"OPEC - Differences Involve More than Oil"
Sydney M. Williams
Last Thursday, the New York Times described the just-concluded OPEC meeting: “It was the first time in two decades that OPEC delegates could not arrive at a public agreement at a formal meeting.” “Acrimonious” was the Wall Street Journal’s way of putting it. The Journal quoted one delegate from the Gulf region who said that the failure to reach a consensus “represented a breakdown of the group’s fundamental principle.”
While the stated differences between the two camps (Iran, Algeria, Angola, Venezuela, Ecuador and Libya on one side with Saudi Arabia, UAE, Kuwait and Qatar on the other – and Nigeria and Iraq not taking sides,) reflect their respective views on the global economy, the tension reflects a manifestation of the enmity between the Saudis and the Iranians, flavored with pro-democracy movements in the Middle East and North Africa. (The lack of agreement is also indicative of the fact that some countries can increase production, while others are at or near their limits.)
It is Iran’s pursuit of nuclear weapons that is most disquieting and which lurks behind these sessions. Israel has been the country most vocal in calling a halt to Iran’s continuing progress toward developing nuclear weapons, but Saudi Arabia must be as fearful. The country is immensely rich, with an estimated 264 billion barrels in proven reserves. They are currently producing a little less than 10 million barrels per day – approximately 140 barrels per year for every citizen. The ruling classes have an enormous stake in perpetuating a stable Middle East and continued global economic growth. In contrast, Iran, with a population of 78 million and despite being OPEC’s second largest oil producer, ranks 88th on the CIA’s list of nations when listed according to per capita GDP. (OPEC members Qatar and Kuwait rank 2nd and 8th, respectively.) Iran stands to garner far more prestige and clout within the region as a nuclear power; certainly that is the belief of the terrorist who serves as President of the Islamic Republic of Iran, Mahmoud Ahmadinejad.
Without the backing of China and Russia for more intense sanctions, and with a U.S. President reluctant to take a strong, unilateral stand, Iran’s eventual membership in the club of nations with nuclear weapons seems assured, perhaps coming as early as the end of this year. Israel may once again come to the world’s rescue, but she could only do so with U.S. support, an unlikely prospect under the Obama administration. It is conceivable that hackers who regularly break through bank security programs could be employed to wreck the computers and software that govern Iran’s nuclear pursuit. Keep in mind, a nuclear-empowered Iran would have severe repercussions on the entire Middle East. An arms race within the region would likely follow. The ability and willingness of Saudi Arabia, and her OPEC allies (Kuwait, Qatar and the UAE) to serve as allies of the West would be at risk.
The “Arab Spring” that infected the region was deferred in both Iran and Saudi Arabia. In Iran, two years ago the Green Revolution was brutally put down, while the United States, ignobly, remained silent. A photograph of a shot and dying 26-year old Neda Agha-Soltan made its way around the world on YouTube and may have been a catalyst for the pro-democracy movements this year in much of the Arab world. Saudi Arabia used another old fashioned remedy – bribery. Friday’s New York Times reported that King Abdullah paid an extra two months’ salary to all government employees and paid $70 billion for 500,000 units of low-income housing. Thus far Riyadh’s efforts appear to have worked, as the only major street protest (March 11) largely fizzled.
The developed (and developing) world will gradually utilize more renewable energy sources, but the process is slow and expensive. No matter what the pundits may say, progress will be measured in generations, not years. Wind farms and solar panels, as attractive as they are in theory, will not do the job. In the meantime fossil fuel consumption will continue to rise, especially as developing nations increase their living standards. The CIA estimates that provable reserves in the U.S. amount to 19.12 billion barrels. However, the potential is far higher. If one adds in the estimated reserves from the Arctic National Wildlife Refuge, the Alaskan National Petroleum Reserve and the Bakken Reserve, then estimates rise to 134 billion barrels.
In not choosing to develop our own sources, we only become more reliant on the Middle East. Iran with nuclear weapons alters the balance of power in the region in a very negative manner. OPEC currently produces 40.1% of world production, but more important, according to the World Fact Book, they hold 62.1% of the world’s reserves. Our self interest requires a stable Middle East. Democratic governments are the best guarantors of peace. The “Arab Spring” we have been witnessing is an indication that the lure of freedom appeals to all people and that democracy is its best manifestation. But the protestors need our support, both moral and real. For all the whining about the Iraq War, that country, unlike any others in the Middle East apart from Israel, is now a fledgling democracy. A nuclear-empowered Iran would have an enormously destabilizing and negative effect, yet the United Nations and the developed world, including Washington, appear to have a surprisingly complacent attitude as to such an eventuality.
The unstated implications of the OPEC meeting that concluded last week with no resolution may portend a future far more frightening than simply a matter of quotas.
Thought of the Day
“OPEC – Differences Involve More than Oil”
June 13, 2011Last Thursday, the New York Times described the just-concluded OPEC meeting: “It was the first time in two decades that OPEC delegates could not arrive at a public agreement at a formal meeting.” “Acrimonious” was the Wall Street Journal’s way of putting it. The Journal quoted one delegate from the Gulf region who said that the failure to reach a consensus “represented a breakdown of the group’s fundamental principle.”
While the stated differences between the two camps (Iran, Algeria, Angola, Venezuela, Ecuador and Libya on one side with Saudi Arabia, UAE, Kuwait and Qatar on the other – and Nigeria and Iraq not taking sides,) reflect their respective views on the global economy, the tension reflects a manifestation of the enmity between the Saudis and the Iranians, flavored with pro-democracy movements in the Middle East and North Africa. (The lack of agreement is also indicative of the fact that some countries can increase production, while others are at or near their limits.)
It is Iran’s pursuit of nuclear weapons that is most disquieting and which lurks behind these sessions. Israel has been the country most vocal in calling a halt to Iran’s continuing progress toward developing nuclear weapons, but Saudi Arabia must be as fearful. The country is immensely rich, with an estimated 264 billion barrels in proven reserves. They are currently producing a little less than 10 million barrels per day – approximately 140 barrels per year for every citizen. The ruling classes have an enormous stake in perpetuating a stable Middle East and continued global economic growth. In contrast, Iran, with a population of 78 million and despite being OPEC’s second largest oil producer, ranks 88th on the CIA’s list of nations when listed according to per capita GDP. (OPEC members Qatar and Kuwait rank 2nd and 8th, respectively.) Iran stands to garner far more prestige and clout within the region as a nuclear power; certainly that is the belief of the terrorist who serves as President of the Islamic Republic of Iran, Mahmoud Ahmadinejad.
Without the backing of China and Russia for more intense sanctions, and with a U.S. President reluctant to take a strong, unilateral stand, Iran’s eventual membership in the club of nations with nuclear weapons seems assured, perhaps coming as early as the end of this year. Israel may once again come to the world’s rescue, but she could only do so with U.S. support, an unlikely prospect under the Obama administration. It is conceivable that hackers who regularly break through bank security programs could be employed to wreck the computers and software that govern Iran’s nuclear pursuit. Keep in mind, a nuclear-empowered Iran would have severe repercussions on the entire Middle East. An arms race within the region would likely follow. The ability and willingness of Saudi Arabia, and her OPEC allies (Kuwait, Qatar and the UAE) to serve as allies of the West would be at risk.
The “Arab Spring” that infected the region was deferred in both Iran and Saudi Arabia. In Iran, two years ago the Green Revolution was brutally put down, while the United States, ignobly, remained silent. A photograph of a shot and dying 26-year old Neda Agha-Soltan made its way around the world on YouTube and may have been a catalyst for the pro-democracy movements this year in much of the Arab world. Saudi Arabia used another old fashioned remedy – bribery. Friday’s New York Times reported that King Abdullah paid an extra two months’ salary to all government employees and paid $70 billion for 500,000 units of low-income housing. Thus far Riyadh’s efforts appear to have worked, as the only major street protest (March 11) largely fizzled.
The developed (and developing) world will gradually utilize more renewable energy sources, but the process is slow and expensive. No matter what the pundits may say, progress will be measured in generations, not years. Wind farms and solar panels, as attractive as they are in theory, will not do the job. In the meantime fossil fuel consumption will continue to rise, especially as developing nations increase their living standards. The CIA estimates that provable reserves in the U.S. amount to 19.12 billion barrels. However, the potential is far higher. If one adds in the estimated reserves from the Arctic National Wildlife Refuge, the Alaskan National Petroleum Reserve and the Bakken Reserve, then estimates rise to 134 billion barrels.
In not choosing to develop our own sources, we only become more reliant on the Middle East. Iran with nuclear weapons alters the balance of power in the region in a very negative manner. OPEC currently produces 40.1% of world production, but more important, according to the World Fact Book, they hold 62.1% of the world’s reserves. Our self interest requires a stable Middle East. Democratic governments are the best guarantors of peace. The “Arab Spring” we have been witnessing is an indication that the lure of freedom appeals to all people and that democracy is its best manifestation. But the protestors need our support, both moral and real. For all the whining about the Iraq War, that country, unlike any others in the Middle East apart from Israel, is now a fledgling democracy. A nuclear-empowered Iran would have an enormously destabilizing and negative effect, yet the United Nations and the developed world, including Washington, appear to have a surprisingly complacent attitude as to such an eventuality.
The unstated implications of the OPEC meeting that concluded last week with no resolution may portend a future far more frightening than simply a matter of quotas.
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