Category Archives: Oil

Friedman, Flit(tm), and Oil

Corner and Kill Friedman,” by “TM Lutas,” Flit(TM),, 5 February 2005.

Tom Friedman is reviving his fly me to the moon dream, and TM Lutas isn’t having any of it

In reality, productive reform requires more capital flowing into a society, not less.

If productive reform requires more capital, then we can only sanction regimes we have given up on transforming.

The spur of peaceful reform in South Africa was a growing international sanctions regime.

But more relevantly, why do the Gulf Emirates have better governments than mainland Arab states? It is because they have come to grips with limited oil. They realized they could no longer buy internal support from oil revenues.

Cornering a regime and killing off an economy leads people straight into the arms of the extremists, in this case the Islamists. Under crushing, punitive sanctions in the ’90s, Saddam started getting awfully religious for a secular tyrant. He changed the national flag to include a religious saying in arabic script. He famously gave enough blood to write out an entire Koran, and he also went on a mosque building spree with some really unusual architecture cropping up. If an authoritarian regime doesn’t have money to stay in power anymore, fanaticism is cheap, if dangerous.

This Geo-Green strategy is one that will put these societies in a corner and when they lash out at us (perhaps in another 9/11?) we’ll have to kill them off.

The Iraq analogy is poor. Oil is perfectly fungible and it is extremely hard to have an effective oil sanctions regime. Iraq subverted UN sanctions and our “allies” to buy loyal Sunni elements we are fighting now.

“Fanaticism” may be financially cheap, but it is very dangerous for the regime itself. Regimes guided by fanatics do not last. This is why there are so few of them, even in the Gap. And fanatics experiments with fanaticism have proven so dangerous (Salafist elements are complicated the Ba’ath 4GW war) it further undermines the “Fanaticism = Cheap” argument.

Instead of doing that, we need to lead them out of their current dead end and give the elite an exit strategy that makes lashing out to retain power highly unattractive.

If they wanted out of their end, a “shrink the Gap” GWOT would not be needed. We could rely on the Global Herd and Golden Straightjacket and all the other wonderful talk of the 1990s. But too many leaders do not want to lose power and too many societies cannot handle the content flows.

I don’t see how $18 a barrel oil is going to get us there.

Emerging Core states will require a lot of energy. This will require oil unless a disruptive technology is exploited. High prices would make that more likely. Why build a substitute when the original good is just as cheap?

The Shia Nova

Russia might build more reactors in China, Iran, India and Bulgaria,” Bellona,, 17 January 2005.

Iran open to ties with U.S,” by Barbara Slavin, USA Today,, 31 January 2005 (from Roth Report).

Walker’s World: The coming of the Shiite Empire,” by Martin Walker, World Peace Herland,, 31 January 2005.

Low-profile privatization not Iran’s only problem,” Iran Mania,, 1 February 2005.

I have previously written that “The shift of Iraq from a sun of a Sunni solar system to a satellite in the Shia sphere is stunning.” More news confirms a shia nova. The Sunni Arabs are alarmed at the rise of Shia Islam. Iraq provides the critical mass for a permanent Shia illumination of the world. At the same time other American policies are forcing Iran to behave responsible, slowly co-opting them in a partner for a connected world.

King Abdullah of Jordan warns that the Sunni hegemony (that wonderful order that gave us terrorism and decay in the Middle East) is over

And now the prospect of their dominance is sending shivers of alarm throughout much of the Sunni-dominated Arab world. Jordan’s King Abdullah warned last month of the emergence of a “Shiite crescent” that ran from Iran, through southern Iraq and west through the Shia of Lebanon to the Mediterranean and south through the Shia of Bahrain and Saudi Arabia to the Persian Gulf. About 15 percent of the Saudi population is Shia, and they happen to live in the eastern provinces where most Saudi oil is to be found.

Iraq’s mass increases the Shia Sphere’s gravity. It gives an alternative focus for Lebanon and Bahrain, as well as beginning the splintering of Saudi’s Eastern Province.

Perhaps His Lordship meant it in another context, but he identified an important consequence of this

“President Bush needs to be aware that the new government of Iraq will write the constitution,” the king said. “The president needs to think out of the box and consider what type of government this will create. If the Americans are so keen to put the Iranians (and their highly controversial nuclear weapons program) in their place, they need to see that Iraq is the soft under-belly of Iran.”

Exactly. Iran is no longer embattled. They are no longer isolated by their religion. Instead, their faith draws them out to the world. In every way that Iraq is different, it provides another model for the Shia world. Open debate, democracy, an academic Shia hierarchy, and no net censorship reign in Najaf. Why not in Qom too?

While the big bang strategy pays its dividends, America’s creation of a globalized order further ensnares (connects) Iran. Whether it involves common interests with the Bulgarian, Indian, and Russian democracies, or an interest in a peacefully rising China…

Alexander Rumyantsev stated this at his internet press-conference in the end of last year, ITAR-TASS reported. He believes Russia will get the opportunity after China, Iran, India and Bulgaria announce the international tenders for nuclear plants construction. ”In China – several nuclear power units on the south of the country. Iran – the second power unit at the Busher. India – 40 power units. Bulgaria – a unit at the Belina NPP” Rumyantsev said. He said two Russian reactors would be put in operation in China this year and two more reactors are currently under construction in India. The co-operation with Iran depends on the settlement of its nuclear program with the world community, the head of Rosatom said.

to the need for a thriving market economy

LONDON, Feb 1 (IranMania) – A senior economic official said the low-profile privatization program is not the whole of Iran’s economic concerns, stressing that there are many more dilemmas that have to be addressed prior to ridding the economy of state-monopoly.

According to Fars News Aagency, Hamid Reza Baradaran-Shoraka, who heads the government’s key executive body, Management and Planning Organization, further told a gathering of senior officials of major state and private organizations that all the country’s economic problems have been blamed on slow privatization process.

“Closed economy, unstable policies, unscientific management systems, lack of adequate assessment systems, etc, are some of many problems that have to be resolved before privatization,” he said, stressing, however, that the government has given top priority to implementing private sector empowerment schemes.

Iran looks at the world, and sees what works. The disconnected Afghanistan of the Taliban was dissected with ease. Saddam’s isolationist policies made him a pariah of the world. And China is becoming great through its openness. How long before the Islamic Republic wants peace and friendship with the United States?

How about now?

Iran’s top national security official said Monday his government wants better relations with the United States, but he advised the Bush administration to stop threatening Iran and said his country will not yield to demands that it permanently stop its effort to enrich uranium — which the White House says is intended to make a nuclear bomb.

We are winning. We destroyed the old order. We are rearranging the world in permanent way. We are unleashing connectivity and peace to lock-in peace.

And we are doing this under a great President. What a beautiful day and what a beautiful Shia sun!

Oil Shock

Conservation Can Work,” by Andrew Sullivan,,, 27 January 2005.

One of my first posts was on the need for cutting oil consumption. Even a margial cut in oil hurts the tyrants who enslave their people, and forces democratic reforms. Money is power, and taking money away from powerful forces can change history.

This is not saying that we need to boycott Middle East oil. Or that China and India should be prevented from making their investments. But marginal demand is power, and if we can reduce the marginal demand for oil we can spead reforms throughout the Greater Middle East.

A writer to Andrew Sullivan agrees

What Klingle doesn’t understand is that it is not about just states “sponsoring terrorism”, but forcing these sclerotic Middle East economies to face the same forces of dynamism that the rest of the world deals with it, resulting in more liberal societies. Not all countries in the Middle East have lots of oil. In fact countries like Qatar, Bahrain and the UAE have very little of it, and not coincidentally they represent the most liberal societies in the region. There is a strong argument that the societal unrest building in Iran is due in large part to their exploding population outgrowing the Mullah’s oil revenue, crippling their ability to buy off interests within society. We could help push them over the edge with a concerted effort to cut our oil demand.

Well said.

Second Inaugural Address (Part 1)

Second Inaugural Address,” spoken by George W. Bush, 2005 Presidential Inauguration,,2933,144976,00.html, 20 January 2005.

Possibly, the greatest inaugural address in American history. I will try to comment on all of it. Here is the first section, from the opening formalities to the promise of a multigenerational struggle.

President Bush’s Second Inaugural Address
Part 1, Part 2, Part 3, Part 4
Not the Reagan Doctrine… but Better
The Reagan Doctrine
The All-Consuming Fire


Vice President Cheney, Mr. Chief Justice, President Carter, President Bush, President Clinton, reverend clergy, distinguished guests, fellow citizens:

On this day, prescribed by law and marked by ceremony, we celebrate the durable wisdom of our Constitution, and recall the deep commitments that unite our country. I am grateful for the honor of this hour, mindful of the consequential times in which we live, and determined to fulfill the oath that I have sworn and you have witnessed.

America’s past and present struggles

At this second gathering, our duties are defined not by the words I use, but by the history we have seen together. For a half century, America defended our own freedom by standing watch on distant borders. After the shipwreck of communism came years of relative quiet, years of repose, years of sabbatical – and then there came a day of fire.

Read closely — the source of our problems is not ideology. While we struggle against Ba’athism, Salafism, etc, they are not our ultimate enemy. Our true enemy is the cause of those ideas. The true enemy will ignore any border, no matter how closely guarded. Our true weapon is human freedom.

We have seen our vulnerability – and we have seen its deepest source. For as long as whole regions of the world simmer in resentment and tyranny – prone to ideologies that feed hatred and excuse murder – violence will gather, and multiply in destructive power, and cross the most defended borders, and raise a mortal threat. There is only one force of history that can break the reign of hatred and resentment, and expose the pretensions of tyrants, and reward the hopes of the decent and tolerant, and that is the force of human freedom.

The solution may be radical, but we are not revolutionary. We are not leading events — events are leading us. And our reactive strategy is connectedness. The struggle for the entire world was not started by us, and is thus a war of self defense.

We are led, by events and common sense, to one conclusion: The survival of liberty in our land increasingly depends on the success of liberty in other lands. The best hope for peace in our world is the expansion of freedom in all the world.

Our reactive war for the entire world is… ideological. In other words, this Global War on Terrorism must transcend realist principles. Short term safety, natural resources, even allies have to be submitted to the overwiding goal of human freedom. If the Cold War was a war against an ideology, the Global War on Terrorism is a war for an ideology.

Human freedom also entails no “American Empire” on the order of the British one. We shall not rule. We are establishing global conditions for minimal rule.

America’s vital interests and our deepest beliefs are now one. From the day of our Founding, we have proclaimed that every man and woman on this earth has rights, and dignity, and matchless value, because they bear the image of the Maker of Heaven and earth. Across the generations we have proclaimed the imperative of self-government, because no one is fit to be a master, and no one deserves to be a slave. Advancing these ideals is the mission that created our Nation. It is the honorable achievement of our fathers. Now it is the urgent requirement of our nation’s security, and the calling of our time.

Note every nation and culture, and the use of democratic movements and not “democracy.” The struggle entails both ending hells like North Korea and improving nominal allies like Ukraine.

So it is the policy of the United States to seek and support the growth of democratic movements and institutions in every nation and culture, with the ultimate goal of ending tyranny in our world.

We will fight in what Dr. Barnett calls “war in the context of everything else.” Peaceful efforts, such as expanding free trade and supporting democratic initiatives will be focused on more than war.

It also means that human freedom triumphs over liberal society. A clerical Shia Iraq is acceptable as long as it is a free Iraq. Likewise, an artificially western yet unfree society, say the old Shah’s Iran, is unacceptable.

This is not primarily the task of arms, though we will defend ourselves and our friends by force of arms when necessary. Freedom, by its nature, must be chosen, and defended by citizens, and sustained by the rule of law and the protection of minorities. And when the soul of a nation finally speaks, the institutions that arise may reflect customs and traditions very different from our own. America will not impose our own style of government on the unwilling. Our goal instead is to help others find their own voice, attain their own freedom, and make their own way.

The global struggle is similar to the Cold War in scope. It will not be won in any one theatre. It is huge.

The great objective of ending tyranny is the concentrated work of generations. The difficulty of the task is no excuse for avoiding it. America’s influence is not unlimited, but fortunately for the oppressed, America’s influence is considerable, and we will use it confidently in freedom’s cause.

President Bush’s Second Inaugural Address
Part 1, Part 2, Part 3, Part 4
Not the Reagan Doctrine… but Better
The Reagan Doctrine
The All-Consuming Fire

Barnett Watch (NPR)

The Pentagon’s New Map,” interview of Thomas P.M. Barnett by Steve Inskeep, Morning Edition,, 18 January 2005.

Dr. Barnett is a former researcher at the Naval War College, and joined NPR morning edition to talk about his book, The Pentagon’s New Map. Some excerpts:

On Rumsfeld famous quote on Iraq

Rumsfeld’s answer was sometimes you go to war with the army that you have, not the one that you want. Not exactly. You go to war with the army that you’ve been wanting.

On the People’s Republic and oil

The second question is really the question of rising China. We have to look at them much like the British looked at the United States in the first several decades of the twentieth century. We have to see them as a rising power to be co-opted, not confronted. Because I think if you look at their strategic interests and you look at our strategic interests the overlap there is absolutely tremendous. Its Asia whose energy requirements are going to double in the next twenty years. So in many ways our quest for a more stable connected Middle East serves the interests of a rising China far more in a direct sense than it does the United States.

On Iran

I think there are ways to co-copt Iran because I think strategically in the region we have a lot of similar interests if we look at the situation with more objective eyes.

There’s a lot more for a seven-minute interview. Give is a listen.

Revolutionary Forces

Downsides of Partioning Iraq,” by Juan Cole, Informed Consent,, 4 January 2005 (from Andrew Sullivan).

Dr. Juan Cole argues against partioning Iraq. While partitioning as such might not be the best idea (a federal structure with Reconstruction for the Sunni lands makes a lot more sense) his reasoning is wrong, wrong wrong.

Then, how do you split up the resources? If the Sunni Arabs don’t get Kirkuk, then they will be poorer than Jordan. Don’t you think they will fight for it? The Kurds would fight to the last man for the oil-rich city of Kirkuk if it was a matter of determining in which country it ended up.

If the Kurds got Kirkuk and the Sunni Arabs became a poor cousin to Jordan, the Sunni Arabs would almost certainly turn to al-Qaeda in large numbers. Some Iraqi guerrillas are already talking about hitting back at the US mainland. And, Fallujah is not that far from Saudi Arabia, which Bin Laden wants to hit, as well, especially at the oil. Fallujah Salafis would hook up with those in Jordan and Gaza to establish a radical Sunni arc that would destabilize the entire region.

I think they’re already fighting. A civil war has already begun. If pro-Democracy Kurds become rich and pro-Totalitarian Sunnis become “poorer than Jordon,” good. Jordon has very limited ability to cause trouble. We do not want to arm our ideological enemies with oil wealth. We have let the Saudis keep their oil wells for fifty years, and it has not been working that well.

Al Qaeda in Iraq (former Monotheism and Jihad) is a leading terrorist organization there now. It is to late to keep them out. Tolerated by the Sunni-Ba’athis under Saddam Hussein, they are organized, motivated, and murderous.

Al Qaeda has already attacked us in our homeland. Sunni Iraqis have already “hook[ed] up with” those in other nations. The first world trade center bombing, for example, was masterminded by an Iraqi. Refusing to recognize that we are at war now and a “radical Sunni arc” is destabilizing the region now is foolishness.

Divorced from the Sunnis, the Shiites of the south would no longer have any counterweight to religious currents like al-Dawa, the Supreme Council for Islamic Revolution in Iraq, and the Sadrists.

The Dawa Party has endorsed the elections. The Supreme Council for the Islamic Revolutionin Iraq has endorsed the election. Supporters of Muqtada al-Sadr are running in the elections. These are the democratic forces in Iraq. Why should they be “counterweighted” by Sunni thugs?

The rump Shiite state would be rich, with the Rumayla and other fields, and might well declare a Shiite Islamic republic.

The fact is the Islamic Republic of Iran is one of the most progressive forces in the region. It has an educated and secular population that operates unders a constitutional republic. Iran has our enemies — they have always opposed the Taliban and the Ba’athi reign of Saddam Hussein. Iran is friends with many of our friends, including Russia and China. Iran has an ability to trascend ideology in its foreign policy (say supporting the Christian Republic of Armenia in its struggles against Azerbaijan, or its support for the “infidel” Alawite Ba’ath Party in Syria) lightyears ahead of Saudi Arabia.

Reality determines policy. Events have conspired to give us and Iran very similar interests. There is no reason to throw that away.

It is being coupled with the Sunnis that mainly keeps them from going down that road. A Shiite South Iraq might make a claim on Shiite Eastern Arabia in Saudi Arabia, or stir up trouble there. The Eastern Province can pump as much as 11% of the world’s petroleum.

So Americans would like this scenario why?

This is a reason to support Shia power. By their continued support for repression, terrorism, and hatred, the Saudis have stabbed us in the back. Their interests are not our interests. Spreading a democratic Shia revolution along the Persian Gulf would at worst check Saudi ambitions and at best create a order for that region.

There is more to life than cheap oil. Such as ending the regimes that support terrorism.

The true downside of isolating the Iraqi Sunni remnant is that it would cement the disconnectedness of that region. Before Saddam the Sunnis were the most connected, the most “Core” of Mesopotamia. It is an irony of history that with the liberation, the formerly isolated Kurds and Shia are embracing the world while the formerly secular Sunnis are turning inward.

Disconnnectedness breeds terrorism. Have freed the majority of Iraq’s people and wealth, we may have to be content with 4/5ths victory. 4/5ths of the people free. 4/5ths of the wealth out of the hands of outlaws. 1/5th sullent, hateful, and backwards.

If the Palestinian election creates an administration capable of peace, from the Israeli administration to independence will have taken a little less than two generations. Taking freedom’s wins in Iraq now, we may have to wait until 2044 to join the world. In the meantime it will continue to be a danger. And if we do leave al-Anbar Province, we will be back.

A Global Failure

Maldevelopment – Anatomy of a global failure
Samir Amin, Ed.
United Nations University Press, 1990

You can always trust the U.N. As the rest of the world was ending the Cold War and welcoming globalization, the United Nations continued prattling in pseudo-Marxist pseudo-intellectual hooey. Two excerpts follow.

The first is a contorted non-defense of OPEC price manipulation. More important than any argument it makes is the realization that allowing a sizeable fraction of governments to make oil be their main source of revenue leads to clap-trap like this. Almost incomprehensible, it argues that most OPEC dollars went to the west anyway, and the Oil Shock was mis-named and completely coincidental. It is from Chapter 2, The decade of drift: 1975-1985, Structural costs; the stakes; the struggle for the NIEO [New International Economic Order].

The claim of the NIEO coincided with the most serious post-war crisis. It was even argued that the oil price rise – the first (and as yet sole) indicator of the implementation of the Third World programme for the NIEO – was the ’cause’ of the crisis. A veritable campaign was orchestrated on this theme in 1973 and 1974, using every kind of argument and despite all the facts: the beginning of the international monetary crisis and the appearance of US external deficits since the mid-1960s, the precedence of stagflation, the scale and persistence of inflation rates irrespective of the calculable increase attributable to oil, the (still massive) placing of oil revenues on the Western finance markets, the modest role of petro-dollars in comparison with the movable assets of the transnationals in speculative fluctuations, and so on. The campaign has of necessity long hung fire: erosion of the oil price in the 1 980s and the reversal of the conjuncture (‘the end of the era of OPEC’) have never allowed it any funkier take-off.


The second is best read after Thomas P. M. Barnett’s weblog and The Pentagon’s New Map commentary. While some our trying to create a free global world, others prefer ghettoization. Few things are worse than infantilizing entire nations. But that’s what the U.N. does. The quote is also from Chapter 2, in particular The efforts of radical African nationalism: adjustment or delinking?

The discouraging prospect afforded Africa by capitalist expansion explains the frequency of the rejections and the high level of effort to ‘do something else’, to escape the simplistic logic of capitalism. But at the same time the objective conditions caused by this historical legacy make the task particularly difficult. This difficulty could be expressed in the formulation that the especially unfavourable external factor is combined with fairly unfavourable internal factors that have been largely shaped by that very external factor.

The response to the challenge of our age that we propose is celled ‘delinking’. The concept is to some extent half of an equation ‘adjustment or delinking’.

We shall not expand here on the theory of delinking but, to avoid any misunderstanding, say merely that delinking is not synonymous with autarky but only subjection of external relations to the logic of internal development (whereas adjustment means binding internal development to the possibilities afforded by the world system). In more precise terms, delinking is the refusal to submit to the demands of the worldwide law of value, or the supposed ‘rationality’ of the system of world prices that embody the demands of reproduction of worldwide capital. It, therefore, presupposes the society’s capacity to define for itself an alternative range of criteria of rationality of internal economic options, in short a ‘law of value of national application’.

Searching Google for “law of national application” reveals one result — that page. Fortunately this attempt at world sabotage seems unsuccessful.

Removing the I.V. from Tyrants

OPEC Poised To Cut Oil Output Despite Consumers’ Pleas
Erik Burns and Simeon Kerr

Why the Future is Hybrid
The Economist

Fly Me to the Moon
Tom Friedman

Results 1 – 10 of about 3,440 for Saudi terrorism
Google News

The Saudis are worried

Despite the pleas of the leading oil-consuming nations to keep the taps open, OPEC looks poised to commit to cutting existing production levels, with the prospect of more to come next year.

Fearing a further fall in prices after they dropped by a quarter in recent weeks, ministers from the Organization of Petroleum Exporting Countries arriving here in Cairo ahead of Friday’s meeting said there was a growing consensus the first step would be to rein in output to the current quota ceiling of 27 million barrels a day.

After meeting with Saudi Arabia and ministers from two other Gulf producers, Kuwait’s Oil Minister Sheikh Ahmad Fahad Al-Ahmad Al-Sabah said he estimated overproduction of around 1.7 million b/d.

Al-Sabah said all OPEC members were committed to stricter compliance with the self-imposed output cap, adding that since most crude deliveries are already settled for January, the retrenching could begin from Feb 1.

OPEC would then meet again in February to assess market conditions and decide whether a more drastic move — lowering the ceiling — would be necessary.

The reason is clear

When did the Soviet Union collapse? When did reform take off in Iran? When did the Oslo peace process begin? When did economic reform become a hot topic in the Arab world? In the late 1980’s and early 1990’s. And what was also happening then? Oil prices were collapsing.

In November 1985, oil was $30 a barrel, recalled the noted oil economist Philip Verleger. By July of 1986, oil had fallen to $10 a barrel, and it did not climb back to $20 until April 1989. “Everyone thinks Ronald Reagan brought down the Soviets,” said Mr. Verleger. “That is wrong. It was the collapse of their oil rents.” It’s no accident that the 1990’s was the decade of falling oil prices and falling walls.

The technologies exist

While it is uncertain whether the car will be mass produced, it is clear that a diesel-electric hybrid would make for an extremely frugal vehicle. A study by the Laboratory for Energy and the Environment at the Massachusetts Institute of Technology, which looked at energy use over the course of a vehicle’s life, predicts that by 2020, diesel hybrids could achieve the same energy-efficiency and greenhouse-gas emissions as fuel-cell cars powered by hydrogen made from natural gas. The difference is that diesel-hybrid technology is available today.

The challange is formidable

So why are diesel hybrids taking so long to appear on the roads? Hybrid diesels impose a double price premium, explains Lindsay Brooke, an analyst at CSM Worldwide. Combining a diesel engine, (which costs around $2,000 more than a petrol engine) with a hybrid powertrain (which adds another $3,000 or so) would make for an expensive proposition. Systems to treat the exhaust would impose further costs. The prospects for diesels and diesel hybrids are particularly dim in America, where regulations in California (and, from 2007, nationwide) require diesels to be as clean as petrol-driven cars. Some progress has been made: particulate filters can now eliminate more than 90% of diesel soot. But traps for nitrogen oxides remain a challenge.

But we have done great things before

If President Bush made energy independence his moon shot, he would dry up revenue for terrorism; force Iran, Russia, Venezuela and Saudi Arabia to take the path of reform – which they will never do with $45-a-barrel oil – strengthen the dollar; and improve his own standing in Europe, by doing something huge to reduce global warming. He would also create a magnet to inspire young people to contribute to the war on terrorism and America’s future by becoming scientists, engineers and mathematicians. “This is not just a win-win,” said the Johns Hopkins foreign policy expert Michael Mandelbaum. “This is a win-win-win-win-win.”

We need to end the huge never-ending subsidy that is foreign oil. To stable, free, and civic societies, like Norway or Alaska, oil is a nice cushion. But in the barbary states it retards progress, corrupts governments, and creates a terrorist society. A $5,000 federal tax on new vehicles, fully refundable if spent on hybrid-diesel or similar technology, would be an incredible step forward

It would dry up terrorist states. It would cause reform. Heck, it would help our balance of payments. It’s the right thing to do.