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The Disintegration Of Iraq

Big Gav, Peak Energy
Time for an update on the infamous proposed Iraq oil law:

The Guardian reports that the oil law is stalled in Parliament, with oil minister Sharistani admitting there is “no sign of movement”.

UPI reports that Ireland’s Petrel Resources wants to develop a block in the western desert under a Saddam era law (containing a measly 5 billion barrels or so).

… Shameless Democrat Senator Carl Levin is making the bizarre claim that Iraqis should pay for all the damage caused by the US invasion with what little oil revenue they are allowed to keep – which will apparently simply formalise the petrodollar recycling that is already taking place (one of the few remaining supports for the sagging US dollar).
(5 March 2008)
Long post with excerpts and commentary. -BA

Peace Breaks Out on Colombia’s Borders
Neighborhood Quarrel Threatened to Bring War to South America

Jeffrey Kofman, ABC News
There are still Venezuelan and Ecuadorian troops massed along the Colombian border, but for now, at least, the threat of war here has given way to brotherhood.

After some heated exchanges between the presidents of Colombia, Venezuela and Ecuador over the last week, the tension was diffused with some awkward hugs and handshakes between the sparring leaders at Friday’s summit in the Dominican Republic.

Remarkably, all it took was an apology from Colombian President Alvaro Uribe, the most loyal ally the United States has in this region.

A week ago, Uribe sent his troops across Ecuador’s border to kill Raul Reyes, one of the top leaders of the leftist guerrilla group called the FARC that has terrorized Colombia for decades, fueled by the drug trade.

Since 2000, the United States has spent billions of dollars on military aid to Colombia to help crush the guerillas and their cocaine trafficking.
(8 March 2008)
Welcome resolution to what could have been an ugly little war.

The energy-related aspect of the conflict is that both Ecuador and Venezuela are oil producers with problematic relations to the United States. Unfortunately, U.S. reporting on the issue is permeated with ideology, making it hard even to understand what’s going on. One has to look around the web for more balanced accounts. -BA

Ukraine to pay gas bill, end crisis

Ukraine’s government will force the company that manages its natural gas supplies to pay off its debts to Russia’s Gazprom to resolve a crisis that reduced the flow of gas supplies into Ukraine and threatened to disrupt European gas supplies, Ukrainian Prime Minister Yulia Tymoshenko said Wednesday.
(5 March 2008)

OPEC – not as powerful as you might think

Peter Z. Grossman, Christian Science Monitor
Brazil’s oil may destabilize OPEC, but not the US.

Brazil’s recent announcement that it might join OPEC reportedly produced a lot of hand-wringing among the experts. According to CNN, “analysts” feared that putting Brazil’s big new oil finds under the Organization of Petroleum Exporting Countries’ banner would mean higher oil prices.

Just who are these “analysts?” Either they need remedial economics training, or they are grossly misinformed about how OPEC works.

First, in a petroleum-thirsty world, Brazil’s oil discoveries are good news. Any Econ 101 student knows that when you increase the supply of something, the price goes down – not up. Not even OPEC can reverse the laws of supply and demand. Second, the possibility of Brazil’s reserves falling under OPEC’s rules aren’t cause for alarm. If anything, a Brazilian seat at the OPEC table could mean greater stress for the cartel than it will for the rest of us.

But the analysts’ fears seem to fit with the belief that OPEC has great and special power over us. This fear is irrational…
(5 March 2008)