Portrait of an Oil-Addicted Former Superpower

How Rising Oil Prices Are Obliterating America's Superpower Status

By Michael T. Klare

Nineteen years ago, the fall of the Berlin Wall effectively eliminated the Soviet Union as the world's other superpower. Yes, the USSR as a political entity stumbled on for another two years, but it was clearly an ex-superpower from the moment it lost control over its satellites in Eastern Europe.

Less than a month ago, the United States similarly lost its claim to superpower status when a barrel crude oil roared past $110 on the international market, gasoline prices crossed the $3.50 threshold at American pumps, and diesel fuel topped $4.00. As was true of the USSR following the dismantling of the Berlin Wall, the USA will no doubt continue to stumble on like the superpower it once was; but as the nation's economy continues to be eviscerated to pay for its daily oil fix, it, too, will be seen by increasing numbers of savvy observers as an ex-superpower-in-the-making.

That the fall of the Berlin Wall spelled the erasure of the Soviet Union's superpower status was obvious to international observers at the time. After all, the USSR visibly ceased to exercise dominion over an empire (and an associated military-industrial complex) encompassing nearly half of Europe and much of Central Asia. The relationship between rising oil prices and the obliteration of America's superpower status is, however, hardly as self-evident. So let's consider the connection.

Dry Hole Superpower

The fact is, America's wealth and power has long rested on the abundance of cheap petroleum. The United States was, for a long time, the world's leading producer of oil, supplying its own needs while generating a healthy surplus for export.

Oil was the basis for the rise of the first giant multinational corporations in the U.S., notably John D. Rockefeller's Standard Oil Company (now reconstituted as Exxon Mobil, the world's wealthiest publicly-traded corporation). Abundant, exceedingly affordable petroleum was also responsible for the emergence of the American automotive and trucking industries, the flourishing of the domestic airline industry, the development of the petrochemical and plastics industries, the suburbanization of America, and the mechanization of its agriculture. Without cheap and abundant oil, the United States would never have experienced the historic economic expansion of the post-World War II era.

No less important was the role of abundant petroleum in fueling the global reach of U.S. military power. For all the talk of America's growing reliance on computers, advanced sensors, and stealth technology to prevail in warfare, it has been oil above all that gave the U.S. military its capacity to "project power" onto distant battlefields like Iraq and Afghanistan. Every Humvee, tank, helicopter, and jet fighter requires its daily ration of petroleum, without which America's technology-driven military would be forced to abandon the battlefield. No surprise, then, that the U.S. Department of Defense is the world's single biggest consumer of petroleum, using more of it every day than the entire nation of Sweden.

From the end of World War II through the height of the Cold War, the U.S. claim to superpower status rested on a vast sea of oil. As long as most of our oil came from domestic sources and the price remained reasonably low, the American economy thrived and the annual cost of deploying vast armies abroad was relatively manageable. But that sea has been shrinking since the 1950s. Domestic oil production reached a peak in 1970 and has been in decline ever since -- with a growing dependency on imported oil as the result. When it came to reliance on imports, the United States crossed the 50% threshold in 1998 and now has passed 65%.

Though few fully realized it, this represented a significant erosion of sovereign independence even before the price of a barrel of crude soared above $110. By now, we are transferring such staggering sums yearly to foreign oil producers, who are using it to gobble up valuable American assets, that, whether we know it or not, we have essentially abandoned our claim to superpowerdom.

According to the latest data from the U.S. Department of Energy, the United States is importing 12-14 million barrels of oil per day. At a current price of about $115 per barrel, that's $1.5 billion per day, or $548 billion per year. This represents the single largest contribution to America's balance-of-payments deficit, and is a leading cause for the dollar's ongoing drop in value. If oil prices rise any higher -- in response, perhaps, to a new crisis in the Middle East (as might be occasioned by U.S. air strikes on Iran) -- our annual import bill could quickly approach three-quarters of a trillion dollars or more per year.

While our economy is being depleted of these funds, at a moment when credit is scarce and economic growth has screeched to a halt, the oil regimes on which we depend for our daily fix are depositing their mountains of accumulating petrodollars in "sovereign wealth funds" (SWFs) -- state-controlled investment accounts that buy up prized foreign assets in order to secure non-oil-dependent sources of wealth. At present, these funds are already believed to hold in excess of several trillion dollars; the richest, the Abu Dhabi Investment Authority (ADIA), alone holds $875 billion.

The ADIA first made headlines in November 2007 when it acquired a $7.5 billion stake in Citigroup, America's largest bank holding company. The fund has also made substantial investments in Advanced Micro Systems, a major chip maker, and the Carlyle Group, the private equity giant. Another big SWF, the Kuwait Investment Authority, also acquired a multibillion-dollar stake in Citigroup, along with a $6.6 billion chunk of Merrill Lynch. And these are but the first of a series of major SWF moves that will be aimed at acquiring stakes in top American banks and corporations.

The managers of these funds naturally insist that they have no intention of using their ownership of prime American properties to influence U.S. policy. In time, however, a transfer of economic power of this magnitude cannot help but translate into a transfer of political power as well. Indeed, this prospect has already stirred deep misgivings in Congress. "In the short run, that they [the Middle Eastern SWFs] are investing here is good," Senator Evan Bayh (D-Indiana) recently observed. "But in the long run it is unsustainable. Our power and authority is eroding because of the amounts we are sending abroad for energy…."

No Summer Tax Holiday for the Pentagon

Foreign ownership of key nodes of our economy is only one sign of fading American superpower status. Oil's impact on the military is another.

Every day, the average G.I. in Iraq uses approximately 27 gallons of petroleum-based fuels. With some 160,000 American troops in Iraq, that amounts to 4.37 million gallons in daily oil usage, including gasoline for vans and light vehicles, diesel for trucks and armored vehicles, and aviation fuel for helicopters, drones, and fixed-wing aircraft. With U.S. forces paying, as of late April, an average of $3.23 per gallon for these fuels, the Pentagon is already spending approximately $14 million per day on oil ($98 million per week, $5.1 billion per year) to stay in Iraq. Meanwhile, our Iraqi allies, who are expected to receive a windfall of $70 billion this year from the rising price of their oil exports, charge their citizens $1.36 per gallon for gasoline.

When questioned about why Iraqis are paying almost a third less for oil than American forces in their country, senior Iraqi government officials scoff at any suggestion of impropriety. "America has hardly even begun to repay its debt to Iraq," said Abdul Basit, the head of Iraq's Supreme Board of Audit, an independent body that oversees Iraqi governmental expenditures. "This is an immoral request because we didn't ask them to come to Iraq, and before they came in 2003 we didn't have all these needs."

Needless to say, this is not exactly the way grateful clients are supposed to address superpower patrons. "It's totally unacceptable to me that we are spending tens of billions of dollars on rebuilding Iraq while they are putting tens of billions of dollars in banks around the world from oil revenues," said Senator Carl Levin (D-Michigan), chairman of the Armed Services Committee. "It doesn't compute as far as I'm concerned."

Certainly, however, our allies in the region, especially the Sunni kingdoms of Kuwait, Saudi Arabia, and the United Arab Emirates (UAE) that presumably look to Washington to stabilize Iraq and curb the growing power of Shiite Iran, are willing to help the Pentagon out by supplying U.S. troops with free or deeply-discounted petroleum. No such luck. Except for some partially subsidized oil supplied by Kuwait, all oil-producing U.S. allies in the region charge us the market rate for petroleum. Take that as a striking reflection of how little credence even countries whose ruling elites have traditionally looked to the U.S. for protection now attach to our supposed superpower status.

Think of this as a strikingly clear-eyed assessment of American power. As far as they're concerned, we're now just another of those hopeless oil addicts driving a monster gas-guzzler up to the pump -- and they're perfectly happy to collect our cash which they can then use to cherry-pick our prime assets. So expect no summer tax holidays for the Pentagon, not in the Middle East, anyway.

Worse yet, the U.S. military will need even more oil for the future wars on which the Pentagon is now doing the planning. In this way, the U.S. experience in Iraq has especially worrisome implications. Under the military "transformation" initiated by Secretary of Defense Donald Rumsfeld in 2001, the future U.S. war machine will rely less on "boots on the ground" and ever more on technology. But technology entails an ever-greater requirement for oil, as the newer weapons sought by Rumsfeld (and now Secretary of Defense Robert Gates) all consume many times more fuel than those they will replace. To put this in perspective: The average G.I in Iraq now uses about seven times as much oil per day as G.I.s did in the first Gulf War less than two decades ago. And every sign indicates that the same ratio of increase will apply to coming conflicts; that the daily cost of fighting will skyrocket; and that the Pentagon's capacity to shoulder multiple foreign military burdens will unravel. Thus are superpowers undone.

Russia's Gusher

If anything demonstrates the critical role of oil in determining the fate of superpowers in the current milieu, it is the spectacular reemergence of Russia as a Great Power on the basis of its superior energy balance. Once derided as the humiliated, enfeebled loser in the U.S.-Soviet rivalry, Russia is again a force to be reckoned with in world affairs. It possesses the fastest-growing economy among the G-8 group of major industrial powers, is the world's second leading producer of oil (after Saudi Arabia), and is its top producer of natural gas. Because it produces far more energy than it consumes, Russia exports a substantial portion of its oil and gas to neighboring countries, making it the only Great Power not dependent on other states for its energy needs.

As Russia has become an energy-exporting state, it has moved from the list of has-beens to the front rank of major players. When President Bush first occupied the White House, in February 2001, one of his highest priorities was to downgrade U.S. ties with Russia and annul the various arms-control agreements that had been forged between the two countries by his predecessors, agreements that explicitly conferred equal status on the USA and the USSR.

As an indication of how contemptuously the Bush team viewed Russia at that time, Condoleezza Rice, while still an adviser to the Bush presidential campaign, wrote, in the January/February 2000 issue of the influential Foreign Affairs, "U.S. policy… must recognize that American security is threatened less by Russia's strength than by its weakness and incoherence." Under such circumstances, she continued, there was no need to preserve obsolete relics of the dual superpower past like the Anti-Ballistic Missile (ABM) Treaty; rather, the focus of U.S. efforts should be on preventing the further erosion of Russian nuclear safeguards and the potential escape of nuclear materials.

In line with this outlook, President Bush believed that he could convert an impoverished and compliant Russia into a major source of oil and natural gas for the United States -- with American energy companies running the show. This was the evident aim of the U.S.-Russian "energy dialogue" announced by Bush and Russian President Vladimir Putin in May 2002. But if Bush thought Russia was prepared to turn into a northern version of Kuwait, Saudi Arabia, or Venezuela prior to the arrival of Hugo Chávez, he was to be sorely disappointed. Putin never permitted American firms to acquire substantial energy assets in Russia. Instead, he presided over a major recentralization of state control when it came to the country's most valuable oil and gas reserves, putting most of them in the hands of Gazprom, the state-controlled natural gas behemoth.

Once in control of these assets, moreover, Putin has used his renascent energy power to exert influence over states that were once part of the former Soviet Union, as well as those in Western Europe that rely on Russian oil and gas for a substantial share of their energy needs. In the most extreme case, Moscow turned off the flow of natural gas to Ukraine on January 1, 2006, in the midst of an especially cold winter, in what was said to be a dispute over pricing but was widely viewed as punishment for Ukraine's political drift westwards. (The gas was turned back on four days later when Ukraine agreed to pay a higher price and offered other concessions.) Gazprom has threatened similar action in disputes with Armenia, Belarus, and Georgia -- in each case forcing those former Soviet SSRs to back down.

When it comes to the U.S.-Russian relationship, just how much the balance of power has shifted was evident at the NATO summit at Bucharest in early April. There, President Bush asked that Georgia and Ukraine both be approved for eventual membership in the alliance, only to find top U.S. allies (and Russian energy users) France and Germany blocking the measure out of concern for straining ties with Russia. "It was a remarkable rejection of American policy in an alliance normally dominated by Washington," Steven Erlanger and Steven Lee Myers of the New York Times reported, "and it sent a confusing signal to Russia, one that some countries considered close to appeasement of Moscow."

For Russian officials, however, the restoration of their country's great power status is not the product of deceit or bullying, but a natural consequence of being the world's leading energy provider. No one is more aware of this than Dmitri Medvedev, the former Chairman of Gazprom and new Russian president. "The attitude toward Russia in the world is different now," he declared on December 11, 2007. "We are not being lectured like schoolchildren; we are respected and we are deferred to. Russia has reclaimed its proper place in the world community. Russia has become a different country, stronger and more prosperous."

The same, of course, can be said about the United States -- in reverse. As a result of our addiction to increasingly costly imported oil, we have become a different country, weaker and less prosperous. Whether we know it or not, the energy Berlin Wall has already fallen and the United States is an ex-superpower-in-the-making.

Michael Klare is a professor of peace and world security studies at Hampshire College and author of the just-released Rising Powers, Shrinking Planet: The New Geopolitics of Energy (Metropolitan Books). A documentary film based on his previous book, Blood and Oil, is available from the Media Education Foundation and can be ordered at bloodandoilmovie.com. A brief video of Klare discussing key subjects in his new book can be viewed by clicking here.

News and politics

oil

Subscribe in a reader

When growth turns into a monster

The one thing people like me aren't allowed to do is question economic growth. To almost all economists, business people and politicians, the need to maximise the growth of the economy is a self-evident truth.

So let me tell you about Clive Hamilton, Australia's leading critic of what he calls "the growth fetish".

Hamilton, founder of the Australia Institute, is widely loathed by economic rationalists, libertarians and many others. They'd dearly like to dismiss him as an ignorant ratbag - were it not for his PhD in economics, which makes him better qualified than most of his critics.

Last week Hamilton renewed his attack on the unthinking pursuit of economic growth in a speech to senior federal public servants. He began with a quote from a leading federal politician.

"If Australia continues to grow at 4 per cent per annum for the next 20 years, my kids are going to be nominally twice as wealthy as they are now, but I know they are not going to be twice as happy," the pollie said. "One of the questions that is not put in the political process by either side of politics, let alone answered, is: Towards what are we striving to grow?"

The politician was Brendan Nelson. But he said it as a backbencher; he wouldn't say it today. He raised a good question, nonetheless: where is all this growth supposed to be taking us?

You'd expect that, if any side of politics was going to question the capitalist obsession with growth it would be Labor. Wrong. The Rudd Government - like the Hawke-Keating government before it - is desperate to prove it can be as economically hairy-chested as the conservatives. Labor is still haunted by the intemperance of the Whitlam government.

No, probably the only leading politician to question the primacy of economic growth is David Cameron, the Conservative leader in Britain. Only a Tory could dare to say this: "It's time we admitted that there's more to life than money, and it's time we focused not just on GDP, but on GWB - general wellbeing.

"Wellbeing can't be measured by money or traded in markets.

"It can't be required by law or delivered by government. It's about the beauty of our surroundings, the quality of our culture, and above all the strength of our relationships."

Fortunately, we don't get such soppy talk in Australia. Hamilton says that when our 1000 best and brightest got together at the twenny-twenny summit, one of their exciting new ideas was to try harder to maximise economic growth.

The summit concluded our goal should be: "Increasing gross domestic product per capita so that Australia is among the top five countries in the world on this measure, with strong, stable economic growth."

Hamilton says no one ever challenges these sorts of statements. Yet the evidence to sustain the view that national wellbeing is best achieved by high GDP growth cannot be found. "Aiming to be among the five richest countries in the world is a form of cargo-cultism; we will have succeeded if we beat 195 other countries in the GDP stakes," he says.

Another of the summit's blinding insights was that "Australia should be the best place in the world to live and do business" which would require "urgent action to increase economic capacity".

Hamilton says the assumptions that there can be only one best place to live in the world and that increasing economic capacity is the way to create such a place are, respectively, banal and unsupportable. "Do they mean that, within Australia, the richest five suburbs are the best place to live?" he asks.

Even the summit's creativity stream fell into the economy trap: "We will aim to double cultural output by 2020," it concluded, as if the quantity of artistic product trumps its ability to stir our passions or let us see into the human condition. The Government was urged to "recognise the centrality of the arts and creativity to the whole economy".

Oh dear. Hamilton lets fly. "What if the arts made no contribution to the economy, or were a drain on it? Would we axe them as an indulgence and turn our artists, poets and dancers into more productive workers? It is a sign of the power of the growth fetish that its natural enemy, the artistic community, believes it must prostitute the arts to attain public funding."

Allied with the attitude that too much growth is never enough is the belief we need all the growth in population we can get, particularly through immigration. The Rudd Government professes to be terribly concerned about the housing shortage, but never admits that immigration accounts for 40 to 50 per cent of the growth in the number of households.

The trouble with the growth fetishists is they're always confusing quantity with quality - or refusing to admit that the former comes partly at the expense of the latter. Hamilton notes that high levels of immigration are greatly increasing Australia's greenhouse gas emissions.

Then there's the changed attitude to leisure. For 100 years to the beginning of the 1980s, falling working hours - from the 44-hour week to the 38-hour week - were regarded as a sign of social progress. We were happy to take part of our greater productivity in higher incomes and part in more leisure. Yet all that has changed.

Working hours increased and we began to be told we should work longer and harder because this increased economic growth.

Wanting to work less signalled a lack of commitment; opting for more leisure became an indulgence. We had a duty first to the Economy.

"Australia can be among the richest five nations on Earth if we sacrifice more of our leisure, more time devoted to the community and time with friends and loved ones," Hamilton says. But how exactly would this make us better off?

"It is important to stress that, contrary to the usual caricatures, critics such as me are not anti-growth.

"We simply take the position that there is far too much emphasis on promoting economic growth over other things that affect our wellbeing.

"The argument is not that we should allow the economy to decline, but that promoting growth should receive less emphasis."

Remember, however, these are the opinions of the heretic Hamilton. I couldn't possibly agree.

News and politics

economic growth

Clive Hamilton

 Subscribe in a reader

Global Power Shift

It was not supposed to turn out this way. When the Cold War ended in 1990, American policymakers generally assumed that the United States would henceforth enjoy a position of unchallenged preponderance. It would be secure in its “sole superpower” status by virtue of its unquestioned military superiority and the absence of credible competitors. Military prowess had always proved the determining factor in anointing global champions in the past and would—so the thinking went—continue to do so in the future. “For America, this is a time of unrivaled military power, economic promise, and cultural influence,” then Texas governor George W. Bush declared in September 1999. Given our overpowering strength, he asserted, the United States had an extraordinary opportunity to extend its dominant position “into the far realm of the future.” But once he assumed the mantle of the presidency and sought to employ this great strength in extending American power around the world, he discovered that military superiority does not constitute the decisive, or even necessarily the leading, determinant of global paramountcy in this troubled new era. Other factors have come to rival military power in importance, and one—energy—has acquired unexpectedly vast significance.

In this new, challenging political landscape, the possession of potent military arsenals can be upstaged by the ownership of mammoth reserves of oil, natural gas, and other sources of primary energy. Hence, Russia, which escaped from the Cold War era in a shattered, demoralized condition, has reemerged as a major actor in the international arena by virtue of its colossal energy resources. For all its military might, the United States has, in contrast, sometimes found itself reduced to cajoling its foreign oil suppliers—including long-term allies such as Saudi Arabia—to increase their petroleum output in order to slow the upward spiral in energy prices. The “sole superpower” has, in short, found itself scrambling—on the battlefield, on global trading floors, and in diplomatic back rooms—to somehow come to terms with what Sen. Richard G. Lugar (R-Ind.) has termed “petro-superpowers”—nations that wield disproportionate power in the international system by virtue of their superior energy reserves.

Other major energy-consuming nations have also been forced to adjust to this changing landscape. China, which enjoys enormous economic clout because of its enviable balance-of-payments position—in late 2007 its foreign currency reserves stood at a staggering $1.4 trillion—is nonetheless becoming ever more dependent on imported petroleum and so must scour the world for available supplies. Japan, with the world’s second largest economy—yet even more dependent on imported energy supplies than China—has found itself locked in fierce competition with Beijing for access to some of the same overseas reserves.

On the other side of the ledger, energy-rich states like Kazakhstan and Nigeria have come to enjoy greater leverage in world affairs, attracting a constant stream of high-level visitors from energy-consuming nations—often bearing promises of investment financing, military aid, and other forms of largess. Nursultan Nazarbayev, the autocratic president of Kazakhstan, has been a much-lauded guest in Beijing, Moscow, and Washington, while his country has been showered with arms and other military equipment by all three—surely a rare feat in the annals of military diplomacy. Equally telling, the outspoken president of Venezuela, Hugo Chávez, has appeared immune to U.S. retaliation despite his frequent verbal attacks on the Bush administration and his close association with the leaders of “pariah” states such as Cuba, Iran, and Syria. (For all the invective hurled between the two countries, Venezuela continues to supply the United States with about 10 percent of its imported oil, some 1.4 million barrels per day.)

Why has energy come to play such a pivotal role in world affairs? To begin with, its continued availability—in great profusion—has never been as critical to the healthy operation of the global economy. Energy is required to keep the factories humming, power the cities and suburbs that house the world’s rising population, and produce the crops that feed the planet. Most important, petroleum products are utterly essential to sustain the international sinews of globalization—the planes, trains, trucks, and ships that carry goods and people from one region of the planet to another. According to the U.S. Department of Energy (DoE), world energy output must increase by 57 percent over the next quarter century—from approximately 450 to 700 quadrillion British thermal units—in order to satisfy anticipated international demand. Without this additional energy, the world economy will fall into recession or depression, the globalization project will fail, and the planet could descend into chaos.

But the wheels of industry are not the only ones to slow without an abundant supply of energy; military forces are equally dependent on a copious infusion of critical fuels. For major powers like the United States that rely on airpower and mechanized ground forces to prevail in conflict, the need for petroleum products multiplies with each new advance in weapons technology. During World War II, the American military consumed one gallon of petroleum per soldier per day; during the first Gulf War of 1990–91, the rate rose to four gallons per soldier per day; in the Bush administration’s wars in Iraq and Afghanistan, it leapt to sixteen gallons per soldier per day. Because the Pentagon is sure to increase its reliance on high-tech weaponry, and because other major powers, including China, Japan, Russia, and India, seek to emulate it in this regard, the already voracious military component of global energy demand can only grow.

At the same time, the competition for energy has never been so intense. Since World War II, the major industrialized powers—the United States, Japan, and the Western European countries—have jointly consumed the lion’s share of the global energy supply. Because the energy industry was generally successful in boosting supplies to satisfy rising demand, the world was spared the cutthroat competition that had characterized the Eurasian energy race prior to World War II and helped launch the war in the Pacific in 1941. In the past few decades, however, a new class of contenders has entered the fray—rising economic dynamos like China, India, and Brazil—and it is not at all apparent, looking into the future, that the energy industry can satisfy both the surging needs of these new consumers and the already elevated requirements of the mature industrial powers. “Energy developments in China and India are transforming the global energy system by dint of their sheer size and their growing weight in international fossil-fuel trade,” the International Energy Agency (IEA) reported in its World Energy Outlook for 2007. Despite huge investment in new oil-production capacity additions, “it is very uncertain whether they will be sufficient to compensate for the decline in output at existing fields and keep pace with the projected increase in demand.” Hence, an intense and sometimes brutal competition for untapped supplies has erupted.

Every nation with a significant need for imported energy is contributing to the intensity of this struggle, but there can be no ignoring the dramatic impact of China’s soaring growth rates. As recently as 1990, China accounted for a mere 8 percent of global energy consumption while the United States was absorbing 24 percent of the available supply and the Western European nations 20 percent. But China’s growth in the past decade and a half has been so vigorous that, by 2006, its net energy use had jumped to 16 percent of total world consumption. If its growth continues at this torrid pace, China will hit the 21 percent mark by 2030—exceeding all other countries, including the United States. The challenge for China, of course, will be to procure all that additional energy. To succeed, the Chinese leadership will have to oversee a substantial increase in the yield of its domestic energy production while obtaining staggering quantities of imported fuels, especially oil. By the nature of things, this can only happen at the expense of other energy-starved nations. No wonder the rise of China has produced such alarm among older industrial powers.

What makes all this even more anxiety provoking is another worrisome factor in the energy-squeeze equation: intimations of future scarcities of vital fuels, especially petroleum. An increasing body of evidence suggests that the era of “easy oil” is over and that we have entered a new period of “tough oil.” Each new barrel added to global reserves, experts suggest, will prove harder and more costly to extract than the one before; it will be buried deeper underground, farther offshore, in more hazardous environments, or in more conflict-prone, hostile regions of the planet. A similar scenario is likely to play out when it comes to most other existing fuels, including coal, natural gas, and uranium. Given this, the future adequacy of global energy stocks is in serious doubt.

Ever since the onset of the Industrial Revolution, humans have succeeded in developing new sources of energy to supplement those already in use—first coal, then oil, and later natural gas and atomic fuel. The development of these fuels has made possible a stunning expansion of the global economy over the past century and a half, as well as a quadrupling of the human population. But all of these materials are finite in quantity, and the supply of most, if not all, is likely to be exhausted by the end of this century. Many experts believe that when it comes to petroleum, this process of exhaustion is already well under way.

Scientists are avidly seeking ways to develop a new spectrum of fuels to replace those now at risk of depletion while releasing far fewer or zero climate-altering “greenhouse gases” into the atmosphere. But no major energy-consuming nation has yet devoted sufficient resources to this problem to ensure that these alternatives will be available on a large enough scale to replace existing energy sources in the foreseeable future. As a result, government and corporate officials alike continue to view fossil fuels (oil, coal, and natural gas) as the world’s principal energy source for some time to come. According to the DoE, these fuels will still be satisfying an estimated 87 percent of global energy needs in 2030. With both old and new consumers reliant on these traditional fuels—and no practical, plentiful alternatives in sight—the struggle over them is certain to be fierce.

In this context, anxiety extends to the net supply of basic energy in general: the sum of all primary fuels, including oil, natural gas, coal, nuclear power, hydropower, renewables like wind and solar, and traditional fuels such as wood and charcoal. When pondering the adequacy of future reserves, however, the greatest dread is usually reserved for petroleum, which, for the last half century, has been—and remains—the world’s most important source of energy. While oil accounted for approximately 40 percent of world energy use in 2006 (natural gas, the number two fuel, supplied only 25 percent) and is expected to remain number one in 2030, it is the energy source most likely to dwindle in the decades ahead. Although there is considerable controversy over the size of the remaining petroleum reserves, enough is known to conclude that global oil output will, at some not-too-distant moment, reach a maximum, or “peak,” level and then commence an irreversible decline. The gradual disappearance of conventional liquid oil may, for a time, be offset by the development of synthetic fuels derived from “nonconventional” petroleum substances—Canadian tar sands, Venezuelan extra-heavy crude, Rocky Mountain oil shale—but the financial and environmental costs of using these materials are huge, and they are unlikely to rescue us, even briefly, from a dramatic and painful contraction in primary energy supplies.

As a result, the problem of “energy security”—as it is widely termed—has climbed toward the top rung of the international ladder of unease and concern. Not surprisingly, this has fundamentally changed the perception of what constitutes “power” and “influence” in a dramatically altered international system, forcing policymakers to view the global power equation in entirely new ways.

This essay was drawn from FPIF columnist Michael T. Klare’s new book Rising Powers, Shrinking Planet: The New Geopolitics of Energy, published by Metropolitan Books

News and politics

energy security

Subscribe in a reader

No end to demonization of Obama?

The demonization of Sen. Barack Obama (D-Ill.)—who has gone from once being labeled “not Black enough” to earn the support of Black voters—to being depicted for White voters as being “too Black,” seems destined to continue all the way to the November general election.

The campaign of Sen. Hillary Clinton, desperately behind in pledged convention delegates, popular votes, and the numbers of state primary victories, has successfully pinned a “Black militant” image on Sen. Obama, who ironically came to prominence in this campaign when he decisively won early campaign contests in the overwhelmingly White states of Iowa and New Hampshire.

A poll of Democratic voters conducted by Edison/Mitofsky for the television networks and The Associated Press found that Mrs. Clinton drew 63 percent of the White vote while Mr. Obama drew 90 percent of the Black vote, according to published reports. More strikingly, Adam Nagourney wrote for “Young@Heart,” the poll found that 18 percent of Democrats said that race mattered to them in this contest — and just 63 percent of those voters said they would support Mr. Obama in a general election.

Mrs. Clinton’s campaign, which unashamedly boasts the support of feminist leaders all over the country, has been able to play both the “gender card,” and the “race card,” to her advantage in her effort to soil Mr. Obama, and to paint him in the eyes of Democratic Party “super-delegates” as unelectable.

“I think it’s a combination of not only the ‘Bradley effect,’ but what I’m calling the ‘Willie Horton-ization of Barack Obama,’” Dr. Wilmer J. Leon III, professor of political science at Howard University told The Final Call, “with the intentional misinterpretations of Michele Obama’s comments earlier about: For the first time in her life she’s really proud to be an American, how that has been compromised and turned into, ‘she’s not American;’ to the Rev. Dr. (Jeremiah) Wright and all of that intentional misinterpretation of his comments.”

The “Bradley effect” is a term coined to describe five-term Los Angeles Mayor Tom Bradley’s unsuccessful campaigns to become governor of California in 1982 and 1986. Then, White voters told pollsters that they favored Mr. Bradley, a Black man, but refused to vote for him in the secrecy of voting booths.

Dr. E. Franklin Frazier, who wrote dozens of books, scholarly articles and book chapters, reportedly said the motive for public lynchings of Blacks in the South after the Civil War and before they were guaranteed the right to vote was: “The closer the Negro gets to the ballot box, the more he looks like a rapist.”

Today, Mr. Obama’s supporters insist, the closer he appears to get to the presidency, the more his opponents are trying to make him look like a Black man.

“I think it’s the ‘Bradley effect’ in terms of White folks now realizing that they may actually have to deal with this Black man and not want to vote for him,” said Dr. Leon, “as well as what the media is doing to kind of fan the flames and heighten peoples’ sensitivities to race in this case.”

“Race is intertwined with a broader notion that he is not one of us,” said Andrew Kohut, director of the Pew Research Center, which did an extensive examination of voter attitudes, particularly among Democrats who have an unfavorable view of Mr. Obama, according to Young@Heart.

“The big question about Barack Obama from the very beginning has been, is he safe?” said Peter D. Hart, a Democratic pollster not affiliated with any campaign. “Safe in terms of both the cultural values that he has, and about whether he is strong enough to be commander in chief.”

The affect of race on the Obama campaign is twofold: Voters opposing him simply because he is Black, and Democratic Party officials who will not support him because they do not think a Black man can win a general election.

So, instead of concentrating the campaign on the serious issues affecting the country, and the overwhelming opposition to the Bush administration’s war in Iraq and economic policies, the Clinton campaign has increasingly targeted the perception that Sen. Obama is “elite,” “out of touch,” and “too liberal” for American voters.

Sen. Clinton cannot escape responsibility for the attacks, from her husband and former President Bill Clinton’s assertion that Sen. Obama’s campaign is a “fairy tale,” to senior campaign advisor and former vice presidential candidate Geraldine Ferraro’s insistence that Sen. Obama would not be as successful as he is politically, if he was a White male or a White female.

“Absolutely,” Sen. Clinton is to blame, said Dr. Leon, “primarily not because she’s in the race, but because of the tactics that she’s using. I have absolutely no problem with her fighting till the last dog dies, so long as her fight is based on the issues.

“But she has been—along with her husband—has been the primary instigators of the personal attack. Particularly in the Democratic race, where she has gone away from the issues and made it personal. And that is doing nothing more than giving the Republican opposition ammunition for their guns. I hold her responsible for the personalization of this thing.

“That is what I think is what has gotten to the core of the racial matter. Because they really can’t attack him on the issues, because on the issues they are really very, very close in a lot of ways, and so really all she has left is to attack him personally.”

The Democrats embrace of Sen. Clinton on these grounds, is potentially dangerous for them. Should Mrs. Clinton win the Democratic nomination after what appears to be race-baiting of Sen. Obama, there is a risk that she face severe Black backlash, and would be unable to mobilize the Black support she would need to win in November.

“In the short term, if Sen. Obama gets the nomination, he could very well lose to Sen. McCain because of the inherent racism in America. If the Democratic Party fails to give Sen. Obama the nomination for that reason, they are doing themselves long term—I mean generational—damage. Because the African American base, I think will run from them,” said Dr. Leon.

“If they go on this electability angle, they’re going to cut off their nose, to spite their face. As much as I’ve been telling my students: ‘History tells me that Sen. Obama will not be president, because history in America tells me that White people in America are not going to vote for a brother for nothing.’ I’ve got to go with history, until history proves me wrong.”

• Is Clinton setting Obama up to lose general election? (FCN, 04-25-2008)
• Blackening Barack Obama (FCN, 04-01-2008)

News and politics

Barack Obama

Subscribe in a reader

The magic of Shane - Ian Chappell

Richie Benaud said Keith Miller was the best captain Australia never had. The same can be said about Warne

I first met Everton Valentine on the 1973 tour of the Caribbean and he now lives in Notting Hill Gate, London. We continue to communicate on cricket matters in general and the West Indies in particular

Dear Everton

Well, mate, you never cease to amaze. After telling me Twenty20 was "like drinking punch without the rum", I get an email from Hyderabad saying you've flown there to watch an IPL game.

Still, I can't fault your reasoning; a desire to see if all this talk about Shane Warne's captaincy was true. I guess I no longer have to try and convince you he would've been a great Australian captain. He makes the game exciting for his team-mates, which is part of the secret to successful captaincy. Keep them involved in an absorbing contest and the really competitive players will regularly produce their best.

Also, his captaincy creed, "We can win from any position," is like the common cold - it's contagious. If a team under Warne pulls off a stunning victory or two, the players start to believe that it wasn't a miracle, just an everyday occurrence.

Everton, what you witnessed in Hyderabad, where Warne captained like a chess master and conjured up a remarkable last-gasp victory against the Deccan Chargers, is exactly what I saw in 1996 when I phoned Richie Benaud in England. I'd just seen Warne captain Victoria in a Super Eights tournament played in northern Australia during the winter. His captaincy was aggressive and there was a vibrancy to his leadership that inspired the players around him to perform at their best. I told Benaud, "I've just seen a brilliant natural leader. We could have another aggressive legspinning captain of Australia."

Even from 16,000 kilometres away you could hear the excitement in Benaud's voice. My prediction had rekindled memories of his own exploits as an aggressive Australian captain who was prepared to take risks.

What you said about Warne, "that he takes his gambling instincts on to the field" was one of the things that impressed me about his captaincy in 1996. Everton, what you and the Indian public are now seeing is what the people of Hampshire have been raving about for a few seasons: how as captain, Warne makes the game interesting for everybody to watch. What a pity we didn't see more of it in Australia.

Just 11 one-day internationals as captain in the late 1990s and Australia won ten of those matches. No wonder Steve Waugh was in a hurry to return from injury to reclaim the job; the team responded brilliantly to Warne's leadership and there was a mystical quality about what might unfold that had the public constantly on the edge of their seats.

He also captained Victoria a few times but that would have been wasted on their fans; they've been subjected to so much pedestrian leadership over the years, they've probably forgotten what good captaincy looks like. Yes, Everton, I know, there's an exception to every rule. My grandfather, and former Australia captain Vic Richardson advised me, "If you ever captain Australia, don't do it like a Victorian."

Anyway, what's happened to the old devil-may-care Everton now you've retired? You're becoming conservative in your old age, agreeing with the "do gooders" (as you once described them), that it was probably just as well Warne didn't captain Australia because he would've embarrassed the country with his off-field antics.

Remember what you said, Everton, "Larrikins make good captains because they are risk-takers." And anyway, I told you if he'd been appointed captain following Mark Taylor's retirement, I doubt he would have got into so much hot water that it ensured he would never captain Australia again. He's made some stupid mistakes but he's not naive.

I think it was Eric Idle, the comic from Monty Python, who said of the male of the species: "Man has two major organs, brain and penis, but only blood enough to run one at a time." That probably best summed up Warnie.

Anyway, we agree on one thing, Everton. Warne has one of the most vibrant cricket brains in the business and there can be no disputing he's a very good captain. Benaud often says the great allrounder Keith Miller was the best skipper he's seen never to captain Australia. I'd say the same about Warne in regard to Test cricket.

Hey, mate, you've really succumbed to the Warne magic. You followed him to Jaipur to watch him out-manoeuvre his old foe Sourav Ganguly and make it four wins in a row against the Knight Riders, and now you're planning a trip to Las Vegas to watch him play in a poker tournament.

If you want some spending money for Vegas, have a little wager on the Royals winning the IPL. There's one thing for sure about taking a punt on Warnie. He always gives you a good run for your money.

Shane Warne

cricket

Subscribe in a reader

Pentagon Targeted Iran for Regime Change after 9/11

Three weeks after the 9/11 terror attacks, former U.S. Defence Secretary Donald Rumsfeld established an official military objective of not only removing the Saddam Hussein regime by force but overturning the regime in Iran, as well as in Syria and four other countries in the Middle East, according to a document quoted extensively in then Undersecretary of Defence for Policy Douglas Feith's recently published account of the Iraq war decisions.

Feith's account further indicates that this aggressive aim of remaking the map of the Middle East by military force and the threat of force was supported explicitly by the country's top military leaders.

Feith's book, "War and Decision", released last month, provides excerpts of the paper Rumsfeld sent to President George W. Bush on Sep. 30, 2001 calling for the administration to focus not on taking down Osama bin Laden's al Qaeda network but on the aim of establishing "new regimes" in a series of states by "aiding local peoples to rid themselves of terrorists and to free themselves of regimes that support terrorism."

In quoting from that document, Feith deletes the names of all of the states to be targeted except Afghanistan, inserting the phrase "some other states" in brackets. In a facsimile of a page from a related Pentagon "campaign plan" document, the Taliban and Saddam Hussein regimes are listed as "state regimes" against which "plans and operations" might be mounted, but the names of four other states are blacked out "for security reasons".

Gen. Wesley Clark, who commanded the NATO bombing campaign in the Kosovo War, recalls in his 2003 book "Winning Modern Wars" being told by a friend in the Pentagon in November 2001 that the list of states that Rumsfeld and Deputy Secretary of Defence Paul Wolfowitz wanted to take down included Iraq, Iran, Syria, Libya, Sudan and Somalia.

Clark writes that the list also included Lebanon. Feith reveals that Rumsfeld's paper called for getting "Syria out of Lebanon" as a major goal of U.S. policy.

When this writer asked Feith after a recent public appearance which countries' names were deleted from the documents, he cited security reasons for the deletion. But when he was asked which of the six regimes on the Clark list were included in the Rumsfeld paper, he replied, "All of them."

Rumsfeld's paper was given to the White House only two weeks after Bush had approved a U.S. military operation in Afghanistan directed against bin Laden and the Taliban regime. Despite that decision, Rumsfeld's proposal called explicitly for postponing indefinitely U.S. airstrikes and the use of ground forces in support of the anti-Taliban Northern Alliance in order to try to catch bin Laden.

Instead the Rumsfeld paper argued that the U.S. should target states which had supported anti-Israel forces such as Hezbollah and Hamas. It urged that the United States "[c]apitalize on our strong suit, which is not finding a few hundred terrorists in caves in Afghanistan, but in the vastness of our military and humanitarian resources, which can strengthen the opposition forces in terrorist-supporting states."

Feith describes the policy outlined in the paper as consisting of "military action against some of the state sponsors and pressure -- short of war -- against others".

The Rumsfeld plan represented a Pentagon consensus that included the uniformed military leadership, according to Feith's account. He writes that the process of drafting the paper involved consultations with the outgoing Chairman of the Joint Chiefs of Staff Gen. Henry Shelton and the incoming Chairman Gen. Richard Myers.

Myers helped revise the initial draft, Feith writes, and Gen. John P. Abizaid, who was then director of the Joint Staff, enthusiastically endorsed it in draft form. "This is an exceptionally important memo," wrote Abizaid, "which gives clear strategic vision." In a message quoted by Feith, Abizaid recommended to Myers that "you support this approach".

After the invasion and occupation of Iraq in 2003, Abizaid was promoted to become chief of CENTCOM, with military responsibility for the entire Middle East.

Neither Myers nor Abizaid, both of whom are now retired from the military, responded to e-mails asking for their comments on Feith's account of their role in the process of producing the Rumsfeld strategy.

Rumsfeld's aides had also drafted a second version of the paper, as instructions to all military commanders in the development of "campaign plans against terrorism".

That instructions document was a joint effort by Feith's office and by the Strategic Plans and Policy directorate of Abizaid's Joint Staff. It followed the broad outlines of the paper for Bush, arguing that the enemy was a "network" that included states that support terrorism and that the Defence Department should seek to "convince or compel" those states to cut their ties to terrorism.

The Pentagon guidance document called for military commanders to assist other government agencies "as directed" to "encourage populations dominated by terrorist organizations or their supporters to overthrow that domination".

That language was adopted because the campaign planning document was issued as "Strategic Guidance for the Defense Department" on Oct. 3, 2001 -- just three days after the Rumsfeld strategy paper had gone to the president.

Bush had not approved the explicit aim of regime change in Iran, Syria and four other countries proposed by Rumsfeld. Thus Rumsfeld adopted the aggressive military plan targeting multiple regimes in the Middle East for regime change even though it was not White House policy.

The Defence Department guidance document made it clear that U.S. military aims in regard to those states would go well beyond any ties to terrorism. The document said that the Defence Department would also seek to isolate and weaken those states and to "disrupt, damage or destroy" their military capacities -- not necessarily limited to WMD.

The document included as a "strategic objective" a requirement to "prevent further attacks against the U.S. or U.S. interests". That language, which extended the principle of preemption far beyond the issue of WMD, was so broad as to justify plans to use force against virtually any state that was not a client of the United States.

The military leadership's strong preference for focusing on states as enemies rather than on the threat from al Qaeda after 9/11 continued a pattern of behaviour going back to the Bill Clinton administration (1993-2001).

After the bombing of two U.S. embassies in East Africa by al Qaeda operatives, State Department counter-terrorism official Michael Sheehan proposed supporting the anti-Taliban Northern Alliance in Afghanistan against bin Laden's sponsor, the Taliban regime. However, senior U.S. military leaders "refused to consider it", according to a 2004 account by Richard H. Shultz, Jr., a military specialist at Tufts University.

A senior officer on the Joint Staff told State Department counter-terrorism director Sheehan he had heard terrorist strikes characterised more than once by colleagues as a "small price to pay for being a superpower".

*Gareth Porter is an historian and national security policy analyst. The paperback edition of his latest book, "Perils of Dominance: Imbalance of Power and the Road to War in Vietnam", was published in 2006.

News and politics

terrorism

Subscribe in a reader

BBC's (S)Hit Piece

Intro

The military industrial complex owned media are working over time to spread lies, dis-info, and subject the masses to compliant thinking propaganda. Goebbels would have been proud of BBC tactics. So, what are you going to do?

For one, know your enemy and know their MO (Modus Operandi). It does not take a genius to figure it out, as the (very effective tactics) are the same used over and over again. It works well in conditioning us to accept wrong-doing, lies, deception and fraud. Things that were unthinkable decades ago, are readily accepted today. Torture is good. Giving up your freedom means securing liberty. The government is good. Terrorists are everywhere.

The dirt bags at the BBC are shameless charlatans, who play the public as if we were three year olds. Well, BBC, it does not wash any longer. People are waking up.


BBC’s Bacons
A case study on Deception.

What is the Modus Operandi (MO) of government dis-information?

1. Deny knowledge of established or provable facts.
2. Make unsubstantiated statements appear to be factual, often state the exact opposite.
3. Bring in “experts” who back-up by opinion these incorrect statements.
4. Couple lies with truths or half-truths to making it sound reasonable.
5. Establish a false logic (‘non-sequitur’ “it does not follow”), which is then accepted as established, creating a parallel or false reality.
6. Create dictatorial rules, regulations and unnatural laws around that false reality with the sole purpose of controlling and financially raping the population.

Alex Jones, a popular Texan radio host with his nationally syndicated radio show and millions of listeners, was invited to a BBC Radio 5 program, where five professional 9-11 debunkers geared up to assassinate the notion that Western governments were involved in the mass murder of 9/11.

Mr. Jones immediately offered a number of substantiated facts, his accurate logic following along this line:

Governments stage terror attacks and do so against their own people. History has proven exactly that.

* Hitler set fire to the Reichstag (27th February 1933) blaming it on Marinus v. Luebbe. This event led to introduction of dictatorship (Hitler was elected, so was Bush, Gordon Brown was not!).
* Hitler attacked his own Radio Station in Gleiwitz (31 August 1939), which led to the invasion of Poland, and thus WWII.


The US has been caught on several occasions to stage terror attacks. Here Mr. Jones cites two incidents:

* The Gulf of Tonkin incident August 1964, which led to the Vietnam War, was a lie. The government alleged a provocation by Vietnam boats on US destroyers (NSA declassified).
* The attack of the USS Liberty by Israeli Air Force (8th June 1967)


Mr. Jones then reasons that it is therefore not inconceivable to think that the US government was involved in the mass murder on 9/11 (and 7/7 I might add). However, Mr. Jones barely got his points across. His total airtime tallied less than that of a caller who bored listeners with an irrelevant Joan v. Arc theory. Alex Jones was interrupted, faded out, dismissed, and made fun of in a manner that bore strong resemblance to staged political trials. The BBC’s operations are rigged and their dishonesties are obvious to the observer who cares to pay attention.


Continuing on: Richard Bacon establishes his non sequitur and continues to build up propaganda around his false reality: “Surely, governments are not capable of carrying out such evil; therefore 9/11 could not have happened with the involvement of the government.” He and his debunkers go full circle by adding “scientific” disinformation pertaining to the collapse of the World Trade Center Towers 1, 2 and 7, calling Mr. Jones a liar.

While Mr. Bacon continues to cast doubts on official and declassified stories, he plays to Human goodness by stating: “Do you really believe this (nonsense)? Surely, the government would never do such evil!” Of course, Mr. Bacon would have us believe the government loves us. Our government would never harm us... Sure they wouldn’t!

True, it is hard to believe what criminal elements in our governments have conspired to do to us. It is hard to digest the density of evil that is acting against the people, against you and your families, against your neighbors, and against your daughters and sons and grandchildren. Reasonable Human Beings, people with a conscience, will have difficulty accepting its existence. Doing so is life changing and painful.

However, the BBC’s Bacon knows that he is covering up for the BBC/the government: He states on-air that the BBC reported that WTC 7 had fallen before actually it happened. Bacon even admits that previously “lost” tapes of that BBC broadcast had been found, proving the fraud.

He, however, does not care and refuses to follow logic. Richard Bacon of the BBC is a liar. He is complacent to those who do not have the best interest of the people at heart. That, Mr. Bacon, makes you a criminal!

Go on then, believe The BBC’s bacons and what comes out of their orifices... Sure, your government loves you!

The BBC knows that people are not reading; they are not informing themselves; they are not making the effort to question the official stories; and hola, the stage is set for more non-sequiturs. On they ramble, building their shaky disinfo-house with flammable lie-sticks. It will take a few sparks more, emanating from the words of inforwarriors all over the planet to burn the house of misinformation to ashes. It is for the people then to start over, to rise like Phoenix, building on the solid fundament of honesty and accountability.

Mr. Bacon: You and the Big Brother Corporation have become irrelevant. You are deliberately harming the Britain. You are abiding a treasonous enemy. You are the enemy, the enemy of the fine British People, the enemy of Humanity and free society!

Challenge for Mr. Bacon

Well Richard Bacon, do you not like the tone of this? Would you like to earn some respect from your listeners? Why not debunk on the Alex Jones Show? I challenge you to go on the AJ show for an hour and debate Mr. Jones. I am not talking for Mr. Jones, but I am certain that he will not line up five 9/11 Truthers or “conspiracy theorists against you to “debunk” you. He would not have to. Truth does not need unfair game.

Links:
BBC Conspiracy Show (Audio)
Original Story on Infowars.net

News and politics

media

Subscribe in a reader

John Button 1933-2008

Items by John Button

A Natural Competitive Advantage
Books | Business
July 2007

Waterfront Blues
The Nation Reviewed
June 2007

America's Australia
The Monthly Essays
February 2007

Crouching Tiger
The Monthly Essays
February 2006

News and politics

Subscribe in a reader

Iran dumps U.S. dollars in oil transactions

''The dollar has completely been removed from our oil trade....Crude oil customers have agreed with us to use other currencies (in the trade),'' Oil Ministry official Hojjatollah Ghanimifard was quoted as saying by the state television. ''We make our transactions with euros in Europe, but yen in Asia.''

TEHRAN, April 30 (Xinhua) -- Iran had totally removed U.S. dollars in the country's oil transactions, an Oil Ministry official said on Wednesday.

"The dollar has completely been removed from our oil trade....Crude oil customers have agreed with us to use other currencies (in the trade)," Oil Ministry official Hojjatollah Ghanimifard was quoted as saying by the state television.

"We make our transactions with euros in Europe, but yen in Asia," he added.

Due to the tensions with Washington in the past years over the nuclear disputes and the latest depreciation of dollars, Iran has vowed to decrease the greenback in its foreign trade. Iran central bank also has reduced dollars in the country's foreign reserves. In last November's summit of the Organization of Petroleum Exporting Countries (OPEC) in Saudi Arabia, Iran proposed that it was necessary to replace the U.S. dollar with other major hard currencies in oil trading.

But some Arab allies of the United States showed few support to Tehran's advice.

However, Iran's Oil Minister Gholam Hossein Nozari has already declared in last December that Tehran had completely stopped selling its oil in dollars, according a report by the semi-official ISNA news agency at that time.

"In line with the policy of selling crude oil in non dollar currencies, currently selling our country's oil in U.S. dollars has been completely stopped," Nozari was then quoted as saying. Right now it's not clear why there seems to be a contradiction between comments by the two officials over the exact time to stop dollars in Iran's oil trade.

News and politics

oil

dollar

 Subscribe in a reader

Gulf States May End Dollar Pegs, Kuwait Minister Says

Gulf states are considering dropping their pegs to the dollar after the U.S. currency's decline stoked inflation across the region, Kuwaiti Finance Minister Mustafa al- Shimali said.

``Yes, there are some'' Gulf Cooperation Council states considering dropping their pegs to the dollar, which has fallen 13 percent against the euro in the last 12 months, al-Shimali said in an interview in Kuwait late yesterday without naming the countries. ``Some countries will do what we are doing.''

Al-Shimali's comments may restoke speculation of a change in Middle East currency systems that eased after the United Arab Emirates and Qatar last month ruled out any revaluation or dropping the dollar peg in the short term. The issue will remain a key issue as long as inflation remains high.

``Inflation is rising in the Gulf to a great extent because of loose monetary policy,'' said Marios Maratheftis, head of research for Standard Chartered Plc in the Middle East in a telephone interview from Dubai. ``Tightening monetary policy can only happen if they drop their currency pegs or strengthen the currency, preferably both.''

The U.A.E., Bahrain and Qatar lowered their benchmark interest rates today by a quarter point, matching a cut by the U.S. Federal Reserve a day earlier. The move is needed to maintain the dollar pegs. Saudi Arabia is on its weekend while Oman moves its interest rates in line with the London Inter Bank Offered Rate.

Gulf Inflation

Inflation is running close to 10 percent in Saudi Arabia and the U.A.E., while Qatar's consumer prices rose 14 percent in the fourth quarter.

The Kuwaiti dinar has appreciated 7.9 percent against the dollar since the nation in May became the only Gulf Arab state to drop its peg to the U.S. currency. Contracts to buy U.A.E. dirhams in 12 months time are trading at a 2 percent premium and Saudi riyal forwards are trading at a 1.3 percent premium to the spot price, suggesting that some traders are betting that those countries will follow Kuwait in revaluing. The link to the dollar meant that imports in euros and other currencies that have strengthened against the dollar became more expensive.

The idea of dropping the peg ``has been started by other Gulf countries and they are partially going this way because the dollar has been going down for some time,'' al-Shimali said yesterday.

Forum meeting

``This news has already been in newspapers,'' al-Shimali told reporters at a meeting of the Fourth World Economic Forum in Kuwait today.

Reuters reported today that al-Shimali said he was citing newspaper reports and not expressing his own opinion when commenting to Bloomberg on the future of the Gulf dollar pegs.

When asked at the forum about Gulf states considering dropping their pegs, al-Shimali told reporters that he would not comment on behalf of Gulf states.

Officials at the Qatari, Omani and U.A.E. central banks were not immediately available. The Bahraini and Saudi central banks were closed today.

Revaluation speculation peaked in November after U.A.E. central bank Governor Sultan Bin Nasser al-Suwaidi said he was considering dropping the dirham's peg to the dollar, and a Saudi Arabia central bank official said that Gulf states may revalue their currencies together.

All the GCC states, apart from Oman, are planning to form a single Gulf currency by 2010. The group's central bank governors will meet in June in an attempt to get the project back on schedule.

``The case for currency reform is strong,'' Simon Williams, chief Middle East economist at HSBC Holdings Plc, said in a telephone interview from Dubai. ``The inflationary pressures the Gulf faces not only demand a stronger currency, they also require an independent monetary policy. The issue is not going to go away, but I don't believe that change is close.''

News and politics

dollar

oil

Subscribe in a reader

B'Tselem Report: Denying Palestinians Free Movement in the West Bank

A summary of August 2007 B'Tselem report: ''Ground to a Halt - Denial of Palestinians' Freedom of Movement in the West Bank.'' It's one of a series of studies it conducts on life in Occupied Palestine to reveal what major media accounts suppress.

by Stephen Lendman

This article summarizes an August 2007 B'Tselem report now available in print. It's one of a series of studies it conducts on life in Occupied Palestine to reveal what major media accounts suppress. This one is titled: "Ground to a Halt - Denial of Palestinians' Freedom of Movement in the West Bank."

B'Tselem has a well-deserved reputation for accuracy and integrity. It's the Jerusalem-based independent Israeli Information Center for Human Rights in the Occupied Palestinian Territories (OPT). It was founded in 1989 by prominent academics, attorneys, journalists and Knesset members to "document and educate the Israeli public and policymakers about human rights violations in (Occupied Palestine), combat (the Israeli public's) denial, and create a human rights culture in Israel" to convince government officials to respect human rights and obey international law.

Its work is detailed, wide-ranging, carefully researched, and based on hundreds of testimonies and dozens of on-the-ground observations. For verification, it's also cross-checked with relevant documents and other government sources. Work on this report was completed over a six month period in 2007. It included information from other reports, statements from political and military officials, petitions to Israel's High Court of Justice, and media accounts.

B'Tselem states: "For the past seven years (since the September 2000 Second Intifada began), Israel has imposed restrictions and prohibitions on Palestinian movement that are unprecedented in scope and duration." It refers to hundreds of permanent and temporary checkpoints, other obstacles, physical barriers, and Israel's Separation Wall (ruled illegal by the World Court) on confiscated Palestinian land.

Free movement in the West Bank is severely restricted and nearly always entails "intolerable and arbitrary delays, much uncertainty, friction with soldiers, and often substantial expense." B'Tselem stresses that throughout 2008, it will continue to focus on this topic - with new maps, short videos, and various "public education and advocacy activities to highlight" Israel's unnecessary, outlandish and illegal restrictive measures. People need to know, and B'Tselem intends to tell them.

This is its 14th report on this topic since September 2000. Previous ones covered specific type restrictions like checkpoints, for-Jews only roads, and the Separation Wall. The one is comprehensive. It surveys all of them and their collective effects on Palestinians' lives.

The measures aren't new or restricted to the West Bank. They've been ongoing since the early 1990s and have undergone expansion and refinement ever since. Until 1991, Palestinians (except small numbers designated security threats) could move freely throughout the Territories and were able to enter and stay in Israel during daytime hours. It helped Palestine establish social, cultural and commercial ties to its neighbor, Israeli Arab citizens in it, as well as between Gaza and the West Bank.

During the January 1991 Gulf war, everything changed. General permits were cancelled and replaced by new restrictive policies. Thereafter, all Palestinians needed (selectively authorized) permits to enter Israel and East Jerusalem. Checkpoints and barriers were erected for enforcement. They've restricted movement ever since, and at times, like the 1993 killings of nine Israelis, became a general closure policy. All free movement was halted, Palestinians lost their jobs in Israel, few opportunities at home could replace them, and the Territories suffered great economic and social harm.

Closure also split the OPT into three areas: East Jerusalem, the remaining West Bank and Gaza. After September 2000, Israel tightened free movement further and continues harassing and containing relentlessly. Two main factors explain how:

-- Israel's "ever-expanding settlement enterprise....along the length and breadth of the West Bank;" they're on strategically chosen and most valued lands; in areas designed to contain Palestinian city expansions; further harmed by Israel's (for-Jews-only) bypass roads that constrict, isolate and divide West Bank areas; and

-- the effects of the Oslo Accords; they split the West Bank into three areas - Area A under Palestinian Authority (PA) security and civil affairs control; Area B under Israel security and right to restrict free movement; and Area C under total Israeli control, including on matters relating to land, planning and building; Areas B and C comprise 80% of the West Bank, including its main roads, so that lets Israel restrict movement how, when, for as long, and for whatever purpose it wishes over most of the Territory.

After September 2000, its measures were hardened. It clamped down on free movement, isolated Palestinians in cantonized enclosures, and made a fundamental human right a privilege to grant or withhold as it pleases. Its pretext is security but, in fact, that's false. The real aim is harassment, land grab, and a state-sponsored expulsion plan so Israel can seize all the land it wants for Jews only. It's gone on for decades and so far unchallenged by the world community. B'Tselem wants to stop it along with all other law violations so Palestinians can have their long denied justice they deserve and should get.

Israel's Means to Control Movement

B'Tselem divides Israeli control into three categories reflecting "different layers" of restrictive policy. They, in turn, build on each other and are interrelated:

-- physical means to divert movement to certain passageways and roads and prevent access to others;

-- restrictions and prohibitions that first layer physical tools enforce; and

-- the means to ease or tighten, selectively and under careful monitoring, second layer restrictions and prohibitions.

The essential idea is that in combination these layers represent a single control mechanism, all parts operate together, and determining their impact requires evaluating the combined effect of four types of control:

(1) obstructions to deny access to main roads; they divert Palestinians to checkpoints where the army (IDF) supervises movement from one area to another or can deny it altogether; obstructions are in different forms - dirt mounds, concrete blocks, boulders, trenches, fences and iron gates; their numbers have gradually increased and in mid-2007 totaled 455 throughout the West Bank; they limit pedestrian and vehicular movement, and especially affect the elderly, the ill, pregnant women and small children; they're even more restrictive in winter when water accumulation turns dirt areas muddy;

(2) permanent staffed checkpoints; they're fairly constant in number, and Israel has used them to some degree throughout 41 years of occupation; they gained prominence, however, after Israel cancelled general-entry (free movement) permits in 1991; they were then expanded during the Second Intifada; over time, they've become the most conspicuous occupation symbol and one of its most hated;

-- in mid-2007, 80 were in place of which 33 were the last inspection point before entering Israel along the Green Line; the other 47 lie inside the West Bank, some with control towers; seven are to transfer goods; they're called "back-to-back" because merchandise is unloaded on one side, checked, then reloaded on another truck on the other side; operating times vary - many open at 6AM and close at night; others are staffed around the clock but limit crossings to "urgent humanitarian" cases;

-- movement restrictions vary from one checkpoint to another and always at Israel's discretion; to pass, travelers must show proper ID or crossing permits; searches may be conducted; procedures are at the discretion and mood of soldiers; some checkpoints are for pedestrians only; others are restricted to commercial and public transportation.

(3) so-called flying checkpoints; they're temporary, may be erected anywhere, and remain for hours or longer; in recent years, they've increased in numbers - from a weekly average of 73 in late 2005 to 136 in 2006 to about 150 in 2007 and at times up to 200. Again, the pretext is security, their real aim is to harass, and no one does it better than Israelis.

Consider the effects of all checkpoints. Since September 2000, they've become "the main (source of) friction (between) Palestinians and Israeli security forces." They generate tension, create uncertainty, deny or delay passage, humiliate and overall makes things intolerable. They're also degrading by demanding that males expose their upper bodies in public simply as a way to harass them.

It gets worse by selective detentions in so-called "positions" - isolated holding areas for additional "security" checks that, in fact, are to punish and further humiliate; they can last hours, in exposed heat or cold, without food or water, and at times include physical abuse; many Palestinians are affected daily; Israel's high command has full knowledge; the government does as well; nominal recommendations are made to stop it, yet abuse continues and few offenders are ever punished.

(4) the Separation Wall; in June 2002, Israel decided to build it; again the claim was security; in fact, it was separation and theft of over 10% of Palestinian land, including for-Jews only roads to connect settlements with Israel and other settlements; most of the Wall is completed; its planned length is 721 kilometers; only 20% of it lies along the Green Line; most of it runs deep inside the West Bank; near Jerusalem, it surrounds the Ma'ale Adumim settlements about 14 km into the West Bank on stolen Palestinian land;

-- its route creates two kinds of Palestinian enclaves - villages and farmland between the Wall and Green Line (in the "seam zone") on the Israeli side of the barrier; another area comprises villages on the Palestinian side that are surrounded on three or more sides because of the route's winding path or that the Wall meets roads on which Palestinian movement is forbidden or physical obstructions prevent it.

Physical restrictions and movement prohibitions give Israeli security forces more latitude, and they take full advantage through a fourfold layer of control:

(1) by imposing a siege to completely or partially prevent Palestinians from crossing to or from a certain area as well as isolating the area from other parts of the West Bank; it's done with physical obstructions to block access and force residents to pass through staffed checkpoints; closing off the area facilitates sweeping movement prohibitions on specific classifications of people by gender, age or place of residence; the IDF claims their "risk profile" makes them "potential terrorists;" targeting them by siege is a frequently used post-September 2000 tactic; large areas of the West Bank have been affected; their degree of harshness varies; and areas like the Jordan Valley, Area A and cities like Nablus, Jenin, Tulkarm and Hebron have been especially impacted.

-- in December 2001, the West Bank IDF commander signed the Proclamation Regarding the Closure of Area (Encirclement) (Area A); it classified it as a closed military area, was unlimited in duration and still remains in force; in April 2007, a separate order was issued for Nablus restricting entry to and exit from the city to certain checkpoints; again the army claims it's a security measure "to prevent terrorists and materiel from leaving Palestinian towns in Judea and Samaria...."

(2) the "seam zone;" Israelis say it's the enclosed area between the Green Line and Separation Wall; when its first section was completed (in October 2003), the IDF declared this section a closed military area with entry into it forbidden; later areas may also be closed off, but even ones that aren't will have severe movement restrictions the way they're imposed throughout the West Bank; all Palestinians are affected; Jews and foreigners have permits permitting easy entry and exit.

(3) prohibiting travel on certain roads for Jews only; on some roads, no Palestinian vehicles are allowed; on others, travel is allowed for ones with special permits; the Oslo Accords set the rules; most often (but not always), Palestinians may travel on Areas A and B roads but prohibited or restricted in Area C; they're excluded from about 311 km of West Bank roads for Jews only; they connect settlements to Israel or other settlements.

-- rules are so harsh and convoluted that further restrictions are imposed on some roads Palestinians may use; an example is forbidding Palestinian vehicles from crossing a road, requiring passengers to leave their vehicles on one side, cross on foot, and get other transportation on the other side; this creates great hardship, is only to harass, and in cases of passenger illness or mothers in labor it may be life-threatening; in addition, Israeli security forces have great enforcement latitude; orders are issued verbally, not in writing, and soldiers at checkpoints can pretty much do as they please, depending on their mood.

(4) harsh travel laws act as deterrence; they impose high fines and/or insurance requirements; Palestinian violators are treated discriminatorily; and a high percentage of drivers are affected.

To counter public criticism, Israel issued two selective easing measures; they help some Palestinians but tighten movement restrictions for others:

(1) the permits regime; since 1991, Israel required Palestinians to have personal entry permits to enter its territory and East Jerusalem; after 1996, Palestinians also needed permits to enter West Bank jurisdictional areas; post-September 2000, rules were further tightened; some Palestinians must have permits to enter, remain in, or leave large areas inside the West Bank, including the "seam zone" and areas under siege; other permits are needed to arrange (passenger and commercial) vehicular checkpoint crossings; a limited number are allowed based on the capacity of security forces to inspect vehicles, goods and passengers;

-- B'Tselem lists nine different type permits for passenger vehicles - commercial ones; public ones for taxis and buses; movement in areas under encirclement; humanitarian ones; for permanent "seam zone" residents; for daily "seam zone" entry; "seam zone" entry for farming or work; and to enter the Jordan Valley;

-- movement restrictions and prohibitions are so onerous and for so many reasons that Israelis consider permits a privilege; for Palestinians, they're essential to meet daily needs; West Bank District Coordination Offices (DCOs) issue them, but procedures are unclear and lack transparency; B'Tselem believes "two general and sweeping criteria must be met" to get one:

(a) "lack of 'prevention,' either for security or police-related reasons relating to the applicant," and

(b) having documents to show justification for the request.

Quotas exist in all cases; when they're filled, many qualified residents are left out; in addition, other qualifying procedures exist but are unstated; ultimately DCO officials have total discretion in awarding or denying permits and can be pretty arbitrary about it; "seam zone" residents provide an example of what all Palestinians endure; to get a permit to their own home area, they must prove they reside there from their ID card address on the day the declaration of closed military area was made or in some other way show their center of life is there; those getting one are allowed entry via one checkpoint only;

(2) So-called "fabric of life" roads for Palestinians only; the West Bank's main roads are only for Jews; initially, those for Palestinians passed through villages and city centers, but because of criticism an alternate plan was developed - creating a separate, contiguous road network running north-south in the West Bank; it's based on separate levels in places where Israeli and Palestinian roads meet; bridges and interchanges achieve separation with Israelis able to travel on top at high speed; lower level "fabric of life" roads comprising 20% of the West Bank's total are for Palestinians; elements of the plan have been implemented and "fabric of life" roads are being built; they represent another part of Israel's repressive apartheid scheme.

Splitting the West Bank

Article 13 of the 1948 Universal Declaration of Human Rights states:

(1) "Everyone has the right to freedom of movement and residence within the borders of each state.

(2) Everyone has the right to leave any country, including his own, and to return to his country."

Israel is a serial international law and human rights abuser. For Palestinians, it believes allowing free movement is a privilege, denying it is the norm, and actions no matter how outlandish require no explanation or justification.

Israel divided the West Bank into three control areas - A, B and C. For purposes of restricting movement, it further split the Territory into six geographical units:

-- North that includes the Jenin, Tulkarm, Tubas and Nablus districts, except for those in the Jordan Valley and Separation Wall enclaves; about 840,000 Palestinians lived in this area as of summer 2007; today the number is somewhat higher;

-- Central that includes the Salfit, Ramallah, and Jericho districts, except for parts in the Separation Wall enclaves; in summer 2007, the Palestinian population exceeded 400,000;

-- South that includes the Hebron and Bethlehem districts, except for the northern Dead Sea and Separation Wall enclaves; Palestinians here number over 700,000;

-- the Jordan Valley and northern Dead Sea that includes the eastern strip of the West Bank, except for Jericho and nearby refugee camps; the Palestinian population is around 10,000;

-- the Separation Wall-created "seam zone" and inside the West Bank "internal" enclaves; when the Wall is completed, the "seam zone" Palestinian population will number about 30,000; an additional 25,000 will be in "internal" enclaves; the "seam zone" also contains thousands of Palestinian farmland dunams (a dunam equals about one fourth of an acre) and 39 settlements; unlike the other geographical units, the enclaves are dozens of non-contiguous sections that are separated from the rest of the West Bank; and

-- East Jerusalem that includes all the area Israel annexed in 1967 and is attached to the Jerusalem Municipality, except for the Shu'afat refugee camp and Kfar Aqeb that the Wall separates from the city; around 200,000 Palestinians live in this section.

All geographical units are constricted by Israel's rigid control system explained above. Below are the checkpoints that control movement from one section to another:

-- Za'tara (Tupuah) Checkpoint controls North to Central sections movement; in addition, the IDF directs to this checkpoint all west and east traffic along the Trans-Samaria highway and from Route 60 from Nablus in the north and Ramallah in the southwest and south; Palestinians may generally pass freely heading north; those traveling south encounter ID and sometimes vehicle checks; delays are common; males aged 16 - 35 often aren't allowed to go south.

-- Container Checkpoint almost totally controls movement between the South and Central sections; Border Police staff it round the clock; from 2002 to February 2007, passenger cars were prohibited without a special permit; it's now cancelled; since September 2000, Palestinians have been prohibited from using Route 398 that runs from the checkpoint to the Ma'ale Adumim and Qedar settlements; Palestinians are diverted to other worn roads of nearby villages; Palestinian traffic passing through the checkpoint are subjected to lengthy delays and at times searches; when Israel declares a comprehensive closure, it applies to this checkpoint; it severs the southern West Bank from the rest of the Territory and requires Palestinians traveling to or from the South to do it by foot.

-- Tayasir, Hamra, Gittit and Yitav checkpoints control movement to and from the Jordan Valley. In May 2005, Israel instituted sweeping Palestinian movement prohibitions here, except for residents with ID cards and persons with special permits. They were cancelled in April 2007, it affects only pedestrians and those using public transportation (that also requires a permit), and applies only to the Tayasir and Hamra crossings.

-- Almog Checkpoint that controls movement to and from the northern Dead Sea; generally only Palestinians with work permits for nearby settlements and/or to enter Israel may pass; since May 2007, the latter category was cancelled.

-- the Separation Wall directs movement between the "seam zone" enclaves and the rest of the West Bank to several gates in the Wall; only Palestinians with special entry permits may pass; 38 gates are in place; only six operate daily from 12 to 24 hours continuously; 17 others open two or three times a day for 30 minutes to two hours; 13 additional ones operate during farming season; two other gates allow movement of residents of a few houses that are enclosed by the Wall and separated from their village; still other crossings are for Israeli travel between the West Bank and Israel; they operate round the clock.

-- the Separation Wall also directs movement between East Jerusalem and the rest of the West Bank; this section is called the "Jerusalem envelope" and has 12 checkpoints; crossing (permitted only through four of them) requires a valid ID and permit and submitting to stringent checks; they include exiting vehicles, having them searched, and passing through a revolving gate equipped with a metal detector; the remaining eight checkpoints are for settlers, Israeli residents and East Jerusalem Palestinians with Israeli IDs.

In addition to area to area restrictions, Israel tightens them further with others within areas by breaking them into sub-areas and controlling movement between them. Nablus in the North is separated from nearby villages and from other northern West Bank districts.