Archive for April, 2006

Holding the world by the unmentionables

Thursday, April 20th, 2006
With over a tenth of the world's oil reserves in their hands, and a location which gives them the ability to disrupt energy traffic through the Strait of Hormuz, the mullahs controlling Iran don't appear to be particulary moved by the oratorial efforts to stop them from developing a nuclear program. It seems that world leaders have forgotten their Mother Goose, particularly the part about "sticks and stones".

Iran has bought itself a third of humanity and a veto on the U.N. Security Council by signing big energy deals with China and India, so the chance of sanctions passing is so small as to be laughable.

Some illustrations of who the world is dealing with:

A regime that during the Iran-Iraq war utilized thousands of children as human mine clearers:

"In the past," wrote the semi-official Iranian daily Ettelaat as the war raged on, "we had child-volunteers: 14-, 15-, and 16-year-olds. They went into the minefields. Their eyes saw nothing. Their ears heard nothing. And then, a few moments later, one saw clouds of dust. When the dust had settled again, there was nothing more to be seen of them. Somewhere, widely scattered in the landscape, there lay scraps of burnt flesh and pieces of bone." Such scenes would henceforth be avoided, Ettelaat assured its readers. "Before entering the minefields, the children [now] wrap themselves in blankets and they roll on the ground, so that their body parts stay together after the explosion of the mines and one can carry them to the graves." (Strongly recommend reading the whole article.)

A regime that has announced it has 40,000 suicide bombers ready and waiting for activation.

Iranian dissident Amir Taheri writes:
"Last Monday, just before he announced that Iran had gatecrashed "the nuclear club," President Ahmadinejad disappeared for several hours. He was having a khalvat (tete-a-tete) with the Hidden Imam, the 12th and last of the imams of Shiism who went into "grand occultation" in 941. Last year, after another khalvat, Ahmadinejad announced his intention to stand for president. Now, he boasts that the Imam gave him the presidency to provoke a "clash of civilizations" in which the Muslim world, led by Iran, takes on the "infidel" West, led by the U.S., and defeats it in a prolonged contest that sounds like a low intensity, asymmetrical war [...]
"Ahmadinejad has also reactivated Iran's network of Shia organisations in Bahrain, Kuwait, Saudi Arabia, Pakistan and Yemen, while resuming contact with Sunni fundamentalist groups in Turkey, Egypt, Algeria and Morocco. From childhood, Shia boys are told to cultivate two qualities. The first is entezar, the capacity patiently to wait for the Imam to return. The second is taajil, the actions needed to hasten the return. For the Imam's return will coincide with an apocalyptic battle between the forces of evil and righteousness, with evil ultimately routed. If the infidel loses its nuclear advantage, it could be worn down in a long, low-intensity war at the end of which surrender to Islam would appear the least bad of options. And that could be a signal for the Imam to reappear."

In the same boat

Tuesday, April 18th, 2006
The Age reports: "The Australian Bureau of Agricultural and Resource Economics estimates Australia's oil consumption will leap by 66 per cent over the next 25 years, cutting oil self-sufficiency to just 50 per cent by 2029, compared with about 78 per cent now...the bureau warned that net oil importers such as Australia would be forced to rely on the Middle East and North Africa for supplies, regions pocked with geopolitical uncertainties."


Monday, April 17th, 2006
In a much touted experiment initiated a few years ago, the World Bank financed part of a big project to build an oil pipeline from Chad to Cameroon. In order to try and ensure that massive revenue influx from the pipeline would be used to aleviate poverty in Chad and Cameroon rather than be funneled into the pockets and warchests of those countries' deeply corrupt and human rights abusing governments, the WB required as a condition for participation serious oversight measures over the use of pipeline revenue. Alas, the experiment appears to have failed. Last December Chad passed a law, roundly condemned by the WB, allowing the regime to tap into the oil revenue as it wishes (Chad was recently ranked the most corrupt country in the world, so we'll leave these wishes up to your imagination.)
The WB decided to show some teeth, and froze oil profits in an escrow account until Chad reverses itself and agrees to honor its contractual obligations regarding the use of funds.
Now, Chad's regime has responded with oil blackmail demanding $100M from the account or else it will stop oil production. In a skittish oil market skirting $70, it will take significant strength of will on the part of the WB to withstand the threat. Stay tuned.

non-OPEC supply not keeping up

Wednesday, April 12th, 2006
The International Energy Agency notes that "Bad weather, mechanical problems, start-up delays and strikes have affected Argentina, Brazil, Ecuador, Bolivia, Peru, Canada, India, Vietnam, Sudan, Chad and Yemen" which means that non-OPEC supply is not rebounding as expected. That means dependence on OPEC is growing.

Sec. Rice: Energy politics have warped diplomacy

Tuesday, April 11th, 2006
Secretary of State Condeleeza Rice, testifying in front of the Senate Foreign Relations Committee last week:

"We do have to do something about the energy problem. I can tell you that nothing has really taken me aback more, as Secretary of State, than the way that the politics of energy is -- I will use the word 'warping' diplomacy around the world. It has given extraordinary power to some states that are using that power in not very good ways for the international system, states that would otherwise have very little power. It is sending some states that are growing very rapidly in an all-out search for energy -- states like China, states like India -- that is really sending them into parts of the world where they've not been seen before, and challenging, I think, for our diplomacy."


Tuesday, April 11th, 2006
A recent ExxonMobil ad makes an excellent point:

"America has made progress since the 1970s ?energy shock?. The U.S. economy today is nearly 50 percent more energy-efficient than 30 years ago. Every form of transportation ? planes, trains and automobiles ? now benefits from improved fuels an engine systems.

"So why is it that despite this overall progress, the average fuel economy of American cars is unchanged in two decades?

"It?s because underlying engine efficiency gains have been largely offset by the increasing weight of vehicles, reflecting a growing share of the market moving to light trucks and sport utility vehicles."


You can read a Chrysler spokesman's response yourself. His basic point is that "greed by the big oil companies" is to blame for high gas prices. Hm.

Let's set the record straight. Oil prices are dynamically determined in a global market. Iinternational oil companies, such as Exxon, Shell, BP, etc, own about 6% of world oil reserves and have access to under 25% of world reserves. Most oil reserves are controlled by governments that severely limit or even forbid foreign access to their fields (e.g. Saudi Aramco, controlled by the al-Saud family, owns about a quarter of the world's oil reserves). In other words, international oil companies have very little control over the global oil market, especially today, when any bad guy with a bomb can send prices soaring. In an age of increasing terrorism against oil infrastructure, and instability in oil producing countries, high oil prices are here to stay. Auto companies that don't want to get their clocks cleaned by more nimble competitors should take heed of that fact and adjust their product lines accordingly.

On the House floor

Tuesday, April 11th, 2006

Watch Cong. Jack Kingston (R-GA) urge his colleagues to cosponsor HR4409, The Fuel Choices for American Security Act, the bipartisan bill he introduced together with Cong. Eliot Engel (D-NY) to reduce America's dependence on foreign oil.

Is your Representative on board yet?

Kudos to Senator Kohl…

Monday, April 10th, 2006
...for becoming a cosponsor of S.2025, The Vehicle and Fuel Choices for American Security Act, based on the Set America Free blueprint for energy security. Is your Senator on board yet?

Sign of the times

Monday, April 10th, 2006
The WSJ features a tip of the week today titled "Tweak Car, Save on Gas" summarizing tips from the DOE's fuel economy guide.

We've been posting tips on what you as an individual can do to reduce your oil use - please do your part! Today's tip: Replacing a clogged air filter can improve your car's gas mileage by as much as 10% - that's over 5 weeks worth of saved fuel a year.

Lower your energy bill with smart landscaping

Monday, April 10th, 2006
Landscaping your home for energy efficiency can reduce your home heating and cooling bills. Some tips from the DOE.