What is with superheroes and fission: No film is bigger this summer than the latest Batman offering, The Dark Knight Rises. While taking in the film, we couldn't help but notice that clean energy is a central plot point -- specifically, a nuclear fusion reactor that Bruce Wayne, Batman's billionaire alter ego, builds to power his beloved Gotham City. While Wayne regards nuclear fusion as the key to clean, lasting energy for all, villains see its potential for big, city-destroying explosions.
This isn't the first time Hollywood has weighed in on the upside and downside of nuclear fusion. In the 2004 film Spiderman 2, the brilliant-scientist-turned-evil-genius Doctor Octopus displays an obsession with creating a stable fusion reaction, hence threatening the safety of Spiderman's (Tobey Maguire's) New York. Then there is Iron Man. In two films, Robert Downie Jr. powers a technological-wonder-suit with a personal-sized fusion reactor of his own design. According to Iron Man, his reactor produces 3000 megawatts -- enough to light up a few million homes. We know these characters belong in science fiction, yet how far off are their ideas from scientific reality?
The best-known nuclear energy process is fission, in which atomic nuclei are split into fragments. That is behind our nuclear reactors, in addition to the weapon that the U.S. is attempting to stop Iran from acquiring. With fusion, by contrast, nuclei fuse together and form a heavier nucleus, giving off far vaster amounts of energy as they do so. Fusion is what powers the sun (Doctor Octopus is only slightly exaggerating when he dreams of possessing "the power of the sun in the palm of my hand."). This has long enamored scientists, because fusion reactors emit less radiation and waste than fission. But fusion reactions require incredibly high temperatures, vast energy inputs, and complex pressurization techniques, leaving them still in the experimentation stage. Yet, scientists are getting closer. This month, the National Ignition Facility in Livermore, California, fired a record-setting 500 trillion watts of energy in a single burst -- over a thousand times more energy than the entire United States uses at any given moment. If Livermore scientists have their way, such laser bursts will eventually drive fusion reactions -- and a major of the supply of clean energy.
Still, that does not explain why superhero films are so hung up on fusion. By way of explanation, perhaps we can begin with their fitting grandiosity in scale and cost -- the National Ignition Facility alone cost over $1 billion to build, the kind of big money that Bruce Wayne and Iron Man alter-ego Tony Stark relish throwing around. In addition, fusion represents a chance at a brighter future, something our heroes like to dream about while they battle the dark present. Safe civilian nuclear energy usage is also about turning the potentially destructive -- nuclear power -- into the productive. Often haunted by their own violent pasts, superheroes can relate to this. (So can studios, which usually hanker for a warm ending.)
Of course, it's the downside of nuclear fusion that titillates the bad-guys. Some green energy advocates protest funding for nuclear fusion research, arguing that no form of nuclear energy can really be trusted. In a post-Fukushima world, those fears are more real than ever, and the evil plans of super-villains in The Dark Knight Rises reflect that. Yet we know that real-world Batman admirers in the laboratory will not stop attempting to realize his vision of super-charged nuclear-power.
Go to the Jump for the rest of the Wrap.
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Is it rational to fear resource war with China a decade or two down the road, when it surpasses the size of the U.S. economy, its appetites surge for metals, elements and energy, and its blue-water navy has grown in capability to secure large swaths of distant sea?
Yes, if you embrace the mainstream conviction that the pace of Chinese growth and call on finite resources are incompatible with consumption patterns in the U.S. and Europe. Under this scenario, the West and China are on a collision course: Starting in the next decade, one or the other must either begin to adapt to much-shrunken expectations, invent an entirely new set of fundamental fuels and high-tech building materials, or simply put up their dukes and fight it out.
But what if a new strain of thinking is correct, and we are entering a world not of fossil fuel scarcity, but of a surprising abundance of oil? The spreaders of this new narrative are tallying up production projections in a slew of new and long-known oil patches around the world -- Canada's oil sands; U.S. shale oil and deepwater Gulf of Mexico; deepwater Brazil; the Equatorial Margin of eastern South America; deepwater Angola; offshore Kenya; the Russian Arctic; and elsewhere (such as the Canary Island, pictured above).
They are suggesting by implication that, if all that pans out, the West and China will not be on the path of a smashup; rather, they will be having a much different conversation, which would center on a question of choice:
Until now, the push for clean-tech has been partly driven by a belief that oil is running out -- we had to develop new sources of energy, and fast, or go back to the forest. Now that there was no impending age of darkness, the U.S., China and others would have to decide on its merits -- do they want a cleaner world, one that is not heating up inexorably and sending seawater over the major cities and swallowing up island nations?
The reason they would have to hold such a conversation is that the corollary of this narrative is a wholesale swamping of clean-tech -- oil prices would probably drop so low as to eliminate the competitive economics of virtually any alternative energy source.
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The geopolitics of bananas, China and over-heated rhetoric: Are oil rigs a strategic weapon? The answer is apparently yes if you are China, which has joined Russia in the league of large nations carrying big petro-spears. The South and East China seas have long been a source of friction between China and its neighbors for reasons of Beijing's naval aspirations, the promise of oil and gas riches underlying the waters, plus the occasional kerfuffle over fish. For a month, China and the Philippines have been in a standoff over a fishing ground called Scarborough Shoal. But now the gloves are off. China has begun to block imports of Philippine bananas, and to suspend tourism in the Philippines. On Monday, an anchor on China's state-run CCTV went so far as to say -- twice -- that the Philippines is in fact a Chinese territorial possession, reports Time's Hannah Beech. Two days later, we heard from Wang Yilin, chairman of the state-owned oil company Cnooc, speaking on the usually staid occasion of the launch of new oil drilling, in this case in the South China Sea off the coast of Hong Kong. "Large deep-water drilling rigs are our mobile national territory and strategic weapon for promoting the development of the country's offshore oil industry," Wang said, according to the state news agency Xinhua. Erica Downs, the China oil watcher at the Brookings Institution, told the Wall Street Journal's China Real Time blog that she suspects that Wang is addressing either domestic political or financial audiences -- seeking favor or more financial support. Look for more such tantrums given the numerous political flaps going on simultaneously in China, along with the scheduled turnover of national leaders.
Abundant oil, and the hope of serendipity: Is the problem with the oil abundance narrative -- the talk that the U.S. is on the cusp of energy independence -- that it relies too heavily on everything going right? Perhaps. Frank Verrastro -- who runs the energy program at the Center for Security and International Studies, and was formerly with Pennzoil, and before that in numerous federal government positions -- thinks that a multitude (and probably too many) stars need to line up for the abundance folks to have their way. There is much oil below ground to be sure, specifically in the shale oil of North Dakota and Texas. The hangups come in extracting it -- little matters such as the cost of production, the impact on water, and the price at which the oil can be sold. "If you are just doing energy resource development balls to the wall, then can you do this because the resource is there? Absolutely," says Verrastro -- as long as you ignore project economics, financing, government regulation, environmental concerns, required infrastructure and rates of return. John Hofmeister, the former president of Shell USA and author of Why We Hate the Oil Companies, also thinks the U.S. oil abundance narrative is optimistic. As field development proceeds, oil production will level off at some point, and not grow as far as the eye can see, Hofmeister told me. Shale oil and gas development will have to slow as it gets closer to population centers, he said. Says Verrastro: "[The forecasts are] way premature. We are in chapter 1, page 10, and some people have us at 18 million barrels by 2020."
For the Sudanese, first it was oil and now it is survival: Sudan broke into two nations last July, and since then has spent much time in virtual war with itself. Apart from the usual ethnic and religious rationale, there are economic reasons: Both states -- Sudan and South Sudan -- are in deep trouble. Before the breakup, Sudan got about 90 percent of its revenue from oil exports. In the first quarter of 2011, the country had a trade surplus of $1.7 billion, Reuters reports; but in the same quarter this year, it has a trade deficit of $540 million. Against these data, opposition leader Hassan al-Turabi is forecasting doom for the regime of his former protégé, Sudan President Omar Hassan al-Bashir. "The economic crisis has intensified and this is very dangerous. If the hungry go out in a revolution, they will break and destroy," Turabi said in the Reuters report. " ... I expect it won't take us long now." South Sudan, which received most of the oilfields in last year's national divorce, cut off oil production in January after accusing the north of stealing shipments. So, in order to stave off collapse, it has been borrowing abroad, reports Bloomberg. South Sudan secured a $100 million line of credit from Qatar National Bank, $500 million from an unidentified benefactor, and expects money from China as well. Will reason prevail? Last year, we thought it already had.
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When one hears of trouble in the South China Sea, it is almost always to do with resources -- oil, gas, rare earth elements. That and fish. Which means that harmony would break out if a fair division of the raw materials and delicacies could be found among the various Asian states, right? According to experts on the overlapping disputes, the answer may be no.
The U.S. and Philippines are conducting war games in the Filipino section of the South China Sea (pictured above), while the Philippines and China continue a standoff over fishing rights in a place called the Scarborough Shoal. Meanwhile, the Philippines has announced an enlarged estimate of gas reserves in the Reed Bank, a disputed area of the sea near the island of Palawan.
Collectively, this activity raises the temperature among China and its neighbors, not to mention the U.S., as I write at EnergyWire. While relatively little oil or gas has been proven as yet in the South China Sea, Bo Kong, a professor at Johns Hopkins University, says that high oil prices and technological advances raise the chance for strains. "Because of technological breakthroughs, we have a much better idea where the hydrocarbons are," Bo told me. "So I think we will see more activity, and there will be more friction."
That may be the case, says Kang Wu, a senior fellow at the East-West Center in Honolulu. After all, the U.S. Geological Survey estimates that some 20 billion barrels of oil underlie the South China Sea. Yet Kang also sees hydrocarbons and fish as a "pretext" for discord. The Philippines, Taiwan, China, Vietnam and the others, Kang says, would quarrel regardless of the presence of oil or fish.
It's all about the age-old issue of territory -- no one wants to lose any, and if the ownership of a particular spit of land is ambiguous, all want that too. Kang:
The South China Sea problem is a territorial, national sovereignty and security issue. Even if there is no economic benefit, even if there is no oil or gas, they will still challenge each other. No one is likely to give up their territorial claims.
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Whatever happens, an enduring U.S. naval fleet: Evidence is mounting that the U.S. will maintain its global naval footprint regardless of any shift in energy or geopolitics: Despite the shrinkage or disappearance of primary raisons d'etre, the Navy obtains other rationales for its current size. Here at FP, Robert Farley suggests that the Obama Administration regards the Navy as an organic tool for sustaining long-term geostrategic balance with China (pictured above, the nuclear-powered aircraft carrier USS Carl Vinson, docked in Hong Kong.). That explains the administration's shift of U.S. naval attention to Asia.
But what about the Carter Doctrine, under which the U.S. treats the Persian Gulf as covetously as if it were located off U.S. shores. Given the fresh belief that the U.S. is on the verge of virtual oil-independence, isn't this the moment that some folks have long awaited -- when the U.S. no longer must protect Saudi Arabia, and can save trillions of dollars in protective military spending underlying oil prices? The answer is no, says retired Gen. Chuck Wald, former deputy commander of the U.S. European Command. "If it had not been for oil and our dependence on oil, which started with Churchill, we would still feel a need to have a presence in the Middle East -- because of Israel," Wald told me. He said:
It is not an ‘either-or' situation, the way that some people say, that if it were not for oil we wouldn't have to worry about defending the sea lanes and all that. If you really look at one of the most interesting threats to sea lanes, it is the pirates off the coast of east Africa, and it has nothing to do with oil. ... [Whatever happens with oil] we are still going to have a growing interdependency based on commerce. As I used to say when I taught at the National War College, when the world has a problem with things globally, they like to call 1-800-USNavy.
I spoke with Wald by phone prior to his appearance at a Deloitte-sponsored event in Washington titled, "The Realities of Energy Security through Supply Independence." He feels strongly that the U.S. needs to build up energy self-sufficiency in order to have a more independent foreign policy. But he simply doesn't think that, while becoming more independent, the U.S. role abroad will lessen. Iran, Wald said, "is playing us like a drum right now from the standpoint of foreign policy based on the pressure they can put on us on the concern about [oil supply] disruption -- this is a bad situation we put ourselves in." Wald:
We are in a situation that doesn't get any better, even though we are [headed toward] an interestingly bright future energy-wise because of fracking and potential imports from Canada and potential technology breakthroughs in the Gulf of Mexico.
Go to the Jump for more of the Wrap.
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The mysterious psychology of price: The well-established wisdom is that consumers respond to psychological price points -- offer your product at $9.99, and shoppers are far more likely to buy it than at just a penny more, or $10. So it has been with gasoline: In 2008, American car-buyers fled gas-guzzling vehicles when fuel crossed the $4-a-gallon price point, bought more fuel-efficient models, and generally drove much less. This year, the same seems to have occurred, as I wrote -- with gasoline again approaching an average of $4 a gallon, we see far greater sales of fuel-efficient vehicles. Yet is it so simple? Perhaps not, says Paul Hunt, president of Pricing Solutions, a Toronto-based firm that advises companies on how to price their products. Hunt told me that consumers may only seem to be responding more negatively to $4 than to $3.99 a gallon, but that something else may actually be going on in their collective heads. It is not the per-gallon rate that sets a motorist's hair on fire, Hunt said. It is the $66.81 total price of filling up.
But when it comes to buying, are gasoline and shoes truly such different creatures? Surely, I asked Hunt, the sight of $4 on the gasoline station signboard is enough to drive off immediately to the Kia showroom. Only in the big picture, he replied. "People really look at the total fuel bill and make sure they can go to a restaurant once a week rather than pay for fuel," he said.
Maybe in 2008 it looked like people were making a decision because of $4 gas, but actually it was the total price that influenced them. [They are thinking], ‘It cost me $85 to fill up, and I want to save $10 a week.' They do the math.
Furthermore, the price has to stick. Even that $85 gas bill won't have a lasting impact unless a driver thinks that will be the price for a long time to come.
In a curious footnote, Hunt said that although price-per-gallon is not the pivotal fact on the way up, it can be on the way down. Motorists watch the signboard for a price that to them signifies "cheap." Then "they go hit the pumps," Hunt told me. "When prices are moving down, people have something that attracts them."
Go to the Jump for more of the Wrap.
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Alexandros Petersen is Advisor with the European Energy Security Initiative at the Woodrow Wilson International Center for Scholars in Washington, DC, and the author of The World Island: Eurasian Geopolitics and the Fate of the West. This post is the result of a recent visit to China and Central Asia.
On a recent visit to China, Turkmenistan President Gurbanguly Berdymukhamedov smiled broadly as he was awarded the title of Emeritus Professor at Peking University. Yet his satisfaction was probably less the academic distinction than a lucrative energy export deal he had signed earlier that day -- 65 billion cubic meters of natural gas, roughly half of China's 2010 gas consumption, would eventually flow from Turkmenistan's massive fields to China's seemingly insatiable consumers.
This end-of-year agreement prompted some observers to proclaim that gas-rich Turkmenistan had achieved a coup against regional political powerhouse Russia: For years, Moscow has been negotiating a gas export deal with Beijing, but what would it do now that China was receiving so much supply from Turkmenistan? Yet that analysis is backwards: Rather than a Turkmen power play, the natural gas deal was a geopolitical chess move by Beijing, whose fundamental interest in the region is both raw resources, and raw power. While the West is focused on constraining China's actions in the Asia-Pacific, Beijing is capitalizing on vast space for influence to its west in Central Asia.
A key outcome of President Barack Obama's Asia tour is an apparent tactical withdrawal by China on drilling rights in the South China Sea. This does not mean that Vietnam, the Philippines and others in the sea can proceed with abandon, but -- at least for now -- Chinese naval ships may be less likely to interrupt oil and gas exploration. Locally there is some elation, with The Times of India calling it a "climbdown" by China.
The issue of who owns what waters in the East China and South China seas is wrapped up in both fortune and stature -- though the seas are relatively unexplored, some experts believe many billions of oil and gas lie underneath; in addition, China regards sovereignty over the waters as a sign of its great-power status. So over the last two years, numerous diplomatic and military confrontations have occurred between China and the oil-drilling plans of its neighbors. In 2010, it was particularly unseemly to observe Japan reduced to effective groveling after a confrontation with China over rare-earth minerals.
China being much larger, some of its intimidated neighbors have welcomed a stepped-up U.S. presence as an equalizer. That has played into narratives unfolding in the United States -- angst over a widely perceived national decline, along with Obama's difficult re-election battle.
All of these layers were on display Saturday, when 16 of 18 leaders gathered in Bali for an Asian summit one after another mustered their nerve and told Chinese Premier Wen Jiabao of their worry over the security of the waters off their shores. Obama expressed the same concern in the forum.
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Hydrocarbon squabble in the Mediterranean ... After the escalating brinksmanship on the South China Sea (more on that below), the Turks and the Greek Cypriots are facing off over natural gas drilling in the Mediterranean. There is grist for this sensitivity over the potential undersea hydrocarbons in the Levant Basin -- drillers have discovered commercial volumes of gas just south of the drilling area offshore from Israel. So first we had the Greek south of Cyprus invite the U.S. company Noble Energy to drill off its shores. Then a competing Turkish vessel showed up with an oil seismic research ship (pictured above), escorted by the Turkish navy and air force. Both sides are pounding their chests and emitting threatening grunts. Where will this tough-talk go? While there is plenty of gas for everyone -- the basin is far flung -- that doesn't mean the taunts will halt. Look for these waters to be another hydrocarbon flashpoint.
Read on to the jump
The Philippines is engaged in a muscle-flexing row with China over oil drilling in the South China Sea, writes Andy Higgins at the Washington Post. So are India and Vietnam, reports Ishaan Thardoor at Time, who wonders whether war is possible between China and India.
The South China Sea is one of the world's energy flashpoints, and it's all about who has the rights to explore for a suspected treasure trove of undersea oil and gas. China asserts a historical claim to nearly the entirety of the South and East China seas, but faces competition from Brunei, Japan, Malaysia, the Philippines, Taiwan and Vietnam (Vietnamese protestors pictured above). No one knows whether there actually is a motherlode of hydrocarbons under the seabed of this island-strewn region. But there has been sufficient evidence to create a crisis of oil envy. China's rise as a global power is embedded in the friction.
This is not new nor surprising. In Monsoon, Bob Kaplan's fascinating analysis of this hub of geopolitical tectonic plates, we read of the escalating naval rivalry in the South China Sea, and a possible future conflict in the Indian Ocean. Of Beijing's aims in building up a blue-water naval force, Kaplan writes:
Above all, China's demand for energy motivates both its foreign policy and national security policy; the need for an increasing, uninterrupted flow of energy to sustain its dramatic economic growth. Despite its increasing emphasis on coal, biomass, nuclear power, and other alternatives, China requires ever more oil and natural gas. ... Concurrently, China officials see this very need for imported petroleum products as a pressure point that a future adversary might exploit. ... If you governed China, with the responsibility of lifting hundreds of millions of Chinese into an energy-ravenous, middle-class lifestyle, you, too, would seek a credible navy in order to protect your merchant fleet across the Indian Ocean and the western Pacific.
Indeed in a report issued yesterday, the U.S. Department of Energy reinforced other findings that China and India's relative energy appetite is soaring -- by 2035, they will account for 31 percent of world energy consumption, up from 21 percent in 2008.
But where some of the analysis goes astray is projecting too far in the future, and missing the implications of nearer-term outcomes. China is far, far away from matching the U.S. on the seas, but that matters less than one might think in the high-stakes brinksmanship under way in the South China Sea.
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As American and Chinese energy officials and scientists meet in Chicago this week, the trick for the U.S. is how to collaborate in the battery laboratory without spilling any secrets.
Two years ago, U.S. President Barack Obama and Chinese leader Hu Jintao (pictured above last January) pledged to develop energy together -- to collaborate on how to sequester the carbon emitted from big coal-fired power plants, and bring the Chinese up to speed on how to develop shale gas, in addition to cooperating on how to make better advanced batteries.
But these are not all the same thing. Carbon sequestration and shale gas are one matter -- here are areas where both countries have much stock in sharing. The battery part of the equation has been thorny from the start -- both countries have singled out batteries as the potential enabling technology of gigantic new industries and are seeking a big breakthrough that, for example, finally makes electric cars economically comparable with the internal combustion engine. So neither side is going to reveal its secrets to its chief rival.
So it is that a final agreement on how to collaborate on advanced batteries will exclude discussion of intellectual property, said Khalil Amine, a leading battery scientist at Argonne National Laboratory, where the U.S.-China meeting will be held tomorrow and Friday. "I am not going to tell anybody what I am doing to develop advanced materials because we have the opportunity of patenting them," Amine told me. Instead, the two sides for instance will try to share tools that help to characterize and diagnose problems both face in the lab, he said.
With the stakes so high, energy has grown as a flashpoint between China and numerous countries. Is this irrational alarm? One can say with certainty only that all sides appear to be exceedingly cautious and protective.
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A war against speculation: A coordinated set of acts by big oil consumers and the world's biggest crude producer is creating misery among oil traders. One is the planned injection of an impressive 60 million barrels of oil -- or about 42 days of Libya's usual exports -- over the next month onto the global market from strategic oil reserves, half of it from the United States. The second is Saudi Arabia's decision to show who is boss in OPEC by boosting its oil production to 9.5 million barrels a day, or even 10. The target of Saudi's ire is mainly Iran, which defied and embarrassed Saudi Arabia in an OPEC meeting earlier this month by helping to block the kingdom's aim of raising overall OPEC output and stemming market instability. Writing at the Financial Times, Citigroup analyst Ed Morse says Saudi ire is reflected in its wholehearted agreement with the strategic reserve release of oil. Why is all of this a war against speculation? Because, by knocking the wind out of oil prices at least for now, the twin acts reveal the bubble contained in prices even absent the Arab Spring. Over at the Wall Street Journal, Liam Denning says the lagging economy led President Barack Obama to put together a "coalition of the willing."
But is a war with a long-term victory in sight? Writing at the FT, Javier Blas says the answer is yes, and he lines up a formidible army of analysts to back up his assertion. I am not so sure. It seems to me that after awhile, oil traders will become less intimidated by the prospect that a release from the reserve will put the kabosh on their bets. They will relish the gamble. In fact a new sort of betting could emerge -- on whether the United States will pull out its petroleum reserve weapon. A sort of brinksmanship will result. In the end, the U.S. will continue to use the reserve only on rare occasions. And the players will be back in charge of the casino, pushing up and down the price of oil.
Read on to the jump
About three years ago, Georgian President Mikhail Saakashvili acted rashly and triggered a war with Russia. But Saakashvili didn't think he was rash -- the United States, he was sure, had his back. He was wrong -- the U.S. had supported Georgia as a strategic bulwark for a big oil pipeline, but that differed from going to battle with a nuclear-armed former superpower. As a result, Russia seized two regions comprising a fifth of Georgian territory, and recognized them as private nations. Since then, Saakashvili has labored with mixed results to rebuild his economy, Thomas De Waal of the Carnegie Endowment writes in a comprehensive look at Saakashvili's Georgia.
Today, Vietnam is conducting live-fire drills in the South China Sea in a show that it won't be intimidated in a push-and-shove dispute with China over waters suspected of containing significant oil reserves. Over the weekend, Hanoi urged its former enemy -- the United States -- to help pull the row back from the flashpoint, reports the Financial Times' Ben Bland. In this case, the U.S. will oblige -- to a degree.
Last Friday, the U.S. State Department said it is "troubled" by the rise in tensions. Though for the last year the U.S. has met a request by southeast Asian nations to resist its instincts to defend them, as U.S. Secretary of State Hillary Clinton last summer suggested the nation was prepared to do, one can imagine a sturdy U.S. response in the Vietnam situation. Not to say that President Barack Obama would dispatch an aircraft carrier square into the disputed zone -- the U.S. will stay well back from rattling its war sword. But there could be stern new warnings from Clinton among other steps, under the presumption that Beijing will temper its behavior accordingly.
Ultimately both regions are vulnerable -- the Caucasus to Moscow, and the southeast Asian nations of the South China Sea to Beijing -- and must more or less fend for themselves. That is just one factor separating the 1990s from now. The South China Sea events demonstrate that, in a fight, China cannot rely on perceptions of its ostensible place in the new age to smooth its way out of potential confrontation. In the Caucasus, the U.S. is pragmatically prepared for all the world to observe its limits. Not so much in the South China Sea, where far more is at stake. Yet at some point, China will do more than just hang back.
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Members of OPEC will agree to increase their official production today, but that won't do much to lower prices -- the plenitude of energy-related stress across the globe underscores more than ever how power has dispersed out of OPEC's hands. It's not only the civil war in Libya, and the loss of its 1.4 million barrels a day of oil exports, or the chaos in Yemen. From the South China Sea to Alberta, Canada, tempers are flared over the control and movement of oil.
The Vietnamese, the Filipinos and the Japanese are vexed over unneighborly behavior by China, which most recently severed the seismic cables of an oil exploration ship, and fired at fishing trawlers in the South China Sea. For their part, some Chinese call their neighbors plunderers and the U.S. a hegemonist. For now, southeast Asia is more worried about U.S.-Chinese friction over these confrontations than winning the debate of the moment with Beijing, and so the Obama administration has relaxed its posture of last year, when Secretary of State Hillary Clinton declared the dispute a U.S. strategic interest. I exchanged emails on this with Bonnie Glaser, a China expert at the Center for Strategic and International Studies. "I think that if Chinese intimidation of oil exploration activities continues, the U.S. will have to take a stronger stand -- especially if Exxon is involved. But the Obama administration hopes it doesn't come to that," Glaser said.
Fighting continues in Sudan, this time in a contest over the breakaway south's oil, writes Jeffrey Gettleman at the New York Times. Southern Sudan is set to become independent next month, and Sudan President Omar Hassan al-Bashir has taken a hostage -- the entire town of Abyei -- as leverage in order to obtain more oil in the split-up. The south produces about 500,000 barrels of oil a day, and though there appears to be little chance of renewed full-out war as long as the south slices off some of that for the north, there is plenty of violence for now.
In western Pakistan, the Taliban yesterday again blew up U.S. fuel supply tankers destined for Afghanistan (pictured above). Such acts do not change the global picture, but illustrate the Taliban's understanding of the centrality of oil in running the war.
A more peaceful but still hardball struggle has gone on a long time between independent-minded Kurdistan and the central Iraqi government over control of natural gas in Kurdistan. There could be a deal yet as Prime Minister Nuri al-Maliki relies on Kurdish political support, writes Tamsin Carlisle at the National, but not very soon. Meanwhile Canada is grappling with the U.S. over its desire to send the bitumen from its Alberta oil sands to Gulf of Mexico refineries.
And all this excludes the impact of natural disasters, such as we may see with the summer hurricane season. So what OPEC decides will help to bump prices one way or the other, but it may not be the main determinant even today.
Update: We are getting a jump in oil prices this morning after OPEC's announced decision to punt on Saudi's proposed increase in production, and keep output where it is. Traders are engaging in opportunistic buying. This should last for a day or two until the reality of an oil glut settles in again, along with the multitude of other factors influencing prices.
The dictator's playbook: You are a cosseted dictator in the world's most strategic place -- the hydrocarbon engine of the global economy -- but then a vegetable-seller sets himself on fire, and your life is suddenly upside down. How do you manage in this state of upheaval known as the Arab Spring? The response of the Middle East's king of kings -- Saudi Arabia's Abdullah -- is an attempt to stabilize not just himself, but the entire edifice of long-time U.S.-aligned Sunni autocrats who, among other things, worked with Washington to make peace with Israel, Neil MacFarquhar reports in the New York Times. The elderly Abdullah has sought to ease out Yemeni President Ali Abdullah Saleh (street scene in Sana'a pictured above), shore up the Bahraini ruling family with both troops and cash, stabilize Egypt with some $4 billion, and fundamentally undermine Iran, which he sees as fomenting the trouble for example in Bahrain. Combined, Abdullah's actions are pro-monarchy, and self-serving -- the Saud family believes it is personally entitled to the country's wealth, and cannot imagine a world in which it does not rule that stretch of oil-rich sand.
We understand Abdullah -- who wants to lose power and fortune? But we also notice his agile hybridization of the dictator's playbook, the limited number of options open to autocrats whose people pour into the streets. Generally, an autocrat has two alternatives, which for ease of clarity we call the Karimov and Shevardnadze plays. The latter refers to the decision by Georgia's Eduard Shevardnadze to step down in the face of massive 2003 protests in his country; the former suggests the calculus of Uzbekistan's Islam Karimov, who in 2005 gunned down hundreds of protesters in the city of Andijan. In trying to persuade Saleh to leave, Abdullah is invoking Shevardnadze; in bolstering Bahrain's al-Khalifa family, he is giving voice to his inner Karimov.
Notwithstanding the cleverness, we see the Karimov play shining through in Abdullah's calculus, because what is this all about but reinforcing the hold of the Saud family itself?
Flashpoint alert: Oil rush on the South China Sea Recall that last fall, China and Japan went to blows over an errant fisherman who rammed a Japanese naval cutter in the disputed, oil-rich waters of the East China Sea. In cutting off rare earth elements to Japan, China signaled yet again that it takes its ostensible rights to both the East and South China seas very seriously. Therefore, we ought to pay attention now that Vietnam and the Philippines are getting set to drill for oil in South China Sea waters claimed by Beijing. Bloomberg reports that Vietnam's oil partner, Talisman Energy, plans to begin drilling next year in the South China Sea; ExxonMobil intends to drill an exploratory well off of Vietnam's waters later this year; and the Philippines, with whom the United States has a defense treaty, plans to do similar exploration in the South China Sea. China's neighbors assert that often these claims are much closer to their own shores than to China's, but China has regularly dispatched ships to disrupt such oil work. Look for more such incidents in coming months.
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Steve LeVine is the author of The Oil and the Glory and a longtime foreign correspondent.