Why Is The Obama Administration Allowing China To Buy Up U.S. Oil And Gas Deposits?

Sunday, May 13, 2012
Michael Snyder, Contributor
Activist Post

If we are trying to become independent of foreign oil, then why is the Obama administration allowing the Chinese government to buy up U.S. oil and gas deposits worth billions of dollars? This makes absolutely no sense whatsoever. The United States desperately needs to maintain control over its own domestic energy resources so that we can end our addiction to foreign oil.

As I have written about previously, the United States actually has plenty of oil. If we would simply use the resources that we already have, we would never have to import a single drop of foreign oil. But instead, we continue to be the largest importer of oil on the planet and we are allowing China to rapidly buy up oil and gas deposits inside the United States. This is fundamentally wrong and it is a serious threat to our national security. But apparently everything is for sale in the United States today, and that includes our precious energy resources.

The Chinese government is using two giant corporations to buy up these energy resources.

The first is the China National Offshore Oil Corporation (CNOOC). According to Wikipedia, this corporation is 100 percent owned by the Chinese government....

CNOOC Group is a state-owned oil company, fully owned by the Government of the People's Republic of China, and the State-Owned Assets Supervision and Administration Commission of the State Council (SASAC) performs the rights and obligations of shareholder on behalf of the government.

The second is Sinopec Corporation. Sinopec Group is the largest shareholder (about 75% of the shares) in Sinopec Corporation. And as the Sinopec website tells us, Sinopec Group is owned by the Chinese government....

Sinopec Group, the largest shareholder of Sinopec Corp., is a super-large petroleum and petrochemical group incorporated by the State in 1998 based on the former China Petrochemical Corporation. Funded by the State, it is a State authorized investment arm and State-owned controlling company.

So wherever you see CNOOC or Sinopec you can replace those names with the Chinese government. The Chinese government essentially runs both of those companies.

And both companies have been very busy buying up U.S. oil and gas deposits.

For example, CNOOC recently completed a 570 million dollar deal that gives it a one-third interest in huge oil and gas deposits in Colorado and Wyoming. The following is from Wyoming Energy News....

Chinese energy company CNOOC Ltd. has agreed to pay $570 million for a one-third interest in Chesapeake Energy Corp.’s 800,000 leased acres in northeast Colorado and southeast Wyoming. The acreage is in the Denver-Julesburg (DJ) and Powder River basins. CNOOC is China’s biggest offshore oil and natural gas producer.

In fact, according to a recent Business Insider article, this deal gives the Chinese government the right to a third of any new oil discovered by Chesapeake Energy in the entire region....

The Niobrara Shale formation stretches over Colorado and Wyoming, as well as Kansas and Nebraska. Chesapeake Energy's position is in Wyoming and Colorado. If Chesapeake find any more oil in this region, CNOOC has the rights to 33.3% of what is found.

But this is not the only area of the country where China now owns energy rights. The following is an excerpt from a recent state-by-state breakdown that appeared in the Wall Street Journal....

Louisiana: Sinopec has a one-third interest in 265,000 acres in the Tuscaloosa Marine Shale after a broader $2.5-billion deal with Devon Energy. 

Michigan: Sinopec gained a one-third interest in 350,000 acres in a larger $2.5 billion deal with Devon Energy. 

Ohio: Sinopec acquired a one-third stake in Devon Energy’s 235,000 Utica Shale acres in a larger $2.5 billion deal. 

Oklahoma: Sinopec has a one-third interest in 215,000 acres in a broader $2.5 billion deal with Devon Energy. 

Texas: CNOOC acquired a one-third interest in Chesapeake Energy’s 600,000 acres in the Eagle Ford Shale in a $2.16-billion deal.

The Texas deal was particularly noteworthy. The following is how a San Antonio news source described that deal....

State-owned Chinese energy giant CNOOC is buying a multi-billion dollar stake in 600,000 acres of South Texas oil and gas fields, potentially testing the political waters for further expansion into U.S. energy reserves.

With the announcement Monday that it would pay up to $2.2 billion for a one-third stake in Chesapeake Energy assets, CNOOC lays claim to a share of properties that eventually could produce up to half a million barrels a day of oil equivalent.

So why is the Obama administration allowing this to happen?

Are they so desperate to have China continue lending money to the United States that they would allow the Chinese government to pillage our precious energy resources?

Somebody needs to be asking our politicians that question.

But oil and gas are not the only U.S. assets that the Chinese have been buying up.

In a previous article, I detailed how the Chinese have been purchasing huge chunks of real estate all over the country as well.

For example, a recent Forbes article detailed some of the real estate deals that China has been doing in New York....

According to a recent report in the New York Times, investors from China are 'snapping up luxury apartments' and are planning to spend hundreds of millions of dollars on commercial and residential projects like Atlantic Yards in Brooklyn. Chinese companies also have signed major leases at the Empire State Building and at 1 World Trade Center, the report said.

In addition, it was recently announced that the Federal Reserve will now allow Chinese banks to buy up American banks.

Where will all of this end?

Should all of us start learning to speak Chinese?

Meanwhile, our trade deficit with China continues to get even larger. Our trade deficit with China last year was $295.5 billion, which was the largest trade deficit that one country has had with another country in the history of the world. This year, we are already on a pace to break that record.

So thousands of businesses, millions of jobs and hundreds of billions of dollars will continue to leave the United States and go to China.

And China will continue to use some of the money they are getting from us to buy up pieces of America.

Does anyone else out there see something very, very wrong with all of this?

 

I do! I do! Now, read this and see how much more sense it makes linked to the above article.--jef

War Tax at the Gas Pump

Sanctions, Threats and Speculators

by JEFF KLEIN


It’s hard to miss the higher cost of gas every time we fill up our cars these days, but the News Media doesn’t do a very good job of explaining why. There isn’t any mystery, though, if you read the financial press and oil industry sources: We’re paying extra for gas because of rising tensions in the Middle East and especially the scare over a possible US or Israeli attack on Iran. In effect, we’re paying a “war tax” at the gas pump, and the cost will only get higher unless we put aside the talk of war and get down to serious diplomacy to settle the differences in the region.

Here’s what the Wall Street Journal had to say recently, under the headline Oil Rise Imperils Budding Recovery:

Rising oil prices are emerging once again as a threat to the U.S. economic recovery just as it appears to be gaining momentum. Oil prices have climbed sharply in recent weeks as mounting tension with Iran has raised the threat of a disruption in global supplies. On Wednesday, oil futures on the New York Mercantile Exchange rose $1.06 to $101.80 a barrel on reports that Iran had cut off sales to six European countries in response to the European Union’s newly stepped-up sanctions.

The world market price for oil is headed upward of $110 a barrel, which could translate into $4 gasoline before too long. If an actual war breaks out, we could soon be remembering the current price at the pump as “cheap gas”.

But what about “Drill Baby Drill” to lower the price of gas – as the Republicans demand? Political rhetoric aside, the reality is that there is a world market price for petroleum which cannot be significantly lowered by marginal increases in US supply. International oil prices are rising even as US oil production has increased during the past decade. Do you think US suppliers are going to sell us domestically-produced oil at a discount lower than the world market price? Keep dreaming. That’s just not the way the oil companies do business.

For example, after the US Arctic oil fields were developed and the TransAlaska pipeline came into service – despite serious environmental objections – large amounts of Alaskan oil were exported rather than sold in the lower 48 states. Between 1996 and 2004 almost a 100 million barrels of Alaska crude were shipped to Japan, Taiwan, Korea and China. Direct export of North Slope oil was eventually banned by Congress, but refined petroleum products – gasoline, heating oil, jet fuel – continue to be shipped abroad from refineries in Alaska and the lower 48. Today Gulf Coast refineries find it more profitable to sell gasoline to Latin America instead of shipping it to the East Coast, where the law would require them to use US-flagged tankers with American crews. The US is now a net exporter of refined petroleum products, even as the rising price of gas continues to put a strain on struggling families with no alternative means of transportation.

But an even higher war tax on gas is not inevitable. Diplomacy with Iran could still diffuse the conflict before the unthinkable happens. Despite all the alarmist and warmongering rhetoric, especially from Republican presidential candidates, we are not facing an imminent nuclear threat from Iran. US intelligence agencies are unanimous in judging that Iran does not have an active nuclear weapons program at this time. In fact, the Iranians – like all the other countries in the Middle East except Israel – have signed the Nuclear Non-Proliferation Treaty and they have the right under its safeguards to produce low-enriched uranium for power plants and medical research. All of Iran’s nuclear materials are under real-time inspection by the International Atomic Energy Agency. The only nuclear weapons in the Middle East right now are the hundreds of warheads belonging to the US and Israel.

Despite this reality – and in the face of opinion polls showing Americans prefer a diplomatic solution to the Iran issue rather than a military conflict – some politicians seem determined to drive us into yet another Middle East war. Ironically, the very same politicians who are trying to make a partisan issue out of the price of gas are the ones who are pressing for policies to sharpen the regional tensions that have caused them to rise.

After the bitter experience of Iraq and Afghanistan, we should have learned enough to demand a peaceful way out of this conflict. If we fail, a new war could have unpredictable and catastrophic results throughout the region. Of course, in that case, $5 gas might be the least of our problems.

Highest Gasoline Prices Ever Ahead for Us in 2012

$5 per gallon this year, kids. The national average will be over $4, but in the bigger cities or in states where gas taxes are higher, $5 a gallon is a given. SUCK!!!!--jef

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Gas pump prices at record high on supply concerns
The Associated Press
Posted Jan 25, 2012


Washington — Americans aren’t likely to find much relief from high prices at the gas pump as they go about paying their post-holiday bills.

Retail gas prices are at their highest levels ever for this time of year despite ample supplies and declining demand. That’s because tension in the Persian Gulf has kept crude oil prices around $100 per barrel for most of the month.

Analysts say oil prices are likely to remain at those levels until there is more clarity about what will happen in the Gulf, where Iran has threatened to close the Strait of Hormuz if the U.S. and other countries impose more sanctions on its nuclear program.

Iranian imports are banned in the U.S., but Iran supplies 2.2 million barrels per day to the rest of the world, mainly Asia and Europe.

Both oil and gasoline futures have moved in a narrow range for most of the month. In addition to the Iranian situation, investors are concerned about the European debt crisis and whether it will impact the global economy.

European Union foreign ministers are expected to discuss possible sanctions against Iran, including an oil embargo, at a Monday meeting.

Many analysts doubt that Iran could set up a blockade without swift military intervention from the U.S., but any supply shortages would cause oil supplies to tighten.

The national average for gasoline was $3.382 per gallon Friday, which was about 17 cents more than it was a month ago and nearly 27 cents more than a year ago, according to AAA, Wright Express and the Oil Price Information Service. Drivers in California, Illinois and parts of the Northeast paid the highest prices while the lowest prices were in the Rocky Mountains and parts of the Midwest.

Gas prices will go up or down based on what happens with Iran, PFGBest analsyt Phil Flynn said. If the situation calms down, retail gas prices could fall from 25 cents to 50 cents a gallon. If the situation intensifies, prices could increase by the same amount.

“It’s that much of a wild card,” Flynn said. “I think it’s a very volatile situation and I think we could go either way.”

High gas prices have been affected in previous years by a stronger economy because consumers have more to spend on filling their tanks. Although the U.S. economy is improving slowly, Flynn said many consumers still have habits that they picked up during the recession — such as watching how much they spend on gas and finding ways to combine trips in the car.

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Forecast: 2012 Worst Year for Gas Prices
By Susanna Kim - ABC News

To the dismay of drivers across the country, 2011 went down in the record books as having the most expensive gasoline average ever, $3.513 for the year, 72 cents per gallon higher than 2010′s yearly average, according to GasBuddy.

Patrick DeHaan, GasBuddy’s senior petroleum analyst, projects that by Memorial Day, the national average will be between $3.86 to $4.13 per gallon, and that prices in 2012 will come close to or set new all-time highs. If that happens, drivers could spend $200 to $300 more for gas this year.

Inflation adjusted data from the Energy Department’s U.S. Energy Information Administration confirmed that 2011 was a record year. The real annual average for a gallon of regular gas last year hit $3.56, up from $2.90 in 2010, according to the EIA. From its data that begins in 1919, the previous record high was in 1981, at $3.45.

Of course, in 2008 gasoline prices had the longest stretch of $4 or more, but the yearly average was $3.24, according to GasBuddy’s data, which goes back to 2000. In 2008, gas prices slid from October to December 2008 to less than $2 a gallon nationally.
Over the past seven years, according to GasBuddy data, gasoline prices rise an average of 93 cents per gallon from the start of the new year to when they eventually peak the same year, DeHaan said.

“Typically, prices peak in the summer months, or around Memorial Day, as has been the case in 2010 and 2011,” he said.

An increase of 93 cents a gallon could mean average gas prices may rise more than $4 a gallon and could easily approach record highs, he said. In 2004, gas prices had the largest price difference from the new year to their peak, when prices climbed $1.31 per gallon.

If such a gain occurred this year, that would mean the national average could rise to well over $4.25 a gallon, and some areas could see $5 a gallon.

“While that’s not very likely, it does represent a realistic worst case scenario,” he said.

DeHaan said he is traditionally reserved about forecasting oil prices, which hovered above $102 a barrel Thursday. But he said 2012 would almost certainly break all records, in part because of political tension with Iran over its nuclear program.

Iran has threatened to close a key oil passageway, the Strait of Hormuz, in possible retaliation for new economic sanctions from the U.S. and the European Union. Iran holds the world’s fourth-largest proven oil reserves, and the world’s second-largest natural gas reserves, according to the EIA.

Should Iran become more hostile and cause a supply disruption, oil prices could soar to all-time highs and approach $175 to $200 a barrel, DeHaan said.

“Coupled with rising demand as a result of a recovering economy, it won’t be pretty,” DeHaan said. “Either way you look at it, 2012 will be among the worst year ever for gasoline prices.”

Daniel O’Connell, senior energy broker with INTL FCStone Inc., said if the price of crude oil increases 8.2 percent in 2011, the U.S. could see a similar price hike in 2012 as jobs, housing and other economic data improve. O’Connell said overall data points to a volatile market with the same trading ranges as those of 2011.

But “if the Iran situation escalates two fold, all bets are off the table, and we will see a disaster regarding energy prices, that this country is not ready to handle just yet,” O’Connell said.

DeHaan said there was still time to lessen the anticipated impact by changing habits or modes of transportation.
“But if they don’t, I can see the average American spending a few hundred dollars more on gasoline this summer,” he said.

Energy Wars, 2012

Oil in the Water; Danger at Hand

by MICHAEL T. KLARE

 

Welcome to an edgy world where a single incident at an energy “chokepoint” could set a region aflame, provoking bloody encounters, boosting oil prices, and putting the global economy at risk.  With energy demand on the rise and sources of supply dwindling, we are, in fact, entering a new epoch — the Geo-Energy Era — in which disputes over vital resources will dominate world affairs.  In 2012 and beyond, energy and conflict will be bound ever more tightly together, lending increasing importance to the key geographical flashpoints in our resource-constrained world.

Take the Strait of Hormuz, already making headlines and shaking energy markets as 2012 begins.  Connecting the Persian Gulf and the Indian Ocean, it lacks imposing geographical features like the Rock of Gibraltar or the Golden Gate Bridge.  In an energy-conscious world, however, it may possess greater strategic significance than any passageway on the planet.  Every day, according to the U.S. Department of Energy, tankers carrying some 17 million barrels of oil — representing 20% of the world’s daily supply — pass through this vital artery.
So last month, when a senior Iranian official threatened to block the strait in response to Washington’s tough new economic sanctions, oil prices instantly soared. While the U.S. military has vowed to keep the strait open, doubts about the safety of future oil shipments and worries about a potentially unending, nerve-jangling crisis involving Washington, Tehran, and Tel Aviv have energy experts predicting high oil prices for months to come, meaning further woes for a slowing global economy.


The Strait of Hormuz is, however, only one of several hot spots where energy, politics, and geography are likely to mix in dangerous ways in 2012 and beyond.  Keep your eye as well on the East and South China Seas, the Caspian Sea basin, and an energy-rich Arctic that is losing its sea ice.  In all of these places, countries are disputing control over the production and transportation of energy, and arguing about national boundaries and/or rights of passage.

In the years to come, the location of energy supplies and of energy supply routes — pipelines, oil ports, and tanker routes — will be pivotal landmarks on the global strategic map.  Key producing areas, like the Persian Gulf, will remain critically important, but so will oil chokepoints like the Strait of Hormuz and the Strait of Malacca (between the Indian Ocean and the South China Sea) and the “sea lines of communication,” or SLOCs (as naval strategists like to call them) connecting producing areas to overseas markets.  More and more, the major powers led by the United States, Russia, and China will restructure their militaries to fight in such locales.

You can already see this in the elaborate Defense Strategic Guidance document, “Sustaining U.S. Global Leadership,” unveiled at the Pentagon on January 5th by President Obama and Secretary of Defense Leon Panetta.  While envisioning a smaller Army and Marine Corps, it calls for increased emphasis on air and naval capabilities, especially those geared to the protection or control of international energy and trade networks.  Though it tepidly reaffirmed historic American ties to Europe and the Middle East, overwhelming emphasis was placed on bolstering U.S. power in “the arc extending from the Western Pacific and East Asia into the Indian Ocean and South Asia.”

In the new Geo-Energy Era, the control of energy and of its transport to market will lie at the heart of recurring global crises.  This year, keep your eyes on three energy hot spots in particular: the Strait of Hormuz, the South China Sea, and the Caspian Sea basin.

The Strait of Hormuz
A narrow stretch of water separating Iran from Oman and the United Arab Emirates (UAE), the strait is the sole maritime link between the oil-rich Persian Gulf region and the rest of the world.  A striking percentage of the oil produced by Iran, Iraq, Kuwait, Qatar, Saudi Arabia, and the UAE is carried by tanker through this passageway on a daily basis, making it (in the words of the Department of Energy) “the world’s most important oil chokepoint.”  Some analysts believe that any sustained blockage in the strait could trigger a 50% increase in the price of oil and trigger a full-scale global recession or depression.

American leaders have long viewed the Strait as a strategic fixture in their global plans that must be defended at any cost.  It was an outlook first voiced by President Jimmy Carter in January 1980, on the heels of the Soviet invasion and occupation of Afghanistan which had, he told Congress, “brought Soviet military forces to within 300 miles of the Indian Ocean and close to the Strait of Hormuz, a waterway through which most of the world’s oil must flow.” 

The American response, he insisted, must be unequivocal: any attempt by a hostile power to block the waterway would henceforth be viewed as “an assault on the vital interests of the United States of America,” and “repelled by any means necessary, including military force.”

Much has changed in the Gulf region since Carter issued his famous decree, known since as the Carter Doctrine, and established the U.S. Central Command (CENTCOM) to guard the Strait — but not Washington’s determination to ensure the unhindered flow of oil there.  Indeed, President Obama has made it clear that, even if CENTCOM ground forces were to leave Afghanistan, as they have Iraq, there would be no reduction in the command’s air and naval presence in the greater Gulf area.

It is conceivable that the Iranians will put Washington’s capabilities to the test.  On December 27th, Iran’s first vice president Mohammad-Reza Rahimi said, “If [the Americans] impose sanctions on Iran’s oil exports, then even one drop of oil cannot flow from the Strait of Hormuz.”  Similar statements have since been made by other senior officials (and contradicted as well by yet others).  In addition, the Iranians recently conducted elaborate naval exercises in the Arabian Sea near the eastern mouth of the strait, and more such maneuvers are said to be forthcoming.  At the same time, the commanding general of Iran’s army suggested that the USS John C. Stennis, an American aircraft carrier just leaving the Gulf, should not return.  “The Islamic Republic of Iran,” he added ominously, “will not repeat its warning.”

Might the Iranians actually block the strait?  Many analysts believe that the statements by Rahimi and his colleagues are bluster and bluff meant to rattle Western leaders, send oil prices higher, and win future concessions if negotiations ever recommence over their country’s nuclear program.  Economic conditions in Iran are, however, becoming more desperate, and it is always possible that the country’s hard-pressed hardline leaders may feel the urge to take some dramatic action, even if it invites a powerful U.S. counterstrike.  Whatever the case, the Strait of Hormuz will remain a focus of international attention in 2012, with global oil prices closely following the rise and fall of tensions there.

The South China Sea
The South China Sea is a semi-enclosed portion of the western Pacific bounded by China to the north, Vietnam to the west, the Philippines to the east, and the island of Borneo (shared by Brunei, Indonesia, and Malaysia) to the south.  The sea also incorporates two largely uninhabited island chains, the Paracels and the Spratlys.  Long an important fishing ground, it has also been a major avenue for commercial shipping between East Asia and Europe, the Middle East, and Africa.  More recently, it acquired significance as a potential source of oil and natural gas, large reserves of which are now believed to lie in subsea areas surrounding the Paracels and Spratlys.

With the discovery of oil and gas deposits, the South China Sea has been transformed into a cockpit of international friction.  At least some islands in this energy-rich area are claimed by every one of the surrounding countries, including China — which claims them all, and has demonstrated a willingness to use military force to assert dominance in the region.  Not surprisingly, this has put it in conflict with the other claimants, including several with close military ties to the United States.  As a result, what started out as a regional matter, involving China and various members of the Association of Southeast Asian Nations (ASEAN), has become a prospective tussle between the world’s two leading powers.

To press their claims, Brunei, Malaysia, Vietnam, and the Philippines have all sought to work collectively through ASEAN, believing a multilateral approach will give them greater negotiating clout than one-on-one dealings with China. For their part, the Chinese have insisted that all disputes must be resolved bilaterally, a situation in which they can more easily bring their economic and military power to bear.  Previously preoccupied with Iraq and Afghanistan, the United States has now entered the fray, offering full-throated support to the ASEAN countries in their efforts to negotiate en masse with Beijing.

Chinese Foreign Minister Yang Jiechi promptly warned the United States not to interfere.  Any such move “will only make matters worse and the resolution more difficult,” he declared.  The result was an instant war of words between Beijing and Washington.  During a visit to the Chinese capital in July 2011, Chairman of the Joint Chiefs of Staff Admiral Mike Mullen delivered a barely concealed threat when it came to possible future military action.  “The worry, among others that I have,” he commented, “is that the ongoing incidents could spark a miscalculation, and an outbreak that no one anticipated.”  To drive the point home, the United States has conducted a series of conspicuous military exercises in the South China Sea, including some joint maneuvers with ships from Vietnam and the Philippines.  Not to be outdone, China responded with naval maneuvers of its own.  It’s a perfect formula for future “incidents” at sea.

The South China Sea has long been on the radar screens of those who follow Asian affairs, but it only attracted global attention when, in November, President Obama traveled to Australia and announced, with remarkable bluntness, a new U.S. strategy aimed at confronting Chinese power in Asia and the Pacific.  “As we plan and budget for the future,” he told members of the Australian Parliament in Canberra, “we will allocate the resources necessary to maintain our strong military presence in this region.”  A key feature of this effort would be to ensure “maritime security” in the South China Sea.

While in Australia, President Obama also announced the establishment of anew U.S. base at Darwin on that country’s northern coast, as well as expanded military ties with Indonesia and the Philippines.  In January, the president similarly placed special emphasis on projecting U.S. power in the region when he went to the Pentagon to discuss changes in the American military posture in the world.

Beijing will undoubtedly take its own set of steps, no less belligerent, to protect its growing interests in the South China Sea.  Where this will lead remains, of course, unknown.  After the Strait of Hormuz, however, the South China Sea may be the global energy chokepoint where small mistakes or provocations could lead to bigger confrontations in 2012 and beyond.

The Caspian Sea Basin
The Caspian Sea is an inland body of water bordered by Russia, Iran, and three former republics of the USSR: Azerbaijan, Kazakhstan, and Turkmenistan.  In the immediate area as well are the former Soviet lands of Armenia, Georgia, Kyrgyzstan, and Tajikistan.  All of these old SSRs are, to one degree or another, attempting to assert their autonomy from Moscow and establish independent ties with the United States, the European Union, Iran, Turkey, and, increasingly, China.  All are wracked by internal schisms and/or involved in border disputes with their neighbors.  The region would be a hotbed of potential conflict even if the Caspian basin did not harbor some of the world’s largest undeveloped reserves of oil and natural gas, which could easily bring it to a boil.

This is not the first time that the Caspian has been viewed as a major source of oil, and so potential conflict.  In the late nineteenth century, the region around the city of Baku – then part of the Russian empire, now in Azerbaijan — was a prolific source of petroleum and so a major strategic prize.  Future Soviet dictator Joseph Stalin first gained notoriety there as a leader of militant oil workers, and Hitler sought to capture it during his ill-fated 1941 invasion of the USSR.  After World War II, however, the region lost its importance as an oil producer when Baku’s onshore fields dried up.  Now, fresh discoveries are being made in offshore areas of the Caspian itself and in previously undeveloped areas of Kazakhstan and Turkmenistan.

According to energy giant BP, the Caspian area harbors as much as 48 billion barrels of oil (mostly buried in Azerbaijan and Kazakhstan) and 449 trillion cubic feet of natural gas (with the largest supply in Turkmenistan).  This puts the region ahead of North and South America in total gas reserves and Asia in oil reserves.  But producing all this energy and delivering it to foreign markets will be a monumental task.  The region’s energy infrastructure is woefully inadequate and the Caspian itself provides no maritime outlet to other seas, so all that oil and gas must travel by pipeline or rail.

Russia, long the dominant power in the region, is pursuing control over the transportation routes by which Caspian oil and gas will reach markets.  It is upgrading Soviet-era pipelines that link the former SSRs to Russia or building new ones and, to achieve a near monopoly over the marketing of all this energy, bringing traditional diplomacy, strong-arm tactics, and outright bribery to bear on regional leaders (many of whom once served in the Soviet bureaucracy) to ship their energy via Russia.  As recounted in my book Rising Powers, Shrinking Planet, Washington sought to thwart these efforts by sponsoring the construction of alternative pipelines that avoid Russian territory, crossing Azerbaijan, Georgia, and Turkey to the Mediterranean (notably the BTC, or Baku-Tbilisi-Ceyhan pipeline), while Beijing is building its own pipelines linking the Caspian area to western China.

All of these pipelines cross through areas of ethnic unrest and pass near various contested regions like rebellious Chechnya and breakaway South Ossetia.  As a result, both China and the U.S. have wedded their pipeline operations to military assistance for countries along the routes.  Fearful of an American presence, military or otherwise, in the former territories of the Soviet Union, Russia has responded with military moves of its own, including its brief August 2008 war with Georgia, which took place along the BTC route.

Given the magnitude of the Caspian’s oil and gas reserves, many energy firms are planning new production operations in the region, along with the pipelinesneeded to bring the oil and gas to market.  The European Union, for example, hopes to build a new natural gas pipeline called Nabucco from Azerbaijan through Turkey to Austria.  Russia has proposed a competing conduit called South Stream.  All of these efforts involve the geopolitical interests of major powers, ensuring that the Caspian region will remain a potential source of international crisis and conflict.

In the new Geo-Energy Era, the Strait of Hormuz, the South China Sea, and the Caspian Basin hardly stand alone as potential energy flashpoints. The East China Sea, where China and Japan are contending for a contested undersea natural gas field, is another, as are the waters surrounding the Falkland Islands, where both Britain and Argentina hold claims to undersea oil reserves, as will be the globally warming Arctic whose resources are claimed by many countries.  One thing is certain: wherever the sparks may fly, there’s oil in the water and danger at hand in 2012.

Wall Street's Code of Silence

Getting Away With Murder
By RUSSELL MOKHIBER

Gretchen Morgenson and Joshua Rosner were at the Wilson Center in Washington, D.C. this week for a discussion about their book – Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon.

During the question period, Blair Ruble, who heads the Kennan Institute at the Wilson Center, stood up to speak.

Blair Ruble told a story about when he was at a conference in Elagua, Tartarstan.

"I was pulled out of the conference, and was told the Minister of Economics was coming from the capital of Kazan to see me."

The country had apparently invested some of its oil wealth with the U.S. government and the Minister was concerned about the lack of accountability after the collapse of the housing bubble.

"They had this oil revenue and they didn't trust the Russian government," Ruble said. "I was the first American he could find. We had lunch. After realizing I couldn't help him he said to me – 'When did you Americans become Russians?"

"I'm going to prove to you that you really are nothing but Russians," the Minister of Economics told Ruble.

"Five years from now, mark my words – none of the people responsible for this – not only not be held accountable – they will be in more important positions – that is what would happen in Russia."

Rosner pretty much agreed.

"My father was a federal prosecutor and my mother was a criminologist, and her speciality was Soviet criminology," Rosner said. "As she read our book – she kept saying – Jesus, this sounds like the way it is done there. Every piece of it. You have an entrenched bureaucracy without accountability."

Rosner said a "code of silence" protects those complicit in the recent collapse.

"All of the parties central to this crisis are unwilling to point fingers, recognizing that their power base comes from the silence," Rosner said. "As long as everyone keeps silent, each one will recognize that they rise to the next level. You see that throughout our government at this point."

Case in point: former Office of Management and Budget Director Peter Orszag.

Rosner said that the Orszag case is "one that I find most offensive."

"It's not on the level of Timothy Geithner or Hank Paulson, but it's troubling."

"Peter Orszag was co-author of a study paid for by Fannie Mae back in 2000 or 2001," Rosner said. "It argued that Fannie and Freddie are incredibly safe and sound, that the stress test that was going to be employed by the regulator insured their safety and soundness. And that there was something like a one in 500,000 chance that they would end up imperiled. And even if that happened, the cost to the taxpayers would be a few million dollars. That's pretty much what the paper said.

"Orszag ends up as the head of OMB. And when the government takes Fannie and Freddie into conservatorship, he says – there is about a five percent chance that the government could be on the hook for more than $100 billion. Wrong again. No one calls him out.

"Orszag is now the vice chairman at Citibank. I noticed the other day he put out an op-ed on Bloomberg which was clearly positioned to support his current institution. And nowhere does it say that he had anything to do with the government, the GSEs. And that's just the way Washington works.

"He obviously was in that position to add three zeros to his income on the other side. It's not about public service. It's about self service."

Morgenson lamented the lack of criminal prosecution:

"I know proving criminal intent is exceedingly hard. But if we don't get some scalps, you will have left most people with the idea that you can get away with murder as long as it's involving not a gun but a pen and a financial institution. That's the wrong message we should send. It's pernicious and damaging.

"In the savings and loan crisis there were 839 criminal prosecutions that resulted in jail time," Morgenson said. "And these were not just low level people. These were CEOs in some cases, CFOs – very high level people. We have had very few this time around. And the people who were on the scene (during the S&L crisis) tell me that because of the regulatory failure during the mania, we are now seeing very few prosecutions.

"It's bad enough that the regulators allowed the bad behavior and practices to proliferate. But now it's going to result in very few prosecutions.

"This feeds into the idea that there are two sets of rules in America. There is one set of rules for people like you and me. And there is another set of rules for people who are powerful, who are politically connected, who have very high level jobs, who know the right people."

The Oil Trap

Bernanke's Version of Trickle Down
By MIKE WHITNEY

Rising oil prices threaten to derail the recovery. Oil at $106 per barrel (Monday's price) is not a problem, but oil at $160 is. With fighting increasing in Libya and social unrest spreading across the Middle East, no one knows where prices will settle. That leaves Fed chairman Ben Bernanke with a tough decision. Should he call off QE2 prematurely and let the stock market drift sideways or go-til-June and hope for the best? If the Fed tightens too early, deflationary pressures will reemerge further straining bank balance sheets and consumer spending. Housing prices will fall sharply and foreclosures will mushroom. But if Bernanke holds-firm with his zero rates and bond buying program--especially when the ECB is raising rates--he could trigger a bond market rout and send the dollar into freefall.

Bernanke has shrugged off the inflationistas saying that core inflation is still hovering at a safe 1 percent. But if oil keeps climbing, consumers will have to cut back on spending just when Obama's fiscal stimulus is winding down and just as the states are trimming their budgets. That will be a drag on economic activity and slow growth. Business investment will shrink, hiring will sputter, stocks will retreat, and the economy will head back into negative territory. It all depends on the price of oil. Here's Gluskin Sheff's David Rosenberg providing a little context to the fact that oil has "doubled" in just two years:

"There have been only five times in the past 70 years when this has happened within a two-year time frame: January 1974, November 1979, September 1990, June 2000, and August 2005. And now, December 2010. . . .

Of the five instances cited above, all but one involved a recession for the U.S. economy and that was in 2005 during the height of the credit and housing boom, which acted as a huge offset. But oil prices did keep rising and managed to outlast the euphoria in credit and residential real estate, so the recession may have been delayed at the peak of the 'growth rate' in the oil price, but it was not derailed as history shows." (The Big Picture)

So spiking oil prices and recessions go hand-in-hand. Accordingly, bond yields have been trending lower anticipating deflation while the shriveling dollar has been steadily slipping for more than a month. All of this is adding to investor anxiety. Wall Street is on tenterhooks waiting to see whether Obama will tap the National Oil Reserve to stop the bleeding or just cross his fingers and hope that the violence subsides before the economy nosedives. And then there's Bernanke. What will Bernanke do?

Most likely, the Fed chair will stay-the-course as long as possible convinced that deflation is still enemy Number One. But he's bound to take a lot of heat from critics who point to the tumbling dollar and higher prices at the pump. If the troubles in Libya spread to Saudi Arabia, as now seems likely, all bets are off. Bernanke will have to pull out all the stops to keep the economy from tanking.

Bernanke does have alternatives, although none that assure that the smooth transfer of wealth from worker to banker. (like QE2) He could, for example, appeal to congress for a second round of fiscal stimulus to increase employment, reduce the output gap, and show trading partners that the US is eager to generate more demand for global exports. That would increase goodwill among US allies while building a stronger foundation for growth. To hell with the deficits. When the economy is firing on all 8 pistons and revenues are poring in, the deficits will vanish by themselves.

And there are other options, too, even if Bernanke chooses to stick with monetary policy alone. Here's a clip form a recent report by Richard Wood titled "Deflation, Debt and Economic Stimulus":

"The US, Japan, and Ireland are suffering from deficient private demand, rising debt, and a tendency to deflation.....The alternative approach (to quantitative easing) involves the central bank printing new money to directly finance fiscal stimulus. This neglected policy option – apparently largely overlooked by officials during the global economic crisis – is likely to be appropriate for countries where prices are falling (or inflation drops toward zero), private demand is deficient, interest rates are already too low and where public debt is excessive.

If monetary policy is considered on its own then there could be a case for terminating current quantitative easing programmes. This would steer Japan and the US away from the shoals of triple jeopardy (Leijonhufvud 2011).

Quantitative easing could be replaced with a policy of printing new money with an explicit objective to assist in the financing of future budget deficits (see suggested money-financed tax cut: Bernanke 2002 and analysis by Corden 2010). The deployment of new money creation in this manner would take some pressure off the need for severe fiscal austerity measures (at a time when continued stimulus is still required); minimize further increases in public debt; provide clear signals of policy intent (in relation to interest rate objectives, the method of financing deficits and the approach to delivering economic stimulus); and be more effective, have fewer adverse side-effects, and deliver stronger economic stimulus than further quantitative easing." ("Deflation, Debt and Economic Stimulus", Richard Wood, VOX)

Ahh, the dreaded monetization of the debt. It's a bad choice compared to fiscal stimulus, but vastly superior to QE2.

Ask yourself this question: Who benefits from QE2? Bernanke even admitted in an op-ed in the Washington Post that the program was aimed at boosting stock market prices. And former Fed chairman Alan Greenspan was even more explicit in an article that will be published in an upcoming issue of International Finance. Here's what Maestro has to say:

"I still embrace the view I held a couple of years ago, that '[w]e tend to think of fluctuations in stock prices in terms of "paper" profits and losses somehow not connected to the real world. But, the evaporation of the value of those "paper claims" can have a profoundly deflationary impact on global economic activity. … [such] that much of the recent decline in global economic activity can be associated directly and indirectly with declining equity values....

'When we look back on this period, I very much suspect that the force that will be seen to have been most instrumental to global economic recovery will be a partial reversal of the $35 trillion global loss in corporate equity values that has so devastated financial intermediation. A recovery of the equity market driven largely by a receding of fear may well be a seminal turning point of the current crisis.'...

Equity values, in my experience, have been an underappreciated force driving market economies. Only in recent years has their impact been recognized in terms of 'wealth effects'. This is one form of stimulus that does not require increased debt to fund it....

Despite the surge in corporate cash flow over the last two years and expectations of security analysts of continued gains in profitability, equity premiums remain near a half-century high. This indicates an exceptionally large and presumably unsustainably high discount rate applied to expected future earnings. If the latter holds up, and activism recedes, stock values, of course, would move higher and carry with them a significant wealth effect that should enhance economic activity.

Short of a full-blown Middle East crisis affecting oil prices, a euro crisis and/or a bond market (budget) crisis reminiscent of 1979, the 'wealth effect' could effectively substitute private 'stimulus' for public." ("The costs of government activism", Alan Greenspan, EurekAlert)

There you have it; Fed policy in a nutshell. If you want to reverse deflation and ignite a "global economic recovery"; pump up stock prices. In other words, if we just make the rich even richer, our problems will be solved. What could be simpler?

How is this any different from "trickle down" economics? It's the same thing, which is to say that QE2 is the same thing. The goal is to increase the "wealth effect" for the investor class to such an extent that the spillover lifts the rest of the economy back to prosperity and growth. It's baloney. QE2 has done nothing to increase demand or help consumers patch their battered balance sheets. The economy is more vulnerable than ever and skyrocketing oil prices could be the shock that sends the economy skittering back into recession.

Bernanke has other options. It's just a matter of whose interests he chooses to serve.

High Oil Price = Faster Economic Decline

By The American Dream on 01-18-2011

Most Americans have no idea how important oil prices are to the overall health of the U.S. economy.  Whenever oil prices have pressed toward record levels in recent decades, it has always resulted in an economic downturn.  A high oil price does not just mean that consumers will have to pay a little more at the pump.  The truth is that oil is the very lifeblood of our economic system.  We have built our entire country around the concept that we can transport lots of stuff very long distances for a very, very cheap price.  When that paradigm beings to change, it fundamentally alters the dynamics of the U.S. economy.  A high oil price will mean an even faster economic decline for America.

The cost of oil factors into everything.  A high oil price means that transportation of products and services costs more, travel costs more and energy costs more.  It means that consumers will have less disposable income.  When the price of oil goes up it benefits the big oil producers and few others, but for everyone else it is very painful.  But perhaps even more importantly, because the U.S. has to import such massive quantities of oil, whenever the price of oil goes up it means that we are becoming poorer as a nation because even more of our money flows out of the country and into the hands of the oil barons.

According to the U.S. Energy Information Administration, the United States consumed a grand total of 6.9 billion barrels of oil during 2009.  That represented approximately 27 percent of the total oil consumption of the entire globe.

Unfortunately, the U.S. imports over half of the oil it consumes, and this represents a massive transfer of wealth out of the United States.

Every single month we send the giant oil producers of the world billions of our dollars in exchange for the oil that we are deeply addicted to.

Meanwhile, many formerly great American cities are being transformed into rotting hellholes.

It is kind of like a rich young man that is rapidly going broke by blowing all of his money on a drug habit.

We’ve just always got to have more, more, more and it is draining more of our national wealth out of us every single month.

Sadly, the truth is that the United States has absolutely huge untapped reserves of oil that the “powers that be” will not let us touch.  It turns out that certain interests are making insanely huge profits by keeping America addicted to foreign oil.  The ultra-wealthy and ultra-powerful people that are involved in doing this to us are destroying our nation economically just so that they can profit.

It is absolutely sickening.

So does any of this money that we ship off to foreign oil producers ever come back to the United States?

Well, yes, there are a couple main ways that it comes back to us.

One way that it comes back is that it gets loaned back to our government.  The U.S. government has now borrowed hundreds of billions of dollars from the top oil producing nations around the globe.

Remember, the borrower is always the servant of the lender, and we are rapidly becoming servants of the big oil producing nations.

Another way it comes back to us is when sovereign wealth funds from nations such as Saudi Arabia, Kuwait, the United Arab Emirates and other major oil producing nations buy up huge chunks of our infrastructure.  These giant sovereign wealth funds are buying up highways, ports, toll roads and even parking meters from coast to coast.

In a recent piece for Rolling Stone, Matt Taibbi described some of the U.S. infrastructure assets that these sovereign wealth funds are buying up….

A toll highway in Indiana. The Chicago Skyway. A stretch of highway in Florida. Parking meters in Nashville, Pittsburgh, Los Angeles, and other cities. A port in Virginia. And a whole bevy of Californian public infrastructure projects, all either already leased or set to be leased for fifty or seventy-five years or more in exchange for one-off lump sum payments of a few billion bucks at best, usually just to help patch a hole or two in a single budget year.

America is literally being sold off piece by piece.

We are slowly becoming owned by foreign entities.  We are slowly being transformed into paupers in the land of our forefathers.

Not only that, but a high price for oil will only cause this incredible transfer of wealth to accelerate and it will likely crash the entire global economy once again.

Already the U.S. economy is teetering on the brink of disaster.  If the price of oi lhits $100 or $120 a barrel, it could be enough to set off another huge economic slide.

According to Sabine Schels, a commodity analyst at Merrill Lynch, whenever the size of the energy sector reaches 9 percent of the global economy it spells big trouble….

“It was in the 1980s and it was the same in 2008. Right now we are at about 7.8 percent and if you go above $100 per barrel to $120 per barrel, you get to that 9 percent level.”

But it isn’t just the rising price of oil that is causing the cost of gasoline to go up.  All over the country, states that are facing massive budget shortfalls are raising gas taxes.  Many state officials believe that since consumers don’t actually “see” the higher gas tax on their receipts that they won’t be as angry as if state income taxes were raised.

Another consequence of a high oil price is that it means that the price of food all over the world will be very high.  In some areas of the globe, even a minor increase in the price of food is enough to threaten the survival of millions.  If the price of oil gets up around $140 or $150 a barrel, it is likely to set off food riots that will make what is currently going on in Tunisia and Algeria look like a Sunday picnic.

But right now, many of the big oil producing nations of the world are openly welcoming the arrival of $100 oil.  Iran, Venezuela and Libya all say that there is no reason for OPEC to act even if oil hits $120 a barrel.

Venezuela says that they now have the biggest crude oil reserves in the entire world. Venezuela says that they had certified deposits of 297 billion barrels of oil at the end of 2010.

That certainly puts a larger target on their back, doesn’t it?

In the years ahead, the demand for natural resources is going to continue to intensify.  It is going to be one of the dominant economic trends during the coming decade and beyond.

The United States should be much further along in developing alternative energy sources, but up to this point big business and the U.S. government have been openly repressing many promising technologies.  Whenever anyone comes along that could seriously upset the status quo they are bought out or squelched.

Because of all of this corruption we are all going to pay the price.  There are plenty of untapped oil reserves inside the United States.  There are plenty of alternative energy sources that we could be developing.  But we have been kept completely and totally dependent on foreign oil and now rising oil prices are absolutely going to devastate our dying economy.

***

(What this also says to me is we need to ease up on our boycott of Venezuelan oil. Citgo used to import all of its oil from Venezuela before the US got all rankled by Hugo Chavez, and we were paying about $1.75 a gallon. I'm just saying. As far as dictators go, he is by far the most harmless and his people love him. I'm not saying he's all that, but we need cheaper oil, and he happens to have a whole bunch of it. He even donates heating oil to poor American families during the winter. I mean, come on!--jef)

Venezuela's Chavez Threatens to Cut Off US Oil

Monday, July 26, 2010 by Agence France Presse

CARACAS - Venezuelan President Hugo Chavez has threatened to cut off oil supplies to the United States if it were to back a Colombian military attack on Venezuela, warning Washington to stay out of the fray.

Chavez broke off diplomatic relations with Bogota Thursday in response to charges by President Alvaro Uribe that 1,500 Colombian guerrillas had set up camp inside Venezuela and were launching attacks from its territory.

The firebrand leftist president said on Sunday he had intelligence that "the possibility of an armed aggression against Venezuelan territory from Colombia" was higher than it has been "in 100 years."

If Colombia were to launch an attack "promoted by the Yankee empire, we would suspend oil deliveries to the United States, even if everybody over here has to eat stones," he warned.

"We wouldn't send even a single drop of oil" to the United States, he said.

The United States is the number one consumer of oil from Venezuela, a member of the Organization of Petroleum Exporting Countries (OPEC) and South America's largest oil producer and exporter.

Chavez, who has been highly critical of a US-Colombian military base deal struck last year, called the United States "the great instigator" behind Venezuela's current conflict with Colombia.

About 20,000 Venezuelan troops deployed along the 2,000-kilometer (1,250-mile) border with Colombia have been placed under "maximum alert," according to military officials.

The United States on Friday threw its support behind its key ally Colombia in its latest row with Venezuela, calling Chavez's decision to sever diplomatic relations with Colombia and put border troops on alert "a petulant response" to Bogota's accusations.

Chavez on Sunday hinted at a possible easing of tensions with Colombia when president-elect Juan Manuel Santos replaces Uribe on August 7.

But in an op-ed piece published in several newspapers, the Venezuelan leader warned that his country "must get clear and unambiguous signs that Colombia's new government has real political will to resume the path of dialogue."

Santos, who is on a tour of Latin America, has refused to comment on the crisis, referring the matter to the outgoing president.

Venezuela "will present a peace proposal to Colombia" at Thursday's meeting in Quito of the Union of South American Nations (Unasur), Venezuela's Foreign Minister Nicolas Maduro said.

Chavez also announced Sunday he would cancel a planned trip to Cuba in light of the crisis.

He had been due to attend Monday in Havana the 57th anniversary of Fidel Castro's rebel attack on the Moncada barracks that kicked off the revolution that brought him to power in 1959.

Venezuela's exports to the United States are almost entirely comprised of oil. Last year oil exports alone reached 27.12 billion dollars, accounting for 96.5 percent of all products exported to the United States.

However that was a steep drop compared to 2008, when the South American country exported 51.40 billion dollars worth of goods to the United States, the Venezuelan American Chamber of Commerce and Industry said earlier this year.

US imports in Venezuela also decreased in 2009, coming in at 9.36 billion dollars -- 27.7 percent less than the previous year.

In 2008, total trade between the two countries had reached a historical high of 64 billion dollars with the bulk of that amount -- 76.4 percent -- corresponding to oil sales.

Oil accounts for around 90 percent of revenue in Venezuela, South America's top exporter of crude oil.

The Gusher and the Sun

(In response to the article below, Why ONLY solar? It will take more than just 'green' solar energy to replace foreign oil. It will take natural gas, ethanol and other biofuels, wind, and whatever else we have cooking, not just solar. But this is a good article advocating solar's positive aspects.-jef)




The Time for Solar is Now
By HARVEY WASSERMAN

BP's apocalyptic Gulf gusher has put our ability to survive in serious doubt.

We have no reason to believe an end to the crisis is near---or even in sight. Nor can we begin to calculate the damage to our Mother Earth…to her oceans, to the core of her being…and to each of us as individual organisms.

Only one thing IS clear: we cannot ultimately survive without a rapid conversion to a Solartopian economy that is totally green-powered. That transformation will be forced by biological imperatives, not money or markets.

The powers that be studiously avoid the core reality that this disaster stems from the ability of large corporations to make all of us pay for their irresponsible greed.

The black poisons killing our global body gush from a system that grants corporations human rights but does not demand human responsibility.

It is suicidal to allow corporations to deploy technologies they cannot mange or insure and then make us pay for their greed.

From banking to industry to energy, the system privatizes profits and socializes disaster. It is the essence of what Mussolini called "corporate control of the state."

Liability at the Deepwater Horizon was set at a paltry $75 million. Had BP been forced to account beforehand for the scale of harm now being done, that well would never have been drilled.

The $20 billion Obama wants BP to ante up won't cover a fraction of the damages. In fact, BP does not have sufficient assets to pay for what it has done, any more than any owner of any nuclear power plant could cover the downwind horrors of a major meltdown.

The liability pool for an atomic reactor disaster stands at a scant $11 billion. These reactor pushers all claim such an accident is virtually impossible. Just like BP.

The Obama Administration supports these nuclear loan guarantees. But it could no more meet the monetary and logistic challenges of a melt down than it's done at Deepwater Horizon.

As always, society as a whole, not the corporate perps, would be forced to pay.

For us to survive, technologies that can't be insured must be replaced with ones that can. That means wind, solar, tidal, geothermal, ocean thermal, sustainable biofuels, wave energy, current energy and a massive push for increased efficiency and conservation, including a restoration of mass transit.

All the above bear risks of some sort. But all can get liability insurance. None threaten our survival.

Fossil/nukers say such technologies are years away from meeting our needs.

But the barriers are not primarily technological---they are defined by the corporate-run world of money, markets and bureaucratic corruption.

Remove socialized risk while taxing ecological impacts and Solartopian technologies would eventually force fossil/nuclear fuels to extinction.

But could the market make that happen before we terminally pollute our planet?

The BP gusher says: not likely.

After Pearl Harbor, Franklin Roosevelt set completely "undoable" goals for armaments production. All defied a market economy and sober assessments of what we could actually accomplish. And all were met.

In crisis, we've conjured military mobilizations, the New Deal, Manhattan Project, Marshall Plan, stimulus package, bank bailouts, public works projects and whatever else it took to survive.

Now energy consumption must plummet as efficiency and green production rise to supplant the fossil/nuclear technologies that are killing us. Our basic biology demands the twain meet before BP and its buddies kill us all.

The Solartopian scenario requires not just a shift in energy production and consumption. It means an end to war, which is not sustainable anywhere, for any alleged cause. Real peace in turn demands social justice, which can come only with true democracy---paper ballots and all. Our food needs to be raised organically. Our numbers can only be controlled by freely educated, empowered women in bio-conspiracy with our Mother Earth.

Above all, the corporate structure that rules our world must be replaced with a means of organization that serves people and the planet, not the reverse. BP's black death pouring through our oceans says we cannot afford the free market illusions of a corporate-sponsored apocalypse.

A system that is peaceful, just and totally green-powered is the only way we survive.