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Resource nationalism and globalization
Quote: For those of a
[quote] For those of a geo-political (or Americo-centric) cast of mind, this development puts into perspective the otherwise short-sighted calls by McCain to "drill here, drill now." [/quote] Precisely. This is de facto evidence that McCain's policy is on target and hardly short-sighted. As McCain and others in the conservative movement have pointed out, it's time to exploit domestic hydrocarbon production while expanding alternative clean energy like nuclear and geothermal. What's short-sighted is McCains unwillingness to budge from drilling in Anwar. I don't care if you have to club baby seals and drill through a polar bear's head. Drill everywhere and immediately.
Quote: I don't care if you
[quote] I don't care if you have to club baby seals and drill through a polar bear's head. Drill everywhere and immediately. [/quote] Sigh. Spoken like a real addict. Anything for a fix, right? Meanwhile, arch-capitalist Boone Pickens--erstwhile sugar-daddy of the Swift Boat Veterans--is telling TOM that
[quote] any credible domestic energy policy must reduce our foreign dependence Of course, T. Boone only has a financial stake in the policy, not an ideological one. And TOM would be a lot more credible if he bothered to show up for any of the Senate votes on alternative energy (he's missed eight straight). Looking at this issue through a partisan-political lens strikes me as the very definition of short-sightedness, though. As I read it, the article points to a crucial vulnerability in the globalization regime. Resource nationalism means that Russia can make its oil exports an instrument of national policy (as it did in Belarus, if I recall correctly), whereas the supermajors are bound to produce for the world market, i.e. the highest bidder. So even if TOM drilled in your backyard, it wouldn't necessarily benefit US consumers, just allow the Chinese to stink up the Beijing air for a bit longer.
Quote: Resource nationalism
[quote] Resource nationalism means that Russia can make its oil exports an instrument of national policy (as it did in Belarus, if I recall correctly), whereas the supermajors are bound to produce for the world market, i.e. the highest bidder. So even if TOM drilled in your backyard, it wouldn't necessarily benefit US consumers, just allow the Chinese to stink up the Beijing air for a bit longer. [/quote] Russia has already made oil an instrument of national policy. Furthermore, there is a significant argument that Russia is attempting to cause turmoil and stifle competition to maintain high levels of oil revenue upon which it depends. And I do not necessarily disagree with T. Boone Pickens, though I think 30% in 10 years is impossibly optimistic given the range of products produced from petrochemicals. I suggest 30% in 50 years is more likely. The fact remains that energy is the lifeblood of any country's economy and to keep the price low, national policy requires increasing supply on the world market to undercut Russia's leverage and decreasing demand through diversification. Great article on point by Dick Morris. [quote] RUSSIA AND GEORGIA: THE REAL STORY
By DICK MORRIS & EILEEN MCGANN
Published on DickMorris.com <http://pr1.netatlantic.com/t/7530928/30194706/588352/0/> on August 20, 2008.
Printer-Friendly Version <http://pr1.netatlantic.com/t/7530928/30194706/593511/0/>
Meet Igor Sechin, nominally the Deputy Prime Minister of Russia. In fact, he is the dominant power in the Kremlin. In Russia, the speculation is over whether Putin is his puppet! According to top Kremlinologists, Sechin was calling the shots when Russia invaded Georgia.
For more information, go to www.robertamsterdam.com! <http://pr1.netatlantic.com/t/7530928/30194706/593512/0/> Take a minute to look at Sechin’s photo. It explains all you need to know about him!
Robert Amsterdam, an international lawyer who knows all about the inner workings in Moscow, calls the invasion, in part, "an effort to sidetrack Dmitry Medvedev,” the newly elected Russian president who has focused on bringing to Russia the rule of law. Determined to show real power and to trivialize the legalisms of Medvedev, Sechin and Putin ignored the Russian president in invading their neighbor.
But Amsterdam makes a larger and more important point: The corporatist leadership of Russia, entirely dependent on oil and gas revenues for its economic viability, has an essential stake in promoting global instability. A stable world encourages a drop in oil prices. It is no coincidence that Russia is at the core of the two major threats to world stability: Iran and the invasion of Georgia. Worried by a major drop in oil prices, creating severe economic problems for Russia, the Kremlin has a cosmic interest in promoting turbulence whenever and wherever it can.
Georgia represents the last pro-Western bridge to bring oil and gas from the central Asian former Soviet states to t he west. Three times as much oil flows over rail tracks on the bridge near Gori which Russian aircraft destroyed as through pipelines from Russia.
Bush’s response to the Georgia attack has been prompt and skillful. Introducing American troops into Georgia on a humanitarian mission makes it clear to Russia and to the Georgian people that the United States will not abandon its ally, but it does so in a way that deters further Russian moves.
But the key answer came not from the U.S. but from Poland which approved having a missile defense shield on its territory. Polish Prime Minister Donald Tusk, elected on a platform of opposing deployment in Poland, quickly reversed field and saw the light when Russian troops began rolling into Georgia. Urgent western attention to the application of Ukraine for NATO membership will further underscore to Russia how short-sighted its invasion of Georgia really was. The backlash in Europe, particularly in Eastern Europe will prove to be far more devastating to Russia than Putin…and Sechin…may have anticipated.
For more information, go to www.robertamsterdam.com <http://pr1.netatlantic.com/t/7530928/30194706/593512/0/> ![/quote]
'I don't care if you have
'I don't care if you have to club baby seals and drill through a polar bear's head.' Sadly, some people will do anything to resist changing their lifestyle and comfort that comes from cheap oil . What a sad stone's throw it is from Mikes quote above to the one below. 'I don't care if we have to invade some soveriegn country and destroy the lives of millions'
Amusing Kremlinology,
Amusing Kremlinology, though it strikes me as a wee bit theological to say that "Kremlin has a cosmic interest in promoting turbulence whenever and wherever it can."
[quote] energy is the lifeblood of any country's economy and to keep the price Isn't this an argument that the US should subsidize Chinese economic growth? That national policy should, first of all, serve the needs of the world market? No serious geologist thinks there's enough undiscovered oil in the US to make more than a marginal difference in the market, and it would take 5-7 years to reach the market in any case. So the "drill here, foul my nest" talk is all swagger, fire-breathing as a substitute for hard choices. In this case, at least, I guess I'm more of a believer in the market than you are. Stop the subsidies. Let the price at the pump reflect the true cost of oil, and find ways to break (or at least brake) the dependence on oil ("foreign" being the weasel-word in that hackneyed phrase). Sure, there's going to be some pain (I'm feeling it) and significant adjustment costs, but better we keep the goal in mind and move now, rather than kicking it down the road for another 40 years.
Quote: Isn't this an
[quote] Isn't this an argument that the US should subsidize Chinese economic growth? That national policy should, first of all, serve the needs of the world market? [/quote] Hmmm. Not sure how you came to first conclusion. The national policy does serve the needs of the world market--it just doesn't serve their wants. Every nation decides whether or not it is in their national interest to subsidize energy. Many economies already do that; China and India most notably, but in a sense, tax breaks in the US also subsidize cheap energy, don't they? [quote] No serious geologist thinks there's enough undiscovered oil in the US to make more than a marginal difference in the market, and it would take 5-7 years to reach the market in any case. So the "drill here, foul my nest" talk is all swagger, fire-breathing as a substitute for hard choices. [/quote] There is a reason Nancy Pelosi will not answer a direct question about the "Destin Dome," the largest deposit of natural gas in North America within easy exploitation. It just does not meet her agenda as demonstrated by her refusal to allow an up or down vote on drilling. The often quoted 5-10 year delay is primarily an invention of beauracracy and red tape. There are fields that could produce in months instead of years. The mere announcement of a drill here, drill now policy alone will dramatically affect the investor (speculator) market and oil prices will tumble to pre-2006 levels. We have the largest coal reserves in the world, far exceeding equivalent Middle East oil reserves. Technology is evolving which make coal-oil commercially viable, along with shale oil, and the tar sands of Canada that are creating a boom up North. Drill here, drill now, and flood the market with cheap energy, removing the leverage of despotic nations. And yes, still diversify towards energy independence. Fire up those nuclear plants instead of coal and natural gas fired generators.
Quote: The mere
[quote] The mere announcement of a drill here, drill now policy alone This you call "reality-based" analysis? Pull the other one, why don't you. (That's my Yoda syntax) Honestly, I don't know why you even pretend to believe in markets. If cheap oil were to be had by wishing ("the mere announcement..."), don't you think everyone would have it? It's not: hence the leverage. As long as the demand increases faster than the supply, the price will go up. And demand is increasing: just look at Beijing, or Bangalore. (Do the Chinese still count as a despotic nation, in your book? Let's not even think about how much leverage they have over the US economy.) It took $4 a gallon gas for the US auto industry to finally decide they should do something besides pump out SUV's, after decades of whining and moaning that higher fuel efficiency was just too tough. When people have to pay for what they consume, they start to take it seriously. What you and TOM are saying is, "Keep partying, people; we can have it all--in fact, we already do!" Hakuna-matata.
Actually the recent rise in
Actually the recent rise in oil prices is not all down to supply and demand. Look at the activity in the Futures Market. I do think that we (Europeans particularly) need to look at energy sources and security. The same is true in the USA, so sell the SUV !
Quote: As long as the
[quote] As long as the demand increases faster than the supply, the price will go up. [/quote] Brilliant! But the price will also go up in response to the futures market as Owly and I have both pointed out. Not to mention the emotional nature of the market reacting to potential disruptions in production or distribution (weather, war, etc. etc.) In other words, it ain't all supply and demand, my friend. Just the mere announcement from the President that he had lifted the executive ban on offshore drilling and challenged Congress to do the same had a sustained depressing effect on oil futures along with decreased demand in the US. In October, the Congressional ban on drilling will expire unless Congress takes an action to continue it. Yep, just in time for the elections, a Democrat Congress will be exposed for the partisan power grabbing Leftists they really are. Yes, I think it's time to go shopping for a big honkin' AMERICAN SUV...maybe an Escalade, what do you think?
Quote: Just the mere
[quote] Just the mere announcement from the President that he had lifted the Huh? [quote] Supply concerns send oil surging 
Oil prices have risen in recent days
Oil prices have passed $122 a barrel on geopolitical worries after a missile shield deal between Poland and the US.
The US has sealed an agreement to station parts of its missile "Also the dollar is weaker," he added.
When the dollar weakens investors tend to place their money in In addition when the greenback falls in value it makes commodities relatively cheaper to buy. [/quote] BBC 21 August 2008 16:28 UK
I hear there are great deals on Escalades right now; they'll probably pay you to haul them off the lot.
Don't know what an
Don't know what an 'Escalades' is. We call SUVs 'Chelsea Tractors'. They are usually used by women to take their ghastly children to school. Why they can't damn well walk is beyond me.
An Escalade is the Cadillac
An Escalade is the Cadillac SUV: a 403hp engine, getting a whopping 12mpg in city driving. If you go here, you'll see someone who looks suspiciously like Bob Dylan lending his outlaw image to this American dinosaur.
Quote: Oil prices have
[quote] Oil prices have passed $122 a barrel on geopolitical worries after a missile shield deal between Poland and the US. [/quote] Well...I guess that proves my point it's not all supply and demand. A jump of $6 in one day is not justified by anything, least of all Patriot missiles in Poland. ...And where did Cadillac get my picture?
Quote: where
[quote] where did Cadillac get my picture?[/quote] There's your explanation--they heard you'd be hawking those Escalades, so they knew they could jack up the price of oil. Don't the Secret Service use
Don't the Secret Service use those ?
Quote: Don't the Secret
[quote] Don't the Secret Service use those ? [/quote] I don't think so. The Chevy Suburban is commonly used by the government and its a monolith even bigger than the Escalade; one that is often armored. I rode in the US Embassy's armored Suburban in Mexico City last spring and that thing is a TANK.
Michael Klare in the LRB
Michael Klare in the LRB reviews the facts about oil production, rising prices and growing demand. [quote]
Although there are tens of thousands of producing oilfields in the
In the 2008 report IEA [International Energy Agency] analysts increased
As the IEA report points out, although the major oil Klare points out that, in 1994, the Chinese declared car production to be a "pillar" of their economy, with the following result:
[quote] According to a recent US government estimate, the number of
Hobbes,
You made a big
Hobbes, You made a big point of noting the rise to $122 per barrel, but not even a mention of the big drop on Friday? Here some disappointingly good news for you American bashers out there. [quote] Oil falls 5.4 percent in biggest drop since 2004 Reuters, Friday August 22 2008 * Oil posts biggest fall since 2004 * U.S. dollar recovers * OPEC output rising in August * U.S. Labor Day holiday travel expected to fall (Updates with settlements, details) By Richard Valdmanis NEW YORK, Aug 22 (Reuters) - Crude oil prices fell more than 5.4 percent on Friday in the biggest one-day slide since 2004 as dealers turned their focus to rising supply levels and weakening global demand. A rebound in the U.S. dollar encouraged the sell-off, applying downward pressure across the commodities markets by weakening the purchasing power of buyers using other currencies, dealers said. [/quote]
Mike--
I have been
Mike--
I have been posting hourly updates on the price of basic commodities on worldwide markets for the benefit of OD investors, but Candace has been deleting them as fast they go up. I detect Leftist manipulation, not to mention censorship. (<--joke Klare's article is about the fundamentals of the oil market, not daily price volatilty. Demand, driven by China, is rising; supplies are increasing, but nowhere near fast enough. Care to dispute the basics?
Hmmm. I think posting
Hmmm. I think posting comodity prices for the benefit of OD investors might violate the terms of use. Unless you are posting them as a point of discussion relevant to the OD community, I'd have to side with Candace on that one. But having said that, I also think that some commodity prices (like oil) do have relevance to some threads, including the one we're in now. I don't dispute the basics. Nor can you dispute my point that some markets can be influenced by factors outside supply and demand or that market fundamentals can be manipulated outside market fundamentals. For a long time now, market "experts" have pointed to the oil market as highly volatile with price fluctuations which have no rational basis. I also read an interesting article that postulated the real estate bust drove increased number of investors into commodities which added to the volatility.
Quote: I have been posting
[quote] I have been posting hourly updates on the price of basic commodities on
Hey, sorry! Joke! Don't shoot, Candace!
you bastard! ;-)
I will
you bastard! ;-) I will only invest in gold, jewelery etc, etc. The market is evil.
You'll have to ban yourself
You'll have to ban yourself for a week |
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An interesting article in the NYT business section yesterday highlights the difficulties facing the "supermajor" oil companies in the face of the new national oil powers (Russia, Iran, Venezuela):
[quote] Oil production has begun falling at all of the major Western oil
companies, and they are finding it harder than ever to find new
prospects even though they are awash in profits and eager to expand.
Part of the reason is political. From the Caspian Sea to South
America, Western oil companies are being squeezed out of resource-rich
provinces. They are being forced to renegotiate contracts on
less-favorable terms and are fighting losing battles with assertive
state-owned oil companies.
And much of their production is in mature regions that are declining, like the North Sea.
The
reality, experts say, is that the oil giants that once dominated the
global market have lost much of their influence — and with it, their
ability to increase supplies.
...
As late as the 1970s, Western corporations controlled well over half
of the world’s oil production. These companies — Exxon Mobil, BP, Royal Dutch Shell, Chevron, ConocoPhillips, Total of France and Eni of Italy — now produce just 13 percent.
Today’s 10 largest holders of petroleum reserves are state-owned companies, like Russia’s Gazprom and Iran’s national oil company. [/quote]
In the past, "resource nationalism" was bound to fail because the companies with expertise could always go elsewhere. But it looks like the new powers have figured out that globalization does, after all, depend on oil, and are learning to use that leverage. The "supermajors" are frustrated because they have more sophisticated technology, but are frozen out of using it.
For those of a geo-political (or Americo-centric) cast of mind, this development puts into perspective the otherwise short-sighted calls by McCain to "drill here, drill now."