How Much Oil Will Iraq Produce?

If the purpose of invading Iraq was about oil, the results have been disappointing. Although Iraq has had a few good quarters in the last two or three years, they have not been able to put together a year of production equal to pre-invasion levels. And it's been three decades since Iraq reached it maximum output. Wars, corruption and incompetence share blame for Iraq's poor performance.

Of course the oil is still sitting in the ground. Everyone agrees there is still a sizable reserve. Here's the latest concerning Iraqi oil:

Head of Iraq's State Oil Marketing Organization, Falah Alamri, said that the country plans to start crude oil shipping operations in March and prepares to export larger volumes of crude in the future, Reuter reported.

Another site carries the same Reuters story. They have a picture that may or not be contemporary and yet it seems to fit what I know of Iraq's petroleum industry for the last thirty years.

It's hard not to be skeptical. Stuart Staniford has a post in The Oil Drum that's also skeptical but he explores the possibility of Iraqi oil production rising from a little more than 2 million barrels/day in 2009 to 12 million barrels/day by 2017. Here's an excerpt from Staniford's post:

At this stage, it seems too soon to say the Iraqis definitely will succeed. But the scenario that they might seems worth serious consideration.

(snip)

There doesn't seem to be too much dispute that Iraq has enough reserves to support far higher production than has actually occurred in the past.

(snip)

Iraq held two rounds of auctions for oilfield management contracts in 2009 that the large international oil companies have responded to. The first round, in June, were for fields that were already in production and set up contracts in which companies get paid a fee per barrel for all production over the existing level. The second round, last month, were for fields not yet on stream. The Iraqis seem to have driven hard bargains - the oil companies are being paid a flat fee per barrel that is generally under $2/barrel in the safer parts of the country, and thus will not benefit from high oil prices - all price risk/reward remains with the Iraqis. Nonetheless they were able to attract some bids from large competent oil companies with a track record - the likes of Shell, Exxon, Statoil, and Lukoil, and have been signing preliminary contracts with them. According to the oil ministry, the total contracts awarded amount to 12mbd of production, and this could be achieved within six years.

Staniford always has good graphs. Below is just one of the them:



It's simply not possible these days to post such a story without checking to see if the Chinese are paying attention. They are:

Iraq's oil exports amounted to 1.97 million barrels a day in December 2009, an increase of 950,000 barrels over November, the preceding month, according to latest statistics from the Iraqi Ministry of Oil. And a significant change in the volume of exports fully reflects the rapidly-rising momentum from an aspect of current oil production in the country.

In line with requirements for its government to sign a contract with foreign energy firms, Iraq would increase its crude oil to 12 million barrels a day from the current 2.5 million barrels in the next six years; at the same time, its gas production would increase to 144 million cubic meters from the present 48 million cubic meters. Representatives of some OPEC member nations, however, regard that Iraq’s practice for a large-scale increase of oil production is inconsistent with the OPEC’s current strategy for "limited production and oil price protection", and this could cause volatility on the future global oil market.

Admittedly, the article doesn't say all that much, but it's in the opinion section of the People' Daily Online. That means it's news China wants to be noticed. Despite the optimism of Iraq's oil sector, China and Stuart Staniford agree: there may be increased production from Iraq but we're also likely to see increased volatility in the world's oil markets.

In the long run, a plug-in or hybrid car not only sounds like a bargain but may also offer peace of mind.

The Growing Complexity of Dealing with China

Fifty years ago the United States would send government officials or business executives to small third world countries with a checkbook. Whenever such a checkbook was opened, such countries listened. At least for a while.

Now it's China that seems more active about using a checkbook to build relationships. In Africa, the Chinese have been buying up resources; one might argue that this is a new kind of imperialism, 21st Century style. Actually, other arguments can be made but the real point here is that the world is growing more complex and China is now very much part of that complexity.

China is often criticized for its human rights record—and rightfully so—but things are no longer as black as white as they were even fifteen years ago. I've been writing about China lately because a number of key issues cannot be dealt with unless China is part of the picture. Dealing with problems like global warming, fossil fuel depletion, the environment, the economy and American job losses are not going to happen without cooperation with China. Of course American companies who have their products made in China are also part of the picture. As an example, Reuters reports that GM saw its sales improve last year:

GM sold a record 1.83 million autos in China last year, the company said in a statement Monday. The auto maker expects to top that this year, though it sees slowing growth. Kevin Wale, president and managing director of GM China Group, "The industry outlook is strong and we expect more growth, albeit on a somewhat slower pace."

Whether Americans like it or not, we are tied to the economic performance of China. If that sounds vaguely familiar, it's because we're also economically tied to the performance of oil producers in the Middle East. With apologies to Laurel & Hardy, "It's a nice pickle we've gotten ourselves in."

Free trade is great if you're on the receiving end of profits but it's not so great if it means losing middle class jobs to cheap labor. Right now, China and the U.S. are increasingly two-tiered societies with a small wealthy class on one side and everybody else on the other. The wealthy of the current generation are too often not interested in the consequences of their behavior . When mostly Republican commentators in The Wall Street Journal praise the Chinese, they're not praising Chinese workers, they're praising Chinese business owners who share their own values.

Like the U.S., however, the Chinese have different factions with different ideas about the future. Obviously an authoritarian Chinese government has low tolerance for different views. But in spite of recent prison sentences, Chinese wanting democratic reform will continue to find ways to make their views known.

Keeping in mind that the Chinese can sometimes change direction on a massive scale—Deng's pro-capitalism moves is one example—the Chinese are slowly moving in fits and starts towards a more open form of journalism. There are certainly steps backward but we're getting news out of China that was unthinkable twenty years ago. We're hearing about coal mine disasters, earthquakes and protests and we're also hearing about Chinese foreign policy moves, new business ventures and sometimes detailed government policies.

Americans themselves need to be more nuanced when they read or comment about news from China. One of today's stories out of China is about a diesel spill; here's the story from a Chinese news site:

A diesel spill from a ruptured pipeline in northwestern China has seriously contaminated two rivers that finally flow into the Yellow River, the country's second longest waterway, a local official said Monday.

The Chishui and Weihe rivers were seriously contaminated after some 150 cubic meters of diesel leaked early Wednesday from a ruptured pipeline belonging to the China National Petroleum Corporation (CNPC), the country's top oil producer, Li Xiaolian, vice director with the Shaanxi Provincial Environment Protection Administration, said at a press conference.

However, contamination to the Yellow River remained under control and its water quality was still within the state standard, he said.

By the time the reader goes to the link, there may be updates but the point here is that earlier in the day the news, accurate or not, is that the spill had not reached the Yellow River. Later in the day, a website called Clean Skies was quick to note an emergency water decree downriver:

The warning contradicts earlier reports from the pipeline's owner, China National Petroleum Corp., that the contaminated water was contained after workers dug diversion channels and used floating dams and solidifying agents to stop the spill.

It's not a bad article though I wish they had given their sources. It gives the impression that China National Petroleum Corp. was trying to minimize the consequences of the spill. It may very well be the case. I note that the spill occurred on Wednesday and it's now five days later. What was that delay about?

But the Chinese in general were not hiding the story. The story can now be found in various places and the details suggests either Chinese government officials or government officials are talking to the media. Here's a BBC story with more details:

Pollution from a broken oil pipeline in northern China has now reached one of the country's major water sources - the Yellow River, state media say.

(snip)

The official Xinhua news agency said: "At present, cities along the river in Henan province have sufficient water resources."

About 150,000 litres of diesel poured into the Wei river in Shaanxi province after a construction accident on Wednesday, state media reported.

It's possible company officials and local officials initially attempted to downplay what happened. I've talked earlier about corruption being a collusion between company officials and local government officials. On the other hand, there was an attempt to control the problem with floating dams, etc. What might then have happened is that the national government became aware of what was happening and the story hit the news agencies.

But the diesel spill is actually only a small part of a much bigger story: the Yellow River has for years been an environmental disaster story of international proportions. It is heavily used and heavily polluted. For some months a year it does not even reach the sea. Wait. This is our story too. The Mississippi and the delta it pours into has become increasingly polluted. It is the story of the Rhine. It is the story of the Nile. It is the story of the Ganges.

It used to take weeks, months, even years to get news out of China. I suppose we can criticize it if it takes more than a few hours for a story to hit the internet. I have no doubt government officials hold off on some stories. I have no doubt it takes time to do an English translation. I have no doubt that those translations sometimes have to get official clearance. But news is coming out of China. And it's often our news, even if, in a country of 1.3 billion people, it's sometimes on a larger scale.

Rare Earth Metals in China: A Case of Corruption Leading to Pollution

Lately, the government of China has been talking about honoring Chinese tradition. It's fine when societies, including our own, honor the best parts of our traditions but actual practices don't always match our publicly declared policies. China, in any case, is a bundle of contradictions. One could easily argue that the red octopus above represents the strange fusion of red communism and acquisitive capitalism that today is indicative of China. (Come to think of it, I ought to use the octopus later to represent Republican members of Congress and Washington lobbyists who wish to snarl up and otherwise obstruct useful legislation in Washington. It's a great image!)

For some time, China has been talking about cleaning up its pollution but not much happens. It is a sad fact that sooner or later China is going to have its Love Canal. But multiply that times ten given the pollution problems China already has.

I recently did a post on rare earth mining in California's Mountain Pass Mine in the Mojave desert. Even during its worst days, Mountain Pass seems to have been handled better than the Chinese mine discussed in the following New York Times article:

Here in Guyun Village, a small community in southeastern China fringed by lush bamboo groves and banana trees, the environmental damage can be seen in the red-brown scars of barren clay that run down narrow valleys and the dead lands below, where emerald rice fields once grew.

Miners scrape off the topsoil and shovel golden-flecked clay into dirt pits, using acids to extract the rare earths. The acids ultimately wash into streams and rivers, destroying rice paddies and fish farms and tainting water supplies.

Lovely. So much for 5,000 years of sustainable agriculture.

I don't want to minimize the environmental damage that has been done by the United States in the last 200 years but the worst stories that have come out of the former Soviet Union and Eastern Europe make the United States look rather green by comparison. There are growing concerns that China is repeating some of the worst damage done during the Cold War. The problem is that the dynamics are far too similar: despite China's commitment to capitalism and the loosening of strict authoritarian control, the government is over-centralized, overly authoritarian, and overly paranoid about a free press. On top of that, there is far too much corruption in government as well as in business.

President Hu Jintao and Premier Wen Jiabo seem bent on curbing corruption but they have the same problem the emperors had from the beginning: the inability of the central government to control events in distant provinces as well as in large cities such as Shanghai. Premier Wen has apparently found it useless to announce personal appearances around the country since that only leads to Potemkin moments as local officials try to put on a good but fraudelent show. Now Wen arrives unannounced and is not pleased with what he finds. And as noted by the Carnegie Endowment for International Peace, not nearly enough is done to enforce laws against corruption:

Though the Chinese government has more than 1,200 laws, rules, and directives against corruption, implementation is spotty and ineffective. The odds of a corrupt official going to jail are less than three percent, making corruption a high-return, low-risk activity. Even low-level officials have the opportunity to amass an illicit fortune of tens of millions of yuan.

Still, despite problems, we need to be careful not to underestimate what the top Chinese leadership can do. There are indications that the global warming deal in Copenhagen wasn't as bad as some on America's far right and far left have claimed. Having any kind of deal that involves China and the United States is better than anything we've had in the last nine years. But no one should kid themselves. Not China. And not the United States. In a real sense, a number of American corporations have been sending their pollution to China for almost thirty years. Further, it's been apparent that many U.S. corporations don't have the kind of quality control that all of us took for granted back in the 1970s—instead too much money seems to go to public relations and Washington lobbyists. In the meantime, a lot of crap is put on the American market by American companies that shouldn't be sold.

A real climate change agreement will only be possible as the U.S. and China build up mutual trust and respect. Eventually mutual inspections will be needed and those inspections will have to extend beyond just the U.S. and China. I know, these things will be difficult but they are necessary and not impossible. And they will take time.

China Needs More Ambitious Alternative Energy Policy

For all their flaws, the Chinese are now one of the big global players. And yet, allthough they're the third largest economy in the world, they still think of themselves as a third world country—at least when its convenient. Although their earnings per capita are still on the low side, they're burning coal and oil like a modern industrialized country. I'm surprised, therefore, that their energy policy is not more ambitious in terms of lowering emissions and turning more to alternative energy. I've written posts about some of the good things they're doing in the alternative energy field but it's apparent that it's still not nearly enough, at least if I'm reading some statements on their energy policies right. Here's the story from the China Daily:

Han Wenke, director-general of the Energy Research Institute under the National Development and Reform Commission, said: "By 2050, over one third of the country's total primary energy consumption should come from renewable energy. This is in line with the country's goal of fundamentally changing its energy consumption structure. This will contribute a great deal to environmental protection and help combat climate change."

(snip)

By 2020, the country, through vigorously developing its renewable energy resources, should be able to supply the renewable energy equivalent of more than 600 million tons of standard coal to fuel its robust economic growth. This renewable energy should account for about 15 percent of the country's total primary energy consumption.

Keeping in mind that much of what counts for renewable energy in China is hydroelectric power, 15% renewable by 2020 isn't nearly ambitious enough and taking 30 years to go from 15% to 33% is pathetic. Of course China is growing fast, perhaps too fast to think things through for the future. It can't continue to burn coal at the rate it does and expect to be taken seriously when it talks about limiting global warming emissions.

If a Reuters article is to be believed, the Chinese seem to be claiming that they may be installing too much windpower at the moment:

Wind power generating capacity has surged so fast that policy planners now warn of severe overcapacity in the sector, and dam after dam piled on Chinese rivers distorts water flow, endangers fish and poses a potential earthquake hazard.

First, if windpower is generating too much electricity, they can shut down some power generation from coal (the coal will still be there for the future). But more important, they are going to need more electrical capacity as the world's automotive fleet increasingly converts to hybrids and electric cars. Of course part of the problem with windpower is that it needs some backup system for when wind levels are low. Perhaps during periods of high wind the Chinese can use windpower to pull hydrogen from water and use hydrogen-powered fuel cells to even out the energy use. They could also, for that matter, use windpower to desalinate water for their vast deserts.

While I'm at it, here's a story from Canada the Chinese should give some thought to:

The natural gas industry — long the bedrock of Alberta’s economy — faces major threats amid a fundamental shift south of the border.

Massive stores of shale gas, once beyond the reach of engineers, are now being successfully squeezed out from under Texas and other U.S. states.

Now Medicine Hat, the unofficial heart of Alberta’s natural gas industry for more than a century, is being battered by this shale storm, along with dozens of other Alberta communities.

With all the money the Chinese have these days they should help build a natural gas pipeline from Alberta to Canada's west coast and ship natural gas to China. That way they can use less of their coal and emit far less greenhouse gases since natural gas is much cleaner than coal and emits about half the amount of carbon dioxide.

Wait a minute! There are already natural gas pipelines from Canada to the U.S. Why aren't we using that natural gas to close down some coal plants ourselves? Make sense to me.

Obama, China and the American Press

George W. Bush left the White House a failure. He also left the nation in free fall. There are many things I wish Obama would do and many things I wish he would do faster. But he faces problems. First, he faces an obstructionist Republican Party. Even within his own party, there are moderates who have fallen behind in their understanding of how much things have changed and how much we need to do.

Day after day, Obama must deal on the one hand with millions of Americans who are angry at what happened in the last eight years and on the other with millions who are angry period. He also faces an American press that is barely in touch with what is going on out in the real world.

The truth is that the United States has not faced so many problems since World War Two. Another truth is that many of those problems are of our own making or have worsened from years of neglect. Bush's go-it-alone foreign policy was based on fantasy but it was pursued for eight years and cannot be undone in a matter of months, though Obama has done much to repair the damage done by Bush.

I was disgusted this week that so many news sources spent more time talking about Sarah Palin and her book than Obama's trip to Asia. Sarah Palin knows nothing and has accomplished nothing but her tour trumped Obama's tour.

Now I realize that for the last twenty years news stories on foreign policy trips usually start out with the phrase, "Although producing no breakthroughs on key issues...." But talking eventually does lead to results and not talking usually leads to deterioration in relations. The reality is that private talks always clear away misunderstandings and facilitate future cooperation. The above quote, by the way, is from an AP story about our ambassador to China, a reasonably rational Republican. Here's what Jon Huntsman said:

"I attended all those meetings that President Obama had with Hu Jintao and Wen Jiabao," Huntsman said, referring to the Chinese president and premier.

"I've got to say some of the reporting I saw afterward was off the mark. I saw sweeping comments about things that apparently weren't talked about, when they were discussed in great detail in the meeting."

Although the Chinese stagecraft their news, one important aspect of Obama's visit is that it was the top story in China. Obama's visit was taken seriously by the Chinese even if many American journalists preferred to minimize what happened or prefer to say that Obama isn't effectively dealing with China, whatever that means.

I have no illusions about China. It is still an empire, it has a poor human rights record, it is nationalistic (one shouldn't ignore the symbolism of its pageants at the last Olympics), it is often plagued by corruption and it is still an autocratic system even if it is more benign than it once was. In addition, China is sometimes paternalistic toward its minorities, sometimes indifferent but there is never equal footing for minorities. At the end of the day, however, through deliberate policies, blunders and inattention, we are tied to China as never before. For one thing, they own a significant portion of our debt. And they make a great number of our goods, often through contracts with American manufacturing companies.

But at the end of the day, the United States is still the most powerful country in the world. Some quick graphs can be found at the BBC comparing the U.S. and China. Note, for example, that U.S. military spending is more than 5 times what China spends.

James Fallows at The Atlantic has a series of posts on Obama's visit. In one post, he talks about Chris Matthews who seems too often to follow the mood of grumpy pundits rather than finding out what actually happened:

...people have sent clips of today's talk show by my friend and former colleague Chris Matthews, which went in super-heavy for the "Obama humiliated in Asia" line. With all good will to Chris, I fear that this show today, notably the comments by the Washington Post's reporter from the Asia trip, will be the new symbol of exactly the kind of instant-analysis that, in my view, fundamentally misrepresents what happened on the trip.

In another post, Fallows writes:

...the before-and-after analyses from a private client newsletter by Damien Ma, Divya Reddy, and Nicholas Consonery of the Eurasia Group, reinforcing the idea that what actually happened on the trip was almost exactly what informed observers expected to happen, and not some humiliating disappointment.

It shouldn't be overlooked that the operative word in Fallows post is: informed.

To be honest, Obama could do a better job of courting the press—one of the many books of Roosevelt's press conferences would make great night reading. But the press has a responsibility to get out of the 24 hours news cycle and actually do news. Our country is sagging in large part because too many people simply don't understand what's going on. Let's face it, it's easier and cheaper to follow Sarah Palin around than to keep up on foreign policy and do some behind the scenes reporting.

It's ironic that there are writers who write because they want to better understand the world around them. It takes attention, a bit of reading and experience, lots and lots of practice and a bit of thought to use writing as an analytic tool. When I was younger I thought I noticed journalists that operated that way. Certainly Edward R. Murrow was like that.

Murrow was probably the last major journalist who could effectively analyze and explain things to Americans; he did an amazing job during the crises of the 1930s and 40s. We have journalists who can do that but they're not always in a position to be heard. Even very good journalists like Rachel Maddow can sometimes get distracted putting out fires instead of explaining the world, though I'm happy to see that she's getting better at that on her program. (I'm not a journalist, by the way, though I've been writing for forty years and have been working of late to add more tools to my utility box.)

I'm going to borrow from Fallows one more time but it's just a quote from Obama—from his opening statement at the controversial Shanghai Town Meeting:

...America will always speak out for these core principles around the world. We do not seek to impose any system of government on any other nation, but we also don't believe that the principles that we stand for are unique to our nation. These freedoms of expression and worship -- of access to information and political participation -- we believe are universal rights. They should be available to all people, including ethnic and religious minorities -- whether they are in the United States, China, or any nation. Indeed, it is that respect for universal rights that guides America's openness to other countries; our respect for different cultures; our commitment to international law; and our faith in the future.

Contrary to the opinions of the usual pundits, this does not sound like a "humiliated" or "humbled" president. We are in interesting times. I write often of the American Crisis. That crisis did not begin last year with the economic meltdown. It's been building for years. It was blatantly apparent during Hurricane Katrina on multiple levels from the effect it had on oil supplies to the dismal response to fellow Americans in distress.

Like many Democrats, I worry about how Obama is doing. From time to time, he surprises me and I realize, okay, he is paying attention. I'm going to stick my neck out and say maybe there's more to the Asia trip than meets the eye. Consider the following story from Bloomberg:

Bill Gross, who runs the world’s biggest bond fund at Pacific Investment Management Co., said Chinese growth is likely to be hurt by an absence of consumer demand from trading partners such as the U.S.

“The Chinese, I suspect, will have a bubble of their own to confront,” Gross said...

At the moment, the fates of the United States and China are tied together. China has been hearing conflicting advice from around Asia but they recognize that they and the U.S. have mutual interests. Whether we like it or not, we need each other. Let's see where events lead in the next few months. I'll have more to say.

Making Sure Green Technology Is Green

We already know that it's becoming harder and harder to satisfy the world's thirst for oil. In addition, with the rise of China's economy, the world is rapidly becoming aware that resources for all the new technology being developed, including some parts of green technology, may not be adequate to meet demand in the coming years. Today's technology often requires rare earth metals that are not easy to come by. New sources of such metals, at a reasonable cost, are going to be needed. In some cases, old sources need to be revived.

Now in this post I'm pursuing a slightly odd story that requires a little background. Here's a story from last month in The New York Times:

Chinese officials said on Thursday that they would not entirely ban exports of two minerals vital to manufacturing hybrid cars, cellphones, large wind turbines, missiles and computer monitors, although they would tightly regulate production.

China produces more than 99 percent of the world’s supply of dysprosium and terbium, two rare minerals essential to recent breakthroughs in high-technology industries.

Although it's good that China is not going to tighten restrictions as much as originally thought, it should be noted that they are using their hard cash to acquire all kinds of resources throughout the world, including shares in various mines and oil facilities. The United States, Europe and other countries can hardly afford to be caught flat-footed. Fortunately, for the United States, there is an economically viable source for some of the rare minerals that are needed. Here's a story in the Los Angeles Times about a mine in California:

Fear of a shortage of rare-earth metals used in high-tech military and industrial products has spawned global efforts to reopen abandoned mines, including the formidable Mountain Pass Mine in California's Mojave Desert.

(snip)

...Molycorp Minerals in Colorado, has just begun a two-year effort to restore Mountain Pass to its former role as a leading global producer. Those plans were given a boost recently amid fears that China was poised to ban exports of some of the scarcer rare-earth metals and to sharply limit shipments of others.

Effort to restore? Uh-oh. In such cases, it's best to read the rest of the article. Down further we learn that Mountain Pass Mine was closed in 2002 for environmental reasons. Before we go further, let's stop and think for a moment. If 99% of some of these minerals are mined in China and the price on those minerals is acceptable to various corporations, what are the odds that China's famous mine has environmental problems as well? And what are the odds that at least some companies who buy from the Chinese are aware that the Chinese mine has environmental problems? Ah, but we still, for the most part, live in an era of laissez-faire capitalism. Anything goes.

Fortunately, there are people concerned about the environment in the U.S. (and more so in some states). So what was the problem with Mountain Pass? Here's an informative article from David Danelski in February 2009:

...while the mine was producing vital elements, it also was polluting the soil and groundwater.

Wastewater from processing the rare earths was pumped to unlined evaporation ponds, where nitrates and other salts leached into underground water on both sides of Mountain Pass...

(snip)

Unocal owned the mine from 1976 to 2005. In the 1980s, the company began piping wastewater as far as 14 miles to evaporation ponds on or near Ivanpah Dry Lake, east of Interstate 15 near Nevada.

The pipeline repeatedly ruptured during cleaning operations to remove mineral deposits called scale. The scale is radioactive because of the presence of thorium and radium, which occur naturally in the rare earth ore.

(snip)

In all, about 600,000 gallons of radiological and other hazardous waste flowed onto the desert floor, according to federal authorities.

Again, visualize what is probably happening at that mine in China! But, hey, their prices are good. Now it appears that the previous owner Unocal and the new owners of Mountain Pass decided to clean up the mining operation. They have passed environmental inspections. They have made various improvements, etc., etc. This is all to the good. Rare earth metals have a role to play in green technology and it's that much less embarrassment if Mountain Pass is cleaned up.

But I keep thinking of that radioactive pipeline. Obviously it has to be taken apart and disposed of and that apparently is happening. Pipelines interest me because I had a great-uncle who built a natural gas pipeline from Wichita, Kansas to Chicago back some eighty years ago. A lot of Eurasia politics now revolve around pipelines running from Western Europe to Russia and from Russia to China and along many other routes as well. Who cleans those pipelines? Who cleans the spills? Anyone?

If you're still with me, bear with me a little longer. I know, it's an odd subject today! But I also keep thinking of the British Petroleum pipeline in Alaska that became a major polluter along its route because of improper maintenance. At the time, the news was a bit ironic since the then president of British Petroleum, what's his name, had a major reputation for being green. The green tag turned out to be more hype that reality.

Of course those of us who have noticed ads by the oil companies since the first oil shortages of the 70s have always been skeptical of their claims of how green and environmentally concerned they are. Sometimes, there's some truth to their claims, but most times whatever little good oil companies do for the environment has been more than offset by so many other things they do that are not good. The Exxon Valdez obviously comes to mind. Even if global warming were not a concern, pollution by companies dealing with fossil fuels has been a reality long before Rachel Carson's Silent Spring.

The oil companies of course are not alone. Over this past weekend, ads have been appearing for Clean Coal. As it happens, there currently is no such thing as clean coal. If one tweaks definitions and ignores how much cleaner natural gas and even light sweet crude are (not to mention solar and wind energy), there is such a thing as cleaner coal—barely. And there is a potential, at considerable expense, for perhaps sequestering the carbon dioxide and other pollutants put out by coal. But coal is the dirtiest fuel there is. Here's what Greenpeace says:

“Clean coal” is the industry’s attempt to “clean up” its dirty image – the industry’s greenwash buzzword. It is not a new type of coal.

“Clean coal” technology (CCT) refers to technologies intended to reduce pollution. But no coal-fired power plants are truly ‘clean’.

“Clean coal” methods only move pollutants from one waste stream to another which are then still released into the environment. Any time coal is burnt, contaminants are released and they have to go somewhere. They can be released via the fly ash, the gaseous air emissions, water outflow or the ash left at the bottom after burning. Ultimately, they still end up polluting the environment.

The article continues on making other points against clean coal. Ah, yes, Greenpeace is that leftist whale-hugging environmental group. So, what does a moderate-conservative magazine like Time magazine say?

If you paid any attention to last year's Presidential campaign, you'll remember ads touting the benefits of "clean coal" power, sponsored by the industry group American Coalition for Clean Coal Electricity. (The ads featured lumps of coal plugged into an electrical cord.) Designed in part to respond to the growing green campaign against coal power — which accounts for about 30% of U.S. carbon emissions — the ads promised high-tech and eventually carbon-free power, emphasizing coal's low cost compared to alternatives, its abundance in America and its cleanliness.

The "clean coal" campaign was always more PR than reality — currently there's no economical way to capture and sequester carbon emissions from coal, and many experts doubt there ever will be. But now the idea of clean coal might be truly dead, buried beneath the 1.1 billion gallons of water mixed with toxic coal ash that on Dec. 22 burst through a dike next to the Kingston coal plant in the Tennessee Valley and blanketed several hundred acres of land, destroying nearby houses. The accident — which released 100 times more waste than the Exxon Valdez disaster — has polluted the waterways of Harriman, Tenn., with potentially dangerous levels of toxic metals like arsenic and mercury, and left much of the town uninhabitable.

I guess the coal industry didn't place enough ads in Time. I shouldn't be sarcastic though. Coal has a friend in oil and it might not be much to ask for Exxon or Aramco to buy a major share of Time Warner.

I started this post by mentioning China. When people talk about limiting coal by turning to alternative energy, the cynics point to China. How will China's use of coal be limited? The statistics, in fact, are grim. According to Worldwatch, China's consumption of coal has more than doubled in the last nine years and now exceeds that of the United States.

I suspect, however, that the more the U.S. switches to green technology, the more China and other developing economies will follow. There are signs that this may already be happening. Unlike many members of Congress, the Chinese leadership seems aware that the age of abundant fossil fuels is coming to an end sooner than expected. We will continue to use fossil fuels for some years to come. It's unavoidable because of the time it will take to build an infrastructure based on alternative energies. But, if we're smart, healthy change will come, though not without troubles that we have already set in motion. If we continue to blunder and put off what needs to be done, we will undoubtedly face catastrophes we cannot fully appreciate at this time.

In the end, much will depends on the American people and how much they're truly paying attention. For now, I keep thinking of those pipelines and how much work it takes to keep them functional. I saw a program recently on the Monterey Aquarium in California. The aquarium brings in sea water by pipeline from Monterey Bay. It takes work to keep things from growing at the entrance to the pipeline as well as inside its walls. Is this relevant? It depends. The world's population exceeds 6.6 billion people and water is another resource that is getting scarce as populations increase and as many areas of the world turn into desert from overuse. Where will future water come from? From the sea through desalination?

In California, such a desalination facility has opened in Carlsbad, a city a few miles north of San Diego. Such facilities will need pipelines and they too will have to take environmental concerns into consideration if we are to avoid even further problems. Even green technology is going to require careful environmental thinking—but the promise of green technology is real.

And the alternative, as we are finding, has probably already set in motion catastrophes that will take enormous resilience and resourcefulness to overcome. It is only the year 2009 and the tasks for the rest of the 21st century are already difficult. Today, the task immediately at hand is to avoid making the problems insurmountable. A small step in that direction is making sure green technology is green.

The Grasshopper and the Ant: The U.S. and China

We're the grasshopper: for years, we've been outsourcing jobs, burning gasoline, building gambling casinos, buying video games and fantasizing that our real estate values were earned. The Chinese are now the ant (we were the ant once when we were building a nation in the wilderness).

The Chinese look at the size of their population, the scarcity of many key resources in their country and the growing resource problems of the world. From their point of view, they need to secure resources for their growing economy. And they've been doing just that. They now consume more iron and coal than any other country. That's the clearest evidence of the economic dynamo they have created in the last thirty years.

Although China has more than 4 times the population of the U.S., they are still far short of our consumption levels in some resources such as oil. Nevertheless, they seem to see the future and they are locking in contracts and also building reserves. Here's an Associated Press story:

Since crude oil and other commodity prices plunged last year - oil tumbled from $147 last July to nearly $33 in December - China has been rushing to build up stockpiles at bargain prices, economists say. That motive, more than a revival in actual industrial demand, has driven its recent import boom of oil, copper and other metals.

(snip)

Ultimately, China aims to have about three months of supply in national reserves. It now has about a month's worth, or about 38.6 million tons of crude oil in both commercial and state reserves, according to state media reports.

The United States also has taken advantage of the drop in oil prices to buy crude for its Strategic Petroleum Reserve, which is far bigger than China's.

The U.S. reserve is about 730 million barrels. China's reserve will be about 170 million barrels. I'm struck by the fact that our reserve, if we include domestic production, is intended to last about 70 days. China's reserve is supposed to last 90 days.

Although one can easily argue that China is making it harder for the U.S. to find oil (along with deliberate production cuts by some members of OPEC), Chinese purchases have helped the price of oil recover. Obviously when oil is $147 a barrel, the price can cripple economies. But a price of $65 to $75 is important. A lot of the oil that is still being found in the world is expensive to produce. If the price of oil falls too low, some of these projects cannot be developed.

The truth is that no one quite knows what's going on with the world's resources—or the world economy for that matter. The Chinese are taking no chances and are planning for the future. In contrast, the free marketeers, including many in the U.S., claim that high prices will naturally develop more resources or at least substitutes. But while we've been waiting for dreamosol to fuel our cars since the 1970s, the events of the last four years tells us that we are in a new era of volatility, an era that means a lot of old thinking and old habits have got to go out the window. With adjustments, capitalism will probably survive. But we have to stop thinking that the markets are some magic bullet. They aren't, as we have seen all too often.

Some people are paying attention and it's not a pretty sight. Here's Paul Volcker's recent comments:

Former Federal Reserve chairman Paul Volcker said the rise of China and other emerging economies has underscored a decline in the comparative economic and intellectual leadership of the U.S.

“I don’t know how we accommodate ourselves to it,” Volcker, an economic adviser to President Barack Obama, said in an interview with PBS’s Charlie Rose taped yesterday in New York. “You cannot be dependent upon these countries for three to four trillion dollars of your debt and think that they’re going to be passive observers of whatever you do.”

Part of the rage of the right wingers over the last year is that they don't understand why the good times don't just keep rolling on (never mind that the good times have been something of an illusion for some years). They blame the government but our government for the last 30 years has not taken the lead. The business sector has and it is failing us. And it will continue to do so until there is real reform in Washington. For too long, the grasshoppers have ruled.

China's Economy Rolls On

At one point last year, the Chinese stock market had lost two-thirds of its value from its high in late 2007. That kind of fall was actually scarier than what we saw with the Dow Jones when it reached its peak in October 2007, sagged for months and then suddenly fell off the cliff last fall. But the Dow Jones in March of this year fell only slightly below half its October 2007 level and only briefly before rebounding to its current level.

Now here's an irony, American stock markets are moving up while the economic news is not good on the job front. Meanwhile, the Chinese stock market is having minor problems but the economy is booming. In China, there is no economy unless workers have jobs. No jobs means enormous unrest.

In the U.S., jobs and the health of corporations have become increasingly disconnected. In recent years the U.S. has repeatedly seen wages stagnate and the real unemployment rate rise while corporations post record profits.

But the Chinese are not succeeding simply because they emphasize jobs. They're also succeeding because they pushed a big stimulus package. Here's the story from The New York Times:

“The whole country’s economy is back on track,” said Shi Yingyi, a 34-year-old housewife who joined the throng. “I feel more confident now.”

The confidence stems from China’s three-pronged effort — a combination of stimulus, liberal bank lending and broad government support for exports.

The Chinese central bank said the country’s economy surged at an annualized rate of 14.9 percent in the second quarter. The United States economy shrank at an annual rate of 1 percent in that period.

There are two main differences between what the Chinese have done in the last year and what Americans have done. First, the Chinese acted sooner than the U.S. while developing a plan. Although Bush gets credit—of sorts—for stopping the recurrence of another Great Depression, he had no plan, and let things deteriorate far longer than he should have. Bush also did nothing once Bernanke and Paulson were able to put the brakes on the economic meltdown.

Actually, Bush, as he so often did on a range of issues during his eight years in office, sat on his hands when economic warning signs showed up in 2005, 2006, 2007 and 2008. Many prominent Republicans are very adept these days at describing what they don't like but somewhere along the line Republican leaders have lost the ability to come up with useful ideas. For most congressional Republicans, a good idea is doing a favor for a useless corporate lobbyist.

Now the second thing the Chinese did is that they pushed a massive stimulus package and made sure banks were loaning money. Obama pushed a stimulus package his first day in office but such a package should have been forthcoming weeks if not months earlier. Unfortunately, given conservative Democrats, uncooperative Republicans and media types who are too dense too realize that Republican economics has failed, the stimulus package that finally did get passed under Obama wasn't quite big enough. It's likely we're going to need more, particularly in terms of stimulating the development of alternative energy. What many Americans, particularly conservatives in the South, do not understand is that we cannot spend enormous amounts of money on foreign oil and enormous amounts of money on Chinese goods and expect the American economy to thrive for long, particularly if we keep destroying good-paying jobs at home. It simply won't work.

I should mention one other problem: American banks are still not loaning money nearly as much as they should. Now banks have a great deal to do with why the economy went sour in the last thirty months. Many of those problems are still not addressed, largely because no one outside the Bush Administration realized just how little anyone in government was minding the store.

In a broader sense, the banking crisis is a function of conservative policies that have been pushed by Republicans with help from moderate to conservative Democrats for the last thirty years. Actually, a more accurate way of describing the problem is this way: for the last thirty years, too many politicians practicing business as usual managed to get themselves reelected year after year. If the American economy is to thrive in the years ahead—and everyone should remember that a lesson of this recession is how key a player the U.S. is in the world economy—we are going to need more reforms from Obama and congressional Democrats. If these reforms do not happen, it is highly unlikely they will happen under the Republicans who currently lead the GOP.

Lack of Foresight and Imagination in Washington

First things first: let's stop pretending that American business can still think about the future ten to twenty years down the road. One of the ironies in our era is that the oil industry is one of the few areas of the business sector that can think ten years down the road, at least sometimes.

If there is to be change, it has to come from our government. Capitalism, free enterprise, competition and all of that will continue to play a role for many years to come but our current economic structure simply cannot deal with problems that have a long timeline such as global warming, declining fossil fuel production and the long neglected problem of world population.

To deal with problems that will play out over the next decade or two, the American government has to get involved. Unfortunately, our government has been ineffective for the last thirty years. There is some hope that the Obama Administration can renew our capacity to make things happen again. Sometimes I feel that Obama is a little behind the growing understanding of the American public but, for the most part, it's a truism that the president cannot move too far out in front of public opinion. Public opinion, of course, has very little to do these days with the American people. Public opinion is largely a fiction of the media, particularly in Washington and New York.

In the last post I wrote how the Chinese seem to have an energy policy while we continue to pretend that Wall Street experts are on top of things. We have been deluding ourselves for thirty years that free enterprise someday, somewhere, in some magical manner, will somehow take care of our energy needs and invent dreamosol, the universal energy solver. The nation that for a hundred years showed what practical men and women can do is now engaging in fantasy.

Of course some people are beginning to notice that we just may have a problem. Tern Norris and Jesse Jenkins of the San Francisco Chronicle have some very useful figures that may startle business people who like to crunch numbers:

As Congress debates climate and energy legislation, Asian challengers are moving rapidly to win the clean-energy race. China alone is reportedly investing $440 billion to $660 billion in its clean-energy industries over 10 years. South Korea is investing a full 2 percent of its gross domestic product in a Green New Deal. And Japan is redoubling incentives for solar, aiming for a 20-fold expansion in installed solar energy by 2020.

In contrast, the United States would invest only about $1.2 billion annually in energy research and development and roughly $10 billion in the clean energy sector as a whole under the Waxman-Markey bill - less than 0.1 percent of U.S. GDP. A group of 34 Nobel laureates recently wrote a letter to President Obama decrying the lack of investment and calling on him to uphold his promise to invest $15 billion annually in clean-energy R&D.

The other guys get it. How is it that we don't?

It's a given that the current generation of Republicans sent to Washington have become useless know-nothings. The thing to keep in mind is that there are also machine Democrats in Congress. 'Machine Democrats' is my catchall phrase for both Democrats from conservative states who get nervous when the status quo is threatened and Democrats in blue states who are put up by various people who know a Republican can't win but who need someone who is likely to continue business as usual. These Democrats are nearly as useless as the Republicans. The only way for our nation to move forward is for more progressive Democrats to be elected. Republicans and machine Democrats are supposedly pro-business. What they actually are is pro-privilege, pro-insider and pro-monopoly. What we need are progressive Democrats who believe that free enterprise and real competition is important while also believing that capitalism needs to work for people and not against people. Until that happens, the economy and power of the United States will continue on what is obviously becoming a downward spiral.

China Now More Dependent on Foreign Oil Than US

If there is one rule in 2009 that applies, it's this: the old rules no longer apply. We're in a strange new political and economic era that is largely the result of 30 years of Republican shortsightedness. For thirty years, the US drifted without a significant energy policy. For thirty years, the US allowed good paying jobs to disappear overseas. From time to time, Republicans of course had help from a few dim Democrats. Nevertheless, Republicans were the driving force behind the economic policies of the era now ending.

Here's an article in The Globe and Mail about China's growing dependence on foreign oil:

China's dependence on foreign oil has surpassed that of the United States, as consumers race to the pumps to fill their new cars with gas and the country feverishly stockpiles supplies to take advantage of weak markets.

The country's increasing appetite has driven it to spend billions to acquire foreign oil producers and construct vast storage facilities to safeguard future needs. It also helps explain a rapid rise in oil prices this year, which many attribute to speculators gambling on an economic recovery.

Whatever one may think of China's domestic politics about such issues as Tibet and human rights, the Chinese are thinking about the future. The more oil China stores, the more it can ride out the ups and downs of the markets. And the more time it has to convert to alternative energy sources, both clean and dirty.

Of course oil was cheap seven years ago. At that time Bush and Cheney could have pushed for building up the Strategic Oil Reserve. Instead, they both opted for a war in Iraq. Given that both Cheney and Bush were oil men, many people, with good reason, believe the war in Iraq was about acquiring new oil assets. It's ironic then that we're seeing articles like this one in The New York Times:

Oil companies from China, the world’s second-largest and fastest-growing consumer of oil, bid aggressively on Tuesday as Iraq began auctioning licenses in six large oil fields.

A partnership of BP and the China National Petroleum Corporation, or C.N.P.C., won the first contract awarded, in the latest indication of Chinese interest in Iraq, a country that has until recently seemed to be firmly in the American sphere of influence for natural resources.

Republicans, and many other Americans for that matter, have still not come to terms with the enormous damage that Bush and Cheney have done to our nation. There are consequences to cowboy diplomacy and it's hitting us in the pocketbook. Here's a story from Reuter's:

Sinopec's $7.2 billion bid for oil explorer Addax Petroleum (AXC.TO) is a sign that China's energy giants find it easier to secure reserves in parts of the world where there are fewer hang-ups about Beijing owning local natural resources.

Africa and the Middle East, where Swiss-based Addax has its main assets, are more politically disposed to China than are developed nations such as the United States, where local politicians blocked CNOOC's (CEO.N) $18.5 billion bid for oil company Unocal in 2005, analysts say.

China is and will remain a cipher to many nations for many years to come. For some time, that will give an advantage to China over the US. But ironies are never at an end in this new era. As China drives up the price of oil, we can expect two things. First, the higher price will make it easier for many expensive and sometimes marginal oil projects to move forward. And the higher price will also make it more likely that many people, corporations and nations will continue to push alternative energy projects.

If we are lucky, more oil will be available to help the transition to alternative energy. And high oil prices will provide the motivation to make the transition. If American government officials, business leaders and consumers understand the new paradigm, our economy may enter the new era with reasonable stability and opportunity. If they do not understand how much things have changed, the American economy will sputter from crisis to crisis for many years to come.

Tibet, Mao and the Chinese Communists

The Chinese are a rising economic power. Up until two hundred years ago the Chinese were an advanced civilization that saw little value in the ideas, arts and goods of other civilizations. But in the early 19th century, the Chinese had been somewhat in decline for about a hundred years despite a growing population. Then, throughout the 19th century, a series of misjudgments, rebellions and imperialist inroads from the west and even the rise of Japan hastened the decline until the complete collapse of China's own imperial system. For a brief moment, democracy seemed to flower in the early 20th century but that too collapsed in a long civil war and an era of war lords that lasted almost fifty years until the communist party gained control of China.

These days it's hard to know what to make of China's communist party as it continues its march on the capitalist road with stock markets and billion dollar deals with large multinational corporations (Bloomberg notes some contradictions). The communists have come a long ways from the famous Long March of the early 1930s when Chiang Kai Shek sent an army of 500,000 troops against what were called "hill bandits" in the American press. For the Chinese communist party, the Long March has the status of legend and mythology. We know many of the facts are real but much of the rest is difficult to ascertain. We know the leaders of the communist party and many of their supporters were based in Shanghai until Chiang Kai Shek ended his partnership with them and either exterminated or chased them from the area. Most of them went to Mao's sanctuary several hundred miles to the west. Chiang's Kuomintang Army eventually pursued them and somewhere between 80,000 to 100,000 red army troops escaped from Chiang Kai Shek's encirclement. At first Mao was not even the leader, though eventually he took control. Around ten percent of those on the Long March survived the journey of some six thousand miles. There were many battles and there were times when the red army had to flee with nothing but their rifles and ammunition. They often had to live off the land. Although the red army eventually managed to escape the Kuomintang army, they suffered many additional losses in the far west, particularly in the highlands.

I've always found the animosity of the communists toward the Dalai Lama and Tibetans in general a little odd. Some of it can be explained by Chinese nationalism, the same nationalism we see around the world that pits one group against another, particularly, if the dominant group believes they 'possess' the territory of the minority . Too often, the minority is supposed to be grateful that they are 'left alone,' except that of course they often are not left alone.

I'm not an expert on Tibet or China though I have read a number of books on both. I have seen maps of the Long March and have noticed that the route partly went through the mountains east of what is called the Tibet Autonomous Region. Many Chinese communists died along that part of the route and though many died from the cold, exhaustion and accidents in the mountains or bogs, the survivors claim the local people were often responsible for killing stragglers. I have assumed for a number of years that the animosity towards the local minority groups of the region was somehow translated into animosty toward Lhasa, the capital of Tibet. I suspect now that it's more personal than that.

What we now call Tibet is part of China. But Tibetans were independent during China's decline and have a long history of their own. Their territory extended—somewhat vaguely—throughout the Tibetan Plateau which is an area much larger than the current autonomous region. The May 29, 2008 issue of The New York Review of Books has a map on page 47 that shows where Tibetans recently protested the Chinese rule of Tibet. The majority of protests by Tibetans were Tibetans living outside of the Tibet Autonomous Region on the Tibetan Plateau. If one looks at the map of the protests and a map of the Long March, there is a sad overlap. It is likely that the Chinese communists have been holding a blood grudge for three generations.

The Chinese still have work to do if they are to get beyond their own insular nationalism and assume a useful leadership role in the world of the 21st century.



***Note: For a curious take on Chinese nationalism, see this Washington Post article.

Foreign Policy Developments: North Korea, Iran and China

I once worked for a man who was fairly good at solving problems and in fact he got a lot of accolades for solving the problems. The catch? Most of the problems were ones he had created in the first place. Be very careful in coming days or months if the Bush Administration starts claiming successes that are not entirely deserved.

The fundamental problem of the last six years is that Bush broke the foreign policy that our nation had been using for some sixty years. During those sixty years, we had Republican and Democratic presidents but, despite their differences, there was enough continuity in our foreign policy that it wasn't difficult for other nations to have a basic idea of what to expect from us. There were breakdowns from time to time but there were usually procedures in place for quickly dealing with the breakdowns. There were exceptions but they were manageable exceptions. Nevertheless, Bush decided on a very different course. However, the radical foreign policy changes of the Bush Administration did not produce the results Bush and Cheney expected. Iraq is clearly the proof of that. A number of other things went wrong. And North Korea and Iran started gambling that a nuclear program might get us to back off (and why not? We left Pakistan untouched despite its troublesome role in the proliferation of nuclear programs and the funding of the Taliban).

There are several strange news stories tonight. Here's the story on North Korea from The Boston Globe:

North Korea said on Friday that it had reached a "certain agreement" with the United States in talks earlier this week in Berlin, praising the rare direct dialogue between the U.S. envoy Christopher Hill and the North's Kim Kye-gwan ended three days of unprecedented discussions on Thursday in the German capital. But neither side in Berlin suggested there had been any breakthrough on the communist state's nuclear weapons program.

"The talks took place from January 16 to 18 in a positive and sincere atmosphere and a certain agreement was reached there," the North's Foreign Ministry spokesman was quoted as saying by official KCNA news agency. He did not elaborate.

"We paid attention to the direct dialogue held by the DPRK and the U.S. in a bid to settle knotty problems in resolving the nuclear issue," he said, using the acronym for the North's official name.

But Hill, arriving in South Korea to brief officials in Seoul, appeared puzzled by the reference to a deal.

"I'm sorry, I'm not really sure what he's referring to," Hill told reporters, but added: "We had very useful discussions."

Keep in mind that the Bush Administration broke off the deal that was worked out during the Clinton Administration. Also keep in mind that the North Korean missile tests last summer and the recent nuclear tests did not appear to go all that well.

Now here's a story in The New York Times about developments in Iran:

Iran’s outspoken president, Mahmoud Ahmadinejad, appears to be under pressure from the highest authorities in Iran to end his involvement in its nuclear program, a sign that his political capital is declining as his country comes under increasing international pressure.

Just one month after the United Nations Security Council imposed sanctions on Iran to curb its nuclear program, two hard-line newspapers, including one owned by the supreme leader, Ayatollah Ali Khamenei, called on the president to stay out of all matters nuclear.

In the hazy world of Iranian politics, such a public rebuke was seen as a sign that the supreme leader — who has final say on all matters of state — might no longer support the president as the public face of defiance to the West.

It is the first sign that Mr. Ahmadinejad has lost any degree of Ayatollah Khamenei’s confidence, a potentially damaging development for a president who has rallied his nation and defined his administration by declaring nuclear power Iran’s “inalienable right.”

There are signs (not proof) that Iran's nuclear program is not as developed as some in the Bush Administration have been claiming. Another development related to Iran is that we might have had a deal with Iran four years ago. Here's the story in The Denver Post:

An Iranian offer to help the United States stabilize Iraq and end its military support for Hezbollah and Hamas was rejected by Vice President Dick Cheney in 2003, a former top State Department official told the British Broadcasting Corp.

The U.S. State Department was open to the offer, which came in an unsigned letter sent shortly after the U.S. invasion of Iraq, Lawrence Wilkerson, former Secretary of State Colin Powell's chief of staff, told the BBC in a program that aired Wednesday night. But Wilkerson said Cheney vetoed the deal.

"We thought it was a very propitious moment" to strike a deal, Wilkerson said. "But as soon as it got to the White House, and as soon as it got to the vice president's office, the old mantra of 'We don't talk to evil' ... reasserted itself."

It's my understanding that Iran made another offer to improve relations a year earlier before the famous axis of evil nonsense but the Bush Administration passed on that as well.

And finally, the Chinese seem to be reminding the United States that we should not take our military might too much for granted. Here's that story from The Boston Globe:

The United States, Australia and Canada have voiced concerns to China over the first known satellite-killing test in space in more than 20 years, the White House said on Thursday.

"The U.S. believes China's development and testing of such weapons is inconsistent with the spirit of cooperation that both countries aspire to in the civil space area," National Security Council spokesman Gordon Johndroe said. "We and other countries have expressed our concern regarding this action to the Chinese."

The Bush Administration has broken several treaties in the last six years, including arms treaties and has talked openly about the possible use of nuclear weapons as bunker busters and even as tactical weapons. The Chinese are important trade partners but perhaps the test is a reminder that the United States is not the only country in the world that can change the military equation. Even the Russians, with their new status as an oil nation, are not inclined to listen as closely to the United States as they once did.

It's long past time for Bush to hire a more realistic foreign policy team and to sit down with a number of nations to reformulate the global situation and return to a healthier foreign policy dynamic. We've had far too much hubris and arrogance out of Washington for the last six years. We need less posturing by the White House and more serious dialogue.

China and India Reach Deal on Energy

Tied down in Iraq and hampered by his ideological obsessions, Bush seems incapable of dealing with an increasing number of developments in foreign affairs. Iran and North Korea immediately come to mind.

The biggest development in the last two years, however, is the growing number of nations who no longer look to Washington for leadership. New alliances and economic ties are leaving the US behind. India and China are entitled to join the 21st century so it's understandable that they take energy seriously as their economies expand. Here's an article in Businessweek:

China and India have agreed to share information on what they're paying for foreign oil and gas for their energy-hungry economies in an effort to tone down a multibillion-dollar rivalry that was driving up asset prices abroad, the Chinese government announced.

The agreement was among five energy cooperation deals signed Thursday during a visit to Beijing by Indian Petroleum and Natural Gas Minister Mani Shankar Aiyar, the government said.

Beijing and New Delhi promised to exchange information when bidding for oil resources abroad.

The article also mentions that China and India have agreed to cooperate on the development of alterntive fuels. If the fastest growing economies in the world are taking the energy issue seriously, and that seriousness includes the development of alternative energy in addition to new oil acquisitions, perhaps the Bush Administration ought to develop a real energy plan that doesn't depend on ideas two or three generations out of date.


Personal note: I've been busy the last few days learning enough html to keep myself more or less out of trouble (I don't think I'm every totally out of trouble with this stuff). I have one wish: that those who write books on html would stop being engineers long enough to write a decent index so I can find what I need!