WITH ENERGY AND RISING GLOBAL TENSIONS
• 37 Children killed in Israeli Strike on Lebanon
• UN Embassies in Region Stormed by Protesters
• Israeli and American Interests Line Up?
• Iran and The SCO
• Pipeline Politics & War
• Peak Oil Looms
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June 31st 2006, 3:20pm [PST] – At least 60 civilians, including 37 children, were killed during an Israeli air strike in Qana, Lebanon Saturday night. Secretary of State Condoleeza Rice thought she was making headway in laying out the framework for an eventual ceasefire just before this attack.
But the assault on Qana prompted Lebanese Prime Minister Fouad Sinora to warn Rice not to come to his country until a ceasefire is in place.1 Rice decided to cancel her trip to Beirut and return to Washington Sunday morning. As a result of the Israeli air strike, enraged Lebanese protestors stormed the U.N. Embassy in Beirut.
“There is something fundamentally wrong with a war where there are more dead children than armed men,” Jan England, the UN humanitarian chief said at UN headquarters in New York on Friday, before the Qana strike.2
Palestinians stormed a U.N. compound in Gaza on Sunday, outraged over the strike on Qana as well as another Israeli air strike in Palestine that injured several people.3 AP reports that security officials at the U.N. fired warning shots in the air to disperse protestors.4 Events in Palestine are taking a backseat to the brutality of the war in Lebanon.
CNN’s Wolf Blitzer said, “If Hezbollah stays in tact (after this war) … that represents a significant victory for them … it’s no secret that Israel is trying to kill Hezbollah leadership.”5 Hasan Nasrallah, Hezbollah’s Secretary General, is now receiving wide support in Lebanon and throughout the Arab world. That in-and-of itself represents a defeat for Israel and a victory for Hezbollah.
With Hamas having won political power in the Palestinian Authority government and Hezbollah harboring thousands of missiles, the kidnappings of Israeli soldiers by Hamas and Hezbollah were enough to prompt this Israeli offensive 20 days ago. If it meant an illegal war was necessary to protect their domestic political ambitions, so be it. But Israel got the nod from Washington because events unfolded in such a manner as to make the timing of the offensive serve as a message to the world regarding ongoing economic warfare.
Syria announcing plans to end its currency’s dollar peg on July 11th6 – just a day before Israel started bombing Southern Lebanon – likely killed any resistance within the Bush Administration (if there was any) to support Israel’s plan to strike Southern Lebanon. It may seem like an insignificant move, but the fact that Russia, Iran and Venezuela have all announced plans to open oil bourses that trade in euros instead of dollars makes Syria’s announcement very important.
It made sense from the Bush Administration’s perspective to unabashedly support Israeli aggression against Hezbollah especially in light of current events at this moment, but that moment of shared interests seems to be under some stress.
CNN reported that Secretary Rice was taken aback by the fact that Israel’s Defense Minister did not inform her of the strike in Qana while she was in Israel on Saturday. Instead she found out from one of her aides after the news broke. I saw this broadcasted live on CNN Sunday only once while watching coverage all day, but did not hear or see it repeated again on CNN or anywhere else since. Such news must be embarrassing for Rice and the entire Bush Administration.
But the U.S. has not strayed terribly far from supporting Israeli interests.
The U.S. still resists the U.N.’s call for an immediate ceasefire, though Rice stated this morning a ceasefire could happen this week. Meanwhile Israeli Prime Minister Ehud Olmert says the offensive could last two more weeks.7 An aide of Secretary Rice announced yesterday that Israel has agreed to a 48-hour suspension of aerial activity but reserves the right to retaliate against any “hostile fire” that may occur during the suspension.8 Israel has not stopped their ground offensive.
Even as the entire world is disgusted from the civilian deaths caused by Israel in Qana, 48-hours were the most Rice could manage to wrestle from Israel in retribution. However, , Israel executed an aerial attack near Talibe today despite the supposed suspension.9
Iran and The Shanghai Cooperation Organization
Reports are breaking everywhere now that plans to invade Iran are on the table. The saber rattling between the U.S. and Iran has gone back and forth for sometime and will continue to do so, but that is where it will end. Taking on Hezbollah – which receives support from both Syria and Iran – is the closest this battle will get to Tehran.
As FTW has long maintained, an invasion of Iran is the most volatile and destructive action that could be taken. Iran’s oil is far too valuable to the world market because there is no spare capacity to make up for even a fractional loss of its 4 million barrels per day. Attacking Iran would throw that nation into the arms of Russia and China even more so than she already has been.
The Shanghai Cooperation Organization (SCO) is an alliance between China, Russia, Kazakhstan, Kyrgyzstan, Uzbekistan and Tajikistan. Many in Washington view this alliance as a threat to Western interests, and rightfully so. On April 18th the Asia Times reported that Mongolia, Iran, India and Pakistan, who all currently hold observer status in the SCO, will become full members.10 But Iran has not received full membership as of yet.
At the June 15, 2006 SCO meeting, China and Russia initiated discussion that Iran become a full SCO member. Iran's President was received as an honored head of state, holding private talks with both Russia's Putin and China's President Hu Jintao, an obvious contrast to Hu's recent snub by the Bush White House. And a Sinopec-Iran energy deal worth billions is about to be signed. That's hardly the kind of diplomatic pressure on Iran Washington hoped for.
That SCO meeting was held in Shanghai. Even if full membership for Iran was postponed, the fact remains that Russia and China both want to seal closer cooperation with Iran in Eurasian energy development. Washington is obviously uneasy with that development. On the eve of the SCO summit, US Defense Secretary Don Rumsfeld criticized Russia and China for trying to draw Iran into closer cooperation with SCO, declaring, ‘It strikes me as strange that one (sic--w.e.) would want to bring into an organization that says it's against terrorism...one of the leading terrorist nations in the world, Iran.'11
According to a number of press organizations and wire services, it does not appear that China and Russia want to bring Iran’s Middle Eastern politics into the SCO – at least not yet.
As Yevgeny Morozov put it in a June 8 commentary on TCS(space) Daily, Moscow and Beijing don't want to be responsible for "Iran's loony statements about Israel or its nuclear program." RIA-Novosti political commentator Dmitry Kosyrev made a similar point in an Outside View op-ed for UPI on June 8. Kosyrev argued that Iran "will not join in the foreseeable future" because the SCO is having trouble coping with a flood of new initiatives and needs to put its current house in order before expanding.12
If America attacks Iran it will force the issue, and we may see Iran accepted into the SCO with haste. Even if Iranian membership in the SCO is ultimately inevitable, strengthening political ties between Russia, China, and Iran is not a U.S. strategic objective. The Neo Cons in Washington may be discussing contingency plans to strike Iran, but backroom talk, unreliable leaks, and chest-pounding rhetoric is all it will amount to.
Pipeline Politics & War
Pepe Escobar wrote the following for the Asia Times:
Beyond Lebanon, Israel is mostly interested also in Syria. The motive: the all-important pipeline route from Kirkuk, in Iraqi Kurdistan, to Haifa. Enter Israel as a major player in Pipelineistan.13
However, it is not likely that this pipeline will open for business any time soon for many reasons – not least of which includes the fact that the three operational pipelines in Iraq have all been sabotaged at some point. The risk is far too high now, and perhaps forever will be. Getting Syria to agree to having a pipeline run within its borders that feeds Iraqi oil to Israel also does not seem likely any time soon.
But there are other pipelines of importance.
As pointed out by Michel Chossudovsky from The Center for Global Research, the Baku-Ceyhan pipeline will provide Israel with access to Caspian oil while bypassing the Caspian Consortium pipeline running through Russia. This pipeline was inaugurated the very day Israel invaded Southern Lebanon, and runs through Azerbaijan and Georgia (widely considered American proxy-nations) on its way to Ceyhan, Turkey.
Chossudovsky argues that Israel has waged an illegal war on Lebanon, in part, to secure the Eastern Mediterranean coast for proposed pipelines running through Syria and Lebanon to provide oil and water to Israel. Thus far, there has only been talk of underwater pipelines from Ceyhan to Israel that would not directly infringe on Syrian and Lebanese territory.14
The implementation of a land-based corridor, as opposed to the underwater pipeline project, would require the militarization of the East Mediterranean coastline, extending from the port of Ceyhan across Syria and Lebanon to the Lebanese-Israeli border.
Is this not one of the hidden objectives of the war on Lebanon? Opening up a space which enables Israel to control a vast territory extending from the Lebanese border through Syria to Turkey?15
On this point I do not see how Israel could achieve such an objective given the political reality of the region. How could such pipelines ever be built, let alone secured, on Syrian and Lebanese land? Building these pipelines under Mediterranean waters seems to be the only possible option to avoid having them blown up on a regular basis.
To enrage the populations of Lebanon and Syria now by slaughtering civilians in hopes of securing future pipelines in the area is not going to work. Nothing short of ethnic cleansing would be able to achieve safe pipeline routes over the land of those nations. While there are many who believe Israel’s intent is precisely that, it is entirely unrealistic. Israel’s chances of eradicating Hezbollah and all guerrilla resistance in the region are slim to none, and if that is their plan for securing their energy and economic future the entire region is doomed.
Israel gets most of its natural gas and much of its oil from Russia. They increasingly rely on oil from Central Asia – namely from Kazakhstan.16 With the introduction of the Baku-Ceyhan pipeline, and the subsequent pipelines that may feed oil and water directly into Israel from Ceyhan, the nation is attempting to diversify its access to vital resources. While Israel relies on the U.S. as a geopolitical ally, they must maintain good relations with Russia who is geographically much closer to home and puts far more natural resources on the market than the U.S. does. Israel is 99% reliant on the market for its oil.
Putin continues to play energy-chess brilliantly with the U.S., this time through Israel:
…In one of the more fascinating moves by Putin's Russia in the area of energy geopolitics, the Kremlin-controlled Gazprom gas monopoly has entered into quiet negotiations with Israeli Prime Minister Ehud Olmert through Olmert's billionaire friend, Benny Steinmetz, to secure Russian natural gas supplies to Israel via an undersea pipeline from Turkey to Israel. 17
Israel plans to have 40% of its energy needs met from natural gas by the end of the decade.18 Just imagine: One day, after Russia no longer sells LNG to the U.S., she may be negotiating treaties between Tehran and Tel Aviv.
The escalation in the Middle East comes just as oil production figures could hardly be more dismal.
Saudi Arabia and Venezuela have cut their oil production and Mexico’s mega-well, Cantarell, is about to collapse. The worst-case scenario put forth is that Cantarell could go from producing 2 million to .5 million barrels per day by the end of 2008. Those numbers were leaked from Pemex’s own studies as originally reported in the Mexican press.19
As blackouts now engulf the world and energy insecurity becomes the norm, access to hydrocarbons will continue to take center stage in politics and war. Caspian oil reserves have turned out to be far less than what was expected, but that only makes them more valuable in a world ready to fight for scraps.
Hezbollah is a decentralized, yet well-organized, force that could keep Israel caught in asymmetrical battle for decades and in a sense, they already have. They are not just a military force, but also a major political force providing the Lebanese people with schools, hospitals, and many other vital social needs. You cannot possibly eradicate such an organization, and in many ways – especially after this tragic attack on Qana – a major portion of the asymmetrical battle has already been lost by Israel.
The financial press has taken note that Israel may be trapped in a lose-lose situation. If you have read The Wall Street Journal print edition recently you will see their editorial page does not believe Israel is in a good situation and may be stuck. Forbes has printed similar concerns. While many justifiably do not trust such mainstream publications, keep in mind that the financial community needs real news in order to make real money.
Things aren’t going very well for Israel’s main ally, the U.S.
Russian and U.S. relationships have been under stress for some time now. Most recently, Bush blocked Russia’s entry into the WTO and Putin fired back by cutting out America’s Chevron and Conoco-Phillips from developing the Barents Sea oil and gas field.20
Chavez has just met with Putin in Russia to secure an arms deal of 24 fighter jets and 53 helicopters while discussing the development of an oil pipeline in Venezuela. Russia has already sent 30,000 of 100,000 Kalashnikov rifles sold to Venezuela.21
When questioned about America’s position within the global competition for finite energy resources, a former aide to Condoleeza Rice, Carlos Pascual, was quoted by The New York Times as saying, “I don’t think any of us have done a terribly good job of thinking through how far behind the eight ball we are on these issues.”22
1Nada Bakri, “Siniora tells Rice not to bother with visit until truce is secured,” Monday, July 31, 2006
2Sophia Chang, “Going Deeper Into War,” Newsday, July 29, 2006
3“Several hurt in Gaza air strikes,” BBC, July 30, 2006
4CNN Broadcast Sunday, July 30, 2006
6Dania Saadi, “Syria plans to end peg of its pound to U.S. dollar,” Bloomberg, July 11, 2006
7“Rice Predicts Cease-Fire May Occur This Week,” The Washington Post, July 31, 2006 http://www.washingtonpost.com/wp-dyn/content/article/2006/07/31/AR2006073100052.html
8Stephen Collinson, “Israel suspends air strikes after slaughter in Lebanon,” AFP, July 31, 2006
9“Israel carries out air strike in Lebanon, AFP, July 31, 2006,”
10M K Bhadrakumar, “China, Russia welcome Iran into the fold, Asia TIMES,” April, 18, 2006 http://atimes.com/atimes/China/HD18Ad02.html
11F. William Engdahl, “USA out-flanked in Eurasia energy politics?” http://kavkazcenter.com/eng/content/2006/07/24/5067.shtml
It is interesting to note that the SCO does not view Iran as a terrorist organization because the SCO definition of terrorism is related more to domestic threats within member countries borders than to the “global war on terror,” which serves as a blanket for every military move the U.S. makes in the energy war.
12Daniel Kimmage, “Central Asia: Does The Road To Shanghai Go Through Tehran?” Radio Free Europe, June 12, 2006
13Pepe Escobar Asia Times Wednesday, July 26, 2006;
14Etgar Lefkovitz, “Israel and Turkey plan energy pipeline,” The Jerusalem Post, May 11, 2006,
15 Michel Chossudovsky, “The War on Lebanon and the Battle for Oil,” GlobalResearch.ca, July 26, 2006;
16Daniel Engber, “Where Does Israel Get Its Oil?” Slate, July 14, 2006 http://www.slate.com/id/2145704/
17Ibid, endnote 9
18Ibid, endnote 12
19Maria Dickerson, “Will Mexico Soon Be Tapped Out?” LA Times, July 24, 2006
20Conal Walsh, Putin Plan to Shut Out US Oil Giants, The Observor, July 23, 2006 http://observer.guardian.co.uk/business/story/0,,1826629,00.html?%20gusrc=rss
21Anna Smolchenko and Nabi Abdullaev, “Putin and Chavez Seal Weapons Deal,” The Moscow Times, July 28, 2006
22 Steven R. Weisman, “As the Price of Oil Soars, So Does Its Power to Shape Politics From Washington to Beijing” New York Times, July 25, 2006 http://www.nytimes.com/2006/07/25/world/middleeast/25oil.html?pagewanted=print
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