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Saudi Arabia's Oil? Sovereign Resposibility Trumps Sovereign Rights!
Raymond J. Learsy
The question needs be asked whether Saudi Arabia, as the current custodian of the greatest natural resource, the world's largest reservoir of crude oil, is fulfilling its responsibilities to the world at large.
...The oil under Saudi Arabia's suzerainty is being made available to the world at large virtually without consideration as to need nor equity. Not only that, but Saudi Arabia breached their fiduciary trust and has delivered this vast and important resource into the grip of the larcenous OPEC cartel in order to extort the maximum possible lucre irrespective of the enormous economic distortion it creates, wresting the means to build Palaces and Yachts from the backs of the miserably poor in the Asian subcontinent, Africa, and throughout the world.
...In today's world Sovereign Rights can no longer go unchallenged if it does not entail Sovereign Responsibility (think Sudan) and Saudi Arabia has used its patrimony to simply enrich itself by being party not to free and open markets but to a willful distortion of price and supply, a total affront to the rules of the World Trade Organization that flatly bans conspiracies to rig markets prohibiting its members from setting quantitative restrictions on imports and exports.
Saudi Arabia's custodianship is further placed into question by her cavalier dismissal and irresponsible stonewalling of all calls to candidly share with the world, who are its customers no less, information on production and reserves enabling the world's economies to rationally plan their future energy determinants.
...In addition this Sovereign state is unable to adequately protect the treasure lode that has served it so well. An international task force of warships navigate in the Persian Gulf off the Saudi Coast (at a cost of over $100 million dollars a day paid for by the citizens of the coalition) riding gunshot for Saudi oil shipments and at the ready to fend off intrusion or attack.
One begins to wonder, rather than being a short hop away at sea, whether the next step be taken, in the interests of the world's economic well being, to have the coalition go the extra mile securing not only the shipping lanes but to secure the oil fields themselves, fields that happen to be located in relatively sparsely populated portions of the country. That the administration, production and distribution be turned over to an international agency such as a newly reformed UN or better yet to the International Energy Agency. Their mandate would be to distribute this world treasure in keeping with the world's societal and economic needs and no longer by priorities delineated by OPEC and its coven.
(15 Jan 2007)
As if on cue for Michael Klare's vision of resource wars in a Energo-fascist future, Raymond J. Learsy seems to be suggesting the invasion of Saudi Arabia and the appropriation of its oil. Since this post appears on the liberal Huffington Post, the oil would be turned over to an international agency (not sure what the conservatives would think about this.) I suspect that given the current U.S. shipwreck in Iraq, Learsy's proposal will get the catcalls it so richly deserves. However it could be a harbinger of things to come. Liberal rhetoric is often used to justify resource wars. -BA
CQ: Officials Covered Up Oil Lease Problems, IG Says
Justin Rood, TPM Muckraker
Uh-oh. The Interior Department's internal watchdog says top officials at the agency knew about problems costing taxpayers as much as $10 billion in revenue, but tried to hide the problem from the public, according to Congressional Quarterly's Jeff Tollefson (sub. req).
One official may even have lied to Congress about when she knew things were screwy with her agency's energy contracts, which have allowed companies like ExxonMobil and Shell to pay billions less than they should have to extract oil and gas from federal lands, CQ reports...
(15 Jan 2007)
Euro displaces dollar in bond markets
David Oakley and Gillian Tett, Financial Times
The euro has displaced the US dollar as the world’s pre-eminent currency in international bond markets, having outstripped the dollar-denominated market for the second year in a row.
The data consolidate news last month that the value of euro notes in circulation had overtaken the dollar for the first time. Outstanding debt issued in the euro was worth the equivalent of $4,836bn at the end of 2006 compared with $3,892bn for the dollar, according to International Capital Market Association data.
(14 Jan 2007)
Has Globalization Passed Its Peak?
Rawi Abdelal and Adam Segal, Foreign Affairs
Summary: Not long ago, the expansion of free trade worldwide seemed inevitable. Over the last few years, however, economic barriers have started to rise once more. The forecast for the future looks mixed: some integration will probably continue even as a new economic nationalism takes hold. Managing this new, muddled world will take deft handling, in Washington, Brussels, and Beijing.
...One of the best ways to measure the health of globalization worldwide is to look at energy markets, and those for oil in particular. Oil has become the ultimate global commodity, unparalleled in importance. As go oil markets, therefore, so goes the global economy. And here, too, the signs are worrisome.
Both sets of states in the oil market -- those countries that have oil and those that do not -- have changed the way they do business in recent years. Among the haves, the rising price of oil has increased the temptation of governments to assert control over the resource. Throughout Latin America, governments have reasserted their authority over extraction projects that they once had ceded to foreign firms. Moscow has similarly muscled its way into direct control over Russia's vast oil and gas wealth and has used that control to extend its strategic influence.
In response, a number of the oil have-nots have taken measures to insulate themselves from a disruption in their oil supply. This helps explain China's seemingly illogical drive to acquire stakes in oil production facilities abroad. So long as oil remains a global commodity, consumers need not own the means of its production; they can simply buy all they need on the world market. China, however, seems to be preparing for a day when oil becomes far harder to acquire and transport and has thus signed various oil and natural gas agreements over the last five years with Angola, Brazil, Iran, Nigeria, Venezuela, and Sudan. This strategy makes so little economic sense that it can only be explained by an expectation that global oil markets will at some point break down, due to either a worldwide recession or a conflict between China and the United States.
... the flaws in multilateral institutions such as the WTO and the growing discontent with globalization will make it harder and harder for politicians to pursue free markets. If the United States, in particular, fails to do more to ensure that the benefits and opportunities of an internationalized economy are spread as widely as possible, there could be an even more potent backlash.
This is where smart policies should come in. The U.S. government must work harder to convince the American public -- particularly those Americans who fear losing their jobs to international competition -- that the costs of undermining or reversing globalization would be worse than the benefits. There is plenty of evidence to point to. Wal-Mart, for example, may have wreaked havoc on the U.S. retail sector with its relentlessly competitive business model, but it has also brought American consumers declining real prices for their mobile phones, DVD players, and televisions. Similarly, the Chinese manufacturing juggernaut may worry some Americans, but without it there would be no lower-cost products for Wal-Mart to sell.
Although this long article in the prestigious journal "Foreign Affairs" argues for globalization, the last paragraph seems to support James Howard Kunstler's complaint about globalization -- that we are exchanging jobs and a solid industrial/retail base for the opportunity to buy cheap trinkets at Wal-Mart. -BA