NYC Junta

George Friedman of STRATFOR is a prescient voice on global affairs, and as it happens he has just penned an article on Iran, which is timely for our upcoming discussion.

What is to become of the standoff between America and Iran? According to Friedman, sanctions cannot be effective against Iran, as the only meaningful one would be on gasoline (Iran imports 35% of its gasoline – I’d love to know why they need to do this when they have so much oil – can they not refine it?), and China and Russia will not play along with that particular sanction. Military strikes carry too much risk: they require good intelligence and massive bombardment with undoubtedly high casualties, with no guarantee that nuclear facilities will be destroyed. Plus, should such attacks occur, Iran is certain to launch counterattacks on Israel via Hezbollah, and on American forces in Iraq via its proxies there. Worst of all, Iran has the power to drive global oil prices through the roof by mining the Strait of Hormuz and launching missiles at any ships in that vital passage. For all of these reasons, STRATFOR does not find US or Israeli military strikes on Iran likely.

With diplomatic and military options ruled out, can America prevent Iran from developing nukes? Friedman argues that this is not as important as checking Iranian power in the region. We need Iran’s help, much as we needed the help of some other unsavory characters in the past:

Roosevelt and Nixon both faced impossible strategic situations unless they were prepared to redefine the strategic equation dramatically and accept the need for alliance with countries that had previously been regarded as strategic and moral threats. American history is filled with opportunistic alliances designed to solve impossible strategic dilemmas. The Stalin and Mao cases represent stunning alliances with prior enemies designed to block a third power seen as more dangerous.

It is said that Ahmadinejad is crazy. It was also said that Mao and Stalin were crazy, in both cases with much justification. Ahmadinejad has said many strange things and issued numerous threats. But when Roosevelt ignored what Stalin said and Nixon ignored what Mao said, they each discovered that Stalin’s and Mao’s actions were far more rational and predictable than their rhetoric. Similarly, what the Iranians say and what they do are quite different.

Could the Roosevelt-Stalin and Nixon-Mao alliances provide a model for an Obama-Ahmadinejad/Khomeini Khamenei [oops, confused my mullahs there] rapprochement? Friedman’s whole article is worth a read.

Articles iran, iraq, israel, oil, usa, war

China Economic Review highlights this WSJ story on American diplomatic efforts to get the Chinese to buy more oil from Saudi Arabia. The idea is that if China buys less oil from Iran, they will be more inclined to support the sanctions the Americans are proposing.

What about a converse situation? Instead of pressuring the Chinese to abandon their Iranian contracts, we could be lifting sanctions and doing more business with Iran. Didn’t someone once say that if goods don’t cross borders, armies will? We should be increasing ties to the Iranians – including business, academic and cultural connections – so as to decrease animosity.

Some will say that this would “reward” the Iranians for “bad behavior.” Nonsense. What have sanctions brought us, except more hostility? Even the Iranian protesters who were out on the streets demonstrating against Ahmedinejad do not favor sanctions against the regime they have far more reason to despise than we do.

If we really care about the brave Iranian souls who were out fighting for democracy this summer, we should reject sanctions and work toward the normalization of relations, which means doing business together.

In the News china, energy, iran, oil, saudi arabia

In the first official meeting of the Junta, the topics of discussion were energy and China.

I led the discussion of energy. The future lies in determining a new way to power our society, not only in this country but in the world. Specific to my argument, however, is that the United States must build a new energy infrastructure as a point of national security. So that we can stop sending money abroad where it enriches others, and start spending it at home, creating jobs for Americans. So that if and when the well runs dry, we’ll be able to keep the lights on.

It has taken only 100 years or so for oil to be discovered, harnessed, glorified, vilified. How long before it is abandoned? Before it runs out? If oil were to expire tomorrow, the US would cease to be a superpower. Think about the fueling needs of the US military alone.

Clearly, though, oil is the power of the present. As is coal, which is responsible for 50% of America’s electricity. Environmentally, these are both disasters, but in terms of security, coal is fine. We have plenty. Still, it’s a nasty business that pollutes and we should be looking for alternatives.

Alternative energy is bound to be a huge market, probably even a bubble – or several bubbles. One of those is probably biofuels like corn-based ethanol. Most of what I’ve read says that it costs more energy to grow the corn and convert it to ethanol than the ethanol actually puts out in the final usage. James Lovelock wrote that there isn’t enough arable land on the planet to produce enough biofuel to power the US transportation sector – just the planes, trains and automobiles of one country.

T. Boone Pickens’s plan was brought up, and someone mentioned that his idea to use natural gas as a bridge fuel is not solving the problem. This is true from an environmental standpoint, but I believe it does help us move away from a dependence on religious extremists. I like Pickens’s contention that “America is the Saudi Arabia of wind power.” But somebody also mentioned the problem with wind power: transmission. New power lines need to be built to take the energy from the plains states to the coasts, and nobody wants power lines running through their yard, even if they are willing to put up with 400-ft-tall turbines.

Some of the notes I took about specific questions we had, as well as some additional info a few lazy Googles turned up:

• Oil industry profits in the 1990s? We had been talking about record profits for the oil companies lately and how it had made them a scapegoat for high gas prices, talk of windfall taxes and whatnot, when someone said that in the 1990s the oil companies weren’t making as much money, that the business is cyclical and that today’s profits had a lot to do with investments made during relatively lean years passed. I didn’t get very far looking into this, mostly because I don’t care how much money they make. I don’t believe in windfall taxes, but I also don’t believe those companies need any subsidies for oil and gas production.
• Who’s using more wind, America or China? Five minutes of research shows me that China has increased its wind power capacity a lot, but I haven’t found how much they actually produce. I found that the US produces 16.8 GW of power through wind, which is about 1% of national energy use. The government believes wind can produce 20% of our energy needs by 2030, but also cites transmission as the major hurdle to be cleared.
• Where is the off-shore border as far as drilling rights go? And where does the power lie between states and the federal government to get at that oil – or indeed anything else in those waters? This one I didn’t even attempt to research, but it could open up a whole new line of thinking as far as who owns the oil in the ground…

I will leave it to Jeremy to summarize his China discussion

Wrap-Ups energy, oil, wind power