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…]
So much that matters in our world and on our planet happens in and remains in the shadows. This website is dedicated to shining at least a small light into some of those shadows. Commenting recently on the failure of the U.S. war on terror as well as the war against the Islamic State, Andrew Bacevich wrote: “To label [such a] problem ‘terrorism’ is to privilege convenience over understanding. It’s like calling big-time college football a ‘sport.’ Doing so entails leaving out all the grimy, money-soaked activity that occurs off the gridiron.” In fact, much of the activity that truly shapes our world happens off that “gridiron” and out of sight. And what you don’t see (or see reported), you often can’t imagine either.
Sometimes history helps. Today’s dispatch is an example. It is adapted from Adam Hochschild’s new book, Spain in Our Hearts: Americans in the Spanish Civil War, 1936-1939, a dramatic account of the thousands of Americans who volunteered to fight the war against fascism before it was faintly fashionable and the correspondents who covered them. It’s a vivid tale of some very well known people like Ernest Hemingway, Martha Gellhorn, and George Orwell who saw the socialist-led Spanish Republic’s defeat firsthand, but also of quite ordinary Americans who had the urge to stop a terrible force before it could storm the world. (Unfortunately, in that they failed.) It also offers an unforgettable picture of a past America under stress and possibly of the last moment before the arrival of Bernie Sanders when “socialism” was not a curse word in this country.
In researching the book, Hochschild came across one of those crucial figures working in the shadows — an unforgettable oilman with a Trumpian personality whose acts in support of Spanish general Francisco Franco and then Adolf Hitler helped ensure that fascism would come to power in Spain and, in the end, that the globe would be bathed in blood. Somehow, his role was missed by the hundreds of journalists covering the war. As you read this piece, ask yourself who and what is no one noticing at this very second as our world spins so madly on. Tom Engelhardt
The oilman who loved dictators
Or how Texaco supported fascism
By Adam Hochschild
[This piece has been adapted from Adam Hochschild’s new book, Spain in Our Hearts: Americans in the Spanish Civil War, 1936-1939.]
“Merchants have no country,” wrote Thomas Jefferson in 1814. “The mere spot they stand on does not constitute so strong an attachment as that from which they draw their gains.” The former president was ruing the way New England traders and shipowners, fearing the loss of lucrative transatlantic commerce, failed to rally to their country in the War of 1812.
Today, with the places from which “merchants” draw their gains spread across the planet, corporations are even less likely to feel loyalty to any country in particular. Some of them have found it profitable to reincorporate in tax havens overseas. Giant multinationals, sometimes with annual earnings greater than the combined total gross national products of several dozen of the world’s poorer countries, are often more powerful than national governments, while their CEOs wield the kind of political clout many prime ministers and presidents only dream of.
No corporations have been more aggressive in forging their own foreign policies than the big oil companies. With operations spanning the world, they — and not the governments who weakly try to tax or regulate them — largely decide whom they do business with and how. In its quest for oil in the anarchic Niger Delta, according to journalist Steve Coll, ExxonMobil, for example, gave boats to the Nigerian navy, and recruited and supplied part of the country’s army, while local police sported the company’s red flying horse logo on their uniforms. Jane Mayer’s new book, Dark Money, on how the brothers and oil magnates Charles and David Koch spent hundreds of millions of dollars to buy the Republican Party and America’s democratic politics, offers a vivid account of the way their father Fred launched the energy business they would inherit. It was a classic case of not letting “attachments” stand in the way of gain. Fred happily set up oil installations for Soviet dictator Joseph Stalin before the United States recognized the Soviet Union in 1933, and then helped Adolf Hitler build one of Nazi Germany’s largest oil refineries that would later supply fuel to its air force, the Luftwaffe.
Andrew Scott Cooper writes: For the past half-century, the world economy has been held hostage by just one country: the Kingdom of Saudi Arabia. Vast petroleum reserves and untapped production allowed the kingdom to play an outsize role as swing producer, filling or draining the global system at will.
The 1973-74 oil embargo was the first demonstration that the House of Saud was willing to weaponize the oil markets. In October 1973, a coalition of Arab states led by Saudi Arabia abruptly halted oil shipments in retaliation for America’s support of Israel during the Yom Kippur War. The price of a barrel of oil quickly quadrupled; the resulting shock to the oil-dependent economies of the West led to a sharp rise in the cost of living, mass unemployment and growing social discontent.
“If I was the president,” Secretary of State Henry Kissinger fumed to his deputy Brent Scowcroft, “I would tell the Arabs to shove their oil.” But the president, Richard M. Nixon, was in no position to dictate to the Saudis.
In the West, we have largely forgotten the lessons of 1974, partly because our economies have changed and are less vulnerable, but mainly because we are not the Saudis’ principal target. Predictions that global oil production would eventually peak, ensuring prices stayed permanently high, never materialized. Today’s oil crises are determined less by the floating price of crude than by crude regional politics. The oil wars of the 21st century are underway. [Continue reading…]