Ukraine crisis: Why it matters to the world economy

a13-iconCNN reports: While the world watches the escalating crisis in Ukraine, investors and world leaders are considering how the instability could roil the global economy.

The political turmoil is rooted in the country’s strategic economic position. It is an important conduit between Russia and major European markets, as well as a significant exporter of grain.

But in the post-Soviet era, it’s a weakened economy. Now, the government is in need of an economic rescue — and torn between whether Russia or the Western economies (including the European Union) is the savior it needs.

Here are five reasons the world’s largest economies are watching what happens in Ukraine. [Continue reading...]

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If climate change is a ‘weapon of mass destruction,’ why promote carbon proliferation?

o13-iconZoë Carpenter writes: On Sunday, Secretary of State John Kerry delivered a call for climate action that attracted considerable attention because of its forcefulness. Speaking in Jakarta, Indonesia, Kerry rebuked climate deniers, referring to them as “a tiny minority of shoddy scientists…and extreme ideologues.” He described the economic costs and catastrophic implications of inaction. Most strikingly, he suggested that climate change is “the world’s most fearsome weapon of mass destruction.”

“It doesn’t keep us safe if the United States secures its nuclear arsenal, while other countries fail to prevent theirs from falling into the hands of terrorists,” Kerry said. Similarly, a serious response to climate change requires that all countries break their fossil fuel addiction. “At the end of the day, emissions coming from anywhere in the world threaten the future for people everywhere in the world,” Kerry said.

Kerry’s nuclear analogy is useful for understanding the Obama’s administration’s climate agenda — and its glaring omission. The plan is built on three pillars: curbing domestic carbon pollution (or, securing our own nuclear arsenal), preparing for the impacts of climate change (building fallout shelters) and leading efforts to address climate change internationally (encouraging disarmament.)

All of that nonproliferation work would be undercut if the US sold weapons-grade uranium to the countries it was asking not to build a bomb. In effect, that is what the United States is doing with fossil fuels. [Continue reading...]

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Will the gas fields of the Levant Basin become Israel’s next warzone?

a13-iconChristopher Dickey reports: When Israel looks at the greatest threat to its long-term hopes for the future, these days it’s looking out to sea. The old issues are on the table, of course: Iran’s nukes, the Palestinians, the Syrian slaughterhouse next door and growing regional instability. But if there’s a place where a sudden, out-of-control war is likely to erupt, it’s probably not going to be called the Sinai, the Golan, the West Bank (or Judea and Samaria). It’s going to be called Leviathan, Dalit or Karish — the vast fields of natural gas and oil discovered in the deep waters between Israel and Cyprus over the last five years.

Who controls that wealth is likely to dominate the economic future of the region for generations to come. The Israelis know it. So do their allies, their rivals and their enemies. And tensions are mounting by the day.

“All the elements of danger are there,” says Pierre Terzian, editor of the oil industry weekly Petrostrategies: there is competition for huge resources, there are disputed borders, and, not to put too fine a point on it, “this is a region where resorting to violent action is not something unusual.”

The United States government is watching warily, trying to broker diplomatic settlements and, so far, failing. No longer inclined to be the region’s policeman on land or in the air, much less at sea, Washington is scaling back its presence in the Middle East while just about everyone else is increasing theirs.

Israel is rushing to create “the most technologically advanced fleet in the Eastern Mediterranean,” according to a report in Tablet Magazine. Turkey is flexing its maritime muscles with plans to spend as much as a billion dollars on a multi-purpose amphibious assault ship that will give its fleet blue water capabilities like never before. The Iranian-backed Hezbollah militia in Lebanon, meanwhile, is known to have naval missiles, and has used them in the past, sinking a cargo vessel and holing an Israeli warship during the Lebanon war of 2006. Russia is expanding both its naval and commercial presence in Syrian waters, despite the Syrian civil war. It inked a $90 million, 25-year exploration deal with Damascus last Christmas Day. [Continue reading...]

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Ellen Cantarow: The frontlines of fracking

FeatureWhat kind of world is this?  In China, an almost 1,350 square mile freshwater lake — that’s more than four times the size of New York City — recently dried up due to an ongoing drought.  In the high Sierra of America’s West, bears have forgone hibernating as a result of (what were once, at least) unseasonably warm conditions.  Across the continent in Maine, increasing ocean acidity is thought to be behind the spread of coastal “dead mud” which may have “disastrous implications for clammers, lobstermen, oyster farmers, and others whose livelihoods depend on healthy coastal ecosystems.”  Meanwhile, across the globe in Australia, blistering heat chased koalas from the trees and sent many to the hospital, possibly baked 100,000 bats to death, and is threatening cattle and crops.

In a world wracked by increasing climate chaos, the seemingly appropriate response would be immediate remediation and mitigation efforts.  Instead, this world being what it is, we have just the opposite.  In the U.S., this means increased coal consumption and a resulting rise in carbon emissions for the first time in years.  It means that, despite so much recent damage from “wild weather” flooding all over the country, the Federal Emergency Management Agency often relies on inaccurate flood maps, leaving property owners in jeopardy.  It also means the administration of embattled New Jersey Governor Chris Christie pushing to, as the New York Times put it, “thread a 22-mile-long [gas] pipeline through the heart of the Pinelands, a 1.1-million-acre protected expanse of scrub pines, gnarly oaks, and yellow-brown river deltas.”

New Jersey is far from alone when it comes to pipeline peril.  Today, TomDispatch regular Ellen Cantarow takes us to the frontlines of fracking.  Once, this would have meant a trip to the ancient undulating hills of Wisconsin, which are being despoiled for the silica used in hydraulic fracturing, or the increasingly toxic towns of rural Pennsylvania where such silica and water, as well as a noxious chemical stew, are all forced at high pressure into deep underground deposits of shale.  With a gas pipeline snaking toward her hometown, Cantarow points out that the frontline of increasing fossil-fuel use and abuse is everywhere. You don’t need to go looking for a frack fight, anymore.  It’s coming looking for you. Nick Turse

No pipe dream
Is fracking about to arrive on your doorstep?
By Ellen Cantarow

For the past several years, I’ve been writing about what happens when big oil and gas corporations drill where people live. “Fracking” — high-volume hydraulic fracturing, which extracts oil and methane from deep shale — has become my beat. My interviewees live in Pennsylvania’s shale-gas fields; among Wisconsin’s hills, where corporations have been mining silica, an essential fracking ingredient; and in New York, where one of the most powerful grassroots movements in the state’s long history of dissent has become ground zero for anti-fracking activism across the country. Some of the people I’ve met have become friends. We email, talk by phone, and visit. But until recently I’d always felt at a remove from the dangers they face: contaminated water wells, poisoned air, sick and dying animals, industry-related illnesses. Under Massachusetts, where I live, lie no methane- or oil-rich shale deposits, so there’s no drilling.

But this past September, I learned that Spectra Energy, one of the largest natural gas infrastructure companies in North America, had proposed changes in a pipeline it owns, the Algonquin, which runs from Texas into my hometown, Boston. The expanded Algonquin would carry unconventional gas — gas extracted from deep rock formations like shale — into Massachusetts from the great Marcellus formation that sprawls along the Appalachian basin from West Virginia to New York.  Suddenly, I’m in the crosshairs of the fracking industry, too.

We all are.

[Read more...]

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America’s diminishing dependence on Middle East oil will be short-lived

The New York Times reports: The boom in oil from shale formations in recent years has generated a lot of discussion that the United States could eventually return to energy self-sufficiency, but according to a report released Tuesday by the International Energy Agency, production of such oil in the United States and worldwide will provide only a temporary respite from reliance on the Middle East.

The agency’s annual World Energy Outlook, released in London, said the world oil picture was being remade by oil from shale, known as light tight oil, along with new sources like Canadian oil sands, deepwater production off Brazil and the liquids that are produced with new supplies of natural gas.

“But, by the mid-2020s, non-OPEC production starts to fall back and countries from the Middle East provide most of the increase in global supply,” the report said. A high market price for oil will help stimulate drilling for light tight oil, the report said, but the resource is finite, and the low-cost suppliers are in the Middle East.

“There is a huge growth in light tight oil, that it will peak around 2020, and then it will plateau,” said Maria van der Hoeven, executive director of the International Energy Agency. The agency was founded in response to the Arab oil embargo of 1973-74, by oil-importing nations.

The agency’s assessment of world supplies is consistent with an estimate by the United States Energy Department’s Energy Information Administration, which forecasts higher levels of American oil production from shale to continue until the late teens, and then slow rapidly.

“We expect the Middle East will come back and be a very important producer and exporter of oil, just because there are huge resources of low-cost light oil,” Ms. van der Hoeven said. “Light tight oil is not low-cost oil.” [Continue reading...]

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Chomsky slams Canada’s tar sands energy plans

The Guardian reports: Canada’s rush to exploit its tar sands and shale gas resources will destroy the environment “as fast as possible”, according to Noam Chomsky.

In an interview with the Guardian, the linguist and author criticised the energy policies of the Canadian government under Prime Minister Stephen Harper.

He said: “It means taking every drop of hydrocarbon out of the ground, whether it’s shale gas in New Brunswick or tar sands in Alberta and trying to destroy the environment as fast as possible, with barely a question raised about what the world will look like as a result.”

But indigenous peoples in Canada blocking fossil fuel developments are taking the lead in combatting climate change, he said. Chomsky highlighted indigenous opposition to the Alberta tar sands, the oil deposit that is Canada’s fastest growing source of carbon emissions and is slated for massive expansion despite attracting international criticism and protest.

“It is pretty ironic that the so-called ‘least advanced’ people are the ones taking the lead in trying to protect all of us, while the richest and most powerful among us are the ones who are trying to drive the society to destruction,” said Chomsky. [Continue reading...]

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Oil companies are sued for burning off natural gas

The New York Times reports: In the sharpest challenge yet to the surge in flaring of natural gas in the Bakken shale oil field, North Dakota mineral owners this week filed 10 class-action lawsuits seeking millions of dollars in lost royalties from some of the nation’s largest oil companies.

Roughly 1,500 fires burn above western North Dakota because of the deliberate burning of natural gas by companies rushing to drill for oil without having sufficient pipelines to transport their production. With cheap gas bubbling to the top with expensive oil, the companies do not have an economic incentive to build the necessary gas pipelines, so they flare the excess gas instead.

Flaring is environmentally less harmful than releasing raw natural gas into the atmosphere, but the flared gas still spews climate-warming carbon dioxide into the atmosphere. The quantities of gas burned are so large that the fires rising above wheat and sunflower fields look like a small city in NASA photographs taken from satellites.

Flared gas has nearly tripled in the last two years in North Dakota, with almost 30 percent of the output in the state burned at wells, producing emissions equivalent to more than two medium-size coal-fired power plants. [Continue reading...]

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Michael Klare: The latest news in fossil fuel addiction

The news couldn’t be better — and it couldn’t be worse.  Or ask yourself this: What do these two headlines have in common: “U.S. expected to be largest producer of petroleum and natural gas hydrocarbons in 2013,” “Shift to a new climate likely by middle of the century, study finds”?

A great deal, it turns out. Evidently, as the U.S. Energy Information Agency reports, the U.S. will surpass Russia as the leading combined producer of oil and natural gas this year.  For the time being, Saudi Arabia remains the globe’s number one oil producer.  And yes, according to a new study in the journal Nature, sometime around the year 2047 (give or take the odd decade), the world will hit a “climate takeoff point.”  Think of it as the moment when, according to the researchers, “the old maximum average temperatures become the new minimum temperatures, extending beyond any climate we have experienced since 1860,” that is, when systematic records first began being kept.

So for the U.S., we may be talking record fossil fuel production, while for the globe we are going to be talking record heat, record storms — of which a preview could be seen in the monstrous cyclone “half the size of India” that just came out of the warming waters of the Bay of Bengal — and record weather disruptions as the new norm on planet Earth.  The connection, of course, is record emissions of carbon dioxide from the record burning of all those fossil fuels.  It couldn’t be a nastier combo, something potentially straight out of Dante’s inferno.  And, as always, TomDispatch has Michael Klare, author most recently of The Race for What’s Left, on the case. Tom Engelhardt

Fossil fuel euphoria
Hallelujah, oil and gas forever!
By Michael T. Klare

For years, energy analysts had been anticipating an imminent decline in global oil supplies.  Suddenly, they’re singing a new song: Fossil fuels growing scarce?  Don’t even think about it!  The news couldn’t be better: fossil fuels will become ever more abundant.  And all that talk about climate change?  Don’t worry about it, they chant.  Go out and enjoy the benefits of cheap and plentiful energy forever.

This movement from gloom about our energy future to what can only be called fossil-fuel euphoria may prove to be the hallmark of our peculiar moment.  In a speech this September, for instance, Barry Smitherman, chairman of the Texas Railroad Commission (that state’s energy regulatory agency), claimed that the Earth possesses a “relatively boundless supply” of oil and natural gas.  Not only that — and you can practically hear the chorus of cheering in Houston and other oil centers — but many of the most exploitable new deposits are located in the U.S. and Canada.  As a result — add a roll of drums and a blaring of trumpets — the expected boost in energy is predicted to provide the United States with a cornucopia of economic and political rewards, including industrial expansion at home and enhanced geopolitical clout abroad.  The country, exulted Karen Moreau of the New York State Petroleum Council, another industry cheerleader, is now in a position “to become a global superpower on energy.”

There are good reasons to be deeply skeptical of such claims, but that hardly matters when they are gaining traction in Washington and on Wall Street.  What we’re seeing is a sea change in elite thinking on the future availability and attractiveness of fossil fuels.  Senior government officials, including President Obama, have already become infected with this euphoria, as have top Wall Street investors — which means it will have a powerful and longlasting, though largely pernicious, effect on the country’s energy policy, industrial development, and foreign relations.

[Read more...]

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Under Obama, U.S. leads the world in oil and gas production

Slate reports: The United States will pass Russia this year to lead the world in production of oil and natural gas, the U.S. Energy Information Administration reports.

America has been closing in on Russia since 2008 thanks to a boom in both oil and gas production, primarily on private lands. This year it’s on track to out-produce it by a substantial margin. Saudi Arabia is third overall and remains the world’s largest oil producer — though the United States may be on track to take that title as well.

“This is a remarkable turn of events,” the head of the EIA told the Wall Street Journal. “This is a new era of thinking about market conditions, and opportunities created by these conditions, that you wouldn’t in a million years have dreamed about.”

As recently as 2007, economists were writing things like, “the amount of oil produced in America each year has been on a path of inexorable decline now for two generations.” Turns out the path was exorable after all. All it took was a whole lot of fracking. [Continue reading...]

DeSmogBlog: What’s it like living in a small town that’s gone from rust belt farmland to fracking boomtown?

First, residents often say, there’s the traffic. Communities have been unexpectedly flooded with heavy tractor trailers that locals say turn 10 minute commutes into hour-long ordeals, choke back roads and decimate pavement so badly that in some areas, drilling companies are barred from entering until they agree to pay for road repairs. “The traffic here is horrendous,” Towanda, PA resident Joe Benjamin told NPR.

Others often describe the impacts on the social fabric – a “wild west” atmosphere that brings with it increased crime and public health problems.

But these reports have been largely anecdotal, with little to quantify how big these impacts are or how much of it is due to fracking. Until now.

A new report by Food and Water Watch examines the social impacts of fracking, comparing traffic, crime and sexually transmitted infections in rural Pennsylvania counties. Using a decade worth of county-level data, they compare the differences between counties with substantial fracking and without, and how these counties have changed over time, from before the boom until after it set in. [Continue reading...]

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Algeria to exploit controversial shale gas

AFP reports: Algeria, the world’s fourth-largest gas exporter, has decided to develop its shale gas potential, but experts fear this could cause severe environmental problems.

Officials say the country’s shale gas reserves are 600 trillion cubic feet (17 trillion cubic meters), or around four times greater than its current known gas reserves.

Algeria may be the world’s eighth-largest natural gas producer in 2011, according to the BP Statistical Review of Energy, but domestic consumption is surging. Official forecasts say that, from 2019, local demand will eat up all the country’s production.

At present, 50 years after it gained independence, the country remains almost totally dependent on hydrocarbons, which account for 90 percent of its exports.

So as long as it fails to diversify its export base, it has no alternative than to develop shale gas, an unconventional fossil fuel, to secure its energy future, experts say.

A new hydrocarbons bill, to be introduced in parliament in the coming weeks, encourages the exploration of unconventional gas and oil resources.

However, the effect on the environment of the production of shale gas is of great concern to ecologists.

Chems Eddine Chitour, director of fossil energy development at Algiers’ Ecole Polytechnique, is concerned that the method used for obtaining the fuel trapped in formations of shale rock could be geologically dangerous and also put a strain on the largely desert country’s water supplies. [Continue reading...]

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Big Oil threatens Obama

North America could be self-sufficient in gasoline and diesel fuel in 15 years if only the government would get out of the way, the president of the American Petroleum Institute said on Wednesday in a “state of American energy” address intended to raise the industry’s profile in the presidential election.

Jack N. Gerard, the president and chief executive of the trade group, said repeatedly that his organization would not take a position on whom to vote for. But he also said, “It would be a huge mistake on the part of the president of the United States to deny the construction of the Keystone XL pipeline,” which would deliver crude extracted from oil sands in Canada to the coast of the Gulf of Mexico. Turning it down would have “huge electoral consequences,” he said.


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Kasich, Koch and big-industry bucks: Why Ohio is the next fracking frontier

Truth Out reports: Fracking opponents in southern Ohio won a victory last week when the United States Forest Service (USFS) withdrew more than 3,000 acres of public lands from a federal oil and gas lease sale scheduled for December 7, 2012. The USFS announced that it needed more time to review the potential effects of fracking after receiving petitions and letters from local leaders who used the old-fashioned method of collecting signatures to catch the attention of government officials.

The fracking industry, on the other hand, has spent $747 million dollars in the past decade to lobby Congress and support politicians in states like Ohio, Michigan and New York as part of a campaign to keep fracking unregulated, according to a recent Common Cause report.

Fracking is short for horizontal hydraulic fracturing, and Ohio is the next ground zero for the rapidly expanding natural-gas drilling method, which has enraged environmentalists and provoked controversy across the country. Fracking involves injecting millions of gallons of water and chemicals – some of them toxic – into deep underground wells to break up rock and release natural gas.

Common Cause reports that fracking companies spent $2.8 million in political contributions to Ohio parties and candidates since 2001. Republican Gov. John Kasich tops the list and has received $213,519 in campaign contributions from the industry.

Additional analysis of campaign records by Truthout reveals that wealthy executives of companies connected to the natural gas industry, including billionaires William “Bill” Koch and David Koch of Koch brothers fame, funneled an additional $127,268 in personal donations through a political action committee (PAC) to support Kasich’s election in 2010.

Earlier this year, Kasich signed a law passed by Ohio’s Republican-controlled legislature allowing drilling companies to frack in state parks, a big signal to the industry that Ohio is open for business.

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For the West, ‘Game over’ in Central Asia

For the West, ‘Game over’ in Central Asia

Last month, the West officially lost the new “Great Game.” The 20-year competition for natural resources and influence in Central Asia between the United States (supported by the European Union), Russia and China has, for now, come to an end, with the outcome in favor of the latter two. Western defeat was already becoming clear with the slow progress of the Nabucco pipeline and the strategic reorientation of some Central Asian republics toward Russia and China. Two recent events, however, confirmed it.

On Dec. 14, Chinese President Hu Jintao and the heads of state of Turkmenistan, Uzbekistan and Kazakhstan personally opened the valve of a new gas pipeline transporting Turkmen natural gas from the state-of-the-art processing facility of Samandepe to the city of Khorgoz, in China’s western province of Xinjiang. The pipeline, developed by the Chinese state-owned energy giant, CNPC, has a capacity of 40 billion cubic meters and traverses almost 1,250 miles through four countries.

Earlier in the month, on Dec. 3, the venture had received the blessings of Russian Prime Minister Vladimir Putin, who declared that Moscow was comfortable with the idea of Turkmen gas flowing eastwards to China. Putin’s words further underscored ongoing Sino-Russian energy cooperation, which has made significant advances and is shaping the new political economy of energy in Central Asia and elsewhere. In an accord signed on Oct. 13, the two countries set the basis for a long-term partnership based on joint explorations in Russia and third countries, as well as cheap loans from Chinese banks to the Russian energy sector, even if complex pricing issues remain unresolved. [continued...]

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