Archives: 2007 October

The poor people of Mosul, Iraq. An Iraq dam near the city of Mosul risks the lives of at least 500,000 of the Iraqis residing in the city of 1,700,000. After suffering through the dictatorship of Saddam Hussein and then more than five years of war and instability under the American occupation their very infrastructure threatens to wipe another 500,000 of them out.

In September 2006, the US Army Corps of Engineers determined that the dam, 45 miles upstream of Mosul on the River Tigris, presented an unacceptable risk and could fail at any time. The dam is the largest in Iraq. The US has warned that the dam is at risk of an imminent collapse that could unleash a 20m (65ft) wave of water on Mosul.

“In terms of internal erosion potential of the foundation, Mosul Dam is the most dangerous dam in the world,” the corps warned, according to the Special Inspector General for Iraq Reconstruction (SIGIR) report released today. “If a small problem [at] Mosul Dam occurs, failure is likely.

A $27m reconstruction project to help shore up the dam has made little or no progress. It seems that as important as the dam is to the safety of the people of Mosul the dam has not escaped the corruption and poor workmanship that has plagued nearly all construction projects in Iraq. In many instances contractors have been paid in full for work that is of poor quality or that hasn’t even been completed.

Once a contractor has been paid in full good luck on getting him back to complete the work. There have even been some instances where lucky contractors were paid two and three times for the same sorry work. Now that would be an extremely profitable contract for the contractor and show incredible incompetence on the part of the projects management.

One fine day maybe the US government will realize that in Iraq it is being played by greedy contractors of all descriptions, from Blackwater to those working on the American Embassy, to the Mosul dam. The name of the game under poor supervision and management practices is to get as much money as you can and run.

Widespread corruption is a fact of life in Iraq and indeed in many nations. Unfortunately, even US Congressmen seem to have caught the corruption disease.  In the Mid East corruption is highly refined and is considered a normal part of doing business, especially when billions of Dollars are being tossed around.

Since the banking system in Iraq remains in a shambles payment transactions are often  made in hard to control and to trace cash.  Iraq may be a hell on earth for many but for a corrupt contractor it is a money making paradise.

I recently was in contact with one contractor who has just retired in Thailand at the age of 29 after spending four years in Iraq. He owned a contracting company that apparently received enough work and money in that four year period to set him up for life. I’m sure that he deserved a good return on his time and effort. Four years working in a combat zone is a very long time.

Crude oil settled above $93 a barrel today as Mexico’s national oil company, Pemex, decided to suspend a fifth of its crude oil production due to an approaching tropical storm. As the balance between supply and demand is now so close any disruption to supply has an immediate effect on price.

Our privileged lives of enjoying the benefits of cheap energy resources and supplies seem to be about over. While it doesn’t seem that way to most Americans $3.00 a gallon for gasoline is actually a cheap price in most first world economies. For example, in Europe you would have a hard time finding gasoline for less than $4.50 a gallon. 

If you want really cheap gasoline you must travel to countries where gasoline prices are heavily subsidized by the government, like Venezuela, where gasoline is priced at a rock bottom $0.14 a gallon. No wonder Hugo Chavez was reelected.

It’s not just gasoline prices that are posed to soar. Natural gas and heating oil prices are going to be much more expensive this Winter than we are used to paying. And jet fuel. Look at these depressing statistics. You will quickly see that on average jet fuel prices are over 40% higher now than a year ago. And that was before the latest surge in crude oil prices.  

Here is the International Air Transport Association’s take on the prospects for this year. Note that the crude oil market is much higher now than when the comments were made only a month ago. Since jet fuel is such an important part of an Airline’s expense structure we can expect further increases in airline ticket prices.

“IATA Commentary: Jet Fuel Price Impact on Airlines
Oil prices reached a new peak above $80 a barrel at the end of last month, though they have since fallen back in the wake of concerns that turmoil in financial markets will lead to economic weakness. So far this year oil prices have averaged $66 a barrel and jet fuel prices just under $82 a barrel, close to last year’s averages and $2-3 higher than our current forecasts for 2007. All other things being equal, this would trim $3 billion from this year’s forecast for $5.1 billion net profits in the airline industry.

The question is whether this fuel price rise will be sustained. Last year it was not. The sharp rise in oil prices so far this year mirrors a similar rise in 2006. That was followed by a sharp decline to less than $60 a barrel in the second half of the year and close to $50 by the end. Unfortunately last year’s rise and fall was driven by changing expectations about future oil supplies, whereas this year’s rise is clearly demand driven.

The change to the shape of the oil futures curve, with spot purchases now attracting a premium, confirms that oil has become scarce. Unless the current financial turmoil spills over damaging economic growth in the second half of this year, oil and jet fuel prices are likely to remain higher than we forecast in June.”

A treasure trove of information about American Presidents life portraits is yours for the surfing. The site was developed originally to complement C-SPAN’s 20th Anniversary Television Series, American Presidents: Life Portraits that aired during March-December 1999.

Your political affiliation or views really don’t matter. At the American Presidents site you will find just about everything there is to know about the lives of all of the American Presidents, the good, the bad, and occasionally the ugly.

You can watch video presentations of the facts and highlights of each President’s life and terms of office on RealPlayer.  The basic RealPlayer is free. To get it go to the American Presidents web site and click on “watch”. If RealPlayer is not already installed on your computer you will be taken to the RealPlayer site for a free download. It only takes a few minutes for the installation.

For anyone with an interest in American politics and history American Presidents is a fascinating web site. You will learn some amazing things about American Presidents.

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