Shana has conducted in exclusive interview with William Engdahl, an American German freelance journalist, historian and economic researcher, about a number of issues including Iran's status in the world market and the role of EU and US in many of the equations and the oil peak myth. The following is the verbatim conversation he had with Shana.
Shana: Thank you very much for accepting this exclusive interview with Shana (Petro Energy Information Network).
Let us, as the first question, ask you about some of your first academic works. In 2004, you had A Century of War: Anglo-American Oil Politics and the New World Order published. Please tell us more about the book and what you sought by its writing.
WE: Actually this book was inspired by the continuing wars involving Iran, Iraq (the horrendous war of the 1980’s) and other oil-rich countries. It was shortly after the illegal Bush Administration invasion of Iraq and a German publisher asked me if I would do a book on how the oil world works. My writing as you may have noticed draws on an explicitly historical approach---everything has a history. So for a book about oil wars I went back to the beginning—to the British Empire at the dawn of the Petroleum Era—to the first swindle of the Shah by the British more than a century ago—The British Royal Navy was the centerpiece of the power of the Empire and they had figured if they could convert from coal to oil in the navy they would enjoy a huge military advantage over any rival. Then oil in the North Sea was unknown so they went where it was known—Persia, the Anglo-Persian Oil Company, secretly owned by Her Majesty’s Government in UK, Kuwait since 1899 when the British robbed it via bribery and corrupting from Ottoman Turkey. As I became immersed in this oil history I quickly realized I was looking at a major thread that connected very different events that in traditional Western history books are NEVER connected. I realized I was not only looking at the history of a commodity, but of an emerging power.
As Henry Kissinger said in the oil crisis days of the 1970’s, “If you control the oil, you control entire nations.” So the Century of War book became a history of the past century in the world seen through the prism of that Anglo-American control of oil to control other nations. After 1945 when oil became the basis of European and world economic prosperity, controlling oil became even more military-strategic. The history of why the CIA toppled Mossadegh in the early 1950’s is one of the most clear examples. The power behind Anglo-American Big Oil was integrated seamlessly with the power of the CIA, US State Department and Pentagon sometime in the 1950s under the Dulles Brothers—Allen at CIA, John Foster at State. Since then that has been the case. These are not simple private corporations—ExxonMobil, BP or Chevron, Shell. The model for their power is the British East India Company of the early 19th century. I wrote it as I did because I felt ordinary citizens, whatever country, deserved to understand this real dynamic of their history, not only the western fairy tale version.
Shana: Please elaborate on your peak oil stance. Do you still call yourself an ex peak oil believer, given the rise of unconventional resources in the market. How can the traditional oil market be affected?
WE: Around 2002-3 as I saw the drumroll out of the Bush Administration in Washington for war—not against Osama any more. They forgot him in Tora Bora it seemed. But suddenly Washington called for war against Saddam Hussein in Iraq who controlled the world’s second largest oil reserves after Saudi. I was perplexed as many why Bush would risk a rupture with America’s closest allies—Germany, France were vehemently against war on Iraq. Then I came across the “peak oil” argument and for want of any other real explanation, for a brief time I was convinced by it. Then, as I tend to do in my researches and work, I dug deeper. I was having growing doubts about the Peak Oil arguments scientifically. I went to a conference of the peak oil association in Berlin. I heard all the top gurus of peak oil speak. The names are unimportant. What they argued scientifically was so shallow and in some cases non-existent. I some weeks later went to Sweden to privately hear a power point presentation argument from a Swedish professor heading the peak oil organization internationally. He was president but had no scientific background in oil, rather in nuclear engineering. Everything he said rested on one crucial point: Oil is a fossil fuel. There began my doubts. So I dug deeper. I read work of scientists in Ukraine and Russia during the Cold War that had been translated into English. They were looking at a revolutionary new way to explain both genesis and origins of hydrocarbons—oil, gas, coal.
Then I realized that one of the prime propagandists for Peak Oil, the late Matt Simmons whom I had met, was a Texas oil banker, not a scientist. He gave great articulate media interviews that made dramatic headlines, he and was a good friend of Dick Cheney. That made me more and more suspicious. Then I found that the main scientists of so-called peak oil all had ties to big oil—Texaco, Total and so. Peak oil is nothing but an elaborate lie to keep other nations from finding their own oil—for maintaining the Anglo-American oil monopoly of power.
The rise of “unconventional” sources of hydrocarbons is nothing new, only the fracking techniques developed by Cheney’s Halliburton and others. If anything, shale fracking weakens the peak oil argument. As a distinguished Dutch oil economist Peter O’Dell, another peak oil critic like myself said some years ago, “The world is not running out of oil, we’re running into oil.” The political problem for the Anglo-American global power is how to hide that fact- hence the reason for the Iran-Iraq tragic war in my view, and countless other energy wars.
Shana: What are the environmental dangers of shale oil and gas production, regarding the hydraulic fracturing techniques used for recovering petroleum products?
WE: The shale “fracking” or hydraulic fracturing has enormous problems. First there is the huge volume of water required to be pumped into the shale rocks. Fracking requires drilling down vertically through hundreds of feet of rock and then horizontally through shale beds. Millions of gallons of rock, sand and chemicals are then pumped down under high pressure to fracture the shale, releasing the natural gas trapped in the interstices of the shale. But in drilling down to the deposits, wells often pass through aquifers that provide water to communities, plants and wildlife on the surface. Here it often happens that ground water is contaminated with the highly toxic fracking chemicals. The companies refuse in the USA to take responsibility as Dick Cheney when Vice President manages to get an exemption making oil companies the only industry exempt from the strict US Clean Water Act. In addition, repeated earthquakes, including the area around Dallas Texas where I grew up, have accompanied the fracking as the structure of the subsurface is often dramatically weakened. In addition disposal of fracking water, millions of gallons is often done at or near the site further contaminating nature, animals, people. Further shale fracking wells deplete far more rapidly than conventional wells, making it necessary for a company to drill ever more wells just to maintain steady volumes. That is a huge environmental and financial cost that US companies are trying to hide from the outside while they try to dump their shale leases on unknowing foreign investors like the Chinese or Europeans who are naïve about all this. All the global estimates of where shale oil or gas exists comes from a Washington consulting firm on contract to the US Government. That alone should cause suspicion. In China, which the US report says holds the world’s largest shale reserves, it happens to be concentrated in Sechuan Province—a major earthquake region with major water problems. Shale fracking now is just what Sechuan does NOT need! Only one example.
Shana: In 2012 you authored one of your most controversial books entitled: Myths, Lies and Oil Wars. Please explain a little bit about the title of this interesting work.
WE: The myth I refer to is the carefully-cultivated myth that oil or gas are scarce—that their origins hundreds of millions of years ago are from biological dead matter such as dinosaur detritus or algae or leaves, the so-called “fossil fuel” theory. But there has never been a repeatable, verified scientific experiment or formula that explains how dead dinosaurs transform into hydrocarbons. This is the central myth that allows the Anglo-American oil cartel controlled by two powerful families—Rockefeller in the case of Chevron and ExxonMobil, and Rothschild in the case of Shell, to control world energy---that is a huge geopolitical advantage. Wars as I say are regularly fought to keep that myth and control. The lies derive from their efforts to maintain the myth of oil scarcity—that the volume of dinosaur detritus is finite. And of course I try to illuminate the wars this cartel that is so powerful it virtually controls the governments of the USA and UK, has initiated to keep their control.
5. - Who suffered mostly from isolating Iran from economic arenas of the world?
WE: The entire world. Allowing Iran to participate normally in world trade would benefit the EU countries who badly need export markets to get out of their economic crisis of the past five years; It would help China and Eurasian countries who could benefit from rising trade with Iran, not only in oil. And it hurts the economy of the US itself, though the powerful rich families that control Wall Street banks and Big Oil and the military industry do not seem to care about the fate of American ordinary people.
6. -How can the current conditions of Iraq and the rise of terrorist groups in the Middle East as producers in the region affect world markets and the future of petroleum policies?
WE: The bizarre fact is that despite the (very suspicious) explosion of activity from this strangely named ISIS (now IS) in Iraq and Syria, despite the fact that the US-backed toppling of Libya’s Qaddafi have endangered millions of barrels of world oil flows, the New York NYMEX oil futures market has reacted with almost a yawn. I maintain that is because oil today is not a physical market anymore between petroleum buyers and sellers with a little price risk hedging. Through the development of oil futures traded on Wall Street’s NYMEX (owned by Chicago’s mammoth CME Group), or ICE Futures in London or the Dubai Mercantile Exchange owned by Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Shell, the financial derivatives markets that are controlled by four or five giant players—Goldman Sachs, Citibroup, JPMorganChase, Barclays—control the paper price of oil.
Shana: According to Resource Geology
Engdahl stated in 2007 that he had come to believe that petroleum is not biological in origin, which is the theory supported by the majority of petroleum geologists and engineers. Instead he now believes the hypothesis that petroleum is geological in origin, produced from carbon, by forces of heat and pressure deep underground. Engdahl calls himself an "ex peak oil believer", stating that peak oil is actually a political phenomenon. If that is true, what made you believe so?
WE: I partly answered this above. I began reading the scientific papers of leading Russian and Ukrainian geophysicists who had uniquely developed this “abiotic” or non-biological origin hypothesis which, by the way, has since been amply proved scientifically by not only the Russians but also by the Carnegie Institute in Washington. Their scientific explanation of the deep inner Earth genesis of the hydrocarbons that are then forced upwards from the mantle via huge pressures in the Earth core to the surface also explains the otherwise mysterious but verified phenomena of “self-refilling wells”. Every giant oil field is self-refilling from under. You need to determine the rate of refill volume and rate of extraction. If they are in balance, you can keep pumping and pumping and pumping…
The trick that the Russians have mastered over more than six decades of initially highly-classified research, is how to read or understand the geologic Earth structures, tectonic indications and such to know where to look for oil or gas. I am in long-standing contact with several of the Russian scientists who have done this. For obvious reasons, the Western petroleum industry—ExxonMobil, BP and co., as well as Halliburton or Schlumberger try to discredit the Russian theories by citing work of a sad incompetent now deceased, Thomas Gold as proof abiotics is wrong.
The deep wells offshore Vietnam were developed by the Russians, as were those in the Donetsk Basin in east Ukraine before the tragic events of today. Those wells produce in a region Western conventional geology claimed was impossible as they were not “sedimentary basins” and held no “source rock.” Science, true science, is always about overturning earlier models for more precise ones and it is no different in geoscience. However, the status quo lobby of Anglo-American Big Oil is so powerful they have largely discredited or ignored the amazing work of the Russians. I am convinced Iran could discover huge new oil and gas resources and, using a variation of the same science of geo-mapping and I would be happy to introduce the relevant scientists. I was in Teheran a year ago and am struck by the warmth and energy of the people there I met. You deserve better than the West has done to your country as to many countries.
These methods are adaptable as well to find abundant subsurface pure water to “green the deserts”. I know the scientists personally who are doing this around the world, very quietly so as not to make too big waves and irritate the vested interests of Anglo-American Big Oil. Abundant and inexpensive hydrocarbon energy for the world economy could open the way for an era of prosperity mankind has never before seen.
Shana: Please let us know your idea about global warming.
WE: Like “Peak Oil” it is scientifically fraudulent. We must ask why the Global Warming lobby refuses any and all serious scientific open debate? They terrorize opponents, slander them, but never argue science with them. Once measured data suggested some years ago that “warming” was becoming “cooling” political people like Al Gore and the head of the IPCC, Rajendra Kumar Pachauri, came up with the deliberately confusing new term, “Climate Change.” Better say “weather change” and weather since time immemorial is always changing.
There is so much scientific corruption, scientists willing to prostitute their integrity for government research grant money or private company money. There is huge documented fraud in the Global Warming game, backed by the interests of Wall Street banks with their “carbon trading” schemes. But the main aim of the original Global Warming idea dreamed up by Margaret Mead and others in the US and UK was to find an argument to stop the economic growth of emerging countries like India, China, Africa. The University of East Anglia leaked emails of the world’s leading Global Warming scientists showing faked data, the deliberate lies put into the IPCC assessment “proving” the Himalaya ice ism melting, such fairy tales are debunked, but Western media is so controlled---CNN, New York Times, BBC, Guardian. And they parrot the religion of Global Warming and the hidden message is “people pollute,” in other words, a sophisticated argument for global population reduction—eugenics. Fortunately, man has little if any long-term influence on climate. Earth is a very robust system and the main influence on Earth climate or weather is the Sun, something NO Global Warming or IPCC computer climate model is capable of or even tries to model. Global Warming like Peak Oil is a political not scientific phenomenon. Fortunately in the last several years the global cooling has cooled the frenzy over Al Gore and the IPCC “doomsday” warnings of an Earth climate “tipping point.”
Shana: Regarding the sizable feedstock available for petrochemical plants in Iran, how do you view the future of Iran's role in Asian and global petrochemical markets?
WE: I believe the future in terms of supply from Iran is extremely positive to supply Asian and global petrochemical markets. It is a political problem of the US sanctions and here Iran is dealing not with an honest counterparty in Washington. The lobby or special interests behind Big Oil want to control Iran’s petrochemicals and the flows to which markets. That is a major reason in my view for the US decision to back Saudi and Qatar financing of the terror inside Syria to topple Bashar al Assad. Assad bluntly refused an attempt by Qatar to join in a gas pipeline deal via Syria through to Turkey, citing his ties with Gazprom. Then, very notably, within weeks of the announcement by the three governments of Iran, Iraq and Syria of plans to build the Friendship Pipeline for Iran’s South Pars gas, the largest known gas field in the world, in February 2012 the USA, Britain and other NATO countries withdrew their ambassadors from Damascus and began covert backing of a total color revolution against Assad’s regime. Assad’s main crime was that he refused to play by the rules of the Anglo-American New World Order.
Shana: In your eyes, what will be the final result of the Iran & P5+1 talks? What is its influence on Oil Market? How would things change for Iran's economy in case a promising agreement is finally clinched in the Vienna talks?
WE: As much as I would like to believe the Obama Administration genuinely for a change wants to deal openly and honestly with Teheran in Iran & P5+1 talks, I do not see it. I believe it is a manipulation tactic at this point or any serious results will be blocked by neo-conservatives and the powerful US military industry lobby in Washington. I believe Iran is negotiating in good faith but she should not be at all naïve over the words of Secretary Kerry and others. The power structures that control Washington are not interested at all in the well-being of Iran or even of the United States people. They are interested in their own power and that power is threatened as never before by such emerging alternatives as BRICS, SCO, Eurasian Economic Union. Even the EU elites are moving to join the emerging new economic colossus of the world—Eurasia led by what I like to call a de facto Iron Triangle of three countries with converging geopolitical interests—Iran, Russia and China.
Shana: As you are one of the rare geo-politicals who began writing about oil politics with the first oil shock in the early 1970s, how do you view the current state of the global oil market? Who & how are the main players on this market?
WE: You give away my age (laughs). The oil market today is virtually not comparable to that of the time of the 1973 oil shock and aftermath. Then we spoke of the Rotterdam “spot market” which was a key market stabilizer when supplies of crude and markets had to be close. In the late 1980’s Goldman Sachs and Wall Street introduced “paper barrel” oil futures trading. Today paper oil determines price, no longer physical supply and demand though it can slightly influence at the edges. This change has been accompanied by the Commodity Futures Modernization Act of 2000 which permits virtually unregulated and unsupervised derivatives trades of oil futures. The main players on this very manipulated and opaque market are the two key exchanges—Nymex (CME Group) and ICE in London. Wall Street banks control both in different degrees. It is a rigged casino. The main players are the giant oil companies like BP, banks like Barclays, Citigroup. Goldman Sachs and JP MorganChase. Incredibly so little has been written about this financial collusion and cartelization of the futures market of oil. It is a huge story.
Shana: What is Rockefeller Foundation’s role in Oil Market?
WE: Today the role of the Rockefeller Foundation, which was legally created in 1913 by Standard Oil founder John D. Rockefeller to keep the family’s oil wealth from government income taxation as the income tax that year had just been passed. Through the foundation over the years, the family has implemented an incredible agenda including eugenics and genetical manipulation of plants research and development, takeover of US medical education to narrow medicine to serve the interests of the (Rockefeller-owned) pharmaceutical industry and such projects. I am not aware of the direct role of the foundation today in the oil market. It is more indirect over minority shareholdings and companies like JP Morgan Chase that are historically Rockefeller group banks or companies voting a certain way.
Shana: What could be the effect of US-Russia tensions & Ukrainian crisis on Global Gas Market?
WE: President Obama apparently was given very poor advice and began promising the new Ukraine regime US natural gas as an alternative to Russian gas. That was nonsense and since then he has not said much. The potential effects if Russian gas continues to not be delivered to Ukraine for lack of payment and if the very erratic Kiev regime sabotages more of Russian Ukraine gas pipelines, could be a huge price spike in gas in the EU market, especially Germany. That is why Angela Merkel whatever she may say publicly privately is trying everything to avoid imposing more severe EU sanctions on Russia as Washington demands.
Shana: What is your idea about investment in renewable energies all over the planet and the role of this energy in the energy basket for supplying energy in the future?
WE: It’s a real pity that for the same political reasons Global Warming has been promoted by a certain interest group for their own agenda. They promote “alternatives” such as solar, windmill power, geothermal. These are not at all realistic as a substitute for hydrocarbons at present. But hydrocarbons exist in abundance and beyond. Yes solar panels in a country like Iran or Morocco can heat water or more because you have the sun. Globally it is inefficient and far too costly and there is not enough sunshine in northern Europe or most of the North America.
Thank you once again
Iranian Researcher of Western European and North American Studies