The last time we heard from Russell Zanca, a Central Asia expert at Northeastern Illinois University, he was reporting on the failures of Uzbek President Islam Karimov. Here Zanca suggests where the United States should go from here.

-- Steve LeVine

For some two years, U.S. diplomatic efforts in Uzbekistan have been oriented toward ensuring that the Uzbeks allow the U.S. military to transport all manner of supplies to Afghanistan safely and cheaply, an alternative to poorly safeguarded routes through Pakistan. As a result, the United States is loath to complain of the Uzbek regime's continued cruel behavior toward its population -- if it does, the risk is that President Islam Karimov, as he did in 2005, asks the United States to leave his country.

If the United States were expelled, would we completely compromise our effectiveness in Afghanistan? Alternative supply routes are few: Turkmenistan has the most to offer in terms of geography and terrain, but the United States has never enjoyed ideal relations with the Turkmen, who make matters difficult with their official policy of "neutrality." Tajikistan is also impractical -- infrastructure such as railroads and roads are undeveloped, its mountains are in the way, and it has too many Russian troops on its soil. With Uzbekistan, the U.S. trades one tyranny for another -- liberating the Afghans while leaving the Uzbeks at the mercy of Karimov -- but it also gets an excellent road-and-railroad network between Termez and Mazar-i-Sharif, along with friendly relations with the Uzbeks of northern Afghanistan.

Read on

Up or down? Oil spent much of last year climbing, climbing until the irrationally exuberant among us began to rub their hands together with glee (that would be the traders). This week, the market placed a speed bump in the road to $100-a-barrel and beyond. Today, oil closed with its biggest one-week fall in five months, plunging to $88.03, Bloomberg reports. As we discussed earlier this week, prudence is called for in the oil markets. Traders might want to look at some arbitrage between crude varieties, however -- that $88.03 price refers to West Texas Intermediate. Brent crude is selling at a $5 premium, closing at $93.44 a barrel, notes Gregory Meyer at the Financial Times.

The trouble with subsidies: In response to a demand from the International Monetary Fund, Pakistan raised the price of gasoline by about 9 percent on New Year's Day. Eight days later, the government reversed the increase. In between those two moves, Punjabi Gov. Salman Taseer was assassinated, a key government ally pulled out of the government, and there was general mayhem in the street. I discuss this in an interview at CNN. A lot of the turmoil stemmed from a poisonous debate over the country's so-called blasphemy law, which prohibits insults against the Prophet Mohammed. But the gasoline subsidy was also a primary player in the turbulence, which may yet return. The IMF wants the subsidy lifted as a condition of providing $11 billion to Pakistan. But a subsidy, once given, is hard to take away.

Price of the spill: President Obama's Gulf oil spill commission returned an early verdict on last year's massive blowout in the Gulf of Mexico, with a stinging rebuke of BP and its partners in the Macondo well. As is usually the case with such reports, one could read into it almost whatever one wished to. That might explain how Wall Street treated the report. The shares of both BP and Transocean ended the week just about where they were before the report was issued, as though investors in the aggregate couldn't decide whether the results were good or bad for the companies.

Electric spying: The world's electric-car combatants take their war seriously, the French no less than the Chinese, the Americans, and the Japanese. So it is that Renault suspended three senior managers for allegedly passing on secrets about the company's electric car plans to China. Renault is partners with Nissan, whose Leaf was launched last month. The probe has been ordered all the way up the chain of command, by President Nicolas Sarkozy himself, the Guardian's Kim Willsher reports.

Vladimir Putin had a relaxing "year of adventure," as my colleagues call it, impressing Russia and entertaining the rest of the world with populism -- motorcycle riding, whale harpooning, fire-fighting -- and coquettish flutters of the eyelids regarding his political intentions or lack thereof in 2012. But the most telling events happened in the closing days and weeks of the year, in which the Russian prime minister revealed his more familiar dark side.

I don't necessarily mean today's harsh prison sentence of 13.5 years against oligarch Mikhail Khodorkovsky -- enough to keep him in jail until 2017, factoring in the time he's already served -- which reflects hard-nosed Putin re-election strategy rather than unadulterated venality on his part. Rather, the more instructive event of 2010 is his embrace this month of racist hoods with chilling power on the street, a thread of extremism that Putin himself kindled and now is racing to get ahead of. Putin's December suggests that, for the moment at least, Russia prefers to remain an unnerving outsider.

Read on

Turkmen President Saparmurat Niyazov generated yuks during the 1990s, given eccentricities such as his variable taste in hair color, his creative renaming of months, days, cities, and ports, and a megalomaniacal festooning of his photo and bust everywhere. But Niyazov also had less-amusing habits, such as truncating high-school education so that Turkmen students couldn't qualify for foreign universities -- not to mention his taste for big bribes. All of it made many people celebrate when he died of heart disease in 2006.

But as we learn in the latest WikiLeaks cables, not much has materially changed since President Gurbanguly Berdymukhamedov succeeded him. For starters, Berdymukhamedov is a dead ringer for Niyazov, as anyone visiting the country can see: The new president has taken down his predecessor's portraits and frequently replaced them with his own.

A Dec. 17, 2009 cable signed by Sylvia Reed Curran,the charge d'affaires in the U.S. embassy in Ashgabat, relates a chat with an unidentified source with apparent proximity to Berdymukhamedov. Turkmenistan's leader, Curran's source tells her, is "vain, fastidious, vindictive, a micro-manager, and a bit of an Akhal Teke nationalist." (Akhal Teke is a Turkmen tribal zone near Ashkabad. It is also a prized horse breed.) Later in the cable, Curran adds that the president is also "suspicious, guarded, strict,very conservative, a practiced liar, ‘a good actor,' and (again) vindictive." (Of course Berdymukhamedov himself might not agree with any of that, seeing as how he views himself as "an author, surgeon, pilot, sportsman [and] statesman,"Curran said.)

Read on

James Giffen, the oil dealmaker at the center of what was once the largest foreign bribery case in U.S. history, is officially a free man.

The 69-year-old former oil adviser to Kazakhstan's president, accused of diverting $78 million from oil companies to the Kazakh government, waited out more than a dozen federal prosecutors and sat through some two dozen court appearances and five trial dates over the course of seven years. Today, the effort paid off. Three months after prosecutors announced a stunning capitulation, dropping all foreign bribery, money laundering, and fraud charges against Giffen in exchange for a guilty plea on a misdemeanor tax charge, U.S. District Judge William Pauley ordered no prison time and no fines in sentencing proceedings at a Manhattan courthouse.

In handing down the non-sentence, Pauley seemingly validated the argument to which Giffen's lawyers had clung since 2003: that whatever crimes Giffen had allegedly committed occurred while he was a highly valued foreign asset of the American intelligence. "Suffice it to say, Mr. Giffen was a significant source of information to the U.S. government and a conduit of secret information from the Soviet Union during the Cold War," Pauley said today.

[[PAGEBREAK]]

Giffen may have been lesser-known than the other businessmen-cum-criminal-defendants of recent decades, but he was equally colorful, a swaggering, coarse-talking, heavy-drinking womanizer and a charismatic fixture on the Caspian Sea. He arrived in Kazakhstan in 1992, but the trajectory that ultimately landed him there began in 1969, when he started traveling to Moscow as an aide to a Connecticut metals trader. Giffen worked his way up to become a major player in a U.S-Soviet business association with top-level political ties in both Washington and Moscow. When the Soviet Union collapsed in 1991, business in Russia dried up, and Giffen moved on to Kazakhstan, which was quickly becoming one of the hottest oil plays on the planet.

Giffen managed to ingratiate himself with a man he called The Boss: Kazakh President Nursultan Nazarbayev. He became Nazarbayev's chief oil negotiator and, prosecutors alleged, his personal banker. While honchoing some of the era's biggest oil deals, he also diverted some $78 million in payments made to Kazakhstan by now-dead companies like Mobil, Amoco, and Texaco into Swiss and other bank accounts that he set up in the name of Nazarbayev, other senior Kazakh officials, and their relatives, prosecutors alleged. (U.S. diplomats said that Nazarbayev, an unindicted co-conspirator in the case, so dreaded being tarnished by a Giffen conviction that both he and his envoys pleaded repeatedly for the George W. Bush Administration to order the case dropped.)

The case seemed open and shut, since the prosecutors presented a detailed paper trail -- provided by a Swiss magistrate -- of Giffen slicing payments into tiny discrete pieces for transfer into secret Swiss bank accounts, rather than shifting them as a whole, a classic method of money laundering. Even at their most voluble and expansive in court, Giffen's lawyers made no attempt openly to dispute the prosecution's facts. They simply kept repeating that, whatever Giffen may have done, he was taking orders from the Kazakh government -- a sovereign state entitled to its own ideas of legality -- and otherwise serving the patriotic interests of the Central Intelligence Agency.

It was an audacious defense that many thought verged on the preposterous. For one thing, CIA officers of the era deny that Giffen was anything of the sort -- he walked into CIA headquarters on his own volition and talked to agency officers about Kazakhstan, they said, but that was very different from being a trusted asset on an informal assignment. In short, they asserted, Giffen was simply another dude talking.

The CIA, however, appears to have refused to hand over many -- if any -- documents sought by the defense. Judge Pauley had ruled that such documents were obligatory if Giffen were to have access to his rights to adequately defend himself. So the prosecution was left with having to drop the charges.

In his sentencing remarks, Pauley said that he had had access to classified documents that no one else in the courtroom had seen, and that they largely validated Giffen's claims. "He was one of the only Americans with sustained access to" high levels of government in the region, Pauley said. "These relationships, built up over a lifetime, were lost the day of his arrest. This ordeal must end. How does Mr. Giffen reclaim his reputation? This court begins by acknowledging his service."

Hillary Clinton has urged Asia's smaller countries to rally around the United States. She has offered to mediate prickly territorial disputes between Asian allies and Beijing, and is trumpeting the early stages of an embryonic U.S.-India axis to thwart Chinese excesses in Asia. This is giving the United States some newfound credibility in Asia, where President Barack Obama begins a four-nation visit on Saturday. Leaving domestic trouble behind him, Obama will find Japan cooling down in a dispute with the United States over a Marine air base; the Vietnamese negotiating a deal to obtain U.S. nuclear power technology; and the Philippines thinking about turning to the United States as a go-between in its dispute with China over the Spratley Islands.

The forces behind this activity are not new -- Japan and the other rising tigers in Asia have been increasingly worried as China becomes less huggy and cuddly in the wake of a financial crisis that has accelerated its rise as a global power. But what's triggered the sudden upsurge now of tete-a-tetes, the type that have driven China's foreign minister, Yang Jiechi, to glare at the foreign minister of Singapore, George Yong-Boon Yeo, and pointedly declare, "China is a big country and other countries are small countries, and that is just a fact"?

Read on

Six months after a U.S. fuel contract contributed to the ouster of Kyrgyz President Kurmanbek Bakiyev, we appear no closer to knowing whether his opponents are correct in assuming corruption and other criminality in the deal. At issue is a $3 billion U.S. military contract with two companies registered at mail drops and in offshore tax havens, and run by a cloak-and-dagger California native who makes Julian Assange look as open as Oprah, the Washington Post's Andy Higgins suggests in a weekend piece. The current Kyrgyz government says the contract enriched the Bakiyev family, and that the U.S. tolerated the situation to guarantee the longevity of Manas Air Base, which services the war in Afghanistan. Incidentally, Bakiyev alleged the same thing when he helped overthrow the Askar Akayev regime in 2005.

By approving such contracts, does the U.S. in effect cultivate the very corruption that it aggressively abhors in governments around the world? Scott Horton, a New York lawyer who sits on the board of American University in Bishkek, is among those who think so. At the Harriman Institute last Friday, Horton said:

The latest Transparency International corruption index is out, and it shows that countries occupied by the United States, in which U.S. contract awards have decisive importance to the economy, are two of the five most corrupt on earth. These nations have, moreover, become dramatically more corrupt since the U.S. took over. What is the relationship between having a large U.S. military installation and military contracting on your territory and corruption? The TI index points to a direct relationship. The U.S. talks a good tune about democracy, transparency and the rule of law. What it delivers is just the opposite.

(Full speech transcript here.)

Read on

The rare earths imbroglio continues. The New York Times' Keith Bradsher has another report on the slowdown of rare-earth exports from China: This time, he wrote, the flow of the strategic elements has slowed to not just the United States but also Europe. The Obama Administration ordered an investigation into the report. Two weeks before the U.S. mid-term elections -- in which the dastardly Chinese are already emerging as a popular bogeyman -- the elements are likely to come up as a political issue.

Sanctions tighten on Iran. The United States succeeded in further tightening oil sanctions on Iran this week, when Japan's Inpex said it would join European companies and halt its relationship with Tehran, which Washington is attempting to push to the negotiating table over its nuclear development program. (The Iranian government, meanwhile, played down Inpex's announced withdrawal from development of the Azadegan natural gas field.) That now leaves China as the last major country with significant energy investments in Iran, John Pomfret reported in The Washington Post.

Did Britain just institute a carbon tax? Earlier this year, Britain's Department of Energy and Climate Change launched a carbon emissions reduction policy that would have levied a pollution charge -- about $22 per ton of carbon -- on Britain's 4,000 biggest energy users, then paid the money back to the same companies in the form of energy efficiency incentives. It was a revenue-neutral approach -- until Wednesday, when the government quietly decided to keep the money, on the order of $1.58 billion a year. David Roberts at Grist explains.

China braces for a flood of LNG. If you want to gauge how much liquefied natural gas a country plans on using in the coming years, look to the shipyards. Case in point: The Chinese shipbuilding company that has built all of China's LNG tankers to date is ramping up its tanker construction efforts in preparation for what it anticipates will be a quadrupling of LNG imports between now and 2015, one of the company's top executives told Bloomberg News on Thursday. China's LNG consumption, if it lives up to the current projections, will have ramifications far beyond the country's shores -- just ask the companies building pipelines in Alaska.

Another $1.5 billion for biofuels in the United States. After the collapse of efforts to pass cap-and-trade legislation and hopes fading for even more modest renewable energy legislation, these are not the best of times for the clean energy industry in Washington -- unless, of course, you're in the biofuels business. Reuters reports that the U.S. Department of Agriculture is throwing another $1.5 billion at the industry in an effort to meet congressionally mandated targets for the production of still-commercially-unproven advanced biofuels by 2022. As for the 54-cents-a-gallon tariff on imported ethanol -- a reliable source of teeth-grinding for Brazil's government and sugar cane industry -- Agriculture Secretary Tom Vilsack says it's probably sticking around, though it's likely to be phased out in the future. File that in the "I'll believe it when I see it" folder.

Chevron drills deeper. Well, that didn't take long -- barely a week after the Obama administration lifted its moratorium on deepwater drilling in the Gulf of Mexico, Chevron announced Thursday that it would develop two fields in the Gulf estimated to contain some 500 million barrels of oil. The project is pegged at $7.5 billion, and would involve drilling wells deeper than BP's ill-fated Macondo operation. "In the end, the United States needs the oil and gas and other countries need the oil and gas, and some of the best places to explore are deepwater environments," Bobby Ryan, Chevron's vice president for global operations, told the New York Times' Clifford Krauss.

CNOOC, Statoil Invest $1 billion in south Texas' Eagle Ford oil shale. Guess who will be scrutinized and who won't? The betting is that the Chinese National Offshore Oil Corp. will not suffer another fiasco like in 2005, when it lost in its attempt to land Unocal. This time it will manage to hold on to its investment, in this case a $1.1 billion buy-in into the scorching hot shale bonanza. Yet some analysts say that election-year jingoism in the United States could again leave China out in the cold. Ditching the deal will be difficult, however, since it was announced on the same day -- Oct. 10 - that Norway's Statoil unveiled its own, $1.3 billion deal with Talisman involving another section of the Eagle Ford field. Given the continued interest of U.S. energy companies in China, the Administration and Congress may have to tough out any instinct to scuttle the CNOOC project.

IEA Bumps Up Oil Demand Forecast for 2010, 2011. The Paris-based International Energy Agency lent credence to those who believe that the global economy is slowly recovering with its much-watched oil report. The agency said increased demand in both developing and  industrialized countries means the world will use 86.9 million barrels a day this year, 300,000 barrels a day higher than previously forecast, and a full 1.5 million barrels a day more than last year's recessionary pullback. Next year, the IEA predicts, demand will rise another 1.3 million barrels a day. What does this mean? Not lower gasoline prices at the pump, that's for sure. Possibly, however, that the record inventories of oil around the world will start falling, and put a floor under what this year has been a volatile market. Reports by Deutsche Bank, France's Total and a couple of think tanks have foreseen comparatively high oil prices headed into the middle of the decade, before falling again, and this could be the start of that climb.

Oil: another target in the Afghan war. Militants linked to the Taliban have spent much of the last 10 days or so blowing up NATO oil and fuel tankers plying routes from Pakistan into Afghanistan. Today there was another attack in the Khyber Pass leading from the Pakistani city of Peshawar into eastern Afghanistan near Jalalabad, where two died in an attack on a NATO fuel truck. It is a time-tested strategy -- war combatants have been targeting each other's fuel supplies ever since Winston Churchill triggered the age of strategic oil just before the outbreak of World War I. Over at Wired's Danger Room blog, Katie Drummond writes of a three-mile-long jam of NATO fuel trucks on the very same route (the piece includes must-see satellite images of the bottleneck by DigitalGlobe).

Moratorium lifted in the Gulf of Mexico. Taking no chances with control of Congress on the line in Washington, President Barack Obama lifted a moratorium on drilling in the Gulf of Mexico more than a month before scheduled. Six months after five million barrels began spilling into the Gulf from BP's Macondo well, the administration said that oil companies again can drill in both  shallow and deep water, though under a tighter regulation regime, and with more surprise inspections. At Investing Daily, Jim Fink calls it Obama's "October Surprise." But Obama was wrong if he thought the move would silence the hecklers. Over at the State Column, a still-dissatisfied Louisiana Gov. Bobby Jindal took a swipe at Obama and his "harsh," "job-killing," "arbitrary," and "capricious" decisions regarding the Gulf.

For the Chinese National Offshore Oil Co., otherwise known as CNOOC, the summer of 2005 must seem like ages ago. That's when the entirety of the U.S. foreign policy apparatus, the state of California and all good American patriots arose in unison and said no, a Chinese company could not buy the highly important strategic U.S. asset known as Unocal. So it was that Chevron swallowed Unocal, and CNOOC (pronounced Shnoss) and other Chinese companies went on to acquisitions elsewhere in the world.

Over the weekend, CNOOC closed a $1.1 billion deal to help finance Chesapeake Energy's enormous gamble on shale oil and gas drilling, the big new rush in the energy industry. Specifically, the money will go for Chesapeake's shale oil play called Eagle Ford, in south Texas.

Has anyone heard a peep from the anti-foreign investment crowd this time around? Not me.

Read on

In February 1989, Soviet troops withdrew from Afghanistan after a decade-long U.S.-backed rebellion in the country. But already the United States was greatly reducing spending in Afghanistan and Pakistan, the staging ground for the arming of mujahideen guerrillas. President George H.W. Bush ordered the Central Intelligence Agency to stop sending agents into Afghanistan. Even as the Taliban was born in 1994, taking power in Kabul two years later, the United States remained aloof. We know what happened next.

Today, my FP colleague Dan Drezner in effect suggests a similar U.S. path in former Soviet Central Asia and the Caucasus. Responding to an essay I wrote for the New Republic, Drezner argues that the region was perhaps once a U.S. strategic interest, but that those days are over. The United States should not fight for its place: "There are a lot of regions in the world where I think a robust U.S. presence is a good idea. Central Asia is no longer one of them," he writes.

Read on

Energy alarmism is on the rise again in the United States. This time, the looming phantom is not peak oil, but the danger of the United States falling behind in alternative energy development. Reprising a role it has played well in trade circles for years, China is a primary culprit. Beijing is accused of illegally subsidizing its clean-energy industry, most recently by the United Steelworkers in a suit filed with the U.S. Trade Representative a few weeks ago. Businesses, clean energy advocates and the U.S. government have make China a focus of attack.

Last Thursday, General Electric CEO Jeff Immelt sounded off on what he calls Washington's "stupid" energy policy, warning that, absent more support for nuclear power, wind, and smart grid technology, the country will risk surrendering its lead in energy innovation to the Chinese. On Capitol Hill, Democratic congressman Ed Markey of Massachusetts has tirelessly urged the country to catch up in the "Global Clean Energy Race."

Read on

At graduate school, a professor of mine voiced a strong distaste for Steven Rattner, the New York Times' young chief economics reporter, based in Washington. This professor, an adjunct who worked at the World Bank, thought Rattner just didn't get economics; he advised us to rely instead on The Wall Street Journal. Soon after, Rattner left the Times for Wall Street, becoming a billionaire in the employ of the investment bank Lazard Frères (now Lazard), an influential voice in Democratic politics, and generally a guy with serious connections. Last year, President Barack Obama, beset with crises domestic and foreign, asked Rattner to figure out what to do about America's failing car industry. So it is that this week, we get Rattner's memoir of the car company rescue, Overhaul: An Insider's Account of the Obama Administration's Emergency Rescue of the Auto Industry.

Rattner is getting serious attention. Tom Braithwaite at the Financial Times interviewed him. Jonathan Cohn at The New Republic interviewed him. Holman Jenkins, a writer for The Journal‘s editorial page, didn't praise the book, but did offer free publicity while using it as a platform for yet another swipe at unions and mileage-efficient cars.

Read on

Macondo well to be "declared dead" this Sunday. Five months after a blow-out caused 4.9 million barrels of oil to spill into the Gulf of Mexico, the Macondo well is on track to be permanently sealed off by Sunday, according to National Incident Commander Thad Allen. On Thursday the relief well, which BP has been drilling since May 2, finally intersected with the blown-out well where it meets the oil reservoir some 2.5 miles below the Gulf's surface. Cement and heavy drilling mud are now being pumped down the relief well to kill the Macondo well once and for all. As the well is sealed, BP expects to scale back its spill response, a sign that cheered investors and ratings agencies on Thursday. Meanwhile, embattled BP CEO Tony Hayward, who will be stepping down from the post on October 1, made his first public appearance in weeks on Wednesday when he testified before a U.K. parliamentary committee. One week after BP published a report on the causes of the Gulf oil spill, Hayward told the committee that the company had exhibited "a lack of rigor and a lack of oversight of contractors," admitting that there had been a level of industry "complacency" towards offshore drilling risks prior to the accident.

China's coal and carbon conundrum. As Europe takes steps to scale back its coal usage, China remains as dependent as ever on black diamonds to fuel its rapid economic growth: The International Energy Agency has predicted that Chinese coal usage will more than double by 2050. After IEA executive director Nobuo Tanaka outlined this week that China's adoption of carbon capture and sequestration technology would be crucial to combating climate change, Elisabeth Rosenthal at the New York Times Green blog describes the challenge of making this adoption happen. Carbon sequestration is still an expensive technology, and it's not likely that China will be willing to embrace it on the massive scale needed to reduce its carbon emissions, unless it has outside investment. Beijing is already facing huge problems of meeting growth and energy efficiency goals at the same time, but given that it has poured $1.5 billion into green technologies, including $300 million for electric cars, attempts to mitigate the effects of its primary energy source may not be too far off.

A new use for those old oil wells. While the Interior Department on Wednesday ordered all non-producing oil wells in the Gulf to be permanently plugged, these wells might prove to be a new business opportunity for carbon capturing technology. BP and Shell may begin storing carbon dioxide by pumping the greenhouse gas into old oil wells in the North Sea, which could net them a sizeable profit as they work to extract the remaining oil in these wells. Though the costs of capturing, transporting, and pumping carbon dioxide into the wells remain high, turning older oilfields into CO2 storage sites could be a viable means of reducing carbon emissions.

As if the oil wasn't enough... Khalid al-Falih, the head of Saudi Aramco, revealed this week that Saudi Arabia could hold massive reserves of unconventional gas, totaling in the trillions of cubic feet. This is good news for the kingdom, which has lately been pouring more money into gas development than into oil, in a bid to satisfy its rapidly growing domestic energy demand. Burning oil for power generation is expensive and polluting, and a shift to natural gas-fired power plants would free up more oil for export, where profit margins are higher. However, developing the unconventional gas reserves poses new challenges; "fracking," the procedure used to access shale gas in the United States, requires large amounts of water -- clearly a problem for a country where water may be more valuable than oil. Aramco says it is working with the major oil companies to look at alternative extracting solutions.

The West's geothermal boom. Clean, renewable, and reliable, geothermal energy seems to be the perfect green energy source, but it has usually been difficult to develop due to the costs of locating geothermal resources on a commercially viable scale. However, technological advancements and government funding are giving geothermal energy a boost in the American West. Geothermal producers have been using such methods as aerial mapping and reflection seismology -- which uses man-made vibrations to map out geothermal resources underground -- to reduce exploration and development costs. At the same time, millions of dollars in federal grants towards renewable energy development, as well as state renewable portfolio standards, are suddenly making geothermal energy an attractive alternative in the West, where the U.S. Geological Survey estimates that there could be 30,000 megawatts of untapped geothermal power. Having proved itself in Iceland, geothermal energy could soon become a major electricity source for Nevada, Utah, and California.

Oil slips on lagging economic indicators. After topping $77 earlier this week, oil prices began a long slide, closing the week at $73.66 on Friday in New York. Crude saw a 3.7 percent loss for the week, the biggest weekly decline since mid-August and reaching its lowest price so far this month. Earlier in the week, pipeline operator Enbridge Energy reopened a major pipeline from Canada to the U.S., releasing tension in the markets that had helped push prices up last week after a leak near Chicago forced the pipeline's shutdown. Rising U.S. stocks and a falling dollar kept crude above $75 until Thursday, but continued high U.S. oil inventories and reports showing a drop in consumer confidence (indicating a negative economic outlook) contributed to a fall in prices towards the end of the week. Analysts continue to forecast oil in the $70 to $80 range, with Credit Suisse revising its estimates for 2011 prices down from $80 a barrel to $72.50.