News Article

Spreadsheet Tips
Contact Us

Add this Page to Favorites

Project Finance Related News Article


Foundation for Indo-Turkic Studies chairman, K Gajendra Singh: This is an essay on the ongoing "Mother of all Battles," for oil, where the US led West, mercifully, is losing some ground.

Starting with brutal colonial exploitation dubbed the so called burden of civilization (the westerners reaching Asia were certainly almost barbarians, as they still remain in many ways, or Christopher Columbus, a greedy and brutal genocidal murderer of 'Indians' in the new world -- anointed a Christian saint).

It then became development and globalization and in case of Iraq, simple 'gobblization' of its oil resources led by decision makers, who have broken almost all international laws and conventions and USA's own internal laws, a country which is becoming less free and more dictatorial, with one party like consensus.

The inherent racist discourse by western leaders, its propaganda machine and people, kept under some check by socialist and non-aligned watchdogs in cold war era is resurfacing, after the fall of the Berlin Wall. Even Zainuddin Zidane (a Kabilie of Algerian origin), an icon of patience and interracial pride, finally had had enough when abused racially as reported in the media by an Italian thug of a footballer and lost his cool. With ongoing enquiries about match fixing in the Italian league, one wonders how many of their footballers might be involved.

Noam Chomsky's comments on the Israel lobby in the US article by two respected US university professors John Mearsheimer and Stephen Walt hit the nail on the head, where in he points out that US and Israel interests coincide in the West's policy to control hydrocarbon energy resources i.e petroleum and gas, ever since the emergence of its importance in warfare and economy (Information Clearing House, 07/10/06 ).

Chomsky points out how western energy corporations have flourished with "profits beyond the dreams of avarice" with "the Middle East (ME) their leading cash cow." It was part of grand US strategy based on control of what the State Department described 60 years ago as the "stupendous source of strategic power" of ME oil and the immense wealth from this unparalleled "material prize"?

The USA has substantially maintained that control -- (but) those extraordinary successes had to overcome plenty of barriers: as elsewhere in the world, what internal documents call "radical nationalism," meaning independent nationalism.

It was convenient to phrase these concerns in terms of "defense against the USSR," but the pretext collapses quickly on inquiry, in the ME as elsewhere. The claim was conceded to be false, officially, shortly after the fall of the Berlin Wall, when Bush's National Security Strategy (1990) called for maintaining the forces in the ME, where the serious "threats to our interests.. could not be laid at the Kremlin's door" -- now lost as a pretext for pursuing the same policies as before. And the same was true pretty much throughout the world."

The global oil industry is worth $2.4trillion. While oil consumers are suffering, the increased oil prices have benefited oil companies across the board. Chevron boosted this year its first-quarter earnings 49% over a year ago to $4 billion, while ConocoPhillips and Exxon Mobil, posted similarly large first-quarter earnings. Combined, the three oil companies earned $15.7 billion during the first three months of this year. That's 17% more than the trio made during the same time last year. For all of 2005, they went on to pocket a combined profit of nearly $64 billion.

"All these companies have so much money, they don't know what to do with it,'' said Oppenheimer analyst Fadel Gheit. Still, George Bush said that his "inclination and instincts'' are that major oil companies are not intentionally overcharging drivers. He also rejected calls for a windfall tax on oil companies' profits but urged them to invest their record profits in expanding domestic energy supplies.

Lee Raymond, the chief executive of oil giant Exxon Mobil, who retired recently with a $400m pay and retirement deal caused outrage among environmentalists. In his 12 years at the top of the company, Exxon pumped an estimated six billion tons of carbon into the atmosphere and led the opposition to action on climate change. According to a former British minister for environment, the US wasted as much as the total energy used by Japan, the 2nd industrial power.

"In 1958, the Eisenhower administration identified the three leading challenges to the US; the ME, North Africa, and Indonesia -- all oil producers, all Islamic. North Africa was taken care of by Algerian (formal) independence. Indonesia was taken care of by Suharto's murderous slaughter (1965) and Israel's destruction of Arab secular nationalism (Nasser, 1967). In the ME, that established the close US-Israeli alliance -- "support for Israel" as the one reliable US base in the region (along with Turkey, which entered into close relations with Israel in the same year).

Suharto's coup aroused virtual euphoria, and he remained "our kind of guy" -- that compares well with Saddam Hussein -- who was also "our kind of guy" until he disobeyed orders in 1990.

Of course the article set off "most impressive tantrums, slanders, fabrications and deceit, and the other standard reactions". It was published in the London Review of Books (Harvard University which reportedly commissioned the piece got cold feet). The reaction proved, without meaning any offence to the feminists, the joke that a hen pecked husband would not be even allowed to complain.

A media barrage and denunciations eruption by Israelis and Jews, those who are part of the Israeli lobby or think like them and in many cases those who are scared off the lobby itself, which covers almost the entire spectrum of US politics.

Any US politician who votes against Israel gets the Jewish-Israeli lobby on its back and he gets defeated. It is all on record. An unfortunate commentary of the state of freedoms and democracy in USA, self promoter of democracy abroad. Heal thy self first.

ME Oil and partition of India

An important reinforcement to Chomsky's conclusion has been clearly brought out in a well researched book by a retired Indian diplomat Narendra Singh Sarila, 'The Shadow of the Great Game: The Untold Story of India's Partition.' Sarila, who was briefly ADC to the last British Viceroy to India, Lord Lois Mountbatten, in his book documents how the British leadership across the political spectrum, Conservatives and Labour, intrigued, told lies, divided the Indian subcontinent and created the state of Pakistan. Because Mahatma Gandhi with this opposition to violence and war, and emphasis on peaceful means to resolve all disputes and Jawaharlal Nehru with his non-real politic idealism and vision of creating friendship and understanding among colonized and exploited people of Asia, Africa, Middle east and elsewhere, would not join Western military pacts to protect from the Soviet Union, the oil resources in the Middle East dominated by Western powers.

Sarila highlights: "little known facts about the unobtrusive pressure that the USA exerted on Britain in favor of India's independence as well as unity in the hope of evolving a new post-colonial world order.

The British leaders warned Indian leaders against dollar domination. Sarila naively forgets, what the US had done in Cuba and Philippines, after it replaced Spain as the colonial master. After the second world war, British realized that they had to get out of India, but the subcontinent was a vital strategic asset, so till the end London tried to keep India as a dominion like Australia or Canada, to keep it as- "a base for Britain to continue their domination of the Indian Ocean and the oil-rich Persian Gulf with its wells of power," says the author. But as the "Congress party of India would not play the great game with Britain against the Soviet Union," the British decided to partition India.

The ultimate object was to retain at least some part in the North-West of India, "for defensive and offensive action against the USSR in any future dispensation in the sub-continent". And Britain knew that this could be best achieved by having a willing and subservient Pakistan as its client. So the only way -- was to use Jinnah to detach areas of India, which border Iran, Afghanistan and Sinkiang and create a new state there. The author also traces the roots of the present Kashmir imbroglio and how the matter was dealt with in the UN to help out ally Pakistan.

Churchill: "In war every truth has to have an escort of lies." A Western tradition

On the question of dominion status and independence for India in 1942,during the second world war, US President Franklin Roosevelt's envoy Harriman was informed by the British that approximately 75% of the Indian troops were Muslims (but only 35% of the troops were Muslims as Lord Wavel, British Military Commander had cabled London the same week). Later British Prime Minister Winston Churchill told Roosevelt in another context that" in war every truth has to have an escort of lies". a hoary western tradition over centuries. They have excelled themselves in the US led illegal invasion and occupation of Iraq.

The escort of lies is so numerous that there is little truth left.

The divide and create mayhem policy used in Indian subcontinent is being replicated in Iraq by Bush and Tony Blair, a wannabe Churchill, with the former once claiming that Churchill was like a Texan. Except that when faced with the nationalist determination of Turks under a young General Kemal Pasha (later Ataturk) at Gallipoli, Churchill's invasion plans during the First World War to land at the Turkish straits of Dardanelles was an unmitigated disaster. The British led allied forces were beaten back, some what like the situation in Iraq.

Sarila documents in detail how after the end of World War II in 1945, the new Labour government of Clement Attlee and Wavell decided to divide India. "The British used Jinnah and political Islam to protect their strategic interests. This policy was the mother of all causes for the creation of Pakistan," asserts Sarila. They succeeded in selling the idea of a truncated Pakistan to Jinnah.

Records show that the layout of the partition was decided in London much before Cyril Radcliffe actually got down to the job of demarcating boundaries. " A top-secret telegram of Lord Wavell, then Viceroy, to the Secretary of State in London dated Feb 6, 1946, suggested the lines on which British India could be divided. I was struck at the uncanny similarity between this blueprint and the actual partition of India in 1947," adds Sarila

On June 3, 1947, British Foreign Secretary Ernest Bevin, while addressing the Labour Party's annual conference, spilled the beans that the division of India "would help consolidate Britain in the Middle East."

A British top secret appreciation prepared in the Commonwealth Relations Office, soon after Indian independence, now available in the India office archives of the British Library, says: "Financially, industrially and from the point of view of manpower and general material resources India was stronger than Pakistan'' But that "India had no real background on which to build and unite a nation, there being no real affinity between its North and South, the existence of disruptive elements like the Sikhs and the likelihood of the Communists, with their own agenda, growing in numbers and influence."

On the other hand, the appreciation asserts that Pakistan, weak in financial and material resources -- through comfortable in food and manpower --"has a definite background, Islam, on which to build up a nation and to unite the people...and has less to fear from internal disruptive forces than the government of India, and less to fear from secessionist tendencies [Bangladesh!]." So much for the so called British political acumen!

Churchill and other British leaders had to be reminded by Indian leaders that their comments on such lines were unwarranted. Decades after 1947, the British media wrote obituary of elections and democracy in India, only to be proved wrong repeatedly.

The book sends out a cautionary signal to present-day Indians; to avoid misplaced idealism, superciliousness and escapism, to which some of their ancestors fell prey. New Delhi is now being seduced by Washington (ask US allies Turkey and Pakistan, how they have been let down in post cold war period) into an nuclear agreement to enmesh India into US spider's web, which would adversely affect the security of billion plus Indians. Throughout history barring a few, the last one being Indira Gandhi, navel watching Hindus have shown little strategic acumen. Recently Homi J. Sethna, a former heard of India nuclear agency and associated with the nuclear implosion of 1974, said that India would be better off signing NPT ( which is unjust like apartheid and dead) than getting into US parlor. Tell it to the ruling Indian decision makers steeped in Washington consensus!

With weak grassroots political organizations, Pakistan with many British and the British-era civil servants strengthened the bureaucracy's control over the polity. While the politicians wanted to strengthen relations with the British, Washington encouraged Military Chief General Ayub Khan to establish close cooperation with the Pentagon. And in 1958 the military took over power. USA, in pursuit of its national interests, has seldom bothered about the form of government in an ally. Otherwise, why would it embrace Pakistan, or say Egypt, Indonesia, Saudi Arabia or any of the other kingdoms and sheikhdoms and repressive regimes around the world. US talk of spreading liberty, freedom and democracy is just nauseating.

Beginning with Ayub Khan's unofficial visit to the US, the foundations for bilateral cooperation in the military field were laid. These have survived through thick and thin, like a bad marriage which neither side can let go, and despite bad patches, like the initial takeovers by Generals Zia ul-Haq and Musharraf. But the 1979 entry of the Soviet troops into Afghanistan and 9/11 attacks on US Trade Towers and Pentagon brought back the old romance. US finds military and other dictators easier to handle.

Washington now needs Pakistan to protect itself from the backlash of its earlier Afghan policies of creating and supporting the jihad in Afghanistan and then the Talebans. After 11 September, Washington desperately needed to stop Pakistan's nuclear bombs or material from falling into jihadi hands. The options in Pakistan are not very attractive. In the last elections, fundamentalist parties canvassing on anti-US platform, increased their votes to 11% from a normal 3% or so, and now control the sensitive Baluchistan and Frontier provinces bordering Afghanistan. They are also the major opposition in federal parliament.

US has now offered to sell Pakistan 18 odd F-16s, weapons and electronics worth over $5.1 billion in what would be its largest arms deal with Islamabad. Unless stopped by the US Congress, unlikely, Pakistan would get 36 new F-16C/D fighter planes worth $3 billion, weapons worth $650 million for them, 60 F-16A/B modification kits worth $1.3 billion and F-16 Engine Modifications and Falcon UP/STAR Structural Upgrades worth $151 million -- all ostensibly in aid of America's Global War on Terror (GWOT)

US exploited 911 for its GWOT to obtain bases in Uzbekistan and Kyrgyzstan. The US base in Uzbekistan has been closed and it is under pressure to withdraw from Kyrgyzstan too by Shanghai Co-operation Organization (SCO), Pakistan has become strategically important again ; to protect and promote energy interests in Middle East and Central Asia. So, Gen. Musharraf calls for demilitarization in Kashmir, while terrorist attacks are on increase. In Afghanistan, a resurgent Talebans are giving night mares to Nato troops, who have over reached into Central and South Asia from North Atlantic. And with the Jihadi blood running in the veins of Pakistan Army and polity, it would be a mission impossible in the region. Bush and Blair could learn a thing or two from the attitude of alienated Muslims in UK, specially of the British bred young men. Will any one take a dare and poll on what black Muslims in US might be thinking on Palestine, Afghanistan and the Iraq war and the occupation?

Middle East Oil History

A study of western imperialism since end 19th century proves the importance of oil and wars to acquire and protect wells of power. The rush of Nazi war machine to Romania and the Caucasus was to reach and control oil resources there. Even a study of the much hyped US Marshal plan to assist West Europe, while it stopped Communism, led to the diversion of coal based Euro economies towards greater use of petroleum, in which US dominance was increasing. After the 1973 increased oil price shock, which US did little to effectively stop, e.g. as against Iraq in 1991, Europe, so much dependent on oil, turned toward Nuclear power and some revival of coal power.

The secret British 1916 Sykes-Picot Agreement between Britain and France led to the division of the Ottoman Empire in ME into heterogeneous states to be ruled by the British and the French, but the British cleverly kept oil producing territories. It led to the creation of artificial states like Kuwait and others. The 1928 Red Line Agreement allotted the percentages of future oil production to British, French and American oil companies.

In 1945, before a declining Britain was divested of its colonies, US signed the following memo with the British: "Our petroleum policy towards the United Kingdom is predicated on a mutual recognition of a very extensive joint interest and upon control, at least for the moment, of the great bulk of the free petroleum resources of the world.. US-UK agreement upon the broad, forward-looking pattern for the development and utilization of petroleum resources under the control of nationals of the two countries is of the highest strategic and commercial importance." (See: Memorandum by the Acting Chief of the Petroleum Division, 1 June 1945, FRUS, 1945, Vol. VIII)

Two years later, the British government expressly noted that the M E was "a vital prize for any power interested in world influence or domination", since control of the world's oil reserves also meant control of the world economy. (See: Introductory paper on the Middle East by the UK, undated [1947], FRUS, 1947, Vol. V, p. 569.)

After UK and France lost their colonies, US stepped in as the dominant neo-colonial power in the ME region and elsewhere Its goals were expressed in a 1953 internal U.S. document: "United States policy is to keep the sources of oil in the Middle East in American hands." (See: NSC 5401, quoted in Mohammed Heikal, Cutting the lion's tail; Suez through Egyptian eyes, Andre Deutsch, London, 1986, p. 38)

In 1958, a secret British document described the principal objectives of Western policy in the Middle East: "The major British and other Western interests in the Persian Gulf [are] (a) to ensure free access for Britain and other Western countries to oil produced in States bordering the Gulf; (b) to ensure the continued availability of that oil on favourable terms and for surplus revenues of Kuwait; (c) to bar the spread of Communism and pseudo-Communism in the area and subsequently to defend the area against the brand of Arab nationalism." (See: File FO 371/132 779. 'Future Policy in the Persian Gulf', 15 January 1958, FO 371/132 778).

A pre-9/11 2001 report in the Oil & Gas Journal, reported that Central Asia represented one of the world's last great frontiers for geological survey and analysis, "offering opportunities for investment in the discovery, production, transportation, and refining of enormous quantities of oil and gas resources." According to an earlier Agence France Press report, "Massive untapped gas reserves are believed to be lying beneath Pakistan's remotest deserts, but they are being held hostage by armed tribal groups demanding a better deal from the central government."

US-Ibn Saud family -- Wahabi nexus

Since the 1930s after the discovery of oil in the Arab peninsula, a critical development in the history of oil industry has been the curious nexus between US, Saudi Arabia and a compact between the Saudi ruling elite and the puritan Wahabis, to handover the peninsula's oil wealth and revenues for western exploitation and benefit. This nexus has stood the test of time between successive Saudi and US governments. Washington has done everything to maintain the feudal regime in power, a regime which controls "the largest family business" in the world and lacks any popular mandate.

It began with Franklin Roosevelt, then to Dwight Eisenhower to Jimmy Carter to George H.W. Bush, Said Roosevelt said after meeting Saudi Arabia's king aboard a warship in 1945, "I hereby find that the defense of Saudi Arabia is vital to the defense of the United States." Carter, in 1980, put it even more forcefully: "Let our position be absolutely clear. An attempt by any outside force to gain control of the Persian Gulf region will be regarded as an assault on the vital interests of the United States."

Washington backed that commitment with military treaties reaching into the Middle East. Apart from NATO and CENTO, US military bases are stretched in east Africa, the Indian Ocean, and the Gulf to protect ME oil. Then came the Rapid Deployment Force and the US Central Command and the US 5th Fleet, now based in Bahrain. The 1991 Gulf War led to a massive expansion of the US military presence in the region, including US troops on sacred Saudi soil, a major cause of anguish and deep resentment among conservative Muslims.

In 2005 Saudi Arabia made $133.5 billion out of oil business and spent $38.5bn on defense. Some of the $57.1 billion surplus went to pay off the enormous 1991 Gulf War debt Saudi. The rest into US Treasury bonds and other capital markets in the West. The media reported that the princes take personal commissions on big trade deals and their money -- estimated in total at $1 trillion -- is invested mostly in the West. According to some analysts, Saudi Arabia has spent hundreds of billions of dollars on weapons, military supplies and equipment to preserve the authority of this oppressive monarchy, which the Al Qaeda is now confronting, with support from conservative clerics.

Saudi Arabia has financed individuals, religious and charity institutions, some fanatic, in other countries. But it is worth pondering, why it has allowed the wealth of the peninsula (and of the neighboring sheikhdoms) and its oil revenues which could have been used to uplift Muslim Ummah, it claims to represent and nurture by virtue of its control over the holy shrines in Mecca and Medina, which have primarily benefited Western powers, so that the thousands of Ibn Saud family princes and princesses could wallow in luxury and worse. It has obeyed US dictates to control the oil price to suit western interests. Its oil revenues have been used to buy expensive Western military hardware (did Kuwait used its in 1990-91) or kept as petrodollars. It allows US to print green backs unlike other nations, so that can run a massive current balance deficit, which finances it military budget, as much as the rest of the world put together. It allows USA to invade Afghanistan and Iraq and support Israel's brutal occupation of Palestine. US debt amounts to nearly 9 trillion dollars, and growing. To maintain it self the Saudi regime has set back economic and hence political and social development and progress of the Muslim Ummah.

By some estimates, as much of 40% of Saudi Arabia's oil revenues go straight into the pockets of the ruling family. Secrecy and fear permeate every aspect of the state structure in Saudi Arabia, and most Gulf Kingdoms. They lack political parties, trade unions, workers safety or immigrant rights advocates, women's groups, or other such democratic organizations. There are few legal associations or organizations to ensure a fair and independent judicial process. So, political and religious opponents can be detained indefinitely without trial or imprisoned after grossly unfair trials. Torture is endemic, and foreign workers, particularly non-Muslims are most at risk.

The UK government has kept quiet when many of its citizens have been judged to be tortured, for the sake of profits from oil and military sales. As for the media in ME, with few exceptions, there are stringent controls. In Saudi Arabia, the government controls all the domestic radio and TV stations, and closely monitors privately owned print media. No criticism of Islam, the ruling family or the government is tolerated. It is thus refreshing to have Al Jazeera TV exposing blatant lies and propaganda by western leaders and their subservient corporate media. But opposition to Al Jazeera comes not only from USA, which has targeted its offices and journalists, but from the Arab governments of the region as well. Al Jazeera is like a breath of fresh air and exercises some control over western propaganda machine.

In neighboring Iran, the democratically elected, popular government of Dr. Mohammad Mossadeq, which had planned to nationalize Iran's oil industry was overthrown and in its place, the Shah was installed in a covert operation masterminded by the American CIA and British MI6. (Roosevelt, Kermit, Countercoup: The struggle for the control of Iran, McGraw Hill, London, 1979.)

Since the overthrow of the Shah in 1979 by the Khomeini led revolution, US had tried to punish and isolate Tehran and openly asked for a regime change, providing finances. It has rebuffed all Iranian proposals for talks to normalize relations. Washington has not lifted its trade embargo on Iran, and opposes use of its territory for pipe lines, the most obvious transit route for the delivery of oil and natural gas from the Caspian and central Asia to global markets, especially in Europe and Japan. US has even brow beaten a supine Indian administration to go slow in its project of energy security with Iran.

In the current stand off with USA and the West on Iran's Uranium enrichment program for power generation, it appears that Iran's policy is based on its perception that the US has been weakened by the quagmire in Iraq and the rise in the price of oil. Tehran has publicly threatened to use the oil weapon and throttle its passage though the Gulf and take other retaliatory measures.

Energy interests rule America

The US has never been serious about the long term energy question, in spite of its many declared missions. Way back, President Nixon announced a national goal that by 1980s "the United States will not be dependent on any other country for the energy." The deadline of energy independence was extended to 1985 by President Ford. Then President Reagan promised to "ensure that our people and our economy are never again held hostage by the whim of any country or cartel."

"America is addicted to oil," says George Bush. Because that's the way powerful interests in Washington want it to be. Bush's policy appears to feed the addiction. This was highlighted by a series of television advertisements, launched by a think tank called the Competitive Enterprise Institute, which argued that carbon dioxide emissions are a sign of American productivity and progress. To hell with the heating of the Planet Earth and catastrophic consequences.

"The fossil fuel economy is based on two illusions -- one, that we can keep up our oil addiction, and two, that substituting renewable energy with fossil fuel has only benefits, no costs. Climate change is very high cost of an economy based on oil. We are starting to eat oil and drink oil. Oil is at the heart of industrial food production and processing, and long transportation," says expert Shiva Vandana.

"The Association for the Study of Peak Oil (ASPO), an umbrella organization of oil expects, mainly geologists who helped find oil fields are now warning us that there are only a trillion barrels or less of oil left, and the supply will peak within this decade. 'Peak Oil,' or the topping point, is the highest amount that can ever be pumped. Beyond 'peak oil,' there will be an overall decline in production and an increase in oil prices (even $100 per barrel)."

Look at the energy interests which rule US and the rest of the world. Zalmay Khalilzad, US Ambassador to Baghdad, was a Unocal consultant, as was, according to some reports, President Hamid Karzai of Afghanistan installed by USA after the Talebans melted into the countryside in 2001. It is well known that the Bush family acquired its wealth through oil; former President George Bush Sr still works with the Carlyle Group that specializes in oil investments and consultations abroad. National Security Adviser Condoleezza Rice was on the board of Chevron before going to Washington. Dick Cheney, before becoming vice president, worked for the giant oil conglomerate Halliburton.

Many senior US officials, while in office, establish contacts with dictators all around the world with oil wells of power, to later help seal deals and enrich themselves easily. Many former secretaries of state, of defense and other departments were falling over each other for a paid dinner in Washington in 1994 to honor Haidar Aliev of oil rich Azerbaijan.

The use of petroleum for air warfare, running military machines on the ground, naval ships was followed by basing the whole Western way of life and civilization on perpetual supply of cheap petroleum and gas, under Western control. And they have kept the prices low. So American cities have spread out into widely spread suburban sprawls, based on cheap supply of energy and metropolitan centers with its high-rise apartments and office towers again based on cheap supply. What will happen when supplies shrink and prices rise further!

By now it is quite clear that the US War on Terror, beginning with the attack on Afghanistan was exploited by Washington to place its forces for strategic control of energy rich regions, as spelt out by the Project for the New American Century (PNAC), a controversial organization whose members still dominate decision making in Washington.

The arrival of American troops at their doorstep after September 11 did trigger worry in Russia and China but neither country objected vigorously to the US setting up bases in Uzbekistan and Kyrgyzstan. But soon it was clear that US invasion of Iraq was to gain control its oil and of the region, and the bases in central Asia were part of US plans to control central Asian energy and other resources.

The idea that that the US should control the oil and gas resources and territories of Central Asia was highlighted in the early 1970s by Zbignew Brzezinski and later explained in his book 'The Grand Chessboard.' A former advisor to Rockefeller and President Jimmy Carter, Brzezinski's book reads like a document for strengthening the neo-cons case for the war on Iraq for its oil. But seeing the mess in Iraq, Brzezinski is now singing a different tune.

Washington 's Energy dilemma

"In 2005 the world consumed about 83.7 million barrels per day, with 25%, or about 20.8mbpd, consumed in the US alone. Of the US demand its Energy Information Administration (EIA) says that 58% was supplied by imports, a figure forecast to increase to 70% by 2025, when imports will nearly equal total consumption today. While the EIA forecasts oil demand growth in Europe and Japan to be flat from now until 2030, US oil demand is expected to grow by 37% over the same period.

"It will therefore take a huge amount of US political willpower to mandate the kinds of actions necessary to reduce substantially the level of oil imports over the next 20 years. Some tough measures, including, for example, higher gasoline taxes and more stringent fuel-economy standards for vehicles, would be politically costly for both Congress and the White House. Proposals so far to promote the use of ethanol, expand the fleet of hybrid cars, or even increase domestic supplies by opening up new areas for exploration and production will have a modest impact at best on reducing import dependence."

The booming economies of Asia, especially China and India, provide lucrative alternative markets to the Gulf producers with about two-thirds of the world's oil reserves." The EIA forecasts that 43% of the growth in demand between 2003 and 2030 will come from Asian nations. Over the same period the OPEC would supply 31% of the forecast increase in world production capacity.

According to The Economist, the top five companies in terms of reserves are the national oil companies of Saudi Arabia, Iran, Iraq, Kuwait and Venezuela. Developments in Russia and Venezuela have to be watched more closely.

Washington is now worried about the slippage of energy control it took over from UK and others. The recent meeting of the finance ministers of the G8 in St Petersburg focused on energy security.

The joint communique said: "We discussed the current situation in the energy markets and the risks that high oil prices pose for the global economy going forward. We call for comprehensive action by both energy producing and energy consuming countries to facilitate investment in the energy sector, improve energy efficiency, including through national initiatives, and promote greater transparency and reliability in energy-market data, including through development of a global common standard for reporting oil reserves. We recognize the importance of the principles of the Energy Charter, of diversification of energy markets and supply sources, and of strengthened energy response cooperation in ensuring energy security."

As quid pro quo Russia is insisting on equity rights in utilities, pipelines, natural-gas facilities and other infrastructure in the United States and Europe, for matching access for Western companies to the Russian energy industry. Unlike Saudi Arabia and ME states, Russia wants same investment opportunities as US led West wants in Russia.

Russian Gazprom hopes to buy into the US east coast in pipelines and liquefied-natural-gas conversion facilities involving massive investments. It has already acquired assets with Germany in the North Sea Gas Pipeline project. (German companies were given shares in the Russian gas fields in return for Gazprom gaining access to energy production and transmission in Germany.)

But Russian Energy Minister Viktor Khristenko said that Moscow was not going to sign the Energy Charter Treaty (which aims at setting ground rules and treaty obligations regarding third-party pipeline access and transit obligations) during the summit.

Meanwhile, Russia signed an agreement on June 22 with Hungary for the extension of Russia's Blue Stream gas pipeline to Central Europe. Italy has also signed an energy deal bilaterally with Russia on the eve of the G8 summit.

Two experts Enno Harks and Friedmann Muller at the German Institute for International and Security Affairs, who were in Tehran for an energy conference said that 10 of the current 25 EU member states depend on Russia for more than 50% of their total natural-gas supplies, and five of them for 100%. France, Germany and Italy import between 25% and 50% each. Europe today is by far the world's biggest natural-gas import market - and will remain so at least until 2030.

According to projections by the International Energy Agency, by 2030 North America will import just less than 200 billion cubic meters of gas a year, China/India some 85 billion cubic meters and Europe more than 530 billion cubic meters. "Europe thus amounts to almost double the two regions added together," said Harks. But encouraged by USA, Poland, Ukraine and Georgia foolishly keep on needling Russia.

Caspian Sea Basin

The US bases around the Caspian were ostensibly requested to stem the flow of drugs, nuclear material, and small arms illicitly crossing borders, but basically they are to control the Caspian basin energy resources. USA supported construction of a new oil pipeline from Baku in Azerbaijan to Ceyhan on the Mediterranean in Turkey. The completion of this key strategic asset, 'East-West energy transit corridor' with oil also from Kazakhstan would cut out Iran and Russia.

In Azerbaijan, Ilham Aliev, son of late President Haidar Aliev, called the father of the Azeri nation was allowed to succeed his father in a controversial election in 2003, but Ilham might find the US embrace too suffocating and meet the fate of US loyalist Shevardnadze, ex President of next door Georgia. if not found amenable to US designs in the region both for security of oil and to destabilize or attack Iran from Azerbaijan. Israel is present in Baku since the inception of the state.

US officials concede that Azerbaijan is vital for the future of the US bases in the region. Last year Stratfor website reported that some US aircrafts, troops and materiel were already in the country, and more forces and aircraft would be deployed later. The access to a base in Azerbaijan, situated north of Iran, reportedly came after some heavy coercing. Nato's Assistant Secretary-General for Defense Planning and Operations, John Colston visited Baku last year and reported that "Special reports will be prepared soon, which will identify the main directions of cooperation between the alliance and Azerbaijan."

Ilham Aliyev favors a pluralistic foreign policy, having resolved differences with Russia over its troops in the Qabala base, northwest of Baku. It is believed that President Putin has tentatively agreed to allow US troops (for pipeline security) being stationed there, but wants that he must remain in the loop. Like the complex Sunni, Shia and Kurd relationships in Iraq, which US ignored before invading Iraq, it might like to ponder that Azerbaijan is also a Shia nation, while Iran has twice as many Azeri ( Turkic language cousin) speaking Iranians, including its spiritual leader Ali Khameini. The Muslim masses have seen through US game and its ruthless pursuit of interests. Instead US might worry over Azeris and others sabotaging Baku Tiblsi Ceyhan pipeline.

Georgia, part of US group of former Soviet republics now surrounding Russia was paid US$ 64 million as part of a two-year "train and equip" mission, in which US Special Forces trained a 2,000 strong antiterrorist force that patrols the Pankisi Gorge, which is where Chechen rebels and AI Qaeda fighters hide out. This easily outstrips the country's annual income from overseas workers and tourism. The company building the barracks and other facilities for the US trainers is Kellogg Brown & Root division of Halliburton industries, the former business of vice president Dick Cheney, which is building plenty of other facilities in this region, as in Iraq.

Azerbaijan, Ukraine, Georgia and Moldova are Members of GUAM, an organization modeled on NATO's Conventional Forces in Europe, which was launched in 1996. They coordinate their defense policies and pool diplomatic resources against Russia. The organization encouraged by USA was to create more security through collaboration against possible destabilizing action by Russia. But all countries except Azerbaijan are dependent on supplies of oil and gas either from or through Russia which can employ tactics like suspending the supplies. These tactics were used against Georgia and Ukraine, the latter were asked to pay commercial rates for the Russian gas.

US failed to persuade its Nato ally Turkey in joining and letting US troops use Turkish territory in South East to open another front in north Iraq in March 2003. Deep differences have cropped up between the two Nato allies, with fundamental changes in Ankara 's policies towards historical enemies like Russia, Iran and Syria.

US disputes with Russia, China and Iran

Following the USSR's collapse in 1991, its essential infrastructures -- political, economic and social -- disintegrated. It lost vast territories in Central Asia and the West. Its GDP plummeted to nearly half. Poverty and misery shrank its population. And in August 1998, the financial system imploded. But as western history has shown it was an opportunity for USA to further increase western hold over oil resources and cut out Russia.

Both under Democrats and Republicans, Washington has conducted, two policies. One is deceptive and outwardly reassuring of "strategic partnership and friendship," with Bush looking into and liking Putin's soul. But the other is the real and exceedingly reckless, to shrink Russia and its allies, Yugoslavia in Europe, inroads in Georgia, Azerbaijan and even Ukraine. When US tried to carry out its franchised street revolutions for regime changes in Kyrgyzstan and Uzbekistan, Russia and China, using the amorphous architecture of SCO, along with its central Asian members held the first ever Russian -- China military exercises off the coast in the east, thus sending a warning. Iran, an observer, is keen to join SCO and might be invited to join as full member.

This US policy objective was articulated in the "Defense Planning Guidance for 1994-99", written by Paul Wolfowitz, then under secretary of defense', to prevent the re-emergence of a new rival, either on the territory of the former Soviet Union or elsewhere, that poses a threat of the order posed formerly by the Soviet Union." It remains the principal aim of Washington 's strategy even today, by ensuring that only the US controls the energy supplies of the Gulf and adjacent areas of Asia, it is the Carter Doctrine of 1980, which now includes the Caspian Sea basin too.

A US expert on Russia, Stephen Cohen, wrote recently that the collapse of the USSR has produced in Washington 'the assumption that the United States had the right, wisdom and power to remake post-Communist Russia into a political and economic replica of America. A conceit as vast as its ignorance of Russia's historical traditions and contemporary realities, it led to the counterproductive crusade of the 1990s, which continues in various ways today. The other was the presumption that Russia should be America's junior partner in foreign policy with no interests except those of the United States. By disregarding Russia's history, different geopolitical realities and vital interests, this presumption has also been senseless.' Cohen could have added that similar foolish assumptions by Neo-Cons have led the US to the Iraqi quagmire, which could lead to a Dunkirk like situation for US troops with no clear cut escape routes.

To counter US forays into Russian strategic and economic space, Moscow has moved back into Syria, by writing off old debts of many billions of dollars and supplying short range missiles and other arms and to install Iran's nuclear energy power plants and support it in UN on the controversy on Tehran's enrichment of nuclear fuel. Russia would also supply arms including sophisticated missiles to Tehran. Energy hungry China has joined Russia in supporting Iran in UN.

China's growing demand in the global oil market is causing anxiety in USA. China is now the second-largest oil market in the world, past Japan. It consumed 6.6mbpd of oil in 2005. It produced 182 million tons of crude oil in 2005, a figure experts say will climb up to 195 million tons by the end of 2010. By then, the country's production demand and consumption will be hovering around 330 million tons and 350 million tons respectively, Last year, China's crude oil imports totaled 127 million tons, about 40% of its total consumption. About half of China's oil import came from the Middle East.

China has signed a long-term $100 billion agreement with Tehran including a 51 percent stake in Iran's largest onshore oil field. Beijing is also investing heavily in Central Asia for its energy and other resources. It has constructed a 1,000-kilometer pipeline from Kazakhstan's central Karaganda region to its own adjoining Xinjiang region, which was completed recently. The Karaganda pipeline will be a vital link in a 3,000-kilometer project that would link China further west to the Caspian Sea. The first phase of the pipeline will transmit 10 million tons of oil a year, a figure that will double when the entire project is completed in 2011. Currently China imports 80% of oil through the Strait of Malacca.

Like the US, Chinese oil production is now flat, and demand is rising steadily. Therefore, the Chinese state-owned oil companies have been acquiring energy assets in the Middle East, Central Asia, Africa and Latin America, prompting speculation that China is embarking on a resources grab to fuel its rise to superpower status.

In the global battle for control of energy resources, Iran occupies a pivotal position. It spawns both the Persian Gulf and the Caspian Sea, allowing Tehran to play a significant role in the two areas of greatest energy concern to the United States, Russia and China. Iran also sits atop the strategic Strait of Hormuz -- the narrow waterway from the Gulf to the Indian Ocean through which about one-quarter of the world's oil moves every day.

With the world's second-largest reserves of petroleum -- an estimated 132 billion barrels (11.1% of the world's known reservoirs), Iran also has the second-largest reserves of natural gas -- 27.5 trillion cubic meters, or 15.3% of known reservoirs. Iran may have less oil than the Saudis and less gas than the Russians, but no one controls so much of both and is strategically located. Many states, including China, India, Japan and the European Union countries, already depend on Iran for significant shares of their petroleum supplies. Iran will remain a major energy supplier.

Chinese-Russian Oil Cooperation

China's oil imports from Russia went up 50% last year to 70 million barrels. Chinese oil companies are looking for major investments in Russian energy sector. Rosneft, the main state-owned oil exporter to China was granted over $6 billion in Chinese loans.

It appears that the main Chinese energy focus would be on Siberia which has half of all the proven oil reserves of the former USSR and 70% of total Russia's coal reserves. The region is Russia's largest producer of oil, the second for coal and a major centre of metal industries. Some 140 out of 200 largest enterprises in Siberia are weapon manufacturers, whose main customer is China.

China is also working with Uzbekistan to develop its gas fields in the Ferghana Valley and has invested in hydroelectric projects in Tajikistan and Kyrgyzstan. China is greatly interested in Central Asian markets for its products. Beijing is also signing energy deals and agreements in Africa and Latin America, traditionally the backyard of US oil companies. It even made a bid for US oil giant UNOCOL, which US rejected. How else would China utilize US$ 900 billions which US owes to China. USA and Europe want freedom to invest everywhere.

The maverick Hugo Chavez of Venezuela

Under a program sometimes dubbed petro-diplomacy, CITGO, a Venezuela's wholly-owned gas and oil subsidiary, has been providing discounts of up to 60% on heating oil to poor communities in Maine, Massachusetts, Pennsylvania, Delaware, Pennsylvania, Vermont, Connecticut and Rhode Island. Most local politicians, welcomed by local politicians but much to the chagrin of the US administration, whose record of providing succor and looking after poor, black and Hispanic Katrina Hurricane victims remains a blot on the richest democracy. The rehabilitation program is in disarray, with the rich cronies skimming away the allotted funds.

But CNN or BBC would not dare touch this story while daily televising miseries and disasters in the developing world. President Hugo Chavez of Venezuela, whom US has tried to unseat many times, insists that the program is rather an example of corporate responsibility because CITGO, which is now making large profits in the US is now giving back to communities where it does business. In the 20 years Venezuela owned CITGO never paid dividends to the Venezuelan state. Only in 2004 and 2005 has it begun to repatriate some of its profits to Venezuela.

Rep. Joe Barton, the powerful Texas Republican, chairman of the House Energy and Commerce Committee, who reportedly received some $2 million in campaign contributions from the energy industry threatens to launch an investigation into possible antitrust violations and wants that CITGO produce all records, minutes, logs, e-mails and even desk calendars related to the program

For the first time in its history, Latin America, sharply split between a tiny rich white elite and huge poverty, is moving towards a degree of independence and also a degree of integration. So the United States is terrified. The major energy producer in the hemisphere is Venezuela and had become by 1928 the leading oil exporter in the world. "Venezuela is now moving towards independence, and the United States is frantic. That's why you have this hysteria about Chavez, because this is a big energy producer." Said Noam Chomsky recently. Further more, it influences others. The second energy producer in South America is Bolivia, where. a people friendly President was elected. "They're moving towards independence, from Venezuela down to Argentina is pretty much out of US control, not totally, but pretty much."

"The US in the past had two fundamental mechanisms for controlling Latin America: one is violence, the other is economic strangulation. They're both weakening. The last exercise of violence was in the year 2002, when in its dedication to democracy promotion the US supported a military coup to overthrow the elected government of Venezuela. Well, had to back down, for one thing, because there was a popular uprising in Venezuela."

In the extensive polls taken in Latin North America, it turns out that the popularity of the government (Chavez) has shot way up in -- since 1998, and it now the most popular elected government in Latin America; in fact, in the hemisphere -- sure, it's driving the United States berserk. That's why you have the constant hysteria from the government and the media about the terrible things in Venezuela and Bolivia."

"So, the US is preparing for more use of violence. If you take a look at the number of US military personnel throughout Latin America, the military bases, the training of Latin American officers, that's all going up very sharply. In fact, for the first time ever, there are now more US military personnel in Latin America than personnel for the major federal aid organizations. That never happened during the Cold War. Also military training for Latin American officers, and you know what that means," concluded Chomsky.

Ironically, while Iraqis are suffering terribly but by tying down the mighty US hype power, they have exposed the limits of Washington's power on the ground, where its effete rulers, rely on its poor people and mercenary forces. Iraq's freedom fighters have helped oil producers like Iran, Venezuela and others against US led efforts to control their resources.

It has encouraged North Korea to go ahead with its multi- missile launch program despite US warnings and threats. A poor country, North Korea has one of the most developed missile systems in the world, meant both as a preemptive defense -- to scare off potential attackers -- and for export. Countries that have bought missile parts and technology from North Korea include Iran, Egypt, Pakistan, Libya, Syria, the United Arab Emirates and Vietnam.

Pakistan was a valuable customer, which gave it Atomic bomb technology in exchange for missile technology.

In the wake of US policy of preventive and preemptive attacks on Iraq and regular threats to Syria and Iran, many admire the steps taken by North Korea to defend itself, in a world made lawless by USA.

K Gajendra Singh K Gajendra Singh served as Indian Ambassador to Turkey and Azerbaijan in 1992 -96. Prior to that, he served as ambassador to Jordan (during the 1990 - 91 Gulf war), Romania and Senegal. He is currently chairman of the Foundation for Indo-Turkic Studies, in Bucharest.

Click here or the image below to go to the Power web page for information and links to the membership website sales copy.

power station models box

Project Finance

Home Us | Subscribe | Excel Tips | Resources | Site Map | Contact Us | Articles | Power | Disclaimer | Affiliate Program

© 2006 | 1st Analyst Information Services CC | All Rights Reserved.