gas reserves found in 2004 are the equivalent of 99.5% of 2004 production, a deficit of 0.5%. Most of the new gas is found in British Columbia, which produces only 16% of Canada's natural gas. There are few new fields in Alberta. Alberta has 75% of Canada's gas reserves.

2004 - (december) the Middle East now produces over 10% of world production of natural gas.

2004  - (fourth quarter) Trend for increasing US dependance on selling government bonds continues. This years USA additional debt is $US413 billion, most of which will be funded by issuing more treasury bonds. Total accumulated USA Federal Government Debt reaches $7.6 trilllion, funded by $4.4 trillion in publicly held Treasury bonds and T-bills. Almost half  the $4.4 trillion publicly held bonds are owned offshore - double the amount held offshore in 1992. If the world is to continue to accept US dollars, all payments for oil must continue to be in US dollars only, as by itself, the dollar has little intrinsic value.

2004 - (fourth quarter) USA Federal Government debt owed to US Social Security Trust Funds reaches an all time high of $3.1 trillion. $US1.8 trillion is now owed to the Social Security Trust fund alone via treasury bonds. Continued raiding of  Trust Fund surpluses to help pay the huge USA debt means the cash in the funds is replaced with treasury bonds whose value depends on the fate of the dollar, which depends on the fate of the 'petrodollar'. The USA Government will not be able to replace the market value of the money it has 'borrowed' from the funds in even the medium term, let alone the long term. Medical benefits and retirees pensions will necessarily be extremely limited when the taxpayer base shrinks as oil prices climb. Bonds must be issued to fund future shortfalls. If the US bonds are to have any value, the dollar has to be backed by oil, as in itself, the dollar has little intrinsic value.

2004 - The USA government-run Pension Benefit Guaranty Corporation administers payment of retirement benefits of nearly 500,000 workers and retirees covered by around 2,700 business sector pension plans that have terminated. The Corporation now also insures around 42 million American workers (about a third of the workforce) in more than 44,000 private-sector pension plans in case the companies fail and can no longer pay out their pension liabilities. It is funded for occasional failures in any given industries, not collapse of whole industries.

2004 - USA has experienced the highest budget deficit in history - $US500 billion. Interest rates on US treasury bonds are at historic lows, but are raised slowly to convince Asian banks to continue buying bonds. Asian banks, and particularly China and Japan, hold 43% of treasury bonds, whose value depends on oil backing. Neither wishes to rock the boat, especially as it is uncertain how much of the Middle East oil reserves USA may ultimately control. High oil prices are in both the Asian banks interests (to support the dollar) and the USA interest (to show foreign banks that Middle East oil backing continues to make the treasury dollar bonds worth buying; thus financing the deficit and the Iraq occupation).

2004 - USA trade deficit (cost of foreign goods imported less money received for US goods exported) reaches $700 billion per year. The largest part of the deficit is for imports of gas and oil, not Chinese and Japanese trade goods, as popularly supposed.

2004 - USA has trillions in consumer debt - per capita, the highest  in the world. Only a strong dollar, backed by oil, prevents interest rates rise, and collapse of the consumer debt bubble, with consequent recession.

2004 - Iran signs a $70 billion energy agreement with China. China's state oil company, Sinopec, agrees to buy 250 million tons of LNG over 30 years from Iran, and develop Iran's giant Yadavaran gas field, and jointly build related petrochemical and gas industry infrastructure, including pipelines. The second phase will involve building a 386 kilometer pipeline in Iran to the Caspian Sea. Ultimately, the Iranian pipeline will link up with a pipeline planned to go from northwest China into Kazakhstan.

2004 -(december 28) Iran announces plans to have an international oil trades bourse, adding to the NYMEX bourse in New York and London's 'International Petroleum Exchange' bourse (both are owned by oil-connected USA and UK interests, and operated by an Atlanta, USA, corporation). The USA government prohibits USA companies to trade with Iran, and therefore the USA government prevents it's domestic oil and petrochemical companies from buying or selling on the bourse. The oil trades will be denominated in euros and transacted over the internet. It solves the problem of lack of a euro-denominated benchmark standard. The three current oil benchmarks - Brent crude (UK), West Texas Intermediate (USA), and Dubai (UAE) are all USA dollar denominated. A euro denominated oil trading benchmark will significantly add to the value of the euro. It will save Europe the bank fees involved in converting US dollars back into euros. Over time, it will remove some of the dollars 'black gold' backing. Iran already trades with Eurasia in euros. The bourse will also make oil-for-carbohydrates barter deals easier for Iran. For example, Iran could swap oil for grain (China has bought large tracts of maize-growing land from the Zimbabwean dictator Mugabe). If it goes ahead with this commercial activity, Iran's fate is likely to be sealed. Iran plans to start trading on March 20, 2006, the Iranian New Year.

2004 - (november) Russias Putin publicly considers the idea of switching its trade in oil from US dollars to Euros at a summit of European leaders in the Urals. Russia is now the worlds biggest producer of oil by volume (bigger than Saudi Arabia). More than half of Russias oil trade is with West Eurasia. This follows the effective re-nationalisation of the Yukos oil company, and may be a 'straw in the wind' to the erosion of the petrodollar. Unlike Saudi Arabia, Russias reserves are not massive enough to allow it to remain as number one for long.

2004 - Denmarks' oil field may have peaked at 50% of estimated ultimate recoverable reserves of oil (around 3 billion barrels), according to one commentator using the Hubbard linearization technique.

2004 - Ghawar, the world's largest oilfield is now producing about 4.5 million barrels a day. One commentator estimates the decline at about 8%. Between 30% and 55% of the fluids pumped up the well are water. In a presentation to CSIS , Saudi Aramco reveal (pdf) that the Ghawar field is 48% depleted.

2004 - Oil output from China's domestic fields is a total of 175 million tonnes for the year, 2.9% more than 2003. Oil consumption for the year is 288 million tonnes. This is16.8% higher than for 2003.

2004 - China imports about 113 million tonnes of crude oil.

2004 - China's largest oilfield in Daqing continues to decline, producing 46.4 million tonnes for the year.

2004 - Both China's second biggest oilfield at Shengli, and it's third biggest, at Liaohe, continue to decline. Field-edge drilling and reservoir pressurisation are being used to maintain production levels.

2004 - China displaces Japan as the second highest importer of crude oil in the World.

2004 - Chinas total energy use from renewables - hydro power, solar, and wind - reaches 1%.

2004 - China sold 2.4 million new cars to it's citizens, 20% more vehicles than last year.

2004 - China increases the amount of automotive fuel it burns by 20% relative to the previous year.

2004 - There are now about 13 cars per 1,000 people in China. Bicycles are a major form of non-recreational personal transport.

2004 - there are now about 600 cars per 1,000 people in USA. Bicycle barely register as a form of non-recreational personal transport.

2004 - China's total oil consumption for the year is the equivalent of 1.3 barrels of oil per citizen.

2004 - China's nett oil imports for the year are about 879 million barrels (120 million tonnes), equal to 2.40 million barrels a day. This is about 40% of China's total oil consumption.

2004 - By years end, USA consumes oil at the rate of 19.7 million barrels of oil a day

2004 - USA remains - by a huge margin - the worlds's highest consumer of oil, consuming the equivalent of 25 barrels of oil per person in USA.

2004 - By years end, global daily oil consumption is now about 83 million barrels a day, 17 million barrels a day more than earlier expected.

2004 - Growth in oil demand in USA, originally thought to have increased by 2.4% over last year - or 484,000 barrels a day - is found to have in reality been nearly 50% greater. The USA increased its consumption by 3.5% for the year, or an additional 697,000 barrels a day more than last year.

2004 - diesel fuel in USA averages $1.81 per gallon for the year, and the trucking industry spent $62.6 billion on diesel.
USA now uses about 3.7 million barrels of crude per day in producing diesel.

2004 - USA uses about 8.8 million barrels of crude a day in producing its daily petrol use. A barrel of crude contains
159 litres/42 US gallons. Once refined, this barrel of crude oil will yeild 75 litres/about 20 US gallons of petroleum ('gasoline').

2004 (december) - USA now imports about a million barrels of refined petroleum per day from overseas refineries.

2004 - USA natural gas use is now about 15% higher than 1999, mainly due to increasing use of gas to generate electricity. The unregulated and unplanned USA 'free' market has resulted in more private gas fired plants being built than there is reliable gas supply.

2004 - USA - Roughly 22,000 new natural gas wells were drilled this year. The national average per-well production is now down to about 146 million cubic feet of gas per day.

2004 - International Energy Agency says rate of demand grew faster in 2004 than any year since 1976.

2004 - the number of private cars on Britain's roads is estimated at about 29 million.

2004 - the number of private cars on Europe's roads is estimated at about 192 million.

2004 - small cars make up 33.4% of the European Union fleet - about 64,000,000 small cars.

2004 - Toyota estimates it will sell 10,000 petrol-electric hybrid cars in Europe next year.

2004 - small cars make up 14% of the USA fleet.

2004 - Estimated 'world car population' is now 740 million.

2004 - The year ends with the preferred, easily refined Dubai 'sweet' crude having sold for a price averaged over the entire year of $33.60 per barrel.

2004 - by years end, knowledgeable commentators predict oil to range between $US45-$US60 a barrel, i.e. EUR36- EUR50 a barrel for 2005. At least one commentator suggests $US75-90 will not choke off demand.

2004 - crude oil production prices have remained at about
$US6 per barrel for non-OPEC oil producers and at about $US1.50 per barrel for OPEC oil producers.

2004 - The International Energy Agency says non-OPEC oil producers are currently producing 50.1 million barrels a day (excluding oil condensate liquids from natural gas wells).

2004 - Saudi Arabia earns about $US116 billion in net oil export revenues, and nearly 80% of state revenue. This is 35% higher than 2003. Oil, gas, and oil product revenue remains virtually the sole source of income for the Saudi dictatorship. Year end budget surplus is about $US26 billion. Public debt is around $US164 billion, and foreign assets about $US110 billion, making a nett negative 'position' of around $US54 billion. Population growth is the highest in the world and unemployment remains around 13%.

2004 - The International Energy Agency lists countries exporting at least 1 million barrels of oil per day. These countries are responsible for exporting 38.3 million barrels of oil per day. The top three nett oil exporting countries are Saudi Arabia (8.73 mbpd), Russia (6.67 mbpd) and Norway (2.91 mbpd), a total of 18.31 mbpd. These three countries are now the 'big three', making up nearly half of the total net oil exports from the top oil exporting countries of the world. But Russias reserves are expected to peak in about 2012, and Norway will peak before then.

2004 - USA - A years end survey of 32 firms (86% in the food and beverage industry) by IBM Business Consulting Services and the Grocery Manufacturers Association reveals transportation costs have risen by 23% in the food, beverage and consumer products industry since late 2001. Overall, these increased transport costs represent 6% of gross revenue for these busineses. Transportation costs have risen to an average of $US1.69 per mile. The companies include mega businesses with annual revenue of $1 billion or more such as General Mills, ConAgra Foods and Procter & Gamble. In response to these cost increases, new efficiencies are being systemically embedded - no partial loads are shipped, and some loads are being shifted to rail, which for some commodities is becoming a cheaper option.

2005 - Houston petroleum consultant estimates, on an inflation-adjusted basis, pump prices in USA would have to be $US5.10 per gallon to even equal the 1980 price. He does not mention the recession that followed.

2005 - (new year) by years end, one analyst projects the possibility oil may be consumed at the rate of 86 million barrels a day by the fourth quarter. This is 3 million barrels a day more than was consumed in 2004. This would be a total annual demand for production of an additional 1,095 million barrels a year by the end of 2006 - well in excess of last years 'cushion' of supply over demand of about 7.2 million barrels! There is no evidence Saudi Arabia has the 'extra' pumping capacity of 3 million barrels a day it is claiming, and that might meet this shortfall.There is no evidence there is spare pumping capacity  of refinable oil anywhere at this time. Using these projections, the implication is that there would be a theoretical supply shortfall 3 days into the new year in 2006. Even taking into account the extra oil no longer required for US strategic reserves, the supply shortfall would still appear on the third day of the new year in 2006. If true, [January 2006 -  it wasn't, supply and demand are almost perfectly matched] this would be an historic event in the very brief oil economy.

2005 - International Energy Agency (a conservative forecaster) forecasts daily oil consumption to rise to 84.3 million barrels a day this year. This is about 1.3 million barrels a day (475 million barrels a year) more than 2004, and on last years consumption levels, this forecast implies that there would be a supply shortfall 6 days into the new year in 2006. Taking into account the extra oil no longer required for US strategic reserves, a supply shortfall would appear 8 days into the new year in 2006.

2005 - (january) China's vice president Zeng Qinghong visits Venezuela and signs an agreement on a number of bilateral areas of  cooperation, including an agreement facilitating oil sales to China.

2005 - (january) India signs a bilateral contract with Iran to buy 7.5 million tons of liquified natural gas a year, the contract to run for the next 30 years.

2005 - USA "almost 200,000 megawatts of gas-fired power plants have been installed [in recent years], equal to one-fourth of the country's total installed capacity in 2000."

2005 - Demand for LNG (liquified natural gas) has reached such heights that it exceeds current capacity to liquify it for shipping. Once sufficient liquification facilities are built to meet strong Asian, European and American demand, there will not be enough highly specialised liquid gas transportation vessels to carry the liquid gas.

2005 - Russia's major gas producer, Gazprom, seeks to develop new fields in the northern and continental shelf regions as its  mature major fields in Western Siberia are now declining and experiencing drops in production of 20-25 billion cubic meters a year.

2005 - (january) Gazprom signs Memoranda of Understanding with ChevronTexaco, Statoil and PetroCanada in its efforts to partner with North American companies with gas marketing and re-gasification facilities. Gazprom intends to develop a train to make LNG near its new Barents sea giant fields. It also intends to make easily-shippable synthetic oil from the gas.

2005 - (january) The U.S. manager of Toyota's advanced technologies group, when asked when fuel cells cars would replace gasoline-powered cars replies "If I told you 'never,' would you be upset?". While American car makers embrace an energetically and logistically impoverished idea - hydrogen fuelling - Toyota embraces and refines high fuel efficiency hybrid gasoline-electric cars.

2005 - (january) New Zealand  - Diesel prices are now NZ 93 cents/litre (US 72.5 cents/litre)

2005 - (january) Turkey uses 2.6 billion cubic metres of gas more than it has contracted for from its second largest supplier, Iran. How much of this extra demand is actually Israeli demand (Turkey on-sells some if its Iranian gas to Israel) is unknown.

2005 - (january) Turkey, an American ally, "expects" to buy an additional 6 billion cubic metres of Iranian gas above its existing 25 year contract by 2007.

2005 - (january) Iran raises the price of its gas exports to Turkey by 4.5%. Turkey (?Israel) doesn't want to pay, and goes to the International Court of Commerce for a ruling. The ruling is due in September.

2005 - (january 31) - light sweet crude is US$48.20.

2005 - (march) Saudi officials claim they have raised their production of oil to 9.5 million barrels a day.

2005 - (march) USA buys oil from these suppliers, in Million Barrels Per Day (rounded) -
Canada 1.98, Mexico 1.64, Saudi Arabia 1.62, Venezuela 1.51, Nigeria 0.95, Angola 0.67, Iraq 0.54, Russia 0.46, UK 0.44, Algeria 0.37, Ecuador 0.30, Virgin Island 0.27, Norway 0.26, Kuwait 0.20

2005 - (february) Indonesia hit its lowest production level in 34 years of pumping - 942,000 barrels per day. Continued depletion plus increased internal consumption means that Indonesia is now a nett importer of crude. Domestic demand for oil and gas increased by around 50% in 2004.

2005 - (february) Saudis produce 9.2  million barrels a day to meet increased world demand.

2005 - (february) USA drivers use over 8.8 million barrels of petrol a day in the winter low demand season.

2005 - (march) USA imports 14.6 million barrels of oil a day of the total of 20 million barrels of oil a day it consumes.

2005 - (march) The price differential between the more difficult and expensive to refine 'heavier' (more viscous) oils and 'sour' (higher sulfur content) crudes and the easily refinable 'light' 'sweet' (low sulfur) crudes is about $15 a barrel. At this time inventories are being built for the summer driving season. In addition, new standards introduced in the last two years in USA, Europe, China, Canada, Japan, Australia and India require less sulfur in petrol. These standards reduce the yield of gasoline and diesel per barrel of crude oil, and therefore reduce the refinery profit. Heavier, higher sulfur 'sour' crudes yield even less gasoline and diesel, and are not preferred for that reason.

2005 - (march) Saudis produce 9.5 million barrels a day to meet increased world demand.

2005 - (march) US petrol still $US2 at the pumps.

2005 - (first quarter) The president of China's Sinopec Economics and Development Research Institute predicts China's oil consumption will double over the next 15 years to more than 10 million barrels of oil per day. As China reserves would only last 17 years at its much lower 1999 consumption rate if it relied soley on its own oil, it is clear that China will be looking to buy up to 8% of current (Q1 2005) daily world production. But in 15 years time there will be a 739 million tonne (about 15 million barrels a day) shortfall in annual world supply if demand averages at 1999 levels in the intervening years. A worldwide 15 million barrel a day shortfall is not a good time to be looking to buy an additional 5 million barrels a day over existing (2004/5) purchases! Perhaps the intention is not to buy them at all...

2005 - (february 15th) - Unverified 'leaked reports' of a second speech supposedly by China's previous Minister of Defense and vice-chairman of China’s Central Military Commission, Chi Haotian, has the Chinese Communist Party worried about its continued existence, and discusses a need to emulate Hitler in the quest for "more living space". He supposedly states openly that The United States, Canada and Australia are the only places large enough to accommodate Chinese needs for unpolluted air, water and land. The racist and xenophobic speech advocates a suprise attack on the USA using China's "biological weapons" to depopulate USA ("clean up") as a prelude to conquest, or, if that fails, implying the use of electro-magnetic-pulse from a sub-space overhead nuclear explosion to 'jam' USA operational electronics, followed by simultaneous explosion of 'clean' neutron bombs - presumably mostly 'small suit-case sized' devices planted in major cities, and some possibly delivered from satellites (Shen 'cyberwarfare' neutron device series ).

This 'speech' - if true - also says China is also working on genetic bio-weapons to kill everyone except (quote) "yellow people", but admits - "in recent years, we have been conducting research on genetic weapons, i.e. those weapons that do not kill yellow people. But producing a result with this kind of research is extremely difficult". The supposed speech advocates multidimensional war - economic, electronic, biological and  nuclear - whose chief element is surprise, copying the Japanese suprise attack on Pearl Harbour, but with either viruses or 'clean' neutron nuclear bombs ("...We are capable of achieving our purpose of “cleaning up” America all of a sudden...It is indeed brutal to kill one or two hundred million Americans. But that is the only path that will secure a Chinese century, a century in which the CCP leads the world."..etc.) .This may be propoganda from one side or the other...or it may not.

In the event it is true, but not just the raging of a 'fading star' of the Korean war generation, then clearly the destruction of large parts of the USA infrastructure by low-yield but 'clean' (no residual fissionable material causing cancers for decades) neutron bombs - with or without nerve gas or anthrax attacks in every major subway - would not prevent retaliation by USA's 56 nuclear powered attack submarines. As the USA does not possess small yeild neutron bombs, the resulting 'high yeild' nuclear conflagration in China and decades of 'hot' background radiation would make China's 'victory' over USA utterly meaningless. Both countries would be crippled. (The wild card is whether or not China can find and destroy USA nuclear submarines, thus making an attack on mainland USA almost reprisal-free.)

But China would in effect be crippled forever. Paradoxically, the Chinese use of neutron weapons would mean USA's infrastructure would remain in place, and a slow recovery would be possible. Chinese infrastructure, on the other hand, would have to be built from the ashes up.

Even with USA and Chinese oil imports dramatically cut, the rest of the world will continue to use oil and gas at an increasing pace. The decline curve may flatten a little, but only by two or three decades. As a result, even in a post-conflagration world, building costs are likely to be much higher than today, and to increase in price over time. Chinas huge flow of overseas income would largely no longer exist, as its factories and infrastructure would have passed the 'tipping point' of such extensive damage it is un-financable. The cost to China of fully rebuilding its infrastructure would ultimately be so prohibitive that China would likely break up into a series of relatively rich (coastal) and poor (inland) loosely federated nation states. (Global infrastructure contains a truly enormous but 'once only' subsidy of decades of cheap oil. Those who 'burn' their lucky gift will never ever get another.)

2005 - (early 2005) - On the 23rd of march an isomerisation unit at BP Texas City's refinery explodes as workers try to start it up after maintainence. 15 workers die and 170 people are injured. The failure is attributed partly to mechanical failure and partly lack of a flare to safely burn off combustible material in the unit as it was being re-started. In may, at the same refinery, a different unit with thin and eroding pipes, had experienced a pipe rupture and fire in 2004. A further unisolatable weld erosion in the same unit, known to be a "serious safety risk", is allowed to run for 3 days until another unit closed for maintenance is back in operation. In order to isolate the defective unit so it can be safely shut down it would be necessary to close off multiple other units. Shutting down units at this plant carries some risk. It was considered the safety standards at the refinery were not high enough that the risk presented by shutting multiple units was higher than the risk of keeping a defective unit operational for a few days. The U.S. Chemical Safety and Hazard Investigation Board calls for BP to appoint an independent panel to assess BP's corporate safety culture, and BP's mechanical integrity programs at BP's five USA refineries.

2005 - (march) US Department of Energy said it expects prices to stay near or above $50 per barrel for the rest of 2005, making their prediction of just 12 months ago wrong - a 40% error margin in only 12 months!

2005 - (march) For the first time, a USA Government report admits what has been obvious to the rest of the world for some time "World oil peaking is going to happen....[the] timing is uncertain". It advocates early governmental intervention, minimising public consultation as it delays an already overdue response. It presents three possible scenarios, depending on when oil peaks. In the worst case - which is more likely to be the actuality  - they tell the truth, but couch it in dense and obscuring language - "if mitigation were to be too little, too late, world supply/demand balance will be achieved through massive demand destruction". "Demand destruction" is a euphism for "recession", a term the authors fear using. "Demand" for oil would be "destroyed" because a recession is characterised by failure of businesses (most importantly, the small businesses that employ most people), unemployment, people stop spending, and cut back in luxury activities such as travel, huge government debt as tax base erodes and welfare skyrockets, failure to repay house loans, huge increase in bankruptcy filings, and so on. [3]

2005 - By years end, one estimate is that 92% of all the oil used in the USA will be imported (some domestic oil will be held in reserves for strategic reasons).

2005 - (april) US strategic crude oil reserves have recently been filling at around 250,000 barrels a day and are now nearly full, providing a buffer in case of 'price spikes' in the Middle East if it attacks or invades Iran.

2005 - Iran considers increasing exports of liquified natural gas (LNG) as oil field production declines.

2005 - Iran produces around 4 million barrels of oil a day, 1.5 million barrels are used domestically. Iranians also use large amounts of kerosine for both heating and for cooking, resulting in high levels of air pollution. Iran imports Caspian Sea oil for its refineries in the heavily populated north, conserving part of its oil in the southern oilfields for export.

2005 - Iranian opponents of gas exports claim by 2010 domestic demand for gas will be 42 billion cubic feet per day (bcfd) - far in excess of the present rather limited production. Critics estimate using gas to pressurise oil fields to maintain pumping rates will require 20 bcfd, 5 bcfd will be required for industrial and petrochemical use, 7 bcfd for electric power production, and10 bcfd will be needed for commercial, residential, and automotive compressed natural gas.

2005 - Iran's electric power consumption grows by 7% a year. It must triple electric supply capacity within the next 15 years to meet projected demand.

2005 - Iranian natural gas production is 25 billion cubic feet per day, which includes production from the first three phases of the giant South Pars gas field. Iran's giant gas fields are only just beginning to be tapped.

2005 - Iranian opponents to natural gas exports claim that a CNG (compressed natural gas) program to power vehicles will need to be in place by 2010 to replace the estimated 63,000 barrels a day of gasoline that will be being consumed by then. By 2010 gasoline for domestic consumption will not meet demand. The further development of South Pars will barely keep pace with existing domestic demand.

2005 - The population of Iran is now 70.7 million. Half of Iran's population is now under 25 years of age. Unemployment is around 11%. Nearly a million jobs a year must be created to keep unemployment at this rate.

2005 - Oil and gas journal reports Iran is losing oil productive capacity of 350,000 barrels day every year, with the decline rate possibly reaching 500,000 barrels day every year by 2010. The estimated decline rate of onshore fields is now 8% a year; the decline rate for offshore fields is now 13% a year. Overall, crude oil production is "stagnant", despite 600,000 barrels per day being added to production from foreign investment since the mid 1990's. New production simply compensates for decline in the aging fields.

2005 - (april) US presidential commission into pre-war intelligence failures finds the CIA believed second hand reports from an informer described as "crazy" by his German intelligence handlers, and by his friends as a "congenital liar" without doing the usual checks on the informants reliability. The informants numerous unsubstantiated lies were the basis for the presidents spy agency to be able to say to the presidential/military administration that Iraq had weapons of mass destruction (later slyly watered down to WMD "programmes"). The report officially confirms that Iraq had no weapons of mass destruction (as the UN inspectors had already reported). It is officially confirmed there were no programmes involved in producing them. The given reason for USA and its minor supporters acting essentially unilaterally outside the International System (UN multilateral system) in invading Iraq was based on lies. The real reason is congruent with the 2001 energy strategy of using soldiers to invade and base themselves (or their proxies) in unstable countries with significant oil reserves.

2005 - (april)  U.S. Department of Defense will reportedly spend $100 million in "the next few years" to establish a network of police forces and 'special-operations units' "that can respond to various emergencies, including attacks on oil facilities" around the Caspian Sea oil and gas fields claimed by former USSR countries.

2005 - Russia expands its Caspian fleet to defend its claims to offshore fields in the Caspian Sea.

2005 - Tension simmer in the Bakassi Peninsula in West Africa, a narrow stretch of land claimed by both Nigeria and Cameroon, and which may contain gas and oil reserves.

2005 - (april) Saudis offer to produce at full capacity - 11 million barrels a day - to meet increased world demand. But this extra supply is made up of higher sulphur medium and heavy crudes not easily used by many refineries, not the 'Saudi light' the industry had been expecting.

2005 - (april) The price differential between the more difficult and expensive to refine 'heavier' (more viscous) oils and 'sour' (higher sulfur content) crudes and the easily refinable 'light' 'sweet' (low sulfur) crudes is about $10 a barrel. In the USA, summer 'driving season' petrol stocks are well in hand, and there is a respite before the build up for winter fuel oil.

2005 - Any increase in supply of Saudi light crude simply will not be available until about 2012. In the interim, existing Saudi light crude supplies will be declining year on year. 2.5 million barrels a day nett are hoped for, by that time - relatively inconsequential in the large scale of global oil decline by that date.

2005 - Saudis are now pumping 7 million barrels of salt water a day into the giant Ghawar field to keep the pressure up to maintain production rates - more water is being pumped in than oil was pumped out at Ghawar's peak of production in 1981. Ghawar produces 60% of Saudi oil. The decline of pressurised fields in general principle is likely to be 'steep' and 'abrupt' rather than slow and gentle. If true, this is very troubling.

2005 - (april) Bank of Montreal analyst predicts Saudi Arabias oil fields decline rate will be "...among the world's fastest as this decade wanes..." and estimates that the Saudi Ghawar field, the biggest oilfield in the world, has already peaked.

2005 - commentators question why even new Saudi fields are being pressurised with water. This technique is usually reserved for aging fields. The suspicion is that the fields are being pumped at a very high rate, which means they would peak earlier than would otherwise be expected.

2005 - Saudi Aramco claims the size of its oil reserves have remained the same since 1990; they also claim they have increased slightly from 258gb to 259gb, due to better extraction techniques. These claims are met with skepticism by those following the Peak Oil debate.

2005 - (april) Saudi Aramco oil company announces it has  "ambitious expansion plans" to raise production capacity to 12 million barrels per day. Aramco claims plans to develop more crude in the "long term" will raise that to 15 million barrels a day. Aramco make the huge claim that oil can be produced at these rate for about the next 50 years. They produce no huge evidence to back the claim. Saudi Aramco's own statistics show existing Saudi fields falling short of previous production by 600,000 to 800,000 barrels per day every year. If this rate of decline continues into the future, the short term expansion of an additional 3 million barrels a day that the Saudis claim (12 mbpd claimed future capacity, minus 9 mbd present production) will be eaten up by field production declines in about 5 years. Production will then be back to where it is today until - or if -  the other 'crude developments' come on stream.

2005 - ExxonMobil, in its 'The Outlook for Energy: A 2030 View' presentation projects that non-OPEC crude oil and oil condensate production will plateau before 2015, thereby becoming the first oil company in history to fully publicly admit peak oil is reality. ExxonMobil, an oil company, suggests the unmet demand can be met by increased fuel efficiency in cars (!!), and by OPEC increasing production. However, as one of the founders of the Association for the study of Peak oil and Gas notes -

"This assessment [of increased OPEC production] is somewhat ominous… such production increases are only possible from Iraq, Saudi Arabia, Kuwait, and the United Arab Emirates. For these countries, and indeed for most OPEC members, petroleum and petroleum products are their only significant export. As such, they have a vested interest in obtaining the best possible price for their non-renewable resources. OPEC nations would be quite unlikely to increase production as rapidly as needed unless compelled to do so." - Colin Campbell, ASPO.

2005 - (april) Australian officials say new projects starting up may allow oil output to rise in 2006 for the first time The last five years have seen output decline from Australias aging fields. Production is expected to resume the decline once more in 2008, as exploration in Australia has failed to find significant new oil deposits.

2005 - (april) Australian Treasurer Peter Costello publicly warns that Australia is running out of oil for export -
"The reason why Australia's crude oil exports have fallen over recent years - while world demand and prices have increased to record levels and LNG exports are booming - is that some of our oilfields are approaching the end of their productive lives..."

2005 - (april) Australia needs to import 30% of the oil it burns domestically. The Australian Petroleum Production and Exploration Association estimates if existing consumption - and consumption increases - continue, in theory Australia will need to import 78% of its oil requirements in 2015. Obviously, recession-mediated demand fall off will reduce that percentage requirement.

2005 - Denmark likely to reach the peak of production this year, others say "within 3 years".

2005 - industry watchers forecast Brunei to reach peak of production in 2006, others say sometime with the next 3 years.

2005 - (april) Japanese government releases survey findings that China's Chunxiao and Duanqiao gas fields on the Chinese side of the median line between China and Japan in the middle of the East China sea are geologically linked to untested gas reservoirs identified on Japans side of the line. Japan makes moves to accelerate test drilling for natural gas on it's side of the line, fearful China will "access" Japanese gas structures. Protests in China over new Japanese school books glossing over Japans never-admitted and never apologised for large-scale crimes against humanity in China in World War 2 may be co-incidence. Or maybe not.

On April 1, the government released survey findings that China's Chunxiao and Duanqiao gas fields are linked to Japan's gas fields. As a countermeasure, the government plans to begin procedures in the near future to grant private developers the right to test-drill on the Japanese side of the median line.

2005 - (april 7th)  the International Monetary Fund says the world is facing "a permanent oil shock". It envisages permanent high prices for the next two decades.

2005 - (april 19th) US president Bush admits in public what he has known since at least 2001 (and probably a lot earlier) "I mean, we're just going to have to change our habits. And that's one of the reasons why I funded the hydrogen-powered automobile initiative, fully recognizing that, you know, with [within] the decade we're going to have to think about how to drive different -- you know, power, power our automobiles. It's a -- the hydrocarbon society will still be with us, but it can't be with us to the extent it is today." Of course, hydrogen power is very energy expensive, and can never ever even begin to replace petrol. Bush also notes the need for more investment in refineries - an oblique admission that the Saudis 'excess capacity' is not the sweet light crude the world wants, but the heavy sulphur containing crude that requires specialised refineries to be able to deal with it.

2005 - (april 15th) Volkswagon abandons work on its extreme fuel efficient car (the prototype does better than 265 mpg). Even with a simple single cylinder diesel engine, it says it cannot produce a  popular economy car for less than €20,000 ($US25,900), which is too expensive. Their existing production model, the VW Lupo, is a 1.2 litre (turbocharged), lightweight, small diesel car and already does a thrifty 3 litres to the 100 kms (~ 78 mpg) or 33.3 kms per litre, and is significantly less expensive at €15,100 ($US19,500). It engine switches off automatically when stopped for longer than 4 seconds, and automatically re-starts when the foot is off the brake.

2005 - (april) The record for going the furthest on a single tank of fuel is broken by a Fifth Generation Golf 1.9 Turbo diesel, driven in an epic fifteen hour trip from Germany, across Europe, to the Czech Republic. Fuel economy was 53.4 mpg.

2005 - (april) work starts on the world's longest subsea gas pipeline (1,200 kilometres), running from Norway to Great Britain. When completed in 2007, its capacity of 70 million cubic metres of natural gas a day will be enough to meet about 20% of UK's current gas requirements. UK's former Minister of Energy Brian Wilson predicts that by the year 2020, 70% of UK's electricity will be generated by burning gas. 90% of that gas will have to be imported. His "working assumption" is that global oil and gas reserves "continue to be significantly underestimated". He provides no data to explain why he makes this assumption. He provides no figures for his assumed "underestimation".

2005 - (april) Americas Secretary of State Rice tries to prevent a gas pipeline to India to meet its gas requirements, telling reporters she had "communicated" to the Indian government Americas "concerns" about "the gas pipeline cooperation" between Iran and India. Unsuprisingly, India's Prime Minister Singh tells her the gas is necessary for India's "soaring" energy needs, and that "We have no problem of any kind with Iran."

2005 - (february 4th) Russia abandons its de facto peg to the US dollar, and alters its exchange rate to take into account the euro as well as the dollar.

2005 - (may)
Americas Secretary of State Rice tells Russias Putin "what Russia can do", that is, "What Russia can do is to adopt policies in its energy sector in terms of the development of its energy sector that will increase the supply of oil both in the short term . . . and the long term..." She wants Russia to allow her countries' oil companies to drill for Russian oil...Rice is a former director of the oil company Chevron Texaco.

2005 - (april) Russia announces it will build a pipeline
from Taishet in eastern Siberian to Skovorodino, near the border between China and Russia - a distance of around 2,000 kilometre. It will then build a branch pipeline into China before possibly continuing on for another 2,000 kilometres to Perevoznaya, only about 600 kms by sea from Japan.

2005 - UK now imports 50% of its domestic coal requirements from overseas.

2005 - UK now obtains 30% of its electricity requirements from coal.

2005 - (april) Saudi energy minister again repeats claims Saudi Arabia has 'spare' capacity of 1.5
million barrels per day over the11 million barrels per day it is already pumping, and can add a further 1.5m b/d in production capacity by the end of 2009. They have previously claimed an ability to raise the capacity beyond 11 mb/d by 3 mb/d in the "long term".

2005 - (april)  BP, the worlds second largest publicly traded oil company, unsuprisingly, reports a record first quarter (Q1) profit. Oil prices were 53% higher than for the same quarter last year. Exxon Mobil (largest publicly traded company), BP and Shell (#3) together made $US16.5 billion profit in Q4 of 2004.

2005 - (april) A BP spokesman says "The world holds enough proved reserves for 40 years of supply and at least 60 years of gas supply at current consumption rates". If the sentence is broken into two parts -
"The world holds enough proved reserves for 40 years of supply" and "The world holds enough proved reserves for... at least 60 years of gas supply at current consumption rates", then true; but it obfuscates the real issue. There is not enough production capacity to supply oil at the rate the market demands at the price the market demands, and no new large high capacity fields have been found, or will be found. BP must be well aware the crisis is in pumping capacity to meet demand, not absolute potential supply over time.
And gas, of course, will be in high and increasing demand as smaller gas fields run out and electric generation plants look around for new gas in a world where piplines are non-existant, inadequate, and/or in need of repair - not to mention insufficient specialist LNG transport ships and too few or non-existant LNG terminals. In short, "current consumption rates" of gas will skyrocket, making the prospect of it lasting 60 years quite risible.

2005 - (april)  BP announces its production from key fields in Alaska is "flat", and from its North Sea oil properties "is declining somewhere between 6 and 8 per cent". This represents around 150,000  -  200,000 barrels a day less. It's stake in Russian TNK-BP and its new output from Azerbaijan have different (unspecified) decline rates.

2005 - (april) Exxon Mobil announces a 44% increase in profits for the first quarter. Its shares lose 4 cents. Why? Because it also reports its total stock of oil-equivalent hydrocarbon reserves have fallen by 5% (older larger fields are depleting, newer ones tend to contain less reserves than the 'rich pickings' of earlier decades - an overall nett loss of reserves).

2005 - (april) CEO of the Royal Dutch/Shell Group claims "...contrary to what some commentators say there is plenty of oil and gas left.", but goes on to admit it is not in 'traditional' locations (the only 'tradition' is to produce from the biggest and most accessible fields
with the greatest production capacity first ), and in unconventional oil (tars, shales, igniting coal mines to generate methane). He says cost of recovery of these sources has halved. All true, with caveats. None of these sources will equate to the current oil demand, or even come close to it. It may be there - but it simply can't be produced at the rate and the price the world wants.

2005 - (april) Shell produces 78,000 barrels a day of oil from oil sands in Q1, a 5% decline on the amount produced in Q1 2004.

2005 - (april) Shell report crude oil production has fallen by 8% to 2.14 million barrels a day, and natural gas production is down by 2%.

2005 - (april) USA lower 48 states (without Alaska) depletion rate now nearly 2% per year;  natural gas demand has also been increasing by 2% per year. In spite record levels of drilling, and drilling in technically difficult and expensive locations, US domestic natural gas supplies are near the point of supply shortfall. Newer gas strikes have been smaller, and have a shorter production life.

2005 - (april) study of the aggregated first quarter reports of 8 major publicly traded oil companies shows a decline of 2.8% in production compared with the previous year. This amounts to 304,000 barrels a day. The Government owned oil companies (responsible for the greatest amount of oil traded) do not make public reports, so their decline rate is not as easy to estimate.

2005 - (april 4)  jet kerosene trades at a record high of $US76.

2005 - (april) The International Air Transport Association (IATA), representing 270 airlines, estimates fuel costs may rise by 20%. Fuel costs make up between 15% and 40% of the total operating expenses of airlines.

2005 - (april)  China Southern Airlines increases passenger numbers to 28 million, a 38% increase, but in the face of a 66% surge in its fuel costs for the last half of 2004, makes a loss. IATA estimates that if oil averages $US43 a barrel, the industry worldwide will
accumulate losses of $US5.5 billion this year.

2005 - USA Delta airlines loses a billion dollars in the first quarter. It has over 3 billion dollars of employee pension liabilities from 2006 to 2008. Delta wins court approval to be relieved of its pension funding liabilities under a bankruptcy type proceeding.

2005 -
With fuel costs high and competition intense, USA's United Airlines also moves to bankruptcy actions and defaults on its pension plan - the largest ever US pension plan default. The USA government Pension Benefit Guaranty Corporation picks up the cost.

2005 - with General Motors still producing gas guzzling SUV's, costs outweigh income and the pension plan (whose investments provide a very large part of GM 'income') is unable to pay $US17 billion of its obligations. Default is possible, and may mark a trend in cheap-oil-dependant USA industries.

2005 -
Americans, with more vehicles (around 210 million) than there are licenced drivers, drive an average of 12,000 miles a year at an average US driver fuel inefficiency of 3.2 kilometers per liter (20.8 miles per gallon).

2005 - (april) UK truckers and farmers protest outside the UKs largest refinery
over the price of diesel, which risen by about 60% in the last six months. Protesters say they were threatened with arrest under the contentious new anti-terrorism laws.

2005 - (april) crude oil spikes to US$58 a barrel.

2005 - (april 15) Colin Campbell, addressing Swiss financiers prior to the Peak Oil conference, estimates global peak oil -
"About 944bn barrels of oil has so far been extracted, some 764bn remains extractable in known fields, or reserves, and a further 142bn of reserves are classed as 'yet-to-find', meaning what oil is expected to be discovered. If this is so, then the overall oil peak arrives
next year..."

2005 - (april 26) Peak Oil UK conference in Edinburgh predicts prices for crude hitting $US100 per barrel by 2010.

2005 - (april 26) Matthew Simmons, pointing to the unreliability in oil figures
reported by governments ("Our data collection system for oil is rubbish") claims there is "a big chance" that Saudi Arabia actually peaked in production in 1981 and is now in decline. He commented that if that were true, most major fields are being over produced. If fields are over produced that can be damaged. If damaged, their original 'probable recoverable oil' estimates are too high.

2005 - (april) The USA Governors Ethanol Coalition (GEC) promotes the desiderata of producing at least 10% of US transportation fuel from ethanol and biodiesel as soon as possible. Almost all ethanol production in the USA at the moment is from taxpayer-funded corporate welfare corn (maize) production. More gas and oil energy is consumed in producing the fuel than the ethanol so produced contains. The GEC promotes a small proportion of the ethanol to be derived from the digestion of crop waste - high cellulose corn stems, wheat stems sawdust etc - by organisms that can digest cellulose and produce alcahol as a by-product (in the same way yeast digests sugar and produces alcohol as a waste product)
. This technology is experimental. Whether the cost of harvesting and transporting the waste, distilling the ethanol, and removing the sludge results in a nett energy loss or gain is yet to be determined.

2005 - (april 27) Bush calls for
fast tracking of new LNG terminals, as the existing 4 in USA are inadequate for the fast increasing dependance on imported LNG.

2005 - (april) West Australias $11 billion Gorgon gas project finds a buyer for 2.5 million tonnes of Gorgon LNG (liquefied natural gas) a year in USA, with the gas to be shipped to a currently non-existant terminal on the west coast.

2005 - (april 27) Bush calls for fast tracking of new specialist oil refineries to handle the poorer crudes now being produced by Saudi Arabia.

2005 - (april 27) Bush calls for fast tracking of new nuclear power plants, tacit admission the 20% of electricity produced by nuclear cannot replace demand as gas-fired stations have an increasingly squeezed supply.

2005 - (april 27) Bush calls for extending the subsidies for fuel-efficient cars to “clean diesel” vehicles, a tacit admission that modern diesels are highly efficient and affordable now, and fuel cell hydrogen cars are an expensive unrealistic fantasy.

2005 - (april 29)  crude oil imports into USA reach 10.9 million barrels per day - the third highest daily import rate ever recorded. Stored crude peaks at 327 million barrels - only around 2 million barrels of storage capacity is left unfilled. This is the highest levels in 6 years. This huge extra capacity filling has kept world oil pumping capacity near its limit. The stores will see the USA over the summer holiday 'touring season'.

2005 - USA now imports almost 60% of its oil consumption. At current crude prices this costs about a billion US dollars a day.

2005 - (april) Chinas monthly imports of crude oil reach a new high of  2.99 million barrels a day for april
(12.25 million tonnes for the whole month).

2005 - (june)
Fu Chengyu, General Manager of China National Offshore Oil Corporation says in a news article the State Corporations annual import of LNG in 2010 is expected to reach 30 million tons, equivalent to rough 3 million tons of oil per month. This figure is expected to double by 2020,  to about 6 million tons of oil per month. Most is from long term (20-25 year) 'take or pay' large-quantity contracts with Australia and Indonesia. China is trying to substitute for oil, and 'lock in' foreign LPG at a relatively low price while it explores its own coastal areas for gas over the next decade. It is aware of the relatively long lead time to bring in gas fields and their associated infrastructure.

2005 - (june) decision on whether or not the US west coast Longbeach LNG terminal will be permitted is delayed yet again.

2005 - (april 29)
Ahmed Chalabi, described as "the pentagons darling", is named as oil minister by Iraqs pro-US Kurdish president.

2005 - (may 9) Algerian oil minister comments that OPEC will be unable to meet demand at current levels in the 4th quarter of 2005. Expected northern hemisphere winter demand can only be met if strong inventories have been built up already in the importing countries before winter, that is, in the third quarter. Look for a 'run' on crude starting september 2005?

2005 - (may) The International Energy Agency says 84.75 miilion barrels a day of crude were produced. This is likely to be 'all liquids - crude plus natural gas liquids plus oilfield condensate.

2005 - (may) The U.S. Energy Information Administration (EIA), calculating with updated figures in 2007, show the all-time global peak of production for crude oil plus natural gas liquids (excluding condensate) occured this month, when 82.08 million barrels a day were produced.

Looking back from the 2007 perspective, the all-time global high for crude oil alone was 74.272  million barrels a day.

2005 - (may) The EIA, calculating with updated figures in 2007, show the all-time peak of production for crude oil plus condensate (excluding natural gas liquids) occured this month, when 74.15.08 miilion barrels a day were produced.

2005 - (may) gasoline futures for november delivery trade on the Tokyo Commodity Exchange at about $US65 a barrel.

2005 - (may) Algeria is producing near full capacity of around 1.4 million barrels per day.

2005 - (may 2) French energy economists at the French investment bank Ixis-CIB speculate that crude oil might reach $380 by 2015. They base this speculation on the ideas that crude prices increase nearly seven-fold, and annual inflation is 2.5%. However, at a certain price point recession will likely tip into deflation, due to lack of demand caused by marked collapse in industrial activity. So the 2.5% inflation may just as likely be 2.5% deflation. In addition, at a certain level of bankruptcy, it will be difficult to re-capitilise and re-open small businesses that have failed. Thus, it may be that demand for oil is simply lost, almost at any price. At least, for a decade or so. Demand might slowly recover on back of stable 'lower' prices, until finally oil prices increase again. The economy can be compared to a punch drunk boxer. It takes a heavy hit in the first round (peak oil), but it won't stay down, it will get up off the canvas. But before it can 'return to form', it is knocked down yet again as oil prices once more rise. Each time the economy is laid out, its stays down for longer before struggling to its feet. Eventually, it cannot get up at all. At that point, the boxer analogy is no longer useful. We should then be thinking of metamorphosis, of the total re-organisation of all systems by the quiescent pupa, before finally emerging once again, but in radically changed form.

2005 - (may 3) "It's too late to maintain a 'business as usual' attitude. What is required is to manage the change that peak oil will bring in a way that causes the fewest casualties. This must be done at an economic and geopolitical level, to fend off resource wars. The US invasion of Iraq is clearly a resource war" - Richard Heinberg, author of  'Power Down: options and actions for a post-carbon world'.

2005 - commentators note that the US Federal reserve will have to raise interest rates or live with inflation flowing through from higher oil prices. If rates rise, the hugely indebted western consumers (and particularly American consumers imprudently loaned money) would not be able to meet monthly repayments or afford to roll-over loans. The consequence would be bankruptcy, recession, cut back in spending, unemployment. Petrol prices may fall with reduced consumption, but this is poor consolation to the unemployed..

2005 - USA conventional natural gas production has now fallen to about 35 billion cubic feet per day, or 6.3 million barrels of oil-equivalent per day.

2005 - (may) Bolivia, with the second-largest natural-gas reserves in the western hemisphere (behind Venezuela) has a law introducing a 32% tax on foreign energy companies earnings on top of an existing 18% royalty blocked by President Carlos Mesa.

2005 - (may) Bolivia has a law partially nationalising its gas and oil - currently operated by 12 foreign firms - blocked by President Carlos Mesa. 

2005 - (may) USA sells 'bunker buster' bombs to the only Arab nuclear power - Israel - apparently in preparation for them to obliterate the Iranian nuclear research facility, and possibly to destroy Irans conventionally armed ballistic missiles. Pakistan and North Korea, both with unstable governments and proven to have weapons of mass destruction, are left untouched. Neither has significant oil or gas reserves. US coercion of Iran is unlikely to seriously affect oil prices. This 'news' item may, of course, be 'planted' USA disinformation to dissuade Iran from supporting the euro.

2005 - China announces its 20 year plan to seize a " window of opportunity" to develop its economy and industrial base as fast as possible for the good of its people. Why is the window open for only 20 years? Presumably it knows the peak of oil has been reached, but has an optimistic scenario of 20 years, rather than the more realistic optimistic scenario of 10 years.

2005 - (may) China, just before the anniversary of its mass murder of protesters in Tiannamen Square signs a $US600 million oil deal with the criminal president of Uzbekistan, Islam Karimov - fresh from murdering hundreds of Uzbek protesters.

2005 - first quarter - The Asian benchmark Singapore fuel oil prices increase nearly 50%. China allows only 4% price increase in domestic diesel prices. Clearly, China is willing to hide the true cost of fuel in order to artificially subsidise business. This shields businesses from the need to be more fuel efficient, and make the inevitable recession, bankruptcies and adjustments much steeper than they would have been if part of the true costs of doing business in China was not artificially kept off the accounts.

2005 - (may) - Norway, the worlds third largest oil exporter, cuts its forecast for 2005 oil production (inclusive of natural gas liquids), from 3.3 million barrels per day to 3.2 million barrels per day, due to 'technical glitches'. This is the same level as 2004. Total oil production is expected to rise until 2006, and then decline. Norway is west Eurasias largest gas proucer. Gas production is expected to increase, peaking in 2011 at 120 billion cubic metres per year, then declining.

2005 - Iran's Ahwaz Bangestan oil fields production has now declined from 250,000 barrels a day to 160,000 barrels a day and is expected fall to 60,000 barrels a day within 1-2 years. Gas injection could increase production to 220,000 barrels a day, but gas is heavily used by the 67 million Iranians to spare oil for export and to sell to generate overseas earnings to feed a wheat dependant nation with an exploding population.

2005 - Iran's oil production capacity is falling by 350,000 barrels a day every year (8% onshore and 13% offshore). Iranian officials estimate the decline rate could increase to 500,000 barrels a day every year in 5 years time. Iraq currently produces about 4 million barrels per day, but imports petrol and diesel as it has little refinery capacity.

2005 - (may) Algerian oil minister identifies a refinery capacity limitation co-inciding with demand closing with supply
“What’s the use of having a lot of oil if you can’t refine it or cannot stock enough products to be used in the winter time...
Nobody can build a refinery in two years and people have just barely started taking decisions this year. Saudi Arabia, and others, including Libya and ourselves have taken decisions so you are going to see a lot of new refinery capacity but not within the next two to three years...”  (Gulf Times, Qatar, 9th may 2005)

2005 - the estimated cost of building a new 150,000 barrel a day re
finery in USA is around $US1.5 billion. Up to US$1 billion more is needed for pipelines to bring the crude from the port unloading facility.

2005 - World refining capacity is about 84 million barrels per day.

2005 - World consumption is now about 84 million barrels per day. The first tier bottleneck to producing the oil the world demands is pumping capacity. Unexpectedly, the second tier bottleneck, refining capacity, now displaces pumping capacity as the primary bottleneck to meeting world demand.

"The marginal refining capacity in the world cannot process heavy, sour crudes at all, let alone process these crudes into light, sweet products. Converting existing refining capacity to process heavy, sour crudes to produce light, sweet products is expensive and time-consuming. In the U.S., the conversion (for the refiners who are converting) is a multi-year, multi-billion-dollar project. Some refiners have elected to produce light, sweet products only from light, sweet crudes. Others have elected to retire refining capacity. In parts of the world that supply markets with only higher sulfur products or that have dropped out of the market to supply low-sulfur products, little or no conversion will take place and the demand will continue for the diminishing fraction of light, sweet crudes."
-Harry Chernoff, in the Energy Bulletin

The 'marginal refining capacity' is mostly older refineries without the 'cracking towers' required to split the heavier crude down into lighter oils. In some countries these refineries cannot by law add new cracking towers unless they also upgrade their entire system to effectively remove most of the sulfur. This extensive upgrade of small-throughput plant is not economically justified. The timing-trajectory of global conversion of large plants to process heavier crude is not yet documented. Even if in time most of the worlds largest refineries convert to be able to handle any grade of crude, 'heat-cracking' the heavy crude burns oil to fuel the process - thus hastening oil depletion. This may not have been factored into calculations of cheap oil depletion curve.

2005 - around 8% of the oil being produced (and about 24% of all oil reserves) every day is sweet oil.

2005 - World consumption, on current trends, expected (want) to be 86-87 million barrels per day.

2005 - USA now consumes around 20 million barrels of world oil a day.

2005 - (may) US military announces it is planning "more permanent" bases in Iraq, and sees itself remaining in Iraq for "many" years to come.

2005 (may) - Italian
Benito Livigni, former manager of the Italian energy company ENI and the United States’ Gulf Oil Company, claims that Iraqi’s oil reserves are estimated at 400 billion barrels, far more than the known figure of 116 billion, and giving it more reserves than Saudi Arabia. The figure include under-explored areas, and there is suggestion some data of Iraqs oil potential has been held by oil companies since the 1970's, but kept unpublished. If true, this information would likely to be known within the higher levels of the American oil/military complex.

2005 - (may) Azerbaijani newspaper reports US and Azerbaijan have agreed to a permanent US base in the
Azerbaijan (strategically important to USA for its oil and gas pipeline). The Azerbaijan government denies it.

2005 - (may)
the 1,762 kilometre long Baku-Tbilisi-Ceyhan pipeline (BTC) opens, due to be exporting 1 million barrels of oil a day from the Azerbaijan's capital city (Baku) on the Caspian Sea west to Georgia (capital city Tblisi), through Georgia, then south and on to the Turkish terminal (Ceyhan) on the Mediterranean. The cost has been around $US3.6 billion dollars, the world's biggest energy investment so far. Filling the pipeline with oil will take about 5 months as 10 million barrels of oil are needed to fill it. The pipeline is buried, and while it is relatively safe from disruption during the on-going border disputes and other conflicts in the area, Turkey, in particular, is prone to earthquakes which could damage part of it. Most importantly of all, it is the only pipeline from the Caspian oil fields that doesn't have to go through Russian territory.

2005 - (may) Russias daily oil production, believed by analysts to be likely to increase by 370,000 barrels a day (a 4% increase over previous years) is now estimated to increase by 230,000 barrels through 2005 (a 2.6% increase). For a variety of reasons, it is no longer expected that there will be any increase in supply in 2006, although Russian oil is not yet considered to have peaked. Russia now exports around half its oil production, almost entirely to West Eurasia, and the proportion exported is slowly increasing.

2005 - (may) analysts suggest the claim by Saudi officials that they are producing 9.5 million barrels a day may be false. OPEC estimates - based on secondary source - put Saudi production at 8.39 million barrels a day. The International Energy Agency puts it at 8.14 million barrels a day, a 34 million barrel a day difference. The difference is very important because the world is increasingly reliant on the one producer that can pump in high volume - Saudi Arabia. The oil 'crisis' is a pumping crisis right now - and an absolute depletion crisis in 20 years or so. The difference is more important because there is no transparency in the Saudi figures. Saudi Arabia is not a modern democracy. It is an absolute autocracy, a feudal state run by absolute power, and the use of torture. No wonder figures are suspect. Real production must be inferred from the number of ships leaving Saudi ports and their capacity, or even from 'tips' from insiders. The difference may simply be the margin or error. Even if the Saudi regime is telling the truth, it may be the amount they have available to the refiners, not the amount the refiners buy. Why would there be a discrepancy? It may be that the extra production is in high sulfur crudes which few refineries can handle.

2005 - (may 31) Iran's OPEC governor, Hossein Kazempour Ardebili says in an interview that in summer refineries want light crude, which is easily processed into gasoline for the 'summer driving season', but OPEC is at the limit of its capacity to produce light crude, and there is simply no more light crude pumping capacity available. "All extra levels of crude oil sent to the market stay in the oil stockpiles, since the crude oil coming to the market now has got limited refinery demand". This 'extra' oil fills the oil stockpiles and pumps up the statistics on oil that has been produced, but the 'extra' production is functionally useless due to lack of refineries to deal with this type of heavy or sulfurous oil.

2005 - (june) Iraq will not be able to pump more than its existing production of 1.5 million barrels a day for at least the rest of this year. It had been hoped to produce an additional 300,000 barrels a day.

2005 - (june) USA first quarter vehicle sales reveal a fall of 13.5% in sales in the petrol-guzzling 'sports utility vehicle' category.

2005 (june) US airlines are estimated to be losing about $US17,000 a minute, partly due to the increased cost of fuel. More job losses are predicted.

2005 - (june) Matthew Simons suggests, in his new book, that Saudi giant fields started losing pressure in the 1960's and have been so heavily pumped with water since that the sustained pumping capacity is an artifact of pressurisation, and the depeletion rate is thoroughly hidden. He suggests the wells are in effect being 'secondarily' produced at the same instance as being primarily produced. While this is unknown territory, he point to the possibility that some of these large Saudi fields could suffer a precipitous collapse in production, rather than a stepped decline. He estimates the highly production North Ghawar field would then have to have every oil drilling rig in the world working it over a ten year period to sustain current production. North Ghawar produces about 4.5 million barrels a day.

In addition, he suggests the two Iraqi giant fields ( Kirkuk and Rumelia) have been overproduced and may be in similar shape to the Saudi fields.

The supergiant Cantarell complex in Mexico is highly pressurised with nitrogen gas, and is currently producing around 1 million barrels a day. If its projected steep decline is earlier than forecast, and if Ghawar collapses, then shortfall in pumping capacity may be larger than anyone may have previously projected.

2005 - (june 17th) U.S. gasoline consumption jumps to 9.53 million barrels a day - the third highest level on record.

2005 - (june 21) US Energy Department's Energy Information Administration reports that crude inventories in the USA declined last week by1.6 million barrels over historic levels for the time of year; and yet demand for distillate fuels (petrol, diesel, and heating oil) was nearly 7% higher than the same time a year ago.

2005 - (june 22) Speculators trading on future oil supplies push the price of Brent crude
to an historic high of $US58.58 per barrel.

2005 - (june 22) Oil for July delivery reaches $US59 a barrel.

2005 - (june 22) Dow Jones Industrials fall 1.5%, Nasdaq composite and Standards and Poors 500 indices fall about 1%, US Treasury 10 year junk bonds are less palatable and are sweetened with a 0.009% interest rate rise.

2005 - (june 22) branch company of the Chinese state owned oil company
China National Offshore Oil Corp makes an  unsolicited bid of $US18.5 billion for the USA oil company Unocal Corp. China continues its apparent strategy of carefully reducing its huge store of US dollars while simultaneously acquiring oil and gas assets. In this case, even although the price of the bid is close to the current asset value of the company, it would assist in small measure in putting some 'spine' in the 'yuan'   (pegged by China to the dollar in order to make oil imports as cheap as possible while also making Chinese exports cheap), and allow China to denominate some oil trading in the yuan, not the dollar. The US Government will almost certainly pass laws to block Chinas acquisition, as it is a then wedge between the dollar and its oil backing.

2005 - (may 31st) China's government backed '
Sinopec Group' buys 40% of the Northern Lights oil sands project in northeastern Alberta. The project has a capacity to produce around 100,000 barrels per day of synthetic crude oil, at an estimated total cost over five years of $4.5 billion.

2005 - (april) Canada's Enbridge Co and China's PetroChina International Ltd agree to jointly build a $2.5-billion 400,000 barrels per day capacity pipeline1,160 kilometres across Canada - from Edmonton to a port in British Columbia. It will carry synthetic crude oil from Alberta's oilsands. Half the crude would be tankered to China, the rest will probably be sold on the west coast North American market. It is expected to be ready by 2010, when it expects Canadian oilsand production to be sufficiently high to enable the pipelines use.

2005 - (june 20) - Indonesia finally cuts an acceptable deal with USA's ExxonMobil to move ahead with the Cepu oil project, expected to ultimately yeild 500 million barrels of oil over the life of the field.
This field will make little difference to the overall decline profile of the ExxonMobil global oilfield holdings.

2005 - (june 20) - Indonesias market-distorting taxpayer subsidies on the price of oil cause a massive blow-out in the subsidy budget as oil price rise rapidly. The cost to the taxpayers is estimated to reach $US11.4 billion this year - a sum that could only be met by debt. The Indonesian government says it will institute unspecified "measures" to reduce fuel consumption. It could start by removing the subsidy, a subsidy that is a form of corporate welfare to the oil companies.

2005 - Indonesia - an estimated 105 tonnes a month of Indonesia's heavily subsidised crude oil and oil products are smuggled out to countries China, Thailand, and other Asian countries for re-sale at closer to world prices, reaping handsome profits for the smugglers.

2005 - (june) Taiwan's 'Chinese Petroleum Corporation' signs a 25 year LNG supply contract with 'RasGas' of Qatar, with the 3 million tonnes per year to commence delivery from 2008. Like many countries, Taiwan is increasingly reliant on natural gas for generating electricity, but it is concerned over reliability of supply. The Taiwan government needs triple the amount of LNG it currently uses to power electricity plants recently built and being planned for completion by 2010. It's new Tatan LPG terminal will be complete in 2009, increasing Taiwan's import capacity from 4.5 million tonnes today to 7.5 million tonnes.

2005 - (june) About 300 billion cubic feet a day of natural gas is used globally. LNG demand has increased 15% since 2000 as demand outstrips gas both from domestic wells and the supply capacity of pipelines from other countries. Because of this, demand for LNG shipped by tanker is expected to rise to about 20 billion cubic feet per day by 2010 (about 125 million tonnes per year).

2005 - (june) India signs a deal with Iran to pay $22 billion for 5 million tons of liquefied natural gas (LNG) a year for 25 years, starting 2009. India signs a memorandum of cooperation to construct a $US7 billion, 2,600-kilometer long gas pipeline from Iran to India through Pakistan.

2005 - (june) The Shanghai Cooperation Organization (SCO) holds its summit meeting in Astana, Kazakhstan. It ignores an American request for observer status, and agrees to consider Iran, India and Pakistans requests to join the organisation. The SCO organisation, whose Central Asian members are oil-rich Kazakhstan, Kyrgyzstan, Tajikistan and Uzbekistan call on the USA to set a timetable for the withdrawal of all American troops from Central Asia. China and Russia are the other members. Azerbaijan, allied to USA and European oil companies via its pipeline terminus, is not a member.

Additionally it ignored an American request for observer status and proceeded to consider requests from Iran, India and Pakistan to join the body.

2005 - (june) Agreement is reached to a multi billion dollar investment in re-working the declining Statfjord oilfield. This will allow for both relatively high oil and gas production levels to be maintained for longer and for maximal extraction of oil, gas and condensate  - but will result in an accelerated decline in the daily production of the oil component of the hydrocarbon reserves in the field.

2005 - (june 22) oil prices briefly reach $US60  a barrel.

2005 - (late june) regular grade petrol at the pump in Canada ( a nett oil exporter) is now about 92 cents a litre.

2005 - (june) Diesel prices in USA reach a record high of  $US2.34 a gallon. The average large freight truck does about 6 miles to the gallon. A truck may travel 500 miles a day, and with a co-driver, around 900 miles a day. In the trucking industry, fuel is the second highest expense after wages and salaries. Two thirds of freight in USA is transported by truck, burning 35 billion gallons of diesel a year. Distillate in USA is generally expected to rise about 2 to 2.5% a year. Combined petrol and diesel consumption has been nearly 7% higher than for the same period in 2004.

2005 (june) U.S. gasoline consumption reaches a new record of 4.4 million barrels a day in mid june, reflecting a 5.7% increase in petrol consumption relative to the same period last year. Clearly the price of gas is not yet high enough to "destroy demand".

2005 - The average vehicle in the USA domestic vehicle fleet has now achieved a fuel efficiency of  21 miles per gallon.

2005 - (june 30) project to recover the last of the oil from the large but low producing Masjed Soleiman field in Iran (currently producing only 5,000 barrels a day) is sold to China, with Iran receiving 15% share. It is hoped to raise production to 28,000 barrels a day, and supplemental wells might add 10,000 barrels a day to that. The contract was originally with a Canadian company, but the USA government forced it to withdraw.

2005 - (july 2) Japan becomes aware that its oil economy is fading, and money cannot substitute for actual supply based on relationships and goodwill (China's strategy and a part of USA's strategy), or a gun to the head (the other part of USA's strategy) - "Japan will not be able to survive an energy war unless it breaks from an idea that was valid until several years ago, in which it was believed Japan could cope with surging oil prices by growing economically strong enough to pay more." -Yomiuri Shimbun

2005 - (july 3) In an historic first, a specialised LNG tanker berths at the United Kingdom's new National Grid LNG terminal (owned by BP and Algerian State Oil and Gas) in Kent with a cargo of 31 million cubic metres of liquid natural gas from Algeria. This is the first time the UK has imported LNG in 20 years. The UK's North Sea gas fields are starting to decline, and the Norwegian pipeline is not yet built.
Planned capacity building does not happen as LNG is re-routed to more lucrative markets, such as USA, which now competes on price with UK for LNG. About 80% of UK LNG storage capacity remains unused as a result.

2005 - (july 3) Oil industry analyst and banker Matt Simmons, author of 'Twilight in the desert', says "...I still think that $60-a-barrel oil is a remarkable bargain...we need a pricing committee to start taking a "cold shower" look at what the real value is. My guess is that will be somewhere between $250 and $400. The sooner oil users begin understanding what the real long-term cost of oil has to be, the easier it will be for everyone to cope with fast-rising prices for the world's highest-volume and most expensive commodity."

2005 - (july 4th) American drivers hit the road in the holiday weekend in record numbers, in spite of gasoline being $US2.25 a gallon. Adjusted for inflation, this is close to the price during the first oil shock. Low wage workers move closer to their place of employment. Middle class start to trade in petrol gulping SUV's for hybrid SUV's. Middle class switch to 'the wifes' European car instead of the massive motored American dinosaur. Some people elect to vacation 400 miles away instead of 1,000 miles away. High mileage petrol dependant small businesses such as garden care businesses with high petrol cost components become marginally profitable.

2005 - (july 5th) options contracts for December delivery at $US80 surge.

2005 - (july 5th) the International Energy Agency forecasts global oil demand to rise to a record 86.4 million barrels a day in the last quarter of 2005 (i.e. 31,536,000,000 barrels a year, or 4,288,896,000 tonnes of crude) This now aligns with more informed analysts early new year prediction, and makes a shortfall in ability to pump the demanded motor spirits very likely early in the new year 2006, or earlier if there are significant weather disruptions to refineries in USA, or if there are 'unexpected' changes in pumping performance of Saudi or Mexican mega-fields.

2005 - (july) India loses several thousand barrels a day in oil production when the off-shore drilling platform at the Bombay North High sector of the Bombay High oil field is destroyed. The Bombay High oil field is India's sole large oil field. Only one third of Indias total oil consumption is produced by its own oil resources, currently estimated at 5 billion proved barrels. Of those domestic resources, the Bombay High  field produces more than a third of Indias total oil production. Bombay High produces 170,000 barrels of sweet light crude oil a day, contributing 14% of Indias annual domestic consumption. The field had been in decline until it was 'redeveloped' (pressurised). The fire will set back the completion of  pressurisation of the North field by about a year. One estimate has Indias oil needs increasing by a massive 60% by 2010, 1,392,700,000 barrels a year. Current global oil consumption is 30,660,000,000 barrels a year. In 1999 the USA alone used 6,205,000,000 barrels a year.

2005 - China's oil consumption for this year is projected by commentators to be 2,272,300,000 barrels for the year, or 6.2 million barrels a day. At this consumption level, 2.6 million barrels a day will now have to be imported, 6% more imports than last year.

2005 -China estimates it will need 600 million tonnes of oil by 2020 if present growth rates continues. This is far higher than officials thought.

2005 - China's oil imports for the first half of the year are up by 3.4% over the huge increase for the same period last year.

2005 - (july) China is desperate to meet a looming domestic oil shortfall exacerbated by industry needing to use diesel-burning generators due to China's unreliable power supply. An agreement is made with Shell oil to form a joint venture to develop a successful method to extract organic matter from shale rock in the northeastern province of Jilin. This can then be converted to oil via a very energy expensive process. The shale-oil reserves have a proven 17.4 billion tons of oil equivalent, with a supposed ultimate potential to yeild 300 billion tons.

2005 - (july) China reduces its refined product (petroleum and fuel oil) imports by 3.4% relative to the 2004 period. Presumably it is in part due to having directed its state owned refineries not to export crude oil, and also to sell petroleum to the domestic market at well below world prices.

2005 - (july)
China's Quongang refinery in Fujian will be expanded by engineers from ExxonMobil, Saudi Aramco and Sinopec to raise its capacity from 80,000 barrels a day to 240,000 barrels a day. More importantly, it will handle heavy Middle East crudes, unusable by many world refineries.

2005 - (july) The G8 summit is dominated by discussions on energy, despite a terrorist bombing in UK and ceaseless terrorist bombings in Iraq. The only 'good news' is a commitment from Russia to "build up its pace of oil production and  its volumes of oil exports...". Russia claims to be able to increase oil production by an additional 30 million tons, or about 602,465 barrels a day. For the moment. The G8 also established the 'Joint Oil Database Initiative'. This database is supposed to give accurate monthly data on the oil inventories, supply, and demand in 93 countries. The International Energy Forum, in charge of the database, delays issuing the first iteration until November. Why? "Difficulties" in obtaining accurate information.

2005  - (july) Indonesias state-owned oil company Pertamina finds it difficult to pay its oil bill, limits distribution to gas stations to conserve existing reserves. Gas stations run out and close. Now a nett importer, OPEC members may eject Indonesia from OPEC.

2005 - (july) Malaysian Prime Minister admits they will soon be in a similar position "
Malaysia is an oil exporter, but if we do not find new oil reserves, then by 2009, we will become a net importer". Petronas, the Malaya state-owned oil company, is exploring for oil in concessions in various muslim countries overseas.

2005 - (july) oil drilling expertise remains in short supply as the impetus to find any available gas and oil accelerates. Chinese drilling crews and rigs are brought into the United States for the first time as insufficient rigs are available domestically.

2005 - USA natural gas prices are now about four times higher than three years ago.

2005 - (july 13) gas for delivery in January 2006 to the UK trades at £1.07 per therm - the equivalent of $US18.65 per million Btu, or in crude oil equivalent, $US108 a barrel. The price reflects the expectation of high oil prices in Europe for the rest of 2005, and the fact that the UK will be a nett gas importer by 2006. Spring-summer water accumulation behind hydro dams has been poor this year, forcing increased reliance on gas for electricity generation. The lack of water has also reduced nuclear power plant output, as nuclear plants are major users of water.

2005 - (july) PetroCaribe Energy Summit, in which Cuba's dictator Fidel Castro notes that within this decade oil will reach $US100 per barrel, prohibitively expensive to impoverished Caribbean countries. A treaty is signed in Venuezuela whereby 185,000 barrels a day of discount priced oil from Venuezuela will go to Caribbean nations, financed by low credit rates. If oil reaches $100 the interest rate will be 1%.

2005 - (july) in a clever device to limit petrol consumption under the guise of concern for 'global warming', the British Government announces the idea of introducing a form of energy rationing called a “personal carbon allowance.” This allows each person in the country a private 'carbon allocation' which in turn allows a certain amount of 'free' vehicular use. Each litre of gasoline uses 1 carbon unit, and this is then deducted from the free allocation in the citizens' 'account'. Those who exceed their alloted carbon entitlement through fuel use pay a tax. Alternatively they can buy someone elses underused allotment on the free market. Thus, those who use public transport are not penalised, and those who are profligate petrol wasters pay for the privilege.

2005 - (july 8th) USA Secretary of Energy Samuel Bodman tells reporters major oil suppliers including Saudi Arabia "are right at their ragged edge" in regard to their ability to meet rising global demand for oil. "We are in a new situation... we are likely at least in the near-term to be dealing with a different pricing regime than we have seen before." This is US Government fog-speak for "the price of gas is going to go up dramatically and there is nothing the government can do about it". From now on, the US government will be increasingly forced to admit the truth that it is bankrupt of ideas to meet the gathering crisis - a crisis it has long known was on its way. It will doubtless try to 'unload' the problem onto the public by hypocritically and duplicitously appealling for "everyone to work together to face this new challenge".

2005- (july) - According to a USA government report  (GAO-05-876 'Rebuilding Iraq'), after it's 2003 invasion, the USA found the electricity, oil and refinery facilities had been damaged more than the white house and military officials planned.
Iraqi oil exports account for 90% of its income.
Iraq’s crude oil production and export capacity are now lower than in March 2003.
Iraq’s overall power generation is now lower than before the 2003 invasion.

$US9 billion of US money has been paid since the USA 2003 invasion for supposed administration and reconstruction efforts. Of the $US9 billion appropriated for Iraqi reconstruction, only $US3.1 was actually spent on what might generously be called reconstruction. The rest, $5.9 billion went to USA contractors, government occupying agents, and allied Iraqi employees and 'favored sons'. About $1.2 billion has been diverted from water and electricity restoration in favor of  "economic and private sector development and governance activities". Presumably privatisation of oil and gas facilities. And presumably to pay for the Iraqi domestic terror agencies - proxies of the CIA - modelled on the criminal 'need to know' system protecting the officers of the occupying power (and the commander in chief of the military) from indictment for torture and murder (albeit USA refuses to sign the Geneva Convention banning torture, and refuses to recognise the World Court responsible for bringing those committing crimes against humanity to justice).

An estimated $US20 billion is required to fully reconstruct the damaged Iraqi power infrastructure.
$US1.7 billion has been spent. The greatest part of the $US1.7 billion spent on generation projects went on buying new turbines and generators (from  the USA contractors) for existing Iraqi power plants, in order to increase megawattage available to the grid to bring it close to what it previously was. The US electricity project contractors have supplied "several" natural gas powered power turbines where there is no natural gas available to drive them. Natural gas pipelines have been made extremely insecure due to sabotage post-invasion. Low grade fuel-oil has had to be substituted, decreasing output by 50%, and trebling maintainance needs. Worse, the contractors admit there is a significant risk the turbines could fail.

Many Iraqi power plants run on crude oil or diesel. Shortages of refined product will seriously impact the ability of Iraq to supply its electricity needs. Iraqs generating capacity remains seriously below the pre-war level - a level not fully recovered from the damage of the 1991 Gulf war. Supply remains limited and erratic. Some electricity is now being imported from Iran. Transmission lines remain vunerable to sabotage, and attempts to hire security staff to protect them were abandoned after the hoped for 6,000 staff complement could only attract 340 men. Repairs worth mentioning are confined largely to the stable Kurdish and southern regins.

The USA has earmarked
$US2.7 billion of USA taxpayer money to be spent specifically on 'the Iraqi oil sector'. So far, $US1.1 billion has been spent, along with $US215 million of Iraqi money, altho' the contractor has yet to put in all his bills. A priority has been restoring the Qarmat Ali water pressurisation plant of the Rumailah oil field (southern Iraq) to halt sliding pressure, but this has been only partially successful due to badly corroded and failing water pipes running to the wells, most of which will have to be replaced. Hoped for production increases have not materialised.

Wells in northern Kirkuk produce more residual fuel oil than there is storage capacity, so excess is re-injected into the wells for later extraction. This practise is considered very likely to limit the amount of crude able to be recovered in the long term. 

Other completed or continuing projects are -
repairing the Al-Fathah oil pipeline crossing (only half could be completed by the USA contractor), restoring a few gas-oil separation plants in relatively stable territories near Kirkuk and Basrah, and repairing some natural gas and liquefied petroleum gas plants in the safer areas of southern Iraq. The gas-oil plants take product from 15 to 50 nearby oil wells and strip out the natural gas liquids, yeilding the domestically important liquefied petroleum gas used in cooking and in heating. ( LPG cannisters are easily transported to households, and don't require localised pipeline infrastructure.) USA contractors are being paid to repair war damaged export terminals, pumping stations, and refineries, and, above all, electricity supply for the oil fields and refineries.

the crude oil production and export levels obtained from initial 'quick fixes' have not been sustained, mainly due to sabotage of pipelines "and a natural decline in production resulting from years of improper reservoir management". Production remains static at about  2.1 million barrels a day (1.8 mbd from the 'safe' south, the rest from safe Kirkuk region). Of that, a nett of between 1.4 and 1.6 million barrels a day of crude are exported. Most of the remaining about 600,000 barrels of crude a day is refined to diesel, fuel oil or LPG for domestic use. While Iraq has a theoretical maximum refining capacity of 550,000 barrels a day, in practice it processes less than 500,000 barrels a day. Upgrading refineries to deal with heavier crude, and expanding their productive capacity would cost an estimated $US7 billion.

Imported refined products now costs over $US2 billion annually. Iraq extremely heavily subsidises the refined fuels it imports and produces, and the price of these fuels is less than a few US cents per litre. Low cooking and heating fuel prices are essential when per capita income is extremely low and unemployment extremely high. Plans are in place to increase the price, but, understandably, officials are afraid to implement them.

The inability to supply diesel for machinery for basic food production continues. Criminals hijack delivery trucks, domestic fuel lines continue to be sabotaged, and the subsidised cheap diesel continues to be diverted to both the local market (because supplies are extremely short) and international black market (because Iraqi diesel is extremely cheap where Turkish diesel isn't) in large quantities. To cap it, as at may 2005, much less than 15 days of diesel fuel stockpiles remain.

Over 14,000 Iraqi men guard oil infrastructure - mainly the fixed facilities. The cost is roughly $US340 million a year, paid by Iraq oil revenues. The force is not trained or equipped to protect the pipelines, and what attempts are made are largely ineffective. The work of contracted emergency response oil pipeline repair teams is quickly undone by repeated sabotage.

The USA report clearly hints that the "framework" for the Iraqi oil industry includes foreign investment and management, which we can reasonably suppose will not be those originally contracted to the Iraqi government, but will almost certainly be American, probably Italian, and possibly British oil companies.

In the light of these circumstances, it seems very unlikely that -
(a) 'foreign' (USA and British) "investment" in Iraqi oil production or exploration will be promoted by any independant Iraqi government, no matter its politics,
(b) significantly increased production from Iraq will not happen for the foreseeable future - unless the stable Kurdish region in the north announces independence, and the pipeline passing close by the Syrian border to Turkey can be protected from sabotage (
attacks on the Kirkuk-Ceyhan pipeline that exports oil to Turkey currently cause the loss of about 200,000 barrels a day).
(c) Iraq will probably not have enough heating fuel for all its citizens this winter.

2005 - (July 13th) American Automobile Association's daily price survey shows the national average for diesel at $US2.46.

2005 - (July 18th) Refinery shutdowns in Texas and Louisiana as precautions against possible damage from Hurricane Dennis and Tropical Storm Cindy take around 200,000 barrels of daily gasoline production off the market for that period. This is a over 4% of daily US gasoline demand.

Facilities for crude oil imports for further refining are also hit. The biggest US petroleum import terminal - 20 miles off the coast of Louisiana - handling the receiving and storage of 1 million barrels a day, closes for 2 days.

2005 - (July) BP's Thunder Horse platform, the largest of its kind, suffers damage to its ballast tanks and list 30 degrees. Plans to commence pumping oil this year are shelved. Thinder Horse is estimated to contain reserves of well over 1,000 million barrels of crude.

2005 - (July) - Europe - Netherlands - Europe's biggest refinery, Shells Pernis oil refinery in Rotterdam, stops production of refined products (petrol and diesel) due to loss of external power. The 418,000 barrels a day refinery remains shut for several weeks. Pernis supplies both Europe and the export market, including USA.

2005 - (july) Middle East oil states continue to repratriate money invested in USA and other western states. According to Salman bin Dasmal of Dubai Holdings, the Saudi dictatorship alone has moved about a third of their trillion-dollar overseas portfolio out of USA and some western countries. Muhammad Al-Jasser, the Vice-Governor of the Saudi central bank, the Saudi Arabian Monetary Agency, announces Saudi Arabia, Bahrain, Kuwait, Qatar, Oman and the United Arab Emirates are planning an Arabian regional currency similar to the Euro. The proposed regional currency could be linked to the euro, or to a basket of currencies. As the oil producers sees the USA oil-dependant and deeply indebted economy in trouble they are anxious not to be caught with too many junk bonds on hand.

2005 - (july) quote of the month -
"The fed can't print oil." - T. R. Elliott.

2005 - (July 25th) China stops pegging its currency to the US dollar. The central bank will attempt to "manage" it so it stays within a band plus or minus 0.3% of the value of the US dollar. It 'float' within this tiny range according to the movement of a "basket of currencies" with the dollar as just one component. China has a tiger by the tail. It can't afford to hang onto dollars forever. It is too scared to let go. It is positioning itself so that it can adjust incrementally or quickly, according to circumstance.

2005 - Peugeots advanced diesel technology in a standard production sedan sets new and meaningful fuel economy records. The Peugeot 407 HDi turbo diesel crosses the continent of Australia - nearly 3,000 kilometres - and used only $A150 of fuel. The advanced diesel engine used an average of 3.45 litres of diesel per 100kms (about 70 mpg).

2005  - Production of the Audi A2, which achieves beter than 80 miles per gallon, stops due to lack of demand.

2005 - (july)  Honda's hybrid petrol-electric motor is redesigned for increased efficiency and greater power output. The wheels are now driven only by electricity at low speed ( as Toyota's hybrids always have). The new powertrain is expected to use 5% less petrol than the current model, which achieves a 'town and country'  fuel economy of less than 6 litres per 100 kms (about 50 mpg).

2005 - (july) In Australia, the demand for small cars rose 26%,  and the demand for sports utility vehicles (SUV's) fell five%, and demand for large cars fell 13%.

2005 - (july) A Welsh engineering company, IMP Ltd, claims to have invented a revolutionary new electric engine that produces 400% more torque than any electric motor unit currently in production. The normal bulky permanent magnets have been replaced with electric pulses transmitted across a number of rotors. It needs no gears, produces little heat, has greatly reduced size and weight (while being fully size scalable) and therefore a greatly increased power to weight ratio. The director of the company claims the acceleration of an electric vehicle based on these motors will exceed that of expensive high performance sports cars.

It is envisaged the new electric motors could be used as the sole drive of all-electric cars. It is envisaged that each wheel could have its own drive motor, with each wheel powered by two lightweight batteries. By powering only either the front or rear wheels, the number of batteries could be cut to four, giving lower power, but longer range between recharges. As there are permanant magnets, the power can be switched off going downhill and the wheels will free-wheel, acting as generators to top up the batteries.

2005 - (august) Chevron Oil Company launches a public community involvement initiative, in response to the truth of the fading of cheap oil becoming better known, overwhelmingly via the internet and via European newspapers -
 "Energy will be one of the defining issues of this century, and one thing is clear: the era of easy oil is over. What we all do next will determine how well we meet the energy needs of the entire world in this century and beyond....Many of the world’s oil and gas fields are maturing. And new energy discoveries are mainly occurring in places where resources are difficult to extract—physically, technically, economically, and politically. When growing demand meets tighter supplies, the result is more competition for the same resources....We can wait until a crisis forces us to do something. Or we can commit to working together, and start by asking the tough questions: How do we meet the energy needs of the developing world and those of industrialized nations? ...Whatever actions we take, we must look not just to next year, but to the next 50 years....We call upon scientists and educators, politicians and policymakers, environmentalists, leaders of industry and each one of you to be part of reshaping the next era of energy."

All major oil companies are faced with 'finessing' the fact of declining oil products - and therefore greatly increased prices - to the consumer. BP ("Beyond Petroleum") was the leader. Eventually all companies (and governments) will have to accept the public worry about the future of supply as well as the outrage over price increases and shortages, and deflect it with some public display of apparent concern, while drawing attention away from the windfall profits made, and the effect on low income families.

The truth, well known to the industry and its political-military complex, is that transition - fiercely difficult even in the very best of circumstances - is now 20 years or more too late. As the oil economy steadily, irrevocably, fades, severe physical and emotional dislocation becomes increasingly manifest.

Huge amounts of capital are needed to start the transition to decentralisation, canalisation, re-railing, hybrid power shipping, solar power via photovoltaics,  massive scale wind and wave power, and all the other massive infrastructural changes. Huge capital will surely be in very short supply within 20 years. Only feudal and corrupt Middle East oil producers will have this quantum of capital. And oil companies.

2005 - (august 1) "The Pentagon, acting under instructions from Vice President Dick Cheney's office, has tasked the United States Strategic Command (STRATCOM) with drawing up a contingency plan to be employed in response to another 9/11-type terrorist attack on the United States. The plan includes a large-scale air assault on Iran employing both conventional and tactical nuclear weapons. Within Iran there are more than 450 major strategic targets, including numerous suspected nuclear-weapons-program development sites...As in the case of Iraq, the response is not conditional on Iran actually being involved in the act of terrorism directed against the United States. Several senior Air Force officers involved in the planning are reportedly appalled at the implications of what they are doing – that Iran is being set up for an unprovoked nuclear attack – but no one is prepared to damage his career by posing any objections"
Philip Giraldi, “In Case of Emergency, Nuke Iran,” American Conservative, August 1, 2005
This may of course be 'planted' disinformation to dissuade Iran from the euro. Or maybe not.

2005 - august - India is warned by the USA not to proceed with the Iran to India gas pipeline, and that all trade with Iran is under USA embargo of 1985, re-confirmed in 1997. All USA trade is embargoed - USA law, on the face of it, does not apply in other sovereign countries.

2005 - mid august - USA - the strategic crude oil reserve now has 600 million barrels in it, and Bush re-states his intention to continue to fill it to capacity, about 700 million barrels.

2005 august 14th - USA accuses Iran, based on its 'intelligence' sources, of sponsoring terrorist attacks in Iraq.

2005 - august - Iran threatened with sanctions unless it halts its nuclear energy programme
. The USA government is worried Iran, although a signatory to the Nuclear Non-Proliferation Treaty and fully monitored by the International Atomic Energy Agency (as required by the treaty), 'might' develop nuclear weapons (or even develop "programs" to develop nuclear weapons). Iran is not yet producing enough gas to meet the existing and projected requirements for gas-fired electricity plants. In 2002, over 70% of total government revenue was from selling oil and gas. Iran's economy is deeply dependant on selling gas and oil. It needs foreign currency from gas sales to meet the needs of its out of control growth in population. Even in the medium run, it cannot rely on gas or oil fired electricity generation. These hydrocarbons need to be sold for national income. It has it's own uranium ore deposits that can be used in nuclear power plants to generate electricity. Of more interest to foreign countries, it has huge and barely tapped natural gas reserves. It's fate is sealed.

2005 - (august) USA Bush agrees to cooperate with India, agreeing to "work to achieve full civil nuclear energy cooperation with India". India, like Pakistan and Israel, has nuclear weapons of mass destruction. India, like Israel, refuses to sign either the Nuclear Non-Proliferation Treaty (which requires monitoring of the countries nuclear facilities by the International Atomic Energy Agency), or the Comprehensive Test Ban Treaty.

2005 - (august 2) The United Arab Emirates disputes the border between itself and Saudi Arabia at the point where it over-lays the giant Shaybah oilfield, with proven reserves of 15.7 billion barrels currently remaining. At stake is the belief that new techniques could raise recoverable oil to 18 billion barrels. More importantly, the field contains 25 trillion cubic feet of gas.

2005 - (august) ExxonMobil completes a joint venture with Qatar to build one of the world's largest LNG manufacturing facilities.

2005 - (august) The world conventional LNG tanker fleet is now 180 ships.

2005 - (august) As oil becomes more expensive and production rates decline from old wells, attention turns to expensive to access deep water oil. The cost of the relatively few specialised offshore exploration rigs is now between 30% and 50% higher than last year - demand for these specialist rigs is now high.

Suprisingly, Saudi Arabia this months hires five 'jackup' oil rigs to drill offshore. Some commentators ask, if Saudi reserves are as large as their unsubstantiated claims say, why do they need to explore the very expensive offshore drilling option? There have been no Saudi offshore fields of any size found in Saudi Arabia since 1978. Why are the Saudis looking for relatively small fields (by their standards)? The answer may be an estimate in 2000 that saw a possible 2 billion barrel of oil oilfield likely offshore Saudia Arabia, mostly, but not entirely, in Iranian waters. Clearly, an ally with strong marine firepower would be needed to protect the drillers in this contentious area.

2005 - In many countries motorists are saving money on high petrol costs by turning to regular gas for their cars. Automotive experts claim using lower octane 'regular' ( typically 87 octane ) in modern computer-controlled engines does no harm, as the timing is automatically adjusted to the richness of the fuel-air mix. The possible exceptions are turbo-charged and high-performance engines. The only drop in power in most cars is when the vehicle is being driven hard and fast - not a likely scenario for those watching their petrol consumption. In some vehicles mileage even improves when regular is used. Older vehicle, especially those with carburettors rather than fuel injection, may experience pre-ignition or 'pinking' when the car is under load. Well tuned and driven carefully, pinking may not necessarily occur, even in carburettor-fueled autos. Premium petrol is typically 91 octane, although some 98 octane fuels are now being introduced. The main benefit is to the oil companies and the gas stations, which have a higher profit margin on the so-called premium gas.

2005 - (august) Mexico's state owned oil company, Petroleos Mexicanos (Pemex) says it expects its second biggest oilfield, the offshore Ku-Maloob-Zaapto complex, containing mostly heavy oil, to more than double crude output to 800,000 barrels a day within five years. A total of 18 platforms are hoped to be in place by that time (barring hurricane damage). The size of the production increase means it is likely to be pressurising the field from the start, hastening its ultimate decline.

Mexico's massive Cantarell field continues to decline at a rate of 2%-5%, with a retired Pemex oil engineer claiming decline may be as much as 15%-20% by 2008. Even if the Ku-Maloob-Zaapto complex  reaches this level, it will be barely replacing the dropping production from Cantarerell. The conventional wisdom is that Cantarell will drop production to about 1 million barrels a day within about 3 years. It may drop more steeply than anticipated.

2005 - (august) Mexico's 56,000 kilometres of oil pipelines, many built in the 60's and 70's, are 20 years beyond obsolete. 40% are either damaged or corroded. The Mexican government has supplied only a third of the estimated capital amount needed for repairs and replacement. About 60% of Pemexs' revenue goes to the Mexican government. Pemexs debt has more than doubled in the last five years, and is now a massive $US48 billion. There is little cash left to invest in exploration, refineries, or in natural gas production. As a result, Mexico now imports around 25% of its gasoline (from USA), and 20% of it's natural gas.

2005 - (august) Iraq's oil production remains low (currently only 1.6 million barrels a day exported), partly due to the dilapidated state of it's infrastructure and lack of material and capital for repair (it already has excellent oil engineers) and partly due to the 257 acts of sabotage on its oil infrastructure since the American invasion to have a look around for 'weapons of mass destruction'.

2005 - (august 28) - USA and UK legal and governmental teams bully and bargain away the original Iraqi draft constitution produced by the Iraqis because it diverted Iraqs oil resources to collective ownership by the Iraqi people and required the money to be spent on "social justice" - a right to state provided health care, housing, education and so on.

After the occupying powers have finished, the final draft of the Iraqi constitution is stripped of all elements of social justice as the basis for the economy, and code words for privatisation and sell off to foreign interests inserted - “reforming the Iraqi economy according to modern economic bases, in a way that ensures complete investment of its resources, diversifying its sources and encouraging and developing the private sector.” 'Reforms' mean privatising all communally owned assets, usually to rich foreigners.

The most important element is that the proposed constitution (article 110) strips Iraqis of 100% ownership of their oil, as it presently is, in favour or allowing multinational companies to "develop" it. It also means privatisation of the state owned oil company.  -"...federal government and the governments of the producing regions and provinces together will draw up the necessary strategic policies to develop oil and gas wealth to bring the greatest benefit for the Iraqi people, relying on the most modern techniques of market principles and encouraging investment.”

The consitution allows a form of federalism, with federal governments controlling their 'share' of the oil revenue. By co-incidence, the Shiite south and the Kurdish north will 'do' very well out of this. The Sunnis in the centre will have to hold out their hand to the central government for whateveer can be got from taxes. This is an effective partitioning of Iraq.

The wheel has turned full circle, and in spite of the circumstances on the ground, the oil multinationals dream of exploitation of Iraq's 'high profit' oil with 'protection' of an assorted band of religous gunmen and other thugs, along the Nigerian model, looks very likely.

2005 - (august) Kuwait, supposedly with 99 gigabarrels of oil reserves, is accused by Iraq of tangential drilling across the border and into Iraqi fields. Kuwait is also now developing small northern fields, suggesting their reserves may be closer to Dr. Colin Campbells recent estimates of 55 gigabarrels, and that Kuwaits main Burgan field is likely to be heavily depleted.

2005 - (august) while the approximately 160 US refineries have been shown as operating at less than full capacity, it is increasingly apparent that this is because they can't operate at full capacity, not because they lack crude to refine. Planned annual maintenance closures may have been shortened or even deferred in order to allow production to continue. Plants may have been over-pushed to try to meet demand. This may be part of the reason for unexpected shutdowns due to plant failure and accidents. The latest refinery forced to shut down is Sunoco in Philadelphia, closed following a fire. It would normally produce 200,000 barrels a day of distillates. Large capacity refineries that have recently experienced interuptions to operation include those of BP, Exxon Mobil and Valero. BP's Texas City refinery recently had their second fire in four months, and then had to shut the gasoline cracking unit for 'maintenance repairs'. As the US refineries age, corrosion and breakdown become increasingly problematic. The problem is made worse by the large numbers of refineries which were closed down in the era of cheap oil in the 1980's. Some of these refineries specialised in producing fuel oil for electricity generation plants that could run on either gas or fuel oil.

The end result is USA's remaining 132 oil refineries now have a reduced capacity of 16.8 million barrels a day at a time of historicaly large demand. Any further shutdowns or damage to these refineries will seriously compromise USA ability to fully supply it's domestic market, meaning USA must import, and therefore bid up international refined product to be the preferred purchaser.

2005 - (august 12th) oil is $US66 a barrel.

2005 - (august) USA energy legislation comes out directing the strategic reserve be increased to 1 billion barrels of crude oil.

2005 - (august 13th) - China is experiencing a refinery-limitation "supply crunch" in some cities, supposedly partly due to tankers not being able to dock due to typhoon Haitang. Previous decisions to curtail imports of refined product may also be to blame. Guangzhou, with a shortfall of about 2,200 barrels per day of distillate is now rationing gasoline and diesel. Chinese oil refiners have lost around Rmb4bn to 6bn in the last 6 months as the Chinese government orders the refineries to 'absorb' half the higher cost of oil in order to artificially shield Chinese businesses from having to bear the true market cost of oil.

2005 - China - an estimated 1,200 tonnes a month of China's heavily subsidised crude oil and oil products are smuggled out to Hong Kong from Guangdong for re-sale at closer to world prices, reaping handsome profits for the smugglers.

2005 - (august 15th) - USA - petrol averages about $US2.48 nationwide. In a few places (19 of 92,792 gas stations) regular sells for $US3 a gallon a record high.

2005 - (august 9) - UK - The average price of unleaded petrol reaches its highest ever point  - 91p a litre. Diesil is almost 94p a litre. This increase translates to motorists paying an additional £7.4 million a day above the price paid at the start of 2005.

2005 - (august 15th) Venezuela, the world's fifth-largest oil exporter, prepares to offer its oil development blocks in it's Orinoco oil belt, which may contain as much as 300 billion barrels of heavy crude, to oil companies in Latin America - such as Uruguay's state oil company, and Brazil's Caribbean Petroleo Brasileiro SA. The objective is to secure the benefits of South American oil developement for South Americans and ensure economic stability. President Chavez says "In the first place oil will be for the Venezuelan people, and then the people of Latin America and the Caribbean" rather than oil benefits 'flooding up' to private US companies from the outside the region.

2005 - Private companies continue to make massive profits from historically high oil prices.

2005 - (august 19th) Venezuelan President Hugo Chavez accuses USA presidential office of planning attacks against the people of Venezuela.  The energy minister reportedly says if the U.S. shows any signs of aggression toward Venezuela the Venezuelan government  is "ready and willing" to stop selling oil to the United States. The minister noted that "the US market is not indispensable to us" and that there were other markets that oil could be sold to, notably China. Venezuela currently exports about 1.5 million barrels a day to the US , and supplies about 7.5% of USA oil, the fourth biggest single supplier in the mix. (Mexico and Saudi Arabia supply about 1.6 million barrels a day each, and Canada supplies nearly 2 million barrels a day.)

2005 - (august) Venezuela announces plans to expand its fleet of oil tankers. The fleet will go from the current 21 tankers to 58 over the next seven years. The objective is to sell to new clients around the world, including Asia, which is around 40 sailing days away from Venezuala - far more than to the USA. The USA is Venezuela's largest customer at the moment. Venezuela currently sends oil to its own petrol station chain in the USA. The USA is unlikely to allow Venezuela to sell oil to whom it wants, or to give favorable deals to impoverished neighbouring countries, or to promote corruption-free democracy in South America. Venezuela has sealed its fate.

2005 - august - Venuzuela's wealthy kleptocrats (20% of the population) use their total control of the media to make hysterical propoganda against the democratically (by the poor 80%) elected president, and continously publish calls by various commentators to murder the elected head of government. Astonishingly, unlike USA, Britain, Canada, or any European democracy, this treasonous call for terrorism is not a crime - and goes unpunished!

2005 - (august) - an exteme propogandist closely allied to president Bush uses his media position to suggest that the USA engage in terrorism - the murder of a democratically elected head of state. Not the head of North Korea, an extremely dangerous dictatorship publicly and clearly involved in building weapons of mass destruction, but Venezuela, an open and participatory democracy. But peaceful Venezuela has oil, whereas insane and dangerous North Korea effectively has none. The US government pointedly declines to arrest the offender under the homeland security law on a charge of promoting terrorism. The US government uses its 'beholden' television and print media to use biased and loaded language full of 'trigger words' (muslim, infiltrate, rogue, leftist, communist, antidemocratic) to characterise the Venezuelas democratically elected government as a "regime", a "rogue state" and as a "launching pad for communist infiltration and Muslim extremism". The american media reports the US governments 'concerns' about his "committment to democracy" and non-specific propaganda about "spreading instability" in Latin America and funding "antidemocratic groups". Chavez is said to be influenced by the ideas of the French revolution and the European enlightenment, which bought democracy, liberty and brotherhood to Europe once the unelected dictators ('royalty') and kleptocrats had been removed. Chavez uses barter to trade oil to poor countries, recently swapping oil to Cuba in return for hire of 20,000 Cuban medics to treat the poor in Venezuelas impoverished shanty towns. Chavez offers to direct-sell discounted fuel oil for winter to USA citizens below the poverty line.

Clearly, the democratically elected government of Venezuela is being propogandised by the USA to 'justify' USA state terrorism in order to control Venezuelan oil for USA benefit. The US is yet to publicise its price estimates for the job.

2005 - US securing of the Iraqi oilfields/ middle east military base, and guarding of the Afghan pipeline route now costs US taxpayers $US5.6 billion a month.

2005 - Fiat announces it will launch an economical new version of its tiny 1957 'bubble car', the Fiat nuova 500. The original was a rear-engined 'micro mini' with a small two cylinder 479cc air-cooled 13 horsepower engine, coupled to a four speed manual gearbox. It had a canvas roll-back sunroof, and carried at least 2 people. The new version will be a front-engined, front wheel drive, 4 seater hatch 3.3 metres long, powered by a four cylinder 1,000 cc engine. A new, low emission, thrifty sub-1 litre, two or three cylinder engine will be developed by 2010.

2005 - UK - British scientists develop plastics that are light, six times stronger than normal, and fully recyclable. Plastic parts can now be as much as 50% lighter than conventional parts, safer to handle than glass fibre reinforced plastics, and cheaper to produce. The high strength lightweight plastic can now allow lighter - and thus more fuel effcient - cars to be designed.

2005 - Fuji heavy industries and NEX develop a manganese lithium ion battery with a claimed 15 year or 200,000 km life. This is significantly more than the nickel-metal hydride battery used in most hybrid cars. These batteries have a guaranteed life of 8 years or 160,000 kms.

2005 - (august) Australian sales of 4 wheel drive SUV vehicles are down by 20% compared to the previous year. Owners are reportedly looking for more fuel economic vehicle. While the there are only about 860 hybrid electric-petrol cars in New South Wales (the most populous state) the Australian Consumers Association cautions that hybrid electric-petrol vehicles may not be the cheapest solution in the long run, pointing out that the A$20,000 premium to buy petrol-electric would not be covered by the weekly fuel saved when compared with an small car with a high fuel efficiency. The Association spokesperson also notes "it is unknown how long the battery will last and how much it will cost to replace it in 10 years' time".

2005 - (august) Auto Bilds magazine tests the state of the art Mercedes-Benz M class CDI diesel against the hybrid petrol-electric  Toyota Lexus RX 400h in a drive from New York to San Francisco. The merc is a 3 litre V6 turbo diesel, the Toyota is a 3.3 litre V6 combined with the dual electric motor/generator system. The M class had an overall fuel efficiency of 9.1 litres per 100 kms (31 mpg), the Lexus used 10.2 litres to travel 100 kms (27.7 mpg). Given the slightly larger engine of the Lexus, it would be fair to say that petrol-hybrid big-engine expensive luxury cars are no more fuel efficient than their diesel equivalent.

2005 (august) - Nigeria faces having to now charge the true price of oil to its domestic consumers. Until now, petrol pump prices have been fixed by the government. But Nigeria must import refined product, and as the cost now far exceeds the sale price, the state-run energy company that handles oil exports and distillate imports is near bankruptcy. Nigerias out of control population growth to 130 million people, coupled with industrial scale corruption, has seen its $US340 billion oil revenue from the last 40 years squandered. As a result, the lost productive-investment opportunities have kept its people as poor as any any other impoverished African state without oil resources. When the vast majority of people are locked out of the benefits of their own indigenous oil wealth by corruption officials or by foreign control (or a combination), people eventually reach a tipping point and demand justice. In Ecuador strikes in the oil industries have reduced production by 50%, and possibly permanently damaged some wells.(Venezuela stepped in to cover the lost production for the Ecuadorian government for free). In deeply impoverished Bolivia similar strikes and blockades of overseas controlled extractive industries have happened. However, interruption to oil supply by popular outrage in Ecuador and Bolivia makes little difference to global supply. But Nigeria is the world's eighth largest producer. The Nigerian government is currently negotiating to try to avoid a strike.

2005 - (august 16th) French  prime minister Dominique de Villepin warns citizens that refinery capacity in France cannot cope with demand - “This crisis, we know, is likely to last. All the factors have come together for oil to remain expensive in the years and decades to come. Our refining capacity is saturated and cannot adequately cope with French demand."

2005 -(august 30th) - Oil is $US70.85 a barrel as refinery bottlenecks continue and as concern mounts for the effect of the looming category 5 Hurricane Katrina on the US Gulf oil refineries and offshore crude reception terminus.

2005 - August - Hurricane Katrina causes refinery shutdowns, and closes the US crude oil reception terminus (the Louisiana Offshore Oil Port) for 7 days. Around 10% of the total USA refinery capacity is temporarily lost; but some, including Exxon Mobils refinery at Baton Rouge, one of the largest, remain in production or quickly return to production. Eight refineries in Loisiana and Mississipi are damaged and stop operations. After the shutdowns in July, USA lost ability to supply 4% of its daily demand.

Oil fields in the Mexican Gulf waters stop pumping. Total US domestic oil production at the end of august was 5.4 million barrels a day.  Mexican Gulf oil provides roughly 1.5 million barrels of the USA current daily requirement of 20 million barrels a day, i.e. roughly 7.5% of total (domestic plus imports) USA national daily requirement (G of M oil share of USA domestically produced oil is about 29%).

Taken together, Mexican Gulf overseas oil terminus import facilities, plus Gulf oil fields, are directly responsible for about 25% of the USA oil supply. Bush says he will use oil stocks from the Strategic Petroleum Reserve if necessary to keep undamaged refineries operating as continuous feedstock (oil) is required for smooth operation.

At least 46 oil and natural gas production platforms are destroyed. A further 20 are extensively damaged. The larger platforms have around 25 production wells on them. The wells must now be abandoned. The platforms act as receving points for oil piped from adjacent derricks. These numerous 'satellite (caisson) wells around the platforms have severely bent derricks and are now unproducable. Bent structures bend the pipe, meaning the well has to be re-drilled. Some of those re-drilled will no longer have a platform hub to pump the oil to, so will not be re-drilled. At least 30 underwater pipelines are damaged by mudslides. Damage is more severe than that caused by hurricane Ivan. Oil industry engineers estimate it will take years, not months, for Gulf oil to return to existing production levels.

The Mexican Gulf represents about 30% of USA current domestic oil production.

Bush releases 30 million barrels of crude oil from the strategic reserve until the Louisiana offshore Oil Port can return to service. The Louisiana offshore Oil Port is the only place that oil supertankers are able to berth, and is reported as being relatively undamaged. The mainland terminus (Port Fourchon) for the oil pipe from offshore suffers considerable damage.

There are no reserves of refined petroleum available in USA to compensate for reduced refinery capacity.

International Energy Agency executive director Claude Mandil suggests Europe will need to send some of its emergency stockpiles of gasoline to USA if USA refinery damage is severe. The USA crude oil stockpiles are nearly full, but it is crude that has been refined down to gasoline that is in short supply. USA uses about 20 million barrels of oil a day (with about 12.6 million barrels a day consumed in refining down to petrol and diesel for use in cars and trucks ). There is no shortage of refinable crude in the USA. If 7.5% of the USA oil supply is interrupted for many months, and the strategic oil reserve is used to replace the lost 1.5 million barrels a day (giving Iran a reprieve but endangering Venezuela), the strategic reserve will last for over a year. The reduction in Mexican Gulf oil production - of relatively modest importance to overall USA oil reliance - can be compensated by reduced demand. Demand will fall due to inevitable high oil prices as USA competes on the international oil market for increased supply, and by a temporary refinery supply bottleneck which is occuring now. Recession is inevitable, equilibriating reduced supply with reduced demand in USA.

The shortage is of refined gasoline, due to refinery damage and temporary shut-down. Part may be unrelated to the effects of the hurricane. The global  refinery bottleneck is causing shortfall in supply, and the hurricane may be partly a convenient excuse, as happened in China.

Most of the large capacity refineries that can handle more sulfurous crudes are in the USA. And these are the refineries damaged in the storm. If USA cannot take as much sulfurous oil, the Saudi sulfurous oil becomes very difficult to sell in quantity. And as there are few other refineries handling sufurous oil, when USA turns to the market for gasoline and diesel to replace lost refinery production, it is largely taking gasoline and diesel refined from 'sweet' light oil, increasing pressure on global supplies.

“If the crisis affects oil products then it’s a worldwide crisis. No one should think this will be limited to the United States”
- Claude Mandil in Die Welt newspaper

While America buying petroleum on the European market and driving up the price may seem like a crisis to the heavily petro-taxed Europeans, it is really a short-lived but uncomfortable phase. As USA 'sour crude' refineries are repaired, others around the world modified to handle sulfurous 'sour crude' crude, and people cut back their consumption, supply will once more meet the (reduced) demand.

Of much more importance than the lost oil production - it can be readily replaced by tankers bringing in more from overseas - is the 16% of USA gas production that has been lost. Nearly 75% of the remaining theoretically operative Gulf Of Mexico gas wells are, for the moment, unavailable (destroyed wells are not yet enumerated). The winter heating season starts in october, and the winter refill season usually runs until the end of october. Around half of USA households are heated with natural gas. Gas is essential as additional electricity generation capacity for demand peaks. Dual fuel gas/fuel oil generation plants are no longer common, nor are small regional fuel oil refineries. Coal (50% of USA electric power) and nuclear plants are constant suppliers, without additional capacity to meet additional demand. While gas storage is sufficient for a mild winter (but 12% below the 3 winter average), full 'high demand' (markedly cold) winter storage re-fill is now unlikely. Additional supplies cannot be brought in from the global market. There are only 4 terminals for specialised natural-gas tankers (LNG tankers) in USA, and none have spare capacity. Gas prices spike 20% over a four day period. Commentators predict price increases for gas of between 50%-80% in winter. A winter supply crisis is possible. The USA government is well aware of the risk, and in an eerie echo of its inaction over New Orleans city levees, does nothing.

August - USA - natural gas prices spike to near double their mid year price.

2005 - (august 31st) USA now has an excess of crude oil (5 million barrels), an atypical situation for the pre-winter season. Usually this crude would have been converted into heating oil and petroleum. Refinery bottlenecks means crude is accumulating steadily and available, but is unusable. Reduced heating oil availability drives its price up to around $US2.67 a gallon. Demand for firewood in eastern USA exceeds supply, wood prices increase dramatically.

2005 - (august 29) light sweet crude prices hit US$69.25

2005 - (august 31st) A poll in Canada shows
49% of those polled wanted petroleum geological resources nationalised.

2005 - (august)
USA power grid researcher Roger Anderson says if the trend identified starting 1998 of  increasing frequency of blackouts due to electricity distribution failures continues a blackout affecting half the continental USA while not likely, is certainly possible.

2005 - (september) Electric power supply fails at the pumps moving gasoline in the two major pipelines feeding petrol to the southeast and mid-Atlantic USA. Petrol stations run out as consumers panic and 'stock up'.

2005 (september) USA environmental protection agency 'suspends' rules of sulfur emmission levels in fuels. This 'temporary' suspension allows more refineries without advanced sulfur stripping technology to now produce diesil transport fuel, helping with the refinery bottleneck. This move is likely to remain in force until recession drives down demand to the point it can be met by sulfur complying refineries alone. Industry insiders pick the regulations forcing refineries to alter their plants to be able to produce ultra-low sulphur 'clean burning' diesil (due in 2006) are likely to be postponed indefinitely.

2005 - (september 1st) Europe - traders betting on a heavy demand from USA for gasoline and diesel supplies from west Eurasian refineries bid up the price of 91 octane unleaded petrol to $US801 a tonne. This new 'market rate' will flow through into prices paid in western Eurasia, with pump prices in the UK expected to hit £1 per litre.

2005 - (september 2) Europe-based International Energy Agency agrees to release 2.1 million barrels a day of emergency oil reserves to USA for up to 30 days, including product from the west Eurasian-based 50 million barrel emergency petroleum store. It is planned to release only
369,000 barrels a day as refined of petrol, the remaining 1.73 million barrels a day being unrefined crude oil.

The USA, with its fleet of huge-engined, heavy, energy-wasteful personal transport, has now increased its daily petroleum consumption to about10 million barrels a day. The damage to refineries, coupled with ever-increasing demand, means it can now only produce 9 million barrels of petroleum a day. USA has ample crude, but is facing a petroleum shortage, and will have to buy the shortfall of about 630,000 barrels a day of refined petroleum gas on the international market.

2005 - (september 4th) Venezuela's US-based Citgo Petroleum Corporation increases output at its four refineries from 810,000 to 834,000 barrels of refined gasoline a day in order to help alleviate USA gasoline shortages. President Chavez  undertakes to send an additional 1 million barrels of gasoline direct from Venezuelan refineries. Chavez also donates $US5 million to the hurricane relief programme.

2005 - (september 3rd) Dr. Colin Campbell of the Association for Study of Peak Oil and gas suggests that as Europe consumes 10.6 million barrels of oil a day, and yet only produces 5.2 million barrels a day, the chief European oil-export nation, Norway, could be paid by Europe to keep its oil in the ground. In the face of economic crisis in the coming decades, Norways existing $US120 billion government oil fund could be seriously eroded by failure of conventional investments. The best investment may be not in USA or Euro denominated bonds and stocks, but is underground reserves of oil that increase in value and will give a yield far beyond any available on the market today. This idea could escalate. Investors could buy shares in a proven well that will not be produced for a defined period of time, helping both conserve oil and increase the value of their below ground investment! Governments might shift some 'retirement' social security investment money from stocks and bonds to 50:50 partnerships with contract drillers to find, prove, and plug gas and oil reserves as an absolutely secure national asset increasing in value faster than anything else on the market.

2005 - (september 6th) Iraq with the world's third largest oil reserves, introduces petrol rationing due to shortages of refined petroleum, a problem made worse by rampant corruption. Petrol intended for gas stations has been diverted to the blackmarket, where it sells for ten times the official subsidised pump price. Worse, refined petrolem product continues to be sold "abroad" when Iraq's needs are still not met.

2005 - (September 6th) - petrol in Ireland is around $US5.30 a gallon. A large part of the price is government tax. As a result of the cost, owning and using any car is expensive; and using a very fuel inefficient car is a privilege. The population benefits by historical large government investment in public transport in a geographically small country.

2005 - (september 6th) - USA - only one of the 8 refineries shut due to hurricane damage has re-opened. One other is progressing toward reopening. The two largest refineries of the 8, the Pascagoula (ordinarily capable of 325 million barrels a day) and the Belle Chasse refineries, have been extensively damaged. Industry commentators say it may be months before they are able to re-open.

2005 - China's second largest auto maker
, Shanghai Automotive Industry, announces plans to begin commercial production of both its own and foreign-branded hybrid-powered vehicles by 2008.

2005 - India's state-owned Coal India Ltd and Oil India Ltd form a joint venture to build a coal-to-liquid fuel plant (synthetic gasoline). India is the world's third largest coal producer. The proposal is to use high-sulfur coal from Assam's north eastern coalfields.

2005 - (september) India announces decides to go ahead with the Iran-Pakistan-India gas pipeline, in spite of USA calls for UN sanctions against Iran of suspicion of one day possibly developing a weapons of mass destruction programme. India announces plans to develop an indigenous natural gas powered small vehicle.

2005 - Mazda has developed a sub-compact 'concept car' that has an idle-stop system similar to that used in petrol-electric hybrids. The system stops the engine when the car stops at the lights, and restarts it automatically when the accelerator is depressed.

2005 - (september 7) USA warns China that entering energy supply contracts with a middle eastern energy seller will be shaky if the USA doesn't like that country. He says "you can't lock up energy resources" in a global marketplace. According to a USA functionary, "from a U.S. perspective...it looked like Chinese companies had been unleashed to try to lock up energy resources." The spokesperson says "even when governments think they "own" the resources of another country, that country could nationalize the assets". Of course, if China bought direct from the seller, it may pay in currencies other than the US dollar...

In the clearest statement yet that USA considered that it owned exclusive rights to global oil, the official said [China had to decide whether it] "want(ed) to be against us and perhaps others in the international system as well". Curiously, USA points accusingly to China's links with murderous regimes such as Sudan and Burma, while USA has the closest links to Saudi Arabia, an autocratic regime of extremist fundementalist that gave rise to terrorist attacks against the USA.

2005 - (september 8th) - Russia's President Putin and Germany's Chancellor Gerhard Schroeder sign a $US5 billion deal to build a 1,200 kilometre natural gas pipeline from the Russian port of Vyborg under the Baltic sea direct to Germany. The gas will come from the yet-to-be-developed  Yuzhno-Russkoye gas field in West Siberia.  The consortium is 51% owned by Russia's state gas company, Gazprom, and two German companies, BASF and E.On each hold 24.5%.

Other adjacent EU countries accuse Germany of putting its needs first. Germany claims the gas "should" be open to "later" participation by third parties. Germany has few oil and gas resources, and relies on Russia for about 30% of its oil and gas supplies. (In fact, about 47% of German gas supplies now comes from Russia.) Russia currently supplies 25% of west Eurasia's gas needs. West Eurasia is Russia's major market for oil and gas, with around 66% of Russia's production being sold there.

2005 - (September 8th) energy consultant warns official projections of UK gas production of between 85 and 100 billion cubic metres per year from 2005 to 2007 are unlikely to be met as the latest statistics on decline rate, at 9%, are higher than government officials or the industry expected. Not only will winter in the next three years experience gas shortages in spite of imports, but electricity generated from gas will be more expensive, as will LNG for UK's increasingly large fleet of dual fuel vehicles.

2005 - (september 9th) Royal Dutch Shell, the major oil producer in the deeper waters of the Gulf of Mexico admits hurricane damage to platforms in the Mars field and adjacent locations means there may be no production from this field for the remainder of this year.

2005 - USA electrical engineer 'tinkering' with his1.5 ltre Toyota Prius with 18 additional batteries claims to be getting 80 mpg/28 kms per litre in short range driving. In addition, a further modification allows the vehicles batteries to be trickle charged overnight from a domestic power point. The 18 batteries add around 32 kms to the normal Prius range (about 50 miles per US 'short' gallon, 17 kms per litre) where motive power is around 50:50 petrol:battery.
At this point the 'home-made' modifications are not cost efficient.

In rough comparison the following much older 'fleet cars', with multiple users and indifferent driving gave -
1996 1600 cc Pulsar (not stated whether auto or manual) did 11.1 kms per litre, presumably around town.
1999 1000 cc Daihatsu Mira (not stated whether auto or manual) did 16.6 kms per litre
1994 1000 cc Daihatsu Charade (not stated whether auto or manual) did 13.7 kms per litre
1999 1500 cc Daewoo Lanos did 12.3 kms per litre

2005 - (September 11th) An interplay of factors cause intermittent petroleum and possibly diesel shortages. The USA shortfall of 630,000 barrels a day of refined petroleum can theoretically be compensated for by drivers slowing down, tuning their cars, using their second (smaller) car, car pooling etc - better than 10% savings can, in theory, be made by these conserving behaviours; (albeit USA now imports close to a million barrels of gasoline a day, presumably to build stocks prior to the winter switch to less gasoline production). But in Europe, refineries are now running at full capacity, so refined product sent to USA is at the expense of availabilty of refined product in Europe. While much petrol use in USA and Europe is discretionary, diesel use in USA is not.

Diesel is used almost exclusively in commercial trucking and rail in USA. A significant component of European diesel use is for personal transport, and thus discretionary to an extent. USA absolute infrastructural transport needs are likely to bid up diesel prices, possibly causing refineries to consider whether some petrol fractionation should be cut back in favor of diesel fractionation - further shortening petroleum availability. This is the reverse of march this year, when refineries cut back diesel production in favor of producing extra petroleum - driving up diesel prices. The equation now weighs heavily on diesels critical importance to world economies versus petrols use for discretionary, frivolous, personal transport.

As USA refineries are repaired and non-USA refineries slowly convert to handling sulphurous heavy crude, and as high prices and intermittant shortages (made worse by outbreaks of panic buying suddenly shifting petrol storage from oil company tanks to constantly full vehicle tanks) force temporary measures, changes in driving habits and put more people on public transport, supply once more will meet demand. Increasing small business failures and unemployment will also help. But the beginning of decline in sweet light crude supply will from now on 'chase' the reduced demand, and overtake it once more. Barring giant field collapse, the next five years or so are likely to be a rollercoaster ride of periods of small-scale localised absolute shortage and relative plenty, before fading into the long decline.

2005 - (september 11th) USA reports of a draft policy formulated  in march to attack real and imaginary so-called rogue states with nuclear bombs without warning. This may be USA propoganda to try to scare Iran into abandoning its plan to engage in international commerce, or it may be a genuine terrorist threat. At stake is a partial shift from the dollar to the euro (and gold) as currencies of value. This would seriously weaken the dollar, and make USA oil and gas imports more expensive. Given the huge stakes, this may not be just a threat. A speculative scenario would see the USA presidential/business/military complex exploit the known temporary gas and fuel shortages likely at the end of this year and early in the new year as an excuse to 'pre-emptively' bomb Iran's nuclear facilities and sign over the marketing of its 'global resource' so that it is 'regular'. And in USA dollars only.

2005 - (september 11th) "The public do understand that stability is all-important here and what we need to do is deal with an oil shock which is as big as the oil shock of the 1970s in terms of its effect on the economy." - UK Chancellor Gordon Brown is telling the truth. He then blames OPEC for the oil prices rise. Which is not true, as he almost certainly knows. Only Saudi Arabia (supposedly) has spare capacity, and this is unusable heavy crude, not 'light'. UK sells oil from its territorial waters. If it wanted, the UK could mandate a drop in price via nationalisation and control of the resource. Brown is being disingenuous.

2005 - (september 12th) - Due to taxes (67% of the pump price in the UK, some claim 80%), many countries pay far more than the most energy hungry country in the world -
UK - some petrol station now charge £1 per litre for unleaded 91 octane - equivalent to US$6.92 per US gallon.
Norway - some petrol station now charge 11 koner per litre for unleaded 91 octane - equivalent to US$6.57 per US gallon.
Netherlands - some petrol station now charge 1.45 euro per litre for premium octane - equivalent to US$6.76 per US gallon.
Turkey - with the average wage only  $US4,642 a year, petrol is $US2.01 a litre - equivalent to US$7.60 per US gallon.
USA - popular outrage as petrol climbs to US0.79 cents per litre - equivalent to US$3.00 per US gallon.

There is currently a shortage of refined product. Demand is higher than supply. Prices ration the supply to those who can pay most, regardless of speculators.

2005 - September - USA congress takes away a large part of the poor's winter's fuel oil and energy assistance subsidies for the coming winter and gives it to victims of of the 'unforseen' levee collapse due to the 'unforseen' Hurricane Katrina in the Gulf of Mexico.

2005 - (early september ) - Desperate for refined product, USA's president Bush calls for USA refineries defer all maintenance and to operate to the absolute maximum. Candadian refineries mull over deferring maintainence to maximise production. The main petroleum pipeline from Canada, the Enbridge 2 million barrel a day pipeline from Canada to the USA midwest, is pumping at near full capacity. Canadian refineries have no spare capacity to max the pipeline out anyway.

2005 - (september 12th) quote of the month from Jim Kunstler:

"Another Big Thought still clogging the collective imagination is the idea that if only we switch to "alternative fuels" we can run the interstate highway system, Disney World, and WalMart just like before. The country is full of people now who want gold stars for running their household car fleet on discarded Fry-Max oil from the local Dunkin Donuts. . . or on oil squeezed from hemp seeds. Notice that the premise of a drive-in society remains.
Now the scary part of this is that these ideas are coming generally from the smarter people in our society. The dumb ones are are praying for the Rapture, or waiting for the market to magically fix everything, or sitting around the suburbs of Houston oiling their riot guns in front of the Nascar telecast."

2005 - september - global oil and gas exploration is now greatly increased. There are 422 offshore drilling rigs working, with only 4 rigs not yet committed. To build a rig to meet additional demand takes between 3 and 5 years. Skilled rig operators are in short supply. Because oil exploration and development infrastructure is limited, the daily chargeout rates for exploration rigs double. Saudi Arabia is pushing exploration hard to compensate for declining mega-volume flows - desperate for experienced petroleum engineers and drilling supervisors, it places full page advertisements in Dallas, Texas, newspapers.

"Virtually every rig and every petroleum engineer in the world is already working. Materially increasing the level of activity beyond the current level is not feasible over the coming 3-5 years"
senior private sector analyst giving evidence to USA Senate Energy and Natural Resources Committee sept 6 2005

2005 - As the North Sea fields continue to decline, closing platforms and pipelines as significant fields play out is economically essential in the difficult arctic environment. Small oil and gas fields at a distance from platforms are not tapped as they too infrastructurally expensive to develop relative to the return. The UK's share of North Sea oil production is now about 10% less than the previous years production, despite eight new fields coming on line.

2005 - Global new car building capacity is 55 million new cars per year. Industry experts predict that will have to double to meet the demand in China. Pity they are not also oil experts.

2005 - (september) Toyota announces it aims to boost petrol-electric hybrid car production by 60% to 400,000 in 2006, and to eventually run all its vehicles on this power system. The cost of components for hybrids makes them $US3,000 to $US5,000 more than an equivalent petrol model. Toyota is working on cutting the cost differential by half. Toyota, owner of Daihatsu, a company expert in small car technology, is now responsible for half the global growth in new car building. It builds about 1.5 million new cars a year.

Daihatsu announces shows a concept car, the 'HVS', a lightweight hybrid sportscar. It combines a 1.5-litre petrol engine with a 4 wheel drive hybrid system. Daihatsu claims the performance will be similar to a 2 litre engine, but with fuel economy better than of a 1 litre engine. Why it is bothering is unclear.

Honda Motor Co. has produced a new version of its Civic compact hybrid.
Ford contunues to buy hybrid technology from Toyota for its a sport-utility vehicle.
Nissan Motor Co, controlled by Renault France, plans to release a hybrid in the USA in 2006.BMW announces it will work with General Motors, and DaimlerChrysler in an effort to develop a petrol-electric power system for their models by 2007. Volkswagen and Porsche plan to jointly develop petrol-electric versions of their SUV models.

Suzuki announces it will manufacture under licence Fiat and Opels 1.3 litre diesel engine for its new small car, the new 'Swift'.  The Swift will do 51 miles per US gallon, 21.7 kilometres per litre, better than the much more expensive hybrids, but not as good as the most efficient small diesel car.

2005 - (september 13) Canadian oil exploration company EnCana sells its 75,000 barrels a day oil fields in five blocks in Ecuador to China. The fields sold for the mid-range price (1.42 billion) that EnCana wanted. The oil fields' proved reserves are said to be143 million barrels. (About 5 years of supply if pumping rates remain at the present extraction rate. Which they won't.). It sells China it's 36% stake in the new 450,000 barrel a day export OCP pipeline. Impoverished Ecuadoreans have recently protested at the lack of benefit from oil exploration to local communities. EnCana had thought that Ecuadorean state owned oil companies would buy the offering.

2005 - (september 14th) - China announces it has shelved plans to start filling their newly developed strategic 90-120 day strategic oil stockpile, due to have commenced by the end of this year. China's more long term view may see it buying heavy crude no other nation can easily process in quantity, and fill stockpile with this lower priced commodity. Or it may be simply converting its massive holdings of US dollars to a different store of value.

A Chinese government spokesman claims following a recent survey of China's oil and gas resources "China is able to maintain production of crude oil at around 180 million tonnes a year over the next 20 years". This is 1,319,400,000 barrels a year, or 3.6 million barrels a day - about half Chinas current oil consumption of 6.2 million barrels of oil a day. Given that Chinas oil production may have peaked (as far as can be told), and China's Sinopec Economics and Development Research Institute predicted this year that Chinas oil consumption will reach 10 million barrels a day within 15 years, the spokesman seems extraordinarily optimistic.

2005 - (September 16th) Saudi oil sells for about $US52, where US light crude sells for about $US65. Saudi has dropped its price by $3 in about a month. Why the larger differential? Saudi Aramco's crude oil blend has a relatively high suphur content, and the major refineries that handle this type of oil have had their output reduced by hurricane Katrina. The Saudis are finding it difficult to sell oil. Commentators observe that there is a lot of, in effect, 'unrefinable' crude in the market at the moment, and the Saudis and other high sulfur producers may have to drop their prices even further. Competition for Texas light, Brent sea light, and Nigerian Bonny light is certain to increase. There are, at the moment, two oil markets - the market for sour suphurous crude is oversupplied, the market for sweet crude is undersupplied. The spread between the prices is likely to increase.

2005 - (September 16th) - USA 44% of Gulf of Mexico oil production is still 'off-line', partly due to damaged onshore infrastructure. Nearly 34% of the USA G of M's gas remains 'off-line'.

2005  - historic first delivery of liquefied natural gas (LNG) by Gazprom (Russia's state owned gas major) to USA arrives at Cove Point, Maryland. The 60,000 tons of liquid is 80 million cubic meters of gas when re-gasified.

The director of Gazexport said “This is a new page in Gazprom’s external economic activity, which signifies the beginning of stable, reliable and regular deliveries of our energy resources to the United States. A relevant contract basis was established for this and next year we’ll send at least five LNG tankers to the United States.” 

Gazprom intends to base itself in Southern USAs oil and gas belt, and be a both a wholesale and retail seller in the USA. Gazprom expects to build its own network of regasification terminals in USA. Gazprom may deliver LNG from the huge Barents Sea Shtokman field (Shtokmanovskoye gas condensate deposits), so long as USA does not veto Russia's entry to the World Trade Organisation. While USA also 'expects' to be allowed to go into Russia and on-sell Russian gas to Europe via USA oil companies based within Russia, the power is with the Russians. USA companies are unlikely to be given a slice of the cake. USA needs Russian gas more than Russia needs USA as a market.

2005 - (September 18th) trend to start selling-off huge big-engined gas slurping SUV's is just starting in USA. Dealerships are finding it hard to sell them, with sales down by a third relative to september 2004. Sales of new small and fuel-efficient Toyota, Nissan and Honda models are up 10% relative to the same time last year. There are almost no buyers to be found for older SUVs on sale in USA. In New Zealand, where - as in Europe - petrol has been heavily taxed for many years (now $1.53 per litre, $US4 per gallon), and the majority of the national fleet is already small-engined (from 1500cc to 2.2 litres) some dealerships are flat refusing to accept SUV's as trade-ins. The demand for second hand 1500cc small cars can barely be met. There is very little demand for large engined cars - except by the relatively wealthy.

2005 - (September 16th) - OPEC predicts demand for oil will fall because of a combination of bottlenecks in global refineries that are limiting petrol and diesel production and damage to refineries that handle sour crude. Both situations drive up prices and reduce demand. OPEC predicts that if the trends continue, global consumption will average 83.5 million barrels a day for the year. This is an increase over last years consumption, but not as dramatic an increase as some commentators predicted.

2005 - (September 18th) - Iran's demand for gasoline continues to surge, growing by 10% in august to about 0.4 million barrels of gasoline a day (70 million litres a day). Domestic refineries can provide only a little more than half the gasoline demand. Gasoline imports will cost Iran $US4 billion by march 2006, and is expected to cost $US20 billion over the next four years. The government rejects rationing to drive down consumption, but will bring in a 'smartcard' to regulate consumption. Details are unclear.

2005 - (September 18th) - USA - Venezuelan President Chavez promises to ship both heating oil and diesel fuel to poor communities and schools in USA at below market price, by "cutting out the middle man". A pilot programme is set to start in Chicago on October 14th in a Mexican-American community, then the oil-for-the-poor program expanded to New York's south Bronx and Boston some time in November. The aim is to supply to use 80,000 barrels of crude at Venzuela's 8 USA refineries to produce distilled product for shipping directly to schools, non-profit organisations and religious organizations that help the poor.

2005 - (September 19th) - sudden one day spike in price of light sweet crude from US$63 to US$67.39.

2005 - (September) - France's 'Total' oil and energy company
outlines a programme to spend US$3.4 billion (€2.8 billion) to increase diesel production at four refineries and to upgrade refineries to be able to deal with heavy and sour oil. This will boost its diesel refinery capacity by an additional 29 million barrels. 60% of new cars in France run on high-efficiency diesel engines. Total will also spend US$612 million (€500 million ) on renewable energy projects.

2005 (september 24th) - Further hurricane, hurricane Rita, hits the Gulf of Mexico, further damaging oil platforms and rigs. Of the 155 drilling rigs in the Gulf, about 18 jack-up and semi-submersible rigs are either seriously damaged or destroyed; of the 1,600 platforms in the storm path, 66 production platforms are destroyed, with another 32 extensively damaged or detached from their moorings. A total of 28 pipelines are identified as damaged. There is relatively little new refinery damage, with only one refinery in Port Arthur down in the short term, estimates are for about the next one or two months.

2005 - (september 27th) - All of the Gulf of Mexico's oil production (about 1.5 million barrels per day) remains 'shut in'. About 78% of the GOM's natural gas production (about 7.8 billion cubic feet per day) remains lost. The Gulf of Mexico shutdown since the previous hurricane to date is equivalent to a loss of about 6% of the Gulf of Mexico's total annual oil production, and nearly 5% of the total annual gas production. Natural gas stocks are claimed by the USA Energy Department to be down by only about 4% relative to the same period last year. Gas prices are about $US14 per million British thermal units. Gas is now an increasingly important source of electricity generation due to numerous free-market gas-fired plants being built without total-nation energy-security oversight. A winter gas and possibly electricity supply crisis in USA now depends on the severity of the weather.

2005 - (september 27th) - USA bulk wholesale heating oil contracts for january delivery now sells for just over $2 a gallon.

2005 - (september) UK gas crisis - energy Minister admits that Britain now has a reserve cushion of only 11 days of gas use as it comes into the colder weather and as gas supplies run short. The UK was a nett exporter of energy, and has insufficiently prepared reserve facilities for the decline in gas production. Most imported gas comes in LNG tankers from Russia. Many of the electricity generation stations are run on gas. Domestic users, not business, have first call on electricity in shortfalls in supply. The Meterological Office issues an 'amber alert' to the UK government contingency planners that UK is likely to have a colder than average winter.

"If we have a cold winter, we are going to throw the switch, businesses will shut down, people will lose their jobs"
 - Sir Digby Jones, director-general of the Confederation of British Industry

Both USA and UK may be in the same boat this winter.

2005 - September - Russia - Gazprom shortlists US owned Chevron and ConocoPhilips, Hydro and Statoil from Norway, and the French Total for the development of the Shtokman natural-gas field in the Barents Sea shelf. Reserves of natural gas are estimated at 3.2053 trillion cubic meters, and include 30.98 million tonnes of gas condensates.

USA pressures Russia to make a decision, as 25% of the liquefied natural gas (LNG) is provisionally earmarked for export to the US, with 75% intended for export to Europe (Russia supplies 25% of west Eurasia's gas). The USA wants Russia to pass special laws for the USA to be allowed access to Russias oil and gas resources. Russia wants the US to allow Russian oil companies reciprocal rights to freely trade and compete in the US domestic retail gas marketing network.

2005 - (september) Saudi Arabia announces it will remove 235,000 barrels per day of gasoline, LPG, jet fuel, diesel, and fuel oil production from its Yanbu refinery. Yanbu's current gasoline production is about 40,000 barrels a day. The one month shutdown due in november is both for maintainance and to increase gasoline production to 60,000 barrels a day. It will also enable a lower sulphur diesel to be produced.

2005 - (september 27th) About 15% of USA refinery capacity remains out of action, and is likely to remain out of action until at least mid november, now removing about 1.7 million barrels a day of refined product (petroleum, diesel, jet fuel, heating oils) from the market. Stocks on hand are 6%-7% higher than the same period the previous year, when stocks were sharply lowered by hurricane Ivan. An increase off an historically low base, in other words.

2005 - (early october) about 20 supertankers, holding about 40 million barrels of crude, remain at anchor in the Gulf of Mexico, waiting for refineries to re-open so they can discharge.

2005 - (september 27th) A 325,000 barrels of petroleum a day refinery owned by French energy company Total is closed by striking workers. Total is the largest European gasoline exporter to the USA.

2005 - (september) - Petrol prices in Russia have risen 15% since the start of 2005. Russian oil companies TNK-BP, LUKoil, Sibneft, Surgutneftegas, and Tatneft agree together to freeze the retail price of petrolem at least until the end of the year. The Russian Federal Antimonopoly Service launches proceedings for 'price fixing'.

2005 - (september 30th) light sweet crude is $66.79

2005 - (september)
Japans imports of middle distillates - mainly kerosene for heating and gas oil - now cost about $US80 a barrel to Japanese companies - a 45% increase so far this year. Nippon Oil, with a refining capacity of 1.217 million barrels per day ( 25% of Japans refining capacity) plans to increase kerosene production in october by about 18% more than the last october (to 485,000 barrels a day) and increase octobers gasoline production by about 7.5 % (to 233,000 barrels a day). A Nippon Oil company official says "We plan to build kerosene stocks now to meet local demand because importing (kerosene) later is expected to be ridiculously expensive".

2005 - (october 2)  Japan beats more than 60 oil companies from various countries to win the right to explore and develop the most promising 6 oil fields in 26 oil zones in Libya. Libya, with the 9th largest conventional oil reserves in the world, has a significant number of undeveloped oil fields. The fields, mostly onshore, will be developed by Inpex Corporation (with the French company Total), Japan Petroleum Exploration Company, Mitsubishi Corporation, Nippon Oil Corporation, and Teikoku Oil. First production at these sites is expected about 2012. The only other Japanese interests in the middle east are minor interests in Algeria, Egypt, its Iraq reward, and Sudan. It's largest deal is with Iran, but USA is unlikely to allow this to progress.

2005 - (october) USA now imports about 1.4 million barrels of gasoline a day.

2005 - (october 3rd) - USA president Bush, learning from the Katrina debacle, announces the 'Northeast Heating Oil Reserve' in New York and Connecticut will be used if necessary this winter. It contains 2 million barrels, and has never before been tapped. The price the USA Federal authorities will offer it at has not been disclosed.

2005 - (october) two hurricanes (hurricane Opal, then hurricane Roxanne) that hit the Gulf of Mexico reducing oil output by nearly 770,000 barrels a day compared with September levels. Production for the month of october averages between 1.9-2.0 million barrels a day. Offshore production (mainly from the Gulf of Campeche fields) was about 2.08 million barrels a day in september. Offshore fields produce around 75% of Mexican crude oil, and six of the seven largest fields are in the Campeche Gulf. These fields suffered extensive damage from hurricane Roxanne in October 11. Around 11 million barrels of oil production was lost in the four days of complete shutdown of the offshore fields. The Cantarell platform, lost production of about 23 million baresl in total by the end of october.

2005 - India - Reliance Industries Ltd announces plans to double the refining capacity of its Jamnagar refinery, which currently processes 660,000 barrels of crude per day. Costs are estimated at about $5.8 billion. Jamnagar currently exports refined product as well as selling in the local market. More importantly, its recent shutdown of some units at the refinery removed 300,000 tonnes of LPG from the domestic market, creating a total shortfall of 565,000 tonnes of LPG. 84 million Indian households are expected to be affected by the shortfall, about 1 in 12 households. Easily distributed cylinders of LPG are essential for cooking - an LPG gas-cylinder dependance similar to many middle Eastern countries with poor and erratic electricity supply and distribution and little domestically reticulated gas. India imports roughly 2.7 million tonnes of LPG, mainly from Saudi Arabia, but the amount is likely to increase (and the source become more diverse). The shut-down will also create a shortage of kerosine.

A proposal for a new 300,000 barrels per day refinery in Visakhapatanam (close to relatively new off-shore oil and gas fields) in the southern state of Andhra Pradesh  is announced by the State owned Hindustan Petroleum. BP is considering an equity stake in return for permission to establish a refined fuels distribution network in India. Shell has recently been given permission to open 2,000 gas stations in India. BP wants to export Indian refinery products such as diesel and petrol to China and possibly the west coast of USA.

India imports about two thirds of its crude oil requirements and a large part of its LPG requirements, but at this time has relatively low gasoline requirements. India is one of the few countries in the world with surplus refinery capacity.

2005 - Volvo and the USA Department of Defense build an experimental 'mild hybrid' diesel-electric truck, based on the frame of  Volvo's 'Mack' model. The diesel engine must be used to overcome the weight-inertia of a heavy vehicle when moving from standstill, but the electric power train can then be used, mostly at lower speed around town driving. If a 'full hybrid' can be developed that is capable of moving forward from standstill, the diesel engine can automatically shutdown whenever the vehicle is stationary, with the potential to save 20% or more of the diesel fuel costs.

2005 - (october) - First quarter production of 
most of the major oil companies falls - ExxonMobil is down 3%; Chevron is down 6%; Shell is down 8%; Repsol YPF is down 7%. Only Phillips-Conoco and BP report an increase, of 2%. Wall St energy analyst John S. Herold estimates that worlds 7 largest publicly traded oil companies (Total S.A., Exxon Mobil, ConocoPhillips, BP, Royal Dutch/Shell Group, Eni S.p.A,. ChevronTexaco) will all have reached peak of production of their global oil field assets within the next 2 years, and that production from all 7 will decline year on year thereafter. Nation-owned public-capital companies exploiting their indigenous oil resources in the public good produce about 77% of the world oil supplies. These include the mega fields of the Middle east whose peak is further out. The balance of about 23% is produced by private-capital global corporate oil companies operating in concessions.

2005 -(october 12) - Iran shuts down two offshore oilfields, the Soroush and Nowruz fields, with a combined potential capacity of 190,000 barrels a day. These two fields produce heavy oil, which, due to lack of refineries able to handle it, has a limited market. The fields will undergo repairs and maintenance, and presumably re-open when major refineries increase their capacity to handle heavy oil.

2005 - (october)
Brazilian state oil company Petrobras makes an exclusive offer to three Japanese trading companies (Mitsui, Sumitomo and Mitsubishi) to bid for the chance to buy 15% of the 600 million barrel reserve Jubarte heavy oil field. The first phase, due 2006, is expected to produce 60,000 bpd, and by 2010 about 180,000 bpd. Japan has no oil reserves, and trading houses have been investing heavily in global oil, gas, coal, and metal assets.

2005 - (october 13) - Bangladesh, with more than a dozen natural gas fields, produces 1,515 million cubic feet of gas a day, but demand has risen to a daily demand of about 1,625 million cubic feet. The government is forced to ration supply, alternating shutting off supply to fertiliser plants and power plants. These two industries use 67% of the gas produced. The shortfall is expected to continue until late 2007, when new gas fields are expected to begin production. At the current rate of use, gas fields are expected to be effectively used up by 2017. All gas is conserved for the domestic needs of the nation of 140 million.

2005 - (october) Contract price for deep-water drillships is now a third higher than 2004, at $US300,000 a day. Land based drilling rigs have increased from about $US35,000 a day in 2004 to around $US95,000 per day. High prices bring high exploration once more, but with low yeild. Very expensive drilling costs leads to extensive geological survey before the drill bit even touches the earth. The extensive and sophisticated surveys find no giant oil fields (albeit the Southern Antarctic Oceans have not been extensively surveyed).

2005 - (october) Iran's sale of 5 million tonnes of LNG to India by 2009 is delayed because USA's General Electric refuse to supply the compressors that convert natural gas into liquid to allow export by ship, due to USA sanctions. German liquification technology has also been refused. Unproven technology developed by the French firm IFP will be trialled instead. As a result, France has been rewarded with development and export of a large block of the vast gas reserves of the southern Pars field. Iran is also considering importing less efficient Ukranian compressors. The end result will be increased Iranian-Eurasian co-operation and interdependance - except UK, Italy, and possibly Germany might reasonably expect to be left out in the cold. USA is unlikely to allow Eurasia to have good relations with Iran, as it would mean the end of USA dollar dominance, and therefore USA domestic depression.

2005 - (october 5) USA - Natural gas spot prices on the the New York Mercantile Exchange reach a record high of $US14.75 per million British thermal units.

2005 - (october) Canada - natural gas sells for over $12 per gigajoule.

2005 - (october 24) USA - A landmark 'peak oil' bill is filed in the USA House of Representatives with the support of the newly formed 'Peak Oil Caucus', founded by Rep. Roscoe Bartlett and co-sponsors:
"Expressing the sense of the House of Representatives that the United States, in collaboration with other international allies, should establish an energy project with the magnitude, creativity, and sense of urgency that was incorporated in the 'Man on the Moon' project to address the inevitable challenges of 'Peak Oil.'

    Now, therefore, be it Resolved, That it is the sense of the House of Representatives that:

  1. in order to keep energy costs affordable, curb our environmental impact, and safeguard economic prosperity, including our trade deficit, the United States must move rapidly to increase the productivity with which it uses fossil fuel, and to accelerate the transition to renewable fuels and a sustainable, clean energy economy; and

  2. the United States, in collaboration with other international allies, should establish an energy project with the magnitude, creativity, and sense of urgency of the 'Man on the Moon' project to develop a comprehensive plan to address the challenges presented by Peak Oil."

The challenge has been officially and publicly placed on the USA government table by courageous representatives. Will other democratic governments confront the issue in their congresses and parliaments?

2005 - (october 26) In an unbelievable stroke of luck for USA president Bush, Iranian president Mahmoud Ahmadinejad is reported in the westrn media as calling for Israel to be 'destroyed' (in fact he called for the political entity of Israel to be destroyed and all the Arab tribes of Palestine - including the Jews-  to be re-united once more). USA now have the excuse they need to prevent Iran from selling oil and gas on the open market in any currency the buyer chooses. Over half Iran's foreign exchange reserves are now euros.

2005 - (october) Russia Lukoil fails in a bid to buy Kazakhstan's state-owned PetroKazakhstan Inc.

2005 - (october) China pays $US4.18 billion for state-owned PetroKazakhstan Inc. Kazakhstan has around 35 billion barrels of oil reserves, and may have considerably more if preliminary reports of a highly prospective offshore oilfield in the Kazakhstani Caspian sea are true. A new 200,000 barrel a day pipeline being built will take Kazakhistani oil to northwest China.

2005 - (november) - China courts Venezuela, securing an agreement for the supply of 100,000 barrels of heavy crude and 60,000 barrels of fuel oil per day for two years. Heavy oil is a difficult crude for any country to sell, as not many refineries are configured to handle it.

2005 - (november 1st) USA - about a million barrels of crude oil production from the Gulf of Mexico remains unavailable due to storm damage. Many pipes are still to be leak tested. About 5 billion cubic feet a day of gas is unavailable. Gasoline imports to USA continue to rise. World gasoline markets are tight worldwide, especially in Europe and Iran. The IEA vote not to supply USA with additional gasoline from depleting Eurasian reserves.

2005 - (november) Dick Cheney, USA vice president, claims that the true purpose of the USA invasion and occupation was not aimed at  to securing Iraqi oil. He deliberately 'labels' anyone who points to contrary evidence as 'unpatriotic', echoing the shameful quasi-Nazi anti-democratic, anti-free speech propoganda of the McCarthy era in USA.

"Patriotism is the last refuge of a scoundrel." - Samuel Johnson, 1775.

2005 - (november 6) - Kuwait Oil Company announces the Burgan oil field, the second largest in the world, has peaked at 1.7 million barrels per day. It had previously been forecast to produce 2 million barrels per day at peak, and maintain that level for up to about 30 years, presumably by water flooding to maintain pressure, but engineers could only force 1.9 mbd from it, at some risk to long term production.

2005 - (november 23) - American and British civil rights groups produce a report on the re-colonisation of Iraq's oil, based on official documents and analysis. Returning Iraq's oil to foreign multinationals will require a heavy 'sweetener' due to the dangers posed by Iraqi civil war, even although Iraq's oil is the cheapest in the world to produce. The usual industrial rate of return of capital invested is 12-13%, but (based on analysis of existing oil multinational production sharing agreements in seven countries) it is expected that the multinationals will demand from 42%-162%. At a price for oil of $US40 per barrel - unrealistically low - and over the low end of the usual term - 25 years - the Iraqi people will be deprived of $US127 billion dollars, relative to if  the previous state firm produced it, as happened prior to the US and UK invasion.

The invasion did not secure civil society because inadequate troop numbers were sent. In-fighting and continuous sabotage was inevitable. As a consequence USA and UK troops are 'unable' to exit, and must maintain military control of all ports and airports. The Iraqi provisional government needs large amounts of oil sales to pay US businesses to re-build the Iraqi civil and oil infrastructure that the USA military destroyed - via munitions and weapons provided by US contractors. Only large multinationals might be able to provide relatively fast infrastructure - so long as the Iraqi government pays out vast amounts of money to US contractors and their sub-contractors and further proxy agents to protect the oil work.

On balance, the invading countries strategy of the dividing of Iraq into self-contained 'strongman-headed' tribal states that collect their own oil revenue and whose power is protected by local militia/gangsters (complete with arbitrary arreest, detention and torture) under USA patronage - plus destruction of civil infrastructure and creating chaos to require Iraq to sell oil cheaply, and create an urgent 'need' for multinational 'investment' to produce oil in the volume required may well work; albeit world rig and crew shortages mean 'fast production' is difficult, even if Iraq was peaceful. 

"...the federal system will facilitate the long-term domination of the weak central government by the Kurdish and Shiite parties that won the majority of the seats in the January 30 election. The regional governments - not Baghdad - will have jurisdiction over internal security and the power to establish “internal security forces... such as police, security and regional guards”. The flow of oil revenues into their coffers makes it inevitable that the Kurdish and Shiite elite will preside over what will be little more than one-party mini-states, with their political opponents facing systematic repression... The Bush administration ...wants a regime that has the power to carry through a sell-off of the oil industry and to sign agreements sanctioning the permanent US military bases that are being built in key areas of the country. After months of horse-trading, the deal with the Kurdish and Shiite factions has emerged as the most viable way of transforming Iraq into an American client state...Tens of thousands of Kurdish peshmerga and Shiite fundamentalist militia, loyal to their respective parties, have already enlisted into the army, police and paramilitary units. They are being accused of extra-judicial killings, arrests and intimidation of opponents of the [USA] occupation."
James Cogan, august 2005.

In the interim, sabotaged and bombed facilities, combined with the internal Iraqi power struggle mean the required production for Iraqs civil needs can't be met domestically, fullstop. There are likely to be critical domestic fuel shortages in Iraq this winter, and oil products purchased from abroad are likely to be very expensive.  The multinationals and their complicit governments are likely to re-take their old 'concessions'.

It remains to be seen how large the Iraqi oil (and more importantly, gas) reserves really are, and how quickly the multinationals can return production to pre-invasion levels.

2005 - (november 22) - UK liquified natural gas prices reach $US20.15/£17 per million British thermal units (Btu's) - a world record for LNG prices on the spot market. (Last month LNG on the spot market was about £3 per million British thermal units). Industries that use gas switch to other fuels where they can; other restrict production; some shut down. Chemical, steel making, and heavy engineering businesses are hit hard. By 2020 supposedly 70% of Britain's electricity will be from gas powered generation stations, and 90% of the gas to run them will be imported. This in theory is possible; but it shows culpable ignorance of the reality of expected life of global gas reserves in the face of increasing world competition for the same limited resource. There are now proposals for 70 LNG-based projects in USA, around 30 projects or proposals in west Eurasia, and others in India, China, other parts of east Eurasia, the Middle East. Until the 2007 pipelines and terminals are built, the UK will experience gas shortages and power shortages in winter.

Russia's Gazprom has charged western European countries an average of US$135 per thousand cubic meters in the first nine months of 2005. Gazprom expects the average price to reach US$255, nearly twice that, in 2006. Gazprom expects European demand to be 151 billion cubic meters in 2006, up from an estimated 145 billion cubic meters to end of 2005.

2005 - (november) -
Russia’s Gazprom completes the final stage of the 'Blue Stream' gas pipeline. Stretching 1,213 kilometers and costing  $US3.2 billion, the pipeline takes gas overland from the Krasnodar gas fields, then underneath the Black Sea, re-emerging at the Durusu Terminal near Samsun, on the Turkish Black Sea coast. The pipeline continues overland to Ankara. At full capacity (estimated to be reached in 2010) it can carry around 16 billion cubic meters of natural gas a year.

2005 - (november) Global oil consumption, according to IEA figures, is now
85 million barrels a day. This is not quite the consumption rate predicted by some at the start of the year, but is not far off. Barring recession, supply/demand mismatch is likely around early 2006, with refinery expansions and upgrades still not complete, decreased production from the 'mega' fields, USA Gulf of Mexico oil still 'shut in' until march 2006, and the US dollar still too cheap. IEA predictions of increased oil production from non OPEC sources are not likely to be especially reliable, if history is a guide.

Increase in oil from non-OPEC countries in 2005 has proved to be less than 0.1 million barrels a day (still being revised downward), whereas one prediction by the International Energy Agency during 2004 was that growth in non-OPEC oil would be 1.31 million barrels a day. Their predicted non-OPEC growth of 1.31 million barrels a day failed to materialise in 2005. They now predict it to appear in 2006. This is unlikely to be true -
The IEA's estimate for 2001 non-OPEC oil was revised down by 500,000 barrels per day; 
The IEA's estimate for 2002 non-OPEC oil was revised down by 400,000 barrels per day;
The IEA's estimate for 2003 non-OPEC oil was revised down by 900,000 barrels per day; 
The IEA's estimate for 2004 non-OPEC oil was revised down by 700,000 b/d....

Others in the oil business calculate non-OPEC oil production will be nearly static until about 2010, when it will commence to decline.

2005 - Novembers quote of the month from William R. Clark, author of 'Petrodollar Warfare: Oil, Iraq and the Future of the Dollar' -
"It is now obvious the invasion of Iraq had less to do with any threat from Saddam's long-gone WMD program and certainly less to do to do with fighting International terrorism than it has to do with gaining strategic control over Iraq's hydrocarbon reserves and in doing so maintain the U.S. dollar as the monopoly currency for the critical international oil market...Candidly stated, 'Operation Iraqi Freedom' was a war designed to install a pro-U.S. government in Iraq, establish multiple U.S military bases before the onset of global Peak Oil, and to reconvert Iraq back to petrodollars while hoping to thwart further OPEC momentum towards the euro as an alternative oil transaction currency ( i.e. "petroeuro")."
Petrodollar Warfare: Oil, Iraq and the Future of the Dollar

2005 - (november 2) - In the last 2 months the USA treasury has issued around $US100 billion in new debt. Medicare committments make taxpayers now liable for around $US65 trillion.

2005 - (november 25) - Russia's central bank announces it will double its gold reserves by buying on the open market and from domestic suppliers. As Russia is receiving large quantities of USA dollars for its oil, it appears to be converting the dollar (and to a lesser extent the euro) to physical metal equivalent as a more certain hedge - tending to drive gold prices back towards its historic link with oil, to the chagrin of the USA presidential/financial/military complex.

In that the USA dollar is backed by oil, a movement by the Russians to be paid in Euros or in gold is effectively a devaluation of the USA dollar. This will make the price of oil imported into the USA higher.

2005 - (november 22) - Oil rich United Arab Emirates opens the first ever gold and 'commodities' exchange in the Middle east, based in the city of Dubai. There is huge interest in gold in the middle east - Dubai imported $US10 billion of gold in 2004. Apart from gold and other precious metals, the exchange will also trade in commodities such as cotton - and marine fuel oil.

2005 - (november 13) -
The German Bundesbank, supposedly holding the second largest gold reserves in the world (about 3,427 tons), has resisted government efforts to sell 600 tons of reserves over the next five years. The Bundesbank refuses to reveal how much physical gold it has, and how much is 'out' somewhere.

2005 - (november) - as oil prices in India continue to rise and currencies to inflate, Indians turn to transforming paper money into gold. Gold purchases in the first half of 2005 have increased by 50% to about 500 tonnes. India's Central bank predicts inflation will be about 5% this year, mainly due to increased oil prices.

2005  - China gives its citizens permission to buy and hold gold. This may assist China to quietly convert US dollars into physical metal value, and help maintain maximum purchase power for middle east oil and gas (except USA's-Iraq).

2005 - China now produces and sells 6 million new cars a year.

2005 - (december) - contrary to earlier expectations, Norways oil production is now 2.7 million barrels a day - production is now declining at a relatively high rate of around 7% a year.

2005 - (december) The International Energy Agencies prediction of 85 million barrels of crude a day is not quite correct - about 84.73 million barrels are now being produced.

2005 - (november 28) - Mexico may have to begin importing oil by 2012, according to officials of the state-owned Pemex oil and gas company. The last proven reserves are now being developed, which, on current use, would allow Mexico to be more or less self sufficient until about 2012. But, as replacement of reserves is only about 22% of the amount being pumped out of the ground, then barring new discoveries of substantial size, Mexico will become a nett importer of oil products by this date. Given Pemex is the de facto guarantor of large amounts of Mexican government debt, where the money to import oil will come from as oil 'debt backing' declines is unsure.

2005 - Mexico's Pemex produces almost 3.4 million barrels of oil equivalent (oil + gas condensates + natural gas) a day, the largest part of which comes from the super giant Cantarell field.

2005 - A report from Pemex experts ( Ing. Amando V. Astudillo, Administrator Cantarell Integral Assets , Dr Fernando Rodriguez Fields Development Manager, Dr Jose Luís Sanchez Bujanos Explorations Manager, and Dr Francisco Garci'a Hernandez, Operations Manager, Deposits) says the decline in the  field will be "dramatic". As a result, Mexico's oil production will face a steep production decline within 3 years. They estimate todays 2 million barrel a day production at Cantarell will fall to an average of 1.7 million barrels a day in 2006, falling further to 1.1 million barrels a day in 2007, 800,000 barrels a day in 2008, and 520,000 barrels a day by the beginning of 2009. Cantarell produces around 60% of Permex's oil.

2005- (december 8th) In response to this report, Petroleos Mexicanos (Permex) releases a statement saying production from the giant Cantarell field, currently producing 2 million barrels a day, will drop to 1.91 million barrels a day "next year", a drop of 5%. They omit to mention this is the predicted production for the start of 2006. By the end of 2006, production is expected to have fallen to 1.5 million barrels a day. "By" 2008 it is expected to have fallen to 1.43 million barrels per day. To reach this level, the field would have to decline by more than 12% in 2006, and by a further 12% of the lower 2006 production in 2007.

2005 - (december 2) - Saudi Arabia plans to increase its existing refining capacity of about 4.1 million barrels per day to nearly 4.9  million barrels a day, by building two new 400,000-bpd refineries capable of handling sour crude. It is hoped to have them in production by 2007. Much remaining Middle East oil is now sour crude, which can't be handled by most refineries. Saudi Arabia does not plan to build refinery 'overcapacity', as that would drive down the profit margin.

2005 - (december) - against all expectations, the 1,776 kilometer long Baku-Tbilisi-Ceyhan pipeline has still not completed filling, and now is not expected to spew any oil from the Turkish Ceyhan end until may 2006. The ramped up production from the Caspian Sea Azeri-Chirag-Guneshli block of  380,000 barrels a day (mostly crucial Azari light oil) must be exported via Georgia's Black Sea ports of Supsa and Batumi, with a portion also used to continue filling the pipeline.

The pipeline was built on the assumption that it would carry a large part of the oil from offshore Kashgan fields, as well as Baku oil. Kazakhstani oil is now more likely to go east, to China, rather than west, to Turkey and the Mediterranean. The pipeline may end up being underused.

2005 - (december) - China inaugorates its new pipeline from its newly acquired oilfields in Kumkol, Kazakhstan to northwest China. The pipeline intersects a pipeline taking oil from Kumkol to Russia. Production from Kumkol is insufficient to fill the pipeline, so half the oil will be imported from Russia into Kumkol, and then into the empty Chinese sector of the pipeline. If a new link is added to reach an existing Kazak pipeline running to the Kazakhstan territorial part of the Caspian sea in the western part of Kazakhstan, China will access the developing offshore Caspian Kashagan prospect, said to be bigger than the North Sea. Currently its is being explored by a consortium of mainly USA and European oil companies. They are pushing for a pipeline from the field to run under the Caspian to link up with the $US2 billion BTC oil pipeline sponsored by USA. China has invested over $US2.6 billion in Kazakhstan since1997. China is also considered by Kazakhstan to be a major market for its developing oil and gas, lessening its dependence on exporting to Russia. Current Kazak production is around 1.3 million barrels of oil a day. Ultimately, China expects to import over a million barrels of oil a day from Kazakhstan, about 15% of its current needs.

2005 - (december) - Russia's Lukoil says it will not accept a discount of $US7 for its Ural oil over the benchmark UK Brent crude. Currently there are no 'benchmarks' for Russian oil traded in Europe, benchmarks, the nearest being the Brent crude benchmark. As Russia has many Eurasian joint venture partners, it can commence trading oil for euros amongst its own local country subsidiaries at any time.

As Russia is, with Saudi Arabia, the overwhelming 'high volume' producer in the world today, it is in a position to 'call the tune'. The marked drop in value of the US dollar versus the Euro in late november has meant the ruble has appreciated against the dollar, creating an even greater incentive for the ruble to be weighted against the increasingly valuable euro, especially as much of  Russia's oil and gas export business is done in west Eurasia.

2005 - (december) - USA - As warned, the cost of heating continues to climb. Natural gas is expected to cost householders an average of about 38% more than last winter. USA domestic gas prices are now around $US15 per million Btu's.  Heating oil is expected to cost around 20% more than last winter.
Over 80% of USA households depend on natural gas and oil for winter heating. Gas heats about 50% of homes, fuel oil heats about 30% of homes. The average household in colder states uses from 850 to 1,200 gallons of fuel oil over winter. Only around 9% of heat supply comes from electricity (generation capacity is also partly gas-dependent), and a tiny 2% comes from burning wood. These prices rises cannot be afforded by the large number of poor in USA. Federal heating costs assistance is given to only 15% (about 5 million households) of those actually eligible. No increase in funding is available. Apart from Citgo Petroleum, no assistance has been offered from the record profits of the oil companies. Some small businesses are likely to have to close. USA consumes all its own production, and relies on Canada to meet its ever increasing demands.

2005 - (december) USA coal production is totally committed, heralding higher coal prices as long term contracts begin to roll over.

2005 - (december) USA
gasoline demand experiences the highest ever recorded weekly increase -  a demand increase of an additional 600,000 barrels. USA must now repay the strategic gasoline reserves it borrowed to tide it over the refinery damage due to hurricanes Rita and Katrina.

2005 - (december 22) - USA Congress votes not to drill for oil and gas in America's
Alaska Arctic National Wildlife Refuge. This decision will inevitably be overturned in years to come. Alaskas North Slope as a whole has an estimated 37 trillion cubic feet of gas, and is the USA's single biggest largest undeveloped gas resource. There is currently no pipeline in place to exploit the gas reserves, or any funding to build one.

2005 - (december 18) Iraq. The Beiji refinery in the Sunni area of Iraq - Iraq's largest and most important refinery, producing around 2 million gallons of gasoline a day - is closed by the government after insurgents threaten to kill anyone loading fuel there. The refinery tanks are full, but the fuel is now undeliverable. Tanker drivers refuse to risk their lives loading it out. Iraq, with some of the worlds largest reserves of crude oil, will have to buy more petroleum from countries such as Kuwait.

2005 - (december 30) - Iraq. Iraqi president signs a deal with US dominated 'world' bank to impose austerity measures in return for "debt forgiveness". 

Part of the deal hinges on Iraq accepting contracts with major USA and European oil companies that are highly disadvantageous, and used almost nowhere else in the world.

Part of the deal hinges on the effective irreversible privitisation of Iraqi oil and gas exploration, extraction, and sale.

Part of the deal hinges on Iraq accepting world bank 'austerity measures'.

Subsidies will be removed not only from from petrol (which the majority of now impoverished Iraqis have little use for) and tripling its price but off a low base (and increasing the price of diesel by 900%), but also the kerosene used for heating, and the natural gas most Iraqis use to cook their grain and bean based food. About a quarter of Iraqi households live on less than than US$1 per day. The three southern Iraqi provinces refuse to implement the USA's  IMF price rises/privatisation attempt.

2005 - (december 30) - Iraqs oil minister is reported as "taking leave", with the intention of resigning. It seems he was actually suspended by the Prime Minister for vigorously objecting to the rise in cooking fuel and gasoline prices. His officials say there is an impending oil supply crisis in Iraq due to sabotage and logistics problems. "Production in the north, centre and south is about to suffocate". Deputy Prime Minister Ahmad Chalabi is once again appointed head of the oil ministry.

2005 - (december 30) light sweet crude is US$60.32

End of 2005
Oil prices for the year average out at around about 37% higher than 2004.

Oil consumption around the world is up, at the equivalent of around 84.7 million barrels a day (84,787,000 barrels a day) by december (conventional and unconventional, i.e. all liquids), about 1.7 million barrels a day higher than end of 2004. By the end of 2005, virtually all the world's spare capacity has been eaten up by this larger than expected growth in world demand for oil by years end.

Looking back from november 2006, it is now the case that december has seen a peak of world oil plus condensates production (according to EIA data).

Average conventional oil production for the year is estimated by ASPO to have been (in million barrels a day)
29 mbd from other countries - Mexico, Venezuala, Nigeria (about 2.5 mbd) , North Africa, China, India etc
26 mbd predicted for 2010

20 mbd from Arabian Gulf states (mainly Saudi Arabia)
20 mbd predicted for 2010

9.2 mbd from Russia
8.4 mbd predicted for 2010

5.2 mbd from Europe (mainly Norway, whose 2005 production was 3 mbd)
3.6 mbd predicted for 2010

3.6 mbd from USA lower 49 states
2.8 mbd predicted for 2010

Average unconventional oil production for the year is estimated by ASPO to have been (in million barrels a day)

mbd from heavy oil, shale, oil sand and bitumen
mbd predicted for 2010

mbd from deepwater oil
mbd predicted for 2010

0.9 mbd from polar oil
mbd predicted for 2010

6.9 mbd from gas liquids
mbd predicted for 2010

ASPO calculates total oil production (all sources) to have been 80 million barrels a day (annualised) for 2005.
ASPO predicts total oil production (all sources) will be 86 million barrels a day (annualised) in 2010
ASPO predicts total oil production (all sources) will be 80 million barrels a day (annualised) in 2015, mainly due to decline in Russia and 'other countries' - Mexico, Venezuala, Nigeria, North Africa, China, India etc.

Saudi Arabian production is pretty much flat. Domestic oil consumption is up 13% over year end 2004.

Saudi Arabia produced 9.55 million barrels a day of crude + condensate, and 1.55 million barrels a day of other liquids, according to the EIA.
This represents almost 100% of their capacity. As Saudi Arabia consumed 2 million barrels a day of their own production, 9.1 million barrels a day was available for export.

Russia's production is up about 2.5%.
Domestic oil consumption is also up 13% over year end 2004.

Mexico's production is probably flat or declining slightly.

Iraq produced less oil than in 2004.

The North Sea produced about 400,000 barrels of oil a day less than in 2004.

Norways oil production decline was 7%.

Dubai is now producing only around100,000 barrels a day

China imported 130 million tonnes of crude oil - 3.3% more than in 2004. About 43% of China's oil needs are now met from imports. It is now the second largest oil importer in the world, after the USA.

China is yet to start filling its strategic reserves.

China exported
an average of 466,386 tonnes of gasoline a month, mostly to Southeast Asian markets.

USA has authorised the increase its 727 million barrel strategic reserves of crude to 1 billion barrels.

USA produced about 400,000 barrels of oil a day less than in 2004. Of this, about 300,000 barrels a day reduction is attributable to damage from hurricane Katrina. That which is not now back on line or under current repair will be permanently lost.

USA is the most intensively explored and drilled country in the world. USA produces about 8% of the worlds oil. There are now
506,000 producing oil wells in USA. Average production per well is a little over 10 barrels of crude a day.

Canada, the USA's first equal major supplier of oil (with Mexico) had static production averaged over 2005 relative to 2004, but increased production in Q4 2005.

USA imports 10.126 million barrels of crude oil a day - the highest annual amount ever recorded.

USA now imports around about 60% of the oil it uses.

USA now imports about 584 million barrels of oil from Canada every year.
USA now imports nearly 584 million barrels of oil from Mexico.
USA imports a little less (548 million barrels a year) from Saudi Arabia.
USA imports around 475 million barrels from Venezuela.
USA imports about 400 million barrels a year from Nigeria.
USA's Iraq gives 256 million barrels a year,
USA gets nearly 110 million barrels a year from Angola and UK.
Smaller amounts come from Algeria and Kuwait.
USA is  heavily dependant on Canada, Mexico, Venezuela, Nigeria and Saudi Arabia for its imported oil.
Of these countries, Canadian production cannot be increased, Mexico's giant Cantarell field has started to decline, Saudi Arabia is sound, Venezuela is sound, and Nigeria may well become so unstable oil exports are severely cut.

The European Union countries now import 9.8 million barrels of oil per day.

Natural gas prices
were 18.6% higher than in 2004.

UK moves from being a nett gas exporter to being a nett gas importer.

USA used 22 trillion feet of natural gas - a lower consumption rate than a decade ago. Even so, demand remains strong, but production from larger fields is declining. More wells than ever have to be drilled to keep up supply, but new finds are small, and relatively low volume. Roughly 27,000 new natural gas wells were drilled this year.

Key volume oil suppliers: Russia and Saudi Arabia, both with mature and declining giant and supergiant fields, are the key volume producers on the world market. Both are squeezing the sponge hard - Russia is squeezing hardest, and have a smaller sponge.

Oil companies - Exxon Mobil makes a net profit of $US10.7 billion for the last quarter. This is the highest quarterly profit in history for a USA company. Exxon Mobil is the world's largest publicly traded oil company.

Nuclear Fuel - Current rates of use of low-cost uranium mean reserves will be exhausted in 20 years. Breeder reactors, which create dangerous fissible material, would have to be used after that.

Renewable energy - according to the United Nations Environment Program, global investment in renewable energy - particularly solar, wind and biofuel - was $US80 billion.

Go to 2006

'Secret US plans for Iraq's oil' story reported by Greg Palast.
Published by BBC NEWS: 2005/03/17 15:41:31 GMT
URL:  http://news.bbc.co.uk/go/pr/fr/-/1/hi/programmes/newsnight/4354269.stm

Aleklett, K,Campbell, CJ. 'The Peak and Decline of World Oil and Gas Production'
published by the Association for the Study of Peak Oil and Gas. www.asponews.org .

Bakhtiari, AM. 2002. '2002 to see birth of New World Energy Order'
Oil and Gas Journal, January 7, 2002.

Campbell, CJ. 1999. 'The imminent Peak of World Oil Production'.

Presentation to a House of Commons All-Party Committee on July 7 1999.

BP Ltd 'Petroleum Review of 2004'

Deffeyes, Kenneth S.2001. 'Peak of world oil production'
Paper no. 83-0,Geological Society of America Annual Meeting, November 2001. gsa.confex.com

Engdahl FW.2003. 'A New American Century? Iraq and the hidden euro-dollar wars'

Hirsch, Bezdek and Wendlings report 'The Peaking of World Oil production: Impacts, Mitigation, & Risk Management', in a March 2005 report to the US Department of Energy.

Simmons, MR. 2002. 'The World`s Giant Oilfields'
M. King Hubbert Center for Petroleum Supply Studies, Colorado School of Mines, January 2002.

Simmons, Matthew. 2004. 'The peak oil debate: crisis or comedy?' Presentation at the SPE Annual Technical Conference September 27, 2004, held at Houston, Texas, USA.

U.S. Department of State. Foreign Relations of the United States. 1945, viii, 45, cited in Joyce and Gabriel Kolko, The limits of power, Harper & Row, 1972

Multinational Oil Corporations and U.S. Foreign Policy, report to the Committee on Foreign Relations, U.S. Senate, 2 Jan 1975

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