The NYT describes the current state of Western oil production: falling.
I created a handy graph using the NYT's numbers. Stark, simple graphs really drive home the reality of the situation. "Western oil companies" below includes not only US companies but also European energy giants such as BP and Total. The graph represents the percentage of world assets under Western control.
This is the first I've heard of this. Rumor, or something more?
The Times Online hints in the middle of an op-ed,
Only recently has it become clear that in the battle for Basra earlier this year British troops remained aloof while Iraqi and American forces overwhelmed the Mahdi Army, followers of the cleric Moqtada al-Sadr. Apparently Britain had done a deal with the Shi’ite group. According to some reports, senior US officers and the Iraqi government have now lost faith in British forces.
People are reacting to the Russian president stating, in no uncertain terms, and Georgia will lose South Ossetia.
Even with my reliably pro-American bias, I could see that both Abkhazia and South Ossetia were very unlikely to return to the status quo (Georgian territory, de facto independences).
The Georgian attacks on Ossetia pushed those citizens farther into the Russian camp. Months of Russian provocations are irrelevant [to S. Ossetians]. I think there is little question that the people in the disputed territories would vote against being a part of Georgia.
Thus, the problem:
The Russians did not and do not care a whit about the Ossetians. But defense of Georgian territorial integrity implies the US does not, either.
Catch 22.
Russia advances from South Ossetia and Abkhazia to bombing targets in core, undisputed Georgia. Putin has been widely quoted as saying the conflict will be taken to its "logical conclusion."
That leaves us to speculate about what that means. Let me offer one guess, something I have thought about in the context of a US attack of Iran: a military assault by one country upon another, with the main goal of eliminating the entire military capability of another country. Although some key civilian infrastructure may be destroyed — particularly items such as bridges with dual civilian and military roles — the civilian apparatus in general is largely left untouched. (something smarter bombs enable, in modern warfare) Occupation of the country is never considered even as a possibility.
Given the relative military strengths, Russia is clearly pursuing a war of punishment at this point. The biggest open question, I think, is not occupation but whether Russia will actively seek to depose Saakashvili and other Georgian politicians.
Quoting today's NYT update on the Georgian conflict,
Secretary Rice worked through the night Saturday [...] on a Security Council resolution. American diplomats said that they did not want an actual Security Council vote on the resolution until Tuesday or so, the better to draw out the debate and publicly shame the Russian government. While the resolution will carry no punitive weight, and is almost sure to be vetoed by Russia, a permanent Council member, the hope is that it could create more pressure for a cease-fire, officials said.
I cannot help but recall the 1939 image of Britain and France ruminating over their treaty obligations to Poland, as the German blitzkreig rained down for hours, then days. Diplomats scrambled and negotiated "through the night" to produce a result that would not shape the conflict in any way.
(to clarify, I am not drawing an analogy between the two situations, merely noting a stark image that flashed through my mind)
Wired Magazine notes that Georgia is under online attack, with most official government websites unavailable for days.
Due to the nature of distributed computing, the sheer numbers of compromised PCs and the cloaked nature of modern botnets, it is difficult to determine how much of the online attack is by a government, by outside groups whom the government tacitly encourages, or by those wholly outside the realm of government involvement and knowledge.
This reveals an unsettling facet of this war: you might be an unknowing participant.
If a virus (or trojan etc.) infects your computer, then your computer may be among the many thousands of other computers around the world sending Internet traffic to Georgia websites. This is called a distributed denial-of-service attack, or DDoS.
As always, make sure your computer has up-to-date software. Update Windows, update your anti-virus software, and manually run a scan if you so inclined. It can't hurt. Pay attention and notice if your Internet connection or computer seems unusually slow.
CNN reports on international reaction to Russia's escalation of the fighting (attacking targets outside South Ossetia).
The official said European allies have told the United States that Russia has "crossed a line of unacceptable behavior" and should "expect international condemnation." "I do sense an emerging unified view among our key allies," he said.
The return of history, indeed. What sort of diplomacy will we see, I wonder? Will we see Europe and America unified, guaranteeing Georgian territory (excluding Ossetia)? Or will we tell Georgia "I told you so" and stay out of it?
Inevitably Western diplomats will be going to sleep tonight, having nightmares about the return of the cold war. This is energy "politics" at its worst, and the forseeable result of Russia's recent willingness to wield resource control as an economic weapon, a method of control.
Updates roll in at Foreign Policy and elsewhere, as well as on major news wires.
New York Times has a good background piece, Taunting the Bear.
Two excellent links from Danwei:
A New York Times editorial calls for tougher fuel economy (mpg) standards. They further claim that consumers and the auto industry would be in much better shape, had Congress done so 5, 10 or 20 years ago.
That seems unlikely, given how CAFE is applied in practice. Automakers continue to sell whatever quantity of popular vehicle is being sold, regardless of its fuel efficiency (example: SUVs). Other cars in the fleet are sold to balance out the CAFE standards, occasionally at slim-to-no-profit. Thus, raising federally required fuel efficiency does little to address pollution, carbon, or oil supply/demand problems. If gasoline is always cheap, fuel efficiency only slightly reduces demand. Fuel efficiency combined with cheap gasoline can even increase demand, if the nation collectively feels it can drive more due to owning efficient cars.
If we wish to benefit from hindsight, the best solution is a carbon tax (or price floor), as noted in a fantastic piece by conservative George Will. (Here in America, a conservative calling for a tax is highly unusual)
If a carbon tax had been in place 5, 10, 20 years ago, the oil prices would be the same as today, yet all that additional money would have stayed inside the United States rather than going to Nigeria, Russia, and the Middle East. High oil and gas prices accomplish what decades of environmentalism and government regulation failed to do: raise efficiency, sink SUV sales, and encourage investors to take a serious look at alternative energy.
Calling for tougher CAFE standards will do little. An oil price floor or gasoline price floor will directly accomplish the NYT's desired goals (reducing auto emissions, reducing fossil fuel use, etc.) while also being far more open, honest, transparent, and simple.
Today, Chinese president Hu Jintao emphasized growth as a higher priority than inflation. Seeking Alpha noted this in their PBoC relaxes lending caps article, which also noted potential shifts in RMB policymaking apparatus.
Those articles led me to an excellent blog post from March 2008, summarizing challenges to China's growth: ROI, energy efficiency, pollution, desertification, demographics, high sustained outside investment levels and slumping business competitiveness.
And while ringing alarm bells regarding copper, this article paints a useful picture about the slowing state of Chinese exports, and commodities in general.
Finally, the current issue of Foreign Affairs examines the US-China partnership and speculates about future policy improvements, suggesting in particular a "G-2".
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