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Geopolitics - Feb 8

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Many more articles are available through the Energy Bulletin homepage


Using the Internet as a weapon
Commentary: Internet interruption in the Middle East looks fishy

John C. Dvorak, MarketWatch
Nobody knows what caused the cut cables in the Mediterranean that interrupted Internet service to parts of the Middle East last week, but there are now conspiracy theories galore written by bloggers and pundits.

Some say it will benefit terrorists and Iran somehow. In fact, the cut cables -- originally blamed on ships dragging anchors -- look more like a ploy by some intelligence agency to disrupt Iranian commerce, specifically an emerging oil bourse that the Iranians have been quietly establishing and hoped to roll out fully in the next 60 days.

This concept seems a little farfetched until you look at the details which were provided to me by one of my readers, Martin Kuplens-Ewart who has been following the story from the outset. He notes: "there is a substantial event that has effectively been killed by the loss of connectivity: the launch of the Iranian Oil Bourse.

"A marketplace for oil, gas, and various petrochemicals, the Iranian Oil Bourse would trade exclusively in non-dollars and probably substantial negative impact to the U.S. economy and financial system. The bourse was scheduled for launch this week (between Feb. 1 and 11. With complete elimination of Internet connectivity to the country, this launch is now impossible and unlikely to be achievable before month's end (given the estimate 10-14 days for repairs to fiber-optic cables)."

He cites various articles expressing the mystery behind the cut cables and describing the bourse and its overall threat to the U.S. economy, as well as how the thing could backfire, ruining the Iranian economy. See Seattle Times article. See World Press article. See Energy Bulletin item.

... In most instances Internet connectivity can be rerouted, and much of the Middle East has already done this. But what makes this situation unique is that the bourse was being established on Kish Island, a free-trade zone set up by the Iranians in hopes of creating a cool tourist destination.

... There doesn't seem to be an alternate Internet connection to the island other than the cut cables. I attempted to email the three top hotels on the island and all the email bounced. I was also unable to make a telephone call there indicating a large telecommunications failure.

The Web sites for the hotels are likely to be hosted off the island and are still working.

This sort of telecom and Internet failure/collapse, no matter what the cause, is unlikely to give anyone confidence in an international oil trading system on Kish Island. Too much money is at risk. The island obviously needs satellite access or some form of connectivity back up that is foolproof.

There has always been talk about disrupting commerce by screwing up the Internet. We've just seen a proof of concept, whether done on purpose or by accident.

It doesn't make a lot of difference how it happened if we want to learn a lesson as to how delicate the Internet mechanism can be.
(8 February 2008)
Links and more at original.


Spying against oil-rich Norway returns to Cold War levels after lull, intelligence chief says

Associated Press
International espionage against oil- and technology-rich Norway is now back at Cold War levels, after spying dwindled following the 1991 collapse of the Soviet Union, police intelligence said Friday.

NATO-member Norway is a major exporter of oil and natural gas and shares land and sea borders in the Arctic with Russia. That includes vast disputed areas claimed by both countries in the Barents Sea, which has massive fish stocks and is seen as a potentially rich area for petroleum production.

In an interview published Friday in the Oslo newspaper Aftenposten, Norway's top police intelligence officer, Joern Holme, said spying against the Nordic country has been on the rise, but refused to name any countries.
(8 February 2008)


Gazprom Says Gas Talks With Ukraine End in Failure

Lucian Kim, Bloomberg
OAO Gazprom, Russia's natural-gas exporter, said talks with Ukraine over unpaid debts failed, raising the possibility of a cutoff in supplies.

``The meeting showed the complete unwillingness of Ukraine to discuss the problem on its merits,'' company spokesman Sergei Kupriyanov said in an e-mailed statement today.

Gazprom is threatening to curb deliveries next week unless Ukraine says how it will pay back a $1.5 billion debt. Ukraine's state-run energy company NAK Naftogaz Ukrainy today called Gazprom's claims ``groundless'' and denied it had run up a debt of $500 million for this year alone.

The conflict is reminiscent of a price dispute that resulted in Gazprom briefly cutting supplies to Ukraine in January 2006, causing shortfalls across Europe.
(8 February 2008)


The Blowback Syndrome: Oil Wars and Overreach 1/2
(YouTube video)
Chalmers Johnson, Ecological Options Network (EON) via Z Video
Chalmers Johnson, author of Blowback, Sorrows of Empire and Nemesis: The Last Days of the American Republic , talks about the U.S. 'military-petroleum complex,' the overextension of the American military, nuclear proliferation, and the decline of Washington's credibility abroad. From 2003...

Chalmers Johnson is president of the Japan Policy Research Institute, a non-profit research and public affairs organization devoted to public education concerning Japan and international relations in the Pacific. www.jpri.org
(6 February 2008)
Long video interview. Johnston starts out by explaining the general concept of "blowback." At about 10 or 15 minutes into the interview, he begins talking in depth about energy resources and their intersection with U.S. foreign policy.

Also by Chalmers Johnson and recently posted at Znet:
Decline Of Empires: The Signs of Decay 2/2 (originally from 2003)
The Economic Disaster That Is Military Keynesianism (originally in Le Monde diplomatique)
-BA


Venezuela's U.S. assets too hard to freeze: Exxon

Robert Campbell, Reuters
ExxonMobil (XOM.N: Quote, Profile, Research) sought court orders in Europe to freeze $12 billion in Venezuela's overseas energy assets because getting a similar order in the United States before it won its arbitration case against Venezuela's state oil company PDVSA would be too difficult under U.S. law, court papers showed.

...Exxon filed for arbitration against PDVSA and Venezuela after Caracas nationalized its holdings in the Cerro Negro heavy oil project. Exxon then sought freezing orders in Britain, the Netherlands and the Netherlands Antilles for $12 billion in order to guarantee payment should it win the arbitration.
(8 February 2008)


Oil resources at stake in Chad conflict

AFP
Underlying the Chad conflict is a struggle to control the country's oil resources, which while not extensive are nonetheless vital to the future of one of Africa's most impoverished nations.

"Oil plays an important role" in the current struggle between forces loyal to Chadian President Idriss Deby and rebels determined to drive him from power, said Philippe Vasset, editor of the specialised newsletter Africa Energy Intelligence.
(5 February 2008)

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