George Bush nearly pelted with shoes

[Kirkland Laing]

Ok, for now let's focus on just how much oil we are talking about.

You have claimed Iraq oil reserves estimated at 500 trillion dollars, or 300 times US GDP.

My source, http://www.eia.doe.gov/emeu/cabs/Iraq/Oil.html puts recoverable Iraq oil reserves somewhere around 200 billion barrels, and that is one of the more optimistic estimates. That is an estimate of proven and unproven reserves.

Right now oil is priced at about $47/barrel on world markets. Last year it was at an all time high of about $140. Lets pick a price somewhere in the middle of $100 barrel. That makes a total value of Iraq oil reserves of 20 trillion dollars, not 500 trillion dollars.

I also have US GDP at about 14 trillion dollars according to U.S. Gross Domestic Product GDP Forecast That means that the total value of Iraq oil reserves would be about 1.5x US GDP, not 300x US GDP.

Any comment? Does this have any effect on your claims of economic motivation for war?

Iraq has never had its oilfields mapped or quantified. There are huge areas of Iraq that have never been seismically tested. Since oil was first found in Iraq there have been less than 200 drills in various areas. To put that in perspective there have been well in excess of 20 million drilled in Texas.

As part of my job I get access to various economic data. As far as oil data goes the company with the most accurate name is a firm in Geneva called petroconsultants. Their reports change hands for over a million dollars a copy, and Petroconsultants' conservative estimate of Iraq's oil wealth based on the projected size of their known geological formations is $500 trillion. Certainly that's the figure that was in discussion in various meetings of financial institutions I attended on both sides of the Atlantic in 2002/3 before we invaded. Although it was never openly discussed from the various comments made it was clear that the participants at those meetings certainly seemed to think the war was all about oil. They were all people like me, who'd absorbed the distilled wisdom of 400 years of British/US mercantalism/imperialism/capitalism over decades working in the financial industry. And I can tell you that the firms they work for, their jobs, status, income etc. was built on us having done similar stuff for hundreds of years and depends today on the same thing. It's hard to overstate the importance of oil to the global economy or the existance of a country where there's huge potential to increase oil production -- only one such country exists. If I'd have stood up and claimed that i was worried about Saddam's WMD they would have looked at me like i had two heads.

OK, you are talking about figures that were in discussion. Can you provide some kind of reference, or industry organization website that supports your numbers? I have provided my sources, another sourse is something called the Oil and Gas Journal. The numbers I quoted were estimates of proven and unproven reserves. Unproven reserves would deal with unexplored areas. And you know what? Even allowing for error, 20 trillion is so far away from 500 trillion that something is very wrong somewhere.

Saudi arabia has at 267 billion barrels known reserves. Saudi Arabia has 1/5 of the worlds known reserves.

According to my calculations, your figures imply that Iraq's potential supply exceed total known reserves in the world by a factor of around 4x. Tell me where ny figures are wrong.

We are talking about whether or not the war is all about the economy of oil. I'd say that makes the value of oil under discussion relevant. If we can't come any closer than a factor of 25x then we our discussions won't mean a whole lot.

I intend to respond to other points you make, but I first want to get some kind of agreement about the value of the oil in question.

I could have gone with the Janet and john numbers that show Iraq with the second/third largest oil reserve in the world and my argument is still valid -- that Iraq is the only country where oil production could be quickly and cheaply increased by a significant enough quantity that, produced by the right people and sold to the right people under the right conditions would greatly benefit certain economys. But Iraq really does contain untold quantities of oil. The numbers from people who know what they're talking about show that Iraq could easily have more oil than the rest of the world put together*. It's certainly the largest single oil reserve in the world.

*When firms like Petroconsultants make estimates like $500 trillion that includes the expected increases in the price of oil over decades of production. Oil was $10 a barrel just over a decade ago and would currently be over $200 and climbing had the current financial meltdown not happened. The bottom line with Iraq though is that it's the only country capable of significantly increasing its oil production in a world where under normal circumstances supply has recently equalled demand for the first time ever. And while oil companies are reduced to drilling holes under 20000 feet of seawater for relatively small deposits these days at production costs of $20-30 a barrel, Iraq's oil costs about a dollar a barrel to produce. When the Iraq war happened half a dozen Baghdadis did a Jethro Clampett in their back gardens while digging air-raid shelters. Iraq really is the world's most valuable real estate. And oil really does make the global economy go round. After two decades working in the financial industry and learning how the world works from the people who make it work I can tell you that unquestionably we invaded Iraq for the oil, just like we did in the 1920s. I'm no wild-eyed lefty, I'm probably Sunderland's only Margaret Thatcher supporter who's spent his career working in the money industry. (Although having seen the results I probably wouldn't support her again.)