Posts Tagged ‘Saudi’

As Syria Continues To Simmer, Lebanon Remains in Limbo

January 16, 2013

Pat_BeirPatrick Henningsen
21stCentury Wire
Jan 16, 2012

BEIRUT – On arrival to Lebanon’s capital city, all seems very functional and normal on the surface, as the city runs business as usual.

Below the surface however, there is a feeling of trepidation, an unspoken collective worry that a city and country who has gradually managed to pick up the pieces from the decades-long conflict which stretched through the 70’s and 80’s, an Israeli occupation of its south, followed by a brief, albeit destructive, ‘33 Day War’ with Israel in 2006 – might once again be dragged into another sub-regional conflict. It goes without saying that police and security services in Lebanon are on high alert.

Tourism Hit Hard

The neighboring conflict has also had a very negative impact on Lebanon’s tourism, keeping away the much-needed outside currency for which many jobs, independent hotels and other SMEs are dependent for their economic survival. But despite the recent problems, Beirut is still moving ahead, still attracting some foreign investment made visible by the hundreds of new building projects springing up all over the city. And as expected, the restaurants seem busy and the cafes are still buzzing.

Already there is a tangible presence of Syrian refugees in Lebanon and in the capital Beirut, who have fled from the fighting and breakdown of society currently unfolding next door. The impact of the Syrian conflict on its neighbor Lebanon in such a short space of time is substantial.

Latest reports put the number of Syrian refugees recently accumulated in Lebanon at 300,000. This figure is contrasted by the number of Palestinian refugees whose ancestors fled Israel’s ethnic cleanings in 1947-48, still housed in Lebanon today – which is currently estimated at 500,000.

The Issue of Sectarianism

Lebanon is, more than ever, a demonstration of sectarianism par excellence. In of country of 4 million, there is differentiation within the Christian community – Greek Orthodox, Maronite, Melkite, Greek Catholic and Roman Catholic, as well as within and the Muslim community – Sunnis, Shi’ites, and Druze.  In addition to this, there is a substantial Armenian community, a large community of foreign nationals from the US and Europe, Asian and African migrant workers, and a small Jewish community. One might also note that the internal rifts between Christian and Muslim factions are almost as great as the polarity separating Christians and Muslim as a whole.

That said, it is also the only society in the region where contrasting religions and cultures are completely intermingled and where tolerance has evolved into a virtue.

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Co-existance: A scene from a recent Christmas illustrates the country’s diversity (PHOTO: Mary Henningsen)

In its totality, Lebanon consists of some of 19 religions and dozens more ethnic , groups. Many a thesis and book have sought to chronicle (and will continue to argue no doubt) this strive towards cultural détente in the Levant. One such writer is Lebanese-American Professor Walid Phares, who sums up the country’s current alignment as follows:

“Although multi-ethic and multi-religious, Lebanon was viewed by the political establishment as a unitary republic which can only have a majority and a minority. Therefore, and without a mechanism of decentralization, Federation or simply pluralism, that establishment was vying over who really represents the “majority” of all Lebanese, and who reduced to a “minority.” The debate was then about numbers, census, demographic changes, communities who have allegedly increased in numbers because of poverty versus communities who have decreased in numbers because of emigration. But that was a false problem.”

Much of the country’s political energy has been expended over the course of the last half century in determining who is the majority and who is the minority, and although the intention was to present a fair solution to representation in its central government, it has also been the source of internal power-politics, which some believe laid down a fertile soil for the sharp upheaval Lebanon experienced from 1975 onward.

Nowhere is the nation’s simmering ‘political ratio’ reflected more than in its own constitution – a document which goes to extraordinary lengths to secure some form of socio-religious balance. The Lebanese constitution mandates that the office President should be held by a Maronite Christian, the Speaker of the House held by a Shi’ite Muslim, and the post of Prime Minister held by a Sunni Muslim.

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Beirut shoulders a diverse collection of ethnic groups, along with their corresponding political issues (PHOTO: Patrick Henningsen)

Many academics such as Phares, feel that the future would be brighter if Lebanon would embrace its multicultural reality and take a feather out of Belgium’s or Canada’s cap, and consider phasing out its historical obsession with ethnic and religious minorities and majorities. In other words, if Lebanon could embrace ‘multiculturalism’, it wouldn’t need the old system. This idea is easier said than done, as vested political interests and blood spilled over decades has, to a large degree, cemented traditional political and social paradigms into place.

Syria Simmering Next Door

What’s foremost on the minds of Lebanese in 2013 is what will happen with Syria, and will Lebanon we dragged to their war. Alongside this, many are left questioning whether or not Lebanon will ever achieve some form of long-term peace with its southern neighbor Israel. The former is the key to its short-term prosperity, while the latter is the key to healing wounds still festering from the wars, as well as the influx of Palestinians it has had to shoulder since 1948.

The situation in Syria is made even more complex by the fact that a number of foreign powers with vested interests in Damascus regime change are supplying fighters, arms, logistics, money and mass media support – which has always been a recipe for chaos throughout history. Among these foreign actors vying for position in Syria are Saudi Arabia, Qatar, Jordan, Turkey, US, UK and France (somehow, it’s all beginning to look more and more like pre-WWI power-politics).

Syria has long played an overshadowing role in the stability – and destiny of its smaller neighbor Lebanon. The scares still run deep from Syria’s obtuse and often disjointed alliances with different factions over the course of Lebanon’s Civil Wars in the 70’s and 1980’s. The result of Syria’s hand in those affairs has been a dysfunctional, and often times confusing relationship between Damascus and Beirut, as well as the cause for political dysfunction within Beirut itself.

In 2013, however, the alignments are markedly different from previous decades. For starters, Syria, itself, is now a major piece on the global chessboard, not least of all because of its three major allies, all of whom seem to run contrary tocentral planning in the West – namely, Hezbollah in Lebanon, Iran and now Russia. All interested parties see Syria as the key domino, and this, rightly so, is the cause for much worry right now.

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Stunning countryside: Sunset over the historic Chouf mountain range in southern Lebanon (PHOTO: Patrick Henningsen)

Lebanon has a number of internal issues I’m sure it would prefer to sort out first before being dragged into another sub-regional conflagration – like it’s own central government, its economy, its potentially massive tourism trade, and of course, the Palestinian refugee issue.

Yesterday, I was able to travel south the ancient city of Tyre, some 16km from the the Israeli border. The ruins are stunning, but so are the Palestinian refugee camp which runs alongside it. It’s was a little tragic, if not amusing to discover there that some Palestinians in need of rock for building their homes had permanently borrowed some of the antiquity ruins next door. In a certain way, some five millennia of history puts the current protracted upheaval into some perspective.

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Ancient city of Tyre in Lebanon (PHOTO: Patrick Henningsen)

The recent past certainly has pulled Lebanon down in a spiral of social tension and extreme economic strife, but set against the larger backdrop of successive empires and cultures who have been overlaid on to this small, but historically pivotal region, it’s merely the latest chapter in a much larger epic novel. Many people outside of Lebanon – academics, archeologists, tourists – all long to see Lebanon achieve stability and one day showcase its incredible cultural and historical wealth to the world.

In essence, making the difficult transition from a fractured state, to one of stability and eventual prosperity. I talked about this to one long-term Beirut resident, named Jamal, who put it simply, “To do all this, first we need to have peace.”

It’s that simple. On paper anyway.

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Writer Patrick Henningsen is a roving correspondent for the UK Column, as well as host of 21st Century Wire TV programme airing Thursdays at 6pm on PSTV SKY channel 191 in the UK.

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Cameron and Obama’s Hired Thugs Now Butchering Their Way Through Syria

December 7, 2012

These people only care about their own lucrative careers, and a life of priviledge on the taxpayers dime.

21st Century Wire
Dec 7, 2012

What a lark. Directing a war from the comfort of a golf course, or over a warm Cognac at Chequers. While they wine and dine in DC and Westminster, their hired hands work overtime to make rivers of blood in Syria.

Barak Obama and David Cameron, flanked by their ‘diplomats’ Hillary Clinton and William Hague, are all doing their bit to increase the bloodshed in Syria by backing the FSA rebel, al Qaida jihadist terrorists, who are presently working their way through the once stable country like termites eating through a once healthy home.

Blood comes cheap, and with budgets tight at home, western leaders are happy with the current arrangement. Rebel terrorist fighters are being paid between $500 and $2000 per month, and arms are free of charge through various NATO proxies and Gulf States. Their job assignment is a blunt one – to intimidate loyal pro-Syrian citizens, and to butcher thousands of innocent civilians – all in all, inflicting a reign of terror much like that one engineered by Washington in Nicaragua during the 1980’s. This is who Washington, London and Paris are backing in their quest to finally bring Syria under their globalist umbrella.

We have never have witnessed this level of open international criminality and hypocrisy by our puppet leaders in the West.

At least with Iraq, Bush and Blair tried to be creative with their lying by making up unbelievable stories of “mobile anthrax labs”.

Nine years on, our well-paid elite political prostitutes don’t even bother with fish stories, they just put the weapons in the hands of terrorists, and pay these professional murderers to kill indiscriminately.

All this will eventually bring shame to the citizens of western nations in the long run, much the same way that the Nazis brought shame to the German people (but no shame to the corporations, bankers and elites though – because you can only feel shame if you have a conscious to begin with).

They will keep using the same tried and tested methods, unless they can be stopped by their own electorate.

Here is a video promoting Obama and Cameron’s favoured operatives in Syria…

Watch:

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BIG ENERGY: WHY THE IEA SHILLS FOR HIGH PRICED OIL

November 27, 2012

Andrew McKillop
21st Century Wire
Guest Columnist

As the global energy game moves into the 21st century, the curtain is beginning with move back, unveiling the true nature of certain international organisations. The implications of this apocalypse should change to way we look at these institutions.

This year’s World Energy Outlook from the International Atomic Energy Agency (IEA), released in November, went further with the two policy obsessions of the IEA, described as “not very fashionable” by the IEA’s Turkish-born chief economist Fatih Birol in a November 15 interview with European Energy Review.

These “new and unfashionable” policy quests are: energy for all at an affordable price; and the struggle to prevent CO2 levels in the atmosphere exceeding 450 ppm (parts per million) by the 2035-2045 period.

The IEA quickly redefines the keyword terms: energy for all means, in particular, oil supplies for the 28 exclusively OECD member countries in the IEA: the IEA’s foundation in November 1974, after the first Oil Shock, by Richard Nixon and Henry Kissinger, laid down the IEA’s mandate of acting to ensure oil supply security for the OECD, and “affordable priced” oil.

For Nixon and Kissinger, the IEA was a second-best. Their original goal was to invade and occupy Saudi Arabia and ensure the free flow of cheap oil, Iraq-style. Their IEA was therefore set as an organization able to confront the Arab oil exporters using guile rather than force, by playing one exporter off against another with a range of different contract types, building up stocks of oil in the OECD countries, and forcing down oil prices.

This has nothing to do with the IEA’s new struggle against global warming – assuming, for starters, that global warming really exists, and is due to human emissions of CO2 from burning fossil fuels – especially coal, not oil. This new obsession of the IEA has however grown to become its single most important policy theme for advising energy ministries and government deciders in the OECD. And “fighting climate change”, according to the IEA is vital and obligatory.

The struggle needs higher energy prices, carbon taxes, emissions trading, carbon offsets and everything we now associate with “carbon finance”. The IEA’s goal for a “sustainable energy future”, and its related goal of “an efficient energy world” by about 2035 are costed by observers (and by the IEA itself) as anywhere up to $45 – $50 trillion in dollars of 2012 value.

Paying for that needs high-priced energy. The IEA is therefore a “price hawk” for oil. This year’s WEO repeats the IEA’s scenario forecast that by 2017 year average oil prices could attain $175 per barrel. We can change the “could” to “should” after reading this year’s WEO.

BACK TO GLOBAL WARMING

Incredible as it can seem to many, freshly re-elected Barack Obama is giving serious thought and attention to banning, or limiting – or taxing – oil and gas extraction by hydraulic fracturing. One part of Obama’s rationale for this is the “possible GHG (green house gas) release from fracking”. Another is a lot more down to earth. Passing a new energy tax, called a carbon tax, in the USA could garner $100 billion in tax revenues for the Federal government in its first year of operation. Cross party support to a carbon tax is growing rapidly in Congress. The extreme low price of gas in the US, due to fracking, provides an easy tax base for adding a new Federal tax and new State taxes.

In the US and soon worldwide, “fracking” has had and will have revolutionary effects on gas supply and gas prices. The drilling process has brought U.S. energy independence within reach – with the important rider that for now rapidly growing shale oil production, this needs $100 a barrel prices.

Some US oil and gas industry leaders remain enthusiastic but cautious that fracking will be fully endorsed by newly re-elected President Obama and by the majority of US state leaders, but this apparent full or majority industry support is belied by the damage to US energy corporation fortunes already produced by “overcheap” natural gas. There is almost no prospect of natural gas prices, in the US, even attaining one-half of gas prices in Europe and Asia. Gas industry hopes, at present, are that the US will have a cold winter, following a hot summer, and this may boost gas prices to around $5 per million BTU, about one-third of European and Asian prices, which prices gas energy in the US at $29 per barrel of oil equivalent. Oil prices still hover around $110 per barrel for Brent.

Open endorsement of fracking from Mr. Obama and state leaders would make fracking the cornerstone of US energy policy for decades to come. Conversely, if for any reason Obama distances himself from fracking, takes a more cautious and pro-environmental line, argues that fracking has a high climate change impact, and is a “disruptive technology” we may expect major changes – in particular a rise of gas prices in the US. The energy price factor is critical, and for Obama the subject of US natural gas has two tax-grubbing opportunity windows: either tax fracking, that is gas production; or tax gas with a carbon tax “to save the climate”, that is gas consumption. The huge difference between oil prices, on one hand, and gas prices on the other show the size of the tax-raising opportunity in the US.

The economic case for fracking is massive. This year’s WEO report however takes a studiedly neutral line on fracking, which reflects the huge range of opinions, in energy ministries of the OECD countries on this subject. US energy sector leaders, and their political friends in both main parties, have now eased off on the “energy independence” claim for fracking. They are now, more than ever, portraying domestic oil and gas production as a key way of generating tax revenues, spurring job creation in “repatriated industries”, cutting the trade deficit and saving the nation from going off the “fiscal cliff.”

The IEA faithfully reflects this emerging realworld consensus of the political elites. World energy prices should be moved up, not down, “to save the planet”, or at least increase state tax revenues and fight the burden of sovereign debt. Keeping oil prices high, worldwide, and keeping gas prices high, outside the US, are easily made conclusions on the IEA’s main policy advise, from this year’s WEO.

WHY HIGH PRICES: THE INDUSTRY ANGLE

The extreme difference between the case for US shale oil production, by fracking, and natural gas production, by fracking, is very simple to explain. US shale oil producers need high oil prices to “keep on frackin”, and claim to believe that oil prices “will not significantly decline” from curent levels around $100 a barrel. Conversely, US gas prices are the lowest since 1992 and set to stay that way. Gas fracking, in the US, has been too successful. Whatever US gas producers, like Chesapeake Corp or Exxon’s gas subsidiary XTO Energy want, it is not cheap gas.

Fiscal cliff reasoning is that tax reform, to be sure, is vital but the US cannot tax its way out of the crisis. Also, there is no way that savings can rise, the US cannot save its way off the cliff. Chasing growth is fine, but the US cannot rapidly grow its way out of the crisis. The alternate and providential way to make recovery feasible, is domestic energy. As the CEO of the US Chamber of Commerce, Karen A. Harbert, has said: “Every dollar that we generate from energy is a dollar that we don’t have to take out of the Defense Department, the entitlement area, or increase taxes, or send overseas.”

Official optimism that Obama and the White House will recognize that remains high.  While many Republicans and some energy industry leaders have doubted his sincerity, Mr. Obama’s campaign voiced strong support for expanded oil and gas drilling throughout his race against Mitt Romney.

The US will overtake Saudia Arabia as the world’s top oil producing country.

The IEA has played its own role by recently predicting that the US will become the world’s largest oil producer by about 2020, overtaking Saudi Arabia and putting the nation on course to be energy self-sufficient by 2030. Due to fracking, US natural gas output has risen by about 25% since 2007, removing any possible outlook of scarcity. Shale oil could or might do the same thing – but only if oil prices stay high.

This new energy reality puts pressure on the Obama administration to fully embrace fracking and avoid taking steps that could hamper it, many analysts conclude. Maintaining high and rising gas output, and bargain basement US gas prices, creates a huge tax window of opportunity. For oil, the situation is a lot more complex, but the goal of increasing US shale oil output sorely needs high-priced oil. Despite some major States – specially New York and California – remaining equivocal on allowing fracking, state level support to fracking has certainly continued to grow.

SQUARING THE CIRCLE

The probable or possible solution, for Obama and for other OECD country leaderships facing the same dilemma, is already on offer from the IEA, in this year’s WEO.

The IEA’s prediction the US can overtake Saudi Arabia by its oil production, due to shale oil, makes little reference to the oil price background for this forecast. The IEA’s commitment to a high-priced oil future is however clear – very few IEA scenarios give an outlook of oil prices declining below about $75 a barrel. Many IEA forecasts paint a picture of year average oil prices hitting as much as $175 a barrel by 2017. This uear’s WEO repeats the IEA forecast of a year average $215 per barrel by 2030. The IEA may be studiedly neutral on fracking, but its oil price outlook is high, very high.

Almost never given coverage in IEA reports and studies, high oil prices are now treated by the IEA as a major long-term – in fact permanent – part of the global energy scene. For national administrations like Obama’s, high oil prices and high turnover and profits for oil producing companies and corporations also have a simple bottom line: high taxation revenue potentials. The European example – several times cited by Steven Chu early on in his job as US Energy secretary – is that car drivers can be forced to pay $8.50 – $9 per US gallon for their fuel (around $378 per barrel), of which as much as 65% goes to the State as oil taxes. The high profits garnered by European oil companies on their home turfs, also generate large State tax revenues, despite the corporate tax hedging and evasion.

To be sure, “high gas(oline) prices” in the US are a politically sensitive subject, as Chu quickly realised, but little by little, US motorists are learning to think in small litres, not big gallons, and pay more for their fuel. Obama’s renewed “personal conviction” that the world faces a crisis of anthropogenic global warming, the recent hot summer, and hurricane Sandy, both in the US, all play strong supporting roles in the elite quest to raise energy prices – and taxes.

The bad example of fracking – slaying US natural gas prices and making major gas companies unable to pay taxes, or even stay in business – can be prevented from “migrating” to oil and killing the Golden Goose of high oil prices. For this to happen, Obama has to act to prevent oil prices eroding too far. Taxing shale oil fracking “to save the planet” is a certainly possible candidate, for his administration’s fiscal cliff-oriented endorsement of fracking and higher gas prices in the US would make the stark, even ridiculous difference between oil prices, and gas prices, less massive.

The IEA certainly hopes so and stolidly continues to forecast high oil prices.

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Mindless America: The Myth of al-Qaida

September 15, 2012

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Why Attacking Iran Will NOT Work in 2012

January 5, 2012

Patrick Henningsen
21st Century Wire
January 5, 2012

All signs coming out of Washington, London, Paris and Tel Aviv are pointing towards a pre-emptive military strike against Iran in 2012. But a number of key indicators are also pointing towards an unsuccessful, unlikely operation, whose failure could result in a military and economic tailspin from which the United States and Israel are unlikely to recover.

Currently, the US is following a trajectory of past unsuccessful empires that were unable to sustain themselves resulting in an eventual collapse from within. The US is currently running up a budget deficit which is not only threatening to bankrupt its entire economy, but also threatening the hegemony of its sole instrument for advantage and influence on the world stage – the US dollar. Any threat to the supremacy of the dollar is also a threat to the empire.

It is difficult to calculate the outcome of a western attack against Iran -because there are so many variables.

No moral mandate

For centuries, even Rome required a moral mandate as it conquered the known world. As was the case with the Iraqi invasion and occupation in 2003, the West and its Axis powers led by Washington will require a multi-nation coalition backed by some form of moral mandate in order to move forward with their plans.

Previously, a US-UK campaign against Iraq’s alleged weapons of mass destruction was waged through the UN, and was sufficient at the time in achieving a minimal sway in public opinion needed from both the American and British people, justifying their governments’ foreign policy goals enough to get the war off the ground. But the cost in 2012 of pushing forward under false pretences with both Afghanistan and Iraq in 2003, means that the Axis coalition powers have already played their best hand under the current social democratic system.

It is clear now, after multiple failures by the UN’s IAEA to implicate Iran in developing nuclear weapons that a moral mandate is not there, so despite the best efforts of the hawks and FOX News, there cannot be the sway in public opinion needed to move forward militarily. The only remaining technique available to trigger a military conflagration is a false flag attack orchestrated by either the US, Israel or the UK, whereby Iran can be blamed for firing the ‘first shot’.

The war has already begun

As far as the Islamic Republic of Iran is concerned, the war has already begun. US-backed sanctions imposed against the Central Bank of Iran have been put into effect, even though no proof has actually been presented to the UN justifying such a pre-war move. But sanctions are still the first step in a physical war. The result of the Axis open abuse of the UN’s Security Council resolution process, a number of influential nations have already announced their disregard for these US-backed sanctions.

This week, South Korea has announced that despite the White House’s wishes, it will still be buying roughly 10 percent of its crude oil from Iran in 2012. China is also defying the US call for sanctions, stating it will ‘resume its existing trade relationship’ with Iran this year. In 2012, China plans to make Iran its no.2 oil importer, adding to an already existing relationship worth approximately $30 billion per year. The West are in no position to challenge China over Iran at present. This means that the Axis powers will struggle to keep anything near an air-tight international mandate. They may hurt Iran in the short-term, but in the long run, such sanctions will have no teeth.

The cost to America and Europe of dragging out this ‘war of words’

The most likely outcome in the first part of 2012, is the West dragging a war of words via press briefings and imperial rhetoric. An increasingly media savvy Iran will naturally follow suit, winning favour at home as the underdog in this imperial clash. The result is a war of the words in the media.

But even the cost of this ‘posturing war’ to the US and Europe may be too much to bear at this time.

Even the threat of an attack on Iran will automatically drive oil speculators to push up the price of oil futures, which will in turn raise the price of oil at the pump at a time when Western businesses and consumers can hardly afford it. And this series of events is already in motion. The Strait of Hormuz is the world’s busiest oil shipping lane, with 17 million barrels of oil per day passing through. Iranian announcements this week stating they will not only defend their territorial waters, but retaliate by closing the Strait’s shipping lanes if it’s attacked by the US or Israel – have already driven up the global price, with the price of Brent Crude jumping another $5 today to an eight-month high of $111.65 per barrel. CNN reported this week:

Oil prices surged 4% Tuesday, fuelled by continued anxiety over Iran’s growing threat to shut down the Strait of Hormuz after the Iranian military launched a missile test.

“It’s mostly about Iran right now,” said Peter Beutel, analyst with energy risk management firm Cameron Hanover. “That’s the most bullish factor.”

Oil prices jumped 4.2% to settle at $102.96 a barrel. That’s the highest closing price since May 10, when prices ended the day at $103.88 a barrel.

The picture gets progressively worse as the US-Iran face-off continues into 2012. Business Insider released a report today detailing a likely scenario whereby barrel costs skyrocket to $150:

Managers of the Guinness Global Energy fund have warned of an oil price spike to $150 per barrel if Iran were to carry out its threat of closing the Strait of Hormuz and blocking 15% of global oil exports.

“The exports transported through the Strait of Hormuz are equivalent to two Saudi Arabia’s or two Russia’s, so the potential impact on the price is massive. We do not think this will happen but we cannot rule it out completely.”

Cash windfall for the oil industry

OPEC oil producing Gulf nations led by monarchies Saudi Arabia, UAE, Kuwait, Qatar and Bahrain, will certainly benefit financially from any initial UN sanctions as well as any protracted stand-off between the West and Iran fueled by hype, with speculation driving up the price of oil, allowing the producer nations to effectively printing money overnight.

GCC foreign companies and joint ventures include Aramco, Harken Oil (Bush family company), Texas Oil, Union Oil of California, and a host of others. Distributors and retail winners include the likes of Exxon, Royal Dutch/Shell, BP, Chevron, Getty, Phillips,  Texaco, Mobil, Occidental/Gulf and Amoco. Each of these transnational oil refiners, distributors and retailers can expect a cash windfall and a rise in their all-important share prices, but more importantly, the current crisis will be an opportunity for this cartel – to fix a new, higher price at the pump.

Even if the stand-off were to climb down between the West and Iran, and the price per barrel were to somehow drop back below $100, this cartel of oil companies will still work to maintain a new higher overall pricing standard at the pump. Past price relationships between barrel price and pump price will verify this cartel practice. The economic implications, particularly on American and European economies which relies so heavily on petroleum to distribute and deliver staples like food and other day-to-day goods – could be horrific, instigating a wave of inflation on an already inflation-battered US consumer. Likewise, such a crisis will have a negative effect on the value empire’s holy grail – the US dollar.

A spike in US prices will also trigger-off that old predictable debate during the coming 2012 US  Presidential election cycle – over lifting any moratoriums on domestic oil drilling within the United States (drill baby, drill). If any are lifted, again, it’s yet another win for the oil industry and its shareholders.

Risks involved in a regional conflict

For a perspective of the Libyan model of intervention, NATO is unlikely to involve itself in a large-scale military operation in Iran. It would prove too costly from both economic and political standpoints.

Neither the US or Israel has engaged in a bona fide naval conflict in decades. In the case of the US, owner of the world’s largest navy, its last true naval military affair was WWII. As Great Britain painfully discovered during its costly Falkland Island War adventure, even one rudimentary French-made Exocet Missile launched by Argentina below radar, was enough to not only cripple a major piece of its naval fleet, but also enough of a black eye to nearly derail majority public support for their ill-conceived war effort from the opposition and back-benchers home in London.

Similarly, the Iranian defense has the capability to sink not one, but many US Naval ships currently flexing their muscles on the periphery of Iranian territorial waters. Such an event would register with shock and horror in the US public mind, but worse, may be used by Washington hawks to justify a revenge nuclear strike against Iranian civilians. Both Washington and Tel Aviv have already raised the talking point of deploying “tactical nukes” against Iran. Such foreshadowing should not be ignored, as it is often a clear indicator of things to come.

Any nuclear conflagration by the US or Israel would most certainly result in a global backlash against the West – at its worst acting as a procession into the hot stages of World War III – or at its very least, re-balkanizing the geopolitical scene into a New Cold War, with the West on one side and Iran, China, Pakistan, and Russia on the other.

Watch author Patrick Henningsen in this segment from Al Jazeera’s program Empire: Targeting Iran, as analysts spec out potential wargames between the West and Iran:

GCC becomes a target

Another factor seldom mentioned by vocal proponents of regime change in Iran, like Hillary Clinton and neocon war hawks in Washington, is that any attack on Iran will most certainly mean that all US allies in the region will become a potential target. This means it is unlikely that those wealthy and developed GCC countries would remain untouched by a conflict happening only a mere hundreds of miles away. Neither would nearby major US military installations in Iraq, Qatar and Afghanistan. All are likely targets in a hot Iranian conflict.

Petrol monarchies like the UAE (most notably Abu Dhabi and Dubai), Kuwait and Qatar currently rely heavily on a high standard of living and complete domestic security and stability in order to survive as societies. These fragile petrol monarchies rely on a very thin veneer of law and order – one which props up their marketing image of a luxurious “Middle East destination”. Any Iranian retaliation against these fragile US allies would result in a massive flight of persons, ex-pats and financial capital from the GCC to much safer havens – like Europe, the US, or Singapore.

If there is to be a war, it will be the US, UK, France, Israel and their allies who will do the fighting. But the GCC would still need to defend itself from reprisals. In December 2011, the United States announced a $3.48 billion arms deal with the UAE, which included state-of-the-art THAD missile defense systems, as part of a wider American effort to build up missile defenses among Gulf allies to counter Iran. In addition, the US and Saudi Arabia signed a $1.7 billion deal earlier in 2011 to boost the country’s Patriot missiles and Kuwait purchased 209 GEM-T missiles at a cost of $900 million. This regional missile defense strategy will need land-based interceptors to knock out incoming missiles, backed up by a detection network aboard a team of US Navy Aegis-class warships.

Although these are significant acquisitions on the part of the GCC, they are by no means blanket protection from an Iranian retaliation, and are most likely the result of America’s arms industry, in its honored tradition, bleeding the GCC of cash with yet more expensive hardware, a hard sell based on fear and war hype.

Taking all this into account, and noting the incredibly concentration of wealth in the GCC, it’s hard to see a scenario where the monied interests would tolerate such a risk to their progressive Arabian project that they have spend decades investing in and building from scratch.

Post-Bombing Blowback

Aside from the GCC risk, it is with near certainty that one could predict a full-scale regional backlash, and genuine uprising around the Muslim world should the US or Israel come good on their threats of a pre-emptive strike against Iran. Iranian civilian deaths could not be avoided, and hence, their would be a blood price to pay by the West in the eyes of many Muslims. Such a pan-Arab uprising would stretch US and Israel capabilities in the region past their ability to maintain control of the situation. The results for Israel could be dire in such a scenario, and it’s only expected that a tit-for-tat would spiral into a long regional conflict.

The West’s best chance to weather such a storm would be to overtake, or set up a military base in either Lebanon or Syria in order to neutralize traditional Iranian ally and Israeli opponent – Hezbollah – currently based in Lebanon. Without wiping out Hezbollah’s military capabilities, Israel cannot safely move forward with a unilateral/US attack on Iran. The time table for such a Syria or Lebanese take-down would put any possible attack on Iran well into late 2012, or even 2013 and beyond.

A Giant Dirty Bomb

If the US or Israel were to hit any of the said Iranian nuclear facilities or reactors, it has the potential to become a giant ‘dirty bomb’. In such a scenario, the civilian deaths could exceed 1,000,000 and a radioactive fall-out would certainly spill over into the surrounding US clients like Afghanistan, Saudi Arabia, the UAE, Qatar, Iraq, Kuwait and possibly as far as Israel/Palestine, Turkey, Georgia, Pakistan, India and parts of southern Europe.

Following such a radiological event, the West would certainly be blamed for any and all environmental damage and death which occurs, resulting in a massive loss of international face, followed by massive financial reparations which would ultimately cripple their already weak economies. Worse than this however, it would certainly throw the global economy into a long economic depression.

Most sane analysts would agree, this is a risk too high, and a price too high to pay. So the real question remains then, are analysts in Washington and Tel Aviv sane enough to make policy decisions?

An Israeli driven effort

Like previous AIPAC campaigns to hit Iraq, the current drive to isolate and demonize Iran has been cooked up in the Israeli lobby’s kitchen. Due to a revolving wheel of campaign contributions to each and every US Congress and Senate candidate, ‘putting Israel first’ has become a top priority for any politician with any ambition in Washington. If any official steps out of line and criticizes Israel, AIPAC functionaries like the ADL and SPLC are sprung into action and a PR campaign is usually waged against the offending public official.

The Israeli lobby will claim that a pre-emptive strike on Iran is needed because Iran has stated that it wishes to, “Wipe Israel off the map”. Most war hawks would be surprised when they learn that such words were never actually spoken by Iran’s President Mahmoud Ahmadinejad. Shouldn’t this revelation change the entire Israeli perspective? It should, but it doesn’t. Regardless of any evidence to the contrary, the lobby and its media partners will continue repeating their faux version of the event as if it were something that actually happened, or spelled a genuine threat to the physical state of Israel. Likewise, US politicians will in turn acknowledge the lobby’s version of events, themselves repeating the very same faux threat – as if this somehow justify plans for a pre-emptive strike on Iran.

What is most important here again, is that at no point during any of this political maneuvering, could either the US, or Israel produce any compelling evidence at all that Iran has, or is near possessing a nuclear weapon in their military arsenal. Even if they could fabricate such evidence to start a war, there are simply too many pieces out of place on the grand chessboard right now to indicate an imminent attack on Iran in the spring or summer of 2012.

So far, however, the clear winner is the oil industry and the OPEC nations, winning a shift in wealth from the global middle class into the hands of petrol monarchies and oil company shareholders.

THE CHINESE CAR BOMB

March 7, 2011

By Andrew McKillop
21st Century Wire
March 8, 2011

We are facing a very real kind of event horizon. Car industry and car fleet growth is accelerating so fast that we may find ourselves in a “can’t get there from here” resource pinch, with no alternative and no way out, starting with an oil supply shortage.

Until very recently exploding numbers of oil- and gas-fuelled road vehicles, including cars, buses, trucks, motorcycles, scooters, mopeds, all terrain ‘fun’ vehicles, and agricultural ‘off-road’ vehicles increasingly used for road transport (Footnote) have drawn much less attention than human population numbers. This is curious given the rate of increase, shown by a few simple figures: in 1939 the world’s roughly 2.3 Billion inhabitants shared a total of around 47 Million motor vehicles.

Today’s 6.3 Billion human beings have around 775 Million motor vehicles to fuel, repair, park and run, almost exclusively using petroleum and natural gas. Human numbers increased less than three-fold, but the world’s car population grew by a staggering 1750%.

22 DAYS LATER: Chinese traffic jam in 2010 saw one of the worst back-ups in history.

THE EXPLODING NUMBERS

Today’s human population is growing at less than 1.4% per year (giving about 85 Million annual increase), but the world’s car and private motor vehicle fleets are growing at close to 7%-per-year. Production of oil-fuelled motor vehicles is therefore increasing at least 4 times faster than human numbers in percentage terms. In several ‘latecomer’ and ‘catch up’ countries vehicle manufacture is increasing output and utilisation of road vehicles at 10-15 times their rate of human population growth, and at several times their rate of economic growth (Reference 1). One thing is sure: motor vehicles, a key part of Consumer Civilisation, generate dramatic increases in personal consumption of oil and gas, probably in the range of 50-100 times comparing ‘before car’ and ‘after car’ consumption habits or ‘needs’.

THE UPPER LIMITS

Just as with the ultimate Heat Limit on world human population numbers (see ‘Moral Dilemma’ by Ross McCluney, in ‘The Final Energy Crisis’, Pluto Books, ISBN 0745320929), fixing a true and final limit on human numbers, there are set and final limits on the possible growth of motor vehicles. These finally include the world’s ultimate reserve of petroleum, unless we wish to fantasize, along with then US Energy Secretary Spencer Abraham, by giving any credence at all to his November 2002 statement that the world « will have a total of 3.5 Billion motor vehicles by 2050 ». If this fantasy fleet were to come about – adding about 2.7 Billion more vehicles to the world’s current stock – the fuel requirements for 3.5 Bn motor vehicles, at current average consumption rates (see calculations at end of article) would increase world oil consumption by about 70%. Because it is simply impossible to fuel this Fantasy Fleet on oil and gas, Abraham added that they would ‘of course run to a large extent on hydrogen’ (the ‘large extent’ was not defined by Mr Abraham), and the production of that hydrogen fuel he also of course did not define or explain.

To set the ultimate limit for the growth of petroleum and gas-fuelled vehicles we can start with the near-ultimate example of a ‘catch-up’ country in the car business – Japan. Even as late as 1949 Japan still had some 146 500 horse- and ox-drawn carts compared with less than 200 000 trucks (and about 100 000 private automobiles). But through a self-reinforcing, very high gain feedback process of growth, with annual growth rates typically of 15% – 20%, year-in and year-out, Japan’s private car fleet explosively grew from these small beginnings to its first million in 1963, to 5.2 Million in 1968, and to some 26 Million by 1982. Annual growth rates had by then considerably slowed, but fleet size effects still permitted this slowed growth to give impressive annual increases; today’s total number is about 45 Million private vehicles (References Tadashi, Shimokawa, Japan Dept Transport).

To get on the growth track, Japan’s administrative élite, even after the culture shock of atomic weapons use against their civilian population, and military rule by US governor MacArthur, had to throw off mindsets dating from the 1918-39 interwar period, when road vehicles were seen as simple ‘feeders’ for short-haul transport to rail, canal, river and coastal shipping points or transport nodes. Japan’s domestic policymakers, at the start of the post-war period under US occupation, thus preferred to spend money on repairing and improving the rail, shipping and public transport sectors. In addition their policy view downgrading road vehicles was reinforced by Japan’s terrain, its dense urban centres, and by Japanese feelings of doubt on the safety of cars: « Because of slow improvement of the country’s narrow, often mountainous roads, the government tended to discriminate against motor transport on grounds of road safety. City streets were often dangerous too. There was strict traffic control, rigorous tests for driving licences and careful inspection of all new vehicles, both home manufactured and imported. A high standard of maintenance was promoted and the manufacture of reliable, safe cars was encouraged » (Ref Shimokawa).

JAPAN: Early years saw public transport planning out-pace the motor car.

The date at which Japanese transport policy switched to outright pro-car can be set as the period of about 1955-60, the period in which animal-powered transport completely disappeared in the agriculture sector, together with the catch-up economic growth that Japan experienced from around 1958. Despite this, however, as late as the early 1960s, Japan’s Economic Planning Agency continued to purposely underestimate forward growth of road needs for the exploding vehicle population (Reference Konno & Okano). Today, as the ongoing ‘restructuring’ of Japan’s national railway corporation proves – that is the effective bailout of an underfinanced, neglected public transport system – public rail transport in Japan, as in its ‘US role model’, is a dwarf compared to the road vehicle sector. As elsewhere in the “liberalized economies” of the aging OECD group of countries, Japan’s national passenger transport depends almost entirely on the existence of oil-fuelled private road vehicles running on oil-based asphalt and bitumin.

THE SECOND COMING

While the USA, and surprisingly New Zealand, were the fastest growing countries for motorization in the entire period of 1905-1940, achieving ownership rates for private cars of nearly 300 vehicles/1000 inhabitants in 35 years despite starting from a near-zero base (Reference Barker), their growth rates peaked out well before World War 2. These countries, with all the older urban-industrial countries, however experienced a “second coming” from the early to mid 1950s. Countries such as Canada, Australia, Italy, UK, France and Germany, experienced a new car ownership growth bulge in the 1950-70 period. Typical growth rates were around 500% in 20 years, for example the UK with a 6-fold growth in car and private vehicle numbers through 1950-70  (Reference SMMT). At the time of the first Oil Shock of 1973-74 it was only Japan that experienced a strong but short downturn in this ‘motorization’ trend.

From no later than 1975-80 the tried-and-tested ‘economic growth model’ of car-based and car-oriented growth- a key concept in economic mythology from the times of Henry Ford in the 1920s USA, was transferred and applied with full force in several non-traditional car owning democracies, and dictatorships of the time, including South Korea, Brazil, Malaysia, Turkey, Iran, the Soviet Asian Republics. Somewhat later (from the later 1980s) but with truly unlimited upside potential, this growth strategy was adopted by China and India.

Today, in countries such as  Germany, USA, France and Australia there is no difficulty finding 3 and 4-car households, nor 25-mile tailbacks every weekday on every main highway into congested, sprawling and polluted downtown centres. The same is to be found in Sao Paulo, Bangkok, Ankara, Seoul and Kuala Lumpur. Shanghai is already close behind in the race to have daily crawl-ins on its fast expanding auto routes and urban highways.

Explaining the “oil demand miltiplier” inherent in motorization, a vast range of products arising from the magic of petroleum-based chemicals industries are essential to the modern private motor vehicle industry, notably plastics and resins. As in Henry Ford’s time – when animal bone and ligaments, skins, wood and wood resins were still extensively used in car manufacture – the economic multiplier impacts of ‘unfettered growth’ of the car industry remain highly attractive to economic planners, resulting in motorization continuing to spread out and away from the core countries of the ageing ‘advanced industrial’ OECD North.

EVENT HORIZON: THE ULTIMATE LIMIT

There are however distinct limits on the ultimate reach of this tried-and-tested ‘growth strategy’. Today’s private car and small vehicle ownership rate in the USA is around 745 vehicles / 1000 inhabitants, with lower but similar rates (around 500-650 vehicles/1000 population) obtaining in Belgium, Germany, France, UK and other car-saturated economies. Applying the same ownership rate to India or China, and assuming these motor vehicles would, could, may or might be oil or gas-propelled, results in absurd numbers for annual oil or oil equivalent gas consumption. In the case of China’s car fleet we are already, using World Bank data for 1990-99, at the fantastic but real average annual growth rate of about 19%, doubling China’s car population every 4 years. (Footnote/Recent growth).

The following is of course a fantasy projection, but its only proviso is that India and China should firstly sustain the growth rates for car production and ownership that were experienced by the USA, New Zealand, Canada, Australia, Japan, France, Germany and other ‘leading industrial nations’, for a period of less than 20 years. If their growth rates are higher, the period needed to attain ‘saturation ownership’ (the USA’s current rate) will of course be lower. If China and India were to achieve this, the entire oil exports of the OPEC group would not even satisfy these two country’s car fleet requirement for oil (or LPG/LNG) !

So the fantasy ‘Hydrogen Economy’ is therefore the only way out for current political and business leaderships – when or if they care to forecast any further out in time than a mere 5 – 10 years.

Average European vehicle kilometrage per year EUR-6 (core 6 nations) is 22 000 kms/vehicle/year.

EUR-15 average is lower. Both average figures are rising with economic growth and declining real cost of energy. Average vehicle occupancy 1.5 persons  Annual mileage averages are not set to fall, nor occupancy figures to rise except by decree- or other draconian measures resulting from real oil shocks, for example oil prices well above $100/barrel.

Average fleet-wide car fuel consumption in Germany is 7.9 L/100 kms vehicle but we will assume that this is rapidly reduced, for India and China, to two-thirds of that value, or 5.267 L/100 kms. We will also assume that India and Chinese cars will only travel 18 000 kms/year.

Total oil consumption at 5.96 Barrels (948 Litres) per car per year is as follows:

Using future population figures (assuming complete zero population growth) of 1 Billion for India and 1.25 Billion for China, we obtain a Future Car Fleet at the ‘saturation ownership’ rate of 745 vehicles/1000 population of 745 Million vehicles (India) and 932 Million vehicles (China). At 5.96 barrels/year for each vehicle their consumption is approximately 5.54 Billion barrels/year for China and 4.44 Billion barrels/year for India… for a grand total of almost exactly 10 Billion barrels/year, and equivalent to 27.4 Million barrels/day. This is about three times the total oil imports of all EU countries in 2002, nearly 3 times the maximum possible production capacity of Saudi Arabia, and slightly more than the total average export volume of the OPEC group around mid-2003.

(Calculations by A McKillop)

FIGHTING FOR FUEL

We therefore have a laughable fantasy, or an insight into exactly why three nuclear armed powers, China, India and USA, are ever more likely to fight amongst themselves, or confront EU importers, including 2 nuclear weapons states for the last oil reserves of the planet. Under any hypothesis – excluding childish technological fantasies and utopias such as those trotted out by Amory Lovins or US Energy Secretary Abraham – there is simply no prospect of China, India, or other countries including Malaysia, Brazil, Turkey, Iran, Ukraine, Mexico, the Czech Republic and other emerging car producers being able to achieve US, West European, Australian or Japanese rates of car production and ownership. The Chinese Car Bomb therefore ticks onward, as each day another estimated 112,190 cars are produced (Reference Motorcity). Each one requires up to 55 barrels of oil equivalent to produce, and must operate on bitumin based highways, on tyres that themselves are about 40% oil by weight.

Not only is this explosion of the world car fleet a serious threat to the Earth’s environment, but through its oil demand impact most certainly will become a major threat to international peace and stability. Meanwhile, our friends at Central Planning are still busy debating which is the ideal green dream car. So it looks as if plans to diffuse the Chinese Car Bomb and its little sister- the Indian Car Bomb, will not be underway anytime soon.

COPYRIGHT ANDREW MCKILLOP 2011

Andrew McKillop is guest writer for 21st Century Wire. He has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

REFERENCES AND FOOTNOTES:
Footnote – Offroad and agricultural motor vehicles are in fact extensively, perhaps increasingly used for human and good transport on roads and tracks. This is notably the case in China and India, where the current lack of road motor vehicles incites the usage of agricultural vehicles for human transport (passengers riding in towed trailers). It can be noted that fuel efficiency of these ‘road vehicles’ is very low because of technical reasons, that is vehicles designed for slow speed offroad being used for road transport.
Reference 1 http://www.geocities.com/MotorCity/Speedway/4939/carprod.html. This site provides recent data on worldwide car production (from 1995). The very fast growth rates of car production in several countries (10-15 times their population growth rates) is clear.
References Tadashi, Shimokawa, Jap Dept Transport – M Tadashi, The Motorisation of Cargo Transport in Japan, Hakuto-Shobu, Tokyo, 1982. Japan Dept of Transport for recent data.
K Shimokawa, Japan The Late Starter who Outpaced her Rivals, in The Economic and Social Effects of the Spread of Motor Vehicles, edited T Barker, Macmillan, UK, 1987
Japanese Dept of Transport, White Paper on Transport, Japan Govt, 1984
Reference Shimokawa, as above
Reference Konno & Okano – G Konn and Y Okano, Study of Modern Motor Transport, Tokyo University Press, 1979
Reference Barker – as above
Reference/ Recent Chinese car sales growth – China’s car sales hit one million for first time
[REUTERS DECEMBER 16, 2002]
SHANGHAI: Annual car sales in China have topped the one million mark for the first time as a rising urban middle class crowns the world’s fastest-growing market for foreign automakers, industry executives said on Monday.  An official at the China Association of Automobile Manufacturers told Reuters 1.02 million cars were sold in China in the first 11 months of this year, representing a stunning 55.4 per cent jump from the same period in 2001.
Reference SMMT –  SMMT (UK Society of Motor Manufacturers and Traders) statistics for 2001 showed the UK having 28.6 million cars and 3.5M commercial vehicles in use. This compares with the UK 1951 car ownership figure of 2.3M, 1971 of 12.35M, and 1981 of 15.63M.
Reference Motorcity – as above. This indicates total production 2001 being about 40.9 Million private cars, or about 112 190 per day, worldwide.