On The Libyan Oil Tank "Time Bomb"
Three weeks ago we first mused about the irrational endgame of it all when we asked: "When Hussein left Kuwait he set the oil wells on fire. Will Ghaddafi?" It now appears that this could well be the endgame, after Al Jazeera reports that "desperate Gaddafi might hit oil facilities in an attempt to fend off encroaching rebels, sparking a human catastrophe." And obviously in order to prevent this, the US will be "forced" to institute a no fly zone, thereby commencing a full blown invasion of the country, and eventually destabilizing the region completely.
From Al Jazeera:
The oil producing town of Ras Lanuf in Libya has seen some of the worst fighting in the last few days.
Home to a huge facility at the very heart of Libya’s massive oil and gas industry, the plant could become a new target.
For now, opposition forces control this and virtually every other natural energy facility in the country.
But as this conflict wears on, Libyan leader Muammar Gaddafi will need oil. He will have to try and take it by force or, as many fear, he could bomb oil and gas complexes to prevent anyone else from using them
“ We expect that he will destroy everything because he is crazy," Fahad Kheri, superintendent in Libya's oil and gas Industry, told Al Jazeera.
The installation is only a few hundred kilometres away from Gadaffi’s hometown and stronghold of Sirte.
Al Jazeera has found that the frontlines are fluid and that the rebel fighters lack organisation. As a result, the natural gas plant here is a potential time bomb waiting to go off.
For now Libyan capacity is off line temporarily. But if Gaddafi makes sure that this becomes a semi permanent feature, then kiss double digit WTI prices goodbye (and Europe can look forward to $10/gallon gas within a month).
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