Thursday, December 25, 2008
WHY IN GOD's NAME DID OIL REACH $147.27 ON JULY 11, 2008?!!
And, another question that is disturbing me is: what were the factors that led to the price of $147.27/barrel in the first place? Or, was the $147.27 an artificially bloated price? Oh, how dumb of me! Of course, it was bloated like hell! Okay, but how was it artificially inflated to that level? What were the manipulating factors that caused it?
It may be mentioned here that there was a well known CEO who said around that time, when oil prices were riding the crests, that oil prices were high simply based on demand and supply relationship, that there was no hanky panky, and that oil traders played no role in pushing the floor price artificially. You know who that CEO was? He was none other than the CEO of a major oil producer - BP!!
So, can the 'great', 'intelligent' CEO of BP please explain why the oil prices are languishing now? Has the demand suddenly dropped so much - more than 70% - that the crude prices went crashing? Was he, when he tried to justify the upwardly moving prices, trying to create some sort of smoke screen, or is he really an idiot of highest order who did not have the requisite intellectual ability to fathom the actual reason?
Nah, chances of him being a classic idiot are remote given that he rose to the position of CEO. Surely, it doesn't seem that BP would have had a corporate goal to create a Guinness Book of Records of sorts by becoming the first oil company of that stature to install a super idiot as CEO.
Anyway, one thing is certain: the rise of oil to $147.27 and then fall to below $40 is definitely not result of natural market forces. Both these phenonmenon, especially, the rise to $140+ smack of something mysterious, surreptitious, insidious and befitting cloak-and-dagger operations.
So, what caused the oil prices to get skyrocketed upwards all the way to $147.27? Was there a high level international conspiracy? Who would be the players in such a conspiracy? There is no doubt that the biggest gainers of high crude prices were the OPEC, and other major oil producing nations, like, Russia, Venezuela and, of course, the oil companies.
Is it possible, then, that OPEC or some non-OPEC countries were in cahoots with oil companies to somehow enlist the help of oil traders in pushing up the prices. In all of this how can one ignore the role of the media - print or TV - which kept up the hysteria as if oil is going to run out soon, and it added to the maddening frenzy that besieged the world oil trade. Whatever it was, there certainly was something utterly fishy that happened at a very high level in pushing the oil prices to $147.27.
Then came the downward movement in oil prices as soon as the US financial institutions started to come down crashing like pack of cards. In view of that in Q3 of 2008, IEA made only a marginal reduction in global demand of oil in 2008 from their earlier estimates of 86.8 million barrels per day to little more than 86 million barrels. The corresponding supply figure, as per IEA, at that time was a little more than 88 million barrels per day. This clearly shows that the demand for oil was not estimated to shrink so drastically so as to warrant a drop of crude price from $147.27 to below $40.0 per barrel.
Just as the price spike to $147.27 seems very fishy, is the precipitous drop in prices also due to some fishy reason that the world doesn't know of? There is a theory that Saudi Arabia periodically causes the oil prices to drop below $50 per barrel to render the oil production projects in other countries to become economically unviable.
Let us think for a moment as to which countries will hurt most if the crude prices were to hover below $50 per barrel. Well, the countries who hurt most are Russia, Iran, Venezuela among others. Surely, US won't mind these three getting hurt economically.
So, was US part of some concerted action to engineer such a drastic drop in crude prices? One may argue that low prices would impact adversely the profits of big US oil companies who are said to be very close to the Bush administration. But then national interests always take precedence over corporate interests, never mind even if they happen to be US corporate entities. One may mention here for the record that owing to sharp drop in oil prices the OPEC countries are estimated to have cumulatively lost more than $700 billion dollars.
Whatever may be the real truth, one thing is certain - the rise of oil price per barrel to $147.27 can not be justified by any rational economic theory. In other words, the rise of prices in first half of 2008 was due to some very high level concerted operation. But who were the main actors in doing this, that is not clear at present. May be in some future time the truth will see the light of the day.
Equally intriguing is the steepness of the fall in prices. Who knows who pulled the rug from underneath the feet of the beneficiaries of high crude prices. Who is trying to cut whom is not clear, some thing very sinister of very high level can not be ruled out. Why this inference can not be dismissed aside is because the global demand for oil has certainly not contracted by more than 70 percent during the period July-end 2008.
In Nov/Dec 2008, OPEC announced cuts of 4+ million barrels per day to stem the falling crude prices. Analysts say market did not feel buoyed by these cuts, and depressing economic news continued to pummel the oil prices. The consensus among the crystal ball gazers is that oil may hit $75 per barrel only in 2nd half of 2009.
It seems a James Bond like figure may only be able to unravel the saga of rise and fall of crude prices in 2008, I am kidding. Seriously, the unprecedented rise and fall of crude prices in latter half of 2008 is something that is extremely serious and people somehow need to reach to the bottom of this story. While the world will wait eagerly for the truth to be unravelled, the immediate challenge facing the G-20 nations is to somehow reverse the recessionary situation and bring the economies back to growth mode.
When the economies look up again, the oil prices will automatically find the motivation to move upwards. Will another cycle of unprecedented rise in crude prices commence? We will have to wait and see. But before that let us hope that the global economy gets back on track soon. Amen!
Tuesday, December 23, 2008
CANADIAN OILSANDS AND ITS RELEVANCE TO USA's ENERGY STRATEGY
The apprehension gets more acute because of the choice of Secretary Energy-designate Dr. Steven Chu. The perception in the market is that Dr. Chu is a strong proponent of nuclear energy (though he has concerns about how to dispose off nuclear waste), and also a known supporter of alternative sources of energy.
But Dr. Chu's personal views about oilsands is not available in great detail; it is said that he probably doesn't hold this abundant resource, available so close to US, in very high esteem. One of the possible reasons for this is attributed to the prevailing environment related brouhaha surrounding this unconventional source of petroleum.
It is true that synthetic crude oil produced from oilsands generates more GHG as compared to conventional crude oil production, and there are concerns about the tailings management aspect of oilsands too.
But before going too much in to concerns surrounding oilsands, and what it does to the environment, it is important that we pause here for a moment or two, and concentrate on this GHG thing and its so-called contribution to global warming.
It is true that there has been some increase in global temperature in the past decade but what the general public does not get to focus on and/or get to know about, in proper detail, are the following very pertinent aspects related to global warming:
- That global warming has been taking place during last tens of decades (even when there was no oilsands, or coal based industries); that global warming is cyclical
- That Scientists have not been able to provide any convincing explanation as to why global temperatures went up cyclically in the past decades when industrialization was no where near current levels
- That scientists in the world don't know even today, or can not explain conclusively as to what is/are the real cause(s) of global warming (all that the environmentalists do is to keep shouting from the roof tops is that CO2 is the villain)
- That seabed methane release has a significant impact on global warming but scientists have not been able to offer any proper explanation on this phenomenon
- That scientists have not been able to understand and/or predict accurately the interrelationship between cooling of earth, that's taking place since the big bang event happened, and GHG effect
- That scientists are not clear how and why La Nina effect negates the so called GHG effect and allegely causes colder spell globally (average temperature of globe in 2008 was 0.3 degree celcius less than previous years, and this is attributed to La Nina effect)
- That CO2 emissions contribute at best around 5% to overall GHG scenario
- That oilsands' CO2 emission is a small component of overall global CO2 emission quantities
All I want to highlight to people is that as of present, scientists DONOT know, I repeat, the scientists DONOT know for certain what are real causes of global warming phenomenon. So, when the scientific community does not know the real causes of global warming, then why the hell they convey just a portion of the whole story (namely the GHG effect) to people and keep trumpeting about it? May be there is some agenda behind it!
Yes, CO2 may be contributing to GHG effect but it is not THE villain which it is made out to be for global warming, and by logical understanding of the aforementioned bullet points it is amply clear that oilsands is not THE villain which can potentially cause some kind of 'disaster' to this planet.
I am not a lobbyist belonging to any oil company nor am I trying to gloss over the concerns relating to GHG emissions. I am a rational thinker who does not jump on any bandwagon just because it is fashionable to do so which seems to be the case with a number of eminent people when it comes to environment. I don't see any virtue in sticking any environment related poster on my back and crying my voice hoarse about some doom and gloom scenario for this planet without having a clue as to what I am talking about.
The bullet points mentioned above do not, by any stretch of imagination, suggest that oilsands industry should abandon its technological endeavours to minimise CO2/SO2 emissions, or should not adopt better tailings management processes.
In fact, Canadian province of Alberta, which has the largest oilsands deposit in the world, has taken a giant step towards mitigation of CO2 issue by allocating $2Billion for carbon capture and sequestration. As well, the provincial government is incentivising the oilsand companies towards adopting innovative strategies for effectively managing the environment un-friendly aspects of oilsands processing.
Now, it is well known that Mr. Obama in his election rhetoric mentioned frequently that he would like US to be less and less dependent on Middle-East oil. One of the faster ways to achieve this is to get oil supplies from Canada - whether from conventional or unconventional sources. And, Canada is poised to play its part with so many of the oil companies willing to invest in oilsands industry.
One of the most vital advantages for US in expanding US-Canada oil ties is the geo-political angle. Canada is a close ally of US - militarily and otherwise - NORAD is one example of US-Canada alliance. Canada is a politically stable country, follows democratic system of governance, has a strong and unbiased judicial system, and shares a historic relationship with US. Canada is a country which US can trust and rely on in good or bad times.
Guided by these premises only some Canadian oil & gas companies like, Encana, Husky have formed strategic partnership with US oil companies to process the bitumen supplied from Alberta to across the border to south. Some US companies like, ConoccoPhillips, Imperial Oil (owned by Exxon-Mobil) are implementing projects to produce bitumen from oilsands and transport the same via pipelines to their refineries in US. All this bodes well for US from the standpoint of having stable assured supply of oil without the fear of any disruption.
But the apprehension is that under the new dispensation if some folks in the US Dept of Energy in their over enthusiasm start to throttle the bitumen supply from Canada because some chest thumping ignoramuses are portraying it to be THE evil causing all environment aberrations, then it will be more damaging to US's long-term energy strategy of becoming independent of Middle East oil.
Canada will hurt obviously because its biggest customer (US) will not have been buying its bitumen. In such a situation Canada will then have to look for other customers - China seems to be prime candidate to fill in the slot vacated by US. This certainly won't be good from US's geo-politico-military game plans. But then Canada will not be liable to be held responsible for entry of a new buyer for the abundant bitumen because after all Canada also needs to earn revenue for its own economy.
One hopes the new US Secretary of Energy will be guided by pragmatic and a rationalist's approach while at the same time remaining fully cognizant of the rock solid time tested US-Canada relationship and its contribution to US's interests and strategies.
No one disputes that alternative sources of energy should be explored and developed but that approach need not be predicated on strangling a stable source of energy (oilsands) based on unsubstantiated cause-and-effect scenarios attributed to it. Hopefully, the new US administration will not allow its vision and judgement to be clouded by irrational populism, and therefore will not stray in to alleys which don't lead to actualization of interests of USA and one of its closest allies - Canada.
Saturday, November 8, 2008
MR. OBAMA, PLEASE HANDLE INDIA (AND KASHMIR ISSUE) WITH CAUTION!
Dear Mr. Obama,
Hearty congratulations to you on your election to the presidency of United States of America!
Many, including me, heard your comments on your first press conference with great interest. The media is also reporting about your team formation process and the 'deliberate haste' that you are proposing to exercise. So far so good.
However, there are some media reports that suggest that you are considering to bring in former President Clinton to act as a mediator for resolving Kashmir issue. You are reported to have said during your luncheon meeting with Clinton in New York recently, “We should probably try to facilitate a better understanding between India and Pakistan and try to resolve the Kashmir crisis so that Pakistan can stay focused not on India, but on the situation with those militants (on Pak-Afghan border).”
The news is also rife that Gen David H Petraeus, who took over as commander of the US Central Command on October 31 and visited Pakistan and Afghanistan soon after that, has reportedly nominated Ahmed Rashid and Shuja Nawaz, author of the recently published book on Pakistani Army called "Crossed Swords", as members of a brains trust to advise him on a new strategy towards Afghanistan and Pakistan.
Ahmed Rashid (along with Barnett Rubin) in an article in Foreign Affairs called for a “grand bargain” in which the Pakistani state trades a course correction on its western front with a more sustained international effort at resolving the Kashmir dispute with India. Former Pak president Pervez Musharraf justified abandoning the Taliban regime in September 2001 as a legitimate price Pakistan had to pay in order to keep up its support for militants in Kashmir.
But the outgoing US administration rightly found it difficult to accept such a trade-off, especially, after the brutal murder of Wall Street Journal reporter Daniel Pearl which highlighted the fact that there are no walls that separate the terrorists operating in different parts of Pakistan.
Mr. President-elect, the foregoing, which I tried to keep as brief as I could, is meant to provide a background so that I could make a sincere request to you: In your administration's eagerness to deal with anti-American forces in Afghanistan/Pakistan please do not push anything on India regarding Kashmir.
Mr. Obama, American interests will be best served if your administration can get Pakistani military to forswear involvement in politics for all time to come. Once that step is taken in earnest, the policy of building alliances with or tolerating terrorists in Afghanistan, Kashmir and Pakistan itself would naturally come to an end.
Instead of achieving the above, if your advisers get launched on the so-called “grand bargain” trajectory, it will be like trying to address the surface rather than trying to hit the root cause. And, in the process the strong partnership which got built between US-India during the last four years can potentially get undone.
Mr. President-elect, India has unhappy memories of some of your foreign policy advisers — Anthony Lake, Strobe Talbott, Robert Einhorn and Richard Holbrooke. Please tell your State Dept folks to DELINK Kashmir from any US strategy on Afghanistan. It doesn't require much brain to understand that support to any terrorist elements, be it in Kashmir or in any part of the world by any govt (in this case Pakistan) is totally unacceptable.
What I am trying to say, if your policy advisers tell you that to incentivize Pakistan (read Pak military & ISI) to help US in winning against Taleban, US has to mediate and 'solve' Kashmir issue (in some way that would please Pak), there is nothing more foolish, illogical, unethical, unprincipled than this.
If YOU didn't subscribe to anything Bill Ayers purportedly said about radicalism, how can you let your judgement be clouded by any "grand bargain" strategy which predicates itself on pleasing one set of radical elements (i.e. the militants in Kashmir) to almost beg support from a govt (Pakistan) to serve US interests.
If you don't handle the Kashmir issue from moral, logical grounds you may end up screwing up an excellent alliance that got built up between US and India - an alliance which has far more strategic spin-offs for US than one could imagine.
My suggestion to you would be that before embarking on any US-Pak-Afghan policy that potentially impacts India, please have a chat with your running mate, Joe Biden. He will have a lot to contribute in finding a strategy that on one hand will get US its desired outcome, but at the same time it will not seek to bulldoze India in some uncomfortable situation which will have immense potential negative knock-on effect.
You may also like to consult Karl Inderfurth, one of your foreign policy advisers.
I hope you will handle India (and Kashmir issue) in a 'deliberate' and sensible manner. Please remember it takes a long time to build a mutually advantageous alliance; and it takes a far shorter time to weaken and/or destroy that alliance!
With warm regards.
Sunday, November 2, 2008
IF OBAMA WAS 'INFLUENCED' BY REV WRIGHT THEN McCAIN COULD BE A 'COMMUNIST'!
Now, let us see what McCain himself says about what he went through during the Vietnam war. He says that he 'carries scars on his body' which he claims were inflicted on him by the North Vietnamese when he was a prisoner of war. People know that he was a POW for five and half years.
Let us think about it a bit dispassionately and logically. It is common knowledge that North Viets, who were communists, tried all they could to brainwash their prisoners with the communist ideology apart from whatever level of torture they would decide to inflict on the POW's to extract information. McCain, in fact, did eventually sign a confession to his supposed crimes against the Vietnamese people and holds that it was only extracted after weeks of pain inflicted by his tormentors. In a more recent interview Mr McCain explained the signing of the confession as his failure.
Therefore, it stands to reason that McCain must have undergone a sustained brainwashing regimen during the five and half years of his captivity. Mind you, brainwashing in captivity is carried out based on proven psycho-neurological methods. These methods, as would be obvious to any layman, are designed to cause far more effective and permanent change in thinking pattern of a person (in this case the POW's) as compared to any speech delivered in an open and religious environment (of a church) where the fundamental focus is on God, Jesus, Bible and the associated teachings.
People very well know how effective the indoctrination processes are in a regimented camp, or in a school or in captivity situations. Classic example in modern days are the Muslim radical suicide bombers who are indoctrinated in a closed environment. McCain never denied that he was brainwashed. And, the military records are also not public about what kind of debriefing he received from US military after his release from captivity.
So, what makes the American feel so safe to believe that McCain is not a communist in his thinking?! One may argue that he is a Republican, and hence he cannot be a communist. But people forget that so many American double agents who worked for former Soviet Union (and may be working now for Russia) appeared totally western in thinking and never betrayed any communist leaning whatsoever.
It is also important to bear in mind that the brainwashing methods adopted by the communists were so effective that it used to become part of the psyche of a person, and worst part of it is that the brainwashed person would never know that he has got changed as a result of brainwashing. That person's changed thinking gets revealed at most unexpected moment, at a moment that would be most damaging to the system to which he is assumed to be loyal.
A minor manifestation of that can be exemplified. When McCain said he wanted more troops in Iraq, as long as it takes, to 'defeat' the enemy, in fact, his sub-conscious was dictating the rhetoric rather than the logical faculty of his brain. The fact of the matter is that in his sub-conscious he carries the emotional scar of a shot down pilot and a prisoner. So, in his overt behaviour McCain likes to see the 'enemy' pummelled to pulp whether or not it is dictated by the ground realities.
Likewise, his every reasoning will be clouded by the emotional scars, and may be by the brainwashing that he might have had at the hands of communist North Viets. It will not be surprising to see McCain making bizarre decisions. His recent rushing to publicly announce that he advised the Georgian President that US will protect Georgia against the Russian 'invasion' is a classic example of that.
On the other hand, what is the extent of any likely effect on a person, who is sitting as a part of a congregation, of any talk delivered to the crowd essentially in a religious environment ? Moreover, the sermons vary every week unlike the brainwashing in a torture chamber where the indoctrination dose is thousand times heavier and dangerously focused to cause maximum alteration of a POW's mind.
What I am driving at is this: if McCain would say that he is not a communist because he could somehow sustain all the brainwashing at the hands of the communists since he had the mental strength, what makes him (and his party) to believe that Obama did not have the mental strength to prevent him to be affected by Rev Wright's so-called anti-white speeches?
In summary, if someone would be so foolish to believe by the McCain ads that Obama was 'influenced' by Rev Wright's speeches, in that case such a person should also be willing to believe that McCain could also have been 'influenced' by the brainwashing by the communists and, hence, the 72 year Senator could be a 'communist'.
One hopes that the American society will not get divided by the poison filled tactics of McPalin who are getting desperate and increasingly seem to be losing their mental balance. Again, a dangerous sign how disastrous and damaging these two can prove to be for US's interests when under pressure. God save USA from these psychopath-like hackers of American societal fabric.