Posts Tagged ‘oil’

THE GREATER MIDDLE EAST ENERGY WAR

By F. William Engdahl – October 11th, 2012
Middle-East-map2

 

On October 3, 2012 the Turkish military launched repeated mortar shellings inside Syrian territory. The military action, which was used by the Turkish military, conveniently, to establish a ten-kilometer wide no-man’s land “buffer zone” inside Syria, was in response to the alleged killing by Syrian armed forces of several Turkish civilians along the border.

There is widespread speculation that the one Syrian mortar that killed five Turkish civilians well might have been fired by Turkish-backed opposition forces intent on giving Turkey a pretext to move militarily, in military intelligence jargon, a ‘false flag’ operation.[1]

Turkey’s Muslim Brotherhood-friendly Foreign Minister, the inscrutable Ahmet Davutoglu, is the government’s main architect of Turkey’s self-defeating strategy of toppling its former ally Bashar Al-Assad in Syria.[2]

According to one report since 2006 under the government of Islamist Sunni Prime Minister Recep Tayyip Erdoğan and his pro-Brotherhood AKP party, Turkey has become a new center for the Global Muslim Brotherhood.[3] A well-informed Istanbul source relates the report that before the last Turkish elections, Erdogan’s AKP received a “donation” of $10 billion from the Saudi monarchy, the heart of world jihadist Salafism under the strict fundamentalist cloak of Wahabism. [4] Since the 1950’s when the CIA brought leading members in exile of the Egyptian Muslim Brotherhood to Saudi Arabia there has been a fusion between the Saudi brand of Wahabism and the aggressive jihadist fundamentalism of the Brotherhood.[5]

The Turkish response to the single Syrian mortar shell, which was met with an immediate Syrian apology for the incident, borders on a full-scale war between two nations which until last year were historically, culturally, economically and even in religious terms, closest of allies.

That war danger is ever more serious. Turkey is a full member of NATO whose charter explicitly states, an attack against one NATO state is an attack against all. The fact that nuclear-armed Russia and China both have made defense of the Syrian Bashar al-Assad regime a strategic priority puts the specter of a World War closer than most of us would like to imagine.

In a December 2011 analysis of the competing forces in the region, former CIA analyst Philip Giraldi made the following prescient observation:

NATO is already clandestinely engaged in the Syrian conflict, with Turkey taking the lead as U.S. proxy. Ankara’s foreign minister, Ahmet Davutoglu, has openly admitted that his country is prepared to invade as soon as there is agreement among the Western allies to do so. The intervention would be based on humanitarian principles, to defend the civilian population based on the “responsibility to protect” doctrine that was invoked to justify Libya. Turkish sources suggest that intervention would start with creation of a buffer zone along the Turkish-Syrian border and then be expanded. Aleppo, Syria’s largest and most cosmopolitan city, would be the crown jewel targeted by liberation forces.

Unmarked NATO warplanes are arriving at Turkish military bases close to Iskenderum on the Syrian border, delivering weapons from the late Muammar Gaddafi’s arsenals as well as volunteers from the Libyan Transitional National Council who are experienced in pitting local volunteers against trained soldiers, a skill they acquired confronting Gaddafi’s army. Iskenderum is also the seat of the Free Syrian Army, the armed wing of the Syrian National Council. French and British special forces trainers are on the ground, assisting the Syrian rebels while the CIA and U.S. Spec Ops are providing communications equipment and intelligence to assist the rebel cause, enabling the fighters to avoid concentrations of Syrian soldiers. [6]

Little noted was the fact that at the same day as Turkey launched her over-proportional response in the form of a military attack on Syrian territory, one which was still ongoing as of this writing, the Israeli Defense Forces (IDF) undertook what was apparently an action to divert Syria’s attention from Turkey and to create the horror scenario of a two-front war just as Germany faced in two world wars. The IDF made a significant troop buildup on the strategic Golan Heights bordering the two countries, which, since Israel took it in the 1967 war, has been an area of no tension.[7]

The unfolding new phase of direct foreign military intervention by Turkey, supported de facto by Israel’s right-wing Netanyahu regime, curiously enough follows to the letter a scenario outlined by a prominent Washington neo-conservative Think Tank, The Brookings Institution. In their March 2012 strategy white paper, Saving Syria: Assessing Options for Regime Change, Brookings geo-political strategists laid forth a plan to misuse so-called humanitarian concern over civilian deaths, as in Libya in 2011, to justify an aggressive military intervention into Syria, something not done before this.[8]

The Brookings report states the following scenario:

Israel could posture forces on or near the Golan Heights and, in so doing, might divert regime forces from suppressing the opposition. This posture may conjure fears in the Assad regime of a multi-front war, particularly if Turkey is willing to do the same on its border and if the Syrian opposition is being fed a steady diet of arms and training.[9]

This seems to be precisely what is unfolding in the early days of October 2012. The authors of the Brookings report are tied to some of the more prominent neo-conservative warhawks behind the Bush-Cheney war on Iraq. Their sponsor, the Saban Center for Middle East Policy, includes current foreign policy advisers to Republican right-wing candidate Mitt Romney, the open favorite candidate of Israel’s Netanyahu.

The Brookings Saban Center for Middle East Policy which issued the report, is the creation of a major donation from Haim Saban, an Israeli-American media billionaire who also owns the huge German Pro7 media giant. Haim Saban is open about his aim to promote specific Israeli interests with his philanthropy. The New York Times once called Saban, “a tireless cheerleader for Israel.” Saban told the same newspaper in an interview in 2004, “I’m a one-issue guy and my issue is Israel.” [10]

The scholars at Saban as well as its board have a clear neo-conservative and Likud party bias. They include, past or present, Shlomo Yanai, former head of military planning, Israel Defense Forces; Martin Indyk, former US Ambassador to Israel and founder of the pro-Israel Washington Institute for Near East Policy (WINEP), a major Likud policy lobby in Washington. Visiting fellows have included Avi Dicter, former head of Israel’s Shin Bet; Yosef Kupperwasser, former Head, Research Department, Israeli Defense Force’s Directorate of Military Intelligence. Resident scholars also include Bruce Riedel, a 30 year CIA Middle East expert and Obama Afghan adviser; [11] Kenneth Pollack, another former CIA Middle East expert who was indicted in an Israel espionage scandal when he was a national security official with the Bush Administration. [12]

Why would Israel want to get rid of the “enemy she knows,” Bashar al-Assad, for a regime controlled by the Muslim Brotherhood? Then Israel’s security would seemingly be threatened by the emergence of hard-line Muslim Brotherhood regimes in Egypt to her south and Syria to her North, perhaps soon also in Jordan.

The geopolitical dimension

The significant question to be asked at this point is what could bind Israel, Turkey, Qatar in a form of unholy alliance on the one side, and Assad’s Syria, Iran, Russia and China on the other side, in such deadly confrontation over the political future of Syria? One answer is energy geopolitics.

What has yet to be fully appreciated in geopolitical assessments of the Middle East is the dramatically rising importance of the control of natural gas to the future of not only Middle East gas producing countries, but also of the EU and Eurasia including Russia as producer and China as consumer.

Natural gas is rapidly becoming the “clean energy” of choice to replace coal and nuclear electric generation across the European Union, most especially since Germany’s decision to phase out nuclear after the Fukushima disaster. Gas is regarded as far more “environmentally friendly” in terms of its so-called “carbon footprint.” The only realistic way EU governments, from Germany to France to Italy to Spain, will be able to meet EU mandated CO2 reduction targets by 2020 is a major shift to burning gas instead of coal. Gas reduces CO2 emissions by 50-60% over coal.[13] Given that the economic cost of using gas instead of wind or other alternative energy forms is dramatically lower, gas is rapidly becoming the energy of demand for the EU, the biggest emerging gas market in the world.

Huge gas resource discoveries in Israel, in Qatar and in Syria combined with the emergence of the EU as the world’s potentially largest natural gas consumer, combine to create the seeds of the present geopolitical clash over the Assad regime.

Syria-Iran-Iraq Gas pipeline

In July 2011, as the NATO and Gulf states’ destabilization operations against Assad in Syria were in full swing, the governments of Syria, Iran and Iraq signed an historic gas pipeline energy agreement which went largely unnoticed amid CNN reports of the Syrian unrest. The pipeline, envisioned to cost $10 billion and take three years to complete, would run from the Iranian Port Assalouyeh near the South Pars gas field in the Persian Gulf, to Damascus in Syria via Iraq territory. Iran ultimately plans then to extend the pipeline from Damascus to Lebanon’s Mediterranean port where it would be delivered to EU markets. Syria would buy Iranian gas along with a current Iraqi agreement to buy Iranian gas from Iran’s part of South Pars field.

South Pars, whose gas reserves lie in a huge field that is divided between Qatar and Iran in the Gulf, is believed to be the world’s largest single gas field. [14] De facto it would be a Shi’ite gas pipeline from Shi’ite Iran via Shi’ite-majority Iraq onto Shi’ite-friendly Alawite Al-Assad’s Syria.

Adding to the geopolitical drama is the fact that the South Pars gas find lies smack in the middle of the territorial divide in the Persian Gulf between Shi’ite Iran and the Sunni Salafist Qatar. Qatar also just happens to be a command hub for the Pentagon’s US Central Command, headquarters of United States Air Forces Central, No. 83 Expeditionary Air Group RAF, and the 379th Air Expeditionary Wing of the USAF. In brief Qatar, in addition to owning and hosting the anti-Al-Assad TV station Al-Jazeera, which beams anti-Syria propaganda across the Arab world, Qatar is tightly linked to the US and NATO military presence in the Gulf.

Qatar apparently has other plans with their share of the South Pars field than joining up with Iran, Syria and Iraq to pool efforts. Qatar has no interest in the success of the Iran-Iraq-Syria gas pipeline, which would be entirely independent of Qatar or Turkey transit routes to the opening EU markets. In fact it is doing everything possible to sabotage it, up to and including arming Syria’s rag-tag “opposition” fighters, many of them Jihadists sent in from other countries including Saudi Arabia, Pakistan and Libya.

Further adding to Qatar’s determination to destroy the Syria-Iran-Iraq gas cooperation is the discovery in August 2011 by Syrian exploration companies of a huge new gas field in Qara near the border with Lebanon and near to the Russian-leased Naval port of Tarsus on the Syrian Mediterranean.[15] Any export of Syrian or Iranian gas to the EU would go through the Russian-tied port of Tarsus. According to informed Algerian sources, the new Syrian gas discoveries, though the Damascus government is downplaying it, are believed to equal or exceed those of Qatar.

As Asia Times’ knowledgeable analyst Pepe Escobar pointed out in a recent piece, Qatar’s scheme calls for export of its huge gas reserves via Jordan’s Gulf of Aqaba, a country where a Muslim Brotherhood threat to the dictatorship of the King is also threatening. The Emir of Qatar has apparently cut a deal with the Muslim Brotherhood in which he backs their international expansion in return for a pact of peace at home in Qatar. A Muslim Brotherhood regime in Jordan and also in Syria, backed by Qatar, would change the entire geopolitics of the world gas market suddenly and decisively in Qatar’s favor and to the disadvantage of Russia, Syria, Iran and Iraq. [16] That would also be a staggering negative blow to China.

As Escobar points out, “it’s clear what Qatar is aiming at: to kill the US$10 billion Iran-Iraq-Syria gas pipeline, a deal that was clinched even as the Syria uprising was already underway. Here we see Qatar in direct competition with both Iran (as a producer) and Syria (as a destination), and to a lesser extent, Iraq (as a transit country). It’s useful to remember that Tehran and Baghdad are adamantly against regime change in Damascus.” He adds, “if there’s regime change in Syria – helped by the Qatari-proposed invasion – things get much easier in Pipelineistan terms. A more than probable Muslim Brotherhood (MB) post-Assad regime would more than welcome a Qatari pipeline. And that would make an extension to Turkey much easier.” [17]

The Israeli Gas dilemma

Further complicating the entire picture is the recent discovery of huge offshore Israeli natural gas resources.

The Tamar natural gas field off the coast of northern Israel is expected to begin yielding gas for Israel’s use in late 2012. The game-changer was a dramatic discovery in late 2010 of an enormous natural gas field offshore of Israel in what geologists call the Levant or Levantine Basin. In October 2010 Israel discovered a massive “super-giant” gas field offshore in what it declares is its Exclusive Economic Zone (EEZ). [18]

The find is some 84 miles west of the Haifa port and three miles deep. They named it Leviathan after the Biblical sea monster. Three Israeli energy companies in cooperation with the Houston Texas Noble Energy announced initial estimates that the field contained 16 trillion cubic feet of gas—making it the world’s biggest deep-water gas find in a decade, adding more discredit to “peak oil” theories that the planet is about to see dramatic and permanent shortages of oil, gas and coal. To put the number in perspective, that one gas field, Leviathan, would hold enough reserves to supply Israel’s gas needs for 100 years.[19]

Energy self-sufficiency had eluded the state of Israel since its founding in 1948. Abundant oil and gas exploration had repeatedly been undertaken with meager result. Unlike its energy-rich Arab neighbors, Israel seemed out of luck. Then in 2009 Israel’s Texas exploration partner, Noble Energy, discovered the Tamar field in the Levantine Basin some 50 miles west of Israel’s port of Haifa with an estimated 8.3 tcf (trillion cubic feet) of highest quality natural gas. Tamar was the world’s largest gas discovery in 2009.

Source:  Jerry Gordon,  newenglishreview.org 2011

Israel discovered huge gas in Levantine Basin with Noble Energy. Source: Noble Energy map, see above

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At the time, total Israeli gas reserves were estimated at only 1.5 tcf. Government estimates were that Israel’s sole operating field, Yam Tethys, which supplies about 70 percent of the country’s natural gas, would be depleted within three years.

With Tamar, prospects began to look considerably better. Then, just a year after Tamar, the same consortium led by Noble Energy struck the largest gas find in its decades-long history at Leviathan in the same Levantine geological basin. Present estimates are that the Leviathan field holds at least 17 tcf of gas. Israel went from a gas famine to feast in a matter of months.[20]

 

Now Israel faces a strategic and very dangerous dilemma. Naturally Israel is none too excited to see al-Assad’s Syria, linked to Israel’s arch foe Iran and Iraq and Lebanon, out-compete an Israeli gas export to the EU markets. This could explain why Israel’s Netanyahu government has been messing inside Syria in the anti-al-Assad forces. However, a Muslim Brotherhood rule in Syria led by the organization around Mohammad Shaqfah would confront Israel with far more hostile neighbors now that the Muslim Brotherhood coup by Egypt’s President Mohamed Morsi has put a hostile regime on Israel’s southern border.

It is no secret that there is enmity bordering on hate between Netanyahu and the Obama Administration. The Obama White House and US State Department openly back the Muslim Brotherhood regime changes in the Middle East. Hillary Clinton’s meeting with Turkey’s Davutoglu in August this year was reportedly aimed at pushing Turkey to escalate its military intervention into Syria, but without direct US support owing to US election politics of wanting to avoid involvement in a new Middle East debacle.[21]

State Department Deputy Chief of Staff Huma Abedin has been accused by several Republican Congress Representatives of ties to organizations controlled by the Muslim Brotherhood. Dalia Mogahed, Obama’s appointee to the Advisory Council on Faith-Based and Neighborhood Partnerships, also a member of the US advisory council of the Department of Homeland Security, is openly linked to the Muslim Brotherhood and an open foe of Israel as well as calling for the toppling of Syria’s al-Assad. [22] Obama’s Washington definitely seems to be backing the Muslim Brotherhood horse in the race for control of the gas flows of the Middle East.

And the Russian role

Washington is walking a temporary tightrope hoping to weaken al-Assad fatally while not appearing directly involved. Russia for its part is playing a life and death game for the future of its most effective geopolitical lever—its role as the leading natural gas supplier to the EU. This year Russia’s state-owned Gazprom began delivery of Russian gas to northern Germany via Nord Stream gas pipeline under the Baltic Sea from a port near St. Petersburg. Strategically vital now for the future role of Russia as an EU gas supplier, is its ability to play a strategic role in exploiting the new-found gas reserves of its former Cold war client state, Syria. Moscow has long been engaged in promoting its South Stream gas pipeline into Europe as an alternative to the Washington Nabucco pipeline which was designed to leave Moscow out in the cold. [23]

Already Gazprom is the largest natural gas supplier to the EU. Gazprom with Nord Stream and other lines plans to increase its gas supply to Europe this year by 12% to 155 billion cubic meters. It now controls 25% of the total European gas market and aims to reach 30% with completion of South Stream and other projects.

Rainer Seele, chairman of Germany’s Wintershall, the Gazprom partner in Nord Stream, suggested the geopolitical thinking behind the decision to join South Stream: “In the global race against Asian countries for raw materials, South Stream, like Nord Stream, will ensure access to energy resources which are vital to our economy.” But rather than Asia, the real focus of South Stream lies to the West. The ongoing battle between Russia’s South Stream and the Washington-backed Nabucco is intensely geopolitical. The winner will hold a major advantage in the future political terrain of Europe.[24]

Now  a major new option of Syria as a major source for Russian-managed gas flows to the EU has emerged. If al-Assad survives, Russia will be in the position as savior to play a decisive role in developing and exploiting the Syrian gas. Israel, where Russia also has major cards to play, could theoretically shift to back a Russian-Syrian-Iraqi-Iran gas consortium were Israel and Iran to reach some modus vivendi on the nuclear and other issues, not impossible were the political constellation in Israel to change after the coming elections. Turkey, which is presently in a deep internal battle between Davutoglu and President Gül on the one side and Erdogan on the other, is dependent on Russia’s Gazprom for some 40% of gas to its industry. Were Davutoglu and his faction to lose, Turkey could play a far more constructive role in the region as transit country for Syrian and Iranian gas.

The battle for the future control of Syria is at the heart of this enormous geopolitical war and tug of war. Its resolution will have enormous consequences for either world peace or endless war and conflict and slaughter. NATO member Turkey is playing with fire as is Qatar’s Emir, along with Israel’s Netanyahu and NATO members France and USA. Natural gas is the flammable ingredient that is fueling this insane scramble for energy in the region.

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F. William Engdahl is a leading researcher, economist and analyst who’s written on issues of energy, politics and economics for over 30 years. He contributes regularly to publications like Japan’s Nihon Keizai Shimbun, Foresight magazine, Grant’s Investor.com, European Banker and Business Banker International. He’s also a frequent speaker at geopolitical, economic and energy related international conferences and is a distinguished Research Associate of the Centre for Research on Globalization where he’s a regular contributor. He is also the author of A Century of War: Anglo-American Oil Politics, Full Spectrum Dominance and the New World Order. He may be contacted through www.williamengdahl.com .

Copyright F. William Engdahl. This article is published with his permission.

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Notes

[1] Reuters, Turkish artillery strikes on Syria continue for second day: Several Syrian soldiers killed in overnight attack; Turkey launched artillery strikes after mortar bomb fired from Syria killed five Turkish civilians, October 4, 2012. Accessed in

http://www.haaretz.com/news/middle-east/turkish-artillery-strikes-on-syria-continue-for-second-day-1.468142

[2]  Hüsnü Mahalli, Davutoglu  Betting on the Fall of Assad, Al Akhbar English, August 7, 2012, accessed in http://english.al-akhbar.com.

[3] Steven G. Merley, Turkey, the Global Muslim Brotherhood, and the Gaza Flotilla, Jerusalem Center for Public Affairs, 2011, accessed in http://www.jcpa.org/text/Turkey_Muslim_Brotherhood.pdf. See also for more ties between Erdogan’s Turkish AKP and the Musllim Brotherhood, GlobalMB, Syrian Ambassador Names Associate Of Turkish Prime Minister As Muslim Brotherhood Leader, May 25, 2011, accessed in http://globalmbreport.org/?p=4496

[4] The figure of $10 billion was relayed in a private discussion with the author by a Turkish businessman and political figure who asked to remain anonymous. Indian diplomats, including H.E. Gajendra Singh, former Ambassador to Ankara, have independently confirmed Saudi funding of the Turkish AKP. Presumably like most $10 billion cash grants, it came with heavy strings attached from Riyhad.

[5] F. William Engdahl, Salafism+CIA: The winning formula to destabilize Russia, the Middle East, Voltairenet.org, 13 September, 2012, accessed in http://www.voltairenet.org/article175801.html

[6] Philip Giraldi, NATO vs Syria, December 19, 2011, The American Conservative, accessed in

http://www.theamericanconservative.com/articles/nato-vs-syria/.

[7] Linda Gradstein, Israel fears Syrian violence spilling over Golan Heights border, October 4, 2012, accessed inhttp://news.nationalpost.com/2012/10/04/israel-fears-syrian-violence-spilling-over-golan-heights-border/

[8] Daniel Byman, Michael Doran, Kenneth Pollack, and Salman Shaikh, Saving Syria: Assessing Options for Regime Change, The Brookings Institution, Washington D.C., March 2012, accessed in http://www.scribd.com/doc/108893509/BrookingsSyria0315-Syria-Saban

[9] Ibid., p. 6.

[11] M. J. Rosenberg, AIPAC Cutout: The Rise & Fall Of The Washington Institute For Near East Policy, Talking Points Memo (TPM), 11 April 2010, accessed in http://cosmos.ucc.ie/cs1064/jabowen/IPSC/php/art.php?aid=126218

[12] Nathan Guttman, Bush officials subpoenaed in AIPAC trial, Jerusalem Post, March 13, 2006, accessed in http://www.jpost.com/International/Article.aspx?id=15860

[13] Alexander Medvedev, Role of Gas in a Sustainable Energy Future, 2nd Ministerial Gas Forum, Doha, Qatar, 30 November, 2010.

[14] Hassan Hafidh and Benoit Faucon, Iraq, Iran, Syria Sign $10 Billion Gas-Pipeline Deal, The Wall Street Journal, July 25, 2011, accessed in http://online.wsj.com/article/SB10001424053111903591104576467631289250392.html

[15] Daily Star, Syria Announces Gas Discovery, August 17, 2011, accessed in http://www.naturalgasasia.com/syria-homs-gas-discovery.

[16] Pepe Escobar, Why Qatar Wants to Invade Syria, Asia Times, September 27, 2012, accessed in http://www.atimes.com/atimes/Middle_East/NI28Ak03.html.

[17] Ibid.

[18] F. William Engdahl, The New Mediterranean Oil and Gas Bonanza – Part 1: Israel’s Levant Basin—a new geopolitical curse?, VoltaireNet.org, 20 February, 2012, accessed in http://www.voltairenet.org/article172827.html

[19] Ibid.

[20] Ibid.

[21] The Economist, Turkey’s political in-fighting: Erdogan at bay: The Turkish prime minister faces new enemies both at home and abroad, Feb 25th 2012; see also Hillary Clinton, Remarks With Foreign Minister Davutoglu After Their Meeting, Conrad Hotel Istanbul, Turkey, August 11, 2012, accessed in http://www.state.gov/secretary/rm/2012/08/196358.htm

[22] CSP,  Center Report Reveals Radical Islamist Views and Agenda of Senior State Department Official Huma Abedin’s Mother, Washington, Center for Security Policy, July 22, 2012, accessed in  http://www.centerforsecuritypolicy.org/p19045.xml?genre_id=3. See also  Aaron Klein, Muslim Brotherhood endorses Obama faith adviser: Gives thumbs up to ‘Sister Mogahed’ for Twitter post on dead journalist, WorldNetDaily, April 29, 2012, accessed on http://www.wnd.com/2012/04/muslim-brotherhood-endorses-obama-faith-adviser/.

[23] F. William Engdahl, Moscow’s High Stakes Energy Geopolitics, Voltairenet.org, 15 November, 2011, accessed in http://www.voltairenet.org/article171902.html

[24] Ibid.

 

THE NEW MEDITERRANEAN OIL BONANZA PART ll

By F. William Engdahl

Part II: Rising energy tensions in the Aegean—Greece, Turkey, Cyprus, Syria

The discovery in late 2010 of the huge natural gas bonanza off Israel’s Mediterranean shores triggered other neighboring countries to look more closely at their own waters. The results revealed that the entire eastern Mediterranean is swimming in huge untapped oil and gas reserves. That discovery is having enormous political, geopolitical as well as economic consequences. It well may have potential military consequences too.

Preliminary exploration has confirmed similarly impressive reserves of gas and oil in the waters off Greece, Turkey, Cyprus and potentially, Syria.

Greek ‘energy Sirtaki’

Not surprisingly, amid its disastrous financial crisis the Greek government began serious exploration for oil and gas. Since then the country has been in a curious kind of a dance with the IMF and EU governments, a kind of “energy Sirtaki” over who will control and ultimately benefit from the huge resource discoveries there.

In December 2010, as it seemed the Greek crisis might still be resolved without the by-now huge bailouts or privatizations, Greece’s Energy Ministry formed a special group of experts to research the prospects for oil and gas in Greek waters. Greece’s Energean Oil & Gas began increased investment into drilling in the offshore waters after a successful smaller oil discovery in 2009. Major geological surveys were made. Preliminary estimates now are that total offshore oil in Greek waters exceeds 22 billion barrels in the Ionian Sea off western Greece and some 4 billion barrels in the northern Aegean Sea. [1]

The southern Aegean Sea and Cretan Sea are yet to be explored, so the numbers could be significantly higher. An earlier Greek National Council for Energy Policy report stated that “Greece is one of the least explored countries in Europe regarding hydrocarbon (oil and gas-w.e.) potentials.” [2] According to one Greek analyst, Aristotle Vassilakis, “surveys already done that have measured the amount of natural gas estimate it to reach some nine trillion dollars.” [3]  Even if only a fraction of that is available, it would transform the finances of Greece and the entire region.

Tulane University oil expert David Hynes told an audience in Athens recently that Greece could potentially solve its entire public debt crisis through development of its new-found gas and oil. He conservatively estimates that exploitation of the reserves already discovered could bring the country more than €302 billion over 25 years. The Greek government instead has just been forced to agree to huge government layoffs, wage cuts and pension cuts to get access to a second EU and IMF loan that will only drive the country deeper into an economic decline. [4]

Notably, the IMF and EU governments, among them Germany, demand instead that Greece sell off its valuable ports and public companies, among them of course, Greek state oil companies, to reduce state debt. Under the best of conditions the asset selloffs would bring the country perhaps €50 billion. [5] Plans call for the Greek state-owned natural gas company, DEPA, to privatize 65% of its shares to reduce debt. [6] Buyers would likely come from outside the country, as few Greek companies are in a position in the crisis to take it.

One significant problem, aside from the fact the IMF demands Greece selloff its public oil interests, is the fact that Greece has not declared a deeper exclusive economic zone like most other countries which drill for oil. There was seen little need until now. An Exclusive Economic Zone (EEZ) gives a state special mineral rights in its declared waters under the Third United Nations Convention on the Law of the Sea (UNCLOS), which came into force in November 1994. Under UNCLOS III, a nation can claim an EEZ of 200 nautical miles from its coastline. [7]

Turkey has previously stated it would consider it an act of war if Greece drilled further into the Aegean. [8] Until now that did not seem to have serious economic consequences, as no oil or gas reserves were known. Now it’s an entirely different ballgame.

Evangelos Kouloumbis, former Greek Industry Minister recently stated that Greece could cover “50% its needs with the oil to be found in offshore fields in the Aegean Sea, and the only obstacle to that is the Turkish opposition for an eventual Greek exploitation.” [9]

Hillary dances the Sirtaki too…

In July 2011 Washington joined the Greek energy Sirtaki. Secretary of State Hillary Clinton flew to Athens with energy on her mind. That was clear by the fact she brought with her her Special Envoy for Eurasian Energy, Richard Morningstar. Morningstar was husband Bill Clinton’s Special Advisor to the President on Caspian Basin Energy Diplomacy, and one of the Washington strategic operatives in the geopolitical battles to dismember the Soviet Union and surround a chaos-ridden Russia with hostile pro-NATO former states of the USSR. Morningstar, along with his controversial aide, Matthew Bryza, have been the key Washington architects of Washington’s geopolitically-motivated oil and gas pipeline projects that would isolate Russia and its Gazprom gas resources from the EU. Bryza is an open opponent of Russian Gazprom’s South Stream gas pipeline that would transit the eastern Mediterranean states. [10] Clearly the Obama Administration is not at all neutral about the new Greek oil and gas discoveries. Three days after Hillary left Athens the Greek government proposed creation of a new government agency to run tenders for oil and gas surveys and ultimate drilling bids.

Morningstar is the US specialist in economic warfare against Russian energy diplomacy. He was instrumental in backing the controversial B-T-C oil pipeline from Baku through Tbilisi in Georgia across to the Turkish Mediterranean port of Ceyhan, a costly enterprise designed solely to bypass Russian oil pipeline transit. He has openly proposed that Greece and Turkey drop all historic differences over Cyprus, over numerous other historic issues and agree to jointly pool all their oil and gas reserves in the Aegean Sea. He also has told the Greek government it should forget cooperation with Moscow on the South Stream and Bourgas-Alexandroupolis gas pipeline projects. [11]

According to a report from Greek political analyst Aristotle Vassilakis published in July 2011, Washington’s motive for pushing Greece to join forces with Turkey on oil and gas is to force a formula to divide resulting oil and gas revenues. According to his report, Washington proposes that Greece get 20% of revenues, Turkey another 20% and the US-backed Noble Energy Company of Houston Texas, the company successfully drilling in the Israeli and Greek offshore waters, would get the lion’s share of 60%. [12]

Secretary of State Hillary Clinton’s  husband, Bill, is a Washington lobbyist for Noble Energy. [13]

And some Cyprus complications…

As if these geopolitical complications were not enough, Noble Energy, has also discovered huge volumes of gas off the waters of the Republic of Cyprus. In December 2011 Noble announced a successful well offshore Cyprus in a field estimated to hold at least 7 trillion cubic feet of natural gas. Noble’s CEO, Charles Davidson remarked to the press, “This latest discovery in Cyprus further highlights the quality and significance of this world-class basin.” [14]

Cyprus is a complicated piece of real estate. In the 1970’s as declassified US Government documents recently revealed, then-US Secretary of State Henry Kissinger actively encouraged and facilitated arms to the Turkish  regime of Kissinger’s former Harvard student and then- Prime Minister Bulent Ecevit, to stage a military invasion of Cyprus in 1974, in effect partitioning the island between an ethnically Turkish north and an ethnically Greek Republic of Cyprus in the south, a division which remains.  The Kissinger strategy, backed by the British was believed intended to create a pretext for a permanent US and British military listening post in the eastern Mediterranean during the Cold War. [15]

Today the ethnically Greek south, where Noble has discovered large gas deposits, is a member of the EU. Its President, Demetris Christofias, is the only national leader in the European Union who is a communist. He is also a close friend of Israel, and of Russia. In addition, he is a major critic of American foreign policy, as well as of Turkey. [16]

Now Israel is planning to build an underwater gas pipeline from the Israeli Levantine fields across Cyprus waters onto the Greek mainland where it would be sold on the EU market. The Cyprus and Israel governments have mutually agreed on delimitation of their respective economic zones, leaving Turkey in the cold. Turkey openly threatened Cyprus for signing the agreement with Noble Energy. That led to a Russian statement that it would not tolerate Turkish threats against Cyprus, further complicating Turkish-Russian relations. [17]

Turkish-Israeli relations, once quite friendly, have become increasingly strained in recent years under the Erdogan foreign policies. Ankara has expressed concern about Israel’s recent ties with its historic antagonists, Greece and the Greek side of Cyprus. Turkey’s ally the Turkish Republic of Northern Cyprus, fears it could miss out on its fair share of the gas after Israel and Nicosia signed an agreement to divide the 250 kilometers of sea that separate them. [18]

It becomes evident, especially when we glance at a map of the eastern Mediterranean, that the oil and gas prospective bonanza there is a rapidly unfolding conflict zone of tectonic magnitude involving strategic US, Russian, EU, Israeli and Turkish, Syrian and Lebanese interests.

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F. William Engdahl is a leading researcher, economist and analyst who’s written on issues of energy, politics and economics for over 30 years. He contributes regularly to publications like Japan’s Nihon Keizai Shimbun, Foresight magazine, Grant’s Investor.com, European Banker and Business Banker International. He’s also a frequent speaker at geopolitical, economic and energy related international conferences and is a distinguished Research Associate of the Centre for Research on Globalization where he’s a regular contributor. He is also the author of A Century of War: Anglo-American Oil Politics, Full Spectrum Dominance and the New World Order. He may be reached via his website at www.engdahl.oilgeopolitics.net 

Copyright F. William Engdahl. This article is published with his permission.

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Notes

1. Ioannis Michaletos, Greek Companies Step Up Offshore Oil Exploration—Large Reserves Possible, December 8, 2010, accessed in http://www.balkanalysis.com/greece/2010/12/08/greek-companies-step-up-offshore-oil-exploration-large-reserves-possible/.
2. Ibid.
3. Hellas Frappe, Hillary came to Greece to seal oil exploration deals!, July 21, 2011, accessed in http://hellasfrappe.blogspot.com/2011/07/special-report-hillary-came-to-greece.html.
4. Chris Blake, Drilling for oil in the Aegean nay help ease Greece’s debt crisis, July 7, 2011, accessed in https://www.hellenext.org/reinventing-greece/2011/07/drilling-for-oil-in-the-aegean-may-help-ease-greeces-debt-crisis/
5. Ibid.
6. John Daly, Greece Considering Plugging Aegean Islands into Turkish Energy Grid, 22 November 2011, accessed in http://www.businessinsider.com/greece-considering-plugging-aegean-islands-into-turkish-energy-grid-2011-11.
7. United Nations, United Nations Convention on the Law of the Sea of 10 December 1982: PART VI: CONTINENTAL SHELF, Article76, Definition of the continental shelf, accessed in http://www.un.org/depts/los/convention_agreements/texts/unclos/part6.htm.
8. Chris Blake, op. cit.
9. Ioannis Michaletos, op. cit.
10. Hellas Frappe, op. cit.
11. Ibid.
12. Ibid.
13. Hugh Naylor, Vast gas fields found off Israel’s shores cause trouble at home and abroad, January 24, 2011, accessed in http://www.thenational.ae/news/world/middle-east/vast-gas-fields-found-off-israels-shores-cause-trouble-at-home-and-abroad#full.
14. Noble Energy Press Release, Significant Natural Gas Discovery Offshore Republic of Cyprus, December 28, 2011, accessed in http://www.maritime-executive.com/article/significant-natural-gas-discovery-offshore-republic-of-cyprus.
15. Larisa Alexandrovna and Muriel Kane, New documents link Kissinger to two 1970s coups, June 26, 2007, accessed in http://rawstory.com/news/2007/Intelligence_officers_confirm_Kissinger_role_in_0626.html.
16. Yilan, Cyprus conflict defies ready solution, May 30, 2011, accessed in http://turkeymacedonia.wordpress.com/2011/05/30/cyprus-conflict-defies-ready-solution/.
17. Stephen Blank, Turkey and Cyprus Gas: More Troubles Ahead in 2012, Turkey Analyst, vol. 5 no. 1, 9 January 2011, accessed in http://www.silkroadstudies.org/new/inside/turkey/2012/120109B.html.
18. Hugh Naylor, op. cit.

 

SILENCING THE CRITICS

By Paul Craig Roberts

In 2010 the FBI invaded the homes of peace activists in several states and seized personal possessions in what the FBI–the lead orchestrator of fake “terrorist plots”–called an investigation of “activities concerning the material support of terrorism.”

Subpoenas were issued to compel antiwar protestors to testify before grand juries as prosecutors set about building their case that opposing Washington’s wars of aggression constitutes giving aid and comfort to terrorists. The purpose of the raids and grand jury subpoenas was to chill the anti-war movement into inaction.

Last week in one fell swoop the last two remaining critics of Washington/Tel Aviv imperialism were removed from the mainstream media. Judge Napolitano’s popular program, Freedom Watch, was cancelled by Fox TV, and Pat Buchanan was fired by MSNBC. Both pundits had wide followings and were appreciated for speaking frankly.

Many suspect that the Israel Lobby used its clout with TV advertisers to silence critics of the Israeli government’s efforts to lead Washington to war with Iran. Regardless, the point before us is that the voice of the mainstream media is now uniform. Americans hear one voice, one message, and the message is propaganda. Dissent is tolerated only on such issues as to whether employer-paid health benefits should pay for contraceptive devices. Constitutional rights have been replaced with rights to free condoms.

The western media demonizes those at whom Washington points a finger. The lies pour forth to justify Washington’s naked aggression: the Taliban are conflated with al Qaeda, Saddam Hussein has weapons of mass destruction, Gaddafi is a terrorist and, even worse, fortified his troops with Viagra in order to commit mass rape against Libyan women.

President Obama and members of Congress along with Tel Aviv continue to assert that Iran is making a nuclear weapon despite public contradiction by the US Secretary of Defense Leon Panetta and the CIA’s National Intelligence Estimate. According to news reports, Pentagon chief Leon Panetta told members of the House of Representatives on February 16 that “Tehran has not made a decision to proceed with developing a nuclear weapon.” http://www.denverpost.com/nationworld/ci_19978801?source=rss However, in Washington facts don’t count. Only the material interests of powerful interest groups matter.

At the moment the american Ministry of Truth is splitting its time between lying about Iran and lying about Syria. Recently, there were some explosions in far away Thailand, and the explosions were blamed on Iran. Last October the FBI announced that the bureau had uncovered an Iranian plot to pay a used car salesman to hire a Mexican drug gang to kill the Saudi Ambassador to the US. The White House idiot professed to believe the unbelievable plot and declared that he had “strong evidence,” but no evidence was ever released. The purpose for announcing the non-existent plot was to justify Obama’s sanctions, which amount to an embargo–an act of war–against Iran for developing nuclear energy.

As a signatory to the non-proliferation treaty, Iran has the right to develop nuclear energy. IAEA inspectors are permanently in Iran and report no diversion of nuclear material to a weapons program.

In other words, according to the reports of the International Atomic Energy Agency, the US National Intelligence Estimate, and the current Secretary of Defense, there is no evidence that Iran has nukes or is making nukes. Yet, Obama has placed illegal sanctions on Iran and continues to threaten Iran with military attack on the basis of an accusation that is contradicted by all known evidence.

How can such a thing happen? It can happen because there is no Helen Thomas, who also was eliminated by the Israel Lobby, to question, as a member of the White House press, President Obama why he placed war-like sanctions on Iran when his own CIA and his own Secretary of Defense, along with the IAEA, report that there is no basis for the sanctions.

The idea that the US is a democracy when it most definitely does not have a free watchdog press is laughable. But the media is not laughing. It is lying. Just like the government, every time the US mainstream media opens its mouth or writes one word, it is lying. Indeed, its corporate masters pay its employees to tell lies. That is their job. Tell the truth, and you are history like Buchanan and Napolitano and Helen Thomas.

What the Ministry of Truth calls “peaceful protesters brutalized by Assad’s military” are in fact rebels armed and financed by Washington. Washington has fomented a civil war. Washington claims its intention is to rescue the oppressed and abused Syrian people from Assad, just as Washington rescued the oppressed and abused Libyan people from Gaddafi. Today “liberated” Libya is a shell of its former self terrorized by clashing militias. Thanks to Obama, another country has been destroyed.

Reports of atrocities committed against Syrian civilians by the military could be true, but the reports come from the rebels who desire Western intervention to put them into power. Moreover, how would these civilian casualties differ from the ones inflicted on Bahraini civilians by the US supported Bahraini government, the military of which was fortified by Saudi Arabian troops? There is no outcry in the western press about Washington’s blind eye to civilian atrocities committed by its puppet states.

How do the Syrian atrocities, if they are real, differ from Washington’s atrocities in Afghanistan, Iraq, Pakistan, Yemen, Libya, Somalia, Abu Ghraib, Guantanamo prison, and secret CIA prison sites? Why is the american Ministry of Truth silent about these massive, unprecedented, violations of human rights?

Remember also the reports of Serbian atrocities in Kosovo that Washington and Germany used to justify NATO and US bombing of Serbian civilians, including the Chinese consulate, dismissed as another collateral damage. Now 13 years later, a prominent German TV program has revealed that the photographs that ignited the atrocity campaign were grossly misrepresented and were not photographs of atrocities committed by Serbs, but of Albanian separatists killed in a firefight between armed Albanians and Serbians. Serbian casualties were not shown. http://www.freenations.freeuk.com/news-2012-02-19.html

The problem that truth faces is that the western media continually lies. On the rare instances when the lies are corrected, it is always long after the event and, therefore, the crimes enabled by the media have been accomplished.

Washington set its puppet Arab League upon Syria in order to establish Syria’s isolation among its own kind, the better to attack Syria. Assad forestalled Washington’s set-up of Syria for destruction by calling a nationwide referendum on February 26 to establish a new constitution that would extend the prospect of rule beyond the Ba’athists (Assad’s party).

One might think that, if Washington and its Ministry of Truth really wanted democracy in Syria, Washington would get behind this gesture of good will by the ruling party and endorse the referendum. But Washington does not want a democratic Syrian government. Washington wants a puppet state. Washington’s response is that the dastardly Assad has outwitted Washington by taking steps toward Syrian democracy before Washington can obliterate Syria and install a puppet.

Here is Obama’s response to Assad’s move toward democracy: “It’s actually quite laughable–it makes a mockery of the Syrian revolution,” White House spokesman Jay Carney told reporters aboard Air Force One.

Obama, the neoconservatives, and Tel Aviv are really pissed. If Washington and Tel Aviv can figure out how to get around Russia and China and overthrow Assad, Washington and Tel Aviv will put Assad on trial as a war criminal for proposing a democratic referendum.

Assad was an eye doctor in England until his father died, and he was called back to head the troubled government. Washington and Tel Aviv have demonized Assad for refusing to be their puppet. Another sore point is the Russian naval base at Tartus. Washington is desperate to evict the Russians from their only Mediterranean base in order to make the Mediterranean an american lake. Washington, inculcated with neocon visions of world empire, wants its own mare nostrum.

If the Soviet Union were still extant, Washington’s designs on Tartus would be suicidal. However, Russia is politically and militarily weaker than the Soviet Union. Washington has infiltrated Russia with NGOs that work against Russia’s interests and will disrupt the upcoming elections. Moreover, Washington-funded “color revolutions” have turned former constituent parts of the Soviet Union into Washington’s puppet states. Shorn of communist ideology, Washington does not expect Russia to push the nuclear button. Thus, Russia is there for the taking.

China is a more difficult problem. Washington’s plan is to cut China off from independent sources of energy. China’s oil investment in eastern Libya is the reason. Gaddafi was overthrown, and oil is one of the main reasons that Washington has targeted Iran. China has large oil investments in Iran and gets 20% of its oil from Iran. Closing down Iran, or converting it into Washington’s puppet state, closes down 20% of the Chinese economy.

Russia and China are slow learners. However, when Washington and its NATO puppets abused the “no-fly” UN resolution concerning Libya and violated the UN resolution by turning it into armed military aggression against Libya’s armed forces, which had every right to put down a CIA sponsored rebellion, Russia and China finally got the message that Washington could not be trusted.

This time Russia and China did not fall into Washington’s trap. They vetoed the UN Security Council’s set-up of Syria for military attack. Now Washington and Tel Aviv (it is not always clear which is the puppet and which is the puppet master) have to decide whether to proceed in the face of Russian and Chinese opposition.

The risks for Washington have multiplied. If Washington proceeds, the information that is conveyed to Russia and China is that they are next in line after Iran. Therefore, Russia and China, both being well-armed with nuclear weapons, are likely to put their foot down more firmly at the line drawn over Iran. If the crazed warmongers in Washington and Tel Aviv, with veins running strong with hubris and arrogance, again override Russian and Chinese opposition, the risk of a dangerous confrontation rises.

Why isn’t the american media raising questions about these risks? Is it worth blowing up the world in order to stop Iran from having a nuclear energy program or even a nuclear weapon? Does Washington think China is unaware that Washington is taking aim at its energy supply? Does Washington think Russia is unaware that it is being encircled by hostile military bases?

Whose interests are being served by Washington’s endless and multi-trillion dollar wars? Certainly not the interests of the 50 million americans with no access to health care, nor the 1,500,000 american children who are homeless, living in cars, rundown motel rooms, tent cities, and the storm sewers under Las Vegas, while huge amounts of public funds are used to bail out banks and squandered in wars of hegemony. http://www.youtube.com/watch?v=suJCvkazrTc

The US has no independent print and TV media. It has presstitutes who are paid for the lies that they tell. The US government in its pursuit of its immoral aims has attained the status of the most corrupt government in human history. Yet Obama speaks as if Washington is the font of human morality.

The US government does not represent americans. It represents a few special interests and a foreign power. US citizens simply don’t count, and certainly Afghans, Iraqis, Libyans, Somalians, Yemenis, and Pakistanis don’t count. Washington regards truth, justice, and mercy as laughable values. Money, power, hegemony are all that count for Washington, the city upon the hill, the light unto nations, the example for the world.

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Dr. Paul Craig Roberts was Assistant Secretary of the Treasury for Economic Policy and associate editor of the Wall Street Journal. He was columnist for Business Week, Scripps Howard News Service, and Creators Syndicate. He has had many university appointments. His internet columns have attracted a worldwide following. For further information and articles please visit http://www.paulcraigroberts.org/

Copyright Paul Craig Roberts. This article is published with permission.

 

THE NEW MEDITERRANEAN OIL BONANZA

By F. William Engdahl

Part 1 – Israel’s Levant Basin – A New Geopolitical Curse?

A major oil and gas find is bound to change dramatically the geopolitical equation in the Eastern Mediterranean region and beyond. To start with, it has sent Israel from rags to riches in terms of energy independence and security. However, Lebanon contends that part of the gas field lies within its territorial waters, and Washington happens to agree. Engdahl explores the implications of this key development, which have already rippled into the U.S. electoral scene, with Netanyahu betting on Republican race horses against Obama.

The Tamar natural gas field off the coast of northern Israel is expected to begin yielding gas for Israel’s use in late 2012.

Recent discoveries of not just significant, but huge oil and gas reserves in the little-explored Mediterranean Sea between Greece, Turkey, Cyprus, Israel, Syria and Lebanon suggest that the region could become literally a “new Persian Gulf” in terms of oil and gas riches. As with the old Persian Gulf, discovery of hydrocarbon riches could as well spell a geopolitical curse of staggering dimension.

Long-standing Middle East conflicts could soon be paled by new battles over rights to oil and gas resources beneath the eastern Mediterranean in the Levant Basin and Aegean Sea. Here we explore the implications of a gigantic discovery of gas and oil in offshore Israel. In a second article we will explore the implications of gas and oil discoveries in the Aegean between Cyprus, Syria, Turkey, Greece and Lebanon.

An Israeli Leviathan

The game-changer was a dramatic discovery in late 2010 of an enormous natural gas field offshore of Israel in what geologists call the Levant or Levantine Basin. In October 2010 Israel discovered a massive “super-giant” gas field offshore in what it declares is its Exclusive Economic Zone (EEZ).

The find is some 84 miles west of the Haifa port and three miles deep. They named it Leviathan after the Biblical sea monster. Three Israeli energy companies in cooperation with the Houston Texas Noble Energy announced initial estimates that the field contained 16 trillion cubic feet of gas—making it the world’s biggest deep-water gas find in a decade, adding more discredit to “peak oil” theories that the planet is about to see dramatic and permanent shortages of oil, gas and coal. To put the number in perspective, that one gas field, Leviathan, would hold enough reserves to supply Israel’s gas needs for 100 years. [1]

Energy self-sufficiency had eluded the state of Israel since its founding in 1948. Abundant oil and gas exploration had repeatedly been undertaken with meager result. Unlike its energy-rich Arab neighbors, Israel seemed out of luck. Then in 2009 Israel’s exploration partner, Noble Energy, discovered the Tamar field in the Levantine Basin some 50 miles west of Israel’s port of Haifa with an estimated 8.3 tcf (trillion cubic feet) of highest quality natural gas. Tamar was the world’s largest gas discovery in 2009.

At the time, total Israeli gas reserves were estimated at only 1.5 tcf. Government estimates were that Israel’s sole operating field, Yam Tethys, which supplies about 70 percent of the country’s natural gas, would be depleted within three years.

With Tamar, prospects began to look considerably better. Then, just a year after Tamar, the same consortium led by Noble Energy struck the largest gas find in its decades-long history at Leviathan in the same Levantine geological basin. Present estimates are that the Leviathan field holds at least 17 tcf of gas. [2] Israel went from a gas famine to feast in a matter of months.

With the Tamar and now Leviathan discoveries, Israel was beginning to discuss how to become a major natural gas export nation as well as whether to significantly tax gas and oil revenues and place it into an Israeli Sovereign Wealth Fund that would make long-term investments in the Israeli economy as China and many Arab OPEC nations do. [3]

“The Levant Basin Province is comparable to some of the other large provinces around the world,” noted a spokesperson from the US Geological Survey’s (USGS) Energy Resources Program. “Its gas resources are bigger than anything we have assessed in the United States.” [4]

Perhaps sensing that major oil and gas discoveries were being confirmed with potential to change the geopolitics of the entire region, the USGS launched its first-ever estimate of the total reserves of oil and gas in the broad region encompassing the Eastern Mediterranean including the Aegean Basin offshore Greece and Turkey and Cyprus, the Levant Basin offshore Lebanon, Israel and Syria, and the Nile Basin offshore Egypt. Their conclusion was impressive to put it mildly.

The USGS, using all data from previous drilling and geologic surveys of the region concluded, “undiscovered oil and gas resources of the Levant Basin Province amount to 1.68 billion barrels of oil, and 122 tcf of gas. Additionally, according to USGS estimates, “undiscovered oil and gas resources of the Nile Delta Basin Province (bounded by the Nile Cone to the west, by Strabo to the north, by the Pytheus and Cyprus Trenches to the east and by the Levant Basin to the south) are estimated to be approximately 1.76 bbl (of oil), and 223 tcf of natural gas.” [5]

The USGS calculated the total for the eastern Mediterranean as a whole currently at 345 tcf of gas and 3.4 billion barrels of oil. Suddenly the entire region is facing completely new geopolitical challenges and conflict potentials.

To put the numbers into perspective, the USGS estimates that Russia’s West Siberian Basin, the world’s largest known gas basin, holds 643 tcf of gas. As well, the Middle East and North Africa regions have several natural gas-rich areas, including the Rub Al Khali Basin (426 trillion cubic feet) in southwestern Saudi Arabia and Northern Yemen; the Greater Ghawar Uplift in eastern Saudi Arabia (227 tcf) and the Zagros Fold Belt (212 tcf) along the Persian Gulf and into Iraq and Iran. [6]

Just months earlier, securing foreign gas was a national security priority of Israel as existing domestic gas supplies dwindled dangerously low. Further adding to the energy crisis were the so-called Arab Spring protests sweeping across Egypt into Libya in early 2011. The revolts toppled Mubarak, under whose regime Egypt had supplied some 40% of Israeli natural gas. With Mubarak toppled and the ban lifted on Egypt’s Islamic parties, especially the Muslim Brotherhood and the radical Salafist Al-Nour Party, the gas pipeline delivering Egypt’s gas to Israel was target of repeated sabotage and disruptions, the most recent February of this year in northern Sinai. Israel was becoming more than nervous about its future energy security. [7]

Lebanon reaction fuels new frictions

Discovery of Leviathan by Israel in the waters offshore immediately triggered a new geopolitical conflict as Lebanon claimed that part of the gas field lay in Lebanese territorial waters in Lebanon’s Exclusive Economic Zone (EEZ). Lebanon delivered maps to the UN to back its claim, to which Israeli Foreign Minister Lieberman retorted, “We won’t give an inch.”

The fly in the Mediterranean energy soup is the fact that Israel, like the USA, has never ratified the 1982 UN Convention on Law of the Sea dividing world subsea mineral rights. The Israeli gas wells at Leviathan are clearly within undisputed Israeli territory as Lebanon affirms, but Lebanon believes the field extends over into their subsea waters as well. The Lebanese Hezbollah claims that the Tamar gas field, which is due to begin gas deliveries by the end of this year, belongs to Lebanon.

Washington has lost no time adding political gasoline to the natural gas dispute between Lebanon and Israel. In July of 2011 as Israel prepared to submit its own proposal to the UN as to where the offshore demarcation line between Lebanon and Israel should run, Frederick Hof, US diplomat responsible for special affairs regarding Syria and Lebanon, told Lebanon that the Obama Administration endorsed the Lebanese document, adding to the growing tensions reported since outbreak of the Arab Spring between Israeli Prime Minister Benjamin Netanyahu and Obama. [8]

Netanyahu has reportedly recently urged America’s eighth wealthiest person, his close friend Las Vegas casino billionaire Sheldon Adelson to pour millions directly into the campaigns of Republicans, including Newt Gingrich and Mitt Romney. It represents an unprecedented direct Israeli intervention into US presidential candidates’ campaigns, in order to try to defeat a second Obama term. [9] New issues of control of the vast energy reserves being discovered off Israeli and Lebanese, Cypriot, Turkish and Greek shores will clearly play a growing role in one of the most entangled political regions on Earth.

In our next piece the added complication of oil and gas discoveries in the Aegean Sea will be examined.

______________________________________

F. William Engdahl is a leading researcher, economist and analyst who’s written on issues of energy, politics and economics for over 30 years. He contributes regularly to publications like Japan’s Nihon Keizai Shimbun, Foresight magazine, Grant’s Investor.com, European Banker and Business Banker International. He’s also a frequent speaker at geopolitical, economic and energy related international conferences and is a distinguished Research Associate of the Centre for Research on Globalization where he’s a regular contributor. He is also the author of A Century of War: Anglo-American Oil Politics, Full Spectrum Dominance and the New World Order. He may be reached via his website at www.engdahl.oilgeopolitics.net 

Copyright F. William Engdahl. This article is published with his permission.

______________________________________

Footnotes

[1] Charles Levinson, Guy Chazan, “Big Gas Find Sparks a Frenzy in Israel,” The Wall Street Journal, December 30, 2010.

[2] “Israel: Leviathan Holds More Gas Than Previously Estimated,”Offshore Energy Today, December 19, 2011.

[3] “Israel has enough gas ’to become exporter,’” AFP, 29 December 2010.

[4] US Department of the Interior, “Levant basin holds 122 trillion cubic feet of natural gas,” U.S. Geological Survey Fact Sheet 2010–3014, March 2010-April 10, 2010.

[5] Ibid.

[6] Ibid.

[7] Avi Bar-Eli and Itai Trilnick, “Forecast Blackout Israel is about to run out of natural gas: Shortage expected to last at least until next year, when the Tamar gas field starts production,” Haaretz, February 2, 2012 . See alsoReuters, Blast Hits Gas Pipeline Between Egypt, Jordan, Israel, 4 February 2012.

[8] Barak Ravid, “US Backs Lebanon on Maritime Border Dispute with Israel,” Haaretz, July 10, 2011.

[9] “Sheldon Adelson Probe: Donations From Casino Owner Could Embarrass Republican Candidates,” Reuters, February 8, 2012. For more on the Adelson-Gingrich-Romney-Netanyahu connection see, Max Blumenthal, “The Bibi Connection“, Al-Akhbar.com, January 12, 2012.

http://www.voltairenet.org/Israel-s-Levant-Basin-a-new

NIGERIA. CHAOS CIVIL WAR AND THE IMF

By F. William Engdahl

Nigeria, Africa’s most populous nation and its largest oil producer, is from all evidence being systematically thrown into chaos and a state of civil war. The recent surprise decision by the government of Goodluck Jonathan to abruptly lift subsidies on imported gasoline and other fuel has a far more sinister background than mere corruption and the Washington-based International Monetary Fund (IMF) is playing a key role. China appears to be the likely loser along with Nigeria’s population.

The recent strikes protesting the government’s abrupt elimination of gasoline and other fuel subsidies, that brought Nigeria briefly to a standstill, came as a surprise to most in the country. Months earlier President Jonathan had promised the major trade union organizations that he would conduct a gradual four-stage lifting of the subsidy to ease the economic burden. Instead, without warning he announced an immediate full removal of subsidies effective January 1, 2012. It was “shock therapy” to put it mildly.

Nigeria today is one of the world’s most important producers of light, sweet crude oil—the same high quality crude oil that Libya and the British North Sea produce. The country is showing every indication of spiraling downward into deep disorder. Nigeria is the fifth largest supplier of oil to the United States and twelfth largest oil producer in the world on a par with Kuwait and just behind Venezuela with production exceeding two million barrels a day. 1

The curious timing of IMF subsidy demand

Despite its oil riches, Nigeria remains one of Africa’s poorest countries. The known oilfields are concentrated around the vast Niger Delta roughly between Port Harcourt and extending in the direction of the capital Lagos, with large new finds being developed all along the oil-rich Gulf of Guinea.  Nigeria’s oil is exploited and largely exported by the Anglo-American giants—Shell, Mobil, Chevron, Texaco. Italy’s Agip also has a presence and most recently, to no one’s surprise, the Chinese state oil companies began seeking major exploration and oil infrastructure agreements with the Lagos government.

Ironically, despite the fact that Nigeria has abundant oil to earn dollar export revenue to build its domestic infrastructure, government policy has deliberately let its domestic oil refining capacity fall into ruin. The consequence has been that most of the gasoline and other refined petroleum products used to drive transportation and industry, has to be imported, despite the country’s abundant oil. In order to shield the population from the high import costs of gasoline and other refined fuels, the central government has subsidized prices.

Until January 1, 2012, that is. That was the day when, without advance warning President Goodluck Ebele Azikiwe Jonathan announced immediate removal of all fuel subsidies. Prices for gasoline shot up almost threefold in hours from 65 naira (35 cents of a dollar) a liter to 150 naira (93 cents). The impact rippled across the economy to everything including prices of grains and vegetables.2

In justifying the move, Central Bank Governor Lamido Sanusi insisted that “The monies will be used in provision of social amenities and infrastructural development that will benefit Nigerians more and save the country from economic rift.”3 President Goodluck Jonathan says he is phasing out the subsidy as a part of a move to “clean up the Nigerian government.” If so how he plans to proceed is anything but apparent.

The huge unexpected price hike for domestic fuel triggered nationwide protests that threatened to bring the economy to a halt by mid-January. The president deftly took the wind out of protester sails by announcing a partial rollback in prices, still leaving prices effectively double that of December. The trade union federation immediately called off the protests. Then, revealingly, Goodluck Jonathan’s government ordered the military to take to the streets to “keep order” and de facto prevent new protests. All that took place during one of the bloodiest waves of bombings and murder rampages by the terrorist Boko Haram sect creating a climate of extreme chaos.4

The smoking gun of the IMF

What has been buried from international accounts of the unrest is the explicit role the US-dominated International Monetary Fund (IMF) played in the situation. With suspicious timing IMF Managing Director Christine Lagarde was in Nigeria days before the abrupt subsidy decision of President Jonathan.5 By all accounts, the IMF and the Nigerian government have been careful this time not to be blatant about openly announcing demands to ends subsidies as they were in Tunisia before food protests became the trigger for that country’s Twitter putsch in 2011.

During her visit to Nigeria Lagarde said President Jonathan’s ‘Transformation Agenda’ for deregulation “is an agenda for Nigeria, driven by Nigerians. The IMF is here to support you and be a better partner for you.” 6 Few Nigerians were convinced.  On December 29 Reuters wrote, “The IMF has urged countries across West and Central Africa to cut fuel subsidies, which they say are not effective in directly aiding the poor, but do promote corruption and smuggling. The past months have seen governments in Nigeria, Guinea, Cameroon and Chad moving to cut state subsidies on fuel.” 7

Further confirming the role US and IMF pressure on the Nigerian government played, Jeffery Sachs, Special Adviser to the United Nations (UN) Secretary General, during a meeting with President Jonathan in Nigeria in early January days after the subsidy decision, Sachs declared Jonathan’s decision to withdraw petroleum subsidy  “a bold and correct policy.” 8

Sachs, a former Harvard economics professor became notorious during the early 1990’s for prescribing IMF “shock therapy” for Poland, Russia, Ukraine and other former communist states which opened invaluable state assets for de facto plundering by dollar-rich western multinationals. 9

Making the sudden decision to end the domestic fuel subsidy even more suspicious is the manner in which Washington and the IMF are putting pressure on only select countries to end subsidies. Nigeria, whose oil today sells for the equivalent of $1 a liter or roughly $3.78 a US gallon, is far from cheap. Brunei, Oman, Kuwait, Bahrain, Qatar, Saudi Arabia all offer their petrol very cheap to their people. The Saudis sell their oil at 17 cents, Kuwait at 22 cents.10 In the US gasoline averages 89 cents a liter.11

That means the IMF and Washington have forced one of the poorest economies in Africa to impose a huge tax on its citizens on the implausible argument it will help eliminate corruption in the state petroleum sector. The IMF knows well that the elimination of subsidies will do nothing about corruption in high places.

Were the IMF and World Bank genuinely concerned with the health of the domestic Nigerian economy, they would have provided support for rebuilding and expanding a domestic oil refinery industry that has been let to rot so that the country need no longer import refined fuels using precious state budget resources to do so.  The easiest way to do that would be to expedite a two-year-old deal between China and the Nigerian government to invest some $28 billion in massive expansion of the oil refinery sector to eliminate need for importing foreign gasoline and other refined products.

Quite the opposite—the criminal cabal inside NNPC and the Government making huge profits on the old subsidy system are suddenly making double and potentially triple more to maintain the old corrupt import system, and, of course, to sabotage Chinese refinery construction that could put an end to their gravy train.

Cutting their nose to spite the face…

Rather than benefit ordinary Nigerians as the IMF proclaims to want, the elimination of the subsidies has further pauperized the 90 per cent living on less than $2 a day, according to Mallam Sanusi Lamido Sanusi, the Nigerian Central Bank governor.12 An estimated 40 million Nigerians are unemployed in the country of 148 million.

Because transport costs are a significant factor in delivery of food to the cities, food price inflation has soared along with costs of public transportation for the majority of poorer Nigerians. According to the  Nigerian Leadership Sunday, “prices of commodities which shot up as a fallout of the fuel pump price increase have refused to come down.” Everything from street vegetable sellers to carwashes to roadside photographers are feeling the shock of the rise in fuel prices. Unemployment is rising as small businesses fold. 13

The argument of the IMF and  the Jonathan Administration  is that by freeing fuel prices, funds would be available to  more social services and rebuild Nigeria’s “infrastructure.” Both the IMF and the Government know it would have been far more economically viable to replace the current corrupt system of importing refined gasoline and fuels with investing in rebuilding Nigeria’s domestic refining capacity.

Son Gyoh of the Nigerian Awareness for Development organization stated, “Would it not be more expedient to pressure government to service the refineries to full production capacity given the implications on overhead and competitiveness for local industries?”  14

Gyoh pointed to the source of the problem: “Why have successive governments left the refineries in a state of disrepair while spending huge on subsidy? Is there any chance that the savings from subsidy withdrawal will go directly into rehabilitating the refineries? Does deregulation imply NNPC will no longer operate a monopoly in importation of refined petroleum product or is this lobby a self-serving lifeline to continue its monopoly? ” He concludes, “In any case, there is good reason to doubt subsidy removal will solve the fuel scarcity problem as the cabal will only regroup to change tactics, a fact Nigerians are only too aware of.” 15

After Nigeria partly nationalized its oil sector in the late 1970’s they also took control of Shell Oil’s Port Harcourt I refinery. In 1989 Port Harcourt II refinery was built. Both refineries fell into serious disrepair after 1994 when the Abacha military dictatorship cut the “take” of the Nigerian National Petroleum Company (NNPC) from domestic sale of refined oil products such as gasoline from 84% to 22%. That caused a cash crisis for NNPC and a halt to refinery maintenance. Today only one of four refineries operates at all.16

What developed since was a system of NNPC importing foreign gasoline and other refined products for Nigeria’s domestic needs, naturally at a far more expensive cost. The price subsidies were to relieve that higher import cost, hardly a sensible solution but a very lucrative one for those corrupt elements in the state and private sector making a killing, literally, off the import process.

NNPC criminal enterprise

The IMF is well aware of the real cause of Nigeria’s fuel industry problems. A Nigerian legislative committee examining the sources of the industry’s problems recently released a report documenting that at least $4 billion annually is taken from taxpayers in fuel industry corruption with the state Nigerian National Petroleum Company (NNPC) at the center. According to the commission, “every day, fuel importers drop off 59 million liters of fuel. The country consumes 35 million liters daily. That leaves 24 million liters of oil available for smugglers to export, paid for by government fuel subsidies. This costs the Nigerian people roughly $4 billion yearly, according to Reuters.” 17

The Nigerian government has said that the 7.5 billion dollars spent yearly on fuel subsidies could be used to provide desperately needed infrastructure. But they omit any mention of the rampant siphoning off of $4 billion of oil by black market smugglers, reportedly with connivance of high NNPC government officials, to sell to neighboring countries at a hefty profit. The refined imported fuel is reportedly smuggled into neighboring countries like Cameroon, Chad and Niger where petrol prices are far higher, according to Abdullahi Umar Ganduje, Deputy Governor of Kano State.18

China as IMF target?

One major geopolitical factor that is generally ignored in recent discussion of Nigerian oil politics is the growing role of China in the country. In May 2010 only days after President Jonathan was sworn in, China signed an impressive $28.5 billion deal with his government to build three new refineries, something that in no way fit into the plans of either the IMF or of Washington or of the Anglo-American oil majors.19

China State Construction Engineering Corporation Limited (CSCEC) signed the deal to build three oil refineries with Nigerian National Petroleum Corporation (NNPC), in the biggest deal China has made with Africa. Shehu Ladan, head of NNPC, said at the signing ceremony that the added refineries would reduce the $10 billion spent annually on imported refined products. As of January 2012 the three Chinese refnery projects were still in the planning stage, reportedly blocked by the powerful vested interests gaining from the existing corrupt import system.20

A report in China Daily last November quoted Nigeria’s Olusegun Olutoyin Aganga, the minister of trade and investment that Nigeria was seeking added Chinese investors for its energy, mining and agribusiness industries. Last September on a visit to Beijing, Nigeria central bank governor Lamido Sanusi  announced his country planned to invest 5 percent to 10 percent of its foreign exchange reserves in China’s currency, the renminbi (RMB) or yuan, noting that he sees the yuan becoming reserve currency. In 2010 China’s loans and exports to Nigeria exceeded $7 billion, while Nigeria exported $1 billion of crude oil, Sanusi stated.21

Until now Nigeria has held some 79% of her foreign currency reserves in dollars, the rest in Euro or Sterling, all of which look dicey given their financial and debt problems. The move of a major oil producer away from dollars, added to similar moves recently by India, Japan, Russia, Iran and others, augurs bad news for the continued role of the dollar as dominant world reserve currency. 22 Clearly some in Washington would not be happy with that.

The Chinese are also bidding to get a direct stake in Nigeria’s rich oil reserves, until now an Anglo-American domain. In July 2010, China’s CNPC (China National Petroleum Corporation) won four prospective oil blocks -two in the Niger Delta and two in the frontier Chad Basin, with plans to become core investor in the Kaduna refinery, and construction of a double track Lagos-Kano railway.23  As well China’s oil company, CNOOC Ltd has a major offshore production area in Nigeria.

The IMF and Washington pressure to lift subsidies on imported fuels is at this point in question as is the future of China in Nigeria’s energy industry. Clear is that lifting subsidies in no way will benefit Nigerians. More alarming in this context is the orchestration of a major new wave of terror killings and bombings by the mysterious and suspiciously well-armed Boko Haram. This we will look at next in the context of Nigeria’s recent transformation into a major narcotics hub.

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F. William Engdahl is a leading researcher, economist and analyst who’s written on issues of energy, politics and economics for over 30 years. He contributes regularly to publications like Japan’s Nihon Keizai Shimbun, Foresight magazine, Grant’s Investor.com, European Banker and Business Banker International. He’s also a frequent speaker at geopolitical, economic and energy related international conferences and is a distinguished Research Associate of the Centre for Research on Globalization where he’s a regular contributor. He is also the author of A Century of War: Anglo-American Oil Politics, Full Spectrum Dominance and the New World Order. He may be reached via his website at www.engdahl.oilgeopolitics.net 

Copyright F. William Engdahl. This article is published with his permission.

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Notes:

1John Campbell, Nigeria’s Turmoil and the Outside World, January 12, 2012, accessed in http://blogs.cfr.org/campbell/2012/01/12/nigeria%E2%80%99s-turmoil-and-the-outside-world/#more-3994.

2 Chika Otuchikere and Chibunma Ukwu, Nigeria: Aftermath of Subsidy Crisis Food Prices Hitting Roof Tops, 22 January, 2012, accessed in http://allafrica.com/stories/201201231627.html.

3 Mustapha Muhammad, Nigeria: Billions Siphoned by Corruption Could Have Been Used to Maintain Fuel Subsidy, Inter Press Service, January 11, 2012, accessed in http://www.globalissues.org/news/2012/01/11/12407.

4 Mike Oboh, Boko Haram Islamist Insurgents Kill at Least 178 in Nigeria’s Kano, January 22, 2012, International Business Times, accessed in http://www.ibtimes.com/articles/285620/20120122/boko-haram-islamist-insurgents-kill-178-nigeria.htm.

5 Christine Lagarde, Statement by IMF Managing Director Christine Lagarde at the Conclusion of her Visit to Nigeria, IMF, Washington, Press Release No. 11/478, December 20, 2011, accessed in http://www.imf.org/external/np/sec/pr/2011/pr11478.htm.

6 Ibid.

7 Quoted in Idris Ahmed and Kate da Costa, Nigeria: IMF Pushing the Country to End Subsidy – - Report, 30 December 2011, accessed in http://allafrica.com/stories/201112300791.html.

8 Olutayo Olubi, Fuel subsidy: International conspiracy against Nigerians, National Daily, 15 January 2012, accessed in http://nationaldailyngr.com/index.php?option=com_content&view=article&id=2825:fuel-subsidy-international-conspiracy-against-nigerians&catid=306:business-news&Itemid=561.

9 Ibid.

10 Ibid.

11 Ibid.

12 Ibid.

13 Chika Otuchikere and Chibunma Ukwu, Nigeria Aftermath of Subsidy Crisis:  Food Prices Hitting Roof Tops, 22 January 2012, accessed in http://allafrica.com/stories/201201231627.html.

14 Son Gyoh, Nigeria: The case against removal of fuel subsidy and the argument for deregulated petroleum sub sector, accessed in http://awarenessfordevelopment.org/index.php?option=com_content&view=article&id=66:nigeria-fuel-subsidy.

15 Ibid.

16 MBendi, Oil Refining in Nigeria–An Overview, accessed in http://www.mbendi.com/indy/oilg/ogrf/af/ng/p0005.htm.

17 Heather Murdock, Nigeria finds 4 billion dollars in fuel corruption, January 20, 2012, accessed in http://www.globalpost.com/dispatch/news/regions/africa/nigeria/120119/nigeria-oil-fuel-corruption.

18 Mustapha Muhammad, Nigeria: Billions Siphoned by Corruption Could Have Been Used to Maintain Fuel Subsidy, Inter Press Service, January 11, 2012, accessed in http://www.globalissues.org/news/2012/01/11/12407.

19 Kerri Shannon, China Continues Its Run on African Commodities With $23 Billion Nigeria Oil Deal, Money Morning, May 15, 2010, accessed in http://moneymorning.com/2010/05/15/nigeria-oil-deal/.

20 Gavin du Venage, Everyone is a loser in Nigeria’s fuel subsidy cut and partial restoration, The National, January 24, 2012, accessed in   http://www.thenational.ae/thenationalconversation/industry-insights/energy/everyone-is-a-loser-in-nigerias-fuel-subsidy-cut-and-partial-restoration.

21 China Daily, Nigeria seeking Chinese capital, November 12, 2011, accessed in http://www.chinadaily.com.cn/cndy/2011-11/12/content_14082411.htm.

22 Xinhua, Nigeria bank chief sees yuan becoming reserve currency, September 6, 2011, accessed in http://europe.chinadaily.com.cn/world/2011-09/06/content_13641562.htm.

23 Kayode Ekundayo, Nigeria: China, 2010 Budget and Oil Blocks, Daily Trust (Abuja), 12 July 2010, accessed in http://allafrica.com/stories/201007121319.html

F. William Engdahl is a frequent contributor to Global Research.  Global Research Articles by F. William Engdahl