Politics & economics - May 8
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How Morales took on the oil giants - and won his people back
Dan Glaister, The Guardian
Stand-off after Chávez-inspired leader sends troops into gas fields
...While foreign governments and the 25 foreign energy companies in Bolivia - including BP and BG from the UK, France's Total, Spain's Repsol, Brazil's Petrobras and ExxonMobil from the US - expressed their "consternation" at Mr Morales' "sad and worrying" decision, really only the timing should have taken them by surprise. For the president was doing that most unfashionable of things, delivering on a campaign promise.
Throughout the campaign, Mr Morales and his running mate said they wanted to renegotiate foreign ownership of Bolivia's natural resources. This would not be appropriation, they said, it would not be nationalisation, it would be a renegotiation of existing contracts on terms that would provide a greater share of the revenues for the state.
Throughout the campaign, hydrocarbons were the most frequently mentioned natural resources. Bolivians have long been sensitive about foreigners exploiting their resources, and not without reason. First came the Spanish, to rid the country of its silver, starting at Potosí in 1545. By the 20th century, tin mining had taken over. Today, Bolivia has the second largest reserves of natural gas in Latin America after Venezuela; 45% of it is exported to Brazil at a low price. But in the late 1970s, faced with crippling debt, Bolivia began to place its public assets in private hands: the mines, the railways, electricity, water, the state airline, hydrocarbons all went through a process delicately termed "capitalisation" in order to avoid the word "privatisation".
But the economic rigour demanded by the neo-liberal orthodoxy failed to produce the expected results. Poverty remained rampant, as did political instability. By the end of the 1990s, popular protests became the preferred method of political engagement. Mr Morales and his Movement Towards Socialism party proved adept at harnessing these pressures. "Twenty years on, people see the grand deception," said José Mirtenbaum, sitting in his tiny office in a dismal building in Santa Cruz's University Gabriel René Moreno.
(6 May 2006)
All Smoke, No Fire in Bolivia (NY Times)
Gas showdown: so much hot air? (UK Observer)
Many others (Google News)
Africa: The New Frontier for Imperial Oil
Michael Watts and Anna Zalik Saturday, SF Bay Area Indymedia
...A recent headline in the Financial Times (March 1, 2006) makes the agenda crystal clear: Africa is the “continent all set to balance power.”
Though not as rich in hydrocarbons as Saudi Arabia, Africa nevertheless is, said the Financial Times, “the subject of fierce competition by energy com¬panies.” IHS Energy - one of the oil industry’s major consulting companies - expects African oil, especially along the Atlantic margins (the so-called Gulf of Guinea), to attract “huge exploration investment” and contribute over 30 percent of world liquid hydrocarbon production by 2010. Over the last five years, Africa has contributed one in every four barrels of new oil discovered outside of Northern America. A new scramble for Africa is afoot. The battleground is the continent’s oilfields - the looting of what the Times calls Africa’s “copious reserves of natural gas and its sweet light oil.”
Energy security is the name of the game. The Council of Foreign Rela¬tions’ call for a new approach to Africa in its report “More than Humanitarianism (2005) focuses on Africa’s “growing strategic importance” for U.S. policy. This means cheap and stable oil imports but also keeping the Chinese - important new actors in the African oil business - and Islamic terror at bay. (Africa is, according to the intelligence community, the ‘new frontier’ in the fight against revolutionary Islam.) It turns out that energy security is a terrifying hybrid of the old and the new: primitive accumulation coupled to American militarism and the war on terror. Will it work?
(6 May 2006)
As Profits Surge, Oil Giants Find Hurdles Abroad
Jad Mouawad, NY Times
To many Americans, oil companies like Exxon Mobil or Chevron appear all powerful, pocketing record profits as energy costs soar. But in many countries around the world, high oil prices are also making life considerably harder for big oil companies.
Sharply higher energy prices have shifted the power to oil-producing countries, as some governments seek a larger share of the riches. As a result, even as Western oil companies expand their reach through acquisitions and multibillion-dollar projects, a resurgence of nationalist policies is weakening their influence.
"We've seen a return to a 1970's style of resource nationalism riding along the crest of high prices," said Daniel Yergin, the chairman of Cambridge Energy Research Associates, a consulting firm. "During times of low prices, governments are keen to open up. But when prices are high, they have the high cards."
This trend could lead to fewer investments by Western oil companies, lower production, and with more limited supplies, even higher prices at the pump. So far, the power shift has taken on various shades and tones. In Bolivia and Russia, governments have taken outright control of oil and gas fields; in Venezuela and Britain, they have increased taxes; and in Nigeria and Kazakhstan, they have given highly preferential treatment to state companies.
(6 May 2006)
Also posted here
Related: Nationalism a threat to global oil production (The Australian)
Global concern for secure energy topping agendas (AP)
Cheap oil, cheap labor and costly habits
Patt Morrison, LA Times
WHAT IF HALF of the hundreds of thousands in Monday's pro-immigrant throngs had been carrying signs griping about gas prices?
They could have. Because immigration and oil go together like peanut butter and tortillas.
Two issues, one problem. We're a nation of junkies. Cars on crack! Factories on smack! It's been one long, fabulous high, but we're starting to crash. We're starting to realize that cheap gas and cheap labor aren't all that cheap after all, and that CEOs have been playing us for suckers, pocketing the profits and benefits for themselves and spreading the costs around to the rest of us.
What we were told in high school driver's ed is true — driving is a privilege, not a right; the DMV can give, and the DMV can take away. And entering the U.S. to work is a privilege, not a right. Workers who come here illegally aren't entitled to jobs any more than we are entitled to tool around behind the wheel of a car.
But. But, but, but. So big a "but" that I repeat it yet again: But cheap driving and cheap labor are so intertwined and so interdependent in the functioning of this nation that it's only when there's a disturbance in the force — the workforce or the driving force — that we realize it.
(4 May 2006)
Let's Not Play The Oil Game
Richard N. Haass, Newsweek International
No doubt it's a sign of the times. Today's war games have more to do with the falling supplies and rising price of oil than with tanks and armored personnel carriers rolling across borders. Consider just such an exercise, conducted several months ago at the World Economic Forum in Davos. The setting was late December 2006.
...What can we learn from this exercise? First: with global demand and supply balanced so closely, and with so little excess production capacity, it doesn't take much for oil prices to skyrocket.
...A second lesson: waiting to develop a serious energy policy until catastrophe hits only increases the pain. It takes years to increase supply or introduce meaningful energy efficiencies that will not prove overly disruptive or costly. The good news is that we know what needs doing. The bad news is that we remain largely unwilling to act. And by not acting, the United States and other oil-consuming nations leave themselves at the mercy of the market, or to individual producers who would manipulate it.
Haass is president of the Council on Foreign Relations and author of "The Opportunity: America's Moment to Alter History's Course"
(15-22 May 2006)