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How I learned to stop worrying and love the Saudis

Steve LeVine, The Oil and the Glory (blog), Foreign Policy
One of our most prevalent current canards is the mantra that we must “get off foreign oil,” by which we invariably mean Saudi Arabian crude — and that we must generally distance ourselves from the kingdom and its leaders. Here is a rare issue that finds bipartisan traction. Last summer, for example, the comedian Jon Stewart looked and found that eight consecutive U.S. presidents starting with Richard Nixon, rolling through Ronald Reagan, both George Bushes, and finally Barack Obama have used the phrase in more or less the same formulation. Usually, the mantra is stated in the context of either the environment — promotion of green industries — or national security, meaning a way to confound terrorists who, it is said, are largely financed by Saudi and other Middle Eastern oil receipts. But ultimately they mean the same thing — Saudi Arabia is bad, bad, bad.

… All the while there is oil, although many people seem to suggest that as a source of strategic importance it is a temporary artifice. What are the facts? Not only will Saudi Arabia’s predominant oil market position not shrink over the coming decades — it will grow. Consider the current activities of Chevron, the original developer of Saudi oil, in the partition zone that the kingdom shares with Kuwait. Vice Chairman George Kirkland told me about Chevron’s findings in the Wafra field, a reservoir of highly viscous, heavy oil in which the company is using a method of steam-injection drilling to recover an expected 10 billion to 15 billion barrels of petroleum. (For perspective, the industry regards a 1 billion-barrel field as a supergiant.) Saudi Arabia, Kirkland says correctly, is “at the top of the mountain as it is. [Wafra] reinforces a longer future delivering liquid hydrocarbons to the world economy.” Meaning probably far into the second half of this century, adding up to another pinion of U.S. strategic interest. Here, Bloomberg’s Wael Mahdi reports on Chevron’s current progress at Wafra.

Those who suggest getting off Saudi oil are violating the basics of economics. As the pithy Anthony Cordesman of the Center for Strategic and International Studies expressed it to me: “What is the benefit for the U.S. of ‘deplete America first’?”
(4 January 2011)

Morales Repeals Decree Raising Fuel Prices

Agencia Boliviana de Información via MRZine
Bolivian President Evo Morales repealed on Friday night the decree issued five days ago to raise gasoline prices, after a meeting with his cabinet, trade unions, and social organizations in La Paz.

… Morales said that he had held — over the last several days when a series of protests arose against his decision to bring the Bolivian prices of imported gasoline in line with the prevailing prices in the regional market, which meant the end of the state fuel subsidy worth 380 million dollars — “profound” meetings with peasant unions and social organizations, who judged the timing of the measure raising fuel prices, though in the end necessary for the good of the Bolivian economy, as “inappropriate.”

“I thank the social movements who have met us: Thank you, brothers and sisters of the countryside. While firmly defending this measure that benefits the Bolivian people, we received the advice that ‘the time is not right for it and it, clearly, is a hard blow to the national economy.’ Nevertheless, we are accountable to the Bolivian people,” the president said about the repeal, in a ten-minute speech he made a little over an hour after the advent of 2011.

Morales emphasized that, after meeting with trade union and social organization leaders for much of the day, “I understood, having carefully listened to suggestions from various sectors over the last several days.”

However, the head of state emphatically pointed out that Bolivia spent, in 2005-2010, at least 1.75 billion dollars on importing gasoline.

The decree for gasoline import was promulgated in 1988, and a decade later the administration of conservative former president Hugo Banzer decided to subsidize fuels.
(1 January 2011)
Previous article: Bolivia Raises Fuel Prices to Protect Economy and Stop Subsidizing Smugglers.

Tax on Carbon: The Only Way to Save Our Planet? (James Hansen)

Phil England, The Independent/UK
He first warned about climate change 30 years ago. Now James Hansen wants us to get serious about a tax on carbon. He tells Phil England why it’s our last chance

Professor James Hansen’s last formal engagement was delivering a keynote paper to the American Geophysical Union Autumn meeting. After that, he spent the holidays not enjoying wintry walks or taking advantage of the sales, but doing something altogether more industrious. “I’m writing a paper to provide the scientific basis for [law] suits against the government – just to make them do their job,” he says.

[Grave warning: Climate scientist Professor James Hansen , who has spent the past 30 years advising US administrations from Jimmy Carter to George W Bush, says action must be taken now (PA)]Grave warning: Climate scientist Professor James Hansen , who has spent the past 30 years advising US administrations from Jimmy Carter to George W Bush, says action must be taken now (PA)
Hansen, director of the Nasa Goddard Institute for Space Studies and one of the world’s leading climate scientists, has not always been as politically engaged as he is now. He had hoped that politicians would respond to the scientific community by taking action to minimise the risks from climate change. But over the course of 30 years advising US administrations from Jimmy Carter to George W Bush, he has seen how the influence of the energy companies has corrupted the political process. Now with just a small window of opportunity left in which to stabilise our climate before it slips out of our control, he has been busying himself with writing to key heads of state around the globe, advocating civil resistance against the coal industry and getting himself arrested while campaigning against mountain-top removal coal mining.
(4 January 2011)

Crafting Energy Security in the 21st Century: A German View of the Challenge

Caroline Mükusch, Second Line of Defense (“Delivering capabilities to the warfighter”)
… Any situation can change at a moment’s notice, so can energy security. Carl von Clausewitz observed in 1830, “everything […] is very simple; but even the simplest thing is difficult”. Frictions can create enormous difficulties for the realization of any plan. (Aron, Raymond (1985): Clausewitz: Philosopher of War, Englewood Cliffs, New Jersey: Prentice-Hall, p. 418.) In fact: Things do often turn out different than expected. There are some wildcards for energy security:

Peak Oil: The arrival of peak oil has been delayed by a couple of years through the economic utilization of unconventional resources. There is still plenty of oil including: However this “new oil” is – because unconventional – expensive; and the times of getting oil cheap and easy are running out.

… Influence from global suppliers: key energy countries – such as Pakistan, Iran, Azerbaijan etc. – have the potential to either provide a corridor for energy trades or to threaten exactly those energy trades.

Is Germany able to cope with trend-breaking or trend-creating events that are hard or even impossible to anticipate?

Although world’s economies ought to be less vulnerable to energy price swings in future than it was in the 1970s, a major disruption in global energy supplies still would have devastating effects on Germany’s prosperity and security. (see page 39 of this CIA document on global trends of 2015)

The Germans have to, as former German president Horst Köhler stated in May 2010, “understand that in certain cases, in an emergency, military operations are necessary to protect our interests”.

Caroline Mükusch has studied political science focused on international security. Presently she is PhD student at the University of Cologne, Germany, working on energy security issues since 2008. She is also working as consultant for the IABG Germany in the field of Security Studies of Critical Infrastructures. She is our new German correspondent.
(2 January 2011)
Sounds like a call for a new energy imperialism. -BA