Archive for the ‘energy geopolitics’ Category

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China set to grab Canada oilsands if US declines

August 11, 2011

Forbes:

A rancorous debate over TransCanada Corp.’s (T.TRP) proposed Keystone XL Pipeline has given rise to two uncomfortable prospects: If the US$7 billion project is not built, Alberta’s oil sands will become landlocked, at least for a while, and the United States will lose access to one of its few reliable, friendly sources of oil.

Keystone XL is a proposed pipeline that would run from Edmonton—the hub of Canada’s massive oil sands—through Montana, South Dakota, Nebraska, Kansas, Oklahoma, and Texas, to Houston. The line is critical to ensure a continued, smooth ramp-up in oil sands production, because producers need to send the heavy bitumen extracted from the sands to refineries able to handle that kind of crude. Since refineries in the Midwest are reaching their heavy-oil capacity, it needs to go to the Gulf Coast.

. . .

The decision lies with the State Department, because the pipeline crosses international borders. Secretary of State Hillary Clinton is expected to announce her decision before the end of the year. The department already issued a preliminary environmental impact assessment, which seems generally supportive of the project. For example, the State Department concluded that if Keystone XL is not built, oil sands production will be diverted to other markets (such as China), and the refineries in Texas will continue to process bitumen apace from offshore platforms. As such, the pipeline would not increase production of greenhouse gases.

The U.S. Environmental Protection Agency (EPA) does not agree. In a letter to the State Department this week, the EPA argued that the project poses serious environmental risks and that the State Department’s environmental review process was seriously flawed.

. . .

Environmentalists are openly using the project as a proxy for their general opposition to oil sands development. Since environmentalists have framed the debate in that sense, Clinton’s decision will have ramifications far beyond the pipeline: It will set the tone for the U.S.’s perspective on the oil sands. But even though environmentalists would celebrate a Keystone denial, their method may be moot, because denying TransCanada approval for Keystone XL would only hinder oil sands development for a few years.

The thing is, if there is no Keystone XL, Canada will find other ways to export oil from its vast oil sands. And if the United States doesn’t want the oil, other markets will.

. . . The oil sands hold 171.3 billion barrels of oil in reserve. For context, Saudi Arabia’s reserves stand at 264.2 billion barrels. The enormity of the oil sands resource has raised the stakes for both sides in the pipeline debate and placed undue importance on the outcome.

Read the whole thing.

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The Obama Dominoes

August 1, 2011

I wrote over the weekend how the situation in Iraq is suddenly crumbling while the (what should have been) certain victory in Libya is also slipping away.   The Obama Administration is preparing the ground for a withdrawal from Afghanistan.  The Arab Spring has swept away our longtime ally Hosni Mubarak in Egypt.  Turkey is turning its back on secularism, and casting eyes toward our rivals Russia and China in the Shanghai Cooperation Organization.  With American power and prestige in the region in obvious decline, even the linchpin of American strategy in the region – stalwart ally Saudi Arabia – is seeking an entente with our regional nemesis, Iran.  From Stratfor lst month:  Something extraordinary, albeit not unexpected, is happening in the Persian Gulf region. The United States, lacking a coherent strategy to deal with Iran and too distracted to develop one, is struggling to navigate Iraq’s fractious political landscape in search of a deal that would allow Washington to keep a meaningful military presence in the country beyond the end-of-2011 deadline stipulated by the current Status of Forces Agreement. At the same time, Saudi Arabia, dubious of U.S. capabilities and intentions toward Iran, appears to be inching reluctantly toward an accommodation with its Persian adversary.

Is this the end of the American Era in the Greater Middle East, or can the decline be reversed – or at least halted – by a renewed focus by the current Administration?   Perhaps, after being frustrated and dominated by the Republicans in Congress (and with domestic policy making hamstrung by the stagnant economy), the White House will seek to make a mark in foreign policy.    This is a pivotal moment for a United States that has been operating without a coherent grand strategy for half a decade.  Let’s hope the Administration siezes the opportunity before any more dominoes fall.
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The Geopolitical Impact of Shale Gas

July 29, 2011

Major study out this month from the Baker Institute on Shale Gas and US National Security.  The report is very detailed and anyone interested in energy and geopolitics (which should be anyone who reads EnerGeoPolitics) should read the whole thing.  In summary, the report identifies the following major impacts of the US shale bonanza:

  • Eliminates the US need for gas importation
  • Reduces pressure on Middle East & Persian Gulf reserves
  • Reduces reliance on Russian, Iranian and Venezualan gas and prevents their formation of a GASPEC (gas OPEC) and limits the use of gas as an energy weapon
  • Will reduce global gas prices
  • As a clean(er) burning fuel, aids in meeting greenhouse gas reduction goals
  • Reduces the possibility of Sino-American conflict over gas supplies
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Territorial disputes in the East China Sea

July 29, 2011

China and Japan have been alternately seeking cooperation and then butting heads over territorial claims in the East China Sea and, in particular, over presumed hydrocarbon resources in the region.  James Manicom details the disputes, their history and some alternate ways forward that could avoid conflict.

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Prospects for Iraq meeting oil production targets fading

July 28, 2011

Analysis from Amy Jaffe at the Baker Institute

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Was there a China/OECD quid pro quo behind the IEA oil release?

July 6, 2011

Fascinating argument from Gregor Macdonald.

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10 new stories on the confluence of Energy and Geopolitics

July 1, 2011

US, West remain dominant over the rising BRIC states, Business Times (Singapore) editorial

Australia  challenging Qatar as dominant LNG supplier, Petroleum Economist (EnerGeoPolitics would like to note that Australia is doing so with a mere fraction of the reserves that the US has)

Can spray-on quantum dots make solar cheaper and more efficient?  Technology Review

Kazakh/Russian military exercises aimed at China?  The Bug Pit

China advancing on Coal-to-Liquid (CTL) programs not allowed in the US, Institute for Energy Research

Canada trumps US for E&P Investment, Petroleum Economist

North America is the Land of Opportunity for Energy, ExxonMobil Perspectives

Spy Shots of the New Tesla Model S, Gas 2.0 (The Model S will feature a 300 mile battery, but that will be still overpriced at $89K after the government rebate, leading to the following item)

Electric cars in need of a new business model, Financial Times

Events in Egypt spurring rapid Israeli development of newly discovered gas fields, Petroleum Economist

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Rising Tensions in the South China Sea

June 21, 2011

The South China Sea is a region rich in largely unexploited reserves of oil and natural gas.  In addition to the resource reserves, it is a strategically vital shipping lane, as most of the oil for the thirsty East Asian economies must transit from the Persian Gulf  through the South China Sea.

The SCS encompasses a vast area stretching from Taiwan in the northeast to Singapore in the southwest.  It is peppered with hundreds of tiny islets and rock outcroppings which are variously claimed as sovereign territory by the nations bordering the seas (China, Taiwan, Vietnam, Philippines, and Malaysia.

For two decades, China has had numerous disputes with the other nations in the region over its claims to the region.  In recent weeks, both Vietnam and the Philippines have had naval responses to what they see as Chinese provocations.  Last week, the National Bureau for Asian Research posted an interview about the rising tensions in the region.  The interview of NBR regional expert Ian Story was conducted by Tim Cook, director of the NBR’s Maritime Energy Resources project.  Read the interview, but also read the excellent reports from the NBR that are also linked on that page

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Sinking oil prices put the pressure on Putin’s Petrostate

May 20, 2010

Russia’s budget reportedly relies on an international oil price of $95 per barrel in order to remain balanced.   At $70 a barrel, it is 4% in deficit.  At $50 a barrel, it drops to 8% deficit.  Oil took a steep drop today to below $65 at one point.  Although it has now recovered to $67.75 per barrel, that still represents an almost 3% drop from yesterday.

Russia has long showed a willingness to use its “energy weapon.”  But that is a weapon that can easily be turned back on them.  If the US fully develops its non-conventional oil and gas resources (see, for example, here and here), it will exert a long term downward pressure on oil prices globally.

It is a matter of will.  The United States has the resources to once again dominate the world energy market.  It need only find the wherewithal to utilize them.

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Three alternatives in the growing struggle for scarce resources

May 13, 2010

Hydrocarbon Hegemony, Petro-Mercantilism, and Global Energy Access:

The three alternatives in the growing struggle for scarce resources

It is fashionable in some quarters to question the motives American foreign policy regardless of which party or what president is in power, and it had become especially fashionable to question the motives of the “neo-con” Bush Administration, even after most of the few actual neo-cons who were ever there had left the White House. The hidden assumption behind all this questioning is that, but for America’s greedy and nefarious motives, the international scene would be one of peace and harmony, or at the very least much more nearly so.

This is, of course, nonsense. US policy does not exist in a vacuum. Standing against US interests and motives are those of other nations. A genuine sceptic and thoughtful critic would examine the likely situation should those other nations’ preferences come to dominate the field. This is not very difficult to do. There are a limited number of actors who would fill the space left by the absence of US policy, and it is easy to compare their actions and goals to those of the United States.

Let us begin by assuming the “silver bullet” that critics on the left and right believe would allow the United States to largely disengage from global politics: Energy Independence.

Reducing our dependence on energy from odious regimes would matter not a whit, because oil is fungible and we will be held hostage to energy prices no matter where we get it.  Our chief sources already are

  • domestic
  • Canada
  • Mexico.

The cost of all that oil – regardless of the source – will go up whenever the global cost rises and falls.

The way to control those future shocks is to engage globally, not to disengage and try to hide behind an isolationist wall (and a false one, at that) of energy independence.

I’m a geographer, and the geographer’s perspective is usually left out of geopolitical discourse that has come to be dominated by the political half of the word.  But, geography is fundamental and the most unchangeable aspect of geopolitics, and we ignore it at our peril.  The facts of the matter are that

  • (a) we are fundamentally interconnected with the global economy;
  • (b) the global economy demands vast resources of energy;
  • (c) 70% of the world’s oil reserves and 40% of the natural gas reserves are held in the Strategic Energy Ellipse that stretches from the northern shores of the Caspian Sea to the southern terminus of the Persian Gulf.
  • (d)If we cede control of this region, then we cede control of our economy.

We have in place a superstructure of alliances in the region that we need to leverage to maintain our dominant role as the guarantor of safe and stable energy delivery to the world economy.  In opposition to this classic Public Good, the Russians are pursuing a strategy of what I call “Energy Hegemony,” an attempt to dominate those deliveries for private rather than public good, while the Chinese are pursuing a contemporay form of mercantilism I call Petro-Mercantilism, seeking to lock up flows of energy for their own use.  We cannot allow these private good pursuits to defeat the public good approach.  If they do, the world economy as we know it will collapse.

This is the end to which US power (in all the iterations of hard, soft, sweet and sticky power that various schools champion) must be deployed.  It is not about the freedom or democracy of this nation or that people.  It is about ensuring the free flow of energy so the best possible environment for economic and political advancement can be maintained.

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The Energy and Climate Partnership of the Americas

April 15, 2010

Secretary of Energy Chu and Secretary of State Clinton are hosting energy minister from throughout the hemisphere in Washington today at the ministerial meeting of the Energy and Climate Partnership of the Americas (ECPA) that President Obama launched last April at the Summit of the Americas.   This could be a necessary first step to ensuring that the energy reserves of the hemisphere are brought to the global market, and not expropriated by extra-hemispheric nations for neo-mercantilist purposes.  Of course, this is not on the agenda of the meeting in so many words, but it should be its ultimate goal.

The agenda for the conference includes:

  • Advancing Sustainable Energy in the Caribbean
  • Strengthening Central American Energy and Environmental Security
  • Senior ECPA Fellows
  • Advancing Sustainable Biomass Energy
  • Peace Corps Renewable Energy and Climate Change Initiative
  • Promoting Shale Gas in the Americas
  • Cooperating on Sustainable Urban Development and Planning

More details on each at the ECPA home page link, above and, soon, on my link list to the right.

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USGS identifies potential giant oil and gas fields in Israel/Palestine

April 9, 2010

Analysis by the experts at the US Geological Survey indicates the potential for ultimately recoverable reserves of 1.7 billion barrels of oil and 122 trillion cubic feet of natural gas in the eastern Mediterranean region.

One cannot help but notice how much of this resource straddles the border of Israel and Palestinian Authority territory, primarily Gaza but also one gas field on the border of the West Bank.  An optimist would say this presents the opportunity for economic cooperation between the two sides that could lead to a wider understanding.  A cynic would say this report just throws gas on the fire.  A lot of gas.

The one thing the Israel/Palestine conflict has lacked over the decades is a tussle over petroleum assets.  Although the region is rich in oil and gas resources, Israel, Gaza and the West Bank have been mostly barren, as this recent (2004) map of oil and gas fields from M.K. Horn illustrates.

I tend to lean toward the cynical assessment of the political ramifications of this.  But the great thing about human activity is that it always surprises you, one way or the other.

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Foreign ownership of US energy firms quintuples

April 8, 2010

The Energy Information Administration published it’s latest analysis of Foreign Direct Investment (FDI) in US energy firms.  The most recent year covered in the study is 2007.   In 2007, FDI quintupled over 2006 levels. It is the highest level in the last decade and a half, save for 1998 and 2000, when a single large acquisition (BP’s acquisition of Amoco in 1998 and of Atlantic Richfield in 2000) skewed the results.  In contrast, 2007 saw dozens of large acquisitions, including 11 (nearly one per month) valued at over $1 billion.

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China, Russia, the Gulf of Mexico and the Monroe Doctrine

April 5, 2010

In news from the weekend, we note that two of America’s biggest international competitors are establishing or enhancing footholds in the energy geopolitical sphere of the Western Hemisphere.

First, as has been reported by multiple outlets, Russian strongman Vladimir Putin and Venezuelan autocrat Hugo Chavez signed agreements that will allow Russian oil companies to begin development of untapped Venezuelan oil fields.  Also, the pair laid the groundwork for a joint Russian/Venezuelan nuclear project.  Russian arms transfers to Venezuela were also discussed.

Meanwhile, in a less widely reported story, the Chinese national oil company, Sinopec, signed a deal with Cuba to develop an offshore block with oil potential.  An Anglolan company also signed a similar deal.  Cuba now has development deals with a number of Asian national oil companies – Petronas (Malaysia), PetroVietnam and India’s Oil and Natural Gas Corporation (ONGC).

All of these nations are eager to exploit the potential of the Gulf of Mexico.  This would be fine if they were all committed to maintaining the international trade of oil, but they are all to varying degrees national oil companies that pursue policies of petro-mercantilism – negotiating agreements to ensure a direct supply to their home nations, rather than to the international market.

The US has meddled in Latin American politics almost from our inception, even before President Monroe codified his Doctrine.  The Doctrine has been used to justify such meddling ever since, often as a post hoc justification.  Its application is definitely open to criticism.  But, at its core, in its original and stated intent – to prevent outside powers from interfering within our own hemisphere – it certainly has the national interest at heart.  The last president to explicitly cite the Monroe Doctrine in his decision to take action was JFK during the Cuban Missile Crisis.    As multiple foreign powers circle the Gulf, seeking to expropriate its resources for use elsewhere, it may be time for the current president – who often self consciously seeks to invoke comparisons with JKF – to consider brandishing the Doctrine once again.  Opening parts of the Gulf to exploration last week was a step in the right direction.  Warning other nations that this resource will not be allowed to be sequestered from the global markets would be another.

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Do oil exports fuel defense spending?

March 31, 2010

President Obama is making a strong push for additional sanctions against Iran.  Speaking with the press yesterday beside French President Sarkozy, Obama predicted a new sanction regime “within weeks.”

The goal of the sanctions is to force the Iranians to abandon their nuclear ambitions.  The question, as always, is will they work?

A recent monograph published by the Strategic Studies Institute of the Army War College indicates that the likely answer is “no.”

Dr. Clayton K.S. Chun conducted a longitudinal analysis of the defense spending of five oil producing and exporting nations – Nigeria, Saudi Arabia, Kuwait, Venezuala and Iran.    What he discovered is that the defense spending/oil revenue relationship in all five nations tends to be inelastic - meaning that the rulers of these nations choose to keep defense revenues the same, cut them at a lower rate, or even increase them in the face of falling revenues.  It is possible that a sanction regime is a signal of external threat, and therefore an impetus for further, rather than reduced, spending.

In the case of Iran, 70% of the nation’s revenues come from oil and gas exports.  At the same time that there is reliance on this trade for funding, there is an increasing internal demand for energy usage.  In order to maintain its export volume and still meet its internal needs, the Iranian regime has chosen to pursue nuclear power.  While it’s nuclear ambitions are also military, the creation of a nuclear power segment is crucial to Iranian stability.  Dr. Chun believes they will cut back on everything else before they give up their nuclear goal.  This makes any sanction regime unlikely to succeed and, in fact, may make it counter productive.  Which is why there is such hesitancy among our allies to join Obama in this project.

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Arctic Energy Summit Final Report

March 30, 2010

The International Polar Year was actually two years – it ran from March 2007 through March 2009.  Among the many activities of the IPY was the Arctic Energy Summit, hosted by the Institute of the North (you can find a link to the Institute among the Research links in the bar to the right).  The final report of that summit was published last month and can be downloaded from this page.

The US Geological Survey estimates that the Arctic is home to 20% of the world’s  fossil fuel energy resources, and that the vast majority of these resources is completely untapped.  The Arctic also holds vast potential for generating wind, hydro, tidal and geothermal energy.  There are 8 nations (Canada, Denmark, Finland, Iceland, Norway, Sweden, Russia and the United States) with claims on lands in the Arctic, and the geopolitical struggle to either dominate these resources or simply to bring them to market will be of increasing importance as the century matures.

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More thoughts on Palin

August 31, 2008

Rick Brookhiser over at National Review’s The Corner blog is among a handful of Republicans who are not happy with McCain’s pick.  Brookhiser’s point #1 seems to indicate that the VP slot devolves solely to traditional foreign affairs, and if you are not versed in that, then you are an unserious pick.  Well, how does that fit Romney, whose choice would have been guided by economics?  Romney is not exactly a star in the foreign policy firmament.

There are other issues, and ENERGY is a major one.  Palin is, by far, the most experienced energy candidate of the 4 principles.  In addition to governing the nations top oil producing state, she also served as chair of the Alaska Oil and Gas Conservation Commission, the regulatory agency charged with overseeing Alaska’s precious nonrenewable natural resources.  The combined practical and executive experience on energy issues dwarfs that of the other candidates, and it stands in stark contrast to Joe Biden, who has been in the Senate long enough to have voted against the original Alaska Oil Pipeline in the 1970s.  When experience and judgement come up in the debates, that fact is going to leave a mark on the Old Pro.

Let’s also not forget that she  is not necessarily a blank slate on foreign policy.  One of the most pressing geopolitical problems of the 21st century will be one that no administration has had to deal with before – the melting of the polar ice cap and the consequent opening of the Northwest Passage.  Palin’s administration has the most direct experience in dealing with what will be a defining issue of our relations with our most important ally (Canada, with whom we share the world’s longest unguarded border and who supplies to us our largest foreign supplies of energy, both oil and hydro electric) as well as our most intractable foe, the resurgent Russia.

From my perspective as a geographer, I thought Pawlenty was McCain’s best option, simply for reasons of raw electoral arithmetic, but I concede that Palin has  some very strong hole cards to play in this debate.  Those who are writing her off may well be walking into a trap.

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The distressing selection of Joe Biden

August 28, 2008

Now that I am finally back to near full strength (even though I am still not eating solid food), it’s past time for a substantive post.  We don’t do partisan or electoral politics on this blog, but we do do energy geopolitics, and there have been some momentous events in the past week that could impact EnerGeoPolitics in the broadest sense, so let’s go.

When I heard through a Vicodin haze last weekend that Obama had named Joe Biden as his VP, I thought I must be halucinating.  Biden, the entrenched insider, seems to be the antithesis of everything the Obama campaign had been preaching about bringing Change to the old Washington ways.  Further, Obama had used his early opposition to the war in Iraq as the  raison d’être of his campaign, and had used it as a sledgehammer against opponents who were not as pure in their opposition.  Now, here he was, selecting as his #2 man someone who, in his (paraphrased) words “had gotten wrong the most important foreign policy question of our generation.”

Of course, Obama is on the cusp of actual leadership, where lobbing critiques from the peanut gallery is a luxury he can no longer afford.  He has to deal with the reality that we are in Iraq, which necessitates moving beyond harping about how we got there and figuring out how to go forward.   His own “immediate withdrawal plan” which he submitted as a Senator was all for show – another peanut gallery grenade that was ultimately unloaded.  His advisors have spoken throughout the campaign of leaving residual forces of 40,000 or 50,000 or 80,000 troops for an unspecified period of time.  Behind the sloganeering, in reality, there is no Obama Plan for leaving Iraq.

But, there is a Biden Plan (actually, there isn’t – it is actually Peter Galbraith’s plan, but in yet another case of the intellectual pilfering for which he is known, Biden has appropriated as his own).  Joe Biden has been a consistent voice calling for the partition of Iraq into three separate federal units based on ethno-religious identity – roughly, a Kurdish north, a Shiite east, and a Sunni west.  Outside of a paniced bug-out from the region, I think this is the worst idea of all that I have heard.

Iraq sits in the center of the Strategic Energy Ellipse.  It is the most under-explored country in that crucial region, meaning the actual size of its immense oil and gas holdings are probably vastly under-reported.  The most important stratetgic objective for the United States in the next half century is to keep the flow of energy resources from this region as unrestricted as possible.  That means preventing the domination of the region by any state or group of states.

The current strength of the US in the region lies in the network of alliances and relationships with other like-minded nations.  Saudi Arabia and the GCC states all fear domination by an Iranian hegemon.  The Central Asian states fear domination by Russia.  The Turks have history with both Russian and Persian imperialism.  Versus Persian and Russian designs, the United States sits as the balancing power.  However, at the moment we begin to show weakness or inability to fulfill our role, all these nations will have incentive to begin making accomodations with one of the other players.  This would have dire consequences for the stability of energy supply and, consequently, to the stability of the global economy.  This is the basic fact underlying US military presence in the region – we have to be there, in one way or another.

The Biden Plan has the potential to seriously damage, if not destroy, many of the alliances the US has in the region.  To begin with, the Turks would be strongly opposed to the independent Kurdistan that the Biden Plan lays the groundwork for.  Next, the Shiite East would likely become a de facto puppet state of Greater Iran, and would probably renege on any oil revenue sharing deals with the other two states.  That would the leave the Sunnis in the west abandoned to a pile of worthless sand.  Our closest and most important allies in the region – the Egyptians, the Saudis, the various states of the GCC – are also primarily Sunni, and would see this as a profound betrayal.  They would also see how much it strengthens Iran and weakens the US – especially if we were to be punished by the Turks by being denied use of our bases there.  The advantages of allying with the US would be fundamentally weakened.

The tripartite separation of Iraq is a monumentally unthoughtful idea.  It begins with the premise of “let’s get out,” and seeks to find a pseudo-intellectual justification or cover for that act.  Leaving aside for now the fact that it would be an exercise in US sanctioned ethnic cleansing, it fails to examine the strategic necessities of the situation first, and to find a way forward from them.  It is ironic that Peter Galbraith said the biggest failure of US strategy in Iraq was “wishful thinking,” and then he went on to put forward this fantasy.

Maybe this is all meaningless, maybe the selection of Joe Biden does not mean an Obama Administration would endorse the Biden Plan.  For certain, realities on the ground have changed much of the tenuous rationale for the plan in the first place, but as of two weeks ago, Biden’s office told Mother Jones that he still fully supported it.  But it is clear that Obama himself does not have a plan for leaving Iraq, and his plan, such as it is, is one of the very few things that Biden really seems to bring to the electoral table.

Distressing.

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The Georgian Crisis and the Threat to the Global Energy Public Good

August 13, 2008

Larry Kudlow over at National Review’s Corner has a post up on the Georgia crisis that has what I think are some important misconceptions. First, you should note that Kudlow mis-attributes to Thomas Barnett a long quote that frames his argument. Barnett did not author the lines he quotes, they came from James Pethokoukis’ keyboard. Pethokoukis was simply referencing Barnett’s line about being “a former expert on the former Soviet Union.”

Pethokoukis’ general idea, I think, is incorrect. Reducing our dependence on energy from odious regimes would matter not a whit, because oil is fungible and we will be held hostage to energy prices no matter where we get it. Our chief sources already are (a) domestic (b) Canada and (c) Mexico. The cost of all that oil will go up whenever the global cost rises and falls.

The way to control those future shocks is to engage globally, not to disengage and try to hide behind an isolationist wall (and a false one, at that) of energy independence.

I’m a geographer, and the geographer’s perspective is usually left out of geopolitical discourse that has come to be dominated by the political half of the word. But, geography is fundamental and the most unchangeable aspect of geopolitics, and we ignore it at our peril. The facts of the matter are that

  • (a) we are fundamentally interconnected with the global economy;
  • (b) the global economy demands vast resources of energy;
  • (c) 70% of the world’s oil reserves and 40% of the natural gas reserves are held in the Strategic Energy Ellipse that stretches from the northern shores of the Caspian Sea to the southern terminus of the Persian Gulf.
  • (d)If we cede control of this region, then we cede control of our economy.

We have in place a superstructure of alliances in the region that we need to leverage to maintain our dominant role as the guarantor of safe and stable energy delivery to the world economy. In opposition to this classic Public Good, the Russians are pursuing a strategy of what I call “Energy Hegemony,” an attempt to dominate those deliveries for private rather than public good, while the Chinese are pursuing a modern form of Oil Mercantilism, seeking to lock up flows of energy for their own use. We cannot allow these private good pursuits to defeat the public good approach. If they do, the world economy as we know it will collapse.

This is the end to which US military power (and all the other forms of soft, sweet and sticky power that various schools champion) must be deployed. It is not about the freedom or democracy of this nation or that people. It is about ensuring the free flow of energy so the best possible environment for economic and political advancement can be maintained.

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Whither NATO?

August 13, 2008

The Bear is once again stalking the woods. Containing that bear is NATO’s raison d’etre. So, where is the NATO response? Unfortunately, our “traditional” NATO allies have been made energy cuckolds by Putin. They will not respond. Meanwhile, the newest NATO members – the Baltic States and Poland – have joined with rebuffed NATO candidate Ukraine to stand bravely with embattled Georgia. If NATO won’t act on this, what is the purpose of maintaining the alliance? Surely not so we can have them sitting behind barriers in Afghanistan, shackled by restrictive rules of engagement.

NATO will not act. It is time for the United States to circumvent them and institute strong bilateral agreements with the Ukraine, Georgia and Azerbaijan. Then, group those three with current NATO members Turkey, Bulgaria and Romania into a Black Sea Treaty Organization. Turkey controls all of the southern Black Sea shoreline, Bulgaria and Romania control the western shore, Ukraine the north, and Georgia a large portion of the east. Together, they dominate about 7/8 of the sea, leaving just a small area in the northeast that is Russian. The United States already bases aircraft in Turkey, it should redeploy others from the non-helpful NATO allies to each of the other 5 nations (including Azerbaijan on the Caspian) in the region, and dedicate a Black Sea Squadron for permanent basing in the Ukrainian port of Odessa.

The Russians have a decided advantage in land power in the region, but they cannot match US air or naval power. Luckily for us, those are the two branches of the military that are least stretched by Iraq and Afghanistan.

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