Iran says wants to stay within nuclear rules

Iranian President Mahmoud Ahmadinejad marked the 28th anniversary of Iran's revolution on Sunday pledging to maintain the country's nuclear program but saying he wanted to remain within international rules.

...His comments had prompted talk Iran might say it had begun installing 3,000 centrifuges at its Natanz uranium enrichment plant, defying a U.N. sanctions resolution which gave Tehran until February 21 to suspend enrichment or face more measures.

...The proposal would permit Iran to keep its uranium enrichment infrastructure of several hundred centrifuges but it would not be allowed to feed any processed uranium hexafluoride (UF6) into the machines while negotiating with six world powers over a package of incentives to observe U.N. demands.

Article Reference: 

Iran says wants to stay within nuclear rules

$100 a barrel for oil?

Wake-up call to U.S. on oil?: Discusses a current worry that the fighting in the Middle East could cause the price for oil to become $100 per barrel. I think that's a very realistic concern, if we think about what's happened with the oil prices over the last couple years. The tensions in the Middle East have served to push up the price.

But that's not the only influence causing the oil prices to be so high as they are today.

There's growing oil demand from both India and China. Both countries are in a massive growth period, due to modernization of their economic activity.

There's the continuing rise in world oil demand, regardless of growth in India or China.

There's the peak oil consideration where it looks like world oil production capacity is going to soon reach a peak. Once the oil production peak is reached the price is inexorably going to go up.

The Chicago Tribune article is flawed by looking only at the immediate issue, and the immediate cause for oil price increases. If we think about those three effects, the price for oil is only going to rise. And once the oil production peak is reached, the price for oil is going to increase dramatically.

Ethanol is used widely in Brazil

In the State of the Union speech, GW Bush mentioned Ethanol as a resource "we" should develop. There's been a big scramble towards Ethanol since. Ethanol has some interesting characteristics, in that it's a liquid fuel that's very compatible with gasoline. Unlike biodiesel, ethanol can be readily burned in a gasoline engine and, in fact, ethanol is widely used today in the U.S. Just watch for a sticker on the pump saying "This gasoline may contain ethanol".

Brazil leading effort to boost ethanol use discusses ethanol production and use in Brazil. During the 1970's the "military dictators" then ruling the country pushed for ethanol production and mandated its use in vehicles. That has turned into a golden spot in the Brazillian economy, and they use ethanol rather than gasoline in nearly half of domestic passenger fuel demand.

Brazil has an interesting advantage with all those sugar canes, in that it's sugar which produces alcohol.

This means the U.S. can't directly replicate what they're doing, we don't have domestic sugar cane production to any great degree. Further, when you mention Ethanol, the corn farmers in Iowa get dollar signs in their eyes, and the corn producer lobbiests have been controlling debate around ethanol.

But I want to gather up some details from the article, so here goes.

The article focuses on one plant that works "around the clock" that is distilling 92,500 gallons of ethanol daily that is trucked away for immediate sale at the pumps. But it can only do this during the sugar cane season, apparently (March to November). This means to cover the period outside that season they'll need fuel storage facilities.

This at the end seems to be a critical point:

In Sao Tome, the cooperative that owns the ethanol distillery is betting on its best profits since it bought the operation in 1993. Cocamar's production cost is $1.10 per gallon, and wholesalers are buying the fuel for $2.68 - up from $1.44 last year.

About the only thing that could hurt Brazil's ethanol industry now would be an almost unimaginable plunge in international crude oil prices, currently trading above $60 per barrel, said Almir Hawthorne, the distillery's industrial manager.

"Oil could drop to $35 or $40 per barrel, and ethanol producers would still make money."

They're making $1.24 per gallon more profit than last year, due entirely it would seem to the high price for oil. If oil prices did drop again it's clear their threshold for gaining a profit is around $40 per barrel. But I wonder if, at that price, they'll make enough profit to get the excitement that's circling around them.

That's been the sticker for most of the alternative fuels, whether their price per unit is less than the price for fossil fuel.

It seems every time the price for oil goes high, the makers of alternatives are in the limelight. Today that's ethanol (of several kinds), fuel cells, biodiesel, wind turbines, etc. Unfortunately when the price of oil drops again, the alternatives become less attractive.

This is simple economics, with the market (in its short sighted decision making) going to the source with the least cost. Another factoid in the article is that Brazil invested years of subsidies in its ethanol production industry. It's paying off now, and in the future Brazil will remain fueled even when the peak oil phenomena hits and oil is no longer available.

The point to that is in the energy industry it takes a very long time to develop alternatives. Brazil is an example, where it took years before their ethanol industry was self sustaining.

If the U.S. decisioning is based largely on the short sighted approach of "oh, the market will take care of it", well, I think the market moves too quickly for the development of new energy resources.

When they say "the market will take care of it" the scenario is that oil supply becomes tight, and the oil price rises, and then people start scrambling for alternatives that are cheaper. And, we're seeing this effect going on today. But when the real oil peak hits the supply is supposed to drop off very rapidly from the peak. That should cause a rapid rise in prices which would trigger the market to search for alternatives. But if it's going to take years to develop the alternatives, and in the meantime oil supply drops precipitously, "we" won't have those years.

I believe the current high oil prices are not the true oil peak, but instead based on the war(s) brewing in the Persian Gulf. Especially with the war we are threatening against Iran.

The current high oil price is making for an interesting training ground, inspiring the people go through the steps of finding an alternative to burning fossil fuels. Last year people were dumping their SUV's and motorcycles were becoming popular. This year they may be looking for ethanol.

I suppose if the oil prices stay high long enough, like they are now, the makers of the alternatives will have a long enough window to establish themselves. Here's hoping.

Kuwait, Saudi Arabia, and oil reserves (HoweStreet.com)

Yikes! Things Just Got Worse ... what just got worse? It has to do with the claimed oil reserves in Kuwait. The article discusses a report published by Petroleum Intelligence Weekly (PIW) titled Oil Reserves Accounting: The Case Of Kuwait. Unfortunately the subscription price puts me off so I can't read the report myself.

Supposedly the report discusses details of Kuwait's claimed oil reserves. Kuwait's reported oil reserves are 99 billion barrels. Kuwait has been an oil exporter since 1946, and has a massive oil field. However it's clear the reserves have been overstated.

The PIW report is based upon data circulating within the top echelons of the Kuwait Oil Co. (KOC). KOC is the upstream arm of state-owned Kuwait Petroleum Corp. KOC has primary responsibility for conducting exploration, drilling and production from Kuwait's oil fields. The PIW report claims that Kuwait's remaining proven and nonproven oil reserves total about 48 billion barrels, or 51 billion fewer barrels than previously advertised.

That 51 billion fewer barrels of reserves represent 5% of stated world reserves. Especially troubling is I've read several articles claiming that many oil producing countries have been overstating their reserves as well. What isn't overstated is the world consumption, especially the growing consumption levels in India and China resulting from their economic expansion.

How did this come about? Well, it's not a simple matter of bravado (e.g. the stereotypical men boasting about the size of X or Y or oil fields). In this case it is about distinguishing between "proven," "probable" and "possible" reserves.

Kuwait (and others?) have stated their reserves as the sum of all three. Well, I don't know about you, but "possible" reserves doesn't sound very promising. Especially when you consider most oil wells turn up dry, even on a good day.

As I said, the oil consumption rate is known (and growing). What isn't so clear are the actual reserves. One thing that's clear is the Hubbert model which predicts the peak oil phenomenon. It's not that an oil field produces fine until one day it just fizzles to a stop. Instead it produces fine until the peak occurs, after which it's a constant struggle to get oil out.

This means the world oil situation will appear fine, but with more and more oil fields tilting to the "struggle" phase as each individual oil field peaks.

That, in a nutshell, is the peak oil phenomenon. The last several years of oil use will be characterised by a struggle to retrieve oil, and therefore the actual oil "production" will inexorably decline.

In the face of America stupidly continuing the glut of oil use and gas guzzling way of life, along with India and China rapidly expanding their oil use, this will not be pretty to watch.

I should warn you the author of the article I've linked to -- well -- he works for a financial investment company. They purport to having some investment ideas related to the scenario they describe. While I agree with the scenario, there may be some tilting of the rhetoric on their part.

The US and Iran: Is Washington Planning a Military Strike? - International - SPIEGEL ONLINE - News

There's been a continuing confrontation between the U.S., the E.U. and Iran over Iran's nuclear power program. Iran has been building nuclear reactors, some of which weren't initially disclosed to the International Atomic Energy Commission, and whose designs could be used to build weapons grade nuclear material. They've promised up and down, those reactors were purely for "peaceful" purposes, but then why would they choose a nuclear reaction that produces weapons grade material if they had a peaceful purpose? Especially as they hid the existance of the reactors?

Coincidentally Iran's plan helps justify the neocon plan to rearrange the political map of the Middle East. So it shouldn't be surprising the Bush administration has been taking a hardline stance towards Iran. The neocon agenda is to create a war against Iran, and taking a hardline stance is the way to gaurantee a war. It worked in Iraq didn't it?

This has been developing for awhile, and as I've posted before it appears to be following the same pattern as was used to cook up justification to attack Iraq. Pressure has been kept hard on Iran, and the Bush Administration rhetoric has been that "all options are on the table" just as they said with Iraq.

In the case of the attack on Iraq, all the justifications given by the administration have been proven to be false. And it's clear that the administration knew the falsity of most of their statements while they were claiming up and down it was all true. In other words, they were lying. And lots of people around the world, including the UN Secretary General Kofi Annan, have said the war in Iraq is illegal etc.

On the other hand the allegations against Iran are largely true. Iran itself has admitted to having this nuclear program. And it is a worry to have nuclear weapon capabilities proliferate beyond the set of countries that currently have that capability. So it's a puzzle where to stand. The Bush Administration has a very poor track record, and are obviously holding an agenda dating back to the mid-90's (or further) to destroy Iran's government.

In any case, right now there are some serious rumors being published in Germany saying the U.S. is clearly planning to launch an attack on Iran.

Here's some pointers to discussion:

The US and Iran: Is Washington Planning a Military Strike? (December 30, 2005, Der SPIEGEL ONLINE)

US planning strike against Iran (Dec. 31, 2005 19:33, By JPOST.COM STAFF)

Rumors Of War (January 01, 2006, Past Peak blog)

Attacking Iran (December 31, 2005, John Robb's weblog)

The source is an article in the Berlin daily Der Tagesspiegel. I don't have a link to that article (and no doubt it's in German) but the Der Spiegel article is a good substitute:

In a report published on Wednesday, the Berlin daily Der Tagesspiegel also cited NATO intelligence sources claiming that Washington's western allies had been informed that the United States is currently investigating all possibilities of bringing the mullah-led regime into line, including military options. Of course, Bush has publicly stated for months that he would not take the possibility of a military strike off the table. What's new here, however, is that Washington appears to be dispatching high-level officials to prepare its allies for a possible attack rather than merely implying the possibility as it has repeatedly done during the past year.

... According to DDP, during his trip to Turkey, CIA chief Goss reportedly handed over three dossiers to Turkish security officials that purportedly contained evidence that Tehran is cooperating with Islamic terror network al-Qaida. A further dossier is said to contain information about the current status of Iran's alleged nuclear weapons program. Sources in German security circles told the DDP reporter that Goss had ensured Ankara that the Turkish government would be informed of any possible air strikes against Iran a few hours before they happened. The Turkish government has also been given the "green light" to strike camps of the separatist Kurdistan Workers' Party (PKK) in Iran on the day in question.

... But the string of visits by high-profile US politicians to Turkey and surrounding reports are drawing new attention to the issue. In recent weeks, the number of American and NATO security officials heading to Ankara has increased dramatically. Within a matter of only days, the FBI chief, then the CIA chief and, most recently, NATO General Secretary Jaap De Hoop Scheffer visited the Turkish capital. During her visit to Europe earlier this month, US Secretary of State Condoleezza Rice also traveled to Turkey after a stopover in Berlin.

Leading the chorus of speculation are Turkish newspapers, which have also sought to connect these visits to plans for an attack on Iran. But so far none of the speculation has been based on hard facts. Writing about the meeting between Porter Goss and Tayyip Erdogan, the left-nationalist newspaper Cumhuriyet wrote: "Now It's Iran's Turn." But the paper didn't offer any evidence to corroborate the claims.

So the Der Spiegel article is not claiming outright there's a war being prepared. But it points to evidence something is going on, even if it's being kept secret enough we aren't knowing what it's about. The Jerusalem Post article is, then, overhyping the truth for some reason. Perhaps the people in Israel are more alarmed by Iran, because the President of Iran has made repeated speeches recently calling for Israel to be wiped off the map, claiming the Holocaust was a hoax, etc.

Iran rejects Russia nuclear plan (Jan 1, 2006, BBC): Russia apparently proposed doing nuclear processing on their terroritory, so that Iran wouldn't be doing the processing. I think the worry is about the expansion of the number of countries who have nuclear weapons capability. In the Der Spiegel article it quoted some General saying that the time to act is "now" because if we wait too long Iran will have their nuclear capability and it will be too late. But Iran rejected the Russian plan.

Iran vows 'crushing response' to attack by U.S., Israel (Haaretz): Tough talk between Iran and Israel just proving they don't like each other. The article provides an interesting overview of the tensions.

US planning to strike Iran's nuke facilities: Report (January 01, 2006 19:36 IST, rediff.com): Describes the proposed attack on Iran as just to destroy the nuclear facilities, rather than an all-out war. I suppose they might be hoping for something like Israel's 80's attack on Iraq's nuclear facilities. But in todays Middle East I suspect it would only fan the flames further, seeing the U.S. as an occupying power.

A 2006 U.S. plan to attack Iran detailed (12/31/2005 10:20:00 PM GMT, aljazeera.com): Details the same story as above, but adds to it a statement by Cheney in Jan 2005. He made a vague statement to MSNBC that Israel might be doing the dirty work (bombing Iran's nuclear facilities) leaving the rest of the international community to clean up the consequences later. Hurm.

Hmmm.. U.S. Asked to leave Uzbekistan air base

One of the side games to the U.S. invasion of the middle east (a.k.a. The War on Terror) is the oil situation in the Central Asia countries that are of the former Soviet Union. There's quite a bit of oil up there, and I gather that there's a game afoot to control that oil. One of the games is the U.S. plan to run a pipeline through Uzbekistan, Afghanistan, Pakistan, and to the sea from there.

This meant that the U.S. was in suport of the Uzbeki government. Conveniently the Uzbeki government has been giving the U.S. land area to operate air bases, that have been used as staging for U.S. forces going to Afghanistan and perhaps other conflict areas. One purpose has been the encirclement of Iran, apparently.

But earlier this year the Uzbeki government brutally supressed a protest. Suppressed, as in killed scores of people. That kinda suppression, where there's blood in the street and lots of crying.

US asked to leave Uzbek air base (Saturday, 30 July 2005, BBC.CO.UK)

Apparently U.S. diplomats have been expressing official consternation over that kinda suppression.

Flights into the K2 (Karshi-Khanabad) base had been reduced at the request of the Uzbek authorities, after the US criticised the government over events in Andijan.

And now the Uzbeki authorities are asking us to leave. The article doesn't quite connect these, perhaps because the U.S. officials are professing to "not know why the request had been made", but anybody who can read between the lines can see there's a disagreement brewing.

The eviction notice came days after US Defence Secretary Donald Rumsfeld returned from a visit to Uzbek neighbours Kyrgyzstan and Tajikistan.

Officials in Kyrgyzstan affirmed that US forces could continue to use Manas air base for as long as the Afghan war requires.

Mr Rumsfeld said he did not believe US operations in Afghanistan would be hurt if Tashkent denied continued use of K2, because there are other options in the region.

Oh, whew, at least our subversion of Central Asia can continue unabated. But what about the oil pipeline?

Okay, I'm being a little tongue in cheek about this. It seems to me this is a setback to U.S. plans, but I'm glad it's because the U.S. authorities were complaining about Uzbeki brutality.

But, wait, there's more. Here's the NY Times coverage: Uzbeks Order U.S. From Base in Refugee Rift (By STEVEN R. WEISMAN, and THOM SHANKER, NY Times, Published: July 31, 2005)

Uzbekistan formally ordered the United States to leave an air base that has been a hub for operations in Afghanistan in protest over a predawn United Nations operation on Friday to spirit out refugees who had fled an uprising in Uzbekistan in May, senior State Department officials said Saturday.

The article goes on to explain about the refugees. That they went to Kyrgyzstan, and that there have been recommendations to relocate them to Romania (?for safety?). The article goes on to explain how the U.S. is insisting on reforms.

About 450 Uzbek refugees arrive in Romania (Turkish Daily News, Saturday, July 30, 2005) reports that exactly this happened. That 450 Uzbek refugees arrived Friday July 29 in Romania.

CENTRAL ASIA: Weekly news wrap (29 Jul 2005 09:36:11 GMT, Source: IRIN, reported by Reuters, published on AlertNet) This Reuters "central asia wrapup" also reports on the same thing, giving a few more details.

Most of the article is discussing health aid being provided to several of these countries. It's not clear what this health aid has to do with the U.S. being asked to leave Uzbekistan, or the refugees, but this is a "wrap up" article. The article also discusses the general expectation from the Shanghai Cooperation Organization (SCO) calling on the U.S. to provide a timetable concerning pulling out of central asia. They are accepting of U.S. presence so long as its necessary for the operation in Afghanistan, but apparently not one moment longer.

The NY Times article ends on this interesting note:

Mr. Rumsfeld received assurances from Kyrgyzstan and Tajikistan that the American military could continue to use bases in those Central Asian nations to support relief and counterterrorism operations in Afghanistan.

"We feel we've had a good arrangement and good relationships in a number of those countries in the region," Mr. Rumsfeld said during his travels. "And obviously from time to time things may be adjusted one way or another."

The issue has been a test of the Bush administration as it has tried to balance two of its most prized foreign policy goals: democratization and counterterrorism.

Pentagon and military officials pointed out that it remained unclear whether the eviction from the Uzbek base would halt all bilateral relations with a nation on the rim of one of the most unstable regions in the world.

Those in the United States government and the military who argue for carefully managed engagement, even with dictatorial governments, note that without any formalized Western influence in places like Uzbekistan, there would most likely be influence from less-democratic sponsors, like Russia or China.

Reading between the lines, saying "without formalized western influence" and contrasting it with "influence from less-democratic sponsors, like Russia or China" points in the direction of a game of influence. Both statements are grounded in the thought that large countries are going to control the destiny of certain client countries. And it implies a contest between the U.S., Russia, and China to establish influence over Central Asia.

When will the oil party be over?

Petroleum Joyride Almost Over?

The article gives a very good overview of the Oil Peak scenario.

Strange bedfellows

There's growing evidence that the Uzbekistan government is a very nasty regime. Over the last couple weeks there were mass protests, followed by a mass government killing of the protesters, that killed over 1000 people. There's brutal interrogation and imprisonment tactics. And, the UN is demanding an investigation. etc.

If this were Iraq, the U.S. would be harumphing up a storm and demanding regime change. Well, that's what you would believe from the statements made by our President leading to the Iraq war. Yet, in the case of Uzbekistan, we're not only sending aid to that country, we're keeping troops in the country, and we're providing shielding for them in the UN.

Karimov escapes regime change as America pursues the ‘great game’ (22 May 2005, By Trevor Royle, Diplomatic Editor)

A GLANCE at the map confirms the strategic importance of Uzbekistan, not just in regional terms but also as it is viewed from Washington.

To the south and southwest are Afghanistan and Iran, a fact which inspired President Islam Karimov to push himself into contention as a useful ally in President Bush’s war on terror.

The US operates an air base with 1000 ground troops at Khanabad outside the Uzbek capital Tashkent. The former Soviet facility is used for operations in Afghanistan, and to date the US has supplied the country with some $800 million in military and humanitarian aid.

More to the point, Uzbekistan has a key role to play in supporting Washington’s wider interests. Khanabad is part of the ring of air force bases, or “lily pads

U.S. Report Sees Gasoline Prices Moving Higher Still

U.S. Report Sees Gasoline Prices Moving Higher Still
( By RICHARD W. STEVENSON and MATTHEW L. WALD, Published: April 8, 2005, NYTIMES.COM)

The Energy Information Administration, an arm of the Energy Department, said it expected the price of unleaded regular gasoline to hit a peak national average of $2.35 a gallon in May and to average $2.28 from April through September. Last week the average price was $2.22.

Okay, here in California the average price is higher than that. But that's besides the point.

The point is what I posted this morning. Namely it's nonsensical to tie the solution of this problem to continued reliance on oil. There isn't enough oil in the U.S. to fuel our needs for very long, the U.S. already spent it's wad in terms of the oil available in this country.

I fully support the general goal of energy independance. That the U.S. is so dependant on foreign oil causes several problems, from balance of trade, to requiring us to meddle with Middle Eastern politics. If the U.S. were instead more self sufficient we could ignore the Middle East with no problems, but so long as we keep up the reliance then the quirks of their political situation will determine the U.S. political situation.

And, really, the price of oil is not going down ever again, probably. The cause? It's the Oil Peak.

What's needed is the development of alternative energy sources. The technologies are known, they just need more R&D to develop them.

But I suppose with President Enron, Vice President Halliburton, and Secretary of State Chevron in office, we aren't going to see any solution that risks the oil industry's dominance. Eh?

Iran rejects EU proposal

Iran rejects EU move to halt nuclear plans
(Filed: 24/10/2004)
see story here

Summary: The proposal previously noted has been rejected by Iran as being "unbalanced". It sounds, though, as if the rejection doesn't halt negotiations, they're just looking for more balanced terms.

UPDATE: [October 26]


A Hint of a Nuclear Compromise by Iran By THE NEW YORK TIMES

"The European proposal for an unlimited suspension of uranium enrichment can be implemented, provided it does not contradict the Islamic Republic's criteria," the ISNA news agency quoted the nuclear negotiator, Hassan Rowhani, as saying on Monday.

"We have said that we accept the suspension as long as it is voluntary,'' Mr. Rowhani said. "No country has the right to deprive us of our right."