Big Oil Watch

Exxon's Collateral Damaged

2010-02-27T11:10:00.000-08:00

http://www.opednews.com/articles/Exxon-s-Collateral-Damaged-by-Merle-Savage-100224-630.html

February 27, 2010
Exxon's Collateral Damaged
By Merle Savage

Silence in the Sound

The Corporations, Exxon and VECO, determined my quality of life 20 years ago during the Exxon Valdez Oil Spill (EVOS) cleanup.

My name is Merle Savage; I was a female general foreman during the EVOS beach cleanup in 1989, which turned into 20 years of extensive health deterioration for me and many other workers. Dr. Riki Ott visited me in 2007 to explain about the toxic spraying on the beaches. She also informed me that Exxon's medical records and the reports that surfaced in litigation brought by sick workers in 1994, had been sealed from the public, making it impossible to hold Exxon responsible for their actions. http://www.rikiott.com

Dr. Riki Ott has devoted her life to taking control from corporations and giving it back to We The People. If corporations continue to control our legal system, then We The People become victims. http://www.MovetoAmend.org

Dr. Riki Ott has written two books; Sound Truth & Corporate Myth$ and Not One Drop. Dr. Ott has investigated and studied the oil spill spraying, and quotes numerous reports in her books, on the toxic chemicals that were used during the 1989 Prince William Sound oily beach cleanup. Black Wave the Film is based on Not One Drop, with interviews of EVOS victims; my interview was featured in the section; Like a War Zone. http://www.blackwavethefilm.com

Exxon developed the toxic spraying; OSHA, the Coast Guard, and the state of Alaska authorized the procedure; Veco and other Exxon contractors implemented it. Beach crews breathed in crude oil that splashed off the rocks and into the air -- the toxic exposure turned into chronic breathing conditions and central nervous system problems, along with other massive health issues. I am only one out of 10,000+ EVSO workers who suffer extreme health problems during and after the 1989 EVOS cleanup. Some of the illnesses include neurological impairment, chronic respiratory disease, leukemia, lymphoma, brain tumors, liver damage, and blood disease.

Please view the 7 minute video that validates my accusations.
http://video.google.com/videoplay?docid=5632208859935499100 (Editor's note: you must have an account to access this site)

My website is devoted to searching for EVOS cleanup workers who have been exposed to the toxic spraying and are suffering from the same illnesses as me. Our summer employment turned into a death sentence for many -- and a life of unending medical conditions for the rest of us.

http://www.silenceinthesound.com/stories.shtml

http://www.silenceinthesound.com/gallery.shtml

Author's Website: http://www.silenceinthesound.com

Author's Bio: I am retired and writing everyday. I have one published book, about the 1989 Exxon Valdez Oil Spill (EVOS),Silence in the Sound the Adventure; Echoes from the Sound is almost completed. At the present time I am trying to inform the media and public about the medical issues concerning the(EVOS) Workers. In October I was contacted by Dr. Riki Ott about the toxic chemicals that were used during the EVOS cleanup, and made the connection with my failing health conditions. Being a General Foreman on the barges, and exposed to the cleaning procedures, has caused many health problems for me. After reading Dr. Ott's book, Sound Truth and Corporate Myth$ the Legacy of the Exxon Valdez Oil Spill, I now have answers to my medical questions.

Tide Turns As Kurds Push For Oil Law Amid South's Sudden Bright Future

2010-02-27T11:08:00.000-08:00

http://www.opednews.com/articles/Tide-Turns-As-Kurds-Push-F-by-OilGuy-100224-815.html

February 27, 2010
By OilGuy

While the Iraqi government has made overtures to its Kurdish counterpart in the north to end an oil standoff, much remains in doubt without an actual law keeping the industry in check - rules which this time the Kurds are pressing for rather than Baghdad.

For a long time, the northern Kurdistan region was seen as the most attractive oil market in the country but the latest bid rounds in December and subsequent contract signings in the south have made it suddenly "less clear that Baghdad actually needs an oil law with Kurdistan, because they're actually doing pretty well on their own," said David Bender, an analyst in the Middle East practice of the Eurasia Group's Washington office.

Iraq's government initially pushed for petroleum-sector legislation, but lately the Kurdistan Regional Government (KRG) has been motivated to act "so they don't get sort of left behind, with this new international oil interest in Iraq," Bender argued.

Thirty-eight companies from 17 countries have exploration and production contracts in the Kurdistan region, according to Ashti Hawrami, the KRG's national resources minister. Several medium and large discoveries have been made, while one private sector refinery has been built and another is almost finished, Hawrami noted in a Feb. 4 government press release.

Baghdad has never viewed oil contracts signed independently by the Kurds as legitimate and blacklisted companies involved in the northern region's oil fields from working in the south. Oil exports from the Kurdish area stopped last year when companies were not reimbursed.

In recent days, however, the government of Prime Minister Nouri al-Maliki has been considering covering the development costs of foreign firms working in the north, according to media reports, which also cite that oil exports would flow again soon from the north's Tawke field, operated by Norway's DNO and Turkey's Genel Energy.

The central government's ban on companies operating in the Kurdish area will probably remain until the implementation of an oil law, which outlines the sharing of profits, the signing of contracts and the role of Iraq's National Oil Company, Bender told OilPrice.com. He added the Kurds will presumably want to continue to forge contracts without Baghdad's involvement.

As of now, only small interests have been doing business with the KRG, "but if the Kurds ever want to attract major oil companies, they will have to come to some understanding with the Iraqi government," added Bender.

Baghdad's interest these days in reaching out to Irbil, capital of the Kurdish north, is "more politically based rather than anything having to do with oil," he maintained. With March 7 parliamentary elections looming, the Kurds may be the "king maker in whatever the next government is, and one of their prices is probably going to be some sort of progress on an
oil law," he argued. He said eventually an oil bill will be passed but conceded it is "somewhat worrisome that there is no time table."

Without clearly defined rules in the petroleum sector, heightened international participation in the Middle Eastern country's oil market has forced dealing with certain issues through a budgetary process, Bender said. This year's budget spells out that provinces will be paid $1 per barrel for oil or gas they produce, while the provinces, namely the Kurdish north, have to agree to export oil or face a fine, he continued.

The whole country's proven oil reserves were last estimated at 115 billion barrels, and analysts have speculated Iraq will boast some six million to 10 million barrels a day over the next several years.

While different stakeholders argue over spreading around the oil wealth, some doubt the optimism of these predictions.

Robert Ebel, a senior adviser in the energy and national security program at the Center for Strategic and International Studies, a Washington-based think tank, told OilPrice.com he has heard Iraqis boast that more oil will flow from their country than from Saudi Arabia.

"I take all that with a huge grain of salt because I don't think it's doable," Ebel said, adding he has a "huge doubt" about how quickly Iraq can produce oil, sell it abroad and bring back money into the country. Responding to all of these contracts will take time, as well as a "tremendous amount of equipment" and personnel, he added.

And the key, Ebel said, is the fate of all that money. "Is it spent properly, or is it lost to the corruption and the variety of projects that don't really have that much importance to the economy?"

While the petroleum law remains paramount, the dispute over the Kirkuk region is also a major stumbling block that may cause problems for the nascent oil industry. Kirkuk finds itself front and center in the fight between Iraqis and Kurds over certain disputed territories.

"In the case of the Kurds, Kirkuk remains an extremely volatile situation. Right now, the U.S. is sort of forcing Kurdish and Arab security forces to cooperate and even that is highly controversial," Bender added. U.S. forces are set to depart next year. Whether such strategic cooperation between local militaries will continue is a lingering question, he warned, and "whether the security forces will start fighting is certainly a possibility."

Source: http://www.oilprice.com/article-kurds-push-for-oil-law-with-baghdad-amid-souths-sudden-bright-future.html

By. Fawzia Sheikh for OilPrice.com who focus on http://www.oilprice.com" target="new">Fossil Fuels, Metals, Oil Prices and Geopolitics To find out more visit their website at: http://www.oilprice.com

Iran begins drilling for oil in Caspian Sea

2010-02-14T13:19:00.000-08:00

http://www.presstv.ir/detail.aspx?id=118561§ionid=351020103

Sat, 13 Feb 2010

The Islamic Republic of Iran has started drilling its first exploratory well in the Caspian Sea to search for oil in the resource-rich body of water.

“The Amir-Kabir semi-submersible drilling rig has started exploration drillings in the Caspian Sea. It will drill the country's first exploratory well at a depth of 1,550 meters under the seabed,” North Drilling Company Managing Director Hedayatollah Khademi told the Mehr News Agency on Saturday.

In light of the great potential of the region, there is a very good possibility that the Amir-Kabir (formerly known as Iran-Alborz) semi-submersible drilling rig will help find new reserves of crude oil in the Caspian Sea, he added.

The drilling rig weighs 14,000 tons without its attachments and will facilitate exploration in deep waters in the southern part of the Caspian Sea.

According to estimates, the southern part of the Caspian Sea holds at least 32 billion barrels of oil reserves.

Iran's exploration efforts have so far led to the discovery of 46 oil fields in the Caspian Sea.

Iran has the world's third-largest proven reserves of crude oil, mainly located in the southwest of the country and offshore in the Persian Gulf.

Falklands oil prospects stir Anglo-Argentinian tensions

2010-02-10T14:11:00.000-08:00

Well this explains why they waged a war over a piece of rock...

http://www.guardian.co.uk/uk/2010/feb/07/falkland-islands-oil-britain-argentina/print

Four British firms set to drill for oil north of Falkland Islands, in move Argentina calls a 'violation of sovereignty'
Rory Carroll, Latin America correspondent, and Annie Kelly in Buenos Aires
Sunday 7 February 2010

It does not look like much: a jumble of pipes, containers and drilling equipment sitting on a windswept jetty at Port Stanley.

The hardware, however, signals an imminent search for oil and gas that could turn the Falkland Islanders into south Atlantic oil barons, a prospect that has already triggered a dispute between Britain and Argentina.

A rig, the Ocean Guardian, is due to arrive by mid-February and will almost immediately begin drilling for hydrocarbon deposits 100 miles north of the archipelago.

Geological surveys suggest there could be up to 60bn barrels beneath the seabed around the British territory, a bonanza that would transform islands famed for sheep, fish and remoteness.

"The rig won't come into sight of Port Stanley unfortunately, it'll be out too far," said Phyll Rendell, the islands' director of mineral resources. "But everyone knows it's coming."

A British company, Desire Petroleum, has hired the rig to drill prospects in the North Falkland basin and will later lease it to two other British companies and an Australian one – Rockhopper, and Falklands Oil and Gas; and BHP Billiton – which also have exploration contracts. They will use the rig in rotation throughout 2010.

It will be the first drilling in Falkland waters since Shell suspended exploration in 1998 after oil prices slumped to $12 a barrel.

"With the rise in oil prices and the worldwide search for new oil and gas services, it has now become more than commercially viable for this work to begin," said Ben Romney, a Desire Petroleum spokesman. "We should know by the end of the year whether or not a major extraction programme will go ahead."

Argentina is not waiting that long to voice its anger. It lost the 1982 war with Britain over the islands, which it calls the Islas Malvinas, but still claims sovereignty and terms British control an occupation.

"What they are doing is illegitimate," said Jorge Taiana, the foreign minister. "It's a violation of our sovereignty. We will do everything possible to defend and preserve our rights."

Last week the government summoned Britain's chargé d'affaires – the ambassador was out of the country – to receive a protest note. Buenos Aires has reportedly warned Argentina-based oil companies against exploring waters around the Falklands and there are rumours it may use civilian vessels to disrupt the rig.

British diplomats brushed aside the protests and said it was longstanding UK policy to let the Falkland Islands government develop a hydrocarbons industry within its waters. They did not expect any Argentinian military forays.

Authorities on the islands were also unconcerned. "There will be quite a bit of rhetoric and Argentina has every right to protest if it wishes. But it will no doubt conduct itself in a proper manner," said Rendell. She was unaware of any plans by Buenos Aires to disrupt drilling.

Argentinians consider sovereignty over the islands a matter of national pride but few seemed impressed by their government's protest.

"Now the government is talking about the Malvinas again with their empty threats, and for what?" said Fabian Volonte, a former teenage conscript who was part of the 1982 invasion force. "We lost the war, now we have to watch the British growing rich from it and we can do nothing about it. It is just shame upon shame for Argentina."

Under current proposals the Falklands would receive 20% of all profits and 9% of royalties on every barrel. The four oil companies involved in drilling have also promised big onshore investment, including overhauling the main port and building 350 houses.

If even a small fraction of the potential deposits are found and extracted, it would transform the per capita income of the 2,900 islanders. Revenue from fisheries licences have in the last decade given Port Stanley, once desolate and broke, the feel of a prosperous Highland village.

The possibility of becoming a South Atlantic version of Brunei has not dazzled a population whose unofficial uniform is anorak and wellington boots.

Rather than the rig's imminent arrival, the local paper, the Penguin News, last week splashed on a proposal to market the Falklands to tourists as the "gateway to Antarctica".

"We have had the oil industry here before so there's a sense of been there, done that," said Rendell. "We have to remember that we haven't found any commercial oil yet. After six or seven months the drill could go away and not come back."

Argentina's claim

Argentina's anguish has sharpened with realisation it may have lost valuable natural resources in the South Atlantic as well as national pride. Argentina has claimed "Las Malvinas" since Britain occupied them in 1833, making the archipelago a source of national yearning for Argentinians. Losing the 73-day conflict in 1982 aggravated the sense of injustice. It has worsened since the islands began to thrive: fisheries licences generate millions of pounds, which could be dwarfed by oil and gas revenues. A scramble is under way off South America's Atlantic coast and the Antarctic. Argentina and Britain have extended claims over the continental shelf around the Falklands, and with Chile, Australia, New Zealand, France and Norway claim waters further south; Russia also says it reserves the right to make a claim. The Argentine president, Cristina Kirchner, has raised the prospect of Argentinian troops in the Antarctic to protect resources. Brazil, meanwhile, has posted troops in the Amazon and is beefing up its forces to protect oil and gas deposits 200 miles off its Atlantic coast.
Rory Carroll

• The articles above were amended on 8 February 2010. In the main story, BHP Billiton was originally described as a British company. In the second piece, China and Russia appeared on the list of current claimants. This has been corrected.

Government Intent on Curbing Speculation and Contract Ownership in Energy Markets

2010-02-04T12:28:00.001-08:00

http://www.oilprice.com/article-government-intent-on-curbing-speculation-and-contract-ownership-in-energy-markets.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+oilpricecom+%28Oil+Price%29

3rd Feb 2010
Government Intent on Curbing Speculation and Contract Ownership in Energy Markets

Increasingly, it would seem the government is intent on curbing speculation and contract ownership of core commodities. Starting last summer, the Commodities Futures Trading Commission, or CFTC, began to debate new position limits on traders and speculators in the energy complex. Regulators blame the big spike in commodities in 2008 on hedge funds and other speculators and have decided to impose limits on contracts.

Anticipating this change, several energy-focused funds and ETFs adjusted their position sizes in oil and natural gas to reflect an anticipated change in trading limit guidelines. But by encouraging less speculation, the CFTC is driving business away from the CME in Chicago, NYMEX in New York (owned by the CME) and other exchanges in the United States to Europe and Asia where limits have not been imposed.

Data from British regulators confirm that price spikes in oil and gas were barely attributed to speculators and therefore have refused to follow the CFTC. London, also a major commodity trading center, will benefit the most as a result of new CFTC guidelines. Amazingly, a similar study conducted by U.S. officials delivered the same verdict; yet legislation followed anyway.

Recently the CFTC announced fresh limits to curb speculation in energy markets.

Importantly, despite a public inquiry on the subject last fall, the CFTC and the government still believe that speculators caused most of the crude oil super-spike in 2008 before prices crashed in July of that year. For now, the new position limits only affect energy commodities like crude oil, natural gas, heating oil and gasoline.

But traders are worried that the CFTC might also include limits on contracts based on copper, gold and silver. All three metals remain in a secular bull market since 2002.

The new laws come with controversy: new data collected by the CFTC from banks and brokers in the United States indicated that index funds – largely blamed for the super-spike in energy prices – were actually reducing their positions as prices were rising in 2008.

Meanwhile, some funds like UNG, or the United States Natural Gas Fund, have started to trade non-U.S. gas contracts as an alternative to CFTC position limit curbs. Other index funds have followed.

In the end, if other international commodity exchanges don't enact similar laws then the United States will lose more contract volume to the competition.

enewable Energy Coming Under Fire Over Subsidies and Shortcuts

2010-02-04T12:26:00.000-08:00

http://www.oilprice.com/article-renewable-energy-coming-under-fire-over-subsidies-and-shortcuts.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+oilpricecom+%28Oil+Price%29

3rd Feb 2010
Renewable Energy Coming Under Fire Over Subsidies and Shortcuts

In a global economic scene dominated by continuing uncertainty, one of the few “sure bets” has SEEMED to be the “green tech/ clean tech” sector.

But in the last few months, significant bumps have appeared in what has almost universally been considered one of the few relatively unblocked roads to “certain” prosperity – at least according to obsessive enthusiasts like Tom Friedman.

The most notable, of course, has been the brouhaha over 'Climategate', the hacked emails that revealed some notable global warming proponents “conspiring” to massage empirical evidence in a way most suited to advance their thesis.

Unfortunately, cherry picking the evidence is all too common among academics of ALL political / ideological stripes, so while some people are shocked by this, it should a) give them a generally more skeptical attitude towards any claims of “science”, and b) not obscure the extent to which corporate “eco-hacks” have been doing the same – and much worse – for decades re the same subject.

But similar sorts of divisions are appearing at the Copenhagen Climate Talks, expectations for which have been progressively diminishing for the past several months.

The most enduring, it seems, are those between the already-industrialized and industrializing countries.

The former want to junk the protocols established by the 1997 Kyoto Conference – which went into effect in 2005 for most countries except, of course, the US under their emissions, while shifting the burden to the advanced world.

Now, there are clearly fissures within the industrializing camp, with rapidly growing – and polluting – China and India in quite a different position than, say, “the 700 million sub-Saharan Africans outside of South Africa [who] have access to the same amount of electricity as the 38 million citizens of Poland”.

But there is enough commonality for them to have staged a temporary maneuver on the first day of the second week, when developing countries threatened to walk out in protest, saying that the world’s richer countries were not doing enough to cut their greenhouse gas emissions ...
African delegates released a statement declaring they were “outraged with the lack of transparency and democracy in the process.”
The move seemed to be tactical … Still, the threat of nonparticipation underscored the tenuous balance between richer and poorer nations.

The final outcome of Copenhagen, of course, is far from clear at this moment, although anyone anticipating something major is likely to be disappointed.

At the same time, two other incidents indicate not just the political obstacles to unblocked progress on the environmental front, but societal and technological as well.

The former is indicated by the already prominent visibility of corruption – due largely to the existence of readily available subsidies – in the emerging and often free-wheeling wind-energy business all over Europe, as an extensive round-up in the New York Times makes depressingly clear.

Wind farm development follows a common pattern in Europe and the United States. It is a complex chain in which, typically, small entrepreneurs strike deals for long-term land leases with farmers and seek local government approvals for wind parks. Then the entrepreneurs sell development packages through intermediaries to large multinational companies or utilities that actually build the wind parks …

Stoking the frenzy in Europe is the vast revenue available through a variety of subsidies, including the European Union’s farm subsidy system, which distributes more than €50 billion, or $73 billion, a year to farmers, corporate agribusiness and rural development projects …

… critics like John Etherington, a former professor of ecology at the University of Wales and author of “The Wind Farm Scam,” contends that because the industry is so dependent on subsidies, it is highly vulnerable to scams. Mr. Etherington said that he is “not sure that the industry is regulated at all — let alone well regulated.”

Police investigators have been busy across the Continent in recent months. This year five Corsican nationalists were jailed and fined for skimming €1.54 million in European subsidies for wind farms. In Italy — where three investigations are unfolding — 15 people were arrested last month in a case the authorities code-named Gone With the Wind. They described it as a complicated Ponzi-style scheme to reap as much as €30 million in E.U. aid.

The reason is that political authorities – anxious to promote the phenomenally eco-friendly image of wind power – have been showering participants in this fast-growing sector with profit margins that make investment a literally no-lose proposition, if handled shrewdly.

Richard Robb, a New York investor in wind parks in France and Germany through his firm Christofferson, Robb & Co., said that even with lackluster winds there was a cushion of revenue for investors because of these [subsidies].
In Germany, he said, his wind farm qualified for a feed-in tariff of about €83.6 a megawatt hour while the free market price ranged between €30 to €70 — helping to deliver as much as a 15 percent return.
“None of this,” he said, “would have been possible without government subsidies.”

And who ends up bearing the burden of these tidy, “no-lose” profits – not surprisingly, consumers in countries where these operations are taking place. “Last year Spanish incentives, or “premium” prices paid to wind producers above market rates, totaled almost €1.2 billion, a cost ultimately borne by consumers.”

Even less surprising, unfortunately, are the well-placed individuals who benefit, as in the Spanish province of Galicia, where “the former head of industry and energy is facing charges of influence trafficking for granting approvals for seven wind parks developed by his brother-in-law”.

But even when baser human instincts aren’t in play, there are real technological roadblocks as well to the imagined utopia of boundless / cheap / clean energy, as the – literally, earth-shaking – story of initial attempts to tap the geo-thermal energy of the earth’s crust.

The company in charge of a California project to extract vast amounts of renewable energy from deep, hot bedrock has removed its drill rig and informed federal officials that the government project will be abandoned.
The project by the company, AltaRock Energy, was the Obama administration’s first major test of geothermal energy as a significant alternative to fossil fuels and the project was being financed with federal Department of Energy money ...

And what was the reason for abandoning this seemingly exciting project ??? The fact that it was, literally, causing earthquakes – in a part of the world already shaken regularly by scary tremors.

And it’s not just California that was finding the geothermal initiative a bit disturbing.

The project’s apparent collapse comes a day after Swiss government officials permanently shut down a similar project in Basel, because of the damaging earthquakes it produced in 2006 and 2007.

Taken together, the two setbacks could change the direction of the Obama administration’s geothermal program, which had raised hopes that the earth’s bedrock could be quickly tapped as a clean and almost limitless energy source.
Of course, there is always a “cash” aspect to initiatives like this:

In addition to a $6 million grant from the Energy Department, AltaRock had attracted some $30 million in venture capital from high-profile investors like Google, Khosla Ventures and Kleiner Perkins Caufield & Byers.

“Some of these startup companies got out in front and convinced some venture capitalists that they were very close to commercial deployment,” said Daniel P. Schrag, a professor of geology and director of the Center for the Environment at Harvard University.

Geothermal enthusiasts asserted that drilling miles into hard rock, as required by the technique, could be done quickly and economically with small improvements in existing methods, Professor Schrag said. “What we’ve discovered is that it’s harder to make those improvements than some people believed,” he added.

The existence of these problems – political / societal / technological – in no way implies that the search for clean / green technologies should be abandoned – as the great theorist of technologically-driven economic growth Joseph Schumpeter pointed out, eventual success is always preceded by heart-breaking failure.

But it does indicate that the road to a clean / safe / renewable energy future is anything but a clear, straight superhighway – rather, it’s more like a potentially treacherous cliffside path, where progress is slow and a mistake of any sort can result, with even the best intentions, in a lot of pain and suffering for innocent people who have no choice but to come along for the ride.

David Caploe PhD
Chief Political Economist
EconomyWatch.com

Exxon defends XTO Energy deal, warns against new regulation on hydraulic fracturing

2010-02-03T13:35:00.000-08:00

http://www.dallasnews.com/sharedcontent/dws/bus/stories/DN-exxonxto_21bus.ART0.State.Edition1.3cfaa44.html

Thursday, January 21, 2010
By DAVE MICHAELS / The Dallas Morning News
dmichaels@dallasnews.com

WASHINGTON – Exxon Mobil Corp. told lawmakers Wednesday that its merger with natural gas producer XTO Energy Inc. wouldn't violate antitrust laws and warned Congress against new regulations that could slow the development of wells.

Irving-based Exxon's $41 billion deal is widely viewed as an opportunity to exploit the boom in domestic natural gas production that has occurred in regions including North Texas. Exxon says it is seizing that chance as the U.S. and other countries consider greenhouse-gas limits that would give natural gas an advantage over coal and oil.

But Exxon first wants Congress to drop plans to regulate a common underground injection technique known as hydraulic fracturing, which is used by Fort Worth-based XTO in the Barnett Shale. Lawmakers at Wednesday's hearing, scheduled to review the Exxon-XTO merger, often focused on a bill that would require companies to disclose the mixture of chemicals they shoot underground.

A report by the Environmental Working Group said this week that the fracturing fluids include petroleum distillates that often contain benzene, a carcinogen. Environmentalists say the chemicals could leak into underground water supplies.

Energy companies insist hydraulic fracturing is safe and hasn't contaminated water sources. While some companies say they don't object to disclosing "fracking" chemicals, they worry that handing regulation to the Environmental Protection Agency could lead to expensive new rules or a ban on the practice.

"Anytime you add a layer [of regulation], you add a cost," Exxon chief executive Rex Tillerson told lawmakers. "And when you add a cost, you just knocked off an increment of production because somewhere out there is the marginal-cost well, and it doesn't get drilled."

Oil and gas companies say state regulators, such as the Texas Railroad Commission, adequately oversee the production techniques that are used in the Barnett Shale and other fields.

But Rep. Diana DeGette, D-Colo., the bill's author, said Wednesday that only four states have laws directly regulating hydraulic fracturing. Her legislation would subject the activity to regulation under the federal Safe Drinking Water Act.

Exxon's deal with XTO allows Exxon to void its purchase if Congress prohibits fracturing or adds regulations that make the wells "commercially impracticable." Late last year, Congress directed the EPA to conduct a peer-reviewed study of hydraulic fracturing and its impact on drinking water.

Many Democrats, including several from Texas, are lukewarm to DeGette's proposal. With Democrats getting blame for high unemployment, Exxon's message that natural gas production would support new jobs may turn more Democrats against DeGette's proposal.

Some Democrats also expressed concern that the Exxon-XTO merger could lead to further consolidation in the oil and gas industry. Tillerson told lawmakers that the merger, which is being reviewed by the U.S. Justice Department and the Federal Trade Commission, would not violate antitrust laws.

The hearing also was notable for providing a rare window into Exxon's views on energy policy, which the company rarely discusses in public.

Exxon opposes the cap and trade system approved by the House in June, Tillerson said. But Exxon, which has funded groups that deny global warming, recognizes that industrial emissions contribute to climate change, he said.

Some Democrats, including Rep. Jay Inslee of Washington, pressed Tillerson on whether Exxon's acquisition signaled its acceptance that greenhouse-gas limits are inevitable, and that such rules would favor natural gas over coal and oil, which emit more carbon dioxide.

"We have identified over the last few years the growing importance of natural gas," Tillerson said. "Already there are policies in place, in Europe and elsewhere, that do put a price on carbon, and that does shift you toward natural gas demand."

Whatever Happened to the Neocons’ Grand Schemes to Control Iraq’s Oil?

2010-02-03T09:51:00.000-08:00

By Michael Schwartz, Tomdispatch.com
February 2, 2010
http://www.alternet.org/story/145522/

Americans have largely stopped thinking about Iraq, even though we still have approximately 110,000 troops there, as well as the largest "embassy" on the planet (and still growing). We've generally chalked up our war in Iraq to the failed past, and some Americans, after the surge of 2007, even think of it as, if not a success, at least no longer a debacle. Few care to spend much time considering the catastrophe we actually brought down on the Iraqis in "liberating" them.

Remember when we used to talk about Saddam Hussein's "killing fields"? The world of mayhem and horror that followed the U.S. invasion and occupation delivered new, even larger "killing fields" that we don't care to discuss, or that we prefer to consider the responsibility of the Iraqis themselves. Even with violence far lower today, Baghdad certainly remains one of the more dangerous cities on the planet. The bombs continue to go off there regularly and devastatingly, while the killing, even if not of American troops who rarely patrol any longer and are largely confined to their mega-bases, has not ended, not by a long shot; nor has the anger, suspicion, and depression that go with all of this.

A striking recent article in the British Guardian by reporter Martin Chulov seemed to catch something of what the U.S. actually accomplished in Iraq in a nutshell. It describes a country in "environmental ruin" (and, let's not forget, taxed with an ongoing drought of monumental proportions). The headline tells the story: "Iraq littered with high levels of nuclear and dioxin contamination, study finds." The contamination from depleted uranium weapons, bombed pipelines, and other disasters of the years of war, civil war, and chaos seems centered around Iraq's population centers and, perhaps not surprisingly, coincides with a massive rise in birth defects.

Worse yet, in all those years of occupation, the U.S., despite billions of dollars spent (or rather squandered) on "reconstruction," never managed to deliver electricity, jobs, potable water, health care, or much else. And despite many attempts, as Michael Schwartz, returning TomDispatch regular and the author of War Without End, makes clear, Washington never even got the oil out of the ground in a country that is little short of a giant oil field waiting to be developed. A remarkable record when you think about it. TomDispatch editor Tom Engelhardt

The Iraqi Oil Conundrum
Energy and Power in the Middle East
By Michael Schwartz

How the mighty have fallen. Just a few years ago, an overconfident Bush administration expected to oust Iraqi dictator Saddam Hussein, pacify the country, install a compliant client government, privatize the economy, and establish Iraq as the political and military headquarters for a dominating U.S. presence in the Middle East. These successes were, in turn, expected to pave the way for ambitious goals, enshrined in the 2001 report of Vice President Dick Cheney's secretive task force on energy. That report focused on exploiting Iraq's monstrous, largely untapped energy reserves -- more than any country other than Saudi Arabia and Iran -- including the quadrupling of Iraq's capacity to pump oil and the privatization of the production process.

The dream in those distant days was to strip OPEC -- the cartel consisting of the planet's main petroleum exporters -- of the power to control the oil supply and its price on the world market. As a reward for vastly expanding Iraqi production and freeing its distribution from OPEC's control, key figures in the Bush administration imagined that the U.S. could skim off a small proportion of that increased oil production to offset the projected $40 billion cost of the invasion and occupation of the country.

All in a year or two.

Unremitting Ambition Tempered by Political and Military Failure

Almost seven years later, it will come as little surprise that things turned out to cost a bit more than expected in Iraq and didn't work out exactly as imagined. Though the March 2003 invasion quickly ousted Saddam Hussein, the rest of the Bush administration's ambitious agenda remains largely unfulfilled.

Instead of quickly pacifying a grateful nation and then withdrawing all but 30,000-40,000 American troops (which were to be garrisoned on giant bases far from Iraq's urban areas), the occupation triggered both Sunni and Shia insurgencies, while U.S. counterinsurgency operations led to massive carnage, a sectarian civil war, the ethnic cleansing of Baghdad, and a humanitarian crisis that featured hundreds of thousands of deaths, four million internal and external refugees, and an unemployment rate that stayed consistently above 50% with all the attendant hunger, disease, and misery one would expect.

In the meantime, the government of Shiite Prime Minister Nouri al-Maliki, fervently supported by the Bush administration and judged by Transparency International to be the fifth most corrupt in the world, has morphed into an ever less reliable client regime. Despite American diktats and desires, it has managed to establish cordial political and economic relationships with Iran, slow the economic privatization process launched by the neocon administrators sent to Baghdad in 2003, and restored itself as the country's primary employer. It even seems periodically resistant to its designated role as a possible long-term host for an American military strike force in the Middle East.

This resistance was expressed most forcefully when Maliki leveraged the Bush administration into signing a status of forces agreement (SOFA) in 2008 that included a full U.S. military withdrawal by the end of 2011. Maliki even demanded -- and received -- a promise to vacate the five massive "enduring" military bases the Pentagon had constructed -- with their elaborate facilities, populations that reach into the tens of thousands, and virtually no Iraqi presence, even among the thousands of unskilled workers who do the necessary dirty work to keep these "American towns" running.

Despite such setbacks, the Bush administration did not abandon the idea that Iraq might remain the future headquarters for a U.S. presence in the region, nor in the 2008 presidential election did candidate Barack Obama. He, in fact, repeatedly insisted that the Iraqi government should be a strong ally of the U.S. and the most likely host for a 50,000-strong military force that would "allow our troops to strike directly at al-Qaeda wherever it may exist, and demonstrate to international terrorist organizations that they have not driven us from the region."

Since entering the Oval Office, Obama has not visibly wavered in the commitment to establish Iraq as a key Middle East ally, promising in his State of the Union Address that the U.S. would "continue to partner with the Iraqi people" into the indefinite future. In the same address, however, the president promised that "all of our troops are coming home," apparently signaling the abandonment of the Bush administration's military plans. Secretary of Defense Robert Gates, on the other hand, has recently voiced a contrary vision, hinting at the possibility that the Iraqis might be interested in negotiating a way around the SOFA agreement to allow U.S. forces to remain in the country after 2011.

Dynamic Paralysis Keeps Iraqi Oil Underground

Iraqi oil, too, has been a focus of Washington's unremitting ambition tempered by failure. Long before the cost of the war began to lurch toward the current Congressional estimate of $700 billion, the idea of using oil revenues to pay for the invasion had vanished, as had the idea of quadrupling production capacity within a few years. The hope of doing so someday, however, remains alive. Speculation that Iraq's production could -- in the not too distant future -- exceed that of Saudi Arabia may still represent Washington's main strategy for postponing future severe global energy shortages.

Even before the attacks of September 11, 2001, the secretive energy task force Vice President Cheney headed was tentatively allocating various oil fields in a future pacified Iraq to key international oil companies. Before the March 2003 invasion, the State Department actually drafted prospective legislation for a post-Hussein government, which would have transferred the control of key oil fields to foreign oil giants. Those companies were then expected to invest the necessary billions in Iraq's rickety oil industry to boost production to maximum rates.

Not so long after U.S. troops entered Baghdad, the administration's proconsul, L. Paul Bremer III, enacted the State Department legislation by fiat (and in clear violation of international law, which prohibits occupying powers from changing fundamental legislation in the conquered country). Under the banner of de-Baathification -- the dismantling of Saddam Hussein's Sunni ruling party -- he also fired oil technicians, engineers, and administrators, leaving behind a skeleton crew of Iraqis to manage existing production (and await the arrival of the oil giants with all their expertise).

Within a short time, many of these pariah professionals had fled to other countries where their skills were valued, creating a brain drain that, for a time, nearly incapacitated the Iraqi oil industry. Bremer then appointed a group of international oil consultants and business executives to a newly created (and UN-sanctioned) Development Fund of Iraq (DFI), which was to oversee all of the country's oil revenues.

The remaining Iraqi administrators, technicians, and workers soon mounted a remarkably determined and effective multi-front resistance to Bremer's effort. They were aided in this by a growing insurgency.

In one dramatic episode, Bremer announced the pending transfer of the control of the southern port of Basra (which then handled 80% of the country's oil exports) from a state-run enterprise to KBR, then a subsidiary of Halliburton, the company Vice President Cheney had once headed. Anticipating that their own jobs would soon disappear in a sea of imported labor, the oil workers immediately struck. KBR quickly withdrew and Bremer abandoned the effort.

In other Bremer initiatives, foreign energy and construction firms did take charge of development, repair, and operations in Iraq's main oil fields. The results were rarely adequate and often destructive. Contracts for infrastructure repair or renewal were often botched or left incomplete, as international companies ripped out usable or repairable facilities that involved technology alien to them, only to install ultimately incompatible equipment. In one instance, a $5 million pipeline repair became an $80 million "modernization" project that foundered on intractable engineering issues and, three years later, was left incomplete. In more than a few instances, local communities sabotaged such projects, either because they employed foreign workers and technicians instead of Iraqis, or because they were designed to deprive the locals of what they considered their "fair share" of oil revenues.

In the first two years of the occupation, there were more than 200 attacks on oil and gas pipelines. By 2007, 600 acts of sabotage against pipelines and facilities had been recorded.

After an initial flurry of interest, international oil companies sized up the dangers and politely refused Bremer's invitation to risk billions of dollars on Iraqi energy investments.

After this initial failure, the Bush administration looked for a new strategy to forward its oil ambitions. In late 2004, with Bremer out of the picture, Washington brokered a deal between U.S.-sponsored Iraqi Prime Minister Iyad Allawi and the International Monetary Fund. European countries promised to forgive a quarter of the debts accumulated by Saddam Hussein, and the Iraqis promised to implement the U.S. oil plan. But this worked no better than Bremer's effort. Continued sabotage by insurgents, resistance by Iraqi technicians and workers, and the corrupt ineptitude of the contracting companies made progress impossible. The international oil companies continued to stay away.

In 2007, under direct U.S. pressure, virtually the same law was reluctantly endorsed by Prime Minister Maliki and forwarded to the Iraqi parliament for legislative consideration. Instead of passing it, the parliament established itself as a new center of resistance to the U.S. plan, raising myriad familiar complaints and repeatedly refusing to bring it to a vote. It lies dormant to this day.

This stalemate continued unabated through the Obama administration's first year in office, as illustrated by a continuing conflict around the pipeline that carries oil from Iraq to Turkey, a source of about 20% of the country's oil revenues. During the Bremer administration, the U.S. had ended the Saddam-era tradition of allowing local tribes to siphon off a proportion of the oil passing through their territory. The insurgents, viewing this as an act of American theft, undertook systematic sabotage of the pipeline, and -- despite ferocious U.S. military offensives -- it remained closed for all but a few days throughout the next five years.

The pipeline was re-opened in the fall of 2009, when the Iraqi government restored the Saddam-era custom in exchange for an end to sabotage. This has been only partially successful. Shipments have been interrupted by further pipeline attacks, evidently mounted by insurgents who believe oil revenues are illegitimately funding the continuing U.S. occupation. The fragility of the pipeline's service, even today, is one small sign of ongoing resistance that could be an obstacle to any significant increase in oil production until the U.S. military presence is ended.

The entire six-year saga of American energy dreams, policies, and pressures in Iraq has so far yielded little -- no significant increase in Iraq's oil production, no increase in its future capacity to produce, and no increase in its energy exports. The grand ambition of transferring actual control of the oil industry into the hands of the international oil companies has proven no less stillborn.

Over the years since the U.S. began its energy campaign, production has actually languished, sometimes falling as much as 40% below the pre-invasion levels of an industry already held together by duct tape and ingenuity. In the Brookings Institution's latest figures for December 2009, production stood at 2.4 million barrels per day, a full 100,000 barrels lower than the pre-war daily average.

To make matters worse, the price of oil, which had hit historic peaks in early 2008, began to decline. By 2009, with the global economy in tatters, oil prices sank radically and the Iraqi government lacked the revenues to sustain its existing expenditures, let alone find money to repair its devastated infrastructure.

As a result, in early 2009, Maliki's government began actively, even desperately, seeking ways to hike oil production, even without an oil law in place. That, after all, was the only possible path for an otherwise indigent country with failing agriculture in the midst of a drought of extreme severity to increase the money available for public projects -- or, of course, even more private corruption.

The Oil Companies Make Their Move

In January 2009, the government opened a new chapter in the history of oil production in Iraq when it announced its intention to allow a roster of several dozen international oil firms to bid on development contracts for eight existing oil fields.

The proposed contracts did not, in fact, offer them the kind of control over development and production that the Cheney task force had envisioned back in 2001. Instead, they would be hired to finance, plan, and implement a vast expansion of the country's production capacity. After repaying their initial investment, the government would reward them at a rate of no more than two dollars for every additional barrel of oil extracted from the fields they worked on. With oil prices expected to remain above $70 a barrel, this meant, once initial costs were repaid, the Iraqi government could expect to take in more than $60 per barrel, which promised a resolution to the country's ongoing financial crisis.

The major international oil companies initially rejected these terms out of hand, demanding instead complete control over production and payments of approximately $25 per barrel. This initial resistance began to erode, however, when the Chinese National Petroleum Corporation (CNPC), a government-owned operation, induced its partner, BP, the huge British oil company, to accept government terms for expanding the Rumaila field near Basra in southern Iraq to one million barrels a day.

The Chinese company, experts believed, could afford to accept such meager returns because of Beijing's desire to establish a long-term energy relationship with Iraq. This foot-in-the-door contract, China's leaders evidently hoped, would lead to yet more contracts to explore Iraq's vast, undeveloped (and possibly as yet undiscovered) oil reserves.

Perhaps threatened by the possibility that Chinese companies might accumulate the bulk of the contracts for Iraq's richest oil fields, leaving other international firms in the dust, by December a veritable stampede had begun to bid for contracts. In the end, the major winners were state-owned firms from Russia, Japan, Norway, Turkey, South Korea, Angola, and -- of course -- China. The Malaysian national company, Petronas, set a record by participating with six different partners in four of the seven new contracts the Maliki government gave out. Shell and Exxon were the only major oil companies to participate in winning bids; the others were outbid by consortia led by state-owned firms. These results suggest that national oil companies, unlike their profit-maximizing private competitors, were more willing to forego immediate windfalls in exchange for long-term access to Iraqi oil.

On paper, these contracts hold the potential to satisfy one aspect of Washington's oil hunger, while frustrating another. If fully implemented, they could collectively boost Iraqi production from 2.5 million to 8 million barrels per day in just a few years. They would not, however, deliver control over production (or the bulk of the revenues) to foreign companies, so that Iraq and OPEC could continue, if they wished, to limit production, keep prices high, and wield power on the world stage.

Nevertheless, the centers of resistance to the original U.S. oil policies have voiced opposition to these new contracts. Members of parliament immediately demanded that all contracts be submitted for their approval, which they declared would be withheld unless ironclad protections of Iraqi workers, technicians, and management were included. Iraq's own state-owned oil companies demanded guarantees that their technicians, engineers, and administrators be trained in the new technologies the foreign companies brought with them, and given escalating operational control over the fields as their skills developed.

The powerful Iraqi oil union opposed the contracts unless they included guarantees that all workers be recruited from Iraq. Local tribal leaders voiced opposition unless they guaranteed a full complement of local workers, and subcontracts for locally based businesses during the development phase. Then there were the insurgents, who continued to oppose oil exports until the U.S. fully withdraws from the country, and expressed their opposition by the 26 bombing attacks they've launched on pipelines and oil facilities since September 2009.

Some of these same groups have successfully blocked previous oil initiatives. Unless they are satisfied, they may frustrate the government's latest bid to make oil gush in Iraq. One warning sign can be seen in the fate of a contract signed with the CNPC in early 2009 that called for the development of the relatively small (one billion barrel) Ahdab oil field near the Iranian border. The language of the original contract met conditions demanded by local leaders and workers, but the work, once begun, generated few local jobs and even fewer local business opportunities. The Chinese instead brought in foreign workers, following the pattern established by U.S. companies involved in Iraqi reconstruction. Eventually, equipment was sabotaged, work undermined, and the project's viability remains threatened.

The end is not in sight and the outcome still unclear. Will the vast Iraqi oil reserves be developed and sent into the hungry world market any time soon? If they are, who will determine the rate of flow, and so wield the power this decision-making confers? And once this ocean of oil is sold, who will receive the potentially incredible revenues? As with so much else, when it comes to Iraqi oil, the American war has generated so many problems and catastrophes -- and so few answers.

Michael Schwartz is a professor of sociology and faculty director of the Undergraduate College of Global Studies at Stony Brook University.

Afghan 'Geological Reserves Worth a Trillion Dollars'

2010-02-01T17:23:00.000-08:00

Well this explains a lot of things! I wondered about this - had a 'Feeling' about this, but could never prove it until now. This is not very 'good news for Afghans' because it means that the Anglo-American empire will stay there (it's called 'occupation') and steal the country blind! What else are the puppet masters hiding?

http://www.commondreams.org/headline/2010/02/01-6

February 1, 2010 by Agence France-Presse
Afghan 'Geological Reserves Worth a Trillion Dollars'

Karzai exclaims 'very good news for Afghans', but perhaps history tells us that regular Afghans should be very cautious of such news

KABUL - Afghanistan, one of the world's poorest countries, is sitting on mineral and petroleum reserves worth an estimated one trillion dollars, President Hamid Karzai said Sunday.
Miners work in the Anyak copper mine in Afghanistan. While Afghanistan is not renowned as a resource-rich country, it has a wide range of deposits, including copper, iron ore, gold and chromite, as well as natural gas, oil and precious and semi-precious stones. (Afghan Government photo)

The war-ravaged nation could become one of the richest in the world if helped to tap its geological deposits, Karzai told reporters.

"I have very good news for Afghans," Karzai said.

"The initial figures we have obtained show that our mineral deposits are worth a thousand billion dollars -- not a thousand million dollars but a thousand billion," he said.

He based his assertion, he said, on a survey being carried out by the United States Geological Survey (USGS), due to be completed in "a couple of months".

The USGS, the US government's scientific agency, has been working on the 17-million dollar survey for a number of years, Karzai said.

While Afghanistan is not renowned as a resource-rich country, it has a wide range of deposits, including copper, iron ore, gold and chromite, as well as natural gas, oil and precious and semi-precious stones.
Little has been exploited because the country has been mired in conflict for 30 years, and is embroiled in a vicious insurgency by Islamist rebels led by the Taliban.

More than 100,000 foreign troops under US and NATO command are battling the insurgents, with another 40,000 due for deployment this year.

China and India have bid for contracts to develop mines, with the Chinese winning a copper contract. An iron ore contract is due to be awarded later this year.

In 2007, China's state-owned metals giant Metallurgical Group Corporation (MCC) signed a three-billion-dollar contract to develop the Aynak copper mine -- one of the world's biggest -- over the next 30 years.

First discovered in 1974, the site, 30 kilometres (20 miles) south of Kabul in Logar, is estimated to contain 11.3 million tonnes of copper.

The Hajigak iron ore mine in Bamiyan province, north of Kabul, is currently under tender, with one Chinese and half a dozen Indian firms bidding.

The contract is for exploitation of almost two billion tonnes of high-grade ore, involving processing, smelting, steel production and electricity production.

The Fateful Geological Prize Called Haiti

2010-01-30T14:15:00.000-08:00

http://www.rense.com/general89/fat.htm

By F. William Engdahl
Author of Full Spectrum Dominance:
Totalitarian Democracy in the New World Order
1-30-10

A former US President becomes UN Special Envoy to earthquake-stricken Haiti. A born-again neo-conservative US business wheeler-dealer preacher claims Haitians are condemned for making a literal 'pact with the Devil.' Venezuelan, Nicaraguan, Bolivian, French and Swiss rescue organizations accuse the US military of refusing landing rights to planes bearing necessary medicines and urgently needed potable water to the millions of Haitians stricken, injured and homeless.

Behind the smoke, rubble and unending drama of human tragedy in the hapless Caribbean country, a drama is in full play for control of what geophysicists believe may be one of the world's richest zones for hydrocarbons-oil and gas outside the Middle East, possibly orders of magnitude greater than that of nearby Venezuela.

Haiti, and the larger island of Hispaniola of which it is a part, has the geological fate that it straddles one of the world's most active geological zones, where the deepwater plates of three huge structures relentlessly rub against one another-the intersection of the North American, South American and Caribbean tectonic plates. Below the ocean and the waters of the Caribbean, these plates consist of an oceanic crust some 3 to 6 miles thick, floating atop an adjacent mantle. Haiti also lies at the edge of the region known as the Bermuda Triangle, a vast area in the Caribbean subject to bizarre and unexplained disturbances.

This vast mass of underwater plates are in constant motion, rubbing against each other along lines analogous to cracks in a broken porcelain vase that has been reglued. The earth's tectonic plates typically move at a rate 50 to 100 mm annually in relation to one another, and are the origin of earthquakes and of volcanoes. The regions of convergence of such plates are also areas where vast volumes of oil and gas can be pushed upwards from the Earth's mantle. The geophysics surrounding the convergence of the three plates that run more or less directly beneath Port-au-Prince make the region prone to earthquakes such as the one that struck Haiti with devastating ferocity on January 12.

A relevant Texas geological project

Leaving aside the relevant question of how well in advance the Pentagon and US scientists knew the quake was about to occur, and what Pentagon plans were being laid before January 12, another issue emerges around the events in Haiti that might help explain the bizarre behavior to date of the major 'rescue' players-the United States, France and Canada. Aside from being prone to violent earthquakes, Haiti also happens to lie in a zone that, due to the unusual geographical intersection of its three tectonic plates, might well be straddling one of the world's largest unexplored zones of oil and gas, as well as of valuable rare strategic minerals.

The vast oil reserves of the Persian Gulf and of the region from the Red Sea into the Gulf of Aden are at a similar convergence zone of large tectonic plates, as are such oil-rich zones as Indonesia and the waters off the coast of California. In short, in terms of the physics of the earth, precisely such intersections of tectonic masses as run directly beneath Haiti have a remarkable tendency to be the sites of vast treasures of minerals, as well as oil and gas, throughout the world.

Notably, in 2005, a year after the Bush-Cheney Administration de facto deposed the democratically elected President of Haiti, Jean-Baptiste Aristide, a team of geologists from the Institute for Geophysics at the University of Texas began an ambitious and thorough two-phase mapping of all geological data of the Caribbean Basins. The project is due to be completed in 2011. Directed by Dr. Paul Mann, it is called "Caribbean Basins, Tectonics and Hydrocarbons." It is all about determining as precisely as possible the relation between tectonic plates in the Caribbean and the potential for hydrocarbons-oil and gas.

Notably, the sponsors of the multi-million dollar research project under Mann are the world's largest oil companies, including Chevron, ExxonMobil, the Anglo-Dutch Shell and BHP Billiton. Curiously enough, the project is the first comprehensive geological mapping of a region that, one would have thought, would have been a priority decades ago for the US oil majors. Given the immense, existing oil production off Mexico, Louisiana, and the entire Caribbean, as well as its proximity to the United States not to mention the US focus on its own energy security it is surprising that the region had not been mapped earlier. Now it emerges that major oil companies were at least generally aware of the huge oil potential of the region long ago, but apparently decided to keep it quiet.

Cuba's Super-giant find

Evidence that the US Administration may well have more in mind for Haiti than the improvement of the lot of the devastated Haitian people can be found in nearby waters off Cuba, directly across from Port-au-Prince. In October 2008 a consortium of oil companies led by Spain's Repsol, together with Cuba's state oil company, Cubapetroleo, announced discovery of one of the world's largest oilfields in the deep water off Cuba. It is what oil geologists call a 'Super-giant' field. Estimates are that the Cuban field contains as much as 20 billion barrels of oil, making it the twelfth Super-giant oilfield discovered since 1996. The discovery also likely makes Cuba a new high-priority target for Pentagon destabilization and other nasty operations.

No doubt to the dismay of Washington, Russian President Dmitry Medvedev flew to Havana one month after the Cuban giant oil find to sign an agreement with acting-President Raul Castro for Russian oil companies to explore and develop Cuban oil.

Medvedev's Russia-Cuba oil agreements came only a week after the visit of Chinese President Hu Jintao to meet the recuperating Fidel Castro and his brother Raul. The Chinese President signed an agreement to modernize Cuban ports and discussed Chinese purchase of Cuban raw materials. No doubt the mammoth new Cuban oil discovery was high on the Chinese agenda with Cuba. On November 5, 2008, just prior to the Chinese President's trip to Cuba and other Latin American countries, the Chinese government issued their first ever policy paper on the future of China's relations with Latin America and Caribbean nations, elevating these bilateral relations to a new level of strategic importance.
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The Cuba Super-giant oil find also leaves the advocates of 'Peak Oil' theory with more egg on the face. Shortly before the Bush-Blair decision to invade and occupy Iraq, a theory made the rounds of cyberspace, that sometime after 2010, the world would reach an absolute "peak" in world oil production, initiating a period of decline with drastic social and economic implications. Its prominent spokesmen, including retired oil geologist Colin Campbell and Texas oil banker Matt Simmons, claimed that there had not been a single new Super-giant oil discovery since 1976, or thereabouts, and that new fields found over the past two decades had been "tiny" compared with the earlier giant discoveries in Saudi Arabia, Prudhoe Bay, Daquing in China and elsewhere.

It is critical to note that, more than half a century ago, a group of Russian and Ukrainian geophysicists, working in state secrecy, confirmed that hydrocarbons originated deep in the earth's mantle under conditions similar to a giant burning cauldron at extreme temperature and pressure. They demonstrated that, contrary to US and accepted Western 'mainstream' geology, hydrocarbons were not the result of dead dinosaur detritus concentrated and compressed and somehow transformed into oil and gas millions of years ago, nor of algae or other biological material.

The Russian and Ukrainian geophysicists then proved that the oil or gas produced in the earth's mantle was pushed upwards along faults or cracks in the earth as close to the surface as pressures permitted. The process was analogous to the production of molten lava in volcanoes. It means that the ability to find oil is limited, relatively speaking, only by the ability to identify deep fissures and complex geological activity conducive to bringing the oil out from deep in the earth. It seems that the waters of the Caribbean, especially those off Cuba and its neighbor Haiti, are just such a region of concentrated hydrocarbons (oil and gas) that have found their way upwards close to the surface, perhaps in a magnitude comparable to a new Saudi Arabia.

Haiti, a new Saudi Arabia?

The remarkable geography of Haiti and Cuba and the discovery of world-class oil reserves in the waters off Cuba lend credence to anecdotal accounts of major oil discoveries in several parts of Haitian territory. It also could explain why two Bush Presidents and now special UN Haiti Envoy Bill Clinton have made Haiti such a priority. As well, it could explain why Washington and its NGO's moved so quickly to remove-- twice-- the democratically elected President Aristide, whose economic program for Haiti included, among other items, proposals for developing Haitian natural resources for the benefit of the Haitian people.

In March 2004, some months before the University of Texas and American Big Oil launched their ambitious mapping of the hydrocarbon potentials of the Caribbean, a Haitian writer, Dr. Georges Michel, published online an article titled 'Oil in Haiti.' In it, Michel wrote,

.[I]t has been no secret that deep in the earthy bowels of the two states that share the island of Haiti and the surrounding waters that there are significant, still untapped deposits of oil. One knows not why they are still untapped. Since the early twentieth century, the physical and political map of the island of Haiti, erected in 1908 by Messrs. Alexander Poujol and Henry Thomasset, reported a major oil reservoir in Haiti near the source of the Rio Todo El Mondo, Tributary Right Artibonite River, better known today as the River Thomonde.

According to a June 2008 article by Roberson Alphonse in the Haitian paper, Le Nouvelliste en Haiti, "The signs, (indicators), justifying the explorations of oil (black gold) in Haiti are encouraging. In the middle of the oil shock, some 4 companies want official licenses from the Haitian State to drill for oil."

At the time, oil prices were climbing above $140 a barrel -- on manipulations by various Wall Street banks. Alphonse's article quoted Dieusuel Anglade, the Haitian State Director of the Office of Mining and Energy, telling the Haitian press: "We've received four requests for oil exploration permitsWe have had encouraging indicators to justify the pursuit of the exploration of black gold (oil), which had stopped in 1979."

Alphonse reported the findings from a 1979 geological study in Haiti of 11 exploratory oil wells drilled at the Plaine du Cul-de-sac on the Plateau Central and at L'ile de La Gonaive: "Surface (tentative) indicators for oil were found at the Southern peninsula and on the North coast, explained the engineer Anglade, who strongly believes in the immediate commercial viability of these explorations."

Journalist Alphonse cites an August 16, 1979 memo by Haitian attorney Francois Lamothe, in which he noted that "five big wells were drilled" down to depths of 9000 feet and that a sample that "underwent a physical-chemical analysis in Munich, Germany" had "revealed tracks of oil."

Despite the promising 1979 results in Haiti, Dr. Georges Michel reported that, "the big multinational oil companies operating in Haiti pushed for the discovered deposits not to be exploited." Oil exploration in and offshore Haiti ground to a sudden halt as a result.

Similar if less precise reports claiming that Haitian oil reserves could be vastly larger than those of Venezuela have appeared in Haitian websites. Then in 2010 the financial news site Bloomberg News carried the following:

The Jan. 12 earthquake was on a fault line that passes near potential gas reserves, said Stephen Pierce, a geologist who worked in the region for 30 years for companies that included the former Mobil Corp. The quake may have cracked rock formations along the fault, allowing gas or oil to temporarily seep toward the surface, he said Monday in a telephone interview. 'A geologist, callous as it may seem, tracing that fault zone from Port-au-Prince to the border looking for gas and oil seeps, may find a structure that hasn't been drilled,' said Pierce, exploration manager at Zion Oil & Gas Inc., a Dallas-based company that's drilling in Israel.

In an interview with a Santo Domingo online paper, Leopoldo Espaillat Nanita, former head of the Dominican Petroleum Refinery (REFIDOMSA) stated, "there is a multinational conspiracy to illegally take the mineral resources of the Haitian people." Haiti's minerals include gold, the valuable strategic metal iridium and oil, apparently lots of it.

Aristide's development plans

Marguerite Laurent ('Ezili Dantò'), president of the Haitian Lawyers' Leadership Network (HLLN) who served as attorney for the deposed Aristide, notes that when Aristide was President -- up until his US-backed ouster during the Bush era in 2004 -- he had developed and published in book form his national development plans. These plans included, for the first time, a detailed list of known sites where the resources of Haiti were located. The publication of the plan sparked a national debate over Haitian radio and in the media about the future of the country. Aristide's plan was to implement a public-private partnership to ensure that the development of Haiti's oil, gold and other valuable resources would benefit the national economy and the broader population, and not merely the five Haitian oligarchic families and their US backers, the so-called Chimeres or gangsters.

Since the ouster of Aristide in 2004, Haiti has been an occupied country, with a dubiously-elected President, Rene Preval, a controversial follower of IMF privatization mandates and reportedly tied to the Chimeres or Haitian oligarchs who backed the removal of Aristide. Notably, the US State Department refuses to permit the return of Aristide from South African exile.

Now, in the wake of the devastating earthquake of January 12, the United States military has taken control of Haiti's four airports and presently has some 20,000 troops in the country. Journalists and international aid organizations have accused the US military of being more concerned with imposing military control, which it prefers to call "security," than with bringing urgently needed water, food and medicine from the airport sites to the population.

A US military occupation of Haiti under the guise of earthquake disaster 'relief' would give Washington and private business interests tied to it a geopolitical prize of the first order. Prior to the January 12 quake, the US Embassy in Port-au-Prince was the fifth largest US embassy in the world, comparable to its embassies in such geopolitically strategic places as Berlin and Beijing. With huge new oil finds off Cuba being exploited by Russian companies, with clear indications that Haiti contains similar vast untapped oil as well as gold, copper, uranium and iridium, with Hugo Chavez' Venezuela as a neighbor to the south of Haiti, a return of Aristide or any popular leader committed to developing the resources for the people of Haiti, -- the poorest nation in the Americas -- would constitute a devastating blow to the world's sole Superpower. The fact that in the aftermath of the earthquake, UN Haiti Special Envoy Bill Clinton joined forces with Aristide foe George W. Bush to create something called the Clinton-Bush Haiti Fund ought to give everyone pause.

According to Marguerite Laurent ('Ezili Dantò') of the Haitian Lawyers' Leadership Network, under the guise of emergency relief work, the US, France and Canada are engaged in a balkanization of the island for future mineral control. She reports rumors that Canada wants the North of Haiti where Canadian mining interests are already present. The US wants Port-au-Prince and the island of La Gonaive just offshore an area identified in Aristide's development book as having vast oil resources, and which is bitterly contested by France. She further states that China, with UN veto power over the de facto UN-occupied country, may have something to say against such a US-France-Canada carve up of the vast wealth of the nation.

Endnotes

Paul Mann, Caribbean Basins, Tectonic Plates & Hydrocarbons, Institute for Geophysics, The University of Texas at Austin, accessed in http://www.ig.utexas.edu/research/projects/cbth/.../ProposalCaribbean.pdf

Rory Carroll, Medvedev and Castro meet to rebuild Russia-Cuba relations, London Guardian, November 28, 2008 accessed in http://www.guardian.co.uk/world/2008/nov/28/cuba-russia

Julian Gavaghan, Comrades in arms: When China's President Hu met a frail Fidel Castro, London Daily Mail, November 19, 2008, accessed in http://www.dailymail.co.uk/news/article-1087485/Comrades-arms-
When-Chinas-President-Hu-met-frail-Fidel-Castro.html

Peoples' Daily Online, China issues first policy paper on Latin America, Caribbean region, November 5, 2008, accessed in http://english.people.com.cn/90001/90776/90883/6527888.html

Matthew R. Simmons, The World's Giant Oilfields, Simmons & Co. International, Houston, accessed in HYPERLINK http://www.simmonsco-intl.com/files/giantoilfields.pdf

Anton Kolesnikov, et al, Methane-derived hydrocarbons produced under upper-mantle conditions, Nature Geoscience, July 26, 2009.

F. William Engdahl, War and Peak Oil-Confessions of an 'ex' Peak Oil believer, Global Research, September 26, 2007, accessed in http://www.globalresearch.ca/index.php?context=va&aid=6880

Dr. Georges Michel, Oil in Haiti, English translation from French, Pétrole en Haiti, March 27, 2004, accessed in http://www.margueritelaurent.com/pressclips/oil_sites.html#oil_GeorgesMichelEnglish

Roberson Alphonse, Drill, and then pump the oil of Haiti! 4 oil companies request oil drilling permits, translated from the original French, June 27, 2008, accessed in HYPERLINK http://www.bnvillage.co.uk/caribbean-news-village-beta/99691-
drill-then-pump-oil-haiti-4-oil-companies-request-oil-drilling-permits.html

Ibid.

Ibid. The full text indicated that, "five big wells were drilled at Porto Suel (Maissade) of a depth of 9000 feet, at Bebernal, 9000 feet, at Bois-Carradeux (Ouest), at Dumornay, on the road Route Frare and close to the Chemin de Fer of Saint-Marc. A sample, a 'carrot' (oil reservoir) drilled up from the well of Saint-Marc in the Artibonite underwent a physical-chemical analysis in Munich, Germany, at the request of Mr. Broth. 'The result of the analysis was returned on October 11, 1979 and revealed tracks of oil,' confided the engineer, Willy Clemens, who had gone to Germany."

Dr. Georges Michel, op. cit.

Marguerite Laurent, Haiti is full of oil, say Ginette and Daniel Mathurin, Radio Metropole, Jan 28, 2008, accessed in
http://www.margueritelaurent.com/pressclips/oil_sites.html#full_of_oil

Jim Polson, Haiti earthquake may have exposed gas, aiding economy, Bloomberg News, January 26, 2010.

Espaillat Nanita revela en Haiti existen grandes recursos de oro y otros minerals, Espacinsular.org, 17 November, 2009, accessed in http://www.espacinsular.org/spip.php?article8942

The Aristide development plan was contained in the book published in Haiti in 2000, Investir dans l'Human. Livre Blanc de Fanmi Lavalas sous la Direction de Jean-Bertrand Aristide, Port-au-Prince, Imprimerie Henri Deschamps, 2000. It contained detailed maps, tables, graphics, and a national development plan for 2004 "covering agriculture, environment, commerce and industry, the financial sector, infrastructure, education, culture, health, women's issues, and issues in the public sector." In 2004, using NGOs and the UN and a vicious propaganda campaign to vilify Aristide, the Bush administration got rid of the elected President.

Cynthia McKinney, Haiti: An Unwelcome Katrina Redux, Global Research, January 19, 2010, accessed in http://www.globalresearch.ca/index.php?context=va&aid=17063

Marguerite Laurent (Ezili Danto), Did mining and oil drilling trigger the Haiti earthquake?, OpEd News.com, January 23, 2010, accessed in http://www.opednews.com/articles/1/Did-mining-and-oil-drillin-by-Ezili-Danto-100123-329.html

The Kidnapping of Haiti

2010-01-29T16:59:00.001-08:00

The Kidnapping of Haiti

John Pilger
John Pilger.com
Thu, 28 Jan 2010 18:12 EST

In his latest column for the New Statesman, John Pilger describes the "swift and crude" appropriation of earthquake-ravaged Haiti by the militarised Obama administration. With George W. Bush attending to the "relief effort" and Bill Clinton the UN's man, The Comedians, Graham Greene's dark novel about exploted Haiti comes to mind.

The theft of Haiti has been swift and crude. On 22 January, the United States secured "formal approval" from the United Nations to take over all air and sea ports in Haiti, and to "secure" roads. No Haitian signed the agreement, which has no basis in law. Power rules in an American naval blockade and the arrival of 13,000 marines, special forces, spooks and mercenaries, none with humanitarian relief training.

The airport in the capital, Port-au-Prince, is now an American military base and relief flights have been re-routed to the Dominican Republic. All flights stopped for three hours for the arrival of Hillary Clinton. Critically injured Haitians waited unaided as 800 American residents in Haiti were fed, watered and evacuated. Six days passed before the US Air Force dropped bottled water to people suffering thirst and dehydration.

The first TV reports played a critical role, giving the impression of widespread criminal mayhem. Matt Frei, the BBC reporter dispatched from Washington, seemed on the point of hyperventilation as he brayed about the "violence" and need for "security". In spite of the demonstrable dignity of the earthquake victims, and evidence of citizens' groups toiling unaided to rescue people, and even an American general's assessment that the violence in Haiti was considerably less than before the earthquake, Frei claimed that "looting is the only industry" and "the dignity of Haiti's past is long forgotten." Thus, a history of unerring US violence and exploitation in Haiti was consigned to the victims. "There's no doubt," reported Frei in the aftermath of America's bloody invasion of Iraq in 2003, "that the desire to bring good, to bring American values to the rest of the world, and especially now to the Middle East... is now increasingly tied up with military power."

In a sense, he was right. Never before in so-called peacetime have human relations been as militarised by rapacious power. Never before has an American president subordinated his government to the military establishment of his discredited predecessor, as Barack Obama has done. In pursuing George W. Bush's policy of war and domination, Obama has sought from Congress an unprecedented military budget in excess of $700 billion. He has become, in effect, the spokesman for a military coup.

For the people of Haiti the implications are clear, if grotesque. With US troops in control of their country, Obama has appointed George W. Bush to the "relief effort": a parody surely lifted from Graham Greene's The Comedians, set in Papa Doc's Haiti. As president, Bush's relief effort following Hurricane Katrina in 2005 amounted to an ethnic cleansing of many of New Orleans' black population. In 2004, he ordered the kidnapping of the democratically-elected prime minister of Haiti, Jean-Bertrand Aristide, and exiled him in Africa. The popular Aristide had had the temerity to legislate modest reforms, such as a minimum wage for those who toil in Haiti's sweatshops.

When I was last in Haiti, I watched very young girls stooped in front of whirring, hissing, binding machines at the Port-au-Prince Superior Baseball Plant. Many had swollen eyes and lacerated arms. I produced a camera and was thrown out. Haiti is where America makes the equipment for its hallowed national game, for next to nothing. Haiti is where Walt Disney contractors make Mickey Mouse pyjamas, for next to nothing. The US controls Haiti's sugar, bauxite and sisal. Rice-growing was replaced by imported American rice, driving people into the cities and towns and jerry-built housing. Years after year, Haiti was invaded by US marines, infamous for atrocities that have been their specialty from the Philippines to Afghanistan.

Bill Clinton is another comedian, having got himself appointed the UN's man in Haiti. Once fawned upon by the BBC as "Mr. Nice Guy... bringing democracy back to a sad and troubled land", Clinton is Haiti's most notorious privateer, demanding de-regulation of the economy for the benefit of the sweatshop barons. Lately, he has been promoting a $55m deal to turn the north of Haiti into an American-annexed "tourist playground".

Not for tourists is the US building its fifth biggest embassy in Port-au-Prince. Oil was found in Haiti's waters decades ago and the US has kept it in reserve until the Middle East begins to run dry. More urgently, an occupied Haiti has a strategic importance in Washington's "rollback" plans for Latin America. The goal is the overthrow of the popular democracies in Venezuela, Bolivia and Ecuador, control of Venezuela's abundant oil reserves and sabotage of the growing regional cooperation that has given millions their first taste of an economic and social justice long denied by US-sponsored regimes.

The first rollback success came last year with the coup against President Jose Manuel Zelaya in Honduras who also dared advocate a minimum wage and that the rich pay tax. Obama's secret support for the illegal regime carries a clear warning to vulnerable governments in central America. Last October, the regime in Colombia, long bankrolled by Washington and supported by death squads, handed the US seven military bases to, according to US air force documents, "combat anti-US governments in the region".

Media propaganda has laid the ground for what may well be Obama's next war. On 14 December, researchers at the University of West England published first findings of a ten-year study of the BBC's reporting of Venezuela. Of 304 BBC reports, only three mentioned any of the historic reforms of the Chavez government, while the majority denigrated Chavez's extraordinary democratic record, at one point comparing him to Hitler.

Such distortion and its attendant servitude to western power are rife across the Anglo-American corporate media. People who struggle for a better life, or for life itself, from Venezuela to Honduras to Haiti, deserve our support.

Gazprom: Angel or Demon?

2010-01-29T15:38:00.000-08:00

http://www.oilprice.com/article-gazprom-angel-or-demon.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+oilpricecom+%28Oil+Price%29

Energy Hedge Fund Syndicate
28th Jan 2010

Gazprom faces regular opprobrium for its bullying ways of using energy as a pressure and political tool. Seen by some, mostly Russians, as the symbol of a successful and strong Russia, others see it as a dominating juggernaut, economic right arm of the Kremlin implementing, or should we say, imposing its policies by using energy as a weapon.

Just like Louis XIV used to say “L’Etat c’est moi” (I am the State), Gazprom could say the same in light of its commercial power and the unconditional governmental backing it enjoys. However, just like Monsanto generates passionate debates with its genetically engineered seeds, Gazprom’s activities cannot be simply labeled as right or wrong and subject to final judgments.

Though far from being an angel, Gazprom is not necessarily a demon either. It is easy to point fingers and to forget that oil & gas is a merciless sector where every major is trying to position itself for the next 20 to 30 years and secure predictable supply and demand at home and abroad. After all, large Western energy companies were not born nice and proper. It took decades for codes of conduct, tacit or written, to be adopted and enforced. It is also easy to forget that all energy companies have in mind the interests of the country they come from.

Why would it be any different for Gazprom? And why should Gazprom take upon itself to act differently if it can get away with what it does and not be sanctioned by its own government?

The main issue with Gazprom could be summarized by using the famous quote of U.S. Secretary of Defense Donald Rumsfeld who said about Iraq “there are known unknowns. That is to say, there are things that we now know we don’t know. But there are also unknown unknowns. These are things we do not know we don’t know.” Because of all the things we do not know about Gazprom, sensitivity to what Gazprom does is greater because ultimately what it decides to do today and how it does it will impact energy supplies for years to come and how the game is played.

This article is part of the Oilprice.com FREE Intelligence Newsletter, where we provide subscribers with Geopolitical analisis and "Real News" before it hits the headlines. Click Here to find out more

The lack of information on the personal relationships between the business and political world, on its exact ownership structure, on the exact identity and role of business intermediaries, on the flow of money through a labyrinthine network of offshore and shell companies, and on the overall exact modus operandi of Gazprom is what leads Gazprom to be subject to greater scrutiny and interrogations. It efforts to maintain an export monopoly for gas flowing to Europe and Asia at a huge cost, possibly over-committing dwindling resources at a time of lower energy prices and lower needs from consumers is another concern as would happen if Gazprom was to fail?

Gazprom: The Lord of the Rings

Gazprom is a behemoth: it is Russia's largest company, state-controlled and the world’s largest gas producer. Engaged in gas exploration, processing, and transportation, it operates an extensive pipeline network stretching thousands of kilometers across Central Asia and Europe. Gazprom ranks #22 in the 2009 annual ranking of the world largest corporations published by Fortune magazine and has 456,000 employees. With close ties to the Kremlin - President Dmitry Medvedev used to be chairman of Gazprom’s board of directors - and accounting for about 25% of Russia’s federal tax revenues according to pre-crisis data, Gazprom has a unique leverage and has no qualm about flexing its muscles.

Gazprom has an uncanny ability to do things that are morally reprehensible by Western standards and to be oblivious to the critics that ensue. Image building and public relations are concepts that have not sunk in, even more so as Russians have the deep belief to be justified in their actions, be it with its dealings with Chechnya or Georgia, or when cutting gas to Europe in January 2009. Russians also like to push situations to the limits, just like driving without seatbelts and passing cars with incoming traffic on an icy road.

Gazprom and Ukraine: who’s bad?

Russians are full of contradictions, and so is Gazprom. One can only be amused to read its mission statement extracted from its Gazprom in Figures 2004 -2008 and 2008 Annual Report that state: “OAO Gazprom mission is to ensure an efficient and balanced gas supply to consumers in the Russian Federation and fulfill its long-term contracts on gas export at a high level of reliability.” That did not prevent Gazprom from bluntly cutting the gas supply to Ukraine in January 2009 over non-payment issues and quantities to be supplied, impacting 18 European countries in the mix in the midst of a cold winter.

The image of Russia as a reliable partner has been severely damaged, even more so as this was not the first time gas supply to Ukraine was cut like in January 2006. Even the Soviet Union did not tamper with gas supply, knowing how important the energy cash machine was to its economy and survival. Those cuts prompted (i) end-user countries to find alternative suppliers and (ii) producing countries that rely on the Gazprom pipeline network, to find alternative export routes for their existing clients, in addition to finding new clients.

In this context, the Nabucco Pipeline that bypasses Russia gains momentum while Turkmenistan can sigh with relief with the new Central Asia – China Gas Pipeline inaugurated in December 2009 that takes gas from the Caspian Sea via Uzbekistan and Kazakhstan to China.

Russia makes no efforts to work on its international public image but Russia and Gazprom would have benefited from elaborating over the payment mechanisms in place with Ukraine. For many years, Ukraine has enjoyed discounted prices, significantly below world market prices. It also has resisted price adjustments sought by Russia. Those sweet deals have been detrimental to Ukraine and to the competitiveness of its industry. According to the European Bank for Reconstruction and Development (EBRD) “Ukraine is one of the most energy-intensive countries in the world and is only one-third as energy efficient as the average European country.”

The following facts would have been good to communicate to show that Russia and Gazprom were sensitive to the challenges that gas price increases represent for Ukraine, both economically and socially. At the end of 2008, Ukraine was enjoying heavily discounted prices and resisted Gazprom’s price adjustment efforts, despite a very preferential rate being offered. Gazprom went as far as to lower its price offer from $418 to $250 for 1,000 cubic meters. When the Ukrainians made a counteroffer of $235, Gazprom reverted to if initial offer of $418. The lack of agreement over pricing by December 31, 2008 led to the January crisis. After the crisis, Ukraine still paid 20% less then European prices. Starting in January 1, 2010, a 10-year contract stipulates that Ukraine will switch to market prices.

Needless to say that the door was swung right back at Gazprom by the countries through which Gazprom’s gas transit. For instance, Ukraine raised transit fees by almost 60% from $1.70 per 1,000 cubic meters per 100 kilometers of transit to $2.70 in 2010. On top of this, Gazprom accuses countries like Belarus and Ukraine to “siphon” gas out of its pipelines, in other words to take gas out of the pipelines without having agreed to pay higher prices.

Russia would also have benefited from addressing the issue of the intermediaries involved in gas transactions such as RosUkrEnergo which according to its website “plays the role of a mediator of interests between Russia and Ukraine with regard to collaboration in natural gas issues. On the one hand, it acts as guarantor for natural gas deliveries to Ukraine at prices that are tolerable for the economy of that country and, on the other hand, RosUkrEnergo is financial guarantor for Gazprom, to which it makes the appropriate payments for natural gas supplied to Ukraine.” That mediation role, notably in paying Gazprom for gas going to Ukraine is where sand got into the mechanism as the money transfer seems to not have proceeded properly and in a timely manner, resulting in the January 2009 conflict. Middlemen need to be cut out of energy transactions and interestingly this was already agreed between Prime Minister Yulia Tymoshenko of Ukraine and Vladimir Putin in 2008.

Living dangerously but too big to fail?

In 2008 the company reportedly ended 2008 with about $50 billion in debt and its net profits fell by almost 50% in the first two quarters of 2009. With aging fields and equipment, ambitious development plans, numerous procurement contracts signed, 2010 will be the year of many challenges for Gazprom and anyone dealing with Gazprom, countries or companies.

Multiple issues should be kept on the radar screen:

- What is the financial situation of Gazprom? One may think that since an international auditing firm, namely PricewaterhouseCoopers (PwC), is the auditor of Gazprom, the books should be in order. That’s possible but one should not forget that PwC has recently been involved in multiple high profile scandals with over $1bn involved in each case. The question is then: how much credit can we give to PwC’s audits? These scandals involve the Satyam case in India, where a large IT outsourcing company cooked the books saying it had $1 billion when it fact it was lest than $78 million, and the Bernard Madoff Ponzi scheme as PwC was the auditor of Fairfield Sentry, one of the feeder funds that channeled $7.2 billion to Mr. Madoff which disappeared in the debacle.

- Economically sound deals? Gazprom agreed in December 2009 to buy up to 30 billion cubic meters (bcm) of gas a year from Turkmenistan. At a time where many wonder if there will be enough gas to fill the Western-endorsed Nabucco pipeline, such a large deal can be seen as an attempt to short circuit and challenge the viability of the Nabucco pipeline. Nabucco, a project supported by the United States and many European countries, is in direct competition with the Russian-endorsed South Stream pipeline and there are concerns that there may not be enough gas to supply both pipelines. Nabucco would ultimately have a capacity of 31 bcm per year and South Stream of 63 bcm/y. The South Stream website though uses sibylline statements saying that “If both South Stream and Nabucco are to be implemented, the South Stream consortium will closely cooperate with Nabucco in order to optimize gas flows and guarantee reliable supplies.”

The underlying question is what will Gazprom do with all this Turkmen gas at a time of diminishing demand from Europe, including Ukraine where a large proportion of Turkmen gas transited or ended. Payment issues are an additional headache and Alexey Miller, Chairman of the Management Committee of Gazprom even assessed in December 2009, “the situation with [Ukraine's] payment for Russian gas supplies in December as very alarming.”

- An evolving world: Gazprom and Russia may see the table turned on them. Despite repeated statements of its desire to be a reliable partner, the 2006 and 2009 events with Ukraine have forced dependent countries to find alternative gas providers and transit routes. For a while Gazprom may have thought its use of Liquified Natural Gas (LNG) would have enabled it to regain the upper hand by opening up new export markets and routes but many countries have significant experience in that technology such as Qatar, Algeria and Libya, while more countries are coming to the market such as Australia and Egypt. Furthermore, in 2009 the United States overtook Russia as the world’s largest producer of natural gas. This is concerning for Gazprom as it confirms a growing trend pushing for energy independence, vocally defended in the United States by U.S. billionaire T. Boone Pickens in his “Pickens Plan” that advocates for the use of renewable energy and American natural gas in addition to energy savings.

What is in the pipeline for 2010?

According to the U.S. Energy Information Agency, Gazprom was planning in 2008 to invest around $45 billion in 2010 just to maintain production at its top four gas producing fields has been declining. With a GDP contraction in Russia of nearly 9% in 2009, tumbling energy prices, lower international demand, and stricter borrowing requirements, 2010 will not necessarily be as ambitious as originally planned. This said, the year started well with the resumption of the gas flow from Turkmenistan after an eight-month hiatus.

For Alexey Miller, and as stated in his column “the beginning of 2010 was marked with a very important event – Gazprom has started up natural gas procurement from Azerbaijan for the first time ever. (…) Objectively, Gazprom offered the most competitive conditions of gas purchase from Azerbaijan since we had everything needed for that purpose: the common borders and the gas transmission infrastructure under operation.” All this comes as a result of intense efforts from Gazprom’s top executives that travelled the world in 2009, oftentimes with high-level Russian governmental delegations, to meet with world leaders to negotiate lucrative agreements.

Russia is often referred as the “Wild East” in a reference similar to the U.S. “Wild West” when people and companies operated in a semi-lawless environment. Russia has laws but its judiciary remains weak and corruption is deeply ingrained. The lack of accountability in Russia that permeates through the society enabling anyone to do as they please goes on par with the dismissive attitude towards the rule of law, which President Dmitry Medvedev calls “legal nihilism,” namely Russians’ tendency to disregard the law. That is unfortunate. In this context, it is not surprising to see Gazprom take advantage of the system, even more so as it enjoys the status of national champion.

For an analysis of the dark side of Gazprom, readers can read the well-documented work of Roman Kupchinsky “Gazprom’s European Web.” Those interested in Gazprom’s perspective and strategy can go directly to Gazprom’s website at: www.gazprom.com. As to finding an answer to the question: “Angel or Demon?,” it is a very subjective matter as it really depends on what is at stake for whom and on the criteria used to judge…

By Philip H. de Leon for OilPrice.com

Venezuela oil 'may double Saudis'

2010-01-25T09:48:00.000-08:00

http://news.bbc.co.uk/2/hi/americas/8476395.stm

BBC NEWS
2010/01/23

A new US assessment of Venezuela's oil reserves could give the country double the supplies of Saudi Arabia.

Scientists working for the US Geological Survey say Venezuela's Orinoco belt region holds twice as much petroleum as previously thought.

The geologists estimate the area could yield more than 500bn barrels of crude oil.

This assessment is far more optimistic than even the best case scenario put forward by President Hugo Chavez.

The USGS team gave a mean estimate of 513bn barrels of "technically recoverable" oil in the Orinoco belt.

Chris Schenk of the USGS said the estimate was based on oil recovery rates of 40% to 45%.

Petroleos de Venezuela SA (PDVSA), Venezuela's state oil company, has not commented on the news.

However, Venezuelan oil geologist and former PDVSA board member Gustavo Coronel was sceptical.

"I doubt the recovery factor could go much higher than 25% and much of that oil would not be economic to produce", he told Associated Press news agency.

Venezuela holds the largest oil reserves of any Opec country outside the Middle East. Saudi Arabia has proven reserves of 260bn barrels.

Haiti: An Unwelcome Katrina Redux

2010-01-23T10:22:00.000-08:00

More proof of oil interests in the area...

http://www.globalresearch.ca/index.php?context=va&aid=17063

Haiti: An Unwelcome Katrina Redux
By Cynthia McKinney
Global Research, January 19, 2010

President Obama's response to the tragedy in Haiti has been robust in military deployment and puny in what the Haitians need most: food; first responders and their specialized equipment; doctors and medical facilities and equipment; and engineers, heavy equipment, and heavy movers. Sadly, President Obama is dispatching Presidents Bush and Clinton, and thousands of Marines and U.S. soldiers. By contrast, Cuba has over 400 doctors on the ground and is sending in more; Cubans, Argentinians, Icelanders, Nicaraguans, Venezuelans, and many others are already on the ground working--saving lives and treating the injured. Senegal has offered land to Haitians willing to relocate to Africa.

The United States, on the day after the tragedy struck, confirmed that an entire Marine Expeditionary Force was being considered "to help restore order," when the "disorder" had been caused by an earthquake striking Haiti; not since 1751, 1770, 1842, 1860, and 1887 had Haiti experienced an earthquake. But, I remember the bogus reports of chaos and violence the led to the deployment of military assets, including Blackwater, in New Orleans in the aftermath of Hurricane Katrina. One Katrina survivor noted that the people needed food and shelter and the U.S. government sent men with guns. Much to my disquiet, it seems, here we go again. From the very beginning, U.S. assistance to Haiti has looked to me more like an invasion than a humanitarian relief operation.

On Day Two of the tragedy, a C-130 plane with a military assessment team landed in Haiti, with the rest of the team expected to land soon thereafter. The stated purpose of this team was to determine what military resources were needed.

An Air Force special operations team was also expected to land to provide air traffic control. Now, the reports are that the U.S. is not allowing assistance in, shades of Hurricane Katrina, all over again.

On President Obama's orders military aircraft "flew over the island, mapping the destruction." So, the first U.S. contribution to the humanitarian relief needed in Haiti were reconnaissance drones whose staffing are more accustomed to looking for hidden weapon sites and surface-to-air missile batteries than wrecked infrastructure. The scope of the U.S. response soon became clear: aircraft carrer, Marine transport ship, four C-140 airlifts, and evacuations to Guantanamo. By the end of Day Two, according to the Washington Post report, the United States had evacuated to Guantanamo Bay about eight [8] severely injured patients, in addition to U.S. Embassy staffers, who had been "designated as priorities by the U.S. Ambassador and his staff."

On Day Three we learned that other U.S. ships, including destroyers, were moving toward Haiti. Interestingly, the Washington Post reported that the standing task force that coordinates the U.S. response to mass migration events from Cuba or Haiti was monitoring events, but had not yet ramped up its operations. That tidbit was interesting in and of itself, that those two countries are attended to by a standing task force, but the treatment of their nationals is vastly different, with Cubans being awarded immediate acceptance from the U.S. government, and by contrast, internment for Haitian nationals.

U.S. Coast Guard Rear Admiral James Watson IV reassured Americans, "Our focus right now is to prevent that, and we are going to work with the Defense Department, the State Department, FEMA and all the agencies of the federal government to minimize the risk of Haitians who want to flee their country," Watson said. "We want to provide them those releif supplies so they can live in Haiti."

By the end of Day Four, the U.S. reportedly had evacuated over 800 U.S. nationals.

For those of us who have been following events in Haiti before the tragic earthquake, it is worth noting that several items have caused deep concern:

1. the continued exile of Haiti's democratically-elected and well-loved, yet twice-removed former priest, President Jean-Bertrand Aristide;

2. the unexplained continued occupation of the country by United Nations troops who have killed innocent Haitians and are hardly there for "security" (I've personally seen them on the roads that only lead to Haiti's sparsely-populated areas teeming with beautiful beaches);

3. U.S. construction of its fifth-largest embassy in the world in Port-au-Prince, Haiti;

4. mining and port licenses and contracts, including the privatization of Haiti's deep water ports, because certain off-shore oil and transshipment arrangements would not be possible inside the U.S. for environmental and other considerations; and

5. Extensive foreign NGO presence in Haiti that could be rendered unnecessary if, instead, appropriate U.S. and other government policy allowed the Haitian people some modicum of political and economic self-determination.

Therefore, we note here the writings of Ms. Marguerite Laurent, whom I met in her capacity as attorney for ousted President of Haiti Jean-Bertrand Aristide. Ms. Laurent reminds us of Haiti's offshore oil and other mineral riches and recent revivial of an old idea to use Haiti and an oil refinery to be built there as a transshipment terminal for U.S. supertankers. Ms. Laurent, also known as Ezili Danto of the Haitian Lawyers Leadership Network (HLLN), writes:

"There is evidence that the United States found oil in Haiti decades ago and due to the geopolitical circumstances and big business interests of that era made the decision to keep Haitian oil in reserve for when Middle Eastern oil had dried up. This is detailed by Dr. Georges Michel in an article dated March 27, 2004 outlining the history of oil explorations and oil reserves in Haiti and in the research of Dr. Ginette and Daniel Mathurin.

"There is also good evidence that these very same big US oil companies and their inter-related monopolies of engineering and defense contractors made plans, decades ago, to use Haiti's deep water ports either for oil refineries or to develop oil tank farm sites or depots where crude oil could be stored and later transferred to small tankers to serve U.S. and Caribbean ports. This is detailed in a paper about the Dunn Plantation at Fort Liberte in Haiti.

"Ezili's HLLN underlines these two papers on Haiti's oil resources and the works of Dr. Ginette and Daniel Mathurin in order to provide a view one will not find in the mainstream media nor anywhere else as to the economic and strategic reasons the US has constructed its fifth largest embassy in the world - fifth only besides the US embassy in China, Iraq, Iran and Germany - in tiny Haiti, post the 2004 Haiti Bush regime change."

Unfortunately, before the tragedy struck, and despite pleading to the Administration by Haiti activists inside the United States, President Obama failed to stop the deportation of Haitians inside the United States and failed to grant TPS, temporary protected status, to Haitians inside the U.S. in peril of being deported due to visa expirations. That was corrected on Day Three of Haiti's earthquake tragedy with the January 15, 2010 announcement that Haiti would join Honduras, Nicaragua, Somalia, El Salvador, and Sudan as a country granted TPS by the Secretary of Homeland Security.

President Obama's appointment of President Bush to the Haiti relief effort is a swift left jab to the face, in my opinion. After President Bush's performance in the aftermath of Hurricane Katrina and the fact that still today, Hurricane Katrina survivors who want to return still have not been provided a way back home, the appointment might augur well for fundraising activities, but I doubt that it bodes well for the Haitian people. Afterall, the coup against and the kidnapping of President Aristide occurred under the watch of a Bush Presidency.

Finally, those with an appreciation of French literature know that among France's most beloved authors are Alexandre Dumas, son of a Haitian slave, and Victor Hugo who wrote: "Haiti est une lumiere." [Haiti is a light.] Indeed, Haiti for millions is a light: light into the methodology and evil of slavery; light into a successful slave rebellion, light into nationhood and notions of liberty, the rights of man, and of human dignity. Haiti is a light. And an example that makes the enemies of black liberation tremble. It is precisely because of Haiti's light into the evil genius of some individuals who wield power over others and man's ability, through unity and purpose, to overcome that evil, that some segments of the world have been at war with Haiti ever since 1804, the year of Haiti's creation as a Republic.

I'm not surprised at "Reverend" Pat Robertson's racist vitriol. Robertson's comments mirror, exactly, statements made by Napoleon's Cabinet when the Haitians defeated them. But in 2010, Robertson's statements reveal much more: Haitians are not the only ones who know their importance to the struggle against hatred, imperialism, and European domination.

This pesky, persistent, stubbornly non-Western, proudly African people of this piece of land that we call Haiti know their history and they know that they militarily defeated the ruling world empire of the day, Napoleon's France, and the global elite at that time who supported him. They know that they defeated the armies of England and Spain.

Haitians know that they used their status as a free state to help liberate Latin Americans from Spain, by funding and fighting alongside Simon Bolivar; their example inspired their still-enslaved African brothers and sisters on the American mainland; and before Haitians were even free, they fought against the British inside the U.S. during its war of independence and won a decisive battle in Savannah, Georgia, where I have visited the statue commemorating that victory.

Haitians know that France imposed reparations on them for being free, and Haiti paid them in full, but that President Aristide called for France to give that money back ($21 billion in 2003 dollars).

Haitians know that their "brother," then-Secretary of State Colin Powell lied to the world upon the kidnapping and second ouster of their President. (Sadly, it wouldn't be the last time that Secretary of State Colin Powell would lie to the world.) Haitians know, all-too-well, that high-ranking blacks in the United States are capable of helping them and of betraying them.

Haitians know, too, that the United States has installed its political proxies and even its own soldiers onto Haitian soil when the U.S. felt it was necessary. All in an effort to control the indomitable Haitian spirit that directs much-needed light to the rest of the oppressed world.

While the tears of the people of Haiti swell in my own eyes, and I remember their tremendous capacity for love, my broken heart and wet eyes don't dampen my ability to understand the grave danger that now faces my friends in Haiti.

I shudder to think that the "rollback" policies believed in by some foreign policy advisors to President Obama could use a prolonged U.S. military presence in Haiti as a springboard for rollback of areas in Latin America that have liberated themselves from U.S. neo-colonial domination. I would hate to think that this would even be attempted under the Presidency of Barack Obama. All of us must have our eyes wide open on Haiti and other parts of the world now dripping in blood as a result of the relentless onward march of the U.S. military machine.

So, on this remembrance of the birth of Dr. Martin Luther King, Jr., I note that it was the U.S. government's own illegal Operation Lantern Spike that snuffed out the promise and light of Dr. Martin Luther King, Jr. Every plane of humanitarian assistance that is turned away by the U.S. military (so far from CARICOM, the Caribbean Community, Médecins Sans Frontieres, Brazil, France, Italy, and even the U.S. Red Cross)--as was done in the wake of Hurricane Katrina--and the expected arrival on this very day of up to 10,000 U.S. troops, are lasting reminders of the existential threat that now looms over the valiant, proud people and the Republic of Haiti.

Haiti is full of oil say Daniel and Ginette Mathurin

2010-01-22T14:27:00.001-08:00

http://translate.google.com/translate?u=http%3A//www.metropolehaiti.com/metropole/full_une_fr.php%3Fid%3D13439&hl=en&langpair=auto%7Cen&tbb=1&ie=ISO-8859-1

Monday, January 28, 2008 09:45
Haiti is full of oil say Daniel and Ginette Mathurin

Scientists Daniel and Ginette Mathurin indicate that under Haitian soil is rich in oil and fuel fossible which were collected by Haitian and foreign experts. "We have identified 20 sites Oil, launches Daniel Mathurin stating that 5 of them are considered very important by practitioners and policies.

The Central Plateau, including the region of Thomond, the plain of the cul-de-sac and the bay of Port-au-Prince are filled with oil, he said, adding that Haiti's oil reserves are larger than those of Venezuela . An Olympic pool compared to a glass of water that is the comparison to show the importance of oil Haitian compared to those of Venezuela, "he explains.

Venezuela is one of the world's largest producers of oil.

Daniel Mathurin reveals that investigations of several previous governments have allowed to verify the existence of these large deposits of oil. It reminds a document of Lavalas party to power in 2004, had specified the number of sites in Haiti hydrocarbons.

According to Daniel et Ginette Mathurin, the lake region, with cities like Thomazeau and Cornillon, contains large deposits of oil.

Asked about the non-exploitation of these sites, Ginette Mathurin said that these deposits are declared strategic reserves of the United States of America. While stating his incomprehension of such a situation, it reminds that the Caribbean is considered the backyard of the United States.

But Daniel and Ginette Mathurin indicate that the U.S. government in 2005 authorized the use of strategic reserves of the United States. This door must be used by the Haitian political négiciations to launch with U.S. companies with a view to exploiting these deposits adds Daniel Mathurin

Experts argue that the government acted Jean Claude Duvalier had verified the existence of a major oilfield in the bay of Port-au-Prince shortly before its fall.

Moreover, Daniel et Ginette Mathurin show that uranium 238 and 235 and the deposit zyconium exist in several regions including in Jacmel. Uranium is used in nuclear reactors to produce electrical energy.

Oil's Power as a Political Weapon

2010-01-21T15:19:00.000-08:00

http://www.oilprice.com/article-oils-power-as-a-political-weapon.html?utm_source=feedburner&utm_medium=email&utm_campaign=Feed%3A+oilpricecom+%28Oil+Price%29

21st Jan 2010

Oil and politics have always gone together for a simple reason; since oil became an indispensable commodity without which the world as we know it today would not function, countries that produce oil have learned how to use it as a weapon. And who says weapons, says politics.

The power of oil as a political weapon became evident during the 1973 Arab-Israeli conflict that became known as The October War in the Arab world and the Yom Kippur War in Israel. Hoping to sway Western sentiments in favor of the Arab cause Arab oil producing countries such as Saudi Arabia and the Gulf sheikdoms agreed to reduce their output. Naturally, less oil on the market meant higher prices at the pump and for the home consumer of heating oil. The Arab oil embargo forced Western governments to enact strict measures in order to safeguard oil reserves.

The tactic employed by the oil producers however backfired: forced by some governments to leave their cars in the garage on alternate days along with having to pay more money for less gas, the 1973 Arab oil embargo initiative was a public relations disaster. Furthermore, given that they were producing, exporting and selling less gas, the oil producers lost billions of dollars in potential revenues.

However, what the ‘73 oil embargo did accomplish was demonstrate the potential oil had as a weapon. The outcome changed much in the modern history of oil and politics. The embargo forced the West to become less dependent on Arab oil and American and international oil companies began looking elsewhere to supplement Arab oil.

There were alternatives to Arab oil except that until the Arab embargo of 1973 purchasing Arab oil was far less expensive than erecting platforms in the inclement weather of the North Sea, for example, in Norwegian waters or off the English coast. The Arab oil embargo and rising oil prices justified exploitation of North Sea oil, Canadian oil and other previously untapped oil fields. The outcome was two-fold; first, European and American dependence on Arab oil lessened; and second, it gave the new producers additional revenues as oil prices continued to escalate.

However, the importance of oil in politics, or rather the importance of the politics of oil, and the important role oil would play in modern post-World War II geopolitics was recognized by the United States very early on. It soon became evident that in the industrialized era oil would replace coal as the main source of energy and as the coalmining towns of Newcastle and West Virginia began to die, a new mirage began to rise in the deserts of Arabia.

The U.S.’s keen interest in oil politics surfaced around the close of WWII, when on Feb. 15, 1945, U.S. President Franklin D. Roosevelt flew to Egypt to meet with Saudi Arabia’s King Abdulaziz ibn Saud aboard the USS Quincy in the Great Bitter Lake in the Suez Canal. The meeting between Roosevelt and inb Saud was a major landmark in contemporary history of oil as it opened the chapter of oil-politics when the American president promised the Saudi king to protect his oil fields in return for preferential treatment.

Just weeks earlier the United States had thwarted a final German attempt to make one last thrust through Allied lines at Bastogne, (where Gen. Anthony McAullif is reported to have said “Nuts,” when asked by the Germans to surrender). Had the Germans been successful they would have been able to link their forces in the Ardennes with the Belgian port of Antwerp, thus giving them access to an uninterrupted flow of oil, essential to keep the gaz-guzzling tanks moving forward. As it turned out the Germans lost the Battle of the Bulge because their tanks ran out of gas.

Roosevelt immediately recognized the strategic importance of oil. Had Nazi Germany won the Battle of the Bulge World War II would have been prolonged perhaps just long enough to allow German scientists to finalize the V2 rocket and as they hoped, produce the first atomic bomb, giving them ultimate victory. In essence what lost the war for Germany was shortage of oil.

Since the end of WWII there were other wars that were fought over oil. The United States went to war in 1990/91 against Saddam Hussein to liberate tiny Kuwait from Iraq after Saddam’s forces declared Kuwait was Iraq’s 19th province and occupied it.

Indeed, one might even trace the events of 9/11 and Osama bin Laden’s hatred of America for the nearly unconditional support given by the U.S. to the House of Saud to that historic meeting in the Great Bitter Lake between Roosevelt and bin Saud.

Finally, it is interesting to note that the two presidents who took America into wars in the Middle East over oil –President George Bush and his son, George W. Bush – both had connections to oil money. Coincidence? You decide.

This article was written by Claude Salhani for OilPrice.com

Iran in billion-euro gas deal with Germany

2010-01-21T12:10:00.000-08:00

http://www.google.com/hostednews/afp/article/ALeqM5i1xGkZn1mCrVi2pwxOTD6JVBsVVQ

Iran in billion-euro gas deal with Germany
Published on 01-21-2010
Source: AFP

TEHRAN — Iran has signed a one-billion-euro (1.44-billion-dollar) deal with a German firm to build 100 gas turbo-compressors, an industry official said in newspapers on Wednesday.

The contract provides for the unnamed German firm to transfer the know-how to build, install and run the equipment needed to exploit and transport gas, said Iran's Gas Engineering and Development Company head, Ali Reza Gharibi.

The German company has already delivered 45 such turbo-compressors to Iran, Gharibi said, according to Iran Daily. Industry experts said he was apparently referring to Siemens.

But the National Iranian Gas Company (NIGC) denied the signing of a deal.

"Following a report about a one-billion-Euro contract between Iran and Germany, the public relation of NIGC denied this," it said on its website.

The NIGC spoke of a contract with an "Iranian company to build 100 turbo-compressors in Iran using a foreign partner's know-how," without naming the firms.

The reported 2010-2015 deal for material not under an international embargo comes as the Islamic republic faces the threat of new financial, technological and international trade sanctions over its disputed nuclear programme.

World powers are weighing sanctions which would boost existing bans on the transfer of material and technology that allows Iran to develop or export its oil and gas resources.

Iran has the world's second largest proven global gas reserves after Russia but so far has played only a minor role on the gas export market.

The development of its gas sector is hampered by a lack of productive investment and growth in domestic consumption, with little left over for exports from the daily output of about 500 million cubic metres (17.6 billion cubic feet).

The equipment and the know-how in the contract with the German firm will help Iran build plants to produce liquefied natural gas (LNG) and export it by ship, newspapers said.

The government daily Iran Daily said the contract was signed at the start of the week and would be a "relief for many German businesses that have long complained about restrictions on trade with Iran" under sanctions.

Germany and China are Iran's top trading partner after the United Arab Emirates, official figures show.

Venezuela's Citgo Renews Cheap Heating Oil Program in United States

2010-01-19T16:06:00.000-08:00

http://www.laht.com/article.asp?ArticleId=350513&CategoryId=10717

Venezuela's Citgo Renews Cheap Heating Oil Program in United States
Jan. 20, 2010

NEW YORK – Citgo, the U.S. subsidiary of state-owned Petroleos de Venezuela SA, renewed a program under which it has provided cheap heating oil to hundreds of thousands of U.S. low-income households since 2005.

Citgo CEO Alejandro Granado, whose company carries out the initiative in partnership with U.S. non-governmental organization Citizens Energy Corporation, told Efe Friday the goal this year is to benefit 200,000 families, the same number as last year.

This year’s program was kicked off with a symbolic ceremony at Riverside Church in Harlem, known for its key role in the civil rights movement of the 1960s.

Among those in attendance, in addition to Granado, were Venezuelan Ambassador to the United States Bernardo Alvarez and Citizens Energy’s founder and chairman, Joseph Kennedy.

Granado said 50,000 households and 39 shelters in New York City benefited from the initiative in 2009, adding that people’s need for heating-oil assistance is significantly higher in early 2010.

He noted that, according to reports in the New York City media, several million people will struggle to heat their homes this winter.

According to the executive, the program is being continued despite the global recession in 2009 because “it’s a commitment of the Venezuelan people and Citgo, grounded in principles of solidarity and cooperation. It’s more necessary now than ever.”

The program provides aid to needy families in the form of coupons that can used to purchase the heating oil.

Participants in the ceremony also expressed solidarity with the victims of this week’s catastrophic earthquake in Haiti, which officials there say claimed the lives of some 50,000 people and left 250,000 injured.

Granado said Citgo has begun a campaign to collect clothing and small transistor radios to send to the affected areas.

Oil-rich Venezuela launched the initiative in 2005 when the price of fuel rose in the wake of Hurricane Katrina and several U.S. senators called on oil companies to help low-income families adversely affected by the higher cost of heating oil.

Between 2005 and 2007, the number of families that benefited from the program in 23 states grew from 100,000 to 224,000, according to figures from the Venezuelan Embassy in Washington.

Citgo has also supported other social programs in the United States, such as the distribution of energy-efficient light bulbs to low-income homes in cities including Houston, Washington, Corpus Christi, Texas and Lake Charles, Louisiana.

Only one impediment to total U.S. control of the Middle East: Iran

2010-01-18T13:24:00.001-08:00

http://www.opednews.com/articles/Only-one-impediment-to-tot-by-michael-payne-100113-933.html

January 16, 2010
By michael payne

A war is raging in the Middle East but, at least for now, it only involves words rather than bullets and bombs. This war of words, with Israel and the U.S. on one hand and Iran on the other, is highly dangerous in itself as it continues to fan the flames of enmity and mistrust. The entire world, war weary as it is, watches in fear and apprehension, hoping that it will not witness yet another massive military conflict that could ignite a Middle East inferno.

Israel and Iran have been locked in an ideological impasse for decades, but there is much more involved with this tenuous situation. The Institute for the Analysis of Global Security (IAGS) is one of the world's leading research organizations on energy security. By projecting current oil production levels, it estimates that by 2020, 83% of global oil reserves will be controlled by Middle Eastern nations; primarily, Saudi Arabia, Iran, Iraq, Kuwait, and the United Arab Emirates.

The Middle East region, over the next two decades, will increase its share of total world oil reserves significantly because nations such as Russia, Mexico, U.S., Norway, China and Brazil will see their reserves greatly diminish. At that point, the Middle East will become the world's major crude oil reservoir.

Based on that probability it now becomes crystal clear why the Bush administration invaded and occupied Iraq, which has the fourth largest oil reserves in the world. The U.S. is now firmly entrenched in Iraq with the largest U.S. embassy in the world, numerous military bases throughout the country and a very cooperative client government. While a substantial number of troops might exit Iraq by the end of 2011, you can bet that a permanent military presence, let's say about 40,000 troops, will remain in Iraq for an indefinite period of time.

Iran is the only Middle Eastern nation with substantial oil reserves that remains completely independent of U.S. influence or control. It finds itself in a precarious position because of that fact and because it remains in the crosshairs of both Israel and the U.S. over its nuclear program.

This is déjà vu all over again. Remember when Bush and his fellow war hawks were threatening Saddam Hussein over his supposed arsenal of weapons of mass construction? WMD's were, of course, non-existent but the drums of war never stopped beating until Iraq was attacked and then occupied in March of 2003. And the first step in the process to control the Middle East became a reality.

Now we seem to be in the early stages of another eerily similar scenario as both the U.S. and its other client state, Israel, are constantly issuing warnings and threats over Iran's nuclear program. Iran says that it is developing nuclear power for domestic energy purposes. They are allowed to do so since they are a member of the NPT, the Nuclear Non-Proliferation Treaty. The International Atomic Energy Agency (IAEA), an independent international organization which is affiliated with the United Nations, has been closely monitoring Iran's nuclear program and facilities for years and has never found concrete proof of any program to develop nuclear weapons.

But just as the United Nation's weapons inspectors relentlessly searched for Saddam's cache of WMD's, and found none, the findings and conclusions of the IAEA have been totally disregarded and dismissed by the U.S. and Israel.

America's armed forces have, for many decades, been used to protect our interests around the world. That has been the U.S. policy designed to prevent some rogue nation or pirates to disrupt or take control of oil or other resources; for example, to protect shipments of oil going through the very narrow Strait of Hormuz from attacks or from a blockade. Also, to prevent an attack on Saudi Arabia, one of our largest suppliers of oil.

But now our military has seemingly evolved from a protector of our interests to become a major element in actually securing critical natural resources. The top leaders in the U.S. government are fully aware that America, with only 5% of the world's population, and which consumes 25% of its petroleum production, will face massive shortages in supply in the decades to come. Knowing these facts, their #1 objective has been to guarantee a steady supply of oil to sustain our economy and our way of life.

How do you do that? Exactly the way we are proceeding; by using our military to become engaged in regions of the world that have enormous oil reserves. And that brings us back to my original premise, that the only impediment to total U.S. control of the Middle East and its staggering oil reserves is Iran. If somehow, Iran can be pacified and becomes one more client state of America, then the mission will be accomplished.

The danger that looms over the region is, that at some point, some provocative action could result in an attack on Iran's nuclear facilities. Should that egregious event take place, the result could be massive devastation. To think that the U.S. would attempt to occupy and try to pacify yet another more sovereign nation, given the fact that Iran's closest allies include Russia and China, is a frightening thought. Let's hope that grave scenario will never, ever take place.

This is a very dangerous situation. Iran, well aware of the power of the U.S. and Israel, does not want to engage them but, if it is attacked, it is capable of considerable retaliation. Ahmadinejad, their slightly wacko president, continues to play his mind games to keep his tormentors off balance. Israel has been itching to attack Iran's nuclear facilities but, so far, has been restrained by the U.S.

However, the biggest problem is the U.S. and particularly President Obama, who many months ago had promised that he would pursue a course of diplomacy, including face to face discussions with Iran. That position was not welcomed by Israel since diplomacy and negotiations have never been one of its strengths. All of a sudden that former quest for a diplomatic solution seems to have dissipated, with repeated warnings and threats continuing to be the strategy of choice.

While, the title of this article refers to "only one impediment" there are actually two. It seems that at every turn these days China keeps getting in the way of U.S. plans. China's ever growing economy needs increasing supplies of oil and it is making deals all around the world to obtain them. Of most consequence is that, today, 58% of China's oil imports come from the Middle East. By 2015, projections indicate that percentage will rise to 70%.

What may transpire in the Middle East in the coming years might best be described by the phrase, "When an immovable object (China) meets an irresistible force (the U.S.)." It's a real stretch to think that China, with a growing, insatiable thirst for oil, would merely stand by and watch the U.S. take control of the Middle East

So, before this situation escalates into an eventual massive confrontation, I believe it is time for President Obama, the Nobel man of peace, to assume that role and responsibility and put an end to the saber rattling by all sides. Will he finally don the mantle of the peacemaker? Or will he allow unbridled hubris to prevail?

U.S. Companies Join Race on Iraqi Oil Bonanza

2010-01-15T14:14:00.000-08:00

http://www.nytimes.com/2010/01/14/world/middleeast/14rebuild.html?ref=world

January 14, 2010
By TIMOTHY WILLIAMS

BAGHDAD — A wave of American companies have been arriving in Iraq in recent months to pursue what is expected to be a multibillion-dollar bonanza of projects to revive the country’s stagnant petroleum industry, as Iraq seeks to establish itself as a rival to Saudi Arabia as the world’s top oil producer.

Since the 2003 American-led invasion, nearly all of the biggest reconstruction projects in Iraq have been controlled by the United States. But many rebuilding contracts are expected to be awarded as soon as this month for drilling hundreds of new wells, repairing thousands of miles of pipeline and building several giant floating oil terminals in the Persian Gulf, and possibly a new port.

The contracts will be administered either directly by the Iraqi government or as part of Baghdad’s oversight of international oil companies that have signed agreements during the past few months to develop the country’s most promising oil fields.

There are misgivings, however, about Iraq’s ability to adequately monitor contracts that could total $10 billion over the next five years. The concerns have been heightened by the prominent role expected to be played by American companies that have been criticized in the past by United States government auditors and inspectors for overcharging by hundreds of millions of dollars, performing shoddy work and failing to finish hundreds of crucial projects while under contract in Iraq.

Among the companies that have started sending workers and equipment to the country or have plans to are Halliburton, Baker Hughes, Weatherford International and Schlumberger, all Houston-based oil-services companies, and several construction and engineering giants, including KBR, Bechtel, Parsons, Fluor and Foster Wheeler.

Halliburton and its former subsidiary KBR, as well as Bechtel and Parsons, have been singled out for criticism by the Special Inspector General for Iraq Reconstruction for their previous work in Iraq.

The new contracts will put the companies into direct contact with an Iraqi government that has frequently acknowledged its own challenges in dealing with corruption and cronyism, and that has a lack of experienced managers, adequate enforcement and efficient auditing systems.

The companies deny intentional wrongdoing in their dealings in Iraq and say that their experience there and in other oil-producing countries in Central Asia gives them an advantage.

“KBR has historic experience on previous oil and gas production projects ranging from Azerbaijan to Kazakhstan,” Heather Browne, KBR’s director of corporate communications, wrote in an e-mail response to questions. “Our pursuit of additional contracts in the region is based on this experience in addition to KBR’s work on Project RIO (Restore Iraq Oil).”

During a conference call with industry analysts in October, David J. Lesar, Halliburton’s chief executive, said that he had visited Iraq and that the company was already doing a limited amount of work on oil wells there.

“I think you see everybody trying to establish a base there, and we’re no exception,” Mr. Lesar said. “Clearly, a great future there and one we will participate in — in a big way.”

But others questioned the Iraqi government’s capacity to police the companies. “These are for-profit concerns and they are trying to make as much money as they can,” said Pratap Chatterjee, former executive director of an anticorruption group, CorpWatch, and author of a recent book about Halliburton. “What the Iraq government needs is a good system of transparency and accountability, and for someone who knows what they’re doing to oversee the work. Otherwise, they are going to be taken for a ride.”

During the past several months, Iraq has signed 10 production contracts with international oil companies as it tries to increase its oil output from a relatively static 2.4 million barrels a day to as much as 12 million barrels a day within six years. Officials said they hoped to drill at least 430 oil wells during the next two years.

The planned work will require new pipelines, including as many as three undersea lines, floating terminals, water treatment facilities, pump stations, oil storage tanks, power plants and possibly a new Persian Gulf port that might be needed to handle the increased oil exports.

There will also be a need for new housing, roads and schools, and workers will need to remove unexploded ordnance from oil fields and shipping lanes, transport massive oil rigs and use extraordinary amounts of concrete and steel to reinforce the wells.

While American oil companies have enjoyed only modest success in winning oil development deals in Iraq, the numerous contracts signed in recent months have created an enormous backlog of work that leaves Baghdad with limited alternatives to Halliburton and the other American companies that dominate the oil industry services sector.

“Iraq has little choice,” said Joost R. Hiltermann, deputy program director for the Middle East and North Africa with the International Crisis Group, a nonprofit organization that aims to prevent deadly conflicts. “It is desperate to increase its revenues, almost all of which derive from the sale of oil. But the government has little capacity to monitor the many companies that will be involved in rehabilitating its ailing oil industry, or indeed its own operations. This is a recipe for massive corruption, but for Iraqi policy makers the cost will be worth it, given the expected massive returns.”

Government officials maintain, however, that Iraq’s system of checks and balances will help it avoid the mistakes made by the United States.

“There are procedures where if a company breaches a contract or makes errors, they will be blacklisted from working in Iraq,” said Dr. Sabah A. Shibeeb al-Saidi, chief of the Ministry of Oil’s legal and commercial department in the petroleum contracts and licensing directorate. “But if they are not blacklisted we will deal with them. We expect oil services companies to do many things in Iraq.”

Neither Halliburton nor KBR is on the Iraqi government blacklist, and Mr. Saidi and other senior Iraqi government officials interviewed said they had never heard of either those companies or of other American ones that have become household names in the United States because of their work in Iraq.

Halliburton’s former subsidiary, KBR, which was once run by former Vice President Dick Cheney, has won contracts worth more than $24 billion since the start of the war, giving it vast responsibility for reinvigorating Iraq’s oil sector. Among many other criticisms of the company’s performance in Iraq, Pentagon auditors found that KBR had overcharged the government by more than $200 million.

Turkmenistan opens Iran gas link

2010-01-08T13:15:00.001-08:00

http://news.bbc.co.uk/2/hi/asia-pacific/8443787.stm

Wednesday, 6 January 2010
Turkmenistan has opened a second gas pipeline to Iran, further eroding Russia's historical domination of its energy sector.

The new pipeline will eventually more than double Turkmenistan's annual gas exports to Iran to 20bn cubic metres.

With a pipeline to China that opened last month, sales to Russia will be a much smaller proportion of exports.

The EU also wants to build a gas link that bypasses Russia, which for now remains the main buyer of Turkmen gas.

Iranian President Mahmoud Ahmadinejad inaugurated the new 30km (19 miles) pipeline with Turkmen President Kurbanguly Berdymukhamedov in a ceremony in the desert near the Iranian border.

The two jointly turned a spigot to symbolically open the link, which will deliver gas from the Dovletabad field to Iran's Khangiran refinery.

"This pipeline will be a good stimulus for energy co-operation between Turkmenistan and Iran, as well as for delivery of Turkmen gas to the Persian Gulf and the world market," Mr Ahmadinejad said.

The new pipelines have given Turkmenistan more power in negotiations with Russian energy giant Gazprom, which has now had to agree to pay higher prices for Turkmen gas.

Previously, the bulk of Turkmenistan's gas was transported along Soviet-era pipelines that went through Russia, giving Moscow the power to dictate prices.

Gas supplies to Russia resumed in December after an eight-month dispute over pricing.

Russia will now buy 30bn cubic metres annually, down from 50bn cubic metres before supplies were cut by a pipeline explosion in April.

Stricter Rules for Oil and Gas Leasing on Federal Land

2010-01-07T14:32:00.000-08:00

http://www.propublica.org/feature/stricter-rules-for-oil-and-gas-leasing-on-federal-land-106

January 7, 2010 by ProPublica
Stricter Rules for Oil and Gas Leasing on Federal Land
by Sabrina Shankman

Interior Secretary Ken Salazar has changed the procedures the Bureau of Land Management must follow before leasing federal land for oil and gas drilling, sending a message that the Department of the Interior aims to reverse some energy policies of the Bush administration.

"The previous Administration's 'anywhere, anyhow' policy on oil and gas development ran afoul of communities, carved up the landscape, and fueled costly conflicts that created uncertainty for investors and industry," Salazar said in a news release . The BLM, which is part of the Department of the Interior, regulates oil and gas on the 256 million acres of federal land it manages.

The reformed policy, which Salazar announced earlier today, will require more detailed reviews before leases are issued, will allow for more public involvement in developing master leasing and development plans, and will shift the focus of new drilling toward areas already being developed. The reforms also create an Energy Reform Team to identify and implement the reforms.

In the past, BLM has used categorical exclusions to approve leases, which allows leases to be rubber stamped based on existing environmental analysis rather than relying on new reviews. Based on today's announcement, BLM will no longer be allowed to use those exclusions in cases of "extraordinary circumstances" -- meaning drilling that could impact protected species, historic or cultural resources, or human health and safety.

"Restoring balance to an agency that was out of whack for years is a good move," said Amy Mall, a senior policy analyst with the Natural Resources Defense Council. "It means [the BLM is] not just going to lease a parcel because the industry wants it."

She added that while the announcement is a positive one, it remains to be seen whether the reforms will be adequately implemented.

The Department of Interior has created a side-by-side analysis (PDF) of current BLM policy and the proposed reform, and has posted a fact sheet (PDF) on the changes.

The Yemen Hidden Agenda: Behind the Al-Qaeda Scenarios, A Strategic Oil Transit Chokepoint

2010-01-06T18:46:00.000-08:00

http://globalresearch.ca/PrintArticle.php?articleId=16786

The Yemen Hidden Agenda: Behind the Al-Qaeda Scenarios, A Strategic Oil Transit Chokepoint
By F. William Engdahl
Global Research, January 5, 2010

On December 25 US authorities arrested a Nigerian named Abdulmutallab aboard a Northwest Airlines flight from Amsterdam to Detroit on charges of having tried to blow up the plane with smuggled explosives. Since then reports have been broadcast from CNN, the New York Times and other sources that he was "suspected" of having been trained in Yemen for his terror mission. What the world has been subjected to since is the emergence of a new target for the US ‘War on Terror,’ namely a desolate state on the Arabian Peninsula, Yemen. A closer look at the background suggests the Pentagon and US intelligence have a hidden agenda in Yemen.

For some months the world has seen a steady escalation of US military involvement in Yemen, a dismally poor land adjacent to Saudi Arabia on its north, the Red Sea on its west, the Gulf of Aden on its south, opening to the Arabian Sea, overlooking another desolate land that has been in the headlines of late, Somalia. The evidence suggests that the Pentagon and US intelligence are moving to militarize a strategic chokepoint for the world’s oil flows, Bab el-Mandab, and using the Somalia piracy incident, together with claims of a new Al Qaeda threat arising from Yemen, to militarize one of the world’s most important oil transport routes. In addition, undeveloped petroleum reserves in the territory between Yemen and Saudi Arabia are reportedly among the world’s largest.

The 23-year-old Nigerian man charged with the failed bomb attempt, Abdulmutallab, reportedly has been talking, claiming he was sent on his mission by Al Qaeda in the Arabian Peninsula (AQAP), based in Yemen. This has conveniently turned the world’s attention on Yemen as a new center of the alleged Al Qaeda terror organization.

Notably, Bruce Riedel, a 30-year CIA veteran who advised President Obama on the policy leading to the Afghan troop surge, wrote in his blog of the alleged ties of the Detroit bomber to Yemen, "The attempt to destroy Northwest Airlines Flight 253 en route from Amsterdam to Detroit on Christmas Day underscores the growing ambition of Al Qaeda's Yemen franchise, which has grown from a largely Yemeni agenda to become a player in the global Islamic jihad in the last year…The weak Yemeni government of President Ali Abdallah Salih, which has never fully controlled the country and now faces a host of growing problems, will need significant American support to defeat AQAP."[1].

Some basic Yemen geopolitics

Before we can say much about the latest incident, it is useful to look more closely at the Yemen situation. Here several things stand out as peculiar when stacked against Washington’s claims about a resurgent Al Qaeda organization in the Arabian Peninsula.

In early 2009 the chess pieces on the Yemeni board began to move. Tariq al-Fadhli, a former jihadist leader originally from South Yemen, broke a 15 year alliance with the Yemeni government of President Ali Abdullah Saleh and announced he was joining the broad-based opposition coalition known as the Southern Movement (SM). Al-Fadhli had been a member of the Mujahideen movement in Afghanistan in the late 1980’s. His break with the government was reported in Arab and Yemeni media in April 2009. Al-Fadhli’s break with the Yemen dictatorship gave new power to the Southern Movement (SM). He has since become a leading figure in the alliance.

Yemen itself is a synthetic amalgam created after the collapse of the Soviet Union in 1990, when the southern Peoples’ Democratic Republic of Yemen (PDRY) lost its main foreign sponsor. Unification of the northern Yemen Arab Republic and the southern PDRY state led to a short-lived optimism that ended in a brief civil war in 1994, as southern army factions organized a revolt against what they saw as the corrupt crony state rule of northern President Ali Abdullah Saleh. President Saleh has held a one-man rule since 1978, first as President of North Yemen (the Yemen Arab Republic) and since 1990 as President of the unified new Yemen. The southern army revolt failed as Saleh enlisted al-Fadhli and other Yemeni Salafists, followers of a conservative interpretation of Islam, and jihadists to fight the formerly Marxist forces of the Yemen Socialist Party in the south.

Before 1990, Washington and the Saudi Kingdom backed and supported Saleh and his policy of Islamization as a bid to contain the communist south.[2] Since then Saleh has relied on a strong Salafist-jihadi movement to retain a one-man dictatorial rule. The break with Saleh by al-Fadhli and his joining the southern opposition group with his former socialist foes marked a major setback for Saleh.

Soon after al-Fadhli joined the Southern Movement coalition, on April 28, 2009 protests in the southern Yemeni provinces of Lahj, Dalea and Hadramout intensified. There were demonstrations by tens of thousands of dismissed military personnel and civil servants demanding better pay and benefits, demonstrations that had been taking place in growing numbers since 2006. The April demonstrations included for the first time a public appearance by al-Fadhli. His appearance served to change a long moribund southern socialist movement into a broader nationalist campaign. It also galvanized President Saleh, who then called on Saudi Arabia and other Gulf Cooperation Council states for help, warning that the entire Arabian Peninsula would suffer the consequences.

Complicating the picture in what some call a failed state, in the north Saleh faces an al-Houthi Zaydi Shi’ite rebellion. On September 11, 2009, in an Al-Jazeera TV interview, Saleh accused Iraq’s Shi’ite opposition leader, Muqtada al-Sadr, and also Iran, of backing the north Yemen Shi’ite Houthist rebels in an Al-Jazeera TV interview. Yemen’s Saleh declared, "We cannot accuse the Iranian official side, but the Iranians are contacting us, saying that they are prepared for a mediation. This means that the Iranians have contacts with them [the Houthists], given that they want to mediate between the Yemeni government and them. Also, Muqtada al-Sadr in al-Najaf in Iraq is asking that he be accepted as a mediator. This means they have a link."[3]

Yemen authorities claim they have seized caches of weapons made in Iran, while the Houthists claim to have captured Yemeni equipment with Saudi Arabian markings, accusing Sana’a (the capital of Yemen and site of the US Embassy) of acting as a Saudi proxy. Iran has rejected claims that Iranian weapons were found in north Yemen, calling claims of support to the rebels as baseless. [4]

What about Al Qaeda?

The picture that emerges is one of a desperate US-backed dictator, Yemen’s President Saleh, increasingly losing control after two decades as despotic ruler of the unified Yemen. Economic conditions in the country took a drastic downward slide in 2008 when world oil prices collapsed. Some 70% of the state revenues derive from Yemen’s oil sales. The central government of Saleh sits in former North Yemen in Sana’a, while the oil is in former South Yemen. Yet Saleh controls the oil revenue flows. Lack of oil revenue has made Saleh’s usual option of buying off opposition groups all but impossible.

Into this chaotic domestic picture comes the January 2009 announcement, prominently featured in select Internet websites, that Al Qaeda, the alleged global terrorist organization created by the late CIA-trained Saudi, Osama bin Laden, has opened a major new branch in Yemen for both Yemen and Saudi operations.

Al Qaeda in Yemen released a statement through online jihadist forums Jan. 20, 2009 from the group’s leader Nasir al-Wahayshi, announcing formation of a single al Qaeda group for the Arabian Peninsula under his command. According to al-Wahayshi, the new group, al Qaeda in the Arabian Peninsula, would consist of his former Al Qaeda in Yemen, as well as members of the defunct Saudi Al Qaeda group. The press release claimed, interestingly enough, that a Saudi national, a former Guantanamo detainee (Number 372), Abu-Sayyaf al-Shihri, would serve as al-Wahayshi’s deputy.

Days later an online video from al-Wahayshi appeared under the alarming title, "We Start from Here and We Will Meet at al-Aqsa." Al-Aqsa refers to the al-Aqsa Mosque in Jerusalem that Jews know as Temple Mount, the site of the destroyed Temple of Solomon, which Muslims call Al Haram Al Sharif. The video threatens Muslim leaders -- including Yemeni’s President Saleh, the Saudi royal family, and Egyptian President Mubarak -- and promises to take the jihad from Yemen to Israel to "liberate" Muslim holy sites and Gaza, something that would likely detonate World War III if anyone were mad enough to do it.

Also in that video, in addition to former Guantanamo inmate al-Shihri, is a statement from Abu-al-Harith Muhammad al-Awfi, identified as a field commander in the video, and allegedly former Guantanamo detainee 333. As it is well-established that torture methods are worthless to obtain truthful confessions, some have speculated that the real goal of CIA and Pentagon interrogators at Guantanamo prison since September 2001, has been to use brutal techniques to train or recruit sleeper terrorists who can be activated on command by US intelligence, a charge difficult to prove or disprove. The presence of two such high-ranking Guantanamo graduates in the new Yemen-based Al Qaeda is certainly ground for questioning.

Al Qaeda in Yemen is apparently anathema to al-Fadhli and the enlarged mass-based Southern Movement. In an interview, al-Fadhli declared, "I have strong relations with all of the jihadists in the north and the south and everywhere, but not with al-Qaeda."[5] That has not hindered Saleh from claiming the Southern Movement and al Qaeda are one and the same, a convenient way to insure backing from Washington.

According to US intelligence reports, there are a grand total of perhaps 200 Al Qaeda members in southern Yemen. [6]

Al-Fadhli gave an interview distancing himself from al Qaeda in May 2009, declaring, "We [in South Yemen] have been invaded 15 years ago and we are under a vicious occupation. So we are busy with our cause and we do not look at any other cause in the world. We want our independence and to put an end to this occupation."[7] Conveniently, the same day, Al Qaeda made a large profile declaring its support for southern Yemen’s cause.

On May 14, in an audiotape released on the internet, al-Wahayshi, leader of al Qaeda in the Arabian Peninsula, expressed sympathy with the people of the southern provinces and their attempt to defend themselves against their "oppression," declaring, "What is happening in Lahaj, Dhali, Abyan and Hadramaut and the other southern provinces cannot be approved. We have to support and help [the southerners]." He promised retaliation: "The oppression against you will not pass without punishment… the killing of Muslims in the streets is an unjustified major crime." [8]

The curious emergence of a tiny but well-publicized al Qaeda in southern Yemen amid what observers call a broad-based popular-based Southern Movement front that eschews the radical global agenda of al Qaeda, serves to give the Pentagon a kind of casus belli to escalate US military operations in the strategic region.

Indeed, after declaring that the Yemen internal strife was Yemen’s own affair, President Obama ordered air strikes in Yemen. The Pentagon claimed its attacks on December 17 and 24 killed three key al Qaeda leaders but no evidence has yet proven this. Now the Christmas Day Detroit bomber drama gives new life to Washington’s "War on Terror" campaign in Yemen. Obama has now offered military assistance to the Saleh Yemen government.

Somali Pirates escalate as if on cue

As if on cue, at the same time CNN headlines broadcast new terror threats from Yemen, the long-running Somalia pirate attacks on commercial shipping in the same Gulf of Aden and Arabian Sea across from southern Yemen escalated dramatically after having been reduced by multinational ship patrols.

On December 29, Moscow’s RAI Novosti reported that Somali pirates seized a Greek cargo vessel in the Gulf of Aden off Somalia's coast. Earlier the same day a British-flagged chemical tanker and its 26 crew were also seized in the Gulf of Aden. In a sign of sophisticated skills in using western media, pirate commander Mohamed Shakir told the British newspaper The Times by phone, "We have hijacked a ship with [a] British flag in the Gulf of Aden late yesterday." The US intelligence brief, Stratfor, reports that The Times, owned by neo-conservative financial backer, Rupert Murdoch, is sometimes used by Israeli intelligence to plant useful stories.

The two latest events brought a record number of attacks and hijackings for 2009. As of December 22, attacks by Somali pirates in the Gulf of Aden and the east coast of Somalia numbered 174, with 35 vessels hijacked and 587 crew taken hostage so far in 2009, almost all successful pirate activity, according to the International Maritime Bureau's Piracy Reporting Center. The open question is, who is providing the Somali "pirates" with arms and logistics sufficient to elude international patrols from numerous nations?

Notably, on January 3, President Saleh got a phone call from Somali president Sheikh Sharif Sheikh Ahmed in which he briefed president Saleh on latest developments in Somalia. Sheikh Sharif, whose own base in Mogadishu is so weak he is sometimes referred to as President of Mogadishu Airport, told Saleh he would share information with Saleh about any terror activities that might be launched from Somali territories targeting stability and security of Yemen and the region.

The Oil chokepoint and other oily affairs

The strategic significance of the region between Yemen and Somalia becomes the point of geopolitical interest. It is the site of Bab el-Mandab, one of what the US Government lists as seven strategic world oil shipping chokepoints. The US Government Energy Information Agency states that "closure of the Bab el-Mandab could keep tankers from the Persian Gulf from reaching the Suez Canal/Sumed pipeline complex, diverting them around the southern tip of Africa. The Strait of Bab el-Mandab is a chokepoint between the horn of Africa and the Middle East, and a strategic link between the Mediterranean Sea and Indian Ocean." [9]

Bab el-Mandab, between Yemen, Djibouti, and Eritrea connects the Red Sea with the Gulf of Aden and the Arabian Sea. Oil and other exports from the Persian Gulf must pass through Bab el-Mandab before entering the Suez Canal. In 2006, the Energy Department in Washington reported that an estimated 3.3 million barrels a day of oil flowed through this narrow waterway to Europe, the United States, and Asia. Most oil, or some 2.1 million barrels a day, goes north through the Bab el-Mandab to the Suez/Sumed complex into the Mediterranean.

An excuse for a US or NATO militarization of the waters around Bab el-Mandab would give Washington another major link in its pursuit of control of the seven most critical oil chokepoints around the world, a major part of any future US strategy aimed at denying oil flows to China, the EU or any region or country that opposes US policy. Given that significant flows of Saudi oil pass through Bab el-Mandab, a US military control there would serve to deter the Saudi Kingdom from becoming serious about transacting future oil sales with China or others no longer in dollars, as was recently reported by UK Independent journalist Robert Fisk.

It would also be in a position to threaten China’s oil transport from Port Sudan on the Red Sea just north of Bab el-Mandab, a major lifeline in China’s national energy needs.

In addition to its geopolitical position as a major global oil transit chokepoint, Yemen is reported to hold some of the world’s greatest untapped oil reserves. Yemen’s Masila Basin and Shabwa Basin are reported by international oil companies to contain "world class discoveries."[10] France’s Total and several smaller international oil companies are engaged in developing Yemen’s oil production. Some fifteen years ago I was told in a private meeting with a well-informed Washington insider that Yemen contained "enough undeveloped oil to fill the oil demand of the entire world for the next fifty years." Perhaps there is more to Washington’s recent Yemen concern than a rag-tag al Qaeda whose very existence as a global terror organization has been doubted by seasoned Islamic experts.

F. William Engdahl is the author of Full Spectrum Dominance: Totalitarian Democracy in the New World Order

Notes

1. Bruce Riedel, The Menace of Yemen, December 31, 2009, accessed in http://www.thedailybeast.com/blogs-and-stories/2009-12-31/the-menace-of-yemen/?cid=tag:all1.

2. Stratfor, Yemen: Intensifying Problems for the Government, May 7, 2009.

3. Cited in Terrorism Monitor, Yemen President Accuses Iraq’s Sadrists of Backing the Houthi Insurgency, Jamestown Foundation, Volume: 7 Issue: 28, September 17, 2009.

4. NewsYemen, September 8, 2009; Yemen Observer, September 10, 2009.

5. Albaidanew.com, May 14, 2009, cited in Jamestown Foundation, op.cit.

6. Abigail Hauslohner, Despite U.S. Aid, Yemen Faces Growing al-Qaeda Threat, Time, December 22, 2009, accessed in www.time.com/time/world/article/0,8599,1949324,00.html#ixzz0be0NL7Cv.

7. Tariq al Fadhli, in Al-Sharq al-Awsat, May 14, 2009, cited in Jamestown Foundation, op. cit.

8. al-Wahayshi interview, al Jazeera, May 14, 2009.

9. US Government, Department of Energy, Energy Information Administration, Bab el-Mandab, accessed in http://www.eia.doe.gov/cabs/World_Oil_Transit_Chokepoints/Full.html.

10 Adelphi Energy, Yemen Exploration Blocks 7 & 74, accessed in http://www.adelphienergy.com.au/projects/Proj_Yemen.php.

The Myth Of Nabucco: Greed, Delusion and $11.4 Billion

2010-01-06T15:45:00.000-08:00

http://www.opednews.com/articles/The-Myth-Of-Nabucco-Greed-by-OilGuy-100104-110.html

January 5, 2010
By OilGuy

Inside Beltwayistan, a number of Bushevik oil patch zombies still roam the recession-blasted landscape mindlessly chanting their Caspian mantra, "Happiness is multiple pipelines" - with the caveat that they flow westwards and bypass both Russia and Iran. They've now added a new word to their vocabulary, "Nabucco," and worse, have bitten a number of Obama administration officials and visiting European politicians, who have joined their shuffling ranks.

Their thinking remains somewhat clouded by primordial memories of Bush's "fuzzy math," as the statistics about Nabucco are contradictory, to say the least. State Oil Company of the Azerbaijani Republic (SOCAR) vice president Elshad Nasirov is now threatening to start selling Azerbaijan's natural gas, currently Nabucco's sole projected provider of throughput, to Asian countries if Europe further postpones Nabucco's construction.

Construction of the 56-inch, 2,050-mile pipeline, first proposed in 2002, is tentatively slated to begin next year and scheduled for completion by 2014. At a cost initially estimated at $11.4 billion and rising, Nabucco will be the most expensive pipeline ever built, more than three times the cost of the 1,092-mile Baku-Tbilisi-Ceyhan (BTC) oil pipeline. Raising such a significant sum in a time of global recession would be an article of faith at best.

Even assuming that Nabucco's boosters manage to assemble a coterie of deep-pocketed suckers er, investors, the only promised current volume for Nabucco's proposed 31 billion cubic meters (bcm) annual throughput is Azerbaijan's future offshore Caspian Shah Deniz production, estimated at 8 bcm. Even if Shah Deniz does end up supplying Nabucco, its currently promised throughput leaves a deficit of 23 bcm, leading to the question of exactly whose natural gas will Nabucco carry if SOCAR drops out, a worst case scenario requiring the Nabucco consortium to scrounge not 23 bcm, but all 31 bcm per annum, especially as Washington's geopolitics invalidate the participation of either Russia or Iran?

For those with knowledge of energy history in the post-Soviet space, the 419-mile, $500 million Odessa-Brody oil pipeline, completed in 2001, provides a cautionary tale to building pipelines without throughput guarantees. The Ukrainian government rashly built the self-financed line without foreign investment, stretching from its Black Sea port to the Polish border to provide Central Europe with oil despite not having firm commitments from a single oil producing nation for export throughputs. After the pipeline remained unused for three years, a reluctant Kiev was forced in 2004 to agree to transport Russian oil southwards in the opposite direction, for export from Odessa rather than northwards to Central European markets as originally envisaged.

Further complicating the picture are the differing proposed transit and pricing policies of the countries that Nabucco will pass through. The biggest geographical hurdle impacting the bottom line is the fact that, if as some Nabucco boosters aver, Turkmenistan can be persuaded to contribute natural gas, the seabed of the Caspian has yet to definitively be delineated amongst the sea's five riparian states. The question remains unresolved 18 years after the implosion of the USSR quashed the 1920 and 1941 Soviet-Iranian bilateral treaties covering the issue of offshore waters. Building a pipeline across seabed whose ownership is in dispute will enrich maritime lawyers, but few others.

The issue of competing claims over Caspian national waters and seabed is hardly a pedantic exercise. In July 2001 Iran dispatched military aircraft and a warship to intimidate two Azerbaijani survey vessels contracted by BP to leave the Alov-Araz-Sharg field, a site that Azerbaijan claimed was well within its national sector, but disputed by Iran. It seems unlikely Russia and Iran would stand idly by as trans-Caspian sub-sea pipelines, which exclude them, are constructed.

Hopes of Turkmen gas filling Nabucco's gas deficits are yet more wishful thinking. Last month the Central Asia-China gas pipeline connecting Turkmenistan's Caspian shore natural gas fields to Xinjiang was inaugurated in the presence Chinese President Hu Jintao, Turkmenistan's Gurbanguly Berdymukhamedov, Kazakhstan's Nursultan Nazarbayev and Uzbekistan's Islam Karimov. This year 13 bcm are scheduled to transit the new pipeline, rising to 30 bcm by the end of 2011 and over 40 bcm by 2013, effectively soaking up Turkmenistan's projected natural gas increases for the foreseeable future. Any further gas from Kazakhstan, an even more distant proposition, would face the same geographical constraints as regards the Caspian, while Gazprom also soaks up its surplus natural gas production.

Which leaves any but the most deluded Eurocrats and Beltwayistan apparatchiks with an uncomfortable "fuzzy math" question which of the five Caspian riparian states of Azerbaijan, Iran, Kazakhstan, Russia and Turkmenistan are going to provide Nabucco's projected 31 bcm annual throughput?

But never mind driving Nabucco is a complex skein of greed, European foreign policy agendas and the ongoing belief, a delusional legacy of the Bush administration, that somehow Caspian energy "belongs" to the West, and furthermore, that both Russia and Iran will complacently stand back while Western capitalism pulls off another energy initiative dwarfing BTC.

European interest in Nabucco is underpinned by the unpleasant realization that since 1991 it has become more and more dependent upon Russia for natural gas imports, with Russia's state monopoly Gazprom now supplying 40% of Europe's imports. As Moscow still largely relies on its Eastern European Soviet-era pipeline network, the annual winter spats between Moscow and Kiev over payment rates and transit have deeply traumatized Brussels to conduct a frantic search for alternatives in a desperate attempt to achieve energy security. Nabucco is designed to carry Caspian and Central Asian natural gas via Turkey and the Balkan states to Austria while bypassing both Russia and Ukraine.

A situation that can only worsen with time, as the EU's European Commission projects that the EU's gas consumption will increase by as much as 61 percent from its current level of 502 bcm to 815 bcm by 2030.

The hard sell has now begun over Nabucco thus represents the answer to Eurocrats' prayers. Nabucco's consortium shareholders are Austria's OMV, Hungary's MOL, Bulgaria's Bulgargaz, Romania's Transgaz, Turkey's Botas and Germany's RWE with 16.7 percent apiece. Notably, none of the countries involved has any significant natural gas production of their own.

If Nabucco is to succeed, there is one potential supplier that could step into the supply void, but for Washington, it is a country too far: Iran. Iran contains 16 percent of the world's natural gas reserves, second only to Russia. Washington has clearly and repeatedly stated its opposition to including Iran in Nabucco, as last month U.S. Special Envoy for Eurasian Energy Richard Morningstar stated, "We have been constantly saying that, in our opinion, Iran is not in a position to become a part of any new projects in the Southern Corridor."

In response, speaking after a Dec. 8 Iran-UAE joint economic commission meeting in Tehran, Iran's Foreign Minister Manouchehr Mottaki bitingly observed, "We have never heard that Europeans have entrusted the Americans with their authority to decide on the pipeline." Motakki then added a blunt dose of reality, stating, "Speaking about the Nabucco pipeline without Iran's participation would amount to nothing but a pipeline void of gas." Mottaki's comments echoed those of Russian Prime Minister Vladimir Putin, who said in March that Nabucco was not feasible without Iranian participation.

Nabucco also has its local critics. Azeri political scientist Ilgar Velizade has noted that Nabucco's high cost, now estimated at $11.8-13.1 billion, is simply untenable in the context of the current global financial crisis. Velizade consequently believes that the less expensive Poseidon pipeline option, which would deliver natural gas to Italy from Shah Deniz, could be as important for Europe, Azerbaijan and Turkey as Nabucco.

Are the Azeris serious, or are they just bluffing, hoping to stampede a tidal wave of investment cash into Nabucco? Hedging its bets, Baku is already exploring alternative markets for its gas. On Dec. 26 SOCAR President Rovnag Abdullayev said that while under the terms of an Oct. 14 contract under whose terms Azerbaijan was to supply 500 million cubic meters (mcm) of gas to Russia beginning Jan. 1, his company would now double the amount to 1 bcm. While this represents a fraction of that promised to Nabucco, Gazprom has already indicated that it will happily purchase any increases in Azeri natural gas production at world prices.

Nabucco remains stoked by the increasingly passé ideological concerns of a Bush-era administrative legacy promoting pipelines bypassing both Russia and Iran further fuelled by Brussels' fears of ongoing Ukrainian-Russian pricing spats disrupting deliveries as in years past. In the meantime, Moscow undoubtedly will press forward with its Nord Stream and South Stream gas pipelines alternatives in an attempt to reassure Europe that Russian pipelines bypassing Ukraine will alleviate future concerns about energy security.

The zombies have gotten their wish. Caspian energy now indeed does flow through new multiple pipelines. The only problem for the wizards of Wall Street and the City is that they now flow mostly eastwards, to China. As for Nabucco, what is Azeri for "expensive white elephant, son of Odessa-Brody?"

This article was written by Dr. John C.K. Daly for OilPrice.com who focus on Fossil Fuels, Alternative Energy, Metals, Oil Prices and http://www.oilprice.com/articles-geopolitics.php" target="new">Geopolitics. To find out more visit their website at: http://www.oilprice.com

Petro Unfriendly California Changing it's Stance on Oil

2010-01-04T16:46:00.000-08:00

http://oilprice.com/article-petro-unfriendly-california-changing-its-stance-on-oil.html

Dave Forest
30th December 2009

The financial crisis changed the way people think. At least some people.

In North America, the bursting of the housing bubble dispelled the myth you could get rich simply by owning a home. Likewise, people are now realizing that buying and holding stocks is not a sure-fire way to grow wealth.

The "get rich easy" schemes are falling by the wayside. Leaving people to once again make money the old fashioned way. Earn it.

The crisis has forced us to ask: what can I offer the world? What value do I bring that someone will pay me for?

With unemployment running near 10% in the U.S. (and similarly high in many other countries), these are crucial questions. You're no longer going to get a job simply by showing up. You need to provide something worthwhile.

And it's not just individuals asking what they can offer the world. Companies and even governments are being forced to rethink the way they handle their finances. A graphic illustration is the financial chaos that has gripped many municipal and state governments in the U.S. A number of states are teetering on the edge of technical bankruptcy.

California is one of them. And news this week suggests that the state's financial problems are forcing officials to rethink what they might offer in order to earn much-needed income. The answer appears to be oil.

California is an exceptionally oil-rich state. Take for example, Long Beach County. The municipality sits atop the Wilmington oil field, which has produced nearly 3 billion barrels of oil over the past century.

However, the state has become increasingly petro-unfriendly over the last few decades. With environmental opposition shutting down much oil development in the state. Particularly in regards to offshore drilling.

But it appears financial woes are changing the official stance on oil. This week it was reported that Long Beach officials are considering new drilling on the Wilmington field. Aimed at producing some of the hundreds of millions of barrels still left in the ground.

The impetus is an estimated $130 million in revenue that could be won by the city through re-drilling the field. This is a lot of money, at a time when funds are badly needed. Which is why the "not in my backyard" movement is suddenly getting a lot less ear from city hall.

This is good to see for the petroleum industry. And we could see more of it, with economic want spurring oil (and gas) development in more places around the U.S. One of the major spots being the coastal states.

It's thought that offshore oil and gas pools are found along most of the American coastline. Yet drilling has largely been restricted to the waters off two states: Texas and Louisiana.

Notionally, the reason other coastal states haven't permitted drilling is environmental concerns. State officials would often talk of the risks involved with offshore petroleum development.

But the real reason has more to do with economics. Under federal law, state governments in places like Florida, Georgia and Virginia were not entitled to share in royalty revenues from offshore oil and gas. The monies would have gone straight to Washington.

Without a piece of the pie, state legislators had no incentive to approve drilling. But that is now changing. Thanks to legislation being pushed through the senate to allow more coastal states to take a share of petroleum royalties.

If passed, these new laws would give state officials a big reason to push oil and gas development. And states are chomping at the bit. This week newly-elected Virginia governor Bob McDonnell sent a letter to Washington's Interior Secretary Ken Salazar, urging the federal government to fast-track new offshore licensing in the state. McDonnell cited the economic downturn as a reason that his state is looking to oil as a new source of revenue.

More states are going to do same. As the financial crisis pushes local governments to search for revenue, petroleum development may well get a boost. An unexpected but welcome consequence of hard times.

Exxon's Built in Escape Hatch From the Shale Gas Game

2010-01-02T17:02:00.000-08:00

http://www.oilprice.com/article-exxons-built-in-escape-hatch-from-the-shale-gas-game.html

Contributed By : Dave Forest
Published : 29th December 2009
ExxonMobil's buyout of XTO Energy was the story of December. It might be the story of 2009.

But equally important are the details now emerging about the deal. Particularly the "escape hatch" that Exxon built in.

Exxon is buying XTO to get into the shale gas game. Shale gas is one of the true revolutions we've seen across the commodities space over the last decade. And XTO has the expertise Exxon needs to quickly become a heavyweight in this arena.

But not everyone is convinced shale gas is a boon. Particularly environmentalists, who fear that the multi-stage fracs used to complete most shale gas wells could pollute local groundwater supplies.

As I've written before, the "anti-frac" movement is gaining momentum in the U.S. The major bone of contention is a 2005 law that exempts fracking from Environmental Protection Agency oversight. Allowing gas producers to frac wells without having to complete costly and time-consuming environmental impact studies.

There have lately been calls to re-visit that exemption. Several members of Congress have pledged to hold hearings on the environmental impact of fracking. This could start happening early in 2010.

And Exxon's buyout of XTO is bringing this issue to a head. Opponents of fracking realize that if Exxon is making an acquisition of this size, the major plans to develop shale gas on a major scale. Which of course, is raising a lot of concern.

Exxon is taking the opposition very seriously. So much so that (as revealed last week) they have included a clause in the XTO buyout allowing them to back out if Congress bans fracking or passes laws to make the technique "commercially impracticable".

The government certainly has the power to derail the shale gas revolution. Imposing extra costs for environmental impact assessments could throw play economics out of whack.

But even more than jeopardizing straight-up economics, extra permitting would create procedural risk for gas producers. Imagine a company identifies a drilling prospect. Securing the land for the play almost always involves up-front fees to government or private landowners. Do you pay the bonus (which could run in the millions of dollars), and then conduct your impact assessment? Running the risk that if the assessment comes back negative, you can't drill on land you've paid dearly for.

The environmental impact process creates one more uncertainty in an industry that already has a lot of unknowns. Maybe the concern over drinking water is warranted (although during my years as an environmental consultant to the oil patch I never saw a case of frac contamination). But regulators need to think carefully about how to deal with this issue. The fate of a much-needed energy revolution hangs in the balance.

PetroChina Wins Approval for $1.8 Billion Acquisition

2010-01-02T07:05:00.000-08:00

http://www.bloomberg.com/apps/news?pid=20601207&sid=a4yJIWfC8.ow

PetroChina Wins Approval for $1.8 Billion Acquisition (Update2)
By Bloomberg News

Dec. 30 (Bloomberg) -- PetroChina Co. won the approval of the Canadian government for its C$1.9 billion ($1.8 billion) bid to buy a stake in two Alberta oil-sands projects, its biggest North American acquisition.

The purchase by China’s largest oil company of a 60 percent share in Athabasca Oil Sands Corp.’s MacKay River and Dover oil- sands projects “is likely to be of net benefit to Canada,” Industry Minister Tony Clement said in a statement yesterday.

Chinese oil companies have spent at least $13 billion on overseas assets since December last year as they take advantage of lower valuations caused by the economic slowdown. PetroChina has said it plans to boost acquisitions after paying at least $3.6 billion this year to buy Singapore Petroleum Corp., a stake in a Nippon Oil Corp. plant and a venture in Kazakhstan.

“Upstream crude oil assets that are for sale are hard to come by now, especially the big ones, so they can try to buy oil-sands projects,” Grace Liu, an analyst with Guotai Junan Securities Co., said by telephone from the southern Chinese city of Shenzhen. “It’s part of their strategy to expand overseas and diversify their portfolio.”

The transaction was initially scheduled to close on Oct. 31 after PetroChina agreed on Aug. 31 to acquire control of the oil-sands projects. Canada was still reviewing the investment, the National Post reported on Dec. 19, citing Clement.

“To successfully compete in a globalized economy, we need to attract international investment, which can create jobs, raise our level of competition, and develop Canada’s long-term economic prospects,” Clement said yesterday.

Company Commitments

As part of the approval, PetroChina committed to invest at least C$250 million in the projects and boost employment over three years, keep a head office for the projects in Alberta for five years and ensure that a majority of the executives working on the projects are Canadian. As well, PetroChina said it will remain publicly traded as long as it controls the projects.

PetroChina has risen 36 percent in Hong Kong trading this year, lagging behind the 49 percent gain in the benchmark Hang Seng Index. The stock fell 1.1 percent to HK$9.24 today.

PetroChina will provide funding for future extractions of oil sands under the deal, Athabasca, a closely held company based in Calgary, said on Aug. 31. PetroChina may deploy methods it has used in northeastern China heavy-oil projects to unlock oil trapped in Alberta sands, Athabasca said.

“Development costs for oil sands are usually high, so it’s hard to tell now the value of the projects,” Liu said.

Expanding Exploration

Liu Weijiang, a Beijing-based spokesman for PetroChina’s parent, China National Petroleum Corp., couldn’t be immediately reached on his office and mobile phones for comment today.

China National Petroleum said on Oct. 19 that PetroChina will focus on expanding exploration and boosting overseas cooperation next year as China’s energy demand rises.

The company said on Sept. 9 that it will receive a $30 billion loan from state-run China Development Bank to fund overseas expansion as China steps up its hunt for oil and gas resources.

Oil consumption in China, the world’s second-biggest energy user, doubled in the last decade to 8 million barrels a day in 2008, according to BP Plc’s Statistical Review.

--Chua Baizhen, with assistance from Alexandre Deslongchamps in Ottawa. Editors: Ryan Woo, Paul Badertscher.

To contact the reporter on this story: Baizhen Chua in Beijing at bchua14@bloomberg.net

Nigerian farmers file lawsuit against Shell

2010-01-02T06:45:00.000-08:00

http://www.presstv.ir/detail.aspx?id=115135§ionid=351020505

Press TV
Fri, 01 Jan 2010 18:43 EST

Nigerian farmers seek to take the multinational energy company, Shell, to court over the firm's pollutants that have "wreaked havoc" on Nigeria's farms.

Four Nigerian farmers, representing the country's agricultural workforce, have decided to push with a plan aimed at holding Shell responsible for its "ongoing release of oil and other contaminants" on their lands despite earlier failed attempts to implicate the petroleum company.

The farmers who have been aided by the environmental group, Friends of the Earth, have filed a lawsuit against the company and demanded compensation for their losses.

They also want Shell to clean up the pollution and improve the general maintenance of pipelines in order to curb further leaks in the future, Euronews reported.

The Royal Dutch Shell has to appear before a Dutch court which has claimed the authority to deal with the firm's case of negligence in their operations in the Niger Delta.

"We think this is a breakthrough, because it's now acknowledged by the Dutch court that the actions of Shell outside of the Netherlands, they can be held liable for these actions and that is the most important victory of today," Radio Netherlands quoted Geert Ritsema of Friends of the Earth as saying on Thursday.

Nigerian agriculture sector in the Delta region has reportedly been devastated by oil pollutions and farmers continue to witness their farms being "transferred from generation to generation ... [Because] the only means of living has been destroyed by oil spills into the environment. They can't produce anything and they don't get any compensation. They are completely lost," Comrade Sunny Ofehe, the Head of the Hope for Niger Delta Campaign, has told reporters.

State Oil and Gas Regulators Are Spread Too Thin to Do Their Jobs

2009-12-31T10:38:00.000-08:00

Go to URL to see photographs, illustrations and graphs.

http://www.propublica.org/feature/state-oil-and-gas-regulators-are-spread-too-thin-to-do-their-jobs-1230

State Oil and Gas Regulators Are Spread Too Thin to Do Their Jobs
by Abrahm Lustgarten, ProPublica - December 30, 2009 12:38 pm EST

This photo, taken Oct. 5, 2007, is of an underground injection disposal well site outside Fort Worth, Texas, that had passed the state's Railroad Commission's inspection eight days earlier. Sixty-one days later, inspectors returned after a resident complained of spilled oil, overflowing dikes and green-colored fluid in standing puddles. The well site was found to have several violations. (Photo courtesy of Sharon Wilson)

Larry Parrish knew something was wrong as soon as he wheeled his state-owned pickup off the West Virginia highway and onto the rocky field where the natural gas well was supposed to be. Oak trees 18 inches in diameter looked dead as boards, and brush as brown as kindling stretched across a piece of farmland the size of a football field.

The dead zone in this otherwise lush mountain country meant one thing to Parrish: Gas drillers had been illegally dumping briny water mixed with chemicals, and the waste had killed everything from the rusty well head all the way downhill into a creek. The worst part, Parrish said, was that the devastation could have been avoided if the West Virginia Department of Environmental Protection had had enough inspectors to make sure the state's growing number of gas wells were checked regularly.

"It was sad -- sickening," said Parrish, a former field inspector for the DEP's office of oil and gas. "It probably had been years since anybody had been out there."

West Virginia has added a handful of people to oversee its growing drilling industry since Parrish retired in 2006, but other than that not much has changed. For the state's 17 inspectors to visit West Virginia's 55,222 wells once a year, they would have to inspect nine wells a day, every day of the year -- no weekends, no vacations.

"We are doing what we can do," said Gene Smith, a regulatory compliance manager for West Virginia. "But that still leaves thousands of wells that are not inspected yearly or even every decade."

Regulators in other states are equally overwhelmed as they try to keep tabs on the nation's nearly one million active oil and gas wells, a number that's likely to climb as the feverish growth in natural gas exploration continues.

Search ProPublica's database to find how many gas regulators work in your state.

A ProPublica investigation comparing the rapid expansion of drilling in 22 states with staffing levels at the agencies charged with policing the wells found that the nation's capacity to enforce its environmental protections is weakening. The picture strikes at the heart of the industry's long-standing argument that state regulatory agencies will be more effective industry watchdogs than the federal government.

While the number of new oil and gas wells being drilled in the 22 states each year has jumped 45 percent since 2004, most of the states have added only a few regulators. Those with the widest gaps are Texas, which is already grappling with the most drilling, and New York, which is expected to soon have the fastest rate of growth.

As regulators' workloads have grown, enforcement actions -- the number of times violations were recorded and acted on -- have dropped in many states, often by more than half. That could mean companies are complying with the law -- or that inspectors aren't checking the wells.

"You just can't do it, physically," said Parrish, who received a $31,000 salary and said he was chronically overworked. "You've got to put out the hottest fires and there was a lot of stuff that slipped through the cracks because no one was looking."

The Marcellus Shale, denoted in brown, primarily cuts across large swaths of New York, Pennsylvania, Ohio and West Virginia. (Map by Jennifer LaFleur/ProPublica)
The imbalance between drilling growth and regulatory staffing levels could become a crucial factor as lawmakers and the public weigh how much environmental damage to expect in exchange for the benefits brought by the drilling boom. Thanks in large part to advances in drilling technology, estimates for the amount of natural gas held underneath parts of the United States have increased by 35 percent since 2007 and are now believed to be plentiful enough to meet the nation's needs for more than 100 years. As a result, drilling is expanding rapidly, including in the Marcellus Shale, the layer of rock that stretches from central New York, underneath West Virginia to Tennessee.

The boom, however, has brought complaints of water and air pollution. Modern gas drilling in particular has drawn scrutiny because it relies on hydraulic fracturing, a process that injects millions of gallons of chemically infused water underground and produces large volumes of waste. The industry has fended off efforts to establish stricter regulations in part with its argument that the current state oversight is effective.

What it takes to enforce regulations, and whether authorities have enough resources to get the job done, are questions that rarely enter the debate.

"Not having eyeballs on the ground is horrendous," said Jim Baca, who served during the Clinton administration as director of the U.S. Bureau of Land Management, the federal agency that oversees more than 85,000 oil and gas wells on federal land. "If you don't enforce the law, the industry will do whatever they think they can get away with."

Spokesmen for state and federal regulatory agencies defend their effectiveness and caution that the picture is more nuanced than mathematical equations can convey. They say that they are working to improve efficiency in their departments and that the number of inspectors alone doesn't always reflect enforcement because staffers can be shifted to meet urgent priorities. Employees might have capacity in their workload to absorb much of the growth in drilling that is taking place, they say.

"They may have to work a little harder," said Stuart Gruskin, New York's executive deputy commissioner for environmental conservation, about staffing in his state. "It's like any other business. You can adjust from a management perspective how you utilize your resources until you reach the point where you are not doing a good enough job."

The New York State public employees union disagrees. "Attempting to have them do even more with less is not possible," it said this week in a statement calling for delaying the expansion of drilling for at least a year because of, among other things, what it called understaffing at the Department of Environmental Conservation and other state agencies.

The Lone Star Record

Click to see our database of wells and inspection staff per state.
No state has more drilling than Texas, which has 273,660 wells and just 106 regulators to oversee them.

As in most states, regulators for the Railroad Commission of Texas, the agency that is charged with oil and gas regulation, are kept busy by a broad range of responsibilities. They police gas wells, oil wells, waste injection wells, disposal pits, compressor stations and access roads. The wells can be spread across hundreds of miles, sometimes peppered throughout difficult-to-access terrain, with limited cell phone or computer access, heavy rains and rough roads requiring four-wheel drive.

Regulators also approve new permits -- and try to do it fast enough to not saddle the companies applying for them with extra costs. They visit new wells several times during construction and old wells before they are shut in, or sealed. They are obligated to quickly respond to all complaints, which can range from an unauthorized flaring of emissions or gases to a spill of hazardous fluids.

Eighty-three of Texas' regulatory staffers conduct field inspections, according to the commission, meaning each person is responsible for almost 3,300 wells, many of them requiring several visits in a year.

As in West Virginia, keeping up with the workload is nearly impossible.

"It's one of the worst-kept secrets around the state that the wells that are ostensibly checked once a year aren't," said Jeff Weems, a Houston attorney who specializes in the energy industry and is running for the top job at the Texas Railroad Commission. "They could double the number of inspectors and still be straining their staff to do their job."

This photo, taken Oct. 5, 2007, is of an underground injection disposal well site outside Fort Worth, Texas, that had passed the Railroad Commission's inspection eight days earlier. Inspectors returned about two months later after a resident complained of spilled oil, overflowing dikes and green-colored fluid. The well site was found to have several violations, including oil-stained soil as seen under the disposal pump, above in yellow. (Photo courtesy of Sharon Wilson)
In late 2007, a Texas state auditor's report (PDF) examined the Railroad Commission's enforcement record and found that nearly half of the state's wells hadn't been inspected in the five years between 2001 and 2006, when the data was collected. (It also said regulators' routine acceptance of gifts from the companies they police raised questions about their objectivity and conflicts of interest, and the commission imposed a $50 limit on gifts as a result.)

In Texas, as in most states, regulators prioritize their work to make sure the most essential inspections get done. Complaints and spills top the list, along with new well construction.

But the Texas auditor's report found that 30 percent of all spills were inspected "either late or not at all."

"It is quite clear to management that inspecting 100 percent of these notices ... is not possible with current resources," the Railroad Commission wrote in its response to the audit. "To the extent resources become available in future legislative sessions, the Commission could witness more activities."

A spokeswoman for the commission said its workload decreased when drilling activity slowed in 2008, so the staffing situation has improved. She said the agency conducted 128,270 inspections in 2009, and visits every site it deems essential.

"Texas has maintained and will continue to maintain a strong enforcement effort for our environmental rules, regulations and policies," the spokeswoman, Stacie Fowler, said in an e-mail.

But the commission's Web site also makes clear that facilitating energy production is a priority and the state won't slow drilling while inspections catch up. It advertises the current waiting period for approval of new drilling permits: three days.

According to ProPublica's analysis, the number of new wells drilled each year in Texas has jumped 75 percent since 2003. However, staffing increased just 5 percent during that period and enforcement actions increased only 6 percent.

Records show that the Railroad Commission's budget for monitoring and inspections has decreased 10 percent since 2005. Fowler said the agency had requested more staffing from the state legislature at least three times in the last five years and been turned down every time.

From the industry's view, the paucity of enforcement staffing sometimes means it is up to the drilling companies to follow the rules as best they can.

"I never saw a Railroad Commissioner on one of the sites," said Dale Henry, a hydraulic fracturing expert who worked in Texas for the global services company Schlumberger for several decades. Henry said companies abided by the law whether regulators were there or not, but he also said the normal work schedule meant that they often avoided regulators. Inspectors worked 7 a.m. to 5 p.m. weekdays, and "all the work in the field is done by operators between 5 p.m. and 6 a.m. and on weekends."

A Schlumberger spokesman said that the company works closely with regulators and that it is the nature of the process to work through the night.

Even when regulators do inspect problematic sites, the oversight can be patchy.

In September 2007, a field inspector working in the Barnett Shale outside of Fort Worth made a routine stop at an underground injection disposal well site. His formal report (PDF) found no problems and stated: "Well area clean."

This photo, taken Oct. 5, 2007, is of the underground injection disposal well site outside Fort Worth, Texas, that had passed the Railroad Commission's inspection on Sept. 27, 2007. On their second visit two months later, inspectors found several violations, including dikes that did not meet the facility's holding capacity. (Photo courtesy of Sharon Wilson)
Inspectors returned 61 days later after a resident complained of spilled oil, overflowing dikes and green-colored fluid in standing puddles. According to their report (PDF), they found that "oil-stained soil" had seeped several inches into the ground around a large tank, that the "containment dike will not hold estimated capacity" and that standing rainwater had oil in it.

When asked about the discrepancy, Fowler, the Railroad Commission spokeswoman, said conditions can change at a site on a daily basis. But Fowler did not address perhaps the most remarkable finding in the inspectors' report (PDF): State records showed that the well site was not being used, when in fact it was actively being injected with hazardous waste.

"We looked at some records and found that the well was never technically shut in," said Charles Morris, the now-retired inspector who wrote the second report about the troubled well. "That happens all the time in the field, too. I hate to say it, but the commission, sometimes their record keeping is not what it should be."

Part of a Pattern

Texas' staffing challenges match a pattern across the states where drilling is most active.

The number of new wells drilled in West Virginia increased 53 percent from 2003 to 2008. Since 2003 its regulatory staffing increased 20 percent. Enforcement actions, meanwhile, remained relatively constant, though they temporarily dropped by more than half during a peak in drilling in 2007.

North Dakota saw a 987 percent increase in new wells drilled each year since 2003, but took 13 percent fewer enforcement actions, even though it added five regulators.

Click to see our database of wells and inspection staff per state.
In Ohio, where the number of new wells drilled each year doubled between 2003 and 2008, four new staffers were hired but the number of formal actions dropped 33 percent.

Not every state saw a drop in enforcement actions.

In Pennsylvania, a state with intensive new Marcellus Shale drilling, state regulators doubled their enforcement staffing last year. Between 2003 and 2009 enforcement actions increased by 60 percent.

Of the 21 states that supplied data on their enforcement actions, five substantially increased those actions even as their staff-to-well ratio lagged. In Louisiana, for example, staffing was flat or falling until 2007, when more inspectors were hired and enforcement actions began shooting up. As a result, the state took almost twice as many enforcement actions between 2003 and 2008, even though the overall staff growth was just 3 percent and the number of new wells drilled annually more than doubled.

The federal government, which separately regulates a large proportion of the drilling on federal land in Western states, is also struggling to police its territory. It has seen a 31 percent increase in drilling since 2003.

A 2005 report (PDF) from the U.S. Government Accountability Office said that the Bureau of Land Management's ability to meet its obligations had been lessened by intense growth, and that "staff had to devote increased time to processing drilling permits, leaving less time for mitigation activities, such as environmental inspections."

The agency has significantly expanded its staffing since then. But even so, a 2009 analysis of its enforcement activity by the Western Organization of Resource Councils, a group of environmental organizations, found that the agency issued fewer enforcement actions in 2007, the last year for which data was available, than it did in 1999.

The analysis, which focused on BLM enforcement and inspection in five Western states, found that BLM inspectors spent a third less time on environmental inspections and completed only 15 percent of the highest-priority inspections. In Farmington, N.M., for example, BLM inspectors completed just 82 of 1,257 high-priority inspections. In Buffalo, Wyo., they finished just 136 of 3,527 red-flag jobs, according to a federal database.

Signs point in all directions to drilling sites in Wyoming. (Abrahm Lustgarten/ProPublica)
"If you ask any BLM staff who has been dealing with the oil and gas industry, they admit they don't have the staff do deal with this. It hasn't been a priority," said Daniel Patterson, an Arizona state representative and southwest regional director for the group Public Employees for Environmental Responsibility, which works to convey confidential views of its government employee members. "It's pretty much up to the operator to decide if they are going to operate legally or if they are going to cut corners that lead to more pollution. That's a problem."

State and federal regulatory officials say that there is no such thing as a proper ratio of enforcement actions to wells, and that there is no way to measure how effective informal warnings between inspectors and operators are as a deterrent. Such warnings are not recorded in regulators' statistics. They also say there are myriad ways to increase the effectiveness of their oversight, including investing in new technology that improves efficiency and writing stronger laws.

Colorado, which has seen a 149 percent increase in the number of wells drilled each year since 2003, is one state that has done both.

In 2006 the state hired several new inspectors and began computerizing its records and equipping field regulators with laptops full of everything from well histories to violations. In April the state instituted new drilling regulations that are widely seen as some of the toughest in the country.

"We now have more prescriptive rules and policies, which will help to prevent problems that could otherwise evolve into violations triggering the need for enforcement," said David Neslin, director of the Colorado Oil and Gas Conservation Commission.

Whether that is enough to do the job remains to be seen. One new hire is Chuck Browning, who came on eight months ago as a field inspector for the northwest part of the state and said the magnitude of the job can be overwhelming. With two other inspectors, Browning shares responsibility for some 25,000 wells. He bounces back and forth between the Utah and Wyoming borders, tallying 17,000 miles on his Trailblazer since March.

"I'm off in some far-flung remote area of the country side and there's thousands of wells around me," said Browning, a former geologist who has worked in the oil industry for 20 years. "I just pick my way out of the woods knocking them out as best I can."

Not long ago, Browning was wandering through the Rangely field -- an eight-mile wide swath of oil, gas and injection wells that stick up out of the brown arid plain of Northern Colorado like candles in a cake -- when he stumbled on an unmarked open pipe jutting out of the dirt. Gas fumes wavered six inches in the air and when Browning dropped a pebble into the hole, he heard a kurplunk as it struck liquid. Abandoned wells are supposed to be capped and dry -- but this one was about to overflow.

In his truck he fired up his laptop, accessing topographic maps, records and aerial photos of some 88,000 wells across the state, searching for this one. But it didn't appear anywhere.

"I still absolutely have no idea how many wells are up in Rangely. It's well over 1,000," he said. "This one is definitely a potential hazard."

It was the kind of puzzle that can take a day to sort through, and at least another day to bring in the equipment and crews to begin to take care of the abandoned well. It's a wild card that can play havoc with the 10-wells-per-day inspection schedule Browning and so many other regulators are forced to keep.

New York State

If Texas and Colorado -- the first- and eighth-ranked states in the country for number of natural gas wells -- can provide a lesson, states like New York may have the most to learn.

New York, which sits atop the Marcellus Shale, has found itself at the epicenter of the nation's drilling boom and the epicenter of the debate over drilling's effect on the environment. The state's relatively small oil and gas division currently oversees some 13,684 wells, but it is under intense pressure from drilling companies, which would like to see thousands more wells drilled.

Chesapeake Energy, one of the nation's largest natural gas companies, has gobbled up more than a half a million acres of land leases in New York, and earlier this month Exxon said it would pay $31 billion for XTO Energy, a gas company that also holds extensive rights to drill in Pennsylvania and West Virginia's Marcellus Shale.

The site of one of Canada-based Gastem USA's wells in Otsego County, N.Y. (Joaquin Sapien/ProPublica)
The state has delayed that development, however, to study the environmental consequences of hydraulic fracturing and investigate a chorus of objections from people who fear that drilling will contaminate drinking water. Just last week New York City called for a ban on drilling inside its watershed, citing a consultant's report that said it could jeopardize the drinking water for nine million residents.

At the same time, however, Gov. David Paterson, reeling from one of the worst state financial shortfalls in the nation, has made gas development a cornerstone of his draft energy plan.

New York regulators say that they have a better environmental record than most states when it comes to regulating oil and gas, and that a suite of proposed rules will put the state's drilling laws on par with Colorado's. Yet New York is the only state examined by ProPublica that has cut its regulatory staffing in recent years. Since 2003 New York's Department of Environmental Conservation has reduced its oil and gas division field inspector staffing by 20 percent (its overall enforcement-related staff, when including management and office positions, dropped 10 percent), stoking concerns that when the drilling kicks into high gear, the state will suffer the same sort of problems that have plagued West Virginia and Texas.

Gruskin, the New York DEC's executive deputy commissioner, says that the agency is committed to good oversight and that energy companies that want to drill in New York will simply have to adapt to the agency's pace.

"It's going to go slow. Very slow," he said. "If we only have a certain number of inspectors available in that region, people are going to have to wait until they are available. And that's just reality, that's the way it's going to be.”

But Gruskin's promise not to let drilling outpace his headcount doesn't match the recent past. Even as the regulatory staffing was being reduced, the DEC allowed a 676 percent increase in new wells drilled each year, a statistic that makes New York one of the fastest-growing drilling states in the nation. Meanwhile, the state's 16 field inspectors took only three more enforcement actions against drilling companies in 2008 than they did in 2003.

If the flat enforcement statistics were a problem, Gruskin said, the number of spills and environmental problems would have gone up -- something he points out hasn't happened.

And unless it does, the state appears content to play chicken.

"I don't think the industry believes that our resources have become so thin that they are not going to get caught." Gruskin said. "There are a lot of eyes on what is going on."

ProPublica reporter Sabrina Shankman contributed to this report. So did ProPublica's director of research Lisa Schwartz and researcher Kitty Bennett.

Write to Abrahm Lustgarten at Abrahm.Lustgarten@propublica.org.

Vladimir Putin unveils gateway to East with new oil export terminal

2009-12-30T07:25:00.000-08:00

http://www.timesonline.co.uk/tol/news/world/europe/article6969875.ece

December 29, 2009
Vladimir Putin unveils gateway to East with new oil export terminal

Vladimir Putin, the Prime Minister, opened an oil export terminal in the Far Eastern port of Kozmino to serve as a gateway for energy exports to Asia.

Russia has been seeking new markets for its energy exports, most of which have gone to Europe. In January Europeans were left without heat after Russia shut off gas supplies to Ukraine. (AP)

Yemen adopts new oil strategy

2009-12-29T11:58:00.000-08:00

http://www.sabanews.net/en/news185296.htm

Yemen adopts new oil strategy
[01/June/2009]
Edited into English by: Tawfiq Alnadhif

SANA'A, June 01 (Saba)- An interview with Oil and Mineral Resources Minister Amir al-Aidarous by Ibrahim Ashmawi.

[Ashmawi] Yemen has announced that there is a new strategy for the oil, gas and minerals sector. Could you give us some of its features and references which based on?

[Al-Aidarous] The strategy will be divided into three main sectors, including oil, gas and minerals.

[Ashmawi] Regarding oil it is supposed to have long and short terms policies and objectives, to see what is required in the near future? Is the future of Yemen is in oil?

[Al-Aidarous] These things will be reflected on a new law and structures and our activities as well. Why a long-term strategy because we believe that the future of oil in Yemen is great, and I am not of the pessimists who say that oil in Yemen will be depleted. The Ministry corporations and the scientific information showed that Yemen consists of 13 sedimentary basins and the exploration and production works currently are carried out in two basins only and are not fully covered by exploration works, and the rest ones did not covered by such works. For example, the block No. 18, which produced oil from for more than 20 years by Hunt company, 30% of its area was not exploited.

The future of Yemen maybe is not in oil only, but it may be in gas also, Yemen has very long areas located starting with the Indian Ocean coast to the Arabian Sea to the Gulf of Aden to the Red Sea and all of these areas are promising areas, there are very good promising indicators of gas in the Red Sea area and also the in the Arabian Sea, we might have a lack of information and this requires an investment.

Therefore, the strategy will draw policies which will include the provision of information, the marketing methods and the projects development; and the national company of Safer will manage these projects.

So we are working to implement the directives of the President that marked 2009 the year of gas, however we are planning to have the first shipment of liquefied gas at the beginning of the 3rd quarter of 2009. Also new agreements regarding gas exploitation have been adopted by the House of Parliament.

The ministry is working with companies, which discovered by chance the gas, to establish supplements to get use of the discovered gas, and we begun to negotiate with an American company in this respect.

Some say that the available quantities were all used in the project of Gas Exportation, and I tell them that these quantities are part of the quantities and there are many explorations in different sectors waiting for investment.

This year we will work to finish by the end of 2009 the Production Unit of Domestic Gas to back up the amount of gas. It is expected to stat production early 2010. We have policies to reduce gas flaring and the beginning of the 1st gas station for electricity generation to supply Hadramout by 25 megawatts.

In the light of the international changes and the expansion of gas market, we received a lot of requests from international companies from India, Japan and Korea want to invest in gas. We have also requests from Emirates Company which has an experiment in the field of establishing gas compounds and cities in number of countries.

We also have another strategy for minerals, which revenues are slow, but would be useful after a long term by employing many people and bringing good revenue.

Explorations

[Ashmawi] How is the situation of oil explorations currently? Are there encouraging clues?

[Al-Aidarous] There are explorations but they need time, for example, there was another exploration last year in Block 71 by a Chinese company and it is supposed to be announced later on. It is a crude oil mixed with gas, which makes it a light oil and expensive, at this time we can't give more details about it.

Out of gas: Yemen crude oil output plummets

2009-12-29T11:56:00.000-08:00

http://www.worldtribune.com/worldtribune/WTARC/2009/me_oil0969_12_16.asp

Wednesday, December 16, 2009 INTELLIGENCE BRIEFING
Out of gas: Yemen crude oil output plummets

WASHINGTON — Yemen, beset by a struggling economy and fighting in both its North and South, was expected to run out of crude oil in another decade, a report said. ShareThis

The Carnegie Endowment for International Peace said Yemen was rapidly losing its crude oil reserves.
In a report, Carnegie said Yemeni oil exports, a key source of foreign currency, declined from 450,000 barrels per day in 2003 to 280,000 in early 2009, Middle East Newsline reported.

"Barring any major new discoveries, energy experts generously estimate that Yemen's oil exports will cease in 10 years," the report, titled "Yemen: Avoiding a Downward Spiral," said.

The report, authored by Christopher Boucek, warned that Yemen's limited capacity was exacerbating the crude oil decline. Yemen's government has also failed to draft a long-term strategic plan for the energy sector.
"There are currently three separate agreements: one for oil, one for gas, and another for a combination of both," the report said.

"As a result, there is no incentive for oil companies to develop resources not covered under a production sharing agreement. Any gas found during oil exploration, for example, is not developed because it was not what the operating company was licensed to extract."

Hordes of Angry Activists and a $27 Billion Court Case Is Making Oil Giant Chevron Pretty Nervous

2009-12-24T14:10:00.000-08:00

Hordes of Angry Activists and a $27 Billion Court Case Is Making Oil Giant Chevron Pretty Nervous
By Peter Asmus, East Bay Express
December 24, 2009
http://www.alternet.org/story/144652/

The oil industry is more powerful today than at any other time in history save the early 20th century. Thanks to last year's record run-up in oil prices, seven of the world's most valuable corporations are now oil companies. Yet just one of those companies has become the focus of intense consumer ire.

Perhaps the largest coordinated activist campaign in history is being launched against the San Ramon-based Chevron Corporation. Foregoing boycotts and other traditional market campaign techniques, non-governmental organizations are creatively communicating the business case for why Chevron should change its ways, focusing on mobilizing company shareholders and consumers to compel the company to come clean and pursue social and environmental leadership.

This unprecedented campaign to make Chevron the poster child of corporate irresponsibility has already persuaded pension funds in California, Maryland, New York, and Pennsylvania to consider selling a total of $12 billion in Chevron shares on the grounds that the firm is mismanaging its operations around the globe. The prime focus of this ongoing anti-Chevron effort has been the company's annual shareholder meetings, but protests at the Richmond refinery and a series of movie and PR stunts have been also been effective tactics.

The brains behind the campaign is a small firecracker of a woman, Antonia Juhasz, director of a special new Chevron program for Global Exchange, the San Francisco activist organization. Author of the book entitled The Tyranny of Oil, Juhasz brings to the campaign a depth of knowledge about the oil industry and a penchant for understanding how the media works. It was her idea, for example, to create an alternative shareholder report — The True Cost of Chevron — released in time for Chevron's annual shareholder meeting this past spring. The report, to which more than a dozen activist groups contributed, chronicles environmental and social issues confronting Chevron around the globe. Among other things, it pokes fun at Chevron's "Human Energy" PR campaign.

In its billboards and television ads, Chevron paints itself as part of the solution, and implies that the ingenuity of California and its citizens are already solving the challenges that climate change poses to society. One subtext of this advertising campaign is that global warming can be solved by everyday people. Indeed, the contented Americans depicted in the ads vow "I will use less energy," "I will leave the car at home more," and "I will finally get a programmable thermostat." The True Cost of Chevron campaign mocks this notion, by depicting put-upon villagers who stoically vow, "I will not breathe when outside," "I will give my baby contaminated water," and "I will ignore the toxic waste pits in my village."

"Chevron is emblematic of an industry that is out of control," Juhasz said. "They are not the worst oil company, but they hold themselves up to be a model corporate citizen, and they don't deserve it." Why then focus exclusively on Chevron? Focusing on one company makes the story more manageable, said Juhasz, exhibiting a clear understanding of modern campaigning techniques. And Chevron is everywhere, she noted, which allows activists to go to gas stations and distribute propaganda, or engage in publicity stunts that take advantage of the company's global profile.

"Our issues of peace, democracy, and environmental sustainability overlap with Chevron's actions around the globe," she said. "We want to take a closer look at the local impacts Chevron has globally in order to put pressure on them to be a better corporate citizen here, and everywhere else they operate. Our goal is to build a regional network not so much aimed at Chevron directly, but rather at policymakers who can adopt better regulations governing big oil."

While each of the activist organizations involved in this campaign has a different regional focus, they regularly hold conference calls and coordinate strategy to maximize impact. Their common theme is that the issues haunting Chevron in Richmond, Ecuador, Burma, Kazakhstan, and Nigeria are all really the same, and stem from a corporate culture that is out of sync with the values of the Bay Area.

Chevron repeatedly declined to comment on the charges leveled against it by activists. This should come as no surprise since outgoing CEO David O'Reilly suggested at the company's last shareholder meeting that the report pulled together by Global Exchange and various other groups should be thrown in the trash.

The company known as Chevron was once part of Standard Oil, which was started by the infamous Rockefeller family, and broken up under the Sherman Antitrust Act. Successor companies of Standard Oil — which once controlled 88 percent of US oil flows — comprised what were known as the "Seven Sisters" and included Exxon, Mobil, BP, Shell, Gulf, Mobil, and Standard Oil of California, which ultimately became Chevron. The sequential subsuming of Gulf (1985), Texaco (2001), and then Unocal (2005) allowed Chevron to become the world's second-largest oil company. Just 36 countries have a larger gross domestic product than Chevron. Based on annual revenues, it is California's largest and the world's fifth-largest corporation, with operations in 122 countries. Chevron was the second-most-profitable US corporation last year, edging out General Electric.

The campaign against the oil company can be seen within the context of a larger global examination of what Karin Lissakers, director of the Revenue Watch Institute, calls the "paradox of plenty." Lissakers and others describe this paradox as the persistent inability of resource-rich countries to transform their wealth in oil and other extractive industries into economic development that benefits their citizens.

The Revenue Watch Institute is hardly a left-leaning organization. Its prime constituency is the financial community, and it is one of many groups behind the so-called "publish what you pay" movement, which calls for greater transparency in where revenues from natural resources go when transferred from private to public hands. "We focus on the money flows, the revenue streams, and the distribution of those revenues in resource-rich countries," said Lissakers, whose institute is not directly involved in the anti-Chevron campaign. "What we campaign for are international good practices in all extractive industries. We should not have different standards for different countries."

Lissakers used Uganda to illustrate her point. Possible oil revenue in that central African nation represents $50 billion in total potential value, a large percentage of which could, if managed properly, provide immense economic opportunity in that impoverished country. "We want to make sure the state captures a significant part of that value. Our ultimate goal is to have access to country-by-country reporting in order to figure total revenues, value of products, and the percentage of this wealth flowing to governments."

In Lissakers' view, interestingly enough, mining companies are "way ahead of the curve" when it comes to such corporate social responsibility issues, while the oil sector — the most profitable of all natural resource businesses — is a clear and persistent laggard. But she believes big oil is going through an evolution in its thinking. "BP and Shell were instrumental in getting the transparency examination off the ground, but the response from US oil companies has been unenthusiastic from the very beginning," she said. And among US oil companies, Chevron's attitude makes it unique, critics say.

"When there is a problem, they send a lawyer instead of engineers," said Juhasz of Global Exchange. "They are dog-headed and would rather litigate than fix the problem."

This penchant for litigation is evident from the depths of the Amazonian jungle to Chevron's own backyard in nearby Richmond. Indeed, of the five refineries operating in the Bay Area, Chevron's Richmond facility is the worst polluter, according to the Bay Area Air Quality Management District. The company has yet to bring its vintage refinery, surrounded by immigrant residential communities, up to snuff on modern pollution controls and practices. Apparently, it would rather fight in court.

Yet the unprecedented coordination between its critics is a big test for both Chevron and the groups. If Chevron prevails, it may conclude that it can continue to conduct business as usual. But if the activists prevail, the entire industry might have to clean up its act — becoming part of the solution to not only climate change but the persistent poverty and human rights woes that plague much of the oil-producing world.

Across the globe, many of the very same issues that haunt Chevron in its global operations are everpresent at its century-old Richmond refinery.

In Richmond, the oil company's chief critic has long been Communities for a Better Environment, a grassroots group focused on industrial pollution issues impacting low-income communities of color. The group's key objective these days is to stop Chevron from processing dirtier crude such as Alberta tar sands at the Richmond refinery. Tar sands are one of the dirtiest forms of crude oil. Development contributes to clear-cutting of the Boreal Forest in Canada — the largest terrestrial carbon sink in the world — and emits three to five times as many greenhouse gas emissions as other more traditional forms of crude oil.

The company recently suffered a loss when the Contra Costa Superior Court ruled that Chevron's environmental impact report assessing proposed changes at the refinery was inadequate. At the moment, it is unclear how the company will respond. The ruling has halted construction activity necessary to process tar sands, stranding 1,100 union workers, pitting their jobs against the activists and local citizens worried about public health.

Another key environmental issue at Richmond is the burning of waste gases. While some refineries recycle these waste gases — reducing such flaring by 80 percent — Chevron has historically maintained that such practices were "not economically feasible" at the Richmond site. But Communities for a Better Environment has estimated that revenue generated by just seventeen minutes of Richmond refinery operations could fund the $100 million upgrades necessary to make the facility state-of-the-art when it comes to these gases.

Jessica Tovar, a local organizer for Communities for a Better Environment, pointed out that residents of Richmond's nearby Iron Triangle neighborhood suffer from asthma, cancer and other acute symptoms on a daily basis. "Chevron is not the only polluter, but their refinery is the largest [pollution source]," Tovar said, "and is one of the largest contributors to global warming in the San Francisco Bay Area." She noted that Chevron itself has described the boilers at the Richmond facility as "vintage," and Tovar added that the thirty- to fifty-year-old pipes are "more likely to create explosions than new ones." Since its environmental impact report was rejected, Chevron has "postponed indefinitely" all promised upgrades to the Richmond refinery complex. "The most important upgrades from a public safety perspective are now not going forward," she said.

Referring to the $100 million upgrade needed to halt the flaring of waste gases, Torm Nompraseurt, a senior organizer for Asian Pacific Environmental Network, said, "This system would serve the community for a long, long time. Our response to Chevron is that our lives are not that cheap — even if we are poor."

For Nompraseurt, the prime issue in Richmond is that Chevron is not following the law when it comes to disclosing its true plans through the environmental impact report process. "Chevron told its shareholders one thing, and they told the local community something else," he said. "For me, it is really about the principle that all projects need to go through the [environmental impact report] process, whether one is Chevron or a homeowner making a change to their own house. Under the California Environmental Quality Act, one has to disclose what the applicant is proposing to do. That's just the law."

While activists appear to be gaining ground in Richmond, immense challenges remain. The Asian Pacific Environmental Network, in particular, faces some unique organizing obstacles due to cultural factors. "Many Laotians do not believe that they can tell the government what to do," Nompraseurt added. "In fact, the majority of the 10,000 Laotians who reside in Richmond also have a fear of corporations. They think money and power equals corruption. They sense Chevron has had so much influence on the Richmond City Council, they don't think they can change anything."

While Richmond is a prime focus of Bay Area activists, controversies involving Chevron span the globe, from Angola, Chad, and Iraq to the Philippines. Ecuador is the hottest spot. There, Amazon Watch, a San Francisco-based organization dedicated to protecting the health and human rights of indigenous peoples in the Amazon River basin, has been embroiled with Chevron in a dispute over the oil company's liability for past operations that have had devastating consequences for indigenous peoples.

Chevron appears on the verge of being handed a judgment in Ecuador next year that could total as much as $27 billion. The ruling is a response to practices of its Texaco operations dating back to 1984, which Chevron assumed liability for during the 2001 merger.

Amazon Watch filed a lawsuit against operations then owned by Texaco in Ecuador in 1993, and first raised the issue of Chevron's potential liabilities in Ecuador when Chevron subsequently purchased the assets of Texaco. Amazon Watch maintains that pollution from oil operations in Ecuador "is one the largest environmental and social disasters on the planet," claiming that 18 billion gallons of toxic wastes have been dumped in an area the size of Rhode Island, threatening the livelihood of 30,000 indigenous peoples belonging to five different tribes. Critics claim Texaco employed primitive exploration and production practices in order to save $3.50 per barrel of oil sold to global markets. As a result, untreated wastes flowed directly into local waterways. Waste pits were simply covered over with soil, locations then re-inhabited by villagers.

Chevron points to its $40 million investment in cleanups in Ecuador as a good faith effort, but in reality, the potential for massive pollution problems in the future still exists. And while a deal with PetroEcuador, the nationalized oil company, allegedly left Chevron "off the hook" for future liability, this agreement did not, in the view of Amazon Watch lawyers, apply to the individuals still harmed by pollution.

Perhaps the biggest irony of Chevron's woes in Ecuador is that Chevron fought to move the trial from the United States to this South American country, where it has historically had a cozy relationship with the government. However, when left-leaning Rafael Correa Delgado was elected the new president of Ecuador in 2007, this strategy backfired. Chevron claims it will take this case about legacy issues it inherited from Texaco to some sort of unspecified international tribunal, but lawyers working on behalf of Amazon Watch say no such venue exists.

"It would have been a lot cheaper to settle back in 2001, when we were only asking for $1 billion to $3 billion," said Amazon Watch Executive Director Atossa Soltani. "They've lost face and an opportunity. They now look like they are out of step with today's values."

Indeed, the core message of the Amazon Watch campaign is that the handling of Ecuador represents a crisis in management. "What they did in Ecuador is indicative of deeply rooted symptoms of a company whose values are out of sync, especially here in the San Francisco Bay Area." She ridiculed the fact that Chevron points to its $40 million invested in cleanups in Ecuador as a sign of goodwill, when CEO David O'Reilly received a $50 million bonus in 2008 after the company boasted record profits of approximately $24 billion.

Juan Carlos Quiroz, a policy analyst and Ecuador specialist for the Revenue Watch Institute, expressed some sympathy for Chevron. "Chevron does make some valid points," Quiroz said, highlighting the difficulties foreign companies face when governments change hands rapidly and cultural factors beyond their control impact their image. Is it really Chevron's fault that large portions of the revenue it creates for host governments may be mismanaged, asked Quiroz.

"You have to understand that the government of Ecuador has been very unstable," he said. "The country has had ten presidents in twelve years." Consequently, Ecuador has lacked a coordinated plan for distributing revenues from oil operations. Regions that are the poorest are getting less revenue than regions that are better off, according to the Revenue Watch Institute's analysis.

Burma, also known as Myanmar, may be Chevron's biggest black eye. Here, the issue is not so much environmental impacts, but rather the ruthless killing and looting of nearby villages by armed forces funded by Chevron. The brutal military junta ruling the country is also siphoning off revenues from oil operations and, according to Earth Rights International, stashing it in banks in Singapore.

Earth Rights International, a small nonprofit organization that started up in 1994 focused on human rights abuses in Burma, is the prime mover behind the anti-Chevron work. Despite proposed legislation in Congress that would require Chevron to pull out of Burma, that is not the group's top priority. Rather, it argues that any new projects going forward in Burma should not rely upon the military as a police force. Such battalions are used to patrol pipeline regions, fostering a variety of human rights abuses, including forced labor, land grabs, and murder. Along with contributing to The True Cost of Chevron report, Earth Rights International has released a series of reports about how revenues from oil operations there are not trickling down to provide economic benefits to local citizens.

Chevron has purported to document the benefits of programs financed by oil companies in 25 Burmese villages since 2002. These reports claim that disease rates are down, while literacy rates are up. Abuses in villages located directly in pipeline corridors have also gone down, but these reports do not acknowledge that abuses in nearby villages have gone up, the organization claims. "Chevron and its partners need to acknowledge a corporate responsibility beyond the 25 villages that exist in pipeline corridors," said Paul Donowitz, Earth Rights International's point person for its Chevron campaign. Because Burma does not pay its military and soldiers are now banned from looting and raiding villagers residing in these pipeline corridors, Donowitz claims they are just expanding their search for food and other supplies in nearby areas.

In essence, Chevron argues that if it leaves Burma, Chinese oil companies will move in to fill the void, and then local villages will be worse off than they are now, which is quite possibly true. The oil business can be dirty indeed.

Beyond the torture and mayhem, the other atrocity in Burma is that the "paradox of plenty" is in full display. Earth Rights International claims it has evidence from confidential sources that $4.8 billion has been diverted from the country's national budget from the Yadana natural gas pipeline to the military regime and is sitting in two banks in Singapore, depriving local communities of virtually any economic benefits from oil operations while enduring violent acts of social injustice.

Kazakhstan is the largest private oil development area in the former Soviet Union. Chevron was the first private oil company to drill here in 1993 and is Kazakhstan's largest private producer. The company owns a 20 percent stake in the Karachaganack Field.

More than six years ago, the village of Berezovka, comprised of just 1,300 people and located within five kilometers of these expanding oil drilling operations, was promised to be moved to a "village of the 21st century." National and international laws require the relocation of any village that close to such oil exploration facilities.

The consortium of oil companies and government is rumored to be close to relocating Berezovka, according to Michelle Kinman with Crude Accountability, a Washington, DC-based nonprofit organization that is focused on environmental-justice issues near the Caspian Sea. "We are cautiously optimistic, since this action is predicated on national laws," Kinman said. In her view, the companies involved with consortium, including Chevron, do not want to set a precedent that raises expectations on future relocations too high.

Unfortunately, previous relocations have not been done well. The residents of one rural village, Tengiz, were all moved into a single urban high-rise building. Disputes over compensation of roughly $1,500 per household involved methods of counting what was and wasn't a "household." Crude Accountability claims that few of these villagers were given any training about how to live and work in an urban setting. The organization is working toward making the relocation of Berezovka a successful one, while simultaneously convincing the World Bank and other financial institutions to not fund oil and natural gas development that fosters pollution or human rights abuses throughout the Caspian Sea.

What happens in Nigeria could have major impacts on future operations in a continent destined to become the top oil producer for the U.S. in the coming decades. In fact, Africa already supplies the U.S. with more oil than the Middle East. But Nigeria is a quagmire that may represent Chevron's toughest challenge yet.

Nigeria's population of 150 million people makes it the most populous country in Africa. (The entire continent has a population of 900 million.) Nigeria is torn by cultural and religious strife that makes everything more complicated. For example, the north is predominately Muslim and has traditionally dominated governing structures. The south is comprised primarily of poor Christian populations living near the oil reserves in the Niger Delta, a former fishing community. These southerners have traditionally have not had much voice in governmental affairs.

Today, oil operations have decimated fish populations, interrupting their traditional way of life in the Niger Delta. Many villagers write long detailed letters to Chevron about the impacts oil operations have on their lives - but they never get a response. Chevron employees live in barricades so they have no interaction with local population. As of late, villagers have become armed and steal oil - locals call it "bunkering" -- and Chevron has begun to bribe armed rebels to allow oil to get to market, further entrenching a culture of corruption in Nigeria.

"Oil is so lucrative, that a web of mysterious relationships between oil companies, the government, militants and communities has evolved," said Laura Livoti, founder of Justice in Nigeria and a long-time activist and radio reporter. Earlier this year, for example, 20,000 villagers were displaced during a government-backed crackdown funded by Chevron. "No humanitarian aid was allowed, no journalists, no human rights observers. Armed political militants blew up facilities, which shut down the oil industry. Things got so bad, Chevron pulled out all non-essential employees," she said.

It was this development that prompted the government to offer an amnesty program for militants this past May. While many balked, a large number have come forward to accept amnesty, except the militants most committed to political ideals as well as genuine solutions to local poverty.

The militants and ongoing corruption in Nigeria complicates things. "When the Nigerians were peaceful protestors, it was a lot easier to gain sympathy," acknowledged Livoti. "Now that an armed resistance as risen up in Nigeria, attracting sympathy -- and financial support - is much more difficult," she said.

Despite the litany of woes facing Chevron around the world on the environmental and social fronts, even some renewable energy advocates come to its defense.

"Chevron is in the business of producing crude oil, which is what makes today's world economy run," said Al Rettenmaier, CEO of Integrated Energy Solutions, LLC, an Overland Park, Kansas-based firm committed to tapping the renewable energy potential of algae as well as other clean energy options. "It is a tough, competitive business and we are fortunate to have American oil companies as the leaders in this huge energy industry. We all want a different model, but the reality for today is that the world runs on oil. My personal experience with Chevron is that they are a forward-thinking, progressive American oil company. There is a great deal of concern in their company for the environment and safety. They are a company I would trust to do the right thing anywhere they operate in the world."

Chevron has turned its Chevron Energy Solutions into a $400 million-plus business developing solar photovoltaic and energy-efficiency projects, including a solar system for the Richmond Civic Center. But this level of funding is chump change compared with its total top and bottom-line numbers. The firm also failed to hire locally in Richmond when installing that system, despite the existence of the city's Solar Richmond program, which hires and trains local youth to create the green jobs President Obama has been touting as the answer to today's struggling economy.

Still, the firm is not without its green-tech supporters. "I have spent a considerable amount of time with the company and feel that while they are working in an inherently dirty business, and have a legacy of dubious environmental attention, they are committed to being an energy company well into the future," said Ian Thomson, a prime mover behind CleanTechies.com, a web site that focuses on green jobs in the Bay Area.

"The company is full of extremely bright people," Thomson added. "They know that 'cap and trade' and carbon regulations and other constraints will make alternatives increasingly competitive with their core business. But they know oil. Chevron feels they can compete with the other big oil companies by doing that what they've always been doing."

Although Chevron officials were not willing to discuss the company's checkered international record, Chevron's recently retired chief technology officer, Don Paul, was made available to discuss new energy technologies in an interview at Chevron's San Ramon headquarters, where security was as tight as at a military facility.

"Just when the world thinks it is running out of something, science and technology make something else work," Paul said, summing up the perspective of many oil industry veterans about the likely solution to the problems posed by climate change. From Paul's perspective, bio-fuels are a big part of our energy future as well as being a line of business not too dissimilar from oil and natural gas. "Crude oil is biomass that was processed through geologic time spanning million of years," he said. "With bio-fuels, we are just short-circuiting geologic time. In essence, what we are looking to do in bio-fuels is cut out that middle step."

Responding to criticisms about relying upon former food crops such as corn to serve as the prime feedstock for bio-fuels, Chevron has partnered with Weyerhaeuser to explore developing bio-fuels from timber and wood waste. "Our focus is how to develop the next generation of bio-fuel technologies and go after a large part of our current waste stream as sources for these cleaner fuels," Paul said. Noting that corn prices have risen due to the ethanol production boom in the Midwest, he expressed concern about trading off food for fuel. "Much of our corn has traditionally been given away as humanitarian contributions to poor developing nations. What happens to that program when corn is diverted to fuel?"

Given the size of its operations, he said Chevron takes a twenty-year view on emerging energy technologies. The firm has created partnerships with key agricultural schools at UC Davis, Texas A&M, and Georgia Tech. "Ultimately, we hope to tap true wastes such as sewage, trash, and waste grease to create bio-fuels," he said.

While Chevron is the largest producer of geothermal energy in the world, it does not see geothermal as a major energy source in California. Instead, Paul was much more bullish on solar energy. But instead of the solar photovoltaic arrays that have become so popular with residents and businesses alike, Chevron is instead exploring solar thermal technologies that concentrate solar energy to create steam. "We think it makes more sense to heat water with the sun to create steam instead of converting sunlight to electricity, where you lose two-thirds of the available energy in the conversion to electricity," he said. Chevron hopes to launch a large-scale, solar-thermal-concentrated power initiative in the near future, he promised.

What if oil companies changed their ways and Chevron owned up to its responsibilities and began to devote larger and larger sums to renewable alternatives to oil and natural gas? Can these corporations be part of the solution or will they always be part of the problem?

The announcement that Chevron will soon have a new CEO, John Watson, is a sign, perhaps, that the company is seeking a new direction. "It's possible that this provides an opening for Chevron to do the right thing in the spirit of moving ahead and getting rid of old baggage," observed Becky Tarbotton, program director for the Rainforest Action Network, yet another non-governmental organization ganging up on the oil company. But Tarbotton isn't getting her hopes up. "From what we can tell, Watson isn't exactly a paragon of progressiveness," she said. "In fact, he was the architect of the merger between Texaco and Chevron. But you never know."

The involvement of the Rainforest Action Network, a pioneer in both boycotts and stakeholder engagement, signals that the anti-Chevron campaign is about to hit a new, even more intense phase. "This will be an on-line, off-line campaign of a scale and scope never seen before," Tarbotton promised. "We're bringing some firepower to the campaign in a full-scale attack on the Chevron brand. Our primary objective is to hold Chevron accountable in Ecuador. Our second goal is to get Chevron to establish a global environmental and human rights policy. We're not asking for the sky. We just want Chevron to do the basic things so they are no longer criminals."

Antonia Juhasz, the mastermind of the anti-Chevron campaign, sums up the core message of this unprecedented assault on a single oil company this way. "Chevron is one of the wealthiest corporations in the world," she said. "It should therefore be the cleanest, safest and most equitable company there is and should be deploying the safest technology. If you have to collaborate with some of the most brutal political regimes in the world to safeguard operations, you should probably not be doing business there. They should be limiting production to the least environmentally damaging methods and regions. Oil is an inherently destructive industry, but Chevron is clearly not a model of how to do it right."

Juhasz claims that every California citizen is now impacted by the political power of Chevron. "Chevron calls the shots for the business community at the state capitol in Sacramento, and it led the fight to kill a proposal to enact a severance oil tax — which most other states have — that would add $1 billion annually to state government's coffers," she said. "We don't have the funds to address health care, cleanups on our highways, and create new jobs because Chevron and its allies also fought efforts to close loopholes on corporate taxation at the federal level, too."

But for all its involvement at the state and local level, the future of Chevron's reputation may well be decided in a court in South America. The looming judgment in Ecuador will signal whether the power of the purse can prevail in today's jittery financial climate. A $27 billion hit to Chevron would certainly send a message to shareholders, as well as the rest of the oil industry. Whatever the outcome in Ecuador, the power of the people is being tested in novel ways, and the eventual outcome of the anti-Chevron campaign will likely have repercussions for years to come.

China Secures Gas Supply From Turkmenistan: Who's the True Winner?

2009-12-24T12:07:00.000-08:00

http://www.opednews.com/articles/China-Secures-Gas-Supply-F-by-OilGuy-091223-637.html

December 24, 2009
China Secures Gas Supply From Turkmenistan: Who's the True Winner?
By OilGuy

On December 14, 2009, an inauguration took place that deserves more attention than it received because it marks an economic power shift to the benefit of three Central Asian countries and China and to the detriment of Russia. The presidents of China - Hu Jintao, Turkmenistan - Gurlanguly Berdymukhamedov, Kazakhstan Nursultan Nazarbayev, and Uzbekistan -Islam Karimov, inaugurated the Central AsiaChina gas pipeline that links Turkmenistan's natural gas fields on the Caspian Sea to the Western Chinese border in the Xinjiang province.

This pipeline then connects with the West-East Gas Pipeline that crosses China and supplies cities as far as Shanghai and Hong Kong. 13 billion cubic meters (bcm) are supposed to transit through this pipeline in 2010, 30bcm by the end of 2011 and over 40bcm by 2013. Ultimately that pipeline could supply China with more than half of China's present day natural gas consumption.

Diversification of gas export routes seen as a regional security factor

Most commentators and officials have stirred clear from saying openly that Russia is losing ground in Central Asia because of political sensitivities. Despite years of recurrent official declarations that there are no spheres of influence with the word "influence" being astutely replaced by the word "interest" - there is a delicate balance of powers in the region with historic, cultural and economic ties that cannot be ignored. There is also the need to accommodate the growing interest in the region of new players such China, the United States and the European Union. Russia sees the region as its natural backyard but many countries no longer consider Russia as the most rewarding partner or one that should always have the upper hand.

Turkmenistan is the big winner with this new pipeline as this new export route for its gas production frees it from the diktats of Gazprom: about 70% of its natural gas production used to exit the country through the Gazprom network. Turkmen President Berdymukhamedov stated, "The successful implementation of this project could become a prototype for all international energy partnerships," adding that "this pipeline will have a positive impact across the entire region and beyond, and it will become a major contributing factor to security in Asia." Other winners are Uzbekistan and Kazakhstan that will also be able to supply the pipeline with their own gas production, notably from the Karachaganak, Kashagan and Tengiz fields in Kazakhstan.

The Central Asia-China gas pipeline is a US$7.3bn project, 1,833 km long with 188 km going through Turkmenistan, 530 from Uzbekistan to Kazakhstan, and 1,115 km from Kazakhstan to China. The West-East Gas Pipeline crossing China is over 4,500 km long, making of the joint pipelines the longest in the world.

A new natural gas player: Turkmenistan

In 2008 the independent British auditing company Gaffney, Cline & Associates Ltd was tasked with assessing the volumes of Turkmen gas reserves in the Yoloton-Osman fields. Despite allegations that Turkmen officials - which included the heads of Turkmengas, Turkmenneft and Turkmenneftegazstroy - misled the auditors by providing inaccurate inflated data, it remains reasonable to believe that Turkmenistan holds the 4th or 5th largest natural gas reserves in the world in light of regularly announced gas discoveries in regions with already proven reserves. President Berdymukhamedov himself sacked the Turkmen officials entangled in this scandal in October 2009.

The problem for Turkmenistan until now was that its export routes were limited as over 70% of its gas exports transited through Gazprom's pipelines. An explosion at a key pipeline in April 2009 resulted in bitter battles: Turkmenistan and Russia blaming each other as to the causes of the accident; Turkmenistan supposedly losing over $1 billion per month in revenues; Gazprom refusing to pay European market prices for Turkmen gas per a deal concluded when prices were higher; Turkmenistan announcing it would provide gas to Nabucco, the nemesis of Russian-sponsored South Stream pipeline; etc.

The recent report by Vedomosti that Gazprom plans to purchase "not more than" 10.5 bcm from Turkmenistan during 2010-2012 compared to the usual 50 billion bcm is the confirmation that Turkmenistan absolutely must diversify its export routes. The bringing online of this new pipeline could not have been timelier.

A crack in Gazprom's Hegemony

Gazprom has for many years monopolized gas supplies from Central Asia. With growing interest from China and Europe to diversify their gas supplies, Gazprom engaged in a risky pre-empting game consisting of securing supply agreements, notably with Central Asian countries, to cut the grass under the feet of European countries that have been looking at alternative supply routes bypassing Russia. This has proven to be a costly and risky game, notably with Turkmenistan, as world market prices and demand dropped and the contracted prices were higher than the prices Russia could reasonably resell the gas for. The game played also includes undermining the Nabucco pipeline.

Nabucco, a natural gas pipeline bypassing Russia and endorsed by European countries and the United States, is the perfect example of the power struggle at play: by securing large gas volumes from Turkmenistan and Azerbaijan, the financial viability of Nabucco comes into doubt as it is not clear that there would be enough gas available to supply both Nabucco and the South Stream pipeline supported by Gazprom. Turkmenistan, bitterly annoyed by Gazprom running away from its contractual obligations, announced in July 2009 its willingness to supply Nabucco. Azerbaijan had also conveyed its willingness to supply both pipelines, though is recently playing harder to get in light of the recent Turkey-Armenia rapprochement.

China's steady approach to diversifying its suppliers for everything

China is very well aware that its economic growth and even domestic stability is conditioned upon securing supply chains through long-term agreements. One step at a time China is securing its supply of staple commodities, minerals and energy supplies. To further secure its position in the supply country, China offers loans and technical expertise in addition to gaining the management authority to run the local operations. China has become one of Africa's top three trading partners and several countries, no matter how unsavoury and corrupt they may be, became important trading partners like Sudan, which exports a majority of its oil to China, while others guarantee China's food supply. In November 2009, the China Metallurgical Group bought for US$3 billion a 30-year lease to exploit copper deposits in Afghanistan further demonstrating that no country, no matter how troubled it is, is off-limit.

Money helps shift the balance of power

As Cicero's saying goes "nervi bellorum pecuniae" (money is the sinews of war) and in the commercial wars that are being fought, China has huge financial reserves that it can put in the balance, notably through its state-run financial institutions such as the China Development Bank (CDB). The CDB played a critical role in financing the construction of the US$6.7bn Kazakh section, the largest and most expensive chunk of the pipeline. The China National Petroleum Corporation (CNPC) acquired 50% of MangistauMunaiGas in April 2009 for US$2.6bn and the China Investment Corporation acquired about 11% of KazMunaiGas Exploration & Production in September 2009 for about US$939 million.

China has a financial advantage at a time of liquidity shortages: its ability to instruct it state-owned companies to work on specific projects and to coordinate the involvement of all possible Chinese players (finance providers, construction and management companies, etc.) enables China to strategically position itself at every level of the food chain. For instance in Central Asia, China acquired shares in companies that exploit gas fields (MangistauMunaiGas and KazMunaiGas E & P); China got the rights to exploit fields in Turkmenistan when other countries are still struggling to obtain such rights; China financed and helped in the construction of the pipelines running from the fields (CNPC, China Petroleum Pipeline Bureau and China Petroleum Engineering and Construction Corporation); and China purchases the gas production.

China is at an advantage compared to its American or European competitors as the US has no state companies while Europe's few state companies are held to the same standards as private sector companies and cannot as easily be told what to do. Also, China's financial support has no string attached beyond a long-term commitment for guaranteed supply. The United States or members of the European Union often condition the granting of financing to the improvement of democracy and human rights which is seen by Central Asian countries as an intolerable mingling with domestic issues. Furthermore, China has a lot of state companies that the government can "instruct" to work on a project such as a pipeline. CNPC was the leading operator of the Central Asia-China pipeline project, working closely with each country towards its completion.

This conjunction of companies "ready-to-go" with guaranteed financing and full government endorsement and support gives China a competitive edge. However, moving away from Russia's arms into China's is not a love story but more a marriage of convenience. Concerns exist over China's growing influence and its lower environmental standards. Central Asian countries remain interested in American and European commercial involvement to see it have a balancing role. In addition US and European companies implement good business practices such as transparency, accountability, sanctity of contracts, rule of law, etc. that would greatly benefit Central Asia that is plagued by corruption.

One successful example of mutually beneficial regional collaboration

The fact that Turkmenistan, Uzbekistan and Kazakhstan managed to coordinate their efforts towards the common goal of building a pipeline that will serve them all is an achievement. China played an instrumental role as conductor in making it happen. President Hu Jintao himself underlined the benefits of mutual collaboration through a win-win situation, stating "in line with the principle of mutual complementarity, mutual benefit, equality and win-win cooperation, the four countries have actively carried out energy cooperation and achieved fruitful results."

This said, regional cooperation is far from being a reality in Central Asia despite the well-recognized benefits of cross-border commercial activities. In the end, though Turkmenistan is definitely an important winner with this new pipeline, China can be seen as the ultimate winner by having not only secured a very valuable route for its gas supply, but also by having reinforced its image as a regional player that managed to get three Central Asian countries work towards a mutual beneficial goal, namely a new export route for their gas.

The additional bargaining power Turkmenistan, Uzbekistan and Kazakhstan gained from diversifying their energy export routes, thanks to the Chinese assistance, strengthens their political and economic independence and reinforces regional stability and security and that achievement deserves recognition.

This article was written by Philip H. de Leon for www.OilPrice.com who focus on Fossil Fuels, Alternative Energy, Metals, Oil Prices and Geopolitics. To find out more visit their website at: http://www.oilprice.com

War Veteran Tells It Like It Is

2009-12-22T16:22:00.001-08:00

IS THIS THE SECRET BEHIND CLIMATE SCIENCE?

2009-12-22T14:58:00.000-08:00

www.nomorefakenews.com

IS THIS THE SECRET BEHIND CLIMATE SCIENCE?
By Jon Rappoport
www.insolutions.info
www.nomorefakenews.com
www.PandemicFluOnline.com

DECEMBER 21, 2009. What I’m offering here is not meant to be a single theory that accounts for all factors in a massive global power struggle. Far from it. But perhaps there are important clues…

In 1945, Europe was devastated. It was lying on its back, looking up. Over the next 50 years, it followed a step-by-step plan to become a super-state, the EU. It became a player. In fact, it waged an economic war against the US. That war, on both sides, is ongoing.

From the EU’s point of view, the notion of freedom has to be punctured. The US has to be made into something politically resembling Europe: a socialist operation. A top-down society where “allocation of resources” and its deployment from a central point of control is the preferred and stifling method of “humanitarian economics.”

114 nations in the world produce oil. The Western European nations, starting at #12 (Norway), and dropping down to #101 (Sweden), produce about five million barrels a day, for a population of roughly 416 million.

The US produces 8.5 million barrels a day for a population of 300 million.

And the price of a gallon of gasoline, computed as a percentage of daily individual wealth, takes a much greater slice in Europe than in the US. According to the admittedly rough figures provided by The Oil Drum, the cost of a gallon of gasoline, as a % of the wealth available daily, per individual, is: Europe—7.53%; US—2.54%.

On this basis alone, it would be wise for Europe to find a way to level the oil playing field.

Yes, the EU can obtain foreign oil, but in order to support its socialist state-run enterprises and governments, the taxes it lays on oil make gasoline a very troublesome commodity. The citizens of Europe are not altogether happy about the price at the pump.

How about a daring end run around the problem? Suppose the entire global oil industry could be put under the gun. Would that work? Suppose the very notion of oil as energy could be discredited through a remarkable propaganda campaign. Suppose, somehow, science could be co-opted into this plan.

After all, scientists are famously pliable. With a pittance in research grants, they can be trained like messianic monkeys to support a particular outcome—and they will actually believe in that outcome.

THE EARTH IS WARMING.

THE PRIMARY CAUSE IS HUMANS.

THE PRIMARY HUMAN CAUSE IS OIL PRODUCTION.

THE PRIMARY CULPRIT IS CO2.

Absurd. That would never fly.

Oh…but it has.

Instead of trying to block the competitor’s access to the resource, in the traditional manner, why not discredit the whole resource? Why not call it a poison?

Why not try to level the playing field that way?

“Manmade CO2 is warming the world and the world as we know it will end soon, unless we all find new energies that will sustain us.”

“Let’s set up a primary research facility in England, and let’s begin to turn out studies that alarm the populace. Let’s find allies and use them to support our work.”

“If we can bamboozle the world into accepting this threat-to-the-planet scenario, we can level the field: we will all have to find non-oil energies to run on.”

This program ties in nicely with the overall environmental agenda, for which there is already much support and funding. In fact, at the elite levels of the movement (Rockefeller, Prince Charles, to a lesser degree Maurice Strong, etc.) the vision of a green planet involves far fewer people inhabiting it and far lower needs for energy.

Now—concerning the question of Peak Oil—do the oil companies believe in the concept? Do they think the world is running out of oil? If so, it’ll be easy to convince them to play along. Manmade CO2 at the root of devastating warming: it would even be a winner for them, if they muscle their way into the vanguard of corporations ready to supply the planet with alternative energies. And during the transition, they can clean up on carbon transfers and trading and make new fortunes.

The EU hopes that, in the end, the US will be brought down. It, as the sole threat to a controlled Earth, will have to sacrifice its notion of individual freedom. It will adapt to the plan for an organized society of Everyone. It will go along.

And then the EU, as the primary regional government now existing, will take its rightful premier place among other such organized regional power structures, and there will be de facto world government.

All right, I’ll stop here.

Yes, I know this sounds quite extreme. And yes, I know there are holes in this argument. I know there are unanswered questions. But I believe we have some clues here.

Several European nations once had far-flung empires. In modern times, they faltered and faded. Their star was trampled in two 20th-century wars. At the end of WW2, they were seething under the utter defeat of their long held ambitions. They were brought back from ruin by the US and its Marshall Plan.

Never again would their dreams of conquest be expressed through military conquest.

From 1945 on, they would have to proceed in a more clandestine fashion. For example, through financial manipulation. Upper echelons of European society were already aligned with internationalists in the US, and the globalist agenda was already a work in progress.

However, in terms of sheer industrial and military might, the US was in a class of its own.

The military/industrial world runs on energy, and that energy is oil.

Given the superior strength and operating power flowing from individual freedom and the capitalist system, America was more than formidable. It was nearly untouchable.

Perhaps, at some point, the target became oil.

Weaken that, and you weaken the US. You bring it closer to the level of the other players. If everyone suffers in the process, so be it.

Of course, there are real environmental problems. Industrial pollution, where it is severe, causes lung disease. Chemical spills, oil spills—these are not negligible events. Ongoing dumping in rivers kills life. And so forth and so on. But that is not enough to hook up the people of Earth to a doomsday scenario.

For that, you need science. You need a provocative theory about the end of all civilization. You need government agencies to feed stories to the compliant press. You need the United Nations, a stepchild of the Council on Foreign Relations, one of the important globalist think tanks on the planet. You need to coordinate many non-profit humanitarian groups. You need major PR. With time, with hard work, you can get it.

What we are now witnessing is the “kinder, gentler” rebirth of the Soviet Union, on a planetary scale. Not only the stifling of enterprise through complex forced interfaces with bureaucratic carbon red tape; not only that. The whole idea is to corral the entire productive capacity of the world under the umbrella of Resource Allocation.

This concept flows from the notion of Central Planning, where researchers determine what the world can produce and how many people it must distribute this largesse to. And how it will be done, on a “fair” basis.

It’s the Jesus Christ of industrial calculations. “We will bring Christmas on Earth to you. Just be patient. We’re figuring out the system. Nations will wage war no more. Swords will be turned into plowshares. We’re building the model.”

Part of my argument rests on the fact that, expressed nakedly, this sounds so absurd no one with a shred of intelligence would buy it. But, you see, we are already stepping out on that road, because Science has told us we must; it’s the only way to save ourselves. There is a thing called CO2, and it’s killing us, and it’s the Alien that was hiding under the surface of our hubris. It’s our recompense for all we did to attack Mother Nature, and it fits everything we’re taught to believe about ultimate justice and payback.

Oil must go down. Industry must go down. We must bring natural green back to every corner of the Earth. It’s not just a pretty idea anymore. No, we must do it because we have brought the planet to the brink.

Our only chance, and it is a long shot, is to place our future into the hands of wizards, who can determine how to allocate the riches of the world. Planning. From above.

The experiment with freedom is over. We proved how destructive we could become with it. Therefore, now we must put the house in order and bind up our reckless ways.

Burn your pride on the altar of Collectivist Realization. Humble yourselves. Await messages from the Planners.

CO2 was just one insight. The whole unruly world must be organized, so we can escape other threats.

It will be a beautiful thing.

They say.

By Jon Rappoport

Neocons Must Be Pissed; China and Russia Are Getting the Sweet Oil Deals in Iraq

2009-12-19T18:48:00.000-08:00

Neocons Must Be Pissed; China and Russia Are Getting the Sweet Oil Deals in Iraq
By Pepe Escobar, Asia Times
December 19, 2009
http://www.alternet.org/story/144639/

BEIJING - Former United States vice president Dick Cheney, ex-defense minister Donald Rumsfeld and assorted US neo-cons will have plenty of time to nurse their apoplexy. One of their key reasons to unleash the war on Iraq in 2003 was to seize control of its precious oilfields and thus shape a great deal of the new great game in Eurasia - the energy front - by restricting the access of Europe and Asia to Iraq's staggering 115 billion barrels of proven oil reserves.

After at least US$2 trillion spent by Washington and arguably more than a million dead Iraqis, it has come to this: a pipe dream definitely buried this past weekend in Baghdad with round two of bids to exploit a number of vast and immensely profitable oil fields.

The bids, supervised by the Oil Ministry, were presented on a live TV game show. Instead of American Idol, Iraqis got "Oil Idol." In a raucous carpet bazaar atmosphere, the ministry played "my way or the highway" and forced 44 foreign Big Oil corporations to cut to the max the fee they collect on every barrel extracted in Iraq and submit to 20-year contracts. These multinationals were not given a share in Iraqi oil production; they will be paid a $2 fee per barrel for raising output above a mutually agreed level.

Still, for Big Oil, the possibility of having a crack at all those mega-giant fields in Shi'ite-controlled southeast Iraq -- the largest concentration of its kind in the world -- led all players to yell , "It's raining oil!" Once you've paid the ticket, you're inside the theater. And what a theatre ... The Iraqi government may end up paying foreign Big Oil as much as $50 billion for its know-how. All these "service" deals will dodge Iraq's parliament -- which might throw a wrench in the works. And Big Oil will still get $2 for each barrel of extra crude above a minimum production target.

In June, Iraq held its first oil auction, offering foreign companies the chance to increase production at already-pumping fields. The latest auction was the first time foreign firms could bid on untapped fields. Of the 10 groups of fields available, seven were awarded.

Win-win for Russia and China

Cheney's and Rumsfeld's script was never supposed to develop like this. Instead of US Big Oil getting the lion's share, strategic competitors Russia and China turned out to be big winners. Dick Cheney's "consolation prize" was an Exxon-Mobil-Shell alliance getting the phase 1 of West Qurna in early November. Exxon-Mobil had been the favorite to also win Rumaila (17.8 billion barrels of reserves). But a BP-CNPC (China National Petroleum Corporation) alliance got it in the end because unlike Exxon-Mobil they agreed to cut their fee per barrel down to the Oil Ministry-enforced $2.

CNPC (50%), along with partners Total from France (25%) and Petronas from Malaysia (25%), was also a big winner for Halfaya (4.1 billion barrels of reserves, projected output of 535,000 barrels per day (bpd)), southeast of Amara.

Petronas again (with 60%), and the Japan Petroleum Exploration Company (Japex), with 40%, will invest a cool $7 billion to develop Gharaf (reserves of around 860 million barrels, projected output of 230,000 bpd). Bidding was fierce. Losers were a joint Turkish-Indian bid, a Kazakh/South Korean/Italian consortium, and Pertamina from Indonesia.

A Petronas-Shell alliance got the highly coveted Majnoon (reserves of more than 12 billion barrels, projected output of 1.8 million bpd), near the Iranian border. Russia's Lukoil (85%), with junior partner Statoil (15%), got phase 2 of the immense West Qurna (located 65 kilometers northwest of Basra; about 12 billion barrels of reserves; projected production of 1.8 million bpd) - which in theory it had already bagged under Saddam Hussein. When Lukoil was stripped of its contract by Saddam, it blamed US-instigated United Nations sanctions, while Saddam blamed Lukoil itself.

West Qurna's phase 1 (8.7 billion barrels of reserves, with a projection to increase output from 300,000 bpd to 2.3 million bpd before 2016) was won in November by the aforementioned Exxon Mobil-Shell alliance. Losers were Total from France, a consortium of Petronas, Pertamina and Petrovietnam, and a BP-CNPC alliance.

Gazprom (40%), with junior partners TPAO, Kogas and Petronas, got Badra (projected production of 170,000 bpd). Unlike the mad scramble for the southern fields, no one even bid for the East Baghdad field, for obvious reasons: it's located in a virtual war zone. [1]

The Shi'ites are coming!

Iraq nationalized its oil industry in 1972. Now Big Oil is back with a vengeance. Iraqi Oil Minister Hussain al-Shahristani made no bones about Iraq's ambitions, saying, "Our principal objective is to increase our oil production from 2.4 million barrels per day to more than four million in the next five years." Iraq is at present exporting less oil than under Saddam, but it aims to export seven million barrels a day by 2016. Shahristani also insists "our country will have total control over production".

That is enormously debatable.

For the moment, Prime Minister Nuri al-Maliki's government in Baghdad is obviously a winner. Iraq currently gets only $60 billion a year in oil revenues. It's not enough to rebuild a country destroyed by the Iran-Iraq war of the 1980s, UN sanctions and the American occupation. Arguably, Iraq's oil industry would not have sufficient funds, equipment and technical people to get back on its feet alone.

Whether with more oil revenues Baghdad will be able to impose law and order - starting with the capital - and fully equip its 275,000 military plus police forces, that's an open question. No one knows for sure who will be in control of Iraq in the near future, with parliamentary elections due early next year. A new government may be tempted to renegotiate these contracts, or even invalidate them.

In the next few years, with Iraq being able to reach the target of producing at least four million barrels a day, it's fair to argue this won't substantially influence the price of oil; but it will prevent it from shooting up out of proportion. China is now importing over four million bpd - and this will continue to rise. China by itself will be gobbling up any output increase in the global oil market.

What the early 2010s will definitely see is the rise of a relatively wealthy, Shi'ite-controlled Iraq friendly with Iran and Lebanon's Hezbollah. Essentially, Shi'ite Islam on the rise. The US-friendly autocracies and dictatorships in the Gulf will cry again, "It's the return of the Shi'ite crescent!" United States think-tanks may be tempted to define Maliki as the new Saddam. The only difference is that by then, Cheney and company will be safely ensconced in the dustbin of history.

NOTE:

1. To see which companies got what in detail, go here

Royal Dutch Shell Nominated for Angry Mermaid Award

2009-12-17T10:13:00.000-08:00

http://www.angrymermaid.org/shell

Royal Dutch Shell
Nominated for actively investing in the energy-intensive tar sands, at the same time as pushing unproven Carbon, Capture and Storage (CCS) technology as a solution to climate change, whilst undermining initiatives to reduce CO2 emissions.

Background
In 2009 Shell became the world’s largest company. The Anglo-Dutch oil giant is also the world’s most carbon intensive oil company: A recent survey by environmental NGOs found that the average carbon intensity of each barrel of oil and gas Shell produces is set to rise dramatically, increasing by 85 per cent. Shell’s rapid re-carbonisation strategy is in direct contrast to governments who are trying to decarbonise their economies, reduce carbon emissions and encourage renewables.

Shell has pulled out of renewable energy a decade after setting up a special unit to promote wind and solar – and now its business strategy is based on developing controversial biofuels and producing oil from the highly polluting tar sands. Shell is leading the development of Canada’s energy-intensive tar sands, trying to argue it can be exploited in an environmentally-sensitive way.

Knowing it is becoming more vulnerable to a carbon constrained world, Shell has been leading industry lobby efforts in Washington, Brussels and the United Nations Framework on Climate Change to weaken and neuter legislation to tackle climate change. A key part of Shell’s lobbying strategy for Copenhagen is to persuade politicians that tar sands are a strategic part of the energy mix and that carbon emissions can be adequately mitigated through the as yet unproven Carbon, Capture and Storage (CCS) technology.

Promoting CCS
Shell, which holds key CCS patents, has been at the forefront of the business lobby pushing CCS as a solution to climate change, both in Europe and Canada. In October 2008, it was awarded over $800,000 from the Alberta and Canadian governments for a CCS project. This is despite a joint Canada and Alberta task force on CCS concluding, in 2008, that only a small percentage of CO2 released in mining oil sands and producing fuel can be captured.

At the EU Shell has been arguing that the climate change fight will be “wasted” without CCS and therefore the EU should pour public money into making the technology viable. The company is extremely influential in the leading EU lobby organisation - the European Technology Platform of Zero Emission Fossil Fuels Power Plants (ZEP) - which is “driving CCS forward in Europe.” The head of ZEP’s advisory panel is Dr. Sweeny from Shell. ZEP’s mandate is to “enable CCS as a key technology for combating climate change” and to “make CCS technology commercially viable by 2020 via an EU-backed demonstration programme.”

Shell has also been heavily lobbying the EU Parliament, especially through Chris Davies MEP, the Rapporteur who is leading in Parliament on CCS. Davies argues that “Shell’s strategic thinking and vigorous advocacy has played a crucial role in making the development of CCS technolgy a priority within the EU strategy to reduce global warming emissions”.

Chris Davies has conceded that he incorporated Shell’s ideas. David Hone, Shell’s climate change adviser, “played an important role in giving substance to the idea of using carbon allowances as a means of supporting CCS capital investment”, said Davies. In June 2009, the Brussels-based lobby organisation Eurelectric, which represents Europe’s biggest electricity generators, was so pleased with Davies’ successful promotion of the industry’s position on CCS in the European Parliament that they gave him a special award.

Chair of the Eurelectric Award panel Paul Bulteel told the audience that Davies understood that CCS “is the answer to making coal-based power compatible with climate change objectives”.

Lobbying to weaken proposed climate laws
In the US, Shell has spent $2.4 million lobbying politicians so far in 2009. During this time, it has lobbied on the latest attempt by US law makers to tackle climate change, the American Clean Energy Security Act, also known as the Waxman-Markey Bill.

Shell is a leading member of the United States Climate Action Partnership (USCAP) and has used its position within that partnership to weaken climate legislation under discussion in Congress. The company was instrumental in removing the only provisions in the Bill that would have stopped the proposed increases in US imports of tar sands.

Meanwhile in Brussels, Shell replied to the European Commission’s proposal to cut CO2 emissions by 20% by 2020 with a vigorous lobbying campaign. Through two industry lobby organisations – the European Petroleum Industry Association (EUROPIA) and CONCAWE, the oil industry research association – Shell has been extremely active in trying to weaken down the proposed legislation, succeeding in influencing the rules on how the 20% target can be met.

The Commission’s Fuel Quality Directive proposed that producers reduce emissions from their fuels by 10% by 2020 compared with 2010 levels. The main target of the Directive was the oil industry. Although this 10% reduction target was seen as being achievable, EUROPIA stated that it “should be withdrawn from the Directive proposal”.

EUROPIA and CONCAWE argued the oil industry could do nothing to reduce the carbon intensity of mineral oil-based fuels, and that the solution was in biofuels. When the Commission proposed sustainability criteria for biofuels, EUROPIA tried to get them removed too.

Another element of the EU’s 2007 “Climate action and renewable energy package” was reform of the EU Emissions Trading Scheme. These include a plan to charge refineries for 20% of their emission permits from 2013, rising to 100% by 2020. Once again Shell and other oil companies lobbied against the proposals and managed to get refineries exempted up to 2013.

Despite undermining the European Commission’s climate proposals, Shell has managed to gain assistance from the Commission to help greenwash its operations. Earlier this year, Shell lobbied the President of the Commission, Jose Manuel Barroso to lend his “Patronage” to the Shell Eco-Marathon held near Berlin in May. After Barroso accepted the invitation, documents released under Freedom of Information legislation, show that Shell suggested that Barroso “could use the EU Flag to start the Grand Parade”.

Shell wanted the EU flag to give an official seal of approval to its climate greenwashing campaign.

Shell was invited to comment on its nomination for the Angry Mermaid Award but did not respond.

American Petroleum Institute Receives Angry Mermaid Award

2009-12-17T10:11:00.000-08:00

http://www.angrymermaid.org/api

Angry Mermaid Award
American Petroleum Institute (API)

Nominated for organising an “astroturf” campaign against the US Climate Bills. In August 2009, a leaked memo from the API revealed it had invited its membership to attend a series of rallies in 20 key states, in order to give the impression of a groundswell of grassroots opposition to the climate legislation.

The American Petroleum Institute (API) is the key oil industry lobby organisation in the United States, representing some 400 companies that cover the spectrum of the oil and gas industry, from the largest major to the smallest independent.

The API has a history of lobbying against legislation on climate change. As far back as 1998, the API plotted to roll out an anti-Kyoto campaign, as revealed in a memo leaked at the time: “Victory will be achieved when … the media understands (recognises) uncertainties in climate science … those promoting the Kyoto Treaty on the basis of extant science appear to be out of touch with reality.”

The API has been lobbying vehemently against the most recent climate legislation to pass through the US Congress: the American Clean Energy and Security Act of 2009, also known as the Waxman-Markey Bill, after its authors. The Bill was approved by the lower House of Representatives in June 2009. The vote was the first time Congress had approved legislation designed to curb greenhouse gas emissions.

So far in 2009, the API has spent over $4.1 million on political lobbying, much of it directed at trying to defeat the Bill. It was outraged that Congress passed it. “The bill will cost Americans billions of dollars in higher costs, kill jobs and will not deliver the environmental benefits promised,” API President Jack Gerard said. “We are hopeful that the Senate will produce a bill that does not harm the economy and includes a more balanced approach to transportation fuels and natural gas.”

You can see why the API was so worried. As a New York Times editorial put it: “What the oil companies are probably worried about is that people and industries will consume less of their product as alternatives appear and consumers become more energy-efficient. But isn’t that the point of the exercise?”

Hence the API’s astroturf campaign, which they called “Energy Citizen” that the API held over Congress’s Summer recess. It was mainly targeted at key politicians from the US Senate which were due to debate and potentially adopt a similar Climate Bill to the Waxman-Markey Bill. The Senate legislation is called the Kerry-Boxer Bill, after the Senators promoting it.

Astroturfing is a public relations and lobbying technique where an organisation like the API sets up a grassroots movement to give the false impression of a popular movement for or against proposed legislation, or other regulatory action.

Big business has a history of setting up astroturf groups with the name “Citizen” in them, such as the Global Climate Coalition (set up by an oil company) and Citizens for the Environment (business lobbyists fighting the clean air act). The unsuspecting public does not see the dirty hand of big oil, they just see ordinary people.

The API proposed a series of rallies across the country populated with API members’ staff, purporting to be ordinary citizens. According to a leaked API memo, the objective of the rallies was to “put a human face on the impacts of unsound energy policy and to aim a loud message at those states’ U.S. Senators to avoid the mistakes embodied in the House climate bill and the Obama Administration’s tax increases on our industry.” So, the public sees workers fighting for jobs, not big oil fighting climate legislation.

In the same leaked memo, API President Gerard notes the effectiveness of their scaremongering campaign in changing public opinion: “Our messages on Waxman-Markey-like legislation work extremely well and are very persuasive with the general public and policy influentials. After hearing that Waxman-Markey-like legislation could increase the costs of gasoline to around $4 and lead to significant job losses, these audiences changed their opinions on the bill significantly.”

This figure of $4 a gallon for gasoline, which is used to scare the public, is from a calculation made by the Exxon-funded Heritage Foundation. It predicted a rise in gasoline prices to “$4 by 2035”. The API conveniently left out the 2035 date. It also ignored figures from the US Environmental Protection Agency, which show that the overall cost of the Bill would, in fact, be around 22-30c a day, or under $100 a year.

The API chose the cities where it was going to hold its rallies carefully. They were in the 20 states and local districts of Congressmen who were in marginal seats and the states of Senators who hold the key votes to getting the Bill through the Senate.

The API counts as members companies who publicly purport to care about climate change, like Shell and BP. Shell has distanced itself from the campaign, although it said that its employees were free to go to the rallies. BP also says it supports the Waxman-Markey Bill. But neither appear to have done anything to dissuade the API of its plans.

However, the API’s lobbying campaign backfired when its memo was leaked to Greenpeace, despite API President Jack Gerard stressing in the memo: “Please treat this information as sensitive and we don’t want critics to know our game plan.”

Yet, the astroturf Energy Citizens website continues to oppose the Senate climate legislation, arguing it is a “huge new energy tax on farmers, truckers, small businesses and America’s families” that “imperils millions of US jobs.”

In the “About” section on the website it still states: “Energy Citizens is a nationwide alliance of organisations and individuals formed to bring together people across America to remind Congress that energy is the backbone of our nation’s economy and our way of life.”

Nowhere does it say it is an astroturf campaign run by the API. One clue to the API’s involvement is that Energy Citizen’s postal address is the same as the API’s.

The American Petroleum Institute was asked to comment on its nomination for the Angry Mermaid Award but did not respond.

The Great Oil Grab! How the Major Powers are Dividing the World's Resources

2009-12-15T12:35:00.001-08:00

http://oilprice.com

Published : 14th December 2009
The Great Oil Grab! How the Major Powers are Dividing the World's Resources

China and Russia will stay on tenterhooks for decades to come, on the question of sufficiency of energy supplies, notwithstanding the oil grab they have indulged in over the past years. According to energy security pundits, both China and Russia have unique problems and are unable to shake off the shackles of the modern open energy market.

“Even though China seems to be rushing to buy oil resources and production supplies, it still has to buy its oil in open markets.

A rough calculation of its production and consumption units in bpd show it would not be using more than one-third of its total consumption from its own productions in the coming decades,” said John Roberts, energy security specialist with Platts. Roberts predicted, “even though China will end up with one-fourth of Kazakhstan production, the rest of Kazak production will head West.”

According to media reports China is amassing oil and gas reserves in Nigeria, Libya, Angola, Iran, Iraq, Venezuela and other available resources around the world leaving no stone unturned anywhere and there is a panic in the Western media about it.

A backlash of sorts is already evident from Libya's recent veto of a $462 million bid by China National Petroleum Corp.

The Chinese invasion news is compounded by Russian claims on untapped gas reserves in the Arctic and the U.S. is getting accused of oil grab in the Middle East, especially in Iraq for now.

In the West there is an open question about security of the western oil supplies vis-a-vis expansion programs of Russian state-owned groups such as Gazprom ready to threaten those supply lines. Russia is the world's second-largest producer of petroleum - about 8 million barrels of crude per day - which accounts for nearly 40 percent of the country's GDP.

Sky-rocketing global oil prices over the past five years have wafted state budgets into the black, fueled a modest economic boom, and enabled the Russian Central Bank to rack up reserves of $170 billion. But far beyond taxing windfall energy profits, the Kremlin moved to take over the industry.

Prime Minister Vladimir Putin, the former president and his over-inflated but shrewd ego is going all-out to get back the super-power glory resulting in the assembly of a vast state-run energy conglomerate. Russian authorities have - by hook or by crook - regained state control of the formerly private oil-and-gas sector with increasing state ambitions to spread its domain now to the Arctic areas. But this oil grab may have damaged Russia's energy prospects, according to sector observers.

A Russian energy expert speaking on conditions of anonymity told Oilprice.com today that exploration has come to a halt while a sustained growth of 9% in oil production a few years ago has dried to just 3% this year.

Platts energy pundit Roberts told Oilprice.com: “The Russian companies are keen to invest outside Russia because it is difficult to make that much money inside as Russian terms are not very good.”

On the question of the Arctic oil and gas grab, Roberts said: “That area promises further major resources because we know that Yamal Peninsula has vast volumes of gas to be developed.”

Citing the Russian estimates of “300 billion cubic meters a year,” Roberts pointed at the need for developing the production. “To develop giant field resources, Russia needs capital and also to maintain the present status quo of production, huge investments are needed between 2010 -2030 as gas production otherwise will be halved,” he said.

Russia, however, has two advantages, Roberts pointed out: First, having resources and second, most profligate user of energy.

“If it could learn to save or conserve energy and become energy efficient, it may hope to free up cash for the transformation of existing resources into actual production,” he said. “Russia needs anywhere between $2.4 and $2.8 trillion for energy development between now and 2030,” Roberts added. “It’s worth looking up at Russian GDP and that is a lot of money for Russia.”

“Russians are planning to tap into FDI (Foreign Direct Investment) but we have never seen anything like that,” he said, questioning where would Moscow find $15 bln per year in FDI.

With the fear of looming energy crisis and impending need for security for hungry industrial giants, there is no doubt that the developing countries like China and India are giving the advanced nations like the U.S. a run for their life in the energy fields.

The energy gurus, however, feel that there will stay an equation of sharing depending on basic principles of give-and-take.

Sarah O. Ladislaw, a Fellow with the Energy and National Security Program at the Center for Strategic and International Studies (CSIS) in Washington DC, said at a recent forum how “consumer feelings of insecurity increased when the price of oil went up,” as she addressed the issue of the intersection of security and sustainability.

Michael Mandel, former chief economist for BusinessWeek, “was optimistic, long-term” despite projections about the industry in the face of a global population crisis and global warming prospects that will exacerbate energy supply.

On the question of sustainability of supply, Roberta Bowman, senior vice president and chief sustainability officer, Duke Energy Technology, maintained that “sustainability, on an industry basis, will only come about through dedication to efficiency, collaboration and capacity-building.”

Curt L. Hebert, Jr., executive vice president, external affairs, Entergy Corp., approached sustainability from the perspective of “conduct,” as well as creating proper incentives and price signals while Pedro Azagra, chief development officer, Iberdola, tied sustainability policy to the proper servicing of clients and communities.

All these augur well for the United States as its crude oil production for 2009 is on target to have its biggest one-year jump since 1970, according to a Platts analysis of industry data.

With U.S. oil production averaging 5.268 million barrels per day (b/d) through October, the gain in U.S. output will be the most since the country produced 9.637-million b/d in 1970, which turned out to be the peak year of U.S. crude output, according to Platts’ analysis of data published by the U.S. Energy Information Administration (EIA).

The Great Oil Grab! How the Major Powers are Dividing the World's Resources

2009-12-15T12:35:00.000-08:00

Iraq aims to displace Iran as second-largest oil exporter

2009-12-14T17:32:00.000-08:00

http://www.telegraph.co.uk/earth/energy/oil/6803680/Iraq-aims-to-displace-Iran-as-second-largest-oil-exporter.html

Iraq aims to displace Iran as second-largest oil exporter
Iraq has set an ambitious target of producing 12 million barrels of oil per day as the country aims to displace Iran as the world's second-largest oil exporter by 2015.
By Damien McElroy in Bahrain
Published: 6:15PM GMT 13 Dec 2009

Ministers have hailed the success of last week's auction of oilfields to international companies.
"This represents a victory," said Hussein al-Shahristani, the oil minister.

Now, two rounds of auctions of Iraq's oil rights have offered international oil giants the rare opportunity of bidding for lucrative Middle East deposits. Most countries in the region have nationalised the industry - as had Iraq before the regime of Saddam Hussein was overthrown by the American-led coalition in 2003.

Iraq lacks the resources to develop its own oilfields. Output since the war has hovered around the Saddam-era 3 million barrels per day, but the government has said the figure will quadruple.

"That is the highest production level of the world's oil-producing countries," Mr Shahristani said.

Figures compiled from 1970s data currently show Iraq's proven reserves are 115 billion barrels, less than Iran's 137 billion and Saudi Arabia's 264 billion.

But experts believe production will rise significantly as modern seismic tests are conducted with international expertise.

The oilfields put to tender on Friday and Saturday offered a potential 5 million barrels per day output.

Shell and Petronas win rights to develop giant Iraq oilfield

2009-12-13T11:31:00.000-08:00

http://www.guardian.co.uk/world/2009/dec/11/shell-petronas-majnoon-oilfield-iraq/print

Shell and Petronas win rights to develop giant Iraq oilfield
Majnoon oilfield goes to Anglo-Dutch and Malaysian consortium in second auction of oil assets since 2003 invasion
Haroon Siddique and agencies
Friday 11 December 2009 09.16 GMT

Shell joined with Petronas to submit the winning bid for the Majnoon oilfield.

A consortium led by Shell has won the rights to develop the giant Majnoon oilfield at the second auction of Iraq's oil rights since the 2003 invasion.

The auction for about a third of the country's known reserves quickly surpassed last summer's sale, with Majnoon the largest field on offer in the current round. A group of oil companies led by China's CNPC struck a deal to develop the Halfaya field.

There are 10 fields being auctioned over two days under tight security at the Iraqi oil ministry's headquarters. Last summer's auction saw a single deal struck despite eight fields being on offer.

Shell and Malaysia's state-run oil company, Petronas, beat another consortium consisting of France's Total SA and China National Petroleum Corp for the rights to Majnoon, which has estimated reserves of almost 13bn barrels of oil, compared with 4.1bn for Halfaya.

A total of 45 firms are vying for 20-year contracts to develop the 10 fields, spanning from northern Iraq to major fields in the Basra region in the south. Among the bidders are Britain's BP, America's Exxon Mobil and state-backed companies from Asia.

The deals are crucial for Iraq, which relies on oil for 90% of its government budget and sorely needs international companies' help in boosting production and revamping its dilapidated oil sector. Iraq has the world's third-largest known oil reserves.

Although the security situation has improved since the 2007 surge of US troops, the auction takes place against a background of attacks in Baghdad that killed at least 127 people on Tuesday and raised questions about the ability of Iraq security forces to stem the violence as US troops depart.

Opening the auction, Iraq's prime minister, Nouri al-Maliki, played down the significance of Tuesday's attacks. "There is no security deterioration in Iraq even if a security violation took place here," he said.

The US defence secretary, Robert Gates, flew into Iraq to discuss security concerns. In a meeting with Maliki he expressed his condolences for the Baghdad bombing and offered any assistance the country might need.

Federal officials seek urgent safety changes after acid released at Texas refinery this summer

2009-12-13T11:23:00.001-08:00

http://abcnews.go.com/Business/wireStory?id=9293385

Feds Urge Safety Changes at Citgo Refinery
Federal officials seek urgent safety changes after acid released at Texas refinery this summer
By JOHN McFARLAND
The Associated Press

DALLAS

Federal officials issued urgent new safety recommendations Wednesday for a Texas oil refinery where 21 tons of deadly acid were released this summer and said they are investigating the use of the chemical at refineries nationwide.

The head of the U.S. Chemical Safety Board said the inquiry continues into the July accident at Citgo's Corpus Christi refinery that seriously injured a worker, and accidents involving hydrofluoric acid in Illinois and Pennsylvania are also being investigated. In all, about a third of the nation's 150 refineries use hydrofluoric acid, or HF, in the process of making high-octane gas.

"We're looking industrywide at the HF use in refineries and the safety of HF at the 51 refineries," CSB investigations supervisor Robert Hall said.

The United Steel Workers union and the Sierra Club have been urging a ban on the acid for months, saying it's too dangerous to workers and people who live nearby. The highly corrosive acid can burn eyes, eat away flesh at a rapid rate and is fatal after prolonged exposure.

At the Corpus Christi plant, a control valve failed July 19 and released an HF vapor cloud. That cloud caught fire and started explosions that released the additional 21 tons of acid vapor, about 2 tons of which escaped into the sky. The injured worker got caught up in the cloud. Winds helped carry the massive cloud into the ship channel and away from people.

The CSB was critical of Citgo's lack of cooperation with investigators, its objection to the public release of surveillance video of the incident and its early reports to state regulators that only 30 pounds of HF escaped into the sky.

"We believe the original release was at least 100 times larger than Citgo had originally stated," said Hall.

Citgo, a Houston-based refiner and subsidiary of Venezuela's national oil company, said in a statement that it is cooperating and has already taken action on the recommendations.

"We hold nothing in higher regard than the safety of our employees and members of the local community," said the company, which said its HF calculations were based on air samples and that its reluctance to release the video was for security purposes.

The Texas Commission on Environmental Quality has "significant concerns" about Citgo's reporting, spokeswoman Andrea Morrow said, and the agency's investigation is pending.

The CSB recommended that Citgo upgrade its emergency water system within 30 days. The system is used to spray down and absorb HF if it escapes, but the board's investigation found the refinery nearly ran out of water after the first day and had to start using salt water from the ship channel.

Officials also recommended third-party audits at Citgo's refineries in Corpus Christi and near Chicago. Refineries using HF are supposed to undergo safety audits every three years, but the CSB found neither Citgo refinery has ever had one.

The final CSB report on the Texas accident will be finished in August, but the board's Chairman John Bresland said the urgent recommendation was issued because of fear of "imminent hazard to workers or members of the community."

"In this case, we felt like we could not wait for the final report on our investigation," he said.

The CSB does not issue citations or fines. It makes safety recommendations to plants, industry organizations, labor groups, and regulatory agencies, and Bresland said typically those recommendations are followed.

Bresland said he's concerned by the three serious incidents this year involving HF. In March, about a dozen workers were treated for exposure after HF was released at a Sunoco oil refinery in South Philadelphia. A few months later, two workers were hurt when acid escaped from ExxonMobil Corp.'s refinery in Joliet, Ill.

The steelworkers union, which includes many refinery workers, and the Sierra club both said they were glad the recommendations included third-party audits. The union said it hopes the final report "addresses the overall safety of the refinery, similar to the BP Texas City report where the board told BP to examine the safety management systems in all its U.S. refineries."

Oil Lobby Photoshopped Minorities Into Stock Photos to Add Diversity to Anti-Clean Energy Pamphlet

2009-12-12T05:54:00.000-08:00

Oil Lobby Photoshopped Minorities Into Stock Photos to Add Diversity to Anti-Clean Energy Pamphlet
By Lee Fang, Think Progress
December 12, 2009
http://www.alternet.org/bloggers/http://www.thinkprogress.org//144514/

In August, The Wonk Room’s Brad Johnson noted that the coal industry had contracted a PR firm to promote its “FACES of Coal” campaign. To attack clean energy reform, the campaign featured pictures of seemingly normal individuals opposed to cap and trade legislation. However, the Appalachian Voices’ Front Porch blog revealed that the “FACES” of the coal campaign were actually stock images purchased from iStockPhotos.com.

The oil industry, under the umbrella lobbying group American Petroleum Institute (API), is copying that strategy. In a newly-released pamphlet, API fear-mongers that “hard working Americans,” like ordinary “valets,” “painters,” “day care providers,” and “rocket scientists,” will lose their job and be “hurt” by clean energy reform. To show the great diversity of those affected by the legislation, API decided to buy a stock image also from iStockPhoto.com. Apparently, the stock image was insufficient for API’s purposes. Upon close examination, it’s clear API photoshopped two of the people to turn them into minorities. One of the minorities, the individual on the left, is poorly photoshopped though — his face is brown, yet his hands are still white:

The original iStockPhoto:

The edited, API version (click here to view the pamphlet):

The PR firm representing the oil lobby, Edelman, clearly did a shoddy job in creating this marketing effort. But this pamphlet reveals a fundamental truth that the oil industry is paying lobbyists to literally manufacture support. (HT: Astrotruth)

Iraq set to be second in oil league table

2009-12-11T14:22:00.000-08:00

http://www.ft.com/cms/s/0/0352857e-e644-11de-bcbe-00144feab49a.html

Iraq set to be second in oil league table
By Carola Hoyos, Chief Energy Correspondent
Published: December 11 2009

Iraq is on course to overtake Iran as the holder of the world’s second-largest proven oil reserves, solidifying its position as the energy industry’s new frontier in the scramble to secure fresh resources.

Baghdad agreed on Friday to deals with Royal Dutch Shell and China’s CNPC for two large oilfields, following on from similar accords with ExxonMobil, Eni and BP .

Consultants who have analysed the agreements struck by Baghdad said the contracts underlined the companies’ confidence that they would be able to use modern seismic and drilling technology to get far more oil out of the fields than had previously been thought possible.

Iraq’s proven reserves now stand at 115bn barrels, below Iran’s 137bn and Saudi Arabia’s record 264bn. But Iraq’s reserves data dates from the 1970s, before the improvements in technology that transformed the industry.

Raad Alkadiri, an Iraq expert at PFC Energy in Washington, said the companies offered Iraq very good terms in the deals because they believed that the oilfields held more recoverable oil than was commonly assumed.

A second consultant, Falah al-Khawaja, who spent 41 years working in Iraq’s oil sector before becoming an independent consultant, calculated on the basis of the bids that Iraq would overtake Iran in proven reserves in three years.

“These are not small companies. They have been studying Iraq for some time,” he said.

Mr Alkadiri warned that the resurgence of Iraq as a significant oil producer would cause problems within Opec, as the oil cartel would eventually have to reduce the production quotas of many of its members to accommodate Iraq.

Iraq’s quota has not been enforced since UN imposed sanctions in the early 1990s.

However, if Iraq’s reserves rise, Opec’s gentleman’s agreement that sees Iraq’s quota not exceeding that of Iran will come under pressure to be changed.

“The Iraqis are making it clear that they no longer see themselves in parity with Iran. They are eyeing themselves being potentially on par with Saudi Arabia,” Mr Alkadiri said.

Iraq’s oil auction saw Royal Dutch Shell and Malaysia’s Petronas win the right to develop Iraq’s giant Majnoon field after they promised to boost its production to 1.8m barrels a day from just 46,000 b/d today.

The deal’s terms suggested that Iraq pays $1.39 for each incremental barrel of oil – a very low fee that reflected the fierce level of competition, analysts said.

These latest awards come in addition to three big agreements Iraq has made with ExxonMobil, Eni and BP. In total oil companies have now pledged to boost within the decade Iraq’s production by 7.3m b/d to nearly 10m b/d, more than Saudi Arabia produces today.

Iraq’s auction is not yet over. The oil ministry will auction off several additional fields on Saturday, including the giant West Qurna one.

Dividing up the Loot: Big Oil in Baghdad as Iraq auctions giant fields

2009-12-11T12:51:00.000-08:00

http://www.reuters.com/article/idUSGEE5B92EQ20091211

Dividing up the Loot: Big Oil in Baghdad as Iraq auctions giant fields
Missy Ryan and Ahmed Rasheed
Reuters
Fri, 11 Dec 2009 03:04 EST

Deal makers from the world's largest energy firms assembled amid tight security at Iraq's Oil Ministry on Friday to compete for deals to develop some of the country's most prized oilfields.

Iraq will offer three of the world's largest fields on the first day of its two-day auction, a rare opportunity for oil firms, from Western majors to Chinese and Indian state-owned giants, to gain access to cheap Middle East oil reserves.

The deals have the potential to boost Iraq's capacity by millions of barrels per day and make it a rival to top oil producers Saudi Arabia and Russia.

Baghdad desperately needs the billions of dollars of revenue these and other deals would generate to rebuild after decades of war, international sanctions and years of neglect and sabotage.

Competition was expected to be fierce as the second auction since the 2003 U.S. invasion includes the last of Iraq's supergiant fields - reservoirs holding 5 billion barrels or more. They are among the last untapped fields of their size in the world.

The auction is one of the largest ever held, with about as much oil on offer in this bid round alone as all that held by OPEC-member Libya.

Executives from the world's top oil companies have braved the security threat to bid in Baghdad. Forty-four companies were expected to send top-level representatives. They include Exxon Mobil, Royal Dutch Shell, BP, Chevron and Total.

A series of car bombs killed 112 people in the capital on Tuesday, police said, a bloody reminder of the threat oil firms would face in deploying staff to remote fields across the country.

Iraqi army helicopters buzzed overhead while convoys of armoured SUVs carrying the oil executives hidden behind tinted windows raced through town.

Iraqi police trucks and squads of police dressed in commando gear deployed at dawn to line the streets leading to the Oil Ministry, blocking off many side roads.

Crowds of uniformed police and army personnel milled around at the ministry next to Iraq army Humvees and police pickup trucks. The auction, which will be held in a large auditorium, did not start on time.

The giant fields on offer on the first day of the auction were southern fields Majnoon and Halfaya and central field East Baghdad, part of which lies under Baghdad's Sadr City slum.

Also on the block were a cluster known as the Eastern Fields in volatile Diyala province, and Qayara, a reservoir in the northern province of Nineveh, where Sunni Islamist insurgents like al Qaeda are still on the prowl and Kurd-Arab disputes have led to considerable tension.

What's Happening With Iraq's Oil

2009-12-10T13:27:00.001-08:00

http://www.opednews.com/articles/What-s-happening-With-Iraq-by-OilGuy-091208-731.html

December 9, 2009
What's Happening With Iraq's Oil
By OilGuy

As multinational military forces have left Iraq, international petroleum companies have eagerly descended -- seduced by the long-term potential of vast oil reserves off-limits to foreigners for decades. Yet lingering violence, legal questions and political uncertainty make doing business in this country a gamble.

In the first international oil auction held last June, widely seen as a failure, the Iraqi government awarded a firm contract to only a consortium of British Petroleum and the China National Petroleum Co. to further develop the Rumaila field over 20 years. Iraq recently forged an initial agreement with a group comprising Exxon Mobil and Royal Dutch Shell to develop the West Qurna field, and one with an ENI-led consortium of Occidental Petroleum and Korea Gas for the Zubair oil field.

Under ratified deals, firms stand to gain a mere $2 profit on each barrel added to production because the Iraqi government wants to convey “they're not going to let the oil companies take over,” said Robert Ebel, a senior adviser in the energy and national security program at the Center for Strategic and International Studies (CSIS), a Washington-based think tank.

The operator of each 20-year service contract, which may be extended for five years, “will still make a rate of return in the double digits,” said Ruba Husari, founder and editor of the Web site Iraqoilforum.com, via e-mail from Baghdad. The country's proven oil reserves were last estimated at 115 billion barrels. These massive reservoirs, and the low costs linked to such an uncomplicated operation, essentially make it “easy oil” for firms, Husari said.

Iraq will boast some six million to 10 million barrels a day over the next several years, analysts tell Oilprice.com. This scenario illustrates why oil companies perhaps are now more willing than last summer to gain an initial foothold in the industry on the government's strict terms and thus build a long-lasting relationship that may lead to a production-sharing contract “for some discovered-but-yet-undeveloped oil field,” Ebel said. “It's a hopeful assumption; I don't know how realistic it is.”

Yet as companies salivate over Iraq's potential, legal and political issues are still problematic to doing business. The war-ravaged country's “weak and ill-defined legal structures,” and uncertain moves by the next government slated to be elected in January, may result in canceled service contracts, warned David Bender, an analyst in the Middle East practice of the Eurasia Group's Washington office.

Through conversations with oil firms, Bender has gleaned that Iraq is probably not “quite at the point in which legal details are the most important aspect” and is focused instead on the larger political process. As a result, he said, members of a newly elected government, influenced by their own interest groups and “power politics,” may annul contracts despite the associated penalties.

Finalizing a long-awaited hydrocarbon law governing the oil industry will be a top priority of the next government, said Mishkat al-Moumin, an adjunct scholar at the Washington-based Middle East Institute and Iraq's environment minister from 2004 to 2005. Ideally, the legislation will outline investing in new oil fields, establishing a council to manage petroleum issues and offering a mechanism allocating oil revenues, she added.

The absence of an agreement to share oil revenues with the northern Kurdistan Regional Government continues to plague Baghdad, which never recognized as legal the Kurds' independent oil deals with smaller companies. “If you get an oil law in place, will the Kurds accept that oil law or will they say . . . ‘You're not giving us enough share of the income that you get from our oil,” questioned Ebel, the CSIS analyst.

Although it is too early to measure the internal impact of opening up the oil industry, in five years oil money will likely flow down to ordinary Iraqis, al-Moumin predicted. The Iraqi government is now debating whether to distribute checks to citizens allocating their fair share or to broadly invest in infrastructure and services, she said.

As the central government and international companies gear up for a second oil field auction pegged for Dec. 11 to 12, Eurasia Group's Bender expects firms this time to be undeterred by initially meager profits, and increasingly tempted by what may become “the most lucrative, exciting oil market in the world.”

This article was written by Fawzia Sheikh of OilPrice.com who focus on Fossil Fuels, Alternative Energy, Metals, http://www.oilprice.com" target="new">Oil Prices and Geopolitics. To find out more visit their website at: http://www.oilprice.com

Obama Administration OKs Oil Drilling in Arctic off Alaska

2009-12-08T08:56:00.000-08:00

http://www.commondreams.org/headline/2009/12/07-13

December 7, 2009 by McClatchy Newspapers
Drill, Baby, Drill: Obama Administration OKs Oil Drilling in Arctic off Alaska
by Erika Bolstad

WASHINGTON -- The Interior Department today gave the go-ahead for Shell Oil to begin drilling three exploratory wells in the Chukchi Sea, a move that opens the door for production in a new region of the Arctic.

"This is progress," said Alaska Sen. Lisa Murkowski, the top Republican on the Senate Energy and Natural Resources Committee. "Today's announcement from the MMS is an encouraging sign that Alaska's oil and natural gas resources can continue to play a major role in America's energy security."

The Interior Department's Minerals Management Service signed off on a plan that allows Shell to drill up to three exploration wells during the July-to-October open-water drilling season. The company's proposal calls for using one drill ship, one ice management vessel, an ice-class anchor-handling vessel and oil spill response vessels, the Interior Department said. The closest proposed drill site is more than 60 miles to shore and about 80 miles from Wainwright.

"Our approval of Shell's plan is conditioned on close monitoring of Shell's activities to ensure that they are conducted in a safe and environmentally responsible manner," Interior Secretary Ken Salazar said today in a statement announcing his decision. "These wells will allow the department to develop additional information and to evaluate the feasibility of future development in the Chukchi Sea.

Shell, Conoco Phillips and other companies last year paid more than $2 billion for leases in the Chukchi Sea off the northwest coast of Alaska. The companies and state officials believe the offshore reserves could power the Alaska economy for decades.

But the potential offshore development is of concern to native Alaskans and environmentalists. Native groups along the northern coast worry the noise of offshore development could chase away bowhead whales and other subsistence foods. They, along with environmentalists, are concerned about the limited technology for cleaning up oil spills in icy water.

"Obviously we're disappointed," said Marilyn Heiman, the U.S. Arctic program director for the Pew Environment Group. "A spill could happen from an exploratory well just as easily as it could from a production well. They have not yet demonstrated they have the ability and the expertise to clean up an oil spill, especially in the darkness, the extreme weather and the icy conditions."

The Bush administration's five-year plan for oil and gas exploration off the U.S. coast is under review by the Obama administration. Salazar has held public hearings, including a meeting in April in Anchorage where then-Gov. Sarah Palin and her replacement, Sean Parnell, spoke in favor of offshore development. The agency is still considering whether to let the plan continue through 2012 or write a new one.

The Oil Man Who Made Sarah Palin

2009-12-07T12:44:00.001-08:00

http://aconstantineblacklist.blogspot.com/2009/08/man-who-made-sarah-palin.html

Monday, August 17, 2009
THE MAN WHO MADE SARAH PALIN
Contents:

1) The Secret Origin of Sarah Palin
2) "Allen Teen Sex Inquiry Re-Opened," Anchorage Daily News
------------------
1) The Secret Origin of Sarah Palin

www.bluebloggin.com/: ...Bill Allen and the VECO employees contributed heavily to politicians and in return expected support for the oil industry. In 2000, Allen co-chaired the Alaska finance committee during the Bush-Cheney campaign.

When Palin decided to run for lieutenant governor in 2001, she paid Bill Allen a visit at his home. According to a VECO employee the two drank wine and spoke about her future. After Palin’s visit with Allen, VECO contributed $5,000 to Palin’s campaign for lieutenant governor. The contributions came at $500 a pop over a two-day period in late December from Allen, his executives and a couple of their spouses, representing 10 percent of all money Palin raised in her 2002 campaign.

Palin and Ted Stevens excellent adventure …

Alaska Gov. Sarah Palin began building clout in her state’s political circles in part by serving as a director of an independent political group organized by the now embattled Alaska Sen. Ted Stevens.

Palin’s name is listed on 2003 incorporation papers of the “Ted Stevens Excellence in Public Service, Inc.,” a 527 group that could raise unlimited funds from corporate donors. The group was designed to serve as a political boot camp for Republican women in the state. She served as one of three directors until June 2005, when her name was replaced on state filings.

People in igloos shouldn’t throw fireballs.

http://www.bluebloggin.com/2008/10/05/palins-campaign-contributions-from-convicted-criminal-bill-allen/
****
2) Allen teen sex inquiry reopened

Police look into claim ex-Veco boss had sex with underage girl.

By RICHARD MAUER
rmauer@adn.com
Published: February 3rd, 2008 06:01 AM
Last Modified: February 3rd, 2008 06:10 AM

Anchorage police have reopened an investigation into allegations that Bill Allen, the government's key witness in the ongoing corruption inquiry and once a leading political force in Alaska, had sex with an underage girl in the mid-1990s.

The investigation originally began in 2004 as an offshoot of the scandalous Josef Boehm sex and drug ring, according to Detective Kevin Vandegriff, who worked with federal investigators on the Boehm case.

But when federal prosecutors asked Anchorage police to suspend the investigation shortly after it began, the department complied, he said.

The Allen investigation was dormant until December, when it was reopened, said Capt. Gardner Cobb, the city's chief of detectives. The evidence of wrongdoing on the part of Allen, now 70, was contradictory and never strong, both Cobb and Vandegriff said.

But Vandegriff decided to go back into the case, interviewing witnesses and reviewing the record, "to make sure there's nothing else out there that we're missing," Cobb said in an interview in December. Vandegriff is still following leads and the investigation remains open, APD spokesman Paul Honeman said Friday.

The specific allegation was sexual abuse of a minor, Cobb said, a crime for which there is no statute of limitations.

A MIGHTY FALL

Allen pleaded guilty in May to bribing Alaska lawmakers. Once the chairman and an owner of the oil field services company Veco, he was forced to sell the company and now faces a lengthy prison term. That's a stunning fall for a power broker who handed oil-policy decrees to a stable of bribed legislators and who regularly socialized with senators and other national political figures who came to Alaska as guests of Sen. Ted Stevens.

At the time the Boehm investigation was developing, from 2003 to 2004, Allen was still a major player in Alaska politics, as he had been for decades, and was a reliable source of campaign money for state candidates, members of Alaska's congressional delegation and other national politicians. In 2000 he was Alaska co-chairman of President Bush's election campaign.

In an interview in October, Vandegriff wouldn't name Allen's alleged victim or victims. He said Allen was not a direct subject of the Boehm investigation. But he said there was one person involved in both the Boehm case and the investigation of Allen: Bambi Tyree, one of Boehm's co-defendants.

Vince Blomfield, Tyree's boyfriend starting around 1999 when he was 36 and she was 18, said in an interview with a private investigator working for Boehm that Tyree claimed to have had a sexual relationship with Allen when she was 14 or 15. Allen would have been in his late 50s at the time. The interview with Blomfield was cited in a court filing by Boehm's attorneys, who were trying to portray Tyree as having a history of preying on older men with money.

Allen's attorney, Robert Bundy, said Allen denied having an improper relationship with Tyree, now 27.

CASE RE-EVALUATED

Cobb wouldn't say what prompted the department to reopen the case. But the action follows inquiries by the Daily News, a surge in activity in civil lawsuits by Boehm's underage victims, and a reference to the Allen-Tyree allegation in a closed hearing in at least one of the recent federal corruption trials, where Allen was the government's chief witness. The existence of the investigation was first reported last week by the weekly Anchorage Press.

Tyree's father, Mark, who died in 2005, also figures in the ongoing federal corruption investigation in Alaska. He installed the furnace and plumbing in the Veco-supervised renovations to Sen. Ted Stevens' home in 2000, according to Robert Williams, the former Veco employee who hired Tyree.

Mark Tyree's name is mentioned in at least one federal grand jury subpoena concerning Veco and Ted Stevens.

COCAINE AND GIRLS

Boehm, now 64, was the wealthy owner of Alaska Industrial Hardware and other businesses, but his deep addiction to crack cocaine and his unrelenting attraction to girls and young women got him an 11-year federal prison sentence in 2005. He is currently at the minimum security Seagoville Federal Correctional Institution near Dallas.

Tyree was also a crack addict. As one of Boehm's original co-defendants, she pleaded guilty to finding the teenage girls for the ring in return for a seemingly limitless supply of cocaine sold to Boehm by her friends and others. Recognizing her cooperation with authorities and her abuse as a young teen by Boehm and other men, Judge John Sedwick sentenced her to three years.

She was released Sept. 6, 2006, and is living and working in Anchorage. Through her attorney, federal public defender Sue Ellen Tatter, Tyree declined to comment.

In the October interview, Vandegriff said he heard no suggestions that Allen was a visitor to Boehm's Oceanview home or the many "parties" Boehm held at hotels around town.

OLDER MEN

Though Tyree's extensive juvenile record remains sealed, her background has surfaced in several court cases, including a separate federal drug prosecution in 1996. The record shows a long pattern of involvement with older men. Bambi had just turned 15 when she, her older sister Tia, then 18, and 42-year-old Billy Ray Lang were arrested at the airport after a flight from California. The Tyree sisters had a combined 11 pounds of cocaine strapped into girdles they had bought before the trip in a Spenard extra-large shop.

Bambi was ordered to McLaughlin Youth Center. But Tia was held in jail and the girls' parents, Mark and Cris Tyree, testified about the family in an effort to get her released on bail. Bambi, a frequent runaway since age 11 and a Wasilla middle-school dropout, had moved in with Lang in the fall of 1995 when she was 14, Cris Tyree said. Cris Tyree described Lang as Tia's pimp and said that he ran an Anchorage call-girl service named "Cover Girls."

"I was told he was using my daughters," Cris Tyree testified.

Boehm pleaded guilty to cocaine and sexual exploitation charges. The government sought to portray his crimes as particularly egregious, deserving the maximum sentence. The defense tried to show him as a doddering, addled old man exploited for his money by a string of addicts and dealers, with Bambi Tyree first among them. It was a pattern Tyree had established for herself, they asserted, referring to Bill Allen. Vince Blomfield said it was the case in his relationship with her as well.

"She suffers from a heavy crack addiction, and her actions were geared toward obtaining funds to feed that habit," the defense said in a memorandum filed under seal and obtained by the Daily News. "Tyree often obtained the required funds by exploiting rich men."

'B.A.' CITED IN TRANSCRIPTS

Citing their private investigator's interviews with Blomfield and another friend of Tyree's, Marty Myre, the memorandum said that in addition to Boehm, "she developed a relationship with another rich and powerful businessman in Alaska, B.A."

"Bambi claimed that B.A. bought her a vehicle and that on one occasion he gave her $5,000," the defense document said.

While the court documents don't further identify "B.A.," in footnotes, the memorandum referenced pages in the transcripts of a Sept. 23, 2004, interview with Blomfield and a Nov. 10, 2004, interview with Myre. Copies of the transcripts obtained by the Daily News show the initials "B.A." referred to Bill Allen on those pages.

Blomfield, who now works at a Fairbanks strip club, turned down a request for an interview. Myre, a guide and contractor, also wouldn't talk.

LOVE AND MONEY

In the transcript of the Sept. 23, 2004, interview, Blomfield said he met Tyree at a convenience store phone booth around 1999 when she was 18. He pegged her for a party girl and asked her if she wanted a ride. She did, and the relationship developed quickly before coming to a halt when his money ran out, he said.

Tyree told Blomfield she was just ending a relationship with Allen, Blomfield said.

"He figured out, I think, to get as far away from -- you know, because to my knowledge, Bill Allen did not use drugs. He drank and partied with her," Blomfield told the private investigator.

Blomfield said Tyree told him she had a sexual relationship with Allen when she was 14 or 15.

That age range would've extended from the time she ran away to Bill Ray Lang's place in East Anchorage to after her release from McLaughlin on the cocaine trafficking charge.

"His name (Allen) came up constantly," Blomfield said. "She would leave me and go get money from him," Blomfield said. "Her father literally told me under his own words that he had met Bill and that Bill had told him that he was dating his daughter." Blomfield said he was present when Bambi called Allen in Washington, D.C.

"I spent Christmas with Bambi's family, and there were presents under the tree for the entire family from Bill Allen. He had bought her sister a car. He had given her father a number of contracts."

Blomfield said he thought Allen got the car for Bambi Tyree when she was 16. The family always referred to the vehicle "as the car that Bill bought," Blomfield said.

Public records confirm that Bambi Tyree got a new 1999 black Volkswagen Beetle on Nov. 30, 1998, but she wasn't 16 -- she was approaching her 18th birthday and just getting out of another stay at McLaughlin. Nothing in the record indicates who made the down payment. Her parents were listed as co-owners.

Three pickups owned by members of the Tyree family are connected to Allen or Veco.

A 1994 Ford originally owned by Veco Equipment was transferred to Mark Tyree in 2002, according to public records. The truck is now registered to Tyree's brother, James. The records don't show how the truck was financed.

State records show that a 1998 Ford pickup was similarly transferred to Bambi's brother Anthony from Veco Equipment Inc. on Sept. 13, 2006, again with no reference to a price.

Bill Allen's name appears as the note holder on the registration for a 2003 Ford truck registered by Anthony, according to state vehicle records.

Anthony Tyree couldn't be located for comment. A neighbor of the family home in Wasilla said she believed Anthony is attending school out of state.

BLOMFIELD CLAIM DISPUTED

In a handwritten note to the Daily News last year, Cris Tyree said Blomfield never came to her house at Christmas. She described him as "an unreliable source" with drug problems himself and a criminal record. She wouldn't answer questions.

Court records show Blomfield had several forgery and escape convictions, mostly misdemeanors and all related to his drug addiction. In 2001, his mother urged a judge to give him a maximum jail sentence to keep him away from narcotics. (Ironically, some of the money that financed his cocaine use during the time he was dating Tyree would have come from the FBI: His share of money paid by the agency to the real estate company owned by Blomfield's family, which built the FBI's downtown headquarters, according to information in one of his court cases.)

ALLEN BEFRIENDED FAMILY

Robert Bundy, Allen's attorney, said Allen had an above-board friendship with the entire Tyree family.

"Bill says he never had any kind of illicit relationship with her, ever," Bundy said. "(Mark) Tyree was a plumber who did good work, did a lot of work on Bill's stuff. He got to know him over the years."

Bundy said Allen doesn't remember how he met Mark Tyree, but it was "before he ever heard of Bambi."

"He and Mark became pretty good pals because they kind of had similar backgrounds, they both dropped out of high school, and got a trade," Bundy said. Allen never had a sexual relationship with Tyree at any age, Bundy said.

Mark Tyree died of cancer at his Wasilla home on April 1, 2005. Allen was with Tyree at his deathbed, Bundy said, and promised to take care of the family.

CASE WAS SHAKY

Detective Vandegriff of the Anchorage Police Department declined to say whether Blomfield was one of his original sources when he opened the case against Allen in February 2004.

"It came up as part of the Boehm investigation," he said. "It just came out as part of the interviews."

The initial case against Allen "wasn't very solid," he added. "We had some contradictory information, but I was just kind of getting started."

Then federal prosecutors told him to "cease and desist," he said.

The joint city-federal prosecution was run by two assistant U.S. attorneys, Frank Russo and James Goeke. Tyree testified that both prosecutors participated in the 15 to 20 hours of debriefings she underwent with the FBI and detectives as part of her plea deal.

Goeke, now with the prosecution team pursuing the corruption cases, didn't return several calls for comment.

Russo acknowledged "there were allegations along the lines of his (Allen's) involvement with Bambi Tyree," but said he asked Vandegriff to suspend the Allen investigation for purely practical reasons: The Boehm case was complex, with dozens of witnesses, and Boehm himself had a high-powered, three-attorney defense team that fought at every opportunity. Nearly 1,000 documents were filed, and that was in a case that never went to trial.

"We said, 'Hey, why don't we put this aside until later. We have enough to focus on,' " Russo said. That was his only concern, he said.

Federal prosecutors and the FBI have not yet provided a historical account of how the corruption investigation began and how it evolved with Veco and Allen at its center. Court filings by federal prosecutors since made public show it was well under way in the fall of 2005 with court-ordered wiretaps and later, video surveillance of Allen and a Veco vice president. That would have been 18 months after Vandegriff opened his case.

Russo added, "There were no charges ever brought against Allen for anything related to what Boehm was doing. In terms of the sexual assault of a minor, that's something that APD has on their files; they're free to do whatever they want with that."

Vandegriff said Russo's request was fine with him.

"I had plenty on my plate to do with the Boehm investigation, and when I was told to stop that one, no problem," the detective said in the October interview.

While mentions of the relationship between Tyree and Allen have appeared in court, most have been heard in closed proceedings or referenced in sealed filings. That was the case in the Boehm prosecution, and also in the recent federal bribery prosecutions.

Judge Sedwick, the federal district judge who presided over the Boehm cases, is also the judge in the corruption cases.

"You can presume ... that the judge knows all about it," Russo said, referring to the Allen allegations.

ONE CASE LED TO ANOTHER

The issue arose at a closed-door hearing during former Rep. Pete Kott's corruption trial in September just as Allen was taking the stand. Government prosecutors, required to disclose information about their witness, volunteered that Allen wasn't coerced to plead guilty by evidence concerning his relationship with Tyree, according to Kott's lawyer Jim Wendt. Had that happened, Wendt said, it might have been relevant to his case.

Still, Allen's decision to cooperate with the government, made in a single August day in 2006, seemed extraordinarily swift, Wendt said. "I did not understand why Bill Allen would have flipped so fast, and I still don't understand. I don't know if it has anything to do with this young woman or for other reasons," Wendt said.

Asked whether Allen's relationship with Tyree was one of the issues that arose during closed hearings in the next bribery case, that of Rep. Victor Kohring, defense attorney John Henry Browne said, "That's something that we were not allowed to go into," but also said he couldn't "confirm or deny that that was one of them because that would be violating the order of the judge."

In December, secrecy issues in the Boehm case flared anew, this time involving more than a half-dozen plaintiffs -- mostly formerly juvenile victims -- seeking to recover damages from Boehm and his codefendants in the criminal case.

With lawyers poised to depose Vandegriff's APD partner in the Boehm investigation, Detective Steven Boltz, the U.S. Attorney's office intervened to make sure his testimony remained under seal. Assistant U.S. attorney Daniel Cooper said at an emergency hearing in federal court Dec. 18, just before Boltz' deposition, that he was trying to ensure that the identities of juvenile witnesses were protected and grand jury proceedings remained secret. He didn't mention Allen or Tyree.

The civil cases against Boehm were tentatively settled two weeks ago. The terms are secret.

http://www.adn.com/news/government/veco/story/303216.htm

Group promoting climate skepticism has extensive ties to Exxon-Mobil

2009-12-06T10:04:00.000-08:00

For the Record: Global Warming IS A HOAX. It is not a global crisis and never was! 'Global Warming' was a scheme of the psychopathic predator elites to kill off a bunch of 'useless eaters' and fund a world government! I'm just posting this because it shows that Exxon-Mobil does fund liars an it shows how these fuckers play both sides of the fence!

http://rawstory.com/2009/12/climate-skeptic-group-nipcc-extensive-ties-exxonmobil/

Group promoting climate skepticism has extensive ties to Exxon-Mobil
By Sahil Kapur
Thursday, December 3rd, 2009 -- 10:22 am

A group promoting skepticism over widely-accredited climate change science has a web of connections to influential oil giant Exxon-Mobil, Raw Story has found.

The organization is called the Nongovernmental International Panel on Climate Change (NIPCC), apparently named after the UN coalition International Panel on Climate Change (IPCC). An investigation into the group reveals its numerous links to Exxon-Mobil, a vehement opponent of climate legislation and notorious among scientists for funding global warming skeptics.

"Exxon-Mobil essentially funds people to lie," Joseph Romm, lauded climate expert and author of the blog Climate Progress, told Raw Story. "It's important for people to understand that they pay off the overwhelming majority of groups in the area of junk science."

The NIPCC's signature report, "Climate Change Reconsidered," disputes the notion that global warming is human-caused, insisting in its policy summary that "Nature, not human activity, rules the planet." Many of its assertions have been challenged by, among others, the scientists' blog RealClimate.

The report was released and promoted this summer by the Heartland Institute, a think tank that claims to support "common-sense environmentalism" as opposed to "more extreme environmental activism." It alleges that "Global warming is a prime example of the alarmism that characterizes much of the environmental movement."

"To call global warming a hoax is to question every scientific journal, every scientific academy, and buy into the most extreme conspiracy theories," Romm said.

Heartland has received at least $676,500 from Exxon-Mobil since 1998, the year Exxon launched a campaign to oppose the Kyoto Treaty, according to official documents of the two groups that have been compiled and reproduced by the website ExxonSecrets.org. Also, the institute's self-described Government Relations Adviser Walter F. Buchholtz has been a lobbyist for Exxon-Mobil, the Washington Post reported in 2004.

The study's two principal authors and NIPCC leaders S Fred Singer and Craig D Idso are both associated with various organizations that have gotten generous funding from Exxon-Mobil.

Singer has researched and published for the Cato Institute, which has accepted $125,000 in grants from Exxon-Mobil since 1998. Other professional affiliations include the National Center for Policy Analysis, Frontiers of Freedom, and American Council on Science and Health -- which have accepted contributions of $540,000, $1.27 million and $150,000, respectively, from Exxon.

Although some praise him as a hero, Singer has been slammed by many fellow climate scientists as "a fraud, a charlatan and a showman" for his unorthodox views and research.

His co-author Idso is founder, board chairman and former president of the Center for the Study of Carbon Dioxide and Global Change, whose mission statement is to "separate reality from rhetoric in the emotionally-charged debate that swirls around the subject of carbon dioxide and global change." The organization has taken $100,000 in funding from Exxon since 1998, according to the oil company's reports.

Idso is also affiliated with the George Marshall Institute, which has reportedly won $840,000 from Exxon.

Exxon-Mobil has spent more money lobbying Congress in the last two years than any enterprise other than the Chamber of Commerce, dishing out $29 million in 2008 and over $20 million so far in 2009 to legislators. It's among the top 10 biggest spenders of lobbying cash since 1998, according to the Center for Responsive Politics.

"Exxon has waged certainly the biggest, most concerted, and most extreme disinformation campaign on this issue," Romm told Raw Story. "The trouble is they don't have to win the argument -- all they have to do is blow smoke and cast doubt, and they've accomplished their end."

In a recent incident, hackers exposed private emails exchanged between climate scientists. Some said the revealed information didn't add up to a conspiracy, while others declared it definitive proof that anthropogenic global warming is made-up.

The Senate will soon take up the mantle on climate bill that the House narrowly passed this summer, and a heated debate is likely to occur in Congress over the nature of the threat and the type of action that needs to be taken.

"I think we're going to pass it, but it's going to be an epic struggle," Romm said.

Republican Sen. Orrin Harch has referenced the NIPCC report, calling it a "Comprehensive scientific answer to the IPCC [sic] Reports." Various blogs, such the conservative Free Republic, have touted this report as evidence that "global warming is not a crisis, and never was."

Iraq outsmarts Big Oil over contracts

2009-12-04T14:49:00.000-08:00

http://www.upi.com/Science_News/Resource-Wars/2009/11/05/Iraq-outsmarts-Big-Oil-over-contracts/UPI-75071257460684/

Iraq outsmarts Big Oil over contracts
Published: Nov. 5, 2009 at 5:38 PM

BAGHDAD, Nov. 5 (UPI) -- The Iraqi government's hardball tactics with oil majors demanding a bigger slice of the profits from taking over the country's rundown oil fields are paying off.

Big Oil has caved in and is now meekly accepting the same 20-year deal the companies rejected at a June auction, the first such event in Iraq in nearly 40 years, because the prospect of Iraq's vast untapped reserves was just too good to miss.

The majors have shown a new willingness to drop their demand for payment of up to $4.80 for every barrel they produce on top of current production levels and accept the $2 offer that the government has stuck to since the June action fizzled.

The companies will recover all costs under the terms of the agreements. The government has sought to sweeten the pot by easing taxation terms during closed-door negotiations.

On Tuesday, BP and China National Petroleum Corp., the only consortium to accept the Oil Ministry's terms in June, signed Iraq's first oil contract since Saddam Hussein's regime was overthrown in the March 2003 U.S.-led invasion.

The two companies pledged to invest $15 billion to build up production at the giant Rumaila field west of the southern city of Basra, with reserves of as much as 20 billion barrels, to help boost national output to 6 million barrels a day in the next few years, second only to Saudi Arabia.

Their target is to almost triple production from the current level of 1 million barrels a day to 2.85 million.

Samuel Ciszuk, an energy analyst with the IHS Global Insight consultancy of London, said: "The incremental this project brings to Iraq is tremendous."

The contract, the largest deal struck in Iraq "in many, many decades," underlines "the extraordinary opportunities there are in Iraq," he said.

As with other companies bidding for the new contracts, BP's deal marks its return to Iraq after being booted out with other Western companies when the oil industry was nationalized in 1972.

Earlier this week, the Oil Ministry signed a preliminary agreement on the Zubair field -- 4.1 billion barrels -- in the south with a consortium of Italy's ENI, Occidental of the United States and Korea Gas Corp. of South Korea.

The ministry is expected to award the giant West Qurna-1 field -- 9 billion barrels -- north of Basra in the oil-rich south to a consortium headed by Exxon Mobil and Royal Dutch Shell, according to Iraqi officials. That consortium was competing against ConocoPhillips and Lukoil of Russia.

The Rumaila, Zubair and West Qurna deals alone are expected to add 4.5 million barrels a day to Iraqi production, about 5 percent of global supply and triple Iraq's current output of 2.5 million barrels a day.

These agreements augur well for the next round of tenders, covering 10 largely undeveloped oil fields, that is scheduled for Dec.11-12 in Baghdad.

"The big oil companies are reconsidering Iraq because they realize that this may be among their last opportunities to get large volumes of crude," according to BusinessWeek.

A big prize for the companies is the vast Majnoon fields in eastern Iraq, with reserves that could be as high as 12 billion barrels. It will be up for grabs in December.

Another is the northern oil field around Kirkuk. It has reserves of at least 8.5 billion barrels. Shell hopes to secure a contract there.

With violence once more worsening in Iraq, there are considerable security risks. Kirkuk, for instance, is at the core of a potentially explosive dispute between Arabs and Kurds.

And parliamentary elections scheduled for January could bring in a new government that may scrap or revise the agreements with Big Oil.

BusinessWeek noted that another peril lurks on the horizon as well: a possible dispute with the Organization of Petroleum Exporting Countries, "which had assumed Iraqi production would remain low until the world regained its thirst for crude."

Once Iraq's output starts to grow, bringing in revenue vital to financing reconstruction, "the Saudis and other big producers are likely to try to persuade Iraq -- which belongs to OPEC but is exempt from its quotas -- to toe the line," according to BusinessWeek.

"The Iraqis, though, may want to pump the maximum, arguing that other cartel members who have profited for years from Iraq's market absence should bear any future productions cuts."

Multinational Companies Win Big Oil Contracts in Iraq

2009-12-04T14:44:00.000-08:00

Multinational Companies Win Big Oil Contracts in Iraq
Published 20 Nov 2009, 11:15 am - No Comments -

Listen to this segment

Iraqi oil officials are scheduled to meet with a consortium of Japanese companies on Sunday to finalize a development deal on the Nassiriyah oil field. The negotiations follow a first round of bidding for lucrative contracts earlier this summer by several multinational oil corporations. Only the consortium comprised of British Petroleum and the Chinese National Petroleum Corporation emerged with agreed upon terms for the largest oil field in Iraq last summer but government oil officials have since made negotiations much more appealing to bidders. Earlier this month, Exxon-Mobil was able to win a fifty billion dollar contract and in doing so became the first U.S.-based oil corporation to reach a deal with Iraq in thirty-five years. Forty-five international oil corporations will be seeking future developmental deals on fifteen oil fields in the country as a highly competitive second round of bidding is scheduled to start on December 11th. Iraqi Oil Minister Hussain Shahristani characterized his nation’s move away from nationalized production by saying, “After decades of oppression and tyranny, Iraq is getting back its riches for this generation and for the next.” Resistance within Iraq and around the world, however, has thus far prevented the passage of the Iraq Oil Law that would further open the country’s reserves to multinational corporations.

GUEST: Antonia Juhasz, Director of the Chevron Program at Global Exchange, author of “The Tyranny of Oil: the World’s Most Powerful industry and What We Must Do To Stop It,” available on December 8th on paperback.

Big Oil Ready for Big Gamble in Iraq

2009-12-04T10:52:00.000-08:00

http://www.corpwatch.org/article.php?id=15394

IRAQ: Big Oil Ready for Big Gamble in Iraq
by Gina Chon, Wall Street Journal
June 24th, 2009

Next week, Iraqi officials plan a welcome-back party for Big Oil.

The government intends to auction off oil contracts to foreign companies for the first time since Iraq nationalized its oil industry more than three decades ago. If all goes according to plan in the first round, foreign oil companies will move in to help Iraq revive production at six developed fields that have suffered from years of war and neglect.

The Iraqi government has hailed the start of oil exports from the semi-autonomous Kurdish region as a move toward ending a dispute with the Kurds.

But Iraq's fractious politics have complicated the process. Some lawmakers and oil officials have called for a delay of the auction. The man behind the plan, Oil Minister Hussain al-Shahristani, appeared before parliament on Tuesday, where some lawmakers questioned the legality of the proposed contracts and what they called favorable terms for the foreign companies. But the auction appears to have sufficient political support to go ahead on schedule, and Mr. Shahristani and other government officials vowed to plow ahead.

Mr. Shahristani's oil deals are crucial to this war-torn country's economy. Iraq is thought to have one of the world's largest supplies of crude oil, with 115 billion barrels in proven reserves. But foreign know-how is key to its plans to boost oil output to four million barrels a day within four to five years, from 2.4 million barrels currently.

Despite security risks, Western oil companies are clamoring to get in. Iraq is still relatively unexplored, offering big companies a potentially easy-to-tap source of growth. Some are touting Iraq as the most important opening of petroleum fields since the discovery in 2000 of the giant Kashagan field in the Caspian Sea.

Some 120 companies expressed interest in bidding for the contracts at the June 29 and 30 auction, according to the oil ministry. Thirty-five companies qualified to bid, including Exxon Mobil Corp., Royal Dutch Shell PLC, Italy's Eni SpA, Russia's Lukoil and China Petroleum & Chemical Corp., or Sinopec. The six oil fields at stake are believed to hold reserves of more than 43 billion barrels. Foreigners won't get the most prized piece of the action -- ownership stakes in the reserves -- but will be paid fees for ramping up output.

Just over 20 of Iraq's roughly 80 known oil fields have been fully or partially developed, and most of its production comes from just three giants, North and South Rumaila and Kirkuk. Because lots of the black gold is considered relatively easy to extract, oil experts estimate that exploration and development in Iraq costs $1.50 to $2.25 a barrel, compared with about $5 in Malaysia or $20 in Canada.

"We're talking about a huge volume of crude flowing through their system for the companies who win the bids," says Samuel Ciszuk, IHS Global Insight's Middle East Energy analyst. "On the other side, Iraq desperately needs technology, and these companies can bring it."

But Mr. Shahristani, architect of the plan, is under attack from many quarters. Falling oil prices have triggered a budget crisis, and he is being blamed for not boosting production enough to make up the difference. Lawmakers and some oil officials, meanwhile, say the auction will give foreigners too much access to Iraq's resources. Mr. Shahristani also has been called to appear before parliament for questioning about alleged corruption and mismanagement at the ministry.

"He should not continue," says Jabber Khalifa al-Jabber, secretary of the parliament's powerful Oil and Gas Committee. "Let someone who is qualified do the job....I can't name one accomplishment."

Prime Minister Nouri al-Maliki's spokesman, appearing earlier this month with the oil minister, voiced confidence in him and reaffirmed that the auction would take place as scheduled.

In a recent interview, Mr. Shahristani, 66 years old, says he has done nothing wrong, and that lawmakers critical of him have a political agenda. He says he looks forward to answering questions from parliament about corruption and mismanagement.

"I'm not a political animal, and I don't enjoy politics," he says. "The only reason I've accepted and continue with my responsibility is to protect the Iraqi wealth from unclean hands."

Deals in Iraq often are reached over cups of tea late at night, but Mr. Shahristani doesn't like schmoozing. In a capital built on patronage, he has denied plum jobs to longtime friends. He's earned a reputation as a stickler for rules, including cumbersome purchasing regulations that other oil officials blame for slowing down Iraqi oil development. He has refused even small gifts, such as neckties, from visiting oil executives, he says.

In his three years as oil minister, Mr. Shahristani has emerged as a key lieutenant to Mr. Maliki. After violence started to ebb in Iraq in 2008, Messrs. Maliki and Shahristani and a handful of other former Iraqi exiles have pushed an ambitious set of economic reforms.

Western oil companies were kicked out of Iraq in 1972, part of a wave of Mideast petroleum nationalization. Oil production hit at least three million barrels a day before Iraq invaded Kuwait in 1990, then fell sharply to 300,000 barrels after economic sanctions and trade embargoes were imposed. Production rebounded to about 2.5 million barrels before the U.S. invasion in 2003.

Iraqi lawmakers have squabbled for years over a draft petroleum law that would set a legal framework for foreign companies to start drilling again. Tired of waiting, Mr. Shahristani in 2008 unilaterally invited oil companies to bid on contracts. Because global companies are reluctant to explore undeveloped fields in Iraq without an oil law, Mr. Shahristani has focused on getting foreign help pumping from existing fields. "We have done what we can with our national resources, and now we need outside help," he says.

He says the contracts don't need approval from parliament, though he insisted they fit the conditions outlined in the draft oil law, which is now being redrafted in the cabinet. Some of the terms, he says, are particularly beneficial to Iraq: Winners of the auction must fork over hundreds of millions of dollars of cash in upfront loans to the government.

Mr. Shahristani, who grew up in Karbala in a prominent, religious family, is a nuclear scientist by training. After studying in Moscow and spending time in London, he earned masters and doctorate degrees in nuclear chemistry at the University of Toronto. In 1978, he became chief adviser to the Iraqi Atomic Energy Commission.

Saddam Hussein had consolidated power and become president. According to Mr. Shahristani and others, he wanted a nuclear weapon. In a face-to-face meeting with Mr. Hussein, Mr. Shahristani reminded him that Iraq had signed a nonproliferation treaty and was bound by it. Mr. Hussein told him to concentrate on science and leave politics to him, according to Mr. Shahristani and two other scientists at the meeting.

A few days later, in December 1979, security officials took him to Iraq's Internal Security facilities, where he was tortured for three weeks, he says. Mr. Shahristani says his torturers offered him palaces and riches if he would reconsider his refusal to work on nuclear weapons. He declined and was put into solitary confinement, where he remained for 10 years, he says. "But I never lost my will, I never lost my faith," he says.

In 1990, he was released from solitary confinement. A year later, the U.S. bombardment of Baghdad during the first Gulf War sowed chaos at the prison. Another inmate stole some intelligence-corps uniforms and arranged for a getaway car.

One evening, Mr. Shahristani and two others managed to evade guards, duck into a storage room and put on the stolen uniforms. After hiding for several hours, they snuck past some visiting intelligence officers playing cards and hustled out the prison gate.

They met up with their families and snuck across the border into Iran. For the next few years, Mr. Shahristani helped Iraqi dissidents and refugees. In 1995, he and his wife, a Canadian, set up the Iraqi Refugee Aid Council. He became an outspoken critic of Mr. Hussein's regime and of nuclear proliferation.

After U.S. troops poured into Baghdad in April 2003, he returned. He was identified by American officials as a top contender for the prime minister's job. He declined the position because it wasn't an elected one, he says, instead becoming deputy speaker of Iraq's parliament.

Around that time, Mohammed Baqir, a family friend who had helped Mr. Shahristani escape from prison, asked for his help in finding government jobs for relatives. Mr. Shahristani refused. "Shahristani's problem is he is too straight and clean," Mr. Baqir says. "As a politician, you need to be flexible."

After a new government led by Mr. Maliki was formed in 2006, the prime minister named him oil minister. His new ministry, like other government agencies at the time, was overrun by militia members, and corruption was rampant, according to Mr. Shahristani and other current and former oil officials.

Over the next two years, hundreds of ministry employees were murdered or kidnapped. By the end of 2007, many top technocrats had fled the country, and various political parties had filled the ministry with patronage employees, according to Mr. Shahristani and the other officials.

Mr. Shahristani fired 250 members of the ministry's security staff thought to be militia members, and replaced top security officials with people he trusted. He turned over evidence of wrongdoing to the ministry's inspector general, and fired or transferred those suspected of malfeasance.

"Before, there was lots of interference in the ministry from political blocs, but he got rid of all that," says Abdul Mahdy al-Ameedi, head of the ministry's contracts department.

The purge stirred resentment. Some employees claimed they were wrongly targeted. Others accused Mr. Shahristani of being too by-the-book. He cracked down on absenteeism and introduced a card-scan check-in system. He scaled back bonuses.

But boosting oil production significantly proved difficult. Insurgents were attacking pipelines and refineries. Without a legal framework in place, foreign companies were reluctant to come to Iraq. The oil law stalled in parliament.

An impatient government in the semiautonomous Kurdish north decided to move without Baghdad. In September 2007, Kurdish officials signed a deal with Texas-based Hunt Oil Co.

Mr. Shahristani criticized the deal, saying it had no legal standing. The Kurdish government accused him of moving too slowly, and pressed ahead with its deal.

A Western official in Baghdad who has dealt with Mr. Shahristani says he and others advising the government agreed that Mr. Shahristani was moving too slowly. Oil prices were sky-high, and foreign oil executives were eager to get into Iraq. The country needed a "wheeler-dealer type," this official says.

Recently, he dropped his longtime opposition and allowed the Kurdish government to begin exporting oil. He yielded after the Kurds agreed to have Baghdad's central government receive payments for the exports.

In this month's auction, Western firms also are competing to develop two natural-gas fields. All these deals are so-called technical-service contracts. Essentially, Iraq will pay companies a fee for boosting output. The contracts will last 20 years. Oil executives would prefer "production sharing" agreements, which give companies a share of profits, and typically allow them to book new reserves. They are nonetheless eager to get their feet in the door. Mr. Shahristani says companies that offer the lowest costs and most profit for Iraq will win. If the auction succeeds, the winners are expected to begin work in November.

The Oil Ministry is planning a second round of bidding, to cover oil fields that have been explored but not fully developed. Nine of the 38 companies that applied to participate have been chosen as bidders. Those contracts will be awarded at the end of this year.

Mr. Shahristani's term ends when a new government is formed after elections early next year. He plans to return to the Iraqi National Academy of Science, which he established in 2003. "I am not a politician," he says.

Nigerian villagers try to sue Shell in Holland

2009-12-03T13:15:00.000-08:00

http://www.dutchnews.nl/news/archives/2009/12/nigerian_villagers_try_to_sue.php

Nigerian villagers try to sue Shell in Holland

Thursday 03 December 2009

Nigerian villagers and a Dutch environmental group went to court in The Hague on Thursday in an effort to get their case against Shell heard in the Netherlands, newspaper Trouw reports.

The villagers and Friends of the Earth want to hold the Netherlands- based oil giant responsible for a leaking pipeline owned by its Nigerian subsidiary, which polluted farmland and woods in 2005.

Lawyer Michel Uiterwaal told the judges that Shell and its Nigerian arm are so closely linked that the court would be justified in taking the case. Shell says the case should be heard in Nigeria.

The court is expected to rule on whether the case can be heard in the Netherlands early next year.

© DutchNews.nl

A Detailed Guide on the Many Different Types of Crude Oil

2009-12-02T15:09:00.001-08:00

http://www.oilprice.com/article-a-detailed-guide-on-the-many-different-types-of-crude-oil.html

A Detailed Guide on the Many Different Types of Crude Oil

Some people arbitrarily speak about oil as if it is a single, indistinguishably homogenous substance without any unique differentiation, but this is actually not the case at all! In fact, there are many different kinds of oil.

In its natural, unrefined state, crude oil ranges in density and consistency, from very thin, light weight and volatile fluidity to an extremely thick, semi-solid heavy weight oil.
There is also a tremendous gradation in the color that the oil extracted from the ground exhibits, ranging all the way from a light, golden yellow to the very deepest, darkest black imaginable.

For the purpose of having a set, agreed upon “vocabulary,” the petroleum industry often uses references to “Geographical Locations” in order to descriptively classify crude oils.

This is due to the fact that oil from different geographical locations will naturally have its own very unique properties. These oils vary dramatically from one another when it comes to their viscosity, volatility and toxicity.

The term “viscosity” relates to the oil's resistance to flow. Higher viscosity crude oil is much more difficult to pump from the ground, transport and refine.

The term “volatility” describes how quickly the oil evaporates into the air. Oils that are naturally highly volatile need additional effort to ensure that temperature regulation and sealing procedures loose as little oil as possible.

The term “toxicity” refers to how dangerously poisonous the oil & its refining processes are to local life, from humans, to flora and fauna as well as other environmentally fragile living entities and organisms. If an oil spill were to occur, each type of oil presents quite unique “clean up” challenges, procedures and priorities!

The four primary types of oil are:

(1) The Very Light Oils / Light Distillates which include: Jet Fuel, Gasoline, Kerosene, Light Virgin Naphtha, Heavy Virgin Naphtha, Petroleum Ether, Petroleum Spirit, and Petroleum Naphtha. These oils tend to be highly volatile and can evaporate within just a couple of days, which quickly diffuses and decreases toxicity levels.

(2) Light Oils / Middle Distillates which include: Most Grade 1 and Grade 2 Fuel Oils and Diesel Fuel Oils as well as Most Domestic Fuels and Light Crude Marine Gas Oils.
These oils are moderately volatile, less evaporative and moderately toxic.

(3) Medium Oils: Most of the crude oil on the market these days falls into this particular category. Low volatility makes for messier & more complex “clean ups” and when it comes to the increased toxicity levels, I believe we have all lived long enough to see what “Medium Oil” spills can do to the local ocean life out on the seas or local wildlife right here on “terra firma!”

(4) Heavy Fuel Oils which include the heavy crude oils, Grade 3,4,5 and 6 Fuel Oils (Bunker B & C) as well as Intermediate and Heavy Marine Fuels. With these oils there is very slow and little evaporation and therefore toxicity is highly increased. This not only means potentially severe contamination for fish, fowl and fur-bearing creatures, but possible “long term” contamination of water and soil as well.

In fact, there are actually over 160 different oils traded on the market theses days, but for simplicity’s sake, let’s discuss the three primary oils that get most of the serious attention in the news and in the markets.

West Texas Intermediate (WTI) is an extremely high quality crude oil which is greatly valued for the fact that it is of such premium quality, more and better gasoline can be refined from a single barrel than from most other types of oil available on the market.

The WTI “API Gravity” is 39.6 degrees, which makes it a “light” crude oil, with only 0.24 percent sulfur, which makes it a “sweet” crude oil. The term “API Gravity” refers to
the “American Petroleum Institute Gravity, which is a measure that compares how light or heavy a crude oil is in relation to water. If an oils “API Gravity” is greater than 10 then it is lighter than water and will float on it. If an oils “API Gravity” is less than 10, it is heavier than water and will sinks.

These combined qualities as well as location make WTI a prime crude oil to be refined in the United States, which is by far, the largest gasoline consuming country on the planet. The vast majority of WTI crude oils are refined in the Midwest and Gulf Coast regions. Even with production of WTI crude oil in decline, WTI is often priced from $5 to $7 higher per barrel than “OPEC Basket” oil and on average, $1 to $2 higher per barrel than “Brent Blend” oils.

Brent Blend is actually a combination of different oils from 15 fields throughout the Scottish Brent and Ninian systems located in the North Sea. Its “API Gravity” is 38.3 degrees, which makes it a “light” crude oil, but clearly not quite as “light” as WTI. It also contains about 0.37 percent sulfur, which makes it a “sweet” crude oil, but then again, not quite as “sweet” than WTI.

Brent Blend is quite excellent for making gasoline and middle distillates, both of which are utilized in large quantities in Northwest Europe, where Brent blend crude oil is most often refined. Brent Blend production, much like that of WTI, is also on the decline, but it remains a major benchmark for other crude oils in Europe or Africa. Brent Blend is often priced at a $4 higher per barrel compared to the OPEC Basket price.

OPEC Basket oil is a collective seven different crude oils from Algeria, Saudi Arabia, Indonesia, Nigeria, Dubai', Venezuela and the Mexican Isthmus. The acronym OPEC stands for “Organization of Petroleum-Exporting Countries” which is an organization that was formed in 1960 in order to create some common policy for the production and sale of oil within its jurisdiction.

Because OPEC oil has a much higher percentage of sulfur within its natural make-up and therefore is not nearly as “sweet” as WTI or even Brent Blend and since it is also not naturally as “light” as well, the prices of OPEC oil are normally consistently lower than either Brent Blend or WTI. However, OPEC’s willingness or ability to quickly increase production when necessary makes OPEC a consistent “Major Player” in the oil industry!

A Humanitarian Disaster in the Making Along the Chad-Cameroon Oil Pipeline -- Who's Watching?

2009-12-02T15:08:00.001-08:00

A Humanitarian Disaster in the Making Along the Chad-Cameroon Oil Pipeline -- Who's Watching?
By Brendan Schwartz and Valery Nodem, AlterNet
Posted on December 2, 2009, Printed on December 2, 2009
http://www.alternet.org/story/144303/

In 2000 Big Oil, the World Bank, and two corrupt dictators teamed up to launch the Chad-Cameroon Oil Pipeline Project. Years on, the media attention is subsiding while the negative impacts of the pipeline worsen daily. Brendan Schwartz and Valery Nodem reporting from Chad and Cameroon.

Know Chad?

If you’ve heard of Chad -- no, not the Bengals’ Ochocinco -- you probably haven’t heard anything good about it. Almost continuous war since independence and its involvement the Darfur conflict have gotten Chad nothing but bad press. One author called it “a neglected tragedy of a nation.” Chad is in fact a strikingly beautiful country and its people are as vibrant and diverse as any. But without a doubt, there is great human suffering. And as many people have noted, the discovery of black gold isn’t helping.

The Chad-Cameroon Oil Pipeline Project, although relatively little-known to the general public, was for a time the source of fierce debate and high rhetoric in international development circles. The World Bank-financed project in the heart of war-torn Central Africa pumps 170,000 barrels/day of crude from Chad’s Doba basin to Cameroon’s Atlantic port city of Kribi, 1,080 kilometers away. Led by such corporations as Exxon and Chevron, the pipeline received plaudits from the World Bank as “an unprecedented framework to transform oil wealth into direct benefits for the poor, the vulnerable and the environment.” Nine years after the World Bank agreed to finance the pipeline, six years after oil went online, and just one year after the World Bank quit the project, Chad-Cameroon is slowly fading from the development spotlight. The World Bank quietly released their own evaluationof the project last week admitting that the project failed to achieve its two main goals of reducing poverty and improving governance. One hopes this is not the World Bank’s final evaluation of the project since oil is scheduled to flow for another twenty years and the worst of the project’s impacts are just beginning to be felt. This is an update from the field.

National Mourning and Broken Promises

For Chadian President Idriss Deby, oil revenues are a means to prolong abusive and undemocratic rule. He changed the constitution to become president for life, used over 30% of Chad’s oil revenues on war, and used money destined for development in “priority sectors” to grant opaque, no-bid public contracts to god knows whom -- all things he promised not to do. It is little wonder that Chadian civil society declared the pipeline’s inauguration a day of national mourning. The World Bank’s public sector lending arms (the IDA and IBRD) announced their withdrawal from the project in 2008 stating “Chad failed to comply with key requirements” of their participation, though the World Bank’s private sector lending arm (the IFC) had no problem staying on board to reap the benefits of its $200 million commercial loan. Many promises were also made to people living in the oil-producing zone in the southwest of Chad. Villagers were promised fair compensation for the loss of land expropriated by Exxon, employment with the oil companies for the life of the project, and 5% of oil revenues to be invested in their villages. According to local residents, these promises were empty.

The Displaced

A woman in the Bero village of the oil producing zone explained that Exxon had displaced her whole family and promised to build them new houses equipped with furniture and find them new land. Although new houses were built, the construction was so shoddy that Exxon was forced to return just two years later and rebuild them to avoid a major PR embarrassment. There is no furniture to be found. In theory, everyone displaced by the project received some form of compensation, but rarely has it been sufficient to restore their standard of living. This is because Chad’s oil happens to be located a few meters below Chad’s most fertile agricultural land. The farming problem is especially serious since the zone is Chad’s only breadbasket and feeds most of the country. Exxon and the project planners claimed that compensations would be paid to displaced people, but that “self resettlement” would take place naturally whereby villagers would find/purchase new land for farming from a “village land pool.” A recent Chadian report notes that this has not happened; many farmers have not found land or enough land. Agricultural production is continually declining and will ultimately penalize the entire country.

The Local Government of Exxon

Hoping to avoid paying too much compensation, Exxon has allowed many villagers to stay in the oil producing zone. Villagers often live precariously close to oil wells which turn round the clock. Increased banditry in the zone led the former governor of the Logone Oriental Province to instruct local police to “arrest or shoot on sight” anyone circulating through the zone after 6 pm. Now people living in the zone are literally surrounded by oil infrastructure and prisoners in their own homes. Almost every facet of their lives is governed by Exxon, the de facto local government.

Take the case of Namarde Keiro. His family lives within 500 meters of Exxon’s Operations Center and within twenty meters of an active oil well. As high voltage power lines tower over his home, Keiro’s family lives in what the World Bank calls “extreme poverty” with no access to clean water or electricity. On October 11 of this year, Keiro discovered an oil spill while returning home from his farm. He alerted Exxon employees who immediately cordoned off the area and “cleaned” it up before any outside observers could see the damage. The oil spill ruined Keiro’s fallow land, and so they decided to compensate him with a special gift: an empty Esso (Exxon’s operator) backpack.

(Pictured above: Esso backpack and remnants of the oil spill)
This was allegedly the fifth oil spill related to the project, yet was not reported by a single media outlet in or outside of Chad. If a journalist from the Associated Press made just one phone call to Exxon in Houston, Keiro likely would receive thousands of dollars of compensation within a week.

Employees of the oil consortium returned to Keiro’s home on November 6th with surveying equipment. Apparently they want to build a road which will pass two meters from the family’s mud hut. According to local NGOs, Exxon’s strategy is to make life so unbearable for local residents that they leave on their own accord with no compensation. It’s working.

Invisible 5%

As for the 5% of oil revenues promised to residents of the oil-producing zone -- it’s all being spent on so-called “Presidential Projects.” These are high-profile large infrastructure projects that Deby has gifted to the regional capital of Doba, more than a thirty-minute drive from the villages hit hardest by oil production. These projects, which include an already crumbling football stadium, are intended to win support for Deby’s party in the 2010 local elections and 2011 presidential election. When asked if any of the 5% funds had been spent in his village, the Chief of Meikiri choked up with laughter before finally catching his breath to say “no.” That was Sunday. On Monday, Exxon began drilling an oil well just feet from the soccer field of his village’s elementary school. $74 million dollars have been spent in the oil producing zone on development projects according to the Vice-President of the committee managing the “5% fund.” Yet nothing is visible in the villages playing host to the project.

Weapons, Weapons, Weapons

The greatest impact of oil in Chad has been felt not by the caged-in villages of the Doba Basin, but rather in the North and East of country where hundreds of millions of dollars of oil money has been used to purchase weapons for a war that has killed thousands and displaced hundreds of thousands. In 2007, Chad spent 4.5 times more money on the military than it did on health, education, and other social spending combined. Despite the World Bank’s guarantee of a model framework for oil-led development, oil has continued to fuel war where civilians are the primary victims. Chad even used oil money to purchase weapons which were later confiscated from JEM, the Darfurian rebel group Deby hired to protect his capitol from Chad’s own rebels. The oil for war and war for oil reality is deeply ingrained in Chad’s popular political consciousness. Nadji Nelambaye, the coordinator of a Chadian NGO, snapped “are you trying to provoke me?” when asked if he thought there was a link between oil and war in the country. He then launched into a passionate hour-long speech which 99% of Chadians would agree with. According to a recent International Crisis Group report, two of Chad’s high ranking ministers -- who happen to be President Idriss Deby’s twin nephews -- defected to the armed rebellion explicitly because of perceived misuse of oil revenues.

Cameroon, the Other One

Chad has received a lot of attention and criticism related to its oil adventures. However, almost 900 kilometers of the Chad-Cameroon Pipeline pass through that other country: Cameroon.

Despite receiving minimal “transit revenues” from Chad’s oil, the pipeline’s social and environmental impacts are just a harsh for Cameroonians living along the pipeline route. 248 villages are directly impacted by the pipe and dozens more by roads, operations centers, and employee living bases all built expressly for the project. Unlike in neighboring Chad, no oil revenues have been set aside for development spending in the affected villages. The Cameroonian government claims it only receives $25 million per year and some of that money returns to impacted villages via increased social spending in the national budget. But the truth is no one knows where the $25 million is spent (or if that’s the true amount) and there is no accountability for the use of the revenues. Thus the accent of the debate in Cameroon centers on the (non)payment of compensation. The Environmental Management Plan (EMP), hundreds of pages of World Bank crafted policy jargon, required the oil consortium and Cameroonian government to pay all compensation before construction of the pipeline began in 2001. Today, Cameroonian NGOs have documented hundreds of cases in which compensation was never paid, partially paid, or paid in kind with shoddy materials. Try this Pu-pu platter of compensation disasters:

The Village Grandfather

Mongotsoe Akam is a quiet and awkward grandfather living in the small village of Ebaka in Cameroon’s East Province. He has been a farmer his whole life and seems content to continue living the traditional village life. During the pipeline’s construction, multiple subcontractors of the oil consortium were constantly buzzing around his home and farm. They were looking for laterite, a type of rock used to surface the unpaved roads the consortium built to transport materials and heavy machinery. Mr. Mongotsoe showed them the exact location of his laterite and negotiated a price for its extraction. Not only was he never paid for the use of his laterite, but he also was never compensated for the $50,000 worth of crops that were bulldozed to access the quarry. Mr. Mongotsoe politely waited until the pipeline construction was completed in 2003 to complain of his plight. When Exxon refused to pay, he asked an agricultural engineer from the Cameroonian Ministry of Agriculture to evaluate the damage to his land. Using EMP principles, the engineer’s report concluded Mongotsoe was owed a little over $50,000 and was sent to the director of Exxon’s environmental unit. Exxon later replied in a written notice that Mongotsoe’s claims documented by the Ministry of Agriculture are “not convincing” and “lack coherence.” In September, 2009 the oil consortium finally offered to settle with Mongotsoe for a mere $600. When the old man refused, an Exxon employee told two Cameroonian NGOs that Mongotsoe was trying to swindle the company since he knows they have tons of money. Can you imagine the headline in The Onion? “Cameroonian Grandfather Bankrupts Supermajor.”

Confusion in the Domps

A few hundred kilometers away in the village of Dompta, unemployed youth watch as small airplanes land and take off where they used to farm—now Exxon’s private landing strip. Their individual compensation payments were spent years ago and now they have no livelihood. The Chief of Dompta signed a contract with Exxon for the construction of a health clinic as “community compensation.” When the health clinic wasn’t built, he wrote to the oil consortium demanding they follow through on their written agreement. One of Exxon’s directors cordially replied that the health center would be built and the village could use health clinics in neighboring villages until then. Dompta’s chief died in 2007 and was replaced by his son as tradition requires. The new Dompta chief claims Exxon built a health center in Dompla (notice the difference in spelling), a village about 30 kilometers away and even proudly posted a sign that read “Dompta Health Clinic.” We will never know if this is a cruel joke or corporate idiocy because no one from the oil consortium has yet to comment on the issue. For the people of Dompta, it doesn’t really matter.

Fishing for Oil

No place in Cameroon has been overrun by the pipeline as much as the coastal city of Kribi. Traditional Kribians wake up around 5 am and ready their wooden canoes for the day’s fishing expedition. As each day passes, they paddle farther and farther to catch fewer and fewer fish. That’s because one of the principal fishing reefs was dynamited to make way for the Chad-Cameroon pipeline, which is buried under 11 kilometers of seabed. Supertankers from around to world come to dock at the Offshore Loading Facility just off Kribi’s coast, fill up on Chadian crude, and then head off to Europe and the US. The Cameroonian coast guard and Exxon private security won’t let fisherman drop their nets near the Offshore Facility and routinely harass artisanal fisherman as commercial Chinese trawlers illegally overfish the outer waters with impunity.

In January of 2007, an oil spill occurred in Kribi. As fisherman reeled in their day’s catch, they couldn’t help but notice the distinctly black color of all their fish. Exxon claims the damage was minimal. No independent analysis has been conducted to measure the impact of the spill in Kribi, which is also Cameroon’s premier tourist destination. The damage done to Kribi’s artisanal fishers is incalculable because the oil consortium’s environmental baseline studies don’t include sufficient data on fishing. Beach-front villages have been given $4,000 each in additional compensation, which Exxon calls “bon voisinage”—being good neighbors—but takes no responsibility for the collapse of Kribi’s fishing industry.

The World Bank asked the government of Cameroon and Exxon to jointly publish an official “Oil Spill Response Plan” before the project became operational in 2003. The plan was “inaugurated” at Yaounde’s ritzy Hilton Hotel on November 3rd, 2009. A member of a prominent Cameroonian NGO which has been monitoring the project was barred from the event because “he didn’t have accreditation.”

America’s Responsibility and What You Can Do

As America’s search for oil and gas intensifies on the African continent (soon to comprise 25% of all US oil imports), Americans should be aware of the human/environmental costs of their continuing lust for black gold and the actions of their corporations. Bluntly put, oil in Nigeria, Equatorial Guinea, Gabon, Congo-Brazzaville, Cameroon, Chad, Angola, and Sudan has further impoverished people at best and caused inestimable human suffering in many cases. Ghana, Mauritania, Uganda, Sao Tome and others have nascent industries which could become strategic in the search for the world’s least renewable resource.

The ultimate goal of international campaigning is to “leave African oil in the soil” and build stronger governance beforehand since the extractive industries almost never contribute to development. However, powerful interests are making that objective difficult. Thus the fight will for now be concentrated on policy improvements. Here are a couple easy things you can do to influence policy and help prevent a repeat of the Chad-Cameroon debacle:

Contact your elected representatives to support Senator Richard Lugar's Energy Security through Transparency (ESTT) Act, S.1700. The bill would require energy and mining companies to reveal how much they pay to foreign countries and the U.S. government for oil, gas, and other minerals. The information would be included in financial statements that are already required by the Securities and Exchange Commission (SEC). This would apply to both American and international companies listed with the SEC, covering a majority of the largest oil, gas and mining companies in the world. This bill is part of a large international campaign called the Extractive Industries Transparency Initiative (EITI).

Alert your elected representatives to the Human Rights Watch campaign to mandate that the US Export-Import Bank (ExIm) and Overseas Private Investment Corporation (OPIC) require extractive industries companies who receive funding or political risk insurance from them to show that they have effective policies and procedures to address security and human rights, and give those companies the capacity to monitor compliance with those standards. Both ExIm and OPIC financed the Chad-Cameroon Pipeline.