U.S. Adviser to Kurds Stands to Reap Oil Profits

OSLO — Peter W. Galbraith, an influential former American ambassador, is a powerful voice on Iraq who helped shape the views of policy makers like Joseph R. Biden Jr. and John Kerry. In the summer of 2005, he was also an adviser to the Kurdish regional government as Iraq wrote its Constitution — tough and sensitive talks not least because of issues like how Iraq would divide its vast oil wealth.

Now Mr. Galbraith, 58, son of the renowned economist John Kenneth Galbraith, stands to earn perhaps a hundred million or more dollars as a result of his closeness to the Kurds, his relations with a Norwegian oil company and constitutional provisions he helped the Kurds extract.

Interview With Russian President Dmitry Medvedev: 'Oil And Gas Is Our Drug'

SPIEGEL: In a recent article that you wrote entitled "Go, Russia," you spoke of your country's "humiliating" economic "backwardness." Why hasn't Russia managed to overcome its dependency on natural resources in the time since the end of the Soviet Union?

Medvedev: Because people quickly get addicted to drugs. Trading gas and oil is our drug. People can't get enough of it, even when prices are going through the roof. Five years ago, who could have imagined an oil price of $150 a barrel? Trading in natural resources is easy, it leads to the illusion of economic stability. Money flows in -- considerable sums of money. Acute problems can be effectively resolved with it. You don't need any economic reforms; you don't need to deal with diversifying production. We could rid ourselves of this lethargy if we would only learn the right lessons from the crisis.

End Of Cheap Oil, End Of Road For Ruinous Lifestyle

"Every serious discussion of the environment ... is ultimately about oil, whether it specifically mentions oil or not," Owen writes. The explosive growth and general prosperity of the past century have been made possible by the "prodigious abundance" of oil; the problems of the coming century will involve "oil's increasing scarcity and cost."

Owen is not a crank or true believer about peak oil; he reports that the decline of oil production has been predicted for nearly a century. He looks at what we know for sure: However much oil is left, it's being used up at a rate of about 350 billion gallons a day; it's getting more expensive to produce; and demand is growing as China and India push ahead to repeat America's mistakes.

About two-thirds of all the oil produced in the U.S. and Canada goes to transportation, mainly cars, "a use for which there is currently no attractive fuel substitute."

And it's not just the Hummer in the driveway, Owen observes, it's everything the Hummer makes possible — sprawl and its duplication of the built environment, oversized houses and irrigated lawns, added roads, costly extension of the power grid, 100-mile commutes, etc.

This whole way of life is dependent on cheap oil. Sooner or later, cheap oil will be over. Then what?

Interview With Ian Gordon

IAN: Well I do subscribe to the theory of peak oil. But again, I think the demand for oil is going to drop precipitously. Simply because no one’s gonna be working. Again if we use the idea that 45% of the U.S economy is going to be halted. That means essentially that the same kind of oil demand is the percentage dropping oil demand is also going to occur in the United States. And we are only picking on the United States because she has the largest economy in the world but we are all going be in be in the same boat.

So the whole world economy is going to drop by that kind of percentage.

TRACE: But not necessarily a precipitous enough drop that we could see 90% of the earth’s population washed away in this winter because of unsustainability?

IAN: Well, you are not going to see that because, as you know, there is a significant part of the world’s population who basically do not have anything anyway. If we go into Africa, or huge parts of China, India, etc. even though they are emerging nations they still have a large percentage of the population that are extremely poor.