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BEWARE !....EXTREMELY LONG AND BORING ARTİCLE
(more will follow, if I hear general public applause)
Energy Geopolitics 2006
by Richard Heinberg
News reports flitting across computer screens these days seem increasingly to be related to the subject of energy. But what do they signify? The modern world affairs analyst is in little better position to discern the patterns and portents than was his or her ancient Roman counterpart, the reader of entrails. What is one to make of items like these?
In January, Russia's Gazprom (the state-owned natural gas company) temporarily cut supplies to Ukraine in order to obtain higher prices. While Russian president Vladimir Putin re-established gas shipments as soon as Western countries complained (they did so because they were running short, due to Ukraine's skimming off of gas being trans-shipped to Europe through its territory), Western officials saw this as Russia unsheathing its "gas weapon."
In April, China's president Hu Jintao visited the US, where
president Bush effectively humiliated him at the White House by "mistakenly" playing the Taiwanese national hymn upon Hu's arrival, rather than the hymn of the People's Republic, and by allowing a Taiwanese "journalist," a Falun Gong member, to rant uninterruptedly for more than three minutes about Chinese human rights violations during a filmed White House press conference, with Hu in attendance. Hu, himself displaying no bad manners, left Washington for Saudi Arabia, where he signed a series of accords involving Chinese access to future Saudi oil production in exchange
for the transfer of sophisticated weapons and other technologies.
Also in April, Bolivia's new president Evo Morales met with Hugo Chavez of Venezuela and Fidel Castro of Cuba, then announced the nationalization of his country's oil and gas fields.
As a result of Washington's rejection of NAFTA decisions favoring Canada, the two countries' relations have soured. Canada may shift some of its oil trade away from the US: Ottawa's minister of natural resources has said that within a few years one quarter of the oil Canada now sells to the US may instead go to China.
On May 9, CNN Money reported that Cuba has invited oil companies from China and India to drill in its Gulf waters. US firms had also been invited, but were prevented from participating by the longstanding American embargo on trade with Cuba.
Russia's Gazprom has hired former German Chancellor Gerhard Schröder as a consultant and has taken a majority holding in the Northern European Gas Pipeline. Gazprom also has Britain's flagship utility, Centrica, in its sights for takeover; Tony Blair initially objected, then acquiesced to the deal.
On a visit to Vilnius on May 4, US vice president Dick Cheney accused Russian president Vladimir Putin of using energy resources as a weapon to brandish against other Eurasian countries. "No legitimate interest is served when oil and gas become tools of intimidation or blackmail, either by supply manipulation or attempts to monopolize transportation," he said. The next day, Cheney visited
Kazakhstan to promote oil and gas export routes bypassing Russia.
In his May 10 state-of-the-nation address, Putin responded by referring to America indirectly using the metaphor of a voracious wolf, mentioning the US by name only in the context of peripheral comments about Africa and South America.
Oil- and gas-exporting Iran, defying Washington's demands that it halt uranium enrichment, is being hauled before the UN Security Council, where the US is insisting on sanctions while Russia and China appear ready to block them. The evolution of the rhetoric on Washington's part is frighteningly reminiscent of that which accompanied the run-up to the 2003 invasion of Iraq.
Meanwhile, oil prices have hit historic highs of over $75 per barrel while global production has been stalled at about 85 million barrels per day for the past year.
While the specific meanings of—and connections between—these occurrences are often difficult to discern, their overall drift is becoming plainer with every passing day: The world is plunging into an energy crisis unlike any before, while geopolitical alliances are shifting quickly and to a degree not seen since the end of the Soviet era, and perhaps not since the end of World War II.
Global oil production is peaking—for all practical purposes, now. In the past weeks, the New York Times, Bill Clinton, and the executive vice president of Ford Motor Company (among many others) have stated that world oil flow is at peak. We have even seen one of the major oil companies (Chevron) place ads in multiple magazines and
newspapers in order—gently, perhaps, but insistently and
conspicuously—to break the news to the American people that the era of cheap oil, and cheap energy in general, is finished, over, done, dead, and gone. And that era just happens to be the only one that Americans alive today have ever known.
Oil is not the only problem; natural gas is turning out to be just as big a worry in North America and many European countries, and just as big a geopolitical prize to those who have and covet it. Gas prices have grown unusually volatile in the US, lurching from the long-time norm of $2 per thousand cubic feet up to $15 and back to $7 or less in six years. Globally, there are enormous natural gas deposits in Russia and Iran, but getting that gas to market in the growing quantities at which importers would like to use it will likely prove difficult, expensive, and perhaps even impossible given the geopolitical and economic context as well as the practical difficulties involved. This is very bad news for North Americans, who will have to rely increasingly on liquefied natural gas imported from far away by tanker—and will have to get used to paying the
geopolitical costs that far-flung supply networks entail.
Welcome to the twenty-first century. And welcome to a world for which none of us is prepared. Take a good look around: things are changing quickly everywhere, and the omens are . . . well, ominous.
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im sorry alphaF 
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