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New Estimate of Venezuela’s Total Oil Reserves Makes It the Grandest of Grand Prizes for US

by Open-Publishing - Tuesday 23 May 2006
6 comments

Energy USA South/Latin America

New Estimate of Venezuela’s Total Oil Reserves Makes It the Grandest of Grand Prizes for US - by Stephen Lendman

I just finished reading an important new book the author’s publisher sent me, which I’ll shortly be reviewing for publication. The book is investigative journalist (and in his words "forensic economist") Greg Palast’s latest foray into exposing the hidden from view crimes and wrongdoings of the Bush administration. I’m very familiar with Palast’s important work and can only wish many others of his profession did the same sort of it he does - his job. Sadly most don’t, but luckily we have some who do, and we should pay close heed to what they tell us. They’re our window to the dangerous world around us, and the information they provide is our protection from it.

Palast’s book is almost encyclopedic in detail, but I only want to focus here on one part of it that relates to Venezuela. In it Palast provides information showing the country may be of far greater strategic importance to the US than we likely realized. It all relates to a somewhat arcane theory called Hubbert’s peak that many readers may not know about or understand well if they do. Before reading Greg’s book, I knew about it but didn’t understand it as well as I do now.

M. King Hubbert was a well-respected geologist of his time who on March 7, 1956 published a research paper explaining his notion of "peak oil," the amount of total reserves likely to be available, when production would peak, and when we would likely exhaust a finite supply. Ever since his report came out, it’s been held up as gospel by many who follow the oil market. The essence of the Hubbert theory, whether we accept it or not, was that "peak oil" would be reached around this year. However, in fact, production rose every year since Hubbert’s prediction and new discoveries of oil have so far kept pace.

A New Interpretation of "Hubbert’s Peak"

M. King Hubbert may have been a fine geologist deserving of the his reputation. But today we know much more than Hubbert did in his time, and it’s currently believed by some savvy analysts that we’re nowhere near peaking or running out of oil. Palast sides with that view and concludes that we have enough oil left untapped to last many decades into the future. Why? Because there’s oil and then there’s oil - there’s the easy to find and refine kind called "light sweet" like what’s abundant in the Middle East, and there’s also the harder to find, more expensive to refine so-called "heavy crude" and oil available from tar sands. When the latter two categories are added in, the amount of total oil available skyrockets to off-the-chart numbers.

Palast makes a key point related to the price of crude. At $10 a barrel the supply is low because only the easy to extract and refine kind are economically feasible. But at $70 a barrel it’s a whole new oil market. The heavy stuff and tar sands then become economical to extract and refine, and a new far higher finite supply is realized almost magically. In short, it’s just a question of supply and demand and how the price of a commodity depends on how much of it consumers want. Too little demand and the price is low, but when it’s high like now and rising, then so does the price.

How This Relates to Venezuela

From what we know for sure plus what we think we may know about Venezuelan "total" oil reserves, I suggest the reader first take a seat and buckle up. In previous articles, I reported Venezuela may have reserves of about 350 billion barrels if all their known heavy and light crude are counted. That total is far more than is now officially recognized by OPEC which means unofficially the country has greater reserves than Saudi Arabia by that number alone.

But wait, there’s more, a lot more. Palast reports a US Energy Department expert believes Venezuela holds 90% of the world’s super-heavy tar oil reserves - an estimated total of 1,360,000,000,000 (1.36 trillion) barrels. Let me repeat that - 1.36 trillion barrels. That alone is more oil than Hubbert believed 50 years ago lay under the entire planet.

Again, back to the key issue. Whatever the true highest estimate of reserves is from all varieties of oil, those reserves are only available at a price. If it ever gets too low again, which looks unlikely, those heavy reserves and tar sands oil will again go off the charts and be uncounted. However, with today’s heavy demand and the likelihood of it continuing to grow in the future, the price of oil may continue to rise and all reserves from all sources may be needed and used to supply the market.

So with a report like this coming from an apparent credible source (according to Palast) in the US Energy Department, it takes little imagination for VHeadline readers to understand more than ever that Venezuela is likely viewed by any US administration as the world’s most important source of future oil supply. And to readers who understand US imperial intentions, it takes even less insight to realize the Bush administration intends to go all out to get its hands on it even if it takes a war to do it. The US goal isn’t access to the oil. It’s control of the supply and its price, what countries get it and how much and which ones don’t, what companies profit from it, and overall how this ocean of oil can be used as a strategic resource and weapon. Beyond question, the stakes are enormous, and the battle lines are now drawn more clearly than ever.

I’ve reported before on VHeadline that the US is now planning a fourth attempt to oust Hugo Chavez by whatever means it has in mind. I think the wheels of its plan are now in motion, but we won’t know what will unfold until the fireworks begin. With the information now available and published here, I feel more certain than ever that US instigated serious trouble is heading toward Venezuela and maybe harsher than we might expect. Venezuela’s likely total oil reserves are potentially so great that the country has to be the grandest of grand prizes for the US. It’s a virtual certainty the US will do anything it takes to try to seize and control it. For those of us who respect the sovereign rights of all nations and the obligation their leaders have above all else to serve the needs of their people, we can only hope Hugo Chavez is prepared for what he knows is coming and will again succeed in deterring it.

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net. Also visit his blog site at sjlendman.blogspot.com.

Forum posts

  • Bush and Company want this oil for themselves and their other oil buddies...for their own money monopoly at the expense of consumers....we send our young to die for their greed , are they grateful...? Hell no, they turn around and gouge us at the pump...what a deal!!! An ownership society that is really a feudal system, we being the serf’s ...no hunting allowed in the Kings forest, death to those who violate....!

    • The Americans will get nothing. Moreover Mexico will become a socialist government, too. That means - America can built its fence across the Mexican border, but America will no longer get any oil from Mexico!
      Canada is also changing policies with American rogues. Soon, dear Americans you will be confined to your own created state owned penitentary. Enjoy!
      You, want to learn how loved America is around the world? Just, read the international press.

      The world does better without America, GB and Israel.

  • It isn’t the Bus administration and its friends in banking, oil and finance but, in fact, it is the American public who wants the oil and will fight for it. Albeit, there will be the small hanffull who will complain about the leadership, not realizing that their own llifestyle is part and parcel with those who the complan about.

    The Americans have always killed for their existence and for their comfort. For those who think otherwise do not know the history of the United States. The Bush leadership did not just magically appear; all prior administrations have set the template for this admistation to operate within. Look at the information that is available — I mean outside of what the schools teach. It is readily available from the sources.

    One thing that can be said about the American public with total confidence is that they are dishonest on a Biblical scale.

  • All wars for, and all the disgusting tatics to aquire oil is pointless, in light of this. PLEASE READ! THIS DISCOVERY IS ON US SOIL!!!!!!!!!

    The US Government’s Secret
    Colorado Oil Discovery
    StansberryOnline.com
    5-2-6

    Hidden 1,000 feet beneath the surface of the Rocky Mountains lies the largest untapped oil reserve in the world - more than 2 TRILLION barrels. On August 8, 2005 President Bush mandated its extraction. Three companies have been chosen to lead the way. Test drilling has already begun

    Dear Reader,

    Five months ago, the U.S. Energy Department announced the results of a land survey

    It was conducted to determine the official amount of oil a thousand feet deep in the Rocky Mountains

    They reported this stunning news:

    We have more oil inside our borders, than all the other proven reserves on earth.

    Here are the official estimates:

    * 8-times as much oil as Saudi Arabia
    * 18-times as much oil as Iraq
    * 21-times as much oil as Kuwait
    * 22-times as much oil as Iran
    * 500-times as much oil as Yemen

    And it’s all right here in the Western United States.

    James Bartis, lead researcher with the study says, "We’ve got more oil in this very compact area than the entire Middle East."

    More than 2 TRILLION barrels. Untapped.

    "That’s more than all the proven oil reserves of crude oil in the world today," reports The Denver Post.

    When asked about America’s least-publicized oil supply, Utah Senator Orrin Hatch said:

    "The amounts of oil are staggering. Who would have guessed that in just Colorado and Utah, there is more recoverable oil than in the Middle East?"

    Here’s the kicker

    The U.S. government already owns the land. It’s been right there under our noses the whole time.

    In fact, the government’s appointed a small group of companies to begin the drilling.

    Test drilling has already begun.

    And the profit forecasts are ridiculous. According to the RAND Corporation (a public-policy think tank for the government), this small region can produce:

    Three million barrels of oil per day That translates into more than $20 BILLION a year.

    These are the conservative estimates. The U.S. Energy Dept. estimates an eventual output of 10 million barrels of oil per day. At that rate, the money flow would be even greater.

    I’ve written this letter to tell you everything I’ve learned about this rarely publicized oil reserve who’s drilling it and how to get a piece of the world’s biggest, untapped oil supply - before it’s too late.

    Here’s the full story

    The Next American Oil Boom

    There’s a new source of oil in the American West.

    Today, it sits idle - untapped - inside more than 16,000 square miles of rock and sand.

    Geologists call what lies in this region, oil shale.

    What is oil shale?

    At first glance, oil shale looks like an ordinary black rock.

    It feels grainy to the touch and greasy. You see, what’s inside oil shale has huge governments, Big Oil, venture capitalists, and even everyday investors scrambling to stake a claim.

    Oil shale - when heated - oozes bubbling crude.

    This precious resource is rare - found only in a few select countries. Places like China, Brazil, Estonia, Morocco, and Australia.

    But the real story is how much untapped oil shale lies beneath U.S. soil. As the chart to the right indicates, there’s 4-times more oil shale in the U.S. than in all other countries combined.

    Over the past 125 years, oil shale has been the secret oil source for a handful of nations. Specifically, those fortunate enough to have it

    * China’s been using oil shale since 1929. Today, China is the largest producer of oil from oil shale. It plans to double the daily rate of production soon.

    * Estonia is an oil shale dependent economy. Over 90% of the country’s electricity is fueled by shale oil. In fact, electricity run on oil shale is a chief export.

    * In 1991, Brazil built the world’s largest oil shale facility. They’ve already produced more than 1.5 MILLION tons of oil to make high quality transportation fuels.

    * Jordan, Morocco, and Australia have recently announced plans to utilize their oil shale resources. All 3 governments are currently working to build oil shale facilities.

    But all these countries’ oil shale resources pale in comparison to the U.S. supply. As you can see from the table to the right, the United States dominates the oil shale market - with over 72% of the world’s oil shale resources.

    Our gargantuan supply of oil lies beneath an area called the Green River Formation - a barren stretch of land covering portions of Colorado, Utah, and Wyoming.

    World-renowned geologist Walter Youngquist calls the oil beneath the Green River Formation, "a national treasure."

    Congress calls this area simply, "the next Saudi Arabia."

    It’s easy to see why

    This region holds the largest known oil reserve on the planet

    Colorado’s Oil Lands - Restricted for 76 Years, Now Open for Drilling

    There are over 16,000 square miles of oil shale in the Green River formation...

    Each acre holds 2 million barrels of oil - it’s the most concentrated energy source on earth, according to the Energy Department.

    The federal government owns 80% of this oil-rich land.

    In fact, the government placed protective legislation on this land in 1930, forbidding anyone to touch it.

    You see, the government always knew this land was saturated with oil - but getting it out has always been expensive.

    Buying oil from foreign countries was always the cheaper bet. It has been for the past 80 years.

    Wisely, the government kept the land around for a "rainy day", protecting it with 1930s legislation.

    I’m sure you’re aware of today’s situation at the gas pump. Buying oil from foreign countries has gotten out of hand. The price of oil is sky-high. It’s way too expensive to keep buying foreign oil. In other words, the "rainy day" has finally arrived.

    The timing couldn’t be more perfect. Oil shale technologies have begun to advance ­ drastically.

    Companies are coming up with ways to extract oil from the Green River Formation very cheaply.

    For example, one Utah-based company says it can extract the oil for as little as $10 a barrel. In fact dozens of companies have stepped forward with similar claims. With oil prices approaching $70 a barrel ­ these are pretty significant breakthroughs.

    That’s all the government needed to hear.

    On August 8, 2005, President Bush signed into law, a mandate lifting the protective legislation on the Green River Formation.

    This mandate is called The Energy Policy Act of 2005. It calls for the opening phases of oil extraction in the Green River Formation ­ the world’s most concentrated energy source.

    We’re finally ready to tap the largest oil reserve on the planet

    http://www.stansberryonline.com/OIL/20060405-OIL
    – COL.asp?pcode=EOILG422&alias=200604OIL

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    • This is sooooo much bullshit....the oil shale would be impossibly expensive to process requiring many times more energy to convert than oil produced....stop spreading this stupid story. Go get the facts. During the 70s, unscrupulous stock brokers were selling government leases on shale oil lands in Colorado, Utah, New Mexico, Arizona, and Nevada.....these were sold to unsuspecting investors who may as well have been buying leases on the moon....they will never produce oil from oil shale because almost every other form of energy including oxen driven carts is more practical.

    • The only rule you need to process information:

      If it’s an important story, your being fed crap.

      Since the mainstream media, mainline sewer, is now promoting the "peak oil" story, you can bet your arse it’s bullshit. Doesn’t change the reality we have to deal with, but if enough folks figure out the system, there’s a glimmer.