Rozina Ali writes: Late Sunday afternoon, protesters at the Standing Rock Indian Reservation, in North Dakota, received unexpected and welcome news. Jo-Ellen Darcy, the U.S. Army’s assistant secretary for civil works, had announced that her department would not be approving the easement required for construction of the Dakota Access Pipeline to continue. The pipeline, which has been the cause of a months-long standoff involving the Standing Rock Sioux, their allies, the state government, and Energy Transfer Partners, Dakota Access’s parent company, was slated to carry crude oil beneath Lake Oahe, the reservation’s main source of drinking water. Instead, according to Darcy, the Army Corps of Engineers will now conduct a thorough environmental assessment and work with E.T.P. to “explore alternate routes for the pipeline crossing.” The decision came just in time: after weeks of confrontation between law enforcement and protesters, tensions had been expected to rise on Monday, when two thousand military veterans were to join the demonstrations, and when a mandatory evacuation order, issued by Governor Jack Dalrymple, was to take effect. When I spoke with Dave Archambault II, the tribe’s chairman, on Tuesday morning, the previous day’s revelry had given way to relief. “We told congressmen, senators, the company, everybody, that it infringes on our rights, but it seemed like no one heard us,” he said, referring to the pipeline. “I never believed the easement would be stopped.”
Yet the protesters’ celebrations have been tempered by concern over whether the decision will outlast President Obama’s tenure in office. Soon after the Army’s announcement, House Speaker Paul Ryan tweeted, “This is big-government decision-making at its worst. I look forward to putting this anti-energy presidency behind us.” Last month, Kelcy Warren, E.T.P.’s chief executive and a personal donor to Donald Trump’s Presidential campaign, told NBC News that he was “a hundred per cent sure that the pipeline will be approved by a Trump Administration,” and that “we will have a government in place that believes in energy infrastructure.” (E.T.P. declined to speak to me for this story.) Jan Hasselman, an attorney for the environmental-law nonprofit Earthjustice, which represents the Sioux, told me that the Army’s move “could be of limited durability in light of Trump’s unabashed embrace of fossil fuels.” Until recently, the President-elect also had a financial stake in the pipeline. Trump has not yet made any statements about the latest Dakota Access development — his transition team did not respond to my requests for comment — but last week a spokesman indicated Trump’s support for the original pipeline route, and specified that it “has nothing to do with his personal investments and everything to do with promoting policies that benefit all Americans.”
But who decides what policies benefit Native Americans? For the Standing Rock Sioux, that issue — not energy infrastructure but the flawed process of consultation between the tribe, the Army Corps of Engineers, and E.T.P. that caused the impasse in the first place — was at the crux of their protest. [Continue reading…]
The Associated Press reports: The U.S. Army Corps of Engineers said Sunday that it won’t grant an easement for the Dakota Access oil pipeline in southern North Dakota, handing a victory to the Standing Rock Sioux tribe and its supporters, who argued the project would threaten the tribe’s water source and cultural sites.
North Dakota’s leaders criticized the decision, with Gov. Jack Dalrymple calling it a “serious mistake” that “prolongs the dangerous situation” of having several hundred protesters who are camped out on federal land during cold, wintry weather. U.S. Rep. Kevin Cramer said it’s a “very chilling signal” for the future of infrastructure in the United States.
The four-state, $3.8 billion project is largely complete except for the now-blocked segment underneath Lake Oahe, a Missouri River reservoir. Assistant Secretary for Civil Works Jo-Ellen Darcy said in a news release that her decision was based on the need to “explore alternate routes” for the pipeline’s crossing. Her full decision doesn’t rule out that it could cross under the reservoir or north of Bismarck.
“Although we have had continuing discussion and exchanges of new information with the Standing Rock Sioux and Dakota Access, it’s clear that there’s more work to do,” Darcy said. “The best way to complete that work responsibly and expeditiously is to explore alternate routes for the pipeline crossing.”
The company constructing the pipeline, Dallas-based Energy Transfer Partners, had said it was unwilling to reroute the project. It had no immediate comment Sunday. [Continue reading…]
Al Jazeera reports: Forces opposed to Libya’s unity government have seized a fourth oil port, Brega, completing their takeover of vital installations in the North African country’s “oil crescent”, according to military sources.
The UN-backed Government of National Accord (GNA) based in Tripoli is struggling to assert its authority and has faced staunch resistance from a rival administration based in Libya’s remote east.
Forces loyal to Khalifa Haftar, a renegade general, on Sunday launched an offensive on Libya’s “oil crescent” along the northern coast. [Continue reading…]
The Guardian reports: Forces opposed to the UN-backed Libyan government in Tripoli appear to be making a clean sweep through the country’s “oil crescent”, seizing control of oil terminal headquarters and gaining a stranglehold over the export of Libya’s economic lifeblood.
The capture of the oil terminals through the weekend and Monday changes the balance of political forces inside Libya and makes the survival of the UN-backed, Tripoli-based government of national accord (GNA) less likely.
The oil ports were seized by forces under the control of General Khalifa Haftar, who opposes the GNA and supports the rival government in the east of the country. The victory for Haftar is likely to increase his prestige and his negotiating power in the event of Libya being carved up.
The clashes also mean that the possibility of an economic revival driven by oil production and export is further away than ever. Six western nations had issued a joint appeal in August urging that oil facilities be freed from the civil war.
The Libyan national oil corporation, one of the few technocratic bodies left in Libya, had produced a clear plan to revive oil production and exports this year.
Oil production, pipelines and terminals have been at the centre of the civil war since the collapse of the government of Muammar Gaddafi in 2011. Oil production has collapsed from a potential of more than 1.5 million barrels a day to just 200,000. [Continue reading…]
Quartz reports: Two years after quietly declaring war on upstart US shale, Saudi Arabia says the need for the fighting is over. In remarks to journalists while on a US visit, Saudi Arabian energy minister Khalid Al-Falih said that the worldwide oil glut has vanished, signaling an end to Saudi Arabia’s strategy of flooding the global market with oil to try to put American drillers out of business.
The implication was that Saudi Arabia owned the victory. But a three-week-long resurgence of US oil drilling after 21 months of decline suggests that Saudi and the US fought to a draw.
Falih noted that a record volume of oil remains in storage in the US and around the world (paywall), built up during the glut, but once much of that is sold off, the kingdom can resume its traditional role managing supply and demand. [Continue reading…]
Emily Meierding writes: When China’s Haiyang Shiyou 981 oil rig sailed into waters off the Paracel Islands in May 2014, it provoked an international crisis. Hanoi insisted that the rig was operating illegally in Vietnamese territory. Both countries sent naval and fishing vessels to enforce their claims. Commentators predicted that the two states might come to blows.
The confrontation died down, but a critical question remains: Do countries fight over oil resources?
The question isn’t just pertinent to the South China Sea. The Arctic, Caspian, East China Sea and eastern Mediterranean have all been identified as potential “hot spots” for international oil conflicts. Numerous conflicts, including Iraq’s invasion of Kuwait, Japan’s invasion of the Dutch East Indies in World War II, Germany’s attacks against the Russian Caucasus in the same war, the Iran-Iraq War, the Chaco War between Bolivia and Paraguay, and even the Falklands War, have been described as international “oil wars.”
However, contrary to the conventional wisdom, the risk of international oil wars is slim. Although oil is an exceptionally valuable strategic and economic resource, fighting for it does not pay.
The belief that countries fight for oil rests on a flawed foundational assumption: Countries reap the same benefits from foreign oil resources as from domestic oil resources.
In reality, profiting from oil wars is hard.
Countries face at least four sets of obstacles that discourage them from fighting for oil: invasion costs, occupation costs, international costs and investment costs. [Continue reading…]
The Wall Street Journal reports: In Syria, George Haswani sees himself as a patriot. In the West, he is a wanted man.
Mr. Haswani acts as a middleman between Islamic State and the Syrian government, the terror group’s largest customer, Western security officials allege. Islamic State controls much of Syria’s energy infrastructure and sells stolen oil and natural gas at a discount—even to the regime it is ostensibly battling.
Emerging from the fog of Syria’s multisided civil war, the businessman, 69 years old, says he is helping keep his country from plunging into the dark ages, given that Syria’s power plants run on fuel controlled largely by Islamic State. To the Syrian nuns he helped free from extremist kidnappers, Mr. Haswani is a hero.
U.S. and European Union officials, meanwhile, have sanctioned Mr. Haswani, a dual-Russian-Syrian national, for his alleged role as a broker of crude-oil shipments from Islamic State to the government of President Bashar al-Assad. The sanctions freeze assets held by Mr. Haswani in the U.S. and EU.
“We’ve declared to the world…that we’re going after him,” said Amos Hochstein, a State Department special envoy who oversees U.S. efforts to cripple Islamic State’s energy business.
The role played by men such as Mr. Haswani is one reason why Islamic State has been able to sustain itself financially despite U.S.-led military strikes and plunging oil prices. The group’s energy profits have fallen by as much as half over the past year, officials said, but sales continue to make up a sizable proportion of total revenues, estimated at $1 billion to $2 billion annually, including income from the Assad regime.
Buttressing Mr. Hawsani are his strong ties to Russia. He teamed up years ago with one of President Vladimir Putin’s closest associates to build the sprawling gas-production facility in Syria’s Tuweinan region that caught the attention of the Obama administration.
Administration officials said Moscow’s military and economic alliance with Damascus makes it clear Russia knows of the dealings between the Assad regime and Islamic State. [Continue reading…]
Elizabeth Kolbert writes: No one knows exactly how the fire began — whether it was started by a lightning strike or by a spark provided by a person — but it’s clear why the blaze, once under way, raged out of control so quickly. Alberta experienced an unusually dry and warm winter. Precipitation was low, about half of the norm, and what snow there was melted early. April was exceptionally mild, with temperatures regularly in the seventies; two days ago, the thermometer hit ninety, which is about thirty degrees higher than the region’s normal May maximum. “You hate to use the cliché, but it really was kind of a perfect storm,” Mike Wotton, a research scientist with the Canadian Forest Service, told the CBC.
Though it’s tough to pin any particular disaster on climate change, in the case of Fort McMurray the link is pretty compelling. In Canada, and also in the United States and much of the rest of the world, higher temperatures have been extending the wildfire season. Last year, wildfires consumed ten million acres in the U.S., which was the largest area of any year on record. All of the top five years occurred in the past decade. In some areas, “we now have year-round fire seasons,” Matt Jolly, a research ecologist for the United States Forest Service, recently told the Times.
“You can say it couldn’t get worse,” Jolly added, but based on its own projections, the forest service expects that it will get worse. According to a Forest Service report published last April, “Climate change has led to fire seasons that are now on average 78 days longer than in 1970.” Over the past three decades, the area destroyed each year by forest fires has doubled, and the service’s scientists project that it’s likely to “double again by midcentury.” A group of scientists who analyzed lake cores from Alaska to obtain a record of forest fires over the past ten thousand years found that, in recent decades, blazes were both unusually frequent and unusually severe. “This extreme combination suggests a transition to a unique regime of unprecedented fire activity,” they concluded.
All of this brings us to what one commentator referred to as “the black irony” of the fire that has destroyed most of Fort McMurray.
The town exists to get at the tar sands, and the tar sands produce a particularly carbon-intensive form of fuel. (The fight over the Keystone XL pipeline is, at its heart, a fight over whether the U.S. should be encouraging — or, if you prefer, profiting from — the exploitation of the tar sands.) The more carbon that goes into the atmosphere, the warmer the world will get, and the more likely we are to see devastating fires like the one now raging. [Continue reading…]
Bloomberg reports: Wildfires raging through Alberta have spread to the main oil-sands facilities north of Fort McMurray, knocking out an estimated 1 million barrels of production from Canada’s energy hub. Fire officials say the out-of-control inferno may keep burning for months without significant rainfall.
The blaze, forecast to expand to more than 2,500 square kilometers (965 square miles) in the next few days, made an “unexpected” move to the north Saturday, rapidly encroaching bitumen mining operations run by Suncor Energy Inc. and Syncrude Canada Ltd. The fires may soon cover an area the size of Luxembourg.
“It is a dangerous and unpredictable and vicious fire that is feeding off an extremely dry Boreal forest,” federal Public Safety Minister Ralph Goodale told reporters Saturday in Regina, Saskatchewan. He said the swirling fire is not yet a threat to any additional communities.
The wildfires have led to combined productions cuts of more than 1 million barrels of oil a day, or about 40 percent of the region’s output of 2.5 million barrels, based on IHS Energy estimates. The cuts, and the mass exodus of more than 80,000 people from the fires raging in Fort McMurray, represent another blow to an economy already mired in recession from the oil price collapse. [Continue reading…]
The Los Angeles Times reports: Though the cause of the fire has not been determined, the inferno has become symbolic of the tension within Canada over its role in climate change.
Some Canadians see the fire as nature lashing back at those who mistreat it in the name of profit.
Others see the hard science: a wildfire formed in conditions consistent with climate change striking with academic irony, not vengeance, in a place that helps supply the world with a fossil fuel. The evacuees were really climate refugees, they say.
Still others view it as just very bad luck, a setback the oil industry will find a way to overcome.
The debate reflects a country wrestling within itself at a difficult moment — and it is testing that famous Canadian civility.
A provincial politician who called the fire “karmic” was quickly castigated and later apologized. When Canadian Green Party leader Elizabeth May said the fire was “very related to the global climate crisis,” Prime Minister Justin Trudeau suggested she was making “a political argument.”
Some environmentalists have been accused of lecturing to or, worse, condemning people who have lost everything. In Fort McMurray, more than 2,000 structures were consumed by the flames.
“I wish I could kick every person posting ‘That’s what you get for living by the oil sands’ comments,” a young Edmonton woman tweeted Tuesday evening at the peak of the evacuation, when flames were whipping across Highway 63, the only road out of Fort McMurray. “You’re terrible people.”
Janet Keeping, the Green Party leader within Alberta, was among several people who invoked climate change early in the week — and did so without clearly expressing support for fire victims. She soon tried to strike a new chord.
“Caring about people means caring about #climatechange,” Keeping wrote Thursday on Twitter.
Alberta’s oil sands are said to hold the third largest reserves in the world, after Saudi Arabia and Venezuela. They made Alberta rich even as they have made Canada uneasy.
Conservation groups have long despised the intensive extraction process involved in gleaning crude from the sands — Alberta would have been the source for the Keystone XL oil pipeline that President Obama rejected last year — and many Canadians loathe what they view as an excessively capitalist culture in Fort McMurray. [Continue reading…]
Jason Coppola reports: As the start of 2016 shatters last year’s record as the hottest year on record, the Oceti Sakowin (Seven Council Fires of the Great Sioux Nation) once again find themselves on the front lines of the battle against the fossil fuel industry.
Members of the Standing Rock Sioux Tribe have established a Spirit Camp at the mouth of the Cannonball River in North Dakota as a means of bringing attention and awareness to a proposed pipeline and act as an enduring symbol of resistance against its construction.
The Dakota Access Pipeline (DAPL) is set to cut through several US states, delivering hundreds of thousands of barrels of crude oil from the Bakken and Three Forks oil fields in North Dakota to Patoka, Illinois.
The Dallas-based Energy Transfer Partners pipeline will cross the Ogallala Aquifer — a million-year-old shallow water table spanning eight US states, which provides fresh water for drinking and agriculture — while twice crossing the Missouri River and running alongside the Standing Rock Indian Reservation.
The Guardian reports: hen Jonathan Powell, the gatekeeper to the corporate empire of Tony Blair, sat down to lunch with the former Saudi intelligence chief Prince Faisal Al Turki in June 2010 he could not have known how lucrative it would turn out to be for the former British prime minister.
As the high-profile mediator of the stuttering peace process in the Israeli-Palestinian conflict, Blair had to be careful not to mix business with pleasure. However, one of those lunching with Powell at the annual “global mediator’s retreat”, organised by the Norwegian Ministry of Foreign Affairs, was looking to make a deal.
Nawaf Obaid, a security analyst who accompanied Prince Faisal, emailed Powell a week later, according to documents seen by the Guardian, with a suggestion to work with his brother Tarek’s company, PetroSaudi, which he “co-founded and co-owns with Prince Turki bin Abdullah, son of King Abdullah”.
“They have several projects that [they] are working [on] and I think it would [give] a very interesting perspective to see if we could establish a strategic partnership with former PM Tony Blair and yourself,” he wrote.
Tarek Obaid was a former banker who styled himself as an adviser to members of the Saudi royal family and a director of a joint venture with Malaysia’s multibillion-dollar development fund, 1MDB. This fund had put $300m through PetroSaudi and as the latter’s chief executive, Obaid was on the lookout for deals.
On paper PetroSaudi looked impressive: its chief investment officer was a former Goldman Sachs banker, Patrick Mahony. The chief operating officer was listed as Rick Haythornthwaite, a City insider who was also chairman of Network Rail and MasterCard.
Blair’s team sold the former prime minister as someone who could help “unlock situations which might otherwise be blocked by political factors” in places such as China and Africa. PetroSaudi was interested in Beijing’s appetite for oil and how Blair’s firm could help. [Continue reading…]
In a Greater Middle East in which one country after another has been plunged into chaos and possible failed statehood, two rival nations, Iran and Saudi Arabia, have been bedrock exceptions to the rule. Iran, at the moment, remains so, but the Saudi royals, increasingly unnerved, have been steering their country erratically into the region’s chaos. The kingdom is now led by a decrepit 80-year-old monarch who, in commonplace meetings, has to be fed his lines by teleprompter. Meanwhile, his 30-year-old son, Deputy Crown Prince Mohammed bin Salman, who has gained significant control over both the kingdom’s economic and military decision-making, launched a rash anti-Iranian war in Yemen, heavily dependent on air power. It is not only Washington-backed but distinctly in the American mode of these last years: brutal yet ineffective, never-ending, a boon to the spread of terror groups, and seeded with potential blowback.
Meanwhile, in a cheap-oil, belt-tightening moment, in an increasingly edgy country, the royals are reining in budgets and undermining the good life they were previously financing for many of their citizens. The one thing they continue to do is pump oil — their only form of wealth — as if there were no tomorrow, while threatening further price-depressing rises in oil production in the near future. And that’s hardly been the end of their threats. While taking on the Iranians (and the Russians), they have also been lashing out at the local opposition, executing a prominent dissident Shiite cleric among others and even baring their teeth at Washington. They have reportedly threatened the Obama administration with the sell-off of hundreds of billions of dollars in American assets if a bill, now in Congress and aimed at opening the Saudis to American lawsuits over their supposed culpability for the 9/11 attacks, were to pass. (It would, however, be a sell-off that could hurt the Saudis more than anyone.) Even at the pettiest of levels, on Barack Obama’s recent arrival in Saudi Arabia for a visit with King Salman, they essentially snubbed him, a first for a White House occupant. All in all, a previously sure-footed (if extreme) Sunni regime seems increasingly unsettled; in fact, it has something of the look these days of a person holding a gun to his own head and threatening to pull the trigger. In other words, in a region already aflame, the Saudis seem to be tossing… well, oil onto any fire in sight.
And in a way, it’s little wonder. The very basis for the existence of the Saudi royals, their staggering oil reserves, is under attack — and not by the Iranians, the Russians, or the Americans, but as TomDispatch energy specialist Michael Klare explains, by something so much larger: the potential ending of the petroleum way of life. Tom Engelhardt
Debacle at Doha
The collapse of the old oil order
By Michael T. Klare
Sunday, April 17th was the designated moment. The world’s leading oil producers were expected to bring fresh discipline to the chaotic petroleum market and spark a return to high prices. Meeting in Doha, the glittering capital of petroleum-rich Qatar, the oil ministers of the Organization of the Petroleum Exporting Countries (OPEC), along with such key non-OPEC producers as Russia and Mexico, were scheduled to ratify a draft agreement obliging them to freeze their oil output at current levels. In anticipation of such a deal, oil prices had begun to creep inexorably upward, from $30 per barrel in mid-January to $43 on the eve of the gathering. But far from restoring the old oil order, the meeting ended in discord, driving prices down again and revealing deep cracks in the ranks of global energy producers.
It is hard to overstate the significance of the Doha debacle. At the very least, it will perpetuate the low oil prices that have plagued the industry for the past two years, forcing smaller firms into bankruptcy and erasing hundreds of billions of dollars of investments in new production capacity. It may also have obliterated any future prospects for cooperation between OPEC and non-OPEC producers in regulating the market. Most of all, however, it demonstrated that the petroleum-fueled world we’ve known these last decades — with oil demand always thrusting ahead of supply, ensuring steady profits for all major producers — is no more. Replacing it is an anemic, possibly even declining, demand for oil that is likely to force suppliers to fight one another for ever-diminishing market shares.
The Wall Street Journal reports: Islamic State oil man Abu Sayyaf was riding high a year ago. With little industry experience, he had built a network of traders and wholesalers of Syrian oil that at one point helped triple energy revenues for his terrorist bosses.
His days carried challenges familiar to all oil executives—increasing production, improving client relations and dodging directives from headquarters. He also had duties unique to the extremist group, including approving expenses to cover the upkeep of slaves, rebuilding oil facilities damaged by U.S. airstrikes and counting towers of cash.
Last May, U.S. Special Forces killed Abu Sayyaf, a nom de guerre, at his compound in Syria’s Deir Ezzour province. The raid also captured a trove of proprietary data that explains how Islamic State became the world’s wealthiest terror group.
Documents reviewed by The Wall Street Journal describe the terror group’s construction of a multinational oil operation with help from officious terror-group executives obsessed with maximizing profits. They show how the organization deals with the Syrian regime, handles corruption allegations among top officials, and, most critically, how international coalition strikes have dented but not destroyed Islamic State’s income.
Defense Secretary Ash Carter called the May 16, 2015, raid a “significant blow” against Islamic State and heralded the death of Abu Sayyaf, the terror group’s No. 2 oil executive.
In the 11 months since, U.S. and allied forces have launched hundreds more strikes against terrorist-controlled oil facilities and killed dozens of militants working in Islamic State’s oil and finance business. U.S. officials estimate that at least 30% of the group’s oil infrastructure has been destroyed, and taxes have replaced oil as the group’s largest profit center. [Continue reading…]