Alright y'all, welcome back to Antiwar Radio, it's Chaos 92.7 FM in Austin, Texas, streaming live worldwide on the internet, ChaosRadioAustin.org and Antiwar.com slash radio.
And hey, I'm happy to bring back to the show my old friend, Greg Palast.
How you doing Greg?
What can I tell you, Ted?
I don't know.
Well, we'll get to that.
First of all, let me tell them about you, you're a, I don't know who exactly you write for now on your byline, but you have produced a TV for the BBC, written for the Guardian and Observer, author of the book Armed Madhouse and the Best Democracy Money Can Buy.
You're at Harper's now?
I wrote with Harper's and there's my editor complaining already that I'm not at work.
And I also now work with Rolling Stone.
And with Rolling Stone, okay, that's good.
By the way, I don't want to divert you onto this topic, but I just wanted to compliment you on your essay that you wrote for the 4th of July there at your blog at gregpalast.com.
That was a cool one.
All right, so here's why I called you this morning though, Greg, is I read this article in the New York Times.
It seems like this is, I always end up interviewing you after I read some article about oil in the New York Times.
All right, here we go.
As oil giants lose influence, supply drops.
And well, we can get into all the major arguments and so forth throughout this thing, but the main thing I wanted to focus on, what jumped out at me and I highlighted with my little cursor was the idea that we're not facing geological peak oil.
What we're facing is political peak oil.
And that reminded me of something you once told me about oil and how it's controlled by the different national governments and oil cartels around the world and so forth.
So why don't you tell us about your impression of this New York Times article that I know you've already seen today?
Right.
Actually, I circled it because I wanted to hit them for plagiarism.
They called an expert who used my phrase.
You don't have geological peak oil, we have geopolitical peak oil.
It doesn't really matter, by the way, I don't want to get in fights with people about whether Mother Earth doesn't want to give us any more oil.
It's almost insignificant compared to the bigger issue of why we don't have it this week when Bill Clinton left office with about 18 bucks a barrel.
Now it's about 118 bucks a barrel.
But we have a kind of nonsensical national debate between Obama and McCain about offshore oil drilling and Al Gore with fluorescent light bulbs and all this stuff.
Let's talk a little bit about the geopolitical squeeze on the oil pipes here.
The number one reason we don't have oil is called the war in Iraq.
Let's go through this.
If you're short of supply, where are you short of supply from?
And the answer is that the number two producer of oil on the planet until we started messing there was a nation named Iraq.
They have about 112 billion barrels of reserves there.
They did have an OPEC export quota of 3 million barrels a day.
They could produce double that.
And now our government is crowing if they produce a million and a half or two million barrels a day.
When you pull more than a million barrels a day out of the market, and remember the surge actually cut it further because it caused chaos at the Basra loading docks and the Basra field.
When you pull a million barrels of oil a day out of the market, it is a big squeeze on the oil market.
Let's put it this way.
Clinton left us $18 a barrel of oil.
Bush gives us $118 a barrel of oil.
When you go from $18 to $118, that's mission accomplished.
So basically what you're saying, and by the way, parentheses for the audience, there's things in your book, Best Democracy Money Could Buy, that Bill Clinton could go to prison for.
So it's not like you're a defender of Bill Clinton here.
Today I was asked about whether I was nonpartisan, and I am supported by nonpartisan foundations.
Of course, BBC is a nonpartisan, non-American network where my material is broadcast.
But all I should say is that I'm not nonpartisan, I'm anti-partisan.
The idea that either of these guys should be president should give everyone a nightmare.
Right, see, that's what I'm saying.
There you go.
So I'm not praising, laughing at Bill Clinton, but I just want to tell you what's happened here.
If you blow up oil fields, believe it or not, you're going to get less oil.
See, this is the thing that I wanted to focus on, was I was going to make a little analogy.
What you're trying to say, basically, is that, for example, if James Madison owns a bunch of slaves, and then he bans the importation of slaves, that drives up the price of his slaves.
And he gets more wealth for the same amount of what he already had, and that's what the oil companies have done here.
They have all this oil, and they get to charge a hell of a lot more for the same amount of work.
Well, let's put it this way, or less.
You know, I mean, the idea...
By the way, they quoted the New York Times, often quote Amy Jaffe, who they don't properly identify as working for James Baker, Mr. Oil himself, the constigliere for ExxonMobil.
She works for James Baker.
And they use her as an expert.
She says, well, you know, the oil companies are having a tough time figuring out where to get new supplies.
Well, I've also talked to Amy.
She doesn't like me quoting her, but since I secretly tape-recorded her, I can tell you what she said when she thought the recorder was off, which is that, if I were the head of an oil company, the last thing I'd do is be complaining about this massive drop in supply.
What we are doing is having a massive, massive, insane profit.
No one even blinks anymore that Exxon...
No one blinks that Exxon is making net profit, that is what they can't hide, a billion dollars a week.
This is not profits from finding oil.
This is war profiteering.
They are making money off a multi-front war.
First, there is literally the shutting off and the bombing and the destruction of the oil fields of Iraq, which was made worse by the surge.
You have to understand, the Wall Street Journal reported, it's a minor thing in terms of reporting, but it's big when we talk about oil, that the surge has cost about a million barrels a day, because there's been basically war on the docks at Basra.
There is massive pressure and embargo on Iran, and it's not whether you think embargoing Iran is good, bad, whether you like Ahmadinejad or you think he's mad Mahmoud, that has nothing to do with it.
The fact is that we are making it difficult for them to upgrade their fields, allow investment there, and so once again, more squeeze on oil.
There is an attack, there are piracy and insurgent attacks on the oil supplies in Nigeria.
There is a low-level Cold War and sabotage against the oil production out of Venezuela, which is the next big source of our supply.
When you look at what's happening here, oil companies are spending their geopolitical capital not on finding new oil, but on making sure that we don't find new oil.
I mean, that's what it's all about.
It's very, very simple.
I mean...
But Greg, I read in the New York Times this morning that the super-majors, the biggest oil companies, are terribly frustrated because politicians everywhere won't let them explore where they want to explore and find new supply.
Yeah, they're very frustrated.
I mean, it must be very frustrating to figure out what you do when you make a billion dollars a week.
Exxon is earning over $40 billion a year.
That's more profit than any corporation has earned since the pharaohs.
It's just never happened, and no one's even blinking anymore about this.
We've gotten so used to the fact that since the war in Iraq started that these guys are cranking up profits, and no one's putting two and two together.
No one is saying, as the war has dragged on and sliced production out of the second biggest oil field on the planet, that oil profits, of course, are going through the roof.
There are two rules, as I try to explain to people endlessly.
And remember, before, as a journalist, I worked for a living.
I was an investigator in oil economics, in energy economics.
There are two rules in energy economics.
The first rule is that the lower the supply, the higher the price.
And the second rule is, the lower the supply, the higher the price.
You learn those two rules.
That's also the third and fourth and fifth rules.
You know all you need to know about oil economics.
These guys are working very hard at cutting supply.
They're extremely successful.
Okay, now let me stop you right there, because if we were talking about a chain of hardware stores that tries to limit the supply of hammers in order to drive up the price of hammers, they can't do that, because there's free entry into the marketplace, and someone else will sell hammers for a decent price, and they will go out of business.
They will be competed away.
But that same dynamic does not apply in the oil business.
Why not?
There are two reasons.
One, because of entry.
While you can go into the hammer manufacturing business, you can't simply walk into the oil business in terms of big fields.
They're controlled by two things.
They're controlled by the oil majors with lock-up deals, which they obtain through massive bribery.
For example, the next big field coming online is out of Kazakhstan, in the Caspian area.
And we do know, no one has questioned the fact whatsoever, that ExxonMobil Corporation, their mobile unit, gave $160 million to so-called President Nazarbayev.
And Nazarbayev gave James Baker a nice sword.
I saw it at James Baker's office, with a little note that said, there's always a slice for you, Jim.
Actually, I added that.
That's not really true.
It really is a sword from Nazarbayev in Baker's office, which is where, by the way, I met with Amy Jaffe, who was quoted in the New York Times, again, without identifying where she's from, except for giving her university credit.
Look, what's happening here is, if you want Kazakh oil, you've got to pony up $160 million to the president of Kazakhstan.
If you want Venezuelan oil, you have to play ball with Hugo Chavez, a guy I think we ought to play ball with.
But you don't just go into the oil business in Venezuela.
You don't go into the oil business in Mexico without buying the PRI.
And basically, you have the oil companies, supposedly, in the New York Times, they were screaming about the fact that national governments are controlling the supply of oil.
That's at the suggestion of the oil companies.
There is a cartel called OPEC.
Well, is there a grain of truth in the idea that these national governments are kind of backlashing against all the really crappy deals they've had with American oil companies all this time, and that they are, in fact, limiting access now?
Well, let's split that up.
Yeah, they're bitching because they want a bigger rake-off.
I mean, Nazarbayev wasn't going to give away Kazakh oil for the old million-dollar bribe to a Swiss bank account of $160 million.
You're talking about corruption on a scale that's just beyond, absolutely, utterly beyond imagination.
For example, when I said the oil companies want the national governments to control the supply of oil so that they can have these exclusive, no-bid deals with them.
They call them production-sharing agreements or profit-sharing agreements, PSAs.
You know, I did obtain, for those who read Darmaninoff, I did obtain the plan written by Amy Jaffe and James Baker and the oil company chieftains for Iraq, which calls for, which demands that the Iraqi national government maintain 100 percent control of the ownership of oil.
Now, you may say, now, why the heck in the world would Exxon and Shell, and Shell Oil, which were involved in the writing of this document, why would Exxon and Shell and the big oil majors want to have nationalized oil fields?
So they only have one customer, or one satellite puppet dictator to deal with, rather than a bunch of property owners.
Right.
Instead of having bids and competing interests and competing owners, where you're going to have a whole bunch of owners who are trying to get the maximum out of their field, you're going to have one national government, which will limit the total production in accordance with their agreements with the OPEC cartel, and the oil companies will cut no-bid, lock-in agreements, as we're seeing now in Iraq.
I mean, you're talking about Exxon, British Petroleum, and Shell controlling the Rumaila fields in Iraq, etc., all this non-bid, completely non-bid operations, all under these production sharing agreements.
That's what they want.
They want a deal with governments that have the authority to cut deals with the oil cartel.
Remember, if an oil company directly participates in the OPEC oil cartel, the executives go to jail.
If you do it through a cut-out, that is, you do it via a national government, then you don't go to jail, you get a $400 million bonus.
The difference between going to prison for profiting from the OPEC cartel and involvement, and getting a bonus, is simply whether you use a national government as your partner.
Yeah, yeah.
Price-fixing is okay, as long as you invite a congressman along on your conspiracy.
Right.
Basically, if you can say, we didn't join OPEC, but Venezuela, Iraq, Iran, Nigeria, Angola, they're part of OPEC, and therefore it's okay if we profit from the squeeze that they've put on the oil market.
But I can tell you something, if any OPEC member decided to, or other producers decided to start producing flat-out, they would be deeply punished, not only by other OPEC members like Saudi Arabia, but by the oil companies.
Do you think the oil companies are really crying about Putin controlling Yukos and taking back control of Yukos into the Russian government?
They're not crying at all, because that means that the Russian government knows how to play the oil market, when to drip in the oil and when to not drip it in, and they're not going to allow some type of competitive situation, which is why we have something called a so-called war in Georgia.
It has nothing to do with Ossetians and Georgians and ethnic this or that, it's all about the Baku-Tbilisi-Cheyhan pipeline, called the BTC pipeline, where there was an attempt by Henry Kissinger and others to create a competitive pipeline for Caspian oil that didn't go through Russia, and Russia's saying, you know, no more of that stuff, because they're talking about more pipelines, one called Nabucco, Nebuchadnezzar.
That's funny, you know, I was just talking about this Henry Kissinger op-ed from early July in the Washington Post, where he's saying, you know, we need to play it cool with Russia and be nice to them, and whatever, you're telling me this whole pipeline to cut them out of Caspian oil was his idea?
Yeah.
And so what happened is that the Russians said, one, pipeline fine, two, forget it.
It has nothing to do with Ossetians.
You think that Putin cares about Ossetians?
You think he wakes up at night saying, oh, those poor Ossetians, suffering from Georgian rule?
No.
Let's not forget that Stalin was Georgian.
I mean, come on, you know, oppression, murder, death, ethnic cleansing is, you know, like Tuesday there.
You know, it's the day of the week, it's not an unusual event.
I mean, I hate to put it in the coldest terms, these guys are concerned with one thing.
When you see tanks roll on this planet today, there's three things to look for, O, I, and L, oil.
That's what it's about.
The whole attack in Ossetia is all about control of Caspian oil.
That's it.
That's the beginning.
That's the end of it.
Nothing else is in the works.
Well, now, you know, my friend Gareth Porter is a good analyst on this, and he comes from somewhere on the left and yet says that, in his view, the oil is sort of the excuse.
The American people are made to believe that they need to do all this in order to secure the oil, but that ultimately what we're really dealing with here is the national security state that's just so big and so interested in perpetuating itself that, you know, oil makes a good excuse for doing what they want to do anyway, which is rule the whole world.
Oh, well, that's, you know, I don't know.
I mean, that's kind of the old century old imperial theory.
I follow the money.
I mean, I'm an investigative reporter, so maybe it's my prejudice.
I follow the money, and when you follow the money on a grand scale, you're talking about following the oil.
I don't think oil is ever an excuse for anything.
Oil is the lubricant and energy for all this mischief.
Well, but we've talked before over the years, Greg, about how the guys in Houston, for example, did not want a full-scale invasion and occupation of Iraq.
They wanted a coup.
If they couldn't make a deal with Saddam, they wanted a coup and lift the sanctions and do, you know, work with them somehow.
They didn't want all this.
Well, I think one of the things that does happen is that there is a course of events where things get out of control, and I think that even we see that in Georgia.
I'm not even sure, by the way, that the oil companies were all that excited about building the Nebuchadnezzar, the Nabucco Line, and to avoid Russia.
I think it was more of a card to play with Russia, you know?
If you don't cut a deal, we'll come up with an alternative pipeline.
Then we put in characters like Saakashvili in Georgia, and we let him play games with the Russian bear, and then it gets out of control, just like Iraq got out of control.
I think that the Georgian situation, I don't think that the oil companies were hoping that the tanks would roll into Georgia, though, again, that brings up the price of oil.
I mean, British Petroleum controls that BTC pipeline.
They shut down the pipeline.
Now, did that hurt British Petroleum?
The price of oil goes up, so it's an odd business.
You stop selling and you make more.
It's an extraordinary business, but these guys understand how it works.
But I don't think that British Petroleum was saying, let's see if we can goad the Russians into attacking so we have an excuse to shut down the pipeline, but they know how to play it.
But I think that it went a bit out of hand, and Putin is making clear that there are limits to messing around in the Caspian, and messing around with the pipeline, that a deal's got to be cut here.
All right, now listen, I know you're in a hurry, but I want to ask you to address one more point, which is something we've talked about before, and I don't know what the fraction is, I hope you can tell me, but some major portion of the dollars spent by Americans at the gas pump, that $3.85 or whatever it is in your town today, a major portion of that basically bounces off the roofs of our client dictatorships around the world and lands back in our government's bank account in the form of U.S. debt that they buy.
Well, actually, here's the odd thing.
I mean, basically, you're paying a massive war tax, oil tax, that we didn't pay before.
Now, 50% of our oil money leaves the country.
You know, obviously, the major source of imported oil, other than Canada and Mexico for us, is out of Saudi Arabia.
100% of that actually comes back to us in the form of purchases of U.S. securities, principally Treasury bonds and Treasury bills, and what that means is that all that debt that we have for the Iraq war, all this massive debt for tax cuts for the rich, has been put on the credit card and borrowed from Saudi Arabia and funded.
In effect, what Bush has done, what the regime has done, I say regime because I don't think the Democrats would play it much different, is to say, we can be charged through the nose at the pump to fund this massive debt.
Now where we are running into additional political problems is that at a certain point, Saudi Arabia, China, the Emirates, are tired of buying U.S. Treasury debt, which is getting a little bit shaky as the dollar is shaky.
So they've created a way, it was at the suggestion of the U.S. Treasury that they created something called Sovereign Investment Fund, S.I.
V., Sovereign Investment Vehicle.
This was a way of allowing foreigners to earn a little bit more than they would get on the Treasury bills, the Saudis.
And by the way, you know where they put their biggest money, these S.I.
V.?
If you want to tie it all up, Freddie Mac and Fannie Mae.
So the U.S. government said, okay, because the Saudis are saying, look, we're taking all the money you're giving us from the gas pumps, we're sending it back to you to buy Treasury bills.
But Bush is on such a buying spree that these Treasury bills are getting shaky and they're not paying enough.
And they said, okay, so we'll give you something else to buy, why don't you set up something called Sovereign Investment Vehicles, and we'll give you something which is basically a U.S. government guarantee, but gets you more because it's not really.
And that's, I guess, Freddie Mac and Fannie Mae.
When people talk about the guarantees to Freddie Mac and Fannie Mae, this is not to save housing in America.
You think those rascals at Congress care that two million people are losing their homes?
No way.
This is about saying to the Saudis, and the Chinese, by the way, who have bought all this Freddie Mac, Fannie Mae debt, don't worry, guys, we'll make sure that you're not in trouble with this.
It has nothing to do with saving people's homes.
It has everything to do with saving the foreign investors whom we told to park their money when they got tired of our Treasury bill.
Well now, pardon me, Greg, but I'm going to go ahead and use the F-word.
I know you're not supposed to do this unless there are guys in gray coats goose-stepping down the street, but is this not, this whole conversation, are we not describing what Mussolini called corporatism?
Right?
I mean...
Yeah, I mean, it is fascism in a technical sense.
I hate to use the word because it has such a kind of dark movie connotation, but it is, and it's technical, you're correct, and it's technical form, fascism, is a corporate-government combine which sets policy, and that's basically what we do have because of its overtones of, you know, I mean, I don't want to give the suggestion that we have some type of like Department of Homeland Security in America.
No, we certainly don't, and I don't know about you, but at least over here, I can't pronounce the proper German for it anyway, so forget it, you know, it's no big deal.
All right, listen, let me give you an opportunity to tell people about your book.
I know you want to.
Okay.
Well, actually, what I want to do is go to gregpalast.com, it's g-r-e-g-p-a-l-a-s-t.
I'm doing an investigation of the upcoming heist of the November election.
I'm doing...
Oh, no, don't tell me they're going to get away with installing McCain in there.
I mean, I'm no Obama fan, but tell me they're not going to get away with stealing this thing.
Well, I don't know yet.
That's why I'm asking people to download.
We're creating a comic book.
I decided to do an investigative comic book called Steal Back Your Vote, and if you go to gregpalast.com, you can find out about it.
I'm doing the investigation with Bobby Kennedy, Jr., who is a law professor and voting rights expert.
And then Ted Rollins is doing all the illustrations, right?
Ted Rollins.
And for those who are into, like, comics, real comics, we've got Lloyd Dangle and Lucas Kettner, like, you know, like real pal-zap, top-notch comic artists, and some advice on stealing back your vote.
And that's, you know, and believe me, I really truly in my heart don't care which of these characters gets elected, but I would like whatever choice it be be done by counting the vote.
So Steal Back Your Vote, it's stealbackyourvote.org or gregpalast.com.
All right, cool.
Hey, thanks a lot for your time today, Greg.
Bye.
