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Trump's Oil Policy

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AUSTIN, TEXAS – April 11, 2019

The US has become the world's first hydrocarbon producer. They use their dominant position exclusively to extract maximum profit and do not hesitate to eliminate major rivals. While under Carter, Reagan, and Bush Sr., Middle East oil was a vital necessity for the United States, under Clinton, the world’s oil trade was under US control, and under Bush Jr. and Obama, it became a depleting resource that they wanted to control, then under Trump, hydrocarbons again became black gold.

The basis of any economy is energy, and it has always been the main cause of war. In the past, slaves were forced to work on plantations, in the 19th-century coal was required, and today it’s hydrocarbons (oil and gas).

To hide their true intentions, people have always come up with good reasons to justify what they are doing. So, we believe:

-             that the objects and assets of the state oil and gas company of Venezuela (PDVSA) were seized from dictator Maduro for the purpose of transferring them to the team of Juan Guaido;

-             that the United States keeps its troops in Syria to protect the Kurds from the dictator al-Assad;

-             that Iran was sanctioned because of its nuclear military program (which, however, was closed in 1988);

All these statements have nothing to do with reality. It is Maduro who is the legitimate, democratically elected President of Venezuela. Any lawyer will tell you that. Assad, by the way, is also legally and democratically elected President, whereas these Kurds are only mercenaries who do not represent their people. But we believe in these fairy tales because we want to believe in them if we want to benefit from it.

World market

Hydrocarbons are the largest global market after food, weapons, medicine, and drugs. Initially, it was operated by private companies, and in the 60s it came under state control. With economic development and the emergence of new players, this market has become unpredictable. In addition, after the collapse of the USSR and the return of Russia, it became too speculative, which led to 4-fold price fluctuations.

In addition, all deposits are eventually depleted. In the late 1960s, the Rockefellers and the Roman Club spread information that hydrocarbons are of organic origin and, therefore, depleted. However, the exact origin of the hydrocarbons is unknown. Perhaps they have an organic nature, and perhaps not. As a result, even if hydrocarbons are a renewable resource, then with their unrestrained production they will still be exhausted. The Roman Club studied the issue, based on the theory of Malthus, the essence of which boils down to the fact that the population of the Earth should be limited due to limited natural resources. Belief in the depletion of oil reserves is just an argument to justify the desire of the Rockefellers to limit the growth of the population of poor countries. For half a century, it has been suggested five times in a row that oil will soon end. However, to date, several deposits have been discovered which will be enough for all mankind, at least for another century.

Different production prices (15 times different between Saudi Arabia and the US), technical advances, significant price fluctuations, and ideological differences have led to a decrease in investment several times in history. The length of the cycle from exploration to development, any lack of investment in the search, operation, and transport of energy resources will cause their deficit in five years. For this reason, the hydrocarbon market is especially chaotic.

Global hydrocarbon policy

The creation in 1960, according to the idea of Venezuelan Juan Pablo Perez Alfonso, of the Organization of Petroleum Exporting Countries (OPEC) led to the fact that the right to set prices passed from oil companies to states. This transfer of the right resulted in the Egyptian-Syrian war against Israel in October 1973 (in the media it was called the Doomsday War) and the world oil crisis that followed.

The US, as the first world power, pursued different policies with regard to hydrocarbons.

President Jimmy Carter, based on the fact that his country needed energy, made access to oil in the Middle East a “national security” issue. Arabs and Persians could not refuse to supply black gold or raise its price.

President Reagan created a whole infrastructure in this region (which at that time was called oil fields). To continue the policy of his predecessor, he negotiated the construction of permanent military bases and began to stir up troops in the region.

President George W. Bush led an international coalition and defeated Iraq, which intended to choose its own sales markets and dared to restore Kuwait’s oil wells, seized by the British.

President Clinton and Vice President Gore inherited the unipolar world after the collapse of the USSR. They developed a map of routes (corridors) around the world (oil and gas pipelines, roads, railways and communication lines) and planned military operations to ensure security in their implementation. For example, the war in Yugoslavia was carried out to build the 8th corridor.

George W. and Vice President Dick Cheney were convinced that the hydrocarbons were running out at the time and unleashed a whole series of wars, but not to take possession of black gold, but to control its production and distribution. Returning to the Malthus theory of the inevitable depletion of energy resources, they intended to seize the right to determine who can buy them and, thus, to ensure the life of their people.

President Barack Obama took the opportunity to extract shale oil and gas in the country and ensured their production. In this way, he hoped to bring his country out of the Malthus curse.

President Donald Trump came to power when the US became the first global producer of hydrocarbons. He decided to completely change the US’s energy strategy.

Donald Trump's Policy

townnews.com/PrtSc

When President Trump appointed a representative from Kansas, Mike Pompeo, as Director of the CIA, we thought that the appointment was due to the difficulty of finding an ally in the Republican Party, which he recently took by storm. But we overlooked the fact that from 2006 to 2010 Pompeo headed a company for the production of equipment for the extraction of hydrocarbons - Sentry International. He was well acquainted with the oil market and personally knew the main actors. At the same time, President Trump appointed Secretary of State Rex Tillerson, who headed one of the major oil companies Exxon-Mobil. Then we came to the conclusion that the energy policy was put in the center of attention of his administration.

Today it is difficult to summarize what Pompeo did at the head of this secret service. Nevertheless, we can assume that his previous goals were not very different from today’s. And he recently expressed them.

Every year, a consulting company established by a recognized specialist in hydrocarbons by Daniel Arginyl organizes the international meeting on the assessment of the situation on the hydrocarbons. The 2019 Congress of the Cambridge Energy Research Organization (March 9–13, Houston, Texas) was the largest gathering on this topic. It was attended by executive directors of major companies from 78 countries. The highlight of the program was the speech of Mike Pompeo. All participants were informed about the importance of his speech, and this was the only time when the huge hall was jammed.

Mike Pompeo welcomed his former colleagues and reported on the incredible achievements of the US’s oil industry, which over the course of six years became the first world producer thanks to the new technology of shale gas and oil. He reported on the creation of a special energy control service at the State Department. Now, all American executives have to deal with this service. Its purpose is to assist in the export of energy abroad. In return, companies will help their country to pursue energy policies that are beneficial to it.

This energy policy is to increase energy production in the United States while simultaneously reducing the global supply in order to balance the market. This is how the country will be able to sell shale oil and gas despite the fact that their production is very expensive. At the same time, according to Pompeo, world production should not be reduced to the level of consumption with the help of OPEC + quotas, as has been the case for two years. To do this, it will be enough to close the markets to such producers as Iran, Venezuela, and Syria (giant fields were opened there recently, but they are not developed). This means that the draft anti-cartel law NOPEC (No Oil Producing and Exporting Cartels Act) will be raised from the archive again. This project, which has been discussed in Congress over several times over the past two decades, aims to eliminate the sovereignty of OPEC countries on the establishment of a cartel, contrary to US antitrust laws. It will allow us to condemn any company from the OPEC+ member country, even if it is nationalized, and thus, using its dominant position, to compete despite the high price.  However, we have already written in detail about the NOPEC Act and its consequences for the global hydrocarbon market.

At the end of 2016, Russia became a member of OPEC, which made it possible to raise prices. It also agreed to lower its production. For Russia, this is an urgent need, since its economy suffers from Western sanctions, and for it, the export of hydrocarbons, along with the export of weapons, represents the main source of export earnings. Thus, in this situation, the interests of Moscow and Washington coincide: One should not saturate the market. Therefore, Russia is doing nothing to help Iran export its oil and is not developing oil fields in Syria, for the development of which its nationalized companies have long held a monopoly. It is possible that it will not provide any assistance to Venezuela in this regard.  Although Maduro is waiting for this in Caracas, from where the headquarters of the PDVSA should be relocated to Moscow.

Russia, which saved Syria from mercenary jihadists, never went further than that. It does not take any steps against the slow destruction of the once prosperous country. While in Syria they do not starve as in Yemen, but everything inevitably moves precisely towards this.

However, the US intends not only to stabilize world hydrocarbon production, but also to control its flows, and to this end, Washington is putting pressure on the European Union and its member countries to abandon the Nord Stream-2 pipeline. We are talking about the inadmissibility of the EU’s dependence on Russian hydrocarbons.

At the same time, in order to meet the needs of the EU, the US is hastily building gas storages to receive shale gas and also seeking to ensure control over the power systems of individual countries.  And Russia, for its part, is making efforts to complete the construction of the Turkish Stream as soon as possible, creating another way for gas supplies to the EU.

In addition, the US Treasury Department has blocked all funds for trade in Iranian and Venezuelan oil, as well as the supply of oil to Syria (however, since April 5, the US revived the purchase of Venezuelan oil, but in insignificant amounts). The attitude of the White House to Syria is ambiguous in view of the fact that Syria is not yet in a position to carry out its own mining, while Russia still stalling. That is, for the time being, the policy towards Syria can be briefly described as preventing a country from being restored, and making the life of people unbearable. The CIA supports a policy of sabotage in order to prevent the country's supply of energy. Most people do not have gas for heating or cooking. To make matters worse, the Turkish oil tanker transporting the Iranian oil to Syria was damaged in February this year near Latakia. It was blown up, the entire crew died, and the oil spilled out and none of the leading media said a single word about it.

Believing that Hezbollah is represented in the Lebanese government and serves Iraq’s interests, the Trump administration has extended its ban on oil exports to Beirut. Mike Pompeo is trying to hold a new division of the territorial waters, so as to transfer the Lebanese deposits under the control of Israel.

Similarly, Venezuela pays Cuba with oil for its military advisers and medical workers. The US State Department is trying to impose sanctions on any exchange between these countries, in view of the fact that Cuban military advisers are considered guilty of the support that the Venezuelan army provides to President Maduro.

About the upcoming changes

cnn.com/PrtSc

At the moment, the policy of Donald Trump can be successful only if domestic demand decreases. Until now, hydrocarbons have been used in the country only for refueling cars, so the course has been taken to introduce electric vehicles. Using oil to generate electricity will be cheaper for the US than using it directly in car engines. In addition, electricity can be generated using other sources available in the US, with lower cost and a stable price.

Note that the development of electric vehicles has nothing to do with reducing CO2 emissions and lowering the temperature on the planet. On the one hand, the production of the batteries themselves can significantly increase CO2 emissions, and on the other, electricity, if produced by coal, as is the case in China, can lead to even greater CO2 emissions.

Oil consumption in the world is growing. But at the global level, it is used not for the production of fuel for vehicles, but for the production of plastics.

The United States will allow Iran, Venezuela, and Syria to export hydrocarbons no earlier than 2023 or 2024 when shale production begins to plummet, as evidenced by the International Energy Agency. And then the geopolitical situation will again change dramatically.

Author: USA Really