Is Washington's Iranian Trigger Finger Getting Itchy Again?

Is the U.S. ramping-up to hit Iran? Follow the timeline and come to your own conclusion!

February '08

• The U.S. started purchasing oil for its Strategic Petroleum Reserve. The reserve of crude oil which is stored in underground salt domes stood at 96.2% capacity. But the government is topping it right up.
• Imad Mughniyah, a leader of Hezbollah, was assassinated by a car bomb in Syria.

March '08

• Washington dispatched the USS Cole to Lebanese coastal waters. Shortly after that, it was replaced with two escorts from the Expeditionary Strike Group (ESG). They are still there.
• The Israeli's announced that they would be carrying out a military exercise in April ... Code Name - Turning Point 2.
• After the announcement the Syrian's deployed 3 divisions (two armored, one mechanized) to the Lebanese-Syrian border in the Bakaa Valley, the western part of which is Hezbollah's stronghold.
• Dick Cheney visits Oman, Saudi Arabia, Israel and Turkey, all whose co-operation the U.S. will need if they were to attack Iran.
• German news service DPA is reporting, that according to reliable sources, after Dick Cheney's visit to Oman the Saudi Shira Council is preparing "national plans to deal with any sudden nuclear and radioactive hazards that may affect the kingdom."
• Jerusalem was notified at the last minute by the White House that they were to prepare themselves for lengthy and exhaustive discussions on Iran with Cheney and his aides.
• Israel's defense cabinet was convened to decide which of Israel's military plans of action were to be presented to Cheney.
• Admiral William Fallon who was quoted as saying that "there will be no attack on Iran on my watch" resigned (was removed) as U.S. Chief of Central Command
• U.S. nuclear submarines along with another aircraft carrier attack group have been dispatched to the Persian Gulf.
• The U.S. is deploying anti-missle defenses to protect U.S. bases and Saudi oil fields.
• According to Novosti, the Russian News & Information Agency, Russian Colonel General Leonid Tivashov said "the latest military intelligence data point to heightened U.S. military preparations for both an air and ground operation against Iran." "The Pentagon is planning to deliver a massive air strike on Iran's military infrastructure in the near future."
• General David Patraeus declares that Iran is responsible for a major attack on Baghdad's Green Zone and the main driver of violence in Iraq.
• U.S Treasury Department's Financial Crimes Enforcement Network (FinCEN) set in motion a process that could make any bank or financial institution in the world that does business with Iran subject to complete exclusion from the U.S. financial system.

April '08

• Israel commences Turning Point 2 which is the largest exercise in Israeli history and includes the calling-up of reserves. The official explanation is that the exercise is designed to test civil defenses and the ability of the national command to continue functioning in the event of an attack with "unconventional weapons."
• Israeli Defense Minister Ehud Barak canceled a scheduled visit to Germany at the last minute.
• Damascus has deployed the 10th Armed Corps. at the Massaneh crossing of Mount Herman. Syrian troops are now strung along a continuous crescent shaped line from the central Lebanese mountains up to southeastern Lebanon.
• The Lebanese government has started to evacuate some civilians from the south.
• Hezbollah has apparently gone on alert and mobilized its forces and is buying-up weapons and rockets.
• The U.S. Navy claims that it turned away Iranian speed boats in the Persian Gulf. Iran denies reports of the confrontation.
• General Patraeus tells Congress that Iran is the cause of the Iraqi insurgency. Blames Iran for the outbreak of fighting in Basra and Baghdad and charges that they were providing funds, training, arms, ammunition to so-called "special groups."

If it looks like a duck, walks like a duck, sounds like a duck ... chances are it's a duck.

If it looks like war, feels like war, sounds like war ......... chances are .................................

How Big Oil and Governments Bend you over the Barrel

As I'm writing this post, oil is trading at $92.84 a barrel on the New York Mercantile Exchange. Gasoline is near $3 a gallon in the U.S and $1.03 per litre in Canada. Meanwhile Exxon Mobil reported a $9.4 Billion (thats with a B folks) dollar profit for the last 3 months.

Here's why it's always your turn to be in the barrel;

• The world's cheapest oil to extract comes from Saudi Arabia and costs $2 a barrel to pump out of the ground. The Saudi's, through their national oil company, produce over 8 million barrels per day which for the most part is off-limits to Western oil companies ... hmmm.
• For Western oil companies it will cost between $5 to $7 a barrel for easily accessible oil. So let's say the cost is $7 per barrel.
• Factor in capital costs, like building the pumping facility at several billion dollars a pop and that will typically add another $5 to $7 dollars per barrel. So for easily accessible fields it costs Big Oil $14 to get that liquid gold out of the ground.
• For expensive fields like the Gulf of Mexico, Texas or the tar sands in Canada, the average production and capital cost is somewhere between $13 and $25 per barrel.

Now look out - here come the governments of the world. They have bequethed upon themselves the mantle of unrestricted taxation. Depending upon where you live on this planet, taxes and royalty payments can range from 40% of profits in the United States to over 90% in places like Russia or Libya.

Add to the mix the fact that there hasn't been one single new refinery built in the U.S. since 1976. As a matter of fact 50 have closed since the 1990's rather than making the necessary investments to comply with pollution laws. The net result are low gasoline supplies caused by a lack of refining capacity.

The domestic refining industry has continued to consolidate, allowing operators to avoid building new refineries, run existing ones at full throttle and thus causing many of the outages which have been experienced over the last few months.

Last but not least big oil companies refine more oil than they pump themselves. For example, Exxon refined 5.6 million barrels a day in the third quarter of 2007 .... but only pumped 2.5 million barrels a day. Chevron sold 3.5 million barrels a day of refined products ..... but only pumped 1.7 million barrels per day.

Mark Cooper, who is the research director for the Consumer Federation of America, said prior to a hearing by a House Judiciary Committee antitrust panel in Washington last May that Big Oil "have no interest in building spare capacity because that would undermine their pricing power." He went on to say at the hearing that "this is a picture of fundamental market failure," and that "Congress and the administration have stood by and done nothing to help consumers." "This is just mismanagement but they get away with it because their is no competitive discipline."

Connecticut Attorney General Richard Blumenthal is quoted as saying "There is near unanimity among economists that there is a concentration of power." The oil companies "have clearly demonstrated that they will abuse it."

To bring gasoline prices down in the short term, Cooper urged Congress to use its antitrust authority and investigate whether the refining industry has become too monopolistic. He also called for creating a strategic reserve to help ease price spikes when a refinery is taken offline.

I would urge Stephen Harper, the Prime Minister of Canada, to also address this extremely serious situation ... because at the end of the day ... the citizens of this great country, like the proverbial golden goose, can only lay so many golden eggs.