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Wrecking a Nation: Oil, Dependency, and Redistribution

Monday, 28 March 2011 01:00
Written by  Ralph R. Reiland

Here’s how the economic and political system of a nation is destroyed.

Every price increase of just a dime per gallon of gasoline at the pump extracts approximately $5 billion from the pockets of U.S. consumers over the course of a year.

On top of killing family budgets, with a dollar per gallon jump at the pumps picking our pockets of $50 billion per year, there is on the macro level an inverse relationship between the price of oil and the overall health of the economy — oil price hikes deliver less job growth, less demand for labor, more unemployment, more poverty, more inequality, more inflation, lower real income increases, and smaller advances in the standard of living.

Additionally, higher oil prices directly cause greater amounts of U.S. capital to be exported, both to pay the higher prices and to pay for the growing levels of imported oil.

In 1985, the U.S. imported 25 percent of its oil usage. Today, it’s 61 percent. And still we are placing restrictions on increases in domestic production, both for oil and other sources of energy.

A few days back, President Obama, rather than sticking around a couple hours to explain to the American people or to the U.S. Congress why we were going to war in Libya, flew off to Brazil to hand out a permit to allow deep sea oil drilling in the Gulf of Mexico to Brazil’s state-run oil company, Petrobras. Capitalist companies in America need not apply.

This particular foreign deal was an especially snug and nostalgic fit for Obama. Brazilian president Dilma Rousseff is somewhat of a Latin form of Obama’s old Weather Underground chum Bernardine Dohrn.

In earlier days, Rousseff, a former Marxist guerrilla, was charged with running with a gang of redistributionists who accumulated revolutionary capital by way of kidnapping foreign diplomats for ransom.

A top priority for Rousseff today mirrors the “spread the wealth around” objective that Obama stated to Joe the plumber.

Dohrn, just home from a trip to Cuba in 1969 where she hoped to pick up some pointers on how to impose a “classless” society on the United States, displayed her true psychopathic colors in a speech she made to the Weathermen’s “War Council.” Speaking elatedly of the murders by the Charlie Manson gang of actress Sharon Tate, coffee heiress Abigail Folger, and three other people, Dohrn proclaimed, “First they killed those pigs, then they ate dinner in the same room with them, then they even shoved a fork into the victims’ stomachs! Wild!”

That’s the fully hateful Bernardine on public display, seeing herself as a new George Washington, a revolutionary fighter for a new nation. It’s the same role, except this founding mother was in serious need of a super-sized bottle of antipsychotic drugs and a super-tight straight-jacket.

Of all the places for candidate Obama to kick off his political career in 1995 in his first run for the Illinois State Senate, he picked the living room of Bernardine Dohrn and husband Bill Ayers, co-founder of the Weather Underground and, more recently, the national vice president for curriculum studies at the American Educational Research Association.

I’d have kept up my guard when Bernardine sashayed out of the kitchen and began circulating around with the hor dourves and metal forks.

In any case, it’s no surprise that things are coming apart, especially on energy. “If somebody wants to build a coal-fired plant, they can,” pronounced Obama during the presidential campaign. “It’s just that it will bankrupt them because they’re going to be charged a huge sum for all that greenhouse gas that’s being emitted.”

What’s the end game?  “Suicide Mission Accomplished”?

Ralph R. Reiland is an associate professor of economics at Robert Morris University in Pittsburgh.

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Carbon Corruption

Iran, North Korea, Sudan rack up millions by trading U.N. carbon credits

BY: Zach Noble – June 13, 2012 5:00 am

The U.N. is funneling millions of dollars worth of tradable carbon credits to corrupt nations worldwide, including Iran, North Korea, Sudan, and Uzbekistan in an attempt to encourage clean energy projects in the developing world.

The U.N. Clean Development Mechanism (CDM) is defined in Article 12 of the Kyoto Protocol. Western European countries fund energy projects in the developing world in order to obtain Certified Emission Reduction credits (CERs), tradable credits that enable Europeans to count foreign emission reductions towards their own domestic emission reduction targets.

“The CDM started from a page and a half in the Kyoto Protocol,” said David Abbass, a spokesperson for the U.N. Framework Convention on Climate Change. “In the beginning they thought there would be maybe 600 projects, but now there are over 4,000 projects.”

Iran, Uzbekistan, Sudan, and North Korea are among the more than 70 countries currently hosting CDM projects.

Iran, with 16 separate CDM projects, brings in around 4.8 million CERs, worth about $26 million, every year, despite numerous U.N. sanctions against the Islamic Republic.

Uzbekistan, dominated for the last two decades by the autocratic Islam Karimov, hosts 20 different CDM projects, with a combined annual value of over 7.5 million CERs, or roughly $40 million.

Sudan, whose president Omar Hassan al-Bashir came to power via military coup over 20 years ago and is wanted by the International Criminal Court on charges of genocide, crimes against humanity, and war crimes in Darfur, is on the receiving end of two different CDM projects, with a combined annual value of over 180,000 CERs, or almost $1 million.

North Korea is hosting seven hydroelectric dams, which may generate over $1 million in CERs annually.

North Korea, Sudan, and Uzbekistan are among the 10 most corrupt nations worldwide, according to Transparency International’s 2011 Corruption Perceptions Index.

It is unsurprising that North Korea is using U.N. money to develop its own infrastructure, said Claudia Rosett, journalist-in-residence at the Foundation for Defense of Democracies.

“One of the first questions with any U.N. program is, ‘Who is overseeing this?’” said Rosett. “Very often no one is.”

The worldwide expansion of the CDM has been accompanied by “troubling stories in various countries,” said Abbass. “When you have over 4,000 projects, you’ll have some projects in areas in dispute.”

“We learn by doing,” he said. “We’re fixing as we go.”

CDM support is open to any country with the appropriate bureaucratic machinery in place. Abbass maintained that the CDM is not concerned with human rights issues and that the Kyoto Protocol merely set up the system—individual projects “come from interest in the private sector.”

The program was born of European self-righteousness, said Chris Horner, a senior fellow at the Competitive Enterprise Institute. European governments have staked their reputations on environmental issues, but cannot meet emission reduction targets on their own, he said.

Europeans therefore “buy phony reductions” through the CDM, said Horner.

“Europeans basically say to the developing world, ‘I’ll pay you not to treat this byproduct as a waste product,’” said Horner, referring to numerous CDM projects that focus on reducing perceived waste in the developing world, from natural gas flaring to the release of methane from farm animals.

More than 83 percent of CDM projects are based in Asia, while Africa and the Caribbean account for a tiny fraction of CDM projects, according to U.N.F.C.C.C. data.

CDM projects are concentrated in Asia due to the disastrous environmental effects of communism and the bureaucratic savvy of China, experts say.

“Communism created the most intensely wasteful society the world has ever seen,” said Horner, explaining why former Soviet states in Central Asia such as Uzbekistan and Turkmenistan receive substantial support from the CDM.

The Chinese government, an aggressive host for CDM projects, has manipulated the system, going so far as to re-open defunct factories in order to get Europeans to pay them to close them again.

The Chinese are adept at twisting the “mandated inefficiency” of CDM projects to their own benefit, said Horner.

Haiti has set up the bureaucratic mechanisms required to host CDM projects, but is currently sponsoring zero projects.

Dorine Jean-Paul, an energy specialist at Haiti’s Ministry of Environment, decried a lack of support from the U.N.

“I believe the U.N. is not helping the countries that need it the most,” said Jean-Paul.  “Besides some training sessions that are organized with the U.N. support in the [Latin American and Caribbean] region, we don’t get assistance or funds for a specific and national identified need.”

Abbass acknowledged that CDM projects are concentrated in Asia, and said the under-representation of Africa and the Caribbean might be addressed at the upcoming Rio +20 conference.

But he also noted that any substantial changes to the CDM could be a long time coming.

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Seadrill Orders Harsh Environment Rig in South Korea

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Seadrill, one of the world’s largest drilling contractors, has ordered a new harsh environment semi-submersible drilling rig from Hyundai Samho Shipyard in South Korea. The company explained the move by the current strong demand for high specification drilling units and Seadrill’s wish to benefit from such market conditions.

The new rig will be a sister rig of the harsh environment semi-submersible unit Seadrill’s subsidiary North Atlantic Drilling currently have under construction at Jurong Shipyard in Singapore.

It will be of a Moss CS60 design, N class compliant and will be able to meet the harsh and demanding weather conditions in the North Atlantic areas. In addition, the new rig will have premium ultra deepwater capabilities including water depth of up to 10,000 feet. The rig is scheduled for delivery in the fourth quarter 2014.

Total estimated project costs is less than US$650 million including a turn key yard contract with a back-end loaded payment structure. In addition, Seadrill has agreed a fixed price option for one further unit from the yard. Seadrill has already received charter interest in the firm unit. With the strong demand Seadrill feels it is likely that the option will be exercised. However, a final decision will not be taken before August 2012.

Seadrill’s construction program now totals 18 units, including 6 drillships, 2 harsh environment semi-submersibles, 5 tender rigs and 5 jack ups. In addition to the rigs under construction, Seadrill also controls several fixed price options at various yards.

Alf C Thorkildsen, Chief Executive Officer in Seadrill Management AS says in a comment: “Based on the enquiries we receive from the major oil and gas companies and the current high oil prices, we are comfortable that the aggregate demand for modern floaters will exceed the supply of available units for several years to come. We are pleased that the good relationships Seadrill and the Fredriksen group have with the top quality yards have allowed us to get access to attractive delivery slots at competitive terms. With an expected strong cash flow from our solid contract backlog we are well positioned to secure attractive financing for our new building program. As a result we remain positive to the prospects of continuing to show higher growth and deliver better operational and financial performance than our peers in an industry that looks very attractive for the years to come.”

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Oil leaders, GOP allies, downplay administration’s seismic plans

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House Natural Resources Committee chairman Rep. Doc Hastings, R-Wash, leads a committee hearing. (AP Photo/Kevin Wolf)

Posted on March 28, 2012 at 11:37 am
by Jennifer A. Dlouhy

The Obama administration’s announcement that it may allow seismic studies potentially paving the way for offshore drilling along the East Coast is political posturing designed to distract voters concerned about high gasoline prices, oil industry leaders and Republican lawmakers said today.

The administration’s move “continues the president’s election-year political ploy of giving speeches and talking about drilling after having spent the first three years in office blocking, delaying and driving up the cost of producing energy in America,” said Rep. Doc Hastings, R-Wash. “The president is focused on trying to talk his way out of what he’s done, rather than taking real steps to boost American energy production.”

At issue is Interior Secretary Ken Salazar’s announcement in Norfolk, Va., this morning that the government is assessing the environmental effects of allowing seismic surveys along the mid- and south-Atlantic that could help locate hidden pockets of oil and gas. If ultimately approved, the studies by private geological research companies also could help guide decisions about where to place renewable energy projects off the coast.

The Interior Department is issuing a draft environmental impact statement that assesses the consequences of seismic research on marine life in the area. The Obama administration had planned to release a similar document in 2010, before the Gulf of Mexico oil spill.

If the draft environmental assessment is finalized after public comments and hearings, the Bureau of Ocean Energy Management could give companies permits to conduct the studies off the coasts of eight East Coast states.

Salazar said that if the geological research turned up promising results, that could open the door to offshore drilling in the area within five years, even though the administration currently has ruled out that kind of exploration before 2017. A government plan for selling offshore drilling leases from 2012 to 2017 does not include any auctions of Atlantic territory.

“If the information that is developed allows us to move forward in a quicker time frame, we can always come in with an amendment,” Salazar said. “We’re not prejudging that at this point in time. My view is … we need to develop information so we can make those wise decisions.”

Industry officials noted that under federal laws, it could take years for the government to revise the 2012-2017 leasing plan, even if federal officials decided to pursue Atlantic drilling.

Erik Milito, upstream director for the American Petroleum Institute, said the administration is repackaging old news and old plans to make it appear it is making real progress to encourage more domestic energy development.

“This is political rhetoric to make it appear the administration is doing something on gas prices, but in reality it is little more than an empty gesture,” Milito said.

Randall Luthi, the president of the National Ocean Industries Association, likened the administration’s announcement to giving the industry “a canoe with no oars, since there are no lease sales planned anywhere off the East Coast.”

If allowed to conduct seismic surveys, geological research firms would ultimately give the resulting information to the government and sell it to companies eager to analyze the data.

But Milito questioned whether seismic companies would pursue the work, given that some of their best customers — oil companies — wouldn’t be able to use it to plan offshore drilling for years, if at all.

“Without an Atlantic coast lease sale in their five-year plan, the administration’s wishful thinking on seismic research has no ultimate purpose,” Milito said. “The White House has banned lease sales in the Atlantic for at least the next five years, discouraging the investment and job creation, and ultimately production, which would make seismic exploration valuable.”

Still, at least six companies already have told the government they want to conduct seismic research along the East Coast.

“We have gotten significant expressions of interest from companies in contracting for these seismic surveys,” said Tommy Beaudreau, the director of the Bureau of Ocean Energy Management. “I am confident that, assuming the process continues on the track we anticipate, that there will be significant interest next year in conducting these surveys.”

Geological research uses seismic waves to map what lies underground or beneath the ocean floor. The shock waves — which some environmental advocates say may harm marine life — map the density of subterranean material and can gives clues about possible oil and gas.

Seismic studies also help identify geologic hazards and archaeological resources in the seabed — information useful in determining the placement of renewable energy infrastructure as well as oil and gas equipment.

The existing seismic surveys of the Atlantic coast are decades old, and in the years since, “there have been enormous technological advances,” Salazar noted.

“We do need to have seismic moving forward so we can really understand what the resource potential is,” Salazar added.

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Norway: Naming Ceremony for Olympic Energy PSV

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Last Saturday, on March 24th, a naming ceremony for Olympic Shipping’s new Platform Supply Vessel took place in Ålesund. The naming of the vessel, now called Olympic Energy was performed by Godmother Marianne Synnes.

After the ceremony, the ship was open to the public and about 1500 people used the chance to study the ship up close.

Olympic Shipping AS, STX OSV and the Training Office of Maritime Studies were represented at the deck, where those who were interested could get further information about the ship and job opportunities in the business.  Olympic Energy is a PSV 06 LNG design, to be delivered from STX OSV, later this month. The vessel is designed as a platform supply vessel for worldwide operations and transport of general cargo for offshore industry.

The vessel is of environmental friendly design, with low resistance hull shape designed for high speed and low fuel consumptions. Its main engines are driven by liquefied natural gas.

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USA: ECO Shipyard Christens New Icebreaker Built for Shell

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Edison Chouest Offshore (ECO) Shipyard in Larose, Louisiana on March 24th 2012 held christening ceremony for Shell’s new 360 foot long icebreaker “Aiviq”. This new Arctic ice class anchor handler under construction for Shell is the largest and most advanced ship ever designed and constructed by ECO.

M/V Aiviq, the newest vessel being built by Edison Chouest Offshore, will be one of the most advanced and powerful U.S. non-military, ice breakers on the water. The vessel is being built to Polar Code 3 and measures 360′ long, 80′ wide, with a 29′ draft. Its primary mission will be to support offshore development in the Arctic. This vessel is the very first of its class to be built in the United States.

The vessel was ordered in July 2009 and is scheduled for delivery in April 2012. It is being built to American Bureau of Shipping A3 class—capable of breaking ice 1m thick at a speed of 5 knots. Her propellers are reported to have been specially designed to be quieter than normal, in order to be less disruptive to local marine life.

The price tag for the Aiviq will be around USD 200 mln. Its main task will be laying anchors for drilling rigs. Also, Aiviq will be equipped for the oil spill clean-up operations.

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Brazil may shift jurisdiction of Chevron case

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By Jeb Blount and Joshua Schneyer
RIO DE JANEIRO | Fri Mar 23, 2012 9:16pm EDT

(Reuters) – A judge in Campos, Brazil, could shift the criminal charges filed against Chevron and drill-rig operator Transocean to Rio de Janeiro, a decision that would remove a crusading prosecutor from the case.

Eduardo Santos de Oliveira, a federal prosecutor based in Campos, in Rio de Janeiro’s interior, told Reuters on Friday a jurisdictional review is under way, which could delay any formal criminal indictment of the firms and their employees for weeks.

Oliveira filed criminal charges against Chevron, Transocean and 17 of their employees in Brazil this week for alleged crimes related to a November offshore oil spill in Brazil’s Frade field, which Chevron operates.

He pledged to seek maximum prison sentences of 31 years against the firms’ executives.

Federal judge Claudio Girão Barreto will consider whether the companies must post bonds in Campos or whether the case should be moved to Rio de Janeiro. The judicial review normally takes around ten calendar days.

The review does not alter the content of the criminal charges, but it could remove the case from Oliveira’s turf and hand it to another team of prosecutors.

The question of jurisdiction stems from the location of the alleged crimes in a deep-sea oil field beyond Brazil’s territorial waters but within its 200-nautical-mile “exclusive economic zone.”

Oliveira said the judge had asked him to appear in court on Monday with more details about the case.

“I think moving the case to Rio de Janeiro would be a mistake,” said Oliveira in a telephone interview. “Chevron and Transocean want you to believe this happened on some foreign ship or platform in international waters. But the crime happened under the seabed, in physical Brazilian territory.”

Some Brazilian officials, including Senator Jorge Viana of the government’s ruling party, have called Oliveira’s charges over-aggressive. Viana told Reuters this week that the case could damage Brazil’s oil industry.

A 20 billion reais ($11 billion) civil suit filed earlier by Oliveira in Campos against Chevron and Transocean, its drilling contractor at Frade, has already been shifted to Rio de Janeiro’s capital. A judge ruled in January that Campos wasn’t the proper jurisdiction for the civil case, Brazil’s largest-ever environmental lawsuit.

Chevron’s November leak of 2,400 to 3,000 barrels of oil at the Frade field was the result of a pressure kick during drilling. Oliveira has said Chevron’s drilling was reckless and unsafe. The companies deny the charges.

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Amount of Coldest Antarctic Water Near Ocean Floor Decreasing for Decades

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Scientists have found a large reduction in the amount of the coldest deep ocean water, called Antarctic Bottom Water, all around the Southern Ocean using data collected from 1980 to 2011. These findings, in a study now online, will likely stimulate new research on the causes of this change.

Two oceanographers from NOAA and the University of Washington find that Antarctic Bottom Water has been disappearing at an average rate of about eight million metric tons per second over the past few decades, equivalent to about fifty times the average flow of the Mississippi River or about a quarter of the flow of the Gulf Stream in the Florida Straits.

“Because of its high density, Antarctic Bottom Water fills most of the deep ocean basins around the world, but we found that the amount of this water has been decreasing at a surprisingly fast rate over the last few decades,” said lead author Sarah Purkey, graduate student at the School of Oceanography at the University of Washington in Seattle, Wash. “In every oceanographic survey repeated around the Southern Ocean since about the 1980s, Antarctic Bottom Water has been shrinking at a similar mean rate, giving us confidence that this surprisingly large contraction is robust.”

Antarctic Bottom Water is formed in a few distinct locations around Antarctica, where seawater is cooled by the overlying air and made saltier by ice formation. The dense water then sinks to the sea floor and spreads northward, filling most of the deep ocean around the world as it slowly mixes with warmer waters above it.

The world’s deep ocean currents play a critical role in transporting heat and carbon around the planet, thus regulating our climate.

While previous studies have shown that the bottom water has been warming and freshening over the past few decades, these new results suggest that significantly less of this bottom water has been formed during that time than in previous decades.

“We are not sure if the rate of bottom water reduction we have found is part of a long-term trend or a cycle,” said co-author Gregory C. Johnson, Ph.D., an oceanographer at NOAA’s Pacific Marine Environmental Laboratory in Seattle. “We need to continue to measure the full depth of the oceans, including these deep ocean waters, to assess the role and significance that these reported changes and others like them play in the Earth’s climate.”

Changes in the temperature, salinity, dissolved oxygen, and dissolved carbon dioxide of this prominent water mass have important ramifications for Earth’s climate, including contributions to sea level rise and the rate of Earth’s heat uptake.

“People often focus on fluctuations of currents in the North Atlantic Ocean as an indicator of climate change, but the Southern Ocean has undergone some very large changes over the past few decades and also plays a large role in shaping our climate,” said Johnson.

The data used in this study are highly accurate temperature data repeated at roughly 10-year intervals by an international program of repeated ship-based oceanographic surveys. Within the U.S., the collection of these data has been a collaborative effort of governmental laboratory and university scientists, funded primarily by NOAA and the National Science Foundation. However, much of the data used in this study were measured by international colleagues.

“Collection of these data involves 12-hour days, seven days a week, of painstaking, repetitive work at sea, often for weeks on end with no sight of land. We are grateful for the hard work of all those who helped in this effort,” said Purkey.

Source

NOAA

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