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221. Ethical Oil: The Case for Canada's Oil Sands by Ezra Levant

Author:
Andrew Brannan
Publication Date:
06-2011
Content Type:
Journal Article
Journal:
The Objective Standard
Institution:
The Objective Standard
Abstract:
Oil is crucial to human life, not only as a source of energy that fuels our homes, businesses, cars, airplanes, and hospitals, but also as a key component of countless products on which our lives and prosperity depend—from medical devices and cell phones, to roads and tires, to books, CDs, footballs, and tablecloths. Nonetheless, the oil industry and the men who animate it are widely loathed and frequently maligned. Read any news outlet for examples. In the face of this relentless anti-oil sentiment, Ezra Levant has written Ethical Oil: The Case for Canada's Oil Sands. Levant explains that conventional oil fields (such as those in Iran and Saudi Arabia) have been decreasing production at a rate of 6.7 percent per year due to depleted reserves, and that, today, the largest exporter of oil to the United States is Canada (having displaced Saudi Arabia in 2004). Most of the oil produced in Canada, he notes, is extracted in Alberta in a geologically marvelous region called the Athabasca Oil Sands. Unlike conventional liquid oil, the oil sands are a type of bitumen—“oil mixed with sand and clay . . . [that] has the thickness of peanut butter”—that is more difficult and expensive to extract (p. 8). Levant explains that higher oil prices, and hence higher oil company profits, have led to capital investment in new technologies and extraction processes that have made “the oil sands economically viable” (p. 9). The first oil company to work the oil sands region was Suncor, in 1967. The open-pit mines that many people think of when picturing the oil sands are a relic of the early days of oil exploration and extraction. Today, Alberta's oil sands are easily one of the most technologically advanced resource operations in the world. Behind every dump-truck driver are teams of computer modellers, engineers, geologists, and technical operators. For every strong back working a shovel, there are a dozen M.A.s and Ph.D.s somewhere working a computer. (p. 117) Most of the thick bitumen (80 percent) is deep in the ground and must be drilled for and pumped out using steam-assisted gravity drainage (SAGD), whereby steam is injected to reduce the viscosity of the bitumen, which then drains, by force of gravity, into a pipe below the steam and is pumped out. Using this technology, Canadian oil sands companies are able to transform what was once “considered an experimental project” into an oil-generating powerhouse (p. 9). In 2008, Canada shipped 715 million barrels [of oil] to the United States, far more than the 550 million barrels the Saudis sold. From 2003 to 2008, the oil sands had helped cut Saudi imports by 80 million barrels a year. (p. 9) But as Canada has become a larger player in the global oil market, Levant explains, environmentalists and other critics of the oil sands have increasingly condemned this technology and the companies that employ it. The critics claim that the oil sands are “140,000 square kilometers of toxic sludge” and “giant toxic lakes” inhabited by deformed fish, and that “migrating birds sometimes stop to rest” at these toxic sites before dying by the “tens of millions” (p. 1). Critics further claim that because of the high volume of water required to extract oil from these sites, “the mighty Athabasca River is about to become a small, dirty creek” (p. 2). They claim that the oil sands are “poisoning the aboriginals” in the region and “poisoning our very planet” (p. 3). And they claim that Fort McMurray, the urban center of oil sands production, is afflicted with all the “social ills of a boom town—the violence, the mistreatment of women, the addiction problems, and an artificially high cost of living that makes almost anyone with a job part of the working poor” (p. 3). Levant contends that the foregoing criticisms are “false . . . [e]very one of them” and sets out to refute them and others, and to show that the oil sands are ethically superior to the alternatives on multiple fronts (p. 3). . . .
Topic:
Oil
Political Geography:
Iran, Canada, and Saudi Arabia

222. Oil and State Building in South Sudan

Author:
Jill Shankleman
Publication Date:
07-2011
Content Type:
Working Paper
Institution:
United States Institute of Peace
Abstract:
Oil started being produced in Sudan in the 1990s and has become the mainstay of the economies of the north and south. Most, but not all, of the oilfields are in South Sudan, but the export pipelines, Red Sea export terminal, and refineries are in the north. Agreement to share control over oil resources and revenues was a central part of the 2005 Comprehensive Peace Agreement, but up to the eve of South Sudan's secession, north and south had not resolved how to divide the industry or its revenues. The Republic of South Sudan starts independence facing huge challenges in using its oil wealth to jump-start development in the country, where over 50 percent of its people live below the poverty line and over 80 percent are illiterate. Without new investment to increase output, or successful exploration that finds additional resources, South Sudan faces declining oil production from 2015-too little time under any circumstances to diversify the economy and develop alternative sources of government revenue. As the most oil-dependent state in the world, the government of South Sudan faces the certainty that its income will fluctuate from year to year with global oil prices, a circumstance known to make sound macroeconomic management difficult. The Government of South Sudan (GoSS) should have three priorities for the oil sector. First, in the short term, it should focus on developing a detailed understanding of what it now owns and what the long-term prospects are for its oil industry. Second, it needs to maximize revenues from the existing industry. Third, it must make the best use of its revenues for development. Information on the potential for, and barriers to, increasing production and incentivizing new exploration is essential to developing a realistic oil industry strategy. This requires a technical and economic reserves evaluation study and disclosure of data by the oil companies-to which the new government will be entitled as a partner in production sharing contracts. To overcome the problem of revenue fluctuations, the government should explore working with donors to use aid to help moderate variations in government income and consider the possibility of oil-backed loans, that is, obtaining immediate funds for infrastructure to be paid with future oil production. To secure new oil investment, South Sudan needs to overcome the toxic reputation of Sudan's oil industry by committing immediately to joining the Extractive Industries Transparency Initiative, the international program for oil sector transparency, and allow its industry's environmental and human rights performance to be audited against current international standards, developing a remediation program as needed. The government also should be ready to consider offering incentive terms to good-quality oil companies to secure their investment in enhanced oil recovery and exploration. Most important of all, as violent conflict has emerged in some of the oil areas in the months preceding independence, South Sudan and the international community must ensure security for oil workers and installations so that the new state gets the oil income it depends on.
Topic:
Civil War, Oil, and Governance
Political Geography:
Africa and South Sudan

223. Revisiting the Resource–Conflict Link: A Systematic Comparative Test of Causal Mechanisms in Four Major Oil-Exporting Countries

Author:
Miriam Shabafrouz, Matthias Basedau, and Annegret Mähler
Publication Date:
08-2011
Content Type:
Working Paper
Institution:
German Institute of Global and Area Studies
Abstract:
Causal mechanisms and related contextual variables are crucial to the study of the resource–conflict link, but little systematic research has been done on their exact functioning. This paper contributes to the filling of this gap by comparing four major oil exporters (Algeria, Iran, Nigeria, and Venezuela) with differing levels of internal violence. To capture the causal complexity of the resource–conflict link we created a questionnaire with some 150 variables that distinguish between resource-specific (RS) and non-resource specific (NRS) conditions. The causal mechanisms are measured by assigning pertinent RS and NRS indicators to them. Our results suggest that the role of resources may be less prominent than is widely assumed. Only three resource-related causal mechanisms provide limited explanatory value (motive at subnational level, indirect economic, and institutional mechanism) by distinguishing Venezuela—the most peaceful case—from all the others. Only a mixed mechanism that combines 13 RS and NRS (economic and geographic characteristics, identity, intergroup relations, as well as political and institutional variables, including elite behavior) conditions can explain the differences between the countries with regard to the dependent variable comprehensively.
Topic:
Conflict Resolution, Political Violence, Diplomacy, and Oil
Political Geography:
Iran, Algeria, and Nigeria

224. Globalizing West African oil: US 'energy security' and the global economy

Author:
Sam Raphael and Doug Stokes
Publication Date:
07-2011
Content Type:
Journal Article
Institution:
Chatham House
Abstract:
This article examines the nature of US oil intervention in West Africa and in particular the ways in which US strategic policy is increasingly being wedded to energy security. It argues that academic debates of a 'new oil imperialism' overplays the geostrategic dimensions of US policy, which in turn underplays the forms of globalization promoted by Washington in the postwar world. Specifically, the US has long sought to 'transnationalize' economies in the developing world, rather than pursue a more mercantilist form of economic nationalism. This article argues that US oil intervention in Africa conforms to this broader picture, whereby processes of transnationalization and interstate competition are being played out against the backdrop of African oil. The recent turmoil in the Middle East and North Africa will add to these dynamics in interesting and unpredictable ways.
Topic:
Security and Oil
Political Geography:
Africa, United States, Middle East, North Africa, and West Africa

225. Resource Management and Transition in Central Asia, Azerbaijan, and Mongolia

Author:
Richard Pomfret
Publication Date:
03-2011
Content Type:
Working Paper
Institution:
Peterson Institute for International Economics
Abstract:
The paper presents a comparative analysis of the resource-rich transition economies of Mongolia and the southern republics of the former Soviet Union. For Uzbekistan and Turkmenistan, the ability to earn revenue from cotton exports allowed them to avoid reform. Oil in Azerbaijan and Kazakhstan was associated with large-scale corruption, but with soaring revenues in the 2000s their institutions evolved and to some extent improved. Kyrgyzstan and Mongolia illustrate the challenges facing small economies with large potential mineral resources, with the former suffering from competition for rents among the elite and the latter from lost opportunities. Overall the countries illustrate that a resource curse is not inevitable among transition economies, but a series of hurdles need to be surmounted to benefit from resource abundance. Neither the similar initial institutions nor those created in the 1990s are immutable.
Topic:
Corruption, Economics, Oil, and Natural Resources
Political Geography:
Central Asia, Kazakhstan, Uzbekistan, Soviet Union, Azerbaijan, and Turkmenistan

226. America's Energy Security Options

Author:
Trevor Houser
Publication Date:
06-2011
Content Type:
Policy Brief
Institution:
Peterson Institute for International Economics
Abstract:
Like clock-work, as US gasoline prices approached $4 a gallon in spring 2011, energy security moved to the forefront of the American political debate. Global oil prices have recovered from their collapse during the financial crisis more quickly than expected due to resilient developing-country demand and political instability throughout the Middle East and North Africa. As with past oil price spikes, politicians have been quick to offer silver bullet solutions to lower gas prices and make America more energy secure. But given the complexity of the US energy system and global energy markets, it is difficult for even informed observers to evaluate how far current proposals go in solving the country's energy security challenge.
Topic:
Energy Policy, Oil, Natural Resources, and Biofuels
Political Geography:
United States, America, Middle East, and North Africa

227. EIU Oil Market Outlook

Author:
Caroline Bain
Publication Date:
09-2011
Content Type:
Working Paper
Abstract:
Global oil consumption grew by 3.4% in 2010, rebounding from a contraction of 1% in 2009. Consumption growth will slow in 2011-14 but remain relatively strong.
Topic:
Energy Policy, International Political Economy, International Trade and Finance, Markets, and Oil

228. Opting for Second Best in Libya?

Author:
Riccardo Alcaro
Publication Date:
05-2011
Content Type:
Working Paper
Institution:
Istituto Affari Internazionali
Abstract:
The looming stalemate in the Libyan conflict is likely to lead to more civilian casualties, a de facto separation of Libya, the under-use of the country's energy resources, and an increase in illegal activities due to the legal and governance vacuum in the country. In addition, it risks denting NATO's credibility as a security provider. To break the stalemate, the coalition is leaning towards intensifying military operations and/or arming the rebels. Both imply a number of risks and political costs. A way to contain such risks and costs would be for NATO and its partners to re-calibrate the mission so that, alongside military action, the mission would foresee also a national reconciliation process, mediated by an international team. Linking military operations to a credible plan for Libya's political future would improve the odds for Gheddafi's regime to collapse.
Topic:
Security, NATO, and Oil
Political Geography:
United States, Libya, Arabia, and United Nations

229. Libya's year zero: Finding opportunity as a country rebuilds

Publication Date:
09-2011
Content Type:
Working Paper
Abstract:
Libya's rebels have pushed the regime of Muammar Qadhafi out of power, and are poised to take complete control of the country. This in itself is a monumental achievement, but it marks only the start of what is likely to be a long and fraught process of rehabilitation. The new leadership must rebuild a state that for decades was run on the whims of an authoritarian leader, determined both to monopolise and to hold on to power. There are few institutions that work, and even fewer that work to the benefit of the general population, so the challenge amounts to little short of building a functioning state from scratch. Views on what form that state should take are as diverse as the regional, ideological and sectarian interests making up its would-be architects, and these stake holders must be persuaded to support the process — or at least not to obstruct it — before it can even begin.
Topic:
Development, Oil, Political Economy, and Regime Change
Political Geography:
Libya, Arabia, and North Africa

230. Iraq's Last Window: Diffusing the Risks of a Petro-State

Author:
Johnny West
Publication Date:
09-2011
Content Type:
Working Paper
Institution:
Center for Global Development
Abstract:
Although Iraq's oil industry is 80 years old, it has an opportunity to introduce an oil dividend based on the expansion of production currently being undertaken. Even assuming a conservative price for crude, the resulting predicted rise in revenues will allow the government to allocate a significant dividend which halves poverty, helps diversify the economy by creating demand at all income levels for goods and services, and stimulates capital formation—all without cutting into the government's capital spending plans. A dividend, starting at $220 per capita in October 2012 and rising with expanded production, could also cement the affiliation of all citizens to Iraqi territorial integrity, act as a powerful disincentive to secession in oil-producing regions, and create popular pressure among all sections of the population to discourage acts by the ongoing insurgency which disrupt economic reconstruction. Logistically, dividends could be mapped onto the nationwide and universal rationing system, as the electoral roll has been, and combined with Iraq's ubiquitous mobile phone networks and new biometric ID cards. A partial dividend would create a strong domestic political constituency for transparency to reinforce international technical efforts to help the government manage oil revenues and create efficient management structures. It would also help Iraq develop an alternative economic model to a future, which the country's present trajectory now threatens, of a bloated state as the country's only significant employer, with all the attendant problems of patronage networks, politicization of the civil service, and outright corruption. Support for an oil dividend policy is growing among some politicians, notably those seeking votes among the Iraqi poor such as the Sadrists and Fadhila party. International support could help the government structure a dividend which functions well and in the public interest.
Topic:
Development, Oil, and Poverty
Political Geography:
Iraq, Middle East, and Arabia