Ex-British Army Chief in Iraq Confirms Peak Oil Motive for War

Praises Fraudulent Reconstruction Programmes

Brigadier-General James Ellery CBE, the Foreign Office’s Senior Adviser to the Coalition Provisional Authority in Baghdad since 2003, confirmed the critical role of Iraqi oil reserves in potentially alleviating a “world shortage” of conventional oil. The Iraq War has helped to head off what Brigadier Ellery described as “the tide of Easternisation” — a shift in global political and economic power toward China and India, to whom goes “two thirds of the Middle East’s oil.”

After the 2004 transfer of authority to an interim Iraqi civilian administration, Brigadier Ellery set up and ran the 700-strong security framework operation in support of the US-funded Reconstruction of Iraq. His remarks were made as part of a presentation at the School of Oriental & African Studies (SOAS), University of London, sponsored by the Iraqi Youth Foundation, on 22nd April.

World Oil Shortage

“The reason that oil reached $117 a barrel last week”, he said, “was less to do with security of supply… than World shortage.” He went on to emphasise the strategic significance of Iraqi petroleum fields in relation to the danger of production peaks being breached in major oil reserves around the world. “Russia’s production has peaked at 10 million barrels per day; Africa has proved slow to yield affordable extra supplies — from Sudan and Angola for example. Thus the only near-term potential increase will be from Iraq,” he said. Whether Iraq began “favouring East or West” could therefore be “de-stabilizing” not only “within the region but to nations far beyond which have an interest.”

Last month geological surveys and seismic data compiled by several international oil companies exploring Iraqi oil reserves showed that Iraq has the world’s largest proven oil reserves, with as much as 350 billion barrels, significantly exceeding Saudi Arabia’s 264 billion barrels, according to a report in the London Times. Former Bush administration energy adviser Matthew Simmons, author of the book Twilight in the Desert, says that Saudi oil production has probably already peaked, with production rates declining consecutively each year. This month the UK Treasury Department warned of the danger of an oil supply crunch by 2015, due to rocketing demand from China and India.

The Threat of Easternisation

Brigadier Ellery’s career in the British Army has involved stints in the Middle East, Africa, Bosnia, Germany and Northern Ireland. “Iraq holds the key to stability in the region,” he said, “unless that is you believe the tide of ‘Easternisation’ is such that the USA and the West are in such decline, relative to the emerging China and India, that it is the East — not the West — which is more likely to guarantee stability. Incidentally, I do not.” Iraq’s pivotal importance in the Middle East, he explained, is because of its “relatively large, consuming population” at 24 million, its being home to “the second largest reserve of oil — under exploited”, and finally its geostrategic location “on the routes between Asia, Europe, Arabia and North Africa — hence the Silk Road.”

Oil production peaks when a given petroleum reserve is depleted by half, after which oil is geophysically increasingly difficult to extract, causing production to plateau, and then steadily decline. US oil production peaked by 1970, while British production in the North Sea peaked by 2000, converting both countries from exporters into net importers of oil and gas.

Oil industry experts and petroleum geologists increasingly believe that world oil production is precariously close to peaking. According to an October 2007 report by the German-based Energy Watch Group, run by an international network of European politicians and scientists, world oil production peaked in 2006. According to BP’s annual statistical review of world energy supply and demand for 2008, released on 11th June, world oil production fell last year for the first time since 2002, by 130,000 barrels per day last year to 81.53 million. Yet world consumption continued to rise by 1.1 per cent to 85.22 million barrels per day, outweighing production by nearly 5 per cent.

Iraqi Reconstruction Corruption Whitewash

Brigadier-General James Ellery is currently Director of Operations at AEGIS Defence Services Ltd., a private British security firm and US defence contractor since June 2004. In April this year, the same month as Ellery’s SOAS lecture, AEGIS won the renewal of its US defence department (DoD) contract for two more years, which at $475 million is the single largest security contract brokered by the DoD. The contract is to provide security services for reconstruction projects in Iraq conducted by mostly American companies.

A US government audit by the Office of the Special Inspector General for Iraq Reconstruction, released exactly two years before Brigadier Ellery’s SOAS presentation, concluded that AEGIS could not prove it had properly trained or vetted several armed Iraqi employees. For a random sample of 20 armed guards, no training documentation was found for 14 of them. For 125 other employees, AEGIS reportedly failed to document background checks. The auditors concluded that “there is no assurance that Aegis is providing the best possible safety and security for government and reconstruction contractor personnel and facilities.”

During his April presentation at SOAS, AEGIS director Ellery declared, “Iraq promises a degree of prosperity in the region as it embarks on massive Iraqi-funded reconstruction, a part of which will raise Iraqi’s oil production from 2.5 million bpd today to 3 million by next year and maybe ultimately 6 million barrels per day.” He added, “With a budget of $187 billion over 4 years, Iraq is poised to have a considerable impact on the economies of countries whose technologies can fill the skills gap left by the latter years of Saddam Hussein’s regime.” During the UN sanctions regime imposed primarily by the US and Britain, Iraq was banned from importing thousands of household goods, including food, medicines, clothes and books, from 1991 to 2003, purportedly to prevent Saddam from developing weapons of mass destruction. It is now widely recognized that the sanctions led to massive socio-economic deprivation, the break-down of civilian infrastructure, large-scale unemployment, and de-industrialisation, resulting in the deaths of up to 1.8 million Iraqis, half of whom were children. The humanitarian crisis led United Nations officials such as Dennis Halliday, former UN Assistant Secretary-General, and Hans von Sponeck, former Humanitarian Coordinator in Iraq, to resign in protest.

Today, those profiting most from reconstruction projects in Iraq are not Iraqis, but private contractors based primarily in the United States and Britain, according to a new report out last month by Stuart Bowen Jr, incumbent Special Inspector General for Iraq Reconstruction. The Bowen Report found that at least 855 contracts valued at billions of dollars were cancelled before completion. Another 112 agreements were cancelled because of poor performance, while still more projects recorded as completed never happened. In one case, a $50 million children’s hospital in Basra is listed as completed although the contract was stopped when only 35 percent of the work was finished.

During Brigadier Ellery’s tenure at the Coalition Provisional Authority (CPA) in Baghdad, under Paul Bremer’s leadership $8.8 billion of reconstruction funds were unaccounted for, and a further $3.4 billion was re-directed for “security” purposes. A UN body to audit the Development Fund for Iraq (DFI), by which the CPA Programme Review Board managed Iraqi oil revenues until June 2004, found “gross irregularities by CPA officials in their management of the DFI,” and condemned the United States for “lack of transparency” and providing the opportunity for “fraudulent acts.”

Under American- and British-administered Iraqi reconstruction programmes, Iraqi agriculture has been devastated. In 2004, the Coalition Provision Authority imposed a hundred economic orders designed to open Iraq’s economy to foreign investment, including Order 12 for tax- and tariff-free imports of foreign products. The Order allowed the giant American agribusiness conglomerate Cargill to flood Iraq with hundreds of thousands of tonnes of cheap wheat, undercutting local food prices, and wiping out the livelihoods of Iraqi farmers.

As an executive director of AEGIS, one of the most prominent US defence contractors in Iraq, Brigadier Ellery is a personal beneficiary of the privatisation of the Iraqi economy. In the conclusions of his April address, he said, “Iraq has resources aplenty: not just oil, of which there is a prodigious quantity”, but especially “the capacity to rebuild a balanced economy including agriculture — for which Iraq was a legend.”

Nafeez Ahmed is an investigative journalist and founding editor of INSURGE intelligence, who reports on ‘global system change’ and regional geopolitics. Read other articles by Nafeez.

9 comments on this article so far ...

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  1. bozhidar balkas said on June 19th, 2008 at 10:37am #

    as i have said s’mwhen-where, a country w.o. governance/government is much worse than w. the worst government. doesn’t saddam look now ooh soooo goood?!
    a puppet gov’t is aslo worse than no g overnment. a puppet/installed gov’t is actually an oximoron; ie, people installed to ‘govern’ by an aggressor/occupier do not govern but do minor errands; drink coffee, call aggressor for instruction, argue w. wives, wear nice clothes, learn english, watch US TV, hope to settle in el-amerikkah, pass lwas that nobody respects. etcetc. thank u

  2. Phil said on June 19th, 2008 at 1:49pm #

    And of course, Ellery declined to give a single word of explanation as to why he thinks the US can guarantee stability, and why he thinks India and China wouldn’t?

  3. synicab12 said on June 19th, 2008 at 3:57pm #

    It is neither peak oil nor bottom oil. It is nothing but old fashioned
    greed and imperialism where the main objective is to control as much resources and people as possible. It is that simple.

  4. DavidG. said on June 20th, 2008 at 12:48am #

    Problem is that oil and the industries it spawns is going to generate the demise of our planet.

    My feeling (as an atheist) is that we are in End Times and I’ve written several posts recently that explain why. Democracy is fast disappearing. The prophetic books: 1984 and The Handmaid’s Tale show us where we’re headed. Global warming caused by oil-based capitalism is a complicating factor as is fascism.

    It’s going to get messy very, very soon. Why? Check my blog.

  5. Lev said on June 20th, 2008 at 12:27pm #

    The Iraq War is so painfully obvious that it’s about oil. And that’s not all.

    The “bin Laden” tapes are made by the same contractor that claims to “find” them for the U.S. government which is how the wrong-colour-beard tape was “intercepted” 2 days before “Al-Qaeda” had a chance to put it online! The whole “war on terror” is fake, it’s all about the U.S. getting its hands on as much oil and natural gas resources as it can as the era of cheap, easily-recoverable oil is over. “Al-Qaeda” is Al-CIAda; the people who attacked the U.S. on 9/11 have their headquarters in Langley, Virginia. Ever wonder how the uppermost floors of skyscrapers can “fall” THROUGH the remaining vast majority of solid building at freefall rate (as admitted by the 9/11 Commission and the N.I.S.T.) when common sense tells you that the only way in the real world that is possible is if something (e.g. explosives) reduces the solid majority of the building under the falling mass to a state of offering no more resistance than air? Otherwise it wouldn’t “fall” through it at anywhere remotely close to freefall rate? Come on America, a 10-year-old with A.D./H.D. could realize that. The whole thing was transparently a false flag operation done by elements in the U.S. government with approval from the top, to provide a pretext for open-ended resource wars.

  6. hp said on June 20th, 2008 at 9:01pm #

    Not to mention the ‘usual suspects.’


  7. Lev said on June 21st, 2008 at 10:37am #

    Well I think the intel. agency you just mentioned http://www.rense.com/general67/intel.htm certainly knew what was going to happen beforehand, and not just because of the “movers” who took pictures of it, knowing just where to be at what time, but also an e-mail was sent to Odigo Systems in the WTC beforehand warning them to avoid going in that day. Another Israeli-owned company in the WTC, this one a shipping company, conveniently relocated at the beginning of September 2001, leaving only a skeleton crew in its old office in the WTC. Both companies would seem to have been warned by Mossad. Nevertheless I’m not at all saying that Mossad pulled off the 9/11 false flag operation under the nose of the U.S. government, but rather that elements inside the U.S. government (with approval from the top definitely) planned and carried it out, Mossad knew of it as well and warned Odigo and the other company, and had agents positioned in the right place to record the events in Manhattan, if I had to guess, probably observing it for blackmail purposes later? For example what if they got photos of what crashed into the NORTH Tower instead of the constantly-seen South Tower photos/video? The North Tower crash happened first and wasn’t meant to be recorded. Maybe for blackmail? To get a good deal on another few dozen F-15s or something? Who knows. Definitely though this was an American government operation and around the margins there may have been assistance from other countries’ intel. agencies for example the Pakistani ISI or Mossad but at the periphery. The ones who manipulated Atta and the other patsies into leaving a B-movie trail of “evidence” like a Koran left on a barstool, taking flying lessons (but doing pisspoor at it) etc., were definitely the C.I.A. In fact it’s about certain that Atta and the others thought they were merely taking flying lessons so they could become C.I.A. drug pilots flying cocaine into Florida as the agency has done for decades. Little did they know that their purpose was only to leave “evidence” to flesh out the “19 hijackers” myth. Nobody hijacked anything on 9/11. And those guys never needed to know how to fly anything, simply having taken some lessons, no matter how poorly they did, was enough.

    By the way, if you look at still photos of the South Tower crash you can plainly see two rather large antennae underneath the fuselage that are not supposed to be there on a normal Boeing 767. Looks like the receivers for a remote control package. Also consider that this was around the time that the Air Force was playing with the idea of having Boeing 767 tanker aircraft replace their aging tanker aircraft fleet (would have been called KC-767s), and it’s the same airframe as a 767 passenger plane. All one would have to do is remove the refueling boom from the ass end of it, paint it up like a United Airlines aircraft, install the remote-piloting package including antennae that are plainly visible and voila! We have “United Flight 175”. For the other 3 which were not supposed to be videotaped crashing they wouldn’t even need all that, just three A-3 Skywarrior aircraft flown by remote control, packed with explosives and painted up like airliners. Take two real airliners’ flight manifests and split them in half (which explains why all 4 “hijacked airliners” were loaded to a ridiculously low capacity in terms of passengers– because there were likely 2 instead of 4), have NORAD notify the pilots of the two in midair that “terror threats against unspecified airports” has made it necessary for them to turn off their IFF transponders and divert to a holding pattern over the Atlantic until it can be sorted out, have the Navy which was conducting exercises in the north Atlantic that morning shoot them down from miles away using radar-directed missiles and that disposes of the evidence. Two unidentified aircraft flying inbound toward the carrier battle group would make it easy to tell the fighter pilots that they were “drones” simulating “hijacked aircraft as part of the Navy training exercise”, they’re cleared to shoot them down and they do. To this day those guys probably wouldn’t know they shot down airliners full of people instead of drones. Meanwhile the remotely-piloted drone “hijacked aircraft” are hitting their targets. All of which is manifestly do-able for the U.S. military and C.I.A. especially considering all the necessary technology has been around for decades. The first remote control aircraft was a biplane back in 1918 so it’s not exactly a new-fangled idea.

  8. hp said on June 22nd, 2008 at 7:57pm #

    I agree. Joint operation. And not the first by any means. Or the last.
    The dirty rats.

  9. vodka said on June 24th, 2008 at 1:05am #

    war on iraq for oil… this is like going to the next street, kill a man living there that because he abused his family, take over his house, abuse his family and steal his stuff.

    i feel so sick 🙁