Ridgeway / Ng Original Reporting

Pipeline Through Paradise: Big Oil’s Plan to Tap the Arctic

There are more untapped oil and gas reserves in the Arctic than almost anywhere else in the world—and with the ice melting, the race to get to them is about to turn ugly.

It’s estimated that one quarter of the world’s untapped oil and gas reserves lie in the Arctic. And while politicians bicker loud and long over Iraqi oil, and oil executives lay plans for bringing natural gas and oil from West Africa, most know that the Arctic is the real prize in the ongoing international struggle to control dwindling energy resources. That’s especially true now, as global warming causes Arctic ice to melt, exposing virgin territory and even, perhaps, opening for shipping the fabled Northwest Passage, which connects the Atlantic and Pacific oceans.

The region has become the center of an international skirmish, with Russian interests going so far as to plant an underwater flag in order to at least symbolically claim reserves presumed to exist beneath the North Pole’s Lomonosov Ridge (which, they say, is connected to Russian territory by a submerged shelf). Even the U.S. government, which for decades has resisted signing an international treaty called the U.N. Convention on the Law of the Sea–which establishes rules for national sovereignty over portions of the earth’s oceans and seas, along with the resources beneath them–suddenly supports ratifying the treaty. The Senate’s Foreign Relations Committee began hearings in late September to get the process rolling.

Oil executives have discussed the “Arctic play” for well over 30 years. But so far, U.S. exploitation of the area’s petroleum resources has been limited largely to the rigs in Prudhoe Bay off the Beaufort Sea on Alaska’s north coast, which pump oil into the Alyeska pipeline that runs south through the state to the port of Valdez, where it is loaded onto tankers. Now, the industry is seeking to move forward on a number of grand schemes to fully exploit what the former president of Shell Oil called the “stranded” reserves of the Arctic region–such as Shell’s planned drilling in the Beaufort Sea off the coast of the Arctic National Wildlife Refuge, which has been delayed by a court challenge by Native Alaskan and environmental groups.

Making profitable use of these abundant fossil fuels depends not only on drilling rights, but on creating a mode of transportation–a way to bring the oil and gas south to energy-hungry consumers. And here, the path to the industry’s goals both short-term and long runs through one thousand miles of pristine Canadian wilderness, following the course of the mighty Mackenzie River. Now, decades-old plans are again moving forward to build a pipeline through the Mackenzie River Valley that would carry natural gas directly to southern Canada and the lower forty-eight. If current proposals succeed, they will lay the groundwork for what will become North America’s greatest ever industrial development plan–bigger than the Colorado dams or the Tennessee Valley Authority. They also will disrupt the native cultures of a vast, virtually untouched region and wreak widespread destruction on one of the last best places on earth. “This is the environmental frontier,” Kert Davies of Greenpeace told Mother Jones. “It will be a giant fight over the next 20 years.”

The Mackenzie River begins in the Canadian Rockies, gathers force as it pours into one lake after another, and grows into a powerful river before emptying through a wide delta into the Beaufort Sea, and from there into the Arctic Ocean itself. The longest river in North America after the Mississippi, its watershed covers hundreds of thousands of miles and encompasses one-fifth of Canada. For the most part, it is still undeveloped wilderness, containing lakes, wetlands, smaller rivers, and the largest intact forest remaining on the planet; it is free of roads, buildings, electricity, and cell phone coverage. Canada’s Northwest Territories, through which the river runs, is home to moose, caribou, wolves, bear, and thousands upon thousands of birds that travel this flyway. The entire human population numbers only about 40,000. Most of these are First Nations people—primarily the Dene and Metis, Inuit and Inuvialuit–whose livelihood and identity are inseparable !from the river the Dene call Deh Cho, variously translated as “big river” or “much moving water.” “Our homeland is comprised of the ancestral territories and waters of the Dehcho Dene,” says their “declaration of rights.” “We were put here by the Creator as keepers of our waters and lands.” Canada’s European colonizers named it for 18th century fur trader and explorer Alexander Mackenzie, but Mackenzie had his own name for these waters: He followed the river hoping to find a route to the Pacific, the fabled Northwest Passage; when he emerged in the Arctic Ocean instead, he called it Disappointment River.

The Mackenzie Valley pipeline project takes its place in a long history of the United States exploiting the fossil fuel supplies of its northern neighbor. While Canada receives little of the attention afforded the Middle East or even Latin America, it is in fact the largest foreign source of oil for the United States. From the beginning, the nation’s oil industry was owned largely by U.S.-based companies. We have always looked to the Canadians–who have been referred to as “the blue-eyed Arabs”–as the guardians of a cheap energy reservoir while disregarding the country’s own interests. “We get all the shit, you get all the benefits,” says one Canadian environmentalist, who wished to remain off the record. Sue Libenson of the International Boreal Conservation Campaign, which seeks to protect northern Canada’s old-growth forests, puts it this way: “Contamination flows north. Fuel flows south.”

The current Mackenzie River Valley plan, advanced by Imperial Oil (Canada’s largest oil company, in which the U.S.’s ExxonMobil has a controlling interest along with ConocoPhillips and Shell), involves building a gas pipeline that follows the river’s course upstream–that is, south–through the Northwest Territories into Canada’s Alberta province. The Mackenzie delta is a rich source of gas and there are three known gas fields along the river, according to Susan Casey-Lefkowitz, who runs the Canada program for the Natural Resources Defense Council, one of a group of environmental organizations fighting the project.

If you ask the project’s supporters, the pipeline would actually benefit the environment by delivering “clean” natural gas to points south. After a visit to Boston at the end of September by the Northwest Territories’ industry minister Brendan Bell, who is a pipeline booster, a Boston Globe editorial entitled “Greener Policy in the Pipeline” declared the region “a potential Klondike of this clean-burning fuel, which could greatly reduce U.S. and Canadian reliance on coal, the biggest fuel emitter of greenhouse gases.” But environmental groups aren’t buying this argument–in part because, they say, most of the gas in the pipeline would never reach cities and industries to replace other energy sources. Instead, it would be piped only as far as Alberta, where it would be used to produce other fossil fuels with a net result that would add to, not reduce, the emissions that spur climate change.

Alberta contains huge deposits of tar sands–also called oil sands or heavy oil–which can be strip-mined and drained of the oil they hold. The tar sands amount to a reservoir of oil that could rival Saudi Arabia’s–some 300 billion barrels currently, and much more if new extractive methods are developed. But the process requires large amounts of natural gas or other energy sources, as well as huge quantities of water. It is extremely polluting, and some worry that increased production could go so far as to drain the Athabasca River. According to Elizabeth May, executive director of Sierra Club of Canada, “Tar sands oil is to conventional oil what crack cocaine is to ordinary cocaine powder. [It creates] more harm to the global climate through increased greenhouse gas emissions, more destruction of boreal forests, more toxic tailings, and more air and water pollution.”

Currently, Canada produces one million barrels of tar sands oil per day; a pipeline could increase that fivefold. The largest producer is the Canadian company Syncrude, which is partially owned by the pipeline’s leading promoter, Imperial Oil. The tar sands oil now goes by pipeline to Chicago-area refineries, where BP and ConocoPhillips want to expand their operations. An increased flow of tar sands oil, facilitated by a fresh supply of Arctic natural gas, likely would be shunted south to the Great Plains area via yet another planned pipeline called the Keystone.

If built, the Mackenzie pipeline would cause environmental damage far beyond its use in boosting the oil sands industry. In the late 1970s, Canadian judge Thomas Berger, who was appointed to study an earlier Mackenzie proposal–billed then, too, as “the biggest project in the history of free enterprise”–warned of the project’s far-reaching environmental impact. He predicted that the gas pipeline would inevitably be followed by an oil pipeline, and that the pristine river valley would become a vast “energy corridor” laden with feeder pipelines, roads, airports, and electric utilities, creating a sort of urban sprawl just below the Arctic Circle. Berger concluded that any pipeline project should be postponed for no less than ten years, and then pursued only after a serious discussion and agreement with the First Nations people whose homeland it would transform.

The risks of running pipelines through the frozen Arctic have been confirmed again and again by experiences with the trans-Alaskan Alyeska pipeline, which has been fraught with leaks and ruptures–some caused by structural problems, some caused by sabotage. In fact, in 1999 six anonymous pipeline workers wrote to warn the federal government of what they saw as an inevitable disaster: “It won’t be a single gasket, or valve, or wire, or procedure, or person that will cause the catastrophe,” explained the employees, who said they all had at least 10 years of experience with the pipeline. “It will be a combination of small, perhaps seemingly inconsequential events and conditions that will lead to the accident that we’re all dreading and powerless to prevent.” More recently, in early 2006 a rupture in a BP feeder pipeline near Prudhoe Bay produced a huge spill of crude oil that flowed onto the tundra and into the Arctic Ocean and was estimated to be the second largest i!n Alaska’s history, after the Exxon Valdez. BP subsequently acknowledged widespread corrosion and shut down and replaced miles of pipeline.

The risks and costs associated with building a new pipeline through the Mackenzie River Valley are enormous. Since the gas pipeline was first proposed in the late 1970s, the estimated price has reached $16.2 billion. The actual construction of the pipeline also would be no easy task, as it would run through areas of permafrost where shifting conditions can result in pipes bursting. Besides that, workers would face hundreds of miles of wilderness with no roads and ice that is solid for only six weeks out of the year.

The energy industry also must contend with the fact that, as with any overland transport of fuel directly from the Arctic to the lower forty-eight, the proposed pipeline must run through Canada, where serving oil interests is not always the government’s top priority. Since the Mackenzie lies within the Northwest Territories, its fate is governed not by one province or another, but rather by Canada’s central government. This means that public opinion throughout the country could influence the government’s decisions regarding the pipeline–on balance, sentiment may run against the project. Provinces such as Alberta historically support the extractive industries, which form the base of their economies, but the federal government is more responsive to centers of population on the coasts, where residents are concerned with conserving natural resources.

The Canadian government also has made it a policy–at least on paper–to consider the views of First Peoples, as indigenous populations are called in Canada. Up and down the Mackenzie River, various First Peoples have taken differing stands on the project. While in the 1970s, they were united in their opposition to a pipeline, three out of four groups now have signed on, provided they get something in exchange for their support. “If managed properly [the pipeline is] something we could live with,” Stephen Kakfwi, a member of the Sahtu Nation and former premier of the Northwest Territories, told Mother Jones. “Right now we don’t get any revenue. The federal government gets the revenue–billions of dollars [from the] diamonds, oil, and gas coming out of the land. We are destitute, and don’t get a penny of it.” Kakfwi goes on to describe the lack of housing, poor health, and high suicide rates in native communities and the failure of the central Canadian gov!ernment to do much about it. “All we do is live on grants, handouts, and contributions from governments,” he says. “We are entitled to govern ourselves.”

The lone holdout among First Peoples is the Dehcho, a Dene group that owns around 40 percent of the land over which the pipeline would pass. In questioning the project, they stress conservation as a goal and are anxious to make sure outstanding land claims are settled before anything moves forward. Environmental concerns are foremost among other First Peoples and white residents as well. A September 24, 2007, poll of Northwest Territories residents, conducted by McAllister Opinion Research, found that two-thirds of respondents said they want to see conservation measures put in place before development begins, with 90 percent giving a high priority to protecting lands, water, and natural ecosystems. These figures are noteworthy when one considers the poverty of many of these communities, especially those in the far north.
Whether the Canadian government satisfies these criteria remains to be seen. In 2004, in a report for the World Wildlife Fund Canada, Kakfwi accused the federal government of failing to implement a protective scheme. He called for “responsible economic development within a sound environmental management framework,” with conservation plans clearly laid out before any major industrial development begins. More than three years later, he told Mother Jones, the situation “hasn’t changed.” The matter now has become entangled in a long-term planning process called the Northwest Protected Areas Strategy, which typifies the perhaps well-intentioned but famously obstinate Canadian bureaucracy.

Later this year, a joint review panel–appointed to study the pipeline scheme and made up of members from the different affected regions and governments–will file its report with the National Energy Board, and its recommendation will be forwarded to the central Canadian government in Ottawa, where Minister of Industry Jim Prentice will play the key role in deciding what to do. Prentice previously shepherded the project as Minister of Indian Affairs and Northern Development, and is widely considered an advocate of the pipeline. As for the Canadian Prime Minister Stephen Harper, Kafkwi gives this opinion: “Harper is more in line with Bush than most Canadians would like. He follows the direction Bush takes, like on Afghanistan and Kyoto. He’s seen as kissing up to Bush more than anything.”

At a May 2007 annual meeting of ExxonMobil in Dallas, CEO Rex Tillerson sounded decidedly glum about the Mackenzie project, which is tentatively slated to get underway in 2014. “We are now in a situation where it’s not economic at the current costs,” he said. This declaration may have been a strategic ploy, since ExxonMobil wants the Canadian government to subsidize the building of the pipeline’s infrastructure, a prospect that infuriates Canadians. As the Toronto Sun recently pointed out, Exxon netted a 2006 profit of $39.5 billion (with Tillerson himself receiving $1.75 million in base pay, plus a $2.8 million bonus).

By September, Tillerson was more upbeat, reporting that there had been “satisfactory progress” on the pipeline project, which he promised was not “on the shelf.” And last week, Pius Rolheiser, Imperial Oil’s public affairs spokesperson for the Mackenzie pipeline project, told Mother Jones, “Imperial remains committed to the project. We are continuing work on a number of fronts.” The company is focusing, Rolheiser said, on regulatory matters and on working with both regional groups and the federal government.

Outgoing Shell Canada CEO Clive Mather also remains bullish on the Mackenzie play, according to the Toronto Sun. “The fundamentals are strong–I mean the fundamentals associated with bringing that stranded gas to market, the fundamentals associated with opening up a potential new [supply] basin in the North,” he said. That potential new supply basin, of course, reaches beyond the Mackenzie delta gas fields to encompass the entire Arctic region and its untapped energy reserves. Over the long term, the vastness of this treasure stands to make almost any investment in a pipeline worthwhile. And the more the price of oil and gas rise, the more the Mackenzie River Valley will seem like the road to riches.

Oil and other Raw Materials

AFRICA

Trade between Africa and China is growing and now rivals that between African countries and the US and EU, reports Michael Deibert in an IPS dispatch. The last century’s colonial interests by European powers is fast being replaced by China in its aggressive search for raw materials, especially oil. Africa is rich in a number of raw materials from copper bauxite, diamonds, platinum, chrome, manganese, silver and gold. The growing worldwide consumer market in cut flowers has found a base in Kenya.

China depends on imported energy, both oil, and increasingly the cleaner burning natural gas. It purchased half of the Sudan’s oil exports in 2006. Critics say Sudan used the money to buy military hardware used in Darfur. The East Asian giant is sure to go after other oil finds in Africa, especially those in the Gulf of Guinea where both oil and natural gas have been found in commercially recoverable amounts.

China’s state-controlled Development Bank has a China-African development fund worth $5 billion. The aid doesn’t come without restrictions. “The conditions include that the aid’s availability will be restricted solely to investment in Chinese enterprises and projects in Africa, and that 70 percent of the contracts be set aside for Chinese companies, with the rest going to African businesses, many already working with Chinese
enterprises,”reports IPS.

Since the Cold War came to an end, the US has evidenced little interest in Africa. It ostensibly ties aid to human rights conditions, although in fact looks the other way when a despotic African leader engages in mass killings, as Meles Zenawi did in Ethiopia, or Yowri Museveni in Uganda, when he locked up opposition leader during elections. Zimbabwe’s leader Robert Mugabwe, one of the continent’s most notorious leaders, is being warmly welcomed at the EU.

In addition, the U.S. conditions on aid to IMF dictates emphasis on cutting domestic budgets, especially social services and increasing exports of raw materials. Read the article here: http://www.ipsnews.net/news.asp?idnews=38630

OIL

ARCTIC PLAY

Last week Shell announced it would send a fleet of ships into the Beaufort Sea to launch an oil drilling program. It is speculated that beneath the Beaufort Sea lie 8 billion barrels of oil and 30 trillion cubic feet of gas. The drilling is to take place 30 miles off the Alaskan coast, where despite protests from local communities the US Minerals Management Service OK’d the project. If Shell hits oil in commercially recoverable amounts, other companies are expected to follow. They include Repsol of Spain, Norsk Hydro of Norway and Conoco-Phillips of the US.

Malcolm Brinded, Shell’s chief executive of exploration and production, last week told the Times Online (London), “There has been drilling there, there has been exploration there, but this is a return to make a new charge at it. Some people say that 25 per cent of the world’s undiscovered hydrocarbons sit in the Arctic. I think that may be optimistic but if it’s half right then it’s worth exploring. It has the right ingredients to be a good energy play and the world needs some new energy plays.”

Oil companies long have eyed the Arctic as an untapped source of oil and gas, but costly drilling and impossible physical and jurisdictional hurdles in transporting oil and gas down through Canada to the continental US.

The rapid melting of Arctic ice has introduced an entirely new factor into this play. To the north and East of the Beaufort Sea, the fabled Northwest Passage hits the North Pacific. At the eastern most end, it meets the North Atlantic, passing between Greenland and Iceland. For centuries this passage has been frozen over for all but a short time during the summer.

Now there is renewed speculation the passage will be open and navigable within a decade for big tankers and container ships. This ought to bring a boom in shipping because the passage cuts by one-third the distance from Europe to Asia. Commercial fishing boats will be able to get at vast schools of fish hitherto unreachable because of the ice. The world’s stock of fish has long been predicted to decline due to overharvesting.

At the same time, it will open yet another wild frontier in the far, far north, with nations fighting each other over fishing boundaries along with environmentalists trying to save the poles from marine pollution, and pirates darting in and out of a maze of islands. Both Russia and Canada consider their northern sea routes as national territory, but the U.S. views them as international waterways.

But while the US desires the Northwest Passage to be an international ocean highway, in reality, the US Navy already is figuring out how to control the region lest terrorists use it to launch an attack. Research points out that policing the area will be difficult because there are no good communications satellites in orbit that cover the North Pole.

The Canadians, who usually get down for Washington, this time are determined not to be ordered around by Bush or anybody else in Washington.

Stephen Harper, the new Canadian prime minister wants to deploy ice breakers to patrol and defend the country’s arctic waters. David Wilkins, the American ambassador, made the Canadians mad when he said with the usual American arrogance, “There is no reason to create a problem that doesn’t exist.”

To which Harper replied, “The United States defends its sovereignty and the Canadian government will defend our sovereignty. It is the Canadian people we get our mandate from, not the ambassador of the United States.”

In a Vancouver speech discussing the Northwest Passage, Michael Byers, an expert in international law at the University of British Columbia, warned of future dangers for Canada:

“Canadians should be alarmed. An international shipping route along Canada’s third coast could facilitate the entry of drugs, guns, illegal immigrants and perhaps even terrorists into this country, as well as providing an alternative route for illicit shipments of weapons of mass destruction or missile components by rogue states. And any shipping involves the risk of accidents, particularly in remote and icy waters. An oil spill would cause catastrophic damage to fragile Arctic ecosystems; a cruise ship in distress would require an expensive and possibly dangerous rescue mission. Any new fishery will be highly susceptible to over-exploitation, particularly because of the difficult-to-police location, rapid declines in fish stocks elsewhere and the consequent, excess fishing capacity that now exists worldwide.”

Canada is not in a good position to defend its interest in the Northwest Passage. It’s ships are not built to get through the ice most of the year and have to be deployed out of the area in winter. Its aircraft are old, and it has no trained troops in the Arctic. Harper has said he will beef up the country’s military presence with new icebreakers, a deepwater port, underwater sensors, and an Arctic trained airborne battalion.

OIL, LNG

CARIBBEAN

As one of the world’s largest net oil exporters in the world, and the largest in the Western Hemisphere, Venezuela’s oil politics makes waves in tiny countries desperate for affordable energy. Caribbean islands, along with the U.S., China, South America, and Europe, covet Venezuela’s estimated 79.7 billion barrels of conventional oil reserves. The slice of the pie, depending on who is sharing, is either growing or getting smaller.

In the Caribbean, only Trinidad and Tobago, Cuba, and Suriname have sizeable oil reserves. But while Trinidad houses most of the region’s oil and natural gas production, oil reserves found off the northern coast of Cuba may prove valuable in the future. Exploration in Suriname has yet to produce results.

Trinidad provides LNG and Venezuela sells crude oil, with the majority of exports landing in the U.S. market. Trinidad, in addition, supplies crude oil to neighboring islands. Volatile, high oil prices means that Trinidadian oil comes at a high cost to islands with little or no energy reserves. While LNG is seen as a cheaper alternative, Caribbean countries are only beginning to build the infrastructure to receive LNG. Enter Venezuela. President Chavez made headway in the Caribbean by launching Petrocaribe in 2005, a subsidized oil program for Caribbean countries. Signed by 13 Caribbean countries with the exception of Trinidad and Barbados, it aimed to broker only with state-controlled entities. The move was criticized as a money-losing scheme serving to further Chavez’s political agenda.

Trinidad’s PM warned Caribbean countries that they would not be able to depend on his country for oil, but Venezuela and Trinidad have since patched up their differences. Caricom announced that it would lower its tariffs on Venezuelan oil. Recently, Venezuela and Trinidad have announced a partnership to develop natural gas fields in Plataforma Deltana, an area off Venezuela’s northeast coast adjacent to Trinidad and Tobago’s maritime borders. (See map.) Petroleos de Venezuela S.A. (PdVSA), the state-controlled oil entity, awarded exploration blocks to Chevron and Statoil in 2003.

Looking towards the future, Venezuela is anxious to build up its lagging LNG market, and Trinidad wants to secure more reserves. But other Caribbean countries, like energy-dependent Jamaica, are afraid of being left out in the dust. A leading world producer of bauxite and alumina, Jamaica is almost entirely dependent on imported energy. Its government threatened to buy LNG from Qatar, and signed a bilateral agreement for LNG from Venezuela (a country that can barely supply itself with LNG right now) to supply it with LNG by 2009.

In February of 2007, Prime Minister Patrick Manning announced that Trinidad and Tobago would not be able to meet the LNG demands of Jamaica. Plataforma Deltana, he said, will help solve the problem. Arnold Piggot, Trinidad’s Foreign Prime Minister, told Radio Jamaica that if Venezuela supplies the LNG to Jamaica, it would bump Trinidad and Tobago as the main supplier of energy products to Caricom. Meanwhile, Jamaica is vying to build a floating LNG terminal, and is looking to revive its depressed sugar industry by producing ethanol.

Energy security in the Caribbean all comes down to Trinidad and Tobago and Venezuela, but Chavez is taking the lead. Venezuela hopes that its LNG export plant at Giria will process LNG from the Mariscal Sucre project and Plataforma Deltana. The Venezuelan president is backing Trinidad’s plans for a natural gas pipeline within the Caribbean and to the the U.S, but wants the pipeline extended to northern Cuba to help reduce Castro’s energy costs.

NATURAL GAS

Trinidad

LNG Route Security after JFK

WASHINGTON—The four men charged with planning to blow up JFK airport come from Guyana with one of them from Trinidad-Tobago. Watch video. The plot was in a fairly early stage,but even so,it drew the attention of anti terrorist officials away from the Middle East and Africa to the Caribbean. Trinidad is a crucial center for the US energy supply, and the island has a history of harboring small, fundamentalist Muslim groups who ally themselves with AlQaeda and other militants.

In recent years, Trinidad has come to play an increasingly important role in the US energy business, providing a growing amount of natural gas to East coast markets. Natural gas now accounts for some 56 percent of all fuel used in the U.S. That includes gas that is burned in home furnaces and appliances, such as stoves, as well as for electricity, and in the East US,acutely conscious of pollution from coal and oil fired electrical generating plants, it is viewed as a clean alternative.

The US has large gas reserves, especially in the Gulf and elsewhere in the South. The Arctic is seen as a future source of gas but is expensive to transport into the lower 48. The Eastern front of the Rocky Mountains is another long term potential source. However, it seems certain that much of the future gas in the US will come from abroad,such places as the Gulf of Guinea in West Africa, Qatar, Iran (which,of course, the US won’t deal with) the Caspian Sea region, Australia and Indonesia. This gas will come in the form of LNG, involving a procedure where the gas is frozen, turned into a liquid, and transported by special tankers. Currently the LNG business primarily services South Korea, Japan, and Taiwan.

These tankers are meant to be safe, but many question their security. No one doubts that an explosion from an LNG tanker would be devastating. Everything within one mile radius would be vaporized. Edward Teller,father of the H bomb, speculated in the 1970s that an explosion from an LNG tanker would rival that of a nuclear bomb. Such an explosion has been compared to the devastating 1883 Krakatoa volcanic eruption. Krakatoa is in Indonesia and the August 1883 eruption spewed enormous amounts of rock and ash into the air and generated the loudest sound recorded by humans. The noise was heard as far away as Peerth and shock waves were felt around the world. For reference click here.

The industry dismisses these fears as being hysterical nonsense with no factual basis and insists the LNG tankers are among the safest ships afloat.

In recent years the southern Caribbean has become a center for the supply of LNG, with Trinidad-Tobago being the center of the trade. It is here that 80 percent of the LNG shipments into the US originate. Current plans envision building several LNG terminals along the populous East coast, where the liquid would be changed back into gas and fed into one of the big pipelines running up the East coast from the Gulf.

When most people think about Trinidad, which is the southernmost of the Caribbean islands lying not far from Venezuela, they think of calypso, carnival and tourists wandering about the delightful island terrain.

But when the anti terrorist officials look at Trinidad they shudder at the thought of what might happen. Because in addition to being the center of the LNG trade, Trinidad has been the setting for one of the early attempts to set up a radical Islamic state by means of an attempted coup in 1990. Fifteen percent of the island’s population is Muslim.

The group behind the attempted coup is called Jama’at al Muslimeen. It has been under the control of Imam Yasin Abu Bakr. Major General Gary D. Speer, Acting Commander in Chief U.S. Southern Command told a House Appropriations subcommittee in April, 2002, “The recent bombing outside the U.S Embassy in Peru preceding President Bush’s visit is indicative that other domestic terrorist groups pose threats to the United States elsewhere in the hemisphere. These include, but are not limited to, the Sendero Luminoso (Shining Path) and Tupac Amaru Revolutionary Movement (MRTA) in Peru and the Jama’at al Muslimeen (JAM) in Trinidad and Tobago.”

There are two other fundamentalist Muslim groups on Trinidad, one of them, the Islamic Front, openly supporting Osama BinLaden, and theother Jemmah Islamiyyah, showing solidarity with the group that bombed Bali. It wants to set up an Islamic state and has put out statements including the following “With our weapons we are going reach you. We will reach you where you sleep, we will reach you where you take your baths, we will reach you where you take your meals and have your drinks, and even a glass of water you hold in your hand to drink may not be safe.” It added: “Don’t for one second think you will be victorious. You feel you fight and kill us but you only fight shadows cast by the Qur’an and the teachings of the Prophet Muhammad. Your faith is in your hands-choose how it ends.”

US investigators have tried to trace terrorists back to Trinidad and there is at least one sting involving a Trinidadian in the attempted purchase of automatic weapons. One Trinidadian was arrested and sent to jail in the US for a bomb plot. Security officials are alarmed at what could happen if a terrorist should strike a tanker, and have urged various schemes for avoiding an attack.

“When LNG tankers go into an LNG port to discharge cargo fast escort boats should travel alongside each gas tanker as it makes its journey to the terminal,” urged Candyce Kelshall,director of Bluewater Defence and Security Ltd and Director of Task International Ltd in a 2004 article in Energy Security, published by the Institute for the Analysis of Global Security. She sits on a British national port security committee, comes from Trinidad where her father is a retired admiral.Bluewater has worked with BP on security issues.

“Aerial surveillance for the passage of the vessel into port can also be provided by law enforcement. A security zone extending 500 yards on each side, two miles ahead and a mile behind the tanker should be imposed and other vessels should be instructed to give the tanker a wide berth during its passage. All boat traffic should be forbidden in the moving safety zone.

“When LNG tankers approach a port in the U.S. six tugboats direct the ship’s movements while two others provide state-of-the-art fire fighting equipment. U.S. Coast Guard crews board and inspect the ship before it enters the harbor. As many as a half-dozen armed U.S. Coast Guard vessels accompany the ship through the harbour. Also present are state and local police boats. The restrictions remain in force during the 12-hour unloading process. Violators face arrest, fines of up to $25,000 and prison terms of up to 10 years. This model has so far been successful and could be emulated in the Caribbean. ”

OIL

IRAQ

IRAQ SMACK DOWN: AN “IRON FIST” FOR OIL WORKER UNIONS OPPOSING US PLANS TO SELL OFF OIL TO FOREIGN COMPANIES

The Iraqi government’s plans to privatize the oil industry took another step forward today(Wednesday) with the issuance of an arrest warrant for striking oil worker union leaders. The unions oppose plans to divide up the former nationalized industry and leasing out the huge oil fields to foreign companies, including the major international oil firms.

The big oil workers union has been on strike since June 4 over Prime Minister Nouri al-Maliki’s refusal to meet union demands, which include improvements to wages, health and other working and living conditions as well as consultation on the proposed oil law, which the union opposes. Al-Maliki warned Tuesday that he would meet threats to oil production “with an iron fist”. The warrants claim the unions are “sabotaging the economy” and names Hassan Juma’a Awad, the leader of the 26,000-strong Federation of Oil Unions, and three other leaders of the Federation. Naftana, a union based support group in Britain, reports this morning:

“The strike entered its third day today and is in its “second phase,” which now includes the closure of the main distribution pipelines, including supplies to Baghdad. “Phase one” closed some of the smaller distribution pipelines. Phases one and two did not include production and exports.” For details see the Naftana website at http://www.basraoilunion.org/

LET THEM EAT REMITTANCES

The United States takes what it needs from Mexico—and leaves it to poor immigrant workers to send home the foreign aid.

According to the Pew Hispanic Center , in 2006 there were some 12 million undocumented immigrants in the United States. (Other estimates run as high as 20 million). About three-quarters of these are from Latin America, and 56 percent are from Mexico alone. Mexico has exported more of its work force than any other nation. The Migration Policy Instituteestimated that nearly one in ten people born in Mexico, and 15 percent of Mexico’s workforce, now lives in the United States (legally or illegally).

“The reason for this massive out-migration is clear,” says Laura Carlsen, Director of the International Relations Center’s America’s Program. “Mexico is not producing enough decent jobs for its people—and the United States is hiring. Between 2000 and 2005, Mexico lost 900,000 rural jobs and 700,000 in industry.” It would seem, then, that the answer to the United States’ so-called immigration problem would be an effective development policy toward Mexico, including both private investment and foreign aid. But that aid, as it turns out, comes not from the U.S. government or corporations but from the immigrants themselves.

Despite having incomes well below the national average, many of these immigrants regularly send a portion of their earnings home to Mexico to support their families and sometimes entire communities. Remittances from overseas workers now stand approximately equal to oil revenues as one of the two largest sources of foreign income in Mexico. According to Guillermo Ortiz, head of the central Bank of Mexico, they totaled $23.54 billion in 2006.

The IRC’s Laura Carlsen points out that “remittances have been a main factor in reducing extreme poverty in the countryside. While the World Bank, among others, cites NAFTA and the Mexican government’s poverty assistance programs for achieving that end, a 2005 report from the Bank of Mexico gives credit where credit’s due—poor families receive more assistance from remittances than from all government programs combined.” The bottom line is that these remittances are a substitute for development policies aimed at generating employment and stimulating rural production, she says.

Remittances from overseas workers—the vast majority sent from the United States, most in payments of $100 to $200 (from which transmittal fees averaging 15 percent are deducted)—also exponentially exceed foreign aid to Mexico. According to the Century Foundation, for every $1 in official foreign aid to Mexico, overseas workers sent home $150. (The Century Foundation rightly refers to these remittances “private foreign aid.”) These modest remittances from some of America’s poorest workers also approximately equal all foreign investment in Mexico.

While the United States frequently grouses to the Mexican government that it ought to provide economic opportunities at home that will keep their wretched refuse from teeming to our shores, we’ve been less quick to provide them with much help in doing so. (The money Mexican migrants send home is almost equals the U.S. foreign aid budget for the entire world.) To the contrary, the United States continues to exploit Mexico’s resources for its own needs. Those resources, of course, include the very undocumented workers we complain about, which, like the illicit drugs we likewise condemn, would soon cease to flow north across the border if there were no demand for them here. They also include cheap goods and abundant natural resources, including of course oil.

The U.S. has been unable to get its hands directly on the oil business, because oil is owned by the state and run by a state company. However, that doesn’t mean Mexico retains the control or profits from its own oil. Through service contracts and joint ventures, Mexico is linked into the production and distribution systems dominated by the large international oil corporations. The petrochemical industry, a key offshoot of the oil business, is not controlled by the state. And certain sectors of the natural gas business are in private hands. American utilities have looked upon Mexico as a good place to build electrical generation plants. With plentiful fuel nearby, and the large California and expanding Southwestern markets at hand, it makes for economical electrical production–not to mention making electricity in Mexico exports pollution south of the border. (U.S. oil companies have for years also dominated the Canadian energy industry, including oil and gas and Quebec’s huge hydroelectric production; the Canadian Arctic promises to be a large untapped trove of petroleum, and Canada, one of the very few countries in the world with an abundant clean water supply, will inevitably become a supplier of U.S. water.)

The 1994 North American Free Trade Agreement was supposed to be a tremendous boon to Mexico, as well as to the United States, Canada, creating the beginnings of a common market, for the benefit of all, but more than 13 years later, the relationship still smacks of colonialism. Howard Zinn, who has documented the history of U.S. colonialism in Latin America, says of the current immigration debate, “Why should capital go freely across borders while people cannot? These are human beings trying to make a better life, for god’s sake. Why is the wall on the Mexican border more acceptable than the Berlin Wall?”

Contrast all this to what’s happened in the EU, which was formed just two years prior to NAFTA, in 1992. Through the postwar years and well into the 1980s, most of the huge number of foreign guest workers in then-richer nations like Britain, Germany, France, Switzerland and Scandinavian countries came not from the so-called Third World, but from current EU countries like Italy, Spain, Portugal, Greece, and Ireland, along with Turkey, where jobs were scarce and poverty high. But in the years preceding the opening of the EEC, the wealthier European countries invested billions in economies of these poorer nations, many of which are now booming. Douglas Massey, Princeton University sociologist and co-director of the Mexican Migration Project, told the San Francisco Chronicle last year that if, when it signed NAFTA, “the United States had approached Mexico and its integration into the North American economy in the same way that the European Union approached Spain and Portugal in 1986, we wouldn’t have an immigration problem now.”

  Members of Congress are falling all over themselves writing legislation that would pump millions of taxpayer dollars into schemes that promise to turn coal into  synthetic gas, develop oil shale,and  the most popular at the moment, plans to transform coal into a liquid oil.

  If any of this were to happen,huge hunks of the fragile western plains would be transformed into modern mining camps, wrecking  fragile ecosystems, exhausting and polluting water supplies. Manufacture of synthetic fuels would subject workers, and the general nearby populations to cancer causing chemicals.

There’s nothing new about synthetic fuels made from coal. In the 19^th century street lamps in cities  were lit with gas made from coal.In 1909, a key date in the development of this business, Friedrich Bergius,a German scientist,invented a way to produce synthetic gasoline from coal and hydrogen under high pressure by means of a process called hydrogenation. During World War I,Bergius tried without success to adapt his process to large scale production. Carl Bosch, the chairman of the  I.G. Farben chemical combine, then in its infancy, thought the Bergius process held great possibilities for the Germany—a country with little or no oil of its own.

     Short on fuel, Germany had been strangled during World War I by the British fleet  By 1924 Germany was secretely rearming in violation of the Versailles treaty, and the new  mechanized army needed a sure source of gasoline.

  But turning coal into gasoline would be  expensive and Bosch sought to involve Standard Oil of New Jersey (Exxon’s predecessor), He thought Standard would help foot the bill.   Standard’s top officers were invited to

    Bosch,of course, was delighted at the Americans’s fright. Throwing caution to the winds,he plunged ahead, pumping million of dollars into mass production, sure the Americans would have no choice but to join him.. His goal was 100,000 tons of coal gasoline a year.

    Soon, Standard and IG Farben  came to terms. The two companies cut a deal, setting up a cartel through which IG Farben agreed to stay out of the oil business and Standard agreed to keep clear of the chemical business.

   Standard, however, soon lost interest–in part because of the depression, and in part because of big new finds in

    Nothing much happened until World War II when Hitler, another keen proponent of liquid coal, got behind synthetic fuel and by 1943 synthetics accounted for half of all German fuel,with the air force being one of the biggest users. The Luftwaffe controlled the skies over Europe during the early stages of the war.One of the liquefaction plants was located in Silesia where there were ample supplies of coal,water and slave labor.It was called I.G. Auschwitz. Finally the US Air Force destroyed the IG synthetic plants.At Nuremburg  the IG Farben executives either got off or received light sentences.

Following the energy crisis of the 1970s, American oil companies renewed their interests in coal, buying up existing coal companies and getting control of reserves.Their emphasis was more on gasification than liquefaction since the supposed need at the time was to find a substitute for dwindling supplies of natural gas.In fact there was plenty of natural gas,and after first Carter,then Reagan,deregulated prices, the oil companies could make enough profit from selling real gas and didn’t need the synthetics. Once again synthetics slipped into the background. Oil companies cut back or ditched their coal holdings.

  Now the cycle begins all over again. The energy industry sees sufficiently high prices to once again develop synthetics. But, as always, this will only happen if the politicians and taxpayers are dumb enough to pay for it..

OIL

Africa

West Africa’s Gulf of Guinea is the scene of a little reported struggle for control of newly discovered oil and gas reserves. Traditionally this area has been under French influence. But in recent years, the big international companies with American and British ownership have entered the play.

The Nigeria delta,ravaged by fighting, is best known of these oil fields. Its low sulfur, lightweight oil fetches premium prices and accounts for nearly two thirds of the area’s income. Nigeria also contains the largest known natural gas reserves in Africa with a large LNG complex on Bonny Island. Now there is a less known play for natural gas around the island of São Tomé, where the poor complain of corruption by officials and multinationals.

Clean burning gas is almost more important these days than oil. It is in keen demand by China, soon to be the world’s largest energy consumer, and a country anxious to reduce its industrial pollution caused by burning oil and coal.

In the US, gas is in great demand as a fuel to replace coal for electrical generation. Both the US continent and the outercontinental shelf have been scoured for gas reserves. Most of these have been mapped, and already are under long term contract to the major petroleum companies. Because of the demand for gas at a higher and higher price, the trade in LNG has been steadily growing. The Bush administration has plans for importing LNG into several different processing facilities up and down the East Coast. The LNG comes from places as far away as Trinidad, Australia, Indonesia and the Persian Gulf.

Gas from the West Africa is especially attractive because the African coast is a relatively short haul to East Coast US markets. African gas would be less expensive to transport than gas from, say, Australia, or even the Persian Gulf. It is partly with this developing trade in mind that American military planners have been concerned with projecting force in the Gulf of Guinea and for that matter in the whole of West Africa, with special emphasis on Liberia, long a listening post for the US.

Video: Oil company chopper flying over Niger Delta

CNN video: Movement for the Emancipation of Niger Delta

Ségolène Royal is optimistic despite poll indications of a Sarkozy victory on the second round of French presidential elections on Sunday. The socialist candidate, deemed “aggressive” by centre-right candidate Nicolas Sarkozy on Wednesday’s televised presidential debate, has been painted as a hothead by French and American media, thanks to Sarkozy’s chauvinistic put-downs during the exchange. Royal pointed her index finger at Sarkozy and accused him of “political immorality” while rebutting Sarkozy’s take on services for handicapped children.

Sarkozy, not one to give up a fight, told Royal to calm down. “I don’t know why Mme. Royal, normally calm, has lost her nerves…”

Royal has labeled Sarkozy’s style as aggressive and brutal throughout her campaign, but her strategy to appear decisive and impassioned during the event played into the hands of her opponent.

Headlines in France’s Le Figaro screamed: “Ségolène Royal: ‘la candidature de Nicolas Sarkozy est dangereuse’.” (Royal says Nicolas Sarkozy’s candidacy is ‘dangerous’.) In the U.S., CNN cited the “combative attacks” of Royal, and Sarkozy was quoted as saying: “At least [this has] served one purpose, which is to show that you get angry very quickly, you go off the rails very easily, Madame. A president is someone who has very serious responsibilities.”

Elsewhere, FoxNews reported that Royal had snapped and the Houston Chronicle announced: “Keeping cool is hot topic in French presidential debate.”

Eric Dupin, a political analyst at the Political Studies Institute in Paris, told the Chronicle:

“People expected Sarkozy to lose his temper, but she did,” Dupin said. “A political leader cannot show anger like she did. An important political leader cannot repeat that he or she is revolted the way she did. We’ve never seen that before. Of course, Sarkozy may have been cynical on the handicap issue and used it to his own ends, but she will also be judged on her reaction.”

“Sarkozy proved he is an experienced politician, Royal showed that she’s got character, but not the experience,” said Dupin.

Royal did not help herself by comparing Sarkozy to President Bush in a post-debate interview in Le Parisien, remarks later picked up by ABC and CBS News. But the candidate shrugged off the widening gap in the polls as she crisscrossed the country today in a final push to garner votes. In Brest, Reuters reported that Ségolène Royal “oscillated between cholera and light-heartedness”.

The socialist candidate’s comments are her own, but as Sunday’s vote nears, Royal appears more so as an unstable, emotional woman, unfit to govern a country. One hopes that they are not the same stereotypes that have plagued women since antiquity. But since the media has its way, the contest is not just one of political ideologies, but a battle between the sexes as well.

EXCERPT OF EXCHANGE BETWEEN ROYAL AND SARKOZY (from International Herald Tribune):

“Calm down,” he told her.

“No, I will not calm down,” she replied.

“Do not point at me with this finger, with this——” he said.

“No. Yes,” she said.

“With this index finger pointed, because frankly——”

“No, I will not calm down,” she said. “No, I will not calm down. I will not calm down.”

“To be president of the republic, you have to be calm,” he said.

She responded: “Not when there are injustices. There are angers that are perfectly healthy because they correspond to people’s suffering. There are angers I will have——”

He said, “Madame Royal, would you allow me to say one word?”

She finished her sentence: “Even when I am president of the republic.”

His voice took on a patronizing tone. “I don’t know why the usually calm Madame Royal has lost her nerve,” he said.

EXCERPT IN FRENCH (from Libération):

Ségolène Royal : Non, je ne me calmerais pas!

Nicolas Sarkozy : Pour être Président de la République, il faut être calme.

Ségolène Royal : Non, pas quand il y a des injustices! Il y a des colères saines, parce qu’elles correspondent à la souffrance des gens. Il y a des colères que j’aurai, même quand je serai Présidente de la république….

Nicolas Sarkozy : Ce sera gai!

Ségolène Royal : Parce que je sais les efforts qu’ont fait pour accueillir les enfants qui ne le sont plus. Je ne laisserai pas l’immoralité du discours politique reprendre le dessus.

Nicolas Sarkozy : Je ne sais pas pourquoi Mme Royale, d’habitude calme, a perdu ses nerfs…

Ségolène Royal : Je ne perds pas mes nerfs, je suis en colère. Pas de mépris. Je suis en colère. Je n’ai pas perdu mes nerfs. Il y a des colères très saines et très utiles.

Nicolas Sarkozy : Je ne sais pas pourquoi Mme Royal s’énerve…

Ségolène Royal : Je ne m’énerve pas.

Nicolas Sarkozy : Qu’est-ce que cela doit être quand vous êtes énervée!

Ségolène Royal : J’ai beaucoup de sang-froid. Je ne suis jamais énervée…

Nicolas Sarkozy : Vous venez de le perdre. Mme. Royal ose employer le mot “immoral.” C’est un mot fort.

Ségolène Royal : Oui.