The story of destruction of global peace
By: Syed Haroon Haider Gilani
Galicia (Poland/Ukraine) in 1853. In 1854, Benjamin Silliman, a science professor at Yale
about 90% of the world’s oil.
Oil Company (originally yielding 25 barrels per day (4.0 m3/d), by the end of the year output was at the rate of 15 barrels per day (2.4 m3/d)). The industry grew through the 1800s, driven by the demand for kerosene and oil lamps. It became a major national concern in the early part of the 20th century; the introduction of the internal combustion engine provided a demand that has largely sustained the industry to this day. Early “local” finds like those in Pennsylvania and Ontario were quickly outpaced by demand, leading to “oil booms” in Texas, Oklahoma, and California. Early production of crude petroleum in the United States:
- 1859: 2,000 barrels (~270 t)
- 1869: 4,215,000 barrels (~5.750×105 t)
- 1879: 19,914,146 barrels (~2.717×106 t)
- 1889: 35,163,513 barrels (~4.797×106 t)
- 1899: 57,084,428 barrels (~7.788×106 t)
- 1906: 126,493,936 barrels (~1.726×107 t)
In the words of Keith Miller who has been a speaker with the OAH Distinguished Lectureship Series since 1999, “Oil was the indispensable product, in all its forms, to the Allied campaigns around the world. Without it World War Two could never have been won. For oil, once processed or refined in various ways, became the source or indispensable material for laying runways, making toluene (the chief component of TNT) for bombs, the manufacturing of synthetic rubber for tires, and the distilling into gasoline (particularly at 100-octane levels) for use in trucks, tanks, jeeps, and airplanes. And, that is not to mention the need for oil as a lubricant for guns and machinery.
To provide all the oil, or at least most of it, for the Allied war effort, the United States enlisted the aid of American oil companies, all of which responded without hesitation to the challenge. Meeting what everyone in government knew would amount to a demand for oil in unprecedented quantities required much organization. On 28 May 1941, even then before the Japanese attack on Pearl Harbor, President Franklin D. Roosevelt established by a letter what became known officially as the Petroleum Administration for War (PAW), on 2 December 1942. To head that agency Roosevelt appointed the very capable Harold L. Ickes, who had been Secretary of the Interior. Ickes, soon after his appointment, selected 72 leaders of America’s oil industry for the Petroleum Industry Council for National Defense, which later became known as the Petroleum Industry War Council (PIWC). Interestingly enough, the PIWC held its first meeting, “‘one of the great coincidences of history,’” (as Ickes referred to the matter in his fine book Fightin’ Oil), the day after Pearl Harbor.
“Along with the marvelous achievements of American oil companies at producing toluene and synthetic rubber, one must add the prodigious yields of gasoline, including 100-octane grade. When it is realized to what extent World War Two was motorized in nature, not to mention the primacy of air power, one can hardly exaggerate the importance of such fuel output.
As suggested above, that production by American oil companies exceeded even U. S. government expectations. For instance, the Jersey group of companies, with just the Baytown and Baton Rouge plants being considered, combined to deliver 2 billion gallons of 100-octane fuel (the grade needed for airplanes) by 1 June 1945.
Before my summation, it remains to recount the history of the Big Inch and Little Big Inch pipelines. Both lines originated in Texas and extended to the East Coast. The former carried oil, as yet unrefined, and the latter petroleum products. Construction of the Big Inch began 3 August 1942 and was completed on 14 August 1943. Until that pipeline was completed east of Norris City, Illinois, however, that small town in the prairie state served as terminus for the line–tank cars were filled there for shipment to the East Coast.
One oilman should be singled out so far as the laying of the Big Inch is concerned. That man was Burt E. Hull of the Texas Company (Texaco). He was what one might call the “dean of the pipeliners” in the U. S. Under his direction the Big Inch was completed in record time.
Now for a brief account of the Little Big Inch. Its construction began 23 April 1943 with the placing of the last pipe on the East Coast on 8 October 1943.
The Big Inch and Little Big Inch pipelines, it should be stressed, aided almost beyond estimation the winning of World War Two by the Allies. For one thing, protected as they were from enemy attack, it was possible to circumvent submarine attacks by the Germans, which had wreaked havoc on oil tankers from the Gulf of Mexico by way of the Caribbean to the East Coast. In fact, before the two pipelines began to operate German submarines had sunk so many tankers, there were many beaches on islands in the Caribbean, which were seriously polluted with oil. But, it must be added–the Big Inch and the Little Big Inch pipelines were both finished before the D-Day invasion at Normandy on 6 June 1944. That made possible the delivery of huge quantities of crude and its refined products for Operation Overlord, the code name for that landing in northern France.
Now, it cannot be stated too forcefully, American oil, which amounted in all to 6 billion barrels, out of a total of 7 billion barrels consumed by the Allies for the period of World War Two, brought victory! Without the prodigious delivery of oil from the U. S. this global war, quite frankly, could never have been won. Besides, without the outstanding cooperation of the Petroleum Administration for War with the numerous oil companies of America, World War Two very likely would never have been won by the Allies either. To dramatize that assertion, consider the following quote from a letter, dated 10 November 1945, to Ralph K. Davies, from the Joint Chiefs of Staff’s Army-Navy Board: “at no time did the Services lack for oil in the proper quantities, in the proper kinds and at the proper places.”
To conclude–this essay began with a anecdote about George S. Patton, American general and tank commander. Let me close with a refernce to a superior officer on the other side, Field-Marshall Karl Gerd Von Rundstedt of Germany. When interviewed by newspapermen, he readily admitted how important oil had been in World War two. In fact, he attributed German defeat to three factors, to wit: (1) the Allied bombing sorties (strategic and tactical); (2) the bombardments by Allied naval guns; and (3) Germany’s own deficiency in oil, especially in the form of gasoline.”
Post World War Scenario of oil and Petrodollar.
Until the mid-1950s coal was still the world’s foremost fuel, but after this time oil quickly took over. Later, following the 1973 and 1979 energy crises, there was significant media coverage on the subject of oil supply levels.
This brought to light the concern that oil is a limited resource that will eventually run out, at least as an economically viable energy source. Although at the time the most common and popular predictions were quite dire, a period of increased production and reduced demand in the following years caused an oil glut in the 1980s. This was not to last, however, and by the first decade of the 21st century discussions about peak oil had returned to the news.
Today, about 90% of vehicular fuel needs are met by oil. Petroleum also makes up 40% of total energy consumption in the United States, but is responsible for only 2% of electricity generation. Petroleum’s worth as a portable, dense energy source powering the vast majority of vehicles and as the base of many industrial chemicals makes it one of the world’s most important commodities.
The top three oil producing countries are Saudi Arabia, Russia, and the United States. About 80% of the world’s readily accessible reserves are located in the Middle East, with 62.5% coming from the Arab 5: Saudi Arabia (12.5%), UAE, Iraq, Qatar and Kuwait. However, with high oil prices (above $100/barrel), Venezuela has larger reserves than Saudi Arabia due to its crude reserves derived from bitumen.
The Term “petrodollar” was first used by Egyptian citizen and professor of economics at Washington’s Georgetown University, first time in March 1973 at an international monetary seminar held at Columbia University’s Arden House in Harriman, New York. Dr. Oweiss says “The situation was unique in history; these were third world countries, selling their commodity for dollars, and having money left over for investment. I thought there was a need for a new term to describe these particular dollars.” Two weeks after Dr. Oweiss had used the word; it was picked up by a prestigious economics commentator in The New York Times. After that, it became difficult for anyone to pick up a newspaper or a magazine without coming across the haunting new word again and again.
New enemies – The Petrodollar and The Petroeuro
As the dollar is steadily dropping against the EUR after the end of fighting in Iraq, Washington appears to be deliberately worsening the dollar’s fall in public comments. What is taking place is a power game of the highest geopolitical significance, the most fateful perhaps, since the emergence of the United States in 1945 as the World’s leading economic power.
The dollar is a fiat currency today that means according to Columbia Encyclopedia, 6th ed., “money that is made legal tender by the decree, or fiat, of the government but that is not covered by a specie reserve.” At the end of World War II, an agreement was reached at the Bretton Woods Conference which pegged the value of gold at $35 per ounce and that became the international standard against which currency was measured. But in 1971, Richard Nixon took the dollar off the gold standard and ever since the dollar has been the most important global monetary instrument and only the United States can produce them. Currently, if any country wishes to obtain dollars from its sole producer with which to buy oil, it can do so only by selling its goods, resources or services to the US, taking out a loan from a US bank (or the World Bank – functionally the same thing), or trading its currency on the open market and thus devaluing it. The US is in effect importing goods and services virtually for free, its massive trade deficit representing a huge interest-free loan from the rest of the world.
A Canadian columnist, Paul Harris narrates it in these words,” Trade between nations has become a cycle in which the U.S. produces dollars and the rest of the world produces things that dollars can buy. Nations no longer trade to capture comparative advantage but rather to capture needed dollars to service dollar-denominated foreign debts and to accumulate dollar reserves in order to sustain the exchange value of their domestic currencies. In an effort to prevent speculative and potentially harmful attacks on their currencies, those nations’ central banks must acquire and hold dollar reserves in amounts corresponding to their own currencies in circulation. This creates a built-in support for a strong dollar that in turn forces the world’s central banks to acquire and hold even more dollar reserves, making the dollar stronger still.
This phenomenon is known as “dollar hegemony,” which is created by the geopolitically constructed peculiarity that critical commodities, most notably oil, are denominated in dollars. Everyone accepts dollars because dollars can buy oil.
The reality is that the strength of the dollar since 1945 rests on being the international reserve currency for global oil transactions (i.e., “petro-dollar”). The U.S. prints hundreds of billions of these fiat petro-dollars, which are then used by nation states to purchase oil and energy from OPEC producers (except presently Iraq and, to some degree, Venezuela). These petro-dollars are then re-cycled from OPEC back into the U.S. via Treasury Bills or other dollar-denominated assets such as U.S. stocks, real estate, etc. The recycling of petro-dollars is the price the U.S. has extracted since 1973 from oil-producing countries for U.S. tolerance of the oil-exporting cartel.
Cóilín Nunan, in his article, “Petrodollar or Petroeuro? A new source of global conflict” asserts the situation, “at present, approximately two thirds of world trade is conducted in dollars and two thirds of central banks’ currency reserves are held in the American currency which remains the sole currency used by international institutions such as the IMF. This confers on the US a major economic advantage: the ability to run a trade deficit year after year. It can do this because foreign countries need dollars to repay their debts to the IMF, to conduct international trade and to build up their currency reserves. The US provides the world with these dollars by buying goods and services produced by foreign countries, but since it does not have a corresponding need for foreign currency, it sells far fewer goods and services in return, i.e. the US always spends more than it earns, whereas the rest of the world always earns more than it spends. This US trade deficit has now reached extraordinary levels, with the US importing 50% more goods and services than it exports. So long as the dollar remains the dominant international currency the US can continue consuming more than it produces and, for example, build up its military strength while simultaneously affording tax cuts.
Getting a share of this economic free lunch has been one of the motivations, and perhaps the main motivation, behind setting up the euro2 . Were the euro to become a reserve currency equal to, or perhaps even instead of, the dollar, countries would reduce their dollar holdings while building up their euro savings. Another way of putting this would be to say that Euro zone countries would be able to reduce their subsidy to American consumption and would find that other countries were now subsidising Euro zone consumption instead.”
Saddam Husain, martyr of Dollar – Euro War
In November 2000, Iraq became the first OPEC nation to begin selling its oil for Euros. He, in the words of Simon Reeve of British Sky Broadcasting, signed his death warrant. Since the announcement, the value of the Euro has increased 17%, and the dollar has begun to decline. One important reason for the invasion and installation of a U.S. dominated government in Iraq was to force the country back to the dollar. Another reason for the invasion is to dissuade further OPEC momentum toward the Euro, especially from Iran- the second largest OPEC producer, who was actively discussing a switch to Euros for its oil exports.
“For the cost of less than 40 days in Iraq, we could provide health care coverage to 10 million children for an entire year.”
Nancy Patricia D’Alesandro Pelosi, 60th Speaker of the United States House of Representatives.
Saddam Hussein’s biggest crime in recent years – in the minds of the US elites – is his demand to be paid in euros instead of dollars for the oil that Iraq exports. On November 06 2000, Iraq announced that it would cease to accept dollars for its oil, and would accept instead only euros. At the time, financial analysts suggested that Iraq would lose tens of millions of dollars in value because of this currency switch; in fact, over the following two years, Iraq made millions. Other oil-exporting nations, including Iran and Venezuela, have stated that they are contemplating a similar move. If OPEC as a whole were to switch from dollars to euros, the consequences to the US economy would be catastrophic. Investment money would flee the country, real estate values would plummet, and Americans would shortly find themselves living in Third-World conditions.
The war between Petrodollar and Petroeuro has become a vital reason for the war in Iraq. In the words of William Clark, “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. Throughout 2004 information provided by former administration insiders revealed the Bush/Cheney administration entered into office with the intention of toppling Saddam Hussein. 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”). However, subsequent geopolitical events have exposed neoconservative strategy as fundamentally flawed, with Iran moving towards a Petroeuro system for international oil trades, while Russia evaluates this option with the European Union.”
He continues his arguments about the war in Iraq, “Similar to the Iraq war, military operations against Iran relate to the macroeconomics of ‘petrodollar recycling’ and the unpublicized but real challenge to U.S. dollar supremacy from the euro as an alternative oil transaction currency.”
The analysis and expert reports are bluntly exposing the truth about American GWOT against Saddam Hussain and its regime. Let us have a look over an analysis published on the website http://www.endtimeprophecy.net on January 04 2007 under the title “SADDAM HUSSEIN’S EXECUTION AND THE EURO DOLLAR WAR, about the situation;
“Some of you are already familiar with some, most or perhaps all of the theories (reasons to attack and eliminate Saddam Hussain and its regime) that have been put forth by me, and others. For those of you, who aren’t familiar with them, allow me to list some of the more popular positions which have been discussed to varying degrees:
1-George W. Bush wanted to secure control of the Iraqi oil fields which are vital to the American economy, and America’s supremacy as a superpower in the world.
2-George W. Bush wanted to contain Saddam Hussein, as had been done during the Gulf War, and prevent him from upsetting the status quo which has existed in the Middle East.
3- George W. Bush wanted to establish an American military presence in Iraq for a variety of reasons which would all be advantageous to the United States; such as:
a.To exert pressure on Iran and keep it under control.
b. To exert more pressure on Russia and China.
c. To establish another listening post close to Russia.
d.To protect oil interests in the Gulf Cooperation Council nations-states-sheikdoms.
e. To better protect Israel.
In an article titled “It’s not about oil or Iraq; it’s about the U.S. and Europe going head-to-head on world economic dominance,” the Australian economist and columnist Geoffrey Heard wrote: ” Why is George Bush so hell bent on war with Iraq? Why does his administration reject every positive Iraqi move? It all makes sense when you consider the economic implications for the USA of not going to war with Iraq. The war in Iraq is actually the U.S. and Europe going head to head on economic leadership of the world” and here I add that Saddam Hussain is the martyr of this war between Euro and Dollar.
Download the Article in PDF