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Kazakh Oil: A War of Nerves

Steve LeVine, Business Week
Russian brinkmanship could imperil the flow of oil and money across the Caspian to Europe

… getting the oil out of the landlocked country [Kazakhstan] has always been a tricky affair: Russia has blocked, stalled, and restricted the flow of Tengiz oil through its territory since the first day Chevron took over the field. Teaming up with the Kazakhs, Chevron has resorted to shipping some of its oil across the Caspian Sea to Baku, the capital of Azerbaijan, and then via pipeline and railroad to Georgia’s Black Sea coast in an effort to avoid Russia. These days, Chevron does ship most of its oil through Russia, but for safety’s sake it hopes to build a long, new pipeline across Georgia and export more through that route.

The plans for the corridor, though, were drawn before Russia’s summer romp through Georgia. Suddenly, that tiny Caucasian state—embraced by Washington in a bold plan to pry it away from Moscow’s grip—seems much less secure. The republics along the route and the companies working there are wearing their game faces, saying it’s not clear the conflict in Georgia changed anything. Chevron regional vice-president Ian MacDonald says “it’s too early to say” whether the Georgia events will cause transportation problems. But already Kazakhstan has canceled plans to build a refinery on the Georgian coast, and Big Oil is privately scrambling to assess how much of a setback its export plans have suffered.

The face-off with Moscow could affect not only Georgian sovereignty but also the energy business all the way from Kazakhstan to Western Europe.
(11 September 2008)

Global warming threatens Asia-Pacific security, warns Australian PM

Kevin Rudd, The Guardian
Food and water shortages caused by global warming could lead to military conflict among the Asia-Pacific’s emerging superpowers such as China and India, the Australian prime minister, Kevin Rudd, warned today.

Australia needed to strengthen its armed forces in response to an “explosion” in defence spending in Asia, he said. There was a growing arms race in the Asia-Pacific, and economic and political conflicts could lead to military confrontation, he said.

“Militarily … as it has already become economically and politically, the Asia-Pacific will become a much more contested region,” Rudd said.

Among the emerging challenges to Australia’s security were the “increased militarisation” of the region and “preparing for the new challenges of energy security and anticipating the impact of climate change on long-term food and water security,” he said. “Population, food, water and energy resource pressures will be great…
(10 September 2008)

Fresh violence in Bolivia stokes civil war fears

Deadly clashes in Bolivia Thursday stoked fears of further widespread unrest and possibly even civil war, amid a furor over the expulsion of the US ambassador to the country.

… The conflagration was a worsening of a months-long political standoff between Morales, who has been pushing through socialist reforms since becoming president in 2006, and conservative governors in the east opposed to his reforms.

Morales, the first indigenous president of majority-indigenous Bolivia, has sought to distribute resources more equally in the poorest country in South America.

The conflict has racial overtones as relatively prosperous regions of the eastern lowlands, where more people are of European descent and mixed-race, are keen to hold on to local resources they see as being pulled away by the impoverished indigenous highlands.

… On a visit to Brasilia, Bolivia’s Finance Minister Luis Alberto Arce said Bolivia was facing a “civilian coup attempt” referring to the protests targeting gas exports. Natural gas is Bolivia’s main saleable natural resource.
(11 September 2008)
Energy resources (NG) again seem to be at the root of the problem. -BA

(More from BBC:

Protesters have been blocking roads and occupying buildings in eastern regions, which are home to Bolivia’s important natural gas reserves.

Opposition groups want greater autonomy as well as more control over revenues of natural gas in their areas.

They object to Mr Morales’s plans to give more power to the country’s indigenous and poor communities, by carrying out land reform and redistributing gas revenues.

On Monday, the government announced it was sending the military to protect gas fields and infrastructure from demonstrators and guarantee exports to neighbouring countries.

Poison Fire Interview
(Film about Nigerian oil)
Phil Moore, The Ecologist
Filmmaker Lars Johansson talks to the Ecologist about the making of the film ‘Poison Fire’ and the curse of oil in the Niger Delta.

… Q: What is gas flaring and why does it occur?

LJ: Oil fields contain various amounts of natural gas. The Nigerian oil contains unusually high proportions of ‘associated gas’. The gas fraction is liquid under pressure and mixed with or dissolved in the crude oil, so there is no way to separate the gas from the oil until it reaches the surface. Flaring occurs simply because they have to dispose of the gas. In most other oil producing countries ‘associated gas’ is sold as natural gas, but in Nigeria there is little such infrastructure. The gas could generate an enormous amount of electricity, but there’s no market as the consumers are too poor to pay for it.

Q: What are the ecological and environmental issues in the Niger delta as a consequence of gas flaring (and oil exploration)?

LJ: The short answer is that nobody really knows. The local, ecological effects of gas flaring in Nigeria have not been studied. The minister for environment in Bayelsa State (in the Niger Delta, south Nigeria) told me that there is not a single laboratory in the Delta that can do even basic water analysis.

Local people blame gas flaring for a wide range of effects on their health and environment.

… Q: Can you talk about the concept of ‘participatory video’ (PV) used in the making of the film?

LJ: Video, just like writing can be used for good or for bad; for speaking truth to power and for propaganda. If you want to stay close to their story as told in their language, which is a spoken language, ‘participation’ is much easier with video than with writing. We can play back footage directly in the village. They can participate in the editing and verify the results as in “yes, this is what I mean”.

A group of more or less literate storytellers can, to a much greater extent than with writing, be co-authors.

… Q: How does your film – and the issues explored – resonate with wider, global issues?

LJ: To me the Niger Delta issues ARE the most urgent global issues of our time but in a local format: economic globalisation, peak oil, climate change, militarisation where a national army protects a foreign company from citizens, the divide between rich and poor, the geopolitics of oil. Nowhere are these trends so obvious and tangible as in the Niger Delta. On the one hand it’s depressing. On the other hand, if you look closer, it is inspiring: people are struggling, uniting, organising, demanding to be heard/ They take Shell to court and win thanks to a courageous judge, there is all this debate and talking going on at every level. If they make progress in the Niger Delta, what are the rest of us waiting for?
(11 September 2008)
Related story about another filmmaker, Andrew Berends: Nigeria Deports Oil Filmmaker.

One thing is clear from the history of trade: protectionism makes you rich

George Monbiot, The Guardian
It is not often that a bureaucrat makes a major scientific discovery. So hats off to Peter Power. The European commission’s spokesperson for trade, writing to the Guardian last week, has invented a new ecological concept: excess fish. Seeking to justify policies that would ensure that European trawlers are allowed to keep fishing in west African waters, Mr Power claims that they will be removing only the region’s “excess stocks”. Well, someone has to do it. Were it not for our brave trawlermen battling nature’s delinquent productivity, the seas would become choked with these disgusting scaly creatures.

Power was responding to the column I wrote a fortnight ago, which showed how fish stocks have collapsed and the people of Senegal have gone hungry as a result of plunder by other nations. The economic partnership agreement the commission wants Senegal to sign would make it much harder for that country to keep our boats out of its waters. Power maintains that “the question of access to Senegalese waters by EU fleets … is not part of these trade negotiations”.

This is a splendid example of strategic stupidity. No one is claiming that there is a specific fish agreement for Senegal. But the commission’s demand that European companies have the right to establish themselves freely on African soil and to receive “national treatment” would ensure that Senegal is not allowed to discriminate between its own businesses and foreign firms. It would then be unable to exclude European boats. Is this really too much for a well-paid bureaucrat to grasp?…

…The people of these countries know that trade is essential to pull them out of poverty. But they also see that unless it is conducted fairly, it impoverishes them more. Many are aware that the European equation of fair trade with free trade is nonsense.
(9 September 2008)