Something Chalabi said got me thinking...

[No Exit]

It was this afternoon. C-Span showed him making a speech.

He said (paraphrasing here), "The insurgency's destruction of pipelines just benefits the (oil) black market."

We know that barrels and barrels of UNMETERED oil are being pumped in Iraq, and SOMEBODY is making money off that oil. Looks like that somebody is therefore benefitted to an extent by the insurgents' constant destruction of pipelines.

Wonder who that somebody could be?

[peacetalksforall]

1. Evil doers and their evil doers find each other. Chalabi-Cheney-Rumsfeld

- perfect fit.

[lovuian]

2. Somebody is stealing the oil in boatloads!!!

where do ya store it???

[electron_blue]

3. I was wondering what he meant, too.

I wish he wasn't so cryptic.

[mirandapriestly]

4. From Wikipedia about Paul Bremer

One of the concerns the IAMB kept raising was that the CPA had repaired the well-heads and pipelines for transporting Iraq’s oil, but they had stalled on repairing the meters that were necessary to document the shipment of Iraqi oil, so it could be demonstrated that none of it was being smuggled.

http://en.wikipedia.org/wiki/L._Paul_Bremer
In their final press release before the CPA’s authority expired, on
...June 22, 2004, the IAMB (International Advisory and Monitoring Board). stated:

The IAMB was also informed by the CPA that contrary to earlier representations the award of metering contracts have been delayed and continues to urge the expeditious resolution of this critical issue.
The CPA has acknowledged that the failure to meter the oil shipments did result in some quantity of oil being smuggled -- an avoidable loss of Iraq's oil that was Bremer's responsibility. Neither Bremer, or any of his staff, has offered an explanation for their failure to repair the meters. Neither Bremer, or any of his staff, has offered an explanation for why they misrepresented their progress in repairing the meters.

By failing to repair the meters, and failing to honestly report the lack of progress, Bremer violated UN Security Council resolution 1483, under which he was accountable to the International Advisory and Monitoring Board for his expenditures of Iraqi resources.
...

[punpirate]

5. Somehow, I can't see how...

... wrecking a pipeline directly aids the black market. When there's a breach, they have to shut down the pumps and lock up the nearest gates to the breach. Somehow, I can't imagine the insurgents waiting around to scavenge up the spilled oil. That takes both time and vacuum trailers, and those are identifiable. As well, if explosives are used, that sets the oil on fire. No good to anyone then.

It's the act of not metering the oil that's critical here. It can be metered going into the pipeline, and metered when it leaves the pipeline for upload to tanker ships. So, if destruction of pipelines is any aid to stealing oil, it's in the calculation of oil lost due to attacks. Once the pipeline is repaired and oil starts flowing again, additional oil has to replace the volume lost at the break. That can be measured from inlet to outlet by a variety of means.

Therefore, it seems to me that Chalabi, as usual, is throwing out a red herring--diverting attention from the failure to meter (which is intentional) to insurgents blowing up pipelines (which is unpredictable).

There are thefts by illegal entrepreneurs--we know that because there have been people caught trying to move unpurchased oil across borders by tanker truck, but, in those instances, it's a matter of a few thousand gallons at a time. But, the biggest thefts are ones where the people running the oil distribution system--Halliburton--are looking the other way when it comes to measuring the oil going out of the country by ship, and that can account to millions of gallons.

Cheers.

[No Exit]

6. Okay, if destruction of pipelines is not helpful to stealing oil, might

it nevertheless not be helpful to selling oil (from some other, non-destroyed source) on the black market?

I mean, the destruction of pipelines, it seems to me, helps to jack up the price by making the product scarcer. When a product's price is sky-high, I think, black markets thrive. (Look at the flourishing cigarette black market.)

So suppose somebody had a lot of unmetered oil to sell, then if the price (in the legitimate market) goes up beyond affordability, couldn't that person offer their oil at a lower price, on the black market, and make some money?

[punpirate]

7. Well, stealing oil one way or another...

... makes one money--if one can sell it on the open market.

As I suggested (because Chalabi, first and foremost, is a fraudster and a con man), his remarks may be a simple attempt to divert attention from what is actually happening. What if the black market in oil is actually insignificant compared to the amount that's being stolen by oil companies right under the Iraqis' noses (perhaps with Chalabi being in on the scheme for a cut--after all, he's now running the oil ministry)?

I guess what I'm suggesting here is that the potential big beneficiaries are the oil companies, rather than the black marketeers. They bring a tanker up to the port south of Basra, the meter says they loaded 700,000 barrels, but they actually took on 800,000 or 900,000. The world is told production in Iraq is down because of attacks on a pipeline. Iraq only shipped such and such this week. That artificially raises the price, and, guess what?, the oil companies always seem to have just enough to sell at that inflated price. And, with the government we have today, no one's checking the oil companies' math.
We even allow oil company execs to testify before Congress without being under oath....

Why would the oil companies buy black market oil at thirty or forty dollars a barrel when they can get it for free? We know that unmetered oil has been going out of the country, so who's most likely to find a way to do that? An oil services company like Halliburton which is running an oil transfer system loading a million barrels at a crack, or some black marketeer sneaking it across the border to Turkey a few thousand gallons at a time?

There's a reason why the Saudis don't let anyone but their own people run the transfer stations at their ports. :)

Cheers.

[Disturbed]

8. Weren't the Tobacco Corp. Swindlers made to swear under oath..

when they went before Congress?