- MUST READS
- PRODUCTS
- RESOURCES
- MULTIMEDIA
- ENFACTLOPEDIA
- FSM AUTHORS
- ABOUT US
- CONTACT US
- FSM BLOG
- DONATE
- PRESS COVERAGE
SEARCH FSM
- IN THIS SECTION
March 25, 2009
Exclusive: The China-Iran Gas Deal
What does the world know that the White House and Congress don’t? Actually, the question should be, what does just about everyone seem to get that our leaders don’t? Simple: that oil and gas are power. Not just in the traditional sense but in the broader context of money, wealth and geoglobal influence.
Recently it was announced that Chinese and Iranian companies have signed a $3.2 billion deal to produce more than 10 million tons of liquid natural gas (LNG) over the next three years. Russia already has similar deals in the works with Iran. This should worry the White House on many levels. More importantly, it should worry the average American that our leaders are constantly blindsided – while the world is going on, our leaders are blithely unaware, uncaring or outplayed.
Clearly the Obama administration places great faith in the United Nations (UN) as an honest broker. So how’s that UN sanction effort working against Iran? Like most UN efforts – doomed to failure. As an aside, we’d save a lot of carbon toxicity by shutting down that Tower of Babel off the FDR.
Is it any wonder Iran is celebrating yet another victory against the West, specifically the U.S. and using this latest billion dollar deal as evidence they are winning. Does anyone doubt that they are? Iran – her successes in nuclear programs, energy, weapons, and satellite launch capability – all in spite of our efforts to the contrary. There’s nothing sadder than when an upstart kicks sand in the face of a super power. And as China and Russia continue to invest in or collaborate with Iran, it emboldens the Tehran regime, further weakening any likelihood the U.S. will be able to counter Ahmadinejad’s ambitions. The downstream ramifications to the U.S., Israel and Eurasia should not be overlooked.
While Russian and China are investing billions of dollars in oil, gas, weapon, electronic and other global commercial ventures, what is the U.S. doing? The best that our leaders can come up with is a regressive cap and trade energy policy, pandering to the environmental movement, undermining the reality of clean coal technology, threatening to curtail advanced weapons development, abandoning our allies, and delaying any new initiatives to drill or explore for oil. Is this “change” we can believe in?
Friends expect friendship. Money talks and “you know what” walks. The U.S. is walking; Russia and China are talking. Cha-ching!
It is sad and pathetic to watch a great nation commit suicide. Instead of getting into the game – putting our military, industrial and yes economic might behind efforts to exert influence in Europe, Asia and North Africa, aiding countries that clearly could benefit from our assistance, as well as using our resources to explore the Arctic, the mainland and Alaska for fossil fuels AND using the profits or even finder’s fees to finance research into alternative and cleaner fuels, influence global affairs, and help struggling nations –our leaders suggest putting a brick in the toilet to save water and turning off unnecessary lights to reduce energy consumption. Wow, we are a welfare nation. We’re acting like the poor relative on the world stage.
Where once great ideas, inventions and industries emerged from our nation, we now get backwards-looking policies that soon will lead us to living off the land. Yet a commitment of paltry sums of money to create a new energy engineering initiative (billions), or forge new global alliances – competing with China and Russia – would pale to insignificance compared to the trillions being pledged for a social engineering initiative over the next few years. The former would create jobs, make us energy independent from the bad guys, and give us the opportunity if not the wealth to rebuild alliances globally. Alas we never seem to miss an opportunity to miss an opportunity. And saddest of all, most of Europe and the world would prefer an alliance with the U.S. over Putin or China – and we’re blowing the opportunity. But our recent decisions to abandon our allies (abandon missile defense system in Eastern Europe to make Russia happy) when it is expedient to do so, and ignore others in need – like Central Asia, North Africa and Eastern Europe or flat out devolve as paper tigers – doesn’t commend us to most favored ally status. Is it any wonder the world is now turning its attention to Moscow and Beijing?
While the left, the mainstream media and the Administration are still obsessing on yesterday’s news, apologizing for being a superpower and perhaps our wealth and power offending Russia and others (get over it), everyone else is going about their business – trade deals, military alliances, oil and gas exploration, projecting influence, forging new friendships. When our State Department talks about abandoning our missile systems or pulling back our military to engender a sense of global bonhomie, even our allies blush with embarrassment…and boredom.
Showing a total lack of perspicacity on all things geoglobal, and not recognizing how ridiculous or naïve or desperate we must look, in spite of daily situation reports that Putin, Medvedev or leaders from China are on a world tour to sign up partners, our leaders ignore the obvious and offer to yield concessions to Russia and China hopeful that they will grant in exchange their assistance and reign in Iran. What part of Russia investing in Iran or China investing in Iran don’t our leaders get? Do we buy Russian denials about having no influence in the region, when she expands her reach through military, technological and financial assistance with Iran, Syria, the “Stan” nations, North Africa and elsewhere? Russia is a key player in the UK, Europe, and growing influence in South America. Canada is next.
Then there’s China.
Think old Russia – will China rivalries win out and aid the U.S.? Guess again. In February, The China Development Bank agreed to lend $25 billion to Russia’s Rosneft Oil and Transneft Pipeline. China is also investing in Venezuela, like Russia. And to the tune of billions of dollars. Then of course there’s Brazil – China is being generous there, too.
China National Petroleum Corporation (CNPC) recently agreed to purchase Canada’s Verenex Energy, which also happens to have Libyan interests – a large oil field. Over the last year, Chinese companies have been investing in or buying energy companies around the world. So while Russia is helping Syria rebuild her ports – not surprisingly to accommodate Russian warships – China spent $ 2 billion on a company to obtain oil fields there. And whatever influence Russia hasn’t just purchased in Uzbekistan, CNPC is investing in a joint oil exploration project there. Quelle surprise! Putin has worked his magic there as well with financing, weapons, and oil deals.
And what is the common denominator tying Russia, and increasingly China to some of our allies and adversaries? One that the U.S. fails to embrace as a powerful tool that is also within our grasp – fossil fuels.
While we’re trying to do 1960s redux and putting flowers in our hair, China and Russia send their navies to help us track down Somali pirates. Are you kidding? What are we using, three-mast frigates or privateer schooners? As predicted, the Russians and Chinese used the piracy as an excuse to get a foothold in the Gulf and we let them do it.
It won’t be long before the Persian Gulf looks more like the South China Sea or the Caspian. Between Russia and China, the waterways surrounding the Middle East, once considered Far East Great Lakes for the U.S. Navy, are now floating a worrisome sight – the Russian and Chinese Navies. Though neither is as fearsome, equipped or powerful as their U.S. counterparts, at least for the moment, their mere presence will underscore a far more ominous reality – our influence commercially and militarily are waning. Russia and China project power through economic alliances – largely energy based – and demonstrate a resolve to ensure the sanctity of those alliances through force.
Then there’s Russia.
Through new found riches – energy, trade dominance, slick monetary policy or brinksmanship and risk taking – Russia and China are a new order of world banking and are sending flash cash to nations in financial trouble in order to realign these nations towards a more Moscow/Beijing-friendly posture. Consider Russia has “lent” billions to cash strapped Belarus and Kyrgyzstan; already with great returns on investment. Kyrgyzstan is kicking out the U.S. from an airbase, and Belarus will allow a greater Russian military presence. The Ukraine is for all intents and purposes bankrupt or on the verge of financial disaster; it may not be able to pay the gas (think Putin) bill. Much of Eastern Europe is in financial turmoil. What better position to find your former satellites if you are the Kremlin than needing money. Hamlet once cautioned “stay out of debt” – no doubt thinking ahead to the time when Russia could be the loan shark. With money comes influence. Russia already has outplayed the U.S. on gas and oil pipeline deals stretching from Saudi Arabia to Hungary and Bulgaria – well, you get the idea.
Whether Russia can afford it or not, Putin et al, are as they say “all in.” The Kremlin/Gazprom team – Putin Inc. – are going to use money, power, the media and any other form of influence to build gas cartels to rival OPEC, and with energy dominance comes economic, military and political influence. Cold people aren’t effective adversaries; shivering people are hard to take serious if you are the schoolyard bully. Germany, the Ukraine and other nations learned pretty fast what it was like to challenge Russia, especially during the winter. And though the Kremlin took some heat, if you’ll excuse the pun, for their latest gas extortion in the Ukraine, it fell on deaf ears and led to the desired result.
THE PUTIN STRATEGY
The Putin Strategy is simple, elegant and effective. And he has implemented it in South America (Venezuela, Bolivia), Africa (Niger, Libya, Algeria) and the Middle East (Iran, Syria) to name a few examples. The list is much, much longer. First the olive branch – money, either in direct investment, loan forgiveness or other creative forms of bashkeesh. Of course that softens the way for new deals with Russian companies. Then of course there are the weapons, the military presence, and the “friendships” that evolve. Trade, a powerful and increasingly influence ally. The bonus – it pokes a stick in the eye of the U.S.; what despot could resist?
The Obama Strategy –Is there one? Honest, it wasn’t a trick question!
While the current administration, in keeping with the near lack of attention from the former administration, focuses on the economy, the team at 1600 Pennsylvania Avenue seems to have failed to grasp the reality that energy is the economy. They are not separate entities. And energy sources remain mostly off the shores or in the deserts of the Middle East and a few other locations. Clearly the US, under Obama’s leadership, is unlikely to change any time soon.
One of the fundamental problems in any organization is the disconnectedness of important, interrelated issues. Whether it is the silo mentality and over compartmentalization of the preparedness communities – federal/state/local law enforcement, intelligence, health, emergency response, military and political entities – or the multifaceted and multi-problematic state of affairs in the U.S. in terms of reconciling leftist goals of environmentalism with the public’s demand for new jobs is nowhere more evident than in the Obama energy plan.
At a time when the United States and our leaders should be considering ways to protect existing industries – whether fossil fuel users or not – this administration proposes tired old cap and trade strategies that, at least in the short term, may punish companies and impose yet another burden in a difficult economy. While much of the world uses, needs and seeks fossil fuels the current administration is proposing punishing industries for using them, while offering no viable, cost effective alternative. It would be one thing to penalize a company for using fossil fuels if a reasonable alternative existed in quantity and accessibility that didn’t require significant retrofitting or expenditures that compromised the bottom line. But those alternatives are years away.
DISCUSSION
After reading the Obama energy plan, admittedly while behind the wheel of my car, I wondered, just who’s driving the proverbial national car? Is there a map in the glove compartment? No, and pretty soon there won’t be a gas station to pull over for directions. But I thought, heck, let’s try some of Obama’s green approaches.
Windmills make terrible navigators, and don’t say much anyway. There are no windmill stations – which means no place to get it tuned up, or buy Cracker Jack either! Plus they just don’t fit on the roof of the car. I tried! I really wanted to leave a smaller carbon footprint. But to be honest, I like my SUV, 15 mpg notwithstanding. Makes snow storms look like road rallies. Fun stuff! Just ignore the black snow in my wake. But I do feel somewhat guilty that the spotted reindeer might get asthma someday from my exhaust fumes. So, like a sailor, I tried gaff rigging my car to tap into New England winter wind power, but the other drivers complained they couldn’t see out of their windshields with all the sails I used to move my car. Back to the drawing board! Undaunted and being a scientist, I borrowed some radioactive materials from the local university – they weren’t too secure (the 2008 DHS ruling to protect low yield materials wasn’t designed to go into effect until the end of 2009) anyway, to make a nuclear reactor for my Jeep. But the environmentalists kept protesting. I told them it wasn’t carbon based energy; but you know those clean water folks. Okay, so the steam glows – at least my carbon footprint would be small. So here I am, back to regular unleaded. At least I can make house calls again. In other words – fossil fuels get me to work. And the rest of the nation, too.
It would be fine if we were all über wealthy folks with nothing but time on our hands to contemplate the climate, and Lear Jets to fly around yammering about the evils of carbon fuels as our private planes, 8 mpg limos, and 10,000 square foot homes guzzle gas and oil faster than a whale can suck down plankton. Do as I say, not as I do! But the sad reality – these are the folks who helped elect Obama and have the IOUs to hold his attention. Not that it is much of an arm twist.
But here are the dangers. While the Obama Administration is focusing on the economy and environmental issues – and promising “5 million green collar jobs” – the how being painfully light on details, they are ignoring one of the most important issues for our time – the economic power of energy. Most worrisome, they are treating the issues as separable and unrelated. Moreover, the latter “energy” – especially in terms of fossil fuels – are considered a bad thing, one to be eradicated. Consider how they describe tapping into the United States’ enormous resources “promote the responsible domestic production to oil and gas.” Plus, we’ll be encouraged to buy hybrids but the specifics of how again are thin. Interestingly obtaining energy in the form of oil and gas – still the predominant resource and most viable fuel available – remain at the middle to bottom of their web site. Clearly we know who the Obama/Biden team is writing to and what they think of fossil fuels – nothing tells an industry how valued they are than a windfall tax, and significant restrictions, regulations and barriers.
Oil and gas are good. Don’t believe me? Ask Iran, Saudi Arabia, Libya, Iraq, Venezuela and Russia what they think about fossil fuels. Then go ask nations that don’t have oil, gas or coal as natural resources what they wouldn’t give for such dirty, evil stuff as carbon based fuels. No one should argue that fossil fuels are the best we can come up with in the 21st century or that the supply is renewable or endless. But there is enough to get us through at least another couple generations if we play it smart. Energy industries provide wealth to those nations blessed with the resources and will to tap into them. And wealth provides a powerful tool – to buy influence and weapons. By vilifying fossil fuels we do a disservice to an industry that employs lots of people. It is also bad politics to create more enemies. And it pushes away from the grown-ups table a powerful team that can contribute to a solution. While only the village idiot will deny the petroleum industry has tried to curtail alternative energy automobiles, higher fuel efficiency or clean fuel industries, never the less it is a major employer, powerful research driver and important revenue stream for the nation. It is time to work together. But the Obama team seems determined to limit the use of fossil fuels, and treating oil/gas exploration as totally antithetical to sound environmental policy. With a jobless rate significantly higher than anyone’s comfort level, family incomes down and wealth per consumer dropping isn’t it time to consider ways to strengthen existing employers and identify new industries?
And as a result of current policies - some of the most vital fundamentals of the economy and environment are being missed – that without a visionary energy policy – one that allows us to tap into the full range of sources from fossil fuels to creating new ones we will fall behind other nations dedicated to controlling, obtaining, producing or selling as much oil, gas and LNG as they can.
U.S. Reservoirs
The U.S. has oil and gas reservoirs just begging to be tapped within the continent, Alaska and the Arctic. In prior FSM articles, you can read my thoughts on the Arctic. It is estimated there are almost 30 billion barrels of oil off the coast of Alaska. These are technically recoverable amounts based upon our current capabilities. In the Green River Formation according to a Rand report, the amount of oil shale in parts of Utah, Colorado, and Wyoming, the U.S. has approximately 800 billion barrels of recoverable oil. That’s around three times Saudi Arabia reserves. Though not the same as tapping into a pure oil field – requiring a fair amount of water to extract the oil, the economic benefit to our nation in the short run – jobs, taxable earnings, drilling fees, and long run – stemming the obscene transfer of wealth from the U.S. to OPEC and most importantly creating domestic wealth, and allowing our country to use petrodollars to forge deals, aid allies and thwart adversaries alone should be incentive enough for our leaders to pursue such policies. But the U.S. is choosing to ignore those riches, those resources and a vital key to a healthier economy. Moreover, we are ignoring a most important foreign policy tool. Given our oil and gas influence in the world would appear inversely proportional to Russia’s and China’s it might be a good time to consider energy as a policy weapon and not just a fuel or minor component of a complex economy. It is one of the true universal currencies in the world – a vulnerability to those without enough of it, and a powerful club with which to enforce policy for those blessed with an abundant supply. It is time we get off the ropes, and get back into the ring.
Perhaps we have gas pump amnesia. With regular unleaded less than $2 a gallon, could we be lulled into a false sense of security? Let’s play “what if.” What if China and Russia decide to squeeze our allies and use their growing alliance to form a Russia China oil cartel?
Green fuel development, protecting the environment and drilling for oil are not part of a zero sum game. We can and should pursue all three. But in times of economic struggles where families are increasingly turning to food banks for help, are losing jobs, pulling their kids from college, signing up for unemployment and worried about the loss of personal wealth – it is not the right era to sacrifice opportunities to drive the economy in lieu of exacting environmental policies that may be anti business and clearly anti exploration. No one is suggesting policies that invite sulfur rain and smog, reminiscent of London circa 1900s.
CONCLUSION
The world runs on fossil fuels. It’s not just a mindset, vile addiction or result of laziness. It is what it is – the result of decades of urbanization, industrialization and exploration intertwined and interdependent with the need for power and heat. To uncouple demand from supply will require more than political rhetoric, even presidential fiat. It will require complex collaborations across industries and disciplines. Class or environmental warfare may be great for pandering to a mob to conjure votes but impractical and ineffective strategies for substantive change.
Since mankind woke up to a cold cave, realized heat was survival and set out to find ways to make our domiciles more habitable. Dung works but, yuck! Wood is fine, if you live near trees. You can just wear so many mastodon skins at a time – clearly the pre-PETA era. The most effective, cleanest and inexpensive sources of thermal units available became the Holy Grail. And voila – black gold – coal and Texas tea…oil.
Coal, oil and gas are the sources of energy for a world built around using them. To undo our dependence would require dismantling large infrastructures – from the small company down the street to entire nations build upon gas lines such as Eastern Europe.
While the Obama administration is trying to sell the world that going green is the best way to avoid the theoretical climate disaster of global warming (it was 30 degrees last night), other nations are more concerned about the reality of feeding and warming their citizens, and have cast their lot with energy industries and energy nations, not “go green” interest groups, and rightly so. Energy exploration, development and production create jobs – good jobs. Consider the book Whirlwind by James Clavell. In it he described the massive petroleum industry and wide range of jobs created in Iran – collaborations between British and other industries. The same is as true today as 20 or more years ago when he wrote it.
Gas and oil have made Gazprom and Putin, Inc a force to be reckoned with. China increasingly is dependent upon fossil fuels and is aggressively securing the necessary resources by intense investment with countries around the world, most notably in the Middle East where both the Bear and the Dragon are establishing a military, economic, petrochemical and as a result political presence in this vitally important region. These new liaisons undermine our influence and may compromise our efforts in the war on terror – a term this administration would prefer eradicated from contemporary jargon. As an aside, wishing words away won’t make threats go away.
Wherever you turn, there is a Russian emissary trying to strike a deal – Iran, Venezuela, Cuba, Syria, Canada – whether over oil rights, pipelines, liquid natural gas (LNG) or ports, you cannot pick up a paper without reading about the expanse of Kremlin influence. Pretty soon virtually all fossil fuel supplies will be controlled in one way or another by China, Russia and hostile Middle East nations. This is not good for a nation that is the leading importer in the world (US) with NO viable alternative to gas or oil on the horizon. Relying on our old pal Saudi Arabia is like putting your eggs in one basket; a basket Putin is already putting a hand on. North Sea oil is not the only answer.
China-Iran Gas Deal: What do Russia, China, Iran, Venezuela and others know that the US doesn’t? Energy is power. This week we got another wake-up call that our foreign policy is anemic. Iran landed a $3.2 billion deal with China. How many more wake-up calls will it take before the Administration acknowledges the strength, sovereignty, economic stability and geoglobal influence of the United States are inextricably tied in with our energy policies? It is not too late to get back in the game. America will benefit and ultimately so will the world. But we need a strategic view that doesn’t artificially divide domestic circumstances from international events. Energy is the Rosetta stone for both. But our current energy policy is running out of gas; and so are we.
FamilySecurityMatters.org Contributing Editor Dr. Robin McFee is a physician and medical toxicologist. An expert in WMD preparedness, she is a consultant to government agencies, corporations and the media. Dr. McFee is a member of the Global Terrorism, Political Instability and International Crime Council of ASIS International. She has authored numerous articles on terrorism, health care and preparedness, and coauthored two books: Toxico-Terrorism by McGraw Hill and The Handbook of Nuclear, Chemical and Biological Agents, published by Informa/CRC Press.
Reader Comments: Submit Your Comment (0)
| Print This E-mail This |
|
