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Geopolitics - Oct 12

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Australian report links energy crisis to security

AAP, The Age
An energy crisis could pose security risks for Australia by pushing fragile states in the region towards collapse, a report has warned.

The Australian Strategic Policy Institute said in the report that such a threat should be factored into foreign and defence policy.

It said the increasing dependence of the world on energy from unstable regions like the Middle East meant obtaining an adequate supply of affordable energy would become a bigger part of most nations' security plans.

"Australia's self-sufficiency in oil products is declining markedly, and like most other Asia-Pacific states, Australia will become increasingly dependent on imports from the Middle East in the next decades," the document said.

The institute said that Australia's smaller neighbours would be most vulnerable if energy supplies were threatened.
(11 October 2007)
Also recently released from the Queensland government is the McNamara peak oil report


Anti-Poverty Index Scores US Last on Environment Policies

Haider Rizvi, One World via Common Dreams
United Nations - Despite its enormous wealth and phenomenal growth in technological inventions, the United States remains far behind other industrialized countries in trying to help poor nations embark on the path of development, a new study by an independent think tank concludes.

The United States ranks last of 21 rich countries on the environment component of this year’s Commitment to Development Index (CDI), according to the Center for Global Development (CGD), a Washington, DC-based research and policy organization.

The Index, produced annually by the Center, ranks high-income industrialized countries on how well their polices and actions support poor countries’ efforts to build prosperity, good governance, and security.

As explained by the Center’s researchers, the scoring adjusts for size, leveling the playing field for large and small countries. The environment component is just one of seven policy areas that comprise the CDI. The other components include aid, trade, investment, migration, security, and technology.

The Index shows Norway on the top among the industrialized nations in the area of environment in development, followed by Ireland, Finland, and Britain. In the industrialized world, Spain has benched as “the second worst” on the environment, preceded by Australia and Canada.

When all seven categories are considered, the Netherlands comes in first on the 2007 CDI on the strength of its ample aid-giving, falling greenhouse gas emissions, and support for investment in developing countries. Close behind are three more big aid donors: Denmark, Sweden, and Norway. Australia, Canada, and New Zealand are among those tying for fifth. The United States comes in fourteenth, and Japan places last again this year.

“Overall standings in the Index were little changed from last year, because countries’ policies and practices towards development tend to change slowly,” said research fellow David Roodman, who is the report’s lead author.

Comparing the U.S. policy on the environment component to other rich countries, Roodman described it as a disaster, saying: “The U.S. can do much better. It has the money, technology, and entrepreneurial flare to be a global environmental leader.”
(12 October 2007)
Related: Canada's not living up to global poverty goals (Georgia Straight).


The Finance Round-Up: October 12th 2007

Stoneleigh, TOD:Canada
In the US, as one door has closed on subprime lending, another has opened on credit card debt. Actually living within one's means doesn't always seem to be an option, for some due to poverty and for others due to greed. Either way, the debt hole Americans (and Canadians, and the British) are collectively digging themselves into is getting deeper by the day, and they start young.

As losses mount, the role of mortgage fraud, by both borrowers and lenders, and also potential securities fraud, is being revealed. The litigation is only just beginning, but be prepared for a storm of legal action and recriminations. The ratings agencies are looking vulnerable to European action as their ratings enabled the sale of bad loans to European institutions, under conditions of conflict of interest.

Signs of stress are spilling over from the world of high finance to the real economy, where trucking and shipping are feeling the slowdown. Meanwhile Canada (several months behind the US) is still seeing a booming housing market, but for how long?
(12 October 2007)
Headlines and excerpts.


A conflict [between Venezuela and] Brazil could be brewing

Clodovaldo Hernandez, El Universal (Venezuela)
Interview with Alberto Garrido, expert in military issues and in Chávez
---
In a few words: a huge conflict around the Bolivian gas issue can break out in South America at any time, and Venezuela would have to be involved as a belligerent force.

There will be two sides in the dispute: one headed by Brazil that needs that gas for its plans of becoming a world power in the medium term; the other side, having Bolivia as a motive, would be Venezuela, which is obliged to play the role of supportive defender of the sovereignty of "The Liberator's favorite daughter."

A video game for the South? This is one of the hypotheses put forward by Alberto Garrido in his double role as expert in military issues and in Chávez. The scenario would result from the mix of world energy crisis and the oil Socialism being advanced by Venezuela.

Garrido, who is considered a chavista by the opposition and an opponent by the chavistas, elaborates on the subject...

Q: How do you think the conflict will break out?

A: Lula himself told Chávez that his military pushed him to start a war when Evo Morales nationalized the gas reservoirs and the Bolivian Armed Forces took control of Petrobras facilities. At that moment Brazilian troops were deployed toward the border with Bolivia. According to military agreements signed by Bolivia and Venezuela, this latter should intervene in any conflict that Bolivia may have with another country.

...Q: You have said that Chávez's continuance in power depends on the moment when US oil lobbyists lose their patience. When do you think this denouement will come?

A: The word denouement is very strong. I rather talk about evolution. Chávez has been progressively tightening the relations with energy multinationals. What happens here is that this international market situation, paradoxically, favors oil transnational corporations. The company that registered the biggest gains in mankind's history was Conoco-Phillips in 2006, when it reported US$39 billion. No matter how much pressure Chávez puts on it, its gains are huge and this helps the company to influence and tie the US political sector. But all this translates into a silent power struggle between the political and the military sector, the Pentagon, which responds to another factor: the military industrial establishment. This explains why the Defense Secretary, Robert Gates, says that the US Government does not want to talk about Chávez. The situation has to be analyzed within its global context: Chávez has put the emphasis of the revolutionary process on energy. Since we are facing a generalized energy crisis and Chávez uses the weapons he has in hand, the situation is never going to be stable. So long as world and regional situations are volatile, his presence in power will be volatile too. He is standing on an oil and gas time bomb.

Q: The US lost the war

Garrido assures that US control over the world depends on its control over energy. And a revolution against that world order depends on it too.

A: Fidel said it a long time ago. This is what oil Socialism is about. This has turned into a sort of wet soap bar, especially for the US: it is something always difficult to grab. The neoconservatives have understood that the only way for the US to gain control of the 21st century is by controlling energy sources. They have decided to put an end to the Vietnam syndrome and go back to territorial occupation. This is the reason why they went to Iraq, to secure oil sources. But they found an awkward surprise: Making a war between two technologically formidably disparate countries has changed. What happened was the sequence of two wars: the first stage it was a fast, conventional war that allowed the US to occupy Iraq in three weeks and Bush to declare that he had won and that soon Iraq would be producing 5 million barrels a day; and the other stage was the 21st century-style war.

Q: Is the US losing this war?

A: This has been a heavy defeat for the US against the Muslim world; no matter if now they wipe Iraq off the face of the Earth. And the same can happen to Iran. This is the end of the US unipolar illusion. The failure of the conventional war in Iraq and transforming oil into a weapon lead to an unprecedented situation in which a civilization based on oil is witnessing how sources decrease and demand increases. The US has provided two oil countries, Venezuela and Iran, this latter being the Middle East emerging power, with a factor that paralyzes them. If the US has not attacked Iran is because it fears that oil, which prices are approaching US$100 per barrel, can shoot up uncontrolled. And in this transformation of oil into a weapon, Chávez, his rhetoric, his political practice, and his geo-strategic moves have played an important role, which the US has not been able to decipher yet.
(11 October 2007)


It’s the Oil

Jim Holt, London Review of Books
Iraq is ‘unwinnable’, a ‘quagmire’, a ‘fiasco’: so goes the received opinion. But there is good reason to think that, from the Bush-Cheney perspective, it is none of these things. Indeed, the US may be ‘stuck’ precisely where Bush et al want it to be, which is why there is no ‘exit strategy’.

Iraq has 115 billion barrels of known oil reserves. That is more than five times the total in the United States. And, because of its long isolation, it is the least explored of the world’s oil-rich nations. A mere two thousand wells have been drilled across the entire country; in Texas alone there are a million. It has been estimated, by the Council on Foreign Relations, that Iraq may have a further 220 billion barrels of undiscovered oil; another study puts the figure at 300 billion. If these estimates are anywhere close to the mark, US forces are now sitting on one quarter of the world’s oil resources. The value of Iraqi oil, largely light crude with low production costs, would be of the order of $30 trillion at today’s prices. For purposes of comparison, the projected total cost of the US invasion/occupation is around $1 trillion.

...Who will get Iraq’s oil? One of the Bush administration’s ‘benchmarks’ for the Iraqi government is the passage of a law to distribute oil revenues. The draft law that the US has written for the Iraqi congress would cede nearly all the oil to Western companies. The Iraq National Oil Company would retain control of 17 of Iraq’s 80 existing oilfields, leaving the rest - including all yet to be discovered oil - under foreign corporate control for 30 years.

...How will the US maintain hegemony over Iraqi oil? By establishing permanent military bases in Iraq. Five self-sufficient ‘super-bases’ are in various stages of completion. All are well away from the urban areas where most casualties have occurred. There has been precious little reporting on these bases in the American press...

...This is the ‘mess’ that Bush-Cheney is going to hand on to the next administration. What if that administration is a Democratic one? Will it dismantle the bases and withdraw US forces entirely? That seems unlikely, considering the many beneficiaries of the continued occupation of Iraq and the exploitation of its oil resources.

...Was the strategy of invading Iraq to take control of its oil resources actually hammered out by Cheney’s 2001 energy task force? One can’t know for sure, since the deliberations of that task force, made up largely of oil and energy company executives, have been kept secret by the administration on the grounds of ‘executive privilege’. One can’t say for certain that oil supplied the prime motive. But the hypothesis is quite powerful when it comes to explaining what has actually happened in Iraq. The occupation may seem horribly botched on the face of it, but the Bush administration’s cavalier attitude towards ‘nation-building’ has all but ensured that Iraq will end up as an American protectorate for the next few decades - a necessary condition for the extraction of its oil wealth.

...Still, there is reason to be sceptical of the picture I have drawn: it implies that a secret and highly ambitious plan turned out just the way its devisers foresaw, and that almost never happens.

Jim Holt writes for the New York Times Magazine and the New Yorker.
(18 October 2007)
Contributor Ronanov writes:
What would an open Iraq oil spigot do to Hubbert's curve?
Maybe the guys at the Oil Drum have calculated it?

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